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Category: Entrepreneurship
Tags: businessdecision-makingentrepreneurshipinvestmentstartups
Entities: DripHitTailMicroConfRob WallingSASSEOStartups for the Rest of UsTinySeed
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I started my first online business 23 years ago. I was reflecting on this the other day and I realized that there are five key decisions I made that literally transformed me from someone who was just dreaming about being an entrepreneur to someone who actually built and sold a
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multi-million dollar SAS business for life-changing money. I'm Rob Walling.
I've built six businesses over the years. I've written five books and I've invested in more than 220 startups.
I talk to earlystage and aspiring entrepreneurs every single day and many
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of them are stuck in what I call the dreamer phase. They're reading all the business books.
They have a graveyard of dormant domains and they're watching YouTube videos like this one. They're planning their perfect startup, but they're not actually building anything.
And look, I get it. I was exactly the
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same way back in 2002 when I made decision number one to stop reading and start shipping. My problem was like many people, I was getting stuck in analysis paralysis and hiding behind constant learning.
The solution I found was transitioning from consuming business
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books to actually building and launching products. And a key insight I received from that was there are no secret guarantees of success.
Shipping publicly creates opportunities, but no book, no YouTube channel, no podcast is going to give you the magic secret to guarantee
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your success. Now, that doesn't mean it's not valuable to take external inputs and inputs from people that you trust who have done what you're looking to do and who you think have insights that can get you there faster.
But at a certain point, you have to stop consuming and start shipping. And it's a
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big emotional challenge, right? The terror of public criticism and judgment and failure, they're very real.
But this is something that as an entrepreneur, you're going to have to learn to get over it. And the impact that it had on my life was building confidence, helping
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me overcome that terror of firsts, right? The terror of launching code, putting a blog post into the world, launching podcasts, even recording and launching YouTube videos.
The first time you do these things, they're going to be scary. And the first time you push production code on the internet and try to promote it and have people use it,
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it's going to be scary. But the more you do it, the easier it gets and the more confidence you build.
For me, shipping was just the beginning. Once I started putting myself out there, I quickly realized that success wasn't going to come from just having good ideas or even launching products.
The real work was
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what came after. And it wasn't nearly as exciting as I thought it would be.
That's when I made decision number two. I had to start embracing hard, boring, grindy, and scary work.
This one decision may have been the most important factor in my success. The
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mindset I took was to never avoid tasks due to lack of passion or interest, but to rank them by how much of an impact I thought they would have on the business. So, I grounded out on unglamorous tasks like doing SEO, advertising,
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copywriting, bug fixes, customer support, code maintenance, and realistically I did a lot of work that I didn't really want to do. And these days, I do a lot less work that I don't want to do because I have the luxury of having grounded out for several years.
and built incredible businesses that
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allow me to now do more things that I want to do. But back in the day, I had to put in hundreds and hundreds of hours of tedious, frustrating work because I had to ship things.
I had to get it done. I had to write the copy.
I had to support the customers and I had to do code maintenance and rewriting and SEO
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and advertising and a lot of things that I hear people shying away from because they're hard work. Bottom line is I think I was heavily influenced by my athletic career.
I ran track and played football in high school and I ran track in college. And then as I graduated from college, I worked construction and I did
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a lot of things I didn't want to do because I needed to pay the bills. And I think if you have more of that mindset of willing to embrace hard, boring, grindy, scary work, you're going to do better in the long term.
I think in the long term, you probably want to enjoy what you do. in the short term and that
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short term might be 6 months and it might be a few years as you're trying to bootstrap is that have hobbies for enjoyment but if you're working on your startup you need progress not passion I see far too many people on the internet on ex Twitter commenting on YouTube
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saying well I don't want to do that sounds boring and I think it is a huge huge roadblock to your success if you only want to work on the things you want to work on these are the folks who want to go on Twitter and act like That's marketing because it's more fun than all
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the things that I've mentioned in this bullet point, but realistically, they're just not going to get you there. Putting in the hard work was something I eventually just got used to.
But just because I was working didn't mean I was working on the right things. And as frustrating as it was, I had to learn how to change course.
So, decision
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number three was learning from my mistakes and adjusting my course along the way. Something I learned pretty early was that BTOC SAS is not good.
And you've seen several videos I've recorded on this channel talking about that. But no one was saying this back in 2002 to
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2006 or 7. And so I had to learn this the hard way.
And after I had a couple of B TOC apps, I realized very quickly that I wanted to sell to businesses. And from then on, every product that I either acquired or built myself focused on solving problems for businesses.
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Another lesson I learned was that lowpriced software products have higher churn. So I moved towards higherpriced products.
I learned that building from scratch takes a long time such that if I could acquire an existing app with some traction with some product market fit
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that that would get me there faster. So I did a combination of building and launching some things as well as acquiring.
So the mistake that I see a lot of founders making is they do the same thing over and over and they don't get out of their own way, right? They don't adjust.
Failure is only a good thing if you learn from it. If you keep
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making the same mistakes over and over, it's catastrophic. You have to look at the reasons you're failing.
You have to look at the reasons why things aren't working and figure out how to adjust course. This lesson still applies to the current ventures I run today, Micro and Tiny Seed.
We've done several marketing
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approaches within these two companies. We like to look and say, "What's working, what's not, and why is it not, and how can we adjust?" We don't just sit there and beat our heads against a wall when something's not working.
This is where you have to make real adjustments rather than repeating the same failures over and over. So, as I
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was changing course, I was learning a little bit more each time. And this eventually grew into what I call the stairstep method of bootstrapping, which you should check out over on my blog, robwalling.com.
But the crucial part was realizing that each step up the staircase could be bigger than the last.
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Which brings me to decision number four. to make increasingly larger but manageablysized bets.
This is a quote from a comic artist named Dave Kelllet and I love this one. It's over the course of your career, you should be making increasingly larger but still manageablysized bets.
So for me there
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was progressive investment in software products that I was either acquiring or building from scratch. So in 2005 2006 I spent $11,000 on net invoice.
Now, if you're watching this video, you're thinking, "He's lucky enough to have $11,000." Here's how I got that $11,000.
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I freelanced nights and weekends as a software developer for months and months and months, and I saved all that money while I worked a full-time day job and had a baby at home. My wife and I had a young child.
And by the time I had about 11 or 12,000, I found something to acquire. And I grew that from a few
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hundred a month in revenue up to three or $4,000 a month in revenue. That then put money in the bank that allowed me in 2011 to spend $30,000 on HitTail, which was an SEO keyword tool, a SAS app.
So I went from 11 to 30,000. And then building Drip in 2012, 2013, I had
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almost $200,000 that I invested to get Drip from just an idea to functioning software with decent product market fit. And where did I get the $200,000?
It wasn't like I was rich. It wasn't like I knew anyone who was rich.
It was me grinding and taking the
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revenue from all these other products that I had built up and investing in the next effort. Now, I never bet the house.
I never took on credit card debt. I never took a second mortgage.
I earned it along the way by freelancing and then building products. And along the way, I
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made increasingly larger but still manageably sized bets. Cuz if any of them had failed, it would have sucked.
But it would not have bankrupted us. I have one more item on today's list.
It's a lesson I still have to remind myself of even after all these years. But before we get into that, if you're
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finding these insights useful, you might enjoy the full Startups for the Rest of Us podcast episode where I dive even deeper into this list, plus an additional five of my best entrepreneurial decisions. I can go a lot deeper in a 45minute podcast than I can in a YouTube video.
So, if you want
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the extra stories and context that I couldn't fit here, just head over to your favorite podcast app and search for episode 782 of Startups for the Rest of Us. And you can also get the direct link in the video description below.
The harsh reality is that the startup journey is rarely easy or clear and
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sometimes gets hard. But one thing that I did really well along the way was I avoided impulsive decisions during difficult times.
In your founder journey, you are going to experience burnout, failure, frustration, times when you feel like you're just banging
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your head against a wall. Maybe times when money is an issue.
when you're concerned about whether or not you're going to be able to pay your bills. I experienced all that plus social media criticism and a deep desire to just quit or dramatically change course.
I never
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acted on these emotions in the heat of the moment and that was a huge win for me. I would often wait months before major decisions when I was emotionally charged.
I gave myself a cooling off period for at least weeks and sometimes months where I would just sit with a big
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decision. Many years ago, I was frustrated with the startup space and we received a seven-figure offer to acquire MicroF.
And in the moment, it felt like, well, we should do this, but we decided not to. And that would have been a decision I think that I would regret to this day.
I never let my temporary
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emotional states change my reality or make me make permanent decisions out of temporary problems. And for me that means that I had a cumulative building period over the past 20 years where I started with the blog and then I wrote a
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few books and then we started microcom and I started the podcast and tiny seed and this YouTube channel and each of these things built on the next one rather than me getting rid of one cuz at any given time the blog was frustrating, books are frustrating, microrob is frustrating, this YouTube channel is frustrating at any given time these
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things are going to bother you and you maybe want to sell them, maybe you just want to quit and shut them down and just go, you know, live on a beach or in a cabin somewhere. But I never let difficult times make me make impulsive decisions.
And that'd be my advice to you is learn the discipline and develop
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the ability to weather temporary low periods without making big decisions. I hope you're enjoying this video.
And if you're serious about starting a business, you should turn off YouTube to figure out what you can ship next. If you're just trying to find an idea and aren't sure where to look, I'd highly
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recommend you go check out this next video. In it, I lay out the seven not so obvious places to look for great SAS ideas.
Make sure you like and subscribe this video, and I'll see you next time.