 I'm Ray Crowe, founder and CEO of Humble Impact, the nonprofit arm of the Humble Ventures Cooperative. Welcome to today's Gist Guru program on how to run your startup. For the next 45 minutes, my colleague, Melissa Perry and I, will be filling and answering your questions. We'll do our best not to suck. Melissa is founder of Products Labs, where she coaches, trains, and consults with clients on product management. I followed Melissa for some time now, and you're going to get some of the best advice you could ever get today, specifically with understanding lean, agile, and overcoming some of your biases towards both of those. You can join our conversation by sending us your questions, comments through the chat roll on the right side of your screen or through Twitter at hashtag Gist Guru. While we wait for your questions to come in, I'll open up with Melissa. This is one of the things that she's talked to for those of you who have been on her blog, who have viewed several of her conferences that she's been at and has been fortunate to video and hang out there in the open source web. And I think it's important for the audience specifically today. So, Melissa, why should people look at lean as a mindset and a culture rather than a method, a tool, or process? Hey, everyone. That's a great question, Ray. So, when we look at lean, a lot of the times we think about lean startup as Eric Grease actually wrote about it in the book. But what we have to understand is that lean actually came from way before that book was ever written. That whole methodology of lean really comes from Toyota, and that comes from all the way back to the mid 1900s. And Toyota had this methodology of lean ingrained in its people. And what they talked about there is that it was a culture of improvement. So, when Toyota actually founded this and when they had their employees working under these practices, their entire goal was to improve how people worked. So, they made it a culture that everybody would be analyzing what they do, how they can make themselves better, how they can make their processes better, and how they could grow as people. And they practiced things kind of called the improvement caught up. So, this is one of the things that Toyota did that was really great. And what it does is it looks at where are you now? Where do you want to go? And how can you run small experiments to try to get there, right? Like, what do you want to actually improve upon? So, they made everybody from the person who was on the shop floor, right? The person who was like sweeping up all the stuff at the metal factories and putting those cars together to the CEO actually practices. And they had coaches to do it as well. So, this became something that was really ingrained in their entire being as a company culture. And that's what we really need to think about for the startup as well. Now that we're into this other world and we've been applying these practices to software, it's not just about throwing up landing pages and seeing if people, you know, land on your patients side up for it. It's more about how do I systematically learn enough to make sure that my startup is what people want? How do I learn about my customers? How do I learn about business goals? How do I take small experimental steps? And with that as well comes this culture of one learning but also a culture of being safe to fail, right? We know that when we try things, it might not always work. But if we keep trying things, we'll learn more. So, we don't want to, you know, shy away from risk taking. We don't want to shy away from actually putting something out there and seeing what people think about it. And that's a really hard thing for people to adapt to with startup culture, with any kind of software culture, right? I work with some of the largest companies in the world and they are terrified of experimenting because when you put something out there, you might be wrong, right? But you won't know until you actually try. So they'd rather not try and just put it out there and be like, it's out. You know, we launch software, we're good, right? Because to them that's better than actually taking a step to see if it's right or not because that means you have to change. You have to be adaptable. So, Lean, we really have to think of as a mindset of getting comfortable with experimenting, of learning, of focusing on that rather than focusing on shipping features. Yeah, I was going to say, I know you've had a lot of experience before going into your own startup with, how does that look within the enterprise and specifically between the two different environments where some people, they get it and they understand it and they understand the value of it versus the ones who may not be interested or who have had bad experiences with people who wanted to institute Lean in their organizations. So I think that's helpful for everyone to understand depending on where they're coming from. They may work in an organization that's established a current business. They may work in a new business, so what we would oftentimes refer to as a startup if it looks or smells or tastes like a technology-based company, which most people I think get into trying to understand the difference between a small business and a startup. And so I think for the audience to understand that the application of this and the understanding of it as it's ingrained in their culture is important no matter what organization that they're in. Completely. And I think too, the differences with startups and enterprises is it's much easier to try to apply these practices in startups. You're smaller, you have less bureaucracy. You're not so constrained by the way you've always been working and I find that is the biggest mental block in enterprises. We've been doing it this way for 20 to 30 years, so why should we change now? Whereas if you're a startup, you literally have to innovate. You have to learn or you will go out of business. So it's easier to try to adapt these processes, but it's also something that startups have to remember as they grow. Once you raise $40 million, you can't stop learning. That's not the end of a lean mindset. That's not the end of your startup sauce that you've been putting together before. You have to keep thinking about that. How do I learn about my customers? How do I take risks? How do I experiment to de-risk that we build the wrong thing? So it's very different between the two, but I love working with startups because they're usually a little bit more willing to try things. That's actually a good segue. I think we were just very serendipitous as the conversation led. One of our first questions come again, so those of you who are out there, we're actually fielding these questions and you're about to see it. Our IRC viewing group in Madagascar asked, what's the difference between a startup company and a business and what's the weight of technology in a startup? Yeah. I guess I'm trying to interpret what that question means. What's the difference between a startup versus a business that's been around for a long time? How are they different? I would probably even break that a little bit further. We deal with this within the humble community all the time as to what's enterprise versus what's an established organization. What's small business versus what's a startup? So I think it may be helpful for them to understand what is the difference between a small business and what's the difference between a startup maybe first. That's probably a good place to start from and then maybe we'll talk about established organization and then a startup. Okay, so let's start with that. So the difference to me between a startup and a small business, when we talk about startups, they're usually characterized in today's nomenclature as a company that is not profitable yet. So one that still has to rely on venture back, venture back funding to actually get going to become profitable. And it might have something to do with technology, although that's not always the case, but that's usually what you hear when you hear startup these days. I think to the difference between a small business is you might be able to get that profitable immediately, depending on what you do, but I still think there's a lot of parallels between them. So for me, example, I started my business, which is a consulting and training firm about three to four years ago, and I would consider it a small business, but I still had to use all the techniques I did when I was building a startup for technology to actually get it running, right? I had to make sure people wanted it. I tested the content. I tested all the things I did to make sure that whatever I was building, you know, there was demand for. So I think it just really classifies where you are in the stage of building your product and developing it. With startups too, usually you're somewhere hovering around this line of product market fit, and this is a really big term in startups. And product market fit means that you have a product that a market actually wants and demands, right? So you found something that the market desires, they'll pay you for it, and you're trying to get that established and grow. So some companies in startup world are actually a post product market fit. They have something that people want. They found a solution, but they're not profitable yet because maybe the operations getting there have taken too much money compared to the profit they're bringing in, so they have to scale it. So then you're still in startup world when you're trying to do that. That to me is the difference between those two. Yeah, I always explain to people the lean mindset and why we look at it in that regards versus is it lean, think of the traditional Toyota model of being established in enterprise versus lean startup which may look more like Eric Ries and Ash Mora company, right? That no matter what and no matter what camp you may find yourself in, the philosophy, the methods, the tools that you use, you could use if you were writing the next novel, you could use if you were launching the next grocery store. It could range between small business or venture-backed businesses. It's making the best use of money more specifically and for us at least it's always time is the most valuable thing to do. Yes, that's a big thing because you don't want your competitors to swoop in there and disrupt you or more importantly like a big company. Google or Amazon could probably do what you're doing if they really, really wanted to very quickly. But if you do the right processes, if you have that lean mindset, you could probably operate faster than they are, be more in touch with the customer because you don't have as much corporation baggage waiting on you. Right. One of the follow-ups they had was what's the weight of technology in the startup? Yeah, so this is an interesting question and this is something that I feel like I teach a lot when I do lean startup training for startups. So technology is great but you have to remember that technology is a solution to a problem. If you don't have a problem that you are solving that is very clear for your customers and your customers are like, oh, this is a crazy problem. It's bothering me. I'm so frustrated by it. Then it doesn't matter what technology you throw at it, you will not be successful. So technology has a play and solving problems with technology is great but you have to make sure there's a problem there. But if you're a very early stage company, you can do a lot of the work without technology. You can go out and talk to users, you can observe them. You can figure out what context they have the problem and you can even do like paper prototyping or build small things with tools that you have on the web. I like to use tools like there's landing page designers out there that you can use yourself or you can put together a WordPress page. Actually, Zappos got together, got built, you can do a WordPress page to validate that people would buy shoes online. That is exactly how Zappos started. So Fred, who started Zappos, when will people actually buy shoes online? He put up a WordPress page, put a bunch of Nike sneakers on it, and then when people purchased them, he went to Sears, bought the shoes from the department store and then shipped them to people to fulfill the order. So very little technology there. There is no backend. There's no infrastructure. There's no crazy technology thing. He put up a $10 WordPress site and just tested it, and that is how Zappos started. So you don't need technology at those early stages to make you successful unless you are very tech... You know, unless your entire business model is based on technology, right? Google's algorithms were based on technology. They need technology. But a lot of startups, if you're working in a B2B area or even a consumer goods area, you might not need as much technology as you think to get started. I think that's important for people to understand just what exactly is out there. Good business models to maybe, for lack of a better word, to mimic, to understand how they used the low-cost small batch testing that they did. They even understand how big the problem really was that they were trying to solve. I think when we look at that, you know, what resources would you recommend? Especially, I think, for early-stage entrepreneurs they're looking to learn more about both, you know, how to run lean, how to adopt and incorporate, as well as agile startup. Yeah. The lean startup is the best place to start, right? That book is great. It gives you a lot of techniques there to really understand how to test things in a minimal way. That's a great place to really start learning. There's a couple other books that are out there, too. Dan Olson wrote the Lean Product Playbook, which gives you a lot more ideas on how to experiment in minimal ways. That's a great one. David Bland is another guy on the Internet who is awesome. He's one of my good friends. But he works with startups to get them out there and testing things. Another guy who does this, too, is Adam Burke. So Adam and I met doing Lean Start Machine around the world. We were traveling companions where we go from place to place and teach people how to start up a company over the weekend. These guys are great resources. They all have blogs out there. They will all tell you how companies have started with zero technology whatsoever. It's a really great place to start. Another one, if you're interested in landing pages and trying to understand that, Unbounce is a great tool to use to build landing pages very cheaply and very quickly. It's all drag and drop. You don't need to know how to code for that. There's quite a few other ones out there that do the same thing, if you look for landing page design. But I want to stress, too, it's not just about landing page design. You can validate your company with many different ways. We validated even in enterprises you feature ideas using Excel sheets. We would send people all the data they wanted on an Excel sheet and say, is this what you want? And they would be like, no. And then we would fix it and then send it back instead of spending six months building something hard-coded in there. So we would test things in very lightweight ways. It's all about I like to think it starts with the question, what do I need to learn next? So when you're building a company, ask yourself, what do I need to learn next? What's the most important thing I need to learn? How can I learn that as quickly as possible? And you get very creative when you put yourself like that. You try to figure out how can I learn in a week? How can I learn in two weeks? And it's all about just getting feedback from your customers. What I was going to say, and that's really the secret that I think a lot of times you can get a little bit enamored with what technologies exist out there, what new resources are. But I think if you have a clear understanding of empathy and how to conduct, I think, appropriate problem and solution interviews, most of your early, I think, time should be out the door actually talking to humans. Yep, exactly. There's a great book out there, it's free online, called Talking to Humans by GIF Possible. It's a great place to start if anybody's trying to figure out how to talk to people. Yes, I concur. For all the startups we work with, that's one of the things, free download PDF and then share with everybody. It's a quick read and it's fantastic. On that note, I guess technology is fairly popular out there. One of the things I think that's helpful for folks that are looking at doing this is with the emergence of Slack and Trello and others, what types of technology may be beneficial to helping, especially I think the more traditional startup when we think about those that may be bootstrapping to investment, but will be venture based. What are some of those, and I would say, I'd probably add to it, what's some of the pros and cons to that? With the stuff that's out there today, I can give you some ideas. I just launched an online school for product management. It was just me and one other person building this thing. It was a big undertaking. I found that me, myself, I was strapped for time. I was trying to figure out how do I harness all these tools, how do I make things work together. One of my favorite things that I found was actually Zapier. What it does is it lets applications talk to each other. What I did is I hooked it up to the platform I was using for the school and every time somebody signed up, it would trigger an email and MailChimp. Then I didn't have to send each individual person emails. I could set everything up, I left it and I didn't worry about it. It works almost too well because I'm like, did that go out? I forgot about it. Let me just make sure everything's running, but it does. It runs perfectly fine. If you're bootstrapped and you're strapped for time, Zapier is awesome. It does so many things that can make your life easier. That automation piece is amazing. Also to get started, I'm a huge fan of MailChimp. MailChimp allows you to validate things very quickly. For instance, we were working with, I was working with a startup two summers ago in New York. We were trying to, they're still early stage, about a year old, 20 people working there. They were trying to promote women's career paths. They were a women-centered startup that was trying to promote people, teach women how to get promotions, how to negotiate, how to go out there. We're trying to figure out how to productize their site because it was all content right now. We were able to test things using MailChimp. One of the ideas that we had is that people would pay for these small bite-sized guides that would help them in different areas. What we did, instead of building all the stuff online, making new content, we looked at what we had, and we started sending out email chains, right? An automated drip that would go out every single day. We're able to validate that people were very interested in it through that, instead of building any code. We didn't need any developers to actually do that, which is a pretty cool thing. I'm a huge fan of using MailChimp. It's free for the first thousand subscribers on there, which is all you need when you're just trying to validate something. Trello is great to start figuring out how to prioritize your work. We get into these big debates, especially in the agile world, about what tools can I use to keep track of my work, right? Do I need Trello? Do I need JIRA? Do I need these things? To me, it doesn't matter. Use whatever's going to make your team keep on track. Trello is great to say, this is what we have to do. This is what we're working on. It really shows your flow of work so that everybody's on the same path. I like it a lot. My biggest issue with Trello, personally, is that I forget it exists. So then I have to go open the website and say, oh, yeah, that's it. If it lives on my desktop screen, that would be a different story. But I think a lot of those things can be replaced with really good communication, too. So the more you talk to your employees, the more you talk to your teams, the less you need all these tools to kind of handhold you, right? It's good to keep track of what you're doing, but you don't need anything fancy to do that. There's Kanban boards out there. They're called, and they just sit on walls. Like they're posted notes on walls, right? It's the lowest tech thing you could possibly get, but it works so much better than a lot of the technologically advanced solutions. So if you're interested in Kanban, a good place to start is Jim Benson's personal Kanban, and it's just really like, to do, doing, done, but it expands on that, and it helps you manage your work. I go into companies all the time. It's the largest companies in the world, like 88,000 employees. Walls are covered in these boards. They're not using stuff on their computer, or they might be, but they don't use it as much as they use that stuff on the walls. So to me, that's important. And the last thing you mentioned was Slack. I love Slack now. So when I started my school, a big thing I heard from people when I was doing the early interviews was we wanted to build a community. So how do we build a community around it? Slack is great for building communities when you're trying to launch a new product. So you can get people out there. You can get them talking to each other. A lot of companies have started this way. A lot of people have promoted their products this way. So for my school, we have all the students talking to each other. And it's, I don't even, like sometimes I'm like, oh, I have to respond. They already responded to each other, right? They're having like such a great time meeting each other. So it's a really powerful tool to build communities. It's also a powerful tool to keep in touch with your, with your employees at the start-up, right? If you're a remote team, especially, you use Slack to like talk to each other every day to communicate, to let people know what you're working on. I really love it for that. The best team I ever worked on was actually a remote team. My developers were the best developers I've ever, ever worked with my life. I love that team so much, but they were in Nashville and I was in New York, but we talked to each other every single day on IRC, which came before Slack. We had this rapport because we talked to each other so much and that made all the difference. Yeah, I think a lot of times it's, people don't start with what are the, you know, what are the processes that you have to have in your business. How much of that communication and flow and your project planning is done with just post-it notes, dry race wall, put your block paper, and then as you decentralize task and responsibilities and people, leveraging technology is there to optimize your ability to make gains. Yeah, and too often what I find with companies is they're so obsessed with trying to get the latest technology out there, it actually slows them down trying to adopt it because they don't need it, right? Like if you fix some of the other social issues about communication and, you know, good planning, you'll find that a lot of these technologically advanced solutions don't matter, right? You can solve them. So I would say if you are trying to adopt something, it's not working for you and everybody else is using it, it just doesn't work for you. Get rid of it. Go back to doing what you were doing. Right. One of the questions that came in is on that topic of project planning. They had asked, understanding these methods that we've discussed to this point, how do you go about writing a good project plan? Yeah, so that's really interesting. So most people are using planning in, they're using Scrum to do planning, which is agile. Scrum is great. Scrum has a bunch of, only when you understand why you're using it. So let me put this caveat out there. A lot of teams get into this habit of doing Scrum, which basically makes you the gist of Scrum, here it is, is that we have a product owner and we have the developers and we have a Scrum master. And every week we get together or every two weeks and we look at the backlog of work we have to do. The product owner figures out what's the highest priority. The developers figure out how long it's going to take and then we decide on what we're going to work. That should be, that is essentially what you should do with a project plan is figure out what are, what can we get done in two weeks and one week and in that much time. What happens with Scrum is that there's a lot of rituals that go with it. And too many teams get really bogged down by the rituals, which is doing daily stand-ups and talking to each other and they don't understand why we're doing it. So the whole reason Scrum was created was to force people to talk to each other and understand their work. So that is the key for big project planning, right? Break down your work into small increments. Try it, you've got, when you're starting a company, there's 70,000 things that you could possibly do and something will always get piled onto it. What you want to do is you want to sit there with your team and look at what you have to do and figure out what's the most important thing we do first, right? So break it down into small manageable chunks. Then try to give yourself a little bit of a time box. You're trying to release quickly. So Scrum works in two-week sprints, which means that we'll build things over two weeks and then we'll ship it to customers, get their feedback, see what happens. You can do that for experimentation. It doesn't have to be just software. So you can say, on week experiment where we put together this Excel sheet, bring it around to customers, get their feedback, iterate on that the next piece. So elements of a good project plan. Breaking down the work to small increments, right? That's a really big thing and understanding the work. In those meetings, you really want to say to each other too, if you don't know, I don't know how complicated this is going to be. We need to go check it out. And then as a team, you say, okay, let's go, let's spend a couple of days actually figuring out the complexity of this work, right? Let's figure out what we have to do. And then you can come back and say, okay, I think over the next two weeks, this is our top priority. This is how long it's going to take. This is what we're going to learn when we actually ship it. And this is our goal for the end of the two weeks. If you put that out as a solid project plan, you can usually get really good feedback on what you're trying to do. Great. I think as we've talked through, you know, the different methods and the different tools, some of the questions that now start to emerge, specifically from a couple of our groups, how do you not get discouraged, right? So, you know, as you're going through, you know, either you're just learning and understanding the application or you're working with others to make sure that they understand what you're trying to do. And it's a little bit longer in the tooth than what most people would like to hear. That, you know, how do you help, you know, I think negotiate that, especially whenever you're thinking about, like, funding, right? So you only have a limited amount of money. You're trying to balance effort with also trying to inspire other people to join, as well as, you know, getting sources to the next round of capital. How do you not get discouraged? You know, what are some of the things that you do? And then, you know, how can you handle failure? And that failure, you know, maybe that, maybe you did run out of runway, right? Maybe you ran out of money. Maybe you weren't able to get the right teammates on board. Like, help us understand some of those things a little better. Yeah. For me, so for me personally, I can tell you my little story about failure. And it wasn't so much failure as a company, it was more failure with my teammates. So when I was in Italy, I was in a startup accelerator run by the Italian government. And we were trying to take a lean startup approach where they, you know, shoved 65 people together from around the world. We're from 10 to 12 different countries. And we had four weeks to find co-founders, come up with an idea and then pitch it to the government to get 25,000 euros and start it up. And everything went wrong. They could possibly imagine what wrong because it was Italy. And I loved Italy, but I do not like working with the government in Italy. So what happened was the, I found two co-founders that I will actually three at the beginning, right? Who I really wanted to work with. We had an idea and everybody was like, you are the best startup in this program. You guys are so, you're so strong. You're such a strong team. But on the inside, we actually were very dysfunctional. And there was a lot of fights for power. There was a lot of cultural differences that got in the way. And eventually I was even kicked out of my own startup. I will say. So like at the end, it just got to be where there became like a power play, right? And it wasn't about the business. It was about egos. So I chose to left leave and start something myself. I wasn't really passionate about the thing that I was building. I was doing this more to build a startup because that's what we get into. And it took a toll on me, right? Like I came home to New York and I felt very discouraged because a lot of the reason we broke up was because of personalities. And my co-founders at the time were telling me that I didn't have a good personality, right? I was too strong. I was too, I was too curt with them, they said, when I talked. And a lot of that was social stuff, right? They were Italian. I was American and we're very straight into the point in America, right? Like the Italians, I'd go, I'd go in and they will spend 30 minutes talking to each other and getting to know each other, which is amazing. But it wasn't a culture that I really knew. And it wasn't a place that I really knew how to operate in. So when I came home, I took a lot of time to regroup. I kind of assessed, you know, is it me or was it the fit, right? And I think that's a big part of that. So when you're dealing with co-founders, you have to look for a fit, right? Like you have to be passionate about the same things and you have to be passionate about the company, not passionate about yourselves. I think that's like a really big thing I learned from that experience. So when you're feeling discouraged, it's one of those things, don't feel like it's just you, right? Everybody who's doing a startup right now is so discouraged, right? Like they're going through such a hard time at the moment. And there's millions of medium articles out there from the top founders in Silicon Valley who talk about how much it took a toll on their well-being. It's a really hard, it's a really personal thing. The way I manage it is I try to look at everything now as a learning experience and an experiment. And I feel like I experiment a little bit too much. So I'll go in there and I'll say, you know what? I'm going to try this company and even if it fails, I will have learned so much, right? I will have learned, and I did when I was in Italy. I learned how to pitch to VCs. I learned how to do corporate or startup finance, right? I learned how to go and incorporate something. I learned what happens when you do stock percentages and try to give out shares. And there's so many things I learned about that. But I also learned that I would not do a startup accelerator again unless I was at a certain stage in my company and that co-founders are the most important things that you can choose wisely. And I think if you're not sure about your co-founders now, it's time to sit down and talk to them and get that cleared up before you decide to move on. Like that's really your backbone. You have nobody else to help you, right? And you want somebody there who's really, really going to support you. I think that's important. And I'm going to bounce around in our questions. Audience, great questions coming in. Please keep them coming. We'll go through as many as we can until we run out of time. But I think as we're talking about the importance of you establishing the startup, what does it take to be able to do it? The importance of your team. Some of the questions that have come in, I'll kind of bunch these together a little bit and let you continue with that. How do we know we can start a startup? How do you know that you can do that? What are some of the fundamental things we need to have in place? Okay. This is all mindset, right? This is what, if I've learned anything, I've worked at very large enterprise like things. Then I worked at a startup that raised $40 million, and I was like the 30th employee. Then I worked at a startup that had $80 million. Still startups not profitable yet, even if it's got $80 million. That had 200 people. Then I started my own and now I coach startups. Honestly, after seeing all that, it really comes down. You can start a startup if you're passionate about what you're doing and you really concentrate on solving a problem. You try to be profitable. This is the biggest thing. Let me start from the beginning. Passion about what you're doing. The biggest thing I learned from that Italian experience was it's not just okay to have a good idea. You have to be willing to give up 80 hours of your life a week to work on that idea. I'm not for staying in the office until you drop dead when you're building a startup. I work a lot now, but I don't work nearly as much as when I was in a full-time job because I've learned to prioritize my time better. I can get way more done in five hours a day than 10 hours a day because I know I stopped being productive. It's not about time that you put in there. It's just that, are you spending your time on something that you feel strongly about, that you are passionate about? The stuff I do now, love it. I have a mission. I want to teach the world how to do better product management. I want to get companies really structured about products. That's what makes me tick. That's the only reason why I like working on Saturdays. My friends will be like, why are you not coming out with us and going to brunch? I'm like, I like writing my stuff. I'm figuring out my school. I enjoy it. It's things that you have to feel excited to do during downtime. You also have to remember to take a vacation. I'm terrible at this. At a certain point, you need to give your brain a rest. Take a vacation, get out there. If you're passionate about what you're building, that's key one that you can do anything. The second part about it is you have to have a problem. Find a problem that you love solving. It's about that passion, but if you can find a problem where people are actually experiencing it, they say they need a solution for it. You've found something to work towards solving. Now you can iterate on different solutions. Don't fall in love with the solution. Fall in love with the problem. It doesn't matter how you solve it if you love the problem. You can start separating yourself from how you will solve it. I think that's the biggest trap founders run into. They get so hooked on the solution idea they came up with that they forget about the problem. Focus on that problem. Third, I forgot what I said for third. I was like one right out of my head. I guess the other thing too is that it doesn't take a lot of money to start a company. You have to focus on trying to make that company sustainable. That's it. A lot of people look at companies like Facebook and Twitter, and they say they got very big, but they had no money. So I work with some of my students who are in my class right now are startups, and they'll tell me, oh, we really need to just onboard as many people as we can onto our site so that companies give us money. That's really not how it works. You have to be careful with VC money. And you don't need VC money. I learned personally for myself I will not take outside money until I can prove that I'm profitable and I'm at a certain later stage where I need it to scale. That's the only reason I would take VC money. If you're in early stages, bootstrapping is the way to go because you retain a lot of control over a company. So that means you have to monetize it, right? Start charging immediately, figure out how to do that. Do freemium models if you have to, but figure out how to make money off this because it is not sustainable for you to keep working on things if you cannot figure out how to be profitable. Yeah, I think that's important, especially given the nature that if you are a user-centric product, the offering isn't complete until you have good pricing, right? And it's not, it's just you provide a solution to a problem. A lot of people lose sight of that. Well, we will make money. Well, tell me the model by which how you're going to make money because if you can do that even earlier on, you're in a better negotiating position with those venture-backed people. Being an investment arm ourselves, it's one of those things that we're in the same boat where we encourage people there's probably a time and no two business models are really the same, but there's a time where you'll likely need money, but you also want to be in the best position possible. I think not only to receive and use that money to scale accordingly, but I think also to make sure that the business in itself is still sustainable. If you're interested in that problem, if you're in love with that problem, the worst thing you can do is go back and trace the history of some companies where they get a merger and acquisition, Enterprise X bought them, fell out of love with whatever they were doing, put the offering to bed, and now there's that whole host of people who are still out there that now don't have that problem solved. I think that it's the balance and the weight and understanding why you even started this to begin with and probably not be revolving around money as a subtle thing. I think you can probably attest to this too. The only thing investors like more than a sizable market that you have acquired onto your platform is that you made money. Investors like it when you make money. I would go for that because that's more of a sure thing rather than acquiring 10,000 people onto your site. Absolutely. What's the amount of users you need to close the first revenue exchange deal? That's the thing I think whenever you talk about earlier about this small batch testing and the experimentation of assumptions that if your model requires users and paying customers, traditional advertising, et cetera, you still have to have those two things closed, right? You can't just say, well, oh, we're on a path. We'll explain and help me understand what that path looks like. Some of the other things that have come in that's along the lines of your team and early stage and how you make some of these decisions, and I talked about this with your own experiences of being in companies, how much do you pay your first employees? I think it's maybe even better to take a step back and say, how do you even look at that? How should you look at the talent that you bring on to your startup? Is that a founder? Is that partial equity for salary? Is that full salary? Maybe to help them understand that maybe a little bit more. And then also, when should you establish a physical presence? One of our viewers out there are working specifically with remote teams, and so when do you need to have a physical presence, if ever? Yep. To me, with the employee thing, you should always pay your employees enough to live, right? And this is something I see startups not do and it really makes me upset. I see this happen in the U.S. as well, where we have unpaid internships. Employees cannot work well for your company if they cannot feed themselves, right? Or house themselves, and they have to worry about paycheck to paycheck. So make sure you understand that. I see a lot of companies to try to pay people just in equity when they're very small. I've gotten this to as a consultant. It's like, well, you're a consultant. We'll just give you equity in exchange for your time. And a lot of people who are not well-familiar with startups would say, oh, great, because this could be the next Facebook. And I really know, equity rarely ever turns into cash. Even if you get acquired, you have to pay back all the investors, all the founders, all the outside money that came in first. And there's usually very little left over in 99.9% of the cases for the employees. The only way you make money off equity is if you get acquired by multitudes, like 20 times more than what was put into your company. And then you might not even get a lot. So really understand that. You trading equity for somebody's time is not the best deal for that. So I always try to make sure that it's very ethical and fair when we hire employees on. You want to make sure that you're giving them a salary that might be slightly below what the standard is out there. If you're going to do that and you're still strapped for cash, that's OK. But maybe make a deal with them. Maybe you don't need those employees to be full-time. Maybe you can make them four days a week if you only have a certain amount of cash and they can freelance on Fridays. Like try to figure out how to work it out that way. So it's really interesting to really figure this out. For equity-wise, it's always good to give somebody who's spending a lot of time who's dedicating some share in the company. That's great. Equity should be a bonus. It should not be looked at as the sole way you're going to pay people. So when you are looking at equity and how much to give, I'm not an expert on this. There's a lot of documents out there that will tell you how to do it from investors. The thing to remember is you want to make sure that they're spending enough time in your company for that to actually invest. So that was the biggest advice I got in Italy. It was like make sure these things don't invest immediately, which means that you just hand them shares. Make sure they invest over two years so people don't just work for a week. Take the shares and leave because if they leave, they will then have those shares forever. So you want to give them options and you want to make sure they invest over time. The right amount, I'm not exactly sure. Something that you probably find on the web. But it's really important to have that cliff, to have that two-year cliff, one-year cliff, whatever you're going to look at for that. But knowing that to make sure that you have a salary that actually matters and will attract the right talent. For me, when I was starting these companies, it's the biggest, I had, I started them very frugally. Like I put a little bit of money into it, not much. But I tried to just focus on monetizing, getting as much profit in, and it got to a certain point where I couldn't do everything myself. So that's when I started hiring people onto my business and working with them. And it was scary for me to actually trust somebody with that amount of work. That was my biggest fear, it was like, oh no, are they going to be as good as me? Are they going to be dedicated? And when you pay people a decent salary, that they're happy with and they don't feel like they're struggling. If you pay people under what they're worth, they're not going to be happy and they're not going to be dedicated to you. So you want to pay them what they're worth. Then you will get people who are dedicated to you. Then you also have to trust them. You have to let go. That was my biggest thing. I had to just say, okay, this is where we're going. How do we get there? And I asked for their opinions and I let them participate. And then they feel like they have a share in building something. So that was one of the hardest things for me to actually learn was hiring those employees for the first time. But it's amazing when you get good people, right? Like hire slow, fire fast is a big thing. But make sure you have the right people working with you. That's awesome. Well, I know that we're getting close to time. There's a handful of other great questions that are out there. I promise we'll snag them. We'll draft up some response, either to hang on one, both, or multiple blogs. And then get it back out to you through the hashtag Gist Guru. Just to make sure that we've closed the loop for everyone out there. And please keep them coming in too. I mean, now you have our Twitter handles. You know where to find Melissa and I. And so before we wrap up, I do want to leave it with Melissa to just say, you know, what's one of the most important takeaways that folks could leave with today? Yeah. I think one, remember that the most important thing in a startup or any company is a mindset of learning. Just always be curious. Always try to learn about your business, your customers, if what you're doing is right, right? Like focus on learning. That's the biggest thing, not building, just learning. Two, startups are hard. You're not alone, though. There is a big community of people building startups out there. So if you feel like you're alone or if you're a little discouraged, reach out to those people. I felt like that as an independent consultant before my company grew. And I found other networks of independent consultants to talk to. And that really, really helps. So you're not alone. A lot of people are going through this and just focus on that problem, right? So fall in love with your problem and not with your solution, which is what I just realized Ray's shirt says. It's really 45 minutes. But really focus on that problem. If you focus on the problem and you're passionate about that, you can start a company. That's awesome. Well, thanks everyone for joining us today. It's been a great conversation. A big thanks to the guest team for making this all accessible to everyone and to overcoming, which is something that I always have a hard time doing, technical glitches. And so we haven't had any of those today, which is great. Please tune in again, February 14th for those of you who aren't out enthralling in the Valentine's Day celebrations. We'll have an incubator or accelerator. Does your startup need one? I think we'll just attach on that a little bit earlier as to her experiences. I think it'll be a great conversation and you definitely won't want to miss out. So thanks for joining us again and we look forward to seeing you again soon.