We’ve been devoting a lot of time on this podcast recently to SaaS or “Software as a Service” businesses.
That’s because we love the upside of SaaS, including the potential for generating recurring revenue and creating life-changing exits.
But is it possible to create a software business without knowing how to code, or having a technical co-founder from the start?
Alan VanToai is the founder of CrewFire.com, a brand ambassador and influencer management platform.
Alan has limited technical expertise, but that hasn’t stopped him from creating and exiting from multiple software ventures.
Alan joins us on today’s podcast to discuss how you can start a SaaS business without a technical partner, how to attract one when the time comes, and some personal feelings about one of our very favorite places in the world: Vietnam.
Listen to this week’s show and learn:
- How Alan got his start in the music industry and why he decided not to pursue a career in that field. (11:39)
- Alan’s first foray into creating a software business. (20:49)
- Tips for starting a software business if you don’t have technical expertise. (24:12)
- What he would do differently if he were starting his first software business today. (39:21)
- Why it’s important to recognize how your priorities change over time. (48:36)
Mentioned in the episode:
Before the Exit – Our New Book
Partner With Us
The Dynamite Circle
Tropical MBA on YouTube
Post a Remote Job
Dynamite Jobs – Remote Recruiting Sales Page
Let’s Talk High-Level Podcast Strategy for 1 Hour
The Stair Step Approach to Bootstrapping
The 4-Hour Workweek by Tim Ferriss
Rich Dad, Poor Dad by Robert Kiyosaki
David Heinemeier Hansson at Startup School
Enjoyed this podcast? Check out these:
This week’s sponsor:
Today’s podcast is sponsored by Dynamite Job’s Done-for-You Recruitment Service.
If you run a growing seven or eight-figure remote company, your next productive team member could be just one simple phone call away.
Our recruiting services are designed to save weeks or even months of your own effort in the hiring process. While we’re finding your next dream team member, you can avoid the ‘job board grind’ and ‘hiring hustle’ to instead focus on building a better business.
The process starts with a free, no-obligation call with one of our senior recruiters. We’ll then go out and execute the entire job search on your behalf. The job will be marketed to thousands of candidates, the applications will be filtered down, the talent will be interviewed, and you’ll receive the top picks hand-delivered.
Hiring can be a total pain but the team at Dynamite Jobs is doing it successfully and efficiently every day. Schedule a call with their team and learn more here.
Subscribe via iTunes.
Listen on Stitcher Radio.
Android users can grab our RSS feed here.
Right-click and “save file as” for direct download.
Or click here to get sent to the top of the page where the on-site player is.
Have comments about the show?
Do you have ideas for things you’d like Dan and Ian to discuss on future episodes?
Our producer Jane would love to hear from you at [email protected] or leave us a voice message using the record button below.
Thanks for listening to our show! We’ll be back next Thursday morning 8AM EST.
Dan & Ian
Alan: And then when I would go to talk to developers, I wasn’t just a business guy with an idea anymore. I was a business guy with a vision and execution, and 100 recordings of customer development conversations with a visual prototype that now the engineer doesn’t have to look at it and try and think through what it might look like, they can look and be like, ‘I can build that’.
And so the idea of this recruiting product is like, just schedule a call with Ian. And, you know, we’ve done this as a company almost 400 times now. So, on that call, we just walk through what you’re trying to accomplish. What’s the budget? Can you go this way? Can you go that way? And we’re seeing that we’re able to say like, ‘Okay, well, if that’s your budget, and you want someone in this time zone with this skill set, like, here’s what you need to pay, does that work for you?’ That’s been leading to a tonne of success. So really working on that concept. So I think if I were to redo the ad today, I would really try to assert this idea of like that 30 minute brainstorm session, so you can kind of see us try to grow that business in real time here on the pod. So more on that in the coming weeks when Bossman gets off sales calls.
For now, let’s visit an entrepreneurial story that was super instructive for myself. Today’s guest is selling recurring subscriptions to relatively expensive software. And he’s not a developer. So something I was super interested in. And this story came about because I’m hanging out here in Austin, Texas. Austin, Texas was already a magnet, but it really became a winner during COVID. Texas is relatively open and there’s lots of open space. And it’s very entrepreneurial. So a lot of folks in the community have come here.
And one of the things I’ve just been noticing about so many listeners of the pod and folks in the community is just how they’re upping their game – having a great deal more resources and leveraging outside capital. And as you get more entrepreneurial chops, this increasingly becomes an opportunity. And that’s what is happening to someone who I’ve known for a long time. His name is Alan VanTaoi. And he’s a longtime member of the DC. I remember hanging out with him back in the 2013-14 era, when so many entrepreneurs were hanging out in Vietnam. Today, we’re gonna talk about his story and evolution and just see it in real time. The thing, when looking from the outside, about growing an entrepreneurial career, like we talked about last week, it’s so hard to know what’s going to happen in advance. With a job, or a career, it’s legible, you can sort of say. But with entrepreneurship, it’s a process and today, we are going to peer inside one entrepreneur who’s upping his game. So just a lowdown on his current business which is Crew Fire dot com, which is a brand ambassador platform that helps ecommerce brands turn their customers into an army of brand ambassadors. And here’s the cool part, the pricing starts at $1,000 recurring a month and can go up in some cases to $5,000. As we record this episode, ‘Crew Fire’ as a startup is moving fast.
So in this show, we’re gonna get into how you can start to develop a SaaS without necessarily having a developer partner at the very beginning, and how to attract that person if and when you need them. We also nerd out on the lure of Vietnam, and how and why Alan rebooted up, rebooted ‘Crew Fire’’ after a really difficult period. So we started out by talking about why this time, Alan’s seeking outside investment for ‘Crew Fire’:
Alan: Earlier in my entrepreneurial career, I was always on the fence of bootstrapping and growing a nice, solid business. But after doing that a few times and experiencing a few micro exits over the last 10 years, now we’re finally in a position where we have a) an opportunity, we have a business that really has an opportunity to scale into the, we believe, tens and hundreds of millions of dollars in annual revenue, and now also we have the ambition to do it, which wasn’t true earlier in my entrepreneurial career. Ten years ago, when I started my first SaaS business, for me then a nice six figure, seven figure outcome would be great. And that wouldn’t appeal to a venture investor. But now having achieved some of those earlier benchmarks in my career, my goalposts so to speak, have moved and so now we’re looking for a bigger outcome.
Dan: What’s your constraint right now to growth?
Alan: It’s a few things – with our higher ticket, and with the kind of platform that we’re doing, it’s not really a self service software product, we really need a sales team to take this to market. That’s one thing that we learned early on, we had a free trial and a low ticket earlier on.
Dan: It’s kind of an enterprise sale?
Alan: Like mid market, it’s punching into mid market. And so like ease of onboarding, decreasing friction onboarding, it really didn’t make for strong customer success because of the amount of investment that it takes to really make a programme like this work. I mean, we need salespeople, we need account managers, we need customer success to really, a) take us into market, get this thing in front of the right decision makers for these mid market and eventually enterprise brands. And b) we need to manage them. It’s not like a self-serve SaaS tool, if you sign up for Gmail or Dropbox, you start using it on your own and you’re off to the races. With this we have to invest in onboarding and customer success, and knowledge transfer. And that’s the bottom of the funnel and then at the end of the product, there’s still a lot of marketing work to do. And right now, it’s just one engineer, it’s just my CTO. And we are running into limitations. Like, this thing works on Shopify, it’ll also work for WooCommerce and Magento. But that’s triple the surface area for integration work that needs to be done. Right now, it’s working great on mobile web, but we don’t have iOS and Android apps. And there’s a lot we could do with iOS and Android apps. So on my list here are high leverage roles that we need to bring on board as quickly as possible in 2021, and it includes sales, customer success, marketing, and then engineering slash development and product.
Dan: So what you’ve essentially done is you’ve created this nugget of like a positive return. And now you’re gonna put it in front of some of the sharpest minds in internet business and say, ‘capitalise my nugget’, essentially.
Alan: Exactly. The greatest minds, it’s more than just the capital, we’re confident now that we have an opportunity that we can legitimately go to world class investors, people that have …. I haven’t scaled a SaaS business beyond seven figures before, I don’t know what operations looks like, I’ve never scale a sales team. I’ve never sold the enterprise, these are solid questions, we don’t need to reinvent the wheel. And that wisdom is out there for any bootstrappers that want to go that route as well. But if you get these, like world class, whether it’s operators or product designers or, ‘go to market enterprise’ or ‘mid market go to market’ geniuses on your table, and they’re out there, they have a vested interest, they can open doors.
Dan: Yeah, investors can pump their investment, right? So, ‘I got a stake at your company. And now here’s 25 clients, bro’.
Dan: I’m pumping my investment. This is a weird question. But I feel compelled to ask like in this time of, because like, I met you in very different circumstances. And I want to go through your story here in just a minute. But before we do that, I want to ask you about – can you let us know a little bit about your lifestyle?
Alan: Yeah, I’m working from home, I moved to Austin, Texas in October, maybe I’ll backup a touch there, you and I met in Vietnam. I was in Vietnam as recently as March 2020 I went home, had nothing to do with COVID,I was celebrating some family stuff. first week of March. I was only supposed to be in town for two weeks. But then fate had other ideas and COVID, you know, the viral curtain shut the world down. And so I stayed with my parents for eight months. But then as it got colder ..
Dan: Where do your folks live?
Alan: Bethesda, Maryland, just outside DC. Yeah. And, as you know, Southeast Asia is beautiful, tropical, sunny and warm. And so this body kind of acclimated to that over the last six years and I thought to myself, ‘Well, Austin, Texas, sounds awfully nice right about now’. So moved to Austin, end of October. I got a house here. Next is Zilker Park and I just work from home. I have an office here. I’m 33 now and so when you and I met in Vietnam, I was in my mid 20s and I optimised for location independence and freedom and adventure and travel. And then, for me, as I hit like 30, into my 30s, the things you optimise for in life changes, you reach different chapters, and for me, it was proximity to family proximity to friends in the United States. For me, Austin has provided those things – close enough to my family, same time zone, I can call them after lunch, which is a luxury that’s not afforded to me while I’m in Asia. And the lifestyle is great, great lifestyle balance, great community of entrepreneurs here. It hasn’t been super social.
Dan: It’s tough to give it a full eval just at the moment. It is a common move in the community to optimise for adventure and almost that kind of solitude from real life and real responsibilities in order to 100% focus on your business. And often, that’s to South America to Asia or Europe and to try to hang around with a crew of people who are doing the same. And then as your business interests mature a little bit, you don’t need to have that maniacal 12 hour a day, ‘I get my food delivered to my door. It’s the perfect macro combination, I take some kind of focus drug’, and there is this kind of maniacal nature to a lot of business oriented nomadism. And then as folks get some traction in their career, you start to serve a stair step your way back, like back across the globe to Europe, and then eventually, a lot of people do end up back in their home countries. I want to go back and sort through some of the early days stuff. Specifically, I’m curious as to what got you in the game?
Alan: I can point to a few. I can really trace early entrepreneurial seeds back to like high school and college. In high school, to be honest, I was selling weed a little bit. I’ll say this, just a little bit, but enough where I realised that there was an alternative to selling my time for nine bucks an hour or 10 bucks an hour, the alternatives to high school jobs. And when I realised that, obviously, I wasn’t gonna do that for life, and it was stressful, the legality of it at the time. I couldn’t go back to working at the pool. I worked at a pool cafe during summers in high school, and that was over.
Dan: If more people were honest on this podcast, you’d hear more stories like this, you got to be willing to do things other people aren’t.
Alan: Yeah, and it’s 2021. I mean, it’s weed, what’s the big deal? So then, in college, I thought I was going to work in the music industry. And I went to the University of Maryland, which is not exactly a hotbed for music industry courses or extracurriculars. So I looked around, there were no options for it. And so along with a few friends as a freshman, and we were freshmen, we started the ‘Maryland Music Business Society’, and it immediately hit and we got hundreds of members, and we started throwing concerts, and we actually became profitable, we were making $5,000-$6000 a month, as a student organisation. From there, senior year of college, my roommate, and I read, I forget which one was which, but one of us read ‘The Four Hour Workweek’.
Dan: Was it hard? Sorry to interrupt, was it hard to be responsible for so much revenue and not own it?
Alan: No, it was fun. I was doing all sorts of extracurriculars. I was also promoting concerts under an actual company, ‘Tink Tank Promo’. And I was brand manager for Red Bull. I was running the NMBS. I mean, I was doing too much. I was doing too much shit, but it was all fun. That entrepreneurial add was on full throttle at that time. And we did things like we would organise like New York trips like field trips to New York and meet with Live Nation and meet with AEG and meet with like, Rolling Stone and we could fund that from this concert money.
Dan: Wow, so it sounds like you really created an excellent education for yourself.
Alan: Yeah, it was fun. I learned early enough that working in the music industry was not a good idea at all anyway, so that was like the most important thing I learned a) there’s not that much capital floating around the music industry. And b) it’s not like a great niche or industry to sell or work in because it’s kind of toxic and a lot of ego. They’re not like getting together in conferences and message boards and following influencers or bloggers and really working on their craft all the time. It’s really just a lot of stress and ego and not a lot of money floating around.
Dan: I’ve noticed that, why do you think that’s the case?
Alan: First off all these glamour industries: music, entertainment, fashion, there’s so much supply of young, kind of naive, if you will, entrants into the industry. Demand is fixed and so the salaries, the amount of money that marketing associates at record labels make – it’s laughable. I don’t know, something about the nightlife industry, it just attracts a lot of ego and a lot of toxicity. I don’t want to trivialise the thing that I’m so passionate about by trying to put a price by trying to make it my career, I’d rather achieve my financial goals somewhere else, and then just be able to enjoy that as recreation. And as a fan. I wanted to keep it playful.
Dan: Yeah, a lot of us make that choice early in our careers too. Because the first entrepreneurial instinct is to jump into an industry you love. But I think an important entrepreneurial skill is realising that systems thinking, the entrepreneurial skill set is flexible across niche and industry. And so making that choice makes a big difference. I was speaking with someone today who wants to do scheduling software. And it was the niche that he knew about that inspired the idea to make scheduling software. But my first instinct was, ‘Oh, that that industry sucks, it sucks for these reasons. But that kind of solution in a better industry could be amazing’ What’s an emergent industry that needs scheduling that can learn from all these other shitty niches and now, it’s that kind of thinking that I think you’re demonstrating right now. So that’s interesting. Okay, so your senior year, you’re hanging out with your friends, and you read the ‘Four Hour Workweek’?
Alan: I read ‘The Four Hour Workweek’, the same time my roommate was reading ‘Rich Dad, Poor Dad’. And then and we were both like, ‘Dude, you have to read this book. It’s a game changer’. And we traded. And so we both read ‘Four Hour Workweek’ and ‘Rich Dad, Poor Dad’ in the same couple weeks stretch. And those two books – first off, you talk to anybody in our internet entrepreneur, digital nomad community, and those two are like the pillars, right? I mean, everybody’s read them. And what they do is they illuminate an alternative path. This is like, 2010. So it wasn’t like today where there’s great, amazing podcasts, and so those books illuminate this path towards like, ‘Okay, like build assets that generate income for you while you sleep. That’s the path of wealth’, or, redefining what asset even means, to be fair, and then the ‘Four Hour Workweek’, lifestyle, design, location independence, you can create a lifestyle that is alternative to this nine to five grind.
Dan: Well, how did you implement it?
Alan: I also was interested in technology and mobile. The iPhone, it came out in 2007- 2008. And it became this new canvas for entrepreneurship. I paired that thinking with a third resource, which was an entrepreneur named David Heinemeier Hansson, or DHH for short. He’s one of the founders of ‘Basecamp’ and ‘37 Signals’, also the creator of ‘Ruby on Rails’, and he gave a presentation at a programme called ‘Startup School’ in 2008. You can find this on YouTube under DHH ‘Startup School’, and in it he breaks down the economics of subscription software, or many of us now know as SaaS software as a service. And he breaks down what I came to find is like the beauty of recurring revenue, and if you can create a product like in software or anything really that has a recurring revenue component, meaning the customer pays on a monthly or some sort of recurring basis, you can build something that achieves your financial goals. And the numbers become way more digestible and way less intimidating.
So, just working backwards on some napkin math here, if you want to build a million dollar a year business, which is great for anybody starting out, certainly any college senior – ‘A million dollar a year business, sign me up’. A million dollars a year divided by 12 months a year, that’s $83k a month that you need to achieve. If you need to achieve $83k a month and that still might sound like a big number, but if you divide that by how much your product costs on a monthly basis, let’s say it’s just a low price, $50 a month product, you need 1600 customers paying 50 bucks a month to make $83k a month to make a million dollars a year. And all of a sudden, it’s ‘I don’t need to create the next Facebook, I need to build a $50 a month product that I can sell to 1600 people’, those numbers are extremely digestible for someone starting out.
Dan: And when David was giving that talk, he was talking about a bunch of techies sitting behind laptops, now we’re talking about a global market that’s purchasing these sorts of products from their mobile devices. And so the amount of people you can sell into has dramatically increased. I love this – what you’re demonstrating to me is kind of entrepreneurship from first principles. Because there’s two different polarities. A lot of people start businesses that are adjacent to their last jobs. So it’s like, ‘Hey, I was this kind of consultant for super, super long. And now I’m stepping out and doing my own thing and building the business around it’. We all do a little bit of that. But we also do a little bit of thinking from principles to which is combining these basic basic ideas, and then choosing the next action based on the principle. We certainly do that every day in our business where we’re doing this same napkin math, and so I just wanted to flag it up how powerful it is, for example, we’re starting to marketplace this week. And the napkin math I’m doing is, ‘I want my sellers to sell a million dollars a month this year, and so that I need 30 partners on $3,000 a month’ right? it’s exciting. It’s not that hard to get there. It’s just 30 people to make three grand a month.
Alan: It’s so doable.
Dan: Okay, so this DHH video will definitely link it up. So you are doing this math, and then what?
Alan: That’s just de risked it for me. Do I think that I could build something that people pay 50 bucks a month for and that’s to get to a million dollars a year? I’d be happy if I were doing a quarter of a million dollar a year. So now you only need to sell to 400 people, that gave me the confidence that like, ‘Okay, I can do this, there’s no risk here’. But before I did it, I thought it would be good to work in a startup and another startup just to kind of get a lay of the land and kind of see how other people are doing it. And so I looked for tech companies, I was in Maryland, I wanted to move to New York. And I was looking for jobs at tech companies in New York. And I found that Yelp was opening a sales office in New York City and they were looking for sales reps. And so I applied and got that job. For about eight or nine months, I was on the phone selling Yelp ad products to local businesses in the New York/New Jersey area. And it was great, I learned how to sell, I learned how to use a CRM, I learned what a pipeline looks like. And I learned how to close deals that, at the time, were 300 bucks a month for these Yelp ads. It is awfully repetitive work, I will say that, and that kind of kind of set me on my way. And from there I kind of took stock of what ideas I had that I believed I could sell for 50 bucks a month or 100 bucks a month to what kind of customers I knew about. And the idea that I had was, going back to my time as a working in the music industry. Among other jobs in the music industry. I managed street marketing teams. So there’s a very niche kind of form of marketing, not many people know about, but if you ever walk around a major city and you see posts promoting an event, or flyers, people handing out flyers or canvassing on the streets, those are often called street marketing teams. And a lot of times these event promoters, concert promoters and brands will spend 1000s, 10s of 1000s of dollars a month on printing out this marketing material. And at the time, in like 2011, I guess we’re getting into 2012 now, there was no accountability there, there’s no way for the brand to get proof that the printed material was actually making its way onto bulletin boards or into the hands of potential attendees.
And so I had this idea, the iPhone had come out a few years before Instagram was blowing up, Instagram, of course, you could share photos and then see their locations. And I thought, why doesn’t someone make a mobile app that these team members can take photos of the work that they’re doing in the field, send it up into the cloud, and we can use a GPS location from the smartphone to map where every photo was posted from. And then back in the office, the management company or the promoter can get all these reports of all this work, it’s been distributed, and we can show heat maps, we can show where every photo was posted, and it’ll just drive more accountability in the space. And so I launched that in 2012. And it’s ‘Simple Crew’ dot com you can check it out still running today. And yeah, we got that out there. And got initial traction.
Dan: Was it 50 bucks a month?
Alan: It was and I think, still is 50 bucks a month, which I at this point, I actually sold it to my business partner, my then business partner, still great friends, we had a very amicable split. And I think the price could raise significantly, that’s something that I’d encourage most entrepreneurs to do, it’s much easier to get to profitability and beyond with higher ticket products.
Dan: How did you build the software though?
Alan: That’s a great question. For me, I’m non technical.
Dan: You’re working, you’re pumping phones at Yelp, and you’re dreaming up software, but you can’t write code?
Alan: Yeah, a dime a dozen business people with ideas who are looking for a technical co founder, right? And so how do you stand out from that? It’s like how do you find a husband or a wife? There’s no one way to do it but I can tell you what worked for me. And that was – there also, as there are a lot of business people looking for a technical co founder, there’s a lot of developers who aren’t creative ideas people or who would like to start something, but they lack the marketing skill, or the ability to envision the product, or they lack the sales ability. And so there are counterparts to this archetype that I was. As that non technical co-founder with an idea, there’s a lot that you can do to make progress on a software idea that you have that has nothing to do with code that has nothing to do with the software itself but has everything to do with building momentum around this concept and separating yourself from the world of other business ideas, business guys or girls with ideas. And so those things can include things like designing the prototypes, and designing the software, you can do that in in Sketch and figma, or even in Canva, or, and then you can start interviewing your target customers and start building a database of first 10, then 25 and 50, then 100 conversations that you’ve had with your target market, walking through the prototype, and then asking them how much they pay for it, and then maybe even getting LOIs letter of intent, or even pre selling this thing. I did all that. I put up the website, I got the domain, I designed the marketing for it. And I got up a landing page, doing all the things about creating a software product that weren’t actually creating the software. And then when I would go to talk to developers, I wasn’t just a business guy with an idea anymore. I was a business guy with a vision and execution, and 100 recordings of customer development conversations with a visual prototype that now the engineer doesn’t have to look at it and try and think through what it might look like, they can look at it and be like, ‘I can build that’. ‘Oh, and it’s pre-sold, and it will launch with revenue too’.
Dan: By the way, this is how you can get any job too, is that you’re already doing the job better than whoever they have there right now. One of the things I was visualising as you continued describing the dominoes keep knocking down, having done all these important things, is that the amount of equity you have to give up to that developer, you know, if you were to run it back 100 times whatever, continues to decrease as you do these tasks. Now, if it’s just an idea and spitballing in a coffee bar, it’s 50/50. And as you continue to knock down dominoes and perform more and more tasks, now the final domino would be something like, ‘Oh, you know what, I’m just gonna take off that first S, and I’m just gonna have an ‘aas’, an ‘as a service’. And I’m going to start selling a service with a mix of, ‘I’m going to have a few support folks that run the spreadsheet, that write the emails’, like 90% of software is just a bunch of other software tied together to deliver a desired result for the client. Now, all of a sudden, you’re selling services, and you just hire the developer. Still, there’s a strong argument for a technical co founder or someone who shares your vision and as a business partner, but you can see like, the more you take your advice, the stronger bargaining position, the easier it will be to recruit. So it’s not just a recruiting thing, but it’s also an equity thing.
Alan: There are so many no code solutions now. You can piece together a combination of existing, like, Lego blocks of software, if you will, that don’t really take an engineer to make happen. And you can create something that’s valuable for a customer that you can charge 10s, or hundreds of dollars a month, or more, just by putting it together and packaging it and bringing it to market. So I’ve seen a lot of friends in our community that have done that.
Dan: And then, yeah, you just kind of eat it backwards with software once you get technical people on onboard. Ueah, we’ll have a lot of examples in house. I’m kind of on fire about this topic. Because we’re doing things via like, emails, spreadsheets, Airtable, plus this plus that plus. There’s this kind of bundle of like, nine different solutions that Yeah, kind of figure out and all of a sudden, you see a client like, bam, they want to pay for it, because it’s like really working for them. If that were software, it would just happen faster and to more people.
Alan: Sure. You’re proving it, I’m actually using one of your ‘aas’es, shout out to Alex at ‘Dynamite Jobs’, we’ve used ‘Dynamite Jobs’ to find and connect with some amazing talent. And, I can tell there’s a bit of software there, but there’s also a lot of plumbing, non software planning or tools, other tools like Airtable and then, Alex’s time, I’m sure and maybe other contractors that you have in the background. And that’s recurring revenue for you, you got me on recurring revenue. And do you have like a high ticket, multi $1,000 upsell, that’s primarily in an ass. And so we’re going with that, by the way, it’s coined.
Dan: So Alan, through doing extensive research and even making pre-sales for his field team management SaaS ’’Simple Crew’’, partnered with a technical founder Mike McCabe, who agreed to build it out
Alan: Among other things, we applied to ‘StartUp Chile’, which is a programme run by the government of Chile, the South American country. They take 100 companies in six month batches, every batch of the 100 companies, and they give each company a $40,000 grant. So it’s equity free, keep all your equity, We moved out of South America for six months, with 99 other companies from around the world. And it’s epic, I mean, startup Chile dot org, cannot recommend it more highly. It was so fun, it was such a cultural experience. And it was kind of like college, except it’s with entrepreneurs from all around the world, and everybody’s got $40,000. And that gave us six months of runway plus a little extra, and we came out of that programme doing about $2,000 a month in revenue. We were each taking home 1000 bucks a month or a little under at the time. And again, ‘Four Hour Work Week’ was ringing between my ears through all that. And in Chile, we’re very much proving that we’re location independent. And I met someone named Andrew Michael Todd, who is in the ‘Start Chile’ batch after me. And I told him I’m Vietnamese American. And I told him at the time that I was thinking about going to Vietnam after Chile. And he said, ‘Oh, you got to join the Dynamite Circle’. And that’s actually how I came to join your community and connect with the people in the DC and find the TropicalMBA and here we are.
Dan: What was it like moving to Vietnam?
Alan: So moved to Vietnam in early 2014. So after Chile, I moved back home for two or three months. And the suburbs of the United States feel so bland, after you’ve had your first living abroad experience. Vietnam called to me for a lot of reasons I mentioned earlier, I’m Vietnamese American, my parents were born in Vietnam, I wanted to understand more about what that side of my lineage meant. So I landed in Vietnam in the afternoon …
Dan: This is your first time in Vietnam?
Alan: It’s my second time I’d visited when I was 16. I had no notion how long I was going to stay. I was just checking it out. But my friend Tom who I had actually gone to high school with who had moved to get on a few months before me and who was also in the DC, he picked me up from my hotel on a motorbike and took me straight to a friend’s house who was hosting this like coworking event. And I immediately plugged in to this community within hours of landing. And then of course, Vietnam, I don’t have to tell you, it’s just magical. And I blinked and six years had gone by, and I was 32.I still love it.
Dan: I know this is a digression. But I was just speaking about Vietnam and comparing it with other countries. Why is it special? There’s something about it and, for me, there’s a kind of a nexus of three things going on with Vietnamese culture. Number one, it’s incredibly different than what we grew up with. That’s the thing, but so is China, but so is Japan. Well, the second thing is it’s somewhat legible. And there’s a lot of reasons for this that are historic or whatever. But I can access it in a way that’s harder for me with other cultures in the region. And then finally, there’s a lot to admire about what’s happening in Vietnam, and you kind of put all these things together, and you just drop, like the best food culture on top of it. And you’re like, ‘Whoa, this place is great’, and they got a really wonderful piece of real estate. I’m curious as to what you think about that, like, what’s, what are some of the reflections you have about Vietnam, the country for those who haven’t visited yet,
Alan: I would say the accessibility and I would build into that affordability. There is something to be able to just afford the things that you need and not have to worry about it and be able to do that at a lower economic threshold than in the US right. So on $1000 or 1500 bucks a month there. My rent was 250 bucks a month/300 bucks a month in the early days, and I could eat whatever I wanted to and go out. Enjoy the nightlife. and not have to stress out about money. And it wasn’t just me, it was all of our friends. And so unlike these expensive American cities, and this is coming from someone who likes living in cities, as opposed to lesser expensive rural areas, but like, he was a city that not only could I enjoy comfortably from an economic standpoint, but all of our friends could, too. And so we had time to hang out and get to know one another and there was amazing, amazing culture to explore. I’m a fan of the nightlife. And the nightlife in Ho Chi Minh city is just amazing. I fell in love with the place, I would die there, if it were closer to the US with an easier time zone to communicate with. That was a big thing we touched on earlier, one thing among the things that life wasn’t 100% optimised in Vietnam is the timezone disparity between the east to the west. It’s just harder to maintain relationships, and have that casual phone call. And as my parents punch up closer and closer to 80, that relationship is meaningful and is important to nurture. But all that said, I still have love for Vietnam, and I will always spend time in Vietnam every year if I can have it my way.
Dan: Let’s talk then about what happened with the business. So you say you left us off with, you’re meeting a bunch of entrepreneurs, now you’re embedded in an affordable place, and you’re making about 1000 bucks a month?
Alan: Yeah, so we grew ‘’Simple Crew’’ to $10k a month, and maybe a little bit more over the course of a few years. But what we found was, we thought we hit like a local maximum on that business. We were selling and still are to some of the biggest music festivals and concert promoters in the US like Live Nation and Electric Daisy,Carnival, Coachella and Lollapalooza are using ‘Simple Crew’. But the most you can get from them for this tool is like a couple 100 bucks a month. And so kind of capped out. And so we were thinking about other ideas. We watched how some of our customers were using ‘Simple Crew’. And again, ‘Simple Crew’ is a photo sharing app, you’re taking photos with your smartphone. And that’s getting put into this kind of like, management view. And we saw that some of these concert promoters were asking their team members to not just hang up posters and hand out flyers, but also to post on Facebook and post on Twitter, about the events that they’re promoting. And then take a photo of their laptop screen with ‘Simple Crew’ to report that that post was done, to get credit for that work. And we saw that and we thought, ‘Oh, this is backwards. And this is an opportunity’. Instead of people taking a photo of their laptop screen to report work they’ve done on one digital platform like Facebook, to another digital platform like ‘Simple Crew’, we could just create an app that would make it easy for these brands to suggest content for people to share on Facebook and Twitter. And then easily like with a couple clicks, those team members can share it. And then we can actually make that post directly to that network through the API. And then track, who had shared it and, and make a streamlined kind of social media Ambassador software.
And so that was the genesis for the idea for ‘Crew Fire”, as far back as 2015. And so we, we had that idea, we built it, and we launched it, we got it up to at the time, I think we got it as high as $5k a month. I was living in Vietnam, Mike, my partner, was living on the west coast of Canada, so there was an extreme time zone difference. I wanted to focus on ‘Crew Fire’, and he wanted to focus on ‘Simple Crew’. It was a good time for a very amicable and friendly kind of split, where I would take ‘Crew Fire’, he would take ‘Simple Crew’. And, and then because simple proof is a bit bigger at the time, he would actually pay me a little bit to exit that position and to just focus on the smaller business. And so we managed that split in 2017. And that kind of set us up for, for me running through ‘Crew Fire’ for the years after.
Dan: We’re in 2008, you watch DHH pull out a napkin and put numbers on it. Fast forward to 2014, you’re on the other side of the globe. You’ve got your napkin math to six figures of income? What would you do differently because that’s a six year period. If you could accelerate that curve, what might you advise yourself in retrospect?
Alan: So many things. First off, picking a better ideal customer, again, who’s your customer? How well capitalised are they, how much cash is actually floating through this market or through this industry, and how much of that are they able to allocate towards the pain of the problem that you’re trying to solve? And, in this case, I’m speaking strictly through the lens of b2b, which is business to business software, b2b and subscription software, which has been my career. I do love selling to businesses, because they have capital, and they’re actually investing in their businesses, it’s a much easier model to get flowing.
But even within b2b, you have people that are selling like a calendar software, like you mentioned earlier, like, you’re gonna be competing with free tools like calendly that have their product pretty dialled in. And so it’s gonna be hard to charge 50 bucks a month, or 100 bucks a month or $1,000 a month. So I would encourage an upcoming entrepreneur to think, what can I sell for hundreds of dollars a month? What pain can I solve that’s worth hundreds of 1000s of dollars a month for a customer. Something else I might have done differently is, to your point about skipping the software component at first and going with services. We bootstrapped from literally zero and then we had a $40k grant. But even then, that’s not really that much capital to build, like software is time consuming and expensive. And then investing in growth also, if you want to grow more quickly, can also be time consuming and expensive. And it would be nice to have a bit more capital early on to help accelerate some of that and I don’t mean going out and raising money. But I do mean, if you have a services business and you can, with services businesses, you can build cash flow much faster than a software business. I would do a service business in the niche that I was going to sell into eventually on and try and build up a six figure capital base, and then have all that leverage – the customers, the service, the team and the capital, and the platform from which to launch a SaaS business, I think that would be a much faster way to meaningful profitability than just bootstrapping, just software from zero.
Dan: I like that, because it fits with some of the patterns we see, of course, there’s always a chance that you don’t fit the pattern. You don’t want to dissuade people from doing what they see uniquely. However, it is easier to sell expensive shit than it is to sell cheap shit. This idea that you can go into a very specific, highly capitalised pain point with a clear sales pitch and say, ‘Give me this amount of money, we’re gonna solve that problem for you’. That’s a lot easier than what you said Calendly is doing, which is building a very slick product that scales out to 1000s of users, that people are happy to pay 10 bucks a month for whatever, that’s hard. It was always the same deal in the product manufacturing industry, too. It’s a lot easier to create like this very specific bespoke bar that’s gonna work for like 30 hotels in the US, and it costs like 15,000 bucks than it is to create one bar that works in dad’s basement that he pays 150 bucks for and invites his buddies over to hang out with his bar. So we made custom bars. And the higher our price point, the easier it was to sell for a variety of reasons. Sometimes I buy shit from Walmart, and I’m like, ‘How did they even make it for that?’ What was your emotion when ‘Crew Fire’ sort of landed in your lap and all of a sudden your buddy isn’t there anymore. It’s just you sitting in Vietnam with a $5,000 a month business.
Alan: The path from ‘Crew Fire’ to ”’Crew Fire”’ today, because if you remember from the top of the call like, ‘Crew Fire’ is the business that I’m ramping up today. It’s nonlinear. Frankly, it’s like a different business today. What happened immediately after I took over this business, so 2017, if you remember, Trump got elected in 2016 and there was this immediate blowback and outrage on Facebook. And there was this data sharing scandal that Facebook got wrapped up in because a kind of growth hacking service company called ‘Cambridge Analytica’ helped Trump get elected, helped Brexit happen. And they did that through some sneaky workarounds on the Facebook platform, abusing the Facebook API. Well, we were using the Facebook API, we depended on it. And, in the wake of this Cambridge analytic data scandal, Facebook, cut off API access for a tonne of third party developers. We lost Facebook API access in our Facebook feature for like, three weeks, and lost most of our revenue, we went from, like, 5k a month to like $1.5k a month within months of me doing this deal with Mike.
And it would have sucked more, but for the good fortune of the crypto boom happening also at the same time, also at the end of 2017. In 2014, when I first moved to Vietnam, and we had hired some team members in Vietnam, the cheapest way to send them money, actually was Bitcoin because of PayPal fees so I’ve been using Bitcoin for like three years when this 2017 crypto boom happened and I just got swept away in it and ‘Crew Fire’ kind of flatlined under $2k a month. And I took my team from that and we started doing services for crypto projects. And that led to a service business in certain crypto projects and then being a software and a product guy that went on to become two other products that I launched in the crypto space and they became my main focus from that point 2017 until right up until the beginning of COVID actually. Sold one at the end of July 2019. It became my second little micro exit. The other product we kind of open sourced and it’s free to use now. All these products are still running. You can check out ‘Chain Fuel dot com’, it’s a Telegram anti spam and analytics tool that a lot of crypto projects use. We built and sold that and then ‘Telefuel dot com’. I built and open sourced it and it’s an alternative Telegram client that crypto communities and crypto power users can use to manage their Telegram chats.
I’m still super passionate about being involved in the crypto space. But what happened is I wound down those other two products right at the beginning of 2020. And then COVID happened and I found myself with all this free time on my hands again, for the first time in years and ‘Crew Fire’ was just sitting there. And it became my pandemic project at the beginning of 2020. And it was a free trial, then $59 a month. And, along with my new co-founder, new business partner, new developer, Fredrik, we started having conversations with customers. And we took down the free trial, and we made it a demo call. So they would have to talk to me in order to get into the product. Because we’d been around for four or five years at that point, we were getting a decent amount of traffic and inbound just from old content that I put up on the blog and on YouTube. And all sorts of people are searching for brand ambassador related keywords, not all of them would make the perfect ideal customer. So I was having these conversations to try and find out. ‘Okay, who exactly are we trying to serve? Are we going to serve political advocacy groups? Are we going to serve information from product entrepreneurs? Are we gonna serve ecommerce brands?’ And through enough conversations, I got clearer and clearer on a few key things that really set us up for the end of 2020 and now ‘Crew Fire’ is my fastest growing business that I’ve ever done.
The insights that these conversations uncovered were, Who is the target customer?’ Which became these direct to consumer ecommerce brands on Shopify? What were the features that were important to them? Things like a Shopify integration, where we can do coupon codes and referral links? What kind of value could we create for them, and then what kind of price points would that value support. I don’t want to make it sound like it was a lightning bolt eureka moment that happened immediately in the spring of 2020. But we had an idea of that direction early on, and we started building for it, and raised prices pretty quickly after shipping some of these features from $59 a month to $99 a month to $199 a month to $300 a month. And then we started billing annually, $3600 a year, $6k a year, $12k a year. And that set us up for like lumpy cash flow, we were getting 1000s of dollars from these deals, just kind of validated the pain that we were solving for the customer and the price point that that would go on to support.
Dan: It’s exciting. One of the thoughts that occurred to me is like, this is what entrepreneurial insurance looks like. People outside of our community, like, I just hear people talk about their 401K’s are their insurance policy, they just want everything to look so stable and solid. But there’s a stability in what you’re describing. The ability to own multiple different assets, to be able to turn focus on a dime, to be able to have fun with it, variety, and expose yourself to incredible upside. What part of your story do you feel motivated to share with the listening audience in the sense of – what do you want to impart to them about what they can learn from your journey?
Alan: Maybe what I would say, this is not directly business advice, but it’s a common theme. My roommate is a young entrepreneur, who just moved to Austin, he’s like 10 years, more than 10 years younger than me. And the thing that keeps coming up in my life that I was conscious of, and that I’m sharing with him is – be conscious of how the things in your life, the things you’re optimising for in life, they evolve and change over time. When I was in my mid 20s, or early 20s, or mid 20s, late 20s, it was all adventure and culture and travel and experiencing the world. And it didn’t occur to me then that that would change significantly.
But as I hit 30, and 31, we talked about the importance for me now of optimising for the relationships with my family, time spent with parents, time spent with my sister and brother in law and the child that they have. Part of the beauty of the location independent entrepreneurial journey is that you have that optionality for your lifestyle to evolve and as what you want evolves instead of being locked into one thing. You don’t have to kind of always flex that location independence too. This is something that Mark Manson wrote beautifully about him in one of his books I forget, maybe, maybe it’s ‘The Subtle Art’. But it’s like, you have that freedom. But sometimes that freedom can manifest itself as choosing to take on responsibilities over time, like family, or like getting a dog, which I haven’t gotten there quite yet, but that’s something I’m still learning, still working on that.
Dan: It’s funny, though. You mentioned it like, you do that napkin math. You started with that million dollar thought experiment. For many young entrepreneurs it’s $10,000 a month is the dream business. If it’s location independent, and it’s 10 grand a month. But as you get older, you realise that well, you might want more capital to do different sorts of things with the rest of your life, and that maintaining a $10,000 a month business might not be it.
Alan: Sure It’s a new journey, right? And I could very well raise this money and learn the hard way that there are downsides to raising money – nothing is ever all just sunshine and rainbows. But, you kind of take all the inputs you learn from people that came before you and then you kind of make a calculated bet based on what you know, and for me I get that sense now that it’s a new adventure, something that I think we can manage and pull off and be successful with and learn along the way. So it’s like I said earlier, cap downside unlimited upside.
Dan: Wow, thanks for joining us in the pod. We appreciate it.
Alan: Thank you for having me, Dan.
Dan: Big shout out to Alan VanToai for coming by the show and sharing so openly and check out what he’s up to over at ‘Crew Fire dot com’. We’d love to hear what you think about this episode. Our email inboxes are open for your comment. That’s it. Thank you for joining us. Have a great day. Go make a cold call or something. We’ll be back next Thursday morning. 8am Eastern Standard Time.