What's driving you now?
Hello and welcome to build your SaaS. This is the behind the scenes story of building a web app in 2020. Justin Jackson and John's not here. And today we've got Ward Sandler, like Adam Sandler from memberspace. How's it going, Ward?
Speaker 2:Hey, Justin. I'm good.
Justin:I've known you for a little while. I we met at MicroConf originally, I think.
Speaker 2:Yeah. Yeah. A few years ago.
Justin:I I think it was actually more than a few years ago. I think it's been I think we first met 5 years ago, I wanna say.
Speaker 2:Yeah. I'll go with your memory on that one. That sounds right.
Justin:Has that much time passed? So let's see here. Because I remember I just published marketing for developers, and that was 2015, I think.
Speaker 2:Mhmm.
Justin:And now it's 2020. Right?
Speaker 2:Yeah. Yeah. I remember my partner actually bought that book. That was he liked it a lot.
Justin:So you have how long have you been doing MemberSpace then?
Speaker 2:Since 2015. So, yeah, it's it's all about that year apparently.
Justin:Wow. Okay. So that's right when you'd started it.
Speaker 2:Yeah.
Justin:And if I remember correctly, you started it as a way of adding, like, paid memberships to Squarespace.
Speaker 2:Mhmm. Yep.
Justin:And, then you've evolved it since then. Right? Now you do other, not just Squarespace.
Speaker 2:Yeah. Yeah. Now it's available on any CMS, Wix, Webflow, WordPress, all all anything like that.
Justin:And like us, you also have a cofounder. Right? It's just 2 of you?
Speaker 2:Yeah. Me and my, cofounder, Ryan. We have a minor partner, Roger, and then we have, we have 2 full time employees outside of that and then a bunch of contractors.
Justin:Yeah. So I think, like, today I mean, what we're gonna we can also do a a typical build your SaaS, like, you know, what are you working on? What are you thinking about? What are you struggling with? But I also just have questions.
Justin:And, we have a lot of listeners that I think could benefit from another viewpoint other than mine and John's. And one of the questions we get all the time is, how do you find a cofounder? So how did you guys find each other?
Speaker 2:Yeah. That's a that's a that's a good one. Well, we definitely didn't didn't find each other to start a business. That's for sure. We went to college or or university together.
Speaker 2:Went to Stevens Institute of Technology, which most people haven't heard of, but it's a a small engineering college in Hoboken, New Jersey.
Justin:Okay.
Speaker 2:Yeah. And, we were actually in the same fraternity together, believe it or not.
Justin:Oh, wow. Yep. Can you just a side quick sidebar. Because fraternities are not a thing here in Canada. What is it is it just like a club?
Justin:Is it like, what what what's the deal with fraternities?
Speaker 2:Yeah. So at Stevens where we went to to to college, it was, mostly men. It it was, so, you know, as with most STEM type stuff, there it's it's skews towards towards men, at least back then, which was, you know, we're talking about 2,004. So Yep. It was mostly guys.
Speaker 2:And so the way that you have a party is you go to fraternities. That's that's what that's just where the parties were. It was just a group of guys. It's kinda like a social club is the way to think of it. It's a social social club that has silly rituals, if you wanna call it that, that you need to get in.
Speaker 2:Nothing weird. Like, the movies and television wildly exaggerates what it's like. It's not it's not super weird like that. It's just Yeah.
Justin:It's just All the Canadians are over on this side going, what the heck is going on?
Speaker 2:Yeah. No. It's just it's just drinking, hanging out, camaraderie, you know, having just a group group of people that you're friendly with. Like, it's a way to, like, essentially create a giant group of friends very quickly. Because, like, suddenly you have, like, 30 people that are, like, close friends and will, like, almost do anything to for you to help you with school.
Speaker 2:Like, a lot of it was studying together even. Like, you know, it doesn't need to be parties, and it it was actually really nice. You just kinda get this nice boost of of a lot of friendship. You're the center of social activity at least at our college. And then afterwards, you have this nice alumni network.
Speaker 2:So, yeah, I I I liked every part of it.
Justin:And and that allowed you to meet, Ryan?
Speaker 2:Yeah. Yeah. He was he was a year older than me, and, yeah, he was already there, and we just kinda were friends. We we didn't we weren't friends at first, but, after hanging out for for a little while, we we became friends, and then we eventually worked at the same startup together.
Justin:Okay.
Speaker 2:It was called Taxstream, and we sold the it sounds boring as hell, but it was called it was, tax software, like, enterprise tax software, which sounds so boring, but it was actually really fun. Just the people that were there was, like, the coolest group of people. Everybody was just super chill, which you wouldn't have expected.
Justin:Yeah.
Speaker 2:And just young and energetic, and it was great.
Justin:Yeah. I mean, that the group you're with actually kinda determines everything. And so you you folks started working there right after college together?
Speaker 2:Yeah. Like, we've I actually started there as, like, an intern during college, and Ryan started as an intern there even before that. He was, like, one of, like, the first, like, 20 or 30 employees. So he had, like, some some equity even, like, private equity. Yeah.
Justin:So do you think working together before you partnered up was helpful?
Speaker 2:In a way. I mean, we didn't it was weird. Like, we both did the same thing. We were sales. So we didn't, like you don't really work together in sales too much.
Speaker 2:You're kinda doing your you're kinda in your own lane, you know, going on your own hunts, if if you will.
Justin:I didn't realize you guys were sales people. Yeah. That's your your background's in sales.
Speaker 2:Yeah. Both of us.
Justin:Yeah. Wow. Yeah. This this changes because I mean, the the dynamic that John and I have is kind of the one that everyone's looking for. Right?
Justin:It's like a mostly technical person and then a nontechnical person that can do all the other stuff. But you 2 neither of you had a tech background or you you were tech plus sales?
Speaker 2:So, yeah, we both need didn't have any technical background. Ryan is definitely more of a natural engineer, though. He started actually doing mechanical engineering in college and then switched to business, but he definitely has an engineer's mind. So
Justin:Okay. Okay. So now the next part is I I remember you folks were an agency first before you started MemberSpace. So, like, after that startup, you and Ryan went on on your own? Or
Speaker 2:Yeah. So, like, that startup got acquired by a giant company called Thomson Reuters. So they bought us.
Justin:Okay.
Speaker 2:And then things got not fun anymore. Everything got super lame and exactly what you'd imagine would happen when a big company bought you. Yeah. Now the the one caveat here is we were paid well. That was that was the nice part, because if you sell expensive software to large companies, you you make good commissions.
Speaker 2:And I'm not saying that to humble brag. I'm saying that because it's actually important in the story because it essentially gave us funding to go do the next thing without having to be stressed about making a bunch of money or how are we gonna pay rent. Yeah.
Justin:Yeah. Yeah. That's that is key, isn't it? Alright. So you had enough money.
Justin:Like, you guys quit your jobs together and then you started working on this thing? Or, you were working on this thing while you're working working full
Speaker 2:time? Yeah. So when when we were at we were acquired by Thomson Reuters, and then me and Ryan just kinda always were sort of entrepreneurial. So we had, like, just ideas we used to bounce back and forth, you know, like everybody does, mostly horrible ideas. And, we just kinda figured one day, like, we kinda picked something.
Speaker 2:I don't even remember what it was. It was it was another bad idea, but we were like, wait. Okay. Cool. Let's do this.
Speaker 2:But then we were like, wait. Who's gonna how are we gonna do that? I was like, oh, I guess we gotta hire someone to, like, program software. And then we're like they were like then I started thinking, like, wait. That's fine.
Speaker 2:But what if I wanna, like, change the button color or, like, the text? And it's like, I gotta hire somebody to do everything? Like, that sounds terrible. Like, I'm someone who likes to be in control of things and, like, have everything a certain way. Like, I'm like, design and stuff like that.
Speaker 2:So for me, that that was unacceptable. I couldn't just they would think I'm a crazy person if I had to call them every time to change a button, text, or color.
Justin:So Yeah. Yeah. Exact I can I can get that?
Speaker 2:Yeah. So we were both like, alright. Let's, you know, a little bit of just being naive for, like, why don't we just try learning how to program? Let's see how crazy this is. Like, it's at the time, I'm I'm I'm sure some people can relate to this.
Speaker 2:If you're not, like, if you don't have a technical background or didn't go to college for this, Programming sounds like this, like, magical power that only these people that make it to the top of the mountain can do. Like, the the the most genius people in the world. And a lot of them are very intelligent. But programming is, in my mind after we started learning it, it's it's it's like learning a language. It's like learning Spanish if you if you only know English.
Speaker 2:It's it's not any harder, easier than that, I'd say. It it's it's you have to learn syntax and and learn how typing this does that on the screen and and it doesn't do that if you type it wrong. And then it's like that. So we read, like, a basic HTML CSS book, and then we both loved it. Got, like, super excited because I could, like, change the color of the background of the page, and that was, like, crazy.
Speaker 2:And then we're like, woah. We have magic powers.
Justin:You're just a couple of sales bros learning some HTML.
Speaker 2:Exactly. That
Justin:Nothing wrong with that.
Speaker 2:So, like, after that book, it was called Head First, by the way. I think I still have a new edition. It was an ex excellent book. Super like, really breaks down step step by step how to do this if you know absolutely nothing, which is what we were starting at. So after that book, I kind of went more on the design direction.
Speaker 2:He went more in the back end. Like he was, he was like, this is cool, but, like, how do we make a form work? How do we, like, store something in a database? And I was like, I don't really care about that. I wanna, like, make the button and the font pairing look good.
Speaker 2:And so, like, it was perfect. He started reading a PHP book, and I started reading more, like, design and CSS books. And so we just kinda naturally diverged, and that's how we learned things, and we started consulting on the side real quick, starting with my uncle uncle Larry who's a lawyer in Florida.
Justin:Yes. Yep. Everybody needs an uncle Larry in Florida
Speaker 2:Yep.
Justin:To be the first client. Yeah. This is interesting. Like, so and so the idea was you 2 are hanging out and you're like, we gotta start something. And then as you're thinking about ideas to start, you you think, well, we have to be able to build it in some way.
Justin:And so then you just naturally started learning things together, but then eventually, you diverged. And you did design, and Ryan did kind of back end PHP programming.
Speaker 2:Yeah. The logic side. And we started with Larry. We built his site. And then from there, just, you know, we're hustling and looking looking for jobs on Craigslist, going to networking things, like, just getting all those terrible low end projects that are out there, with terrible clients, because that's what you gotta do when you're first starting.
Speaker 2:It just kinda sucks. But it was fun for us because, like, we we looked at it as being paid to learn. So we're getting paid money to learn things, and it's like, okay. Cool. And we were still working at Thompson Reuters, by the way, at this point.
Speaker 2:So what
Justin:was driving the hunger? Was it just, like, your day job was so boring and bad that you were like, we gotta build we gotta carve out our own little piece of the pie here? Or
Speaker 2:Yeah. I mean, like, with sale is a bit of a tangent, but with sales, anyone who's done sales out there, it's it is kinda it is exciting. Like, especially at first when there's like, woah. Like, you gotta, like, call somebody and, like, get them to buy something. It it's kind of exhilarating, especially when you get a yes, then you get a nice commission check from it.
Speaker 2:So, but the problem with sales is if you do it long enough, it's basically like a logic tree. Like, if I say this, you're gonna respond with, like, 1 of 1 to 3 different things. And then from there, I have 3 responses, then I then you might object to that one, and then I have another three responses. And then and then the tree ends. Like, it usually ends with a either you're gonna you're gonna buy or call you back or no.
Justin:So you you have it quantified down to some like that math? I didn't I never wrote I
Speaker 2:I well, I did actually write it out, to help with training for other people that did that did the job after me. But, Yeah. Yeah. Basically, it really does it the any and if you're trying to sell anything, it there's just a logic tree of yes, no, maybe, and then objections, and then eventually just ends with them moving forward, them saying no, or them saying, you know, basically call them back or email them back later.
Justin:The the patterns are that frequent?
Speaker 2:Yeah. It it it it's a it it's a pretty decent sized tree, but, you know, after a certain amount of calls, you learn I learn all the different ways of you would say no, all the the best the best highest chance response I could give to get you to go to maybe. And then from there, get you to yes or or no. And then I know that if you said no at that point, there was nothing I could have said that would have changed your mind. It was done.
Justin:Okay. So, like, I'm I'm a purchaser at Exxon, and you call me, like, cold?
Speaker 2:A lot of times we're calling, like, VPs of tax or, like,
Justin:the com
Speaker 2:the comptroller, sometimes the CTO. It depend on the size. Sometimes I spoke to CFOs if it was, like, a medium sized business. They can have to
Justin:sort of
Speaker 2:call call the CFO of, like, you know, some, like, Cisco or something. But
Justin:But were these cold calls?
Speaker 2:Yeah. A lot of them.
Justin:Okay. So you get someone on the line. And what do you say to me? Like, what's your what's your opening line?
Speaker 2:Oh, boy. I'm trying to even remember. Well, first, I don't even get to talk to you first. Usually, you have to get past the secretary. Okay.
Speaker 2:They all they all have a secretary, and that person is their job is to not let you talk to them because they know that They're
Justin:the gatekeeper.
Speaker 2:Mhmm. The gatekeeper. And so you gotta learn so, yeah, we I'm trying to remember what the phrase was, but it was something along the lines of, I'm calling regards, to Sarbanes Oxley compliance because that's what our software helped you with, be compliant with Sarbanes Oxley. And when they hear the magic word compliance, now Yeah. They'd be in trouble if they didn't say something to their boss about compliance because, oh, it's about compliance.
Speaker 2:That's important. So that gets you passed the trigger.
Justin:Okay. So you make it past my secretary. Now you're talking to me. Now I'm just imagining if it's me, like, let's say that I do have a gatekeeper and you get through to me, and then I get the transfer and I realize I'm talking to a salesperson. I'm pissed.
Justin:Mhmm. So so what how do you what do you do next? Like, what you get me on the line. I go, okay. Hey.
Justin:Justin here. What do you say next?
Speaker 2:Oh, man. It's been so long. I'm trying to remember. It's it's always been it's been, like, 8 years since I did this. But, yeah, it was something along the lines of, like, you know, calling again about, Sarbanes Oxley compliance.
Speaker 2:Just curious, you know, what are you using right now to to stay compliant? So just kinda get get them to start talking.
Justin:Books online, small business edition.
Speaker 2:Right. Said no CFO ever. I mean, they're all paying for something. That's that's the interesting part about this market is they're all paying for something. They're because at that level of a business
Justin:Let's say I have an existing solution and I go, you know, we're fine with our existing solution. Is that the end of the call? Or what do you do then?
Speaker 2:Oh, no. Then I mean, this is goes back to that tree. Like, depending on what solution you said, I have a few responses of things I know they don't do well that I know our software does do, and I'll bring those up immediately. Be like, I I hear you. I get that you're busy.
Speaker 2:Yeah. Does I know that, you know, x doesn't do y and we do y really well. Does that matter to you at all? And just kinda get from the, like, like, I know it matters to you. That's but I'm asking it in a way that isn't like me cramming it down your throat.
Justin:Yeah. And okay. Here's an interesting thing about that is that I often find when salespeople use those on me, they're fishing, and it doesn't hit a nerve at all. Like, usually, I'm just like, no. Like, no.
Justin:It doesn't matter. It's like but had you identified, like, these are just open exposed nerves that everybody like, who identified that? That? Was that you as a salesperson or is that somebody ahead of you that's tracking patterns and going, oh, wait a second. You know, we know for sure that if you say these words, it's going to trigger a response.
Speaker 2:Yeah. I mean, I'd say if a salesperson had done something like that to you and it didn't hit a nerve, they're not very good. And they didn't they didn't they didn't know what to say in that. Like, it's not just we do this and the other person doesn't. It's we do this and we know that's important to a company like you.
Justin:Yeah. And and know how that your experience
Speaker 2:is pain. Well, yeah, it's it's some of it is our previous bosses. We gotta give us tips and hints and part of it's trial and error. Like, learning after you know, if you get a client and you start implementing our software and they're like, oh, I'm you guys do this thing so much better than our last solution. It's like, oh, I didn't know that.
Speaker 2:Good to know. And then they make a note, and then for the next person I talk to, I can bring that on.
Justin:Yeah. It's sales is one of those interesting things that if you happen to get a hold of somebody who's hungry, then, you know, they're thankful you called. Right? Like, today, I've been calling around because I'm in Canada. But I get paid.
Justin:Almost all of my payments come in as USD, US dollars. And which is great. That's that's exactly what I want. The problem is I can lose literally 100 of dollars a month if I'm not converting those USD to Canadian efficiently. And it's tricky because there's lots of personal banking products.
Justin:This is super boring to people. Anyway, it's tricky. The the point is, like, if and every person I talk to, like, that I call doesn't know what I'm talking about. Like, I have to go through a whole thing. If somebody called me that clearly knew what they were talking about and wasn't a jackass, I would be, like, overjoyed.
Justin:But that just seems like I think a lot of people, even in SaaS, struggle with this. How do you observe a repeatable pattern of pain or friction or, like, an exposed nerve and then find those people in an efficient way. And you know what I mean? Like, have you been able to take any of that sales stuff over to member space?
Speaker 2:Yeah. I'd say the main thing like, we don't do, like, 1 on 1 sales like that anymore because the only the only would do that generally is if you're at a certain you're selling a really expensive piece of software, and our and our software is not super expensive. So but what we did take over is the level of follow-up and communication that you need when you're selling at the enterprise level, which is Mhmm. Really good email follow-up, being really clear about things, scheduling meetings, all those little details, like, no ball ever gets dropped. And by both me and Ryan having that experience and bringing that at first into consulting, especially for those low end projects, it would blow people out of the water, our level of communication, because, you know, I think developers and tech companies in general kinda get a bad rep for having, like, bad communication and, like, not following up and being just disappearing.
Speaker 2:We hear that all the time. And so our approach was, like, we were we were treating you as if you were, like, you know, a $1,000,000 project, enterprise project referring us to other people, just being really happy in general.
Justin:Yeah. Isn't that funny how, like, different contexts I mean, because before I got into tech, I was working for in the nonprofit industry and nonprofit workers work their asses off. They work like a 100 times harder than anybody else. And I remember getting this job at this startup. And my one of my coworkers, after the 1st week, pulled me aside and said, dude, you have to slow down.
Justin:Like, you're in some way, you're making us look bad. Like and I felt like I felt like my whole life had just switched to easy mode. Like, the the it was just a completely different context. Like, every the yeah. It was so strange.
Justin:And so you had that experience, like, sales at the enterprise level and the way you experienced it was kind of at this level, this level of communication, this level of follow-up. And then you bring that into, you know, doing websites for people and it's like, okay. This is we're really killing it here. Like, the the the competition isn't even close. Yeah.
Justin:That's hilarious.
Speaker 2:And then that naturally, we brought that to member space in terms of, like, how to provide support for people. Right? Because it's just like following up, following up again if they didn't follow-up just to be like, hey. Was everything clear in that last message? You know, hop you on the call to talk to people.
Speaker 2:Just, again, treating everybody like they're paying you a $1,000,000 doesn't even if they're not, it really makes a difference in terms of how they their their perceived value and then their their loyalty and their ability to kinda roll with punches if you have bugs or issues or whatever down the line.
Justin:Yeah. Yeah. I like that. So, I mean, the other question that we get all the time on this show is people are looking for an idea. How how did the idea for member space come about?
Speaker 2:Yeah. So I I gotta give, Amy Hoy, credit here with the Sail Safari concept. I'm sure you're aware of it. But, for people that aren't, you know, just Google Amy Hoy 30 by 500. She's got, like, a whole, I guess it's like a class or boot camp of sorts you can buy.
Justin:Yeah. But
Speaker 2:I basic no. That was cheap. I reverse engineered essentially from her blog post where she would allude to the concepts and kinda give general ideas. But the the quick summary is with the Sales Safari, instead of trying to come up with idea, instead, you should look at watering holes where people are already talking about things, complaining about problems. So things like public forums, review sites, feature up up, like, feature boards where you, like, click to move that feature higher up.
Speaker 2:I can't think of the phrase for it.
Justin:Mhmm. Yeah. Yeah.
Speaker 2:But that that kind of a thing where, like, people are already communicating and talking about what they want, what's not working. So we did that in Squarespace when when we were just building websites on Squarespace. I went to their forum, and it was like you could view view by topic, and I sort of I most view topic, and it was, like, a 100,000 views for how do I add memberships to Squarespace. And we're just like, oh, boy. We had been asked this by a few of our customers, and so I just kinda started reading through every single response, which is what Amy says to do.
Speaker 2:Like, this is the boring work that other people aren't gonna do, but you do so you can really get a really rich set of data without having to go out and find those people. They're right they're already talking. They're right there. And so I I I read through every comment in terms of what people like, didn't like about existing solutions, pricing, features, blah blah blah. And you and you document all this.
Speaker 2:Right? You have a nice Excel sheet or whatever that you're keeping track of all this data, and that's how we came up with 1. Clearly, there was a need. There was, like, the solutions out there were terrible, and people hated them, and they were still buying it because there was no no one else there was nothing else. So we're like, okay.
Speaker 2:There's obviously a market here of people that are willing to pay. I don't have to guess. I I know that for a fact. It's right there's data right there in front of me, and that that validates it for you. And so then we also use that to shape, okay, what's actually the MVP here?
Speaker 2:And so we launched something with the most basic possible feature set for free to this to this to the to the forum users by basically just replying to the thread and some Facebook groups. And then we got initial traction with fruit, you know, got to a 100 free people pretty quick. Because if if it's a market where people willing to pay for something, you can get a 100 free people pretty quick already to just beta test something. And then from there, you just start iterating.
Justin:Was that was the idea of launching it free because you just felt like it wasn't enough to charge people for? Or
Speaker 2:It it's actually it's it's funnier than that. So, like, we were so MVP that we couldn't bill people to use member space yet.
Justin:Okay.
Speaker 2:Because we actually used member space to run member space.
Justin:So Gotcha.
Speaker 2:We were like, well, if we can't charge people, if it you know, we we our customers won't can't charge people, then neither can we. So it's like, okay. We're all in this together.
Justin:And was there other competitor competitors at this point?
Speaker 2:There were, but competitor is a pretty generous term. You know, probably one one developer guy, you know, in a basement somewhere who's got some, like, crappy product he wrote that doesn't really do much support.
Justin:Gotcha. And, like, Memberful was already around, but they didn't do Squarespace.
Speaker 2:Right. And Memberful is more of, like, for WordPress. Like, yeah, they they don't do Squarespace. And, yeah, like, the idea with and I don't know if we really made it clear before, but what MemberSpace does is it it allows you to, turn any part of your website into members only It's just like a few clicks. So you don't need to be technical.
Speaker 2:You don't need a plug in. It just bolts right into your existing website, Squarespace, Webflow, whatever, and just turns any page or section into members only.
Justin:Yeah. Yeah. Which is I mean, you were probably also hitting this kind of developing wave of interest at that time of, you know, there's more people self publishing. There's more people building these, quote, unquote, lifestyle businesses. You know, the the make money online crowd is starting
Speaker 2:to get
Justin:really get fired up and coaching. And did you have a sense of that? Like, do you have a sense of, like, woah. Like, there is there is this kind of growing wave of interest? Or did you feel like you were too ahead of it or maybe just there at the right time?
Justin:How did you feel like you kind of approached all that that stuff, your timing?
Speaker 2:To be honest, we we didn't even realize we were we were in a wave, which we definitely are in, but we didn't quite realize it. All I all I knew for sure was that there are a 100,000 people who are interested in this topic in at least from Squarespace.
Justin:A 100, sorry. How many?
Speaker 2:There was a 100,000 people in that forum, that that that forum post that I that I was talking about where they talk about memberships. There was a 100,000 views to that to that topic.
Justin:There's a I must have missed that. There's a 100,000 views. Wow. Okay. So you
Speaker 2:that's So that's all I knew is that there was something going on there.
Justin:Pretty clear signal. Yeah.
Speaker 2:Yeah.
Justin:I think that's interesting because, you know, I've been using this metaphor of surfing. And when people are are thinking about, like, how do I find an idea? Right? You're basically what you're looking for is a good wave. And to me, the wave is market demand.
Justin:The more you kind of, like, observe, you know, folks like you and other people who have started businesses, and you dig into the story, you realize that there is a general shape to demand. Like, you can start to see it. And one of those one of those shapes is like, is it where is where has demand been demonstrated? And so, like, a forum post that has a 100000 views, that's a pretty good indicator. Like, if you're sitting in the water on your surfboard, that maybe that's worth paddling over and investigating that wave.
Justin:Right?
Speaker 2:Yeah. And,
Justin:I mean, you also had the the benefit of initially launching on this platform, Squarespace that had massive traction. Right? Like, at the time, they're they're I mean, they're probably still the leaders in that space. Right?
Speaker 2:Yeah. Aside from WordPress. We had done a lot of consulting too. Like, we had a lot of Squarespace specific experience. Like, we were one of the top agencies, I I think, in terms of volume in in the world in Squig.
Speaker 2:We had built over 400 Squarespace sites.
Justin:Oh, wow.
Speaker 2:So, like, we had a lot of of, like so we were known in that community as well. So, like, we had that going for us. We weren't just coming out of the blue.
Justin:And so it wasn't enough that you had a few people requesting it in your consulting practice. Like, that didn't kinda trigger any thoughts. It was like, no. Not not really.
Speaker 2:No. Because, I mean, I I I think our consulting practice, if you like, of of all the people that use Squarespace, what percentage care about memberships is maybe 10% tops. So from our consulting practice, if you're not talking about a big number, 10% of not of a small number, it's it's it didn't didn't really register. It's like, oh, yeah. This is this thing we hear about sometimes, but, you know, know it.
Speaker 2:But when it's brought to the context of all of Squarespace, a 100,000 views of a topic now, it's like, oh, this is actually a big mark submarket within Squarespace.
Justin:Yeah. I still think there's part of that experience that's instructive because the the what led you to the Squarespace forums was the fact that you were already kind of sitting in the Squarespace waters.
Speaker 2:Mhmm.
Justin:Yep. Right? And the, like, I often, advise people, like, if you don't have any good ideas, start with consulting because it will at least lead you to industries and product categories that, like, you might have an understanding. I mean, most people have, like, kind of an understanding of how Squarespace works and that people use it. But until you're in it, until you're, like, getting those phone calls every day, until you're, like, you're going through the forums all the time to find answers to your own problems until you're, like, really in that ecosystem and in it for a while like, how long were you consulting for before you started Memberful?
Speaker 2:Member space? Member space. Yeah. Sorry. It's okay.
Speaker 2:Every everyone's got uses the word member now in their in their software. Let's see. We had been doing Squarespace sites since, I wanna say, 2012, and MemberSpace is 2015. So, like, 3 years?
Justin:3 years. Yeah. See, that's a fair amount of time to be just swimming around earning money, being relating to those clients. And the clients, I'm guessing, are the same people. Right?
Justin:The people who are buying Squarespace sites from your agency, those are the same I I mean, you said it might be only 10% of your business before, but the the the target market is still Squarespace site owners, at least initially.
Speaker 2:Right. Which can be extrapolated to small business owners for the most part or people just starting a business.
Justin:Okay. So you decide to start MemberSpace, and you put out this MVP. You get a 100 free people. So what happened after that? What did you how did you figure it out?
Speaker 2:Yes. I mean, you know, this is kind of the classic. You're sort of scrambling to build the features that people are requesting the most. And I think at that stage of of a you know, it's not even a business yet because we're not charging people. But at that stage of of a thing, you pretty quickly hear what's the most common request.
Speaker 2:Like, right away, people are like, this is cool, but I wanna be able to charge people for access. Like, essentially, what we were was like a gate a a gate where you have to enter in your email address, and then you get access to a page. That's all we were doing Yeah. Which for a lot of people, that's actually all they needed. That that that core thing.
Speaker 2:And but then the very obvious next feature was you need to be able to charge people, but that's a bigger feature. You have to build build it out with Stripe and all that. It's not trivial. So, there are other sub things that people wanted to, like, oh, Mailchimp integration or, oh, can I export my list of members? So, like, you you and then instead of just doing whatever anyone asks, you just kinda let it bubble for for a little bit, and then you can just quickly tell what to build next.
Speaker 2:And that's easy. And that's all very clear, I think, up to a point. And I'm maybe you're at that point now with transistor, but you get to the point where it's like, okay. All the major big things are are done for the most part. It's like now it's like the medium sized bits and small bits that we have to, like it's really hard to pick what to do next.
Justin:Yeah. I mean, yeah, if we have time because I I wanna get I wanna get past your your early stage stuff, but that would be good to talk about. It's just the the challenge of because in some ways, you are similar. You probably don't have as many competitors as we do. But you have competitors that have similar feature sets.
Justin:And I think one thing that's been challenging for us now is initially, we were and you actually had this too. Initially, you're just the best option because you're the newest. You're the most well thought out. Everything else is, like, maybe really old and crusty or just hasn't been updated in a while. So just being the fresh face is helpful on its own.
Justin:But eventually, you know, that wears off. And then there's new competitors coming on. And it's, yeah, figuring out, okay. And we're all, like, using the same tech stack. We're all you know, there's everybody's you know, it's so trivial for our competitors to look and see what graphing library we're using and just implement that in their own app.
Justin:How have you and Ryan dealt with that so far?
Speaker 2:Yeah. I mean, it's something we're still dealing with. You know, I don't have a good answer for it, really. It's the thing I'd I've been, I've read the most is, you know, focus on your customer, not on your competitors. Right?
Speaker 2:We've all heard that, it's easier said than done, but it's, you know, what why would people pick you? Like, there's there's, like for us, you said that we don't have that many competitors compared to you, but I'd say we have we have a lot of, like, tangentially related competitors, like Teachable, for example, or, you know, Podia or Gumroad. Like, there's always, like, anyone who wants to, like, sell something online is kind of a competitor, which makes our market enormous. And it means that so it's like we're we're a niche within a niche. It's like, okay.
Speaker 2:If you wanna keep people on your website the entire time and have full control over the design, that's what Emberspace is for. But, like, there's all these, like, little things right around there that are close. So for us, it's it's like how do we stay in stay in our lane and stick to the lane and not try to expand and be more like a teachable and, you know, more like x. And that that's hard, because people keep telling you, why don't you do this, though? That's that's what we want.
Speaker 2:But it's, like, you want that, but not everyone else wants that.
Justin:Yes.
Speaker 2:And that's yeah. So it's, you know, focusing on your customer, yes. That's an easy thing to say, but it's like, well but what does that mean exactly? Like and where where are the edges of that?
Justin:Yeah. And I think one thing that's been helpful is it just still you and Ryan, or do you have some employees now too?
Speaker 2:Yeah. I'd say so we have, we have we have 3 full time support people, me, Ryan, and then we have a bunch of developers, and then we have a couple other contractors as well.
Justin:Okay. Wow. When when you say a bunch of developers, you mean, like, contract developers?
Speaker 2:Yeah. Like, they're they're an agency that we we contract 4 of their people full time, for us. Yeah. So we have, like, 10 10 full time folks all all in.
Justin:Wow. Yeah. That's a big big team. I Yeah. I think one thing that's been helpful for John and I, at least right now, and I obviously obviously, this could change, but we just do not desire to really grow the team.
Justin:Like, we don't really and so when when people request things, sometimes it feels like our math as founders is off when, like, a customer comes in and goes, well, if you offered this, you know, I would sign up or all people in my industry would sign up. But whenever I've like gone down those paths and like looked into it, I'm like, that just seems like so much additional stuff that I'm adding and way more risk. And I and so, you know, one thing that's been helpful, I think, for for us, at least, again, this could change. We we just might be naive. But going, you know, here's the type of customers that these type of customers just sign up and enjoy the product, and we only hear from them when we onboard them.
Justin:And after that, we don't hear from them. They're just happy to use the product. But then there's another type of customer that looks and smells like enterprise customers. And it's like, the these folks are just so difficult. And and people keep telling me, well, no.
Justin:They're worth it once you get them online. But, you know, if I need to have a lawyer on retainer for every deal, and I need to have a a person that can fill out RFPs and security questionnaires. And, you know, it's like, man, that that just doesn't feel right. But it is challenging figuring out what is staying in your lane.
Speaker 2:There's that, and there's also, like, you know, Paul Jarvis comes to mind with a company of 1 mindset Mhmm. Of, like, well, how big do you wanna be? Because, like, if you wanna be a, you know, $50,000,000 a year business, then you can't just be like a niche within a niche. Like, that's not how that would work. Yeah.
Speaker 2:And if you don't wanna be that, then you have to be okay with a lot of people complaining all the time because you're a niche within a niche. Yes. At least and it's tricky. It's I think I'm not it's hard to actually accept that if it's something I'm trying to figure out too is, like, where what's enough? Like, what's the actual end goal here?
Speaker 2:And what what's what's the what's the boundaries of our lane of what we wanna stay in? And I think everyone has to kinda figure that out themselves. Like, Paul Jarvis's, Fathom Analytics, I think, kinda comes to mind because if anyone's used that, it's it's pretty simple. It's pretty straightforward. Not a ton of features, but they're very clear with their messaging.
Speaker 2:It's like, if you care about privacy, you use Fathom Analytics. Yeah. It's like people aren't using Fathom Analytics because it's some powerhouse analytics tool. Right? And they know that.
Speaker 2:And there's and I'm sure I bet you the majority of people that do analytics don't really care that much about privacy. But there's some subset that really do, and that's their people. And, you know, I would assume they're gonna stick to that. And that means they're not going to be a giant analytics company, probably. I mean, maybe you can look back at this in 5 years and see how wrong I am, but maybe that's okay, though.
Justin:But I it's it's interesting asking, like, what is the end kind of outcome you want? And that evolves, obviously. But I'm just, like, I'm always thinking, like, to what end? Like, you know, we could take investment. But to what end?
Justin:We could get acquired. But to what end? We could, try to grow really, really fast and add all these enterprise features. But to what end? Because a lot of those just seem like like, right now, I'm getting, paid well, and I'm comfortable.
Justin:I don't my there's nothing on my calendar. Like, the like, this is the only this this year is the first thing that should have been on my calendar, But it was like, we did this conversation last minute. And so I thinking it like, it seems like sometimes people have this goal of freedom or, you know, more time with their family or, you know, I don't know what it is. And we just keep adding all of these requirements or prerequisites or complexities, layers of complexity, hoping that we'll get there. And I yeah.
Justin:I've just won yeah. I have you for you personally, like, what is your end? Because, I mean, your team's already 10 people, and you took investment from Earnest. Right?
Speaker 2:Yeah. We took a a bit of money from them, and we didn't even need the money. Like, we we we we were profitable before them. We had we were cash flow positive. We we didn't need the money.
Speaker 2:It would just you need kinda need to take some, to to get investment. We we did it more for the mentorship, network and just the the community that it opens it up to. Because, like, me and Ryan have been to MicroComp, but, like, we don't we didn't have a great, like, network. Like like, you you're kind of the polar opposite. You have a great network of of people in the software world and and and, you know, people that have done and started large companies, and we didn't have that.
Speaker 2:So we were like, this is kind of a way to to to kinda go around the back and, like, get get into, like, a big network of, like, the software world. And so that that was yeah. And good advice.
Justin:But why like, okay. Can we just stay on there for a bit? Because so let's say you take a $100 from earnest. And I you might have taken more or less. I don't know.
Justin:But let's say you take a 100. To me, that's like the assumption is that you're going to pay that back at some multiple. Right?
Speaker 2:Mhmm.
Justin:It just seems expensive just to to play devil's advocate, to get just just to get the network. Like, that just seems like, do you, like I mean, may I don't know. Maybe maybe it's worth it. Maybe it's like $300 or $500 or whatever you end up paying is is worth it. But it just seems like, wow.
Justin:That's that's expensive just to get the the network and membership the mentorship.
Speaker 2:So let's just say, hypothetically, it was a $100, and let's just say, hypothetically, we have to pay back, $400. Right? So it's a 303100 net is basically the payment for the access. Right? Let's just pretend that those are the numbers.
Speaker 2:Yeah. That does sound expensive on the face of it. You know, once if you get to the point where your business is generating, you know, a a million, 2,000,000, you know, $300,000 is still a lot of money, but, you know, you could do that maybe in a quarter in terms of revenue. Now and then and then if you also get to the words like, okay. Well, by having that mentorship network, if they, for example, help you with your pricing page or help you with, plan your plan tiers, or introduce you to a new head of marketing.
Speaker 2:And that that person or that idea, you know, has a significant change in in in, you know, trial to conversion rate. Right? Then you multiply that over 2, 3 years of people visiting your website, you're talking about it, you know, 300 grand I paid. I made well over a1000000 in that exchange. So I was like, sure.
Speaker 2:I'll take that deal every day. So it depends on what scale you're operating at.
Justin:Yeah. It's just the the hard part is you can't split test life. So it's hard to know how much you can attribute to. I mean, I I could understand it. Like, there was a time at the beginning of Transistor where it was like, I was suffering because we weren't, you know, we were at 5 k MRR, and I'm pouring all my time and energy into this thing.
Justin:And, you know, I'm like, I gotta I gotta have some money to live on. Right? But the a good trade. Like, if if on the whole, all of the cohort like, all of the earnest capital cohorts or any of these other funds, eat too. Like, if the cohorts kind of significantly out perform their peers, then you would say, okay.
Justin:Well, that's probably that makes sense. Right?
Speaker 2:And and that's just the money side of it. There there's all there's all there's other elements. There's the like you were saying, the mental side of it. So, okay, so now instead of me and Ryan Ryan having to figure out everything, now we can lean on a group of experienced software entrepreneurs to give us guidance. It's like, hey.
Speaker 2:How do you think about future prioritization? You know, should we be thinking about this part of DevOps? Like, what do you do? Like, that kind of stuff is, like, I don't know if you can put a price on that, to, like for example, we got to talk with, you know, Jason Fried about our pricing page. Like, we I got to have a phone I got to have a video call with Jason Fried.
Speaker 2:He looked at our pricing page and told us what to change, and it made an enormous difference in our conversion rate. And it's like, that kind of thing is hard to put a a price on how much that was worth. Nat Natalie Nagel from Wild Bit is is a is a mentor of me and Ryan's. Like, she's in I'm in Philadelphia and so and so is she. So, like, me and Ryan went to physically meet them in their office and, like, talk about our business for half a day.
Speaker 2:And then give us advice on how to, like, handle people and to think about growth and, like, again, how much is that worth? I don't know. But, like, it's for me, it's mentally reassuring to know it's, like, I have, like, these, you know, these giants I can lean on to give me help when I don't know what to do instead of reading their blog posts or listening to their podcasts, which are useful. But a lot of that is is signal, and I I I wanted more than noise. So so I could I could actually because I'm reading all the mentor like, most of the mentors in earnest, I already was following their stuff, but now I can, like, go and ask them context specific questions.
Speaker 2:And, like, that to me is invaluable.
Justin:Yeah. I could see that. I could see that. It is still, like, it's still I don't know if it's just a mental hurdle, like and also because, I mean, one of the the old kind of bullshit things that VCs would say is, like, you know, go with me, kid, and I'll, like, take you under my wing and, you know, show you a thing or 2. And as time has passed and I've looked at a lot of those people that were saying those things, I'm like, that was bullshit.
Justin:Like, you're you're not there's no the the the the advice and I've, you know, I've consulted for startups and other things that I've been in part of those sometimes they'll have a meeting where they're like, we're bringing in one of our investors or one of our board members. And it just was not helpful in a you know, looking back on it. I'm still open to the idea that it could be different and that could be better. So you say it's already helped you folks. Like, you're you're you're seeing actual, like, quantitative results.
Speaker 2:Yeah. Quantitative and qualitative. Like I said, there's the emotional side of it, then there's the the the financial side of it. And and the the emotional side of it was why we did it more than than the financial side. It was just I don't know what I've never run a large software company.
Speaker 2:I have no idea what I'm doing. I'm just reading blog posts and trying to figure it out from there and and trying to be good to our customers. But once that starts to keep scaling up, it's like, I don't wanna make some really stupid mistake and then lose all this stuff. I've all this this thing, this asset that I've built up, I don't wanna I don't wanna screw it up. And so Mhmm.
Speaker 2:So maybe it's partly a fear based thing, but it's for me to know that I have these people on in my corner that can help me with anything that comes up
Justin:Mhmm.
Speaker 2:And give me sage advice, not just like some random person on the street that I'm asking. Like, these people know what they're doing. To me Yeah. I I that feels good. It's like I always have, like, a, like, a home base I can go do to ask questions and feel safe.
Speaker 2:You know?
Justin:Yeah. No. I totally get it. The one thing, emotionally that I think has been surprising for John and I is, you know, we got here. And and so many people, you know, wanna get here.
Justin:And, I I've wanted to get here for a long time. And then you get there and there's a little bit of a sense of, ennui, ennui. A feeling of listlessness and dissatisfaction arising from a lack of occupation or excitement. How do you say because in French, it's ennui. But, anyway, do you know what I'm saying?
Justin:Like, there's this this this feeling of, oh, okay. We're here. And the excitement you had when you're kinda building up to, you know, this thing paying your bills. And then now we've gone way past it. It's, you know, it's doing well.
Justin:Have you and Ryan experienced that? And how did you overcome it?
Speaker 2:So, like, it kind of dovetails with burnout. It's a little bit, I'd say. There there's some they're they're at least cousins to each other. Yeah. I mean, for sure, we had we experienced some burnout type stuff when we were doing consulting and because you we're just kinda scrambling and always working as much as we could to make you know, to try to grow that fledgling thing.
Speaker 2:But now that we're a member space, you know, we're paid a nice salary. We have a full time team. We give them health benefits. Like, things are good. There's no problem right now for growing.
Speaker 2:But it's like yeah. Again, it's it's to what end? What what is the goal? What are we trying to get to? Otherwise, you're just kind of running and then constantly running.
Speaker 2:And then, like, why am I still running? Where am I going exactly? Like, I don't know.
Justin:Yeah. And there's there is a tension between on one hand, it's like, okay. We got here. Why don't we just relax for a bit or, put our focus elsewhere? Right?
Justin:Like, John could start baking sourdough bread, which he's super interested in. And I'm wanna, I'm, like, staying up till 3 AM reading climate change white papers. Sounds healthy. So we could invest ourselves in other things. And, certainly, we have the margin to do that.
Justin:Or we could invest ourselves, you know, we could just say, well, no. Let's let's set some new goals for the business and then, like, invest ourselves in that. And then there's the idea of also, like like, for especially for like, I think John feels this way too. But for me, it's like, I I never want to to succumb to that ennui. Right?
Justin:Like, I don't I don't want to succumb to that feeling of listlessness and dissatisfaction. I'm always kinda, like, firing myself up every day going, no. Like, we gotta stay on it because we've all seen businesses where the founders kinda, like, drifted away, and then the business wasn't as good. And so there's all these kind of, you know, different tensions in there. And, like, for you, do you have a new goal?
Justin:Like, are you trying to get to $5,000,000 a year in revenue? Or, like, what's what's driving you professionally now?
Speaker 2:Yeah. I mean, we we got to the, you know, the MRR that we wanted to get to, but it's in we don't wanna grow indefinitely. Like, I do not I don't wanna be, like, a $50,000,000 a year business. That sounds like a nightmare. But, what's driving me now is, like, we have real businesses and real people, you know, using our platform and making a living.
Speaker 2:Some of them, it's their full time living is through our platform. And so it's like, I have a responsibility now to maintain this asset that we built and make it better for them. Not not so that I can keep growing our revenue, but because it's like I mean, you kinda like you kinda like set up shop. You can't just, like, not maintain it. That's not that's not, I think, morally okay.
Speaker 2:So but I think it's important to, you know, as with everything, have balance. So I don't think it needs to be all or nothing, like, either we're, like, let the business autopilot or be 100% sprinting. Like, I think there's a very healthy area where it's like you put in a solid 40 hours a week and you go do other things. You do hobbies, you do whatever, you have hard cutoffs to when you stop working. You take, you know, month long vacations to have, like, a serious amount of time away, things like that where it's like mini mini full breaks.
Speaker 2:But then you come back to this the shop that you set up because you have people that are relying on you, and I think that's important. And that keeps me motivated at least.
Justin:Yeah. So the for you, it's just the idea of, like, we've created this thing. There's people using it. We have staff. That's enough to get you out of bed every day.
Justin:Because there's some folks it's like, they get real fired up about just increasing revenue. Like, they just wanna so there was like, okay. Well, we hit 1,000,000 ARR, and now we just gotta keep going. Right? And, for me, it's like I mean, maybe I could get fired up about that, but, like, I relaxed a ton.
Justin:Once I was getting paid well, I was like, I the making more revenue was not super interesting to me. And so, but I do get really fired up about podcast and helping people launch shows and, like, I I still really love that stuff. But, yeah, I'm I'm always kinda thinking like, wow. It's funny. Like, when you get the when you get to the place that you wanted to be, there's still there's still gotta be something else ahead of you that you're going after.
Justin:And, I can see how that can be dangerous. Like, you can, like, get there and then just kind of slowly, like I said, just drift away or just kinda, like, succumb to this feeling. And, I'm I'm trying to preempt that in some way.
Speaker 2:Yeah. I I think focusing on service to other people is one of the antidotes to that. Not the goal is not to get revenue to a certain point. Like, that is diminishing returns, and I can tell you as somebody who made a healthy salary when we were doing enterprise sales, that that also is very much diminishing returns. I I'm not it was good.
Speaker 2:It was a good lesson I learned. I'm not motivated by money. Like, I didn't I didn't care that my bonus check was, you know, whatever, more than the last year. It didn't matter. It's like, I I have enough money.
Speaker 2:I don't it's not a problem. So so that I know already revenue doesn't drive me, and same with Ryan. So that that was helpful with doing member space because it's like, we know that just becoming some giant company isn't the end all be all. So for us, at least for me, it's the service to other people to, like, I wanna help people start a business, and help them make it sustainable. And so, like, that to me is important.
Speaker 2:And then also we have people that work for us who have rely on us as a job, you know, for health care and salary. It's like that's important to me. I wanna keep keep them happy and all that. You know? Now that's enough for me, that's enough just to maintain that.
Justin:I like that a lot because it feels like I do have this feeling of having more margin. One thing about having more margin is I think it does free us up to think about other people. Like, when you're in that desperation cycle desperation cycle of I'm I just need to make enough to pay my mortgage and feed the family and all that stuff. That's very, like, self focused, and it's it's, I think, a lot of in the beginning, every entrepreneur is kinda there. They're just, like, trying to make enough money to, like, meet their basic needs.
Justin:And the weird thing it's, like, ironic is that it's almost like a a switch gets flipped. And all of a sudden it's like, woah. But now we've got tons of money. Like, now now we've got, like, more than enough. And we that means we've got more time and, like, you've got more you've got less cognitive load.
Justin:And so with this new margin, what do you choose to do with that? And, yeah, like being other focused feels like a good place to start. Just like instead of just hoarding all this margin, which is not super fun, we can, like, go out and, like, actually use that margin to help other people.
Speaker 2:Yeah. Exactly. And that that for me keeps keeps me going.
Justin:Cool. Well, this was good. I I feel like I got I I it was nice to talk to someone who's, like, ahead of us. You know? And you've been doing this for a while.
Justin:But you're not so big that you're, you know, a 100 kilometers down the road or whatever.
Speaker 2:Yeah.
Justin:Yeah. So this is this is great. Folks that want, actually everyone who's listening right now should go and tweet you at Ward Sandler on Twitter. Sandler like Adam Sandler. And then you folks are memberspace.com.
Speaker 2:Yep.
Justin:Did you have memberspace.com from the beginning?
Speaker 2:No. We it was my memberspace, and, we got the Twitter handle memberspace from you, Justin, if you recall.
Justin:Tell people that story because that's hilarious to me. Yeah.
Speaker 2:So What what is it from your perspective? If if I recall correctly, we were looking on Twitter for the handle at memberspace, and it was taken. It didn't say by who. And so, I I DM'd the account and asked if I, you know, hey. Do you are you interested in are you still using this or interested in selling it?
Speaker 2:And it just so happened to be owned by Justin Jackson of all people on the Internet. Because I guess you had some side project maybe you had thought of with it.
Justin:I mean, I was thinking about starting so many things. And so, yeah, I I probably registered it at some point, and I had forgotten about it, I think. And so I was like, oh, oh, because I'd met you already. And so then I was like, oh, your thing is your thing is member space? What the okay.
Justin:Yeah. Sure. You could you could have that. That's awesome. That kind of serendipity.
Justin:That that's amazing. Yeah. Yeah, folks. Go check out member space. Thanks for being here, Ward.
Justin:You wanna stick around while I read out these patrons? Sure. You're you're number 3. Thanks to everyone who supports us on Patreon. Mason Hensley, Boria Solar, Ward Sandler.
Justin:Thanks for being here. Eric Lima, James Sours, Travis Fisher, Matt Buckley, Russell Brown, Evander Sassy. Evander Sassy. Yeah. Pradyuma Schenbecker, Noah Pral, Robert Simplicio, Colin Gray, Josh Smith, Ivan Kerkovic, Brian Ray, Shane Smith, Austin Loveless, Simon Bennett, Michael Sipfer, Paul Jarvis, and Jack Ellis.
Justin:We mentioned them earlier. Dan Buddha, that's John's brother. Darby Frey, Samori Augusto, Dave Young, Brad from Canada, Sammy Schuichert, Mike Walker, Adam Duvander, Dave Junta.
Speaker 2:Junta.
Justin:That was amazing. Kyle Fox from get rewardful.com. Thanks, everyone. We'll see you next week.
