Episode Transcript
Speaker 0 00:00 Hello and welcome to episode two Oh nine of rogue startups. This episode I have a really cool interview with Danielle Simpson and Arbid call the co founders and couple behind feedback Panda, which they started and in two years grew to 55,000 MRR and sold the business to Kevin McArdle and the team at shore Swift capital. This is a really cool interview, a and one that I've been wanting to do for a long time since Arvid and Danielle and I met at Microcom for Europe and Croatia this last fall because I was really kind of taken with their attendee presentation about really how intentional and disciplined they were about building the business to sell from scratch. And having kind of that exit in mind from the very beginning. And a lot of what they did along the way was informed by kind of that vision they have. And ultimately in just, you know, two and a half years or so.
Speaker 0 00:56 It came true and I think this is a really cool story for a lot of us who, who want to build a business to sell and at least to be able to sell it, whether we have, whether we ultimately do sell it or not I think is a different story. But being able to sell and having that optionality gives us a lot of confidence and a lot of peace of mind. And then we dig into, in the last part of the interview what the reality of that looks like, what, what's selling your business looks like. And it's not all sunshine and rainbows. I think that there's a lot of emotion, uh, maybe some guilt and regret that goes into this, but, but there's also a ton of learning that goes into the building and the selling process. And then afterwards, a lot of us have the ability to kind of take a different perspective on things and look and say, okay, next time I'm going to build a business like this or serve this type of customer in this niche or with these certain characteristics. So this is a really great conversation I think with Danielle and Arvid and it certainly is a founding team that I look up to a lot and can't wait to see what they do next. So with that, here's my conversation with Arvid and Danielle, formerly of feedback Panda.
Speaker 1 02:11 Welcome to the rogue startups podcast. We're two startup founders are sharing lessons learned and pitfalls to avoid in their online businesses. And now here's Dave and Craig.
Speaker 0 02:23 One of the things about your talk from MicroComp Europe that was so interesting to me is how everything seemed really intentional. Everything you did didn't, and I think it was kind of the premise of your talk was that you built the business with a lot of thought. Well, a lot of like forethought about like if we do this then in the future this thing will happen and that will allow us to whatever kind of be successful and ultimately led to to selling the business to share Swift. Am I right? The end thinking that like you guys spent a lot of time thinking and planning ahead of time and not just kind of shooting from the hip like I do. Well, I definitely was reading a lot on entrepreneurship
Speaker 2 03:00 and building startups in the, in the beginning, like before we even founded the company and one of the books that I read that really made a big difference in how I approached us and how we finally approached everything in the company I think was built to sell by John Warrillow because the idea of building a business that you can sell at any point, even though you don't have to, it makes a lot of sense. You build a business that runs without you, that can run without your, or easily runs without much of your work. So it's highly automated. It's you're replaceable. That's perfect. Even if you don't want to sell the business. So from the beginning we put a lot of thought into every process, um, how we could automate it away, how we could take this and turn this into something that works for us instead of us working for it. And if you do that often enough in the business, then everything in the business kind of gets you closer to the goal of building a sellable business. Again, don't have to sell it right. You can still keep growing it. You can keep receiving value, but monetary and growth and reputation, all these kinds of things from the business. But it definitely runs much better if you don't have to do as much as if you had to, to work on it every waking second of your life.
Speaker 0 04:14 Does it affect your ability to grow quickly or did it have, I guess the answer is no cause you grew really quickly. Um, but, but in my mind, like the time to, to build documentation and SLPs and all this kind of stuff just takes away from time doing things in the business. Is that shortsighted of me?
Speaker 2 04:34 Yeah. In a way. It's true. Obviously any kind of activity that is not dealing with the day to day operations might feel like it's taking time away from what you could be doing. But then again, you're actually taking time when you think about this, like you're taking time away from the now. Sure. But you're enabling your future self to have so much more time for other things. Right? It's, it's, it's pretty much an investment and non-monetary investment into your own business to just like we did this as part of a process as well. Like whenever we would have a customer talk to us through our customer service channels and they would ask a question we hadn't answered before, we would come up with the answer and turn the answer into a knowledge base article, which would then be automate automatically suggested the next time somebody else, like any other customer in the future with asset kind of question.
Speaker 2 05:24 So by taking those two minutes, we saved ourselves essentially hours of time in the future that we could then spend on actually building our business and continuing to grow it. So I guess no, because if you take a little bit of time every day, I think, and I struggled with this in my personal life, it's like doing the dishes right after cooking. Right? Talking a bit about that kind of stuff. I used to not do that and I still struggled with it, but it's obviously a much smarter strategy to do a little bit every single day. Then having to do the one bulky thing four hours once a week and they, right. Yeah, that's, yeah, that's when you build a business with your partner, you're learning a couple of things that are transferable to the personal life. So it's just lending a little bit of time on the seemingly mundane turn out to be. So that whole thing turns out to be very, very
Speaker 0 06:17 helpful in the future. So, so Danielle, like practically what are like, what were some of the biggest kind of bang for your buck? Like biggest ROI things that you did, like Ave was saying like on a, on a daily basis, these little things that then compounded into big time or kind of your investment into the business later on.
Speaker 3 06:36 I think definitely it was every customer service interaction that we had, both on the knowledge base, uh, side of things which I've already touched on, you know, turning a conversation that we had more than once. Okay. Now that we've had this conversation more than once, it really needs to be a self serve option where people can, can find the answers to themselves and not need to take our time to have the conversation. But also, uh, I noticed from a marketing side that, um, we could really turn our customers into amplifiers for our, our business. So, um, that involved creating a really nice story around the foundation of feedback Panda, making it relatable. Um, having the teachers see themselves in my story and, uh, want to share that as a success back into the community. So a lot of our marketing was also something that we kind of made more efficient. Instead of trying to have this communication strategy where we were always generating our own content, we would take content, you know, we would make those conversations that we had with customers count or show them what was happening in our story and make it something that they could share and then they would share on all of their channels and it would scale so much better than if we, you know, she had it just on our own social media pages or on our own blog.
Speaker 2 08:12 Now we really tried to avoid like shooting in the dark, right? We didn't want to just test random things and see if they kind of worked within a couple months. We just were not willing to experiment on that kind of scale because we cared that every single thing we did really had an impact in the community and in the tribe that that was the teacher community that we were serving. So there wasn't a lot of like random growth hacks that we tried. Um, just to see if we could squeeze out another percent or two. We really made sure we had a coherent story and behavior that we were showing towards our customers because we cared about them if they weren't just a number that we were trying to get up trying to increase like some percentage here or there, we really wanted to impact their lives and that was the easiest I guess by doing actual like careful deliberation on the content that we would create on the communication strategy that we had for every single conversation we had.
Speaker 2 09:08 We were making sure that the customer left in a better place. And I think it's not about scale at that point. Particularly not if you're trying to build a sustainable, slow growing startup, right? You don't need to squeeze out 10% growth month over month. It's great and it happened to us, but that doesn't need to happen to get to a sizable customer base because I, I guess that if we had done all these growth X, we could have had 20% growth month over month. So yeah, great. But we still build a great company with 10 all right? So you can build a great company, but five kind of depends on your churn I guess, but still, um, you, you can, you can build a really nice community off your customers buy, but just carefully speaking to them, right? They're not just speaking about them or using them as some sort of number somewhere.
Speaker 2 09:59 You really want to make sure that you interact with them on a relational level because that's what it is, right? We are in the membership economy. People don't buy a thing and then they walk away. They buy your relationship. They buy into a relationship with you over a long, long period of time. Sometimes you have lifetime values in three digits, four digits, four customers. At this point. It's not just the person that comes to a store, buys a bit of toothpaste for $3 and then they're out again forever. That's not the kind of kind of customer you're looking at. You're looking at people that you consistently build a relationship with. And for that you have to be conscious of all these little things and care about each customer individually.
Speaker 0 10:37 Do you think that, uh, the kind of like enabling brand evangelists or whatever you want to call it, that, that I think you guys did really well is, is transferrable to most markets and that's something most people like listening to this podcast could do?
Speaker 3 10:53 I definitely think that, I think customer interaction is sometimes overlooked as something that doesn't scale. Like really listening to your customers and making them feel heard is something that will always generate value to your company. So I think that is something that would transfer to any kind of, um, company where you, yeah, you have value by just talking to your customers. But yeah, I think what, what we did was really care about our customers and you know, that's a great strategy to actually really care about those interactions that you have.
Speaker 2 11:37 Yeah, I think it's definitely applicable and and almost to every market because I feel like we've, I've, I've noticed that our customers were highly tribal. A tribal community is that's not just teachers. Like there are tribes all over the place, there are tribes and any kind of industry and you probably wouldn't even imagine them to be there. I was looking in this for an article I've written just a couple of weeks ago and there, there is a really, really tight community of plumbers and pipe fitters in New Jersey. They have a forum, they have this, this really strong bond between people. They're exchanging like tips on how to do plumbing and how to be efficient and how to get people's pets out of their way without scaring away the customers. This whole vibrant community that was, that I just randomly found by looking into some industry that I had no idea of how it worked.
Speaker 2 12:30 Just trying to see if I could find a vibrant community to see if there was a tribe. And that was one in a place where I did not really expect that plumbers and in a state. So if plumbers in New Jersey and online teachers in I guess Southern, the Southern States of the U S if they can have these kinds of tribal communities, they are anywhere, they're everywhere, right? You can find them anywhere you want to look. You just need to kind of see where the water cooler is, where they hang out both on a formal level like where do their bosses want them to congregate. This stay like a SharePoint or something or on the informal level is their Facebook group or it's what a community or an Instagram and kind of community around them. There will always be tribes and any tribe has this kind of strong bond between members. They all follow the same leaders in their tribe. They're all connected, interconnected heavily and they all share the same goals and they're interested in the same stuff so you can find this in any community. You just really have to look for it.
Speaker 0 13:28 Like kind of on a practical level, how much of the, the support that you gave your customers was strategic and contents style support is to instead of like technical or like conventional customer support, like how much were you saying like, Hey, enable for you to be successful, you ought to think about doing this and this and this, not to achieve this thing in the tool. Click this button and do that. You know, like I'm saying like when we think about, so support or success, a lot of it is consulting almost. Did, did y'all find the same thing?
Speaker 3 14:01 I would say the thing about our customers is they were quite similar in their technical ability. So they were kind of pre-filtered, uh, customers that they were already working online. So they had relatively, you know, good enough technical skills to, to find their way through the application. The biggest consulting we needed to do was to get them to the moment of realizing how we can help them. And this was streamlined because everybody had the same problem. And the problem we were solving was very specific. We were very careful about how we built the product, not to over-serve, uh, you know, all of the, the things we could offer an online teacher. What we wanted to do was to solve two problems, help them build relationships with their students. And the second one is to help them write feedback based on a text templates. So that was, you know, 50% of of our customer service was showing them that that's what we do. And then of course there was the, you know, click here and find this button. But we, we tried to get rid of all of those kinds of interactions through, you know, onboarding videos and uh, the self serve knowledge base
Speaker 2 15:27 that we never really did much in terms of consulting for additional success. Right. They were already pretty clear on what their goals were by using our product, which was a scalpel, kind of like product, right? We served a very specific niche of people solving an extremely specific problem. So it was not about like building a career as an online teacher. That was not what we were helping them with. We were just helping them with one of the many problems in that market by design because we didn't want to be the one size fits all that did everything kind of well enough, but we wanted to solve this one problem the best we could. So we never really expanded further. That I guess would have been the trajectory of the business or at least have the company building more products in that space had we not sold it at some point, but in our company for what we did, we were so specific that we didn't need to help them with anything outside of the usage level of our application.
Speaker 0 16:25 Think I want to, I feel like there's more there about the scalpel. I really liked that analogy and and I think that's a tough thing. Like, admittedly with Castillo's, and this is terrible to admit, I don't know if we'll keep this and I've looked at our opportunities for growth a lot of times in product and, and I think this is a trap that a lot of people fall into is like if the thing did this or if we can charge people $20 extra a month to do that, then you know, everything will be better and it never is. And so I think that the ability to keep a tool really simple and solve a very specific problem is really admirable because then, well technically it's easier, right? It's from a support perspective, it's easier because you have less integrations and less, uh, all these like edge cases of things working together.
Speaker 0 17:14 But if you didn't <inaudible> you mentioned like if we, if we wouldn't have sold the business, we would have gone there eventually. What does that decision look like? A have like you can grow a business to a certain point, right? With the, with the scalpel tool. And then I'm sure you say like, okay, our total addressable market is X, you know, 50,000 people. We will never get all of them. So when do you say like we just need to keep working on marketing and like this viral growth engine that you have or when do you say we need to add more tools and go more broad market or change the change the tools that we can go up market to, you know, more type type customers.
Speaker 3 17:51 So I would say that no matter how many features or how much we evolve the product, our market was going to stay the same for this online English community. There wasn't, we often did have this conversation, you know, should we add this new feature when we first started in those very early conversations, I like was shooting way out too. We could go to homeschooling, we could do, uh, we could get into the classrooms. What a nightmare that would have been. Um, so I think in those early days, Arbid really did kind of rein me in and help me focus on let's focus on building a great product, a great experience, and solve the problem. That was my problem at that point. The problem of the online teacher, very specifically working for these Chinese kid English companies. And then, you know, later on when we would have a conversation about, you know, what, what other things do online teachers need? It was never a product that would be a part of feedback Panda. We thought, okay, this will be a new product. If we build this out, it's going to be a completely different product. The market's the same. It's still the same teacher. Maybe it's the, you know, Panda suite for online teaching now and there's different products. But, you know, feedback Panda wouldn't, uh, wouldn't change that much. The core offer was the same.
Speaker 0 19:25 Yeah. I think if I'm honest with myself, this is a, this is a trap that marketers fall into is, um, blaming the developer, uh, of saying like, Oh, we're marketing but the, you know, people want this feature or the product needs to do this to make my job easier. And I'm talking about myself right now that, that I'd definitely say and think that that, and some, sometimes it's true. I think sometimes it is true that everybody wants this thing. If you build the thing, then the marketing gets a lot easier. But I think that's probably true less often than is specially nontechnical people think because we think we see the whole kind of customer landscape and the marketing view, um, and that, you know, we're doing our job and that if the product could, could support us more than, than we would be more successful. And I just don't think it's true as often as we let ourselves believe.
Speaker 3 20:19 I think we didn't get to our plateau where we really needed to reevaluate what our offer was. If anything, in terms of marketing, like re-evaluating, what we needed to do was we just needed to get the product in front of more people, um, make them aware that they had a problem because all the teachers weren't on the same level. Some people were feeling the pain quite strongly. Maybe they just taught more students or they were just tired or had another job. Whatever their reason for seeing the problem was we were fortunate that they, they felt the problem, but a lot of teachers were, were happy to just write the feedback on their own or they didn't care about building this deeper relationship with their students. So, um, so the, from the marketing side was more about showing the value that was being created not only as a time saver, but yeah. Showing that relationship that you can have with the students. Also just a higher quality of teaching. Those were the kind of different avenues. Same product, same offer, but it just, just different messaging.
Speaker 0 21:31 Yeah. We, we find that really difficult to talk to people at different kind of stages of awareness, if you will. Uh, some people don't know they have the problem. Some people know they have the problem and don't know what to do about it. Some people know that they have a problem and what they want to do and that there's a product. And then there's people that are choosing between company and company B. And to talk to all of those different four or five steps or phases of a customer buying journey in one site I find really difficult. Um, and is something we are actively trying to Tamar out right now is like on this page where people come from this particular point, are we talking to them at the level of awareness that they have? And I think it's easy for us to write one landing page or one homepage because you only consider that that one phase of, you know, a customer could be in or a potential customer could be in, but that that alienates whatever 80% of the people maybe, you know, like a lot of people come to your website ready to buy or having no idea what you're doing and if you're your market, if marketing messages not varied or generalized to, to each of those, I think that's where a lot of people fall short us including, and that's where we're looking at it right now.
Speaker 3 22:41 And that's where we, we found it very positive to see competition in our space. So there was one company doing something similar to what our offer was when we first started, before we developed our product. And then, uh, after that there were kind of teacher led solutions, like a smart Google sheet that would, um, generate templates or yeah, some, some other tools. And we always thought, great, now the teachers actually know that they have a problem and that there are solutions available and they should look for solutions. And we were confident that ours was the best. So any, uh, competition was just further awareness.
Speaker 2 23:24 I think we were also very, no, I wouldn't say lucky, but it was good for us that we were in a, in a niche that was so Well's specified, right. It was so well defined that we, we had online teachers teaching for Chinese kid English companies that were speaking English natively. We're teaching through their browser that were from the United States or Canada. We have a couple more of those qualifying filters. So our audience was so highly specific that anybody who was not part of that audience who came to our website, well, they might just as well bounce right. That we were not looking for the general market, we were looking for a niche market and we're trying to construct a message and construct a communication style that would appeal the highest likeliness to those kinds of people that were in our niche already. So we kind of used the imagery like feet.
Speaker 2 24:14 The candor was, is not a Panda by mistake, right? We were serving the teacher market that of North American teachers teaching for Chinese companies. Right? That there's cute stuff when you teach kids. And then there's the Asian component and it depends as an Asian animal. So all this kind of works together and that the brand, the messaging, all of this was really specifically tailored to communicate what we do, why we do it, and why they should at least check it out to our specific niche audience. It's much easier if you're trying to go to a niche audience. Then if you go to much more generalized audience because then you have the, the whore, um, prospect awareness scale that you mentioned by Eugene Schwartz. Right? The whole thing with completely unaware up to perfectly aware. Yeah. The more people you have that are different, the more you will have these kind of groups and then more you will have to build some sort of funnel through your content to get them from the spot where they are to where you want them to be. In a niche, it's much easier.
Speaker 0 25:14 Yeah. And I think it's just for us it's scary to write copy or design a page that alien on purpose alienates people. Um, but, but it's what we should be doing. Cause we should be saying, you know, kind of putting the stake in the ground. We are this, we are podcast hosting for people on WordPress that are hobbyists but want to be better podcasters or you know, I mean that that gets a little,
Speaker 3 25:37 I have this thing, I've been looking into so many, I'm currently trying to get to an MVP with no code and I w I feel like I waste so much time on landing pages just trying to figure out if it's what I need. I just want to know is it what I'm looking for. I don't want to spend too much time, you know, learning the product to find out that it's not what I want. I wouldn't allow love if landing pages would be so specific and tell me exactly what I can do when I get there.
Speaker 0 26:07 Yeah. Yeah. It's thought, I mean, I think early on it's easy to be really opinion cause you'd kind of have nothing to lose and you know, with the point that y'all were at or that we're at or you're like, okay, we're, you know, we have hundreds of new trials a month. Changing the homepage copy is a big deal. Big deal. Even like split testing, it's a big deal. So, um, but, but I think it's something that all of us, again, talking about myself could do better with. So when we met at Microcom for Europe in Croatia, uh, y'all were about to go, uh, sit on a beach for a couple of weeks as I remember. Is that, is that right?
Speaker 3 26:40 Yeah. We went in to the middle of the African Bush actually. Um, and uh, I really wanted to go somewhere that would kind of put the stress and X is a existential crisis. We kind of felt at the end of having the company put everything into perspective and there's nothing like looking at a leopard that's like hissing at you and you're wondering if it's going to jump into the Jeep with you. That kind of puts things into perspective.
Speaker 2 27:08 Yeah, definitely. I can imagine. Yeah. Yeah. How, just kind of generally, how has it been at since the sale and kind of getting back into the swing of things? Well, I've, I've started writing a pretty much the, the moment I stopped working on the product and working on the business, I fell into this void like most entrepreneurs do when they kind of jump ships, either sell or the business stops working. It doesn't matter if it's a good or a bad outcome. If you can work on it anymore, something happens because you've been working on it 24, seven, at least your mind has the prior years. And what's the same for me? The moment we handed over everything regarding the business and I didn't have anything to do. I kind of wanted him, what am I going to do with my time? So what's my purpose in life at this point?
Speaker 2 27:55 And I noticed at that point that I had a lot of knowledge that I had accrued running the business with Danielle for those two years and I never really had time to reflect on it. I just did stuff because that's what worked. And I think most entrepreneurs are kind of caught up in this, right? This kind of operational instinct that we have at some point, but we never kind of codify it. We never document as much as we should. We did that for the business because we needed to get all of this information on the page. And in that process I kind of learned to, to really reflect on my experiences and distill that into something that is actually actionable. So I started writing, I started a blog and I started a newsletter and I started a podcast recently. I'm just kind of trying to create a lot of content off the stuff that I would have loved to learn three years ago before we started the business.
Speaker 2 28:43 And I'm just trying to give back to the community that has been so helpful to me with all the blog posts and podcasts and all these things with my own content. Just writing it down as much as I can, writing down my experiences, what worked, what didn't work, which is the more interesting stuff I guess and what I learned in both this business and prior businesses. Um, so I've become a writer. I think for now at least. I uh, released a guide a couple months ago called Ciro to sold 25,000 word guide that I'm now turning into a book. So I'm even more of a writer I guess will be in the future. I just love writing. It's something that for a software engineer, I guess it's not surprising because we write all day, we just write different kind of pros. But now writing for people, not just for computers is also quite interesting to me. So that's what I've been doing.
Speaker 3 29:34 I have to say it's been much different for me. I, I really, um, I think it's been much emotional for me too, to have to let go of the company. And I've been also leading through this kind of mourning, mourning the company or really actually mourning our customers in this community that we built around feedback Panda that was very difficult to, to say goodbye to. And, um, and also, even though I'm not a person that really wanted to identify with, Oh, I'm CEO, when I have a successful company and, and I don't hang on to that too much, there was, uh, a bit of feeling of defeat. Like something was taken away from me and now I have to build up something again. So I, I knew that this, all of this was kind of brewing inside of me and I wanted to get really still and you know, be intentional about what I moved into next.
Speaker 3 30:32 Um, not to, to kind of knee jerk into something, just to kind of fill the void. So Arbonne and I had a great conversation finally when I was ready to, to deal with everything head on. And I realized that it was really hard work and I just, I w you know, now I have to do all of this again, like a company from the start. And, but actually that was the part I really enjoyed. Like actually that was the most fun part of feedback. Panda was building the product and once the product was finished and it wasn't that fun anymore, it was still great and it's still wonderful company. But the fun part was really getting to getting that idea into a product. So, um, once I realized that I, I remembered that, Oh yeah, we co founded a company while we still had feedback Panda and it needs to have a product. And um, so I have been, I touched on it earlier, I'm trying to get to an MVP with old code. So it's been another steep learning curve for me and I love it. It's awesome.
Speaker 2 31:40 What is the new product or what is the company y'all found it before?
Speaker 3 31:43 Um, so it's actually a product with a trainer, a physical trainer. She has an accountability, uh, kind of habit building product and she's brilliant. And I love this program. Um, so we, we kind of hopped into the project as people who could build it and then I thought, Hey, I don't need Arvind to, to build it from scratch. I want to try to pull it this time. So, um, yeah.
Speaker 2 32:11 Cool. Do you regret selling the company? That's a, it's a tough one because the thing is I don't think nobody ever doesn't regret it a tiny bit. Right? Of course, we don't regret the fact that we, we sold it for a life changing amount of money and we're financially much more secure than before and that we have accomplished this, right? That the fact that we have sold a company that is already something that nobody can ever take away from us. So that is amazing. And the opportunities that this has given us to people we've come to or get to talk to, all these kinds of things are wonderful. And it would never have happened if we didn't sell the company. So no, don't regret it. But then again, it was a lot of fun. It was cool. It was our thing, right? We built this from nothing and we built it into, yeah, we sold it when it was at $55,000 of MRR.
Speaker 2 33:04 So we grew it within two years to this quite substantial amount of money and it paid off. Then your student loans and all these kinds of things. It was a lot of success and we would have and could have continued the thing, but we didn't. We chose to sell it and we have to accept that fact and it's, it's, it's, it's never one or the other, right. It's like we tried to diversify our wealth cause all of it was bundled up in the company because that was the most important and valuable thing we had. But also the most risky thing at this point because every single kind of experiment we did in the company could financially result in devastating losses. Right. We didn't increase our pricing beyond the one price increase if we did because we thought, Oh, what if they don't like it? What if they cancel and no business should ever have this kind of risk attached, right.
Speaker 2 33:50 Where you would do an experiment that you might roll back and everything's fine, but you don't do it because you think, ah, what if, whatever. So I think diversification is important. I was also very anxious and stressed at the end because we never hired people, which is I guess Mike complete fault should have hired a customer service agent, should have hired another developer. But I thought that's fine. I can deal with it. Well, yes I could. But burnout was peeking through, right? Or there was a lot of anxiety about not being able to like deal with technical problems faster for thousands of customers. Being able to be sponsored should have just hired people. But I was afraid to do it because I'd never hired anybody before. So that's all learning and there was a lot of these kind of things have come. He noted in me being ready to sell the company. Danielle wasn't as ready. I guess she could have continued
Speaker 3 34:40 regret was definitely one of the States that I was also letting between with the, you know, kind of depression of and mourning and and totally being excited that, you know, now we had this achievement and this amount of money in our bank account, but I think I'm, I'm not one that looks back too often. I'm very forward looking person. I'm always thinking, okay, what's the next thing? But I will say that looking back does have a lot of value when you have this kind of clarity. We could not have looked at feedback Panda from in the middle of it with the kind of clarity that we have now that we've sold it to recognize the mistakes that were not detrimental to the company, but that we can then, you know, learn, take those learnings and apply them to whatever we do next. Yeah,
Speaker 2 35:31 I completely agree with this and it shows for myself in, in, in my writing, in the clarity of my thinking that leads into all the articles that I write. I try to write while we were running feedback and are still, and I think it took me two months to write like 1,500 word blog post that was not really good, right? Because it was completely filled with all the anxiety that went that I was actually still having. And it was about anxiety. So that was, that was kind of weird. Yeah, pretty much. But a journal that nobody can get any help from because you're caught up right in the middle of it. So the moment we sold the company and I had time to reflect, all of a sudden all these different things appeared that were not just my operational anxiety, but other like concepts that were there. Other things that we did that I noticed we did just only we had the time to look back onto it. So I think being able to reflect, having this clean cut make makes it much, much easier to reflect. And I think that'll show in any future endeavors that we will be part of as well. Having this knowledge, just kind of stepping stone thing, um, will definitely translate much better than continuing to be in the hamster wheel. Right? Because that's where you get tunnel vision.
Speaker 0 36:45 Yeah. I mean when I think about it, like risk mitigation is a, is a really good reason to sell. I think all of us in these spaces, if you're doing, you know, less than $10 million a year, it's a really risky business, you know, I mean you get to that, but at that point a lot of things can go wrong and that's still okay. But you know, certainly where a lot of us who are bootstrapped or whatever, it's super risky still. And so I think that may, especially, you know, shit now coronavirus and the, you know, the economy potentially tanking, a lot of us should be thinking about what, not necessarily selling, but like what we're doing in our business to de-risk our lives. Because you know, for a lot of us, our businesses by far our biggest asset and it's a super volatile one. Even, even if we think we have a lot of control over it, which we, I don't think we do.
Speaker 0 37:30 Um, yeah. But I think the other thing that you said that really strikes home and, and, and I see people in our kind of world do this a lot is kind of go from one thing that's, you know, a scalpel, a single use, super specific tool to something that might be a little bit broader market or higher price point or something to where the business could be bigger and you only can run that bigger potentially more successful business cause you had the previous experience and you'll learn the things you did. I think for me it's been a bit that way. Like you know, starting out with one relatively simple business now being in a more complicated business that that maybe has some more potential. I see kind of what you guys are talking about that you're dating, you definitely taking your time, but it sounds like you're on that path to like if and when you're ready to do something else, it's going to be, you know, something that it could be 10 times the size of feedback Panda.
Speaker 2 38:18 Yeah, that, that was one of the things, right? I think we were sharing a thought right now initially we kind of didn't really set goals, which was a big problem cause we had, we had no means to see if we had accomplished what we set out to accomplish because we hadn't set up anything. Right. There was no goal. And for myself, I thought that reaching $50,000 in MRR was the biggest thing I could ever do. So once we did that, we had no further goals. Right. And we didn't have step goals either. Like, we didn't know when to get to 10 when I get to 20 and then we're going to do this. Like we going to hire our first employee at like 15,000 because then we can pay them and can pay for the rest of the business. We never had these kinds of goals in retrospect. We reached these things and we did things kind of more instinctively, but had we set out to do these things at certain parts of the business, we could have been much clearer and getting to those stages and then actually like intentionally producing these results. Right? It just happened because it happened and then we figured out some things of good or bad, but we could have been much more clear and the intentionality of what we did in the business.
Speaker 3 39:19 Yeah. I think that comes full circle. Right back to your very first question about the intention that we had building the business. I think the structure, um, what's very intentional and then once everything was built and set up, we thought, okay, now let's see what happens. And so there was a very, a large portion of what we did was what's all shooting from the hip. And we were lucky that most of the time we had very good intuition or good thinking on our feet.
Speaker 2 39:51 Oh. And we were quick to change things if they didn't work out either. Both in the software itself, like in the product and in the business. Like there we had a plan, we started out with like a 10 month plan, a to $10 a month plan and a $5 a month plan turn out $5 a month. It's not a lot for a as business and the people who choose to pay five when they could pay 10 for a SAS product, they also have a different perspective on customer service. I think that, yeah, it was one of the more problematic kind of segments of our customer base, which we quickly eradicated, not the people but the plan. So we kind of got rid of the $5 a month plan very quickly and then increased our plan at some point from 10 bucks to 15 bucks cause added value added uh, dollars to the price.
Speaker 2 40:37 So we, we were quick to react to things that didn't work. Also marketing, we tried Facebook marketing, like actually paying for ads that didn't go anywhere. Google Edwards, I think we tried once for like 20 bucks. Yeah, we didn't really need that but we just didn't go too deep into things that uh, didn't make sense like that we tried. Sometimes we tried, we didn't, like I said earlier, we didn't overly experiment too much cause we found a couple things from the beginning that worked for us, which was like, um, the people spreading the good news about feedback found that by word of mouth in their communities. And then we kind of doubled down on that enabling more community, building a network effect, generating feature into our product for people to build a more community. We noticed a community gay community was the big thing for our community of teachers to try. So we kind of just amplified that as much as we could and kind of anything else.
Speaker 0 41:34 Yeah. It's kind of the rule of marketing, right, is like find one thing that works and then just hammer it until it's saturated. And you guys didn't get to that point. It sounds like you were still growing when you sold it. So that's, that's awesome that you found that thing. I think a lot of people go a long time without finding that one thing, uh, that's reliable and scalable. So that's cool. Kind of looking a little bit back and then a little bit forward, um, looking at what you might get into next, uh, you know, aside from writing our vet or for Danielle with, with the, the habit, if you all decide to, to start, uh, you know, start another SAS business, what are some things like kind of specifically from feedback Panda that you saw that you didn't like, that you would want to try to avoid next time?
Speaker 2 42:20 Well, one of the biggest things that we noticed with our business was that we were German companies selling to North American people. And there was a lot of, uh, trouble with charges on credit cards and the systems that the payment providers have built to capture or recapture that failed charges. They were not really nice. So these kinds of retained products, these kind of, um, what's the word for it? Like there's a specific name for dining system. Thank you. The dining systems, they, um, they were not up to scratch. They were great for North American selling to North Americans, but not for people from, not North America selling to North American. So that's a gigantic market because it's essentially the rest of the world. And for digital products, it makes no difference if you're a German company or a Belgian or a Canadian or North American, you can sell to anybody.
Speaker 2 43:13 So having five to 10% of your revenue be caught up in banks kind of blocking charges. That was one of the problems. And that was one of the problems that we try to automate by using services that existed. It didn't work out. So we had to build our own, build our own little internal Dunning tool that would reach out to our teachers through Entercom whenever a charge was declined, telling them what can you please call your bank and here is what you should say. This is the receiving bank, this is the country it goes through. Just giving them all this kind of information and I don't know if Dunning tools have caught up to that specific kind of niche problem just yet, but likely not. So that is something that is interesting. However, I probably wouldn't build it because I don't love Danny. Right. I love helping people.
Speaker 2 43:54 I love helping people build things or it may just be more productive. That is great, but donning and this whole payment system stuff is not for me, so not sure if I would do it. I just saw the problem and I guess that's what you asked. But I probably wouldn't build a business in that field. And at the same goes for developer tools. Even though I am on, I probably wouldn't want to build for that market because let's be honest, developers don't like to pay for stuff that they're interested in building themselves. It's always one of these gigantic problems in the market, right? Because we love solving problems or we love challenges, which is I guess quite unique when it comes to industries that when the thing appears we wanted to tackle it instead of just ignoring it. Right? So selling things that solve problems for you takes away from your own agency as a developer support to sell to them.
Speaker 2 44:42 So I fund a lot of things that I would have loved to have when it comes to like it, the face components that show if you have downtime or stuff like these, these kind of more operational things or PDF generation also not interesting and these kind of, there's a lot of problems, but I'm not interested in building them. So, which is why I'd rather write or my experience or write about my experience right now than to jump into the next software project because I know that there will be something, I've noticed a couple of things in writing that I find unbearable, so maybe I'm going to go there. But yeah, it's, there's a lot of small problems that likely aren't critical. And that's the thing, right? You want to build a business around a critical problem. You're not just any problem. And none of the things that I talked about were really critical.
Speaker 2 45:30 Even the Dunning that was like 5% of five to 10 depending on which banks they were with of our customers that we could still eventually kind of recover by building our own little thing. So if that is the extent to which this is a problem that people consult with themselves quite quickly, well then it's not critical, then you don't need to build a business if people solve it anyway. Right. Only the things that people can't really solve as easily as, as by having a developer spend a day or two on it. These are the things you want to look into. And I have not found any of these, at least not by quickly reflecting on it and feedback, candor, all of these were just like either nuisances or tedious problems or with some urgency may be but not important. W with the whole, um, the Eisenhower matrix of importance and urgency. None of these problems that I just talked about were both important, that urgent, some are important, some are urgent and some were neither. And none of these are interesting for building a, like a scalpel like tool with a bootstrap business
Speaker 3 46:30 on my side. I can thinking the thing that made feedback Panda worked so well is also the thing I wouldn't want to bring into the next business. We were so highly dependent on this, uh, very price sensitive, very kind of volatile English teaching market. And we were so dependent on these few companies that were early stage. So I think, yeah, just the fact that we sold to the teachers kind of made us the last month to know when there was a change in the teaching portal that we had to, you know, change our integration for. So maybe we would think of a more enterprise, um, kind of solution for is that, you know, selling seats for all the teachers and selling directly to the English companies, that would be a dream. But that being said, I don't think online teaching is going anywhere. So feedback Panda would be very, uh, easy to pivot into something. Not easy. I very don't want to say anything. It's easy, right?
Speaker 2 47:35 Yeah. Just go enterprise. It's no big deal.
Speaker 3 47:38 No, no. Um, but there are opportunities in the space, uh, and online teaching is very, um, so hot, right?
Speaker 2 47:46 Yeah. Yeah. Twitter, Twitter has been blowing up over the last couple of days with the whole homeschooling and online teaching and like universities have been moving all of their classes to online portals. This, this may just be a wave, what with Corona being around, but still this is gonna leave a lasting impact, right? Because people for the first time will understand that this also works. It's just like working from home. Like people are now forced to work from home and they might need to, they probably will need to go back to the offices in a couple of weeks or a couple months from now. Let's just hope that this is the case, but they are going to be in the office sitting in a cubicle thinking of the five second commute that they had from the bedroom to the table that during their work from home time and now they had to drive for an hour. So traffic, this is never going to look at a computer, right? This is, this is never going to go away and homeschooling through an online medium or just like education through online media, it's just going to be the exact same thing. People are going to notice how cool this actually is and how individualistic it can be and how supportive technology can be for reaching like high, higher States of understanding in certain concepts I think does not going to go anywhere.
Speaker 3 48:59 Yeah. And I think with all of the decisions that seemed like the only option for feedback Panda, it's all about weighing the pros and cons. Like if you look at our, we sold directly to the teachers. So now we're selling to a lot of teachers who are quite price sensitive. But if you look at this compared to selling to a school board, selling to the individual teacher is a lot more attractive. So it's, I think with all of the decisions that we made in feedback Panda, it's all about being intentional. Again, it's weighing the pros and cons and then just making a choice and saying, okay, I'm going to live with this downside. The fact that our teachers are price sensitive, but take the pro, which is I can sell to them directly and that's going to be a lot faster.
Speaker 2 49:46 Yeah. And they actually have a budget and like schools, teachers that teach for themselves that teach for different schools, they understand themselves at least a tiny bit of, in most cases, a large percentage of them understand themselves to be a business. Like these are teachers that are essentially freelance teachers, right? They teach for one Chinese company, maybe two, maybe three. They have all their different schedules, which is also something that they need help with. Right? There's a lot of problems in the online teaching space that are completely unsolved. Scheduling your lessons with multiple schools or tracking your payments through multiple schools, making sure that for the lessons you're taught, you actually get paid the right amount. We saw all these problems from the beginning. From day one we ask people, so what are your other problems? Just to see where the problem space is and to see if there's criticality in other problems as well. Maybe we just wanted to see like are these important things, can we help them with important things cause we, that's what we want to spend our time on. And we didn't find any more critical problems that were as critical as our problem was at that point. But who knows, the industry is definitely changing and it's growing and it's uh, definitely these things become more important. So there's a lot of space still in the ed tech space in the attic industry for bootstrap businesses to go into and solve particular problems, scalpel methods. Right.
Speaker 0 51:05 Awesome. Very fun Arvin and Danielle. Thank you. This is really, really cool conversation. Thank you for taking the time to, to share your story and what you've learned in the last few years with everyone, for folks who want to kind of catch up with y'all and kind of connect and learn more. What's the, what are the best places.
Speaker 3 51:21 So I am on Twitter and Instagram under the same handle. It's at Simpson. Danny Kaye. Danny is spelled D a. N. I
Speaker 2 51:29 uh, you can find me on Twitter at uh, avid col, a R V. I. D K E H L. and you can find my blog@thebootstrapfounder.com. Awesome. Thank you all very much. It was wonderful. Thanks so much.
Speaker 1 51:43 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>.
