The Rogues talk entrepreneurship with 30x500's Amy Hoy.

Special Guest: Amy Hoy.

 

I have a massage therapist I’ve been seeing lately, who does really deep tissue work and sometimes the next day, I feel like I got run over by a stampede of Pygmies.

Live Pygmies? (laughs) That’s a very vivid illustration.

Well, because –

Most people would say “truck” or “reindeer.”

(laughs) Reindeer. You know, I’ve never been run over by a heard of reindeer.

Hey, everybody and welcome to episode 72 of the Ruby Rogues Podcast! This week on our panel, we have Josh Susser.

Hey good morning everyone. I’m back to normal. (Whatever that means.)

We have David Brady.

Hey, it’s David Brady and I’m 90° out of phase with everything.

Avdi Grimm.

Hello, hello!

I’m Charles Max Wood from devchat.tv and this week we have a special guest and that’s Amy Hoy!

Hi everybody!

Amy, do you want to introduce yourself real quick?

Oh, no. You didn’t tell me I had to do this. Yes, hi, I’m Amy. I got involved in Ruby on Rails in, I think 2004 or 2005. It was definitely thewinter. Rails was at 0.7 and became a little bit famous because I wrote the sort of right brain tutorials about Rails and Ruby. That totally changed my life and now I’m a product superstar!

There you go. That’s why we have you on the show.

So, that’s actually the perfect lead in to the story I mentioned in the pre-call. So, Amy, you and I have never met before this call, but name dropping your name actually helped me get a job.

I have to hear this.

Okay. So, it’s a pretty short story. It starts with a very sad joke, which is that I was – well, actually, the whole point of it is the joke. In an interview, talking about how much do you know Rails. It was in 2005 or so, somebody asked me how much I knew Ruby on Rails, and I said, “Well, a little bit. I

know enough about Rails to know that if you know one woman in the Rails community, you know Amy Hoy.”

(laughs)

And I got the job, so thank you.

You’re welcome..? (laughs)

And as we’ve talked about on recent episodes, I’m glad that the percentage of women to men ratio is changing in the Rails and Ruby community. This is awesome.

As seen very clearly in the recent Golden Gate Ruby Conference. A very nice… still not nearly equal, but a very nice ratio.

25% is halfway to 50%.

Woohoo! Right on.

Right on. Now, that’s speakers – that’s speakers, right?

Yeah, that was speakers. The attendees, still working on that. Anyway, hi Amy! It’s been a while.

Hi! (laughs)

So, okay we do a bit or two of Rogues business before we dive into the topic. So, it’s time for Best of Parley, right? We need like a–-

I need a sound bite for that.

Yes, Chuck, we need like a little jingle or something.

I’ll see what I can come up with.

Okay, good.

So, you can call it like a pirate day, guys. In terms of that Parley, I feel like this is a party theme going on right now. It should be Pirate Parley.

Chuck, if you’re not going to do the joke from the pre-call. I just want to point out that we’ve got “AHoy!” on the show.

Oh, no! (laughs). You know, yeah, well, my parents should think that one through.

We have this email list called Ruby Parley and if you go to RubyRogues.com and look in the sidebar, you can see a way to sign up for that. We don’t charge for the podcast, but we are giving you all a way to support the podcast by paying a $10 annual subscription and you can get on the email list and chat with the Rogues and other listeners about cool things. A lot of it is about Ruby, but we also talk about other random things. My favorite thread this week was talking about fantasy literature and our own Chuck asked about, “Hey, what are some good fantasy series to read?” And you can tell from my response that I care deeply about fantasy literature and I’ve been learning a lot –

Josh wrote an entire novel about fantasy literature.

(laughs) Well, you know, it was late and I was trying to avoid working on my conference. Anyway, I now have a few new book series to pick up and start and start reading, so it’s –

We’re talking serious fantasy or like comedy-fantasy?

Both.

Now, arguably, replying to Rogues is work, so I think it’s funny that your work avoidance is work.

Okay, (sigh) now I’m going have to go see a therapist.

Oh, now? [laughter]

Okay, so – Okay, enough about Rogues, enough about me. Let’s talk about Amy and entrepreneurship.

I agree. We should talk more about me.

That was like lesson one of entrepreneurship, wasn’t it?

(laughs) No.

It’s marketing, right?

No, I’ve always been this way.

I’ll give a little back story on how we ended with Amy on here right now. That’s Paul Graham posted one of his infamous screeds about called “Black Swan Farming”, where he basically disclosed that the business of Y Combinator does not consider the startups that they work with to be their product, but are their raw materials for making money. And then Dave McClure came back with his own response, talking about, “Okay, it’s not so much about Black Swans, its more about...” (Oh, what was his analogy?) It was Ichiro and Ugly Ducklings.

A bunch of people that I never heard of, yes.

Yes.

Lots of sports stuff. At first I thought “Ichiro” was that novel by William Gibson, but then I realize that was “Idoru”, so, not the same. I couldn’t understand most of Dave’s posts because I don’t follow sports at all.

Same here. I was completely baffled.

Ichiro or Ichiro, he plays for the Yankees (or he used to).

Okay.

My dad’s a huge Yankees fan.

I didn’t have time to read the whole article in depth, so I thought it was about that sushi movie.

Anyway, you were saying.

We decided we’d bring Amy on the show and have her set us straight about entrepreneurship.

Awesome! So, I think it’s really telling that you said that Paul or one of his screeves and that it was a disclosure, that they don’t look at the startups they have as their product, but rather the raw materials. I think it’s like as if Paul Graham wrote an essay disclosing that his name was Paul Graham. [laughter] He treated the subject matter like this was some kind of surprise, whereas, anyone who has ever even contemplating criticizing Venture capital model, that is their criticism. So, but he wasn’t being all diplomatic and going yes, this is a criticism, but you know if he just like, you know, we’re betting on a few big wins and we don’t really care about the rest but in his more roundabout kind of way. I think it’s valuable.

Well, he basically said, “Almost every one of our startups is just the cost of doing business, so that we can find one that would give us a decent return”.

Exactly. And I did not look in to see what the reaction was, but if I was somebody who was considering going with Y Combinator and I wasn’t so full of myself that I would assume that I was obviously going to be one with the big pay off, which I think most people do, they assume, “Oh, my idea is going to be the Black Swan!”. I think that would be a real turnoff. And I think it’s a bit of honesty which you wouldn’t have expected. Meanwhile, still, Paul Graham, hard to read but I thought it was very interesting. And the Black Swan metaphor I find entertaining. I mean everybody read the book the “The Black Swan” by Nassim Taleb?

I’m like the one person who hasn’t.

I’ve read like an essay about it. He is the same guy who wrote “The Camel Has Two Humps”?

Possibly?

Okay.

But only some camels have two humps.

But he was actually talking about a type of graph in which not a single bell curve, but there are actually two dominant subcultures.

So, what’s the deal with the swans?

So a Black Swan is a metaphor for a really rare event that you don’t foresee and can’t foresee until it happens. For example, tidal wave, earthquake, nuclear meltdown. It’s not something you really contemplate all these things happening at once. Like, somebody being born such a genius, like Mozart being able to compose concertos at the age of three or whatever. Things you can’t foresee. Things you have no reference for until they happen. The thing about Black Swans is it’s an entire species, it’s like there’s lots of them. It’s like a breed of swan. If you go to for example Rotorua in New Zealand, all you see are Black Swans. They are everywhere, they are like rats. So, I find that a bit strange.

Amy, but then they have the “White Swan Fallacy”. [laughter]

Nicely done. But I think Black Swan is very apt in the sense of startups in business because if you just pick up a damn book, you will see that there are Black Swans all over the place. If you’re ignorant and you’re just reading blogs and you’re going, “Hey, Dropbox! They made a lot of money!” you would be surprised if you were totally ignorant. And I think that’s a great metaphor but that not the metaphor they were going for.

That makes sense. I read an essay based off of his book in reference to the 9/11 attacks and hurricane Katrina. And it was the same kind of thing, if you surveyed the landscape, yes, sooner or later we’re going to get a force five hurricane over the top of this levy or sooner or later, we’re going to get a terrorist strike on US soil. But’s It’s not until retrospect, that you can go, “Oh, we should have been preparing for that all along,” because you don’t know which swan is going to turn out to be black one. That is the opposite context of startups. With startups, it’s more like “pick this thing and back it and back it right and it’s much less of a long shot gamble”.

There is a lot of people who are trying to make it be more that way systematically, I think Eric Ries in “The Lean Startup” stuff is definitely more appealing model to me that the “big crap shoot in the sky” model.

(laughs) I love that “The big crap shoot in the sky.”

BCITS.

Feel free to use that.

I already stole it. I don’t know what you’re talking about. Giving me permission? (laughs)

Josh, did you credit Amy for your idea there?

I’m sorry, Amy. [laughter]

So, I don’t know. I think that there is, most things you can give them an infinite amount of backing and it won’t make a damn difference. And some things will survive with no backing. With Dropbox, they create such a compelling product, that they would have succeeded without the connections allegedly that Venture capitalist, Y Combinator bring. They needed money, yes because it’s an infrastructure product, but it’s just so anybody could have funded it and it would have been great. There was nothing special about it. It was just that they didn’t have the capital. If they had subfunded had the money it would have been perfect for them. *background noise* Hold on a second. (What are you doing? Stop. I’m recording!)

Stop putting the cat in the dryer. [laughter]

Actually it’s the filing cabinet.

In the dryer? [laughter]

You put the cat in a filing cabinet?

No, my husband’s about to go in the filing cabinet as soon as we are done recording. (laughs) So, I also kind of don’t agree, what it is about startups that make everyone philosophical and ooey gooey and like great crap shoot in the sky? What is it about that? Why are people, like, “Well, you know the only way to figure it out is to throw a bunch of things to the wall and see what sticks.” I don’t understand that.

See, I see it kind of like the lottery, right? Where, you know, there is such a vast amount of money that they’re giving away, the people don’t actually think. They don’t do the math. So, there are not paying attention to the, you know everything else. They just see this big money out there and so it’s like, “Okay, well how do we get to the promised land?”

And the answer is obviously to pick a goofy name like “Fleezy” or something.

“Fleezy?”

I apologize if there is an actual startup with the name Fleezy. I was trying to pick something that couldn’t possibly be –

But, why would you apologize to them? [laughter]

Yes, you’re right. Fleezy, what the heck is wrong with you?

No fleezy.com is available.

There’s been a pattern I’m seeing like on Twitter and Facebook and that sort of thing for about the past year and a half now, where the question is, “Why call it a startup? Why not just call it a business?” Oh, yeah, it’s because we don’t run it like a business at all.

Yes, it’s “the hunt for a business model” which I find HILARIOUS. It’s like we’re not talking about looking for something that is obscure or rare, you know. The gas station around the corner from you has a business model, why don’t you borrow that one? It works. They make more money than you do.

That’s boring though.

Aww…

I don’t get to implement my vision. So this fits nicely into your blog post about Master Craftsman which I loved.

(Thank you.)

Because you totally just described me. I’m like, man I would so be the bad apprentice on that show, because I’ve focused my career for the past ten years on contracting and working at startups and the failure rate just has been preposterously high, to the point that I had to sit down and actually ask myself, “am I a contributing factor? “And I’ve decided that no. One of the things that almost all these startups that I’ve worked at had in common was that their business model was, “Okay, we’re going to get some investor’s money and we’re going to spend it and...”

Magic happens.

Yeah.

What I like to say about that “business model”, people look at funding as some kind of success, but funding to a business is like a trust fund. And nobody likes kids with trust funds and nobody should like businesses which run off funding. *laughter*

There are rare cases where you really need it. Like a Dropbox needs a lot of capital. Average for social networks for dogs or whatever doesn’t require money, and if it does, they’re fooling themselves. I think a lot of people just want to say, “Hey, I raised X hundred thousand or millions of dollars, Hooray, I succeeded!” But it’s a total false success. It’s like getting a gold star. It doesn’t actually give you anything. It’s a pat on the back.

Well, as someone who once bought a house and got a mortgage to pay for it, the two events are sort of inextricably coupled. And while I was not very excited about taking on the mortgage and all that it implied, it was really cool having a house.

Absolutely. I agree with you completely. We just bought a house too and a friend of mine was saying, “Hey, you can probably buy the next one in cash.” And I said, “No, why would I? I could get a better annual return on my money if I keep it”. She thought it was just about the share ownership, but that doesn’t make financial sense even if you do have the cash to pay for the house in cash. But, some people with trust funds grow up to be good adults who have careers and do things, but that’s not the typical reaction.

There you go, slamming the 1%. [laughter]

No, there is such – No, so besieged. I should feel bad. I’m not anti-Venture capital actually and people think that I am and I could see why. But, what am anti is “blind” taking of capital. Look at the mortgage, the terms are extremely clear. They can’t do anything to you, unless you stop paying. There is not an equal balance of power, but it’s extremely clear what the rules are. There’s no involvement of Mortgage Company, they are not coming over and saying, “You know, the way that you’ve decorated this living room is really devaluing our share of your house, you need to change it and we’re going to hire a new husband for you because your current husband isn’t doing his job.” [laughter]

And we need some more gray hair on the management team. [laughter]

Now, can we talk about your neighbors.

Exactly. Funding is a completely different ballpark because it gets entangled, unless you start convertible notes or share a very small portion of your company. You can lose control over it very quickly and I think a lot of people think that funding is the thing they should do and that’s naturally what they should do and they feel good when they do it, but they’re not keeping in perspective they got this money for nothing. Not for being good at our jobs or for making money or for actually helping people, we got it because it’s a bet. We are just a lottery ticket or a horse someone’s betting on. Shouldn’t think that the money has anything to do with our value, we need to go and make the money work for us. But people –like the meat going into the grinder, meanwhile if you are aware of that, then you could work with that. You know what I mean?

Yes, it’s and there’s also the – “we’re the horse that someone is betting on”. A lot of startups that I’ve worked at there’s that, “You know, if the only thing we care about is whether or not this horse wins this race, let’s pump it up with an explosive amount of stimulants. It’s going to win the race, probably, and then it’s going to die, but that okay because we’ve flipped the company and walked away by then.”

Right.

So, can we change tactics just a little bit because I’d like to get into – we’re talking a lot about why certain aspects of this don’t work and what I’m really interested in is, you know, “Okay, so when is it appropriate and how do you make it work?” Does that make sense?

Sure.

So, when is it appropriate to take funding?

When you don’t need it. I think if you look at a company like 37 Signals or GitHub, I mean if somebody came and offered me a sweetheart deal, I would definitely take the money right now. But, these companies, they’re taking funding because they want some extra capital expand, they want access to really good advisors and that comes via an economic exchange. But a company like GitHub, for example, doesn’t require that money. They’re using it to secure their position, they not using it to build from scratch. And I suspect they got very favorable terms considering they don’t need the money but the investor wants them more than they need the investor. So, you don’t want to be the person who has the least leverage in any economic situation.

Right.

Like with the house, you can sell the house. You can’t just get rid of your venture capitalist in most situations.

I heard a great story about angel investors, which is, “Why are they called ’angel investors’?” And the answer is, “Because they got to pick the name.” [laughter]

So, can you talk about like, before you get to that point where you don’t need it, how do you validate, you know, in a world outside investors telling you that you’re valuable by investing money in you, how do you actually validate your idea or your business?

You don’t. That’s a trick question. I don’t believe in this validation nonsense. What I teach my students and granted okay, my rules don’t apply to every single business, but what I teach my students is: don’t have an idea and validate it. That’s starting from the inside out, you’re starting with what you think and you feel and shopping around to see if anyone will pay for it. What you ought to do is go see what people NEED and then go fill that need. Go find what people struggle with, what hurts them, what irritates and eliminate it or make it better. Then you know that you have a market and you don’t have to worry about “validating”. You start with the customer because without the customer, you don’t have a business. You may have a thing, but it’s not a business until you transact.

Mh-hmm. *silence*

Silence? *laughter*

Absorption. Wow.

Well, I’ll be interested in sort of expanding on the customer finding process because I think that something that, I think you’re absolutely right that that sort of backwards from what a lot of people are doing.

It really is and I’ll admit that the very first version of my class I taught that was – I did in more than normal sequence and then I saw how people got really stuck at figuring out this “how to” part. And, I’m, “Oh, of course, duh, everyone get stuck at this point, that means it needs to come first”. That means that all the other things up through this point were possibly wrong. So, in terms of finding customers, that is actually a huge part of my class. It’s hard. It’s a long process. I think people are sometimes turned off by how long they feel the process can be to find a customer and learn about them enough so you can serve them. But what you should really do is look at what groups you belong to. Are you a writer? Are you a Ruby developer? Are you a Rails developer? Are you a freelancer? Are you a graphic designer or a web designer? Are you a user experience specialist or whatever. Information architect, where do you belong? Where these people hang out and then lurk and study the crap out of them.

Actually reminds me a little of Chad Fowler’s book, The Passionate Programmer?

Passionate programmer.

And I think towards the beginning he says, he was talking about career development, and he recommends going and finding somebody who is in a successful business that isn’t software and just like taking them to lunch and asking them like all about their business and like what sort of challenges they had and what their business needs are. And just like studying somebody who is already making money but may have needs that haven’t been satisfied yet. I don’t know if that’s exactly related, but it reminds me of that.

It’s similar. I think a lot of people focused on the idea of customer interviews, which is a lean start up customer development thing, but I think again, that’s putting the cart before the horse. Because if you talk to a person, what most of the problems where people have really successful product solving those problems, for example, Dropbox. They are not problems that people would have thought off.

Right.

A lot of the most powerful problems that really make people motivated to buy, (if you can present them properly), they aren’t ones that come to mind. People are really bad at spotting their own issues. They think that they are something else, but they don’t even think that they’re issues at all, because they are just so used to doing this every day and suffering with it every day, that it doesn’t even come to mind.

Right. It’s like the old “People want a faster horse; they don’t realize they want an automobile.”

Exactly.

Or however that goes.

Which is great, because Henry Ford’s autobiography is one of my takes.

Nice.

Nice. Yeah. So what I tell people to do is to study what people say and do in their natural environment and not to ask them, but to see what they actually do. And this is important in business in general, for example, you talk to somebody, “What would you pay, or would you pay this?” They’ll say, “Yes” or they’ll say, “No”, but you can’t trust their word at all.

I was going to say that I’ve seen so many businesses where they went out of the way to find that customer and then said, “Would you pay for this?” They said, “Yes”. They build it and they don’t pay for it. They don’t sign up.

It’s just human nature. You want to be positive to the person you’re talking to. They’re giving you attention; you want to be, you know, “uplifting”.

Isn’t the follow up question to “Would you pay for this?”, “Would you pay for this right now?” I want to say I’ve read somebody’s and whoever it was, they got away with it once. They got enough money to shoestring their startup because they said, “Would you pay for it?” “Yes, I would.” “Would you pay this much right now?” and they said, “Yes.” And they said, “Okay, go get the cheque book.”

Because there is an infinite number of “nice to haves.”

Right. I’ve never tried that so I don’t know. I don’t know anyone who has tried that exact technique, so I have no way of really weighing in on it.

Well, in a sense you have though, haven’t you? Because I was just reading – you were talking about Brennan Dunn’s book that he started selling basically before he had written it, which I also recently did the same thing. So, that’s kind of similar, right?

Sorry for the interruption but Eric Ries did exactly the same thing for his lean start-up book and not only did he start selling it before it was there, but he started selling it before he was done writing it and his entire sales website was a bunch of AB experiments to help direct the construction of the book. So, it was so mad it almost made my head explode.

(laughs) I did not know that about the AB experiments before the lean startup ship as a book. That’s actually really interesting. I wanna to learn more about that later. So, okay, pre-sales, kind of like that; fair enough. What didn’t happen was, Brennan didn’t go out to lunch with somebody say, “What are you problems? “And they say, “My freelance rates are too low,” and he said, “Well, would you pay right now to learn how to change that?” He actually came up with a COMPLETE offer. He told people what their problems were, he showed that he understood. He showed how he could help them and he gave credibility reasons, like why he should be trustworthy. And then he said, “You can buy it today for this price.” That’s very different from saying, “What would you pay?” and “Would you pay it today?”

But the “would you pay it today,” comes from – you have to remember that the product doesn’t exist yet. That the guy that got away with it, he was selling blue sky.

Well, I mean, technically speaking, so was Brennan, right. The book didn’t exist yet.

Right. But did Brennan go –did he go lurk and do his research so that he knew there was a market there?

Yes, he did. He got a lot of the customer research in this particular case from his customers for Plan Scope, which is a software, for helping freelancers and consultants manage scope with the clients. It’s a sort project management, scope management, time tracking tool which is doing really well for him so far, but software is a service subscription rates that grows slowly. Even if he is growing 10% a month, it’s going to take quite a while to get a while for him to get to a $100,000/year. So, one of the things he does marketing wise for that is he has conversations with customers, he writes about how he charges and he sell people having a lot of interest in that, a lot of positive feedback with his writing regarding his rates and charging more. And he realized that this was another problem that they had that he could solve. The research method I can call it “Safari”, because you are like, out in the Savannah looking around looking around, you don’t always spot animals. You have to go for a long time to get those great nature shots. And he was doing Safari on his own customers, that he already had which is brilliant.

Yes, he also approached me about looking about looking into his product and maybe mentioning it on my freelancer show and things like that. So, I know that he is continually reaching out to the same type of person anyway and trying to find other ways of getting more feedback and more input.

Absolutely. He is a real hustler.

So, Amy, there is the customer part of things, there is the building the product part of things, there is that being able to have money to support yourself and building your product. Then there is the, like, “What the hell am I doing?” part of it. So, I think you said part of what you get when you take investment money is that, you are now in a relationship with your investors and they literally have an interest in seeing you succeed, so they going to help you succeed to the best of their ability modulated by how much they care about you. But that sort of support can actually be very helpful sometimes, and if you’re trying to do the bootstrapping path and you don’t have these automatic advisors that come with investment money, what is a good approach for getting that sort of support and advice in community?

So, if you can get a Venture capitalist who cares about you, who really invest their time more in you than percentage wise, you “deserve” based on like how much of their portfolio you represent and they actually have good advice, awesome. Most of what I’ve heard from people I know who’ve taken investment has been that their VC ignored them, or that they got bad advice or that they meddled and interfered. And you know, obviously this is coming from the person being meddled with. So, maybe they didn’t know what they were doing, maybe the venture capitalist was right, but it wasn’t done in a smooth way. So I think that that is having great report with your VC and having actually helpful advice is pretty unusual. If you can get it, that’s awesome. Venture capitalist doesn’t really care if you succeed, he or she just want somebody to succeed. So the interest is kind of diffused. So, if you can find someone great, fantastic. If you don’t want to take that risk, that you’re get someone disinterested or worse, interfering, and you want a bootstrap, there are lot of options. For example, there are the startup groups. There are lots of business books you could read which are about real business and which will provide you with business guidance. Like a lot of people, they don’t act until someone tells them, specifically, “Hey, Amy, your business is doing X. You should really be doing Y.” Meanwhile, if they had been willing to take general advice from a business book or a business blog and, gone, “Gee, maybe I should do X”, that they would have all the advice and guidance they needed. People want to hear, “You’re unique. Here’s how to solve your problem.” But, in fact, none of us are unique. We all face the same problems. All businesses have roughly the same issues; same issue with customer support, where people telling us the price is too high. It’s all the same and there’s a lot of stuff out there if people are just willing to read it and generalize – go from the general to specific. But even among my students, I see that people will ask – multiple people will ask the same questions throughout the class and they won’t ever look at the other person’s answers because they are waiting to hear it to them. And that I think is something that cripples people. But there are all kinds of bootstrap communities coming up and people are really starting to see this as an alternative.

Okay, that’s cool. I’ve been to a couple of the lean startup events here in San Francisco and it seems like a great group of people, but I haven’t quite hooked into it at the level where I feel like I can get support from that community and working on the issues with my startup. So, maybe that’s an opportunity I haven’t developed yet or maybe I need to be looking at slightly different groups. I’m not sure.

I don’t know. It could be either way. We did it basically ourselves. We did not have a, what I would call a community at all; building one kind of, now. But I think what really – community can be really important to people, can’t it? To feel like you’re not alone.

Oh, yeah.

But at the same time, fundamentally we’re all alone. (laughs)

(gasp) This is the Ruby Realism Podcast. [laughter]

You’re bringing me down, Amy.

Sorry. You know the email is sent to people on my community launch list today were like, “life is suffering.” I really did. I’m such an intellectual d*** bag (laughs).

“Life is pain. Any one tries to tell you different is selling something”?

Yes, something like that.

“You mock my pain!”

(laughs) Such a good movie.

What movie is that? I never catch the reference –

The Princess Bride.

The Princess Bride.

Oh, I should have known that.

“Life is pain, Princess. Anyone who tells you anything different is trying to tell you something.”

What about someone telling you, life is pain who is also trying to tell you something? [laughter] I’m raising my hand here. You can’t see it but –

Yeah, Amy, I’ going to explain to you about “podcasts” and “audio recordings”. (laughs) and I’m making air quotes. [laughter]

You mean people can see me?

Okay, so let’s get back to the topic really quick. So, let’s say you have a customer and you understand their pain and you’re pretty much ready to move ahead and build their product, how do you know whether you have enough of the right resources to do it? So, for example, this is something I’ve been talking about for quite a long time, so I’ll just use it as an example, but, my dad is a dentist and he has complained bitterly for years about Dentrix. Just doesn’t meet his needs and you know, the thing that’s always held me up is the fact that it would take me quite a long time to build a feature set that has parity with Dentrix. And you know there are few other concerns, but how do you get around that to know that what you’re going to build is something that will actually solve their pain? It will have enough to where they will want to buy it?

I think that I’m going change this question on you, again. Sorry, I have this annoying habit.

How rude.

I know. I’m not really a big hit at parties. (laughs). (People like me, I swear). So, your question is “I kind of want to make better software for dentists. How do I know I can do that?” right?

Right.

Well, let me ask you this. If software is so bad and if everybody hates it, why isn’t there somebody else making it better?

That’s a good question.

Yes. Often people hate tools, love to bitch about them all the time, but if you give them something better, they won’t actually use it. I think I’ve seen almost infinite number of people who were like, “Oh, I’m going to make property management software better”. “I’m going to make it easier to schedule swing shifts for restaurants.” “I’m going to make it easy for local bars and restaurants to fill up seats by texting special offers on slow nights.” They all die because people who run the salons and bars are running salons and bars and not international corporations, because they like playing it small and suffering.

(laughs) I’ve worked so many of those startups. For somebody else, it’s not even funny.

I know. People like, “I see a problem. I can fix that problem. And then they will be grateful and throw me money and a throw me a parade because I, the brilliant software developer has come in and solve their problem”. But the reason these people have problems is because they cherish their problems.

Or the just don’t care enough.

Or they just don’t care.

There are an infinite number of minor annoyances in the world. I mean, you can always find another one, even, you know, even the filthy rich have minor annoyances. And if it’s not enough of an annoyance to charge enough to support you in solving it, you know, I’ve been part of a startup myself that everybody thought that the idea was great and thought it was a terrific service, but it wasn’t nice to have. You know, it wasn’t –

Yes.

It wasn’t a “must have.”

That should be – I mean, that could be like whether or not you’re selling it properly people need to be kind of inflamed. Sometimes they have minor problems, but when you echo the problems back to them in a way that they identify with it sets them on the path to seeing that it’s actually is not that minor of a problem. But sometimes it can just be that people don’t care enough to change, like you said.

So, Amy, what you said a few moments ago I think is pretty spot on, but I wanted to try it again with a little less ire dripping from it. [laughter] You’re talking about people don’t want to give up their problems because they cherish them. Like they’re attached to their problems. I know that it’s pretty easy to look at that and go, “Haha haha, how silly of you to cherish your problems”, but I think for a lot of people, it’s, you know, we can laugh at them but we’re all like that and we’re all are dealing with our lives and our business and whatever at the level that we know like what are the problems we know how to solve.

Oh, I absolutely agree. You’ve misinterpreted my ire. The dripping ire is for the people who are so arrogant to think and they will solve these problems and that those people will love them for it.

Oh, but they will. I know they will.

But they won’t. (laughs)

The other take on it to take add a whole lot more ire to it is one quote that I still remember when Zed Shaw flamed out and left the Rails community forever because it was a ghetto. One of the things that he said was, “There’s no work for a smart man in a town full of stupid.” And I remember reading that and thinking, “That smart man must be a lousy salesman”. [laughter] And I think the “cherishing our problems” is true, but Amy, you teach an entire course based on how to get around that, so do you start selling dumb or do you sell smart better?

To my students of have them sell to their customers?

Well, either.

See, what I tell my students is, look out for the set of fifteen or sixteen failure archetypes and one of them is called “The Cure for Religion” or ----, there are two different ones. They are related. The “cure for religion” is trying to solve the problem where the people actually really believe in their problem. For example, how many times have you looked at someone and it’s an office somewhere, doing everything out to sell and you’re like, “Oh, I can make that so much better.” And then you may be present them with a solution and they’re like, “Oh I love it so” They like it. They like it; it’s not a problem to them, they like it even though you see it as a problem. So, that’s the cure for religion. ---- is when you try to sell something to an audience, where it fundamentally disagrees with their values. So, that is a case of things like trying to solve swing shift scheduling or whatever. So, I tell my students, when you find, you have to be careful which problems you attack, you need to keep these types of product failure archetypes in mind. And so, not to try and sell them in the first place, because there are different kinds of failures you can recover from but if your product in its conception, if you pick the completely wrong audience, those you can’t almost never actually fix. You may have to start over and that’s not good. So, it’s more like aim your failure towards stuff you can grow from and build on even if it’s in a kind of a flop right away.

Right.

So, I would not try to sell that kind of tool to somebody. So, I don’t – when it comes to me selling my course, I obviously have to lure people in who are a little bit earlier in this process, but I wouldn’t call it, “selling dumb.” It’s more like seducing them by degrees.

Right.

It’s like I’m seducing them with something they understand and then I go, “But that’s not actually how it works.”

So, is one of your failure architects… (laughs) failure “architects” that could be my next title. [laughter]

Only if you go to a startup.

Yes. So, Dentrix is a local company here in Utah, that makes dentist software and it’s insanely complicated and it’s hugely vendor lock-in. And I would not ever compete with them for different reason and I’m curious, this is – touching back on Princess Bride again, but it’s one of your fifteen failure archetypes getting involved a land war in Asia?

It isn’t. It isn’t.

You know what I mean by that tough, right? It’s like taking on –

I completely do.

Okay.

Although, that’s not a Princess Bride reference, is it?

Yes.

Is it?

And only slightly less well known.

“GOING IN AGAINST THE SICILIAN WHERE DEATH IS ON THE LINE?” [laughter]

Oh, Okay.

One of your failure archetypes? [laughter]

No, it should be. It should be.

Going up against someone who is not afraid to die.

It should be sixteen failure archetypes. One of them though is Mount Everest, which is a product that you could never finish. So, I feel like competing against Dentrix is probably also a “Mount Everest”, even ignoring or an itch you can’t scratch, like if you can’t get to the people you need to sell to or if the people who are being pained by the problem aren’t the people who can make the purchasing decisions, that’s kind of a way to fail. But to go back to your specific example, if you really, really did want to compete against Dentrix and you want to solve that pain that people suffer from, you need to start really small. Start writing a blog about how to cope with Dentrix, how to improve your practice without throwing away your software, or you know or to do things better without radically changing.

Wow.

So, you lure them in, you build your audience with little investment and no software you have to throw away and give up on and cry yourself to sleep.

And that’s great because you’re attacking two sides to the problems at once; you’re both building your audience and doing your customer research at the same time.

Bingo. You’re building a honey trap.

I really like that. I really like that idea.

But that approach doesn’t have a working product at the end of two weeks.

Well… [laughter]

This is an Agile honey trap. [laughter]

Hopefully the sarcasm was obvious.

You can’t do sarcasm in a podcast.

All right. What is the sarcasm hand gesture?

It looks like this.

I’m making it right now. [laughter]

So my next question is it sounds like you’re saying, if you are going to build a product, and this – I’ve heard this before, (and it kind of applies to any product) is that you need to start selling it beforehand. At least finding customers but you know, really just talking to people about what it is and building that honey trap. And what’s the best approach to that? Does it depend on your customer?

To a small degree, yes. So, you need to make sure that you pick the right kind of customer, because if you can’t find them online and study them to learn from them, you also can’t find them online to market to them. So, one of the other things I teach in my class is, if you can’t find them hanging out together online in sufficient quantities, you can’t sell to them because you can’t learn from them adequately. There won’t be enough research material for you. Then, when you do start creating your content marketing and you want to talk to people, if you can’t find them, you can’t sell them. You can’t afford to pay for bill boards or sponsor user groups right away. No way. You need to work on a pragmatic way to market and that is to build a blog, do a webinar, you write some blog post, create some cheat-sheets, free eBooks, whatever will draw them in and you have to have a distribution mechanism for that; it has to be shareable. And things won’t get shared if the people don’t talk to each other. So, it’s kind of a combination of factors that leads –

Is there a place in there also for what you enjoy doing? I mean, like I sell books and pairing appointments these days and that works because I have people that read my blog among other things. I have people read my blog because I really enjoy writing.

Right.

And other people, you know, they enjoy other things. Gary Vaynerchuk, he likes making videos.

Totally.

So, is that part of your consideration as well, like, what you enjoy doing and will actually continue doing for an extended period of time?

Are you crazy? They call it “work” because it’s not fun! [laughter]

Am I doing this all wrong? Should life be pain?

Yes.

Life shouldn’t be pain, it just happens to be pain. You should definitely choose things which match your inclinations but definitely – Josh was being silly, but if you want to run a business there’s going to be stuff that you’re going to hate. I’m enjoying to you guys right now, but after get off this, I have to talk to my book keeper. I don’t want to do that, but I have to. And you have to market until the point where you can hire somebody else to market for you. So, if it’s a question of whether you should do podcasts, videos, screencasts, live meet ups or on the internet, you know. “Live” as in as it happens not necessarily in the “meet” space. You know, you pick that things that work for you and it work for you and it works for your audience. You know if your audience hates videos but you love videos, you might have picked the wrong audience. You have to find the pegs that match your holes. I didn’t just say that. (laughs) was that not dirty to anybody or was it just me?

No, it’s one of those times that when you go back and say, “That sounds way dirtier than it actually is”, it makes it dirtier than it actually sounded, which is awesome.

I’ve spent enough time around Dave, no, it didn’t.

So just by contrast, the thought that I had in my head about bookkeeping as you were saying it was, (this is Dave’s business tip for anybody who wants it). I hate book keeping as well, and I couldn’t convince my bookkeeper to sleep with me, so I convinced the woman I sleep with to become my book keeper.

(laughs) I was going to say, “I know your bookkeeper!”

So, David, what does your wife think about this?

Umm… So, Amy! About the – [laughter]

She doesn’t listen to the podcasts.

But does she do your bookkeeping?

Actually, yes.

Wow.

My wife is a saint. I married well. I married well.

That’s awesome. I can’t even imagine trying to get Thomas to do our book keeping. It would not work. But to continue the marketing thread, (I wanted to say something), I just blogged about this. It’s really important not to talk about what your product is; nobody cares. Talk about what the customer feels, wants, dreams of etcetera. That’s what they care about. Everybody is completely self-absorbed and the best way to completely win somebody’s heart is to talk to them about them.

Just imagine you’re Don Draper.

Who is Don Draper?

This is me not getting pop culture references.

No, I didn’t follow that one either.

Oh, wow. None of you watched “Mad Men”?

I know of it. I know who Don Draper is, but I don’t watch it. No.

Well, then I will just leave that one.

Isn’t he kind of evil?

No, well, he is a Mad Man and he’s sort of noted for his ability to sort of get into the customer’s mind and you know, talk about products from the point of view of what the customer is thinking rather than what the product is. So, like the classic example is he’s –Kodak has come to him with their new, well they haven’t called it this just yet, their new carousel slide changer, you know; slide projector, only they call it like “the wheel” or something and they’re very keen on the ad agency selling the fact that they put tons of research and development into this wheel and they’ve practically re-invented the wheel.

(laughs) No pun intended, right?

Well, I think pun intended but Don completely like ignores that and comes up with a campaign that is based on nostalgia rather than the future and talks about the nostalgia that’s reflected in the slides that people actually want to project on their walls rather than the device itself.

I think I saw that when it first – a video clip of that when it first came out.

Yes, the clip went around for a lot.

Yes. I totally agree with that. Now, if Kodak also started and built that because of what their customers wanted, then you will have the full circle or the full wheel.

The full carousel.

The carousel would have come full circle. [laughter] So that makes complete sense. I wholly approve of being Don Draper like then.

Amy, I’m going to take your class and make a million bucks and buy Chuck a mute button. [laughter]

I HIT MY DAMN MUTE BUTTON! (laughs) I’m going to have to look at this afterward.

That would be a very touching success story.

Well, it must not be hooked in right. I got a new mixer and I re-plugged everything, so I must not have plugged it right.

Actually, one of my picks for today is actually a mute button. And I guess I should talk not about the product, but about the benefits. “Have you ever wished you could make David Brady shut up?” [laughter]

Well, David Brady can’t.

So, this is the mute button that works for the other person’s microphone?

It’s a sonic screwdriver.

Somebody’s going to come up with a terrible name for it.

You know, nerds; (laughs) myself included. See, I would say you shouldn’t start with the benefits; you should start with the pain. “Have you ever been really embarrassed by forgetting to use your mute button, only you actually press it but it didn’t work?”

Okay, okay, get the point!

Now, how much would he pay? (laughs)

$2!

One million! You can solve the problem. You can fund the mute button.

Kickstarter.

Oh, yes.

There we go.

Okay yeah, quick take. Kickstarter, good idea, bad idea?

Me?

Yeah.

I think it would have been a better idea when they approach me to design it but I had not told them a really high price and done it for them. (laughs) I kick myself a little for that. Then I’ll kick start myself a little bit for that. I think that in the right hands, it can be really amazing and then it’s also, on the flip side, sponsoring a lot of things which are vaporware and will never get built because these people don’t know what it’s like to get lots of money up front. Getting a lot of money up front can be really crippling because then you have all this anxiety and then you end up maybe doing nothing.

You don’t have a sufficient amount of desperation to drive you.

Yes and its gets weird. The psychology around money can be very strange. But I think that for some projects it’s really amazing, wonderful and others, it’s probably just enabling a kind of personal problem. Thomas recently funded the YFS light bulb thing, which I don’t think is ever going to get produced, personally.

What is this?

It’s allegedly this new way of light bulb which has colored LED’s in it. So, it’s an LED light bulb. It’s supposed to retail for like $49. Go into any regular light socket, it creates a local mesh network on Wi-Fi and connects to your actual Wi-Fi internet service, so you should be able to control it completely from your iPhone. Kind of like the nest. So you should be able to set it to create mood lighting according to the beat in the music that you’re playing, or like control all the bulbs at once; turn them on in groups or altogether in your house. It’s really cool looking, but I don’t think there is any way that they can get it produced for the money that they’re raising and seems like all these high tech products that go on kickstarter missed their shipping deadlines or never get shipped and all sorts of problems. So, I’m highly skeptical about it.

Right.

Yes. Well, there is using kick start to fund your business and there is using kick starter to fund one off projects.

Right.

And that does seem like they’re doing pretty well in a lot of cases. I’m really excited that the first project that I funded, the SkyCube satellite got funded and they are, working like mad to build the satellite to launch next year. So, I got my fingers crossed there. But, yeah we haven’t seen if like the whole kick starter model for business is workable. The only one that I know of that got funded and has been around for a while is “Diaspora” and they’ve now pivoted and they are doing all sorts of other stuff.

Oh, have they? I haven’t been watching but I’m curious—

I don’t want to freak you out but Diaspora was in the most recent Y Combinator class.

Really?

Yeah, really. Yeah. They’re now like “Makr.io”.

Oh.

So, yeah. Well, they’ve discovered that people don’t care to pay for privacy or ownership of their Content.

I’m not surprised. (laughs) In search of a problem I was afraid. I’m surprised they’re still around though. But, I am a cynical, cynical person.

Well, they have a dedicated team and they actually have a community who is interested in them. They just don’t have customers to pay them.

I’m nodding.

Startups are like terrorist organizations, once the primary goal has been achieved or abandoned, the organization doesn’t disband.

That’s like ANY organization.

Yes, basically.

Or committee.

Yeah. All right. Well, we’ve gone way over our hour.

Oh, we have? Actually, we’ve done exactly an hour. We just don’t have time for picks now.

That’s okay. I only have five.

(laughs) But I’ve prepared in advance!

Okay, so let’s do picks.

There is always time for picks.

All right, well, Josh, why don’t you start us off with picks?

Because I don’t have any, dude. I had a conference. (laughs)

Massage therapy?

Yes, well I already picked that.

Okay.

I picked that a long time ago. I’m going to pick voter registration. So, I know we have an international audience and people in countries outside the of the United States of America look at our politics mainly a source of either terror or entertainment, but I’m going to say if you are a US citizen, I encourage you to vote no matter what’s your persuasion and to vote you need to be registered. And in some cases, have an I.D. But, there are plenty of places to go register to vote, including online so that there is – the one that I know of that is non-partisan is.. there is a site for Rock the Vote that I help build a couple years ago, where you can go fill out your stuff online and then download the PDF that you signed and mail it, and it just helps you with that. And I know that there is plenty of other places that are building that too, but I wanted to pick one that didn’t have a particular political affiliation. And then my other pick was – Oh, I’m sorry. Were you going to say something, Avdi?

Vote for Cthulhu 2012.

Yes, Why choose the lesser evil?

That’s right. [laughter]

And then I really wanted to pick Sandi Metz’s book “Practical Object Oriented Design in Ruby,” but Katrina picked it the other week so all I can do is second her pick.

Didn’t I pick it, too, like before then? It’s your turn to pick it!

Yes, it’s my turn to pick (laughs). Okay, I’m done with my picks.

All right, Avdi, what are your picks?

All right, I’ll have to start out with a pick withdrawal. A while back, I picked Parallels Workstation and I recently had a terrible, terrible support experience with them. Basically, they failed to keep up with current – I upgraded along with the rest of the Linux Universe to Ubuntu 12.04, which is the current long term release of the most popular desktop Linux distribution out there. And Parallels completely broke and basically blamed me for keeping my system up-to-date, even though it was like almost six months after that system was released. So, just a terrible, terrible experience; I’m trying to get my money back from them and I’m probably will never buy a product from them again. A couple of travel picks. I recently stayed at my first Airbnb, very good experience. and it was – so I’m a total travel cheapskate and it was a way to stay in downtown San Francisco for under $100/night. (That you very much Josh for pointing me to that listing.) So, if you’re travelling on a budget, Airbnb can be a great option. Related to that, in most cities, if you’re trying to get to or from the airport to or from downtown, you know, a taxi or something like that is going to cost $50-$60. In most cities you can usually get a super shuttle, for like under $20 and as long as you don’t mind getting in a van with a few other people, you know, you can go online and schedule when you want to be picked up and it’s always worked really well for me. It’s super cheap. Programmer related, there is a great Kent Beck article recently. It’s called “Naming from the Outside, in,” I think and it’s just really enjoyable; it’s about naming things and how you go about figuring out what to name things with different variables and classes and stuff. And one last pick, I just came back from the Golden Gate Ruby Conference and the videos are already going up on ConFreaks and one of my favorites have gone up already. It’s called “Linguistic Potluck: Crowdsourcing Localization in Rails” by Heather Rivers. And it’s a surprisingly for the subject matter, it a surprising enjoyable and illuminating talk about a topic that I’ve thought of as pretty boring. So, I’m done.

Awesome, David, what do you – Go ahead.

Just a little follow up pick. I want to pick Avdi’s dancing. [laughter]

Thank you.

That man knows how to open up a dance floor.

We did promise that we’d talk about Avdi’s dancing, so.

Is this going on right now? I understand when people are doing a podcast you can’t see what’s going on. Is he dancing now? Am I missing something?

Please, Avdi. Please?

Right. Over to me?

Yes.

All right, just real quick, (Ha-ha I always say that. But this time for real). So, I dropped and broke my podcasting microphone last week and now I have spent a week with the Blue Yeti USB

Microphone. Love it, it’s great. You can set it to directional; you can set it to Omni-directional. It got this red mute light on the front, a mute light on the front – a button you can put push on it, and when you push it and you mute it, it flashes and I thought that would bug the snot out of me, and it actually turns out that’s it’s incredibly useful to have that little visual indicator that that’s actually going on there. And that leaves me to my second pick which is Shush.app, if you’re on a Mac and you got microphone woes as we often do, there is two apps in the app store right now that will give you push to talk on your keyboard to mute and unmute your microphone. And push to talk is the cheaper of the two, but you actually find the key combo, key Shift+M, you know, command, back, or whatever. Sush, actually lets you bind the function key or just the shift key to unmute your microphone. And I’ve been using it all through this episode. So, every time I just cough or whatever, I just let go of the keyboard and I’m fine. I really like just the flexibility of it. And what blows me away is that it’s integrated with the Blue Yeti mic, so that I push down on the function key and the little red light on the mic stops blinking, so that I know that the mic is hot. So, I’m I had some other picks, but I promise I was going to keep it short. I’m going to keep my promise today.

So, that’s it for my picks.

All right. Well, I’ll go ahead and go next. My first pick, I’m not sure why this game has been so addicting for me, but I picked up Civilization 4 from the App Store and I’ve really been enjoying it. I’ve been playing it pretty much non-stop when I’m not working. It’s kind of fun, It’s a turn based “world conquest” kind of game. I don’t know the best way to describe it. I think that’s as close that you can get without going into too much depth. But it’s a fun game and I’ve been enjoying it, I don’t remember, I think it was like ten or twenty bucks in the App store or something. And then another pick is the guys that I’ve been working with, we were playing with – what was it, Dave? It was something.fm?

Turntable.fm

Turntable.fm and one of the guys played music by Joe Satriani and I really liked and so I went I bought one of the albums off of iTunes and I have it say, it’s pretty good music. I really enjoyed it, just the guitar and stuff that’s in it and things like that. So, my other pick is Joe Satriani and I’ll put links to those in the show notes, as well. Amy, what are your picks?

My picks are, first the TV show BBC Mastercrafts, if you are outside the U.S there is pretty much only one way to get it and you know what I mean. But it’s totally worth it. I wrote that epic blog post all about it. I’ve watched it twice now. It is basically a series. It’s a reality TV show like audition series, kind of like American Idol, but with hand-weaving and blacksmithing, which makes its awesome. Oh, no Simon Cowell. It’s FANTASTIC. I love it. I think that most of the best inspirations for business and startups and life are actually not about a business and startups. This is one of them. I also really love my Levenger Circa Notebook. And I’ve got the link ready for that because it’s not spellable. It is the notebook that is like the hacker’s ideal paper notebook. It is not held together by rings or spirals, but by discs which are independently positionable. So, if you for example want a larger note book, you can get more discs and configure any size you want. And paper is held on not by complete loops, but sort of D-shaped or mushroom-shaped holes punched in it so it can slide in and out. You don’t have to open anything. You can rip a piece of paper out and just reposition it anywhere in the notebook, no snapping, and no pinching your fingers. I love it. You can make your own paper – any kind of planner you want, you can put any paper you want in it with a punch. I spent a couple hundred bucks on way to many accessories, but you can get it for as low as $12 and it’s just fantastic. I work a lot on paper but the overhead of working with paper is always been to hide it. I would give up. I accidently closed the page I had opened on my – (laughs) oops there it is. My other pick would be the book “Breakthrough Advertising” by Eugene M. Schwartz. It’s about a $100 but it’s the best book on marketing that I have ever read in my life. It helped inspired me to rearrange my class to start focusing on the customer first. It’s a little dated, but it really deserves to be a classic. Almost nobody knows about Eugene M. Schwartz. He is not one of the top copy writers, people reference, but this book is a goldmine. I recommend everybody read it whether or not you run a business because even if you’re a consultant or an employee it will tell you how to better present yourself, how to identify and serve needs in a way that lets you charge more and also be more effective.

Nice.

That’s it for me.

All right.

The sound clip of you ripping that page out just sold forty-nine notebooks.

(laughs).

That’s awesome.

Get the punch. I hear that the staples M series is interchangeable and that the punch may or may not be cheaper. But the punch means that I can just doodle on any random scrap of paper around and then punch it and then put it wherever I want. It’s AWESOME. Let me do it again. Paper porn.

Oh, yeah. [laughter]

You can’t hear me putting it back in.

Don’t need to.

(laughs) it’s so easy.

Awesome. All right. Well, I think that’s everything for our show. We are going to be putting up some information requesting that people who are new to Ruby contact us who put the information up on the web page and we’re looking for people to come and talk about what it’s like to be new to Ruby. So, look for that page to go up pretty soon here and other than that, if there is nothing else, we’ll wrap up and we’ll catch you all next week!