MBA2176 Why I Started a Software Business

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Foreign. Welcome to the Hundred Dollar MBA show where I share what I know so you can grow every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014 and in today's episode you will learn why I started a software business. I get asked this a lot by other entrepreneurs in podcast interviews, in chats, over dinner. Many people are curious about the software world and what led me to get into that world and build a business around it. I'm not highly technical. I don't come from a software background. I consider myself a non technical founder. So many of you want to find out what made me make this decision to get into the software world. In today's lesson, I'm going to share exactly why and it might surprise you. I actually stumbled into this business, but it's a big lesson on knowing when to go all in on something. I'm going to share in today's lesson. So if you're thinking about starting a software business yourself, if you're evaluating your options in terms of what kind of business you want to start, you're going to find this episode quite interesting. So let's get into it. Let's get down to business.

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So in today's lesson is all about explaining why you'd want to get into the software business and why I chose to do it with Webinar Ninja. What are the advantages? What are the things to look out for? What are some other things that you're going to have to put up with and if it's a good fit for you to back up a little bit? I actually just stumbled into the software business because I was running webinars with other pieces of software. I got really frustrated back in 2013, but I loved running webinars because I was getting results. I was selling my products and services using the medium of teaching, which is my background. And I just loved webinars, but I hated the software and the process to pull it off. So I decided to build something for myself, not a product to sell. So again, I stumbled into the software business. I was running lots of webinars to sell my products and services back in 2013, but I was really frustrated with all the software tools that were available at the time. They were clunky, they were hard to use. I had to spend two hours a week just trying to put one together. But I continue to do them because they're very powerful. They sold my products and services. They still do. They help me connect with the world and use my superpower, which is teaching. So I was in my comfort zone when I ran webinars, but again, hated the software. So I decided to create something for myself, something small, something just I can use. I started using it, and my attendees on the webinars I was running were asking me, hey, what are you using for this webinar? And I said, just something I slapped together for myself. And they said, well, can we buy it or can I buy it? This person said, and I never really considered selling something that I built for myself. But through the experiences in business in the past, I knew that I need to have a level of idea validation before I decided to go into this. I wanted to make sure if this is actually viable, people actually want this thing, if it's worth my time. And at the time, I really just thought of it as an experiment and not really as starting a business. So I actually put up a sales page which pre sold what is now Webinar Ninja. I just explained the problem I was trying to solve by making webinars simpler, having one place to build and Market and run and record your webinars and build a system that's by a teacher that's for people that love to teach and not a software that was actually built for meetings. That's what most webinar quote unquote software are built upon the teaching and learning environment that webinars lends itself to and make it so powerful. Or live workshops or live classes are not meetings. This is like saying the classroom is the same thing as a boardroom. So I put this landing page together and I pre sold webinar Ninja. I actually wanted to see, are people really interested? I asked them to put down $250 as a deposit. And the whole point of this was just to see, are people willing to part ways with their money with the solution I'm offering on this page. And lo and behold, they were willing to part with their money. In fact, we said, we're going to open up to 150 beta spots, and those spots sold out in 48 hours. Now you might say, why $1 $250, such a random number? Well, it was the amount of money I needed to be able to fund cleaning up my code, getting a real engineer that knew what they're doing to create a product that's ready for commercial use. So I basically created my own Kickstarter campaign. And when I got that response, it was a huge light bulb moment for me. It was like, okay, this is something people actually want. I'm not even giving them the software yet. I'm just giving them the promise of the software. I told them that I'd deliver it four to five months from now because I still need to build it. I was totally honest and transparent about the situation. When I saw that kind of demand, I was like, well, I can use a little bit extra cash. Let me see if there are more people that are interested. We opened up another hundred beta spots and that sold out in 24 hours. So we're like, okay, we have interest. This is validated. People have given US$250 each for the promise of a solution to their webinar worries. Now, I'm going to pause here for a second because in this moment I realize I have a business that that allows me to push a boulder down a hill and not up a hill. And this is an important moment in time in any entrepreneur's career. They're going to stumble upon these opportunities maybe once, twice, three times in their life. They're rare. And it's important to realize that, hey, when you have a product that people actually are dying for, they're throwing money at you. That's a great product or great market to be in because it's going to make your life so much easier from there on in because you're not going to have problems selling it. And therefore you're not going to have problems growing that team, investing in your business, improving the product and service, and continuing to grow exponentially. They say sales cures all problems in business, and it's hard to disagree with that. So that's kind of how I decided to start Webinar Ninja, because I was excited for the opportunity to build something people actually wanted that they needed and something that I really believe in allowing people to spread their message and teach online at scale. Something that really is a culmination of my whole career as an educator, going back to the days when I was in the classroom for 13 years teaching English as a second language. And I knew that I had this background and I can use that background to my advantage in building a product that was teaching and learning focused. But in all honesty, once we had the ball rolling and we had the pre sales and we had the opportunity to build a product for these people, I just got caught up in the fun of building something for people that they actually asked for something they actually want. And one year led to the next and we're eight and a half years later. And do I have regrets? No. Was it smooth sailing every single day for the last eight years? Of course not. I can probably give you a dozen examples off the top of my head when I wanted to throw in the towel. Why? Because software is a beast. Okay. Building a software business is not like any other business. Now, the advantage of a SaaS business, software as a service, is that you get reoccurring customers, meaning that they sign up and they pay you every single month or every single year for the service. This is great because you get reoccurring revenue. It's the holy grail of a business valuation. You get high valuations because companies want something that has reoccurring revenue. When I say companies, I mean other companies that may want to buy you one day. The value of your company is quite high. You can get multiples of 5, 6, 7, even 10x. Some SaaS companies get 30x of their annual recurring revenue. That is pretty significant. Now, the reason why that is so valuable is because you're adding so much value to the customer's experience. And it also means you need to earn your customers every single month. You gotta make sure you keep them happy so they stick around. So they don't cancel. This means a never ending hamster wheel of work because in software there's no finish line. And I learned this from my friend Noah Kagan, who told me this early on that hey, in software you're never going to be done. As soon as you release a new feature or a new update, your customers are going to be like, this is great and all, but can I have this feature? And you got to be okay with that. The other thing is that in a software business there is no downtime. You're constantly working, you're constantly pushing, constantly improving. You got to be on top of your business constantly in terms of security and maintenance. Of course you can't go down. It's a huge problem and a huge loss for a lot of companies. When Facebook goes down for a few hours, they lose tons of revenue. So will your software company if you do that as well. Going down is something you don't want to happen. So there's a lot of pressure, There's a lot of work and constant work. There's no seasonality. It's not like things slow down at a certain time of year. I think maybe given that my SaaS company is a B2B company, there's a bit of a slowdown between Christmas and New Year's, but outside that week it's full on all the time. Now one of the things you learn really quickly when you build a software company is you can't do this alone. You need to build a team of talented, bright, hardworking, positive people that can help build your dream, right? You have this idea in your head and you can't just pull this off by yourself. You need a team of great engineers and managers and copywriters and marketers and customer service professionals and customer success professionals so that you can make this all happen seamlessly for your customer. The advantage of this though is that you can start to step away from the business more and more and focus on bringing in big clients, working on the branding of the company or even just stepping away totally and having somebody else take your place and you reap the rewards. That is a lot of SaaS business founders dreams is to get to that point. One of the things I also love about a software company is that it's a long term play. I like long term games. I like games that take a while to start getting good at getting momentum, to start winning. People don't realize that these companies that seem like are huge and they're making so much money, they feel like they just came out of nowhere. A company like Mailchimp started by Ben Chestnut and Mark Armstrong started in 2001, so 21 years ago. But it's only recently that people started hearing about them. Yes, they make $700 million in revenue every single year, but those first five, 10 years were really slow. I like that kind of story. I like that kind of business that gives me a chance to really build momentum because things that take a long time last a long time. If you're thinking about starting a software company, my best advice to you is to say to yourself, this is a long play. This is going to be at least 10 years of my life. Because then it allows you to not rush things and do things right and build the right systems and hire the right team to make it happen. Gas, snacks, tolls. 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To wrap up today's lesson, I started a software company because, hey, I became an entrepreneur to be able to impact the world and help others. And a software company allows me to do that at scale. There's only so many people I can coach, there's only so many people I can teach. But with a software company, I can help millions through my vision, through what I believe can help other people through the software. And I don't have to do it alone. I could do it with a team of people that are smarter than me in a lot of ways, have more skills in different areas that I don't have skills in. And I get to be the orchestrator. I get to be the person that deploys all these great talents in the right way. So that way we can build an amazing solution for our customers. The one piece of advice I would give somebody who's starting a software company is that quality matters. Build a quality product that solves a big pain point for people and it makes your life a whole lot easier. Because if you're solving something that has a strong enough pain that people are willing to pay for, you're not going to have a hard time selling it they're looking for you, okay? And when they find you and they use your product and it's a good product, it's a quality product that's reliable, that does what it says it's going to do, they stay for a long time. And that's a formula of a great SaaS business. Thanks so much for listening to the $Hundred Dollars MBA Show. If you love what you hear, hit subscribe. Hit follow on your favorite podcast app so you don't miss an episode. Also, by hitting subscribe you get access to our archive episodes, over 2100 episodes in our archives. By the way, if you want to dive into specific topics like marketing, like getting started, like finance, we have curated these episodes in our back catalog and we call them Power Packs. And you can check them out on our website100mba.net right on the homepage you'll see a link to the power packs. You'll see a red link that says Start here. Before I go, I want to leave you with this. I know a lot of software founders and software business owners, and it's one of those businesses that can break your heart. It's hard. Things go wrong. It's tough to find the right people to build your software. There's disappointment, there's slow growth, there's bad actors and hackers and all kinds of stuff. It's challenging. So if you're finding it hard as you get started, don't worry, you're in good company. That's how it's supposed to be. I wish somebody told me that when I got started. Thanks so much for listening and I'll check you in tomorrow's episode for our Friday. I'll see you then. Take care.

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