Garrett Dimon Founded and bootstrapped Sifter, a bug and issue tracker, and ran it for 8 years until it was recently acquired. He’s also the author of Starting & Sustaining, a book about building and launching a web application with less pain and fewer mistakes — something we could certainly all stand to do.
In this episode, we dive deep into both the challenges and the beauties of running a bootstrapped SaaS essentially on your own. Garrett is full of great advice and shares lots of lessons learned. He also discusses the hard times he has had lately with health issues, and how he was able to keep Sifter running, and what lead to the eventual sale of Sifter. He also gets into the actual sale process, and what that looked like. Garrett exudes inspiration, and great advice!
Mac: Welcome to another episode of The SaaS Bootstrapper podcast. Today’s guest founded and bootstrapped Sifter, a bug and issue tracker. He ran that for eight years until it was recently acquired. He’s also the author of “Starting and Sustaining,” a book about building and launching a web application with less pain and fewer mistakes, something we all can certainly stand to do. Garrett Dimon, welcome to the show.
Garrett: Hi, thanks for having me.
Mac: How’s it going today?
Garrett: It’s going good.
Mac: Down in Texas? Go ahead.
Garrett: Going good. The weather’s gonna turn around. It’s nice here.
Mac: Good, good. It’s been freezing here. We have ice and snow which we don’t normally get in Portland. So, Garrett, I normally do, you know, a little bit of diving into people before the interviews and I just…a lot less and less time because I’m getting faster at it, you know. But this morning I was like, “I’ve got to do this quickly because I’ve got so much other crap I gotta do before this thing.” Just, you know, trying to wind down work before the holidays and things and I got on your blog and, man, I got so sucked in. I read so many of your blog posts and you’ve just got so much amazing and inspiring stories, both personally and also with your career so I’m excited to talk to you.
Garrett: Yeah, I hope. I started sharing a lot of that stuff kind of, partially, for me it’s just therapy but also just the more I talk to people, the more like, “Wow, okay, yeah.” You know, it kind of helps people realize I guess a more grounded view of things than the tech crunch billion dollar evaluation, typical news story type of thing.
Mac: Well, it’s great. It’s great to read and I love it when people are open and not holding back, so that’s certainly you. So let’s rewind a bit and why don’t you tell us of what you were up to before Sifter which I think you said was 2008 and kinda how that came about?
Garrett: Yeah, my whole career before Sifter was consulting, usually, kind of varying sized projects. So after college I was at Sapient doing pretty large enterprise projects and executing on a lot of…seeing well-executed projects in terms of quality assurance and all that. So I immediately was exposed to really, really good bug tracking and really well-run and all that.
And then my next job after Sapient was a smaller company and they had outsourced development and I reached out to the development team because we were kind of transitioning and they were gonna turn it over. I was like, “All right, where do I file bug reports?” And they literally emailed me a PDF and they said, “Print this out. Fill it in and fax it to this phone number.” I was like, “You gotta be kidding me?”
So at that point like seeing a really good process and a really bad process and just the contrast kind of made me fascinated. And just quality assurance and process and see how big of a difference it made in the end result.
And then [inaudible 00:02:57] consulting, more and more projects, and more and more…like with small projects with less technical clients. We had a hard time getting them to really participate. They would just email us bugs no matter…tried all sort of different bug trackers and they would log in and be like, “I don’t know what to do.” And they just wouldn’t do that and they email it to us, things would invariably sift through the cracks. You know, nobody was happy and I was like, “There needs to be something that’s just simple.”
Because all the bug trackers are great. If you’re a developer, you can figure it out, do all sorts of awesome things with it. But if you have nontechnical people contributing in some form or fashion, it’s just too much for them to handle. And so I was like, “Well, I need to build this.” And I constantly, I kinda kept dabbling with the idea.
Finally, kinda all the stars aligned where I had started just playing with ideas and designing them for fun. Just something to do, posting them on my blog, and then… All right, the company I was working for got acquired by EMC, who had a naturally very extensive draconian employment agreement and I wasn’t thrilled about that. And I kind had this idea and these people were nudging me along like, “Are you gonna make this?” I was like, “Well, I hadn’t really planned on it.”
And so I had a bunch of just kind of voices in my head and people pinging me like, “You should make this. You should try to do a business.” And so it all just kind of…it wasn’t really my intention but it just kind of happened and went from there. And so just kind of stayed, do all that, involved and interested in bug tracking. And not so much like traditional bug tracking, but just, “How can we bring a process like this down-to-earth for more average people to be able to get some level of quality assurance in their projects instead of just looking the other way and doing it on a to-do list or via email, or whatever?”
Mac: So you felt like the issue had a…the tools available had a big enough part in why the clients weren’t…?
Garrett: Yeah, they were just…they’re so powerful with so many features that it was overwhelming and intimidating for somebody who didn’t need or use those features. And while the developer sometimes needed those features, a lot of developers just used the features because they were there, not because they really needed them. And the process quickly just became cumbersome and intimidating. It just kind of turned…and this is for small teams.
For large teams, there’s justification for that where you’ve got a dedicated project manager and somebody who can go through the process and use the tools and all of that. But with a small team where you’ve got a few people and a couple of clients, it just was way too much overhead with the traditional issue trackers.
And so I was just trying to create something smaller that people could hop into it and immediately and go, “Okay, I see how it works.” And file issues there.
Mac: So you basically had it mapped out by the time you were talked into…?
Garrett: Yeah, yeah. I mean I was originally kinda halfheartedly thinking, “Oh, maybe I’ll just create something open source and throw that out there, and then I don’t have to worry about any obligations or billing or support or maintenance or any of that.” And people just kept asking and asking like, “Are you gonna ship this? You’re gonna make something?” I was like, “I don’t know. I was kinda thinking about it.” But like I said, it just one thing led to another and friends talked me into it.
Mac: So I was ask quickly about competition at that time. I’m trying to think back to that period and trying to figure out what else was available. What would you say the competition was at that time for that sort of level of issue tracker?
Garrett: The main one, at least in the closely related, probably, would have been Lighthouse. There wasn’t a whole else out back then. There was a bunch of little ones that were kinda…they never really went anywhere. I think most of them went out of business or shut down or whatever. But Lighthouse was probably the main one, but even then, Lighthouse was still just a bit too much for kind of what the audience I was hoping to help and I mean that was really pretty much it.
I mean a lot more started coming out and it’s such a weird space because it’s not just…it’s not just the issue trackers people use, right? Like it would be competing with Basecamp or literally competing with email or to-do list. Every single to-do list app out there was theoretically…I mean it was even simpler than Sifter, so it’d have less functionality.
And the way I saw it all is all of that project management stuff is this huge spectrum, this Goldilocks problem, right? Where it’s like this one’s too hot, this one’s too cold, and every team falls somewhere on that spectrum. And almost every team as they grow, they slide up and down that spectrum in different ways.
And so it was less a matter of competitors, so much it’s just really carving out a part of that spectrum that’s just big enough, but just small enough that you could really be good at that part and really serve that slice of this spectrum to, you know, really well instead of trying to capture everybody because it’s way too difficult to make everybody happy in that space, especially, developers who can build their own tools and they’re like, “Oh, I want it to do this. It should work this way. Why doesn’t it work this way?” So, yes, just a spectrum is kinda of the way to look at it.
Mac: Yeah, were you thinking about, you know, narrowing down the market for it, did you know who you were targeting specifically?
Garrett: Yeah, the companies and projects I had worked on for the previous eight years or six or seven years, I guess, were really kind of the inspiration. And in all honesty, I was kind of naïve and ignorant. I wasn’t doing any kind of advanced market research. It was just, “I need this and people were telling me they need this, so I’m gonna give it a shot.”
Mac: That’s all you need.
Mac: It’s the best way to do it, right?
Mac: So you started building it in spare time?
Garrett: Yes, it started out…I mean the designing was all spare time. Just for fun. And then when the employment agreement came along, I probably would have kept my job and worked on it on the side, but I was ultra-paranoid about big enterprise company being like, “No, we own every thought you have.” And, you know, I wasn’t really thrilled about it, so I was like, “I’ve got these opportunities for some freelance stuff, so I’ll just freelance and work on it.”
So I would literally line up freelance work, do that work, and then once it wound down, I had enough money in the bank. I’d work on Sifter and so if I was starting to run the money, I’d find some more freelance work and I just kinda went back and forth as I needed to until it was ready to launch and even after it launched, it took a couple of years before I was full time. So even then it just kind of…I just did things to make ends meet in the meantime.
Mac: How long would you say it took from, you know, actively starting to develop on it and actually not even getting your first customer, but getting it up to the point of like offering it for sale, you know?
Garrett: So I quit my job at [inaudible 00:09:42] and started Sifter not fulltime, but started working on Sifter officially January 1st of 2008 and it launched December 4th of 2008. So 12 or 11 months of time, but probably five or six months of work.
Mac: Because you were freelancing in between?
Garrett: Yeah, alternating. These days [inaudible 00:10:04] there’s so many tools out there that would have made it easier, probably would have taken half of that, if not less.
Mac: Yeah, so but you had plenty of experience developing these types of apps, so that wasn’t…
Garrett: Yes and no. I had plenty of experience designing apps and doing that stuff. I didn’t have a whole lot of hands-on development experience for the full stack. My degree is in computer science, so I’ve done development work and I had experience in that, but it wasn’t something that I have spent a lot of time on.
So then Rails came out and I really like Rails. Switched from PC to Mac, started tinkering with Rails and tried to get familiar with Rails and Ruby and all of that. So I had spent probably, I don’t know, two, two and a half years tinkering with that, like building little things for myself and learning, but nothing big where consumers or people actually paid for.
Mac: Pretty good. Pretty good. Pretty good amount of…not a terrible amount of time is what I’m trying to say for getting something out the door.
Garrett: Yeah, it wasn’t too bad. In hindsight, it feels like it was forever, but I mean that was nothing when you look at eight years of working on it and sure, 11 months of that were the beginning and the hard part was all the part after that.
Mac: Right, right. So then when did you get your first customer and how did you get your first customer?
Garrett: So, like I said, I’d been kind of designing it for fun, so people were interested and following along anyways and so I just threw up a page to capture emails and say, you know, a placeholder page, “Sign up, I’ll email you when it’s ready.” I don’t remember the exact dates but I think I mean…all of our customers came from Twitter and that newsletter and I think within a month, we had a $1,000 a month in recurring revenue.
Mac: Wow, nice.
Garrett: So enough that it was clearly like, “All right, this can support itself at worst and then maybe it’ll actually grow bigger.”
Mac: And I think you said, “We.” Did you have a partner?
Garrett: So I was fulltime…or not fulltime. I was the main person on it. Keith, he was the one who kinda encouraged me to do it and he put up $16,000 in the beginning and he kind of…wasn’t quite an adviser-investor, he was a little more hands-on than that, because he took off all of the tedious things like legal and financial and handled most of that, the accounting, the bookkeeping, so that I could focus on the product. So it was kind of…I think we ended up spending like, I don’t know, maybe only $10,000 of that initially. And I don’t even remember because it seems like so much now.
Mac: So that would have been external expenses like not to you but…
Garrett: Yeah, that was like the hosting. I think we spent a little bit on advertising, but that advertising wasn’t until like four or five months after launch. Miscellaneous expenses, you know, SSL and hosting and all of that. Software, some stuff here and there.
Mac: Yeah, it’s great. So, okay, so then what happened? You said after a month or two, you had $1,000 recurring. Actually, let me ask you this. It sounds like you were blogging, basically, and you had the newsletter. So the blog was how people initially…
Mac: …were keeping up with it? And how active…? I mean, I’m trying to gauge how big of an audience you had this time.
Garrett: So at the time, I wanna say, according to FeedBurner, it was like 6,000 RSS subscribers and I don’t know, on Twitter, maybe 2,000 followers or something.
Mac: So you had an audience that was paying attention. So you had access…
Garrett: Yeah. I mean certainly not like a mind blowing audience, right? Just a very focused audience.
Mac: Right, that’s great. And then so launch time came and it was continuing to blog, it was your newsletter, it was Twitter, and then sounds like you started dabbling in a little advertising.
Garrett: Yeah, we did. Advertising, at least for me at the time, it’s something that you really have to invest time in to do well. Otherwise, you know, you’re kinda just burning money, right, if you’re not advertising and measuring and tracking and tracking and analyzing and I wasn’t doing much of that because I wasn’t interested in any of that, so I was kind of lazy and ignorant about it. I got a little better about it later on but, yeah, it was never something I really, really committed to. So all said, we probably lost more money on advertising than we made.
Mac: So you mentioned that the first 11 or so months of developing was, in comparison, the easier part and that the hard part came later. What became the hardest part and the most challenging?
Garrett: I mean I wouldn’t say there’s any one hard part and this is kind of the whole reason the book title is “Starting and Sustaining,” right? Because everybody is like, “How do I launch a business? How do I create a business?” But that’s the easy part. Anybody can get a business off the ground, it’s sticking with it through kind of all the ups and downs of, you know, the following years and staying profitable, staying healthy, staying excited about a project that can sometimes drag on and you could feel like, “All right, you know, growth has plateaued. Am I wasting my time? Should I do…?” You know, there’s just so much room for second guessing yourself and self-doubt and wondering if you’re working on the right things. “Should I do some advertising? Should I try this?”
In the eight years that I’ve run Sifter, I saw so many apps. So I mean at least two or three bug trackers that launched. They launched and all this enthusiasm and then like even on their blogs, “Oh, we tried Lighthouse and Sifter and da da da. None of them are good enough and da da da.” And they all shut down within a year or two. They just kinda fade away and like their SSL expires and this and that and like they just didn’t stick with it. And I’m sure those are just the ones I knew about because they explicitly mentioned us or something.
So really, launching is the easy part. Building is the easy part. It’s once you’re doing customer support every day and taking care of customers and if it’s down, you have to jump out of bed and fix it. It really can be a slog where you’re just kind of fighting every day. And, you know, hanging on for a year is one thing, but once things are tough and you’re fighting through it every day for a month, then that wears you down. You kind of recover and then it happens again. And, you know, dealing with fraud and credit cards. There’s just always something, you know?
Mac: Always something new. So was there a point, you know…I think it is very difficult to keep focus and yet, you know, everything you said is like…anyone who does this type of work experiences it, like, “Am I working on the right thing?” How do you keep focused? How do you like not jump over to this other idea? Was there ever a point when…I mean it sounds like maybe it was just up and down the whole time, but was there a point when you were like, “Okay, this is the right thing. This is good. This is going…”
Garrett: No, I mean I enjoyed all of the design and development work. That was always fun. For me, it was just more…and I think, you know, this is, everybody’s different. It’s just how you’re wired. Just the tedious things and especially as a solo founder. To me, my biggest goal was, “I just wanna have one other person on this whole time with me so I’m not in the trenches alone every day.” And I had a handful of people helping in other ways, but they just weren’t in the trenches with me day in, day out.
You know, when you have a bad day, somebody else can lift you up. They have a bad day, you can lift them up. It always kind of helps because I never cared if Sifter was a huge company or not or anything like that, I just wanted to work on something I liked. And so since we just never quite got to that point…I mean I probably could have hired somebody junior but we never quite got to that point and I think it just…the combination of the medical issues and everything else, it all just kind of chips away day by day until I was like, “All right, I need a break. I need to be able to step back and relax instead of…” and I was a terrible boss to myself.
I think many of us probably are, right? Like we are way harder on ourselves than we should be. Unrealistic expectations, all that kind of stuff. So it was just…a kind of death by a thousand cuts in terms of, you know, how I was managing and staying excited about it knowing what to work on. And I feel like that may have drifted from your original question but…
Mac: No, it’s good. I was also wondering how much…so it sounds like you had Keith involved but wasn’t necessarily…you wouldn’t call him quite a co-founder who was there by your side at all times.
Garrett: Yeah, he kind of was and I mean I’d call him and talk to him about like challenges and stuff, but he’s not a dot designer-developer. He’s not a product person. He’s a business guy through and through. And so there wasn’t a lot he could do except help me think about things that I hadn’t considered like, “Oh, maybe you should try to outsource this.” So like he helped me have some perspective. He kind of was an adviser but he was doing a lot more hands-on stuff than an adviser would do. So he played, you know, kind of both of those roles to a degree.
Mac: Okay. So then can you talk about the numbers of…how Sifter did overall and how it was growing overtime?
Garrett: It was very, very linear. The actual numbers I’d have to leave. Now that JD owns it…
Mac: All right.
Garrett: …I’m keeping my mouth shut on that. But I mean he’s actually saying like low six figures. I mean it was a very comfortable living for me, making plenty of profit, but certainly nothing that was going public tomorrow, you know?
Mac: Sure, yup. Okay, so then about three years ago, you had some…ran into some health issues that again amazing story. I suggest everyone go and read your blog. But, you talked a lot about…I think it may have been your first post where you were expecting to be out for four days and then it turned in to be to four weeks or something and you’re like, “Man, initially, I thought this was just gonna be crazy. My business…” You didn’t use these exact words, but like you thought your business was gonna like crash and you thought it would…
Mac: …, “What’s it gonna be like when I’m not there for this long. I never thought I could be out for this long.” And you said actually it did okay without you. I don’t know again the level, amount of time you were able to put in there but you were surprised at the end like, “Wow, I’ve been out longer than I ever thought I could be out and things are actually okay.”
Garrett: Yeah. So, one thing, I mean just overall with SaaS and I think a lot of…everybody’s starting to realize this, it’s generally speaking a very resilient form of income. When you create something of value and people are using it, they don’t just cancel, you know, at the drop of a dime. People don’t decide one morning, “I’m just gonna go cancel that out.” Instead like they kinda drift over time, right? Or something, they kinda drift towards another app.
There’s no dramatic event that’s gonna cause your business to just shutdown, short of you pulling the plug on the servers. And so as much as that make sense, it’s hard to fully buy in to that and have faith and believe that. And, especially, then, you know, I was like, “Oh, four days. Okay, just an extended weekend.” But I mean I was working on vacations. I took my laptop with me everywhere. I was effectively always on call. So then I was gone for four weeks where I was basically just keeping up with support emails and not doing anything else and I was like, “Oh, crap this is terrible.” And I was like, “Wait a minute. Everything’s fine. Nothing’s burning down.”
And then over the course of the next three years, just through all the surgeries. I had various spells of working on it intensely and then not working on it at all as I recovered from surgery. And then I mean the biggest problem with all of that wasn’t so much not being able to work as it was constantly being interrupted. Going to doctors, physical therapy, getting additional opinions, having surgery, going in for blood work and pre-surgery and post-surgery, and follow-ups. I had so many appointments going on so constantly that like the days were just Swiss cheese and it was almost impossible to find like a truly good solid uninterrupted space and time to do any meaningful work.
And so answering support emails, that was easy. I stayed on top of that. No problem. Still gave great support. But doing meaningful work, that just got really challenging. And so that’s kind of what…and then ultimately Sifter, the growth plateaued, I mean it’s a health plateau, but it did plateau. And after all of that, I just didn’t have the energy left and I wanted to spend more time with the girls, with the kids and I just wasn’t doing that because I felt like I was playing catch up with Sifter.
And, again, kind of just a terrible boss for myself in that context, but, yeah, in hindsight, it was a really resilient form of income like almost to the point now…I had disability insurance, but it didn’t kick in until I didn’t work for six…or not consecutive, but six months and I got close to actually being able to justify that six months, but not close enough. And part of the problem was because I kept making money even though I wasn’t working.
And so like it’s just, it’s weird. It’s like, yeah, technically, I haven’t been able to work but it’s not long enough and I think it was like five months that I didn’t work and at that point I was able to work enough. So it was kinda weird and that’s the point where I realized like, “Hell, this is better than the disability insurance. It’s even good than disability insurance.” It usually isn’t gonna kick in until like month three, right? And you’re paying for that the whole time, whereas this, like it kicked in right away and so we’re really lucky in that manner, that financially like we didn’t really every feel any…I mean beyond the typical medical expenses, we didn’t feel a whole lot of pain about paying bills and making ends meet and all that. That still just kept on trucking.
Hell, I think I even…like two years into it, we gave me a raise. I was working less, we’re like, “Yeah, let’s just do it, you know.” So it’s just a great source of income. If you can build it and sustain it, then it’s fantastic.
Mac: Yeah, sounds like the beauty of SaaS at work.
Garrett: It is.
Mac: So actually I wanna ask a few questions here but you mentioned…I’m curious now about, you mentioned, giving yourself a raise. So even as a one-person…I don’t know what your situation was like with Keith, but essentially, it sounds like it was you…are you still…when the money came in, you would just pay yourself a salary over time?
Garrett: Yeah, I still owned the majority of the company. Theoretically, I could kind of do whatever, but for the most part like I still ran it with Keith and made decisions with Keith. And a lot of that, too, wasn’t just like…a lot of it was, you know, I want his wisdom in on this. Like if I’m gonna give myself a raise like, you know, he’s helped me think through this like, “Is this the right move?” I mean we’re healthy enough that financially wouldn’t have mattered at all and for the longest time, too, I was, in a way, under-market paying myself. So it’s not like it was something where’s it’s like, “Oh, let’s give me a raise.” It’s like, “Hey, let’s get me up to kind of near market rate.”
But that said like, Keith and I, we’re good friends and it was very much like, “Oh, yeah, you deserve this. Yeah, do it. You know, financially it makes sense. We can afford it. There’s no reason you shouldn’t do this. We probably should have done this long time ago.”
Mac: So then where did the rest of the money go? The money that wasn’t paid out?
Garrett: Yeah, I mean we had a good amount in the bank when we ultimately sold Sifter. So that just got paid out. We paid out dividends fairly regularly. We did some marketing. We hired contractors. You know, nothing really magical. Just, you now, some stuff here and there because that’s… Until we could hire somebody fulltime, one of my ideas was, “Well, I’m going to bring on some people to help here and there.”
And so that was a lot of it for contracting, but it wasn’t quite the same as having somebody there with you every day, day in and day out. Like they were great to work with and it helped and it was fun to be able to work with other people again, but there was just nobody else there to kinda help carry the load. They were just helping out with certain features and things that kinda grew the product.
Mac: Sure. So it was essentially just going into your bank account for expenses but also just to have a caution and have a little bit of a…
Mac: …holding tank. Was just kinda curious. And then I wanna hop back, you had mentioned when you weren’t able to work much, you were taking care of customer support. I’m curious what the other work that comes to mind first that you feel like you should have been doing or at least, at the time, felt like you should have been doing. I’m curious as a developer and as the one building it, you felt like there were all these features that you really needed to get in there and that that was urgent and then maybe realized that if it that wasn’t urgent, or was there other business stuff that actually…?
Garrett: No, you know, it was mainly features and marketing. And not features like quantity of features per se but just feature improvements. Things that could make it easier to use, easier to navigate, simpler for customers, you know, because I was on support, I knew the things customers struggled with and had a hard time with that I could streamline and I knew exactly how to improve it because I heard customers saying what they, you know, had a hard time with.
It was just a matter of finding time to do that work and that was the hardest work to find time to do because you need those uninterrupted blocks so you can sit down and concentrate. So that and marketing. I needed to get back to writing more, you know, sharing more about Sifter. Yeah, I didn’t market it enough. And, like most of developers, product people, I don’t enjoy traditional marketing per se and so it was something that…it just wasn’t in the forefront of my mind.
I knew that just cramming a bunch of features and it wasn’t gonna move the needle and make the product all of a sudden, you know, start growing. But the product person in me wanted to perfect and improve a lot of those features that customers were having problems with.
Mac: Okay, so it sounds like it was more of a matter of improving the product and improving the lives of the customers and the flow as opposed to like if these customers don’t get this in the next week, they’re out of here.
Mac: Which is, it’s a great place to be in, right?
Garrett: Yeah. Well, and there were certainly feature that, you know, I should have added. In hindsight, I was probably a little stubborn about having some that I personally could not comprehend the value. I mean I knew why people wanted them but then like I just felt like that they weren’t a good fit for Sifter. And in hindsight, I was probably too much of a hardliner on that. I probably should have been like, “These are legitimate features. Just because I don’t want them, doesn’t make them not legitimate.”
But I was like, “Well, I don’t wanna support a feature that I’m not gonna use because like I’m not gonna be using the feature. I’m not gonna know anything about it really. I’m not gonna be using it and seeing the particular problems with it.”
So I should have done that more because I had plenty of feedback and mountains of feedback and ideas and suggestions. People were really great about that and really helpful. But, yeah, I should have done that more. In automation, lots of support requests that I received regularly, there were ways and things I could have done or should have done that easier on customers and made some a couple of features more self-service like let people change their own sub domains.
You know, people do their own trial extensions. Like if it’s signed up for a trial and they never created any issues, then they should have just been able to extend their own trial, right? They don’t need to ask me for permission to keep trying it out.
Like you haven’t tried it yet, obviously, so keep trying. Little things like that I should have gotten around to, and that would have made life easier. It would have gotten those support requests. The customers would have been happier. I would have been uninterrupted fewer times so I could focus more on features. It’s just a virtuous cycle. But, yeah, just so many things that’s just taken so much out of me, that at that point that I was like, “ All right, I need to let somebody else take the reins.”
Mac: Sure. So I wanna get into the sale in a minute here, but can you talk for a minute about…so you’ve mentioned you’re not a big fan of or you just didn’t put much into traditional marketing, but you do blog and you mentioned blogging again just now. Were you blogging on the Sifter site as well as…?
Garrett: Yeah, I was. Mainly more about features. I mean the problem with that, for Sifter, was QA isn’t the most exciting topic that people talk about and share things. Most people kinda just take it for granted and aren’t interested in it. The problem was I built a QA tool for people who didn’t know anything about QA, right? And that was the whole point like they needed to like this so they don’t have to know things about QA.
And so it was in a weird spot where it’s hard for content to really help people because helping people improve their processes like in…there’s not a lot of people who are in actively small teams trying to improve their QA process.
So that was difficult and challenging, but there’s still a lot of other things like the paid advertising. I kept trying that thinking, you know, we tried different channels and tried ad words and invest more effort in ad words to really kinda figure it out and try some things.
And always experimenting and trying to mix it up, you know, kind of…I guess with the channels, with the approach to each channel, it just never really panned out in a way that it was like, “I can see a path where we can scale this to be something that will make a difference.” You know, it would work but it wasn’t anything that was gonna make a big difference and it took a lot of attention to get there.
So I think there’s a lot of other things I could have done from a marketing standpoint to help people, but I was too heads down on the product to really, you know, step back and be like give it an objective view and kind of come up with ideas, I think.
Mac: Okay, so what would you say then was the biggest contributing factor to the growth of Sifter then if…doesn’t seem like you were doing a lot of advertising and…?
Garrett: Honestly, just word-of-mouth. I mean the content helped, right? Having some of that, but a lot of it was word-of-mouth from just…I gave really, really obsessively fast in good customer support, things like, you know, people email like they got a notification that said, “Hey, we couldn’t charge your credit card,” and they email to me like, you know, “My credit card is stolen and my wallet was stolen.” I’m like, “Don’t worry about it. Give them a free month,” and be like, “This month’s on us, so you don’t have to stress about it.”
You know, it’s little things like that that just always just trying find things to do to help people, give good customer support, detailed answers, turnaround features, you know, fix exceptions really quick, and then email them back and say, “Hey, sorry you ran into that problem. I fixed it. Can you try again?”
You know, turning all that around in half an hour and people are like, “Woah.” And so I think that, combined with just the nature of it is we had a lot of agency customers, and so then they had their clients use it and then when their project was over, their clients would wanna start an account and so they’d wanna spin off the project into their own account, and so there’s a lot of that that kind of contributed naturally to growth. Still a lot of things really but, ultimately, you know, I mean low six figure company. That’s not a lot of growth, right? Like it’s enough to create a healthy company but it’s not like we were having runaway growth and, you know, that’s one thing. I was still managing everything all on my own. I was customer support and everything. We probably get three to five emails a day, if that and probably half of those, if not more, were feature requests rather than actually genuine support. So I would say that’s pretty much how it all went.
Mac: Yeah, interesting. Okay, so then let’s get into the sale. You decided it was time to move on and what did that process look like for you to find a buyer and…
Garrett: Shortly after my foot stuff and I started having a bunch of surgeries, I was in the hospital for I don’t know, three weeks and at that point, that was kind of the worst point. Like I was just beat up physically just my body was destroyed, energy, everything, painkillers, all that stuff.
And so I reached out to Chris and Natalie at Wildbit, which is where I work now, I don’t know, probably, two and a half years ago and just talked to them. I was like, “You know, I don’t really know,” I was like, “but here I am laying in a hospital and I’m destroyed. Like I don’t know I can keep doing this.” And we talked a little bit at that point. But as I got better and they didn’t really know like what the right position would be for me at the time and so we just said, “Okay, let’s just stay in touch.” And so that kinda ended there.
And then a couple of years later, you know, I had recovered, I’d kind of figure things out, reached back out to them and said, “Okay, I’m kind of at this point where I think I’m there again, but now I’m actually better-ish.” I hadn’t amputated at that point, but it was a possibility. It was always a possibility. And they said, “Okay, sell Sifter and come here.” I was like, “Wait, what?” I was like, “We were just talking here.”
And I mean I’ve always respected their company and, you know, loved interacting with them. We use Postmark. They’re integrated with Beanstalk. Everybody that worked there was, you know, just great to work with and fun. And so I was like, “All right, well, maybe.”
And Patrick McKenzie had just sold Bingo Card Creator, which was his little app, and I reached out to him and said, “So hey, how did that go down? Like do you think there’s a market for something like Sifter?” And he said, “Absolutely.” And he goes, “Talk to FB International.” So I was like, “A broker? I don’t know.”
So I talked to FB and, of course, they said everything I wanted to hear and at that time I was like, “Great, they’re just giving me a sales pitch and they’re full of it.” It all ended up being pretty dead on actually. So I talked to them, I said, “Okay, I can do this.” Called Chris and Natalie and said, “All right. Let’s make it happen.” It wasn’t very long. I think within a couple of weeks, I was working fulltime at Wildbit and starting the process of trying to sell Sifter.
The first we got a couple of offers or at least bites, nibbles, interest in the beginning. One of those deals progressed all the way to closing day and at closing day we decided to walk away. Just chipped away, too many little concessions we gave in and finally they wanted one last one and they literally brought up the night before the closing day and I was like, “No, not gonna do this.” It’s something they should have known way before hand, too. And so we felt like they were holding it back to drop at the last second just to get us to go along with it because they knew it was gonna be a big request.
I mean who knows that that’s really what happened, but all the signs kind of pointed that way, so I was like, “We’re not doing this. Like, we’re walking away.” We told them, we said, “Take it or leave it. We’re not gonna do that.” And sure enough, he walks away.
The cool thing there and I always give them credit for this like FB International is literally…they were a signature away from getting paid and they didn’t put an ounce of pressure on me to sign. They’re like, “We get it.” Like they could have drastically increased their work, we could have gotten a lower offer, which we ultimately did, a significantly lower offer. So they made less money for more work and they never pressured me at all like they’re, “Yeah, it’s the right move. Do what you gotta do.”
So we did that and then a mutual friend introduced JD and I and that deal was night and day. Like, it was simple. The first deal had all these stipulations and complications. With JD it was just straight cash, no Escrow, we trusted each other and even since then, you know, we sold. We’re in the same city, we make sure to hang out and catch up, you know, for a beer or something like that. It’s been great. They’ve been taking care of it.
We were joking around the other day of hanging out in the slack room for Sifter still whenever they run into things like way past what they would have expected and we were kind of joking around, kinda feels like I’m helicopter parenting still like they’ve got it under control. They’re doing great, but, you know, I just still feel still like I wanna help them even thought I have, at this point, zero obligation to help them. Like it’s just nice to be able to help and stay involved.
So that’s kind of it. We went through two deals. I got to see one really complicated, you know, fairly, probably standard deal but just complicated with all sorts of NDA and non-compete and this and that and it was not pleasant.
And then the deal with JD was like we trusted each other and it went down quick and easy and we were both happy with the outcome and everything. And it was just completely different and so I think that’s ultimately…plus, going through due diligence when you sell a company, you start seeing things that you didn’t necessarily notice when you were too busy building it. It’s like, “Wow, I did a really shitty job of that. I should have done better. I could have done better. What could have I done differently?”
And so I got to their side and I was like, “I learned a hell of a lot in this process.” Like I pretty much have to update my book at this point, so that’s when I got the idea I’m gonna circle back and update the book and that project has been growing in scope and here we are.
Mac: That’s awesome. I wanna talk about the book, but that’s really funny. I think two nights ago I watched, I think it was like a 2015 maybe, microphone talk from Patrick McKenzie, where he talks for about half an hour or more about the sale of Bingo Card Creator and it’s really funny because it’s just so fresh on my mind and I even think he…I think he said he had a similar story where they got too close or super close and then…
Garrett: They did, yeah.
Mac: …their people had said, “Can we have 40% off or something?” Just like, what? Came this far and now you’re gonna ask for this? And also he had a backup offer waiting, luckily.
Garrett: Well, he had a backup. We didn’t have a backup.
Mac: Yeah, right, right.
Garrett: I was just saying, “No” with no idea how it was gonna unfold. But, yeah, it happens. You know, you get all the way down to closing day and in hindsight, I’m so glad that we walked away and didn’t take that deal even though we made a lot less money. I feel so much better about like how JD has been running it. His experience, he’s got SaaS knowledge and, you know, they really care about it and they’re running it like a healthy business. So it’s good stuff.
Mac: Well, congratulations. That’s really exciting.
Mac: So the book. So why don’t you talk about the book for a minute. I know you have first edition’s has been out. I don’t know how long and your…
Garrett: The first edition launched right before all my foot stuff happened. It launched in March and my foot stuff happened in July of 2013. So it was out for a little bit and so, basically, it launched and then all this really crazy stuff happened. All the medical issues, selling, all the experience around all of those things, the lessons learned. And so there’s a lot more that I’ve learned that I didn’t even touch on in the first edition.
And so the best way to describe it is just I look back and I’m like, “I did a lot of things really wrong and made a lot of stupid, silly trivial mistakes.” They’re not…they’re silly in hindsight. They’re obvious in hindsight. But in the moment, you’re like, “Oh, this makes sense. Let’s try this.”
And I didn’t wanna write like a prescriptive book to say, “This is exactly what you should do.” Instead it will be like, “Here’s an option. Here’s an option. Here’s the pros and cons here. Here’s the pros and cons here. Make your own decision, what’s right for you.” Type of thing.
So the way I described it is I wanted it to be more like a trail guide than a road map, you know. It’s like, “Here’s all the trails. This one’s kinda difficult and fun. This one’s easier but it will be longer. You know, choose your own trail and have fun.”
And now after all this and, especially, going through due diligence which just there’s way too much stuff that I, you know, could still fill in and just looking at and I don’t see myself being tempted to try it again anytime soon. But like I look at everything that’s available now and like it would be so, so much easier to launch right now.
Now, there’s a lot more people doing it because it’s easier, but I think with the right idea and stuff, it’s just so much of the pain is gone. Like I had to write our own billing system. Like now you don’t have to write a billing system. You can basically just outsource, just subscribe and then plug in, you know, some tools that connect to it and they handle all the dirty work and all you’ve gotta do is sit back and focus on your product.
And I think seeing that and it’s like, “If I could do something so much easier and so much better and faster today, like I could just put all that knowledge in the book and it’s gonna help somebody else do the same.” Plus, it gives me a side project now that I’ve got a fulltime job, so it still gives me my own little world where, you know, I’m in charge of everything and get to play with all sorts of different things and aren’t, you know, not focused on just marketing like I am at work.
So, yeah, it’s a fun side project to this point that, hopefully, I could get done before we move.
Mac: That’s great. I’m gonna start reading it tonight. I found it. So the first edition is up on Medium, right? For free right now.
Garrett: Right, startingandsustaining.com is now just points at Medium and I published the whole first edition there, which it is the first edition and, yes, there is more that I’m gonna add to and polish, but it was intentionally written not to be…timeless is a little generous, but it was designed to withstand the test of time and be relevant advice that wouldn’t change a lot as time changed.
Naturally, there some things in there like payment processors and stuff, some of that has evolved a little bit more. It’s still a pretty relevant read but there’s details I can clean up and fix in there now that things have changed. But other than that, I mean it’s still just as relevant today as it was three years ago when I wrote it and I’m gonna tweak most of the chapters, the existing chapters a little bit. Try and trim them down I think some more, but the new edition’s probably gonna double the length of the book. So that’s part of the reason I wanna trim down the beginning.
So there’s just a lot of new ground to cover. A lot of it on selling. Just a lot of it on kind of having more realistic expectations about things. You know, I think a lot of people start and then they only have two customers for the first six months and they’re like, “Oh, I’m just gonna give up.” It’s like, “Well, don’t give up. Like talk to your customers. Talk to people. Figure kind of what your core is and then build on that. Like it doesn’t just happen overnight. If you think you wanna build something five years from now, start building an audience now. Go out there. Do open source work. Share things.”
A couple of people I’ve been talking to and interviewing, specifically, people who had open source projects and turned those open source projects into a viable business.
And so there’s just so many opportunities and I think so many people just wanna build something and immediately have an income, be able to quit their job, you know, next week. And it’s like, it doesn’t work that way. It’s so much easier if you plan ahead and start doing something to at least build a platform that you can launch your business off of down the road.
So focus on more than just building the app, but like how do you get there to the point where you have a platform to build an app off of?
Mac: Yeah, I think I saw…did you talk with Mike of SideKick?
Garrett: Mm-hmm, yup.
Mac: Yeah, I had him on. It’s amazing. So I think you’re right. Almost everyone I talk to that’s been successful has had some sort of audience leading up to what they did and they’ve been embedded in the market that they’re going after.
Garrett: The key is, and I think this is what a lot of people get wrong when they’re building that audience, is they’re trying to build an audience instead of trying to help people. And like the best way to build an audience is to help people. Create things, give them away, sell them for cheap. Start with small products, you know. Whatever it is, you should create things and really, really care about finding a way to give people value whether that’s blogging or creating templates for…sketch templates, or, you know, whatever it is. You know, free icons. Find ways to give people value and help them and talk to people and the audience kind of just accumulates, right?
And it’s less of an audience and more a community except they’re just not necessarily talking to each other. And I think too many people kinda now set out like, “All right, I need to build an audience. How do I build an audience?” Well, don’t build an audience. Like how can you help people? And trust me, the audience will come.
Mac: So that leads me to the question, what would you say to people that may know who their audience is but maybe don’t necessarily know what they want to build or what their product would be? Would you say to just get out there and start helping them in any way they can via blogging and that the idea will come to them, or that the audience will tell them what they need or…?
Garrett: I think it varies. You kinda have to…well, I guess this is another challenge like a lot of people, they decide they wanna create a business but they don’t have the idea and it’s kind of backwards like you shouldn’t create a business to foster ideas. You should create ideas and then kind of you gravitate towards the one that a business can be built around.
The best way in my mind to do that is just tinker and play with technologies. Like so much of the good ideas out there right now, to me, are cross-pollination, right? Like you do some designs and development and you see these opportunities where it’s like, “Oh, nobody’s combined these two ideas in this way.” And to do that, you have to have side projects. And so you almost start out with like, “What can I tinker with and build and create?” And it’s a great way, too, to help build. It’s kind of it just works all around like the more you build and create and give it away, the more ideas are gonna pop into your head and you’re gonna find one that’s gonna be able to be that one for a business and at the same time, you’re building an audience because they’re interested in what you’re creating.
It’s difficult because if you create things that aren’t necessarily relevant to what your business ends up being, you don’t necessarily have a built-in audience if it’s the wrong audience. But, for the most part, as long as you’re having fun and doing that and just keep trying and whether it’s writing, doing open source, building tools, and putting them up for free. There’s so many free tools right now out there, you know, there are single serving sites that do one little neat thing really well.
There’s just always something you can do to create and help people and the rest kinda takes care of itself, the ideas and the audience.
Mac: I think that’s all really, really great advice.
Garrett: The other tough part is knowing which time…the people get scared of like, “How do I know when to cut off the other side projects and focus on one? Right, it’s scary to kinda gamble. It’s the whole, you don’t wanna put all your eggs in one basket, but if you chase two rabbits, you’re not gonna catch either.
Mac: You don’t wanna be spread too thin.
Mac: Yeah, exactly, it’s tough.
Garrett: And the best way to do that is, you know, create the projects and let people tell you if like you find out you’re getting 20 emails a day about this one project, that’s probably the project that you should commit to, you know.
Mac: Pay attention to.
Garrett: So it’s difficult though. That’s never easy. I think a lot of people, too, want a nice little canned answer that’s perfect and it’s not. It’s just, go out and make things and do things and experiment and the idea is you’ll have a hard time, you’ll have to beat them off with a stick.
Mac: This has been really inspiring and you’ve given tons of great advice. I encourage everyone to go check out your book. I’m gonna check it out tonight. When did you say the second edition would be available?
Garrett: Hopefully, March 1st but we’ll see how all this… I’ve still got a lot of recovery and physical therapy and selling our house and moving, so I’m kinda scared that I might not hit it, but I’m gonna try to.
Mac: Oh, you got a goal. That’s the first good place to start. Can you tell people again where to find you and Starting and Sustaining?
Garrett: I’m just garrettdimon.com, two Rs, two Ts, D-I-M-O-N. And Starting and Sustaining is at startingandsustaining.com. If you want to get on the list for when I finally announce or release the second edition, that is get.startingandsustaining.com.
Mac: Excellent and I’ll put that all on the show notes as well. Well, Garrett, best of luck with your recovery and I saw you’re aiming for running a mile January 1st?
Garrett: Yeah, we’ll see.
Mac: I’m cheering you on. I’ll be cheering you on. So thank you so much for being here and keep in touch.
Garrett: Right. Thanks, appreciate it.
Mac: Take care.