Startup Therapy Podcast

Episode #232

Ryan Rutan: Welcome back to the episode of the start up therapy podcast. This is Ryan Ruin, joined as always by my friend, the founder and CEO of start-ups dot com. Will Schroeder will one of those age old questions that founders ask themselves over and over often too late is, am I building the right product? How do I know? Am I building the right product? Is this is this thing gonna work at

Wil Schroter: any level? You know, I, I think what's funny about that is we, we'll assume we'd know. It's like having a kid. Like did I build the right kid? Maybe you'll know at some point. Yeah. Yeah. Yeah, maybe, probably not. And so, you know, when we think about how to build products, that what we'll talk about here is like, you know, how do I understand that being on the right path is we, we tend to be asking the wrong questions. We'd love to know if we're on the right path, but we're assuming that we can know. And I think that's where the the breakdown starts, nearly every start up we work with is in some form of like this iterative stage, right? They're in the early, early stages from, I just had the idea nine seconds ago to, you know, I'm trying to get my series a series B funding and I'm trying to scale the product either way. They're still wondering. I built in the right product and the truth is you probably won't know for like, what, 3 to 5 years. Right.

Ryan Rutan: Yeah. Yeah. Yeah. Lots of feedback, lots of iteration, lots of questions and lots of, lots of variables turning into something a little bit more like Constance, but it is a laborious process to be sure. I don't

Wil Schroter: think we understand that. In other words, I think, I think when we think about, you know, how to start ups work, et cetera, I think we think I have genius idea right out of the gates. Right. I have genius idea. I then take that genius idea. I start a company and I just build that product, you know, whatever that was. And that sounds awesome. That sounds fantastic. Except it sort of doesn't work that way. Does

Ryan Rutan: not work at all.

Wil Schroter: Yeah. No, no one ever tells you this. That's all I was gonna say. Right. Like, no one ever tells you that that's not how it works. Why, what do you think otherwise? Yeah,

Ryan Rutan: because that, that's what, that's what seems obvious. Right. So, what you end up doing, you have this idea in your mind and then you set out to be in building it and you try to build the best version of that idea based on what you know about that idea, which let's be honest, it's pretty close to Jack shit at that point, right early stage. But you're still, you're going to keep pushing and trying to iterate and make the best version of, of that product, which is often absolutely the wrong product and, and we have to be OK with that. I think that's the other thing that, that we we should recognize is that that first idea that you had came out of nowhere and it, it has about that much detail to it, right? Which is very, very little and we have to be ok with the idea that this is just the, the roughest version of this thing and maybe, maybe not even a version of this thing, right? How often have you and I come up with product ideas that by the time it actually hits the market look nothing like the original idea often, like maybe not even the same form factor, right? So which is fine, to be flexible, it's not only fine, it's how it has to go, right? Because if we just continue to force whatever that early idea was and it's not what the market wants. Hello, the reason that 90 something percent of start ups fail right there, right. It's just persistence down the wrong

Wil Schroter: path. Well, let's talk about initially out of the gates. You know, we've got an idea we've been working on an idea for a while and we want to be able to get that idea out there and we want to share it with people and find out if they think it's a good idea. Exactly. Here's where we messed that up. First thing we do. I've got a cool idea. I talk to my friends. Hey, would you guys think this is a cool idea? They're my friends. Right. So, who else would you talk to? And your friends say yes. Sounds like a really cool idea. Right next, I go to a potential investors and I say, hey, would you guys fund something like this? They say, hey, that's a really good idea. Now, so far, everyone's told us it's a good idea. We talked to a couple of advisors. They think it's a cool idea. It's a good idea. We nailed it. The one person we forgot to ask is the customer person who actually is gonna buy this. And because of that, we end up down this path where we think that we have a good idea. And again, often, particularly for start ups or founders, new ideas and novel ideas. We associate with good ideas. Hey, no one's thought of this and there's a reason cases, no one thought of this. So, so I think that the first place we should triangulate is maybe why customers are the people we should be asking to begin with, you know. Yeah,

Ryan Rutan: 100% and, and we have to be careful because even when we get to that step, right? And then a lot of, a lot of founders will have talked to customers, but then they'll ask them questions that don't help at all. Like would you use this product? Right? Instead of digging in understanding what problems do you have that are in the space of this product? Right? And so because here's the reality, your friends are gonna lie to you because they like you, they want you to hear, you know, they want to support you, right? Investors are gonna look at it and go, yeah, it's a good enough idea. They're also not putting money down right then at that point because it's just an idea. So yeah. Ok, that some legs maybe customers still will lie to you. Not because they intend to because how could they possibly know you're asking them to predict the future? How good are you at? Predicting the future? I'm awful at predicting the future, right? I'm not even that good at reminding myself what I had for lunch yesterday, let alone figuring out what's gonna happen in the future. So any time we're asking these forward looking questions and would you use this or my favorite? Like would you pay for this? Like who's gonna say no? Right? Or maybe they'll say no, but no matter what they say, the chances of them actually being right are so low at that point. Because there's no information. So don't ask questions like that. This is one of these things I keep finding myself saying over and over and over again to founders and I'm sure I've said on the podcast, but I'm gonna say it again, which is, don't fall in love with your product idea. Don't fall in love with the product. Don't fall in love with any of that. Fall in love with the people. You want to help fall in love with the population.

Wil Schroter: You stole that from Tony Robbins. F did I? You'll fall in love with your product, fall in love with your customer. Really?

Ryan Rutan: You know, it's funny, I've listened to so little Tony Robbins. I just find him to be like an intimidating character. He's just too large for me. He's just, he's a massive human. I'm just like, I just feel insignificant, small and want to run away. I don't want to learn from much or hide from him so well, I'm glad he said it. That means a lot of people have heard this. So here's me saying it again, fall in love with the people you want to help,

Wil Schroter: right? Yeah. No, no. All good man. I agree. Super

Ryan Rutan: nerdy, super nerdy about their problems and this is where our product needs to flow from.

Wil Schroter: Let's stick with that when, when founders come to us and they say, hey, is this a good idea? Our retort is going to be, are people paying for it. And if the answer is no, then it's not a good idea. Now, will it become a good idea? Sure. Maybe. Right. But really the validation that we're looking for is paying customers. I've never seen a person say I have so many paying customers. Is this a good product idea? Right.

Ryan Rutan: Do, do you guys think this is a good idea? I'm getting so confused by all of the dollars flowing into my bank account that I can't tell this is a good idea or not. Yeah, I don't think I've heard that one

Wil Schroter: yet. That has happened. Never. Now, don't get me wrong. You can ask all the right questions. You can survey customers, you can do all things and just like you're saying, everyone can give you green lights. Here's what I would say, pausing there. If I had the choice between a product where I've done no validation and some validation, I'll take the one with some validation. Now. They could both fail validation. You know, early's feedback doesn't guarantee that it's going to work. No, not at all, but no feedback. Right. Yeah, certainly increases our odds

Ryan Rutan: there. I guess it's a good idea. Yeah, it's, it's, it's a recipe for disaster.

Wil Schroter: But I think what, you know, what we kind of map back to is the customer, the paying customer and maybe your model doesn't require payment, maybe it's usage ads, things like that. Whatever your version of how you monetize is. The paying customer is the opinion that matters. Even if we build a product that we think is awesome. Right? And we'll go through Google Glass, New Coke Segue, all of the famous ideas that in test groups tested incredibly well. Inventors created these amazing things. But when they brought them to the people who actually are supposed to use them, they were like this doesn't make any sense. I would add all of crypto, it's everywhere all the time where we don't ask the people at the end of the chain, the people that matter whether they would pay for it, that's how we know we're building a good product. Yeah,

Ryan Rutan: exactly. Yeah. And, and again, like you, you want to start with the problems and work outward from there, right? If you're not solving a problem, guess what? I can predict how many people are going to pay you from right now. And I'll be very accurate with this. If you're not solving a problem, no one's gonna pay you, right? So this is this is where we have to like, you know, digging in, asking the right questions, getting the right feedback and ensuring that there is some validation again, like the problem exists, right? That people actually wanna solve it. The worst thing in the world that I come across in our environment is a founder who has gone so far down a path with a product hiding in their basement on their engineering bench just building away and then they, then they're like, ok, it's done. Now, I have to show someone else. It's like, oh, come on. Right. And then now they're running around and, and the, the rhetoric is always about the same, you know, once people understand what it does, like, people just don't understand it. I haven't found the right population yet. I'm like, well, this is why we start with the population. This is what we start with the people who actually need it and then build from there, not build and then go find out who actually wants this thing. But it's, it happens so frequently and it comes from a lot of places, right? Some of it comes from, I had this idea but I don't know if it's good. So I want to keep iterating on it, working on it until I believe that it's really good and then I'll show it to strangers, right? I don't wanna, I don't wanna find out that my baby is ugly. The best time to find out your baby is ugly is the minute it's born. Like you wanna know, then that way you can work on it because unlike babies, you can make them as beautiful as they need to be to suit the market as long as you're talking to the

Wil Schroter: market. Right? I agree. Well, ok, let's, let's play this out though. You and I live this first hand. So for folks listening at home Ryan, I will. We launched fundable in 2012. It was one of the first crowdfunded equity crowdfunding marketplaces. Ok. Awesome. At the time, crowdfunding was all the rage. Kickstarter was unlike every headline that year, right? Like everything was a Kickstarter. It was crazy. Everything was a Kickstarter and we were like, oh my God. Well, if Kickstarter is gonna work, then equity crowdfunding will be 10 x bigger than that because these are bigger checks, et cetera. Ok. So we immediately made all the cardinal mistakes right out of the gates. Mistake. Number one, we fell in love with the product. We said equity. Crowdfunding sounds cool. Therefore everyone's going to want it. Couple things we forgot to ask as did the entire crowdfunding industry. Ok. Question number one. Hey, investors, are you looking for more things to invest in really highly suspect products that probably no one will get involved with? Oh, you're not. Well, let's

Ryan Rutan: see. Here's a, here's a largely unwashed deal flow. Would you like some really unfiltered deal flow with very little objective evidence around the products or traction or anything? Was that what you were looking for? Right. Right. And

Wil Schroter: so so just think of how big of a and it's hilarious to even repeat this now, but at the time, it actually didn't occur to us in a meaningful way. The second one was, hey, start ups, you have a really good idea when you look for investors. Is it the case that these really good ideas can't find any investors. Turns out. Not really. Yes, there's tons of start ups that need money. So that part made sense like, oh my God, so many more start ups will get checks. But then we kind of forgot to ask some other questions. Hey, why aren't those guys already getting checks? Us creating this vehicle called equity. Crowdfunding didn't magically create more fundable companies nor did it create more investors?

Ryan Rutan: No more checks. No,

Wil Schroter: both were pretty important assumptions that we forgot to

Ryan Rutan: ask. It, redirected some of the investment a little bit, right. That part of the, that tiny part of the thesis which wasn't really useful to very many people did prove out to be true. Right? People who otherwise might not have gotten checks, got a check because they were visible in that case, but they were really strong companies. They would have otherwise gotten a check. But again, didn't create net new checks and it was a zero sum game that meant someone else didn't get that check. Yeah, I mean, the expectation was right. Again, the expectation without actually going and talking to any of them was that everybody's well heeled aunt, their dentist, their, their lawyer, all of these people who had previously been unable to invest in start up companies have been locked out of this market that they desperately wanted into. Now here we were opening the gates for them. Well, we opened the gates and exactly, nobody walked through the gates.

Wil Schroter: I'm really glad that we went through that journey. That's actually what got us to be, what start ups dot com is today, which we're gonna talk about next. But I really want to point out that for as obvious as it might have been a time if it was 2012 and you were in this era and you were building an equity crowdfunding marketplace, which by the way, like 30 other companies did the exact same. We did that on the same day. We were not alone, we weren't alone in this thought. By the

Ryan Rutan: way, remember what that did for us? There was idea validation. We're not the only ones building something. This must be a good idea. Right. Again, who did we ask competitors? People who were chasing the same thing? We were chasing customers. Not so much. That's

Wil Schroter: what I'm saying before. You know, at the top of the episode, I said, hey, you're talking to your friends, you're talking to investors, you're talking to all the people that aren't the people that are going to write the check, right? So we kind of gloss over all of these really important assumptions. And if we were to zoom back and say, hey, guys are rebuilding the right products. We have said, absolutely yes. All the market signals tell us we're building exactly the right product. Cool, then why aren't there multibillion dollar crowdfunding companies? Because no one gave a shit. And again, we're saying this as the guys who own this company, right? Fundable is still around, right? We're trying to explain that even in the right context where it all seems to make sense and you know what you're doing, not asking the right questions to the right people is a disaster,

Ryan Rutan: asking the right questions of the wrong people. Also a disaster, asking the wrong questions, the wrong people clearly a disaster. But we got false positive feedback on this market and ran with

Wil Schroter: it. We learned a valuable lesson and I think we're better off for it. Here's what I would say when we realized pretty quickly on it, probably not even 18 months in that the crowdfunding business that we saw probably wasn't going to be the crowdfunding business that we wanted it to be. We were also, we did a good job listening and we said, wait a minute when people come to us, these founders, a lot of them can't fundraise why, why are they unprepared? And we started to ask those questions and all of this always starts like, like good product discovery, product validation comes with questions. And I think what we did a good job of Ryan, whether we intended to or not was we started to ask some of these questions we, we drilled down, we didn't get so worked up. It was like, why can't everything be solved with this one tool? We started to say why do these pro exist to begin with? Why don't founders know how to put together a pitch deck or business plan or anything else like that? And once we started digging further and we got way less attached to fundable or equity crowdfunding and we said, let's just go find the problem and the problem wound up becoming millions of founders start every year and none of them know what they're doing. It's not their fault. There are many of you are listening, saying the same thing you're all doing it for the first time. Why would you understand any of this? And that became a problem we're solving because we just listen more to the problem. Not so much to our solution.

Ryan Rutan: Yeah, again, fell in love with the population. I mean, that was, that was obvious for us from the beginning, we knew we wanted to help founders. We believed that what we wanted to help them with was fundraising and we do and we do help people with fundraising, but it was not the, it wasn't the solution to the biggest part of the problem, right? To your point as we started to dig in and spend time with them and really communicate with and understand where these problems came from. A whole bunch of stuff surfaced, right? And that's, that's what's become start-ups dot com that we see today. The other thing that was really interesting was in finding out, you know, we were trying to solve a problem that to some degree was, was a bit of a phantom, right in the sense that yes, there were all of these founders that said I need funding, I need funding, I need funding. But when we would do a deep dive on these, these folks with their, with them and their businesses, we'd find out that like there were fundamental reasons that one, they didn't need funding. Two, they weren't going to get funding at least yet. And that three funding wouldn't have been the right approach for them to build and grow the business at that point anyways. Right. So, but to your point, it's millions of founders starting every year who don't know what to go and do. And that was the actual problem. So, so in absence of something better to do, they looked at the headlines and were like, guess I go raise funds, I guess that's what happens next. I guess this is the logical progression, right. The ink has dried up my cocktail napkin, idea. Time to go raise money. Probably not, you

Wil Schroter: know, something that's really funny about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the end already exists. You may just not know it, but that's ok. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups dot start ups dot com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it. I think this did give us a very different outlook and how we build products and I think this will be useful. A lot of the folks listening, we started to think about all of our product ideas, not even just in building the product. But Ryan, when you and I talk about marketing, right, when we talk about strategy as a whole, really every aspect of our business, we start with what I call just raw clay. And the way I use this, this this metaphor is I want you to think in terms of yes, this raw clay will become something beautiful, some object of art. But right now at its formative stages, it's just raw clay, right? I think we try to start not with raw clay, but we try to start with the final product. And the reality is we will never be in a more disadvantaged position than when we first start to build the final product. And only with time, do we understand what the product should even be? So I think what we've done well for ourselves and certainly in helping other founders is to start off with just saying, let's ask questions, let's ask lots and lots of questions. Let's run lots and lots of tests. Let's not get mired in it. Right. Let's also eventually, you know, put our feet to the ground and go and go run. But let's make sure before we head in a direction that we're, we've got some semblance that we should have in Ryan. You and I have talked about this on earlier episodes. Part of what's prevented us from getting ahead of ourselves is we're bootstrapped. We can't, we, we don't just have tons and tons of money that we don't know what to do with that. We can just throw out a problem and see if it maybe works. Right. That, that's the venture funded mentality. We actually have to test a little bit, test a little bit, test a little bit and have it back out. You know what I mean? Yeah,

Ryan Rutan: for sure. I mean, I think that we, we approach everything with an MVP mentality, like you said, it's not just the business, it's not just, you know, that, that macro level. Sure, we did that, but down to the micro level, right? Where, where we're thinking about like, ok, do we need another, do we need another member on the engineering team to another member on the sales team? Do we need to launch a new marketing initiative? Every one of those things comes with some version of testing and validation around whether that's the thing we need to go do now, right? And I think that this is a really healthy mentality to adopt whether you're venture funded or, or bootstrapped. Right. If you're bootstrapped, you don't really have a choice. This is your mentality because there isn't dry powder to just go see, hey, let's throw a million dollars at a product and find out if it works. Right. Most companies don't have that luxury. I'm not even sure I would call it a luxury. It leads to a lot of bad decision making. So yeah, the MVP mentality is, is super, super important. And I think that really, you know, your raw clay analogy is great. And I think that one of the things we have to be really careful of here is that the MVP isn't just an early product, right? This is where I see a lot of folks get this point, spend a minute on this. The MVP is a process whereby we ask questions and get answers. Now, sometimes those those questions come in the form of a prototype, right? And we want to see reactions to it. Sometimes those questions are literally just questions. How are you solving this problem now? Right. What are you doing? Where are you struggling in this in this process that we want to somehow impact to the point where like, you know, it needs to just be a a series of tests and right, it may never cobble together into anything that even resembles your product, but answers all of the questions that we would need to understand would a product like this even be worth building. But typically, what I see is that people will, will claim an MVP. But what they've really done is they just kind of build a beta version of the product and there isn't really an MVP process in place. They're like, well, this is the sort of the least we could do and have it look kind of like our product and now we're going to see what happens that's better than building the full version. But it's still not really an MVP to the point where I've started calling it the MVP the, mmmmmvp, the much more minimum, minimum viable product because this is what we really need to go and do, right? So that we can start to answer these questions one at a time in isolation and figure out is this worth constructing in its entire? Because so many people just jump in to our point at the very top of the episode. Here's my idea. Now, I'm just gonna keep building some version of this until it's the best version of this that can exist whether anybody wants it or not. Right? It sounds like a terrible idea, doesn't it?

Wil Schroter: Well, it happens, right? Like all the time I think with, with what we've adopted as more of a, let's test it and see mentality, everything you gotta, you gotta take leaps, right? A few years back, we launched our founder group product which is a eight person cohort that was designed to get founders to be able to talk to each other and share stuff. And we launched that a lot of people don't remember this or, or know this. We launched that as an in person product that was going to be in every major city in March of 2020. I think like the day they announced COVID and no one can ever leave their house. We announced, we announced it in person meeting product. So our timing was awesome. But we, we basically shelved it, you know, because it wasn't our main part of our business. It was an experiment. We shelved it. Now, here's what, here's where it got interesting. A bunch of the early founders that we had signed up, you know, to be the product when COVID hit after a month or so, they reached out and they're like, hey, can we still do those meetings? Like, because I'm kind of bored and I'm at home, like, I, I'd love to talk to other founders and I was like, well, no, because, you know, we kind of shelved it like, well, what if we did it over Zoom? And here's what's interesting. I didn't think it would work over Zoom. My fallacy. OK, to be fair. I just didn't think it would work. But we tried it like, hey, let's give it a shot. See what happens. And all of a sudden people started to really connect. Something else interesting happened when it was an in person product, you could only connect people that were physically close to you, right. So we were severely limited by who could be in your group or et cetera.

Ryan Rutan: All we can do is conduct better parochial networks, right? We can't change the parochial

Wil Schroter: nature of it. And then because COVID forced us to test the different model, it turned out that model was 10 times more effective and we scaled way faster. Then we got into it. We're building these groups and the groups are meeting and we started to notice that when people went to the meetings, about half of them wanted to sit and talk and like, you know, shoot the shit with their other founders. But the other were coming there with a very specific problem that the people in the room couldn't necessarily help with. Right? Say for funding, for example, if I was trying to raise money, I was trying to do like my, my seed round and the other founders, maybe a few of them raised some money, et cetera, but they weren't like funding experts. They were just, people had done some of it. I was in a bind. I came there to get help and nobody in that room could help. And so we were listening, we sat in those meetings, we said, you know, wouldn't it make sense if we just gave you like one of our advisors that you could just go to for stuff like this and they could explain to you how fundraising works and how pitch decks work and things like that. It turned out that wound to be wildly successful

Ryan Rutan: without sitting in the same room. Well, actually

Wil Schroter: Kate, I'll take it a separate then as we're doing that, as we're doing, uh, helping people funding and pitch decks and things like that. You and I are on office hours with countless founders and all of a sudden, we're like, you know, we keep saying the same thing over and over and over and over, wouldn't it be a cool idea to turn everything we keep saying into video series and courses and things like that? So we launched that and that winds up being wildly successful. Point is we started off even just a few other, a few years ago doing in person business where founders were gonna bullshit with each other. Now, we have a massive course library, right? That came from, that was never part of the initial idea, but because we just sat back and said, tell us what you need, we'll go build

Ryan Rutan: it. This is what the population of interest needs and wants. But let's go back to the MVP process here. What we didn't do was hear them say we need help with all these things and be like, OK, let's go off into a black hole. We're gonna lock ourselves in the lab and we are going to build a massive course library. We did not do that. We launched one, we had pitch deck perfection and that was it. Right. And we, and that was just a, that was a series of just a couple of videos with no visuals. Nothing backing up. Super basic. Let's get that in front of a couple 100 people and see what happens. OK, cool. They liked that. Here's how we can iterate. Here's how we can make this better. But you know, wasn't something where we just sat down and we're like, let's invest tons of time, tons of money, tons of resources at the distraction of anything else we could possibly be doing and see if anybody wants this right. We did not take that approach.

Wil Schroter: Actually, that is not true. Ryan, I took exactly that approach when I wrote by hand, 100,000 words for all of those same courses as blog posts.

Ryan Rutan: There was that, yeah, that, that, that may or may not have been ill advised. That was also 56 years ago, right? That was, that was, yeah. So

Wil Schroter: what ended up happening was I ended up basically thinking this is five years ago long before founder groups that we needed lots of content on our site and the start ups dot com site to cover funding pitch decks, business plan, equity, uh everything, right. So I basically chugged endless five hour energy for like what like 18 months, it was a long time and wrote the equivalent words wise of three full size business books in that time, right? Volumes of content that no one ever read. Why? Gee will, why? Because maybe no one was looking to answer their question of how do I get funding by reading a 40,000 page or 40,000 word blog post that you wrote about it. And the irony was I took all that same content repurposed it for what became our video lessons, et cetera. But some valuable things. Number one, did we have an active audience that we were gonna hand it to when I was done? Not really. Number two, did they want a 40,000 word blog post? Whoa, what a shock. No. Right. I mean, and I basically just instinctively overlooked all the things that I should have been asking, right? Simply because I didn't ask the questions. I didn't ask the customer. I said, how would you like this? They would said short videos. Cool. 40,000 block word blog post. Got it. You got

Ryan Rutan: it. I'm on it, right. I'll, I'll see you in 18 months. Oh Jeez. Yeah. But it, it's, it's, it's so hard. I mean, we get caught up in this, you know, I think as, as founders, one of our, our core traits is that we're problem solvers and we're builders and we're doers and so we, we forget sometimes the should I question? And we get caught up in the can I like, could I write 40,000 words on Start Up finance? I think I could. Let's find out I'm gonna go and do it right where they're asking. Should I write 40,000 words on Start Up finance? Uh, according to what my audience wants. I'm right. Look, if you're looking to kill time, it was a great exercise. Uh, look, and we've, we've managed to repurpose. But, yeah, it's one of those mistakes you, it's, it's easily enough made. And in our case, look, we had enough other stuff going on. It didn't hurt us. But when you see stuff like this happen at the early stage of a product where this isn't a mature company where this isn't a large team where that type of distraction could have meant the difference between survival and not survival. It's a really, really important distinction, right? Taught

Wil Schroter: me a lesson, man. I mean, I'm so uns shy now whenever I would go down any of these rabbit holes, right? Like I'm just finishing up a course now I'm building an MVP, which is appropriate for what we're doing right now. And every time I finish another part of the course, I'm like, man, I don't want to record one more lesson unless I'm sure someone's gonna read this or, or watch this whatever because I realized that like what a giant colossal mistake it was to run down a path without asking anybody whether I should have. Now let me say this though. Sometimes you do all the right things you ask all the right questions, you follow everything we just said to the letter and your product still sucks. Or, or at least you perceive it like my company is not working. What do I do then? Well, a few things that, that I, I think are really important for us to cover number one. Sometimes it actually is a good product that no one's ever seen. I would argue that the start ups dot com product is a phenomenal product that only 10% of the world has seen versus, and I'm sure being our CMO you'd feel the same way, but that's a big part, right? You're assuming that because we built it, we also had the distribution to support it and I don't think it's always

Ryan Rutan: true. No, no, no, it's not. Yeah, that's the thing like the, the, the best product in the world when it's kept a secret, still secret, right? And so these are one of those things that we have to be, we have to be mindful of, right? Is the product not working simply because lack of distribution or, or something else, right? There's all kinds of market forces that, that come into play that even if we have done everything right, that it still may not work or it still may be struggling to catch its stride or whatever. But very few products that that were not well conceived didn't come from asking the right questions and were just thrown together, you saw their day in the sun and then somehow magically worked is just a crap product. Right? That, that part never happens.

Wil Schroter: Well, you know, it's funny, our viewers and listeners right now are consuming a product right now, our start up therapy podcast that Ryan and I get help hilariously mocked for as a wonderful product that not nearly enough people know about more consistently than any other like compliment that we get is your podcast is awesome. I can't believe no one knows about it. We're

Ryan Rutan: trying to keep it a secret. This is, this is unintentional exclusivity, folks basking it. Right. You are among the very few who get to hear all that we do here revel in that.

Wil Schroter: It's hilarious to me because it's on the one hand, it's the greatest compliment and the other thing, it's, it's like our greatest fear, right is that we build something that no one knows about. So if we were to stop doing the podcast, heaven forbid, and both of our listeners would get turned away. I think we'd be in a position where like where all of a sudden we'd be like, ok, damn. Like did the podcast not work because we did something wrong with the pod cast because we have a lot of really passionate listeners or was it because we just didn't reach enough people? And I would argue it would be the latter, you know, if we ever came to that decision, I'd say not the products felt right. Like we said, what we wanted to say, we definitely aligned with what was going on in our, in our audience's head. But yeah, not enough people knew about it. So I think that's a very real outcome of right product or no audience,

Ryan Rutan: no audience. Yeah, we're just, we're, you know, right products, right audience, but lack of distribution into that audience, right? So we know we've clearly hit our audience, our audience knows who they are and, and we know who they are. It's how you reach more and more of those. Yeah, it's funny this, those backhanded compliments. Like I love your podcast so much. I've binge listened to all 230 episodes in three weeks of which I'm like, is there even enough? Like, what, what speed are you listening to us on? Because I cannot imagine listening to us on anything more than like maybe 1.25 because we both already talk kind of fast. So that's a lot of time. But then the, the follow up to that would be I binge listened to every one of your episodes and I'm talking about it nonstop and none of my friends have heard of you. I was like, there, it was there, it is, there's the second part of that I knew it was coming.

Wil Schroter: Yeah, perfect. So, so, ok, let me give you another scenario. I actually have a great idea but at the, it's at the wrong time now. It's some, at the time it's always hard to tell that it's at the wrong time. But I'll give you an example of that years ago. And I, I mentioned this on the pod before that I built afford it dot com with Elliot and we're doing buy now pay later, right.

Ryan Rutan: Also known as a firm in today's life

Wil Schroter: firm, Klarna, like you name it, right. Multibillion dollar companies doing exactly what we were doing and we were doing it exactly at the wrong time right. Now. Look, it happens at the time. You can't tell the difference. The world wasn't ready for what we were doing just yet. And frankly, we weren't a good enough player to last long enough to make it. Right. So again, I'm not just blaming bad timing it. That that's our fault for not making the product sustain. The

Ryan Rutan: timing. Definitely didn't help at a point where people were literally defaulting on their mortgages left and right. The idea of selling them consumer products. It's like, maybe not.

Wil Schroter: Yeah. Right. We we're launching a high interest consumer facing product at the height of the mortgage crisis in 2007. Not an awesome time launching that product, right? No different than we were just saying about founder groups launching it at the onset of COVID, right? Like sometimes you hit the market timing just right. And sometimes you do not. Now that said sometimes that just means we've got to shelve it for a minute however we can and we, you know, we bring it back at the right time. That's OK too. But let's talk about the third one, which is not, this was just the wrong product, this was the wrong product at the wrong time for the wrong audience. OK? In I wouldn't say fundable was that it was just the best thing I, you know, I, I can use as an example. You use that experience to find out what else you could be building right now. Sometimes what you should be building has nothing to do with what you're building. Ah, it's a pivot, right? Yeah, because sometimes you make the wrong bet. When I think back to I mentioned, you know, my old business partner, uh Jamie who started Ring prior to that, he started something called the power pot, right? And it was just this giant battery. Essentially you could take around with you. He ran it on Kickstarter. He did a bunch of things. He made a little bit of cash out of it. But at the end of the day, he was like, dude, that's just, it's not the right product, right? And then he did a bunch of pivots that eventually became ring. Now that said when we look at what we're doing and we find out we just got a stinker like we just picked the wrong product, the wrong market, whatever. Yeah, then we drop it and we move on to the, the next thing. But I think there's a lot of, a lot of cases where founders assume they've gotten to that point when they haven't exploited the entire market. I mean, a positive way, like, find, found all their customers, right, where they haven't shaped the product enough, they were so stuck on one version of the product Ryan that they weren't willing to say, well, maybe we should be builded something else for this customer. What do you think? Like, I, I think not asking those questions is more dangerous than anything. 100%.

Ryan Rutan: It is, this is why I'm gonna go back to falling in love with that population because then you don't feel stuck. You don't feel like, oh this is the end, you just start to understand what they actually need. So my, my process is typically if I'm I'm talking to a founder or I'm thinking of my own ideas, it's who benefits from this, who benefits from this most? Who am I talking about helping? Here? Is this a product for founders? Is a product for parents? Is this a product for, you know, friend and developers for B to B SASS companies? Who is it for? How much do I care about helping them? How much do you care about helping them if I'm talking to the founder? And then it's, you know, Well, you know, I, I don't know, I just think this is a good idea and it's like, OK, let's, there's red flag number one. If you don't really care about who you're helping, then you are putting yourself into the do or die category with this particular product, right? Because you're not gonna care enough to want to help them with anything else. It's just like I had this idea, let's see if it works. So for me, I just go from the idea and I say who really benefits from this? And then, OK, cool. Now let's dig in and see. Do they actually have the precursor, tangential problems that would indicate they need what I wanna do. And this is where, you know, we just start talking to them, we just start getting that feedback. The thing that I really loved about what we've been able to do over the last, you know, 12 years is we fell in love with founders. We knew this is the population wanted to help. And so we never felt like we were at this like, OK, well, crowdfunding for equity is not gonna work. I guess we'll, we'll go do something entirely different. I guess we can't help founders, right? That's it. I mean, no shortage of challenges, no shortage of problems. And because we love helping founders, we just get to keep reinventing and rethinking and reimagining how it is that we do that over time, right? Like it took us, you know, almost 10 years to, to conceive the, the founder group piece. And now I can't imagine not having, right. But this is how it goes, this is that iterative process where unless you intentionally pick something where it's like so myopic and so product focused that if it works, it works. If it doesn't, it doesn't, you have infinite flexibility, right? We can help founders in any way that we want to, you can help whoever your population of interest is in any way that they actually need. And that's kind of the point. Right.

Wil Schroter: I agree. I agree. I think, look for most of us, we're builders, we wanna build stuff. So when we have an idea, we wanna go after and build and that's the fun part. I get it. But we, we've said this a few times in this episode. It's not so much a matter of, can we build something? Yeah, you can probably build it. It's should we build something? And I think when we look back at all, all the shots on goal that we've had, whether it's at start up dot com or in our previous careers, et cetera. Our probably most common problem or, or challenge that that we've run into is we got so caught up in wanting to build something, we didn't stop ourselves and say what's the right questions we should be asking. And I think for any of the folks listening for founders and builders like ourselves. We shouldn't be in the business of building. We should be in the business of asking questions because the question will inform what we built. But if we get in the habit of just asking questions and thinking in that mentality, we don't lose because no matter how many times the market changes, our customer changes, et cetera, we're always using the same script, which is what should I be doing? What should I be doing? And that allows us to build a perfect product every time. So in addition to all the stuff related to founder groups, you've also got full access to everything on start ups dot com. That includes all of our education tracks, which will be funding customer acquisition, even how to manage your monthly finances. They're so, so much stuff in there. All of our software including Biz plan for putting together detailed business plans and financials launch rock for attracting early customers and of course, fundable for attracting investment capital. When you log into the start ups dot com site, you'll find all of these resources available.

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