Episode Transcript
Speaker 0 00:08 Welcome to the rogue startups podcast where two startup founders are sharing lessons learned and pitfalls to avoid in their online businesses. And now here's Dave and Craig <inaudible>.
Speaker 1 00:20 All right. Welcome to another episode of rogue startups. One 96. Craig, how you doing this week? I'm doing good, man. Doing good. How are you? I am excellent. We hit an important milestone yesterday with recapture. Yes. Not enough. Oh, this is an Oh boy. So we processed, or I should say we recovered our $90 million on recapture yesterday. Wow. No way. Yeah, that's amazing. And when I took over the platform, it was, you know, we had recovered somewhere in the neighborhood of like 50 something, maybe the high forties. Um, so yeah, this is significant. This is pretty significant. Uh, I'm really excited. I'm super excited about that. We're going into black Friday, which means the rate is gonna increase here for the next few weeks. So I'd say with that, there's a solid chance I might hit 100 million before the end of the year. If I don't, it'll be like early January, mid January when we do hit it. But yeah, I mean this is pretty, pretty significant recovery. $90 million for customers. That's no small amount of change.
Speaker 2 01:32 That's incredible man. I love the like direct relation of value that you have for your customers. Like you can show them we recovered this much for you. Here it is, you know, like in your face. Um,
Speaker 1 01:45 yeah, yeah. I mean that direct attribution where we can Mark exact cards to say, Hey, we sent these people email they bought from you. Good to go. Yeah. Pitching. Yeah, yeah, yeah. That, I mean, having that direct correlation is really awesome. It's really awesome. I saw, I love seeing people be successful with the service here. It definitely gives me a warm fuzzy feeling inside
Speaker 2 02:10 and in, in like black Friday. What kind of volume do you typically see, like relative to a, uh, an average period? Like, is it a hundred times at five times? Like what, what kind of scale you're looking at in terms of like,
Speaker 1 02:23 yeah, so it, you know, last year I wasn't, I wasn't doing a great job of tracking all of the daily volume and stuff like that. So this year I have things in place that are going to track it a little more closely. Uh, I was watching the numbers in a very rough sense and it seemed like we were doing about three to four times normal volume, but this varies wildly per store. So some stores are running like a big black Friday promotion, so they might like five X their volume and then there might be somebody who is only two X in their volume. You know, it, it very much depends on who's selling and what kind of deals they're offering. And you know, are they doing heavy email marketing? Are they relying on Facebook traffic or are they like a really new store and they're just sort of depending on ancillary search traffic or you know, stuff like that. So you know, I mean you can make broad sweeping generalizations, but it is very much a per store phenomena.
Speaker 2 03:21 Nice. Well I would say either way, like it's great that you're on the, on the track you're on and like I'm sure next week will be huge. I'm sure you're anxious and we'll be kind of watching all your metrics. And stuff as the, as black Friday and cyber Monday go on. But
Speaker 1 03:35 yeah, I think the term you're looking for is nervous as fuck because we, we've made some pretty serious upgrades to our infrastructure here in October and we're finishing those up. We're still scarily enough, we're still working on them like this week and they're going to be done, they're going to be done in time and that's all great. Some of them, like one of them was where we're basically offloading the, the processing of web hooks from Shopify. So we, we've had a couple of times where we just got overwhelmed by garbage carts where we're not really sure exactly if these are crawlers or robots or whatever. And they came in and they'd be like adding 100,000 of an item and you're like, wait a minute, that doesn't even make sense. So that kind of garbage traffic would actually, it took down our entire front end for a few minutes, a couple of times.
Speaker 1 04:28 And I was like, what? So we found ways to work around that. But it was like, all right, if we get this kind of load, I don't want it taking down the entire front end. Like that's bad. It's extremely bad, especially when you have like five nodes on the front end and your Lastic load balance or you should be able to withstand this. And it wouldn't matter how many nodes we threw at it, we would still get this problem one way or the other. And that was sort of the rub of this. So we offloaded that processing into a backend. So we just queue all this stuff up and we slowly drain it out as we get to it. And you know, we've just put all of that in place. We've got a total of nine servers now that are doing this, five in the front, four in the back.
Speaker 1 05:07 And then another one that you know has been the same one that we've done to do email tracking and stuff like that. So we've got this fairly robust infrastructure in here. And you know, I wanted to have like a couple of weeks of quiet time to really sorta suss out the stuff. It didn't really work out that way. So I'm hoping that we don't run into any major glitches, but you know, Mike's was solid developer and he tests things pretty well. And when we've had issues, they've been really minor. So, you know, knock on wood, I think we're okay for, for next week. But yeah, I mean I'm kinda, I'm clenching a little bit. If I would be, I'd be lying if I said anything else.
Speaker 2 05:48 How has the, uh, how has the search for a new developer going?
Speaker 1 05:51 We've had several candidates. A couple of them just weren't senior enough. One of them flaked on me and we've got one guy that's looking pretty good. And then another guy that looks like he might be good on paper anyway. And we've got an interview with him next week. And I think after that we're making a decision. Nice. I like it. That's pretty quick. Yeah. So, uh, we're using a new service on this one and they've been pretty solid. So, you know, I'll, I'll, I'll give him a shout out here. It's called upstack, you know, trying to, uh, get a little bit of brand rub off from Upwork, I'm guessing. But, uh, these guys upstack that CEO, they, they source basically it's kind of like top towel for Upwork or kind of, well, it's not even for Upwork. That's really there. It's like Upwork for top town now.
Speaker 1 06:42 I can't even, I can't even describe that properly. It's like a, uh, like a procurement service. Well, it's, it is Def or curation services. It's a curated developer service. They really only handle senior developers. You know, you gotta be looking for somebody in the 55 to 75 an hour, but they source them all over the world. So they've got a strong presence in Eastern Europe, Latin and South America as well as the U S a. And I think that they have some others that are in Asia as well, but they, they made it sound like those first three were their primary areas where they've really done recruiting. And I have a feeling that they have a presence, like a direct presence in Eastern Europe, uh, based on the people that I've interacted with so far. So they're probably sourcing people like locally, directly in that case, which is great.
Speaker 1 07:32 I mean if you've got local connections for that and you can leverage it, that's awesome. And so, so far the people that we've been interviewing here, they're very solid and they're all comfortable with remote work. They've had great English skills. They seem like they have, you know, they, they are pretty well vetted. Like we're not, I'm not getting garbage developers that are coming through and they're not sending me like nice 30 of 'em either it's three, you know, and if you don't like those three, they'll give you two more. But you know, it's like it's serious from both their side and your side. And that rate that you pay is like all inclusive. You don't have to pay extra fees, payment processing crap or worry about what the cut is. They, you pay them, they pay the developer. You don't really know what's going on, what kind of a cut the developer gets.
Speaker 1 08:14 But I presume if you're senior talent, you're not going to be putting up with a lot of shit. So it must be a fair cut, you know? So they take a piece every month or whatever, or it's a one time kind of transaction deal. No, they, it's a, it's an every month sort of thing. So as long as you've hired them, they manage the payment of the developer and you pay them. Yeah. So I don't know, like if you're working with somebody longterm and you're like, all right, I don't want to pay you anymore, I'm gonna pay them directly, then they could leave the platform and presumably you could say, I'm going to stop paying you a and then work around that. But you know, I haven't gotten there yet. And you know, I mean I'm not, I'm not going to short these guys for their service. They are providing a valuable service. It's clear that they've spent some time vetting these guys. So yeah, it seems like it's working out. All right. So for those that are looking up there and you're tired of Upwork or you can't find somebody on your own, try upstack.com they might be able to help. Nice.
Speaker 2 09:10 I like it. I love the concept. I love the concept. That's cool.
Speaker 1 09:13 <inaudible> I've tried a couple of other services like that in the past, but you know like the pool of talent that they were drawing from wasn't the right, it wasn't the right group for what I was looking for. Like in one case I was going with blue coding and we were trying to source WordPress developers and they just didn't have any, they didn't have a lot of people. Like the best they could get me was a PHP developer, which is, you know, it's like 60 it's nuts. Same. It's like 60% they're like the other 40% is all WordPress and that's, that's a big 40% to be missing. Let me tell ya. Yeah. So, I mean, you know, nothing against Bluecoat and I know others in our circle have had great success with blue coating, but it just didn't work for me because I was looking for something that they didn't have. So you know, it is what it is. It's fine. Yeah. Yeah. Cool. How about you ma'am?
Speaker 2 09:55 Yeah, things are good. Um, we are pushing out a big update, uh, to, to the web app, to the Casto SAP. By the time this goes out, uh, it will be live, which is cool. It's like a big kind of onboarding UX update, which is really cool. I've been working on it for awhile and it's, you know, it's typical kind of thing where like when you redo kind of the core part of an existing app with a bunch of users, it gets really complicated. So there's been a lot of considerations of how do we handle older users, how do we migrate them to this new kind of way we're doing things. And so we'd been very cautious. Uh, we've been integrating a lot of kind of unit and kind of functional testing into the app as part of this roll out, which is cool cause it gives us like more confidence to make these changes and that we won't break people's podcasts, which is nice.
Speaker 2 10:39 So it's been a, it's been a learning experience. I think, you know, myself and our two developers are, you know, ready to get this done because we've been working on it for awhile, but we've learned a lot about like how we, how we change really core things in the app and going forward we'll need to keep doing this to, to evolve the product. So it's been cool to, to kind of learn this stuff through this kind of project. Yeah. And then there's some stuff that I can't talk about yet, but is kind of pertinent to what we're talking about today. Like for our, uh, our kind of main topic, which is like, um, when and why, you know, we should kind of move horizontally in the podcasting world. We're looking at doing some things with cast, which would open us up to kind of new parts of the market and doing different things with podcasters and offering different solutions.
Speaker 2 11:25 And so it's, uh, it's been a really kind of big mental exercise to say like, okay, if we're going to do this, how and how do we position it? How does this fit in with the rest of like the image that we have for our brand and what we were trying to do. So it's been really cool. It's been a lot of fun talking with like the folks on our team and the rest of like the founders and the tiny seed cohort, uh, and Rob and INR and Tracy directly about like, you know, Hey, what does this look like? Or how, you know, how can we best kind of set ourselves up for success us because it, it could be a pretty big shift kind of in, I don't want to say like the mission of the company, but because that sounds kind of cheesy, but like, you know, if we do some of these things we're looking at, it would change. Yeah. The fabric of, of like kind of what the business is, which is cool. Um, but he's also a little scary, so
Speaker 1 12:11 change the fabric of space time.
Speaker 2 12:17 Um, yeah. So that's, it's been really cool and we're kind of really getting into it now, so I probably can talk about it on the next episode. Yeah, it's a really cool exercise to go through even though most of it's been kind of just like a mental exercise and internal stuff up until now. Uh, it's been really cool to go through because it's really, really, really promising if it goes well. So.
Speaker 1 12:35 Very cool. Very cool. That's exciting stuff. Yeah.
Speaker 2 12:38 Yeah. The other thing is, I haven't talked about this much, but with podcast motor, we hired a sales rep a while back and I would say like to anybody running a, an agency or a productized service business, if you haven't looked at doing this, it has been a godsend for me personally because up until three or four months ago, I was doing all the sales calls for podcast motor. So, you know, six or eight times a week I'd be on a 30 minute call with somebody and it just took so much time out of my, out of my week. And you know, living here in Europe, like that was always in the evenings. And so it just killed like family time and stuff. And so Chris post has is our sales guy for podcast motor and he's killing it and he's doing great and it's really kind of like revitalized a lot of that business cause he comes in and like, you know, typical sales guy just wants to go sell a bunch of shit. And so that's cool. Um, and so like, it makes us kind of challenge some of our assumptions there of like, you know, what good customers are and how we onboard people and stuff. Because like I think if you organically acquire customers, they're always like the best customers. And if you are acquiring customers through like more intentional sales, I'll say, uh, you have a chance of like getting customers that aren't exactly right. Um, and so it's been cool because we're like, we've navigated it pretty well, but it's been a learning experience. Yeah.
Speaker 1 13:57 So I'm curious, and I don't know if you can't talk about it, you can't talk about it, but how are you, I don't want to say the word reigning in, but I can't think of a better way to do this. Cause you know, you've got basically an unrestricted salesperson and they're like out there, sell, sell, sell, sell, sell. Yeah. Which is exactly what you want, right? Like that's you do, but you want to make sure that they're selling to the right people. So how are you making sure that he's selling to the right people?
Speaker 2 14:21 Yeah. So, uh, we're very fortunate. He is a very good salesperson. He's also a former, uh, like marketing agency owner. So he gets like the business side of it. Um, and he's like, got a really good balance of like, okay, he ran a marketing agency before. Um, and so he knows what bad customers look like. Um, and is, is really reasonable from that perspective, kind of inherently. Um, so, so we don't have a lot of that. Like, like I think other people that I've talked to in these similar spaces have had where like you get a sales guy and he brings just all bad customers. Like he's, Chris is really sensitive to this dynamic for all of us who kind of have to manage things after the customer gets in. But I think, I think one of it is like if the customer kind of fails and we have to refund them, obviously he doesn't get paid.
Speaker 2 15:06 So he's gone through like a bunch of work to get this person sold and onboarded and stuff like that. And then he doesn't get paid if the customer doesn't work out. And we have, you know, kind of the term is like clawback optionality into like subsequent months with him. Like if somebody comes in and doesn't work out, he doesn't get that commission from, if, you know, if we have to refund them later on. But, but really like I think it just is a cultural thing and that's really soft thing to say. But it really has been, it's been like he understands that he needs to bring in good customers for us to be successful and not for it to be more of a pain in the ass then than having less customers.
Speaker 1 15:41 Okay. All right. That makes sense. I mean, yeah, I mean it is, it's squishy, right? So yeah, you know, that's, that makes it kind of hard to reproduce in a way because then you have to find somebody else who quote gets the culture. But yeah, I mean, okay, that's important. That's good.
Speaker 2 15:55 I'll tell you like talking about culture, man, I think that the more I talk to really successful people, and we talked about this at MicroComp Europe a little bit with Kevin McArdle. I think it's at a, at a point and like I think at <inaudible> and at podcast motor we're, we're at this point where like once you're paying the bills and you have people handling like the majority of like the day in day out stuff for the business, it's all about getting good people and like you need good people to get there but you can kind of like scrap and claw your way to get there even by yourself. If you're a developer you can be kind of like full-stack business person. But like when you get to this point I think, and I mean Kevin McArdle is surely there, they're a team of like 50 people or something like that.
Speaker 2 16:34 But it's all about bringing in good people that just come in and work and fit in the system and not create extra work for you. You know? And like we see a little bit of this at Castillo's where like we have a really good team and everybody fits really well. But I know that if we didn't it would be really obvious and it would be painful. So that's something I'm really conscious of. Like as we're, you know, looking to, to grow into next year we'll, we'll add another person probably. And like that's a, that's a big decision cause it's working really well now and if we do something to break that, it would be horrible. So
Speaker 1 17:06 yeah. Yeah. I call that the friction factor. How much friction are they adding on the team? And when you bring somebody new on, I mean there's always friction, right? Cause they have to, they have to find their way. You have to determine where their strengths and weaknesses are they working out? Can you know, are they trainable? Do they get the stuff that you're trying to get them to get? That almost didn't make sense, but all right. But yes, I mean that friction factor. So in my experience, the ones that are the strongest members of the team have the lowest amount of friction. And you know, it's very much a continuum. It's not a step function. There's not like some magic level of friction where it just goes up and then they suck. It's like middle amount of friction. They're kind of a middling person, high of friction.
Speaker 1 17:49 They're usually a shitty team member of some kind. Like they're just not doing their work. They don't know how to perform things. They're not communicating well, whatever it is. It's like the, that friction factor really makes a huge difference. Yeah. Um, and sometimes they can be, they, they can appear to be low friction but then they generate other problems down the line, which I still factor into the friction thing. Like if they're not getting their shit done, if they're not getting things done the way you want them to get done, if they're not making the stuff happen that you expect, even though they might not be like, you know, having communication problems with you, they say that they're doing all these things, they seem to be easy to work with. If they're not getting that stuff done, that's another factor in the friction. But yeah, anyway, that's not, that's not the topic of today here. So we can talk about that a different time.
Speaker 2 18:34 I will say two, two things on that. One is that there is good friction and we are trying to promote more of this within the business of like challenging each other in a, in a healthy and respectful way. Because I think it's really dangerous if you don't do any of that. And I'm trying to read radical candor, this book right now to kind of be the, be the leader of like doing this in a respectful and productive way because I think that's really good. And somebody I see doing this really well is Jordan, Jordan golf from card hook. Like I think he just inherently is kind of this person who naturally kind of challenges a lot of things and that probably spills over into the rest of the business. So we're trying to do some more of that to just make, like to gain from the experiences and the perspectives of everybody on the team, let them be comfortable sharing that everywhere and all the time, um, in a like positive way. So. Totally agree. Yeah. So this is a huge tangent from kind of what were like the main, the main topic, uh, for it today. Yeah. Which is, which is kind of like this horizontal expansion into, into your niche, right?
Speaker 1 19:33 Yeah. Yeah. So what prompted this discussion that we wanted to have today was MailChimp just announced that they are now doing like a website builder and they've already added on like a landing page builder earlier this year. So MailChimp is not just a an email marketing service anymore. They are very much trying to expand horizontally to consume all these needs that their customers have to build. Businesses, build websites. And I have to say, I don't know that it's 100% good luck on MailChimp yet. Like it definitely leaves me scratching my head a little bit and it also makes me wonder, based on the tools that they've had so far, like their workflow automation and things like that, are they really going to create a solution that is truly best of breed or is this whole thing just generating lock in for their customers? You know?
Speaker 2 20:32 Yeah. So I think that like we have some examples that we noted down of, of people that have done this well and are doing this well and people that are, that are not doing this well or haven't done this well in the past. I think it's worth maybe like going through those to kind of jar our memory <inaudible> and the folks that are listening. There's their kind of perspective on kind of what we're talking about and then we can talk about some like lessons maybe that we've learned and things that we, we all think about as we're maybe looking to do this. Um, so, you know, I think that a couple of the bad examples maybe that we've seen, so, so I think, you know, Squarespace got into the email marketing space a couple of years ago and that I don't think was a really good move, um, from everybody that I have. Yeah.
Speaker 1 21:18 No, nobody, nobody sits there when they're having email marketing discussions and says, Hey, have you tried Squarespace? Yeah. Like it just, it never comes up. Like, if you ask what a square Squarespace do, everybody will tell you, Oh, they're website people and the email marketing thing just doesn't even come up. So I, you know, obviously it's not a solution that people are like, wow, this works great or that B that it's, you know, wow, I can build websites and send email to my customers. This is awesome. Like nobody's saying that I'm, I'm not, you know that people talk about Squarespace as the cheap place to build eCommerce sites and websites. So you know, because you are now in that low cost space, then your email marketing kind of has that, we'll call it the negative halo effect, right? You're the cheap, you're the cheap website builders.
Speaker 1 22:08 So now you're also the cheap email marketer, but you're also competing against people like MailChimp. That's free up to 2000 contacts. So, you know, people are certainly in the Shopify space. I can speak to that pretty strongly. And uh, to WordPress to a lesser extent, if people are looking for an email marketing solution, MailChimp is kind of at top of mind because it's free. They have that 2000 customer cap. It's great to get started. There's lots of connectors and integrations in those spaces. So if you want to get in there you can do it. You know Shopify and MailChimp had the falling out recently because of the email marketing and it turns out because Shopify is going into the email marketing space. Right,
Speaker 2 22:47 right. Yeah. And that's another kind of like negative example, right? Like negative,
Speaker 1 22:52 I'm going to call it negative at this point, cause it's not Shopify is wheel house. But at the same time, you know, Shopify has already done this with abandoned carts. Guess where my, all my growth has come from this year in e-commerce, it's been Shopify on abandoned cart. So their abandoned cart solution is not intended to be the end all be all. They very much have a, a good enough 80% not, not even 80% it's just how can we get people onboarded onto these things quickly so they'll, you know, consume their ecosystem and do that. They did it with abandoned carts, they're doing it with email marketing. But again, if you're doing anything serious or you want to do, you know, I'm not even going to call this advanced stuff cause segmenting to me is table stakes. But Shopify doesn't support segmenting like in the same way that you can do with bigger, better solutions, recapture has more segmenting options than Shopify email marketing.
Speaker 1 23:45 And I guarantee you that their development staff that went into this is many times the size of what we have. So you know, they, they clearly could have gone farther with this, but chose not to. Yeah. So, but you know that, that's another example of just they're trying to expand themselves horizontally. In their case, you know, the jury is out and I don't know what this means, if it's like all the other things that they've added into the platform, like reviews or abandoned carts or whatever. It's not about trying to lock vendors in. It's trying to get people up to speed. But, you know, when I'm looking at Squarespace or I'm looking at mail champ, it feels more like the lock-in part than it does trying to actually make people successful in that <inaudible>.
Speaker 2 24:28 Yeah, I agree. Yeah, I think it's, it's lock in. It's probably something like churn prevention, right? Is like, yeah, this is built in the platform right now. You don't have to go look for another third party tool. We offered this thing. Um, is I think to an extent, what I can imagine their product people are saying is like, yep, we do that. Yup, we do that. Is it the best? No, but we do it, you know, it again checks that box, you know,
Speaker 1 24:49 checkbox marketing. Yeah. I'd think that's what Shopify is doing. It's about checkbox marketing, right? So they're just basically saying, Hey, you know, we've got all these features. If you want to start your store with us, you don't have to do a lot to get there. But then once you get here, you can sort of upgrade things piecemeal as you want. But that's not the case, you know, of Squarespace per se. Because I think these features, and I haven't looked to Squarespace's pricing. I used to be that this was an add on you had to pay extra for. Maybe they've got it on their lowest platforms now, but you had to like upgrade to it. You know, it was a, it was an upgrade feature. So for them it was about revenue expansion.
Speaker 2 25:24 Yeah. So like, I think that one of the things that ms <inaudible> makes me think of is like, if you can do this and be a best in class tool, then it's okay. If you are going to do this and be a a below average tool, then I think the better route is to integrate your way there. Uh, and that's like a much, and a lot of ways, a much easier, a much quicker solution to this. Uh, and this is something we're doing at <inaudible> is we're integrating with a product that would take us months to build, uh, and we're gonna integrate with these people to do some revenue sharing. And like the, the solution is done for a Mar customer's perspective. It fits right into the cast to stash board. Everything's beautiful, but we don't have to go build this. The downside is we don't get all of the upside from a revenue perspective,
Speaker 1 26:08 which I'm cool with. Yeah. And you don't control that aspect of your platform either. But then again, you also don't have to sit there and put the engineering resources in to keep up with the Joneses, so to speak. Yeah. Because if your Squarespace and you're seeing what's going on with email marketing and what MailChimp and drip are doing, I mean, how much engineering resource to Squarespace really have to be able to split between their webs website builder and their email marketing solution mean which one do you think is really going to be getting the lion's share of those resources? It's the website builder, right? Yep. So the email marketing is going to be very much a redheaded stepchild at this point. And you are not going to be seeing that thing, you know, dominate, get the new features, innovate as fast as the other stuff.
Speaker 1 26:54 So, you know, I think it, it can be something where it becomes, you know, more of a boat anchor on your platform. Like here's another example. So groove, the customer support tool, they used to have their own integrated chat. Like they built the damn thing from scratch. And I remember Alex Turnbull specifically saying early on in the days of groove that they thought that this had to be like a super critical feature and the customers were asking for it but they didn't integrate with something like, you know, Intercom or any one of the other live chat platforms that are out there that I'm not remembering the names. Oh, lauric. Yeah, yeah, yeah. Those guys. So they specifically made the choice to do that and then they found, you know, a year or whatever it was down the line that they couldn't continue to put the resources into their support tool and this chat tool to keep up with all the requests on both sides.
Speaker 1 27:49 And so eventually they basically said, fuck this, we got to shut it down. And of course, you know, that pissed off a certain sub segment of customers, but then they turned around and integrated with best of breed solutions and people stop complaining. Yeah, yeah. So it was definitely one of those, you know, they thought they had to do it from the customer perspective. They tried it, it didn't work. They ended up doing the integration thing. Everybody was happier in the end. And now groove is spending a lot less resources on there. Uh, they're, you know, well, they're more focused on the resources. I shouldn't say they're spending less, they're, they're focused on their resources, on their real core competency, right? So MailChimp's core competency is email marketing, but now they're spreading out to website builders and landing pages and all this other stuff. I mean, I get why they're going there, but you know, for a lock-in factor, just to keep your customers on that platform. I mean, that feels a little kind of me, but on the other hand, are they really likely going to be the world class version of the website builder and the world-class version of the landing pages? I mean, there's a lot of people out there that have been doing this a lot longer than they have, and honestly, they've got a lot of catch up to do.
Speaker 2 28:54 You know, the one thing when you're talking about groove, it made me think of HelpScout actually in the, in the opposite way, is that they for a long time had no live chat aspect. And the beacon, the HelpScout beacon was just like a, you know, drop a drop a message on here, we can show you the help docs or whatever. And they integrated with other tools like go Lark and stuff like that. And then they built their own. And I think that this is like a possible way to go. And maybe this is what we're doing at <inaudible> is we're going to integrate with this tool now, get the solution to our customers, understand the market and the need and the best kind of solution here. And then maybe we'll go build it in the future. And I look at this as like a really low risk way of providing a solution to your customers.
Speaker 2 29:33 It's like, okay, we're gonna integrate with this other tool. It fits right into kind of your experience in our app really easily. It's easy to get out and quick and then later on if you, wow, this is like you're saying like a core part of our business. We need to own every aspect of it. We need to own the revenue, uh, and everything you can decide to, to kind of rip that integration out and offer it natively to your customers. So I think that either way is possible, but maybe kind of going back to like what we're both saying I think is like you have to have the best solution out there for your customers and if that means you have to integrate to start with and then build it later or vice versa or whatever, then I think that's like maybe the guiding star of all this. It's like if you can't build the best thing than integrate your way there or just don't do it at all, you know?
Speaker 1 30:13 Yeah. I mean, I think you could argue that help Scouts at what, what's helps sets core competency there about providing support, omnichannel support. Yep. So for them, that's email and chat and uh, and also just, you know, website docs and those are the three core things that, that help scout now offers all of those. And you know, I mean, you can go back and say, well, Dave, that's the same as groove, right? And, yeah, but I mean groove also did this several years ago when they didn't have an engineering team to do that. We'll help Scott's a hell of a lot bigger now. And they've decided to do this much later. And my guess is is that, you know, knowing what I know about Nick and the way that they have figured out what features to add and to help scout as a, you know, a general rule, I'm guessing that they didn't bloat the shit at a beacon.
Speaker 1 31:03 They got the core use case of what people were trying to do with it and added only that functionality in there and built it in a very specific purpose driven way based on what they heard from their pool of HelpScout customers instead of trying to build the ultimate chat tool, which is what I saw the thing from groove kind of turning into. Yup. So yeah, I mean it's obviously your mileage may vary on that sort of thing there, but you know, so the question is, is this horizontal expansion just the inevitable result of running out of market to expand in with your current product line? You know,
Speaker 2 31:41 I think for everybody listening to this podcast, uh, it's not the case for them yet, right? Like MailChimp is so massive and has so many customers, like, yeah, maybe they've saturated of the, the, you know, their corner of the email marketing space and feel like they have to go somewhere else too to get more customers. Um, I know for us like we certainly haven't
Speaker 1 32:02 sell or to up sell to there. Yeah, yeah, yeah.
Speaker 2 32:05 We certainly haven't saturated the podcasting space at Casta us. I mean there's, there's hundreds of thousands of customers we can and should get. So us looking to, to, to move horizontally, you know, maybe isn't the best move in that respect, you know, in the respect of like, if you do this too early for the wrong reasons, you know, it, it can hurt you. And too early is when you haven't really saturated your market and kind of exhausted your marketing efforts to our customers in your original niche that your product was built for and stuff.
Speaker 1 32:33 Yeah. And to be completely fair here. I mean neither of us are MailChimp employees. So we have no insight into exactly what they're actually talking about internally on these conversations. Like what their customers are saying, what are they struggling with, what are the problems that they want to solve, what part of the puzzle is email marketing and how can this fit into a larger picture of what they're trying to do. I mean they could be trying to be just sort of the small business platform, you know, kind of like the way that Stripe is dominating with a lot of things. Like they've got, you know, the, the payment processing is their core stuff but then they've added on Atlas and then you know, they did radar and they did a lot of other things in there to enhance those things. Cause you, if you're doing payment processing, you're going to want to incorporate as a business.
Speaker 1 33:19 So that's what Atlas is for. And you know, they've got new offerings coming out all the time. The tax reconciliation, it makes sense from a business standpoint. You basically, you have an audience, you can make a product and you can sell it to that audience. It remains to be seen whether it's going to be the product that a, that they want or B, really meets their needs and see that, you know, makes them excited. You know, if it's not, if it's not something that they're excited about and that tax reconciliation, people are like, eh, you know, I'll just stick with tax jar or whatever, then you know, that's going to be a thud on the face. But you know, I also think that's one of the things that <inaudible> we're not going to see right away and it's going to take time to resolve, so, yeah.
Speaker 2 34:01 Yeah. Yeah. You know, I think it's funny that maybe, maybe it's, this is like, you see some of these companies do all of these things so well. Right. And Stripe is definitely one of them. Buffer, I think is another, they're like image creation tool. Pablo, they rolled this thing out and it's like amazing, right? It's really good. First time they nailed it. I think Entercom is another good example of like they do these, uh, you know, these several few things. They have kind of a marketing automation suite inside their support tool or if you want to think about it like that. So they are kind of a platform like Stripe is. And so, you know, maybe Dave, it's like if you have the resources and that's like time and money and people and talent to do this really well, then horizontal expansion is a good thing.
Speaker 2 34:42 And I think for most of us that are bootstrapped or nearly bootstrapped, uh, like that's not the case. I mean, we can't just go build a to Z in the podcasting world with the resources that we have. And so, so we're not going to, you know, if we can expand a little horizontally with, without breaking the bank and breaking the company, we will, because I think it is to our advantage and to everyone's advantage to offer as much of the complete solution in your space as you can because it does make your product really sticky. But if you can do it really well and, and not, you know, kind of getting bright the banker or, or lose focus, there's another part.
Speaker 1 35:15 Oh yeah. Oh yeah. It's very easy to go off into the weeds thinking you're building something that your customers want based on a few conversations than it is to understand that, you know, this is a common issue across many if not all of your customers and then build something that meets that need there. I've certainly had people that have approached me in recapture. They're like, Hey, do you do XYZ? And I'm like, <inaudible> could do X, Y, and Z. But yeah. Would anybody else really use it? And so, you know, if I hear it once, I'll kind of hem and haw and say, well, we'll consider it, but if I keep hearing that like two or three times, then you know, sort of make perks up my ears and says, ah, maybe we should be doing that. Yeah. That definitely is a litmus test for me. But anyway,
Speaker 2 35:59 so, uh, yeah, we'd love to hear your, your thoughts on this kind of horizontal expansion in your niche. If anybody has any thoughts, please shoot us a message podcast@roguestartups.com if there is examples kind of good or bad that we, that we didn't come up with or things that that we should all should be thinking about, please let us know. And as always, the ask is if you're enjoying the show, please share it with someone who you think would enjoy it as well. Until next week,
Speaker 0 36:23 thanks for listening to another episode of rogue startups. If you haven't already, head over to iTunes and leave a rating and review for the show for show notes from each episode and a few extra resources to help you along your journey. Head over to rogue startups.com to learn more <inaudible>.
