Picking the Right Market to Get Started In with Justin Jackson and Tyler Tringas

Courtland Allen: 7s

What’s up everybody? This is Courtland from IndieHackers.com, and you are listening to the Indie Hackers podcast. On this show, I talk to the founders of profitable internet businesses and I try to get a sense of what it’s like to be in their shoes. How did they get to where they are today?

How do they make decisions at their companies and in their personal lives, and what, exactly, makes their businesses tick? And the goal here, as always is so that the rest of us can learn from their examples and go on to build our own profitable internet businesses.

I have interviewed hundreds of founders on this podcast and many hundreds more on indiehackers.com. I think it’s clear that the idea you choose to work on matters. In fact, the big decisions that you make in the early days might be the most important factor in whether or not you can build a profitable side project and turn it into a business that supports your vision for your life.

Today, I’m bringing on two previous podcast guests to have a discussion about how to make some of these decisions. Specifically, how do you choose what to work on? Justin Jackson is the founder of Transistor, a podcast hosting service that’s recently taken off in a big way. He first came on to the show back in September to share Transistor’s story. Justin, welcome back to the show.

Justin Jackson: 1m 13s

Thanks. Good to be here. I had to miss a good skiing day for today, so.

Courtland Allen: 1m 17s

I know, I feel so bad.

Justin Jackson: 1m 17s

This better be worth it.

Courtland Allen: 1m 21s

It’s up to you, I guess up to me, too. Tyler Tringas is the founder of Earnest Capital, where he provides early stage funding for bootstrappers and indie hackers who are trying to build profitable, sustainable tech businesses. Tyler, this is your third time on the podcast so welcome back.

Tyler Tringas: 1m 35s

Thanks for having me back. Does that make me the record holder?

Courtland Allen: 1m 39s

I think you might be the record holder. I think we’ve had someone else that’s been on here twice. So you’re officially in the lead if we’re keeping track of this sort of thing.

Tyler Tringas: 1m 47s

That’s the crown I’m after.

Courtland Allen: 1m 50s

So the reason I wanted to bring both of you onto the show is primarily because of a blog post that you wrote, Justin. It’s called The Main Thing. What would you say is the point you’re trying to get across in that blog post, Justin, and also what motivated you to write it?

Justin Jackson: 2m 4s

That post there is me following my curiosity. It was just me pulling on a thread and going, “That’s interesting.” I was talking to Nathan Baschez, and I was pulling on this thread of, it’s interesting how sometimes, in certain categories, the main thing swallows up most of the value in that value chain or in that category.

Then I thought of this metaphor of eating out. When I was in college and didn’t have very much money, if I ate out I would order an entrée and water, and just thinking about how that’s interesting. Most folks often will just order the entrée and maybe 10% of the time they’ll order dessert.

And I was wondering, maybe this is applicable to the way we think about products. So it was an exploration of this intellectual rabbit hole of, “Hm. Maybe this is a good way to frame some of the way we think about building products.”

There are definitely some scenarios where this seems true. I have a few examples in the post, but I use my friend, Josh, as an example. He has this subscription form business. He found it difficult to be an appetizer in that market.

Courtland Allen: 3m 36s

What does it mean to build a company where you’re an appetizer? What’s your example of your friend Josh’s company?

Justin Jackson: 3m 43s

In that specific case, he was doing subscription forms that you could embed in Medium posts. His initial advantage was that he was an appetizer for a main thing that was taking off, Medium. Medium was crazy. There were tons of folks like me that were building big audiences on Medium.

Invariably, eventually it would be like, “Man, I’m getting all this traffic at Medium but it’s not helping me any.” That’s how I found him. I Googled subscription forms for Medium. But eventually what he found was that that wasn’t enough. It’s not enough to be an appetizer, especially when, in his case, the main thing, Medium, started to not be as popular for bloggers like me.

Then he was trying to move over and say, “Well maybe I can be nice subscription forms for regular blogs.” It was always too much of an appetizer. It wasn’t enough. Maybe 10% of the time people would want to order it, but most of the time people just didn’t want that.

In that category, email newsletters, the main thing is I want to be able to create and send newsletters and a nice form that I can embed on my site is nice to have. It’s an appetizer. It’s something I might order once in a while but I don’t really need it all of the time.

Courtland Allen: 5m 11s

One of the cool things about business is that it’s complex enough for there to be a lot of different viewpoints on topics like this. I’ve seen talks were founders have basically agreed with you and said, “Don’t build on top of other platforms. Don’t build a side dish. You should build the main thing that provides value for customers that they’re used to paying for.”

I’ve seen talks where founders say the exact opposite. I was just watching Jason Cohen give a talk at MicroConf where he was saying one of the best things you can do is build in an aftermarket, where you’re building on an app store, following in the footsteps of a bigger business where their momentum is pulling you along with them.

Tyler, when you read Justin’s post, I think you had some points you raised on Twitter, where you disagreed with some of the things Justin was saying as to how you can maximize your chances of building a meaningful business as a bootstrapper. So what’s your take on whether or not a new founder should build a main thing or a side dish or an appetizer?

Tyler Tringas: 6m 6s

First of all, I think it’s great post and I think that Justin, you’ve been on a roll lately with a bunch of insightful posts that have done a good job of giving a nice, concise intellectual wrapper around important things to think about.

So I just want to say that the reason we’re having this conversation is that Justin has been putting out this series of great posts and then essentially I’ve been a lazy reply guy, jumping in there and saying, “Well, let me just nitpick on this, this and this.”

But I think at a high level, there are two points to most of these posts. One is, “Hey, this is an interesting and important thing to think about,” and then there’s a layer that goes into, “But now what should you do when you think about that?”

I think on all of these, I feel like I wholeheartedly agree with Justin that these are a good way to frame a thing that it’s important for people to think about. Then where we’ve come into areas of disagreement has been, what are the implications for doing business?

Usually I think both of us and probably everyone here goes to the narrower view of, “Okay. Bootstrappers, indie hackers, how should they be thinking about this particular category?” So that’s where we start to create areas of disagreement.

I think it’s a great framing. It’s very useful to think about, “Okay. I want to build this product. Is it a main thing? Is it a dessert? Is it an appetizer? Is it foie gras, a luxury product that barely anyone’s ever going to buy but it’s incredibly expensive?” That’s a great metaphor to use and a lens through which to look through things.

Then through a first order of approximation you might take that metaphor and say obviously you should be building a main thing, because everybody is going to buy the main thing. Everybody that goes to a restaurant gets an entrée, and water, and then maybe they would add some stuff to it, so that’s going to be much easier to find customers.

But where I look at that and think about, “Okay. If I’m a bootstrapper now or indie hacker or something like that, should I be thinking more towards building a main thing, or should I be thinking about building things that are side dishes or appetizers or bolt-on products that can leverage somebody else’s effort in a main thing? Should I be building the complimentary product to a very popular main thing?”

I generally think, at least at this point in time now for bootstrappers or indie hackers or folks who are not coming with a ton of incumbent capital or unfair advantages, I generally use the aggregate term, should be shying away from main things, in the main because a lot of these general big verticals are incredibly competitive right now.

When I look at Indie Hackers and if I scroll through all the products getting launched, where I see people that I think, “Oh, I hate to break it to you, but that’s definitely going to fail,” are folks who have a new idea for a to-do app or a new twist on WordPress hosting or something like that, these obvious, big main things.

What they’re not factoring in is how much competition, the second order effect where it’s going to make it so much harder to get traction, to get distribution, to get differentiation, all those things that make it hard.

So where I see these talented founders running a hundred miles an hour into a brick wall is building another project management app, another big obvious main thing. That’s where I think we can have a discussion around, is should you build a main thing? I think it’s a great lens to analyze things but should you do it or not is a separate question for me.

Justin Jackson: 9m 53s

And I think if you read the post, I explore both sides, because they’re both interesting. One of the examples I used is one of my favorite places in Portland, this ice cream place called the Salt & Straw. They regularly serve 36 flavors and they make it themselves and it works because it’s Portland. That place has a lineup out the door. They’re selling dessert.

But that concept wouldn’t work in my hometown, for example, because it’s just too small of a market. I think Portland has almost 30 million tourists a year. Here, we’re not even close to that. So here, the places that work well are the meat and potatoes places.

If you sell meat and potatoes and you do a good job, you’ll probably have a lineup out your door. But a place that sells just ice cream handmade the way they do it at Salt & Straw, it likely won’t work. It’s interesting looking at both sides.

So in what situations and contexts does it make sense to go after a main thing? Sometimes, those existing categories, the existing competitors there, are old and crusty. There’s opportunity because the incumbent players are just so old that you can come in with a fresh new take on the category and you can do well, even though these are big giants and gorillas in the space. In other situations, there’s a main platform, like WordPress, that’s taking off and it makes sense to build good WordPress hosting. You can ride on the coattails of this bigger thing that’s moving.

For me, that’s the interesting part about this, is looking at the variables on both sides here. In what cases does this makes sense and in what cases does this not make sense? What we don’t want to do is we don’t want to discount things too early.

We don’t want to say don’t ever go into a competitive space, because there’s too much competition. But wait a second. In podcasting Libsyn has been around forever. But for a lot of people they were super old and crusty, so to have a fresh new take in that market made sense.

Courtland Allen: 12m 18s

Tyler, I’m curious what, in your opinion, is the biggest risk with trying to build a business that’s the main thing. Is it the competition? Is it the fact that if you get started as an indie hacker building something that targets such a huge audience and it’s got a lot of incumbents who are dominating the space that you won’t be able to beat them?

Tyler Tringas: 12m 37s

I think it’s the second order effects of competition. To get any amount of traction, I think you need differentiation and distribution. You need some amount of either of those two things. So it’s just so much easier, just to put cards on the table here.

The holistic view that I have here is that both in terms of where I think most of the opportunities are for entrepreneurs to succeed in this software technology enabled indie hacker realm, leaving aside restaurants and ice cream chains outside of metaphorically, but in these realms I think to maximize your chance of success you need to niche down by either product or audience.

So that’s differentiation or distribution. Either you’re going to target a niche audience somehow, let’s say with a main thing for that audience, or you need to build a differentiated product that is probably not going to be the main thing, but in a big market.

I think if you are going straight at the main thing, again, we can list them. When I think of the idea of what the main things for indie hackers are, it’s a CRM. It’s a project management tool. It’s a to-do list. It’s basic ecommerce. It’s static site hosting or just general CMSs. Those sorts of huge verticals. They’re just chock full at this point in time.

They weren’t ten years ago. It was a totally reasonable thing to be Squarespace and bootstrap Squarespace and go into that market. But now I feel like we’re in a time now where so many of those things that we would say, “Oh, go after a main thing,” to a young entrepreneur just starting out looking for the best place to succeed as an indie hacker, they’re just so hard to differentiate or to distribution.

We all know these stories of folks who started their business back when you could get five cents a click on AdWords, and that was how you got your thing out there. You didn’t need to be super differentiated. You didn’t need this incredibly niche audience, but that’s just not the case anymore with these main things.

Now sometimes you can find these niche audiences where they don’t have a main thing at all so it’s just wide open. This is maybe a little bit of a separate conversation. But the other thing is you can find these niche use cases within the categories.

And that’s where I think if you look at, for example, the portfolio of companies that we’re investing in, as well as where I see a ton of the successful indie hackers, they’re almost all, in terms of lately, let’s say things that have started in the last five years, these sorts of appetizers, you would call them.

They are automated dunning and collections on top of Stripe. They are error collections and notifications on top of Rails and other hosting platforms. They are these little bolt-on pieces, and the magic is that it’s even when you are a side dish, maybe you can’t build an ice cream shop in Vernon, BC, but when you are selling to the internet, you do still have this magical ability to find these shockingly small niche products that you can’t even believe.

I think you were interacting on Twitter the other day. I saw somebody who does snapshots for Digital Ocean. I don't know the details there but it looks like it’s a fulltime business for someone for several years. The most niche things you can think of can turn into real businesses, and it’s so much easier to get both differentiation and distribution on the internet as an indie hacker.

Justin Jackson: 16m 15s

Yeah. Ultimately, what I’m especially interested in right now is quantifying demand. What is the economic potential for a product if I built it in this context? This is why I often say the market you choose matters the most.

So if you’re in the PHP market, and of course you can get pedantic or semantic about how we define these things, but if you’re in the PHP market, that is a massive, massive market. Taylor Otwell has built a $10 million business in that market. In a sense, he’s a side thing because he’s on top of this massive market. I’m guessing that $125 billion a year is spent on PHP developers. But in another sense, he’s built things that are very much the main thing in a development pipeline, like Forge.

It’s something that you need to get your work done. Also, I’ll take a quick sidebar and say I think we have to be careful, also, about the examples we use, cause the developer market, especially, the technical market, is one of the most unique markets in the world.

What works with the developer market, especially these special niches we find within the developer market, likely won’t work outside of the developer market. It’s a very unique market. You can’t take the lessons that Adam Wathan learned with Refactoring UI and apply it to knitters.

Developers right now are highly incentivized to get better at their job. They’re making some of the most money in the economy right now. There are a lot of factors that make it a very unique market, so we don’t want to draw too many parallels outside of that category. I lost my train of thought, but.

Tyler Tringas: 18m 10s

Yeah. I might need to hear you say more about that. In what specific way to you think developers are different from knitters? I think you’re right, but.

Justin Jackson: 18m 19s

First of all, the number of them, their average revenue, the fact that they are highly incentivized to get better at what they do. Professional development in that category is unlike anything else. There aren’t that many categories that are like that.

There might be some parallels with doctors, but nobody has all of the checkmarks: reachable online; congregates in communities online; has tons and tons of cheap channels to reach them with. What’s Adam Wathan and Steve Schoger’s marketing budget? It’s nothing. It’s their time. They’re using existing channels.

Most businesses in the world now are software businesses. It makes sense, if you go to your boss and say, “Can we buy a copy of Refactoring UI?” he’ll say, “Oh, yeah. Let’s do it. We’re a software business. It makes sense to invest in this.”

So when you have that many people in motion, when you have that many companies that are also incentivized to invest in tools and education and all these things, it’s just a very unique market, and we might see it change. If in 20 years, artificial intelligence is writing most low-level PHP, maybe that market won’t have those characteristics anymore. It’s probably likely. Markets change all the time. The dynamics within a market change all the time.

I think that market, especially, I see a lot of examples on Indie Hackers and podcasts and things that are in the development market, and then I see other people trying to apply those to real estate agents and lawyers and other things. I think the reason it doesn’t work is because the developer market and the technical market is a very unique animal right now.

Tyler Tringas: 20m 13s

I think, though, that it probably shares a lot of characteristics with anything that is internet native right now, which is a much bigger pool. Anybody who is ecommerce first, I think, shares a lot of those characteristics.

Anybody who is a content-based business, whether it is ad based, news, blogs, membership sites, all that sort of stuff, I think they all share those characteristics. If you get into pure offline target markets, yes, but I don't know that developers are so, so unique versus everybody who runs a Shopify store.

Justin Jackson: 20m 50s

I think there are a lot of differences there. If you look at ConvertKit, for example, they do these state of the union surveys with creators, which is essentially bloggers and podcasters and other people. The difference, and I used to be in that category, and it was meeting folks like Taylor Otwell and Adam Wathan that blew my mind.

There’s this natural cognitive ceiling we have when we’re in a bubble. I’m in this online course creating category, and I’m going to the conferences and all the meetups, and I know. Who are the most successful people in this space? What do they earn? What does a typical launch look like?

What I’ve discovered over time is that launches, the programming niche, the programming market, do way better, make way more money, have way better channels, have way more upside. I’m also an advisor for Podia, so I have some insight into what folks are doing on that platform, and this has held true.

Let’s take online education. One person does a course for Shopify stores, and one person does a course for programmers. It’s hard to generalize, but in most cases the programming course is going to do better, just in terms of sales, number of people buying, average sale price and overall revenue. There is a noticeable difference between categories.

Tyler Tringas: 22m 31s

Yeah, it’s true, but I don't know if you would see the same thing if you were talking about products, SaaS products. If you were to analyze the success of entrepreneurs building on, just to generalize, the Heroku add on store selling primarily to developers, the Shopify app store selling primarily to ecommerce entrepreneurs, and the WordPress plugin directory selling primarily to content folks I think they would share a lot -

Justin Jackson: 22m 57s

I think that the difference is between WordPress. There are noticeable differences in that market. The customers tend to be more difficult. The customers are more price conscious. It’s harder to get them to upgrade from free to paid.

That’s the whole reason I’m so interested in markets, is that characteristics of markets matter. These things that we observe at the beginning, when we’re pointing ourselves in a specific direction and deciding which way to step forward, that 1% at the beginning of our journey matters a lot.

Pointing yourself, there’s no guarantees, and it’s still not easy. People ask me all the time, like, “Okay, well give me an example of a good market that’s on tap.” Well if it was easy, then I would just be playing the stock market. But it’s very similar to skiing. You can teach me how to position my skis one direction or another. You can teach me how to stop. You can teach me to do all these things.

But if I’m on a flat slope, none of that matters, and it feels like sometimes we’re teaching people how to position their skis and how to go backwards and all these things, but they’re on a flat slope so they’re not moving, where the first thing we need to show them is, here’s a good slope. This is too mellow. This is way too steep. But this right here, this is as good slope.

And now, your positioning matters a lot, because now as you’re going down that slope the way you turn your skis matters. Your technique matters. The gear you’re wearing matters. The skills you bring to the table matter. To me, finding a good market is very similar to finding a good slope to ski. There are noticeable differences. That run over there? It’s a little bit more mellow. Maybe don’t go after that one. That one over there? Ooh, that’s really steep.

Tyler Tringas: 24m 48s

I feel with your main thing, though, you’re telling folks, “Go straight to the double black diamond. It’s going to be fast. You’re going to get to the bottom, and you’re going to either die or get there real fast and it’s going to be wonderful.” I’m saying maybe you could start with some greens and blues.

Justin Jackson: 25m 5s

Tyler, the number one rule in the metaphor club is that you can’t cross metaphors.

Courtland Allen: 25m 11s

I think Tyler brings up an interesting point, and it’s funny that both of you are on the two sides of this issue that you’re on, because I would typically associate the position of, “Go for the main thing. Go hard or go home.

Pick the biggest market,” with advice that I would hear from investors, especially high-growth, startup, Silicon Valley investors who don’t necessarily care that much about the individual success of any of the companies they invest in, but they want one or two or three of the companies they invest in to really hit a home run.

As a bootstrapper, I think more people are concerned about, “Hey, can I get to enough money in revenue to quit my job, to be able to sustain my lifestyle?” And it often ends up looking like a tradeoff between something that has a higher chance of success but might not have as high of a ceiling in terms of how big of a business you can build, versus something that might be swinging for the fences, going after a massive market, but there’s just so much risk there, there’s so much competition.

You might have to be so much more clever to figure out how you’re going to make your mark. So Justin, my question for you is, do you see that as a tradeoff that you have to make or do you think that picking one of these giant markets and building a main dish doesn’t come with any downside?

Justin Jackson: 26m 19s

I get mischaracterized here. I’ve never said, “Pick the biggest market,” or I’ve never even said, “Pick a massive market.” I’ve just said the size of the market does matter. I think there is a danger to lean too far to like, “Oh, no. Just pick a tiny little group where you can compete.”

We don’t even have to use the word tiny or massive. We can just say, well, at some point the size matters. We have to quantify demand. What is the economic potential for a product if I built it in this category?

So I’m not saying that you want the biggest possible ceiling that is infinite. But I’m saying the ceiling matters. If your ultimate outcome that you’d like is to hit a certain threshold for income or something, then yeah, the size of that market matters and the ceiling matters.

There are no guarantees that you’re going to be able to start in a smaller market or even with niche positioning, and that you’ll automatically be able to move yourself over to something else. So I’ve never said go after the biggest market.

Go and look through all my posts. Maybe I said it, but that’s never how it’s been in my head. In my head, I’ve been like, “No, this does matter though.” The size of the market is one of the characteristics that we want to look at, and we want to look at some other things, too.

We want to look at number of potential customers, how much they spend, the frequency at which they buy, the growth rate, right? How many new customers are coming into the market? How much are the spending? What’s the frequency of spending, and what percentage of the market do you think you can reach?

Tyler Tringas: 28m 10s

I want to try to pin you down a little bit on this.

Justin Jackson: 28m 12s

Sure.

Tyler Tringas: 28m 13s

I agree that rather than debating what you have said in the past, what do you think? Because it seems that the post, The Main Thing, says you should build a main thing, right? I mean, it does say there’s caveats and exceptions but the gist of it is, you should probably build an entrée, right?

Then at the same time, you’re also doing that. I think most people would look at you going directly head-to-head when you launched Transistor. When you Google “best podcast host,” there’s a blogpost that comes up with 42 options on there.

So you’re also clearly doing something that I think most people would consider to be on, not the extreme end. You're not going head-to-head with WordPress or Shopify. But you are going after what most people consider to be a non-niche product. And you write this post saying, “Hey, you should think about main things, appetizers and desserts and you should build an entrée.”

Justin Jackson: 29m 6s

I’ve never said you should build an entrée.

Tyler Tringas: 29m 9s

I think you did, but what do you think?

Justin Jackson: 29m 12s

No, I didn’t say that.

Tyler Tringas: 29m 12s

Regardless of what you said now.

Justin Jackson: 29m 13s

That’s important.

Tyler Tringas: 29m 14s

OK.

Justin Jackson: 29m 14s

It’s important because often the people who are nitpicking me on Twitter are assuming that I’m saying something, but that’s not what I’m saying. What I’m saying is, “This is interesting, this idea of entrée, appetizer and dessert. Hmm. And we should consider this.”

And then here’s a big section of the post, like 30, 40%, that just talks about how bigger markets can support ancillary products. And that’s interesting too. And “Huh, what are the circumstances in which all of these fit together?”

So the responses I get from my readers of my newsletter seem to be more understanding of all of the nuance I’m writing in the post. The comments I get on Twitter are often saying, “Well, you must mean this.” And it’s like, well no.

Courtland Allen: 30m 4s

Twitter is not the place for understanding, Justin.

Justin Jackson: 30m 7s

I’m just exploring an idea and the idea has this section over here, and the idea has this section over here. In many ways, podcasting is interesting, because it’s not that big of a market. So people are always just saying, “Well, Justin, you’re always saying massive market.”

No. My biggest competitor, from what I can tell, has 70,000 customers. That’s a pretty small market comparatively. From the beginning, if you go back to John’s and my podcast, early episodes of Build Your SaaS, we’re talking about these things. The ceiling of the podcasting market is probably much lower than what we saw with WordPress hosting and what we see in video.

It’s growing, but it grows 5%, 10% a year. It’s not going to be this massive market. But we looked at it. Okay, what’s the number of potential customers and how much they spend and the growth rate and how much of the market we think we can reach, and then we go after it.

I’m just saying podcasting was big enough that it felt like it was worth going after, as opposed to some other things I’ve tried. I’ve had all sorts of businesses in my life, and I’ve worked for different startups as well along the way. I’ve got my newsletter list. I’ve got friends. I’ve got MicroConf. I’ve got MegaMaker Club. I’ve seen all of these people launching products.

Often, one of the problems is they chose a market that for a number of reasons wasn’t the best market. In some of those markets whether you’re building the main thing or a side dish really matters, and so you should consider that. In other markets, it might not matter as much and there are other factors to consider.

But this is one of the filters I think people should be applying, and it’s an interesting exercise. “Hmm. Am I building a main thing or a side thing? If I am building a side thing, is the market I’m in big enough to support it?”

If I am building a side thing, what are the potential threats? If I am building a side thing, what is the ceiling for what I’m building, and is that going to be enough?”

SnapShooter, that you mentioned earlier, the Digital Ocean thing, he’s in MegaMaker Club. He’s built a great business. It’s a great business. But he has hit a ceiling and now he’s wondering, “Okay, what do I do? Is there a way to grow this beyond what I’ve got here?”

So these are all things to explore in the complex and difficult world of starting a business. What are you going to explore?

Tyler Tringas: 33m 6s

I will try to take a little bit more falsifiable position on this to maybe try to engineer some debate here. So Courtland, I think you framed it right a little while back. We used to be talking about how you would traditionally expect the hats to be reversed, or at least for me to be wearing a different hat as an investor.

Most investors have a diversified portfolio, so they want their individual companies to go for broke. So yeah, sure. Take on the biggest market you can with the most main thing entrée that you can.

We have a totally different approach. Our basic key metric is not the magnitude of the individual outcomes, but how many of the founders that we back actually succeed. We’re trying to make as many of them succeed as possible.

So I’m pretty aligned in the sense of, when I try to give advice to entrepreneurs I say, “This is going to maximize your chance of success with our fund strategy.” Then you can look through our portfolio and you’ll see that it matches up with what I’m saying which is essentially I think if you are a bootstrapper or bootstrapper-esque company, you don’t have a huge array of unfair advantages.

One of those unfair advantages could be a big pile of VC money. Another advantage could be a lifetime of working in the industry and a giant audience in that industry. There are a lot of those. But if you don’t feel like you have a huge number of unfair advantages and you’re trying to maximize your chances of success as an indie hacker, I think you should almost exclusively think about side dishes in main markets, any of those big verticals, probably any of the categories along the left-hand side of the Indie Hackers/products or whatever that page it that says “Ecommerce, CRMs, sales automation.”

If you’re going to go right at any of those categories, you should absolutely be building something that looks like a side dish, because you’re going to be able to much more easily achieve differentiation. You’re going to be able to piggyback on the distribution that big players are already tackling in that space.

You can either jump into their ad stores, their add-on stores. You can hop into their forums and find their customers and all that sort of stuff. And you should run like hell away from trying to compete directly. I see people coming in and trying to build the main product in those categories. “I’m going to build a simple, easy-to-use ecommerce store.”

How many failed versions of that have you seen in Indie Hackers? It’s the build-the-to-do-app way to learn to code, but it’s not the way to build a business. So we’re pretty solidly in the camp of, if you’re going to go after any of those verticals, you should be building something that looks like a side dish, and the big caveat being if you’re going to go after a very, very niche audience, to agree with Justin’s point earlier, if the audience is very small, you probably do need to build a main thing product that is their primary use case.

So if you are going to build something specifically for dentists in Florida, you need to build a comprehensive, full stack SaaS platform, which is going to be the thing that they pay hundreds of dollars a month for, at least, not a little add on. But if we think like, go for side dishes basically.

Justin Jackson: 36m 21s

Yeah. I mean, that philosophy is fun. There are definitely examples of where that can work. Certainly, again, there’s still a question of how much momentum in a market is enough to make a side dish work? The problem with trying to quantify, scientifically, which approach is better, is that we just don’t have quantitative data on success. What is your definition of success at Earnest?

Tyler Tringas: 36m 56s

Well, we don’t have a defined definition of success, but one of the things that we measure is getting to default alive as quickly as possible. Most of the companies we invest in, they’re not default alive. It’s a side project. It’s not paying them enough to cover their bills, and we try to say, in under 12 months the business should be default alive, covering your businesses.

I think that’s a platform that you can build on. One of the things that I think is the thing that often kills businesses is, they go after too big a market. They go after too big of a product scope, and they don’t get to default alive, whereas once you get to a default alive - and by default alive I’m just meaning that you're making enough money, that you can keep doing what you’re doing.

You’re covering your costs, and then you can think about, “Do we expand into an adjacent market? Do we add on a second product? Do we build out a feature set that moves us closer to the main thing from the amuse bouche up to a hefty appetizer up towards the entrée?” But you need to achieve those little economic platforms as you’re building. It’s easier.

Justin Jackson: 38m 2s

Sure. If we were going to quantify it, is that $10,000 a month in revenue? Is there any baseline we can use there?

Tyler Tringas: 38m 10s

One magic number is $10K MRR per founder. That usually feels like enough that people feel like, “Okay. Hey, I could probably do this for the foreseeable future,” rather than having a lit fuse that’s going to blow up any moment. But it hugely varies, right? It depends on whether or not you have a mortgage and three kids and all that versus a solo hacker in Thailand.

Justin Jackson: 38m 34s

Yeah, this is what makes all of this so difficult. So first of all, none of us here can quantify which approach is the best approach to get most businesses to $10,000.00 a month in monthly recurring revenue, because we don’t have that kind of data, especially not that kind of data on bootstrap businesses.

And so that’s tricky already. You can’t split test life, so if there’s Jane in Ohio and she’s like, “Okay. Well which approach am I going to take? Am I going to go this route or this route?” We can’t split test that and see which approach would work better.

And so a lot of this does end up being what, in Tyler’s case, what is he seeing on the Earnest side, and in my case, what am I seeing on my side, not just with my own experience with Transistor, but with all these other people I know.

The biggest thing, and Tyler probably feels this on his side, is I don’t want people to discount the big categories. My friends, Paul Jarvis and Jack Ellis, they’re going after Google Analytics. That’s one of the biggest, most competitive categories. That’s it. That’s a crazy category to go after as a bootstrap company.

Tyler Tringas: 39m 53s

But they have such huge unfair advantages. This is where I think we do have a genuine point disagreement.

Justin Jackson: 39m 58s

Mm-hm.

Tyler Tringas: 39m 57s

I think a young indie hacker who is reasonably good at coding, and that’s it, young in the sense of their total time being an indie hacker. They could be older, but they’re just getting into it and they don’t have a massive audience and a best-selling book and a huge amount of built up trust from folks who say, “Yeah, I’ll give this a shot.”

Were they to come and launch a direct competitor for Google Analytics they would fail and I’m sure that if we go through the annals of Indie Hackers, we will see a whole bunch of launched milestones, nothing else, in that exact category?

Justin Jackson: 40m 37s

Sure.

Justin Jackson: 40m 38s

I mean, this is why I don’t want to over extrapolate these categories. Tyler Tringas: [00:40:39] But including people that on the surface look like they have unfair advantages. There are a lot of those folks that launch things that don’t work, that have the big audience, that have these things that people often point to.

Obviously, there are other characteristics that matter. This is why I’m saying, the market you choose is the most important decision you make. So Paul and Jack launch this now when there’s this whole other context happening. If they launched it five years ago, even they with Paul’s big audience and things, would have probably failed.

And Paul has a number of failed software project launches. And so do I, by the way. I have things that I tried to launch that did not work for a number of reasons. Right now, there’s this big backlash against Google. There’s this whole concern about privacy that the idea of privacy-focused analytics is increasing as a trend. The idea of simple analytics is increasing as a trend.

Really, this is another thing I should point out because I remember Rob Walling telling me this. I said, “You know, your audience must have helped you so much with Drip,” and he’s like, “Mm, a little bit.” But on my side, I can see the (inaudible).

Tyler Tringas: 41m 58s

Everybody says that, and I don’t believe that for a minute.

Justin Jackson: 41m 59s

I know. I said.

Tyler Tringas: 42m 1s

Everybody says that they don’t want to think they have an unfair advantage, and they’re just wrong. Everybody says that, but it is a humongous advantage.

Justin Jackson: 42m 7s

I said the same thing, and I’m not discounting that it is a bit of an advantage. But do know that people with big audiences launch failed products all the time.

Tyler Tringas: 42m 18s

Sure.

Justin Jackson: 42m 18s

So certainly it helps, who you know and who knows you, your financial margin, how you execute on the product, how you execute on marketing channels, your history and skills, positioning, timing, all of these things matter. But unless the market is right, that’s the slope that you build everything else on.

Right now, the slope for privacy-focused analytics and simple analytics is a bit steeper than it would have been five years ago, and so the timing does matter. I don’t think Transistor would have done as well if we launched five years ago or if we launched five years in the future.

Tyler Tringas: 43m 0s

Or if was somebody else that wasn’t you. Let me put rubber-meets-the road here. So somebody joins MegaMaker. They are a software engineer. They know how to code. They’ve never launched a product before.

They listen to this podcast, and they say, “Huh. Analytics market, sounds like a good market, pretty big. Looks like Paul Jarvis is succeeding. I see some other stuff in there. I think I’m going to build an analytics company as my first product.” What do you say to them? Do you say, “Go for it, great market, go after it”? Or do you say, “Eh.”

Justin Jackson: 43m 35s

That’s a really good point. Definitely, if it’s your first day skiing a black diamond and I come along, and I ski black diamonds every weekend, I’m going to kick your ass. For sure, your experience matters. Everything you bring to bear as a founder does matter, absolutely.

I started blogging in 2008 and made no money for a long time, and then gradually built an audience. So audience is one advantage I have, for sure. Ruben Gamez doesn’t give a shit about audience. He’s never built it. He doesn’t care.

But he had an unnatural advantage with search engine optimization and he also had the right timing, because when he was initially doing it, he was there at the right time. So all of those things matter.

Courtland Allen: 44m 32s

I think one of the things that we’re hitting on here is that regardless of what your choice is, there are always different variables. Do you build an audience first or do you build an audience later? Do you build the main thing, or do you build a side dish?

There are examples of successful companies who’ve done all of these things, but I think if you make a choice, you have to go into it with your eyes wide open and make the resulting tradeoffs that are consistent with the choice that you made.

So I wonder. I want to get both of your takes on this. What tradeoffs do you have to make if you decide to build the main thing? What can’t you do? What has to be true for you to succeed making that choice, cause obviously Justin, you’ve succeeded doing that with Transistor so far. A lot of other people, Tyler you’ve pointed out, have failed.

How do you make it work if you decide to build the main thing for a market? What things can’t you do? For example, if you are building the main thing for a market, Tyler might say you can’t get into a market where there are powerful incumbents with amazing products that are not super out of date.

Justin Jackson: 45m 30s

I disagree with that. I think you can, because in some of those existing categories, the existing players are super crusty. When Basecamp came on the scene, Microsoft the big player in project management software, huge. But Basecamp had a new take on it and some other advantages that enabled them to be successful.

I think one challenge with this, especially, is so much of this has to do with where you are in your life, because I’m almost 40. I have four kids, and when people come to me know and say, “Should I build a bootstrap startup with kids, when I’ve got a two year old and six month old?” I’m like, “Oh, it is so hard if that’s the stage of life you’re in.”

When a 20 year old comes to me and says, “I’ve just graduated college. I’ve never had a job. Should I start a business?” I go, “Well, you could but it would be better for you to work in an industry and spend some time on the slopes and start to realize, oh, this is where the good runs are and this is where the bad runs are and this the kind of equipment you need.”

It does help to have some experience. So these touchstones that we give people in blog posts and tweets and other things, these are things for people to consider as they’re moving along. But depending on where you are, those tradeoffs depend on who you are and where you are and also the context you’re in.

So I don't think those tradeoffs are true all of the time. Sometimes a side dish is better, and it seems great, and everyone’s like, “Oh, Baremetrics, that’s the best business you can start,” because they went on top of Stripe and it’s incredible.

But then you see, oh, wow, there’s a ceiling to that business, and after ten years, after some time has elapsed, there are reasons why you might not want to be in that business. So we definitely have to be careful. Don’t follow me just because Transistor’s doing well right now, cause in six months it might not be doing well. There are all sorts of things that can happen.

I’m as much of a player in this game as anybody else. As I’m experiencing them, I try to share the way I think about them, how I’m positioning myself on the slope and what kinds of slopes I’m looking for. So that’s a difficult question to answer from my side.

Courtland Allen: 48m 6s

I think your Bearmetrics example is a good one though, where you might be able to start a business that has a lot of momentum in the beginning, but also if you haven’t looked at the ceiling for that market size, one tradeoff you’re making is that it might not be able to get as big.

Or if you’re talking about audience, if you have a large audience but then you enter a market where the only way to acquire customers is with good SEO, maybe your audience isn’t going to help you that much because you have to do all this content creation and you can’t just get customers from Twitter.

Tyler, I wonder what your take is if you’re building a side thing. As you say, most bootstrappers and indie hackers should start by building a side thing. What are they giving up by doing that, and what do they need to make sure is also true? Do they need to target a big market? Does it need to be a growing market? What should they take into account if they want to start by building a side thing?

Tyler Tringas: 48m 50s

I think it’s so true what you said, Justin, about how it’s so context-dependent on the personal context of the entrepreneur. That’s why I’ve been trying to continuously preface this with, “from the perspective of” a young, as in how many years since indie hacking with no unfair advantages? Cause as soon as you change any of those, it starts to become a totally different question.

But I think to your question, and this is something that we’ve talked about before, but to your point that you can split-test life, to some extent you can get some experimental data in the sense that you have a big megaphone here. And when we were starting Earnest and we’re doing funding for bootstrappers, what you were doing comes up a lot.

So a lot of people were thinking, “What do you think about podcast hosting?” I looked at a lot of podcast hosting businesses and had a lot of podcast hosting businesses apply, reach out. A whole bunch of people who built relatively feature-complete, very competitive, modern, slick UI, not necessarily objectively better or worse but had a lot of the same features as what you guys are offering and what the major incumbents are offering and didn’t ever crack $1k MRR.

I don’t want to throw anybody under the bus, but I could send you a list of 12 companies that launched in a comparable timeline, and one of the things they didn’t have was they were just smart indie hackers, smart entrepreneurs that could build product but they never were able to get distribution or enough differentiation to get off the ground.

So it really does matter who you are, where you are, and all of those factors, I think, come into play. But I do think you can start to strip those away one by one and say, putting back your original hacker hat on, where would you start to maximize your chance of success? I don't know.

I think that’s an important takeaway, is that what I do see people without those unfair advantages coming in and getting success is when they find this one niche where nobody else is building that product, and they just solve a problem, and they can just go one by one.

They can just email these customers and say, “Hey, I built this product. You’re using spreadsheets and sticky notes for this and you should be using my SaaS product instead. It costs $20 a month.” And enough people will be like, “Great, I’m in.”

And I think that even though maybe that has an ultimate ceiling, even if it has a ceiling what you often see, even with some of these examples of people who end up building bootstrap businesses that are in the main thing, they often start somewhere more niche as a point of entry.

And that’s how you build those platforms to say, “Well now, I’m not a solo hacker. Now I have two people on support and two engineers and a part time designer that I love working with. Maybe now I should go tackle this adjacent big thing.”

So the ideal, the magic path, is to find a side dish that is sort of - this metaphor is going to break down - but is to find an add-on entry point to a market and gradually start to use that as an Archimedes lever to get further and further and further into that market.

If I were to say something I think is definitely true, it’s to take the analysis that Justin’s laid out here and then take my advice, which is to find one of those great markets and then find the right entry point for it, which has potentially less competition or is more differentiated or has a better distribution aspect and then build your team. Build your MRR. Build your audience. Build your unfair advantages, essentially.

I think this is a thing that I’ve changed my mind on the most since becoming an entrepreneur, is I used to think everything should be super meritocratic and you shouldn’t care about whatever was the best product would win. And now I see businesses, this steady accumulation of unfair advantages and finding the right entry point to apply your pressure, depending on what unfair advantages you have at the time. Anyway.

Justin Jackson: 52m 54s

I agree with that. You’re right. When you’re starting out you need some sort of toehold and that can take all sorts of shapes but it’s probably going to mean starting small. That might mean you have to build a side dish in an already big market. I think that’s good advice.

Courtland Allen: 53m 12s

How did you get a toehold with Transistor, Justin, because you’re in a relatively competitive market, and yet you’ve been able to grow quickly.

Justin Jackson: 53m 21s

There are so many things. It’s layer on layer. It starts when I’m in high school and I love talk radio and thought about how cool it would be to own a talk radio station, and then it continues on from there.

There are layers and layers of experiences and connections and skills that we built up, and sometimes to untangle all of that is tricky. John had built a podcast hosting platform before. That helped. Our first customer was Cards Against Humanity.

That helped. That gave us a lot of cred. I was able to take that, I built up all these sales and marketing skills, and I was able to use that initial customer as leverage to get us other customers. I’m 40, almost 40. I had years and years of grinding and observing and working on different things and trying different things, and then meeting people who showed me their numbers. There’s so much there.

So there’s a culmination of things that have helped us get to where we’re at. And by the way, since we started there are a couple strong competitors that have come up after us. And figuring it out when you’re in the stream and figuring out, “Okay, how are we going to go from here?” is also tricky.

So what started us out, I think who I knew and who knew me was the big one. All of these skills that we’d been working on since we were kids helped as well. If John hadn’t started programming in high school maybe Transistor wouldn’t exist. There are a lot of things there that helped.

Tyler Tringas: 55m 16s

I think there’s a more complimentary way to put this, and I’ll see if you agree with this, which is you said, “I’m 40.” What you’re really saying is you have a huge trust bank that you have been giving to a community of entrepreneurs, of podcast creators, of all of these folks that are in the orbit of making a business like this work.

And you had been building trust with them through honest transactions and through giving away valuable content for a long freaking time. You had a huge, huge trust bank. One of the things, I think I’ve heard you say this so we can edit it out if you don’t want people seeing, but I think you said that affiliates helped you get off the ground to get to that break-even part where you were cruising.

Justin Jackson: 56m 3s

Mm-hm.

Tyler Tringas: 56m 4s

One of the things we’ve learned from having a portfolio founder, you probably see this in MegaMaker as well, is that a lot of people think affiliates are just this thing where you put up a referral program and voila, it just works. It’s not. It’s its own marketing campaign.

You have to pitch affiliates to be affiliates and to prioritize you and to promote you. You had this trust bank with them, where sure, a bunch of affiliates that have known you a long time, maybe you’ve done them a favor or maybe they just knew you were a good guy and they were like, “Justin’s doing Transistor. He’s got an affiliate program. We’re in.” Right?

Justin Jackson: 56m 40s

Mm-hm.

Tyler Tringas: 56m 41s

There’s no, “Oh, that’s cheating.” It’s that you’ve earned that. You earned that over a long period of time for them to say, “We’re going to do this for you,” and maybe not the other random competitor from someone they’ve never heard of. That’s one of the ways you can get a toehold. That’s a perfectly fair play.

Justin Jackson: 57m 1s

Yeah, yeah. And I think hopefully that gives hope to people who are older and people who are younger. I think one of the reasons Nathan Barry succeeded is he started a practice and a pattern in his life earlier than I did. He was blogging consistently in his early 20s. He was publishing things in his early 20s.

He was selling things. He started practicing selling early, in his 20s. That enabled him to get started earlier than I did. It wasn’t until I was in my 30s that I started practicing those things. It is the practice and the experience that matters. If you're young and you’ve got a lot of time and a lot of energy, that’s as great time to start practicing because you’ve got a lot of time and energy.

If you’re older, it’s probably going to take longer. If I hadn’t started in my 30s, then I would have never gotten to where I’m at today. When I’m advising young people I say, “Who you know and who knows you matters a lot and you’ve got to start practicing. You’ve got to start putting things out into public.

You’ve got to start publishing. You’ve got to practice selling. All of these things take practice. And the more repetitions you can put in, if you’re moving in the right direction, make sure that you’re pointed the right way, the more repetitions you can put in, that really helps.”

And if you’re older, if you’re in your 30s, 40s or 50s or 60s or 70s, whatever, it took me a decade probably to get a reasonable toehold. But you can still do that when you’re older as well.

Courtland Allen: 58m 44s

Tyler, let’s say I’m listening and I don’t have very much experience. I’m just a fledging indie hacker considering this, and I’m trying to decide between building a main thing and a side dish, building in a niche or not building in a niche.

How do I make that decision for myself? I also wonder, do you think these things are mutually exclusive? If you build a main dish, something that people are used to paying lots of money for, is it impossible to also build that inside of a niche

Tyler Tringas: 59m 9s

I think that’s a great point. One of the things we didn’t touch on too much here, we spent a lot of it on this idea of main thing/side dish. We were going back and forth with this in Twitter and I feel like I parsed it a little bit better in my own head, which is that there’s this two by two matrix of, is it a niche audience or the mainstream audience, or is as main thing and it is a side dish?

Justin Jackson: 59m 35s

Right.

Tyler Tringas: 59m 36s

I feel that there’s two good quadrants on that, which is either the main thing for a niche audience, or a side dish for a huge audience. Then there’s one bad one, which is a side dish for a niche audience, which is almost guaranteed to fail cause there aren’t enough customers.

Then there’s a questionable one, which I think is a function of how many unfair advantages you have, which is going after a main thing in a huge market. If you don’t think that you have a huge number of unfair advantages, then you should pick one of those two quadrants.

This is how we allocate capital, essentially. If you look through our investments, pretty much all of them fit into either. It is the main product for a relatively niche audience.

We’ve talked about this to death on Twitter and elsewhere, that niche is this incredibly complicated word. But in broad strokes it’s not ecommerce owners. It is small businesses that do IT network installation. One of those is clearly niche and one of those is probably not, in a very broad brush.

If you’re going to go after something like that, you’re probably want to build a core product for them. Another thing would be if you’re going to go after just CrossFit gyms, you probably want to build something that takes up a good chunk of their business.

You could think of Mindbody, I think, as a good example. They went after yoga studies, but it’s everything you need to run a yoga studio. You pay them a couple hundred dollars a month for a SaaS product that does everything.

I think if you want to build a main thing, let’s say you have a particular product insight into how project management should work or how payment transactions should work or something like that. I would go try to match a niche market where they really over-value that insight, relative to just launching it into the main ether of, “Here’s how we’re going to do ecommerce.”

You want to launch a Shopify competitor. You have a couple of insights. Go and look for the particular CBD industry because they’re quasi-legal in certain places. I’m not advocating you should necessarily do this. But try to match that up to the, “We’re insanely good at managing this aspect of it, and it happens to match up with this niche audience.” That’s a great idea, even if it’s as main thing.

Or if you know the industry well, you’ve been in podcasting, you’ve been in ecommerce, you’ve written books about it, et cetera, and now you want to turn that into a product, I don't think you should go build a Shopify competitor. You should look at the Shopify app store, talk to your customers and clients there, and figure out what’s missing and where the white space is. I don't know if that makes sense.

Justin Jackson: 1h 2m 22s

Mm-hm. I like that idea of the grid. For me, that was the perfect evolution of the thread that I was on. It wasn’t something I thought about, but I think that’s a good way to think about it.

Courtland Allen: 1h 2m 35s

Justin, one thing we haven’t talked about is that in your post you mentioned that there are a limited number of things that customers are both already used to paying for and value enough to pay a lot for.

I was wondering if you could elaborate on that and how that could help people identify these main things that are worth building. Because I talk to so many indie hackers who are so afraid of the competition that they end up building these weird products that nobody values, no one wants to pay for, just because they feel this pull to build something completely unique. What’s your take on building things that people already pay for and pay a lot for?

Justin Jackson: 1h 3m 9s

That’s another vector of this idea. The only example I can think of is my friend, Jack, who runs Statamic. If they’re in a product stack, they get very little of the value in that stack. Most of the value, most of what people pay for, goes to Digital Ocean and Forge and the hosting side of it.

He’s in a market where people don’t value the CMS as much. That’s the momentum in that market right now. WordPress is free, so if all you're selling is a CMS, it’s difficult because what people are used to paying for is the hosting and they get the CMS for free.

You can see with Webflow and Ghost, one of the reasons that they ended up offering hosting as a part of it is because - I think Statamic is valuable, but it’s difficult to change people’s minds or change the way they do things. You have to look at that.

In this category or in this product stack or in this value chain, who typically gets most of the money, and who gets left out? Sometimes that’s more equitably split up in certain value chains. All the folks along the chain get a reasonable portion of the income, and in some value chains people don’t get very much.

In podcast hosting, for example, if you’re just going to do a commenting platform or a review platform, and those products exist but they’re always a side dish, like, “Okay. Well maybe I’ll get that but really what I need is the hosting.”

It’s an interesting exercise to think about. Am I building something that there isn’t a lot of competition for but it’s because there’s no momentum? There’s no demonstrated demand that folks are paying this kind of thing right now.

Tyler Tringas: 1h 5m 21s

I think I totally agree with that. It’s tricky to square that circle of, look for where folks are already paying for stuff but also there’s not a lot of competition. Where I think I see that circle gets squared most often is to look orthogonally at where they’re spending money or valuable time, but not necessarily on an existing software product.

If you see something where the CEO or the owner of a business is burning tons of time and you can say, “Hey, I built a software product,” you can directly relate that to, “saving you a ton of time.” That’s good.

Even better is, “Hey, I built this software product that’s going to prevent you from having to spend money on an employee or to pay a contractor to do a one-off project for you.” I feel that’s often where you see these things happen, where “Hey, we used to have to have a staff of three to manage our fulfillment center’s inventory.

But now that we have this software product that intelligently sorts everything and automatically synchs between stuff, we don’t have to have three people doing data entry anymore. We were spending money on that.”

We knew you could assign a dollar value to it. It wasn’t that we were already using a crappy software product. We were spending money on people or other things That’s seems to be the best version of that, although another good version is they’re already spending money on a very, very crappy, outdated product.

Courtland Allen: 1h 6m 48s

We’re running low on time here but to close out, I’d love to get both of your opinions on how somebody who’s just getting started can get over this hump of paralysis when deciding what to work on.

I think it’s hard enough to come up with a good idea, but then you listen to a conversation like this. You hear there are so many different variables to keep in mind and to consider. You can enter a big market or a fast-growing market, a side dish, a main dish. Is it going to be podcasting or developers? Is it going to be something where you build an audience first or not?

I think that can be even more paralyzing as to, wow, it’s hard enough to come up with a good idea without trying to check all these boxes. So Justin, perhaps I’ll ask you first. What’s your advice for somebody trying to navigate all of this complexity? Tyler, I’d love your opinion as well.

Justin Jackson: 1h 7m 28s

I think the best advice is to get out of your bubble. If you live in a small town and you just hang out with people in your small town, and the only tech people in your town that make money are the people who build WordPress sites, you need to get out of that bubble.

You need to talk to other people and you need to meet other people. You need to have your understanding of what’s possible blown up. Because you’ll see this in small towns. People are like, “Oh, okay. Well the only way I can make money is to build WordPress sites.” You’ve got to open your mind. You’ve got to get out of that context. One way I did this early on is I would find a cheap flight or I would drive to another city a couple of hours away, and I would just go to a local meetup.

You’re automatically exotic because you’re coming in from the outside and it’s all local people. It gives you this opportunity to figure out what’s going on in their world. What kinds of things are they doing? What kind of money are they making? What kinds of industries are outside of your understanding?

You can also do this in your town as well but it’s harder. So if you have a chance to get out of your town especially if you live in a smaller place, you would want to visit New York. You would want to visit Chicago. You’d want to visit San Francisco at some point and just meet with some people. Look up meetup.com and go to a meetup and start to expand your horizons.

Tyler Tringas: 1h 9m 1s

I think that’s good advice. I guess one thing I would advise folks to do is to try to keep the stakes low at the beginning. If you’re still at the idea stage, you're still at the “is this a good market?” stage, don’t quit your job and immediately start trying to figure out, “Okay. I have to figure out something that’s going to work.”

I feel that on the one hand I have this slightly pessimistic view for entrepreneurs, at least indie hacker software entrepreneurs, which is that a lot of the obvious, low-hanging fruit is taken in terms of a lot of the big, obvious use cases are now chock full of amazing competitors. It’s not the same as when you were launching businesses 10, 15 years ago and you could be like, “We’ll just email marketing, I don't know. There are two crappy people doing that. Let’s throw something up there and if we’re any good at it, we’ll succeed.”

The flip side of that is this idea that I call the peace dividend of the SaaS wars, which is that all of this battling also produced Ruby on Rails and Laravel Spark and amazingly low-hanging fruit. Those people, they had to build their own help desks from scratch. Now you plug in Intercom and Help Scout or whatever and you’re good to go.

It’s an amazing time to be able to run fairly low-risk experiments, to be able to launch a real product and see if it works. Even though I’ve taken this position that you shouldn’t go headlong after these main things, if you keep the risks to yourself low enough, I don't know. Give it a shot. Go believed a CMS or a WordPress hosting business or a podcast hosting business.

Sorry, Justin. But you know, just go build it and see what happens. I think it’s unlikely to succeed but if you keep the risks low enough, I think you should go for it and just put in those reps to figure it out.

And then I guess one tactical thing along with Justin’s “Go to meetups,” I would say is often becoming a freelance consultant in random industries can be a great way to figure out if there’s a business. It’s how my last SaaS business started because I was just a freelance Rails developer for ecommerce sites and a couple of my clients were like, “I have this pain point. Will you build it for me for an enormous sum of freelance hours.”

And I was like, “Oh, I think I can make this a SaaS business.” If you’re working a fulltime engineering job, maybe moonlight a little bit in some random industries and see what people are struggling with and see if you can build something for them.

Courtland Allen: 1h 11m 27s

Love that advice. I think it’s really difficult to pick up on a pattern and see some of the commonalities between how successful businesses work and what ideas are out there. If you’re really not broadening your perspective, getting out of your hometown, perhaps working different jobs in different industries than you’re used to.

So get out of the building and keep your expectations and the risk low early on so you can experiment. Tyler and Justin, thank you both for coming on the podcast. Hopefully, this was a great discussion and people learned something from the things you both agreed and disagreed on. Can you tell the audience where they can go to find out more about Transistor, Justin, and also about Earnest Capital, Tyler?

Justin Jackson: 1h 12m 0s

Yeah, just transistor.fm. Say hello in the live chat.

Tyler Tringas: 1h 12m 4s

Yeah, we’re at Earnest Captial.com and you can find me on Twitter @tylertringas.

Courtland Allen: 1h 12m 10s

All right. Thanks, guys.

Justin Jackson: 1h 12m 11s

Thanks.