In this episode of SaaS Origin Stories, Phil speaks with Geoff Roberts, Co-Founder of Outseta, the only all-in-one platform that integrates subscription billing, email marketing, support, CRM, and reporting tools which reduces costs, maintenance, and helps SaaS startups get off the ground faster. He is also the founder of SaaS Growth Strategy and was previously the Vice President of Marketing at Roambi.
They discuss just how ruthless prioritization within your company can be, the revolutionary, problem-solving methodology of Outseta, why you don’t need to know everything about SaaS in order to be successful, and the importance of sharing your entrepreneurial journey.
Name: Geoff Roberts
About Geoff: Geoff is the Co-Founder of Outseta, the only all-in-one platform that integrates subscription billing, email marketing, CRM and more which reduces costs and maintenance. It was designed to help SaaS startups get off the ground faster. He is also the founder of SaaS Growth Strategy and was previously the Vice President of Marketing at Roambi.
Geoff on LinkedIn
Outseta on LinkedIn
Topics we cover:
It is said that, in order to build a successful business, you need to create something which either solves a problem/fulfils a need or entertains an audience. In creating Outseta, Geoff was able to solve a hefty amount of business problems.
All SaaS or membership businesses need the same fundamental technological tools: a billing system, a CRM for prospecting customer data, and marketing tools to communicate with customers. Outseta is the only company bringing all of these tools together under one platform. Geoff compares it to the way Shopify works for e-commerce, and just like a lot of the world’s best ideas, Outseta was born out of the personal experience and agitation towards the complexities of building a company which needed all of these tools.
Despite developing such an ingenious SaaS platform, Geoff reveals that he didn’t create Outseta due to any real attachment to SaaS, rather it was out of his love for startups and their evolution. He is also responsible for almost everything at Outseta apart from developing the tools themselves: sales, support, marketing, and internal operations.
But how? He claims that his writing degree was probably one of the most beneficial things to happen to him. And yet, despite not having any inherent connection to the SaaS industry, he has been able to make waves and offer a revolutionary, groundbreaking platform for any startup who needs it!
Geoff recommends that, when starting your SaaS business, share your entrepreneurial journey with the world. It can be incredibly beneficial to show off to everyone how much you’ve grown. This can develop a sense of trust between yourself and potential new clients and customers. Not only that, but it is naturally interesting to see how a business grows over time. It’s like watching evolution in real-time.
“This is not something I expected going in, but a huge part of our customer acquisition strategy is simply sharing our own entrepreneurial journey. I know that a lot of other founders do that; we’re certainly not the first company to do so, but I think it actually worked for us as an acquisition strategy because we sell our product to other founders. Just by sharing our own journey, founders tend to be interested in that kind of stuff.”
With the sheer quantity of tools that Outseta uses, they had to figure out which aspects to prioritize amidst its creation. In order to do this, they had to look at what it was that all subscription and membership SaaS services use and where they would focus their energies.
When beginning your startup, you will have to ruthlessly prioritize your work. Some ideas simply won’t make the cut or, at the very least, won’t get as much attention as others. But this is okay, just make sure you are prioritizing the right things.
Geoff acknowledges that for the first few years of Outseta’s existence, they were trying to sell to too much of a niche audience. Instead of trying to sell to business founders, they were selling to founders who were also developers. So, when the time came to pitch to them, they would often just make the tools themselves. This isn’t logical, but it is rational, and both parties involved know this; once you’re a developer, you can’t shed that programmed, coded skin.
Know who you’re pitching to—a niche audience is good, vital even, but if it’s too niche then you may run into some problems.
“The hard truth was we were trying to change the predominant behavior of developers. I would have a lot of conversations with developers where I would say ‘It’s not the best use of your time to spend all of this time integrating these tools. Why don’t you focus your time on building your product rather than building all these tools.’ And they would nod and say, ‘That makes a completely logical sense,’ and then they would go and build it anyway. It’s just what they’re accustomed to, even if it didn’t make the most logical sense.”
You could have the best ever idea for a product, but you need to be able to acknowledge that you won’t always get it to perfection right away. It’ll take time, and there may even be moments when you think it’s over, but it doesn’t mean it is. Sometimes, the best thing you can do is face the hard truth and think about how you can improve and be better to grow.
Probably in the future, if I was going to bootstrap something, it would not be a mission-critical software product.
Like, I think there's a reason that you see a lot of mission-critical software products go out and raise tons of EC funding because they need employees dedicated to this stuff like combating spam and fraud and all of that in a way that non-mission-critical products often don't. 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 do's 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. Today I have Jeff Roberts, the CEO of Outseta. Welcome to the show, Jeff. Thanks so much for having me, Phil.
Jeff, the first question I'd like to ask you, what problem does your company solve?
Sure. So Outseta is essentially a starter kit for running a SaaS or membership type business. So if you're running any of these kind of startup businesses that have a recurring revenue model, you typically need the same technology and tools. You need a billing system to charge your customers and a CRM to store your prospect and customer data and email marketing tools to communicate with your customer base.
Outseta brings all those tools together in a singular platform. So it's very similar to like what Shopify is for e-commerce. Outseta is for SaaS and membership style businesses. That makes sense.
And how do you come up with the idea?
The idea was actually born out of our experience at a previous SaaS company called Buildium. It's the word build and then I-U-M on the end, where I was sort of the business user and my now co-founder, his name is Dimitri, was the CTO and co-founder of that company.
And as we started to scale the business, I was kind of pulling on Dimitri's shirt, if you will, and saying, hey, we're at the stage where we need a serious billing system. We need to integrate Stripe. We need HubSpot for marketing automation and Zendesk for support and Salesforce for a CRM.
And at one point, Dimitri just kind of threw his hands up and he was like, I'm spending as much time integrating software as I am building our actual software. All of these SaaS businesses need essentially the same core tooling.
Why hasn't somebody delivered all the basic tools that a SaaS business needs in a single platform?
So that's where the idea came from. We ended up actually building sort of a very basic version of Outseta and used it to scale that business to about $6 million a year in revenue. Eventually, we did outgrow that kind of homegrown tech stack. But when we were looking to work on something new, we said, you know what, that product that we built for our own use served us really well.
I bet other founders, particularly founders of small bootstrap teams, would really benefit from this too. So we built the product and took it to market. Nice.
So when you decide to build the product, how did you fund it?
Yeah, it's completely self-funded. We've had sort of a long and winding journey to get to where we are today. The company is about six years old as we sit here today. But we started out all working on the product in a part-time capacity. So myself as an example, when we first started working on Outseta, it was something I devoted two days a week to.
And then three days a week, I was consulting to cover my financial bases and whatnot. And then over time, as the company has grown, we all sort of have moved to working on Outseta full-time. So your strategy was to start kind of like as a side project and keep growing from there.
What's your opinion on doing a side project versus going raising money and work full-time on the product?
So why you decide to go that route?
Yeah, in general, I think it's sort of a fallacy that you should ever raise money to build your product. I think that's flat out wrong. I think there is a time and a place for venture capital. But it should be to accelerate the growth of your business. You should have demonstrated that you've built some sort of basic product that people are willing to pay for it.
And then the venture capital ultimately is something that accelerates your growth rather than something necessary to build your product. Unless you're building something like SpaceX and you need millions of dollars to shoot rockets into space, I don't think you should raise money to just build the product itself. And frankly, I don't think you'll be successful doing that if you try.
So you believe you should wait for like at least product market fit, figure out, I am now I have a product people want and able to scout this and more money could help me. That's kind of like for sure, where you think is the price to raise money.
And how did your background you have like a big background in marketing and you work in companies that went to have big exits?
How did your background prepare you to build this company?
Yeah, it's an interesting question. So I actually went to college to be a writer. I thought I was going to work for like a newspaper or sports illustrated or something like that. I got out of school in 2008, right as the economy was crashing.
Frankly, I didn't know what to do. So I went back to school and got a business degree and the combination of kind of writing and business eventually led me into marketing. But I had no particular interest in tech, no particular interest in SaaS. I just sort of happened to land my first job in that space.
And what I found very quickly was and I say this today and I don't mean it negatively. I don't have any particular attachment to SaaS or technology. What I fell in love with early on in my career is startups and the opportunity to figure out how to help a startup grow into its potential. That's really what I love more than anything.
And I think the things that have sort of helped me be successful in doing that, one is certainly that writing background. I essentially do everything at Outset aside from building the products. I do sales, I do support, I do marketing, I do internal operations. And in all those things, the writing background is super helpful. There's a communication component that is just huge. Probably our single biggest marketing channel today is Content Marketing.
So you can see my writing background come through there. I think the other thing that most marketers need to be successful is some degree of being comfortable with ambiguity. Marketing is kind of part art, part science. There is a lot of gray, you can't measure everything perfectly. And I think that that's something that I've always been comfortable with.
I don't have an engineer's mind per se where there's a correct answer to everything. I think that's been really helpful to me as well. Makes sense. Let's dive deeper into your marketing strategy for your product and how you got your first customers. It looks like you're kind of building your own founder's brand and that's helping a lot.
But walk me through what's your high level strategy to grow the company?
How did you get your first customers, your next 100 customers, and how did you do that?
Yeah, I would say our strategy has evolved. But at this point, and this is not something I expected going in, a huge part of our customer acquisition strategy is simply sharing our own entrepreneurial journey. And I know that a lot of other founders do that. We're certainly not the first company to do so.
But I think it actually works for us as an acquisition strategy because we sell our product to other founders. So just by sharing kind of our own journey, founders tend to be interested in that type of stuff and that happens to be a population that could also use our product. So that in short is like our acquisition strategy at this point.
But there are certainly other things that have contributed to our growth in a significant way. We do have an affiliate program that we use just to drive referrals to the business. We don't have any sales team. So we basically treat our affiliates as our sales team, incentivize them pretty heavily, try to present them with opportunities to create content sort of on behalf of Outseta and compensate them for doing so.
And then there's a couple of partnerships that have been huge for us too. We're partners with Stripe, we're partners with Webflow, we're partners with Circle, the community platform. Those are all super complimentary technologies to Outseta. So just having a presence on their website and whatnot drives us a lot of business as well. Makes sense.
How long did it take to build the first version of your product?
Talk me through the process, like you told me that you had something that was built inside the company you guys were using. But when you decided to make this a SaaS, I imagine you started again.
How long did it take to build the first version?
Yeah, so we did start from the ground up. A big motivation to do at the time that we started was around billing in particular. So we sort of knew going in that to deliver what we wanted to deliver, Outseta needed to be this all in one tech stack. We needed to deliver the billing system and the CRM and the email marketing and the help desk.
So it was really more like building four or five software products than one. And as a result, it took us two years even to get an MVP out into the market. So that's a long time to sort of be sitting around building. But we felt comfortable biting that off because the categories of software that we sell don't really need validation.
We know that people are going to need CRMs and email marketing tools and billing systems. So it was a matter of can we build this interconnected system and build it to the point where the feature set is good enough that it's truly competitive with the other products on the market. And two years later, we had an MVP. The short answer was the MVP wasn't good enough.
There was just such a competitive space that we were in that we really struggled in our third year. And by the time we got to years four, five, and six, the product had matured to the extent that we started to grow in a significant way. Makes sense.
So when you're trying to tackle that challenge, bringing five products in one, how did you figure out what features do we build, what features I don't build?
I imagine you don't have all the features of all the five products that you replace. You probably were kind of trying to pick and choose. And two years, even though it's a long time, it's still impressive because you're replacing five huge companies.
How you guys prioritize and got to that place?
Yeah, I would say the first part was just sort of ruthless prioritization of the feature set.
So it is this big thing, right?
It's email and CRM and billing, et cetera.
But we really looked at subscription businesses and said, what are the tools that they all universally need?
There's no argument that they need a billing system. They need a CRM. They need email tools. There's all kinds of other stuff that we could have built that lots of subscription businesses need.
But we said, what are really the core systems?
Those are the things that we're going to deliver. The other part I would say is because we sell to an early stage audience and largely startups, we don't need all of the bells and whistles that this sort of more specialized tools have. At an early stage, you really just need sort of the 80% of each feature that allows you to send emails to your customers or allows you to accept payments.
And you need enough functionality to sort of get off the ground and start to scale your business. But I think what you see with more specialized software tools is they're often fractionally used anyways. And the features that are set up is missing tend to be things that more advanced, more enterprisey customers would use as they kind of go upmarket. So we don't need to build that stuff anyways.
We've really sort of distilled each of the features that we offer to the core feature that delivers the 80% of the value. And that's what we've focused on. That makes sense. You focus on your ICP and you're like, my ICP is not using this, this, and this. This is what they need.
But still, you went to market and what were their learnings?
Because that's normal with any product. You realize they were missing things or missing features.
What are the things that you realized that were missing?
And how did you correct that?
Did the customers tell you, welcome to the process of now you have a product, the product faces the market and you're trying to get to the product market fit. You're making the adjustments. And that's normal for any product.
How was that process?
Yeah, I would say a couple things stand out. The first one would be, I mentioned, like took two years to build the MVP and our third year we really struggled. We basically looked up after three years and had almost nothing to show for all of our effort.
And the hard truth was, at that point, we were trying to sell out SADA almost exclusively to an audience of technical founders, developers that were building their own SaaS products. And the reason for that was we had experienced those same problems ourselves in building SaaS products and we were trying to niche down and focus on a very specific audience. That's kind of standard startup advice.
But the hard truth was we were trying to change the predominant behavior of developers. So developers have the technical skill set to integrate all these tools and sort of build the perfect tech stack. And I would have a lot of conversations, sales conversations with developers where I would say, you know, it's not the best use of your time to spend all of your time integrating these tools.
Like you haven't even built your own MVP yet.
Why don't you focus your time on building your product rather than building all these tools and integrating all these tools that you need to sort of operationalize your business?
And they would nod and they would say that makes completely logical sense. And then they would go build the perfect tech stack anyways. That's just what they're accustomed to.
You know, if you're an engineer, you sort of take pride in your craft and a lot of people just were going to continue doing that even if it didn't make the most logical sense. So I think we sort of learned the hard way two things. One is it's just hard to change the predominant behaviors of any audience.
And two, the product just wasn't good enough yet to really warrant the attention of developers. Developers are super knowledgeable about technology. They know what's out there. They're just demanding buyers in general. So in year, roughly year four, we sort of got discovered by the no code community.
And what we realized very quickly was less technical founders were deriving that much more value out of outset up because they didn't have the skill set to sort of assemble the perfect tech stack. So we really started growing in the no code community and that was really the first sort of jumpstart to our growth.
And then what we've seen since then, kind of ironically, as developers have come roaring back, I think they have looked at no code tools and said, hey, first of all, there's this whole new class of entrepreneurs that are less technical that we have to compete with that we didn't previously.
But secondarily, these products have huge speed to market advantages that we should be taking advantage of so we can spend more time building products. And I think it's just a matter of once the product sort of matured to the point where they looked at it and saw it as truly competitive with the point solutions we compete against, they said, okay, this does make sense.
And our customer base is roughly split today, sort of between technical and less technical users. Makes sense. So the first adopters was the no coders, but it took a little bit for you to figure out who are the right people to start using this product, help us improve. As the product got better, developers are like, yeah, we're going to use this too.
And that's kind of like was the big learning that you have. You had like, this is the people that are going to buy my product right now. That's pretty cool. 100%. The other thing I would say that's been really helpful is we are our target customer. Our entire business runs on our own products, and that's been the case since the earliest days.
So as Outseta has grown, you know, from zero dollars in revenue to where we are today, we've sort of implemented features as we've needed them in the course of our own business. So we've sort of seen like the natural progression of what a early stage company needs. And just in solving our own problems, we're solving the problems of our customers as they grow as well. So that's been helpful. Makes sense.
And when did you go full time on the company?
Yeah, I didn't technically go full time until July of 2022. So only about six months ago, I was working, you know, four or five days a week on Outseta for a couple of years prior to that. But I was always doing some sort of consulting or whatnot in the background, even if it was a very low time commitment.
Well, we've got the company to the point at this point where it's paying me a full time salary. I don't need to consult anymore or anything like that. So that was a big milestone and it took five years or so to get there. Makes sense. But you didn't have like an actual job. You just have some consulting, actual revenue. So you didn't take from the company.
You went and did some consulting, got the money, and that's how you kept building the product, correctly?
That's right. Yep. I think that's a good strategy, especially for a bootstrap founders, because you have a skill, you can keep making some money, you can still kind of control your schedule and you don't take everything from your company. It's less stressful that way, I would say.
What do you think?
I think so, too. I think it's a good path in general rather than just quitting outright. I think people that kind of quit their jobs outright and go all in on their startup, it's very well intentioned, but you are inviting an enormous amount of financial stress into your life that I don't necessarily think is always helpful.
The challenge for me, I always felt good with our strategy of consulting until the business could afford to pay us, but there's always some middle ground, right?
There's a point where you've seen enough traction in your business that you truly believe in it and you want to go work on it full time, but the business doesn't have the ability to quite pay you what you need to stay financially afloat yet.
For us, it was a couple of years where we were kind of in that point with me personally. And it's tough because you kind of have one foot in both buckets and you really want to focus on your thing full time. And at some point, it's definitely worth making that jump.
We got to a point where I sort of knew, yes, it's a little bit premature, but if I don't go focus on outside of full time, there's a real opportunity cost to not doing that. The business needs my full time attention. And then when you make that call, it was very much a judgment call and a tricky thing to get right, I think.
I agree with you, especially as consultant, you can make a lot of money and then if your lifestyle is a little bit higher following the money they can make as consultant. So I think, like you say, it's finding the equilibrium to make that jump because long term, the SaaS is going to help you progress and make more money.
So how does your team look like today?
How many people do you have working for you?
We have five people today. There's basically three engineers, a designer and myself. I would say we have a weird model in the sense that we don't have a sales team and everybody outside of does customer service. But outside of that, the engineers and the designer are really focused on building product and I do kind of the business side in general.
And the way that you pay your team and the way that you organize your team is a little bit different.
Could you share with us how you do that?
Yeah, we have an organizational design that's called self-management. The basic idea of self-management is that there's no bosses in the organization. You hire kind of the best people that you can. And rather than having like a job title that defines what that person does, everybody is just encouraged to help the company in whatever area they're best suited to. So our engineers focus on building the products because they have that skill set.
Like I focus on marketing because that's my skill set. But everybody is paid the same rate. We have a standardized salary. If you work on outside of full time, it's $210,000 per year. But you can choose how many days a week you work. So if you wanted to work one day a week, it's $42,000 a year. If you work two days a week, it's $84,000 a year.
If you work three days a week, it's $126,000 a year, all the way up to that $210,000 salary. And the idea there is we want to, first of all, attract high quality people. Secondarily, we recognize that the type of people that will thrive working at Outseta probably have their own entrepreneurial projects anyways.
So we wanted to create a structure that allows people to come in and say, I want to work with you a day a week. I want to work with you three days a week. Not everybody needs to work with us in a full time capacity. We're more interested in getting really quality people working on Outseta and excited about Outseta.
Beyond that, we also give everybody the opportunity to earn equity in the company on the exact same terms as our founders. So you can elect to work however many days a week you want for paid compensation. You can also elect to work however many days per week you want to earn equity in the business. So we have some people that come to us and say, we really believe in Outseta.
At this point, I have enough money on a personal level that I just want to earn equity in Outseta as fast as possible. And they can devote the majority of their time to working for equity rather than cash compensation.
So what's interesting about that and sort of what we're trying to do is you see in these tech companies, even tech companies that have huge exits and whatnot, it's usually the founders and maybe some investors that make money and everybody else doesn't make much money even if they made significant contributions. We're basically trying to solve for that.
We're saying we're giving everybody the same opportunity to actually have ownership in this company that even the founders have. So if that's what's of interest to you and if that's how you believe wealth is built, you've got an opportunity here that you wouldn't have anywhere else save for founding your own company. That's very different, very interesting.
Like in two ways, you're like helping them build wealth, right?
One you're saying, hey, if you want to have your own side gig like I did mine, you can work here two, three days a week and you can build your own product or you can even do both. You can also work here and get some sweat equity and get some equity of this firm as this firm is successful, you're going to be successful too.
So you can decide how you want to build your own wealth as you work here. That's very interesting.
So how did you come up with the idea?
Like did you base on anything or like how did you guys got to that point?
I think there's a couple things. So in the previous company that I mentioned, Buildium, we did bootstrap that company to six or $7 million a year in revenue. Then we went out and raised funding and did the traditional VC path. And we had a great experience with our investors, with the team, we had a good outcome. It wasn't like none of this is a reaction to a negative experience whatsoever.
But when we were ready to work on something new, we kind of looked back at the experience of building Buildium and we said we had a lot more fun when we were a team of 20 than when we were a team of 200. And one of the things that we latched on to was we want to keep this business intentionally small. We don't want the overhead that comes with a big team.
We don't want the politics and whatnot that comes with running a larger organization. Let's see how far we can push this company with say 20 people. And that's an artificial threshold and we're certainly not there yet. But that is our thinking when it comes to all aspects of the business.
It's how do we scale this with the smallest number of employees possible?
And I think if you're going to go with a structure like that, first of all, you're going to want to hire awesome people. And secondarily, you're going to need some sort of compensation structure that attracts sort of like minded and really quality people.
And this checked a lot of boxes that provided that flexibility, it provided a good rate of pay, it provided an opportunity to earn equity in a business that you simply wouldn't find elsewhere. And just to sort of drive that point home, nobody had out set it today.
Yes, we're a small team, but everybody owns at least 4% of the company. The smallest stake anyone has is 4%. And that's somebody that's elected to work much more for cash compensation rather than equity. We have another employee who's been with the business at this point for like 18 months. He owns like an 11% stake in the company because he has really optimized for equity.
So that's ultimately what I think has been helpful and what's been attractive about that structure to a lot of people.
Yeah, that's pretty interesting. Thanks for sharing.
So one of my favorite questions I ask, I like to ask everyone that comes to the show is like, what was your old shit moment from the early days of your business or just any the first ocean moment that comes to mind?
Yeah, I'll give you two. One is a very specific incident. One is a more broad sort of topic. So I think the more broad ocean moment was being three years into building outside and looking up and having very little to show for it. We had devoted two years to building this product. Year three, we started aggressively marketing it.
And at the end of three years, I forget the exact number, but we had something like 30 or 40 or 50 customers, it was relatively low.
MRR was, I think under maybe $2,000, $3,000 a month. But that's very, very little to show for three years of effort.
And I think we all looked up and looked at each other and said, do we need to do something differently here?
Like what have we learned?
And ultimately, the learning was just that the product wasn't mature enough yet, and that there was an audience that was going to value what we had built more than developers.
But that was certainly an ocean moment and caused a good deal of sort of soul searching amongst our team where we said, do we continue on with this?
Is there a path forward?
I'm very happy that we did. But that was the first one.
So did you guys think up before going to the second one, did you guys think about just quitting at a time like three years and only $2,000 in monthly recurring revenue was quitting on the table?
Oh, quitting totally was on the table.
Yeah, quitting was without question on the table. I think we recognized the things that I said, but I think we also recognized that this was an idea, as I said previously, that doesn't really need validation. People need these tools. And we said, you know what, we just need to take a dose of the hard truth that the product isn't good enough yet.
And likewise, that maybe there are audiences that are going to value this more than developers. So like niching down is generally a good thing in startups and something I still advocate for. We had sort of niched down on one target audience to a fault.
And I think that like pulling our head out of the sand and looking for other audiences and being honest with ourselves about where the product was at were the right things to do. And I think that's a mistake I see all the time with startup founders.
They sort of have this mindset of like, why aren't, why isn't somebody buying my product?
And the mindset should be like, why would they buy your product?
You need to have a really compelling reason and not like sit there and feel like the victim because someone's not buying your product yet. The market, the market doesn't lie.
You know, it's going to tell you when the product is good enough or not. What you told yourself to be like, no, we're not going to quit. We're going to go and you're going to make this work.
Like what was the, how did you guys got to that conclusion?
Because I feel like quitting would be like the easier option after three years where you guys were. That's for sure. And that's what I hear at the time. The most companies are successful. They're successful because they just kept trying long enough.
But walk me through like how, what helped you get going?
I think there's a few things. And to be fair, I think that answer is probably different for myself and our other co-founders. But I'll speak to my own feeling. My own feeling, I would say it was twofold. One was just stubbornness and some degree of pride, I guess. I'm pretty good at committing to things for the long term.
And I think frankly, after three years, like I saw an opportunity for a product in this space, we weren't where we wanted to be, but I wasn't going to roll over very easily. I sort of looked at it like if we're not where we want to be, we need to work harder. And I know that that's not always the right approach. And a lot of times that is sort of counterproductive.
But I think there was certainly an aspect of stubbornness there that was just, I'm going to work on this until it is successful. That ultimately helps. That's probably the big one. I would say the other thing aside from that was what I wanted to get out of Outsetter. For me personally, don't get me wrong, I want Outsetter to be a smashing financial success.
But more than anything, like my personal reason for wanting to be a startup founder is really freedom with my time. I want to work for myself. I don't want to answer to somebody else. I kind of want to control my own destiny going forward.
And even though we hadn't sort of gotten to the point in terms of success where that was the case yet, I still viewed Outsetter as my best opportunity to do that. And I looked around and I looked at my two co-founders and I said, the product needs some work for sure, but this is my most direct path to working for myself.
Similarly, my two co-founders are obscenely talented engineers and people that I'm extremely excited to work with.
I said, I'm not going to get a better team than this. We just need to double down with this team on this idea, be stubborn, and hopefully it'll work out. And it was certainly a grind, but it started to work out. That's awesome. Thanks for sharing.
What's the second OSHIP moment?
Yeah, the second OSHIP moment is much more specific. And I would say something I don't see people talk enough about is whether you're building a mission-critical software product or not. A mission-critical software product, like a reason Outsetter is, is because we handle authentication and payments. So if we have downtime, our customers can't log into their own products. They can't accept payments from their own products.
We are the engine of all of our customers' businesses at this point. And with that is an entirely higher level of responsibility in terms of the security of your software and the uptime of your software and all those sorts of things.
And something I personally didn't anticipate as much as it's come to fruition is once you start to have any sort of success with a software product that either collects payments or sends emails, you invite a massive amount of people who will try to use your system in malicious ways.
And it is almost impossible to overstate how much time you have to spend just combating fraud and working on security and all these sorts of things. And it was a couple of years ago now, but with email in particular, people look for every opportunity to exploit email marketing platforms that they possibly can. So there are obvious things that you would think about.
For example, if someone signs up for a free trial of your software and your software allows them to send emails, they could use that free trial period before they've paid you anything to send out a high volume of emails. That's a relatively easy thing to solve for. You can throttle how many emails can be sent during a free trial period and that kind of thing to protect against that.
So we did all those normal things that you hear about email marketing providers doing, but these hackers, these people with bad intentions will find every loophole in your code base possible. And the example that I like to give is we send or outside of does send transactional emails. So think of a forgot password workflow.
If somebody clicks on a forgot password link, an email goes out that prompts them to reset their password. So we got to the point where we had one email type hacker fraudulent person, I don't even know what to call them, where they figured out a loophole where they wrote a script that literally went to our website, clicked on the forgot password link, and then just input emails into that lost password form.
And it would trigger a transactional email, but then they could edit the transactional email template to have links to all sorts of sketchy sites or whatever it was they were promoting. So these are the sorts of things you just never think would happen. But next thing you know, someone's literally written a software program specifically to trigger that forgot password email and then modified the template.
And just the amount of time that you spend combating that type of stuff was sort of an no-shit moment for me too.
Yeah, I can't imagine. And it's like, oh, look at that. People are seeing us. That's great. And now they're hacking us. Let's try to do something about it.
And I also love what you say about is your software mission critical or not?
You have to realize that from day one. And if you are a mission critical software, there's other things they have to be aware of. As if you are not a mission critical software, you can be a little bit more laid back in a certain thing. I work in a lot of software products and I repeat that to people all the time.
I'm like, this is not mission critical. If it breaks, not a big deal.
What if they can't see a report for two hours?
But what if they can't receive a payment for two hours?
That's a big deal. Yeah. So it's important. And your strategy should be different depending on what kind of product you are building. For sure. And I don't want to trivialize non-mission critical software products. In most cases, a learning from this for me is probably in the future, if I'm going to bootstrap something, it would not be a mission critical software product.
I think there's a reason that you see a lot of mission critical software products go out and raise tons of VC funding because they need employees dedicated to this stuff like combating spam and fraud and all of that in a way that non-mission critical products often don't. Yeah. I think any route has pros and cons.
In SaaS, I chose the non-mission critical software. So I tell my developers, if we broke something, we broke something. It's okay. Sure. They don't need to look at those reports to keep running their company.
So could you share a very big mistake that you made and how you correct it for?
I mean, I think the obvious one is the niching down on the developer audience. That is probably the biggest one in terms of something that we really thought was well intentioned and in the end, hurt us. We had started to hear about the no-code community and people building with Webflow and tools like that a couple of years prior to paying any attention to that audience. And ultimately, I think that hurt us.
And that is a mistake that's solely on my shoulders too. There were other companies that had far lesser products than Outseta that started targeting the no-code community before we did. And they grew in popularity very, very quickly because they were sort of there in the right market at the right time as it was emerging. And we sort of showed up late.
And even though we showed up late with a better product, this other brand or brands had sort of developed brand awareness within the space that we're still trying to catch up to. So I would say that was probably the biggest one. That's a good share.
And if you could go back in time and meet yourself from five years ago when you started this company, what you would tell yourself?
Yeah, it's a good question. I would say we knew going into Outseta, we went in very eyes wide open that in a lot of ways, Outseta is not a good startup idea. And I say that today as well.
And what do I mean by that?
We are in a super competitive market. We compete with every CRM product and billing system and whatnot. We complete directly with Stripe and companies like that. So super competitive market. We are bootstrapping an incredibly ambitious software product to life. So just in terms of needing to build a huge thing with a very small team, that's a challenge.
We sell to startup founders, bootstrap startups who by their very definition don't have a lot of money and go out of business at an extremely high rate. So long story short, we just picked a really, really difficult battle. And we knew that going in. Part of the reason for that, frankly, was our engineering team was like, we want something big and meaty to work on.
We want to devote legitimately 15 years to building this product.
What's going to hold our attention?
And in retrospect, like boy, oh boy, did we get what we bargained for. We got a difficult battle. There is a lot to be built. Everything certainly our progress has been slower than we had initially hoped. So I think what I would tell myself is it's not like we didn't know these things going in.
But I think you always want to stack the cards in your favor to the extent that you can. And I don't know that at least taking this bootstrapped approach, I would go back and pick something this difficult. It's benefited us now that we're sitting here today that we bootstrapped the company because we have retained control of it and all those sorts of things.
But it was a very painful four or five years to get to this point. And I think if I was going to bootstrap something going forward, I would look for something much smaller where we could get traction a lot more quickly. That's probably not a mission critical software product. That's probably the conversation I would have with myself five years ago.
Would you listen to yourself?
Or would you think, yeah, it's a good question. I think I feel this way to this day, too, maybe to a fault. Ultimately my reason for choosing to work on Outseta, frankly, was not the problem space or the product vision or anything like that. It was my two co-founders.
And I sort of looked at them and said, I don't know that I'll ever have the opportunity to work with two engineers of this caliber. I'm going to work with them because I know whatever we build, they're going to build something great. And that has certainly proved itself to be true. I think I was right in that sense.
But I also think I was maybe a little short sighted and the market and the product vision matter more than I necessarily thought they did or more than I gave them credit for it at that point in time.
So yeah, I think I would probably, I hope I would hear myself out. But I think my intentions in terms of the team that I selected were spot on. For sure. Thanks for sharing.
And so how does the company look like today?
I don't know how publicly you are with like how many customers you have or what's the revenue look like and what's the future look like for you guys?
Yeah, it's a good question. We don't share revenue publicly, but we're a six year old business. We're bootstrapped, we're profitable. We're not at a million dollars a year in revenue yet, but we're quite close. That's generally what we share on that front. What the company looks like in the future is a really interesting topic on two dimensions, I think.
So the first one is today Outseta is this tech stack agnostic product and a big part of our ethos is whether you're building a SaaS product or an online community or a membership site, whatever it is you're building, you can pick which tools you use to deliver your product or to deliver your content.
You can use any website builder, any development framework, any online community platform and Outseta integrates with those and gives you sort of this engine for running your business. That has served us well in a lot of ways.
That is certainly what we set out to build, but there's no denying that it's easier these days for a website builder or whatever it might be to integrate payments and email and the type of tools that we offer than it was previously. And we've seen this within all the complementary technologies that are integrated with Outseta. So when we launched, we launched Outseta largely because Stripe billing didn't exist at the time.
Stripe billing exists today. Webflow was really what drove our initial growth. At the time, they didn't offer membership payments and authentication tools. They offer those sorts of tools now. Circle initially was very important to our growth because they needed a way to monetize a Circle community. They've since launched payments.
So a big kind of outstanding question for us is, does the current product strategy continue to benefit us and is it something sustainable long term or do we need to deliver some sort of front end?
It could be a website builder. It could be a platform to offer courses and community. It could be a lot of different things, but some means of building an actual product in addition to sort of this engine that we offer today. That is a big outstanding question. As we sit here, I don't know the answer to it, but it's something that we're discussing internally.
So I'd say that is kind of a big unknown for us at the moment.
The other thing of interest, I guess, is like, what does an ideal outcome look like?
We are six years into building this. We said going in very specifically, we're going to work on this for 15 years almost no matter what. So I've got nine more years of working on this thing and I can't tell you where we'll end up revenue wise, but I have a pretty high degree of conviction.
If we work on this thing for nine more years, we're going to end up in a really good place. That's kind of a finger in the wind, but that's how I feel about it nonetheless. The other thing I would say point blank though is we don't have intentions of building a billion dollar company or anything like that. Certainly I want Outsetted to be a runaway financial success.
I'll take all the success we can have. But if we got to a point where this is a $10 million a year business supporting 20 employees, I would be absolutely thrilled with that. For sure. And another thing, if you're not raising money, you don't need a billion dollars company because the founders of a billion dollar company, they end up with 3% of the company and then they take $10 million, $50 million home.
So if you have a company that's a lot smaller, you might take the same amount of money of a founder to build a billion dollar company and it's just less risky this way. That's how I see it.
Jeff, thank you very much for your time today. I love talking to you and learning so much with you.
The last question I'd like to ask you is what book do you recommend for SaaS founders?
Ooh, good one.
Can I give you three?
Sure. I'll give you three really quickly. One is very standard. The other two are probably more abnormal. The first one is just The Lean Startup by Eric Rice. I know everybody's kind of heard of that book, but I still think the fundamental concepts around building an MVP and doing as little effort as possible to validate your idea and start to get some traction and all those things that that book espouses.
If you haven't read it, I have a hard time saying there's another book that's going to benefit you as much. Outside of that, there's two that I'd give you. One is called Reinventing Organizations. That's by a guy named Frederick Lalu. That talks a lot about the organizational model that I discussed where there's no hierarchy and everybody's paid similarly and all that kind of stuff.
That book for me just opened my eyes to every business and particularly in tech. They all operate the same way. There's so little innovation around how we actually build companies. It's kind of staggering.
That book opened my eyes to you can build your company absolutely any way that you want to and there's probably lots of interesting ways that might actually make you more successful than just saying this is the Silicon Valley way of building companies. That's the second one. Then the third one is called Life Profitability. That's by a guy named Adi Panar.
That book is really, I don't want to say focused on mental health, but it's more interesting to founders as they look at how their entrepreneurial journey is affecting them as people. The basic premise of the book is if you're a startup founder, you understand financial accounting. You know how much money is coming in and out of your bank accounts and that's how you measure the success of the business.
Life Profitability makes a case for looking into your life as you're going through your entrepreneurial journey. The core idea is people become entrepreneurs because they want to benefit their life in some way. They want to enrich their life in some way.
Yet, if you look at startup founders, they are as a population as a whole incredibly stressed out, working long hours, oftentimes not terribly happy in their personal lives. The book basically says you need to do the same sort of accounting that you do from a financial perspective with this business.
Is your entrepreneurial journey actually enriching your life and making you happy and making things better or not?
It's just a case for measuring success by means other than just monetary success that I think is really important. That's awesome. That's one of the favorite parts of the show for me because I always get to learn about new books and then I pick them up and I read. I'm a big believer of real wealth is optionality. For sure. Having the option to do what you want to do.
So I haven't read this final book that you talk about. I'm definitely picking up the other two I did read. So but those are great books.
Again, thank you very much for your time today. We got to learn a lot from you.
Yeah, that was fun.
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