# Building a Billion-Dollar SaaS Business with Jason Cohen 📈📈

Channel: Rob Walling
Video: https://www.youtube.com/watch?v=JleTJKIGHGg
Duration: 47 min
Language: English
Words: 10219
Transcript page: https://viewrankai.com/tools/youtube-transcript/JleTJKIGHGg

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[0:00] you're in this room because you don't want anyone telling you what to do that's the deal like let's be honest get rich and no one tells you what to do so you start a company where your customers tell you what to do your employees do whatever they want like God forbid you have investors they're telling you what to do so oops you you failed love to introduce to you someone that I'm guessing most of you know Mr Jason Cohen can we give him a more micro comp welcome Jason is the founder and the CIO of uh so up on the slide it said CEO and man

[0:33] in my card says CTO but it turns out he's the CIO Chief Innovation officer at WP engine and he started WP engine back in 2011 2010 and in fact interesting story that I might touch on a little more later um my first ever Angel investment was in WP engine and when Jason Cohen emails you and says hey so I have this over subscribe Brown and I'm starting this new thing I literally didn't even ask him what it was and I think you were supposed to attach a deck and you didn't and I was just like I don't care I'm going to write this guy a check and it

[1:06] was right after I had just purchased a small SAS application it didn't really have the money to invest and Jason said the minimum is 25 Grand but whatever you can throw in and I was like God I wish I could put in 25 000 but I robbed Peter to pay Paul and I uh wound up investing 20 grand in that first round and a little bit in the second and then when we exited early stage investors exited in 2018 it bought my house so thanks sir yeah it was a big deal so with that you started WP engine in 2010 and I remember you you like

[1:43] bootstrapped into profitability then raised some funding and then bootstrapped it again not bootstrap but you got its profitability again um and today like where is where's WP engine employees Revenue whatever you can talk about uh so we have about 1100 people globally and they used to come into offices like this one they no longer do at least not in the main um but so everyone's almost always work from home or some kind of space that we we have um but we have about 200 000 customers we power um we power about 2.5 percent of the internet like not just WordPress which is our which is what we host specifically but

[2:23] of all websites so that's a lot because you know two and a half percent times infinity is a big number you know it's like halfway to Infinity um and uh yeah so so it's it's exciting because we have a lot of we have a lot of problems due to scale human scale and technology and that's fun that's a different kind of problem of course but uh that's exciting and your startup right before WP engine was called smart bear and you sold that you blogged about this in public so you you sold it for enough money that you never had to work again like you could have retired you

[2:55] were in your early 30s if I remember so why go back to the drawing board like what was the impetus and you did take some time off you blogged a lot that's where you and I got to know each other your blog you did some speaking um and then you got the bug what was that process like yeah um so at smart bear I started this blow that was cool in the 2000s to have a Blog and I thought it'll be like 37 signals where everyone will post on there and it'll be our culture and then no one ever posted on there but me which probably was our culture

[3:27] and uh anyway so when I sold it in 2007 and I left in 2009 because my wife was pregnant and I bootstrapped uh also smart bear for that was a total of seven years then um so everyone in this room knows that's hard so yeah take a break of course having a kid is not having a break so I don't know what I was thinking but I guess one is enough one of those two things is plenty right um anyway so so I was a stay-at-home dad and writing was a great way to stay in contact with like the the world do something intellectual in that in that weird period where you

[4:00] know you're not you look outside and you're like I legit do not know if the Sun is going up or coming down right now but I'm going to sit here with this thing until it falls asleep so I'm going to find out yeah anyway in that that mental mode I was able to just keep writing with no deadlines or expectations right so that's good it was so that made it a good prod project and uh so then the blog got popular and it would get on things like Hacker News every Monday which is when I would schedule to post and then it would crash a lot because

[4:26] you get a lot of traffic if you go to if you get on Hacker News and so I'd ask other bloggers like how do you keep WordPress running when you when that happens uh and the answer was always I don't know but if you find it tell me because I need that okay so that was the seed and then I did 50 5-0 customer interviews uh because I had another idea at the time but I also thought was good I also did a bunch of customer reviews and figured out it was not a good idea I mean it was a fine idea it wasn't a good business

[4:52] um but then I did the same with smart but I found I mean uh WP engine and I found okay if we made sites fast and scalable secure and if we had good service they would pay 10 times what they currently pay people like GoDaddy and Bluehost for word processing if we did that those four things so that was the initial impetus and to this day if you look above the fold on the website you can see speed skill you know you can see these Concepts certainly in the first website they were you know straight up bullet points right and so that's still why people sign up

[5:22] today um in the May of course we do a lot of things now we have tools that the people who make WordPress sites use um some of them are used by literally millions of people for free and some are for money we have another one that has a hundred thousand monthly active users so we do now more than just have the website there's these tools with significant customer bases and stuff so now it's a little bit more broad but uh but fundamentally it's still people need to be online and the website's gonna be fast and scalable and so this this you know whenever any of us talk about oh

[5:52] you got to do customer development and figure out the pain and figure out like it's still that and it can be true now 13 years later almost it'll be 13 years in January um still still right you were the first story because I don't know that I'd heard the term customer development right Steve Blaine came up with this at Stanford and it's often attributed to Eric Reese but it was not it was a concept before that and you were the first person I ever heard who did interviews to to find out if this pain point was a valid you know going to be a valid business and I later I mean my story of

[6:24] drip which I started in late 2012 was basically exactly what you did but although I only did I did like maybe 17 and I got 10 yeses and I said I'm doing it because I was I was going to bootstrap it to a small you know it didn't matter as much but um I was always struck by this approach that it was um it just seemed out of nowhere and super Innovative and super smart it's what everyone knows today like this is you've heard this a hundred times now of course find the problem talk to a bunch of people right at the time were you doing it because you'd heard of customer

[6:53] development or was it kind of like this just seems like the smart like a logical thing to do it's a long time ago so I don't remember but I think so I think I've been reading about stuff and I think when I think about the Lean Startup um I feel like the good part about that is it got people it got people at least trying to think more objectively like we gotta go actually find out the whole get outside the building which I think is also Steve blank but anyway in that whole lean movement let's say I think that's good because people were really insular and not getting outside the

[7:23] building we still don't right nobody in this room really wants to talk to customers we know what to do listen to them you know but so that's a good pull but I actually feel like the book doesn't really work in other words like do you think that like people who use the link start method are less likely to fail I don't I don't observe that I don't have any data I'm just saying I don't really observe that it's not if it is an effect that's so subtle that I can't tell so I do think there's good impact but I don't think it's a manual like it was sort of meant to be and I've

[7:49] told Eric Reese that personally and I said well Eric what if since it works so well why don't you um do a startup and of course he won't he can't because like if it does if it's not a raging success what does that mean now I don't blame him for that I wouldn't either you know so he's doing his long-term stock market whatever the heck it is um and uh you know just something orthogonal right which by the way it seems like a great idea like I hope you succeeds it's you know because it's a cool idea but um um so I feel like there's some ideas and

[8:19] customer Discovery or development is one of those ideas where it's like yeah we probably should you know talk to the customers and listen a little bit I guess you know probably but how is is a good question so I do have a recent post on how I did it and how I did it then and how we still I still like to do it so we have to go into detail because you can just read that if you want to read it um but like because because then it's like what do you ask exactly right you know if you're just asking like do you like this feature they're gonna say

[8:47] yeah sure that's you know that seems pretty good and you haven't learned a damn thing so like that doesn't work so then you have to it has to be directed in some way besides plugging my own post it it um and by the way I don't even use analytics on it like I learned a while ago like don't look at the numbers don't try to chase the things just like put it up there if people like it they'll like it don't even be tempted to look at like Google Analytics so I don't care if you look at the post or not um the other book I really like about

[9:13] this is Teresa torres's book which I think is the continuous Discovery habits and I think she and her methods are freaking great and you know most business books you read it it's just maybe there's a good idea and then there's like hundreds of pages between the good ideas of just like filler to switch so it takes up this much space on the shelf and they can hard cover it you know um or there is one really good idea that that is worth it really but still in her book I don't feel that way I feel like every chapter it's like oh this is good you know you could use this oh I'm gonna

[9:43] maybe I'm gonna try it like all the time it's like a so I really write no no at all and in particular she does talk about customer interviews but also what do you do with that afterwards okay so you've interviewed now you have this pile of stuff and now what like how do you organize that somehow and and in some way so that you can like get us get a feeling for things share it with other people of course so you might need to work with like engineers and so on designers maybe um and then maybe pick what to do next exactly and so she has thoughts in there

[10:12] like another thing for example that I really like that she didn't invent but it's just an example of another great thing from the book Is Right storming so like for the last year especially with covid this has been exciting for me I know I'm just going off on a tangent but but it's like brainstorming again like I always feel like brainstorming didn't work that well like you get everyone a room you're like now think of stuff and everyone's like um you know and then maybe someone has a halfway decent idea so the room sort of gloms onto it and yeah I don't know it just doesn't feel

[10:38] good and then in the zoom era forget about it because you can't you know and so there's this thing I guess is roughly turn bright storing where you have people understand the problem first maybe that's a short meeting to get like on the same page about the problem okay but then maybe for the next week whenever people want that's another nice thing whenever it's you know nice for them to work you you do brainstorm alone so right storming then you come back together but now since everyone's had the space to think you know different people think different ways I you know one person may want a lot of time to

[11:10] ruminate someone else is like I just fired off and I'm done like great this some people are good in the morning or the evening great everyone can sort of work in the way that makes sense for this kind of work which is different so then when you come together you got your stuff so there's no like oh that was a good idea so we stopped no no you've already got these so you really do get everyone's ideas out there and you know you and then you go from there of course but it's just such a better way and also there's a study that showed and the

[11:37] study who knows today's probably who again who even knows when it's a study I don't know what that means but there was a study that showed that um um when you try to do normal brainstorming on Zoom it does not work but when you already have the ideas like they're in the mirror board or the Google Doc and then on Zoom you're arguing about it that does work I was like oh this is another like remote work trick in this one area is Right storm and then discuss together that's a good use of time so anyway that's another thing I got out of her book again I

[12:06] don't think she invented it but who cares it's an assemblage of fantastic ideas then you know so be it yeah oh yeah so the author is Teresa Torres and the book is called continuous Discovery habits she was also on a podcast with uh Lenny richardski now you say that Lenny's podcast and uh again she's fabulous on that because of course she is and uh yeah so I'm a huge fan of that yeah that's great it's a good recommendation so one question I asked of Founders on the podcast and I asked it so often that we even have a musical sting that plays and the question and it

[12:40] involves a cash registering but I say when did you know you had product Market fit that's the question I ask and I usually catch it by saying look product Market fit I don't believe it's not one or zero it's a Continuum you get weak and then it's stronger stronger stronger and then you'll find that you only have strong stronger part of America fit with a certain audience and then as you Branch into others it's weaker whether you agree with all that or not if I were to ask you that question like with WP engine like when did you know you have Hardware fit how would you how

[13:08] would you describe it yeah it was January of 2012. and the reason I know do you seriously remember that yeah and the reason I know was because suddenly like all you could do is try to keep up with customer demand and you literally you can't do anything else there's there's the support tickets are flying in which you know is not necessarily that's not part of the good news right but just like the here come the orders here come the support you just can't even think about like let's make a new feature are you kidding me we have this backlog of tickets even of people signing up and migrating and this and

[13:37] that and you just can't keep up and then then now you're buried and hiring is hard because you're too busy and also you don't have a hiring practice of any kind of course you don't why would you and so like when this happened to us we were four people this was two years in we're still only just four maybe we're five people actually so again kind of a typical bootstrap thing two years in it is going well um in generally speaking I think we were around billion in Revenue at that point and four people four or five people so again profitability like you said um and then oh God and we went from one

[14:09] to five that year and we just and we kept going like nuts you know and just it was that hockey stick thing and um and what happened is we changed pricing that's what caused it well it's hard to run the experiment again sure but that happened you change pricing then that happens there's also it turns out a season I mean now that we're far away from 2012 there's a seasonality for us that the first quarter of the Year people are building websites um however again that the previous two years that wasn't like that and again it never ended so it wasn't just seasonality but maybe that was a little

[14:43] kicker like maybe there were people at the end of the previous year thinking and so maybe there's a little bit catching up but um yeah it was pricing and and so since that's always a topic and I know in the new book The Hero pricing is one of the topics let's see it should be and everyone wonders about pricing of course nobody knows exactly what to do and everyone will tell you the usual things you got to do anchoring you're like I know but like what should I charge for it you know um well we I did actually talk to a lot of customers like I don't want to harp

[15:10] on the customer Discovery but I did and so I heard certain things such as people would say listen for my I have this one really big website and I'm happy to pay a hundred dollars a month for it that's fine no problem but I have like this one other side I make it's for my mom she's got like an art studio it gets two hits per month you know are you telling me I need to keep my account with this other thing and you know per site yeah yeah yeah yeah sorry yeah 100 like come on just let me move the little crap site like what are you doing

[15:42] um so that was one thing it's like oh at the higher plans there should just be more sites that was a revelation it doesn't sound all that like freaking insightful right like okay but no one else was doing it and you know I only figured out because I kept hearing that type of thing oh my friend oh my and it was like okay or maybe it was a freelancer while they're working on a site they need a place to put it before it launches and it's like okay so you got these different signals that say that would work another thing was the lowest tier was fifty dollars a month it

[16:10] turned out it needed to be 29 a month and what people would say is um we'll have these people at GoDaddy for five dollars a month and I can get them to pay more I can tell them security speed okay but 10x I can't get them 10x but I could get them like maybe to 20 maybe 30 bucks like I get them there but like mentally I can't get them to 50 and so there's always this notion of price uh in pricing of like you could you could generically call it something like willingness to pay and again it's true but I think there's something more in subtle about it of like I

[16:44] it probably is worth 50 but they can't do that in one shot like mentally that's not how they think about it and that kind of emotional how are they even thinking about it and it wasn't about anchoring or you know that's not what it was about so that's interesting of just like how do people think about it another challenge I think a lot of bootstrap companies run into is many bootstrap companies the the product is some kind of adjoint to another product we're a plug into WordPress there's there's literally a thousand bootstrap companies that are plug into WordPress right so that's I have to know about

[17:12] those a lot you know but a lot of them are you know we're this for Salesforce or the you know of course because there's some ecosystem and you can get a you can be a part of that it just makes sense um there's nothing wrong with that but it does set the price because you know well if I already paid the main company X so how could I also pay a x to a plug-in that's clearly some kind of small component this is a super common thing right like so that kind of mental thing I guess you could call that anchoring maybe but I think it's more

[17:37] again it's more interesting and specific than just I see a price and I see another price you know anyway so that was one and then the last and then two more things one is because maybe this is relevant or useful I don't know um one was we just made the most expensive one called business does that work I have no idea I honestly have no clue if that worked but we did it and then the other thing was we had a um we had a two-week free trial which was kind of special because in hosting you don't have free like now you do in in a cloud they they give you free

[18:04] stuff um but then like nobody did free because it costs money immediately like there is physically a server and you're paying for power and and bandwidth like it does cost so like it's not like in software where it's free and that's okay it's like not okay so it was pretty cool that we did that but we had a 90 percent 90 success rate after the two weeks so I was looking at going like well number one that's product Market fit when your trial is a 90 conversion rate and number two we're just losing two weeks of Revenue right like apparently they knew they were going to be here

[18:36] so I was like all right let's try a 60-day money-back guarantee you're gonna give them give me the money now but I'll like give it back and I actually thought this would not work I've tried it anyway but I figured people would be like I don't know if you're gonna give it back and you know like I don't know if um I'll have to ask for it instead of you know just but actually uh sales went up and when I would ask people about it and I probably should ask them before but oh well um they said uh oh we had before when it was two weeks that wasn't enough time

[19:05] but two months that's enough time for me to check it out it was like okay they were just thinking about the time that's interesting because I bet that if you had a you know 60 or 90 day money back guarantee you know most people are not gonna do it and you know but if in their mind that's more time maybe that's good I don't know or you could try it for just a month and see and then undo it who cares because it's specifically for new customers so that's the easiest way to test is with if it's specifically for new customers you can just undo it of course you know

[19:31] so anyway so that that happened to work for us um and that that was coincident with this with this enormous change right and if you haven't watched I referenced it earlier but there's a talk on our YouTube channel called building the ideal bootstrap business I think it's called and it's Jason Cohen from 2012 13 somewhere in that range and he talked a lot more about the money back guarantee the charging up front eliminating trial a bunch of other stuff so it's when I when I say it's the I I refer to it as the best talk ever about bootstrapping a company which is it pains me that I

[20:07] haven't done that but he

[20:13] last week so he's it's been the number one video on our on the Microsoft YouTube channel for you forever and finally I passed it but I with a video like seven SAS ideas you should steal today it's like not not what I want to be known for right it's like okay can't I have the amazing framework that everyone refers to um so a couple other questions as so you know we're talking about product Market fit and and measuring that and obviously like uh support tickets going up um trial to paid being amazing mrr is a thing these are all metrics right and and a lot of folks get overwhelmed by

[20:50] saying well there's I can measure 10 20 different metrics in my startup early stage let's say you're half a million ARR or a million whatever early stage bootstrap mostly bootstrap were there one or two metrics that you were just obsessive about that you feel like folks should should pay attention to or is it more are there too many to narrow it down to those so before the hyper growth started besides just mrr not really it was just like try to make the customers happy um I think a lot of companies have a good cancellation rate early just simply because there hasn't been enough time for people to decide that they don't

[21:27] like it so whenever there's like the product's been market for six months and everyone's still here we have a perfect and it's like just wait that's going to change you know right um so but just trying to keep people happy and you know that was that was that was largely it we weren't trying to do LTV or anything nonsense and then once product Market fit it was like who cares we just need to like operate we need we're going to hire people and try to just you know fix some stuff or automate some stuff and I don't know it just who can even think about the metrics you know

[21:58] um now of course we're very sophisticated about metal that so I don't know of course there's not gonna be one metric that works for all companies that that should be clear but a good question is like so how do you pick one that's good for you like what do you do about that so I think um so I think there's there's obviously the the inbound vanity metrics in the front how much traffic do I get right and you know that doesn't matter because if that number changed a lot like nothing would really happen you wouldn't react to it any any number where you wouldn't really react to it that's not a key metric

[22:28] right um and then there's these metrics that are the obvious ones like like retention and mrr and this kind of stuff but the problem with those is that they're way too laggy and they're multi-input so in other words the reason that you have MRI this month is many many things what happened in sales what happens in marketing how many people stayed how many people upgraded how many people downgraded did they like the product that they like your service like that's all in that number so on the one hand it's the most important one because if it's not there then you uh starve to death so on the one hand is the most

[23:02] important number and it's not the one that you can operate their business on because it's it happens way too late there's too many inputs to it so to me like if you imagine the customer moving through their Journey from like oh I found out about you in the website and and then again it depends on the company obviously maybe there's a trial Maybe not maybe they're using the product Maybe not maybe there's some moment where they get value or moment where now now probably the customer will be successful and stay now probably that moment that to me is the is the one because you know Revenue will come I

[23:34] mean if if you if you're looking at your data you'll know Revenue will come if this happens but this happens every day and I can try to do stuff and see this week or even today whether that changes and so when Revenue may or may not change later I can I can actually operate on this so as an example early on in Netflix their number was the number of people who put three or more DVDs in their queue in the first day very specific because they found just a correlation not necessarily causation but just the correlation that if you put three or more DVDs then that you were like seven

[24:12] times more likely to become a customer and stay for at least six months like it wasn't even that long right so they're like that's the thing so we got to get people in and get the thing in the queue so they so like all right if that's the goal what do you do and it's actually very easy to think of things well let's ask them what genre they like and just put stuff in the queue for them or let's uh let's take our most popular 10 most popular titles and just suggest before they get hit next that they have to put like you could just kind of make it

[24:37] happen right so the nice thing is it it may it may be smart actually to do that and it was like it wasn't even gaming the system that worked um now of course over time that should change and early on it should change all the time like all right now you're better at that now the most important metric is this other one that's fine right because you're just and then later as time goes on the things more mature it probably doesn't change all the time but even today a WP entry point we're very sophisticated with metrics we have lots of people lots of product lines lots of stuff we talk about all the time

[25:06] how like the revenue of this product is this laggy multi-input thing it also combats um as as you do grow a bit and you have more employees you start getting like Engineers are like well we can't we can't look at Revenue because that's the sales team and you're gonna get this like who owns what crap so again the way you slice that off is just say Well Mr is clearly the output of all of us doing a good job so it's none of our primary metric sales team has their own stuff they have quotas and whatever the hell they got and what do we got can't be mrr

[25:35] so so I think finding that um that again that moment where you're delivering value to customers that's a great thing because it's probably true it's probably best it's very customer-centric customer minded you can literally draw it out and probably find it you know like like pictorially um it's easy to explain to the whole team like okay so these these metrics are inputs to this not like a perfect formula but just in general like it is true that the more traffic into the website the more we'll eventually have this so it is important just not our key metric and the conversion rate here is important just not our key metric but

[26:08] yeah it's an input and that's actually another nice thing you can do with that one Central some people call it Northstar is you can say well what are those immediate metrics in front that again maybe we want to optimize so for example instacart has famously like had just like total cart value as as uh as their Northstar but then it's very easy again to think of what are the inputs so it's like number of customers at all average size of cart number of items in the cart those overlap a little it's okay this is not an equation this is just like stuff that generally leads to

[26:40] the thing we want and you track it you don't have goals for it necessarily you're just looking at it like this is this is the like a dashboard in a car is not goals it's just what's going on so in that with that mentality of a dashboard it's a dashboard of what's going on and in any moment you could say you know I don't love our conversion rate maybe for the next couple of months we'll just focus on that on that it's easy thing to say and you know or uh uh oh these two things are linked so we're gonna you know do this one thing

[27:09] and it'll do both of these at the same time yeah that'll feel good you know so it also provides like a way to sort of decide what should we do what should we do to make it better and if we if the question is simply what do we do to make Mr go up I mean that is a okay question but again it's just like I mean I don't know a million things it's such an undirected space it's such a huge space whereas saying like we need the cart we need the average cart size to be bigger and some of the things that go into that

[27:34] are these which ones do we think we could pick that either we think we can move we got some ideas we're excited about it even is a reasonable reasonable like reason to prioritize something it will be fun but it can't only be fun it has to be fun but in service of something so here's some some things that that you've determined are smart too to do um and I do think that's an underrated thing too I'll just say the using your ex you're using excitement as a reason to do something and if it's the only reason that is bad because maybe that's not useful but when

[28:05] it's a tie you know well there's like three projects we could do all of them sound pretty good we have no idea which one would work because why would we know to have the tie go to the thing that people are excited about is smart to me and again we do that even here where that sounds like how could it's fun be a reason at scale but it's exactly what we do because what I figure is people will simply work on it harder and care more and just want to do it more and that's a huge Advantage so I mean if one thing is clearly better then do that obviously

[28:35] but but usually it's not usually there's a few and who the hell knows okay well they do the thing that you're like gonna spend a lot of energy and everyone's gonna like because it probably gives that the best chance at success and it's also the most fun and we should allow ourselves to make that be a reason right so you have bootstrapped you have raised Angel funding you've raised venture you've kind of done it all to speak I know folks ask you for advice right a new founder comes up and says I'm starting XYZ should I raise funding what do you think about that how do you frame that in your

[29:12] mind of the maybe the trade-offs realizing that it's no longer bootstrapping in Venture that there is that there are other tiny seeds or what you know there's this in between now yeah well for for traditional Venture the answer is the default answer is you shouldn't accept if and then there's like a bunch of things that you know well if all this is true then then yeah that's probably the right way because like all things like all tools there's a time and a place where like that's the right tool you know so even at WP engine it was not the right tool at first I did not expect

[29:42] it to be ever the right tool um but then it turned out like there was things like huge and growing Market everything's you know kind of wind at our back this could really be a billion dollar plus company now it is um and and so on like you could just tick down oh man there's like actually all the reasons all the all the kind of conditions that BC could make sense um actually actually hit it oddly enough I mean almost none do so it actually made sense I think also a big factor for me personally was that I had bootstrapped a few companies and I just

[30:13] thought I'm a bootstrapper like it did not occur to me that like I should do something else um but I also had this feeling this time of well geez like the opportunity is there like it became apparent again two years in to be clear like you know but it can be a parent that it really is that big of an opportunity and like maybe this time the journey can be different and that doesn't mean better or something it just means it's just different like the constraints are different instead of the constraints being profit the constraint becomes growth the Mandate becomes growth and constraint of money is less so and so

[30:45] forth it's just a different game and so like maybe a different Journey this time would be interesting and fulfilling and so for me it was like that was part of it for me but that's just a personal thing of course um so VC it's like you shouldn't accept if if it really is that sort of a thing um as for the other stuff I mean it's just so hard to get the engine turned over in any company just getting enough people there getting that product Market fit right so I really do feel like if you haven't quit your day job then it's just it's just too hard for it to succeed and

[31:20] so the hope is well but maybe I'll get lucky and it will anyway and that'll quit my day job and of course that's true and it's simply practical so I'm not saying that's again I'm not there's no judgment that I did the same thing right like like just 20 years ago um so no judgment of course you got it you got to do what you got to do I'm just saying that does not give the company the best chance of success that's that's I think it's simply a fact so if you can take down a little bit of money and have the time and attention where

[31:46] this is all you do ever it's clearly going to be there for you know risk for the company I mean I don't think you argue that um or if you could afford to hire just one person I mean the difference between one and two people is a very big difference even if the other person's not a Founder it's still a really big difference or afford to do something like maybe you're in a space where design does matter and you're not a designer well if it matters you know so it depends on depends obviously on what you're going to do with it but or if you can experiment in

[32:11] marketing so I do think you should know what the money's for so the idea is like I don't know so I can quit my job it's like and and do what I don't know buy ads like then that's not actually good because that's not a that's not a plan but if it's like the only thing stopping me from I mean whatever the next phase is getting this version making this partnership getting this number of customers is one two and three now you may be wrong about it like but you but you have a theory and it's like well I talked to all these people and they said this and

[32:42] I'm seeing these competitors and they're running in this other direction I can run in this direction and here I look I have 10 people saying please do run in this direction and the only thing that's stopping me is something to do with money well there you go you just you just decide you just said why this is a good this is good for the business so then it makes sense yeah yeah very good I think I have one one maybe I have two questions to wrap us up one is you start a WP engine 2010 you raised funding you were the CE founder and CEO for several years and

[33:17] then I remember at a certain point getting an investor update that said Jason is it wasn't even stepping down it's like stepping to the side right and I don't did you become CTO at that point okay and you brought in had with Heather yeah I'm trying to remember the names but um what was that this like there was no no VC was forcing you out right right and it was your choice just my understanding yeah this was a few years after BC so yeah yeah so it was it was your choice to do that to step essentially step down as CEO of your own company yeah I guess

[33:48] two questions there like what was that decision like and was that hard like after you did it how hard was that I I interviewed Rand fishkin a couple months ago in in Seattle and he had his own experience of doing this if you read his book lost and founder it was very very hard I've never heard you you know talk about this decision that way but uh I'm I'm curious to get your take yeah he obviously did not enjoy his experience um whereas I did um which is which is the risk I mean you're looking at it right um they can both they both happen um

[34:25] so first how did I make that decision so um there's a there's a um there's a there's a framework which at this I tweaked and so I it kind of became known or at least here as as my framework I guess all ideas are inherited and tweaked probably but okay about how to think about I guess you could say personal fulfillment or just what's what's good to do and the circles are Joy skill and need meaning what the company needs done and my observation there and this was you know again this was synthesized from other stuff I didn't like invent this from Whole cloth right um

[35:06] the observation was that while this is uh in a sense obvious um there are these traps that occur when you have two of them so when you have joy and and and and Founders are always trapped in them because no one tells us what to do so why we're here when you're in this room because you don't want anyone telling you what to do that's the deal like let's be honest get rich and no one tells you what to do so you start a company where your customers tell you what to do your employees do whatever they want like God forbid you have investors they're telling you what

[35:37] to do so oops you you failed but anyway anyway okay so so uh so you follow these traps in like who can tell you otherwise is kind of a problem right so the joy skill trap is you love it and you're good at it so you do it and it feels good and you have Flo you're going to flow states which we're all told is good and of course it is so hooray and then you're but you've missed what the company needs done so the classic for me uh is the engineering founder who should be working on sales and marketing whatever and is instead making that next

[36:10] new feature that but two people ask for it and you're right they did but that's not what you should be doing but that's your flow stage it's a classic trap of that right and who's going to tell you otherwise and after all this should be fun yeah right again what no it's not it's not fun at all um just moments are fun you have little peaks of fun and back to not fun that's how it should be um so so um so that's the that's that trap so another trap is is uh the company needs it done and you're good at it so you do it but no joy but no joy and so that's

[36:40] burnout land and I can't afford to hire someone to do this so like another like one for me was accounting I'm good at that like when I sold smart beer no joke like the the the the the firm that bought smart bear I say firm because it was a it was kind of complicated but there's this VC in New York called um but it's like a late stage uh very like kind of innovative creative type of thing called Insight Ventures and they'll do things like they'll buy lots of things and consolidate and sell it but over a period of like a decade like a like a really long strategy they have

[37:12] interesting stuff anyway they're the ones that bought the company and then renamed the whole thing smart care and all this weird stuff anyway they said when they bought they bought they've got companies all the time they're like this is the cleanest Christmas books we've ever seen and I'm like well what else do you need they're like nothing like we've pulled random big you know statements and looked and it like to the penny and we're like this never happens we this is fine we just trust everything must be fine because you're crazy to be this obsessive so that's like I have the skill to be a good accountant

[37:39] like objectively and the company needs accounting I mean of course but if you just do that all the time right and so a classic burnout for for bootstrappers because we can't afford to hire enough people to do those things we do it anyway and we also this mentality which we think is coming from a well it is coming from a good place we think it's good for others on our team which is this is work no one wants to do so I'll do it and protect my people so that they'll stay and want to be here but what you forgot is that if you asked your people they would not want you

[38:09] always doing Scott work that you hate they don't want you doing that so like they don't want you burnt out either so maybe you could trade off or maybe you know maybe we could pitch in and whatever like there's probably probably they don't actually want you to do that but you didn't ask anyway so so that's a classic one and then there's the joy and need I love it and the company needs it so what's wrong with that don't have the skill for it not very good at it you said the company needed it if we start with that if they if it doesn't need it

[38:36] you shouldn't be doing it okay you just said it needed to be done but you suck at it so a classic example here would be like um marketing again I'll take the engineer because that's what I am so it's easy for me to pick the examples and so it's like we need to do AdWords you're like I can figure out AdWords of stupid markers do it I could surely do it you know like I know more math than they do and so and besides if I'm going to hire someone to do it even if it's a consultant or this even a part-time if I'm ever going to pay someone to do it I

[39:03] need to understand it otherwise I won't be able to interview them or manage them and hold them accountable because I won't know like and they tell me this won't work or this is normal I won't know because I've never done it so I need to do it is the conclusion so you do AdWords really badly for three months and now you're an expert you think and now what and the company needed it done again under the presumption that it was needed to be done in fact and so that sucks and then you hire somebody and you still don't know how to manage them actually because you're not actually an

[39:30] expert it's a another classic and again who's going to tell the founder you you actually are bad at marketing yeah you need a co-founder okay then like but not excellent like isn't the point to have Excellence everywhere isn't that the goal anyway not mediocrity so so um bringing so first of all that I love this framework and I use it all the time I use it for other people I use it for myself and the CEO thing which is why I went into it in so much detail so for me it was like all right so what is a CEO so at this time we're like

[40:00] maybe 80 people 70 80 people and it's still growing fast like clearly we're going to be hundreds over the next few years and at that time so it was like okay do I love managing people no it's one of the things I hate the most actually right now I have no direct reports that's one of the reasons why I have this title now yay HubSpot right it's the same thing yay um so no I don't like that and then there's board management because at that time we had raised money and okay and and um and we've got to hire and manage a global sales team right not right now we

[40:35] have a few hundred people in sales all over the place I don't want to do like just Joy just straight up Joy I don't want to um and uh what about skill well yeah that too actually for a lot of those things some things I can do but some things you know so you start doing all that and it's like oh I should be doing at that time engineering and product I mean that's what I love and I'm good at it and the company needs it done obviously and um so now I say that like it was just this easy thing that took about four months

[41:03] of really difficult struggle okay an emotional turmoil and there was this moment where I got over it which is useful to repeat because I think um because I think it's not just me I was at a um I was in this uh this bar outside of a restaurant with um it was it was a person from our on our board but this person had also been a Founder multiple times to take home companies public and like gone through everything right like that kind of person and uh we were just sitting there and he could tell like I know we should hire a CEO I know like everything

[41:37] I just told you like I know that but I'm just like of course I mean who who's like you said you did that like it's just it's like not credible right and uh and he just goes um I know what you're thinking I'm like what he goes you're thinking one day like maybe you'll ring the bell on the NASDAQ and uh you want the credit I'm like ah God damn it is it just ego like is that it and it's like yeah and I was like okay fair enough and he goes but here's the thing you're the founder like you'll always get the credit and for me personally just at that

[42:12] moment that's what I needed to hear for what it's worth my light bulb moment of like oh yeah I get to keep all the ego stuff like forever there's nothing wrong with keeping the ego stuff why shouldn't you for God's sakes this is hard you should at least get that but it's like yeah you just get to keep that forever it's like oh oh yeah then why would I want to like run the board meetings that's stupid wait I cannot run the remedies and get the credit that's what I want to do you know so for me personally that was my emotional moment that I had to get over

[42:43] so again easy to say but four months in in like that was the thing um but it's been fantastic I mean just whatever Rand happened like we had the opposite um Heather is the best and uh and she's still CEO today still CEO today nine years later I've said this many times but I've always called her the the late joining co-founder because I really feel like that I mean and anyone who's been here um I'm looking for someone that's here because they would agree but um anyone's been here for even like five years would agree like yeah if you told me Heather was the co-founder I would I would say

[43:18] yeah of course like it just makes sense like just culturally in leadership and the way she is and everything um it just it just is like that and I stole that um that little phrase from um um Reid Hoffman at LinkedIn who also famously brought in a CEO did not work they had to kick that CEO out then brought in Jeff weiner which was amazing and you know Etc and so um so I was actually looking at that example during during all this and that was his phrase that Jeff felt like a late Jaren co-founder I thought yeah that's that is kind of how it already

[43:50] feels like this is probably good so that I kind of stole that phrase from him but it's totally true [Music] um and it was funny so Heather was a c-o-o at a public company bizarre voice um when we were talking to her and at a public company you can't you can't make public that you're maybe talking to a c-level executive that would that's effectively like insider trading to know that so you don't say anything and then when it's all done you file the certain form and then you can talk about it because when you file the form that's when the world knows and now you're allowed okay so I wasn't able to tell

[44:22] anyone around Austin and Heather's was well known in Austin for a few decades already for being amazing so anyway finally I was able to tell people I remember I was at a at an event at Capital Factory and I was talking to oh oh John a second John Price all right so you know what I'm talking about he's he's like he's like this little energetic guy really smart but create like crazy glasses and with stuff and he's just like you know and uh uh right and uh and I said oh oh oh I I can tell you like Heather's joining us as as a CEO you

[44:55] know Heather right didn't he work with her or something and he goes Jason and he grabs my my forearm I look at them because they know John you can you can picture this right he's like and he's like listen you don't understand you know Heather's going to do a great job you know she's great I'm like yeah I know like and he goes you don't understand Heather is my favorite person and if you ever do anything to hurt her like your bro long lost brother yeah like what's happening what's going on here like okay I won't I won't I don't even know what that means what would I

[45:26] do anyway um so that's when you know you've hired a good person I guess that's awesome exactly that's an awesome story man and if you want to hear more about the joy skill and need framework you did a great talk at saster so you can go to YouTube Type in safter Jason Cohen I think it's the only talk you've done there because it's number one in that in the result and I didn't know he was going to mention it today but I actually watched that talk a few months ago and I have a screenshot out I don't know he has a draft in my book which is

[45:55] why I mentioned earlier but did you see the screenshot I took of it's laid really late in the book under the mindset thing but it's of your joy need and luck thing because I was talking about my own burnout and how I was doing some of the traps you just mentioned I did myself so with that ladies and gentlemen Jason Cohen [Applause]

[46:24] foreign

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