วีดีโอ

Agreed. People often forget the "viable" part in "minimum viable product".

That's true. The point Abdul was making is that you can turn on monetization at any time, and when you do, you can remove anyone who isn't willing to pay for it. But if you make it free you lower the barrier to entry and get people using it and hopefully hooked on it. Then when you later turn on monetization, you should hopefully have iterated and improve the product quite a bit and gotten a few habitual users who would rather pay than lose access.

Glad you enjoyed it!

Glad you enjoyed it! Yeah, David is an absolute beast when it comes to building and growing SaaS businesses. Super humble guy too, considering very few people ever build a SaaS business to $1m+ and he's done it multiple times.

I'm not sure I'd go that far. I know a few VCs who are genuinely wonderful people with a strong moral compass who love helping entrepreneurs - most are former founders themselves. Plenty of sharks as well of course, but you get that with any industry. The main issue IMO is around goal alignment. VC's need to deliver big returns, and given how risky startup investing is, that means they need a unicorn to pay for the whole portfolio and then some in order to raise another fund from LPs. If that doesn't happen, they can't raise another fund and don't get to play VC anymore. But for many founders - especially in B2B SaaS - the goal isn't necessarily to swing for the fences, it's to build a highly profitable business with predictable revenue and growth. Selling a business for $10m or $20m is still life-changing money for most people, especially if you managed to keep most of the equity. See how what's best for the VC and what's best for the founder can often be at odds with one another? If you're doing deep tech hardware or biotech or even genuine AI (not just. awrapper around ChatGPT) - look, realistically you're going to need a ton of money to get that to market. But B2B SaaS? It's never been cheaper to launch one, I really think raising VC for that makes less and less sense as time goes on. Especially with all the alternative revenue-based finance options available now. Also, something that doesn't get discussed enough is that raising VC isn't really something you choose or choose not to do - it's more a function of the business model and whether raising capital is the best way to execute it. Nick mentions this in detail and it's an important point more founders should talk about.

You guys are crushing it at AppSumo, this interview was a lot of fun and super insightful too! Love your channel by the way @Noahkagan!

Yeah David's a super talented entrepreneur - but he works really hard too. As they say: once is a fluke, twice is a coincidence, three times is a pattern.

@@ryan-wardell how can I join his startup / company?

Thanks! I appreciate the kind words! Yeah Alex Hormozi is a weapon, would love to interview him one day. Glad you found this interview with David useful!

Thanks mate!

I really don't see how you could get enough traffic from a $5 total campaign to get any meaningful insights, that just won't give you a large enough sample size in most cases, unless you're paying a few cents per click, and that's pretty unlikely in most SaaS verticals in Western marketings.

Yeah the first step us coming up with all the ad copy variations; the second step is to actually set up all the ads and test them to see which combination works best.

Having been there, done that, I’m building an Immortal Lifestyle Startup.

I like that approach a lot. "Lifestyle" gets a bad rap sometimes but more and more I see that appealing to founders over the VC backed model.

@@ryan-wardell I CAN work on my thing, that I can control. I CANNOT make a VC notice, call, take a meeting, make a decision, setup a closing. If you think about it, seeking VC money is actually a crazy person endeavor.

I think it's more that Nick tapped into the way his customers like to engage with and buy new products. It's a little bit like what Aaron Kassover spoke about when he mentioned that his customers actually wanted to talk to someone over the phone vs exploring the app for themselves. th-cam.com/video/HiKsaU573gM/w-d-xo.htmlsi=gMiISWUkS0ICwa9A&t=840

great advice!

I think it's one of those things - you can teach a salesperson to be a better salesperson, but you can't teach someone to become a salesperson in the first place. You definitely need a minimum level of charisma and people skills to be successful at sales. People need to like you and trust you before they'll buy from you. That said, lots of people are warm and friendly, but struggle to move a sales conversation toward an actual purchasing decision. That's where some structure and training really helps. I can't really comment on the drama thing, I know plenty of good salespeople who have zero background in that so I don't think it matters a whole lot. Personality matters much more IMO.

Not even for the accelerator. The $20K for 6% of AirBnB deal is the single best angel investment in history. YC can't even hit home runs like that consistently; 500 and Techstars have some success stories too but nearly all the other copycat accelerators have pivoted to being "corporate innovation" labs - ie glorified PR exercises. There's still value there for a certain kind of startup, especially if you're very early, or don't have a personal network. Or if you're doing something that requires a lot of capital - like deep tech or hardware or biotech etc. But if you're building a SaaS business today, there are so many better options than an accelerator program.

@ You, Sir, are stunningly right, on the numbers. I just meant “yay! bag of money!”. Their model doesn’t produce anything repeatable-so back to your original point: best of a bad game. Great video btw!

Short answer: it depends. Long answer: you need both a sufficiently large sample size (at least 100, ideally 1000+) AND you need enough time to elapse for someone to complete a workflow cycle and to eliminate any seasonal variation. Workflow cycle = all the steps required to complete a particular task. If you have a cold email campaign that takes 6 months to complete, you can't really make any inferences about whether it's working or not when you're only 1 month in. Seasonal variation = time of year. If you only run an experiment around Black Friday for example, you'll get very different results to when you run an experiment during summer when people are on vacation. Here's the catch though - in the real world you don't have unlimited time and money to run experiments perfectly; so I usually recommend focusing on "quick win" experiments that you can prove/disprove within 3 months first and worry about longer term experiments later.

Glad you enjoyed it buddy!

Nope! That's the beauty of it. Sometimes they'll want an upfront or ongoing fixed fee, but often they'll be happy to get paid as an affiliate on a performance basis. After all, none of the other results on that list are paying them anything. The appeal of doing this for a SaaS business is they just got themselves some sweet, sweet passive income, on a blog post they already wrote and published.

Glad you liked it! This was originally a member's-only video within the StartupSauce Community. Adam's actually a member in there. Really smart guy, and a very talented entrepreneur.

1 - Do we work well together? This isn't a dealbreaker, but it is a massive green flag. 2 - Are we both passionate about the problem space? If not, motivation will wane eventually 3 - Do we have complementary skill sets? And specifically, do those skills include either sales, marketing or coding? The hacker/hustler dynamic exists for a reason - check out how Andy Allen from Hike and his cofounder operate together: th-cam.com/video/27KsNGGcxpM/w-d-xo.html 4 - Do we actually get along outside of work? There will be good times and tough times, and becoming cofounders is like getting married. If you don't actually like each other as people, it won't work.

Great comment, totally agree. Really don't think you should have 5 founders under any circumstance though. It's a mess at board level but it's also going to be a mess on a day to day level as well.

@@ryan-wardell Oh it was. In hind sight we should have put some of the advisors and investors on the board instead of ourselves. Maybe just the CTO, but a lot of egos dictated elsewise.

How? Can you give numbers or data to invalidate his claims or are you too much of a wimp to respond?

From YC's own website: "Roughly 90 percent of startups end in failure. (YC is an exception; over 50 percent of YC companies that are over five years old are still alive)." www.ycombinator.com/library/D0-startups-for-students#:~:text=Roughly%2090%20percent%20of%20startups,years%20old%20are%20still%20alive). Not only do half their startups fail, they're actually proud of it. Jared Haymen from Rebel Fund (which specifically exists to invest in YC companies) calculates that 50.2% of YC startups have failed after 12 years. jaredheyman.medium.com/on-the-life-and-death-of-y-combinator-startups-d58aa03421f0

@@ryan-wardell If 90% of startups fail, meaning 10% are successful, and YC's success rate is 49.8%, that means they've nearly quintupled the likelihood of success. Does that not mean they are actually extremely successful?

YC only accepts the top 1.5% of startups. If you cherry pick the top 1.5% in any field I’d expect them to be vastly more successful than average. In that context, how much value is YC actually providing?

@ryan-wardell This assumes that their selection filter is perfect though. The fact they select 1.5% of applications doesn't mean they actually get the best 1.5% of startups from the application pool.

Sure - actual AI (not just chatGPT with a wrapper around it) and legit innovation, hardware, deep tech, biotech - all that stuff requires serious capital upfront, often for many years. But SaaS? It's never been cheaper or faster to build a SaaS business than right now, which means most of that capital is going to be used for marketing rather than product. But if you need money for marketing, there's now a bunch of non-dilutive capital options available now like revenue-based finance - which allows you to keep the equity and, just as importantly, doesn't require the massive 6-month distraction of one founder having to go on an investor roadshow to raise capital.

@@ryan-wardell …and that cost, is exactly why “A.” “I.”, which is neither btw, will have a very hard uphill battle towards profitability. Look at more conventional plays, like Uber: an Uber driver pointed out that Uber itself lowered the prices, for no real reason….and there are NO economic hurdles to a business like Uber’s, except branding, and breaking the law(s).

Going through an accelerator plus 2-3 funding rounds mean the founders get diluted down to nothing. Owning 100% of a $10m company is the same as owning 10% of a $100m company - but it's WAY easier to build a $10m company.

@@ryan-wardell You do have more impact (and bragging rights + future partnerships) on the world from $100m company than a $10m company.

Sure - and that certainly appeals to a certain type of founder. Conversely, I'd argue that if you want to do that, build a $10m company first (it's way easier), sell it, then use the money as seed capital for your $100m idea. If you can skip an accelerator and a seed round, you end up owning way more of that $100m company at the end of the day. Otherwise, even if you're one of the very few founders who ever builds a $100m company, the vast majority of the money made from it goes to investors rather than to the founders.

@@ryan-wardellcan I have super thumbs up and thumbs up 10x?

@@ryan-wardellhow many years can you work 72hrs a week? In the three weeks before my startup got bought by (at the time) world’s biggest company, I worked > 100hrs. Lunacy.

Check out the interview with Aaron Kassover - he turns away bad-fit customers early on: th-cam.com/video/HiKsaU573gM/w-d-xo.htmlsub_confirmation=1 I do actually know a few other SaaS founders who send customers who aren't a good fit to competitors - and take an affiliate cut along the way. Strange but true.

Always a small test project first. Always. Hire 3-4, give them a test project - then pick the best one.

Glad you enjoyed it! Abdul is a SERIOUSLY talented entrepreneur, was a lot of fun to interview him.

It's about overcoming objections as well. Most B2B SaaS businesses are ultimately competing with Excel, or even pen and paper. The cost of your software subscription is often trivial compared to the cost of changing to a new system, integrating it with all the other tools they use, training all their team members on it etc. Switching costs are real.

Check this other interview too, 40:30 th-cam.com/video/HiKsaU573gM/w-d-xo.htmlsub_confirmation=1 I talked to Aaron Kassover from AgentMethods about how and when to experiment and take risks.