If I Had To Start Over, Here's 3 Steps I'd Take to $1M+ Revenue

0:00if I had to start over today here are three steps I'd take to reach 1 million in annual recurring revenue and if you stick around till the end of this video I'm going to tell you the biggest disadvantage to the approach I'm about to outline I'm Rob Walling I've started six companies invested in more than 100 startups and I've written three books about entrepreneurship today I'm going to be diving into the stair step method of Entrepreneurship you may have heard me refer to it as a stair-step approach to bootstrapping but what I've realized is that it isn't necessarily about bootstrapping and it's more of a method

0:28than an approach anyway and so today I want to look at these three steps of the stair step method of Entrepreneurship I'm going to run through the three steps quickly and then I'm going to circle back and dive into each one step one is your first product it's a simple product I'll talk more about what that means step two is rinse and repeat and step three is to go full force into a full-blown SAS app so let's Circle back to step one this is your first product this is where you choose to build a relatively simple product often this could be a single feature of another

0:58larger product often this is within the single traffic channel like the examples of this are a WordPress plugin a Shopify add-on a Heroku add-on basically something that allows you to start generating revenue and learn the ropes without having to build a full-blown SAS app because building SAS applications is it takes a long time it's complicated there is so much more to just building it there's the marketing the sales the copywriting the support the internal operations there's there's so much even just keeping servers stood up you know if you're not a devops expert there's a lot to it and so the idea of basically building an add-on to an existing

1:34ecosystem simplifies a lot of this with WordPress you don't need to keep servers stood up you just need to learn some PHP or hire someone to write a plugin for you and if you can just rank well in the WordPress plugin repository you can get a steady flow of visitors this is not the case with a full-blown SAS app if you register your SAS appsdomain.com no one will find it unless you go out and are actively marketing and driving leads versus your appear number three in the Shopify App Store when someone searches for abandoned cart emails suddenly you're getting a steady flow of new customers and so this is a simplified

2:10way of launching an app and learning the ropes I like to equate this to baseball where some people see someone playing in the major leagues and they want to also be a professional the thing is is it serves you so much better to play junior high ball to play high school ball then to play college then to play in the minor leagues and to work your way up and you during that time you develop experience you develop skills you develop confidence you make some money you build a network maybe you build an audience same thing with stair stepping the whole point of this is to build the

2:44experience skills confidence money and network such that by the time you get to step three it is so much easier and so much more likely that you're going to succeed so you might be wondering what app stores are in existence and there are 69 of them at least 69 B2B SAS marketplaces with opportunities for bootstrappers I'm going to link up a post from rocket gems where the author has been kind enough to put together this list Salesforce HubSpot pipedrive Zoho CRM zendesk freshdesk intercom help Scout I'm gonna stop there I'm not gonna read all 69 but you get the idea there are a lot of these out there and there

3:17are a lot of opportunities to build something simple that still teaches you a lot and still makes you money in this video I'm going to focus on building software and ultimately building SAS but realistically the stair step method of Entrepreneurship applies even if you don't want to build software in the early days of my career I built info products I wrote a couple of books I did some online courses I had an e-commerce website I had downloadable software and I had SAS any of those can work it can be recurring revenue or not it can be in an ecosystem or not one of my early information products was an ebook about

3:49growing bonsai trees and folks would find it via SEO it was organic search and there were enough purchases that it would have made a car payment at the time then I built an online course about hiring VA is for startups and push that out there and so I was part of the ecosystem and their existing traffic you know again it made enough money that it made it worthwhile and it was a nice little augmentation to the other longer term things I was focused on at the time so don't feel like this has to be reserved for software but I do tend to focus on that because this channel is

4:17all about building SAS products and most folks who are watching this are looking to build software with step one you have a nice little side income and you don't need to compete against the Giants who are competing in these big spaces if you want to build a million dollar SAS app I'm saying take these three steps and in fact this is what I did I'll talk a little about my story in a bit but the idea of building a step one business and then jumping to step two which is to rinse and repeat it's to double down on the model that worked in step one and

4:43repeat that until you own your time sometimes folks find success with the first Shopify add-on Heroku plugin and actually acquire one I've seen several people do this where they now have understood the ropes and they start to network with other folks who have these add-ons and they buy the next one instead of building it because it saves them so much time but realistically you could also just build another one and what I found with step one businesses is they typically have a natural Plateau maybe they Plateau at 2K a month maybe they Plateau at 5 8K a month therefore it's not a business that's going to get

5:15you to seven or eight figures there's also platform risk you don't have diversification of your Revenue there's a lot of things that could go wrong with the step one business so the idea with step two is not only to increase that Revenue increase that income such that it pays for your full-time income and you can quit your day job but it allows you some income diversification as well and the idea is that you're using skills you have already developed you're getting good at this essentially free or low cost traffic channel and you're learning the ropes of how to support software and how to ship it and interact

5:43with customers one example of that is Dave rodenbot someone you may have heard on startups for the rest of us I've interviewed them over there Dave had one WordPress plugin it was not paying his full-time bills so he went out and he acquired two more WordPress plugins so by the time he got to step two he had three WordPress plugins he later sold those after he moved to step three step three is recurring Revenue step three is the full-blown SAS app and he had acquired an app called recapture and he sold off his step two businesses and now he's focused on recapture at recapture.io another friend of mine is

6:13Phil Dirksen he did this with a couple of Wordpress plugins he launched these all on his own he didn't buy them Pinterest pin it pro and stripe checkout Pro for WordPress allowed him to quit his day job several years ago and he basically stacked their revenue into a full-time income and was later acquired by a larger player in the WordPress space and it's not just about WordPress Richard Chen of PHP grid moved from one time sales to SAS so he stepped one step two step three and he now has the freedom of being a full-time entrepreneur and I can't tell you the number of folks who applied to tinyseat

6:44or who come to microcomp who have these amazing Shopify add-ons there's notion and there's air table you know there's all these ecosystems now that didn't exist 10 or 15 years ago and they not only allow you to have a great step one business that is relatively simple compared to a full-blown SAS hat but they allow you you to have recurring Revenue which is something that the step one businesses I had it was a lot harder to get recurring Revenue in a step one business so my stair-step journey involved an app called.net invoice that I acquired when it was in Alpha it was one-time sales and I marketed it mostly

7:15through SEO so that was my channel but when I got it it was making 500 700 a month I grew it up to be about three to four thousand a month and I was never able to get it past that it had a natural plateau and that was okay because then what I did is I built and bought other products as I mentioned earlier the info products e-commerce sites SAS and I just kept stacking those on top of each other and then I was able to move on to step three but by that time I had so much experience I had built a lot of marketing skills product

7:44development skills I had Revenue I had confidence I had even built myself a network and an audience along the way by talking about what I was doing and so by the time I did dive deep into the more complex and challenging world of full-blown SAS I had all these assets at my back and for finally step three is that recurring Revenue SAS app it's the holy grail for bootstrappers everybody wants it but it is popular and therefore it's very competitive and I think jumping straight into the deep end trying to go straight to the major leagues without ever playing in the minor leagues leads to a lot of failure

8:16and a lot of frustration I see a lot of people you know you'll see them right into the podcast or comment on these YouTube channels about how hard it is you're right it is that's why I would take these three steps and not just jump in and try to compete with the likes of myself or of Jason Cohen or of heat and Shaw or of all these people who have so much more experience and money and skills and confidence than you do because they've been doing it for so many years right and that's what the stair step allows you to build as you climb the stairs in a minute I'm going

8:44to talk about the biggest disadvantage to the stair step method but first I want to talk about the biggest advantage and really it's predictability and repeatability this is a way that I have seen dozens if not hundreds of entrepreneurs climb the stairs you see it all the time now that I've said it you're going to start hearing stories of someone who freelanced and then started a product High service and then later parlayed that into a product and maybe into SAS you can do it through that that's a stair step method as well for someone who created some info products then some courses and then later started

9:13a software company and then you know up to SAS and frankly there's chance you could skip step two I do know some folks who built these step one businesses and they do go to 10 12 15K a month and now it is enough to quit your day job and focus on building you know that more challenging but probably that bigger opportunity before I talk about the biggest disadvantage of the stair step approach if you enjoy this video please hit the like and the Subscribe I'm releasing videos like this every week deep dives into topics about building launching and growing your SAS product and also if you're interested in reading

9:42an entire book about finding step one ideas and trying to grow them I wrote a book it's called start small stay small a developer's guide to launching a startup and I would recommend it for those looking for those step one and step two businesses in addition to videos like this and of course startups for the rest of us and now the biggest advantage of the stair step method is that it takes a long time it takes longer than if you're to try to do a SAS app right now and have success and that's the key is most people who go for the full-blown Major League SAS app they

10:11don't have success and so it does still take them two three four tries and someone who is stair stepping is so much more likely to have success at those early stages to be able to climb their way up to step three but with that said it often takes longer to get where you want to go and that's why I so often say about entrepreneurship is to think in years not months don't look for success in the next few weeks in the next few months think in terms of the long term and think about how you can get there predictably and repeatably even if maybe it takes you a little longer at least

10:42you have a lot of confidence that you're gonna make it there in the end thanks so much for joining me today and I'll see you in the next video [Music]

11:06thank you