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Dan & Ian
Full Transcript
Dan: Hey, thanks for clicking play on the TMBA podcast. I got the Bossman here live in the studio.
Ian: In the studio. I’m sorry about my voice. My allergies are just in full effect. I don’t think you’ve experienced this yet, Dan, but live here for a couple of years and then your allergies start to kick up. It’s like Texas is constantly trying to kill you. I mean, it’s the allergies, it’s the rattlesnakes, it’s the tornadoes. Depending on what part of Texas you’re in.
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Dan: Texas makes tough people, makes tough businesses. Increasingly, that’s what we’re here doing today literally, in my studio, talking about so many business initiatives we got going on. First, I want to introduce the concept of today’s episode, Ian, if you identified a really smart entrepreneur and gave them the TMBA gameplan derived from not just our ideas, but the ideas of our guests over the years. things we talked about over and over again, like the 1000 day principle, the power of working on your business, not in your business, the Saturday morning side hustle, baselining and affordable locations, building profitable SaaS companies. This episode, this journey we’re gonna share today draws a line through all of it. So I think you’re all gonna really enjoy it.
But before we get to that, I just want to share a few business strategic updates about what we’re doing, specifically at Dynamite Jobs dot com. Another narrative we’ve sort of been following from day one here on the podcast, we had an episode about paying for that M, for example, at the end of the co. And we’ve been just doing a lot of interesting things. And one of the things that have popped up is that the early returns suggest that for the first six weeks of the new year, we’ve had just a major breakthrough in terms of revenue growth. The first month of the year, we put $30,000 worth of revenue into the month, and we continue to have a strong February. So it’s incredibly exciting, a little disorienting because there are so many things going on, you know, what’s your take on having seen a dramatic jump up in revenue for us?
Ian: You never know why. Right? I’m always skeptical. So part of it, first, is the beginning of the year, people are trying to get hiring. That’s what we do over Dynamite Jobs right now. So I’m thinking, ‘Okay, is this just the beginning of the year push?’ And then I’m seeing a lot of repeat customers come back. And I’m like, ‘Oh, that’s interesting’. And I’m asking myself, ‘Is this sustainable? Should we be building more infrastructure based on this?’ It’s the constant feeling, as an entrepreneur, you’re always feeling like this is gonna topple over any minute, but then you’re also excited about the trajectory.Dan: Yeah. And also, you know, we’ve been sharing this information with a lot of our smartest business friends, listeners of this show, and getting a lot of tough feedback too. We’re doing a lot of things. We’re a little bit unfocused right now. Although one thing that we do have a strong focus on is, we have a team around recruiting. And we charge a flat rate for recruiting. And this has been doing really well. Basically, this idea that, hey, using job sites is difficult, making sure maximum eyeballs across the internet see my job and then interviewing all the people that come through and figuring out who’s best. That’s tough. How about I just pay you guys 4600 bucks, that’s been working out really well for us. So personally, one of my initiatives over the next few weeks is to put a sustained marketing process in play to really push this idea that we do flat rate recruiting.
Ian: Yeah, the flat rate recruiting thing. This is an example of an accidental business, basically. We talked about it on the show here. But essentially, we were promising placements. That was like our main metric in dynamite jobs at the beginning, we hit something like 300 placements, but we were essentially not charging people anything for it. In some cases, we were charging like $200.
Dan: It was a place to learn.
Ian: Yeah. And everybody’s like, ‘Guys, you know, you just did the recruiting product. And I’m used to paying 20% of the first-year salary for that, and you only charged me $200’. So we’re like, ‘Oh, yeah, that’s why we’re not making money. Oh, interesting’. And so it was kind of this accidental business. And now we’ve put real professionals in seats. And actually, our team has become professional at this too. So I want to give them credit, as well, specifically, Alex, because he was kind of thrown into this position, asked to make these placements, and basically became an accidental recruiter, in some ways.Dan: And we’ve gotten enough deal flow now that we’ve been able to partner with essentially a full-time recruiter that we’ve been friends with for a decade and has tonnes of experience. So it’s a good team coming together around that product. So I’m very optimistic about how that’s gonna play out. One of the other crazy things that happened, we’ve had, you know, this platform at Dynamite Jobs where people can get, post, find jobs, all this stuff. And we’ve been building out this database of candidates. And last week, over 1000 candidates signed up for the database. And so that’s piping along, we have a little product for them, like a small membership to have a premium profile. So that’s kind of coming along. It’s sort of interesting, we got mentioned by some influencer on tik tok last week, and, you know, all these new candidates come through looking for jobs. Just stuff like that starting to pile up, we’re getting momentum after having really focused on this. And then maybe the most exciting thing is – this week, we’re opening up Dynamite Jobs to companies. So if you want to create a company profile, there are a couple of different early-stage functions we’re working on. The first is hiring, of course. If you build a company profile and want to hire, then candidates looking at your jobs will not only be able to go to your home website but will be able to look at your profile on the DJ system. You’ll be able to browse a great number of candidates that are on our system, those ones that have paid for those premium listings, you’ll be able to see them. And then finally, and I think another speaking of focus ..
Ian: Yeah, I was about to say.
Dan: I know it’s a lot, but sometimes like you’re doing things that you know, or wrong, you did episodes about or wrong. And then you just find yourself doing them anyway because I want to know if folks listening to this podcast want to sell their stuff on this platform. Because here’s the reality – when you go and you’re thinking, ‘Ah, you know, I need to get a trademark done, should I hire a lawyer? Or is there someone that’s a freelancer? Or is there a productized service that just does this like legal stuff for me? Where do you go to do that?’ There’s a bunch of places around the web, but what we’ve found, over the years, is people in our community go to each other, they go to each other to figure out, ‘Hey, who are you using for bookkeeping? Hey, who’s doing your marketing funnels right now’. And that’s a very similar impulse to going looking for help for your business. And so I really feel like it’s an interesting experiment to see if we can help businesses sell their services on the DJ platform. Because, again, we have the businesses there looking to invest in this stuff.
Ian: So, as of last week, you could kind of sign up on the platform as a candidate. That’s what we’ve been building so far – profiles that are based on being a candidate and getting a job. Now we’re opening that up to companies. So if you go to Dynamic Jobs dot com, you can sign up as a company, and you can do two things like you said. You can sign up to hire people, or you can sign up to sell your products and services. So definitely, please check that out.
Dan: It’s early stages, the vision is that we can drive a lot of profitable traffic for people who have built productized services.
Ian: If you listen to this podcast, and you’ve been listening to our journey the last couple of years, this probably isn’t coming out of left field, because some of you will remember that we started a site called ‘Dynamite Deals’, that turned very quickly in the six figures of revenue, believe it or not, and then we shut it down. I was asking myself, ‘Why did we shut this down? You guys, idiots?’ The answer is yes. But this is basically the next version of that.
Dan: And we do mention this at the top of the show, obviously, we hope that you’re gonna use the site or a portion of you and give us feedback and hopefully make money or hire your next team member off of it. But also, because you know, we get a lot of email love from this stuff, people enjoy following along, watching some mediocre entrepreneurs stumble their way, hopefully, to another reasonably successful business. So I think it’s cool. Part of what we talk about with this pod is those years in the podcast when we weren’t really doing a lot interesting from a business perspective. We were interviewing interesting people, but we felt a little left out, you know? And in this room today, discussing our pricing, our team, we’re not left out anymore. We were active players. And so, you know, in the coming year, we’ll be able to do episodes with a lot of lessons learned and things like that. So we thought we’d keep you updated on where we’re at with that. And let’s get moving on to today’s guest Bossman.
Being a part of this particular conversation was specifically inspiring to me. Today’s guest Amar Ghose has built a million-dollar SaaS company, something we aspire to do. And so it was like really close to the bone asking Amar like, what were the timelines? How long did it take you? I got to know this stuff, man. And he was incredibly generous with his thoughts. He is the CEO of a company called ZenMaid, which is a scheduling software for maid services. He co-founded this in 2013, actually read about it on a Reddit thread and an interesting story that will emerge. Amar is also, we must mention a member of our online community, the Dynamite Circle or DC, and I met up with him in quite a few places, stunning places around the world. Oh, those were the days Ian. In part, Amar started this business because he desired the freedom to travel the way. He could have been a highly paid employee in a lot of these cool San Francisco companies. But he desired to travel the world. In fact, we did this interview while he was in quarantine at a very fancy hotel, in the wonderful Kingdom of Thailand. So let’s get to it. I started by asking Amar to describe the business in its current form.
Amar: In a nutshell, every maid service has to know where they have to be and when lots of maid services use pen and paper or Google calendar or something along those lines. And we just built a very, very specialized system that essentially manages the schedule for them. And then over the years, we’ve added on more and more features and functionality around that. We have maybe four or five full-time folks on the team. But we have very close relationships with everyone that’s involved in ZenMaid. And so our Slack channel is probably 25 people at this point that we probably work with maybe three or four DCers that have like agencies that are part of our Slacks we can go to them for input.
Dan: So that’s not like, that’s not people that live in Washington DC right. These are Dynamite Circle members. And it’s funny, you mentioned that because I’ve kind of done the same thing. I have like a little bit of an ad hoc DC mastermind, where we toss around like, ‘Hey, what are you think of this copy’ kind of stuff?
Amar: Yeah, exactly. So I found that hiring DC-ers and other entrepreneurs has been really, really great. Because they also have to handle their own business side of things that usually you know, Bunty, who does our Facebook ads is very helpful to me when I have business questions when I’m dealing with business challenges that don’t directly have to deal with Facebook, he has his own input, because he runs his own business. And so like, the two places that I’m always looking to hire from are the DC and then from our actual customer group. So we have I think, six people now on the team that are actually ZenMaid customers who work for us for maybe two hours a day and provide support
Dan: What a cool idea. I’ve never even heard of something like that. Where did you come up with that?
Amar: It’s one of those things of how your limitations, when you’re bootstrapping a company, can sometimes turn into your strengths. So in the beginning, it was just, I didn’t have the time. I didn’t have the money to actually hire someone to take over support for me full time. I was trying to find someone that could just take off, you know, maybe 50% of my load. And it just so happened that someone in our customer group on Facebook was looking for extra work, or whatever. And so she’d been using ZenMaid for a while. And I looked at that and I was like, ‘Okay, I have to train you on Intercom but I don’t have to train you on ZenMaid right?’ She wanted a reasonable hourly and she didn’t want to work more than two hours a day. And I was like, perfect. And yeah, we ended up hiring her and I realized the value in that. And so now our success team, which is like our combined sales and support team, I think like six out of seven or five out of seven of them run their own maid services.
Dan: Fantastic. So we got 25 people in the Slack the four or five full-timers, give us some more shape of the business.
Amar: We just passed a million dollars in annual recurring revenue in October. So I think as of today, we’re at like 92 or 93 k in MRR which is completely surreal to say I mean, it took us over three years to get to $10,000 a month in MRR so to be like closing in on 100 just boggles my mind. And then the entire team is distributed, all of our full-time people, my wife helps me a lot with the marketing she’s part of the DC too actually recently joined. Our CTO is a bit of a nomad. He’s in Barcelona, he’s in Barcelona, but he’s planning on coming to Thailand soon. coo is in Germany. And then a lot of our part-timers are actually in the US and that’s just because that’s where most of our customers are. So when we were looking for all the customer-facing parts of the team, a lot of them ended up being over there.
Dan: And you’re in quarantine in Bangkok right now. So for those of you that don’t know, when you go to Thailand, at the time, we’re recording this, this is February 2, you have to stay for 14 nights. Is it still 14 nights in a hotel?
Amar: 15 nights.
Dan: What’s it like, because you’re on day seven.
Amar: I feel like our experience in quarantine is a bit different. I think it’d be rough for a lot of people. But my wife and I can just hang out all day, every day. That’s what we do normally. So it’s not like we’re trapped in a room together, unlike normal, We’ve already done a 14-day quarantine in South Korea. And so with that, you had no control. You know, they put you in a hotel room, I was like a Ramada Inn in South Korea, and they’re blasting over the loudspeakers. ‘This is not a hotel, it’s a government facility”. They’re like, we’ve taken over whatever you can’t call the front desk with requests or whatever. And here, we paid a little bit extra. And they brought us a little crappy exercise bike, and like a yoga mat. You know, I put in an order for 7-11 yesterday, I mean, it’s a pretty luxurious quarantine, and I’m not gonna lie.
Dan: Amar, 10 years ago, if I would have told my business mentor about a case study like yours, like, this guy’s got some part-timers over here, and some people that don’t work for them and a chat group, and only four people work for them full time, real employees, but they’re like, who knows where they are. And it’s a million-dollar business, my business mentor be like, ‘That’s not serious’. We talked about the gradients between freelancers and masterminds and like full time and part-time and outsourced and whatever. You’re finding even more granular ways to like get your customers involved in paying for a little bit of input here and there. What is your sense for why that comes so naturally to you?
Amar: I think that it’s a big product of kind of being a child of the internet. I think that it has a lot to do with luck and with timing. I grew up in Silicon Valley, I went to school in Palo Alto. From a relatively young age, I remember just being online and spending time around a lot of internet forums and stuff. So I used to play poker competitively. When I think back to it, from around the time that I was probably 12, or 13 years old, I was doing things online, I was chatting with friends online. And so that became a very normal thing for me. A lot of people ask when I’m traveling the world don’t I feel, you know, lonely? And the truth is, is that I’ve been online for so long, that even my real-life friends that are back in Palo Alto, a lot of them, you know, I might have seen them once a week, but then be chatting with them on Facebook or G chat, or whatever it is, the rest of the time. And so I think that that sort of experience has really played a big part with ZenMaid, both in terms of building a real community within our Slack for our actual team. But we were also the first ones to build up a really popular Facebook group for maid service owners, and not just for our customers. We have one customer group and then one general industry group, and all of that stuff really came naturally to me. But honestly, I would say the timing really has to do a lot with it. If I’d tried to do this maybe three or four years earlier, I wouldn’t have that access to Stripe and so getting my billing in place would have taken six months or like eight months longer, right? I wouldn’t have had access to Twilio and automatic text messages through Twilio was like our differentiating feature from day one back in 2013. We were just in the right place at the right time to take advantage of the technology that was available to us.
Dan: Your timeline is particularly interesting. Can you let us know what year you graduated from university and what were you studying at the time?
Amar: I graduated in 2010. And I was doing economics and philosophy.
Dan: And where did you go to school?
Amar: UC Davis in California near Sacramento. I made a horrible mistake going to Davis because of a girlfriend at the time, it was one of those things, and I went, and I was like, you know, microeconomics is the closest thing that I can get to like a degree in entrepreneurship or in or in business. And that’s why I chose it.
Dan: Were you like a ‘lemonade stand on the front lawn’ entrepreneur? Or was there like an inciting moment where you were like, man, I can’t really be normal?Amar: I kind of had some entrepreneurial, like blood a little bit. There was one time in elementary school I heard in middle school that I found, like, it’s gonna sound dumb, but I found like an insanely good deal on candy at the grocery store. And like, literally showed up at 5:55am circled the lines for two hours, went to school undercut the vending machines and made like a couple $100. I didn’t do too many things like that. But I had my moments like that. But I think what it was is that I read ‘Rich Dad, Poor Dad’ at some point, which it’s kind of funny because I can’t actually say that I recommend that book. But for me, it was a really important book. And it was the right book at the right time. And what’s always stuck with me is ‘don’t climb the ladder, own the ladder’. And as I went further along, in my formal education, I realized that the only way that I was going to make the amount of money that I wanted to in this world, or have any sort of freedom, was either if I stuck with and got really good with sales, which – I like doing sales, but I hate doing sales calls 80 times a day, right? That grind is not for me. And so I realized, you know, even in high school, but also again, in college, when I looked at where my degree was taking me, I realized that the only way that I was going to be able to design the lifestyle that I want was if I worked for myself in one way or another. And so with that in mind, you know, combined with reading the ‘Four Hour Workweek’, I just had that seed planted.
Dan: Was there a reason you wanted to make a lot of money and have a lot of spare time?
Amar: I don’t think the goal was ever to be like, rich, I think it was just that I realized I wasn’t going to be happy in the rat race, that school made me miserable. And particularly at the time, before becoming an entrepreneur, I definitely associated being in a job with being miserable. And now I think that I could, I could go back and get a job. And I think that I could be very, very happy. I don’t think that that’s going to happen. But I have the skill set now that I wouldn’t take on a job that I didn’t have the potential to be the best at and wasn’t going to strive to be the best at every single day. Whereas prior to starting ZenMaid, I kind of felt like I was pigeonholed into these sort of different positions and stuff that I just didn’t enjoy. So I think it was more rather than being rich it was being financially independent.
During college, I was trying a bunch of kind of online marketing ways of making money that I made some crappy micro niche sites of bamboo comforters, and lead Crystal decanter dot com. And just like stuff like that. And so you know, at some point that was bringing in, you know, $400 a month, and then it tapered off and was at like, $100 a month for a couple of years. I joined an MLM program, because of a girlfriend in college, which actually taught me some stuff both about sales and about how you don’t get paid if you don’t actually add any value to the world, which is great. I’m like, ‘Okay, like, I want to own the product in the future, right, I don’t just want to be like the salesperson, they say I own the product, but I get like three cents on every like friend that I lose who buys this, you know?’ So, I was trying all of that stuff. And then I definitely realized at some point in college that the economics and philosophy degrees were not going to take me into anything that I wanted to be in. And so at that point, I started focusing a lot more on, on kind of, like my social skills. And so after college, I bounced around to a couple of things. I was a valet, which is kind of funny that you guys were selling like valet equipment or whatever. I was actually a valet and was doing 25 hours a week as a valet for about a year or so after college. And then I was a tech recruiter for a very short period of time. And then after that, I took a job in Southern California doing sales for a construction company, like a printing company. And then the entire time that I was doing all of that stuff, I was still trying to figure out ways, but nothing really took off. Like, honestly, I don’t remember any of the things that I really tried in those couple of years. But I was sort of looking at affiliate sites and things like that.I’ve been doing things like the entrepreneur kind of hustle. When I read the ‘Four Hour Workweek’, I read it when it first came out in 2006/2007, and one of the reasons that it affected me so much was that I was playing poker online. And I had friends that were living in Costa Rica that had lowered their expenses. And so when I read the book, it wasn’t just oh, this is a nice concept, but it’s not for me, it’s no I have friends that have been playing poker for a little bit longer than me or just better than me that are actually doing this and living this lifestyle. And I think that made it seem like it was possible. And so then throughout college, I spent time trying to get something off the ground.
Dan: Can I pause there for a moment though? Poker, honestly, has had an enormous impact on this community. Because it was one of those first legible ways that you could make money online if you just had the desire. And there are just so many people with poker pedigree, for lack of a better term, in the online business space. Even if it was just passing interest because it was just so huge there for a while.
Amar: Exactly. I never considered myself to be any good at poker. I was better than maybe the average person, but I always had friends that were much, much better than me. But poker has shaped a lot of my approach to entrepreneurship. When you have the experience of losing three or four months rent in a single day, or in a single session, while you’re in college, it’s a lot easier to be even keel when you’re running a company. As you have a bad day and your growth, you know, like you drop like 2% in a day or something, which as a SaaS company is pretty scary, right? It doesn’t sound like a lot but it is when you’re used to growing a couple of percent like month over month. And being able to just sort of react to the ups and downs, Nothing that I’ve done in business has come close to like the emotional, just roller coaster that poker was back in the day. And then also, I think, the whole concept of expected value, that’s something that was just drilled into my head in poker. I look at so many of our marketing campaigns and so many things that we do in the business of, even if there’s an 80% chance that this fails in the 20%, that it goes right, it’s 100x return and we’re going to take 10 of these chances until one of them like works as long as the downside risk isn’t that we go out of business. And I think that that’s something that shaped a lot of my entrepreneurial approach and mindset. So yeah, I credit poker with a lot of stuff, both in terms of lifestyle design, but also in terms of my approach to actually building the business.
Dan: How do you think about expected value?
Amar: ‘ve got a couple, I guess, kind of mental models or frameworks around various situations in running like the company. So most marketing, there’s not too much of downside risk to most marketing campaigns, like the most risky one is a marketing campaign that we never ran. Because we have a really conservative Christian kind of customer base. And we had a video done by fiber Jesus, I’ll send it to you after the interview. It’s hilarious, everyone that’s seen it has been like, ‘It’s amazing. But you can never run that to your audience’. So we decided not to do that. Because the risk there was too great. But I think that the main thing when it comes to expected value, is just essentially, it’s going into a lot of things and being okay with the fact that it might not work and that it might not work for things that are outside of your control. And being able to, to have that sort of mindset or mentality before trying different experiments. And before figuring out what’s going to work or confirming that something is going to work, I think is very healthy. I just see so many of my SaaS entrepreneur friends that they don’t want to do something unless they’re sure that it’s going to work. And that’s fine. But you don’t have much, much upside if you don’t take much risk.
Dan: So take me to the moment then when you’ve had the idea for ZenMaid. It’s not the idea that you’d expect someone from Palo Alto studying economics. It’s in a blue-collar industry.
Amar: You interviewed Neel Parekh, who runs I think ‘Maid This’. Any listeners go check out that episode, I listened to that actually before jumping on today. And we have similar stories. So he started his maid service after reading a thread on Reddit. I read the same thread on Reddit and started my own maid service back in 2012. It wasn’t titled this way. But it was effectively just how to start your own maid service if you’re a digital marketer, and you don’t want to do any cleaning. So a bunch of people online were like, ‘That sounds awesome’. And so me and a friend started that, and that was in 2012. And essentially, the long story short is we shut that down after about a year and another friend of mine who I knew up in Palo Alto approached me and was like, ‘Hey, I saw all of the work that you guys were doing on the back end and on your website that you built for yourselves, I think that I can turn that into a SaaS and we can go and sell it to other maid service owners’. And so the idea actually came from him, and then we partnered on it. He did everything product and technical. I did pretty much everything else, that’s how we started. I learned a lot during the 14 months that we were running that maid service, but I think that that failure actually set me up for a lot of success.
Dan: What’s your post mortem on it?
Amar: So there were quite a few things that we were doing that weren’t legal, and we weren’t actually aware that we didn’t have the proper paperwork to be operating. We were technically a business, but we were like training people that were contractors, which is a huge no in like in California. Our margins weren’t that good. Our insurance didn’t actually cover us for them. So when we shut down we did so because my business partner realized that if something were to go seriously wrong, his personal assets might actually be on the line based on some of the paperwork that we had done. It was very challenging to deal with clients with cleaners, quality control was a big challenge. Let’s just say I came away from that going ‘Never again’. Yes, I want a software company, you know, I want to work with the same team members. I want to sell a service that’s actually unique and isn’t like a dime a dozen.
Dan: So it’s the classic move where you start a services company, and then you need software to run the company. And so you make custom software, and you find out that that’s the more valuable thing.
Amar: Exactly.
Dan: So we left Amar still in a sales J-O-B in California. He had just over a year’s experience side hustling a maid service business that ultimately folded. But now it’s 2013 and he’s just entered a partnership with a friend to try something different. And crucially, Amar’s new co-founder knows how to code
Amar: We actually looked into other industries first. We initially didn’t think that maid services were going to be a good industry, because they don’t pay as much as if you can sign up dentists or lawyers or lots of other industries. And we also thought in a very, like, roundabout way that my experience as a maid service owner was actually going to be a crutch for us that it would make it easier on us in the beginning, and that we might not fully validate the idea. So we tried a couple of other industries that I was doing cold email, I was cold calling. At some point, we were like, ‘Okay, this isn’t working, we’re just going to go back and try maid services’, because we kind of know what they want and all that stuff. And so when we decided to do that, that’s when we officially started working on ZenMaid. And so at that point, that was I think, in April 2013. And essentially, for about six months, my co-founder Arun was just coding from 11pm until 3am every day to just build this product. I was sending out 20 to 50 cold emails a day. I would wake up at 5am in California to cold call people on the East Coast where it was 8am. And I would do that for like two hours every morning and then I’d be on the 7.15am train up to San Francisco to go to my day job, come back and do strategy in the evening. And then he would get to work on the product and I would go to sleep and we just rinsed and repeated that for probably close to two years. That was pretty much the cycle to really get it off the ground.
Dan: Holy goodness, was that required?
Amar: That’s a good question. I think that it was required for us to succeed. But I think that there are so many different ways to succeed in business. I don’t want someone listening to this, to think that, like, they’re going to have to do that. One of the reasons that we chose to take that approach is because it played to my strengths. I was doing sales already, it came to me naturally. I’d owned a maid service for long enough that I could have a nice chat with people and add value to other maid service owners, even if they didn’t end up buying. And so that was the path that we chose. I think that everyone should definitely play to their strengths to kind of get a company started. I do think that the time and the hustle is very much necessary, it doesn’t have to show up in the world the same way that we did. But it’s definitely vital. You’re not going to be able to just sit around and spend half an hour a day, you know, working on this and expect to really change your life in that amount of time.
Dan: I guess the remarkable thing is the 38 months from inception to 10K MRR. So I mean, you guys are in California, at 10K, you can’t probably even live off of that, right? Because you have enough expenses involved. This is a long period of time. And I want to underline this – this is what we talk about all the time on the show, like talk about some of the challenges of getting through that time. And importantly, why did you persist?
Amar: So the first thing was that even though we were growing slowly, we were growing consistently. And we did genuinely feel that we had product-market fit, and the people that did end up signing up and paying us were happy with the product, they were happy with the development. We did feel like if we continued to grind, it was only a matter of time until we would get there. But the other thing is that we started in 2013. And I didn’t go full time on ZenMaid until early 2015. And, during that time, of course, I was working my job. So I had my expenses covered, as did my co-founder; he was a PhD student at Stanford. So he was getting a stipend as a PhD student. So we didn’t need the money from ZenMaid.But really to answer your question, I was inspired by you guys. Because I essentially quit my job. I went to Thailand, and I just completely dropped my expenses. So, when I quit my job in the US, ZenMaid was making $8,000 a month, we had quite a bit of money in the bank because we hadn’t been paying ourselves at all up until that time. I started taking a salary of $1,000 a month and just went to Thailand, and was like, ‘I’m going to grind out full time’. And I was honestly happy. I would much rather be grinding it out. And each sale was so much more gratifying because it was selling, you know, my product or our product. I realized that if I could live in Thailand and be happy for $1,000 a month, that that would give me all the freedom that I would need in the future. And of course, my goals were to make way, way, way more than that. But it’s really nice knowing that at, any point, I can just hop on a flight like I’m going to do next Friday and go to Chiang Mai and live really well for a very small amount of money.
Dan: Now, in your case, did you take a look at the overall market size? Did you guys do that kind of math?
Amar: No, never did that kind of math. I still get asked about that all the time. I honestly just don’t think that it matters. I think that when you’re running a bootstrapped business, I think it’s a very binary question of, ‘Are there enough businesses or potential customers out there that if you get a small segment of the market, that you can, you know, pay for your lifestyle, and like and build a successful business?’ And to me, it’s just a straight yes or no question. There are so many house cleaning businesses in the US, I don’t care what the exact number is, if it’s 100,000, you know, that’s fine. If it’s a million, even better. I always try to filter information for – does this information actually inform any of my decisions, and if it doesn’t inform any of my decisions, then it’s entertainment. And that’s okay. Sometimes I read things about the stock market, where it’s just like, this is not going to impact me at all, maybe it’ll expand my thinking a little bit, but it’s not going to affect any decision that I’m going to be making in the short term future. If there’s a million, you know, business owners out there that could potentially pay us, it doesn’t change my marketing strategy. It doesn’t change my product strategy. The only thing is that there’s like if there are only 50 potential customers out there.
Dan: There was enough, let’s go. Okay, so now, you’re following another interesting parallel here, which is you have your first 38 month period. So we’re putting ourselves into the 2016 timeframe. You peel out, take your $1,000 salary move to Thailand. And now, as we sit here in February 2021, we’re talking about a 10 X-Factor. And that, I want to underline for the audience, is a very common pattern in the universe. It’s a very common pattern in the TMBA universe. It’s amazing. How do you do it?
Amar: It’s slow and steady wins the race. It’s obviously an oversimplification, and a bit of a cliche, like so many things, are. But in a lot of ways, I look at what we’ve done. And the main difference between us and our competitors that started around the same time is that we’ve continued to show up every single day and try to do what’s right by not just our customers, but by the entire audience. And we’ve just continued to be present until people trust our brand. And now we’re the go-to software in the industry. So if someone’s looking for software, they’re going to come and trial us. It doesn’t mean that we’re right for them, but they’re going to come and try us. And that has a lot to do with just how much people see me on the Facebook groups and how I answer questions when they go, ‘Does anyone have a cancellation policy they can share’, I go, ‘Yeah, here’s here’s mine from like, from back in the day’, you know, adjusted as necessary. But I go out of my way to really help people and do the kind of value add thing until people are ready to sign up.But in terms of action, one of the reasons that I started Zen maid was actually because I wanted to get into marketing after listening to a lot of podcasts back in 2013. And no company would give me a shot at even the most junior marketing role. I’d been pigeonholed into a sales position. And so when we started ZenMaid, I looked at it as a very risk-free proposition because it was essentially a canvas for me to just try a bunch of marketing things and to learn by doing, which is the best way that I learn. As a longtime listener of this podcast, for me, everything changed when I just began to look at business as a series of systems and that every day, if I could do the work as in working in the business, but also set aside time to maybe spend 30 minutes building one part of the one part of any system in the business better, and just keeping that consistent action. That’s when things really began to change. And even if ZenMaid hadn’t worked out, if we went under tomorrow, I would still consider ZenMaid to be a success, because of how different a person that I am now because of the opportunity and experience that it’s essentially given me. And so over the years, we’ve just continued to stack on more and more marketing things, while also consistently improving the product. And so a couple of key moments were in 2017, we launched a huge redesign after probably spending a year and maybe $60,000 or $70,000 on a redesign that just revamped the entire software.
Dan: And what was the inspiration to do that?
Amar: It was essentially that the initial version that we built had taken on a lot of technical debt. And design-wise just wasn’t up to par. We felt that even though it was working, we didn’t feel like it was a product that was going to be able to take us over maybe 25K or 30K a month. Also, it was just hard to be taken seriously. And we had competitors that were much better designed, even if they weren’t as full of features. And so we launched that. And that made a huge difference in two ways. So the first thing is that that relaunch went absolutely terribly, and we lost 40% of our recurring revenue and our recurring clients in maybe a six month period after that. That was just an entire circus, we critically took down our software and our clients’ businesses, from Monday to Thursday, right, which for a maid service is pretty bad, it destroyed trust with our brand and all of that stuff.But that launch is, in a lot of ways, what saved the company because even though the clients at the time, really lost faith in us, and we lost a lot of them, every single new client that signed up after that, that didn’t run into any of the issues around the actual swap between the versions, they absolutely loved the new software. And we immediately saw our growth and our conversion rate increase from there. So that was a big one. And then the other big, big event that we had is we ran the first virtual summit for maid services. And so I’m very big into the digital marketing and internet marketing communities. And so I always see that virtual summits were really popular back in 2015. And now they’re completely saturated. Well, we’re in a very old industry. And so I can look at trends that are happening now in internet marketing, and I can go, ‘Okay, that’s going to be the hot new thing in like two or three years’. And so everyone thought we were industry innovators and all of that stuff. But with that, I mean, we brought together 45 industry experts that are maid service consultants, coaches, accountants that only work with maid services, we brought together just the who’s who of the industry, ran a five-day event online. I think we had 3000 people that actually signed up for that, we charged for replays after and made maybe $10,000 or something along those lines. And we were essentially at the top of the industry for about a two week period. It literally positively impacted every individual number throughout our funnel. And that lasted for probably six months. Now we do that annually. But I just want to emphasize that even though those were two big events, really, it’s just been consistently showing up and just doing the work and making just small improvements. It hasn’t really been any one thing you know, if we hadn’t done all of the consistent hard work along the way, neither of those two major events would have made a big difference to our results.
Dan: Tell me a little bit about your philosophy on pricing your product. In the SaaS world, you have competitors that you can click over and you can see what their prices are. You have costs like there are all these theorists that write in the SaaS community about you know, if you have your product price at this range, you are bound to be dead and churned out forever. Let us know what your perspective is on the sort of theory of pricing and SaaS products.
Amar: I think that it changes a lot over time. When you’re first getting started, gaining momentum is more important than optimizing your pricing. So the pricing advice for best practices that I follow now for ZenMaid, are very different from the ones that we followed in the beginning. So when you’re first starting out, I think that having flat-rate pricing, and just making it as simple as possible, and just trying to get people on board, and actually paying you money for your service is by far the most important thing. And then once you have momentum, then you can focus more on optimization. So I do think that in the long run, you need to have some sort of usage-based pricing, or some sort of pricing, where you have the ability to grow with your customers. And as your customers become more successful, you become more successful. And so ZenMaid initially was $49 a month, $99 a month, or $199 a month, depending on a couple of different variables. And now every single person starts at $49 a month. And for each additional cleaner that they add, we charge an extra $9 a month. So what that’s done is that’s aligned us with their success. And some people don’t like that, and that’s okay. But we do have to decide what’s best for us. But in a lot of ways, we have a great justification for it in terms of our customers, that now we have all these resources on helping them hire better cleaners, and how they can build a more successful business. And before we were kind of doing that, almost pro bono, but as a form of marketing. Whereas now we can begin to funnel our current customers to that content and go, ‘Hey, this is what might be next for your maid service’, so that we can help them to continue to build a more and more successful business and that we reap a small reward every time that they’re successful enough and they add on enough clients to actually hire someone, someone new.The bigger that you get, the more that churn affects you. So 2% churn or 5% churn when you’re making $10,000 a month, could be better, but it’s not a huge deal, right? That you’re losing, you know, $500 a month, if you have decent marketing, you’re probably going to make up that margin. We’re now closing in on $100,000 a month. And so a 5% churn rate is $5,000 a month that we have to make up. That’s a lot of customers for us to bring on every single month. And so when we changed our pricing from flat-rate to usage-based, now what happens is we still churn 5% of customers every month, but the existing, or the remaining 95%, become more successful every single month. And so they might go from 95% of our revenue to be in what was 98% of our revenue. And so now we lose only 2% of our revenue every month. And in order to scale a SaaS business long term, you have to find a way to make those metrics work. And, of course, the Holy Grail is to make it so that every month your existing customers pay you more money than they did the month before even taking into account the customers that you lose. And so that’s something that we’re trying to do. But you know, it’s called a holy grail for a reason, right? Not an easy one And then just quickly there, just because I’ve been writing about it, again, a lot on Twitter, I’ve been sharing a lot about it there. But we just released a freemium plan actually for ZenMaid. So what we did is we realized that our competitors that are going to come in and are going to take business off of us, they’re going to take business off of us because their software is maybe a little bit better than ours or their software is good enough. But they’re going to be offering it for $19 a month, where now because we’re established we need to charge $49 a month plus like usage-based. And so what we did is we tried to come in and build a moat by adding in a true ‘Free for life’ plan that will essentially stop a large percentage of maid service owners from choosing the cheaper paid options over us until they’re ready for the full suite of tools. And so yeah, it’s a good question because I’ve been thinking about pricing and pricing strategy nonstop for probably like six months now.
Dan: Why?
Amar: Mainly because I realized that pricing as you get bigger and bigger in a SaaS makes more and more of a difference to your bottom line. And it’s not as important in the beginning. When I look at our results for 2019, we changed our pricing in the beginning of 2019. And if we hadn’t changed our pricing, we would have ended the year at, I think, $48,000 a month. And instead, we ended the year at $65,000 a month. And that was due just to pricing, we signed up the same number of customers, but because we were able to monetize better and to align our customers’ success with our success, that made a bigger difference than any marketing campaign that we ran. It made a bigger difference than improving any conversion rate anywhere along the funnel.
Dan: Is that called progressive pricing? Or is there a technical term for that? I’ll have to look it up here because I’ve heard from a number of SaaS founders that one of their regrets is not implementing that sooner. Because, you know, we don’t have that right now, for example, on our product where you can use it like 100 times, and you pay the same amount as the person who uses it once.
Amar: Yeah, exactly. I know a bit about what you guys are dealing with at Dynamite Jobs. And I think that charging $99 a month for your, like initial customers to just get some people paying and using the system. I think that that’s the right way to go. But it’s also good for you guys to be cognizant of the fact that, in the long run, and probably sooner rather than later, but not right right now, is that you do want to get to the usage-based pricing where it’s $99 a month, and then each job that you post is $5 or whatever. And so someone that posts 100 pays you considerably more than someone that’s using the same service and pays only four, or whatever. So, yeah, I mean, it’s definitely something to consider for the future. And I can virtually guarantee that you’re gonna get there, but there’s a timing to it.
Dan: Speaking of timing, I appreciate you spending your time with us here today. Just a couple more questions. The first is – what is the reality of having like, learned all these ideas, taking the concepts, applied them and you’re success story, you know. What is it you know, that if you had to like talk to yourself at the beginning when you were armed with those concepts, that maybe is like different about the reality of where you’re at, then you might have dreamed of the dreams that motivated you in those early days?
Amar: If I go back and like tell myself anything, it would just be like having a stronger bias towards action. I think that for most people that are listening to this, you know, chances are this is one podcast of many that you listen to, or like audiobooks and stuff like that. And the learnings that you get from all of these things completely change when you have your own experiences to actually relate to what we’re talking about here today. And so for me, I wasn’t that big of a reader and everything back in the day. And while I do wish that I’d started reading earlier, I’m also glad that I didn’t, until I really started taking massive action towards making this a reality. And I feel like because I have that experience now I’m able to go through so much more content and like pick out. ‘Oh, that’s useful to me’, or, ‘Oh, that’s interesting, but it worked differently for me and being able to recognize the differences in sort of what I’m consuming. The other thing is and I think that it is quite underrated and again, this is more if you’re already taking action. Rereading and re consuming content I think is massively underrated. It’s like the saying goes, ‘No man crosses the same river twice for the man is different and the river has changed’, or I don’t know the exact wording but something along those lines. And I’ve actually found that there are so many books that I’ve read, that you add a couple of years of life experience, and you reread the book and it just reads like a completely different thing. I mean, whether it’s fiction, it might read completely like a different novel, or when it’s like business books and stuff. There are so many business books that I reread and I find that rereading them, I get more out of them the second time and different things out of them the second time than when I initially read them just because I have more things to relate it to.
Dan: Is there an example of one book you could toss out to us?
Amar: So two books actually would be ‘Principles’ by Ray Dalio. Read it, begin implementing it, read it again, re-implement or whatever. Another big one is ‘The Ultimate Sales Machine’ by Chet Holmes.
Dan: Just a classic dude. You seem like a disciple based on your story here today.
Amar: That’s one that I’ve reread, like a couple of times. But every time I reread it, I’m like, ‘Oh, yeah, I do that, I do that, crap. I forgot about that detail. It’s probably time to incorporate that in’. And just to kind of add on to that point, the other thing that I’ve realized that is very different from my younger self is, I very much believe that systems set you free. I no longer have, you know, a calendar that I really have to follow, you know, I have maybe three or four calls that I’m obligated to be on every single week. And that’s it, and then I have a clear calendar. And I do think that’s kind of the dream, but in the past, I was like, ‘Oh, like it’d be nice to just have no responsibilities or whatever’. And now it’s., ‘No I have responsibilities. But I’ve built the systems in place to take care of those responsibilities without me personally having to be involved’. And so I’m not systematized at all. And yet, all of the systems that we’ve built over the years are what allow me to be unsystematized. And when I was younger, I tried to be like, ‘Okay, like, I don’t need systems’. And it’s like, ‘No, like, you need the systems in order to essentially in order to not need them’, which sounds weird, right? But I think that was a huge realization for me.
Dan: It’s remarkable. The bigger your business gets, the less you have to do to make it run.
Amar: Exactly. It’s a flywheel, you know.
Dan: Big ups to my guy, Mr. Ghose for coming by the show. Amar is in quarantine right now, spending a lot of time on Twitter sharing some entrepreneurial wisdom nuggets. Check it out. He’s very active. His Twitter handle is itsjustamar. That along with all the other resources discussed today will be in the show notes, including a link to an article on what progressive pricing is Bossman, not only did I look it up, but actually, you know, as I said at the top of the show, what Amar is going through right now is the exact sort of conversations we’re having. He gave me some advice on how we can change our pricing. We had a strategy call based on what Amar said to us, so follow him on Twitter, this guy is awesome. He offered a free phone call to people who listened to the show, take them up on it, you know, smart dude. This is like a very DC ish kind of situation where entrepreneurs get a lot of benefit from sharing their knowledge with their peers, it’s really rewarding. So it’s really cool. It’s funny, like the stories of entrepreneurs coming on here and like doing those free, you know, shout out offers, as Jesse did it Jesse Hanley came on the show and did it, and then it had this like, domino effect where I’m talking to people that I just met, and they’re like, ‘Oh, I took Jesse up on that. And here’s what he told me’. And so it’s just this cool connection that happens in the community of people helping each other out. And you see the positive benefits sort of Domino out. So really cool Amar, and congrats for your success.
Ian: By the way, one of the coolest things that’s happened to us recently was machine learning data scientist reached out to us, shout out. I’ll leave his name out of here. But he reached out he heard about like, what we’re doing over a DJ, and then he had some things to offer us. So really cool. Appreciate that.
Dan: Yeah. That’s awesome. It’s a give and take. Hopefully, you got a lot out of today’s episode. We’d love doing it for you. Thanks for listening, as always, we’ll be back next Thursday morning. 8am. Eastern Time.
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