The State of Bootstrapping in 2019 – Rob Walling – MicroConf Growth 2019

0:00[Music] [Music] talk for the next about 40 minutes I think about the state of bootstrapping in 2019. This is something I I did at our Europe conference about six months ago. I did a 2018 one and you know when I come to Microsoft and speak I tend to look back at what I've thought about what I've experienced and what I've been building over the past 12 months and this is a lot of that. It's been kind of cool to have been able to step back from Drip almost a year ago. It was in April last year and to have a lot more time much like you know something Mike didn't

0:42mention is um there was a time in in the late before 2010 where I was building a lot and then there was an 18month period where we launched our online community micreneur academy I wrote start small stay small my first book we launched micro comp and we started the podcast within 18 months and then there was this that took us into like 2011 and then there was this next eight years of app app hit tail drip all the things and during those times the talks just come naturally right out of what I'm doing this kind of talk comes out of having six months of sitting and watching the

1:17bootstrap uh uh scene and watching the startups and you know continuing to be a part of it obviously through tiny seed and what I'm doing now but almost having the headsp space to really look at it at a higher level and um yeah it's it's been fun so I enjoy these kinds of things so uh most my talks I break them up into three parts There's a couple intermissions between uh the parts. So, the first thing we're talking about is five things that I've seen hold true over the past 14 years. Uh 14 trends from the past 14 years. 14 things that have changed. That's how I think about

1:50it. 14 things that have either come in and faded or come in and stuck around. There are certainly more than five and more than 14 that have done these things, but in the interest of time, these are kind of the ones that I I feel like are most relevant, most important. And then that's going to lead us into into the third part, which is something I've been thinking a lot about. You know, we're at the as as you heard um

2:07Jason Freed talk about this morning. We're at this interesting period in in our history of these self-funded bootstrap startups where it's not this binary state anymore. It used to be venture funding and bootstrapping. And now we're and and now we're starting to see even more shades of gray in there. and I why I think that's a positive thing and why I think that's a positive thing for for everyone in this room. So, one of my favorite traditions um at MicroCom is that a lot of um uh uh the speakers over the years include a picture and it's a picture of of our families because this is our why, you

2:46know, this is why we're here doing this. I think that's where we perhaps diverge and micro always has been that way is we diverge from a lot of typical startup conferences and that the end is not the money, the end is not the success. Those things can lead us to then have more freedom to spend time with these folks or to have uh the ability to build stronger relationships with these folks and the folks around us. And while we do hold, you know, success and and profit and these are very important things, this is the end for me. And I think it's the end, I would hope, for most of the

3:20folks in this room because that's what Micro has always been about. So why do we do this? Um, I've talked about this in the past in some of my talks where I have these three kind of north stars that I've always looked at. And when I have all three of these at any given time, I find myself being happy and fulfilled. And when I lose any one of them, I find myself wandering seeking for it. And so, um, I think over over the years I used to say, "This is me and maybe it's not you." I actually am starting to just the more conversations I have, the more I realize if you're

3:49kind of in the bootstrapper ethos, I think this is why you're doing it. The first is freedom. We do it to to be free from working on crap in crap jobs and working on projects that we don't enjoy for people who we don't enjoy working with. But the freedom to work on super interesting things or maybe to work less for a period of time is is

4:06something a lot of us seek. Purpose. purpose is working on something that's fascinating and that that drives you forward and that you know allows you to to um I don't know feel proud about what you're building and relationships and relationships we've already covered this it's been a theme but the relationships between folks here the relationship between me and my family me and my co-workers me and my colleagues um I think is super meaningful so um if you haven't given thought to this yourself about h you know are you seeking freedom are you seeking purpose and are you seeking relationships in your everyday life I I think you might get to a point

4:40where you have the arrival fallacy and you'll say, "Hey, if my SAS app only did 20 grand a month, 50 grand a month, 100 grand a month. That's not going to make you happy. I've been to all those places and that alone is not it. And when I did that and sacrificed my relationships or I did that and I I I sacrificed my freedom, I was unhappy. And I think there's a good chance you might be as well. So, let's dive in. Um, as I said, it's going to be a threeact play, so to speak. Part one is five things that have held true over the past 14 years. Um, as

5:09of five days ago, this was 10 things, but I had to cut some of them. And as I said, these are what I think are the most important. You might be wondering why 14 years. Um, because that's when I started talking about bootstrapping. So, I started bootstrapping in 99 when it just I was it was yeah, there was nothing out there. It was very hard to do and I made a bunch of mistakes. And in 2005, I knew just enough that I could at least start writing blog posts about it. when I go back and read them, they're terrible. Don't read them. They don't make any sense. But um as it got

5:39on 2007208, it was like ah I learned a few things and I can actually offer some value. So in that 14 years, I've written 2.1 books. So my wife wrote the other 0.9 of the entrepreneurs guide to keeping your together. So I've written two books and then and then worked with her on one. I had over 400 blog posts, 638 podcast episodes between startups to the rest of us and Zenfounder. And that doesn't count interviews I've done. And then we've done 16 and a half micro comps as 35 minutes from now it will be 16 and a half and then 17 tomorrow. And then more recently the cool part is that was

6:11always the fun stuff. Um you know running the businesses starting the companies I you know I've made 50 times if I were to guess I I should do the math stuff. I made 25 times 50 times more money from actually building software companies than I have from all the stuff I just talked about because the podcast loses money. conference makes a little bit of money, but I do it because it's it's super fun and because of that purpose and the relationships part. But more recently, now that I've had kind of more time um after I left Drip, uh over the past year, I looked and Mike and I have answered 127 email

6:43or voicemail questions on the podcast. And in the past 45 days alone, I've done 71 phone calls with founders as we're doing tiny seed and we have the enrollment going and I have more than 90 email threads of like indepth I have like 400 email threads, but about 90 of them where it's like we're going back and forth with questions and what's your

7:00MR and let's talk about this and that. So I'm saying these things because that's the context I'm coming from. I I'm exposed. I've always tried to not be the guy who has one business and then I'm going to come and do a talk and say everyone should do it that way because I've done one company. But I've been doing it a while. I've had multiple and

7:16I have a lot of exposure to the stuff. So, um, channeling that. I'm going to start on the first of my five that haven't changed that I believe haven't changed. So, the first is tactics have a halflife. And that doesn't mean we shouldn't use tactics because tactics are amazing. But back in 2005 to 2010 when I was first learning all these things and I'm like, dude, keyword stuffing it works great. You know, just building links through link directories, it works great. It did work great until it didn't. And what I've seen with marketing tactics tactics and such is about 18 to 24 months it works about

7:47half as well. Another 18 to 24 months half as well. And you know that's the idea behind a halfife right is if you have something radioactive it's less radioactive every billion years or so. Um so keep that in mind as you're learning things that our our um our industry and our space changes so quickly that what you're doing today will work for a while. But be prepared to kind of leaprog that with the next thing. And if you stop learning in what we're doing, you are going to get overtaken. I've had businesses where I kind of put them on autopilot in the

8:20background. They eventually get trucked. They eventually lose their their organic SEO and they plummet. They an API gets cut off and they they get destroyed. There's real risk long term with, you know, our kinds of businesses, unfortunately. um you know there are dry cleaners and and um you know car washes and such and they start and there's a bunch of risk but man you can see a car wash just kind of be there for 30 years it gets a clientele and it's great there are no SAS apps that are 30 years old I mean we could probably name three that are 15 years old you know there very

8:50very few because stuff changes so quickly so anyways tactics have a halfife a couple examples of that keyword stuffing of course this used to actually work you could just do that and they would find you it was super Um, this one might be too small, but this is uh Facebook ads circa 2011 and it's the um uh the cost per click. And again, I'm not saying Facebook ads don't work today, but I'm saying they were way easier. Like a schlub like me could make these work in 2011. And I did. I bought HitTail and that was a big, you know, I 10xed it in 15 months. I've done a talk

9:20on that. And a big reason is because freaking e-commerce clicks are 31 cents here and and uh startup clicks are are 50 cents. I mean, it was a different time. Um, and that's just with fa Facebook ads. And if you, you know, you ask Moza Mars, who's, um, or Moza Jove, who's in the audience, um, you know, she can make this stuff work, but just a kind of person off the street doing it these days, I think, has a lot a lot more trouble. Article directories. I'm sure many of you mentioned these. These were tactics that work really well until they didn't. And, uh, even this is one

9:50that's it's cold email. And cold email still works, especially in certain niches, but in other niches, it's it's been burned out. Like I I get I don't know Mike and I get five or 10 cold emails a week of people wanting to come on the podcast and I get the link, you know, link to us emails about the blog five or 10 times a week. And those those don't necessarily work with us. But I was talking to a founder the other day

10:11um who is in a like a tight vertical. It's some like construction, you know, vertical of construction. And he's like, "Dude, cold email, it's the thing. Like I'm getting 10% response rates and blah blah blah." So um but what I was telling him was 18 months, 24 months is not going to work. Like just keep that in

10:26mind. So we're always evolving, right? So what this means overall is that, you know, this is base camp in in 2005. And I really appreciated what Jason Freed said this morning of like, you know, we we got a little lucky. We had some timing and and they did some things right as well. And so we can't just go back and copy what they did, right? And we we can emulate it. We can look at the high level decisions they made. Build a great product, build a community, build an audience, be ethical, you know, whatever whatever you want to take away from them. But take away the high level

10:54things from them. If you go back five, six, seven, eight years and look at the success of a SAS app, trying to replicate that today is probably is probably not going to work straight across. All right, so that's number one. Number two, you're probably still not charging enough. It was true in 2005. Um, and I think it's true in 2019. I'm going to say nothing more about that except if you have questions about what this slide means, talk to Patrick McKenzie, please. Number was like four minutes that I was able to edit out by pointing you to Patrick McKenzie. All right, number three is um SAS takes too

11:27long to reach escape velocity even with the Cinderella stories. By escape velocity, well actually I guess I have a slide with it. Um escape velocity I just mean it's just past product market fit where you kind of things start to get a little a little easier. And there's a great talk of course Gail Goodman long slow ramp of death uh boss a couple years ago classic. I think I just unlocked an achievement with that by mentioning this talk. every startup talk about SAS should should have this because she just talks about how Constant Contact charged 30 bucks a month or uh 30 or 40 bucks a month and

11:59they had to raise millions of dollars in 2000 or 99 to just get this business up and it took years and years and years and years to do it and it's true and it's a little better today. Today it's easier to start than ever before. It's not necessarily easier to get to the place we want to be to escape velocity, which maybe 10, 20, 30k for you, but it's the point where you know you've built something people want and you're

12:21really starting to to get that traction. This is my escape velocity slide if you don't know what that means. It's trying to escape the thing. So, um, I actually talked to I had no idea that that Ally was going to use Cart Cart Hook as an example, but um, I'm I'm an angel investor in Cart Hook and I asked Jordan for his revenue graph since 2015 when they started. Um, I took off the numbers uh uh per his request, but you'll notice there's just this moment that's escape velocity. That's where you hit it. It's where it's going and then suddenly just takes off and it starts getting

12:51easier. And now it's always going to be a cluster, right? But there's a point where you have enough revenue that it being a cluster is kind of worth it, right? When you're it's four when it's four grand a month and you're working 16 hours a day or maybe only work eight hours a day, but it's a pain in the ass. But when it's doing 50 grand or 100 grand a month, it's like I can I can

13:09kind of justify, you know, doing this. What's interesting is if you know Jordan, he's he's smart, he's talented. Um, and he he really went all in on this. And it took him just based on this graph about 27 months to get to what I would consider escape velocity. And that's a long time. That's a very, very painful long time. Um, this is a slide from a talk I did a couple years ago about drip. Uh, so it's public. This is revenue from tw that's from the very start. So the very very little um the tiny little thing on the on the left is June of 2013 and we started building in

13:48December of 2012 and then it's revenue through sometime in 2015 I believe and for us it was about 13 months and this was you know I was coming at this as like my third or 10th startup depending on how you count and I was pulling revenue off of of HitTale. I mean, I dumped between 150 and 200 grand of my own money into this. Like, we had money, we had resources, we had a talented

14:11developer, Derek Rhyr, if you know him. Um, and it still took us 13 months. And this was from when we started charging. There was another seven months before this where we were just building and not charging anything. So, it took us between 13 and and 20 months. And I thought I knew what I was doing at this point. It turns out I did, but the whole time I was like, how are we not getting this faster? This is terrible. And then, uh, I just took another one. I won't belabor the point, but hub hub staff, if you know them, they're doing half a million a month now. So, six million a

14:39year and I pulled it off of the open bare metrics open stuff and it took them 12 months and I believe oh yeah, this doesn't include building time. I have no idea how how long I should have uh emailed the founders and asked them, but you got to figure six to 12 months just to get to this point, right? So, somewhere between 18 and 24. Again, for guys who pretty quickly got to half a million in a couple, you know, a few years after this, it takes a long time even for the Cinderella stories. I've just shown you three apps that, you know, are are multi multi-million dollar

15:07apps. And even for those people with resources, it was painful even for the Cer Cinderella stories. And the the fourth point is that there are no Cinderella stories. Um, all those apps you've seen or, you know, any other SAS app you've heard that is just growing like crazy and we all are envious of that growth. The growth, the growth is cool and it feels great, but under the covers, it's always a show. Like, if you can actually get the founder to honestly talk about what's

15:37going on. Everything's always breaking. You always have spammers doing XYZ to your thing. You're getting on email blacklist. Someone's going to shut down an API, an employee just quit. It's just always like that. And it's been that way for 14 years. And I remember at a certain point thinking if I could just have an app that was doing 50 grand, 100 grand, whatever a month, it would be easier. And it gets I don't think it gets easier. The problems just get different. They become different. And the fifth and final thing that I've really started to see is that every year SAS gets more competitive. And I think

16:14this is pretty much across the board. There used to be verticals you could build an app and you were the only one. There are a lot fewer of those these days. Uh chief martekch.com puts out his marketing technology landscape. He calls it the martekch 5000. Uh this was from April of 2018. There are actually 6800 companies on this list in marketing technology. And so it's email marketing and it's conversion rate, you know, optimization, split testing. It's just

16:42everything you can imagine. Interesting. That's a lot of companies. We could say, "All right, that's cool." The the crazy part, look at this. In 2011, there were 150 that he could find. In 2012, there were 350. So, what about is it about two and a halfish in 2014? So, that's two years later, tripled. 2015, doubled. 2016, almost doubled. And then another two years, and it doubled again. So, I don't know where this is going to keep going, but it's a thing. And there's a reason why Jason Frerieded said this morning, it's harder to start today than it used to be. There's a reason I started saying this probably four or

17:21five years ago, talking about stairstepping and all these approaches to get around this. In 2008 or 2009, it was still hard to do, but it was that sweet spot of we don't need to rack our own servers anymore and we have Ruby on Rails or or a good, you know, Python Django, but we weren't at the point yet where all the VC money had had discovered that it was there and there was a sweet spot where you could could in it gets harder. So, it's not to say we shouldn't do it, but I think a lot of us feel this in the room and don't know

17:47why why is this harder than it used to be. Well, there's just more competition. There's more people doing it. And now I just have a couple slides of of VC money. This is early stage VC deals. So, not the ABCD. It's more like the seed VC deals. Um, and you'll see it goes from 2010 to to first half of 2018. This is from TechCrunch. And in the in the first half, I'm sorry, in the in 2018, uh, the first half it did almost trying to read it here. Oh, almost two billion in the first half. And in all of 2010, there was less than half a

18:24billion. So it's it's pretty stark contrast. All of 2010, half a billion. And in 2018, let's assume it was three or four billion. So it's it's quite a it's a big number. Pretty soon you start talking about real numbers when you throw a billion here and a billion there. And then SAS uh seed through

18:40seriesD investments from 2008 to 2017. It's a similar graph. It's five, six, seven, you know, whatever the number is. It's just absurd um to see a graph like that and to then realize, oh, that's why when I try to build an ESP today, it is so hard because there's just a lot of money coming into it, you know, and and as as a bootstrapper working nights and weekends, it can be hard to do that. All right, so that's part one. And I always have intermissions, brief humorous intermissions in my talk, so you can catch your breath and I can too. So this

19:11is from uh courtesy of vuza.com. if you haven't checked them out. They're kind of a parody site of uh of startups and I find some of their stuff pretty funny. All right, coders. Uh you guys are doing a great job, but I am going to have to ask you to stay and work the entire

19:29weekend. Do we get overtime for that? Not exactly. No. Well, uh the thing is the uh Ren fair is this week. No, you've worked us 80 hours this week, Matt. I we I physically I can't do anymore. Okay. Uh, did I say we were working this weekend? Because that is not what I meant. Uh, we are not

19:50working. We're having a hackathon. Hackathon. Hackathon. Oh, yeah. You say hackathon. Not working. It's going to be a hackathon. Yeah. It's a It's going to be a venue for self-expression, you know, and creativity, you know, via technology. A lot of passion and caffeine and free labor. It'll be great, guys. Free labor. Free cupcakes. Free cupcakes. Wait, are we gonna work on the app that

20:17locates your headphones? Oh, yeah. Those We may get to that. We may get to that. We will probably start somewhere else, though. Okay. All right. Well, as long as it's a hackathon, I'm there. Hackathon. I'm there. It's a It's a hackathon. All right.

20:37That's right. Hack those germs, fellas. Remember, we're going for minimum viable cleanliness, okay? You know, I I don't think this hackathon is really pushing the limits of technology. Good point. Here, try this. Hey, I'm having a uh paint my apartment hackathon next weekend. Did you say hackathon? Say hackathon. Yeah. All right. All right. We got another one.

21:05We got it. Okay. So, let's uh let's dive into part two. 14 trends from the past 14 years. As I said, some of these are trends that I I feel like are still around and others kind of came and went. There are certainly more. What's funny is I put the chart together and I was running through it today and I was like, I missed I miss content marketing. That's kind of a big deal. And, you know, there's some other stuff. So, it's certainly not complete, but I do like the the thought experiment of doing this. And the idea here is let's look at the past so that we can figure out kind

21:33of where, you know, where the puck is going like the old Wayne Gretzky quote. But there are some opportunities that I missed now that I look back at this chart and remember this stuff coming in. I wished I had built a specific app on a specific year and it would have been really cool in hindsight and I was there and I remember thinking this is this new

21:50thing and I didn't take advantage of it. So um I think on in most of these there's opportunities both for people to implement these you know there's going to be like split testing right that's the first one because we didn't used to do that in the startup space didn't exist I know it's hard to think imagine that um but there's opportunities for you as founders to utilize some of the newer ones but also I think there's opportunities to build tools and actually start a startup within it which is something that I I should have done earlier so it's a cluji little timeline but um the earliest I can remember of of

22:21so when I started bootstrapping 2005. I I had this little software product called .NET Invoice and the only thing I knew the only hammer I had was was SEO and so I'd bang everything. All right, SEO I guess and then I bought another product like an ebook and SEO SEO was all that stuff and then um I learned Adwords. So then I came back and I'm like all right invoice with Adwords but there was no one in the startup world like if you went to read startup literature it was like techrunch and it was like all right here's how you build a software product or build a you know

22:47income stream and or grow a a profitable company. um it is to you know have a big launch party. First you raise the funding and then you have the big launch party and then you go on Techrunch and then you go viral and I mean that was literally like the playbooks and I was like how the hell I mean I have a product that sells for 300 bucks that like actual real people use to build stuff with how do I actually market this? So I went into the kind of the internet marketing space because they were all talking about let's have sales letters and split tests and um uh

23:15analytics and conversion rate optimization. I know it's hard to believe like we know that today. No one no one in the startup space was talking about that. The only people I could find talking about it were frankly questionable some a lot of questionably ethical you know internet marketers but I took that stuff and pulled it in. Patrick McKenzie was another one because you and I were doing this at the same time where we're like good idea shitty implementation or sketchy. How can I make my bingo card creator or my net invoice or my apprentice lineman jobs these are all I owned a beach towel website for crying out loud. Um but how

23:46can I raise that up? And so um split testing in 2008 was not it just wasn't done or it wasn't talked about. It wasn't taught in startups and I did a short little talk at a business of software about it. It was a 7minute pachka talk and people came up to me afterwards and they're like where did you hear about this split testing? What where did you learn that? And I was like um kind of embarrassed to say but do you know who Frank Kern is? You know that kind of stuff. Um and uh uh email marketing was the next one. A bunch of these I'm going to say and you're not

24:15going to believe me, but again 2009 I I think it was 2009 might have been 10, but I did a talk at BOS about email marketing and I was like look we're not doing enough email marketing in the startup space. We think it's not cool but uh it's working for these guys. You do a capture and then you nurture and then you it's fundamental basic stuff we know today. And I got multiple comments

24:36like so are you kind of a spammer then? And I was like no like just you know send stuff people that they really want. And then like you know the next year like Groupon blows up and AppSumo blows up and I remember thinking damn it why didn't I you know do something with email marketing. This was we saw Mailchimp rise during this time right 2007 they stopped consulting 2008 they were doing well and they figured out fremium they're the only one in 2009 to then on there you know whatever hundred millions and millions of dollars they rode that wave and that's when I remember it starting that's my

25:06perception. um customer development 2010 first time I heard about that where it's like no you should talk to your customers before building stuff because we didn't do that before then and you made a lot of uh products and a lot of mistakes virtual assistants was something came over from the Tim Ferrris club and I talked a lot about it and some people did it and then that one kind of died down which is which is fine uh micro started in 2011 the kind of this this community we've talked about um uh what is that oh retreats founder retreats that was something some people uh in here do as

25:37well as masterminds. That was around the the 2012 time frame. Um, cold email. I remember getting my first cold email ever that wasn't spam that was actually targeted to me and it was when I I owned Hitale and Perfect Audience. Anybody use Perfect Audience for retargeting? They cold emailed me. And I was like, that is amazing. And I signed up and I spent like tens of thousands of dollars with them. And now, you know, I get 30 cold emails a week and I don't respond to any of them. But it was this fascinating

26:04thing cuz there was a halfife, right? There's a halfife in these spaces. Um, and uh, webinars. The first time I I heard someone webinars were big in info marketing. The first time I saw someone in a startup do it was Klay Collins with Lead Pages, and that was his playbook to grow it. Um, that one still works as as

26:21we're seeing. Marketing automation. First time I heard that term was 2013. Derek and I jumped on that that with Drip. And um, bootstrapper exits in 2014. The first time I heard of bootstrappers selling a company. Again, hard to believe you used to you could build a SAS app to 20 30 grand and then you just had to run it for the rest of your life or sell it on Flippa for 18 times net monthly net profit 1.5 years

26:46that those were the multiples you got. It's insane. I think that that FE and and you know Shswift and Empire Flippers and Quiet like I think they've actually done a good service to this community that there are these smaller exits that people can use to parlay up Bootstrapper exits. Let's see the SEO blood bath was in 2013 2014 um bootstrappers raising money. This was the first time I'd ever this was uh when I heard of customer.io IO raising money, but they did it in 2011 2012. But this is when kind of Cart Hook and Leadfuse and and and Churn Buster and stuff started talking about it. It's like wait, you're a B

27:25bootstrapper, but you're going to raise few hundred grand? What are you are you venture like I am a rigor? Like I was so confused and it eventually occurred to me that there's it's not binary, right? And that's something we're going to talk about later, but that's when I first started realizing it was in in 2015. And then um where are we without? Oh, flat

27:45design. Yeah, that became a thing. Windows 10, indie.vc launched, I believe it was uh 2016. SAS debt financing like we talked about earlier with the lighter capitals and the and the big foots and um chat bots, that's David Canel started, you know, doing that. LinkedIn outreach there. And then of course we have tiny seed 2018 and and kind of this whole alternative funding uh stuff that's that's coming out. There's

28:09there's other players moving into it. Um, the interesting thing is when I look at this curve and I think, boy, I remember email marketing kind of not being a thing and that it was like a a hammer or it was a great tool that other people weren't using. Why didn't I build an ESP at that point, right? I could have taken advantage of that. I could have ridden the wave. Um, I thought the same thing about split testing. Patrick Mackenzie and I had a conversation one time where we were like both like we should have built visual website optimizer like three years before they did you know and it's not

28:41enough to have an idea not implement but I I think we could have implemented but it was very obvious that split testing was a thing and people should do it and it was super powerful and so when I look at trends like this and when you look at trends like this the purpose is not to be nostalgic and say look at what's happened over the past 10 years or whatever but it's to say what are the trends that are coming in you know uh the chat bots the LinkedIn outreach whatever SAS debt and and alternative funing you know, is there a way to take advantage of that wave because it won't

29:06it'll either go away eventually or it just won't be new anymore. Like email marketing hasn't gone away. It's just not new, right? So, it's hard to like compete in that. It's hard to launch a new app into it. Um, but you know, the reason that of course I'm doing Tiny Seed, which is a, you know, an accelerator designed for bootstrappers, is because I've I see this wave coming and I and I think that there's a way to help more of us like, you know, the rising tide to raise all the boats. Um, this became kind of obvious as I started mentioning this idea of bootstrappers raising small rounds and I would mention

29:38it in a talk. I'd mention it on a podcast and people would email or they'd come up to me and say, "I heard you invested in in Cart Hook." Yeah, I'm just a little angel investor um and and I wrote a check. Well, who you know, is there anybody else doing this? Yeah, there's a few people. Will you invest in me? It's like I'm kind of out of money for that stuff. Like I'm overweight startups at this point. And several times I heard this, well, someone should really start a fund to do that because it makes a lot of sense. And I was like,

30:05yeah, someone should. Then I walk away. And it didn't occur to me for quite some time until uh uh Anar Volat, my co-founder, said after my talk last year at the blackjack table, he says, "Hey, you should start a fund for that." And I was like, "Yeah, I know. I don't want to deal with the headache of of, you know, there's a lot that comes with that." And he was like, "Well, we should talk then." And that's, you know, that was a year ago. So that's where we are now um for Startup Accelerator and we're evaluating our first batch at this

30:31point. That's my 14. They were all on that one slide and now we intermission. So this is Eddieard who is a comedian and he has a cool bit about Star Wars and someone put um digital animation over it. So you'll hear like crowd laughing because it's a dude doing a live show and you can actually just Google the live show but there's a kind of goofy animation over it and this is one of my favorite cake or death is probably my favorite of his but this might be my second

31:04favorite. So uh yeah but the death star one thing about the death star is there was no food. No one had food at all. enough talking about something I've been thinking a lot about and it's this this topic of bootstrappers and funding and uh I have a lot of kind of of of thoughts and and opinions that have formed over the past five years as I said four or five years as it's happened and I'm hoping that I can not only help you understand it but here's what's interesting I'm not going to tell anyone or convince anyone that you should raise funding just like I wouldn't have told

31:38you in 2009 you should go start an ESP because I think email is going to be a thing or that you should start a LinkedIn outreach SAS because you know people started doing it last year. I'm kind of calling it out so that we can all understand this and have like a shared understanding and to realize that, you know, that that I think there that it's not helpful to have a binary view of things like this. And I think there are more people that can be helped by at least considering the option of doing something like this. um raising a little bit of money, it could make a lot

32:10of our lives easier. So, uh bootstrappers and funding. So, I think we hopefully I've I've um kind of instilled it like it's more it's more competitive today with the the SAS uh funding coming into the SAS space and just that there are a lot more out there. There's a lot more competition like the chief martekch and that reaching escape velocity 27 months, 20 months, whatever. It just takes too long. And frankly, this is the most dangerous part of of starting a startup, starting a SAS. The reason it's tough is because uh there's a lot of reasons, but one is you really haven't created any value until you're past that escape

32:44velocity because once you get to 20, 30, 40k, whatever, and up, you can at least get some money out of that. You can at least sell it if worst came to worst. And it was like, I just can't do this anymore. I mean, the multiples are really quite good. Um, and if you get over a million, you can look at private equity, get multiple on revenue. There's all kinds of good stuff. But in these early days when you're pre 510, you know, 20k, whatever, pre- escape velocity, you you can spend 2 years and literally walk away with nothing like

33:13nothing of value. And this is like the the trough of sorrow. I think Paul Graham kind of kind of targeted it. It's this trough where like you just you can't get out of it. You can't reach escape velocity. And this is when we see people giving up because it takes two years. This is when you can run out of cash. This is when you lose that motivation. You get way stressed out. This is when you live in the uncertainty for this long. And the hardest part of for me of any startup

33:38I've ever done has been this part. It's different challenges later, but we forget until you start over again how hard this part actually is. And our options for getting through it have been traditionally kind of limited. If you're bootstrapper, you can do nights and weekends. Of course, I I did it for a lot of time. I'm assuming most of you in here have done it or may still be doing it. And this is tough, right? If we go back to freedom, purpose, and relationships, um, nights and weekends, you tend to work a day job and then you work another four or five hours at night. It's not a ton of freedom. When

34:08your friends are going out, when your kids are going to a play, when you know, going to see a movie, you can't do it. And frankly, when I was doing nights and weekends, I I how do I say this? My relationships were not as healthy as I would have liked. Um, so this is something we sometimes have to do. Um, but I think if we're trying to keep that balance, it's definitely something that that can be a challenge. you can go to your savings, something some folks do. I was never able to save 50 grand or 100 grand in order to take, you know, a year

34:34off. Um, I also would have been super like I'm conservative in terms of that. Kind of risk averse a little bit. And then if I ever saved up a 100 grand, I wouldn't have wanted to bet it that I could get to product market fit and get to escape velocity because it always takes longer than you think. So, there's a drawback there. Again, not that you shouldn't do it, but there are drawbacks. Debt, I've seen people go into credit card debt for it. Um, not a fan. Um, seed funding has been a thing,

34:57but it's come with a lot of caveats. You're going to go raise VC funding. Uh, you know, we take a board seat, whatever it is. And seed funding can make a lot of that easier, but we are bootstrappers, right? And we're traditionally, you know, folks uh uh in our circles, some have been really anti-funding. Um, it was interesting to hear Jason Freed this morning talk about, you know, because he's come out and he's really anti-VC, but he's not

35:23anti-funding. You notice a difference? And that's where I've that's where I've come to over the past four or five years. Um, and in fact, I wrote a book called Start Small, Stay Small and published it in 2010. And in the intro to that, so this is nine years ago in writing, we have proof that I said I am not anti- venture capital, but I'm anti- everyone thinking venture capital is the

35:41only way to start a tech company. Because with venture capital, you're forced to go after much larger markets. And a market that 10 times the size is 100 times harder to get right. There's more competition, more complexity, higher ad rates. Interesting thing about that whole assumption is in 2010 I thought you could bootstrap or go VC raise venture funding. And that may have that may have been the case. I honestly

36:02don't know. I can't go back nine years. But my supposition is those are the only two choices. But there is an option in here that doesn't make you go after a market that's 10 times the size and it's these small kind of seed rounds that I've been talking about. These used to call them fund strapping but it's you know it's raising around and uh seeing where you get and trying to get to profitability. So, I had this interesting interaction with the founder of a startup that was taking off like crazy and he was in the Bay Area, a company called Datanize. Has anyone ever heard of or used Data Knives? Yeah. If

36:33you've done sales prospecting, you can basically plug in a competitor's URL or competitor's name and it'll um give you a list of websites that that that competitor's JavaScript snippet is installed on or or that can be detected. you know that if you could put in WordPress and it'll try show you this huge list of WordPress sites. They crawl like 20 million sites or 30 million or whatever. And this one dude wrote all the code to crawl it and he had like 50 crawling things crawling uh uh servers and he was growing like 10k a month in like five months he was doing 50k MR. It was like the most amazing thing I've

37:07ever seen. and he read my book in 2010 and in like 20 I can't remember the year 2014ish let's say he he emailed me and he said his name is Ilia Semenmon he's the founder he said I've always wanted to stay bootstrapped and grow as much as possibly organically possible organically but a lot of people right now are telling me that it would be unwise not to take the money the money is he was getting multiple offers from venture capitalists because people stumbled on it realized it was a great sales tool and then when they asked him I was growing. He's like, "Yeah, here's my financials." And everyone's like, "Oh

37:40my god." And so they were throwing the amount, but it was like seven figures at like a 10 million, you know, like a huge valuation somewhere in that. And he was like, "I'm going to drive down to Fresno and I want you to talk me out of this. I want you to tell me why I shouldn't take this money." And this is venture money, right? Which is it comes with even more um not strings attached, but more there's more uh uh there's governance and there's board meetings and stuff. this isn't just a hey here's a $200,000 seed round from some angels that are gonna be kind of not up in your

38:13grill about stuff. And so I'm like all right no problem dog I can totally do this. So we like and a I was like could you could just call me and he's like nope 7-hour round trip. He did he did a seven-hour round trip to Fresno and back bought me a few beers too. Got me going and I said all right so are they they're going to give you this money the strings attached. Are there board seats? And he's like, "No, they're only going to be a board observer and I'm going to be the only one on the board." Or something like that. I don't remember what the

38:38deal was, but he was like, "Nope, that's not a not a deal." And I said, "Okay, are they going to have like control of the company? Like, will they own more of it than you?" And he's like, "No, they're buying like a super minority percentage." And I was like, "Okay, do they have liquidity preference where

38:51where it sells and they get the thing?" He's like, "No, they're not doing that because they're this kind of that and you know, blah blah blah." Like he talked it through. Okay. I said, "Are they going to is there big pressure to like hire to grow faster? like are they going after the unicorn thing because you're a bootstrapper like aren't you happy with let's say tens of millions in AR which I think you can get to at this rate are they cool with that and he said I communicated that openly and they said that's okay and I said wow I never heard of this I thought that venture was like

39:19this big dragon that came out of that you know I didn't actually think that but I I thought that it was a lot more complicated than that and last thing I asked was like can they block a sale because that's often the thing you hear is founder start something takes VC gets an offer for 10 million that's lifechanging for them and the VC is like nope not lifechanging for us keep going and and it and it happens it's a real thing there are terms like that and so anyways his terms I couldn't talk him out of it and I we kept going I won't go through all the the agonizing uh you

39:48know three hours and three beers uh per hour that we did but uh I don't even drink beer but um and then he told me so I emailed him about this uh seven months ago when I was first kind of reodling on this and I was I know you took the money. I was actually an angelist syndicate. You know, I put in like $10,000 or something. Um, and he said, "Yeah, and let me tell you, I did take the money and I'm happy I did. And here's why I did it." Um, one, the terms were just they were like too good to pass up, right? I struggled to talk

40:17myself out of it. No one else could either. He said the credibility it lent me was big that they were selling sixf figure multi-year contracts and being bootstrapped hurt them because the people were saying, "How do we know you're going to be around? How do we know you're not going to go out of business? And when he raised this money, gave credibility, not only the amount, but then he could say, you know, who I don't remember who the fund was, but these guys believe in us and so you should too. Hiring became easier because he had budget to pay market rates. He was in the Silicon Valley and or he's in

40:44San Francisco maybe. Hiring became easier because of that and because he again could say, well, we raised around so at least we'll be around for a few years and their stock options and stuff, right? And the extra capital gave him breathing room to do some marketing stuff that uh he wouldn't have had if he was bootstrapping. So that was his trade-off. Um they actually got acquired in September of last year and uh you know doesn't always happen that way but um you know he worked hard for three four years and it worked out well. Now

41:09with all that said he had a great deal. He was growing very quickly. There can still be terms that that don't work out. You know your mileage may vary and venture capital is certainly the whole different ballgame than anything I'm talking about with with Angel and Seed and even Tiny Seed and and Indie. BC and such. Um, with venture, some objections I think still ring true. I think a lot of of of venture, if you took it, you know, there's still board seats in board meetings. There's often a triple twice, double three times growth at all costs unicorn stuff. Headcount as a success metric, you know, discourages capital

41:42efficiency and is really is that still fun? But I do think that it's changed and that's something um I've realized over last several years and I think it's something that that is a is pretty incredible to think about if we tried to raise money. Anyone in this room tried to raise money 15 20 years ago it was very very much stacked against us. They could ask for whatever they wanted and there was information asymmetry out the wazoo and you just didn't know what good and bad terms were. And then a few people came along and started changing that. Um, you know, Bradfeld started blogging about it, about what terms

42:17should look like and fair terms. He wrote several books about it. Um, uh, av.com, Fred Wilson, Fred Wilson was another guy who just started, I remember reading his stuff. I didn't even care about venture capital. I wasn't going to raise it, but or wasn't going to raise it, but I would read it and be like, "Wow, I didn't know that's super cool for me to know." And then frankly Paul Graham starting Y Cominator was an absolute uh uh meteoric shift in in founder rights because he started it with his he started the first cohort with eight eight people. Reddit was in that first one 2005 I believe

42:49gave them each $18,000 or six grand per founder 18,000 bucks for 7% of their company. And he then as he built that up into something, he was able to start getting terms, you know, some some investors would actually say terms that are now investor unfriendly and way too tilted to the founder. But I think that all of this has been amazing. Like that the whole point of this talk is that this is only good news for all of us because this rising tide like it it raises all the boats and the ability to raise funding at terms that are more friendly to us. You know if there's 250

43:27people 270 people in this room maybe five of us five of you should consider venture funding at some point. I mean, it's just probably not something knowing the micro ethos that is going to be up your alley. But are there funding options that maybe 20 or 30 or 40 of you should consider? I actually believe that. I believe that's not only becoming the case. I believe that is the case. I believe that there are now options that are much more familyfriendly. And the best news is that if it doesn't make sense and it doesn't sound right, just say no. like we we have an amazing an amazing opportunity here of at no

44:06point in time has it been easier to start a software company but as Jason said and as I was thinking it's funny how much Jason Freed said that I was like yes I was going to say that in the talk never been easier to start but right now it's harder perhaps to hit escape velocity than at any time I can remember so how do we get from there to nights and weekends, other things or maybe maybe taking a you know a small amount of funding is is a more an option for more people and I believe that it is. So

44:39why do we do this? I come back to this. If we can find options, if we can find things that fit into our framework of I want freedom, I want have a purpose and I want to be able to maintain relationships, not work crazy hours, not have people breathing down my neck, and I can make my life easier, not do the nights and weekends, I can take a little

44:58bit of money, you know, is it worth it? And that's what I'll leave you with. I welcome your questions. The interesting thing that we've seen, so we announced last October, we announced Tiny Seed. What I've noticed is that already there is way more interest on both sides of investors wanting to put money in and founders

45:20wanting to do this. There's a lot more than we thought. And so I think I don't think this this is not stopping where it is today. In fact, I'm betting probably 5 to 10 years of my professional career that this is where the puck is going. And you know, someone asked me at one point because uh when I started Drip, it was uh you know, was it was ESP and then it became marketing automation. I started saying, "Oh my gosh, marketing automation, it's the future." Like this is where we're going is to have these automation. Someone asked me one day, "Are you saying it's the future because you started a

45:50marketing automation platform?" And I said, "No, I started a marketing automation platform because I think it's the future." And that's the same thing with Tiny Seed. I'm not telling you to believe in this vision because I think I should I'm I'm betting that a big chunk of my career and I'm pretty conservative with this stuff. Um that that this is an option and this is going to be a real thing and it's going to be way bigger. I hope we look back on this talk in a few years and be like wow Rob way

46:13underestimated where this was going. Question. Yeah, it's a excellent summary Rob. Everything you said is spot on. Thank you. It kind of leaves me though it leaves you with a very dark picture. What's the encouraging news for the folks who are showing up for Wednesday through Friday? Encouraging news is that we live in a time where we can start a company for almost no money and we can still do the nights and weekends and we have more options now than at any time in the past. And that while it is more competitive, it's always been hard. If it was easy,

46:50everybody do it. So, this is not really a joke question. It's kind of serious, but can you be a bootstrapper and take money at the same time? It's a I think we need No, it's a good question. I, you know, Drip by the time we got to profitability. I had put almost $200,000 of my own

47:14money from another app into into Drip. Would you say I bootstrapped that or did I self-fund it or did I, you know, it was another company that I owned. Did I just angel invest? Like I don't know, you know, I don't know what the terms are and I I think there need probably needs to be another term because it not binary anymore. Bootstrapping, self-funding and and VC funding has been something I've been talking about for a while because self-unding is heat and Shaw uses that term, but I think of bootstrapping is self-unding is different. So funny is if you have a bucket of money and there's several of

47:45us that like you look at ConvertKit, he didn't start that with no money. He put tens of thousands into it and it didn't do much and then he right before the push he put another 50k into it and went up. Now if you have 50 or 100k lying around I don't know I don't know if that's bootstrapping or not. You know I don't know it might be important to differentiate but I'm not I don't know if it is. Fund strapping was something that Colin from customer.io has thrown around and I I don't know if that applies either yet. So I think TBD on on what we call that you know to me

48:13bootstrapping has always been an an ethos like Jason Cohen would come here I mean his company's valued at like half a billion dollars I believe and he would come here and do talks to bootstrappers that were some of the best talks so is he and he bootstrapped multiple companies before he did you know did WP Engine and it's like is he still a bootstrapper I mean technically it means you start a company without money but like in here he's still a bootstrapper you know, maybe we

48:40should call it microcoming. I'm just throwing that out there as an idea. Yeah, some of us are are first-time founders. Um, when you start a company now, you really are your own adviser. Um, one of the things that you supposedly get with VC or with any kind of incubator is you get somebody who's an adviser. I can ask anybody to advise my company, but if they don't give me money, they don't have skin in the game and I don't really think they're engaged. So how do you get the benefit of the serial entrepreneur to engage in your business without

49:13accepting their money? I see. So you're looking for someone to advise you in your startup without giving you money. Is that right? Yeah. Without without them giving without them investing. Um that's interesting. I've I've only done so I've done some advising. Typically, it's to startups I've invested in. But I also have done two other models. One is um when I was hanging around for that

49:40six months before I started Tiny Seed. Um I charged hourly as an adviser. I mean, people would bring me in and say, "Hey, we're going to meet once a month and here's my numbers and what do you think?" And I would just give them my opinion and it was just a dollars per hour type thing. That's one way. And I know there are folks other folks who do that. Clarity.fm, frankly, if if you want to do that. and people are 100 to 500 bucks an hour depending on who they are. Um, that's one way to do it. And then the other way is to give a small

50:08piece of equity, you know, to give half a percent or what whatever 1% of of stuff. And those are your options. Asking someone important and busy or smart and busy to give their time for free for no benefit. I I don't know how to do that. I Yeah, if they were to give us a certain amount of money and get equity in return, they

50:26would adise as part of that deal. Sure. But he he said if they were to give him certain amount of money and take equity they would advise as part of that deal. Yeah. But like you don't go raise a a seed round of 25K. Like you know most people are Yeah. 25K is not enough to move a needle, right? I've never I've written 25K checks, but they're bundled with a bunch of other angels. So you raise a round that makes a meaningful difference, which is typically in this stage 200 to 400K, let's say. So, I

50:56don't know how to get a one-off advisor. I just don't think it makes sense for one adviser to write your 25k check that you burn through in a few months and then now that person is stuck on the hook advising you, you know, I don't think the the values align there, but maybe I'm just not creative enough.

51:09Yeah. Hey, Rob. Uh, thank you for the overview. Um, my question is, so as a bootstrapper, um, you have this attitude of like you need to make every dollar count. Um if when you get funding what we often see is then people overstaffing getting really like getting offices that they don't need and uh this type of stuff. Um do you think that with this uh more like seed funding or or this this type of funding that that can be avoided that you can keep that bootstrapping uh yeah mindset while also having some

51:49money? I think it depends on two things. On the person giving the money and the pressure that they put on that team because often you write them a check and then if if if the investor is pushing saying grow faster, grow faster, higher, higher. Well, yeah, they're probably going to do that. What if the investor is not saying that? So, that's the first factor is is

52:10the investor going to put pressure. Second factor is the founder or founders. Um I've written I think 11 or 12 angel checks in total. Half of those have been to kind of the Silicon Valley, you know, data nice type thing that was trying to go really big and half have been to folks frankly within this community and everyone that I wrote within this community is someone who's pretty capital efficient and that's a thing that that's something that I would that I look for in in I mean it's a personality thing, right? If I raised around half million bucks, I'm super tight with my money because I've

52:41bootstrapped every company and I don't you know I don't want to let it go. So as we're talking to tiny C founders, it's the same thing. It's like how do you think about money and you know what are you doing with the funds you have? So yeah. Uh thanks Rob for the talk. Um what's your advice to two co-founders who sit on the complete opposite side of the

52:58spectrum? I mean one one wants to raise the money to make it easier and one just has no desire to talk to. So Dr. Sher Walling Zen founder is really good at helping people find common ground. That would actually probably be a pretty good recommendation. Um, I don't know because see there's not a right and wrong answer here. I mean, I hope that's I hope I didn't come across as saying like everyone in this room should go raise funding because I don't I don't think that's true. I just think us all knowing that this exists and us knowing these trends like is a helpful thing because I do think it's going to

53:35be around. So, um, I couldn't give you advice other than try to work it out and get a mediator or something like that. Hey. Um, I'm really interested in this because I mean I've been the same as you. Like VC is bad and probably going to put you under under on the rack for something, right? But um the one thing I'm wondering is like I'm building my company, my plan is to be in it for 10

53:58plus years, right? You hold the mic a little closer. Sorry. Yeah. Yeah. So like you know being in being in a company for like 10 plus years like you know Jason Freed is like I'm happy to be in base camp for the rest of my life or whatever, right? I don't know if that's the case for me but I have that kind of very quite long-term view. Yeah, Angel and all that stuff has always seemed there's always been an exit as a requirement I think for pretty much any kind of funding that's been around, right? Because people want their returns. Um, how do you see things going in this kind

54:24of space in terms of like when we've in our early days we pitched to in investors we said hey we want to build a profit machine we don't want to build have an exit and they've like you know sort of dropped the phone at that point right and just like left us alone but I mean like it seems like that's changing do you see that as a trend where people are happy to just take a dividend every year and that sort of thing thank you so much for reminding me of an entire slide that I should have uh have covered I mean that's that's really the

54:50You could ask what's the difference between traditional funding routes that go through the the seed venture I'm sorry seed series A series B series D and what indie.vc BC pioneered in 2015 16 where they said if you never raise another round and just become profitable then just kick off dividends and and that's it and that's what that's how tiny seed is structured same way you have the option to raise a round in the future but if you don't want to then don't and it's it's done through dividends uh earnest is the same way you know it's it's that's the key difference what you've just called out between all

55:25these other sources and and the alternative funding bubble that I had there you know tiny seed alternative funding That's that's the main difference is that you can if you run a company for 10 years or whatever. Cool. Profit is profit. Yeah. Hey Rob, I'm wondering if you can talk a little bit about the value ad of the ecosystem services and the mentorship and that comes along with it because you know a lot of the VC funders they'll you know be on your board or whatever introduce you to people but like how involved are they and how are they introducing you to the right people and how important it is for you guys in

55:55TinyC to like really create that like community and get get your founders there faster. Yeah, that's a good question. I think it depends on the VC and it depends on all this stuff. But I mean, it's a difference between, you know, a venture capitalist who has a fund and writes checks to startups and and an accelerator. It's it's just a different thing. They write a they write a smaller check and they might take, you know, the valuation might be lower. They tend to take more equity for a smaller check, but then they have the whole ecosystem as you were saying of there's the alumni network. There is is mentors

56:25that uh, you know, do office hours and can specifically advise you. So there's this whole structure around it. Um utilizing the network of those mentors, getting the introductions. Um I mean I've always loved I've admired what what YC in particular has done. And I think it it literally changed the game. And they didn't do it by offering higher valuations or by offering more money or anything. They said, "We're actually going to offer you a worse valuation than you could go get from this venture capitalist, but we're going to include all the stuff you just said, mentorship, community within a batch." you know, it's kind of that friendly friendly

56:58competition, but also we're all in the trasaro together, and that helps to know that there's 10 or 20 other people doing that. So, that's what we're hoping. I mean, that's our goal. That's what we're replicating with with Tiny Seed is that that kind of stuff. Hey, Rob. Um I had a question about uh sort of what Jason Freed talked about in that um how he has expressed his not regret about um not being complete

57:25owners of the company. Yeah. And I've thought about that with Tiny Seed and um I definitely submitted an application but in the back of my mind if that opportunity was even there with this different setup nonVC setup is what if that day comes where you want to be the full owner again? You and your founder or whoever you're you know running it with you want to maybe change the equation is you know and and it it doesn't need to sound ungrateful because obviously that's huge

57:54as an investment. Yep. No, that makes sense. So, you're saying, you know, you take some funding, sell a small portion of your company, and then 10 years later, you're like, I'm just kind of not ready to have that. That happens today all the time with investors. Not all the time, it happens. But, I mean, Chris Savage talked about how he handled it. He went to the investors and said, I want to buy you out. Um, I wouldn't be surprised. I have no insider knowledge. I want to be very clear, but how long do we think Base Camp is going to go and before they buy

58:20Bezos out? You know, it could happen. And what what will they do? They'll go to Bezos and they'll say, "Are you willing to sell your share?" And then they negotiate a price and then they do it and they'll be out of it, you know, but in the meantime, they've built they got through that traro faster or they they slept better at night, you know, that's that's the thing. It's like the value of the money. You're right. Now that you're making tens of millions of dollars a year throwing it off that few million bucks, you know, those first years, yeah, it's different, but but you can't those are not the same there, you

58:46know, you can't compare them. So, I think I think that'll be it. Are we out of time or um take two more these two up here and then I think we're done.

59:04Thanks for a great talk and answering all these questions. Rob, I was wondering if you could help us crawl inside the minds of the investors, right? Not just why is Tiny doing what it's doing, but why are your I'm assuming like LPs. Um what are they looking for out of this? What are they looking for? What what's their incentive? What's their psychology? I mean, I figure if I'm selling, I need to understand my customers. I'm looking to raise. I need to understand my investors. Who are the investors behind this? How are they thinking? Could you give us a little bit of insight into

59:34their minds? Sure. Maybe um I can I can take a guess. Um, yeah, I mean there's so it's going to depend on the fund, right? Tiny feed versus indie.vc versus, you know, other Ernest and other folks in the space. Um, and there's a I mean you might have 45 invest LPS LP is a limited partner that writes check into a fund that then like we would invest. Um, I think that it varies from investor to investor. I think some folks, you know, base camp is investing in Tiny Seed. What do we think their mindset is? Well, he wants to raise the tide of all boats. There's a

1:00:10little bit of giving back, but there's also um I don't think they're want to write a $100,000 check or you know, whatever the the I don't even know what the amount is actually. Um and and have that go to zero. They also want that to have a return. And if they could put that into a REIT or the stock market, you know, they would probably and get the same return, they would probably do that. So, um I think it's a mix of let's make this interesting thing work. Let's be at the front end, the cusp of this trend and also let's let's get a return

1:00:40because we're investing money, you know. So, yeah, last one here. So, my question basically centers around I can see this as you know, somebody who's investing the nights and weekends and, you know, so this money basically frees them up to either hire somebody to help them or to essentially hire themselves to do the work. Um, but can you imagine a scenario under which a company could conceivably like you did, you know, pulling money

1:01:09off of HitTail to, you know, build Drip? Would would it make sense to do something like this instead of pulling the money off of another um profitable business? I I think it depend I think it depends on how you how you feel about risk, you know. Um I there are founders who save up 18 months of runway and it's super impressive to me and at that time they get to ask themselves do I want to keep 100% of my company and gam you know bet that I can get to escape velocity in 18 months because if I don't I have to go back and get a job because I'm going to

1:01:46run out of money and I'm also going to burn through 18 months of runway which for most of us I'm imagining is a chunk of change. Um and that's a question and there's no right answer to that. Um, I've seen founders do it and do it successfully. I've seen founders do it and do it unsuccessfully and it's pretty miserable. Um, and you know, I've never been in that situation. So, I think

1:02:07that's that's a thing to weigh, right? is it's like if you have another business throwing off all this cash. I guess you know the question is if if I had had the opportunity to take funding like this pretty in a pretty easy kind of clear-cut fashion I probably would have just put the hitail money in my bank account taken the funding personally. Um, but I also like, as I said, I'm I'm not riskaverse per se, but I I would prefer to risk someone else's money than my own in

1:02:39general. Wouldn't we all? So, that's it. Thank you guys. Is that it for questions? We're good. Thank you.