Why is SaaS hard?
Welcome back, everybody. Another episode of the Bootstrapped Web. Brian, it's Friday, and today today we head to Ann Arbor.
Brian Casel:Oh, you do?
Jordan Gal:We go to the big house. We're gonna be insufferable national champs. Everyone's gonna be walking around with a chip on their shoulder.
Brian Casel:Oh, boy.
Jordan Gal:It's gonna be beautiful.
Brian Casel:Oh, it's gonna
Jordan Gal:be fun. Beautiful.
Brian Casel:The whole fam?
Jordan Gal:Whole fam, I expect to spend the same amount on swag and like Lululemon like Michigan collab swag as I did for the entire weekend. But I'm prepared and I'm excited.
Brian Casel:That's awesome. Yeah. Just a couple days ago, went with I went with my dad to the US Open, the tennis US Open. Oh. At the day out there.
Jordan Gal:That's good one.
Brian Casel:It's great. And you know, we went to the first round which I love doing at the US Open because you you get to walk around It's like a festival. It's like there's so many people. So you know, we had tickets in the in the in the main stadium, Arthur Ashe. Okay.
Brian Casel:Saw some good matches in there. And then you In the first round, you get to walk around to all these courts and sit wherever you want. Like we literally sat front row watching like number 12 in the world play number 20. And it's just the most incredible thing to see that close. These guys are so crazy good.
Jordan Gal:Yeah. It's it's fun. What I what I recall from The US Open, I think I was same situation. Correct me if I'm wrong. But you have tickets to an event in the main in the Arthur Ash Stadium at a certain time, but then you just you can just walk around.
Brian Casel:That's right. There's like a day ticket and a night ticket. So, we the day. We get there at like 11AM. We're there till like 5PM.
Brian Casel:And and you get you get seats in the stadium. And you And so, there were like two matches during the day that we popped in for like a
Jordan Gal:set of seats for during the day in the stadium.
Brian Casel:In the stadium. Okay. But outside the stadium, there's like 20 more courts. Sit wherever you want.
Jordan Gal:What I remember is how small the courts are.
Brian Casel:The close.
Jordan Gal:Yeah. You're just hanging out.
Brian Casel:It's it's so weird, you know, because like, you know, I've I've played tennis. I'm not I I'm terrible at it, but when I when I play like a tennis court feels like a tennis court. It's it's kinda big. Right? Yeah.
Brian Casel:But when you're up close watching these pros and the court is surrounded by fans, it makes it feel so small.
Jordan Gal:Yeah. Because it's like And these guys are
Brian Casel:are at like a 120 miles an hour on what feels like a ping pong Yeah. Table when you're that close.
Jordan Gal:Experience. And they make the court look small because they're gigantic athletes.
Brian Casel:They're gigantic athletes. They're hitting the ball like you can't see it. It's Yeah. It's unbelievable.
Jordan Gal:Awesome. That's a that's a great like New York event too. It feels very New York. Yeah. You're not in Manhattan, but it has a very New York vibe.
Brian Casel:Yeah. Everything is extremely overpriced and crowded. Window. Yep. Oh, yeah.
Jordan Gal:Yep. And then there's like a there's a hierarchy. Like, that's where the rich people sit. The celebrity sit. Yeah.
Jordan Gal:This is where we sit.
Brian Casel:There's there's the food court and then there's the restaurants and then there's like Yeah. You know, we only allow the VIPs over here.
Jordan Gal:Yes. But they have good drinks. I remember. Yeah. That's that's Yeah.
Jordan Gal:Beautiful. That's awesome to go with you, dad. It's great.
Brian Casel:Yeah. It's a good time.
Jordan Gal:Good time. Nice. Well, we're yeah. We're gonna go to Ann Arbor and then come back and have a nice Labor Day weekend. To me, this weekend feels like business New Year's.
Jordan Gal:Like, I get to restart the year next week. Like, with all my resolutions and my energy and focus and the kids are back at school. That's what it feels like to me.
Brian Casel:Yeah. This week my this is my kid's first week back at school. Oh, man. It's it's so great to have, like, my house back.
Jordan Gal:For my damn kids.
Brian Casel:Yeah. Like just And also like, you know, my my wife works in the school, so she's Okay. It it's it's so nice to like have the flexibility to work at home and be close to my family and see them off to school, see them come back to school. But man, I forgot how much I missed having this like like a six hour period every day where this place is just mine.
Jordan Gal:Right.
Brian Casel:Just hanging alone, working, doing my thing, you know.
Jordan Gal:Yeah. More like an office. Less like I'm enmeshed in my home life. Yes.
Brian Casel:Exactly.
Jordan Gal:Alright. Well, look. I gotta start off by just talking about something. Okay. I gotta be honest.
Jordan Gal:It caught caught me by surprise which makes me feel stupid. But the important thing is Rosie has paying customers. Yes. We got we strike, hit it, the bell rang somewhere out on the Internet.
Brian Casel:This week was like the first like conversion from trial to to paid?
Jordan Gal:No. It was last week. I just didn't know.
Brian Casel:Okay.
Jordan Gal:Okay? So that's the that's the shameful part. But besides that, in my mind, I mean, first of all, we got we got a bunch of sign ups. Hell yeah. I I didn't realize but when we look back at the month of August, there's a lot more sign ups than I expected.
Brian Casel:Hell yeah.
Jordan Gal:And then some of them, you know, we have a seven day trial. So a bunch converted and we have paying customers. Now here's here's the thing.
Brian Casel:Are you okay. Like I I like we historically don't like share too many numbers and stuff. Like what can you share? Maybe this is an off air conversation. But like in terms of like revenue and number of customers and all that.
Jordan Gal:Revenue, I actually don't know. But we got about a 100 sign ups for the month.
Brian Casel:And what is the price points that you're offering?
Jordan Gal:We're only offering one price point right now. $49 a month.
Brian Casel:So then some some number of those are paying 49 now.
Jordan Gal:Yeah. That's right. Nice. So so I I I think the the, you know, the bulk of the conversation business wise in this podcast will be about like the different phases of the funnel for us.
Brian Casel:Of course. Yeah.
Jordan Gal:And I think and that's why I I have actually been pretty strict about Anything that falls outside of my current focus on the current phase of the funnel, I kinda don't think much about and conversion to paid is a few steps down the funnel and I honestly have not given it much thought. Mhmm. And that's why it kinda caught me by surprise and I was like, oh, I guess some of these might have converted and I look and I'm like, oh my god. We've paying customers. I didn't I've missed it.
Jordan Gal:Yeah. Now, we're professionals. We can be honest about this stuff. Just because they're paying does not mean they're using it successfully and have adopted it. Like two different things.
Brian Casel:Yep.
Jordan Gal:Yes. So I would say thumbs up. We have paying customers. TBD on usage and churn and like again later down the funnel.
Brian Casel:And what this proves I I think at this point is that Yeah. Like like you said, like like it's not like like it it still remains to be seen like how much they're actively using it, how long they're gonna stay and and retention and and and all that. But like it does prove at at the very least, I think more than this, but at the very least that Rosie is offering a solution to a problem that definitely exists that people will click ads and go to and sign up and then actually pay for because they're they're actively seeking a solution to something.
Jordan Gal:Yes.
Brian Casel:They they want something.
Jordan Gal:Yeah. I think nail on the head. That's the most important thing out of this month.
Brian Casel:And more than that, like they they they liked what they saw at at the free level and they still continued down the down the funnel with Rosie before moving on to something else.
Jordan Gal:Yeah. Yeah. And and I don't think we should over index, you know, the importance of them converting to paid. The most important thing is actually that we got about a 100 sign ups and people I mean, went through the sign up process and then they got set up and that's kind of where we should stop in terms of like patting ourselves on the back. But the more important thing for the next phase of the funnel, the activation and conversion part of the funnel is that we feel like we have a pretty clear picture of what people need in order to solve the problem that that that they're coming in with.
Brian Casel:Mhmm.
Jordan Gal:Yes. So we've been doing the we've been doing the the early stage dance of basically anyone we talk to. We're like, we're gonna extend your trial because the this feature that you're asking about is coming out next week. So let's make sure you have at least a week with the feature to make sure that it's right for you.
Brian Casel:Yeah. Yep. Interesting sort of like a quick update. I wasn't gonna talk about this today but actually with Clarity Flow, I talked about last week how I'm doing that pricing experiment
Jordan Gal:Okay.
Brian Casel:Here in the month of August. And what you were just saying about like, oh, I didn't even realize like people were converting. A little of of sort of a version of that happened for me with, you know, because I think we talked a week ago and and I was three weeks into the experiment of where we have no more free trial and we're just charging upfront. And and it was in three weeks ago, it was in that gray area where like, alright, we have a handful of of conversions on this new offer. What does that mean?
Brian Casel:Like, is it I I seems like it's less than what we would have gotten before with the trial. But now that we're a week later and and we're about four weeks into this, like there have been a few more conversions. And now I'm looking at the numbers for the month and like this was an up month. Like it definitely was an up month in terms of MRR in increase and we had lower churn this month. And so but it's not but the the the experiment is not complete yet.
Brian Casel:But I think now I'm What's different from last week is like now I think I'm willing to give it another month before I make any changes.
Jordan Gal:You you took a step back and have a slightly different perspective or or a perspective that that takes into account a bit more than just how many sign ups have come in, how many have
Brian Casel:I think last week, and it was it was hard to think about it last week because I was like, man, it's it's not a complete failure. It's not like we have zero conversions here.
Jordan Gal:Mhmm.
Brian Casel:It doesn't seem like a whole lot. So I was leaning toward like, alright, this was like a one month experiment that I'm probably gonna cut around September 1. Now, a week later, just looking at the numbers, August looks like a generally positive month compared to previous months. Like, you know, if we were like fully plateaued, this this could be the start. If this repeats, if this if if August were were to repeat Okay.
Brian Casel:For a number of months, then this could be the start of a nice growth. Oh, wow. But but it could just be some it could I don't know. That Right. Been the story, like So so now I'm leaning more towards like, okay, let's not the experiment just yet.
Brian Casel:Let's give it at least another month. Okay. And so because the other thing about this, there's a few factors. One is that we are getting more traffic now that we weren't getting before. Mhmm.
Brian Casel:Mhmm. So I am curious to know like how this traffic would convert if we were offering the the free trial, which we're not right now. But the other thing is that in August, some of those convert some of the earlier from like the first two weeks were hangovers from the previous month. Like they had they did trial back in July and they just happened to convert in August. But Mhmm.
Brian Casel:Everything from mid August on, like we are still getting new conversions who did not go through a trial. So that tells me like, let's just give it another month and see.
Jordan Gal:That's tricky. There's so many factors you can't tell which factors are important, what did it, what didn't do it.
Brian Casel:Because the in September, if we just continue and change nothing then we will have like a pure thirty days of like there have been no trials. Let's just see how many customers we get, you know.
Jordan Gal:Now, one of the things I think we used to talk about, people used to talk about more often a few years ago is AB testing. Yeah. Right. Like, you're running an experiment but you have a lot more traffic So you have a lot more going on top of the funnel. It could be an opportunity to say, well, let's send half the people through this and half the people that.
Jordan Gal:I find it rarely makes sense to actually set that up.
Brian Casel:Yeah. And it's so complicated to do that for this type of like pricing. Cause you'd have to have like two different like literally build two different Yeah. Funnels. And we did build it in a way that it's easy enough for me to flip the trial back on whenever I want to.
Brian Casel:Mhmm. But it's not easy to have like two parallel funnels. Yes.
Jordan Gal:You know? Yes. We're about to have an opportunity for something like that because we're about to start sending all of the traffic from ads to a landing page.
Brian Casel:Mhmm.
Jordan Gal:That's totally separate from the homepage. And that so that the most important part of the experiment, we're actually we're gonna be consistent on both and that is the the sign up process more than anything else. Mhmm. Yeah. But it's been fun to build a landing page.
Jordan Gal:It's funny when you build a landing page and then you like things in the landing page more than your homepage. And I think I'm just gonna change the homepage. Yep.
Brian Casel:I mean, feel like that's sort of natural because I I think that landing pages by their by their nature, they're supposed to be very targeted and you're speaking to one customer. So so they are gonna have very effective copy for that one customer. Whereas the homepage is sort of by design a little bit more general like Right. This is the product, this is the company.
Jordan Gal:Yes. Like very wide open. Yes. Yes. Yeah.
Jordan Gal:I've had fun with the with the landing page part and and it feels much easier to experiment. Like one of the experiments we will do because it's so reasonable to do is just cut the landing page off at the hero. So there's a hero section and there's a whole bunch of stuff below it. One of the experiments I wanna run very quickly is just cut off the hero and just have nothing below.
Brian Casel:See if they just take action based on what they see there.
Jordan Gal:Yes. Yeah. The head headline, sub headline, graphic, promise, you know, done.
Brian Casel:That's been like a marketing design approach that I've I've always been in in awe of, but for whatever stupid reason I can't like I always wanna give people more information
Jordan Gal:Mhmm.
Brian Casel:And like but you see these high converting newsletter landing pages and and sites where it's like they give you almost no information, just sort of like a promise, a headline and a button or or an email field. Yeah. And it's like to really learn more,
Jordan Gal:you know. You like you go further in. I I think that has a lot to do with where the traffic is coming from and how warm the traffic is, how much work is being done before that page.
Brian Casel:Yeah. But we just we just we just
Jordan Gal:do not know. And our ads are kind of very they just generate they just point out the pain very, like, clearly. And so if you have that pain and then you get to the page and it promises to take that pain away.
Brian Casel:Yeah.
Jordan Gal:The the most important thing in in the last week that we've been working on is a new sign up flow. So we're almost done. I think I think it looks great. I have some concerns.
Brian Casel:Okay. You showed me some of that. Looks good.
Jordan Gal:Yeah. The you know, it goes from what we have now which is a a button and you click on the button, you go to a page and the neck that that page is registration page with a account, you know, email and password or a Google sign up. And now it is being flipped where it is a field with a button and the field is your website URL and you click the button and the next screen you see is we are building your agent. And then
Brian Casel:it Mhmm.
Jordan Gal:You know, the little circles get filled in and takes about a minute and that's where my worry is. It's awesome to get people further into the funnel. So it creates the agent, and the next page it automatically sends you to is preview your agent, and then you can listen to a few recordings of Rosie talking about your business. And then if you like what you hear, then you hit claim my agent and that's when you create an account. So we're letting people go further in adding more value, but I'm worried about that second page.
Jordan Gal:If it takes sixty seconds to create your agent, I'm worried people are gonna drop off. Maybe they'll be really excited and think it's very cool. Maybe they'll close the window. I I don't know you.
Brian Casel:It's funny. I'm I'm One of my MVP products that I'm working on for a client right now is It's got a What you just described, it's got a very similar like home page flow where they The first step is they put their website in into it and then we hit some AI queries and it comes It's actually a pretty cool product. I I'll probably talk about it once once they're okay with me talking about it live. But Yeah. I'm not gonna share what it is in case Right.
Pippin Williamson:They don't want
Brian Casel:me to. But it's but it's it's pretty cool. It because it it does it does that and it and it There is like a step two where we have to wait for a result to come back. And then a step three where we do some analysis and and run some stuff. Okay.
Brian Casel:Okay. But like part of it is we're showing like a little animated spinner to say like, hey, our our robots are working. Uh-huh. Uh-huh. Sit tight and yeah.
Brian Casel:Here we go.
Jordan Gal:Yeah. You know. That's similar but I I I've already gotten paranoid about it and asked Rock like, okay. See what you can do to get that down.
Brian Casel:Mhmm.
Jordan Gal:Basically, every second it takes, you know, beyond the first five seconds is a problem. So if we can get it to ten seconds instead of thirty, whatever it is, like, we we show progress nicely, but I don't know. It's a little it feels a little a little dangerous.
Brian Casel:Yeah. Yeah.
Jordan Gal:What else, man?
Brian Casel:What are you focused I've got some high level thinking that I've been doing a lot lately and I'm starting to get I think a little bit more focused. Alright. I'll try to try to make sense of this without rambling on too much. But Alright. So you know, whoever's been listening to this podcast this year and for many years, know that this year, 2024 for me has been a year of exploration to say the least, you know.
Brian Casel:I talked about the Clarity Flow stuff. That's still running. I've got a a team running that. We're doing those experiments. We're shipping some some features but Clarity Flow is, you know, it's four years in and so I'm I'm I'm now moved on to thinking like, what's the next thing that I'm building here?
Brian Casel:You know? And and I've been jumping around. I've been exploring and and hacking on ideas. I I did the Ripple idea. I I talked about Sunrise dashboard or something.
Brian Casel:I've been playing around with programmatic SEO. I've been, you know, I earlier in the year, I was playing around with YouTube a lot and doing some video content. Just just exploring and just trying to be active, trying to get my wheels turning and and trying to see what I can learn and but Okay. And I think I've learned a lot. Also learned a lot through the consulting stuff.
Brian Casel:Just in terms of what it what it means to offer this type of consulting and then generating a lot of byproducts in terms of development tools and components and UI stuff. Alright. So lot of stuff, lot of activity, lot of analysis, lot of thinking. But I think that the thing that I'm now the the the frustration that I'm trying to to work through now is like, okay. I think it's time for me to pick a direction.
Brian Casel:Pick something to commit to longer term than just a month here, a month there. Right? Something that I wanna build. Like I'm trying to figure out like what is it that I truly want to commit to building for for years in terms of like the next business, the next like like big asset that I wanna grow. Right?
Jordan Gal:Okay. So not not a small thing to just make money in short term, but like
Brian Casel:Yeah. Focus on There's probably gonna have to be small steps that make money in the short term. But Sure. Like even whatever those little stair step, you know, stepping stone things are gonna be, I don't want them to just be like random things like, hey, here's a thing, go buy it. Maybe I can make a buck real quick.
Brian Casel:Like it's gotta be part of a larger strategy toward building a like I really wanna commit to a mission of some kind that I'm fired up about that I can show up every day for years to build something. Like that's that's what any great business asset is gonna require. Right?
Jordan Gal:Yes. Years.
Brian Casel:And I As frustrating as this year has been with being so unfocused, I think I needed hold on. Let me close the window. Landscaping time. I think I needed this year and I and I'm I'm happy that I've been able to take the time to explore and try to learn a lot about what I truly want to sink my time into. I think Alright.
Brian Casel:One idea that I wanna talk about here that's really on my mind lately is just the the concept of SaaS. Right? You know for years that I, like you and like probably a lot of listeners of this podcast, have been on the quest to make a SaaS business work.
Jordan Gal:Mhmm.
Brian Casel:And for me personally, I know this is not the case for most of us here, but like for me, I I'm I think I'm finally just like fully like letting go of that of that dream a little bit.
Jordan Gal:Okay. Okay.
Brian Casel:And just really understanding for me why I don't think it's wise or ideal or optimal for me to just pick a SaaS business idea and and commit to that for Okay. For however long.
Jordan Gal:Think that's smart. Let's get into that. I I'm Alright.
Brian Casel:And I have a specific
Jordan Gal:Oh, you got there.
Brian Casel:Thing on that. I like, when I consider all these different business ideas, like, why is it that I've had a hard time choosing a SaaS idea and and saying, yes, I'm so fired up about this idea and this opportunity and this evidence that I see around this opportunity that I'm willing to put in many months to see this through. Right? Like I have not been able to get myself to that point about any single SaaS idea. I have plenty of SaaS ideas that I see opportunity with, that I think would work fantastically well for for some someone who wants to do them.
Brian Casel:But every time I start to think and game out each of these ideas, it's like even if it's successful, even if it gets first customers, it's still such a long road to make it work and it also requires a lot of just like, almost like magical thinking to think that like you're gonna be able to get out of the desert on this and you're not gonna waste a year or more on this idea. Yeah. Like I I just can't be convinced of that for any SaaS idea. And I think part of the reason for that, of of course it comes down to like product market fit. Right?
Brian Casel:Like why is it why is product market fit so hard right now in SaaS? I like I don't care who you are. If you are starting a new SaaS in 2024 and you have not reached product market fit, you you know what I'm talking about. It this is the most the hardest thing to nail.
Jordan Gal:And so many people that nail it, there's so much luck involved. It really doesn't feel like this reasonable, repeatable thing to like bet your, you know, years of your career on.
Brian Casel:Dude, it exactly. And I'm and this week, I'm thinking a lot about like, why is that so particularly hard in SaaS specifically?
Jordan Gal:Do did you get to any answers?
Brian Casel:I Here's an answer. I think that it's not just about It's true that SaaS is so much more competitive than it has ever been. Mhmm. Right? We know that.
Brian Casel:We we know that every category is hyper competitive now. Every single one. We also know that competition is coming even faster. I talked about last week that like it's so much faster and easier for anyone to spin up a new competitor
Jordan Gal:discover something relatively not competitive Yeah. That works and gets product market fit, it will be competitive faster than in the past.
Brian Casel:Here's the new idea that I'm thinking about or the new reason why I think it's hard. It's You do need to dominate your your You have to really win your market for every single customer. Like, it it's great that you have competitors. It's great like, I think that's a good thing because it proves that there's activity, there's there's a market there, like you're gonna have competitors, that's fine. That the existence of competitors shouldn't scare you off from any business.
Brian Casel:But in SaaS in particular, for you to win each individual one customer, you have to completely obliterate every single one of your competitors. Because because your customer is not gonna choose any of your competitors. They're only gonna buy from one and they're choosing you. And and
Jordan Gal:the switching costs aren't that high?
Brian Casel:You're you're selling them on your on your solution, but I would say these days even more, you're selling them on like, hey, don't buy those 50 other SaaS competitors to mine.
Jordan Gal:Mhmm. Yeah. Even though you heard about them from someone and you saw their advertising and And they have a better name and a better domain. Yeah. I hear
Brian Casel:that. That's unique to SaaS. Right? Because think of every SaaS tool that you pay for, you only buy one of them. Like I for for Clarity Flow, we we pay for customer IO.
Brian Casel:That's our email service provider. We don't pay for any any other ones. Like we pay for one hosting provider. We pay for one this, one that. Like we're not gonna pay for the other ones.
Brian Casel:But that's not true in other business models. Like training core you know, course businesses, educational businesses, coaching businesses
Jordan Gal:Mhmm.
Brian Casel:Even consulting. Like people buy multiple You know, community businesses, people buy and belong to multiple communities. People buy many courses. People hire many coaches over time. Sometimes simultaneously like they hire many consultants like you don't have to completely That that's why those businesses are easier to sell to customers.
Brian Casel:Every business is hard in some way. But like, you don't have to dominate.
Jordan Gal:It's easier to be unique. It's easier to differentiate. It's not as competitive in that same way where it's like a business expense that happens every month and therefore you you choose one and use it.
Brian Casel:Yeah. And it's like and it's like the the buy the the buying proposition on a SaaS business for any customer, it's always, you always have to get over the the main objections are are like, well, why don't I just do this? Or why don't I just use that? Like, you don't have to get over that that objection with other business models. You only have to do that in SaaS, it seems.
Jordan Gal:Yeah. Okay. So here here's the counter to that. The the normal argument against that is in categories where it's a regular take email, for example. Right?
Jordan Gal:If you assume a very large number of businesses and a large portion of businesses online are going to use an email solution, you can battle your way into a niche and do things slightly differently and therefore stake out a position. Because the market's so big, that position can still be worth pursuing.
Brian Casel:Yeah. 100%.
Jordan Gal:Yes. Right. That's the logic of it. In practice, the the the distribution of customer focus is extreme. I mean, when I talk to RVCs, the only interesting thing is either winning the market or becoming number two at worst.
Jordan Gal:Yeah. Because everything everything congregates toward the very, very, very few at the top. So you if you want a bigger business, you have to win the market or be number two at worst.
Brian Casel:But even all that is like in in the aggregate in at at at the high level
Jordan Gal:like when you have It makes sense logically in practice.
Brian Casel:Look, it's it's still fun You can still have a great business being the tenth most popular email service provider or any SaaS. I
Jordan Gal:challenge what you mean business.
Brian Casel:Well, like any any bootstrapped business or low Like you could Like Clarity Flow is not set setting out to be the biggest platform for coaches. But like we we could have a a you know, a solid business. Hopefully someday, if if it if it were to get through these growth plateaus. Right? Sure.
Brian Casel:But like But part of the reason why there are growth plateaus in It is because there are competitors and there are there are always alternatives. And it's easy enough for customers to switch to another one or just choose another one. Yeah. And and look, what I'm saying here is look, sat there are incredible SaaS businesses to be had. There still are.
Brian Casel:It's still to me like probably like the holy grail business model. It's fantastic. We see it every day. People build and grow and sell SaaS businesses and it's incredible.
Jordan Gal:Yep.
Brian Casel:What I'm saying is, this is mostly speaking for me where I am at in my career and life and everything. It's like I What it takes to start and bootstrap and and like and and kinda put all my eggs in that basket of like, I've gotta fig I've gotta find a sass idea to make work. To just me like I'm The more I I think about this, like there are other business models in the world where people with my skill set and my strength and weaknesses and I could I could build a fantastic business another way. It doesn't have to be a SaaS.
Jordan Gal:Okay. I I I like you opening up in in this way on on the mindset and and like the type of business to pursue. What what I I don't think it happens that often. Great SaaS businesses are actually not that common. There are a lot of them.
Jordan Gal:Does not mean they're that common.
Brian Casel:Right.
Jordan Gal:Think about the the web of people that you know. How many great businesses are there? Not that many. Yeah. And my real problem, my real problem is our definition of a great business is bullshit.
Jordan Gal:A million, $2,000,000 a year is is not a great business.
Brian Casel:Right.
Jordan Gal:It's it's a million bucks in this economy is I I hate I hate that the cap or what is considered by us to be a great business is is really not. It's really hard. You have to keep running forever. You have to sprint. You you you can't just like, you know, go on vacation and rest on your laurels and have your business keep growing because other people run it for you.
Brian Casel:I do think that 1,000,000 a 2,000,000 a year is is still a pretty life changing business for most people.
Jordan Gal:Agree. A, very hard to get there.
Brian Casel:Yes. That two yeah. You're you're still in the top what? Like 1% once you Right.
Jordan Gal:Once you get there. Get there, how much are you actually taking home? Out of a $2,000,000 a year business that's growing and and needs to be fed with customer support and success in marketing, most people, the margin sure. Gross margin after cost of goods sold looks amazing because it's just hosting. But how much is actually being brought home?
Jordan Gal:Right? This is that that conversation I had Oh, okay. Like Rob Walling a while back. Remember, I just wanna finish this because it stuck with me. I remember being at like 10 or 20 k a month with Cardhook and Rob was at like a 100 or 150 k a month with Drip.
Jordan Gal:And I was like, dude, how much profit are you taking? And he was like, are you kidding me? Yeah. You can't. If if you wanna take profit, are consciously putting a weight on your business and slowing it down and you have to make the trade off.
Jordan Gal:And I was like, in my back of my head, I was like, that's crazy. When I'm at a 100 k, I'm gonna be banking. And he was like, you let me know when you get there. Yeah. And tell me how it really looks.
Jordan Gal:And he was a 100% right.
Brian Casel:Okay. I So
Jordan Gal:I don't I don't I don't like it. I don't like selling ourselves short. I don't like seeing all this other stuff out in the economy.
Brian Casel:I We hear you.
Jordan Gal:Such better potential. If I were about to if I were to start a new business tomorrow, I don't think it would be it definitely wouldn't be SaaS. Yeah. I don't even know if it would be online. I think I'd rather go to the SBA and put 10% down and acquire a local business for $3,000,000 and try to make it better with my digital skills and outsourcing to The Philippines and doing all this stuff that we know that's more modern than the person running the $3,000,000 painting business knows.
Brian Casel:Totally.
Jordan Gal:And I think there's more there's more money to be made there.
Brian Casel:I think I mostly agree with with everything that you're saying about a call it a million to $2,000,000 business, especially in in the world of SaaS. And I don't think that this is for every SaaS, yeah, probably for most of them, you're not very profitable. You You're you're gonna be growing the team at that point. You're gonna have server costs. You're gonna have customer support costs.
Brian Casel:Sales and marketing costs to to to remain competitive because it is hyper competitive and you and you do need And and so like, yeah. I could easily see how most SaaS businesses who who cross a million or 2,000,000 like, the I do Well, okay. They might not be like crazy like beyond belief profitable, but the people working in those businesses, the founding team, they're making a good income. Like that you're you're not You're you're getting paid a full market salary at that point. Number one.
Jordan Gal:Yes. Which none of us are actually after is the goal.
Brian Casel:Exactly. But the other point that I'll make is that because look, like my my SaaS business is not in that range right now. And I and I feel like I I'm not even gonna come close to the idea of having a sellable asset that I could have a life changing exit from until I get to that 1 to 2,000,000 or above level. So once you do get to that 1 to 2,000,000 above
Jordan Gal:Then you're
Brian Casel:then you're talk
Jordan Gal:because Yep.
Brian Casel:Then then you know that what you are working on every day is something that in all likelihood, you will have a life changing exit from in the coming years.
Jordan Gal:Right. If you own the company Unless you really from anywhere between right. Anywhere between 2 and $10,000,000 is a lot of money. Yeah. A lot of money.
Brian Casel:And so so Not retiring,
Jordan Gal:but it's a it's a lot of money.
Brian Casel:So once you've grown that to over 1,000,000, you you are now working on a fantastic asset that that's going to be great unless you really screw it up.
Jordan Gal:Yeah. I mean, that's the dream everyone's chasing. It I don't see nearly as many people reaching that goal
Brian Casel:Yeah.
Jordan Gal:As as as I would
Brian Casel:But I would also say and what I'm focused on right now, like like this week thinking about where am I gonna focus my effort, my business going. Like if I'm gonna start my next business that I'm gonna dump years of my life into, I think that there are other businesses that could like get to 1 to $22,000,000 and above and be very profitable. I'm thinking a lot about training businesses, community businesses, and and like you know, templates and components.
Jordan Gal:Mhmm.
Brian Casel:You know, building for building for builders, you know. Right.
Jordan Gal:That kind of business, $500,000 a year, you're probably taking home 400. Which again, that's a lot of money. You can't sell that business for $5,000,000.
Brian Casel:Well, okay. So so here's another thing that I'm getting very interested in Okay. Right now. And I'm starting to like talk to a lot of people about this to try to learn. Okay.
Brian Casel:What I'm really interest What I'm starting to set my sights on in terms of where I'm I think I'm gonna be really focusing for for a long period of time going forward is I think it's gonna be some kind of training business Mhmm. Educational business. But I'm not interested in it being like a solo creator who sells a course business.
Jordan Gal:Okay. I mean, those can be beautiful businesses
Brian Casel:beautiful, you know, the the creators who who do amazingly well, like it's a it's a fantastic business.
Jordan Gal:Yeah. I think Aaron Francis is gonna end up making a million dollars a year.
Brian Casel:Oh, hell yeah. Yeah. He doesn't already. Yep. The you know, I I'm I'm so inspired by those kinds of businesses.
Brian Casel:Right? Like the the creator business. Right? But I I'm thinking more about like Well, okay. Shorter term, it's probably gonna look like templates.
Brian Casel:Taking my UI stuff and selling it as like a template library. That's probably like the next thing that I'm looking at. And that's more of a short term thing, but I think it's a stepping stone to expanding out into a a bigger company here that can be a training thing. I like I remember, I'm thinking more about like a training company with multiple instructors and Okay. And whether that's a team of instructors or we bring in like guest instructors and guest coaches to like feature them and they teach a course here and there and like having like a whole like library of courses and community.
Brian Casel:And so if I think back Like here's a little pattern that I think back to. Like back when I started audience ops years ago. When I had the It was the day I was sitting at MicroConf in Vegas. And it was like the day where I realized like, oh, there there could be a business in selling blog content as a productized service to clients. And I was like, I think there's an opportunity here.
Brian Casel:I see a lot of people who have a need for this. But my rule my personal rule for this is like, if if this business is gonna work for me as a business that I wanna start, I cannot be the one writing the articles. Like, I'm not going to write articles for clients. Like, me, Brian
Jordan Gal:Yes. Yes.
Brian Casel:If if it If that's a requirement, then I don't wanna do that
Jordan Gal:Agree. Any business actually.
Brian Casel:Yeah. And so I never wrote a single article for a client. Right? But I built and sold that that business. It it was super profitable for years and then I sold it and it was great And and I did it through building a team and systems and processes.
Brian Casel:And I sort of have that same mindset here. If if I'm gonna build some form of a training company, I wanna get really good at the system for researching, designing, building, deploying courses instructors. Know, bringing in outside instructors or building a core team of of instructors. Something like like that. I don't know all the details and and how that would work.
Brian Casel:Maybe what the financial model might be or the licensing deals or royalties or whatever that might be. Mhmm. But like, that's sort of interesting to me and then you you sort of pair that with templates, UI components, tools. So I'm talking about like four builders, fellow builders. And I I think that's something that I that I could get fired up about.
Brian Casel:And and and I could also see a path to like making this work as a profitable business without too much, like, magical thinking. You know, without, like, hope Without, like, hope of making it out of the desert a year from now, like the way that I would with any SaaS idea. This this seems more attainable and at the same time, I I can see a path to building a multi million dollar business that can actually be sold in the future, which is, you know, like, let's not lie. Like, that's that's definitely a goal of
Jordan Gal:Hell mine yeah. Yeah. The the only thing I think the the key thing that was wrong with the business model of, I mean, of services in general is that there's marginal cost for every and that's the enemy. So anything having to do with training or courses or, you know, curriculum, that type of a thing, as long as you make it once and then there's no additional marginal cost for each sale, then then you have the right business model. Yep.
Brian Casel:Yeah. I I think that they're I think with, like, real is the wrong word. But I what I mean is, like, these, like, scalable training companies that I'm trying to study right now. I'm trying to learn a lot about them.
Jordan Gal:Yeah. There there are a few out there that are good examples.
Brian Casel:Oh, there's a there's a ton of them. It's a huge market. There's like just in the tech space alone, you've got like boot camps everywhere. You've got Yeah.
Jordan Gal:There's a bunch of the word WordPress WordPress. A few years ago.
Brian Casel:Yeah. What's what's
Jordan Gal:the one based in Portland? Not egg egg?
Brian Casel:Egghead. I'm Joel Hooks. Joel.
Jordan Gal:That's it.
Brian Casel:Yeah. I literally just emailed him this morning. I'm gonna be Okay. Interviewing him on the Open Threads podcast next
Jordan Gal:week. Okay. Cool.
Brian Casel:I can't wait to learn from him.
Jordan Gal:This is what I remember from Joel. I go to a lunch in Portland with the MicroCon crew. One of the first lunches of after moving there. We're sitting down, we're hanging out having like I'm in our normal lunch spot. So I think I'm feeling myself at this point because Cardo's at like 50 k a month.
Jordan Gal:Okay. Joel comes sit sits down tatted up loose Yeah. Happy, no ego, no not just this casual dude sits down starts talking about his numbers. I'm like, oh Yeah. Okay.
Jordan Gal:Like, because that that's a better business. So he he's been doing great for a long time. They just put out amazing quality. Incredible.
Brian Casel:Amazing quality. I I can't wait to meet him. I'm gonna talk to him next week.
Jordan Gal:Go and
Brian Casel:and really pick his brain on air on on the Open Threads podcast. So that that that should be pretty cool. I'm talking to a few other course I'm also talking to to Chris Oliver from Go Rails. He's he's built an incredible business over there. And so what I'm interested in, like I said, short term, I'm probably gonna be selling like templates and components and UI stuff.
Brian Casel:Because that's like a by I already have that. It's like a by product of the work that I've been doing. But I see that pairing with like training on how that stuff is built. Longer term in like sort of like the sort of like the the mission, if you will, that I'm start And I don't have like the exact elevator pitch for this yet, but what I'm getting kind of excited about, I sort of see a wave coming.
Jordan Gal:Non developers trying to become developers?
Brian Casel:In a way, yes. It's AI driven. Okay. There's We're already in like an AI wave right now in terms of like tooling with AI. Mhmm.
Brian Casel:Right? Like you're building an AI tool, like there's That wave exists and it's real. Right? I think that we're also on the cusp of a people wave of Look, people like me and and you and most of the people listening to this podcast, we know how to leverage AI to build software solutions in in businesses. Right?
Jordan Gal:Mhmm.
Brian Casel:And AI makes it incredibly easy to build software solutions. So that that viral tweet of an eight year old building a software thing with cursor this week, that was incredible. But the rest of the world is not there yet. Mhmm. Right?
Brian Casel:Big gap. Big gap. Huge huge gap. And they might see that this stuff is possible but you don't know how to You you can't use AI to build a software solution if you don't know the right questions to And the prompts and the And how and how software gets architected and and what's actually possible and how the big pieces put together. You People like me, I can direct an AI or I can build myself to put it all To put the pieces together.
Brian Casel:Right? I think that there's already a a ton of training out there for like developers teaching fellow developers how to build this or that stack. But I think that there's a larger a larger wave of because businesses everywhere are are gonna be hiring builders at a much much higher rate in the in the coming years. I I really believe this. I I think that like small businesses everywhere, Like businesses who who wouldn't normally hire developers, they're gonna Like hiring a developer is gonna become the norm for like every business.
Brian Casel:Like every single business.
Jordan Gal:To just solve their their I don't know.
Brian Casel:Streamline your business with technology and AI.
Jordan Gal:Yeah. I I'm seeing a lot of agencies that are starting to specialize in that and they're coming to us. They're they're almost kinda nontechnical themselves. They're just selling to people who are completely nontechnical and they're like, I will improve your business. Yeah.
Jordan Gal:Like, basically, don't worry how. There's lot of opportunity.
Brian Casel:I think the past couple of decades, it's it's been like most businesses don't even really know like what's possible with technology and so they they just stick with their spreadsheets and their paper and their and their, you know, person to person interactions. But now we're in a time where like businesses are becoming a lot more savvy about what's actually possible. You're see you're literally seeing it with your customers on Rosie. Like small businesses are are starting to get tech technology. Mhmm.
Brian Casel:And they need to they they Yes. They need They're gonna be hiring tools for that. They're gonna be hiring consultants for that. They're gonna be hiring employees for that. The founders themselves are becoming more technology, you know, technological.
Brian Casel:So I think that there's a workforce wave that's coming where people need to be skilled up in order to be hired to be the builders in these companies. They need to be skilled up to offer their consulting services to companies and they and maybe they're running a business themselves and they wanna skill up to to streamline something in their own business, you know.
Jordan Gal:I I I like that, identifying that. To me what stands out is the potential to either improve your hireability or build a business around these skills that make learning it very very valuable. Beyond just like, hey, I wanna accomplish a task so I wanna learn how.
Brian Casel:Yeah. I think that like there I That's why the the training space especially in tech has has already blown up for the past ten years. Like there's there's a massive industry of of these like tech boot camp, like course educational companies.
Jordan Gal:If you're motivated, you can get yourself into a 6 figure salary. It doesn't matter where you were
Brian Casel:born Exactly. Or what circumstances. And those are Those have done really well on the what they're selling is like, hey, you're in some other industry and you wanna break Yeah. Into the tech industry. Right.
Brian Casel:Hireability. And that's just to get a tech job. And I I think that's gonna continue to play. But it's gonna get multiplied now with AI because like every single business is gonna have a wave of demand for more of these builders. It's not just like get hired at a tech company.
Brian Casel:It's gonna be like get hired at like literally any business because they're all hiring technical builders.
Jordan Gal:You know. Yeah. Very interesting. I saw something
Brian Casel:that's just like my hunch, but like that's sort of what I'm seeing. Like, even like in some of the clients that I'm working with on on the MVP service. Right? Like, I'm I'm finding like people are in these like regular non tech industries and they are technical. Like, small business owners are using Zapiers and no codes and to wire up ChatGPT to streamline things in their own little small business.
Brian Casel:Yeah. You know? And like, that's like, wait. Normies are starting to do that kind of thing? Mhmm.
Brian Casel:Like, that's a that's a little lagging indicator for like, there's a wave here. Like, people are, you know
Jordan Gal:I I I like that. I don't know exactly where it leads. I don't it doesn't really you don't need to know where it leads right now.
Brian Casel:Yeah.
Jordan Gal:You're just kinda heading that direction. I saw something the other day that stuck with me where this video is showing how to sell websites with AI. And what he was doing was take a website, your prospect's website, put into these tools
Brian Casel:Yeah.
Jordan Gal:Take all the data, have it build a a beautiful modern website with all the existing data. You have done no work and it has cost you nothing. And then right. And imagine approaching a business with, I rebuilt your website. Do you wanna buy it?
Jordan Gal:And imagine competing with someone who said, you know, let's have a conversation. I'll give you a quote, then maybe I'll start working on your website. So even that's
Brian Casel:just
Jordan Gal:a little unfair thing to take advantage of that if you know how to do it, you're at an advantage.
Brian Casel:100%. Like, a lot of that stuff is like, if you start to think about it, now in the age of AI, all all that all that kind of stuff. Like I My whole early part of my career was selling people on redesigning their websites. Right? And like, that stuff is going away.
Brian Casel:Like, like, yes, there are there's always gonna be consultants who can help with that. But I think that we're just a few years away from like, mainstream small businesses being able to do that themselves. Like, you know, like, I we're we're really entering a phase now where it's gonna everything is gonna become so much faster and easier. And maybe maybe the the the whatever like like the like the older business owners are not gonna be able to you know, tool tool it up themselves. But they're gonna be hiring younger folks to get into their businesses and and and get get set up.
Jordan Gal:Yeah. That's fine.
Brian Casel:You know?
Jordan Gal:Alright. Well, I I like this detour that we took. I'm gonna jump off to my my mastermind
Brian Casel:because I
Jordan Gal:got I got those on Friday now.
Brian Casel:There you go.
Jordan Gal:We're gonna keep working our way down the funnel. We're gonna go celebrate Michigan not losing their opener to Fresno State.
Brian Casel:Alright.
Jordan Gal:And That's a good one. Everyone has a great Labor Day.
Brian Casel:Alright. Later folks.
