On Being Bold

CLV

[A Structural Change, Boldly; The Fuck You Money of SaaS; The Money Burning Alternative; Defining Risk; The Upside; XP Farming; Procrastinating Away Anxiety; Be Bold]

Thesis: Stop tweaking and take the risk

[A Structural Change, Boldly]

Dear Reader, the deed has been done.

I'd be lying if I didn't say that it gave me some anxiety, but that's to be expected.

It might not seem like a big deal to you, and it really, in the grand scheme of things, isn't a big deal at all.

But it's a big deal precisely because it isn't a big deal when it should be a big deal.

Jack & I just flipped a switch on the business we spent the last 2 years building into something that can support both of us.

In the past, if you wanted to buy WhiteWhale, you'd have to talk to one of us on a call. Now, if you want to buy WhiteWhale, you can do it from our website without speaking with us.

This is a switch from what was "Sales Led Growth" to now being "Product Led Growth" (PLG).

It's a big deal because it changes the levers we need to pull to hit $1M ARR with just 2 guys. And, I think it's one of a few changes we could've made that make the goal actually possible.

The beautiful thing is, if we fuck up and are totally wrong - well, we can just change what we're doing again. Today, I want to talk about:

• Our bold goal & why we're pursuing it

• How the decision to switch to PLG is actually close to riskless

• A few notes about ignoring undue anxiety

[The Fuck You Money of SaaS]

First off, the goal that is driving Jack & I’s decision to switch to PLG is a very aggressive one: We want to build WhiteWhale to $1M in Annual Recurring Revenue (ARR) without either taking on any outside funding or hiring other people.

This is a pretty unconventional goal, because raising money and hiring people are two big levers you can pull to help your business grow, and we’re actively saying no to both of them.

I know a few founders who have done things more impressive than this (think 2 founders + 20 VAs doing $20M in revenue in 2 years), but accepting both of these constraints really isn't so common.

To put this into reference, here is a table of some real examples of numbers from founders I know or know of who either I or someone else would call successful:

If you couldn’t guess, the very last row is the most attractive one to Jack and I. The guy who achieved it, Adam Robinson, calls it the "Fuck You Money of SaaS". So, we do know that it’s very, very possible.

[The Money Burning Alternative]

To be clear, I’m not objectively against raising money or hiring people overall. I think the founders behind the second to last row will genuinely change the world and IPO in 5 years.

That being said, given our space in particular, and the outcome we want, I think it makes sense to not raise and to not hire. We’ve seen the alternative in our space.

One company, as an example, raised $50M total, sold to an incumbent, and word on the street is that the 'acquisition' was for a fat $0. (this is one of the ostensible benefits of raising enough money; even if you fail, you can find someone to 'buy' you for $0 to publicly save face)

When you start raising money in our space, you tend to instantly have aggressive growth targets that you need to hit. If you don't have Product Market Fit (PMF) yet, basically what you start to do is hire a sales team to force annual contracts down your customer's throats and justify them by adding half baked features that aren't really part of your value prop. Ultimately, you lose focus on finding PMF and chase revenue that is only sticky because of your sales team + terms.*

And, on top of that, I just genuinely don’t know if a lot of our competitors can ever justify the valuations they’re achieving. Outside of the CRMs, the ‘best outcomes’ in sales tooling are rather grim by venture standards: Clay, the rising star, is at $100M ARR and has a $5B valuation. To put that into perspective, ZoomInfo, one the biggest established non crm players in the space, has something like $1.25B in revenue and is valued at ~$900M.**

And, more than all that, Jack & I know the outcome we both want. We're both workaholics, but we're fighting for freedom, not to work more. We both have a laundry list of other things we want to do, and manage a bunch of employees or get in arguments with a board of directors is not on the list.

Okay, but why not just hire an employee? Because we want the leverage to be inherently baked into the business. And, as a I wrote about last week, baking it into the product is a more pure play way to do that.

This is why we switched to PLG; it solves for a structural bottle neck that would otherwise need to be solved by hiring human capital.

_{*If the alleged ‘SaaSpocolypse’ is real, I really think it's because investors were not appreciating the problems with this model, not because of LLMs and pixie dust.}

_{**If you don’t understand why these numbers are bad, depending on the financing terms, if you raise $50M like the competitor I mentioned did, the bet your investors probably made is that you’ll be worth at least over $1B, if not more! If the biggest provider in the space, ZoomInfo, isn’t even worth that much according to public markets, the likelihood you can find someone who believes your private business is worth way more than that to fund you further or by your company goes down a lot.}

[Defining Risk]

When you have a vague fear that something could go wrong, it's easy to make a big deal about some vague and hairy conception of risk.

But getting down to the nuts and bolts and really understanding what ACTUALLY can go wrong and how bad it could be when it does is key.

Since we've bootstrapped WhiteWhale, we are blessed to have a profitable business with basically no liabilities. In this sense, if we stopped getting new revenue for the next month while we played with PLG, we're totally fine.

This is one of the great blessings of the way we're building: We have no burn rate, no ticking time bomb that says you need X new revenue by this date so you can raise more money or you'll go out of business. So, if we're dead in the water for a month, and this PLG stuff doesn't work... well, we can just roll it back!

On the other hand, if we raised capital, we would have time tables to keep up with, and risking one month of new revenue could be the difference between life and death.

There is nothing stopping us from swapping the buy now button back for the "book a demo" or talk to sales button.

[The Upside]

And, on top of that, we were actually able to make the swap a ‘profitable’ trade even if we do end up giving up a month of revenue. After all, one of the pre requisites to make PLG work is a product that is self explanatory and easy to use. To get to the point where we even felt comfortable putting the buy now button on the website, we had to be super, super aggressive with the product design and features.

Everywhere we've seen where more than one user gets caught and confused, we've been deleting or redesigning or rebuilding or redoing.

This, overall, just makes the product better and reduces the number of users who ask us how to do x or y or z. And, it removes the number of times we actually have to do x or y or z because the platform feels like it should do x but doesn't. So now it either does x or it doesn't.

That's not at all to say that the product is done - it's definitely not! We're still doing this process very aggressively.

But already, in a lot of ways it's not recognizable compared to what we had 3 months ago.

As a concrete example, check out this before and after picture of our main dashboard:

If you’re not a user, it might seem like some marginal differences, but we’ve removed unneeded pages and hidden menus, and importantly, our usage has gone up quite a bit, and support questions are going down.

Back to the point - if PLG fails miserably, it still caused us to make a product that is far better and easier to use than it ever was before.

[XP Farming]

If you're taking risk and paying attention, you should be learning.

Meaning, maybe you want to make a big move and place a big bet, but so fucking what?

We know about a million times more than we did 2 years ago when we were starting WhiteWhale (then BirdDog). It'd be outlandish to think we’d be less equipped to make this kind of decision than we were back then.

And, guess what? We can still be wrong! But, as discussed above, we've structured the bet to chop off the downside, so oh well.

If you're making some big decision, I'd encourage you to think about the same - what other big decisions have you already made? What did you learn? What can you do to control the risk of this decision?

[Procrastinating Away Anxiety]

One other source of anxiety in the face of bold decisions is general worry about all of these little commitments and other shit you have to do. But what about this and that and this?

Maybe you have some other things you're involved in that are making you say oh I shouldn't take that risk because of this this or that. I, as of late, have a couple of things like that.

But guess what? You'll always have items on your to do list that distract you from the big thing or goal you're trying to accomplish. Don't let them stop you. Again, actually map out the downside and handle them accordingly.

I trick I started to use is procrastinating as long as possible.*

What I mean by this is if I have some task I don't want to and is really low leverage but I can't get rid of it super easily, I'll figure out how long it will take me to do and the longest amount of time I can wait to do it and then schedule to do it in that much time close to the deadline.

Meaning, if it doesn't need to be done for 4 days and will only take 30 minutes, I won't let it disrupt my flow or focus now. Rather, I'll put it on my cal for 30 minutes 3 days from now and stop worrying about it.

It's not a problem til it's a problem, and you'll always have a to do list. There's no point in tweaking about it until you do it, just stop thinking about it instead and tackle it when you need to.

_{*As a word of caution, this advice is given in the context of being one of those type a over achieving people who tend to do too much, not too little. If you already procrastinate and don't do anything, maybe this advice doesn't apply to you, or maybe you've been wise beyond your years for your whole life.}

If you want to follow along on the journey to $1M ARR and me finding myself along the way and maybe helping protect against the fall of the west, please subscribe

[Be Bold]

Go out and be bold. Whatever you're worrying about probably isn't that deep.

If you have a crazy stupid ambitious goal, go for it.

I’m sure you can take the risk in a way that doesn't mortgage your house or whatever.

Be bold and handle that shit.

Live Deeply,