The Psychology of Building and Selling a SaaS: 5 Lessons Exits Teach Founders

0:00Okay, so hopefully you have in your hot little hands this pretty green book um which Rob and I have recently spent the past couple of years really diving into the subject of what happens when people are exiting their business. And I've given talks about exits at Micro Comp before. We're not going to redo that, but the thing that this book has been so helpful for us in terms of really doing this deep dive is that we're kind of looking at the story backwards. So, when we talk to people about what their journey has been like and how they've exited their business and all of the things that went into their experience

0:34of starting and growing and running their business and then getting ready to leave their business, we learn a lot about their relationship with their business. And as a psychologist, this is the thing that I like love about the conversation that we have at Micro is this understanding that it's not just tactics and strategies. Of course, those things are very important. But it's also this question of how do you do this well? How do you do this in a way that is sustainable, that is healthy for you, healthy for your family, healthy for your team? And I like this framing of thinking about how to be in a

1:12relationship with your business almost like it's this separate entity. So, we have learned a lot by writing this book about this relationship question and how people are in relationship with their business in a way that is useful. So, we're going to go through the five lessons and we're going to go back and forth a little bit. Hopefully, we won't interrupt each other too much. Although, I did think that we should have like a drinking game or a bingo card to see how many times someone

1:39interrupts somebody else. Yeah. [laughter] Let me stop you right there and just That was an obvious joke. Sorry, Lyanna. Um, no. One thing though is you have the book, you're going to read the book. What we're saying on stage is not from the book. It builds on top of the book. So, it's additional information. It's one of the challenges of being an author is putting something into the world and then being like, but you all have the book, so I can't just regurgitate a chapter. So, I really this stuff is is new custom content that

2:02you're seeing for the very first time. Which is also a way of saying you have to read the book. Yeah. Okay. Lesson number one. Your values determine your trajectory in your business. Bless you. Good timing. So your values, who you are, what matters to you are phenomenally important in shaping of course the business that you build, but also the exit that you have. And we have watched how uh people have developed and shifted their values over time. So a lot of us begin in our business because

2:36we're we're good at doing something. Maybe you know how to code. Maybe you're a designer. Maybe you're like a marketing, writing, copywrite person, but you have this skill set and usually you have the ability to form a business around a skill set and it's the thing that you love, but it's also probably not sufficient in all the things that you need to be able to do and able to be good at in order to

3:03grow and scale your business over time. So we think about these different components of who you are and what matters to you. And the first of course is the artist. This is where a lot of us start. We think about what is to become of the product. We're so focused on the thing that we're making. And then we've got the leader. What's to become of the people? How do I run a team? How do I grow a team? How do I hire a team? And then in the case of getting ready to exit, what happens to my team? What is my role in this conversation around the team? And then

3:38of course we have the entrepreneur. This is the business person which is how much money are we talking? How much can I charge? How much am I making? How much can I sell for? And in the context of an exit because again we're sort of starting with the end and working backwards. These are some of the like knobs that you turn and buttons that you push. When you think about what your optimal deal is, it's it's usually not just here's a bucket of money, but you're also thinking about these other things. What happens to the product? What happens to the brand after I leave? How much do I want to be

4:13involved in that? And of course, what happens to my team? What are the options for them? So, these questions that we're asking about what's important to us shape the kind of exit that we're going to have as well as like the business that we're going to run the whole way through. Yeah. Yeah, I think it's important not just to think about the exit because as as I think about my entrepreneurial journey, uh the artist is I think of it as the maker, right? It's the designer, the developer, whatever is Sher said, the copywriter, marketer inside you. And as I started my journey, let's say 20 years ago, I was a maker. I was a

4:45developer. And I didn't want to be a leader. I didn't want to have team members. I didn't want the headache of it. And I was really out I want to make enough money to provide an amazing lifestyle or, you know, rest of my life for me and for my family. and I want to make cool and I want to make cool that I want to work on. So those were my two goals. Artist and entrepreneur were right up there. Well, over time as I became, let's say, more successful with efforts and and like after Dererick and I sold Drip, you know, the money thing faded away from me

5:13because I'm in a place where I don't have to worry about it so much. And I'll be honest, even the artistry, how in deeply involved I used to be with every product decision and every every line of copy that was on the drip website I had written myself, that is almost I've gone through a transition to where now I view myself much more as a leader of people, right? So, if you ask anyone on my team, you see here um well, you don't have to ask them, but I I I'll just say I spend more time like mentoring, rising raising up and and teaching people now than

5:43actually doing the thing. And I didn't think originally I'd be very happy not making but in fact what we're making as a group and what I'm you know maybe painting the vision towards and leading people uh I think is much more important and if you look around and you say people will ask me how do you get so much done like how are you running micromp and tiny seed and this podcast and the YouTube channel and it's like because I don't actually do that much anymore I lead. I come in and I work with my people and my team gets the done and they make really good decisions

6:13because we're we're a unit. So that just I'm just trying to illustrate like how it's changed for me over the last 20 years. And so if you're in a spot where you are truly a maker and you don't want employees or whatever, that's cool. That may change for you over time. Be open to

6:25that idea. One of the questions that I get a lot from founders is around focus. It's around what do I pay attention to in a world where there are so many competing priorities and especially in the early days of a business where you might be the only person working on the business or maybe you have a couple contractors and there's so many things on your to-do list. How do you focus? How do you choose what's most important? And it's not perfect, but I think one of the things is to really go even into this high level of what are the values right now? What are the things that are most

7:01important to you? Is it building that really great product? Is that the thing that's driving you? And then let your to-do list, let your daytoday kind of fall in line under the values that are of paramount importance to you given where you are in the life of your business and be honest with yourself. I have a lot of respect for Jordan Gaul who couldn't make it this year, but he'll get on a podcast and say, "I'm in it for the money." And I always respect him because, you know, I think I was kind of in it for the money, too, but also making stuff and working on what I

7:31wanted. But I don't know that I could admit that to myself because it felt like, well, then what am I a sellout or am I not a real entrepreneur or whatever? But like Jordan will just say, "No, man. I want to get I want to have 10 million bucks, 50 million bucks. I want to be able to work on whatever I want." So, if you're doing this

7:44exercise, be honest with yourself. And so one of the ways that getting to this for yourself is thinking about where you want to be in a year or two years or five years that helps you to know like what's the most important thing that I'm after that I want to accomplish. I do a lot of uh work with founders around like basically like time traveling like skipping between time pulling things from the back to the present or from the past to the present and then looking forward to the future and really getting clear on what matters to you. So one of these value questions that I really like um I picked up from

8:20my friend Clay Abear and he asked this question if we were to meet one year from now what would you like us to be toasting? What's the thing you're after that would be worth a celebration? And because Micro Comp has become a place that really is um like like wonderfully fertilizing relationships, like really helping relationships grow to be strong and deep. I actually want you all to take just a moment and turn to the people at your table, maybe in huddles of like two or three, and ask this question. If we were to meet one year from now, March 17th, 2026, and we were celebrating something or you were putting your big

9:06success in the Circle app, your big brag, your big like, "Oh my god, I did it." What would it be? What would be the thing that we would be toasting? It's a good question, isn't it? It's a good question. Like, what would we want to be celebrating one year from now? I hope um you'll write it down and continue the conversation with the person you were talking with if it serves you. Lesson number two that we really gleaned from talking with founders about their exits is that business moves at the speed of

9:36relationship. And I must be honest, I think this is a bit of a difficult one, but it's something that we have found to be true over and over and over. And again, if you are a maker and you really like to be the person in the garage or the basement who is tinkering and who is making something just fantastic and amazing, this idea that your business is really dependent on your relationships can be uncomfortable. But the reality is that you can't build your business

10:05alone. You need humans in your business. You need humans to be your customers. You need humans to be your team, your employees. You need humans in your life to help you celebrate, to drink your champagne when you have accomplished the goals that you've set out or to like pass the tissue if something doesn't go the way that you plan. So, you can't build your business alone. So, no matter how ingenious you are in the ways that you solve problems or creatively see the world, and you probably are because most of the people in this room have a way of solving problems or seeing solutions to things that are truly unique, which is

10:44why you're here and why you're successful. So, you are your business's most valuable asset. The way that you see and think, we acknowledge that, but you aren't the only asset. And if you run your business like you are the only asset, then you will experience pretty significant trouble. Even like really specific like bottomline business things. This isn't just like a a soft like happy life psychologist idea. Your relationships determine your level of burnout, which of course is a psychological framework, but how tired you are, how much energy you have to do your work. Your relationships can also really shape things like churn. How much do you interact well with your

11:32customers? How are you attaching to them? How are they attaching to you? How much do you attend to their needs? Of course, your team turnover is highly dependent on your ability to be successful in relationships. The fact that you can build something doesn't make you a great leader. It doesn't make you a great manager. Those of you who are in the process of hiring know this well. It's a totally different skill set and it's one that can be really challenging for people as they're growing. So your ability to be well in your relationships with other humans shapes all kinds of aspects of your business success, right? And so Sherry talked about

12:12customers, team members, but if you've listened to me for any length of time, you hear me say the same things over and over, right? Build your network, not your audience is one of those. And so that goes outside of your company and that starts at a place like microcom. And when I say build your network, I mean do it authentically like authentic friendships. This is not about fakey fakey. Oh, I know a bunch of people who are kind of my friends. It's like you build these relationships to where you can ring somebody up when you're in trouble, right? Ring somebody up when you're when you're struggling with your

12:41business. You can ring somebody up when it's like, "Hey, you have an audience that uh is a bunch of podcasters and I run a podcast hosting company. So like can you you know promote it?" uh your network is something growing up probably almost none of us had in here because none of us were uh you know most folks who come to microconf and frankly who are funded by tiny seed are just kind of came from nowhere and that's what I did as well right and you build it up one person at a time and I've heard this phrase your network is your net worth which I don't know I think build your

13:12network not your audience is a little better but um of course you do because you say because I coined it yeah to quote quote myself, allow myself to quote myself, quote myself. Um, anyways, the the ability to just uh come into a room, it's a skill set that you want to develop um both online and in person. And I think that's a big big part of being here. And then the other part of this is the personal relationships. Um you'll often hear me say, you know, the reason I became an entrepreneur was for the freedom, for the purpose that it brings me, and for and so I could

13:43maintain healthy relationships. Those relationships I'm talking about are actually the interpersonal ones. Um, the ones with my wife and my kids and my close friends. And over the years, as things got hard and then not hard and hard and then not hard, I I torched some of those relationships. Um, not on purpose, I will say. And so, I think part of this talk is is not just about how staying in contact and and being uh being a good manager to your team and building your network. This is all important. I was doing a good job of that. But if you neglect the personal side, you will have potentially deep

14:17deep regrets. And some of the the deeper regrets I have about all through all the successes and failures that I've had is when I haven't paid attention to this piece of it. There's a reason that we bootstrap or mostly bootstrap is so we can maintain these personal relationships. Um you'll see in my deck when I talk tomorrow it's I always have the picture of the family because that

14:37is the guy that's my north star, right? And my guiding light. I don't know if people know that you became an entrepreneur when we had our first child. Like Rob had a normal person job and then we had a baby and he took paternity leave and just like never went back to work. So literally the personal relationships drive the Y for this. And and one other just thing to add, like when we talk to folks about exiting, one of the best exits is a strategic acquisition. And it's often with similar companies, maybe people who could be kind of considered competitors, but who are sort of in your sphere. You know,

15:14they're growing maybe faster than you, but they're sort of doing something similar. So, keeping a tab on people even who you might consider to be competitors, but who can someday be your best buddy because they're writing you a really big check for your business. Um, is just an important kind of like relationship strategy to keep in mind. All right, lesson number three. This of course is my personal favorite. Um, your psychological well-being is really a

15:39competitive advantage for your business. And I think this is one of the things that um I'm really proud of about the microcom ecosystem is that there is this emphasis on like let's be sane, let's be kind, and let's do this in a way that um you know feels good and we can kind of keep our souls intact. One of the things that I've been thinking about a lot uh in in my funny brain is the internal founder system. If you know anything about psychology, it's a total ripoff from internal family systems. But I think a lot about the different versions of you that live inside of you and the

16:15different voices that you hear in your head when you're trying to make decisions. So internal family systems breaks this down. And this is a pretty common concept. If you've ever been in therapy, your therapist might be like, "Oh, that feels like your inner child talking." But it's real, right? There are all these parts of us that get activated by different experiences. So

16:36in this model we talk about exiles. These are the parts of us that maybe are not quite fit for grownup responsible life. This is our rebellious teenager. The part of us that wants to stick it to the man when they, you know, raise our slack slack fee or something. The part of us that like refuses to work in a cubicle. Like it's a powerful part of us. Or there's an inner child that's like seven and really just wants to impress their dad or get their mom's attention or be better than their older sibling or whatever that little child part of you was motivated by. All of

17:14these things get sort of swept up into who we are as entrepreneurs and we kind of have to have eyeballs on it, right? We just want to know when we're acting out of our adolescent rebel versus our inner child and we're just trying to people please. We also have these parts of us that are the emergency response system. Dick Schwarz, who came up with internal family systems, calls these the firefighters. These are the parts that come in and they're like the business is failing and there's like big reaction and we get afraid of anything that could

17:44pose a potential threat to our business. And that can kind of make us crazy because there are lots of potential threats to our business. Some we can control and some we can't. And so for us to have a good read on when our emergency response system, our firefighters are getting activated helps us to know what is truly the thing that we need to cancel family dinner for and like go all in because the server is down or what are the things that feel stressful and unhappy or you know like not well but not necessarily necessitating emergency response. And then we have the managers. These are the

18:21parts of us that follow rules and do things right. So again, this really curious self-exloration is part of running a business well. We don't want our inner child to be making the company decisions. We just it's not a good plan. It's not a good strategy. It's reactive. It's immature. It's impulsive. It's things that will lead you to very problematic decisions in your business if you operate out of these parts of you. But we also don't need everything to be an emergency. We don't want the firefighter to be running the show because what we'll do is erode trust in our team, in our family members, in our

18:59partners when we say, "Look, I have to miss this. I have to miss this. This is an emergency. It really better be an emergency." So this idea of understanding how we calibrate our relationship with risk and threat shapes the extent to which we can just keep doing this day in and day out. But nor do we want to be only always in our responsible manager because all work and no fun is of course no fun. And I don't know about you but I enjoy having

19:26some fun in my life. Yeah. I want to add two things to this. So I have seen founders that uh there's a there's a bit here about knowing yourself, right? And and there's a lot of folks in this room who run a little on the anxious side, myself included. And if you're if you're not aware of that, then it becomes a blind spot. And as as Sher was saying, you can turn speed bumps into roadblocks really easily. Things that aren't that actually that big of a deal, you you turn them into something like the business is going to end. I have to sell and you sell too early, right? So, I've seen

19:59founders kind of get under that anxiety and let that drive their decisions. Um, and you know, in my own story, I certainly had moments of that along the way. And after stepping away, like selling drip and then stepping away. I took six months off and I started I went to therapy every week and I just did a lot of exploration into what was driving me and what was driving decisions and I told Sherry I said you know I'll probably start another company probably won't be SAS but I'm going to do the next one different and even though the stakes are higher the dollars there's extra zeros on everything I do these

20:31days with tiny seed micro comp whatever I have never been more relaxed in my life as a founder as a manager as a leader and [snorts] that came from doing a ton of work internally. And so if you are doing fine, you're doing fine. But if you're not, if you feel like things are really stressful, they're way more stressful than they should be. It's a lot of that that's happening in between your ears. And there's probably a bit of work to be done um to try the journey doesn't have to be that hard is is really what it is. And you don't what you don't want is for the journey to

21:04feel so hard that you just want to escape it because then you're not making good decisions around your business. I see this dynamic of these multiple parts or multiple inner voices come up a lot around big decisions. Big decisions about hiring, big decisions about what's the direction of my company. The times where you feel intention almost like you're fighting with yourself in your own mind. Has anybody ever had that

21:28experience? Yeah. Yeah. Two people over there. Thank you. [laughter] [gasps] Well, where you feel stuck kind of in internal gridlock. And because many of you are soloreneurs, you work alone. You run the show alone. You don't have a board you report to. That's by design. Uh you are a you are your own board. And so there are these various parts in you that are in conversation with each other and sometimes in tension with each other. So just just like having reverence for the complexity of you as a human and what it takes for you and all of your complexity to get on the same page in order to get things done in the

22:09way that you want to do them um is is really important. And so whether that happens through reading books, self-help, self-development, meditation, listening to podcasts about mindset related things, being in a coaching group, being in a mentorship group, being in the micro connect, like there are lots of things. Also, working with a therapist is generally a good idea for

22:30healthy well functioning adults. My take. Thank you for coming to my TED talk. [laughter] All right, point number four is understanding your money story. It is fascinating. So I'm invested in a couple hundred companies and the gamut of of folks uh I will we invest 150,000 200,000 into a bootstrappers company and some folks are really they grew up with a money story much like me of like I didn't have a lot of money so I can't spend any of this money. I'm a bootstrapper. I'm not allowed. And it's like we have to talk people into hey you

23:06need to spend a little more money. You're not going to burn it like a Silicon Valley company but you got to spend something. And then on the other side, there are some folks whose money experience or money story is like, "Hey, money is infinite money. Look at all look at all the zeros at the end of this." And then they burn through it too quick. Most tiny [snorts] founders do not do that. But um realistically, your money story is at the heart of a lot of business decisions. And I remember building Drip. I I had been so cashstrapped all the way up. And as we were building Drip, there were certain

23:36decisions that I think back on that I was like, "Well, we don't have the money for it." And I asked myself now, we might have had the money for it. I think there was a there was a money story going on, a scarcity story going on with me. And I remember after we we raised money for Tiny Seed and we were starting to hire and do things and Anar at a certain point, uh, my co-founder, um, he said, "Let's spend this money on a senior hireer or whatever." And I said, "We don't have the money for that." And he said, "What do you mean, Rob? Like

24:01there's a lot of money in the bank, right?" And I I started realizing my own money story and the scarcity around that was a negative driver. I was making poor decisions, not the ideal decision. So, as anything, it's a spectrum, right? You don't want to be too flippant with it. You don't want to be too scarce about it. The one action thing I'll recommend is on the next slide, there's this uh five money personalities. There's a bunch of diff different ones here, but five money personalities. There's an assessment that I took, Sherry took, and our kids took. And there's like five or I guess five different money

24:31personalities. Um, and it's this super fast quiz just to get an idea. You may already know it. You know, there's like a spender, there's a risk taker, there's a frugal person, a saver. I don't even remember what they are, but you do it. It gives you an idea. This drives a lot more decisions than you think in business. Like it's some underlying stuff. And if you know the the more you know yourself, the more you know about how you operate, the fewer blind spots you have. So even little say like trivial things like this figuring out oh you know what I really am a little flippant with money so good to know so

25:06that it you can have weaknesses you can have strengths if you know them that's great if you don't know your weaknesses they're blind spots and that's the that keeps you tripping over yourself over and over making the same mistakes. We've seen a lot of people get really far into like the exit negotiation process and then begin to act in ways that are just really irrational. And it's clear that there's something guiding their behavior that's guiding their story of themselves and their business that it isn't about the numbers on the spreadsheet. It's about some

25:41other money story or belief about money. And it's one of those things that really can torpedo an exit which is like again you're crossing the finish line. It's your like grand moment and it's a point in the story where people fall apart and it's often because of this kind of relationship with money. So it's a thing that you want to have a really good handle on right at the beginning um so that you you know save yourself the

26:07suffering. You don't need to suffer. Okay. Number five, the last one, an exit mindset helps you build a better business. Um, this is something that we have come to believe really deeply and it's why we wrote a book about exits knowing that not all of you are even thinking about that yet. But we're hoping that it's a bit of a guide to again this like idea of like fast forwarding and reversing out like starting with the end in mind and then learning from that process what you can about how to build your business in a sustainable way. One of the things that I think about in relation to exits is

26:45the ways that it's sort of like parenting. Like ideally, you're making something that can grow and thrive and exist without you. We have a kiddo in college and this experience of like watching them come up in the world and then be autonomous and now like go on road trips off without us. It's really strange, but that's a little bit of what we're doing with our business. And the way that we do that, again, this like issue of how we have a relationship with our business, we talk about that psychologically is attachment. What's your attachment to your business? And if you remember from psych 101 in college

27:25or if you've, you know, had children and done any parenting classes there or been in therapy with your partner, like there are these attachment styles and I think they apply in a really interesting way to our businesses. So a secure attachment is this sense of being able to see yourself and your business as separate entities that you can tolerate being away from your business. You can go on vacation for a minute and allow yourself to be away that you can delegate. You can trust that you have a sense of personal separateness from the

27:59business. That's secure attachment. You're like I'm okay. The business is okay. We'll be okay. Avoidant attachment is our way of um kind of not really engaging in the business. Like we might really like the idea of having a business, but we get down to the nitty-gritty of what it takes to be really healthy in the business. It gets more complicated for us. So this is sort of rosecolored glasses, difficulty engaging,

28:25inattention, lack of responsiveness. This is probably not most folks in this room. I feel like this is like the quality of the entrepreneur crew on Instagram. They're like entrepreneurs in in name and role but don't really love doing the work. Um, people are pretty vulnerable to shiny objects. Anxious attachment is maybe the one that might show up in this room a little more. And this is where like your internal filter

28:50is really set to what's going wrong. What are the threats? This is an anxious anxiety, difficulty with time away, hypervigilance, hyper attention, distress, difficulty with delegation. You don't trust anybody to do anything in your business. And this is not a sustainable way to be if you want to grow a business that is capable of living without you. Allah sellable. A business that is absolutely enmeshed or interwoven with you can't be sold unless you are also interested in being sold. And I I don't think any of

29:24us want to do that. And I think this single slide maybe summarizes most of the talk, right? It's thinking about how to build your business to run without you as soon as possible. It's not always possible when you're getting started, but it'll hit you'll hit a point of maturity where you can start hiring senior people and step away a little bit, take a vacation. That leads into cultivating a sustainable lifestyle so you're not grinding so hard. You don't want to grind so hard that you burn out and you need to sell, right? You want to be able to sell on

29:50your terms when it makes sense. Community with other founders, you're already here, so I think you got you're at least taking a step there. And then doing your own work. we've kind of talked about already, right? Therapy, learning, taking even these silly assessments. I have a folder in Dropbox. I say silly. I think I have like nine or 10 different ones like the strength finder and the enagram and the, you know, the money one and there's some

30:13work zone of genius at work or whatever. And I take all these and I'd read through them and sometimes they're right and sometimes they're not. But the more I learn about myself, how I operate and what I'm good at and what I'm not and I'm realistic about it, like honestly, the better the better. uh the happier I am and I think the better I am at my

30:29job. Well, thank you for coming to our experimental two people on stage at one time talk. Uh hopefully you learned a few things that will be helpful to you as you think about being in healthy relationship with your business. [applause]