TMBA 263: Building Low-Risk Software Startups

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I’m in Bangkok this week, getting set up for DC BKK and I was very excited to run into our good friend David Hehenberger from WPCast.fm and FatCatApps.com. His products help marketers drive conversions from their WordPress sites. This is really a full-circle moment for us, as David used to edit the show in the early days of our podcast and work directly with us on a variety of projects. We’re gonna be talking with David about how he got his software company off the ground, how difficult it really is to develop a software product, and the challenges of working within the WordPress ecosystem.

Listen to this week’s show and learn:

  • How David decided to get into developing software products.
  • What attracted David to the WordPress platform for his SAAS business.
  • The importance of market research during the formative stages of your business.
  • The benefits of taking a “stair step” approach to growth.
  • Why usability IS the product when it comes to software designs.
  • What David would do differently if he were building the product today.

People on this episode:

Mentioned in the episode:

David and I Talking Software in Bangkok

David and I Talking Software in Bangkok

Listening options:

 

Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.

Cheers,

Dan & Ian

Published on 09.25.14
  • http://empireflippers.com/ Joseph Magnotti

    Great podcast guys, glad to hear somebody is making software work as a business. I hope one day your circle back to WP Rank Tracker as I think there is still some opportunity there.

  • http://davidhehenberger.com/ davidhme

    Thanks Joe! WP Rank Tracker is still on the “someday” list, but I’m hoping to re-visit it sometime soon.

  • Tung Tran

    Nice episode guys!

    It’s very inspiring to see your growth David from just launching a new plugin last year to a profitable software business today.

  • http://davidhehenberger.com/ davidhme

    Thanks Tung!
    I remember our DCBKK mastermind last year where Easy Pricing Tables only had 400 downloads and most of you were skeptical if this was going to work out =)

    See you at DCBKK!

  • http://davidhehenberger.com/ davidhme

    Thanks for having me Dan! I’ll be hanging out in the comments to answer any questions that may come up.

  • http://TillCarlos.com/ Till Carlos

    David is one of the best room mates ever!

  • http://www.tropicalmba.com/ Dan Andrews

    haha :D agreed!

  • http://www.tropicalmba.com/ Dan Andrews

    you got it David it was a real pleasure, love what you are doing

  • http://www.tropicalmba.com/ Dan Andrews

    Thanks Tung! See ya soon

  • http://www.tropicalmba.com/ Dan Andrews

    thanks Joe! David’s got some of that hyperfocus you guys have been demonstrating, pretty impressive so early in the game.

  • Bettina

    Thanks for the interesting episode, very inspiring! Regarding developing WordPress plugins, here’s a very helpful article about how to find profitable niches by using clever searches: http://nichediver.com/idea-generation/4-12-ways-to-find-wordpress-plugin-ideas/

  • http://www.tropicalmba.com/ Dan Andrews

    cheers Bettina thanks for the link

  • http://www.linkedin.com/in/sholaabidoye/ Shola Abidoye

    @ David. How big do you want your company to grow? Do you think your growth would be accelerated if you moved to a place with “big” thinkers like Berlin, London, Palo Alto etc? Something I’ve been talking about a lot – very quietly, off board – people making at least $500,000/month. They want the pressure of a bigger city because that kind of money (outside of say HK, Singapore, Shanghai, etc) – it would be easy to get complacent in such a low cost environment. Curious to hear your thoughts!

  • http://davidhehenberger.com/ davidhme

    Thanks Bettina, haven’t seen this post yet, looks great.

  • http://davidhehenberger.com/ davidhme

    Spending the summer in Barcelona (not super expensive, but 2x-3x of living expenses in Saigon) definitely motivated me to step up my game, so did spending a lot of time with Travis Jamison who’s crushing it.

    If I were to go to HK / Singapore / Palo Alto the sensible thing to do would be to raise a round of funding which doesn’t make sense right now (I don’t want to report to investors / business model doesn’t support a large exit).

    Maybe I should re-visit moving to one of these places once I can take a higher salary in a few months from now.

    The current vision for the business is a low to mid 6-figure yearly profit with a small team of 2-3 full-time staff. I’m only money motivated to a certain degree right now. I think my lifestyle wouldn’t be drastically different if I were to make $100k/year or $1MM/year.

  • http://www.linkedin.com/in/sholaabidoye/ Shola Abidoye

    Hey David. Good stuff. Actually it’s not all about money – although that helps, lol. Mostly it’s about being around people with a massive, earth-shattering vision of changing the world – and having fun doing it. But truth be told, if you wanted to have a home in HK, Singapore and Palo Alto – even a studio – then even $1 MM a year might feel like $100k in Asia. London too for that matter. I think this is an issue that James Schramko brought up. Lifestyle businesses are fine but if one really wants true, 100% location independence you need to be able to live in the first world if you want to – and at least by American standards that’s the land of $3500 a month “Starter homes” any place where there are really hungry people. That killer spot near the beach in Asia costs 7 figures in the USA or Europe. Now no one says you have to be there, but it’s nice to have a choice! In terms of biz success, if for no other reason than to be invited to the table with the top tier of the industry it makes sense. I love what Tim Ferriss does. He maintains a minimalist lifestyle but still manages to do things big enough to be a thought leader not just in small IM or lifestyle design circles but globally. Just a thought….

  • http://www.linkedin.com/in/sholaabidoye/ Shola Abidoye

    By the way, what’s your take on Berlin? And yeah why not swing through Palo Alto if for no more than a week. America really is paradigm shifting…

  • http://davidhehenberger.com/ davidhme

    Good points. Maybe it really is worth re-considering living in SE Asia after 4.5 years, I just love it so much here =). I’m definitely not 100% location independent at the moment when you look at it that way.

    Where are you based?

    I’ve only spent a week in Berlin and liked it, but I’d probably rather be in Barcelona (or maybe even Hamburg or Munich).

  • http://www.linkedin.com/in/sholaabidoye/ Shola Abidoye

    I’m in MX at the moment.Been talking to several DCers over skype and I’m eye-ing Berlin now. I need the big time. I’m told it’s the closest thing to Silicon Valley – not in the USA (I’m from the States and I prefer living abroad). If you love SE Asia and what your current biz is doing by all means stay! I’m not a big fan of making “more” just because. There needs to be a very specific reason. My main reason is wanting to be around the best in the world. It’s just something about talking to folks who really have no limits to their ambition and creativity that’s more pleasurable than all the beaches in the world. I did that for 2 years had a ball lived in like 5 countries but now I want the big time.I think this is a perspective you don’t hear alot in the DC. Having said that, I will restate if you love SE Asia and are comfy with a small agile team, no need to go after “more” for more’s sake! Good luck….

  • http://www.MimicMethod.com Idahosa

    I started developing my own software this past summer and have since come to understand the difference between UX (user experience) and UI (User Interface).

    Dan made a good comment: “As the entrepreneur – your job is to place the buttons.”

    I’d like to modify this to “As the entrepreneur – your job is to design the UX”.

    The UX is the road you create between the user and the pain point you are helping him solve. You want to make this path as short, efficient and enjoyable as possible – and this requires A LOT of planning.

    I spent an entire month with mockup software and a pen and paper creating the UX for my app. The process is similar to writing – first you dump all your ideas onto the screen, then you slowly chip away at every single element to suss out the core idea you’re trying to communicate.

    So if the UX is the road, the UI is the street paint, signals and traffic lights that guide the user down that road accident free.

    Depending on the complexity of what you’re creating, this part will often require some design expertise and knowledge of best practices – which I don’t have (though and quickly learning as I go through the process).

    My workflow has been to think through the UX, mock it up on proto.io with the click interactions so I can really see how it feels, then make screencast videos explaining all the main functionalities.

    Then I’ll send this to my designer (university student from Russia who’s cheap but great quality) who re-thinks the whole design in a way that is much more sexy AND intuitive.

    He uploads the new screens to invisionapp.com, which allows me to make annotations, then through our conversations on the invision screen we go through more iterations until I finally have something that I like.

    Next step then is to user-test, which you can do on invision if its just simple click-through screens. If you need to test more complex interactions, proto.io is pretty advanced. Otherwise, you’ll need the developers to code up some basic stuff.

    Great episode!

  • http://www.tropicalmba.com/ Dan Andrews

    Nice!!! Thanks Idahosa… I like your analogy to writing here. I was just reading Peter T’s new book:

    http://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296

    And he said something to the effect of “as an entrepreneur you need to accept that you are essentially a designer”

    I really love the perspective. Many of us start out thinking we are out of the business of design b/c we can’t use photoshop, and often, as our businesses get some traction we give up the reigns of design once we get momentum to “experts’ and that can often be a mistake as well (the same way giving over your wealth to financial ‘consultants’ can be a mistake. If they knew so much about financial consulting, why would they be a financial consultant? :D

  • http://www.tropicalmba.com/ Dan Andrews

    I really enjoy considering how your location effects your mindset and performance, one thing that I think is generally underrated in this conversation is finding people who are coming up to “come up with” rather than “hanging with ballers.” I’ve spent my fair share of time with the “made it” crowd and I’ve found there’s only a very small subset of that group who’s relevant for much but financial advice, because the way they did it (and the networks they leveraged to come up) aren’t available to people at your level or in the same ways anymore.

  • http://empireflippers.com/ Joseph Magnotti

    I don’t know Dan/Idahosa — as someone who just came through a huge redesign I think you could easily get caught up in the minusha of what color a button should be or where it should be placed. Better off to leave that to someone with a specialized skill IMO.

    Now you should be generally involved in the process and first time around you should probably do it yourself, but Mark Z is no longer making day to day decisions about UI/UX at Facebook and neither is Bezos over at Amazon.

  • http://www.tropicalmba.com/ Dan Andrews

    My opinion is the opposite, assuming your business depends on people clicking on that button, you should have an opinion about the color, informed by those experts sure, but not outsourced to them. His example (OF COURSE!) was Steve Jobs, who very much did seem to care where the buttons were. The distinction for me lies in how critical it is. If it’s central to your users experience, it would be ideal (but not necessary) to have a strong understanding of how and why the decision is being made (and have final say). In your case since you have one site and one marketplace, regarding EF.com, if I asked you “why are the listings presented with x data point in this graph?” and you said “I don’t know I paid some guy to decide that” it might not be a big problem, but it doesn’t seem optimal to me.

  • http://www.tropicalmba.com/ Dan Andrews

    I like this by the way, using David’s thread to debate management ideas !

  • http://empireflippers.com/ Joseph Magnotti

    Sound like a possible podcast episode faceoff brewing! ;-) See ya in Bangkok!

  • http://www.tropicalmba.com/ Dan Andrews

    Love it let’s do it! Got some rooms rented for podcasters….

  • http://davidhehenberger.com/ davidhme

    Good point! Hanging out with rich dudes can be inspiring, but someone who made millions in construction won’t have many insights on how to best run Fatcat Apps.

    Shola, you’re making Berlin sound more interesting than I thought it was, maybe I should check it again last year. When you’re talking living expenses Berlin doesn’t seem much more expensive than Bangkok (which is 20-30% up from Saigon).

    I don’t know anybody in Austria who makes more than $100k/year after taxes and they all seem to be pretty happy. None of them has a private jet or a mansion, but I don’t think I necessarily need this type of stuff.

  • http://davidhehenberger.com/ davidhme

    I think @Idahosa_Mimic_Method:disqus made a good point differentiating between UX an UI.
    Choosing the shade of orange for your button (UI design) is much less important than deciding where the button goes, what happens when you click on it and what the copy is.

    I also agree that mocking up a user interface is similar, maybe even more difficult than writing. Designing a user interface for a new plugin is the most glucose-consuming task for me.

    @magnotti:disqus & @TropicalMBA:disqus:
    I think there’s a difference between making software and a blog redesign.

    The core of the Empire Flippers business isn’t building software, but to sell websites.

  • http://www.MimicMethod.com Idahosa

    no way! I had the exact same epiphany that “entrepreneur=designer” last month. That’s why I started the DC discussion (and Jon Myers clickbait) – “How do I become a Design Rockstar Like Jon Myers?”

    Society and culture has been “designed” to be the way it is by the collective efforts of people over history. Every new design builds upon the old one, to the point that most of the things we do are out of habit and not because it’s the currently the most efficient way to achieve the end (think QWERTY keyboards).

    So the entrepreneur is the one who rethinks the design of society. Then he deploys whatever engineers and resources he has it his disposal to actually implement that redesign.

    Starting off, he has no resources so he learns all these little skills sets out of necessity. Though it seems like an inefficient use of time, all this seemingly random knowledge is what ultimately tilts his head and gives him that unique perspective on society.

    If he can execute, he can eventually reach Zuckerberg status and just outsource all the details of innovation to his staff.

    But the consistently groundbreaking entrepreneurs designers are the ones who continually tinker in the minutiae of random things to get new ideas and perspective.

    That’s why we idolize Steve Jobs so much. No matter how many Apple II computers were flying off the shelf, he’d still take the time to walk out to the parking lot and study the minutiae of the mercedes benz bumper design in search of inspiration for the next “Rethink”.

    Anyways time to put the cork on my navel and get back to work. Thanks for the book rec, Dan. Gonna start it this week

  • http://www.sidehustlenation.com/ Nick Loper

    Oh that was fun, about halfway through the call I realized I was actually using David’s pricing tables. Sweet!

  • http://davidhehenberger.com/ davidhme

    Haha that’s so cool!

  • BrunooArruda

    I really liked this podcast for the amazing simplicity on the view of getting something done… I already have a growing business but this view really help us to reflect that we often think that we need to make really complex things to achieve big results, but the reality often shows that the great things are often simple right?

    I think this podcast should be nominated to tmba top5 list to newcomers…

    Also, I am curious about something @davidhme:disqus , weren´t you afraid that the coder also published a plugin in his name too? Because the friction to do that was really small… I´m not talking about fear of someone stealing your idea and that kind of thing, this one was a real issue, trusting someone third-party where theoretically would have everything up to start a competition with your assets…

    Thanks very much guys! keep the nice work!

  • http://www.tropicalmba.com/ Dan Andrews

    Thanks Brunoo I appreciate that nomination as we are currently working on that list! I’ve asked David to drop in and provide his perspective here.

  • http://www.linkedin.com/in/sholaabidoye/ Shola Abidoye

    Just saw this. I think there’s a real space in the market for more discussion about “scenes” and would love to hear you guys do more content about ‘I really enjoy considering how your location effects your mindset and performance…”. Looking forward to meeting in person in 2015 Dan. Look me up if you’re in the .DE in 2015!

  • http://www.tropicalmba.com/ Dan Andrews

    It has to happen!

  • http://www.marketfit.net Gregory V. Diehl

    I hired Shola Abidoye, founder of Converport last April to help me create, publish, and market a bestselling book for $5,000. Unfortunately, after delaying everything six months past the due date, she decided to cut off all contact with me without delivering what I paid for.

    I have yet to receive even a partial refund for what I paid, and Ms. Abidoye publicly denies that I hired her to do these things. She has taken a very insulting and condescending tone to me or anyone who questions her about this incident.

    I know these are strong accusations I am making, and I am prepared to support them with emails and recorded calls if necessary. Please let me know if you have any questions or any suggestions for getting Shola to reach out to me so we can resolve this dispute.

    You can read the full details of my experience getting ripped off and scammed by Convertport here: http://www.borderlessblog.com/shola-abidoye-scam-inspired-me-write-self-publish-first-book/

    Because she has ignored all my attempts at peaceful resolution, I don’t see what other choice I have but to start warning others about her fraudulent behavior before I gather to evidence necessary to take her to court and try to get my money back.

    Gregory Diehl

    livefreeretiree@gmail.com

  • http://www.marketfit.net Gregory V. Diehl

    I hired Shola Abidoye, founder of Converport last April to help me create, publish, and market a bestselling book for $5,000. Unfortunately, after delaying everything six months past the due date, she decided to cut off all contact with me without delivering what I paid for.

    I have yet to receive even a partial refund for what I paid, and Ms. Abidoye publicly denies that I hired her to do these things. She has taken a very insulting and condescending tone to me or anyone who questions her about this incident.

    I know these are strong accusations I am making, and I am prepared to support them with emails and recorded calls if necessary. Please let me know if you have any questions or any suggestions for getting Shola to reach out to me so we can resolve this dispute.

    Because she has ignored all my attempts at peaceful resolution, I don’t see what other choice I have but to start warning others about her fraudulent behavior before I gather to evidence necessary to take her to court and try to get my money back.

    You can read the full details of my experience getting ripped off and scammed by Convertport here: http://www.borderlessblog.com/shola-abidoye-scam-inspired-me-write-self-publish-first-book/

    Gregory Diehl

    livefreeretiree@gmail.com

  • http://www.marketfit.net Gregory V. Diehl

    I hired Shola Abidoye, founder of Converport last April to help me create, publish, and market a bestselling book for $5,000. Unfortunately, after delaying everything six months past the due date, she decided to cut off all contact with me without delivering what I paid for.

    I know these are strong accusations I am making, and I am prepared to support them with emails and recorded calls if necessary. Please let me know if you have any questions or any suggestions for getting Shola to reach out to me so we can resolve this dispute.

    Because she has ignored all my attempts at peaceful resolution, I don’t see what other choice I have but to start warning others about her fraudulent behavior before I gather to evidence necessary to take her to court and try to get my money back.

    You can read the full details of my experience getting ripped off and scammed by Convertport here: http://www.borderlessblog.com/shola-abidoye-scam-inspired-me-write-self-publish-first-book/

    I have yet to receive even a partial refund for what I paid, and Ms. Abidoye publicly denies that I hired her to do these things. She has taken a very insulting and condescending tone to me or anyone who questions her about this incident.

    Gregory Diehl

    livefreeretiree@gmail.com

  • http://www.marketfit.net Gregory V. Diehl

    I hired Shola Abidoye, founder of Converport last April to help me create, publish, and market a bestselling book for $5,000. Unfortunately, after delaying everything six months past the due date, she decided to cut off all contact with me without delivering what I paid for.

    Because she has ignored all my attempts at peaceful resolution, I don’t see what other choice I have but to start warning others about her fraudulent behavior before I gather to evidence necessary to take her to court and try to get my money back.

    You can read the full details of my experience getting ripped off and scammed by Convertport here: http://www.borderlessblog.com/shola-abidoye-scam-inspired-me-write-self-publish-first-book/

    I have yet to receive even a partial refund for what I paid, and Ms. Abidoye publicly denies that I hired her to do these things. She has taken a very insulting and condescending tone to me or anyone who questions her about this incident.

    I know these are strong accusations I am making, and I am prepared to support them with emails and recorded calls if necessary. Please let me know if you have any questions or any suggestions for getting Shola to reach out to me so we can resolve this dispute.

    Gregory Diehl

    livefreeretiree@gmail.com

  • http://www.marketfit.net Gregory V. Diehl

    I hired Shola Abidoye, founder of Converport last April to help me create, publish, and market a bestselling book for $5,000. Unfortunately, after delaying everything six months past the due date, she decided to cut off all contact with me without delivering what I paid for.

    You can read the full details of my experience getting ripped off and scammed by Convertport here: http://www.borderlessblog.com/shola-abidoye-scam-inspired-me-write-self-publish-first-book/

    I have yet to receive even a partial refund for what I paid, and Ms. Abidoye publicly denies that I hired her to do these things. She has taken a very insulting and condescending tone to me or anyone who questions her about this incident.

    I know these are strong accusations I am making, and I am prepared to support them with emails and recorded calls if necessary. Please let me know if you have any questions or any suggestions for getting Shola to reach out to me so we can resolve this dispute.

    Because she has ignored all my attempts at peaceful resolution, I don’t see what other choice I have but to start warning others about her fraudulent behavior before I gather to evidence necessary to take her to court and try to get my money back.

    Gregory Diehl

    livefreeretiree@gmail.com

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