00:00.60
tylerking
Now much where we got a new recording schedule not that anyone listening can tell. But normally we record at night and we're we're doing it in the morning now.

00:00.80
Rick
What's up this week Tyler

00:10.96
Rick
Yes, um, it'll be interesting to see how this works. Um you I can already tell your your your ah vibe is different.

00:18.48
tylerking
Well so I don't drink coffee but what I do drink as you can see here is a mini can of Dr Pepper seven point five fluid ounces this is my source of caffeine. ah ah yeah my vibe's different. How is it different. Do I seem like a morning person or and a night person.

00:32.70
Rick
Ah I don't know you're not a morning person I'll just put it that way. Ah.

00:35.75
tylerking
No fair enough I certainly am not well and we're recording on Thursdays which is a work like in office day. So I'm I'm in a different spot. Normally I would record from home and I'm ah at the office today. So anyway.

00:48.66
Rick
Appreciate you doing this for me. Um, it's this is all in an effort for me to try tame my life ah and get more control over my schedule.

00:54.70
tylerking
Yeah I mean that will so my first topic actually this year is even though we're only 2 or two and a half weeks in revisiting some of the goals and saying how am I doing so far. How are you doing on that like do do you feel like you're taming stuff all right.

01:06.17
Rick
Yeah, like things are like is I just start focusing on the basics like getting back to waking up at 5 am in the morning which is really important because that's the 2 out. It gives me 2 hours every day that I can just be like if I just want to watch Tv I can watch Tv if I want to work out I can work out if I want to write read catch up on work. It's like it's my time. Um, so I started doing that not every day but you know a couple days a week. Um, and yeah man things are like settling. It's ah I'm feeling a lot better.

01:34.86
tylerking
Cool. That's great. Um, well so my first topic here is one of my main goals for this year that I said in our last episode was like to make time for myself to code and so far I have failed at that and ah. Feel like normally we set these goals and then we don't revisit them until a year later in the annual recap and I don't even remember what it is at the time I want to like I'm going to make an effort to actually bring this up somewhat regularly and be like am I coding or not um I just went I kind of forget every year so there's a lot of like end of year stuff that I do. During in December when things are slow. For example I kind of like update the financial model for the next year and I you know go through and see if there's any expenses we should cut stuff like that and then I always feel like going into the year I'm done with that. Fresh start hit the ground running and then I forget that I have like 15 recurring reminders on January first that's like all this other crap. Ah you know I have to go in and for example, we have salary transparency at the company. So I have to go calculate. Everyone's salary and update this wiki document and you know imagine that but times 10 or 20 like different things.

02:43.59
tylerking
So anyway I am feeling good like as of today. Basically I'm looking at my to do list and it's pretty light and I think I should aside from the fact that I have had a meeting stay like today or tomorrow I should be able to start coding again. But I'm just saying out loud I have not done a good job of that so far this year yeah um so I'm hoping.

02:56.50
Rick
Yeah, you had annual maintenance to take care of.

03:02.58
tylerking
Hoping that was ah a two week thing not a year long thing. We'll see um, yeah, ah and yeah I'm on I'm excited on Sunday I'm flying to Montreal to.

03:06.61
Rick
But well I look forward to the next. Update.

03:19.48
tylerking
There's some s skiers aren't near there I forget the name of it go to big snow tiny comp for the second year. Yeah yeah, that's where my bachelor party was. We didn't really do the Montreal thing though we just went to Mcdonald's every night because that's that's how I do.

03:23.86
Rick
Montreal that brings back some memories. Oh boy.

03:36.32
Rick
Yeah, um, what do you know the Ski Resort What's called.

03:40.40
tylerking
Oh I should anyone listening who I think there's like 1 good ski resert there that um although you know East Coast skiing I was so spoiled the first place I ever skewed was park city and I just thought that was normal. Ah.

03:51.41
Rick
No gosh. Yeah.

03:56.37
tylerking
I'm not quickly finding the name of it I'm so bad at remembering names of things. Anyway, we're going to as skiers are there a big snow tiny conf is yeah for anyone who doesn't know it's like 10 ish people and I'm grateful to get invited to that and it's kind of like you know as a conference but is it really a conference of its 10 people. It. It feels more like a meet up. In a good way like I don't like conferences. Ah, but so like I you know I have like a little talk to give which is it's less like I feel like a normal conference talk is I'm an expert and you are my disciples here's my wisdom this is more like. I'm going to say some things and the crowd is going to yell at me. Ah, because I'm doing stupid shit and they're going to tell me that so I'm kind of ready to go get roasted a little bit. It's weird though. I yeah good I've got a handful of things but I'll I'll be honest, it was kind of hard.

04:41.58
Rick
Ah, what do you do you have topics to take like things that you want to bring to the group.

04:49.80
tylerking
To come up with topics this year because I don't have like a burning question. Um or or rather I I think I know what the plan is this year and I think this year is really about execution. This is why I also mentioned a few times recently I don't think I'm going to have great topics to bring the podcast because I'm just like my update is going to be. We are coding. Are building all the features we expected to build like I don't think there's big strategic conceptual things I'm struggling with right now but ah, having said that last year I went to big snow tiny humph and the biggest value I got was something I did not go in there asking about and that was um.

05:08.99
Rick
Um.

05:27.77
tylerking
I think I mentioned this on the podcast but just to say it again like the general dynamic was I do a lot of stupid business stuff because I am just too much of a weakling to like be to take what's mine or whatever like a normal entrepreneur would be like raise prices as high as people are willing to pay and I'm like no. I'm not going to justify it stop talking about it. Um, there is a bunch of stuff like that where I just like we. Our customer service is too good. We pay our customer service people too much and everyone said stop doing and not not really, but they were like why are you doing that and I like I don't know it feels right? and then. Somebody raises their hand is just like I'm on your website right now and it doesn't talk about any of this like you're doing all this stuff that makes you less money and is good for the customer and you're not even telling the customer you're doing it. So the biggest benefit I got from last year was. We completely changed our positioning and if you go to our homepage right now. Everything about the homepage changed and you've but Rick before said that I think you said you liked the change but ah, it's all based on just one little. Kind of offhand comment that happened last year at big snow tiny com. So I'm hoping to get a lot of value I just don't know what it's going to be.

06:36.94
Rick
That's great and I think um, generally like when you can get out of your day-to-day in a in a group of people that you don't normally spend time with talking and like forcing yourself to talk about life business. Um. You you pick up a lot. First of all, you get challenged and people ask you questions in different ways that you have been asked and then you also get to like listen to the other people like kind of do the same thing and you you pick up a lot of stuff like it's a very valuable exercise.

07:03.95
tylerking
Um, yeah, yeah, it's also I think just good. You know they say being a founder is lonely. Um I have like a team of 20 people and we are very close and I like have a lot of social interaction with them. But there is something to the idea that like it's.. It's not that I'm I'm not like literally Lonely I have a lot of social contact with people but there are some issues that only other founders can really relate to and just it is kind of cathartic just being in that environment. So.

07:31.75
Rick
I agree. Yeah I love it. Um, are you Ah, what's that What's the skiing level of of people going. Is it like you have do you have to be a certain level of skiing to to to go or is it.

07:45.25
tylerking
I think it's like the expectation is no one should need to babysit you but you know some people are so it's ah, there's a number of people coming back but there's a few new people I don't know how they'll be um, last year it was I'd say kind of like upper beginner was the the worst like. They can go down. They don't need to be babysat but they're not going down anything challenging up through I'd say a couple people were like noticeably better than me I don't think anyone was as good as you? Um, so it's not like expert level for the most part.

08:16.93
Rick
Well I haven't skeed in 3 years so um cool um I told you what my brother's doing. He's it ba in bamp. He's been for the past two years ah

08:17.91
tylerking
Well no one was as good as you used to be how about that.

08:25.45
tylerking
I Don't think so.

08:31.83
tylerking
Um, file.

08:32.51
Rick
Key instructing there. He's 20 like late early early twenty s and so he's going to ski circles around me when we actually go skiing together.

08:41.98
tylerking
Bam is such a cool place but I'd much rather live in park city when in my like when I'm twenty years old than in Bam when I'm twenty years old like but that well it's freezing cold and the town sucks. It's it's beautiful nature but like I don't know.

08:47.62
Rick
It's freezing cold.

08:54.24
Rick
You've been there.

08:55.32
tylerking
I've been there twice but both during the summer so maybe it's a completely different vibe in the winter but parks like it does not because it's in it I think it's in a national park if I'm not mistaken. It's not a city with bars and I mean there's a little strip but ah, it's not yeah I don't know.

09:09.11
Rick
I haven't haven't actually looked at pictures other than what he sent me like of of himself skiing but like yeah's I'm looking at it online right now. It's beautiful, but very national park is.

09:20.95
tylerking
Yeah, great. It's ah I would like to go there in the winter. It's amazing in the summer. It's a really great place to visit anyway. Ah, what's going on with you.

09:30.16
Rick
Well, um, big leg up health goal for the year was implement profit first and ah, we're off to the races with that. So. There are some baking changes. We need to make so um, profit first is it refers to like basically living on what you're making and then you know. Ordering sort of spin expenditures. Ah based on percentages ahead of time and just living within those percentages and so we have set j d seller for the year we have set our profit sharing like. Private first refers to paying yourself profit first. So we have a partner distribution of 1 % of our revenue is like our first sort of tax on the business then we have our necessary expenses which is like roughly a thousand dollars a month. Um, ah, ah, on average and then we we cut really hard there I was. Um, one one thing we had our partner meeting recently and I was we we I was planning to keep some things and it was clear that you and Jd were like that's not something we need and so we cut it and it feels I thought it was going to be painful but like I actually have relief as a result of cutting it. But I was very worried about cutting it.

10:33.90
tylerking
Um.

10:37.99
tylerking
Yeah, it was an interesting exercise because we were going through and like spending are the 3 of our time which is valuable like you and I are not full time on the business. So ah, our time is limited and we're spending time debating a $10 a month expense and like a part of me is like.

10:39.84
Rick
And.

10:57.69
tylerking
It's not worth like. It's not worth our time to think about this but also that's how you end up I don't know I think it's probably good to to have the muscle of like let's be frugal at this stage of the business.

11:08.12
Rick
The the other benefit that I didn't expect from this exercise is I actually I felt like a loan in the finances of the business for the past couple years and I now feel like there. There's like 100% transparency on what money we're making where it's coming from and.

11:15.60
tylerking
The.

11:27.50
Rick
Also what money we're spending and where it's going. Um, and so I just this there's like a burden that's been lifted off of me in terms of like and and we're going to talk about any any expenditure we add we we will talk about and frankly J D's going to be the one driving list of that. Um, good.

11:35.62
tylerking
Yeah, can I dig into that a little like I that sounds a lot like how I feel about transparency in general at a company like right now. The company is only partners and so you I don't know if you've.

11:46.94
Rick
Um.

11:52.86
tylerking
It's probably not worth your time to think about this yet but like is is it worth being transparent with the whole company or just with partners. But this is generally how I feel less annoying where there are some partners but mostly employees every time I'm transparent about something I'm like this is a bit of a pain I have to think more carefully about what I say and all that. But once you say it, you're like okay there are no secrets anymore I don't have like going forward I can be totally open about what I say because I don't have to think well is this public information or not so anyway I feel like transparency in general kind of has this upfront Burden and then long term payoff.

12:28.75
Rick
Agreed ah, there's a lot of effort in like ah creating transparency in the first place. But then there's like if you really want to do it right? So that you can maintain transparency. There's actually even more engineering involved so that you can maintain it like because if you just like do it and yeah, it's like a very manual process like.

12:39.16
tylerking
Are.

12:46.45
Rick
You're not going to keep doing it so you have to set up a system to manage it and so I think like that's what I spent a lot of time on the last thirty days and I feel really good about it. Um, the other The other benefit is like sort of predetermined decision making around budgeting so like because of the percentages we set up so it's like 1% if anyone's interested in this It's 1 % to to shareholders necessary expenditures of a like kind of a fixed fixed budget. Um, then there's a fixed sort of like base pay for Jd um, and then there's like a tax savings. Ah, ah you know whatever's left over. There is like what we call like our our first level of profit and um. We have a sort of 15 % going into like ah a savings account for tax purposes for corporate taxes. Um, and then after that ah we have a treasury savings of another 15% where we're basically saying let's set aside another 15%. In case, we want to have expenditures that are not budgeted. So. But so we wanted to get together in person or Jd wants to travel or who knows like rainy day fund. Um and then ah and then and then the rest like is like okay this is available to page ad variable every month um and ah up to a certain amount.

13:56.89
tylerking
Yes, so so his base pay is enough for him to survive but not enough for him to be happy basically does is that about right.

13:58.66
Rick
And then we it's like.

14:05.41
Rick
Yeah, yeah, it's like enough it's enough to like not feel like we're It's something to worry about um and then the variable comes out up to a certain amount and gets them to a target comp and then after that we kind of go save it like we don't really had really thought through that next.

14:20.37
tylerking
Um, yeah.

14:22.30
Rick
Stage. So but like the runway on this is basically until J D gets to a start comp. We have how we're going to spend money every month sort of predetermined. Um and it's very very nice to have that.

14:31.50
tylerking
Yeah, yeah, it was great for me I Just having a better sense of how the finances work has been interesting but like looking at it I had a few like thoughts that maybe I can share with you So one you you said like the.

14:43.68
Rick
I Love that.

14:49.90
tylerking
First 1% goes towards like profit to partners and I think this is very similar to the concept in personal finance of pay yourself first. Are you familiar with that. Okay, where you take you get paid and before the money even makes it into your real account. So I think that there's different ways to do it but like.

14:56.41
Rick
Yes.

15:07.37
tylerking
You have 2 different accounts your money goes into one account but you never touch that immediately it transfers some percentage of that into your investment like your brokerage account and then it puts the rest into your real checking account. So it's it's 1 thing to be like I got paid $10000 I'm going to spend some money. How much do I have left over to save. But if you're like no I only got paid $9000 because a thousand already in savings you just and immediately adapt to that new reality. Um, it seems like 1%'s a very small number I assume the goal is to get that number higher over time.

15:41.93
Rick
Yes, so there's kind of two factors. It's a percentage so that as revenue grows the one that that 1 % becomes um more meaningful so there's sort of like you know that that 1 % gets more powerful as we grow the business. But but also we want to ratchet up that percentage like I would love to have it. You know be you know anywhere from 5 to 10 percent at some point and that gets pretty meaningful like if we're doing 5000000 on topline revenue at some point that's the business we build at people keep right? Um, over over 8 to 10 years

16:01.53
tylerking
Yeah, yeah, that sounds right.

16:14.73
tylerking
Her.

16:17.13
Rick
Um, so like the same ten years we're at 5000000 and top line. That's five hundred thousand at 10 percent profit share paid First that's $500000 in partner distributions before we even think about actually taking a base salary ah or variable comp associated with the jobs that we're doing for the business. So.

16:32.44
tylerking
Yeah, so that was one thought I had another. It was interesting so like Rick set this up in a spreadsheet where like the going top down and so you know the top comes out first and then the next is interesting going between percentages and dollar amounts because it was take out 1% then take out.

16:34.93
Rick
Pretty exciting.

16:51.40
tylerking
Ah, Thousand dollars a month for expenses then take out 5000 or whatever, whatever the number is for salary and then it goes back to percentages and it's it was just interesting seeing this kind of stack I've just never thought about money that way like for me, it's like we've got a pool I think of it as a pie chart and it's it's kind of all being taken out at the same time and then. Um, the the final thing of just well no I'm having a brain fart I forget what my final point was but anyway I was really interesting looking through it. Ah I thought.

17:18.58
Rick
The stack thing that you're saying is interesting. Um, yeah like I think ah it simplifies it right? like it. It makes it more of like a flow diagram. Um, where it's like ah you know, step 1 you know then decision and then if this do step 2 if otherwise do step 3 versus like.

17:32.16
tylerking
No.

17:38.34
Rick
You know it just like happening. Um it yeah.

17:38.51
tylerking
Yeah, because normally you think about percentages of the the whole pie and here you're saying well I've already subtracted this I've subtracted this I've subtracted this and then it's 15% and then subtract another $500 and then it's 10% of that. It's a whole different way of thinking about it. Yeah.

17:52.26
Rick
Yeah, it's multiple pies right? Like we're we're basically you know, ah you know, splitting up the pie and then rebaking the pie. Um, but but anyway it's it's um I think ah I have a I like there's so many benefits from this. Um and then I'm extremely excited to see.

17:56.96
tylerking
Just and half.

18:10.29
Rick
How it it changes J D's mindset because I think it's going to like make him feel like a real like full entrepreneur. Not they shouldn't already um because he should but like I think like I can already tell how he like he's like he's checking the commission statements with with a closer eye like there's just little things that are happening that are that are just really.

18:24.75
tylerking
Um.

18:28.30
Rick
Positive for the long-term stake of the business. Um, and ah yeah I think there's some burden that he's taken on as a result of this that I think I need to pay attention to because I think ah it can be.. It's hard to like be responsible for this type of stuff and um. But but I think the the the benefits well outweigh the negatives. But what? Ah, What else is's going on your world.

18:47.75
tylerking
Yeah, yeah, cool. Thanks! So so yesterday we had ah a big migration. We we fully switched to paddle for our billing so I've I've been talking about paddle for a long time and we sort of like quasi. Switched in this end like the the way you migrate something like this and for people who don't know paddle is a payment processor. We were previously using stripe um, we are switching basically just for tax compliance reasons I am fully conflicted about whether or not it was the right move. But I think it's the risk reduction move. Um. But so ah, maybe a couple months ago we did the first switch which is anyone who pays or updates their billing like when they go to the billing page and lessoning serum instead of seeing a stripe checkout. They see a paddle checkout so gradually over the last couple months people been moving over I think about 10% of our customers prior to yesterday were on paddle. Actually so sort of surprised me like 10% of people touch their billing over a two month period I would have guessed it would be lower than that. But anyway, ah, but yesterday was the like we had exported all the credit card information. So so once everyone that updates is using paddle at that point everyone in stripe is is locked in as in. No one can change billing info in stripe anymore. So at that point it's safe to export everything out of stripe even if you don't run the migration for another month. Nothing could change about the stripe data. So we a while ago had we told stripe export the data send it over to paddle.

20:19.30
tylerking
Paddle has all this credit card information and then yesterday the real migration. What happens is we export all the data out of our system to basically tell paddle here are the people who like like you have a month old data about stripe data. You don't know who's active and who's not still. Here are the people who are actually active right now in our system only like activate subscriptions and you know we tell them. There's this many users this is their currency and so on. So anyway, yesterday was the day the remaining 90% of our customers switch over to paddle now they won't notice until they get billed which will happen gradually over the next month but ah as of right now we're 99.9 percent off stripe. Yeah, um, it's one of those projects that there's nothing good about it. It's like at the end of the day we are still charging people money and there's no upside really, but.

20:57.58
Rick
Cool.

21:12.80
tylerking
It's been taking so much time and I'm really glad to move on.

21:15.91
Rick
Yeah, this is um, one of those I think anytime you're you're reducing risk um in a business which is what you're doing with this change like there is no immediate benefit. It's just peace of mind. And so like it's like so painful and distracting.

21:31.27
tylerking
Yeah, yeah, um there yeah there've just been. It's one of those projects where you know you kind of spec it out and they they initially told us they were like on average it takes about two weeks of dev work and I knew that was bullshit to begin with but I changed that to two months in my head. It was like 4 and and of of Robert our lead developer I mean this was like major major opportunity cost not to mention it's going to cost us I think something like $80000 a year in extra credit credit fees. Um, so yeah and we'll never know would there have so in case people don't get what I mean by tax compliance in theory. Software as a service is taxed and about half of us states nobody actually does that? Um, but in theory a state like texas which has sales tax on saas and is big and has a large population meaning we have a lot of customers there they could come to us and be like you don't just owe taxes for last year you owe taxes for the last ten years you know and every year you keep not handling sales tax that burden that liability goes up and up and up and the question is will that ever happen. Um base camp a much bigger company than us but still like a set a bootstraps sas company. Apparently they got one of these tax bills is my understanding and that's what it like? Ah. justin jackson from transistor.fm had a podcast episode about this and he made me that. That's what when this got on my radar and so yeah I have no idea if we ever would have gotten that letter from texas but yeah, well I mean.

23:00.16
Rick
Well hopefully you don't ever. You still have risk right? like you still have exposure for the past taxes. Um, but like you know the I.

23:05.98
tylerking
For past yeah and I should say we've been paying some. We've been paying sales tax anywhere. You know what? actually we have been paying sales tax in Texas because we have an employee in Texas I forgot that um so that's a bad example, but but what we've been doing is we just charge everyone the the $15 a month. And then we pay the sales tax out of that money so we actually make less money off of customers in Texas Missouri and Massachusetts which is where we have employees. Um.

23:31.12
Rick
That's cool. Yeah, it's so you're you're you're yeah this is going to be done and then it's basically like you're never going to think about it again ever.

23:39.95
tylerking
Yes, certainly hope assuming so there's still a lot of little random bugs and stuff like that. There's assuming we can get that all under control. Then yes, we'll never think about this again, It's not been smooth. But anyway glad to get that out of the way. Um I do have I don't like.

23:56.88
tylerking
I have 1 other thing to say about this there've been a lot of annoyances in this process and I don't want to be too hard on paddle. It's a hard thing to do not just to be a payment processor but to be a merchant of record. Ah 1 of the things I learned from this though is like how dangerous it is to outsource something customer facing. Because paddle's a merchant of record which means our customers are not paying us like with stripe our customers pay us stripe just facilitates it with paddle our customers pay paddle and then paddle technically is licensing our software and paying us a licensing fee that is why paddle is able to handle taxes for us. What that means is the emails our customers get come from paddle and this the credit card if you go on a credit card statement and look at the you know it has a phone number here's who to call if there's a problem that phone number goes to paddle ah, every time our customers have been dealing with paddle's customer service and they paddle pitches this as like one of the benefits is. We'll handle some of your billing support. You know you can stop doing that we've gotten so many complaints from our customers. Um, just slow response times people in the us who are like why did I get billed and paddles like well there's vat where you live and that is not a thing in the us it's called sales tax here and they're just using the wrong terminology which of course confuses our customers. And on and on and on. Um so we we did at 1 point have to just be like paddle like send every customer service request to us because like we we can't have our customers talking to you directly and it it was a pretty hard reputational hit for us to take for a while there. Yeah yeah.

25:27.22
Rick
Ah, it just makes me cringe.

25:30.93
tylerking
Now most saas companies have shitty support. So maybe you want? Maybe you'd be like well you can get our shitty support. You can get paddle shitty support. But ah our customers they're incredible I also I feel bad for paddle they're like we replied in three days that's fine and we're like no, you need to reply in an hour like our customers expect that. So.

25:50.20
tylerking
It's it's kind of unfair for us to expect paddle to live up to our standard but also I'm just like this is ah this is why you don't outsource shit you know? Yeah yeah, um, how about you got anything else.

25:54.75
Rick
Yeah, exactly especially when it's your differentiator.

26:04.30
Rick
Yeah, so um j d and I have our weekly meeting on Thursday mornings. Um early in the morning we had that today. Ah we had a lot of follow up just like kind of wrapping up the profit sharinging profit first framework um, but then we started moving into growth planning. So um, as you may recall our. Our growth goal for the year yeah our base plan is to double to 200 k and a r stretch goal is to get to 400 k er are so we're going to do bet planning around four K Four hundred k and ar r um, just to you know, kind of force us to to think outside the box. Um, but we didn't get very far on this today but I wanted to run this by you.

26:41.81
Rick
We we started talking and we we're trying to figure out like what's the one metric that we want to focus on like if you focus on airr. It's like not that tangible to impact today and so it's hard to yet you I have to like draw lines to actually get to actions that matter. Um, yeah, exactly. So.

26:54.91
tylerking
Yes, like a lagging indicator.

26:59.76
Rick
Trying I think like that the right metric to track is how many icp pitch meetings are we having Icp stands for ideal customer profile. So our Icp is a Utah small business owner I don't know with let's say 5 to 25 employees. So if we're like. Like if we have a pitch meeting I think that like if Jd has at the very worst like 10 pitch meetings. He's going to close 1 deal I actually think it's probably like when we perfect this. It's going to be closer to like a fifty fifty um sort of pitch process but like let's just say it's you know 10 1 1 in 10 or. You know some you know, just for for planning purposes. How do we get? You know how do we get a you know if there's twenty days in a month if we want to get 2 customers a month which would be plenty to get past our 200 k goal and then if we could get to a month we could probably double it to you know four from there like we need.

27:35.99
tylerking
Um, with her.

27:53.15
Rick
Ah, meeting a day. Ah, how do we get to a meeting a day that's sort is sort of the question that we're focusing our growth around um is that the right way to think about this or would you challenge that.

27:54.32
tylerking
Um, yeah.

28:04.14
tylerking
No Yeah I think that makes sense. It feels like the answer in the future might to be word of mouth is a huge part of it but that can't that that's never the answer in the the very early stages of something there just aren't enough existing customers. For that? Um, So yeah I mean have you have you gotten into that. Are you just kind of saying you're starting to to think about it.

28:28.76
Rick
That's where we left it is like okay so we're we're going to frame our planning around. How do we get to 1 icp pitch meeting a month which is 1 small business owner in Utah that is allowing us to pitch them. Um, ah you know a day sorry um, a day and then you know if we do that we can.

28:41.21
tylerking
Um, a day. Okay.

28:44.19
tylerking
So twenty a month because you know weekends don't count and you convert 10% of them so that's how you get to 2 yeah.

28:46.57
Rick
But yeahp to two a month which would be ah, a lot and and and the the general hypothesis here is that if we meet with Icp customers. It's going to feed our 3 product lines which are. Basically group Health Insurance. Um leg up benefits and then consumer you know Consumer leads.

29:12.89
tylerking
Yeah, it seems like in the past the um, a pretty common path has been you talk to a business owner and you say hey let's switch your whole business owner over and they say no but I need help with my individual insurance. Can you just handle me and so you kind of get a consumer lead that maybe. Six months later we'll turn into an employer lead but you're you're kind of you're starting with the employer dropping back falling back to consumer and then upgrading the employer later is that like do you think that's likely to be the the best model to kind of target.

29:29.84
Rick
Correct.

29:41.48
Rick
So I actually think it's really hard to that's not publicly available information whether someone offers group health insurance or not so it's actually very I think part of the advantage we have is that we can just go to any small business owner that has 5 to 25 employees which is generally public like or like estimateable. Yeah.

29:47.18
tylerking
Kind of.

29:57.89
tylerking
You can get Yeah, you can get the.

30:01.37
Rick
Um, and so so and going to them saying like we don't care what you do. We want to serve you. We are better at this and and and we'll learn what what how the percentages break down like who's more likely to take the call. Um and then as we as we find out their situation. We might yeah double down on a more specific pitch on like what we recommend for them. But. To get the meeting I don't think it's targeting um a particular situation. It's targeting the small business owner um problem it's it's it's as with 5 to 25 employees.

30:27.28
tylerking
So the the definition of an icp here is very broad like it's just it's any small business basically in Utah. Yeah, so okay I get what you so technically leg up health has an offering for.

30:38.24
Rick
Um, and you talk co-loated.

30:46.27
tylerking
Anyone? Okay, okay because they're less likely to have group group plans or what.

30:46.33
Rick
I should say we Ah, we've also said professional services is like is so in the in general. Um, it's It's so a very interesting question So This is not about whether what they decide to do like I know that that's a mindset that we've been in the past but like we do not care. What our customers do if they want to do group Health insurance Great if they want to give people money. Great. Yeah, So so um, so so what matters is that they have a budget for benefits and that their employees make enough money where they can afford Health insurance and don't like kind of out of a medicaid piece. So What that ends up being is a company that has um.

31:04.95
tylerking
Um, well I want to push back on this though.

31:23.13
Rick
Salaried jobs versus hourly jobs more white collar versus blue collar and so you end up in like targeting and like kind of subs industries that have more of a like ah a salaried type role.

31:34.00
tylerking
Okay, so that makes sense to me but I want to push back on what I said versus what you said because I'm not saying we need to be pushing no group like we can go to an employer and say we'll offer you any of these 3 things but that doesn't mean that targeting.

31:42.77
Rick
Um.

31:53.83
tylerking
Has to say we don't care what you're currently doing. So for example with the less knowing crm. It's a different pitch someone who isn't using a cm right now and has an excel spreadsheet is a very different pitch from someone who is using salesforce they're both going to end up using lessening serum that's going to be the end destination but 1 is easier to sell than the other.

32:11.68
Rick
Yeah, and I'm not disagreeing with that. Um, but you can't target. It's It's very difficult to Target based on nonpublicly available information. Um, and ah people aren't posting like and sharing publicly like it's much easier to find out if someone has salesforce with tools like built with.

32:26.27
tylerking
Yeah, yeah, okay, but yeah I assume some industries have a higher ah penetration of group insurance than others. Maybe there's other like correlation things like that I don't know.

32:27.38
Rick
Then it is to find out if someone offers group Health insurance.

32:39.64
Rick
Maybe like there. Well there's probably some assumptions we can make is like hey when we reach out to 10 businesses. Um, there's probably like ah the on average 5 of them will be in this situation. 3 of them will be in this situation and 2 of them will be in this situation. But um.

32:54.66
tylerking
Um, yeah.

32:55.57
Rick
But above 5 employees the likelihood to offer group health insurance increases pretty substantially compared with below 5 employees.

33:00.28
tylerking
Yeah I would think that it makes total sense What you're saying that professional services tend to have high margins and like white collar employees I would think that almost all of them would have group plans is that not the case.

33:13.53
Rick
No, um I don't know I think the reality is like if I knew this I would be like yeah let me tell you like what we know about um situations you know by industry and like what our close rates are by that. Um I don't um.

33:24.91
tylerking
Yeah, okay.

33:28.54
Rick
So I think part of what we're going to do is we're going to go set Icp meetings and then we're going to sort of it's going to develop its own sort of process like at the end of the day like we need to figure out how to get meetings with people. We don't know much much about other than what's available publicly. Um, and then it's like.

33:43.10
tylerking
Um, j d was JD was doing this last year right like we're not starting from scratch here.

33:48.57
Rick
He was mostly reaching out to people. Um that yeah he was already was he already doing what like reaching out to business owners. Yeah, he was already doing that. Um I wouldn't say that he was booking when meeting him.

33:56.44
tylerking
I Thought so yeah was he not.

34:05.90
Rick
A day to pitch. Um, so I think that's ah, that's a big difference.

34:07.25
tylerking
Um.

34:09.60
tylerking
Yeah, the goals different. Yeah, okay oh it'll be interesting to get updates on this I wonder so you don't have a plan yet. So there's nothing to report on I guess.

34:14.62
Rick
Um, yeah, well I mean no, no, there's no plan but like I think if if the the general question is like is this the right thing to focus on and do we just like put our head down on trying to get 1 icp meeting a day or or should we be thinking about this in different context and.

34:27.30
tylerking
Um, yeah.

34:31.97
tylerking
I Like that metric a lot. So what? what could go wrong here maybe is a question asked. Yeah, do you have anything you're like worried about.

34:33.88
Rick
I Don't yeah.

34:44.82
Rick
I Guess the main thing I'm worried about is that the what we are missing an easier path um to growth. Um, so this is definitely the old school knock on doors. It's just hard and grueling and you know if if.

34:51.92
tylerking
Earth.

35:04.19
Rick
It doesn't grow generally while you're not working um and so I I think there's like is there is there something that's like very obvious that if we just built or did and measured twice cut Once it would just work like that's the thing that I guess I I worry that we're missing out on. But I I think like.

35:05.15
tylerking
Um, yeah.

35:23.32
Rick
I've gone in search of those and never like I always regret not just doing the hard work to get this sales machine built.

35:29.53
tylerking
Yeah, although it okay, it makes me think of something that happened um last year and again for listeners I'm in a lot of these meetings but I don't know what's going on so I'm basically just observing and I'm going to I'm going to share what it looked like from my perspective which was. Jd was doing all kinds of work trying. You know we're going to pay for this paid channel I'm going to find people on Linkedin I'm going to use this cold prospecting tool and then at one point we had a meeting where you asked him look back at the ah the leads we actually got because we have some employer clients right? Hemp like 10 or something.

35:56.26
Rick
Yeah, 10 yeah.

35:59.85
tylerking
Um, and you're like where did we get those 10 and it was like 8 of them came from a personal referral or ah, the the owner of the business was already a consumer client of ours and like all of that work grinding. He was doing was basically not where any of those 10 people came from I think that is a. Ah, potential concern here is that like you could grind and grind and grind and it turns this is the same thing you're saying that there's maybe an easier path but like yeah can can you reproduce the easy kind. Yeah.

36:29.48
Rick
I don't think so um and so ah, anyway like if you look at like how do we get these costs like how do we have 160 clients 10 employers um, hundred gay and ar are like most of this came from like surges of. The right behaviors of like getting to the right people primarily through networking um and looking at our relationships, existing relationships and figuring out how to you know turn those into either introductions and so I think it's I think it's as simple as saying how do we find more customers and how do we like.

36:48.76
tylerking
Ah.

37:02.84
Rick
Stop doing things that aren't leading to more customers or servicing our customers and like stop getting distracted by like shiny gold I really think it's like very basic. Um, if you put in and then you know there's some number of like and an ideal world like by the end of March we have a pretty solid like if.

37:09.70
tylerking
Um, yeah.

37:20.16
Rick
If a person whether it's Jd or me or someone we hire does these activities every day for a week. Um, over the course of multiple weeks. It will turn into 1 meeting a month or sorry one meeting a day. Um, and if we figure that out then we've got a pretty interesting.

37:34.50
tylerking
Um.

37:39.55
Rick
Business um that you can optimize on top of but right now it's like I be what question I'd be interested in asking gd if you were here is like what do you? What is your plan today to generate a meeting and I don't think that's like what he's thinking about right now.

37:51.17
tylerking
Yeah, what? yeah where it's still kind of in recovery mode from open enrollment but it needs to be what he and you probably are and are you planning on doing marketing and stuff this year what are you going to be focusing on. Do you think.

38:06.47
Rick
I want to I think one of the mistakes we made last year is we had a lot of stuff going on across like what like multiple people and ah I don't want that this year. So like I think if we're going to go after 1 pitch meeting. Um, ah.

38:18.40
tylerking
Ah.

38:22.30
Rick
You know a day like that's what we should all be working on until we hit it. Um yes and that could be like whatever like whatever levers I can pull um and ah if I'm working on something else. It's less likely to happen.

38:22.81
tylerking
Okay, so you're going to be trying to get some of these meetings for him through networking or however, yeah.

38:36.58
tylerking
Yeah I totally agree. Um I said earlier what could go wrong here. I'm not worried about this in this case but I think it's worth saying out loud that one of the benefits of working with like a partner who has skin in the game I know a lot of indie founders. Want to like. Hire people for a dollar a dollar power rate or something like that they don't they don't want to really bring on and it's like a fear of commitment almost or like I want to be in control of everything. So I'm not worried about jd because he has skin in the game but in a different world. You could say your Kpi or whatever is how many calls are you having with icps. And you could imagine that leading to a world where a he's he has every incentive to define icp wrong to just be like well I'm doing calls I'm doing the thing you're paying me for ah but that they don't convert I again I don't think we're in that situation. But it's in a if things were slightly slightly different I would be worried about that.

39:27.86
Rick
Well and the thing that happened last year I think that that because we didn't have this this profit framework in place. Um is I think we spent more money testing things than we should have and I think that you know if you if you look at like okay we don't have money to spend on marketing. We really it kind of just like eliminates so many options. It's like listen, we just need to go talk to people.

39:48.91
tylerking
Yeah, yeah, it's so hard not to be like well is that going to scale or well what are we going to do next year when we have to get twice as many and it's like well that's a problem for next year we can get if the goal is to get. 10 Twenty thirty employer clients this year like yeah, that feels very doable with just networking.

40:13.92
Rick
Yeah, and if we do that most likely it will be repeatable um with some sort of playbook and we can hire people to do that and to go do it again for another 30 but you know it's it's just that's that's how that's that's obviously you don't work in past businesses and and generally. It. It generally works itself out. But if you can't get to the 1 meeting a day. It's that's a whole different problem.

40:37.92
tylerking
Yeah, cool, all right? Well I assume this will be an ongoing theme that we'll keep talking about um I Want to talk about a concept and I forget if I mentioned this did I use the word mini van.

40:40.71
Rick
A hundred percent what else is on your list.

40:51.62
tylerking
In the last episode to you. Okay I thought I thought I mentioned this.

40:53.11
Rick
Oh yeah, well I was I was actually listening to our episode on the way on the commute yesterday to the office back and forth and I really like I and I appreciated the car analogy I think you one and thing you said was um, ah, would you rather have half a Ferrari or a complete like piece of crap. And a car and it's like you don't have the piece of crap because it's actually functional on a half of Ferrari is worthless and so then you expanded it into this minivan analogy and I I actually really liked it. You were talking about cup holders and you know.

41:15.70
tylerking
Um.

41:17.60
tylerking
Cool I'm glad Yeah so for if anyone didn't listen or like me forgets things in that short a period of time like yeah, basically the idea is less Annoying. Serum's not trying to build a sports Car. We're not trying to build something with the most horsepower with the nicest interior or whatever. We're building a minivan meaning cup holders like people like yes, it has to be able to drive. But it's about being practical being comfortable, not being sexy, not being powerful. Um, so yeah and I.

41:50.64
tylerking
I Really like this is my brother's Terminology. He he kind of came up with this but I really like it I think this describes me as a person. Um, because like if you look at how I dress I I wear the same outfit every day I mean I make sure it's a different color but otherwise like I have a stack of the exact same shirt I take which everyone's on top and I wear it. And I think a lot of people. It's it's easy to imagine I don't care about quality I don't care about design like I think people get confused that I'm a designer that dresses this way and I'm a designer that makes software that doesn't look sexy. Um, and there's this other type of design. And I think like designing a minivan I Love having this is just this is my whole philosophy about everything and it explains who I am ah I I yeah.

42:32.67
Rick
Okay I actually do the same thing I like wear the same thing every day but I have I would say I I would say I look better than you and what I and I I'm just kidding I but but but but do I.

42:45.74
tylerking
Ah, no you you absolutely put more effort in your appearance than I do which like.

42:51.64
Rick
I actually like I think I just might I think my stack of of shirts is of a different quality every 4 weeks. What do you do.

42:55.96
tylerking
Well, how often do you get your haircut. Yeah, so more than me I have no idea but less than that. Ah I remember when we were roommates you were looking through was it bricks Brothers you like were looking through.

43:12.13
tylerking
Business casual catalogs all the time I I was like Rick what fuck he doing yeah was I forget the brand I forget the brand you care about your shoes. We'd be at work and we were about to go out to a bar and you'd be like I got got got to go home and change my shoes and like your shoes are fine.

43:13.98
Rick
What no I was not maybe a break is Joseph a bakes. Yeah.

43:27.11
Rick
that's an East Coast yeah that's an East Coast thing that that is not a problem anymore I will I've I've adopted the West Coast attitude around food shoes.

43:33.20
tylerking
Ah, um, anyway, yeah, but ah, no yeah I think we're probably maybe not totally similar but but more similar than a lot of people and you wouldn't.

43:42.34
Rick
I Just think the decision making is not worth it like why would I want to decide what I want to wear every day I'd rather have that decision predetermined.

43:50.71
tylerking
Yeah, absolutely totally agree. Um, so like a couple comments on how this I got 5 minutes and then I got to go couple comments on how this affects lessening serum. Um, so because we're going to be working on cup holder projects that really gets us back to our roots of just like customers are asking for things. Now. It's up to us to prioritize it and we're going to say no to some things I'm not saying we're literally just going to do whatever customers say but like it's so liberating just be like our our roadmap for this year is the stuff customers want the most basically um, which is how it was back in the day when honestly when growth was a lot easier are those 2 things related time will tell.

44:24.98
Rick
Yeah I can't wait to hear about it.

44:26.89
tylerking
Probably not the other thing though is I'm a little conflicted about maybe three to six months ago I said we we were kind of making a change to how we worked on dev projects which is like in the early days. We said every developer works on 1 project and. You know if there's 3 developers. There's 3 projects going on in parallel and there are advantages to that. There's no communication overhead of them. You know having to work together. But the downside is as the dev team grows now we're working on our eighth most important thing because there's 8 developers instead of moving faster on the most important thing these. Cupholder projects which by which I mean again, just small little quality of life improvements the crm none of them are big enough to have multiple people on them really and so I do think this takes us back into a world where not 100% of the time but more of the time people are just each person's working on a different project. I don't know how to feel about that.

45:24.17
Rick
Well I think if a whole year goes by and well you I don't think you this is the the path that you're on and you got to let it play so you got to see what happens. Um, that might not be a bad thing by the way and you at your phase. Um, but but I what I kept my happy that this is that.

45:31.77
tylerking
Um, yeah.

45:38.75
tylerking
Ah.

45:41.20
Rick
By doing this getting back to your roots something is going to like come up through this that's going to pull the team together. Um on something that you you identify as like oh this is the number 1 thing. Um and I think that will happen. Naturally, it may not happen immediately. But I'd be very surprised if. If before the end of the year there's not like a an exciting customerdriven. Ah project that sort of is is pull is sort like the magnet that pulls everyone together I don't I don't think you know what that is and that's probably uncomfortable.

46:10.75
tylerking
Yeah I mean we're doing one of those right now but this is like before the new strategy kicks in. We're working on bulk actions which have've talked about before and like almost the whole Dev team's going to be on it as soon as they finish their other projects. Ah, but but yeah, like part of it is that I'm trying to specifically prioritize high. Ah, impacts to effort ratio and those almost by definition after bulk actions those almost by definition are small projects. It's very unlikely that a really really massive project has the best impact to effort because it's so much effort like the denominator is so big. The the impact would have to be astronomical. So almost all these are small projects. Probably once we knock out a lot of these small projects then we can move on to to bigger ones again I guess.

46:47.58
Rick
Yeah, or or something naturally might happen where patterns are recognized that you can't see right now and and dots get aligned where it's like oh well, we should be doing this and.

46:53.78
tylerking
Um, yeah.

46:59.69
tylerking
I yeah you're you're absolutely right? and I am going to play it I'm not actually questioning it. It's just like especially having a podcast and saying all of this out loud. There's something very embarrassing about how much I probably everyone does this but I'm most aware of it for myself because you know I'm I'm the hero of my own story right? like. How many times in this podcast I've said oh I've had this breakthrough I've had this huge insight here's the right way to do things and then six months later I've completely reverted back. Ah, and in this case intentionally it's not even like I don't have the discipline to do it I'm just I've had a different insight. That's the exact opposite of the last insight and I'm just going in circles and it's embarrassing.

47:37.18
Rick
Ah I don't know I don't know um I feel like I don't know the the more experienced in life I get the more back to basics I end up getting like I always fall back to like oh man this is just so much simple.

47:49.91
tylerking
On the.

47:55.33
Rick
The the simplicity of just like waking up at 5 a m and reading in the morning is the recipe for happiness versus like trying to do more than that. It's just like it's anyway. Um, it's it applies in so many fashions.

48:05.55
tylerking
Yeah, ah I like on that topic like 1 of the questions that I am bringing to big snow tiny conf is I think it's everyone having a podcast like this working in business and so on is just without even saying it out loud. The assumption is their question is. How do I make this the most successful I can and less knowing serum is successful enough or what is it. So my new question is can I do exactly what I want to do without failing. It's not what is the most success I can achieve. It's. How much can I indulge in what I want to do without causing problems and it's a it's a mindset I'm yeah yeah, exactly like if we don't grow at all ever again, but everyone is happy with their salad like let's say we just keep up with inflation is that enough.

48:45.18
Rick
Um, and and where do you where do you sort of like draw the line from ah what? what is failure what is problems.

49:00.60
tylerking
Do we need to grow a little bit when I say grow a little bit. Do I mean pay people more do I actually mean grow headcount grow market share. Um because I increasingly as I get older to your point about waking up at 5 am increase I'm just like I want to I want to spend three days a week coding and if the business could be twice as big if I instead worked on growth but it won't fail like it'll be good enough if I code I should probably do that. That's what I want to do yeah all right? Yeah I'll I'll report back. Um, cool, good talking to you.

49:20.69
Rick
Yeah, it's I Love It. That'll be an interesting conversation I Can we to hear about that one. 2 We'll see if you like to view past topics or show notes visit start to last dot com see you next time.

49:33.47
tylerking
Morning Podcast it worked see.