TMBA 563: How Software With a Service (SwaS) Startups Can Succeed Big in Traditional Industries
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One of the promises of entrepreneurship is that there are opportunities to make money all around us if we can learn how to recognize them.
On this week's show, Laurence Taylor shares the false starts, trials, and mistakes he made before hitting on something successful.
Laurence and his wife are the founders of HipTen, a SwaS (Software with a Service) consultancy that works exclusively on the Salesforce platform for the insurance industry.
Prior to getting into that niche, they were struggling, as many small startups do, to find their place in the market.
Laurence joins us today to talk about the pros and cons of SwaS startups, what it's like working with your spouse, how they saw an opportunity work within the insurance industry, and much more.
Listen to this week's show and learn:
What kinds of services HipTen provides. (10:02)
Why they chose to work on the Salesforce platform. (17:04)
Laurence's thoughts on the SwaS business model. (24:10)
Why he isn't worried about relying on a company like Salesforce for his business to survive. (31:27)
Laurence's advice for people considering a SwaS business. (42:46)
Mentioned in the episode:
Before the Exit - Our New Book
TMBA Masterminds
Partner With Us
The Dynamite Circle
Dynamite Jobs
Dynamite Deals
Tropical MBA on YouTube
Laurence Taylor
HipTen
Salesforce
Upwork
Loom
DocuSign
Vanilla Forums
Enjoyed this podcast? Check out these:
TMBA293: Start a Business This Weekend Using the Software With a Service (SWaS) Business Model
TMBA307: The One Where a Business Starts on the Show
TMBA557: Ascending the Staircase
This week's sponsor:
Today's podcast is sponsored and hydrated by Drink LMNT.
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Thanks for listening to our show! We'll be back next Thursday morning 8AM EST.
Cheers,
Dan & Ian
Full Transcript
Laurence:If you speak with a lot of these companies, and you tell them what you're looking to do, they're often really interested and they go, ‘Oh, great, we've struggled to find partners that really know our product’. You know, ‘if we get a lead, would you be interested in taking it?’ And you're like, ‘Heck, yeah, I'll take your leads.’
TMBA Ident
Dan: Hi y’all, welcome back to the podcast. I got the Bossman here to drop some .. What are you gonna drop today?
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Ian: I don't know, I’m nervous. What am I supposed to drop today?
Dan: Let me allude to the concept of today's episode. It is something of an insurance policy. There is money and opportunities that can materialise in your bank account in relatively short order, all around us. And when you know the simple techniques to see where that money is flowing, and how you can tap into it, that can be an opportunity, an insurance policy and a reliable way to make flexible income from anywhere on the planet. And regardless of your situation right now, that's sort of the promise of today's ep. Sound exciting?
Ian: I want to make money. Yeah.
Dan: We're gonna get into today. First, I want to do a little housekeeping at the top. We appreciate all the emails, I've been getting a lot of thoughtful responses to the concepts presented on this show at Dan at TropicalMBA dot com. We're building future episodes around a lot of those responses and you know what? A lot of people complain about their inboxes because, of course, anybody can send you an email. However, so many listeners of this show take the time to craft thoughtful responses to the ideas presented here. And we talk about them, discuss them on our production meetings, they definitely inspire us.
It's interesting when you have a public brand like this, you do receive every morning I wake up, I receive maybe 20 ‘kind of’ pitches, like people trying to get something out of us. And I don't think there's any reason to be salty about that. That's actually a really nice thing. It means people noticing, they want something, there's stuff happening. I appreciate all that inbound. If all that inbound is problematic, you know, you can set filters up but also, you know, set very real filters in your business like when I compare my email inbox to my Dynamite Circle inbox, you know, where you have to pay a membership, you have to make an application you have to have certain goals and standards in mind all this. It's just such more qualified communication at that point. So I'm still thankful that I wake up every morning honestly and receive 20 pitches for folks that want to come on this podcast and peddle their wares. Now, today's episode, one of the reasons I was so excited about it is, it's decidedly someone who has zero to gain from sharing their knowledge with us here today.
Ian: Which is often the case with I guess, which I think is a great thing.
Dan: A couple of news items. I gotta say, the September zeitgeist is in full bloom here in Austin, Texas. I was driving around the other night. And I just felt like all of a sudden, the whole state of Texas decided that COVID wasn't a thing anymore. We were just gonna go back to normal life and I reflected on it a little bit, this is also something that happens every year in the business community where we talk about ‘armpit August’ and everybody's on vacation and figuring out what the rest of the year is gonna look like and September, I really feel like people have clicked into gear in figuring out how they're going to drive their lives and their businesses forward. So it’s been kinda energising.
Ian: I'm trying to decide if you make these concepts up and then you make life fit into them, or if life actually does fit into them. That's like my biggest question right now.
Dan: It’s the fundamental question for every theorist.
Ian: Yeah, exactly. But I will say this - hiring has up ticked. And over at ‘Dynamite Jobs’ we see this happening, and I guess it is the case from talking to other people, it is the case that you think like, ‘Okay, this is a sprint, we're kind of towards the end of the year. You know, Q3, Q4, what can we actually accomplish before it gets to be the holiday slump? And so over at ‘Dynamite Jobs’ we have seen a huge push in terms of people trying to hire before the holiday season.
Dan: Before we jump into the episode today, I'd like to give you an opportunity to give us your pitch boss, man. I mean, I know we have an exciting software platform coming down the pike at ‘Dynamite Jobs’, but it's not quite public yet. Let's talk about what is public, what are we doing on a day to day basis to help listen to the show at DJ.
Ian: Filling jobs. You know, ‘Dynamite Jobs’ started as a job site. Basically we're aggregating ..
Dan: A job board.
Ian: Yeah, we're aggregating and also posting what we thought were the best remote jobs. like the no BS jobs, the jobs that we wanted to have when we were younger. And certainly, we've posted jobs on there. It's grown a lot in the last couple years, especially the last year because you and I have put a lot of focus on it. We have actually some really exciting software news coming up, but I'll save that for later. The work that we've been doing recently is helping people hire and specifically helping people remotely hire, so finding amazing candidates and placing them in the companies. Early on in this venture. Dan, one of our main objectives was placements. And this is still one of our main KPIs is, how many people can we place in remote jobs?
Dan: Yeah, at this point, it's hundreds and hundreds of people that we've actually which is cool.
Ian: It really is. And I think the interesting thing is that our pool of candidates and people that come to our site, word of mouth is getting out there. Certainly because Google's not helping us out at all.
Dan: I'm burying the lead a little bit. So let me just say it and have you respond. Last month we booked $16,000 of revenue at Dynamite Jobs, how do we do it?
Ian: We're actively placing people in companies. So basically what that means is people come to us and they say, ‘’Hey, I've got this position to fill. I haven't been successful in it before or it's above the bounds of my team, or you know, we don't have resources’, whatever it is, we go out there and we find you the perfect candidate, and we place some in your company. And basically what that means is we do all the interviewing, we do all the screening. If we need to do technical assessments, then we send those out to people, we've even on some occasions, reviewed technical assessments. So basically, we completely vet candidates and deliver them to you, generally somewhere between three and five people and they are placed in your company within three to five weeks.
Dan: So we’ve got a team of five that understand bootstrapped businesses. And all it takes is, if you want to go from having to hire yourself to having a 30 minute phone call with us instead and then having us go out and take care of the vast majority of it, we have different price points for, you know, whether we take care of all of it, or whether we take care of just promotion and getting you the right candidates. If you're stressed out about hiring, and you want people who understand your business to bring you the right people that are amazing, that's what we charge for and it's worked. Now you can do the math on five people versus $16,000 a month and figure out that it's not exactly a profitable success yet, but we're getting there and hopefully we'll have some, you know, continued positive milestones to share on the show in the upcoming months. So let's get stuck into this conversation and I hope the details shared today will be inspiring to you on your wealth journey and Bossman and I will be back at the end to share some reflections.
Of course, we get so many emails from listeners that are interested in entrepreneurship. But there's this vagueness around. How do you get started? Where do ideas come from? And how do you make it happen? The proposal here is simple, Ian, if you are open to it, sit down and dig deep into what you might already have going for you and combine that with some very simple research tactics that will be illuminated on today's show. And if you're willing to start combining that with starting making some sales calls, and some cold proposals, you can begin getting a business off the ground as soon as you like. Because today, we're going to be talking about a business model we're kind of a little bit in love with. It's called SwaS and that stands for ‘software with a service’. The idea is simple: you take an existing product. And that's the beauty of it. You don't need to employ extremely expensive developers or build one yourself and use it as a tool for providing a service to solve problems for clients.
Essentially you charge for the implementation of a very expensive thing that companies have already decided to invest in. And that's just what today's guest, Laurence Taylor, and his wife and co founder did. They established Hipten using the platform Salesforce, and Laurence is going to share the mistakes they made along the way, so you don't have to. But there's a lot more we covered today, including working with your life partner, using your ‘career capital’ to get started, and why niching has solved a lot of problems that Hipten experienced in the early days. So just a little background. Hipten is a totally remote company. And I know, because they're in the DC, Lawrence and his wife have lived all around the world including Mexico, Spain, and more recently, the US. Hipten has 10 employees currently, and their annual revenue is in the high six figures. So let's jump right into it. We started out by discussing what services Hipten provides.
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Laurence: For those who don't know what Salesforce is, it's kind of ‘do anything ‘platform, you can kind of do marketing, sales, customer support. The list goes on and on. It's a ‘Swiss Army knife’ of features. So we use the platform to help them you know, just be a bit smarter with how their business works. Particularly because insurance is such an old industry, you know, it's kind of pen and paper, Rolodex, business cards, it’s any kind of technology you can slice and this is going to help them be better. So that’s where we come in.
Dan: Now you guys, you know, you're young technology forward digital nomads. Now we're combining one of the oldest marketing platforms on the web, Salesforce. It's one of the original SaaS success stories. And now it's just an absolute behemoth and, combine that with the insurance industry, which is equally, I would say, entrenched. It feels like maybe a lot of people listening to this podcast would think maybe there's not a lot of opportunities in insurance. So you describe to me the process of how you guys connected the two and saw opportunity there for yourself?
Laurence: Well, you're quite right, insurance, it's a dinosaur, you know, it's hundreds of years old. And, you know, a lot of the guys and gals as well have been doing the same thing for decades. So, that is one of our challenges, introducing new technology because people don't like change. But there are kind of a new breed of insurance companies popping up that are very tech forward. How did we get into it? We don't have backgrounds in insurance. Neither has my co-founder. But, you know, we went through a process of, you know, when we started our business kind of trying everything, any client that came along, we would, say yes, and we'd happily take their money and kind of, you know, try and try and get them some value. But I'm sure most of your listeners know, when you're kind of everything to everyone. It's really difficult to be good at anything. And you know, every time we came across a customer, we had to start from the beginning and learn what their business was, how do they make money? What are they interested in? How does the marketing work? The list goes on and on.
And then your marketing material or your processes, everything is kind of, you know, haphazard and ad hoc each time. So we kind of wanted to go through niching, you know, even in those early days, and we kind of tried our hand at a few, we sort of thought maybe nonprofits might be great for us again, give back. It's fun, put a smile on people's faces. We didn't like that so much, there wasn't a lot of money to be made either. So that didn't really fit some of our outcomes. And we also tried SaaS, but we had a couple of insurance customers in those early days. And, you know, we kind of dabbled with the idea and we eventually came back to it, and eventually kind of went all in on it. And, you know, it's been great. It's been probably one of the best decisions we made, not without its road bumps, we had to really bring ourselves up on how insurance works, but you know, it's really paid off for us.
Dan: Let's circle back to talk a little bit about why you're an entrepreneur. Can you take me back to, you know, where you grew up? And what sort of things led to you seeking an alternative career path?
Laurence: You know, it had little to do with my career. I'll tell you the story. So you know, I'm from New Zealand originally, I've kind of worked for, you know, technology companies in New Zealand for years, pretty good background in that space. I decided to move to the UK to London, like a lot of Kiwis do on their overseas experience. And basically spent a few years there, had a good time. And then I met my now wife, while I was travelling in Barcelona, actually. We kind of travelled for a few weeks and we were like, ‘Hey, this is great. We'd like more of this’. And then we kind of went back to our respective countries. I went back to London, she went back to the US. We were trying to plot, ‘How do we make this happen?’ You know, because visas are hard to get, right? If you want a visa for the US, it's a several year process. Same for the UK. How could we pull this off? And you know, we started brainstorming all you know, we could volunteer, we’re both native English speakers, we could teach English. And I think through the process, we kind of came across, you know, material, like the TropicalMBA, and we kind of started listening to that, and we're like, ‘Oh, actually, maybe we could do it a different way. Maybe we could create a business and, and actually have some money while we travel instead of kind of living, you know, day by day and week by week’. And so we just kind of started hashing out ideas and we tried different things.
Dan: What year was this Laurence?
Laurence: That was probably about six years ago,
Dan: So you guys are scheming over the web about - just let's make money online so that we can live a life where we can be together and enjoy the sort of experience we had in Barcelona.
Laurence: Exactly. We knew if we travelled, we wouldn't be subject to the visa restrictions. If we did three months here, six months here. We both love travelling. So yeah, we were scheming over text message, over email, trying to kind of come up with harebrained schemes that could make money and most of them failed. So that was good. And then this one kind of stuck out and kind of worked.
Dan: Can you tell us about some of the things that you did that didn't really get off the ground?
Laurence: Well, my wife actually worked for a company teaching English I think to South Korean students at one point. They would basically hire a company to upskill their employees so they could do better international business. And so we thought, ‘Hey, that that could be an idea’. So I think we tried to teach English to some of the wealthy Middle Eastern countries. We were cold calling, you know, Dubai and Qatar and things trying to see if they wanted to teach their employees English. That was one of them. I kind of did an IT company thing for a while, but IT you know, it is no fun because there's desktop computers and printers and all sorts of things that you physically may need to touch and unplug. And that was a terrible idea.
Dan: And so what was the first thing that you were like, ‘Hm, maybe this is something?’
Laurence: It was really by chance because I used Salesforce over the years I was familiar with it, kind of used it, you know, a few companies and worked with it. That never really considered that as a possible option. And then by chance encounter, you know, a former colleague was basically telling me, his clients were ringing him up saying, ‘Do you know anyone that does Salesforce consulting, we can't find anyone, they won't return our calls’. And I thought, ‘Oh, that's interesting. They won't return your calls’. And so it was at that point that we started looking into it in a big way and seeing if there was, you know, a space we could fit in? And because it's all virtual, it's all software. Again, you can do it anywhere. So it kind of ticked all the boxes for us.
Dan: There's not a single person listening to this podcast that doesn't have fluency in at least one software application that helps businesses grow. Can you take me from that feeling of confidence with Salesforce to making money from it with clients?
Laurence: We didn't really have any context in this space. All the clients we, you know, we won over the years, we had to go out and find them. So it wasn't even like we could tap a network and be like, ‘Hey, you know, can we help you with this?’ And it was scary at the start, you're kind of coming in as an expert and perhaps it's the first project you've really done on the platform. In the early days, there was a lot of winging it, there was a lot of googling,, a lot of Upwork you know, hiring freelancers to help us with different things. And yeah, it was scary. It was exciting, and to look back now, you know, we're, it just seems like that was another life.
Dan: So you find you find a client, say on LinkedIn or ..
Laurence: In the early days, we did cold email marketing and we had some luck actually, because you know, this products like ‘Builtwork’ that you can pay them and they'll give you a list of companies that use a particular piece of software, like Salesforce is pretty easy to spot a lot of the time.
Dan: You can spot it and you can start it for reasons like their emails are generated from something that looks like a Salesforce platform, stuff like that?
Laurence: It's kind of like if they're using the webform feature of Salesforce, to get web leads and things, then you can kind of spot it. Now we know it doesn't work for all Salesforce customers. In fact, probably most of them you can't spot but a select few you can and they turned out to probably be the smaller customers that were probably easier to win in the early days. And in fact, we were actually pitching them an unlimited support offering, you know, kind of looking at the ‘WP curves’ and going, oh, maybe we could do this for Salesforce. I don't think anyone's doing this.
Dan: WP curve. For example, can you describe what was inspirational about that? Or what it is for the audience?
Laurence: Yeah, they had a kind of a WordPress support model where you pay a set price per month, then you get as much as you want, as long as it kind of fits a mould of different requests. So we thought, ‘Hey, maybe we could do that for Salesforce as well’. If you're doing these 20 items. We'll take care of it for you under a fixed fee each month. We don't do that anymore. And we kind of realised that was maybe not as profitable as we wanted, and that we could make a lot more by doing bespoke things that our customers really wanted. But in the early days, we got a bit of traction. And then we spent a lot of time actually on Upwork, we found quite a few clients on there. Some of those clients, still customers today. There's constantly jobs being posted, you just have to get really good at pitching. So you have a small little window to pitch and we would record videos of ourselves and you know, introduce ourselves our video and include that in our pitch. And I think for most people who just do a generic pitch we stood out above the bunch, so we went a lot of work that way.
Dan: Interesting. So what are some other ways you can be good at pitching and give me an idea of what one of these early deals might have been that was a good one.
Laurence: Well, in the early days, a good deal would have been maybe five to seven thousand. Nowadays a good deal is six figures plus. If you've seen a lot of Upwork pitches. It's so generic. often they're not even spell checked, their profiles are boring, they don't really speak to you. And a lot of people don't use video, a lot of people won't record a quick like a Loom or a cloud app, just a quick screen recording describing why you're a good fit and how you can help them. The number of people that would just say, ‘Hey, thanks for the video. No one's done that.’ And maybe it's different now, maybe people five or six years later people are doing it to a higher degree. But at the time, no one was using videos. So it was easy for us.
Dan: It's remarkable how everybody's looking for, you know, fancy strategies and high level stuff, but that so many professionals just focus on the basics - have a channel, get leads, pitch them effectively. Now, are you guys going into companies and saying, ‘Hey, Salesforce can like help grow your revenue, here's the campaigns we want to run for you, here's how you need to implement it with your ..’, you know, I'm assuming you do implementations with their ERP systems or other sorts of in house systems. Or do you say, ‘Hey, you guys want to do this, we can do it. Here's the price’ sort of thing.
Laurence: Thankfully, a lot of customers coming to us already know what the platform is, and they're typically looking for very insurance specific features. So, you know, Salesforce is a Swiss Army knife, and you kind of need to add some other applications with it to make it useful. So they buy the ‘Swiss Army knife’, and then they're like, ‘Cool, it can't do anything. Can you now make it talk to these other things? Can you make it useful to us’, and that's where we come in. We speak insurance, which is basically another language. And we connect all the dots for them. And we've partnered with a few. And this is this is actually again, like a huge perk of niching is we because we're so focused, we're able to partner with some other software companies that also integrate with Salesforce or are built on top of Salesforce, but are very insurance specific. So to them, we're a fantastic partner because we speak their language as well and we just want to deal with insurance companies and so they know when they send us a lead, ‘These guys will take care of them. They already know what they're doing. They know our software’. They're not just going to do one project and then shoot away. They'll continue to do projects with us over and over.
Dan: Now, so few of us have felt the feeling of what a six figure engagement looks like. Can you bring us into that world a little bit? How can you even charge somebody that much money for anything?
Laurence:Living in New York helps. I mean, it's not easy the first couple of times, right, you're going to get the butterflies, you're going to be nervous. I think it helps if you look at what enterprise capital, even small to medium business are prepared to pay. You know, if they want to recruit a person, they might pay a recruiter tens of thousands of dollars for the privilege to recruit someone for them. They're gonna pay company benefits. They are going to have to pay them to go on holiday and not be at work, they're gonna pay when they're sick and the costs just add up. And then you have to think about how many tea breaks they're going to have when they're not doing anything and you're still paying them.
Dan: Are you getting to the idea that you're anchoring your pricing to what they would have to pay someone to do it in house?
Laurence: Well, they would still typically pay a little bit more, they're outsourcing is usually more, but they're typically going to get much quicker result. From when they push play to when they go live, it's going to be a much shorter period of time for them. When you hire someone, if you get it wrong, you know, you have to go back and re recruit and find the right person. So these will add time delays. So really people that come to us that don't want to recruit people, they don't want to deal with it in house. They want someone to take care of it, someone who's done it before because this stuff is, it's complex. So you really want a partner that's done a lot of them to make sure you get a good result.
Dan: Now, on the show before Laurence, we've talked about this business model as SwaS, which is ‘software with a service’. I'm curious, do you guys identify with that term or think anything about it?
Laurence: Yeah, absolutely we do. I mean, you know, we piggybacking on another product, on a software product. So without that product, we wouldn't really exist. And I think you can recreate what we've done with so many different products. Even in the Salesforce ecosystem, there are thousands of products that are all complex, that are all absolutely critical to various organisations that you could layer a service on top of, it doesn't have to be just marketing. For example, there's a product called DocuSign, which does electronic signature. That's something that's complex. And it's absolutely critical to most sales organisations. You don't need to know anything about marketing or sales, you just need to know that they want to generate a document that can be signed off really quickly, with a few clicks. Most of the time, it's companies like us that end up having to deal with it, even though it's not our core focus, but we kind of have to bring it under the umbrella because no one else does.
Dan: Interesting. So you're suggesting in this specific instance, that someone who could do DocuSign implementations to a wide variety of different platforms, that could be a business just in and of itself?
Laurence: Oh, yeah, like an iPhone or an Android. There's an app store for Salesforce called ‘The App Exchange’. And all of these apps are on there, thousands of them, with 10s of thousands of instals all over the all over the world. So yeah, they're all potential opportunities. We don't have the bandwidth to cover all of those. And in fact, we do partner with some other organisations for specialist software that we don't want to deal with, you know, because it's just not our key focus.
Dan: What I find exciting about SwaS business models, especially I think, the situation you found yourself in where you're just kind of like, ‘Hey, I'm at zero, I want to start travelling, and I need cash flow’. Well, the cool thing about SwaS for me is like, like you just mentioned, you can see the cash flow like, yeah, of course, you're marrying yourself to a platform. However, you can see exactly how long the platform has been alive. You can make an estimation of how much money there is, in terms of their total customers. A lot of companies have this information public. Salesforce is a public company. And then you can dig into all the people who are implementing it and make pretty rough napkin math in terms of how much they're spending to do it.
Laurence: Absolutely, there's very little startup cost to do it. And you know, and kind of a little known secret, you know, and DocuSign is probably not a great example, because they're just a giant organisation. But if you speak with a lot of these companies, and you tell them what you're looking to do, they're often really interested and they go, ‘Oh, great, we've struggled to find partners that really know our product, if we get a lead, would you be interested in taking it?’ And you're like, heck, yeah, I'll take your leads And you know, and again, if you can continuously deliver, and you can kind of cement those relationships inside the business. Those leads just keep coming, in a way you create your own sales channel, it's fantastic.
Dan: Well, and even in smaller organisations, you know, I look at someone like ‘Vanilla forums’, someone that I speak with the product manager, and they have 15 developers in house. They currently, as far as I know, don't have a Developer Advocate business attached. And they would love that if someone who was a talented PHP developer said, “Hey, our firm does ‘custom Vanilla’”, you're just SwaS-ing right on top of an existing cash flow. And you get to have a relationship with the product folks. So a lot of opportunities can come direct, they could be your marketing channel. So one of the things I just want to point out to the listenership is just, you could sit down with a friend with another business mind. And you could have a challenge and just try to come up with 100 SwaS ideas in an afternoon and I don't think you'd be that hard pressed to do it. And I think that that's what's exciting about this.
Laurence: There's a lot of jack of all trades. Yeah, there's a huge opportunity if you get really focused on a platform like that.
Dan: How long did it take you guys to get to the level where you felt as comfortable with running your own business as you did in your job when you were getting a salary and you were making rent and all that. Were there years there you were kind of scared, whether or not you were gonna be able to do that for yourself?
Laurence: Of course, the first couple of years, I think of any business. You don't know what's going to happen, you don't know if it's gonna work out. It probably took maybe two or three years at least to really start to feel like it was really starting to pump along and that we really kind of had it together. I don't think you can really create something that's going to grow in six months and know that, I mean you can, but for us, it obviously took a lot longer.
Dan: Why? Because I feel like that's a big emotional milestone when you know, I look at your face right now. You seem like a comfortable, confident entrepreneur, like a guy who can go out and just make this work and if I even took away your current business from you? I don't think you'd be bummed about it. But I don't think you'd sweat too much. I think you'd say, ‘Yeah, now I can go do this again’, I want to kind of tap into that sense of confidence. Is it just a feeling that you have? You're just used to it after three years? Or were there certain assets that came about that changed things for you?
Laurence: My background is technology. I've kind of done various technology projects over the years. So there's kind of a lot of career capital, you know, when you switch to something like a Salesforce or a SwaS business, you know, you can take a lot of your skills you already have, and kind of apply them. And my wife, business partner, you know, we used to say, ‘Well, what if Salesforce shuts down? What do we do then? Like, what if they go out of business?’ And it was like, ‘Well, we kind of already know how to do these projects. We kind of know what some people need on our team, we know how to price it, we know what our customers need, we could go find a different product that is similar, learn how that works, and then do the same thing’.
You know, so it doesn't have to be Salesforce, it could be any of the different software platforms that are competitors. And it wouldn't take us that long to get up to speed and be able to create a business around that. So, if we got bought out, we got purchased tomorrow, we could easily go and compete on a different platform within a few months, just because we've kind of been through those two or three years of figuring out how the industry works.
Dan: That it sounds like you're gesturing towards ‘know how’. You can sell, you know how to identify a market. It doesn't seem like you're saying, ‘Oh, we finally built up enough traffic to our website, or we finally, you know, figured out this thing we were doing wrong, we changed it and now we're good’.
Laurence: Yeah, definitely not traffic to the website, we have very little, I think, yeah, I think we have maybe 15,000 views on our YouTube channel, which is, you know, nothing really it's absolutely nothing in the big scheme of things but a lot of it for us has been relationships and kind of knowing where to put those relationships, where to put the work, who should we be talking to, who do we need to buy lunch for to? And we don't buy many lunches. We are remote but we need to put out energy and time so that we are in front of the right people and they know we exist.And I think we would like to build an audience, it's definitely something that we, you know, we would like to do. But, we tend to have a large number of big deals, that kind of keep us moving and some of those deals last for years at a time. So, it just hasn't really been a drive to bring in lots and lots of new leads. As long as we win the leads that we want to win, then, you know, we continue to grow at a rate that we can sustain because we're self funded, we bootstrapped. You know, we, like many companies, we started with just the money in our back pockets and we've had to grow from there.
Dan: Looking back at your career, there's a lot of debate in our community about, you know, should you have a good job, how long do you need to have it and, you know, should you just go straight out of college or university and be an entrepreneur? How much has your career experience benefited or detracted from now your experience as an entrepreneur?
Laurence: I think I got really lucky. I joined an IT company years and years ago that was on a big growth trajectory. And the three founders of that company had basically spent very little time in the industry and it started the company very, very soon. So I kind of got to watch and absorb as they grew their business and the challenges they went through. And, you know, over those kind of eight or nine years, they went from, like, 15 staff to nearly 100. So there were a lot of milestones in there that got to see and experience firsthand, I think, I think it was actually really helpful. It's kind of hard to imagine if I didn't have that experience how would we be projecting? I really don't know. But for me, at least, it was super helpful.
Dan: Now, I've been making a bit of a sales pitch for SwaS here, could you supply me with some of the negative things about running a business in this style?
Laurence: There's definitely a few negative things. At the end of the day you have customers and then you have your partners, and your partners are also a customer. So if you think about a company selling Salesforce, you know or Salesforce based solution, they want to sell licences. So when you get involved, you want to do a good job and deliver the solution for them. But if you're too expensive, that may then mean that the SwaS provider, whoever that is, may not get the deal. The customer may decide actually, it's too expensive. We'll do it next year. So you're kind of constantly in a juggling match where you have to keep your supplier happy. And then also keep the customer happy. So that would definitely be one thing that surprised us, particularly. We used to do a lot of work with Salesforce directly. You know, their sales reps would expect it to maybe cost I don't know, let's say it cost five grand. You know, when we talk with the customer, we're like, this is a 30-40 thousand dollar deal. So there was often a really big misalignment between what the partner thought it should cost and what we actually thought it would cost. But, I mean, other than that, I think it's a pretty good model. It is a service business. So you're always, you're always fighting fires, but I don't know if there's any business where you don't fight fires. If there is, I'd love to work at one.
Dan: Well, on that note, I'm certainly in this category. Sometimes I think about lifestyle businesses and I attach that idea to like doing things I really enjoy. And so there's a lot of folks in our community who, you know, ‘I'm passionate about this. So I'll become a coach or a teacher in that realm, or I'll write books about it’ or, you know, get involved in like you said earlier nonprofits cool stuff’, and then here you are saying, Well, you know, ‘I met my wife in Barcelona, we cooked up a business and I'm an insurance and service’. And I'm curious, how do you see that dichotomy between like the kind of passion angle and then doing things that I assume you wouldn't think, like you mentioned earlier, ‘You speak insurance’. I'm assuming this isn't a language you would have learned on a sabbatical if you had some spare time.
Laurence: Yeah, we definitely tried the passion route. It just didn't really work for us. So we kind of tried the next thing that we thought would be exciting. And then the next thing and it turns out insurance wasn't top of our list. It was probably near the bottom. It is what it is. But we kept coming back to insurance. It kept coming back as taking the most boxes for us. So then it was, ‘Okay, well, if we're going to do insurance, we got to go learn insurance’, there's books you can read, there's podcasts, you know, there's conferences you can go to, you can really kind of learn the industry pretty quickly.
Dan: It's got to be so much cheaper. If you look through your whole organisation, you pointed to operational costs, especially in terms of the sales and marketing costs, I would think it's so much easier to identify good clients and to get them to pay you money.
Laurence: Even think about case studies. You know, we only have to do insurance case studies, we don't have to deal with, you know, if someone's coming to us in real estate. We don't have to scratch to find another real estate deal that we did three years ago. And it's nice when you talk to a client, you kind of already know what they want you. You just have to get them to say it and confirm it, you know, because they all want very similar things. It makes your life a lot easier. You don't have you're not doing as much hard sell, you're just kind of stating what you've done, and it resonates with them.So, once we've made that decision, it was pretty smooth sailing from there. I think, had we done it sooner, we'd be in a much better position now, but there was a lot of reluctance at the beginning to pick that route. You know, you're travelling around the world, I don't think anyone dreams of doing insurance. But you know, it's a shame because I think more people should go into that industry. There's a lot of people that are reaching retirement age, who run these huge organisations, and there aren't enough, you know, younger people coming through the ranks to replace them. So, we've certainly discovered insurance is just a massive opportunity. And you know, they're going through a huge digitalization at the moment. And that's not going to be done next year. That's going to take decades, and it's going to be ongoing.
Dan: You are business partners with your wife, and there's a lot of people, in the community, that partner with a partner. Can you give us some insight into business partnerships and how specifically it works in the context of a relationship.
Laurence: You got to be good communicators, right? You kind of have to separate how you talk to your partner, as your partner and how you talk to your colleagues. You know, because there can be a difference. When you're talking business to another person it can be very matter of fact, it can be very, I don't know, you kind of have to adjust how you speak. So that's always an ongoing learning battle for us but I mean, it's worked out extremely well for us you know, it's like having someone you can trust with everything you've got, you know, running the books and watching your back at all times. So not having my wife as a business partner, I don't know how I’d do it. I think I would need to seek out a business partner because there's just too much, you know, my brain is busy rattling around with just the part of the business I deal with, let alone having to also concern myself with all the parts she runs.
Dan: You mentioned you're about five years in, and a lot of times in the DC, the Dynamite Circle, we see that you know, kind of like five to eight years of running the same business is sort of when people are going to make like a wealth move with their business, it tends to happen in that time frame. You've gotten yourself to the point where you make a good living, you can live in New York. And then it's like, there's a next level that some businesses achieve, where you're basically making a lot of money every year, and someone's running the company, a lot of it. And then the other option is to sell it. I'm curious, do you guys think about those things? Do you feel like this could be a wealth vehicle, not just a really good living from anywhere in the world?
Laurence: We go back and forth. You know, this year in particular has been really busy, as much as we lost business due to COVID we've also grown and replaced it and then some. So if you'd asked me a few months ago, I probably would have said, ‘Sell it, sell it, let's get out’. But since then, we've been kind of working on our team and our struggle. And right now our focus is just getting the right people into the right seats so that we can continue to kind of ride the wave that we're on. But, you know, I imagine if you got stuck at that same point for eight years, something would have to change, either you'd give up or you'd sell it. So I think thankfully, we're kind of moving through that. We don't know what the future could hold, you know, we've certainly lookedat various options. Salesforce actually has an investment arm where, you know, for select businesses, they'll actually take an investment in your company, and then, you know, to kind of foster growth in their community and whatnot. So that could be a really interesting option to consider if we can kind of meet their revenue requirements. Because once you've got a backer like that, they're going to continuously push you and kind of open you up to opportunities you didn't know existed. It's like you getting the Fast Pass at a theme park. So we'll see what happens.
Dan: What sorts of things would you want to tell yourself when you started kicking around? There's a lot of folks listening to this podcast, they might have heard about these ecosystems and SwaS and be reminded of the idea, what sorts of things would you encourage them to think about as they ... got a little spare time, it's COVID times they want to spend some time hustling and building an income for themselves that can be location independent.
Laurence: I would say, ‘Just start’. I think, you know, a lot of people spend so long figuring out the domain name or the website or, I don't know, the product. I don't know. There are just so many reasons to procrastinate when you should be out trying to pitch someone and trying to get someone to say, ‘Yes’. And until you do that you don't really know what your business is. Like our business has changed. It's unrecognisable from when we first launched it. But, you know, if we'd spent months and months fine tuning, and we did like, don't get me wrong, we did as well. But it wasn't until we started cold emailing. And we got the first ‘Yes’, that our business really started, we could have a client without a website without, you know, a lot of things. They didn't actually matter at the end of the day for our first couple of customers. Just please start, just stop putting it off and just go out and sell it even if it's not ready, it's not perfect because you'll very quickly find out if you've got it right or wrong. And don't waste six months or a year kind of toying around with the idea that that's the pattern I see over and over again and it and you kind of just want to shake them. ‘Come on, do it’.
Dan: Let's talk about that. Then real quick and you don't have to be diplomatic. Let's just find one way that anybody could start like, what's something rather than be that person that everybody wants to shake? What is the action that represents starting for you.
Laurence: Research, find a product, take the product, ‘That's the one, that's what I'm going to do’ and reach out to the vendor. Start making some inquiries at the vendor. A) ‘I want to focus on I don't know DocuSign implementations, that's all I want to do. All I'm interested in doing, how do I get certified? How do I get leads? Do you have a partner channel? What can I do for you? Who do I need to talk to?’ Just start putting the foot out there and that would be an easy option.
Dan: All right. So you get you get, ‘We don't need certification, we don't provide you leads, you're too much of a small fry. We don't want to deal with you’. Now what?
Laurence:I think in that case, you might want to find a different app. You know, if you want to do a SwasS, you really need partnerships. I think it's important. So that would be a consideration. Have I got the right app? Should I try a different one and repeat the process? Otherwise, yeah, who can I tap in my network? What's my LinkedIn connections look like? Hopefully, you've been, you know, over the years connecting with everyone you know, is there anyone there that might be somehow connected to someone that I might want to talk to? If not, do I have any friends, just start scraping the barrel to see if there's anything you can turn up. Worst case, jump on Upwork, see if you can scratch up some work there, cold call I mean, there's so many ways you could go and find a client. You don't need huge amounts of money to start. You don't need, you know, the perfect business plan. You don't need the perfect sales script.
Dan: You don't need anything. That's the brilliant part. You know, it's like with all these other business models, it's like, ‘Build traffic, build an audience, build trust, build likability, build a product, build a platform, blah, blah, blah, blah, blah’. With this, all you need is to build an offer. You can say, ‘Hey, LinkedIn peeps, I'm seeking to help people that are using DocuSign’ or whatever app you like, or feel there's an opportunity with and ‘Here's what I'm offering’.
Laurence:Definitely, business to business as a funny game, like most of its just done on handshakes. A lot of it is, ‘Oh yeah, you seem like a good person. Okay, cool. All right, come help us out. Sign this doc. You're it, you're the person now. We're gonna call you whenever there's a problem’. No one ever really looks at your website. No one ever really looks to see if you have the right business cards and if your logo looks cool, nobody cares. They just, they're just looking for someone to make it their problem, so then have to deal with it anymore.
Dan: You mentioned you're an interesting position because you're a listener of podcasts. And you are the audience, sort of like the silent majority of the audience of these podcasts who - you don't benefit from coming on the show. You know what clients are probably gonna come knocking, maybe they will or whatever but like the point is, is you're here because you're doing me a favour. And the question I have for you is like when you listen to podcasts. What is sort of the things that like the internet, podcasts, Twitter, all this stuff like misses about the reality of what this lifestyle of entrepreneurship is really about?
Laurence: First, let me say, podcasts like yours, the reason we are where we are today, so we're indebted to the work you guys put on it. It's been really powerful for us. And, again, it showed us a possible way forward. I think a lot of the podcasts and material is, at least for us, it's very business to consumer focused, we’re very business to business focused. Soeven like a lot of the marketing stuff you talk about, the examples they always give you is, ‘I design kayaks or I do this, I do that for this person to make them happy’ or whatever it is’. So I feel like the business, the business aspect is often kind of underserved a little bit, how do you grow a service business that talks to other businesses, that part I feel like we don't get a lot of. I feel like most people would talk about business to consumer just because it's a maybe a more interesting conversation. The examples are more uplifting, they're easier to relate to.
Dan: Well, and certainly I think you might get the wrong impression about how well everybody's doing because we come here to talk about, ‘Hey, here's like, a model that you can learn from’ but the reality is, is like, hustle, grind, self doubt, COVID blues, you know, having to get recharged and motivated. And that's, that's most of it actually.
Laurence:Yep, self doubt and fighting fires, making sure invoices get paid, that's your life going forward. Is the life you really want? Well, here it is entrepreneurship. I wouldn't change it. And I don't know what you would say Dan but I wouldn't change it. You know, the decisions we've made. I would do it all again if I had the choice.
Dan: Hell, yeah. Laurence, I really appreciate you coming on the show and sharing your thoughts with us today.
Laurence:Was pleasure to be here. Thank you, Dan.
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Dan: A big shout out to Laurence for dropping by the show. I love the just straightforward focus, like - yes. When you decide to start a business in your day to day grind is going to be problem solving fires, like it's like the old duck going across the pond with the legs underneath the water going crazy and at top, it just looks like, ‘Oh, here's a business that makes almost a million bucks a year’, you know. But what I love about the swac concept and how Laurence broke it down for us, is that fundamentally the principles here, and the frameworks, are simple. There are existing cash flows, companies have already raised their hand and say, ‘We believe in this software and we're not just saying it. We are investing in it. And frankly, we need people to help us facilitate that investment’. And those opportunities, frankly, exist everywhere. And one of the things we see in the job space, we talked about Dynamite Jobs at the top of the episode, it's very related to the gig space and the project and the services space. And one of the things we've noticed is - there is a complete lack of people like Laurence in the world, people that all day long in the DC we see people post in the status updates, ‘Does anybody know someone that does blank, blank, blank blankety blank five figure project’, all day long. And these are people that are truly invested. Now you go on podcasts and reality is underrepresented. You hear people come on the show and they talk about fancy products and their new course and all these businesses that are very sales and marketing heavy you know, you ask Laurence, ‘Hey man, like what kind of sales and marketing you're doing?’ It's like, ‘You know, haven't really gotten around to the website a little while’. And the reality is, that is the majority of people that I have seen living this lifestyle, over my 10 years of doing it, they don't have an active marketing presence on the web. Because it's just so easy to reach out there into these very needy cashflow markets that have expressed interest and to build a business there. One of the things I feel really passionate about is bringing that story to this show, because it's a very, very real opportunity. And now Laurence has an incredible platform to make all kinds of business decisions from where he stands. And so I find it inspiring and thankful for Laurence for being willing to share about his business with all of us here today.
Ian: Being in business for a while now. It's so easy to see for me, but I think it's so difficult for people to see from the outside, like you said, that if people are already spending money, like money is already shooting out of the window. They're going to be willing to allocate some of that money towards you if you're providing a solution. That's actually for them. So these businesses, it's not like your personal finances, you actually have to spend money to make money. It's just part of the equation. And so the question is, you know, what can you syphon off, that money that they already know that they need to spend or that they already are spending, and help them get a better return on it or better result on it or ultimately, help them get where they're going.
Dan: Looking at specifically where that cash flow originates, and how it operates, really at the core of entrepreneurship is understanding those flows. And that's what I love about this mindset in this framework of SwaS which is, it really focuses your energy, even if it's just a mental exercise to ask yourself, you know, how these value flows are happening, and what structures you can build to, like you said, be a big part of it and benefit as well.
Ian: So my main takeaway down is find somebody that's spending money already and ask them if you can have a piece of it. Of course, you got to do some work.
Dan: We talk about, with b2c stuff, you know, business to consumer, how difficult it is for a consumer to get to the point where they're ready to pull out that credit card.
Ian: And also the reason behind why, because the reason why a business owner pulls out their credit card, like you said, you got to do a little digging, but it's kind of always the same story, which is we're trying to make money or we're trying to do this or that. It's not usually a secret. Getting into the mind of a consumer, and their pleasures and their desires and all these things like, then you start thinking about psychology, it's not even about business and numbers and spreadsheets anymore. Now you got to factor in like, these ideas, these esoteric ideas about why people spend money. I'm not smart enough to do that.
Dan: Which is totally cool. But the reality is, you know, I was talking to producer Jane about this episode, and she's like, ‘It's just so much easier to get businesses to spend money’, and it's so true. They're already in the habit of spending money on a daily basis. The proof is in the pudding. In just this limited sense - this is how the vast majority of entrepreneurs in our community actually make money is by doing b2b services, whether that's in a productized form, a SwaS form, or in more of a agency project base. And that's how it gets done. It's right there in front of all of us to take up as an opportunity. Cool. So big thanks to Laurence. Big thanks to you, Bossman. Good day to you. And big thanks to LMNT for sponsoring the show. You got your LMNT in your drink over there.
Ian: I'm not kidding you, Dan. I drink this stuff every single day.
Dan: It's so good. You feel like it's like a simple, no calorie way to hydrate yourself, to do something good for yourself. And to stay motivated throughout the day. A little bit of coffee, a little bit of LMNT infused water. And you are off to the races on your next business idea.
Ian: When you say a little bit. I'm on my second and a half cup this morning.
Dan: That as that qualifies a little bit for you Bossman. Thank you listeners for joining us. We'll be back as always, next Thursday morning 8am. Eastern Time.TMBA Ident.
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