157: Downshifting to a Delightfully Part-Team Team with Laura Roeder

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I don't know where startups got into this phrase winner take all. I mean one, there's hardly any company anywhere that's winner take all. I literally can't think of any software company that's winner take all. It just doesn't make any sense to me in that market. I mean it's true that a lot of software is mutually exclusive where you're not having a few of the same kind of. It's not like a cookbook where I buy 10 of them. You know, if I'm buying a Salesforce type tool, I'm not going to buy three of them, I'm just going to buy one. But that doesn't mean that there's only room for one in the market. There's always going to be room for a lot of them.

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Welcome back Free Timers. I am so excited to be here today with Laura Roeder. Laura is a lifelong entrepreneur and founder of several multimillion dollar bootstrapped companies. Her current two focuses are Paper Bell and Coach Compare. We're going to talk a lot about those today. Prior to that, she built and sold Meet Edgar, co founded Marie Forleo's B School and ran her business LKR Social Media. That sparked all kinds of projects and a lot of early, early material on just how to dive into this wild Internet world. I remember meeting Laura at my very first south by Southwest in 2011. She hosted a party at her house and I said to her before we hit record, there's no way she would remember me. But her home and being there, being part of that scene when I was still basically working at Google full time, I had left just a couple days prior. Little did I know I wouldn't go back. But Laura, you're part of that first week of Freedom, so welcome to the show.

That's so cool. See, I thought we had met at wds. Yeah, I didn't remember Soft Spy. So very cool that I was part of your first week of Freedom story.

Yeah, like going to a brunch at a house in Austin. It was just one of those pinch me moments. And then yes, we have all our Shannon again photos from wds. I think it was just later that same year. Cause I was doing a big book tour throughout the years, even before going to your home, I remember just following so much of what you were doing online. And I've always admired how you seem to grasp trends and bigger than trends, just what's coming down the pike. And it seems like in many cases you've gotten there early and then you've been able to quickly develop expertise and then teach it to other people. That was in the earliest days of Alkihira social media. And I see you still doing that to this day. Where does that desire or that drive come from to just kind of find a space dive in early and create within it?

That's an interesting question. I mean, I think I found early on that I have a natural ability to make tech specifically kind of relatable and easy to understand and not intimidating and not overwhelming. I started my online career doing online classes about social media in particular. And my first classes were like very detailed how to classes. I mean, I would make screen churn videos where I'd show you like screen by screen, you know, how to do different things on Twitter is kind of how I started out. So I think a passion of mine is making things accessible. I am overjoyed that starting an online business has just become so much easier in the past 10 years. You know that now we have amazing course platform tools. You don't have to figure out the tech of how to do that by hand. And I just think there's so many people out there with ideas and talents and skills to share and I hate that they would be held back by not understanding the tech. So I think that's just kind of always been a passion of mine, is wanting to democratize and wanting to share these skills and make sure that people aren't intimidated and aren't scared away.

In recent years, I've been hearing you share your story of building and then selling meetedgar and I was an early Meet Edgar user before I pretty much signed off of social media altogether. But I really loved what you built it's been so interesting hearing you on shows like Built to Sell Radio with our mutual friend Lexi Grant on they got acquired of your experience and then contrasting it to Now. So I've heard you a couple times share that you had built out a whole team with Meet Edgar. Whereas now what you're doing with Paper Bell, it's entirely built with part time support. And so what I find really curious about that is sometimes I talk about the Goldilocks sweet spot for managers or founders or the owner of a team that a lot of research on team size is all about productivity. What's most productive, what's most efficient, effective, how do you grow the fastest, go the farthest. But then it doesn't really take into consideration your joy as the owner. Some people would say you should never do that. That's not a business, that's a hobby. But here at the JBE School of Free Time. So I'm really curious, like always with pursuing these passions. Team is a part of it. How did you find out what was too big and then now what I would call delightfully tiny or delightfully part time.

Yeah, I loved that phrase from your book, by the way. Delightfully tiny teams.

I was like, yes, small and proud and no plans to grow. Yeah, yeah, that's my sweet spot.

So at Edgar, it's not like our team was huge by any standard, but for me, being a bootstrap business, I think the largest we ever got was around like 30 people full time employees, which to me did seem very large and definitely introduced. You know, I know in your book you show that famous graph of all the different nodes and how they're all connected and how many different relationships you have. 30 people is enough to make that graph look very, very complicated. And at the time, I had come from a world of, you know, what we now call like creator or online courses. At the time it was called like info products and Internet marketing. And in that world, what I saw When I launched Edgar, which was in 2014, it was like no one had full time teams. Everyone was working with VAs and stuff like that. And then I would look at my friends who had largely like funded Silicon Valley companies, and they of course would hire out big, full time teams. And I'm like, okay, I'm starting my first software company. You know, Edgar was my first SaaS, my first software. I'm like, I need to be more like those funded companies. Even though I was booed, bootstrapped, even though I didn't have funding, I'm like, I'm gonna Have a full time team, because that is gonna be the path to success. That's gonna be the path. I felt like that's what you had to have to have a quote unquote, real business. At the time I felt like, oh, it's not serious unless everyone's W2. And I was like a big believer in like, oh, you want everyone to be W2 and just devoted to you and not have like a bunch of other clients and have their attention divided. So we always built a team at Edgar with W2 full time employees. We used very little freelance or agency or fractional or anything like that. Almost all the work that was created was from a W2 team. And there were some parts about it that were really fun. I think the peak experience was always in person retreats because our team was always remote. All based in the US but remote. We didn't have any kind of central office. And once or twice a year we would get together in person. And that was a real emotional high for me, like getting to spend time with everyone and meet everyone. And I felt like, wow, this is my company that I created, you know, with all these cool people and we get to do these fun events and activities together. But I also sometimes saw the inefficiencies of having everyone be full time and especially kind of after I sold that company. And looking back in retrospect, I definitely saw areas where in retrospect, we could have brought in someone to do a one time project. But then what happens when you hire full time? It's like, maybe you don't know that it's just a one time project, but then they kind of do what needs to be done. But then you don't want to fire them because they're great and you hire them and you kind of find stuff for people to do. And I think it very often happens, and it definitely happened for me, that you end up creating a lot of busy work because you're like, oh, I went through all this work finding this really smart, really talented person. Like, I want to keep them around. This is not how you're thinking of it at the time. You're not like, ooh, what more busy work can I create? But that's definitely something that I saw happen is that was the outcome of where like you bring people on. You wouldn't want to let them go. So more busy work got added to the company.

And then their incentive too is to create work for themselves. So they're also going to suggest projects and plans. And that's not necessarily a bad thing. But I had that experience too, even on a really small scale where I hired one va and then she said, this is too much for one person. So we hired a second and all of a sudden there's now two VAs where it used to be just a fraction of one person. And in the moment it seemed like the right thing to do. I was launching the book, so I just didn't have the bandwidth to stop and really think it through. And so I, I ended up spending all this onboarding time and investment when really it was a skill issue. It was not necessarily that the role was so vast, it was that I didn't have the time to properly onboard the person, didn't quite have the skills to meet the needs. So we brought on a second person and I could just see how that could so easily expand. Like Parkinson's law for time could be Parkinson's law for team.

Well, and you can always find things to do. Like probably one of the most obvious examples at EDGAR is we brought on a full time marketing analyst who was going to help us kind of like figure out all the, all the stats and all the tracking for all our marketing activities. And now I think that was crazy to bring that on as a full time role. But at the time we were like, oh, we have this huge problem. We can't track any of our marketing. Like, all of our numbers are wrong, they're all inconsistent. So we did like, that was a genuine project in the business, but I should have just brought in a consultant to sort that out and then evaluate what needs we had after. But because like many things, you know, we used Mixpanel at the time, which is just this like immense, super complicated data tracking system. There's always more stuff you can set up with Mixpanel. You know, like there's no limit.

It's like Salesforce, right?

Yeah, like, yeah, setting up reports, like tracking new things, finding new ways to analyze things. And a lot of work is like that. And like you said, it doesn't come. It's not like people are like, oh, I'm gonna like trick her into billing for a bunch of hours. Like, they're genuinely trying to help the company. They're trying to like find things to do to help the company and add value. But yeah, it comes from a place of like trying to fill people's time. It's the opposite of seeing like, okay, what is the business need and then what's kind of the most like simple, streamlined, elegant way to do that. That's the perspective I have now. The Other perspective is like, okay, we have 10 people, what can they all do all day?

Right, Right. And then also what are all the nice to have things we could do? Let's bring on those. You mentioned something. There's another question. I'm curious to get your take because the arguments that I've heard people make for a relatively small business. I mean, the US government defines a small business as under 500 employees, which I think is bonkers. But let's say a relatively small business. Exactly what you said earlier. People will say, well, you really want people full time. You want them only waking up and going to sleep thinking about your business and not juggling all their other clients. I've never felt completely sold on that because anytime I had a full time job, I always had a side hustle and that job never had my full mind or my heart. So I feel like I've resisted that advice a little bit as well. And I know sometimes it does involve like sticky communication where they say I have a huge launch for another client. To me that's the equivalent of an employee taking a week of vacation. It's like, it's okay, it's not the end of the world that I don't need everything urgently at all times. I know with Paper Bell you're now building out part time. So how did you grapple with that question of are people really committed if they're part time? And then it's clearly you've made the choice like something about having a 30ish full time team. You know, maybe you're leaving some of that commitment behind, but maybe not. So I'm curious to hear your take on that.

So much of it is really more dependent on kind of what their whole life looks like rather than whether or not they happen to be full time or part time. I mean, some people work part time freelance and you're their only client. That's just their work setup, you know, or like you said, some people have a full time job. Well, now some people have three full time jobs working remotely.

I heard about that. I heard about that.

So you don't even know that. You might not be the only one. That's right, full time job. But you know what I've been thinking about a lot lately in how I'm crafting this business is it's less about what's going on and it's like the word passion isn't quite right, but it's like, I guess it's like satisfaction from doing this type of work. So we just recently brought on two part time customer service people. And one of them right now, this is her only gig and she is a mom and she also has like some hobbies that she devotes a lot of time to and the other one has basically like two gigs going on right now. But both of them have a huge love for this type of work. They find it extremely satisfying. They really love the problem solving element. They really love, you know, getting to see like the instant result from the human on the other side. So I think looking for that quality in your team is also what will lead to, I think, the type of engagement that we're all looking for at our companies. And also of course, doing those things to allow people to be engaged. You know, I'm definitely a big believer in like Daniel Pink's drive model where people need autonomy, people need to know, you know, their work makes a difference, these different things that allow them to have the engagement. But I think it's not so much about whether they're like working five hours or 40 hours or whether they have three clients or they have one client. If you have someone doing customer service who has just like a deep, juicy interest in customer service, who they just, they really enjoy this type of problem solving, their brain is going to be thinking about how to make it better because that's fun for them. In the same way that for me it's extremely fun to be the founder of a software company. I can't help but think of ideas for it. If you find it extremely fun to do to, you know, be in a financial function. If you find it extremely fun to be a front end software developer, like, that's what your brain enjoys thinking about. So you're gonna have that deeper level of engagement.

We'll be right back just after this.

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I love that connection to Fun, even. Moving aside the word passion, but fun. I interviewed Katherine Price on the Pivot podcast. I'll put the link in the show notes. She describes fun as the ultimate flow state. And in fact, the definition of flow doesn't always contain fun, but fun always contains flow. And it's usually like something where we feel connected to other people. We're completely immersed and present in the moment. And there was one other quality escaping my mind. But I love what you're describing. And then I find it so rewarding, too, when I find someone like that and I can match. You know, we talk about product market fit, but the person role fit or the fun role fit, it's so joyful for me because I thrive. I realize as a reluctant manager, I don't consider myself a true manager, but I really get energy from people who love the work, and it's really hard for me. If I don't feel that sense that they're having fun or that they find it joyful. I have a really hard time managing to that. It kind of drains my energy.

Yeah, yeah. And, you know, something that I've learned over the years is there are people who like doing everything, believe it or not. You know, those things that sound terrible to you, there's someone who likes it. And even the things that, I don't know, cleaning out a sewer or something that a lot of people would agree is not the favorite, there are humans that are like, yeah, I'm able to find a lot of satisfaction in this work because I know how important the outcome, you know, because I know if I don't clean out the sewer, the septic system for the whole city will get backed up or whatever. There are people, if you can give them the right environment, that enjoy doing everything. And certainly, you know, the types of businesses that anyone listening to this podcast has right now, which is going to be like a knowledge worker type of business. I promise you that everything in your business is there is, like, someone that really, really does enjoy doing it. And I think often we have this bias of the things that we don't like to do. I had this happen recently where I had this project that was on my plate, and just every time I looked at it, I, like, wanted to cry, you know, or I was like, I can't dig into the details. I can't even look at this thing. This thing is making me so stressed out. I just have to hand this off. So I made a task. The task was titled Figure this Out. And I just kind of wrote down everything I did know about the project, I'm like, I know this. I know this. I haven't looked at that. I haven't looked at that. I'm thinking it'll get this sort of outcome, like, can you figure this out? And I handed it off to a freelancer I've been working with named Irene. And Irene was like, yes, like, give it to me.

And then Irene probably feels great because she knows how much you're dreading it. So not only is it something she might enjoy, but then knowing she can help crack the case on something that is so vexing for you is also deeply satisfying.

Exactly, exactly. So thinking of a team less about, yeah, are they full time or not? And more about, are they having fun? I agree, that's a great word for it. Like, are they having fun? Digging into these problems is really what I'm focused on. And I do think it does enable you to take away sometimes that layer of management. You know, you said you don't love managing. I definitely don't love managing either. I think a lot of humans don't.

I always feel like a bad person when I say that. So, like, having conversations like this gives me permission that I'm not just the grumpy curmudgeon that I am. That if I hear you say it, something about it makes it more okay for some reason.

Well, a lot of people don't like managing. And guess what? A lot of people don't like being managed either. And. And there is this way that we look at management that something I've always disliked about it is it felt very paternalistic is usually a word you use. I'll use maternal. But it did feel maternal to me, like in a bad way. Like I'm your mommy and I tell you what to do and you ask permission for me. And I was like, that's not the type of relationship I want with the people I work with. I want a totally peer relationship with the people that I work with. And what we do now at Paper Bell is like, like I said, some roles are more project based, but some roles are ongoing. Obviously the customer service roles need to be ongoing. We have emails that come in that we want to answer every day. And I told them when they started the role, like, we don't do any kind of regular performance reviews or check ins. And this is such a sacrilege to the way that I used to work at Edgar, like it was all about. You have to follow your. We followed the scaling up system, which is very similar to Traction, if anyone knows that book where it's like you have your meeting rhythms and you have your quarterly and you have your annual. And if you're not giving people reviews, they won't be engaged. The way we do it now, we don't have any regular meetings. We're all async now that we have more people. I write a Friday update of what happened that week so that people can know what's happening across the company. I mean, they could kind of poke around in our online tools and find out, but kind of make it easier for them. But we don't have any kind of status meetings of any kind ever. And I told them, like, I'm not going to review you. I'm going to give you real time feedback as it's useful. If there's something you want to talk to me about, you have to come to me. There's not going to be a regular cadence for it. And honestly saying that on this podcast right now, I already feel like spring some business God is going to come down and hammer, you know, and tell me I'm doing it wrong.

Yeah, I always talk about the personal development police, but there's also the business ops police. Like if you don't have business ops police okrs and KPIs and your weekly traction work back plan and yeah, yeah.

But I'm like, we're not going to do performance reviews. We're just not. And if you need a place that does that, then like this is not the place.

And so are you rigorous in terms of metrics and project sprints and the deliverables of the work, or is even that a little more flowing now than it might have been with Edgar?

The way that I think of it is I try to keep expectations very clear is kind of the word I would use for it. So especially not having meetings. That does mean that like task based things need to have really clear timelines associated with them. For example, because we're not like at Edgar, you would kind of be able to get a feel for like when projects were happening. Now you don't really have a feel for that because things are happening, I guess more like one off. Like a project can just kind of like live on its own and not necessarily touch anything. So like if I'm assigning a task to someone, I always put a deadline. Like we always use Fridays as a way to say, am I thinking this is like a one week project? Does this need to be done this week? Does this need to be done next month? Month? So I might put a deadline of a month from now, four weeks from the Friday just to let them know, like. And that just means I expect this to be done in about the next month so that people aren't having to guess. Like, is Laura thinking this needs to be done now? Is she thinking it needs to be done later? For the customer service roles, you know, we have a document that says it's called something like this is the bare minimum. It's like, this is what we expect to happen 24 7. If this is not happening, we're just like not a fit right away. And it's like for our company, we expect the inbox to be cleared out by a certain time Monday through Friday. Or a communication. It's like, oh, we got 600 emails today. So like, no, it will not be clear, you know, or a communication if that's not happening. Tell us when you're checking out every day so we know that you've showed up for work. Every email needs to be friendly. If not every single email is friendly, like you have gone below the bar. So it's like the bare minimum. And then we have like, here's what you should do and here's what you should not do so that people have a very clear expectation of like, okay, this is how this company operates.

When you say checking in and out at the beginning or end of the day, is that just for customer support roles and if so, how are they letting you know that? Or is it for the whole team?

Checking in and out is just for customer support. So there's two reasons for that. One reason, and they do that in Slack. Actually it's just checking out. It's not checking in. They say when they're ending their workday on Slack. And so one is because we do have two people just that they're coordinating between each other. The other reason is because customer service is mostly happening in our customer service tool, our help desk tool. Other people are doing stuff. In our task management tool we use ClickUp and like I'm in ClickUp all the time for other roles. I can see if stuff's getting done. I don't want to have to check in to the customer service inbox every day to make sure that it happened because basically it's just kind of a fail safe for, let's say the customer service person didn't show up for five days. I don't want in the back of my mind me every day being like, wait, did they answer yesterday's emails? So them posting on Slack like, I'm done for the day. And they'll usually post a little summary of what they've done or like if they have a little message for the other person. Because they tend to do kind of one first and the other one second. Although not always. It's just a way to let us all know, like, yep, I showed up and did my work because that one is a little less visible. And that's a good example I think of like when you have this asynchronous type of work, the stuff that is important to make sure things aren't dropping into black holes. Like we do all of our work in ClickUp. You know, nobody's working like in their inbox. Nobody is like creating random Google Docs that nobody else knows about. So it's like if you're going to take away things like those meeting rhythms that I was talking about earlier, I'm not anti having meetings. I understand why they exist. We've chosen not to have them at this company. But then we do have to have other things. You can't just like take away the normal structure of work and not put like another type of scaffolding in its place.

I think, you know, we use notion for the same purpose that nothing lives in email. I also can't stand the hodgepodge of Google Docs and sheets anymore now that I know that notion exists. And it's all there, it's all searchable. There's a record of everything. So I think you and I think very similarly about how to reduce meeting time management time, searching for stuff. I'm curious about one aspect that you wrote in the job wreck you say about our company culture. And one piece of it is we want to be upfront that we aren't the kind of company where work is your social outlet. We love doing excellent work at work and living the rest of our lives outside of work. We are not a reactive, firefighting or workaholic type of company. The vibe is quiet and focused. We're friendly. But you aren't going to see a bunch of social chitchat or getting to know you activities. And this just kind of made me laugh out loud. It must be in reaction to something. So were you trying to do this at Edgar and now you're being really clear that it's not going to happen? Or did you get burned in some other way? Kind of leads you to be more explicit here.

Yeah. At Edgar, we spent a lot of time on social activities because we were a remote team. I listened to a podcast with Matt Mullenwig recently, who's the founder of WordPress and a very early pioneer in remote work we were doing remote work early at Edgar, he was doing it really early at WordPress. And listening to the podcast gave me some clarity about what we were doing at Edgar. And what we did at Edgar was we happened to work remotely, but we were trying to recreate an in person work environment on the Internet. I mean, we even called it real time remote because we were like, we're remote, but it's not asynchronous. You know, we're all in the US we're all like working live on Slack together. We're having a lot of like live check ins and live meetings and things like that. And because we were trying to recreate an in person office on the Internet, we also did a lot of like dedicated social time for the team to get to know each other and for the team to form social bonds. So, you know, we did all the different, like Slack tools that you do to have little fun questions and hosting the like, mixture of your dog, what were you up to this weekend? All that stuff. And I just thought a lot of people get sick of it. I definitely got sick of it. And I kind of realized there's another way to do online work which is just work, which is like you're not trying to recreate an office. It's not a social environment. It can be just a work environment. And making it just a work environment can really cut down on the hours when you're doing just the work and then you have time for your social life and especially being remote. I actually think that it's something that, you know, we've already seen so many companies go back to in person after Covid. And I think a lot of people are realizing that not seeing other humans in the real world is very bad for you. And I think it's kind of a bad trend for online workplaces to try to be that social outlet because it's like trying to make Facebook your social outlet. Like we're also addicted to it because it feels like it feeds that need. I always think about like whenever I go on social media, all I'm really doing is being like, human connection, like, please, you know, give me like some like we crave it so much, like looking at other humans on the Internet, but we know that it's not good for us that we need to be seeing people and spending time with people face to face. So I like this idea. It's like, if you're gonna do online work, keep it just your work and limit it so that you can make your social time hopefully not online. So that Your social time hopefully is with other humans in the real world.

Right? And honoring that. Like we're not workaholics here. This isn't a burn. Insurance culture companies like Coinbase and Basecamp caught a ton of flack when they tried to say our internal Slack is for work conversations only. No politics, no outside stuff. And they were completely thrown under the bus on social media, ironically. But I agreed with it. I mean I would not be able to work if I were part of a small company, especially one that had 30 people. But even if it had 30,000 or 300,000, there's no way I could work with the level of stress and gut churning of trying to participate in the right conversations and have the right beliefs and then not offend anyone. But then don't be quiet about them because there's so much to be done across all these different areas. Like I get overwhelmed by the news just on a day to day baseline basis, let alone if I felt that that was part of somehow not my role expectation at work, but almost a social contract or expectation at work, I couldn't handle it. I just don't have the kind of constitution for that.

It's a huge thing that doesn't get talked about. And actually someone, one of our new customer service team who obviously this type of culture is appealing. You know, she read the job ad that you just read. She told me that at her previous job there was so much slack social activity she said she would come back from the weekend and so much had happened on Slack and she felt like to not be a jerk. You're supposed to keep up with every. It's like whose cat is sick, like whose three year old they're dance recital, you know, like, like who just got divorced. Like you're trying to be nice by like keeping up with all this information but it's just this whole extra job that you have and I think that's where it gets more artificial and harder online. I think if you were in a physical office it would be something that kind of happened naturally as like you're chit chatting with people and you're keeping up with the news of some people at your company, certainly not everyone. But then when we move it to online it's like now you can be in this work environment with sometimes hundreds of people and, and you're trying to like navigate all these social relationships and you know, niceties and you're trying to be friendly and polite and keep up with everyone and it's this just whole other second job that we've Given people where I'm like, no, we're just like, we're not doing it. And to be clear, it's not like there's some sort of rule against it. We just don't create the container for it to happen. Like, we don't have any social change channels on our slack. We don't have any little activities that we do. We don't have any question of the week, tell us about this or that. Like, if you wanted to go on our slack and post a picture of your dog, you could. It's just no one ever does.

It's just such a relief because I truly just kept thinking I'm the worst manager because I don't do these games, I don't do Icebreakers. Like, I don't chit chat too much at the start of meetings and like, really dive deep into life and everything. I just think, let's just get to work.

Yeah.

So, okay. I wanted to ask you in one of your interviews, like I said, I've always joyfully listened to them and I've always loved hearing your experiences. Not even just to prepare for this, just when I hear you. And you referenced an interview with Gail Goodman and she talked about the law of large numbers and the long, slow SaaS ramp of death. And this was. You said most startup founders know about this video or this concept. I didn't. And it's such an interesting example of the paradoxes of growth and the vicious cycle that can occur. So can you just remind me? Because I couldn't remember where you said it or why you brought it up, but can you just tell us what is the long, slow, sad ramp of death? And have you confronted it in the past? Or, you know, is it something on your mind as you even build out paper bell?

Oh my God, I'm so nervous I'm going to get it wrong now. So I'll say what my current memory is because I haven't watched the talk in a while.

Yeah, I'll link to it in the show notes too.

Yeah, it's Gail Goodman from Constant Contact, a talk she gave a business of software a few years ago. And I think the slow SaaS ramp of death is your churn overcoming your growth. I think that is the core concept of it. Okay, so churn in SaaS refers to the percentage of people that quit the software every month. And therefore your churn is always a percentage of your user base. So it's like, you know, you have a hundred people, 5% quit every month, and five people quit. Right. So the problem with the math is that your churn is a percentage of user base, but your growth is usually totally unrelated to the size of your user base. So let's say that you're like running Google Ads to grow and you're adding like 100 customers a month. Maybe in the beginning that 100 customers is amazing, but now once you have 10,000 customers, you still have your 5% churn, but now you're only adding on 100 more from your Google Ads. So now the amount you're churning out is in no way making up for the amount that you are adding on. So the process gets harder and harder. This is getting very SaaS specific. But by the way, the cheat on this is you have to have expansion revenue, which is where people go to higher tiers of the product and pay you more because that's again based on your user base. Right? Like if 5% upgrade and 5% churn for the same amount, now you're at break even. And so now those hundred extra people from the Google Ads do add up, but we did not have any expansion revenue at Edgar.

Yeah. It struck me as so interesting that the more successful a company becomes, specifically in this case software, they almost saturate the market. And it's interesting that you've been bootstrapping because this is when a lot of startups take exorbitant amounts of money from VC because they need to flood the market. It's winner take all. And if they don't just absolutely take a battering ram, and I'm using that word intentionally to the space that they're trying to conquer, it's always about conquering and growth at all costs. But if they don't do that, they're going to risk this long slow ramp of death because the more successful they become, they're just tapped out. So like you said, it becomes almost harder and harder to grow once you reach a certain size. So I don't know. With Paper Bell, I'd love to know your reasons why not to take venture funding. Do you worry about competitors? You know, there's other software like Dubsado or Kajabi or Practice, even something like Notion or ClickUp that maybe people can now kind of create something related to what you're building. I will not say the same. How do you think about managing competition while staying bootstrapped and not just like brute force investing in growth.

So one, I don't know where startups got into this phrase winner take all. It's a very common phrase that you hear, you know, with anything around startups or fundraising. But I mean one, there's hardly any company anywhere that's winner take all. I literally can't think of any software company that's winner take all. It just doesn't make any sense to me in that market. I mean, it's true that a lot of software is mutually exclusive where you're not having a few of the same kind. Like it's not like a cookbook where I buy 10 of them. You know, if I'm buying a Salesforce type tool, I'm not going to buy three of them, I'm just going to buy one. But that doesn't mean that there's only room for one in the market. There's always going to be room for a lot of them. So that has never made any sense to me. I don't know why people say it so much.

Maybe it's because of the long tail that the few companies, even if it's a handful, not just one, I mean, we could look at Facebook that gobbles up everything meta, but maybe it's the long tail that yes, you could have customers as you're down the long tail, but maybe not enough to be profitable unless you're running super lean. So maybe they're referring to the fact that like Uber and Lyft are in competition and it's kind of winner take all because the network effect. So the better Uber does, the better they do, the more client, the more people use it. And then it'd be really hard for via. That's a new one in New York. New ish. I don't know, something like that to even break in at all at a certain point and be able to sustain themselves.

I think you're right that that might be the reasoning because yeah, people talk about Uber as a winner take all, but it's like, but there's always been Uber and Lyft and a bunch of little ones and even Google for search, which has an enormous amount of market share. There was recently ads on the tube for DuckDuckGo here in London. Like there's still others taking market share even from Google search. So yeah, it's just, I don't believe in that concept.

I love it. Way to debunk that big one. I love a good counter narrative.

Yeah, you've pointed to one of the brilliant things about bootstrapping, which is you can achieve success with a much smaller company size. So at Edgar, we always had funded competitors from day one when we launched Meet Edgar Hootsuite, which I would think a lot of listeners would be familiar with. It's always been kind of the number one social media scheduling tool. And Meet Edgar is the social media scheduling tool. Hootsuite existed when we launched. It's not like we were launching to this barren market. Hootsuite existed. I don't know how much money they had raised at the time, but it was definitely tens of millions and ended up being hundreds of millions. And they were always there throughout our journey. But that also meant that what was a huge success for Meet Edgar, which was getting to a few million a year in annual revenue, was a huge failure for hootsuite. If you raise 100 million and get to 3 million annual revenue, you're not doing so well. If I own 100% of the company and get to a few million, I'm doing amazing. And that allows you to carve off a part of the market that often the larger companies aren't interested in. And for us, that was small business like hootsuite was never that interested in having freelancers and one person businesses as their customer because they couldn't make a lot of money from them. But that was our core customer at Edgar.

That's such a great point and I really appreciate you sharing how you think about this. It's so encouraging that there is room and the whole benefit of staying lean and agile is being able to create success and on different terms.

We'll be right back just after this.

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I heard you talking with Nathan about after selling meat Edgar, you had enough money that by the time you invested it, you are truly financially secure in the sense that you don't need to work again. How does that change your relationship? To building a company, knowing that you have enough money in the bank, you're financially secure, has that changed your relationship to. To work, to know that it has.

Made me more strict about it being enjoyable, which it's something I've always been a believer in at Edgar. I was always a believer in. I love the person who put it best in his book, Anything youg Want. Derek Sivers says, your business is your utopia. And I love that phrase, your business is your utopia. And that is how I think about running your own business. Which, you know, I think just beautifully ties in with your themes and free time. It's like the whole reason that you work for yourself is so that you can have this control and have this freedom and have free time. Right. To make it your utopia. And that was always important to me at Edgar and now at Paper Bell. I just have really taken it up a notch. And honestly, it probably really has freed me to do things like not do annual performance reviews, which when I say I feel nervous saying it, I'm not joking. I really do feel nervous saying that. Like, a bunch of people are going to tell me that this company has no chance of succeeding without annual performance reviews. And obviously I'm doing it wrong and obviously I'm failing my team and blah, blah, blah. But knowing that I'm not doing this for the money because I've already made the money, it's like, I'm doing this because I enjoy the journey and the challenge of growing a company. And if I hate performance reviews, let's find out if it's possible. Maybe it's not right. Maybe I'm totally wrong and, like, my team is going to come to me and they're like, listen, we are out of here unless we get our annual performance review. Okay, okay, fine, fine, I'll give you one. But, like, why not see if we can achieve a great result without it?

Well, if it makes you feel any better, even the talk in HR circles for big companies are doing away with performance reviews. So I love that you're saying it out loud. And thank you for telling us that you even feel nervous saying it. Because I think we all have these questions or insecurities are ways we want to give ourselves permission, but then we worry about those business ops police. But I think even in big HR conversations, the consensus is pretty much that performance reviews suck and nobody likes them and companies should do away with them. So that's an emerging trend.

Oh, there. You said I was on top of the trend. So There you go.

Exactly. Well, that's it. If you follow your intuition. I have learned this time and time again that the times where I think I'm crazy is actually just that I'm hypersensitive. And then a few years later. Oh, now suddenly everybody thinks a certain way, whereas in the beginning I thought I was just neurotic or something.

Last thing before I ask you the permission slip question that I ask everybody on this show. I love the tagline for Paper Bell. One of them. You say the inside of your business should be as beautiful as the outside. A woman after my system's loving heart. So what do you mean by that?

So the kind of selling point of Paper Bell, I think, is to give coaches. So we haven't actually even said what Paper Bell is. So Paper Bell is software for coaches, as in life coaches, business coaches, mindset coaches, that type of coaches, software to run your business. So it handles your billing and your scheduling and your client management, automated messages, stuff like that. And a lot of coaches just want to coach and don't want to set up systems in their business. And they don't love it the way that you and I do. It's not what brings them joy. What brings them joy is really that client. Client transformation. But a lot of coaches really desire to have this ease and relief in their business. Actually, I noticed one time I was reading a bunch of testimonials and I noticed a bunch of people use the word relief. I love that word. That word resonates with me so much. That is such a beautiful goal for me for what I want to provide with our customers, a Paper Bell. And so a lot of coaches have this idea of, like, I know that I create a beautiful experience with my coaching, and I wish that the whole experience of my business, both, like operating inside the business and how the business appears to my clients, I wish that whole experience could be as beautiful as the coaching is. And that's really what we want to provide with Paperbill.

I just love it. That sense of relief, and that is the mark of good software or smart systems or both, is that you're relieved. Like I often say that software is my first employee because I try to delegate as much as I can to all my software. And if software is really working for you, you. You can run in such a more joyful, as you said, simple, beautiful, streamlined way.

Absolutely.

Last question. If you could give fellow business owners permission to do something differently or drop something altogether, what would it be?

Oh, my God. Yeah. So many. So many things. I think the big Thing that comes up for me is permission to enjoy your business. I think we often have this feeling and that it's meant to be hard, it's meant to be difficult. I see this on social media all the time is people are like what it's like to be an entrepreneur. You know, 7am you want to kill yourself. 9am you're elated and I'm like, that's not what it's like for me. And that doesn't mean that I don't have like good and bad things happen. But I'm hard pressed to remember a time I've ever like cried about business.

That's good. Even throughout 2020, even through all of it.

It's okay if you're like a huge guy and that's how you deal with things. It's just for me the business is not this super emotional thing with a super intense ups and downs or I remember I had a friend who would always say it's like a knife fight out there. It's like a knife fight.

Wow. Can you imagine going about your day to day picturing it as a knife fight? Like just how that would change your whole vibe, your actions. That must mean that you've detached your identity. It seems like maybe you have this really healthy separation that you are not your business. The businesses ups and downs have nothing to do with you, like your worth. That's not always easy to do as a founder, you know, I did that.

Very deliberately when I switched to software because the businesses I had run before were very tied to my identity in like the public sense. Which you can still do that and not have that deeper level of identification like you're talking about. But my businesses were like Learn with Laura, you know, was basically what the businesses were. And I wanted to switch to a business that was not centered around me. And I deliberately was like, I want to have a business that's like a business. I don't know a better word for it. I think of the business as like a thing, a project. It is definitely not me, it is definitely not my whole life. It's not my self worth. It's like a thing I do. I tried to get into LEGO recently because I don't have any hobbies. So I'm like, maybe I could be a LEGO person, but which I didn't really get that into it but to me I had this like London Bridge LEGO set. The business is like the London Bridge LEGO set. It's something to do, it's something to mess around with. I really enjoy it. So I Spend a good amount of time doing it, but it's certainly not me.

That's a beautiful way to look at it. And it's funny because it's true. The LEGO set is building and it says something about what you love and what you find fun. Because you don't have to build anything at all, but you're doing it because it's fun. Like your IRL LEGO set or your, you know, online.

I totally get that. Like, you're not somebody that wants to just go retire and sit on the beach, even if you can.

Maybe it was a built to Sell episode. They talked about how so many people, once they sell their business, they have this, like, fantasy that they're gonna want to do nothing. And the person was like, but if you reach the point where you've sold a business, you are a very ambitious person with work. That's obviously something you have within you, is that you are very ambitious about your work. What are the odds that after having this trait for 5 years or 20 years or however long it got you to sell the business, now you just flip a switch and you're like, oh, actually, I went from being super ambitious and super interested to work to, like, never wanting to work again. Probably not.

No chance, right? Not want to solve the problems, do all the tinkering. Finish Big is a great book on exactly that because he talks about how the founders who exit with knowing what's next did so much better, just mentally, emotionally, spiritually, than the ones who had no clue, who then felt really lost and aimless if they didn't have anything lined up. This has been so fun. Laura, thank you for sharing all that you have and in all your interviews, for being always so open about your story, your process, your thinking. We didn't even talk about Coach Compare, but tell us all the places where people can find you if they want to learn more and keep in touch.

Yeah. So I explained what Paper Bell is. Coach Compare is for you if you are not a coach, because you probably need a coach. Don't we all? And CoachCompare.com is a free site with thousands of coaches, all different specialties. It's just like, find a coach that resonates with you, send them a message. It's just like a very simple directory site. Basically, we just created it because there was not a good site to find a coach. Because once I started Paper Bell, people would ask me for recommendations all the time for where they could find a coach. I didn't have anything to send them, so I had to build it so yeah, go to coachcompare.com to find a coach.

Beautiful. And paperbell.com paperbell.com if you are a coach. Yeah, amazing. And I'm going to put a link in the chat to Laura's article exactly how I cold emailed my way to a life changing exit and you can too. And that's@lauraroter.com it's such a good write up. Thank you so much Laura. And big thanks everybody for listening.

Thank you.

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