This week I sit down to chat with Drift founder, David Cancel. David has been founding things for over a decade and has been a part of great companies like Compete, Lookery, Ghostery, Performable, HubSpot and more! In this episode we talk about transparency, bootstrapping & VC, being a lifelong learner, creating products, competition, psychology, when it’s time to move on, enterprise vs SMB and so much more!
David: Yo, dude.
Josh: Hey, man. How’s it going?
David: Hey, man. Your beard is serious. Look, I have some envy. Mine is short.
Josh: If you work hard, when you grow up, you can have a beard like mine.
David: That’s awesome.
Josh: Cool, man. I appreciate you doing this. The format for us …
David: Same here, man.
Josh: For the podcast for me, it’s always been basically an audio version of our articles that I’ve been writing.
David: Cool. I love it.
Josh: Which works great but having somebody else with the call will be good.
David: Did you start out that way using that method because you were transcribing the articles? Is that how it started?
Josh: I just write the article and then lots of people have been like, man, I would love to listen to a version of this because, you know, people in commutes and things like that so I started just recording them after the fact and it’s worked pretty well. It’s another format, I guess, to distribute it in so it works pretty well.
David: Yeah. It’s a totally different thing. That’s awesome.
Josh: It’s a little extra life out of a given piece of content.
David: Exactly. A lot more re-use. How you been, man?
Josh: I’ve been good.
David: I think the last time we spoke was Pop Signals. Is that right?
Josh: PopSurvey …
David: PopSurvey. Sorry.
Funding, Pay cuts and Transparency
Josh: Yeah, with David Hauser and Siamak from Grasshopper. They were co-founders on that. That’s ultimately what I built Baremetrics for, stuff of Baremetrics after that.
David: That’s cool. How’s Baremetrics been going? I’ve been watching you from the sidelines.
Josh: Yeah. It’s good. It’s been interesting. I had never taken funding before and that’s been a different ballgame.
David: Hahaha. That’s right.
Josh: I’m not anti-VC money but …
David: It’s a different game.
Josh: It is. What I would use it for, I think, is different. I used too much of it for hiring and now we’ve put ourselves in a tough spot. The buffer guys had just written about how they had to lay off 10 people. The week that they published that was we’re in the same situation and I didn’t have to lay anybody off but everybody had to take … I had to ask everybody to take a 15% pay cut, I took a 30% pay cut, having to hunker down to get profitable.
David: What you’re talking about here, this is the shit no one wants to talk about.
Josh: It is, right?
David: Nobody. I’ve done it every which way, mostly venture-funded, but I’ve done it with VC, I’ve done it angel. It’s just different games, right? It’s different parameters. As long as you know that going in, I don’t think one’s necessarily better than the other because I’m not religious on it but I like talking about this stuff. That’s why I always reference back Ben’s Hard Thing About Hard Things because after having gone through this and you’re going through it, that was the only book that ever felt like this is what it feels like.
David: There’s no other business book felt that way.
Josh: For sure. That was the impetus for Baremetrics, us making our metrics public and then … That’s a lot of the reasons Buffer did that too is to keep the conversation honest, at least, as much as possible because nobody talks about it, right?
Josh: You just post the rosy, sugar-coated junk.
David: Yeah. Be like, oh, we’re going on a field trip or a vacation or T-shirts or whatever.
Josh: Right. People get on Facebook and you just see all the perfect moments of everybody’s lives and not the nasty stuff where everybody’s depressed.
David: Oh, are you guys all virtual?
Josh: Yeah, we are. I’m in Alabama. We got four guys in the US and then four guys outside the US and the UK and Canada.
David: It’s great that you … I mean, it must have been hard with your team and yourself on the pay cut but you didn’t have to lay anyone off which is even tougher.
Josh: Right. It was either everybody takes a pay cut or we got to lay off a couple of people. The pay cut seemed it would hurt morale a lot less than layoffs.
David: One of my first startups, Compete, we started in 2000, raised funding and then started the company already after the dot com explosion meltdown and then, you know, the first two years had to lay off two rounds of lay off. I’m telling you nothing has shaped me more than going through that, so painful, both in a good and bad way. Maybe you can argue that it’s made me more conservative than I should be but it was just so painful to go through that process. It was nuts. I don’t wish it on anyone.
Josh: I feel like you hate to do that to people but … I mean, our team took it really, really well. Nobody on our team’s dramatic or anything. I wasn’t expecting anybody to really blow up but everybody was like … Almost like instilled this … All right … Let’s hunker down and do this versus I feel like if we had to lay people off, the by-product would have been like, “Oh gosh, I hope I’m not next.”
David: That’s exactly what happens.
Josh: Right. So far, it’s been on that positive both morale and cash.
David: Yeah, cash-wise. What is your focus now? What is keeping you up at night?
Josh: Really, it’s figuring out what … Honestly, to have a good revenue and that trickles down to a lot of different ways. I mean, that’s the hole in the ship right now that needs to be plugged, it’s revenue growth specifically. When Baremetrics launched, we were just Stripe, just for Stripe, and then almost a month ago, expanded to Recurly and Braintree. We just spent a bunch of time trying to basically make the target market larger.
David: I didn’t know you guys were using Recurly but you weren’t when I looked at you a while back, and then you integrated it. That’s it. We’re Recurly users.
Josh: Oh, nice. Cool. It should work. Recurly’s probably been one of the least hassles from an integration standpoint because, basically, Recurly’s a subscription platform, right?
Josh: Whereas, Stripe and Braintree have a subscription component but the majority of people actually are not subscription companies that are on those.
Building on another platform
David: How has it been like building business on top of Stripe specifically?
Josh: Early on, it was scratching my own itch so I just went with that but from API standpoint, they’re, by far, the easiest. From a partnership standpoint, early on, they’re fantastic. When I first built Baremetrics, Stripe as a company was only, I think, 80 people or something. They’re four, five times that now. I had a pretty close relationship with them. We talk frequently. They’re like, “Hey, how could we help?” If you emailed Stripe early, “Hey, how can we get more analytics?” They’d suggest Baremetrics. It was a good partnership for sure.
David: That sounds great. I’m always amazed … I don’t know the Stripe people and I love their product but I’m always amazed every time I dive back into Stripe for whatever reason, both positively and just surprised, I guess, because great on the API stuff obviously, right, developer-focused but I’m always expecting it to do things that it doesn’t do. I’m just like, “Really? It doesn’t do that,” or, “It does it but you still have to write all the other code to do that? Hmm. Interesting.”
Josh: It’s funny because you think of … I know Recurly and there’s a couple of other products that have things like credit card forms that are just … You get up and running within minutes where Stripe is so developer focused. There’s been so many things that had been built on top of Stripe to basically make it as accessible to non-developers, say, Recurly or a Chargify or something.
David: One of the most amazing parts about it to me is just … Maybe you’ll resonate with this having started a company is how do you maintain that level of focus and not bill those other things. That part is actually the most amazing part of Stripe to me.
Josh: Yup. The fact that they’re, whatever, 3, 400 people now and they’re still, for the most part, so hyper focused on the thing that they’re doing.
David: Yeah. I want that DNA. How do you do that? How do you turn down revenue opportunity after?
Josh: For sure. It’s so hard to not just like, “Oh, shiny object.” There’s one thing I actually want to talk about is founder optimism and how …
David: I suffer from it.
Josh: Right. Me too. The idea of this idea that you’ve got or that thing would have some massive payoff, thinking that everything’s got a massive payoff when it doesn’t.
David: It doesn’t, almost never.
Josh: Yeah. In fact, it’s the opposite. Chances are this will not work out at all. I’m curious how you … I don’t know about battle founder optimism but keep yourself in check and not chase all the shiny things or, in the case of our cash flow issues, that was the result of over optimism on my part for growth. How do you avoid that kind of stuff?
David: I’d say I do and I don’t. I do avoid it and then I’ll talk about how but all of us, I think, just have to battle often and succumb to it every once in a while so I am a victim of optimism, founder optimism, as much as anyone else. What I view is to battle it over time and this just come from looking at myself over the years is defaulting to the customers, my number one thing because so many times you’re building … Like you did with Baremetrics. It’s building stuff to scratch your own itch and it’s like you’re the first customer. You don’t think of it as anyone else. It’s for yourself. There’s no people involved.
The second that I find that people are involved, then things get really complicated and whether it’s selling a customer … Every new customer, every new person you add to the team, things get complicated.
Josh: Yeah. Do you find that having … I mean, the team itself, while it adds complexity also helps with the balance?
David: It can. It depends on the team. I think definitely it does. Having more than yourself helps to balance things out because there are going to be alternative voices. Sometimes, depending on how strong your voice is amongst those voices, maybe you can drown them out or maybe, depending on your optimism and your ability to convince others of your optimism, right? Sometimes you can drown that out but I think, net-net, it definitely helps.
For me, starting companies is all about people. I went through this process myself of being solo founder, scratch my own itch, early on, and thinking that was really hard going through that, and it was, not to discount it, but the people suffers way harder and so, from a learning standpoint, that’s a part that I geek out the most on. I always say that. It’s 99% people at this point and software and everything else is a small, small piece of the pie.
Psychology + business
Josh: That’s what’s interesting for me because I’ve been basically solo founder for a decade. Now that I’ve built this team around Baremetrics, I find that I’m almost playing psychologist … Not about therapist but, I mean, I spend all my time trying to figure out how the humans play into this, right?
David: It’s so funny that you said that. That’s exactly what I say all the time. I’m part psychologist and part cruise ship director.
Josh: Right. Twiddling with all the knobs and then seeing how people react to that both customers and your team.
David: Exactly. Within your team, are these people going to work well together? How come they’re not working well together? What’s different about their personalities? Should these people work together or these two over here work together? It’s amazing. I spend so much time before starting Drift at HubSpot, we’re in product and engineering. There, we were really going a scale so, for me, it was my largest team ever, it was almost 200 people, so a lot of powering, a lot of growth and spent a lot of time there really figuring out the psychologist part.
Josh: Yup. That’s super interesting to me. I actually was briefly a Psychology major in college. It’s funny, college stuff, to me the stuff … If you had a degree in Psychology or something almost seems way more valuable than having a business degree.
David: I totally agree with you. If there was only one thing I could go and actually spend time now reading books that would fall in the Psychology category more than anything else. I geek out on things like personality test. I never had to take a personality test many years ago. Before that, we did at one of my companies. I was like, “This is the dumbest thing ever.” I was the last person literally in my own company to take it and I hated it. I took it and I was like, oh, man … Since then, I’ve been a total proponent of it.
Josh: Probably a month ago, I did StrengthsFinder. That was super insightful. My wife had been like, “You should do this. I’m going to do it and then we can compare.” I’m like, “Fine.” I did it and I spent the next week just diving into all the things.
David: That’s crazy. You should do the other ones too if you have them like MBTI if you go to 16personalities.com.
Josh: Oh, nice.
David: It’s a free website, totally free. We use it internally and everyone … Even when we interview people. If they don’t know their type, we ask them to take it. That’s Myers-Briggs. That’s just one type. We used to use a DISC which is another type. You know, they’re all different. For me, personality types are starting point that you can start to understand how to communicate with someone.
Josh: Yup. I totally agree.
David: Has it helped your marriage?
David: That’s great.
Josh: My wife and I have done personality stuff early on. I’ve been married 11 years. Early on, we did lots like premarital counseling, we’ve done marriage counseling, all that stuff so, yes, we’ve done a lot of personality test and trying to figure out how that stuff plays into how we communicate and all so, yeah, it’s all good stuff.
David: That is awesome.
Josh: You touched on a few things here, so Compete and HubSpot and then the thing that your currently working on at Drift. You had a few other companies as well between Compete and HubSpot. Can we talk a little bit about those few companies?
David: Sure. There’s companies before Compete. Compete was a company I started in 2000 and we got acquired in 2006, 2007, around that time … 2007. I left at that point. Most of the team, actually the entire team stayed there. It’s part of the acquire. I left and didn’t know what I would do next and ended up starting a company called Lookery. I started that with a friend of mine who I had never worked with. He lived on the West Coast and I was based in Boston and we started this company almost accidentally.
We were just working on a project and it was at that time … It’s 2007 and in the summer of 2007, Facebook had just launched their platform so the Facebook platform just opened at that point. It was this rush, if you can remember, early Mafia Wars and all that kind of stuff. Of all these apps and in the beginning, it wasn’t just games. It was all sorts of apps that were built inside the Facebook ecosystem. It happened to be that a lot of our friends were building apps on those systems and some of them still have companies in that ecosystem.
One of the problems that they had was that there was no way to make money on the system and so we started to figure out can we help them make money so how to monetize in there. We ended up building this total ghetto at that time, Ad Network for social media apps, so it’s focused at social media apps. That was Lookery. It was total accidental the way it started. It got us working with what later became Zynga and Noah Kagan. If you know him, he had a whole bunch of apps in the ecosystem. I mean, he had a huge portfolio of apps back then, and a lot of other people that I can mention that you would know had apps and experiments going on in that system.
We learned a lot. A lot of stuff that I look back at now that people would say like growth hacking or whatever you want to call it, these were the early, early days and we were seeing a lot of that stuff happening in that ecosystem. Anyway, we built this company. We started it. We got some angel money for it. We ultimately sold the ad network pieceto another company. At that time, we were like, “Let’s focus the company on helping other ad networks use this kind of social data. It was not personal data.
It wasn’t David Cancel or Josh. It was just actually data like likes movies, likes this, likes that, all kinds of data about users. At that time, it was so early that almost ad networks didn’t know what an API was so we were basically an API business, didn’t have developers to integrate. They were mostly sales people. It was like this case of being too early too soon which is common in the startup world, and we ultimately shut that company down at that point.
Josh: Got you. There’s Performable? Was that … ?
David: Yeah. It was something we would be doing. I left Lookery. It was still going at that time. My partner didn’t shut it down at that point. He still had it going. I took some time off just over the summer and I started working on this browser plugin app called Ghostery. I created this thing which I thought nobody in the world would ever care about basically because I wanted to know what other ad networks and anything else was running on a website so you’d visit, you’d install Ghostery … At that time, only Firefox … You’d visit a website and then it would tell you, hey, it’s running Drift and HubSpot and this ad network and Facebook Pixel and all these kinds of things.
I thought who in the world go geeky so I only released it to myself and then a couple of friends in the Bay Area saw it and asked me to release it publicly so that they could use it and they were equally as geeky so I did. All of a sudden, within less than a year, I had 3 million people using Ghostery all through Firefox then early Chrome extension. It sounds crazy now but the whole time, I was like this isn’t a business. This is just a plugin at that time. Firefox and even Chrome were vehemently against extension developers because of the open source nature of things to make any money so I was like you couldn’t monetize anything in that ecosystem.
I can’t make money doing this thing but it’s fun and I like it. I was getting ready to start my next company called Performable. A few people approached me to buy the company. I sold Ghostery to a company in New York that got started and Ghostery continues now. They have 300 million users using Ghostery. It’s insane. It’s nuts. If you go to an ad network or web analytics conferences, something like that, I’ll walk around and see people with Ghostery stickers at this point, so it’s nuts.
Josh: Yeah, it’s funny. Then you went on to Performable which is what ultimately is what HubSpot acquired?
David: Yes. I started this company Performable with one of my VP of Engineering back at Lookery who become my CTO, Elias Torres, who’s my co-founder at Drift. We started Performable and I said … Well, Performable was an early marketing automation company and our competitors at that time would have been companies like Mixpanel and KISSmetrics. Although we were selling and mostly focused from a company standpoint against Omniture, which was acquired by Adobe at that point, we were more enterprise instead of startupy.
We started this company and 18 months later, HubSpot acquired us and the history was that they had been trying to acquire us number of times throughout the first year. We said no and then finally we agreed to do the acquisition. We said let’s bring the companies together. We have the same mission. I knew Dharmesh and Brian and all the people who started HubSpot and all of their investors early on and so we were all friends. We wanted the same thing which was can we build a massive company in Boston? Can we build something that ultimately will stand the test of time and be a pillar company here?
We’re both trying to do the same thing. Let’s see if we can do it together. They had an amazing marketing and sales machine and we thought we were really strong from the part of Engineering standpoint, and so, together, maybe we could create something awesome.
Josh: How long were you at HubSpot?
David: I came in as Chief Product Officer. I ran engineering, design, product, basically all of that kind of stuff which was unusual, right? Usually, you have a head of engineering and then a head of product, and those things are separate. I had a head of engineering and heads of product but we rolled it all under what we call Product.
Josh: Got you. You left before the IPO. Is that right?
David: Elias and I left technically one or two weeks … I don’t remember … Before the IPO.
Josh: Okay. Got you. With my investigative hat on, we noticed that between Compete which you’re hacking on for seven years, which is a pretty long time and …
David: Really long time.
Josh: Between that and then your time at HubSpot, all the stuff in between, you were basically doing those things for 12 to 24 months and moved on.
Lifelong learning & when to move on
Josh: I’m curious. In looking at Drift, that’s basically where you’re at now is that almost two-year mark?
Josh: Do you feel like, not that to imply that you’re going to bail on Drift or that it’s going to get acquired or anything … I guess, I’m curious is that an attention span thing or that’s just complete chance how that stuff played out?
David: Good question. This is a perfect psychology question and maybe I don’t even know the real answer myself so here’s my interpretation. I think, for me, the way that I look at starting companies has always been around … It has been less about starting the company and has been more about learning. I had this obsession with learning in all aspects, not only business and then starting companies but in developing things and life and whatever, all areas. I’m obsessed with growing.
When I look back at the companies that I started, they all started because I was obsessed with some idea or problem and then, when I left or when we sold the companies, overlapped with when I felt like the learning had stopped and we can all relate to that. For whatever reason, learning had stopped. Compete was my longest. That was seven years as you said. I started in 2000. The first two years were brutal, brutally hard. First almost three years are brutally hard. The meltdown was hard but then, right after the meltdown, we got going in the first year and then September 11th happened so then we lost all of our customers in September 11 because they were largely telcom and travel and media companies. None of them were buying. It was all shut down, then it got really hard. You know, it’s all timing.
Then, the last four years of Compete were like the hockey stick. If we started Compete in 2004, it would have been pure hockey stick but we can’t control the mackerel. At the time we sold the company, I felt personally like I was getting to a point where all the learning had stopped, all the learning that I wanted to get to had stopped. We were about 150 people at that point, largest company I’d ever been a part of really, definitely my largest owned company and so we sold the company. Ultimately, it turned out to be great because 2008, if you can remember, there was a meltdown, right, and so it was perfect timing.
That was great and all of our investors, employees, and everyone were super happy that we did. That was great. We sold the company. Then, it was Lookery, and Lookery was, for me, it was a company but it was less of a company and more a hack that turned into a company, if that makes sense. I really didn’t go into Lookery in other words saying, “I’m going to start a company.” The same thing with Ghostery which was a project. Then, Performable was I wanted to start a company and it was painful to sell Performable to HubSpot at that time although I look back now and it was the best thing ever for lots of different reasons.
It was painful because we didn’t have one blip in those 18 months. We had tons of customers, we had raised 3 million dollars to start the company. By the time we acquired, we had two thirds of that money still in the bank. It wasn’t like we needed money and we have lots of other investors including our own investor trying to put more money in the company and we had happy customers and we had momentum but I felt like if we could put the companies together, that we could create something bigger. That one was a reluctant … At that time again.
Now, I look back and think it was the best thing ever but it was reluctant decision and why it took multiple attempts before I finally said let’s do it. Then, cut to HubSpot. I was there about three and a half years, and then started Drift. When I left HubSpot, I didn’t know that we we’re going to start Drift. I didn’t know what I was going to do exactly but I knew that the learning I wanted to see had stopped at HubSpot.
HubSpot’s tremendous and amazing and there’s still learning happening there but I wanted to see what would happen from 200 employees to a thousand employees, rapid growth. That was the timeline in my head and that’s exactly what I saw. We got to over a thousand employees. When we were acquired by HubSpot, we were 200 employees, 2,000 customers and we went to 1,000 employees, 15,000 customers. I saw that and I didn’t want to learn the lessons of being a public company. I didn’t want to learn the lessons that came after. I saw the thing that I wanted to see.
When we left and I didn’t know if I’m going to start a company, am I going to retire, what am I going to do? I thought to myself, you know what? I still have something to prove. I still have one more in me and I’m going to do it now. If I’m going to bother to start another company at this point, then I’m going to go for it, whatever go for it means. I’m going to go all out because this is it. I don’t know how you read this psychologically like this is some swan song or something but that I wasn’t going to sell Drift and I’m not going to sell Drift. We’re going to go and try to build another large company in Boston. Sorry for the long answer.
Josh: That’s perfect. Obviously, when you’re building anything from this small project like the browser plugin, all the way up to HubSpot which is straight up, at this point, almost certainly enterprise software. Whereas, Drift, I picked up that it’s probably, at least at this point, not terribly focused on the enterprise side of things.
Josh: This is almost certainly a personal preference thing. Small and medium-sized businesses versus enterprise from a product standpoint, those are different types of problems to solve? I’m curious for you, what … Not pros and cons but what do you find is [fun 00:31:14] about each of those types of markets from a product standpoint.
David: I like that question because there are things that are fun about them all. I have this .. I don’t know if it’s contrarian but it feels like it when I tell people, this view on SMB and enterprise. What I think is that SMB and enterprise are actually very similar to me from a product standpoint. We’ll talk more about about why. I think what is actually abnormal and weird is the thing that we all as, especially in this as we’re focused on which is this middle of the market and that’s actually the weird …
From a product standpoint and psychology standpoint, that’s the weird part of the market that we all think is normal which is actually not normal. What I mean by the middle of the market is, and what’s weird about it, is the middle of the market is highly technical, used to a lot of change, can do a lot of technical work and integrations, integrate Baremetrics into Drift and all this kind of stuff. It’s like hungry for change and hungry to do things on their own, try software and all that kind of stuff, right? That’s the middle of the market. That’s actually really weird. That’s a weird part of the market. That’s not represented …
Josh: Most businesses are not like that.
David: No, not at all, but we all end up building software for that kind of user which is not a normal user. Then, I’d say the opposite ends of the spectrum, SMB and enterprise, are actually very similar in that they both resist change for different reasons. They both need a lot of hand-holding and service work. SMB needs it because usually, they don’t have anyone on staff. You know, it might be an owner-operator. They might be a very small team. They might not have a dedicated marketer or a dedicated admin or developer, any of these things, so they need a lot of service work.
Then, on the enterprise side of things, they actually need a lot of service work too but for other reasons. Because there are so many people, because things are so complex, because they’re dealing with so much compliance and they’re so slow-moving that a lot of the enterprise solution side of things is actually dealing with the humans and building services for the human, whether that’s training, whether that’s roll out of new releases, whether that’s on-site integration, all that kind of stuff. They both need a lot of human touch and we all build software for this weird anomaly that doesn’t need any human touch.
Josh: If you think of in terms of market size, I think the risk of that middle market is it’s like startup serving startups, right, and it’s a bad rut to get in.
David: I think you nailed it. I think it’s the big risk of that market and it is the market that we all, as geeks, want to build for and it’s not normal. It’s actually a small market that can cannibilize itself especially because those people are so into the new thing and trying and loyalty is low. They’re always looking for the latest and the greatest. On the opposite ends of the spectrum, with SMB and enterprise, they’re the opposite. They’re looking for little change.
They’re not looking to switch things out easily and so, in some cases, that is where the real money is, if you can figure that out and you can see that with apps that now have transcended just building software into changing the way that we live, whether that’s something like Uber or insert other example here, of things that are transforming day-to-day life. They’re tapping into those other ends of the spectrum, of non-technical audiences, even though they started maybe techie, and you could see the market size impact that they have.
Airbnb is another perfect example. It started off techie but look at how it can be used by the entire market versus the stuff that we all do including me. I’m guilty just like everyone else, of building stuff for this weird niche in the middle.
Josh: To me, I think, it’s easy. I would say most entrepreneurs are not necessarily … They’re probably actually risk-averse.
Josh: To me, it seems like we need more entrepreneurs who are less risk-averse and really great at seeing the potential of things outside their own assumptions about what they’re doing, right?
Josh: Like Airbnb started off as this tiny, little, this weird idea that they certainly would have never thought it would be what it is today but they had the foresight or maybe they were less risk-averse and said, “Let’s just see what happens if we keep going and going and going.”
David: Yeah. I think, in some ways, maybe they didn’t give a shit, right? They didn’t care at that time because they weren’t believing their own hype at that point because they started billions of dollars in the hospitality revenue.
Josh: For sure.
David: I totally agree with you. I think one thing that I love your take on is why do you think people have this misconception that entrepreneurs are actually into risk.
Josh: I feel like there’s so many people who maybe they shouldn’t be called entrepreneurs but they’re makers. They just build stuff. For most people, especially … I hesitate to say older generations or something like that. Technology seems so voodoo to some people. If they make something, it’s like I could never figure that out. It’s almost like this perception an entrepreneur, a tech person’s like a magician and so this view that they can create something out of nothing but that seems risky but, in reality, it’s not risky at all.
David: It’s not. You know, most people would start companies … Totally. Most people would start companies that I know are quite the opposite. They want more control, if not less control. They could probably be control freaks so that’s why they’re starting a company. They want to control all the variables so it’s quite the opposite of what people think.
Josh: I tell people I would be a terrible employee.
David: Me too.
Josh: The only job I ever had lasted seven weeks and I quit that’s because I have to … I don’t even think it’s control thing. It’s like needing to have the freedom to steer the ship in the way that I feel is most appropriate.
David: I love it because you’re worse than me. At least, I did three and a half years almost at HubSpot.
Josh: I say that my only real job is seven weeks. I used to have a blog called TheAppleBlog. GigaOm acquired it. This is probably 2007 or something like that. I technically was employed there for a couple of years but it was an interesting setup but I was still at building lots of other things at that time. I can’t really be an employee. I’m bad news.
David: At least, you know it.
Josh: Right. At least, I can be upfront about that. Let’s tackle one more thing. I don’t want to take all your time here.
Josh: Today, I saw you tweeted about a competitor using, what was it? An email?
David: A messaging in position.
Josh: All that stuff, right. I’m curious to your thoughts or how you approach or view competition, how you let that play or not play into how you’re approaching building a company.
David: I love competition. Let’s just say that from the beginning. I love it. I thrive on it. Actually, today was one of the most energetic days at Drift ever for me. I just love it. I don’t know why. I didn’t know this about myself. I wasn’t big into sports or anything like that but, when it comes to building things, I’m very competitive so I like it. That being said, I don’t actually spend any time thinking about competitors when it comes to how we build things. I used to, maybe in my first company, but I really switched over to this mode which we mentioned before, being the customer is the thing that is right and so I’m really focusing on just how do I solve customer problems.
The customer doesn’t care about competitors even if they name mention a competitor. They really care about solving their problem. I’m here to solve customer problems and so I obsess around customers and making them happy. I don’t really care about competitors. Especially competitors that are startups, those are the ones that I care the least about because … I wrote a post about this a long time ago while at Performable. I had someone, which is common, at some event, someone came up and said, “Hey, I’m a competitor of yours.” I was like, “You’re not a competitor of mine.” They were like, “What?” I’m like, “I don’t think we’re competitors.” I said, “If it turns out that we are competitors someday, you know, five years down the road, it turns out that you and I are competitors, then, wow! We really screwed up, the two of us, because the total market was just you and I as competitors. That would really suck.”
For me, if I’m really addressing a customer problem just like you are at Baremetrics, then there are going to meet endless competitors and there are going to be software and services and providers and hacks that people are doing. It’s like an endless list of doing things. It’s not like a company or a list of companies. It’s basically different ways to solve a problem that a person has. That’s how I think about competitors. I always [cite 00:41:54] to hear that this competitor was copying our stuff and offering free, you know, three months off to customers. Awesome! That’s great! Do I think about them? Never at all.
Josh: We have basically the same view. Especially when you’re talking startups, there’s so much new …
David: Oh, yeah…
Josh: Everybody’s new though. There’s so many, not necessarily new problems but kind of new problems in like everybody’s jumping on board to figure out how to solve them but, in the grand scheme of things, still so absurdly early in anything. The reality is, you and that competitor who may have started trying to solve the same problem in the same year, the fact is as long as you’re focused on, like you said, the customer and solving customer’s problems, then there’s a fork in the road that happens. You go one way and they go the other. You either end up solving completely different problems or one of you picked the wrong fork in the road to take and you don’t exist anymore, right?
David: I totally agree with you. Even if I go back to Performable and when you asked about it, you know, I mentioned Omniture, we would compete against but you consider Mixpanel and KISSmetrics in there and maybe some other companies. I think what we’re doing at Performable is we are really second wave marketing optimation. First wave being Eloqua and a couple of other things that existed at the high enterprise side and we were taking that stuff down to mid-market and SMB.
There was Eloqua and there was one or two others but if you look now and say it was the entire category. It wasn’t one or two companies. If we went down the list of marketing automation companies, even marketing automation companies that are actually pretty large in size, the list is so long. I don’t know the end of that list. The point being that it was a category that we were trying to go after because we were trying to identify the right pain and that’s going to be endless new companies in that area including stuff like Drip, which is a great product that Rob Walling started. Love that product. That came along about two years ago. There’s going to be another 10 versions of Drip 3.0 and 5.0 after because it’s a legitimate business problem that they’re solving.
Josh: I almost think a lot of entrepreneurs give themselves way too much credit for their ability to solve problems. You know, you start this product to think that you’re fully solving the problem the day that you launched some product. You’re so full yourself. Baremetrics is almost three years old. The things that we’re doing and even just features, it’s a different product than it was three years ago, right? To think that you know everything about a problem and that you’re fully solving it and that there’s not more market to get after you’ve.
David: It’s crazy.
Josh: It’s crazy, right? Yeah.
David: That’s totally crazy. At this point, I have almost a zen view on things. My view is I don’t know. I don’t know. Maybe I’m mature enough now that I can say that where I couldn’t say before. It’s like, “Oh, what do you think about this?” “I have no idea. I don’t know.” “How are we going to figure it out?” I know how we’re going to figure it out and it’s going to involve making lots of mistakes and learning from those and talking to customers.
We all know how the scientific process works, right, the experimentation. That’s how we’re going to figure it out but I don’t know. It’s something maybe entrepreneurs or maybe world technology that we’re afraid to say that but, in any other medium that relies on the same process whether it’s actual science, hard science, or the arts, people are okay with that, the game of iteration and the game of figuring it out and the game of putting in the work in order to do that and, for some reason, we want to be right in version one.
Josh: Yup. Probably a lot of the companies that fail are the ones that refuse to adapt, right?
David: Oh, yeah.
Josh: To say, “Man, that was the worst idea we have ever have.”
David: You’re so right. When I meet with young entrepreneurs or entrepreneurs who’s starting their first company, the ones that scare me the most are the ones where you can detect that in them, that they’re so … The other side of that, it’s great that they have passion for what they’re doing but you can detect in some people that they’re not going to budge, that they’re not going to give. No matter what evidence you put in front of their face, they will never give. Maybe that’s where the heroes come from. I don’t know. I don’t know anyone that’s been successful that way.
Josh: Well, David, thanks for taking a few minutes to chat.
David: Thank you, Josh, man. It’s a pleasure, dude.
Josh: I appreciate it. Is there anything that you want to say or push or?
David: I don’t want to push, you know. I love the stuff that you do. I’m always reading your blog at Baremetrics so I love your voice and love your stuff and just getting into the podcast game myself. We do podcast called Seeking Wisdom. Check it out if you’re interested at all but, no, nothing to plug.
Josh: All right. Thanks, David.