#223 Mail-Right Show With Special Guest Dr. Lee Davenport From LearnWithLee.com

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We Discuss What Are Some of The Best Tech Apps and Online Services That Real Estate Agents Should Use in 2020!

More About Dr. Lee Davenport

Armed with degrees in business administration and legal studies, Dr. Lee Davenport is an award-winning real estate educator and thought leader. Dr. Lee speaks internationally at various business meetings (including ToastMasters and Fortune 500 companies), universities as a guest professor, real estate associations, realty firms, and real estate conferences.

Additionally, Dr. Lee has article features in both a peer-reviewed publication (The Journal of Real Estate Practice and Education) and consumer reads including the Huffington Post, South Philly Review, the Detroit News, and the Atlanta Journal-Constitution.

http://learnwithdrlee.com/

https://www.inman.com/author/lee-davenport/

BSafe https://getbsafe.com/
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Alexa Skills https://magazine.realtor/for-brokers/network/article/2019/04/make-alexa-your-ally-6-ways-brokerages-can-use-voice-tech
Amazon Virtual Staging https://www.amazon.com/adlp/arview
Offerbarn https://www.learnwithlee.realtor/2019/11/are-you-iagent-how-to-be-innovative.html
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Jonathon: Welcome back folks to the WP tonic show. This is episode 457. We really, have got a special guest here. I’m a bit of a fan boy myself. We got Rob Walling here. He is the joint founder for drip. He’s got a great podcast with his cohost start up for the rest of us. And he’s just got a fantastic history of helping online entrepreneurs. Rob, what do you like to quickly introduce yourself to the listeners and viewers?

Rob: Yeah. Hi everybody. Sorry I’m blocking half of my face, but I like to use the good microphone. So yeah Rob Walling. I’ve built some SAS apps, started a conference with a cofounder. Startups for the rest of us is the podcast written a couple books just to kind of been in this space. I have been in bootstrapping for, well really like 20 years. But that just makes me sound old. And I actually had some apps that started getting traction about 15 years ago. So kind of in before it was a thing when there were just a handful of us. And I really enjoyed the fact that it’s become such a mainstream thing because it was not in 2005.

Jonathon: It’s has been an amazing ride.

Rob: Yes, it really is.

Jonathon: And I have got my great cohost Adrian. Adrian, would you like to introduce yourself to the new listeners and viewers?

Adrian: Hi everybody. My name is Adrian. I’m the CEO and founder of Groundhogg. And we produce and sell marketing automation plugins for businesses that use WordPress.

Jonathon: Before we go into this great interview with Rob, I would just like to mention our major sponsor. And that is Kinsta hosting. If you are looking for superior WordPress hosting for yourself or for your clients, I suggest you go over to Kinsta. They are big enough to have all the technology bells and whistles but still small enough to care. And they’ve been hosting the WP Tonic website for about two years now. And they have been a sponsor for about two years. And what you get is you get Google cloud hosting but you get a superb UX interface and other technologies.

Plus you get some of the best, in my opinion best support 24 seven support on the market at the present moment. So if that sounds really interesting, go over to Kinsta, buy one of their plans for yourself or for your clients. And also tell them that you heard about them on the WP Tonic show. So Rob let`s start off looking a little bit at your history. Am I correct that your first bootstrapping company SEO long tail was it`s name.

Rob: That was, so I had one called hit tail, hit tail.com and that was in 2011 that I acquired it. And it was really in bad shape at the time. It was a SAS app that had been built in like 2006 and had been semi abandoned, but it was still hanging around. The first product. I mean I launched a bunch of dumb ideas like we all do. And especially when, you know, this was before like, oh you should pick a niche. And I was trying to launch like venture backed ideas, but I was a bootstrapper and I didn’t understand that ad models and like trying to get to millions of daily active users doesn’t work when you’re trying to work from your basement in essence. So the first real success I had was an app called .net invoice. And that was in 2006.

Jonathon: Oh yes that was invoicing. I mentioned that to Adrian.

Rob: And it wasn’t even SAS, it was onetime downloadable, it was $300. You would download this software and run it on your web server. I mean, again, like SAS really wasn’t, we didn’t call it that back then. And so that was a nice one. It was one that taught me that you can make. First I want to prove this whole concept to myself. Can I be a single founder or a bootstrapper and just have software that pays the bills? Can I have something that pays the car payment or pays a house payment? And that was the one that worked. For spend and see how many more of these I need before I can quit the day job in essence.

I think it broke up on you.

Jonathon: Yeah, just a little bit but you are still pretty stable. Over to you Adrian.

Adrian: So you started off with like invoicing you said. How many of these did you actually need to start paying off bills? How many was it started?

Rob: So .net invoice wound up doing about 25 grand a year. And at the time, I was making like 200 grand as a consultant in 2006 or whatever. Which was just a good light, you know, has a good life. But I realized that expenses were under a hundred grand. I was the primary breadwinner, but we were living in expensive places like Connecticut, Boston, and California. So I needed about four of them is what I thought. But over time I acquired some that were smaller and some that were bigger.

And I don’t sound that, you know, I wound up having this suite of products by 2010. And this was like, I mean there was that one time downloadable, there was a wedding, a website builder, kind of like Squarespace for wedding websites. But it way, way less powerful. And weigh less expensive and the lifetime value was terrible.

And you know all this stuff. And I had some info products I had, I mean like a book on what was the one, there was one on like bonds I trees that I acquired from someone. Because I had this tool belt in marketing experience that I learned. I started learning SEO, I started learning ad words, I started learning display ads. And I realized that it didn’t really matter the product. As long as I wasn’t going to buy something that was unethical or something. But as long as it was a good product I could just apply the same tool belt to it. So that’s what I had. So I want to have on like eight or nine by 2010. And I realized, you know, it’s like I’m done with this small kind of having a bunch of small things is providing full time income.

It was amazing. I was able to quit full time consulting in 2008 ish. I think it was 2008 and that was life changing for me, right to not, I didn’t have a boss anymore. I literally was living off products. And I mean, I think that’s so many of us. It’s like the goal you want to see.

Adrian: So it seems the point where you stop trading time for dollars.

Rob: Exactly. That was it. Because I was salaried for a while and then I was consultant, but that was the moment in 2008 where I was able to do it. And then I took time off at four hour work week, the whole thing. I mean I was working 10 hours a week for like a year and eventually I got bored with that. And that was when what Jonathan asked about it earlier that I acquired hit tail.com which was a SAS app in 2011. And that was kind of my next challenge. I did it very intentionally. It was like, I want to level up my skills, I want to learn new things, and I want to do something really hard, which is re-life back into a failing app. In essence, it’s like literally going down, servers are going down for three days at a time. Like that was my next challenge.

Jonathon: It is still going is it?

Rob: Oh, absolutely. Yeah, I sold it. So I built it up. It was doing about somewhere around 1,015 hundred a month when I bought it. And I built it up to the, at its peak it was 30,000 a month. But most months, I mean it was solidly in the 20s for a long time. And while it was in the 20s, I realized, boy I’m concerned that Google may kill this app. It was precarious. It was in the SEO space and I was just becoming nervous about that. I had sold off all my other apps to focus on it. And so I started thinking, what’s the next thing I could do? And that’s where it came about was like, I want to be ambitious and I don’t want to be under the thumb of. I don’t want to have the platform risk that you have when you build on.

Jonathon: I’ll apologize before I say this. Hopefully you’re gonna laugh at it. So you mentioned drip. This is where the nightmare began. Was’ it? I remember on some of your podcasts where your cofounder and I got the sense that you literally wanted to cry in your coffee.

Rob: Yeah, we did often actually. Yeah, if you go to startupstoriespodcast.com. Or I think you can just search for launch an audio documentary in like iTunes and such. We recorded I think what you’re referring to is we recorded for about 15 to 30 minutes a week for almost a year. So we had this nine or 10 hours of audio and we didn’t release any of it until like a year later.

And I edited that down to like 90 minutes. So it’s just the best bits. There’s a little bit of music in it, but it is agonizing. Like, I’m like traumatized when I listen back because it because it’s the early days and ever as we all knows, it’s so hard. Like the hardest part are these early days when you don’t know what you’re building and for whom. And that was basically how I spent 2013 with Derek my cofounder trying to assess out is this going to fail? Like I thought I was pretty good at it by that time. And yet you can hear the doubt in my voice during that time

Jonathon: It just seemed like problem after problem, after problem.

Rob: Customers don’t like it. The churns too high. The, especially in the early days, that all went away when we really [09:03 garbled audio]. There were technical issues and then it’s like, well we can’t scale. And then the database is failing and then yes, that’s what it is though. That’s, I mean, to me, having a high growth startup is absolutely a blessing and a curse. There are no Cinderella stories. It’s something to say often. And what I mean by that is you can have an app that grows really well, and that’s a Cinderella story. But under the covers, it is always a shit show always.

I’ve never talked to a founder who has not said, Oh my gosh, this was so painful. Even whether they’re talking about it publicly or not, it’s hard. But the, it’s worth it. It’s who we are. And it’s worth it for the outcome. I mean, we sold it and I had the freedom to ride off into the sunset if I wanted to. And it was totally worth I’ll say a few years of struggle, to wind up having that end result.

Jonathon: Over to you Adrian.

Adrian: So I mean, I feel you. You went through that, like those three years of struggle and trying to figure out an answer. All of these questions like, is it going to work? Why isn’t this working? Why is there high churn? What are some of the things that you did? Because it’s not just for SAS business, it’s really some of that same struggles applicable for every business under the sun. Because everybody more or less goes through that same thing, especially as like a solo founder or solo operator. What are some of the things that you did in order to help yourself see the light at the end of the tunnel, so to speak?

Rob: Yeah, no, you’re absolutely right. Anytime you’re building something new, that’s there. Because you just don’t know. Does anyone care? Is anyone going to use it? So I think that the big thing that I was doing. One, I didn’t handle it as well as I should have. I was stressed a lot and I wished this time around. So now I’m doing tiny seed, which is a startup accelerator for bootstrapper. I am much calmer this time. And a lot of it is from the lessons that I learned building drip and how stressful that was. And when we started tiny seed, I said, I’m not going to live like that again. So that was one thing was like be less stressed. Because I was worried about things and being worried and thinking about it is fine. But really hating on the same stuff when you can’t do anything about it and there’s no new information and it is not helpful.

It is a negative pattern. So that was one thing that I learned from it. The other thing was we iterated pretty quickly. So Derek Reimer was my cofounder with drip. And we had the luxury of, I was basically just talking to customers and doing support and onboarding and success and all that, just nonstop. So I was very close to the customers. And Derek was just cranking on code. So we moved really quickly. And now I have the luxury of like, if I was doing both, it would’ve been exponentially harder. And I had done both in the past, but with this one I was like, I think one’s big enough that I need someone in my corner as well. So if you don’t have a cofounder or having a mastermind group, you know that you meet with once a week, once a month, whatever it is, someone that knows your story and can follow it. That’s not your spouse or significant other is really helpful. Because then you can cry in your beer together.

And another thing was since we were able to ship stuff relatively quickly, we did see what was working and what was not. And we were able to iterate instead of it taking two years, maybe it took six or eight months. Because we just kept shipping and kept asking. And we iterated quick enough. Does that make sense? So there was, it wasn’t like, Oh my gosh, it’s two years of grind with no progress. It was two years of grind or three years. But we had a lot of progress along the way and we had a lot of validation. And, you know, we would launch something and it wouldn’t work, but we would hear, well if you did this, you know it would. And so there were some dark times, but it wasn’t years of dark times. It was months of dark times. And I think that we all have to be able to put up with that because entrepreneurship, it’s hard.

Jonathon: I think I’ve got time for another one. Let’s go for a break actually folks. We are going for our break. We will continue this fascinating conversation with one of my online heroes, Rob from drip. You’re always going to be known for drip.

Rob: And that’s fine. And MicroComp, you know, people and the podcast, I mean there’s, things but yeah, no, I I’m proud of drip.

Jonathon: Yeah, you should be. We’ll be back in a few moments’ folks.

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Jonathon: We are coming back. I’ve had a fascinating first off the history of Rob Waggling. And before we go into the second part of the show, I want to mention one of our great sponsors. And that’s Lifter LMS. So if you’re building for a client or you’re looking for yourself to build an online course on WordPress, which I think is an excellent idea. You need a great platform tool. And that’s what Lifter LMS provides. It’s built by two friends of mine, Chris and Tom. And they’ve built a fantastic learning management platform. So it’s fully featured and they offer fantastic value in the free product. And they offer even better value on their premier solutions. So if that’s of interest for yourself or your clients, go over to lifterlms.com. And also tell him that you heard about them on the WP Tonic show.

So Rob I think quite a while ago it could be almost on your podcast. You pass some remarks that you weren’t totally interested in the WordPress space. And because it opens I think some of your arguments. Cause you had concerns because it was open source. And through tiny seed I noticed that you have actively invested in startups that are in the WordPress sector. So I presume that you’ve changed your attitude to some degree. And also I am interested in why your attitudes have changed around the WordPress ecosystem.

Rob: I don’t recall ever saying that. I think that, yeah. No, I’ve never been. I don’t remember. I don’t think I would’ve said that. I’ve never felt that way because it’s open source. The thing I love about WordPress is the ecosystem there. I wouldn’t do it if I wanted to personally build a seven figure or more software company. I wouldn’t do WordPress because trying to get the subscriptions is still a challenge. It’s a lot of one time sales things plateau. You see that the way folks get bigger, I mean there’s only a handful that I know of a seven figure product, seven or eight figure product businesses compared to the thousands of large SAS apps in WordPress. That was a weird sentence. Sorry. But it’s a lot harder to get seven or eight figures in WordPress because it’s not recurring.

So that would have been an issue or a concern that I would raise. But I would never say not to do it and it wouldn’t have anything to do with the open source piece of it. I think that what I like about WordPress is it is really great for, especially if you really just want that kind of first win. So I have this thing called the stair step approach where I say, Hey, step one is to get a onetime sale, get something up to a couple thousand bucks. You learn so much doing that. And going from zero to a thousand or 2000. Typically that step one app is, like I said, it’s a onetime sale. It has a single traffic channel. It’s really hard to grow past that one or $2,000 mark. And WordPress plugins fit really well in that. And you have built in distribution if you can figure out how to rank in the WordPress repository. And that’s the good news.

Now, could I take a plug in and make it a seven figure business? I mean, it’s possible. It’s really hard. We’ve seen a few folks do it, but they tend to just pivot into SAS. So I like it for the early stage stuff. And if WordPress is your thing and you want to. I’m trying to think like Pippin’s company and Brad tin arts company. They basically just, you just keep building more and more plugins and that’s cool too. It’s not something that I personally would want to do and we only have a couple models, a couple of examples of it. Whereas I can point again to hundreds of small SAS apps that do six and seven figures. So that’s the tradeoff. I think it’s way easier to get a WordPress app or I’m sorry, WordPress plugin to two grand a month than it is to get a SAS app to do grand a month.

I think there’s less code. I think there’s less. There’s just a lot less complication and the amount you learn from that, you can then parlay. If you’ve got one or two WordPress plugins doing five grand, 10 grand a month, even two to four grand a month, use that to set us up. Absolutely. That’s the stair-step. Yep. The second step is getting enough that you buy your time out. Third step is if you want to get into SAS, which I’m not saying you have to, but recurring revenues, really nice. Then you use that to fund your time. Much like I pulled from all of my little products to buy hit tail. And I didn’t have the 30 grand to buy that. I pulled that out of some businesses that I acquired and built. And then I used hit tail, grew that up to 2025 we couldn’t have built drip.

I mean I still funded drip. It was almost 200 grand in the hole in essence before. And I couldn’t have done that. I made $6 an hour, my first job. Like I didn’t have the money to do that, but it’s a stair-step. And that’s how I think about it.

Jonathon: That’s great. Over to you Adrian.

Adrian: So we’ve talked a little bit about tiny seed now. Would you mind just explaining what tiny seed is for anybody who’s not familiar? Because we’ve just been dropping the name a little bit, but not everybody might be familiar with that.

Rob: So it’s my next act after drip. Tiny seed, it’s the first startup accelerator that’s designed for people who had traditionally bootstrap. So we looked around and I said, for years I’ve been saying, why isn’t there a why kind of a Y Combinator thing?

Let’s provide support, a little bit of money and, and mentorship and a network. But for folks like us, who want to build, Hey, let’s say $1 million ARR, 5 million, $10 million ARR. Google, Uber, LinkedIn, you know, don’t want to build these unicorns. And there really any funding aside from ABC. And or no accelerators. And so that’s what we did. We raised it. I’ve never raised money before and we raised a four and a half million dollar fund. And we did our first batch of essentially, you know, we funded them there. They were bootstrapping and we funded them. They’re no longer bootstrapper, but they’re also not venture funded either. Right. It’s now there’s an in between and our terms are very founder friendly. If they want to run a company and take dividends out that works for us.

They don’t need the big exit. It’s remote and it’s a yearlong. So we have two folks in Europe, one company in Mexico, and then everybody else’s is in the States. And so we try to be more close to the startups for the rest of us. Ethos, you know, MicroComp just of like, Hey, grow as fast as you can, but like don’t kill yourself. Like tick, tick time. We all have families don’t work 70 hour weeks and let’s be ambitious. In essence, right? Let’s build really profitable startups. We’re going to charge real money to real customers and build a real product that does that. Rather than do this whole ad revenue model which just blows. And it’s not gone bigger or goes home. It’s not bad. Everything crashed the company. It’s like, let’s change your life.

And you know with a real good win.

Adrian: Like a small profitable SAS is still making more money than Uber. That’s right.

Rob: No, you’re exactly right. And that’s, in a small profitable SAS, I mean, let’s say you built a SAS app to 3 million bucks, net margins on SAS can be 30 to 50%. So you build something to 3 million bucks if it throws off a million and a half or even $1 million a year in free cash flow. Like that is life changing for any of us? That’s an abject failure to a venture capitalist. And for us that’s a really nice base hit and we want to help more people get there. Because it’s really hard. I mean, as you’ve heard me say, like it was hard for me and I had an audience. And I had all this stuff and I want more people to get there.

And that’s in line with kind of everything I’ve been doing and talking about for 10, 15 years.

Adrian: What kind of companies like really like fit really nicely into your portfolio there?

Rob: You know, as Jonathan mentioned I was just trying to rack my brain. I think it’s two of the firsthand. So we ran our first batch we’re about seven months into it. We have 10 companies, and then we’re interviewing now for a second batch, which I think will be a little bit bigger. The first batch of 10, there were two that had WordPress plugins.

Jonathon: One of them is coming on the show. I forgot the gentleman’s name, I apologize. But he’s coming on the show. One of them has a podcast.

Rob: That’s Craig, Craig Hewitt, companies cast host.

Jonathon: Yes he is coming on the show.

Rob: He started with a WordPress plugin that I believe he acquired. And it was podcast hosting and seriously simple podcasting is what it’s called. And then he built a SAS on top of it. And that’s a great model. You get the lead gen and then you can get the recurring revenue. But generally we focus on subscription software. I mean that’s really our bottom line. So you could say it’s SAS is really it, but we also have some marketplaces that charges a subscription. So far we haven’t done any hardware because we fund $120,000 for the first founder and 60 for each additional founder. It’s not enough money to like do a lot of hardware. And writing code is pretty free, right? That’s the thing, right? We tend to really like to a team of either one where the person is technical. Or two where one is technical and one is either a sales or perhaps a subject matter expert.

And yeah, you can look at it. If you go to [website] com slash latest you’ll see we list out all the companies. And it’s subscription software across all the gamut. There are some tight verticals, you know, where it’s like we only serve schools, afterschool programs. Or there’s a horizontal, if like this is candidate reimbursement software for. And we’re going after the fortune 5,000, so it’s really runs the gamut. We just look at the business metrics and talk to the founders and try to help them.

Adrian: I’m curious about that. So you’re doing your second batch. So you’re seven months into the first one already though. Right?

Rob: Yeah, yeah.

Adrian: I’d love to hear if there are like any like super awesome, amazing results that you’ve experienced so far.

Rob: I mean, like I can’t share revenue numbers publicly or anything, but yeah, of course. I don’t want to single out put folks and say like, oh, these two companies are really successful because it implies the others aren’t. But the answer is yes, it’s gone very well. I’d say that it’s gone at or above my expectations of what I thought we could do for the companies. I think a big surprise is the money originally we thought, well, there’s a bunch of people working part time on these SAS apps. And if we give them 120 K they can live for a year and focus on it. And really only two, maybe three of the companies we funded and needed that money to quit the job. Everyone else, are already working full time. And some of them, because they were making enough money from it and others, because like the folks who moved to Mexico, they used to live in Seattle.

And they moved to Mexico because they’re just capital efficient people. So that was a surprise. And that’s something that people use the money now for hiring more developers or hiring a marketer or just investing in growth. And that’s been good. And the other thing is like the batch, the community aspect of it, we’re in Slack group, do weekly calls. That has been hugely, hugely valuable for people along with the mentorship. So that’s been good to see that it’s three legs of a stool, not just you’re giving people money. Cause that doesn’t sound fun to me. It’s the other stuff that the interaction that is important.

Jonathon: Yeah, I think it’s an exciting model. I actually think it’s a lot of States economic authority, economic growth authorities. It’s a model that a lot of people should really look at. Isn’t it Rob?

Rob: Yeah. I think if you look at the number of businesses that are venture fundable, it’s whatever it is, less than 1% of all companies started or something. The model that we’re using, I think it could fund the other 90%, or the other 95%. I mean we wouldn’t do it with dry cleaners and bricks and mortars and such. But technology companies. I mean, if I could raise a fund today and I could fund, we get people applying with hardware startups. Not solely harder, but it’s like software value added hardware. We had some people with kind of biotech ish type stuff. Like I would love to do a lot of it. I think it could work for many, many, many businesses. And that’s really the goal, is to raise the tide so that all the boats can go up and not just go after that 1%.

Jonathon: Now this is going to be, I’m notorious for my broad questions so I apologize. Adrian is much more specific than me. Have you got any kind of insights to what founders apart, because I’ve started my own company, a SAS Company? And I’m not a developer so I’m totally on Guano. I’m bloody mad as they come. So there we go. If somebody is a coder and they are looking to go down this road. Have you got any insights about some other skills that I really got to have in the quiver? If they’re gonna get a success role?

Rob: Yeah, absolutely. And I would say, I mean, I know a lot of non-developer founders who like Craig from castoffs who you’re gonna have on the show. He’s not a developer and he built cast off too. It’s a very successful SAS app. So it’s totally doable. It’s just hard. When I started, you had hair like mine. I really think there’s kind of the trifecta of skills. It’s development to build the product and that I include in that product knowledge, which is not always the same as being a developer. Being able to write code doesn’t mean you can build a great product. The second one is marketing and the third one is sales. And you’ve got to figure out, are you going to be one, two, or all three. In which, does your market need all three?

Typically if you’re gonna build SAS. You need that developer slash product role. If you’re gonna build a SAS, keeping up castoffs, but they’re an example here. Like they don’t need to do sales because their price points are low. They’re like 19, 39 40 you know, it’s mostly self-service. Hit tail was like that when I had it. We didn’t do any sales so I didn’t need that skill. But then you need a wide funnel. So you need to learn how to market, you need to learn how to drive traffic. And whether that’s with content paid acquisition. There’s a bazillion, so you know, social media, I mean on and on and on. There are ways to do that. Building an audience, those are the three skills and you have to look at your market.

You know, a different example is REMB, which is also in tiny seed. And he’s going after the fortune 5,000. It’s reimbursement software for candidates that they fly in. Well, it’s through him. It’s all about sales. Like they don’t get that many leads, but the leads they get, they close a lot. And the price points are 500 a month and up. You only need two, three, four of those a month to like actually grow a business. So either be either get good at sales or get good at at marketing if you’re a developer.

Jonathon: Well we’re going to end the podcast part of the show. Hopefully Rob will agree to stay on for another 10, 15 minutes of what we call bonus content Rob. But we like to keep the podcast around 30 minutes. So Rob what’s the best way people can find out about what you’re up to and your thoughts?

Rob: Yeah, sure. Well, if folks are listening to podcasts anyways, search for startups for the rest of us. We’ve been doing it for 474 episodes over more than 10 years. So we ship every week, every Tuesday morning. That’s the best way. And then I’m on Twitter at Rob Walling.