This week we're mixing the format up a bit. Instead of doing a deep dive on a specific topic, Rick interviews Tyler to learn about how he bootstrapped a business to over $2.5 million in revenue, what the future holds, and how he approaches business in general. We hope this provides some helpful context when listening to our opinions in other episodes.
Here’s what you should know about Tyler:
- Grew up in St. Louis, Missouri
- Went to college at Washington University in St. Louis (“Wash U.”)
- Majored in Computer Science
- Became a web developer through side projects and internships
- Played guitar in a heavy metal band called Embers Rise (listen here)
- Left his Masters program early to join a startup called Zane Benefits (which is now part of PeopleKeep) in Park City, Utah
- Met Rick at Zane Benefits in 2007
- Survived a lay-off with Rick in October 2008 and became head of product
- Worked with Rick to pivot the business model to get to cash flow positive
- Zane Benefits provided a software-enabled service to small businesses that allowed a company to reimburse its employees for individual health insurance tax-free
- Had no interest at all in entrepreneurship prior to Zane Benefits
- Got frustrated having the responsibility to lead Zane Benefits without the power to make key decisions (i.e. “board decisions”)
- Founded what is now Less Annoying CRM in 2009 with his brother Bracken King
- Less Annoying CRM is a simple customer relationship (CRM) tool for small business people
- Got the idea from working with insurance agents and Salesforce at Zane Benefits
- Less Annoying CRM is 100% self-funded and bootstrapped
- Launched the product at the beginning of 2010
- At the beginning of 2011, hit 50 users / $6,000 in annual recurring revenue (ARR)
- At the beginning of 2012, hit 500 users / $60,000 in ARR
- As of the recording of this episode, at 22,000 users / $2.6 million ARR growing at ~20% per year.
- Wants to run Less Annoying CRM for the rest of his life
- Unique perspectives
- Fan of bootstrapping
- Thinks raising venture capital is limiting for a company
- Thinks more founders should look to run companies for life versus selling
Where were you born?
Tyler: Cool. So, Rick, you are interviewing me today. Where would you like to start?
Rick: I'd like to start at your birth.
Tyler: Ah. Tucson, Arizona is a hot, dry-
Rick: Were you really?
Rick: Oh, I didn't know that.
Tyler: Yeah. I was there for like a year.
Rick: Yeah. Tell me your personal story.
Tyler: My personal story. So yeah. I grew up in St. Louis, moved there when I was one, and basically, I'll focus specifically on how I got to the startup world, right?
Rick: Mm-hmm (affirmative).
College and major
Tyler: I had no interest in it at all. I think everyone wants to have that, "Oh, I was selling lemonade when I was a kid. I was a hustler." I didn't have anything like that.
Rick: What year?
Tyler: Well, they forced me to take a computer science class my freshman year just to meet the requirements for electrical engineering. I went to my advisor and I was like, "I promise you I will never code. I hate computers. Don't make me take this class. It's a complete waste of time." My advisor was like, "No, you have to take it." I took it and I just loved it. So I didn't switch freshman year, but that was really the start right away. And then I worked as a student web developer for the business school that summer and then did internships and stuff. I didn't particularly love classes, but I loved the process outside of school, like building personal websites. I was in bands and I made a message board for a heavy metal band, Embers Rise, just fun projects.
Rick: Where can I find a copy or a streaming song of Embers Rise?
Tyler: Embers Rise. I think there's another band called Embers Rise now, so if you Google it, you'll find a band. But it's not mine. My Dropbox is the only place to find recordings.
Rick: I'm going to have to find one of those and publish it on StartupToLast.com.
Tyler: We'll see if that happens or not. But yeah. So I was more of a hobbyist. Even though I was majoring in computer science, I was never good at the academic side of it. But I was kind of a hobbyist, and that's where I really developed a passion for building software.
Working at Startup in 2007
Rick: So what happened after college?
Tyler: This is when I met you, as you know. So I was actually supposed to do a fifth year. I was in a bachelor's/master's program, and during the fifth year, a friend from high school, Tom Elgin, reached out to me and was like, "Hey, I live in this place called Park City, Utah," which I'd never heard of before. It's a ski town in Utah. "And there's this startup here that's like about to go... It's about to explode. It's about to be hugely successful." I actually at the time, because I wasn't good at school... I mean, I wasn't terrible, but I was a B-minus student. I didn't have a lot of confidence in my professional capabilities, and I thought, "This might be the only chance I have in my whole life to just ride other people's coattails success." So I wouldn't say exactly dropped out. I ended up getting my bachelor's because I had finished the requirements for it, but I left school in the middle of the semester, drove to Utah, and started working at this tech startup called Zane Benefits.
Rick: What year is this?
Tyler: This was 2007, which, for people who were around back then, was an interesting year to enter the workforce because for that first year things were pretty normal. You joined at the same time. For the first year at this company, it was a normal venture-backed startup. They just raised... What is it? A series A or a seed or something.
Rick: They call it a series A. Three million dollars.
Leading a startup from 2008 to 2009
Tyler: Yeah. So I was just like an entry-level programmer. I had bosses, and I was just learning the normal corporate world. And then I assume we'll talk about this when I interview you as well, but 2008 hit and global recession and all that. I don't know the whole... You know the whole story a lot better than I do, but basically, 20 out of 25 people or something like that got laid off at the company. Both of us were lucky enough to be survivors of those layoffs. I tell every person we hire, everyone who wants to really know my story on entrepreneurship, this was the defining moment because we showed up the next day to work and there was... Our bosses had been fired, right? The CEO fired himself. So we just showed up and we're like, "Well, I guess we're in charge of the company now." I don't know if... Did we realize that at the time?
Rick: Oh yeah.
Tyler: Yeah. We were just like, "Nobody else here is going to care enough to... We should just take over."
Rick: Yeah. And I remember... I don't know if you remember this, but you and I had proposed a new direction for the business six months earlier or so, and it just been flat-out rejected as a dumb idea. So we basically pulled our work out, and the founder was like, "Do whatever you want to." And we did it.
Founding a startup in 2009
Tyler: Yeah. So for the next year, basically, we had no official power, but we were effectively running this company. It was an interesting blend of (a) about to die, but (b) it had the infrastructure of a real venture-backed company. So we were sort of getting the experience of being co-founders of a company, which is not something I ever aspired to do or anything like that. But after a year of doing that, I was like, "This is awesome. I love the work. I like the challenge. But wouldn't it be interesting if I actually had some kind of official power here and not just..." On paper, I was still just an entry-level software developer, and you were an entry-level salesperson. So, in 2009, my brother Bracken is all around probably the most talented person. He has a PhD from MIT, just really, really smart guy. For that whole year, I'd been telling myself, "If he ever comes to me and wants to start a business, I don't care what the idea is. I'm doing it for sure." And so he did. He had an idea. He came to me, and I was like, "Let's do it. Let's start a business." Two days later we were like, "That was a stupid idea." So we abandoned the idea, but we were already committed. So, in 2009, we started what is now Less Annoying CRM.
Rick: That's so cool.
Tyler: It's weird looking back on it because you make these spur-of-the-moment decisions, and then here we are 10 years later and that was a pretty big one.
Rick: Were you scared to leave? I remember when you left Zane Benefits. Was that a big decision for you? Were you scared?
Tyler: I wouldn't say scared. It was a big decision since I liked working with you, and I really believed that we were on the right track and I liked the work. But I think entrepreneurs... There are a set of different skills that you don't have to have all of them, but there's kind of a Venn diagram type of thing. I think that fear has never been a problem for me. I'm very privileged. I knew my family would take care of me. I wasn't going to be homeless at the end of this. I'm very lucky in that way. I think too many people have that privilege and are afraid to take advantage of it. I was not particularly nervous about... If something went wrong, I'd just go get another job. Whatever.
Rick: Yep. Yep. So how did that go? How'd you guys get started?
The early days
Tyler: Yeah. So I moved from Park City to San Francisco. Everyone who hears this thinks, oh, you're starting a company. You move to San Francisco because that's where all the startups are. I was such an idiot at the time. I didn't even realize that. Just... I had friends in San Francisco. I didn't know it was a tech place. So I moved to San Francisco, got this tiny little studio apartment, and my brother was and still is in Boston. So for the first... For quite a while, we worked kind of remotely, and we just got started. We're both technical. He does dev ops server side, like kind of infrastructure stuff. And I do everything from back-end engineering, like full stack all the way through. At the time, I was doing a lot of marketing and customer service, just whatever needed to get done. So we just started. There was no business plan. There was no... This was before customer interviews were... Maybe they existed. I'd never heard of it before. We didn't do any real validation. We just started building a product.
Rick: Well, you had some validation that there was a problem from your time at Zane Benefits, right?
Tyler: That's true. Yeah. So, as you can probably tell from the name, Less Annoying CRM is a CRM, a customer relationship management tool. At Zane Benefits, one of those ideas you were talking about that we pitched before everyone got laid off and then we ended up doing was we built a CRM for insurance agents to sell our product just to make them more efficient resellers of our product, right?
Tyler: That's how I remember it, anyway. And yeah. The insurance agents... This is not meant to be a general-purpose CRM. It was meant to be enter your leads in here, and when they're ready to buy our product, hit this button and we'll sell it to them. They came to us and said, "I would love to just use this as..." They had never heard of CRM support, basically.
Rick: Some of them were paying us $1,000 a month to use the CRM.
Tyler: Yeah. That's sad, but probably yeah. Probably, one or two of them were.
Rick: Yeah. And I remember we were getting... I think we were getting more feature requests from the CRM users than we were our actual product users.
Tyler: Yeah. And I believe I went to you, and you were the main connection to the board directors. But I was like, "We should become a CRM company," and you guys made the right decision, which was, "No. What?" But yeah. I actually decided to start Less Annoying CRM with my brother. We called it Less Annoying Software because we didn't know what we were going to build. The company started before we knew CRM was what we were going to build. But in retrospect, after we got going, looking back at it, it was like, "Oh yeah. We know that there's demand for a really simple CRM that's way simpler than..." An insurance agent could never use Salesforce. they're not sophisticated enough, nor would it even help them.
Rick: Well, let's... I have some insurance agent friends out there. Some of you are sophisticated. Most of you aren't.
Tyler: Okay. And I don't mean that as a dig. I'm not sophisticated enough.
Tyler: Well, because I had to set up Salesforce at Zane Benefits. That was one of my jobs as like the de facto IT person, and (a) it took a month of full-time work, and (b), I believe as soon as I left you just went in and replaced it all because I did it poorly.
Rick: You had to redo it all.
Tyler: Yeah. So I was like, "I have a degree in computer science. I think I'm reasonably intelligent with technology. I can't figure this out. A typical small business has no shot."
Rick: Yeah. And at the time, if you searched Salesforce online, there was enough people saying "This sucks" that there was a business opportunity.
Tyler: Yeah. Yeah. So yeah. One of the things that was really important in that decision to start Less Annoying CRM, I loved working at Zane Benefits, but one of the constant struggles that I wasn't thrilled with was you and I would have ideas, and then the board of directors would say, "No. That's not what we're going to do." And in many ways, they were probably right. We were dumb kids, so I don't begrudge them that. But I was like, "If I'm running my own business, I don't want to be at the whims of someone else to tell me what I can and can't do." So it was really, really important from day one to bootstrap it to be entirely self-funded. So, for the first three and a half years, you were kind enough to let me consult at Zane Benefits 20 hours a week. That was my... Paying my bills was kind of working for Zane Benefits still. My brother was finishing up a PhD and then worked at a biotech startup. So we were both working other jobs while we built Less Annoying CRM and grew it.
Rick: That's great. So you basically part time founded... This was a moonlight project.
Rick: Kind of.
Tyler: Kind of. I'd say, for Bracken, it was. He was full time on the other thing and part time on this. I'd say I was full time on Less Annoying CRM and part time on Zane, but I was putting in at least 40 hours a week. But, definitely, I could have moved faster if I had been able to devote my full time to it. But in retrospect, I'm really glad I didn't take that risk because you hear these startup stories about someone starts, and six months later, they're making $100,000 a year in revenue. We had 10 paying users 6 months after launch. We charged $10 a month, so we had $100 a month in revenue six months after launch. We had 50 at year-end, so we were $500. So if we had not done this side hustle thing, we almost certainly would have had to shut down before we ever got to ramen profitability.
Rick: Makes sense.
Tyler: Yeah. I do sometimes wonder, could I do that again? I'm 34 now. I was 24 then. It required a level of energy that I'm not sure I have in my 30s. But, at the time, it was definitely the right move.
Rick: Well, you're going to run Less Annoying CRM for the rest of your life, right?
Tyler: Oh yeah. Absolutely.
Rick: Yeah. So we don't have to worry about that.
Tyler: We don't have to, but I... You sometimes wonder, do I have what it takes? And I'm kind of like, "No, probably not anymore."
Rick: Yeah, I know what you mean. Hustling is harder.
Tyler: Yeah. Yeah. There's all these serial entrepreneurs out here who just want to hop from one thing to the next. I kind of like won the lottery on the first one... Not that it's that big of a success, but there's a lot of luck in anything working, and the fact that it's still around after 10 years, I'm like, "There's no way I'm risking trying it again when I could just keep running this thing."
Rick: So six months, five users. Twelve months/one year, ten users.
Tyler: 50 users.
Rick: 50 users. Okay. So that's a good trajectory.
Tyler: Yeah, and that was almost all at the end of the year. We were actually at seven users. I looked this up because yesterday, one of my customers, who was our customer number seven, messaged me on LinkedIn and was like, "Hey, just want to let you know I'm still using you." I looked it up, and yeah, we were at seven users in October, so like 10 months into the launch.
Rick: That's so cool. So what happened from there?
Tyler: So yeah. Two years... So, basically, Bracken and I are both technical product people. So we very much focused on making the product as good as we could. We did a little marketing, but I wouldn't say that was ever a strength of ours. But we built up to the point where we had enough customers paying us $10 per user per month that we were making maybe $5,000 monthly recurring revenue two years in. And that's at a point where you can't pay a full-time salary super comfortably, but it would be enough for one of us to go full time if we wanted. Instead, though, we looked around and we said, "We're both fairly productive as we are. Maybe it would be better to hire an employee to come in and take over all the customer service stuff so we can focus on product." It was just kind of the math, like running through the scenarios in our head. Do we move the business forward more with one of us having full-time work, or do we move it forward more working part time but having no customer service to do? We decided the latter. So, two years in, we hired our first employee. So neither of us were actually the first full-time person at Less Annoying CRM.
Rick: Interesting. That's interesting. That's an interesting problem of, hey, you've got enough money to pay someone. Do you pay yourself or do you bring on more help, more people to help you focus on what time you have already?
Tyler: Yeah. Absolutely.
Rick: That's interesting. Would you do that same thing again?
Tyler: In the time? Yes. I think what the decision really comes down to is, are you willing to continue sacrificing? And I was still so young and I didn't have a girlfriend. No kids. Didn't own property. I had no responsibilities. So I was like, "I'm perfectly happy to just keep killing myself working long hours." It didn't feel like torture at all. I loved it. So I was like, "I could become more comfortable right now, but probably less would get done, or I can just keep pushing and more will get done." It was kind of a no-brainer when you think about it that way. But if I did it at this age, I have more responsibilities and it would be harder to say, "I'm going to go another..." because it ended up being another year and a half. Three and a half years in, and Bracken and I both went full time.
Rick: Okay. So 2009 launch. 2010, 50-user milestone. So that's, probably-
Tyler: The launch was January 1, 2010. So it's really easy to do the math because it was basically New Year's when we launched.
Tyler: At the beginning of 2011, we were at 50 users.
Rick: And then 2012, first employee. First full-time employee. How many users?
Tyler: Would have been about 500, probably.
Rick: Oh, wow. So 500 users, and then yeah, 5,000 a month times... 500 times 10.
Tyler: Yes. It's really easy to calculate our revenue. Yeah.
Rick: $10 per month per user. Okay. So then halfway through that year, or was it another year and a half after that?
Tyler: Another year and a half.
Rick: So, then, by the middle of 2013?
Rick: You and Bracken probably came on full time.
Tyler: That's when I stopped consulting for Zane Benefits, and yeah, we were making 60,000 a year at that time, I think was what we could afford to pay ourselves. So, to me, the company is 10 years old right now because we're recording this in 2019. That period in mid-2013, that's when I'd say we went from this weird, bootstrapped side thing to a real business. And we started thinking, "We probably need an office somewhere. We need to start hiring people in a more routine way, not just hiring my friends and stuff like that." So that was a big inflection point for the business.
Rick: Wow. Well, what else do you think is an important part of that journey from, let's just say, you going full time to today?
Tyler: I guess you could interpret that question in different ways. The way I interpret it is I personally have changed a lot during that time, and it's been shaped by the company. So I can kind of talk through the ways I've shifted. When we started, Bracken and I both, I think, viewed this as a lifestyle business. No one in the whole world is passionate about CRMs. No one grows up dreaming of it.
Rick: Marc Benioff.
Tyler: I wonder when he got his spark to just start the biggest CRM company. But we never did. We were like... This is really embarrassing to admit. Our goal was to make enough money to support ourselves so that we could work on a fantasy football website full time, which in retrospect was so stupid... I don't even like football anymore. But I was 24 years old. So, in the early days, I didn't want to have any employees, and I didn't even want to talk to customers. We approached one of our friends and said, "Will you start a separate business reselling our product? You hire employees, deal with the customers. We'll just build the product, and you'll be the sole reseller of it. And you can take 50% of the revenue." Thank God he said no. I can't believe how stupid... If anyone's listening to this and they're like, "Oh, I don't know enough to start a business," I absolutely did not. This was the dumbest idea, but we tried it. And he said no. But that just goes to show how little I wanted to deal with customers, basically.
Rick: What was it? You just didn't like talking to people?
Tyler: Yeah, I just didn't... I think what it comes down to is I, like many people, do not naturally have empathy for someone I've never met before. Right? Like you read a news article about something happening somewhere in the world, and intellectually you know it's bad, but you don't feel the emotional suffering of that the same way you do someone you know. Until I met customers, I didn't have any empathy for them. I was just like, "I'll make a product. They'll like it. They'll buy it. It'll be a great transaction." And then, not thinking, I just put my phone number on the website. The first customer called in, and just 180. I was just like, "Holy shit. This is a real person, and they have thoughts and feelings. I have an obligation to serve them." So that was one big change I had. As soon as I started talking to them, we went from being not customer-centric at all to being... Now I think it's safe to say we have by far the best customer service in the industry. That's not at all what we planned on doing.
Rick: And what was it that... Was it just feeling empathetic for your customer? Is that what changed?
Tyler: I think it's that, and I'm not a particularly ruthless businessperson. If a customer asks you to do something and it's a reasonable request, it didn't occur to me to do any calculus on, "Oh, like what's the lifetime value of this?" I was like, "They ask me a question; I'll answer it." Eventually, we just did that for long enough that we were like, "Customers are signing up with us just for the customer service." That was not a plan, but all you have to do is pick up the phone. And that's more than most companies do. So we were like, "Well, I guess we should keep doing this because it seems to be working." So it was a total accident.
Rick: Interesting. Interesting.
Tyler: Yeah, especially... We're on the low end of the market. We're as cheap as CRMs get, basically. So our competitors maybe don't even have email support, let alone phone support.
Rick: So one big shift was getting focused on the customer versus just the product.
Rick: And you mentioned that you were going to go into fantasy football. That was the plan. When did that change?
Tyler: I'm not sure if there was a specific turning point. But there was some point where Bracken and I both just fell in love with what we're doing here. I still think it would be disingenuous to say I'm passionate about CRMs, but when you talk to customers and employees, and they just love what you're doing, it's really easy to convince yourself, "This is it. This is my life's work here." So I didn't have a single light bulb moment, but sometime in the first few years, that shift happened.
Rick: And you're like, "This is it."
Tyler: Yeah. This podcast is called Startup to Last. One of the reasons that name really resonated with me is there's a lot of startup podcasts out there, and they all take this really short... "How do you grow for the next two years and then sell?" Or something like that. I would love to hear from more people that take enough pride in what they're doing that they're like, "I'm committed to this for a long, long time."
Moving the company home to St. Louis
Rick: Yeah. That's very cool. That's very cool. Okay. So, eventually, I think you moved the company to St. Louis.
Tyler: Yeah. In 2014, basically, we were in San Francisco but we were bootstrapped. All of the advantages to being in San Francisco are about the ecosystem, and you only have access to the ecosystem if you raise money. Basically. I shouldn't say that, but you're competing with companies that did, so salaries are outrageously expensive. Nobody wants to work at a bootstrap company. So as soon as we needed to start hiring people, it was clear we needed to move away. We considered a lot of places and ultimately settled on St. Louis. That's where... At the time, we had six people, counting my brother and I. And then everyone we hired after that we hired in St. Louis. A.
Rick: So how was that? An easy transition?
Tyler: Mostly, yes. But the hard thing about the transition was we kind of had a remote culture, and we talked about this in one of our earlier podcast episodes about remote versus co-located. It's really hard to be both. We basically said to anyone who we didn't hire in St. Louis... We said we grandfathered them in. We said, "You can stay remote if you want." It's really hard to have remote employees when the culture is being built around an in-person experience. So, ultimately, a couple of them moved to St. Louis. Two of them stayed remote and didn't stay with the company. My brother is the only person currently that's not in St. Louis. So it was a natural thing. I think it's probably healthy for the company that that happened, but there was a bit of a transition there. Yeah.
Rick: Where is the company now in terms of size, and where do you think it's going next?
Tyler: Well, this is another... They partially... The two people who left, one of the reasons was the remote thing, but probably the bigger thing is, when we hired them, we were 4x-ing year over year. And, pretty quickly... I've talked to so many founders who are like this. They're like, "Oh, we're growing 400%, 500%. Now we're hiring people. That's going to go even higher. Our growth is going to go up because we're going to have employees who are specialists." That's just not how it works in my experience. Gravity always pulls you down. It pulled us down maybe faster than some startups, but pretty soon, we were at a point where we were growing 50%, and that was not enough to retain two of the people.
Rick: Why not?
Tyler: A variety of reasons. First of all, in terms of financial outcomes, it went from, "We're all going to be making a million dollars a year in five years," to, "In five years, we should be at market rate." They just weren't in it, and I don't blame them at all. This was a totally rational thing for them to do. There were other things as well, like I was a first-time manager and probably didn't handle... There are all kinds of reasons, but they joined a really, really high-growth startup, and two years later, it was not a really high-growth startup. So I understand why they left. But... So, anyway, you asked where we are now. We've we kind of came back down to earth. At this point, we're at a 22,000 paying users, which comes out to about 2.6 million ARR, annual recurring revenue. This year, we're probably going to have grown about 20%. So if you say that to a small business, they're like, "Whoa. That's amazing." And if you say that to a startup, they're like, "Oh, so you failed." We're kind of in between the two.
Rick: Yeah. So who do you talk to that's like, "That's really great"?
Tyler: I mean, a lot of people... First of all, you hear $2.6 million ARR, and if you've never run a business before, I think what they're thinking is, "Well I own 50% of the business. Bracken owns 50%. So I'm making 1.3 million a year." Absolutely not. I'm making less money than I would be making working for someone else right now. I'm not saying that as a complaint. I make plenty. But people hear that number and think of it as personal wealth, and for a business, we have 17 employees. The average revenue per employee, whatever that comes out to... I think that's $140,000 a year. That's not a lot, right? You have to pay their salaries, health benefits. You have to pay for the office space, server costs. The margin on the business is not not great. It's fine. We did this intentionally. But people who I think haven't really been through it think we're way more successful than we are just based on the revenue number.
Rick: Well, you have something that it sounds like is sustainable, and you can be more calculated with how you move forward to increase the pie.
Tyler: Yeah. That's why I'm not worried about it. If we were still working 80-hour weeks and there's a 50% chance we don't exist a year from now, I'd be pretty pissed that 10 years in I'm still making less than market rate. But, instead, it's like we're on this steady trajectory, and I love my job and it's pretty low stress. So it's kind of the good aspects of a lifestyle business while also having the good aspects of a startup, I think.
Rick: That's great. Well, what's next?
Tyler: Yeah. So we've been doing a little bit of soul searching recently because we realized that when we started the company, we didn't put any thought into what our goals were. I mean, we did from a product standpoint. We knew what we wanted to build, but personal goals, financial goals, it was just assumed start a unicorn, right? Because every startup you see, it's just growth for growth's sake. And I never questioned that. So when we started, that was just the default. And now we're getting bigger, and we're obviously not on that trajectory. A part of me thought I should be disappointed, but then I wasn't. So I've been trying to figure that out. So I think, basically, what's next is we want to fit into this mold of... I still want to be ambitious and I want to challenge myself the way any startup does, but I want the challenges and the outcomes not to be based on purely financial... like providing shareholder value, basically.
Tyler: So I'm really passionate about the product. We've got big plans for that. Right now, we're a CRM company. The long-term goal is to become the only piece of software that a typical small business needs to operate. I say typical. Obviously, there will be a lot of people that can't just use us, but not just CRM, but what if we could do project management and invoicing and billing and any number of other things so that you want to start a business, you just go to LessAnnoying.com, sign up for an account, and all your tech's handled? And you can go back to whatever your core business is. That's kind of the vision for the product. The vision for the company, I'd say another one of these inflection points I had... I said I had the one with customers. I also had one with employees. I didn't have empathy for hypothetical employees until we hired them. And then, as soon as we did, both Bracken and I were like, "Well, we need to pay them as much as we can and have really great work/life balance and all that stuff." So we're always looking for ways to improve that as well.
Rick: Interesting. So, just to clarify, when you talk about taking some risks that aren't necessarily financially motivated, what exactly do you mean, and why are you interested in taking those risks? I assume it is actually financially motivated at some point.
Tyler: Yeah. I think there's a quote from Tim O'Reilly that I'm going to butcher here, which is something like, "Money is to a company like gas is on a road trip." Have you heard this one?"
Rick: Mm-hmm (affirmative).
Tyler: That you need gas to do a road trip, but the point is not to tour as many gas stations as you can. So that's how I view it. Certainly, money is a thing. We can't pay our employees better if we don't make money. Right? I mean, I would like to get paid better, too. We can't invest in new things. So money is a way to fund the other goals that we want, but the reason we're doing it is not the money. The reason we're doing it is the other goals. And I'd say there's also a personal aspect of this, which is just it's boring to not be challenged. So we could go into hibernation mode here and just be like, "Our customers are super happy with us." Most of them don't want us to change anything about the product because these are not super tech-savvy people who are in it for hot new features. We could just be like, "Cool. We're just going to maintain this for the next 20 years and probably be fine." But that's not fun. So, if I'm being totally honest, a big part of what motivates me and, I think, everybody in the company is just we're alive; we might as well try to make it interesting.
Rick: I love it. I love it. And have employees responded to that?
Tyler: Yeah. I think it's challenging. The bigger you get, the harder it is for everyone to be exactly on the same page. So some people, I think, are more small business, conservative decision making. Some people would be more excited by the startup, like taking risks. But, overall, I think one of the things that I've learned... I didn't start knowing this, but trust is just everything. Right? This is true with customers and this is true with employees. Every company wants their employees to trust them, but they don't go the other way. Or loyalty, maybe, is a better way to say that. Companies want employees to be loyal but not vice versa. I think we've done a good job of this where even if an employee's natural instincts are not the same as my natural instincts, I think we have enough trust built up that everyone knows they're not going to get screwed by this. This isn't going to be, "Let's take a risk and then lay off half the company if it doesn't work." Nothing like that.
Rick: That's great. That's great. Well, tell me about some of your unique perspectives on business that people who listen to our podcast will hear as we talk about topics.
Tyler: Yeah. It's probably worthwhile to understand this bias because I rail against a lot of stuff that would be, quote unquote, good business. I think there's this assumption in the startup world that the whole point is to provide shareholder value, ultimately. Basically, that's my main thing, is don't. I'm pretty anti-raising money from investors, partially because of the way it would impact me, but also, I don't think a company has the ability to do anything other than the normal playbook if they raise money from, specifically, venture capital. You can raise from friends and family, and probably they're not going to pressure you to do whatever. But as soon as you have a professional investor on your cap table, at that point, they're your first customer. You can say your mission as a company is whatever you want, but it's not. The mission is to give that person money. Right? And they will sue you if you don't.
Rick: Or fire you.
Tyler: Or fire you. So it starts out with that, but then, if you get past that point, it opens up the door for so many interesting things. We're bad as a company at a lot. We're not good at marketing. We're not good at any kind of growth type of thing. When you don't have investors, you're allowed to decide what you want to make easy and what you want to make hard. So we've decided the things we're bad at, we're just not going to make them hard. So we're going to say we're not going to grow real fast. And, for example, our price is too low. $10 per user per month is too low. Everyone in the bootstrap startup world would be like, "Your unit economics are terrible. Don't do it." But, by doing this, it's a lot easier to make customers happy. So you can just decide. You can be like, "Yeah, we're going to make less money than we could, and I'm not going to stress out about having to convince enterprise customers to use us, because that sounds miserable."
Tyler: So, just across the board, I really liked the idea of saying, "What decisions are other companies unable to make; they could not decide?" We we pay our customer service people... They start at $54,000 a year and get guaranteed $10,000 raises until they're at $124,000. No company with investors could do that because the investors would be like, "What the fuck are you thinking?" So just identifying things no one else can do, and as a result, we have 1,000 times better customer service team than all of our competitors. So I guess almost all of the opinions I have kind of center around that. If you don't have investors to serve, you should challenge all of the assumptions that go into business and figure out there's entirely new things you can do to differentiate yourself that aren't even options for everybody else.
Rick: Yeah. The dominant playbook out there is a venture capital funded company playbook, and there isn't a whole lot of consensus around the playbook for bootstrap businesses.
Tyler: Yeah. Yeah, which is... What makes it so fun is each bootstrap business can just go do whatever they want. So I'm going to talk a lot of shit about VC and that whole model on this podcast, I think.
Rick: Well, that's awesome. What else? Any other unique perspectives that you bring to the table?
Tyler: That's what comes to mind. Anything you feel like I should be disclaiming before people take my opinion seriously?
Rick: Yeah. Well, I think I would say that you're a technical guy first, and I think that brings some unique perspective to how to be a CEO. One, I don't think... Your temperament isn't the... You used to tell me that you never thought you were the best CEO because you didn't look like me. You didn't act like me. And then you eventually realized that you could be whatever. I don't know exactly what you said, but the point is that you are a different kind of CEO, and a lot of that probably has to do with your temperament and you are a technical person first.
Tyler: Yeah. Well, yeah. You can pull that back to the bootstrap thing.
Rick: You always say, "I'm not businessy like you, Rick. You're all businessy."
Tyler: Well, you're wearing a collared shirt right now and I'm in my Henley, but yeah. No, to that point, I... This is not me being falsely modest. I think I'd be a terrible CEO at a different company. This is another great thing about being bootstrapped, is I think we've built a company around the skill sets we have. I'm in Utah right now as we're talking, spending 10 days coding. This is not what a CEO should be doing, but whatever. I like it. I also think this will be reflected in the podcast, probably, that you're more likely to talk about high-level concepts and I'm more likely to want to talk about very, very specific... Like, "Okay, how do we actually make that happen?" which sometimes causes a tension between us, but I think it also allows us both to learn from each other. So yeah. I think that's a good point.
Rick: Yeah. Cool. What about anything you think that you need to tell about yourself that we haven't talked about?
Tyler: I'm sure I'm forgetting stuff, but I feel like we're 36 minutes in here. This probably is enough about me. So thanks, everybody, for indulging me here. Hopefully, that adds a little context to all of my bad opinions on the podcast.