69: Sound, Actionable Advice with Jason Cohen

Thanks for having me. It's good to be here. I didn't realize I had to fly, though. That's uh I guess I need to put the booze down now.

It was a large bottle of bourbon.

Only 615.

If you establish the baseline at 700, then it's small.

I can't. Anchoring is such a powerful, ridiculous brain hack. I can't even believe it's like legal. Like, you shouldn't be able to do it.

That's the thing. Yeah. Like if only knowing your cognitive biases meant they didn't work anymore, right?

Well, I don't know if I would say it was contrarian.

Um, yeah, that's fair. I mean, contrarian by saying it's not semi. Okay, never mind.

Right. What's nice about being straight even if it kind of hurts is that you can get right to the solutions. Like just stop beating around the bush about what's going on or what's wrong and just, and it's nobody's fault. Like just stop it. Let's just call it what it is. And then let's spend all the time thinking about what could we do? What are some options? Can we weigh those? What could I try? Like let's just get to that part and stop arguing about how that works. Let's just get to it.

Um, not in person. Of course, I think many of us have seen the advice in the form of blog posts and tweets. I think it's a great example of there's a common phrase: people give advice to themselves. Meaning, but what I would sort of amend a little and say people have a certain thing in mind when they give advice and it's often themselves because we're all egotistical and of course I'm not an exception. But there's certain goals you have in mind or a certain context. Like for him, it's you got to change the world and make something huge. And so that's the context and so the advice is in that context. And so is that advice still accurate if you're a bootstrapper and you don't want to be the next Facebook? Is that still, and you don't want to be a Y Combinator company, which of course is what the advice is tuned for, Y Combinator style companies. So if that's not you, then is the advice right? And the answer is sometimes, because some advice is more universal or maybe there's other reasons why it's right for you. Maybe it's not. So the closer you can get to an advisor who either naturally is aligned with you because they have the same kinds of goals and attitudes and worldviews and life trade-offs as you, and so even though they're talking about themselves, that works. That's one way. Or someone who's conscientious and sort of aware enough to ask lots and lots of questions first to try to understand those very same topics so that hopefully the advice is tuned.

That's good. They're boring anyway.

Yeah.

I'm not sure how I came to that conclusion, but I think it's more as I give advice to others, I've realized that I'm speaking from my own experience and all those other things I just mentioned. I don't have to repeat them. And that's not necessarily right for people. I also, I don't know, maybe a decade ago had a presentation, you know, one of these go to conferences presentation on this topic of advice and how to know if the advice is good, how to take advice. And I started with this premise which I think is still true which is if you find any advice whatsoever, I can find you someone else who's very smart and successful who will tell you to do the opposite, no matter what. Anything. Um, the thing about being able to do it on the side. DHH says you can do it 10 hours on the side, even though that's not actually what they do with 37signals, it turns out. But anyway, Zell says so. You can find it and he's smart and very successful. So, what the hell? And then you can find many people saying no, you have to work very hard. Easy to find both sides. You could find people that say you have to be good at social media like Twitter. And other people that say, look, I built a million, a hundred million dollar bootstrap business without ever using social media. It's easy to find all those. So given that, what do you then do? Because that means none of the advice is necessarily the make or break. And probably it's not true either that like well that's because advice is just good and bad and you can't tell. Like probably all that advice is good for somebody and all of it is bad for somebody probably. So then it's not really about the advice, is it? It's really about like okay so how do I know what's right for me? And so that's how I eventually got to this notion of it has to be tuned to your context, goals, etc. All those things we just said go into more detail on those things, I guess. And so then the advice giver is usually not introspective enough or conscientious enough to know that. Therefore, they're just giving advice. Therefore, that's not helpful. So the conscientious person knows this and therefore asks a bunch of questions. What are you trying to achieve? In what time frame? Do you care about money more than being at home? Do you care about changing the world? And if so, what does that even mean to you? Because it means very different things to different people, as it should, right? And I mean, there's maybe 20 questions on big questions like that easily that you could ask to really understand what a person's trying to do and what their strengths are and what they should avoid and help they may need or things they should ignore. Then you start getting into, okay, here are some real options that address the situation you're in and are consistent with things you're actually trying to do. And now we're into the realm of good advice. Or at least the chance of good advice, right?

Yeah. Well, who knows? You can't run life twice, right? You can only run it once, which is all just to say, don't obsess about the damn advice. Try to think for yourself. Try to limit it to a couple of main things that you're going to decide based on a couple of main ideas and then move on. Because even if you have great advice from a really good advisor, it's still not, still maybe who knows. And the exception is when it's very black and white stuff such as, hey, what's the employment law in Texas about X? Okay, now there's an answer and so that's good. You can get an advisor that gives you the answer and that's a good thing. And if you learn that, then you have some experience you can bring forward. Good. So, I mean, there is such a thing as stuff that's just correct, but it's few and far between and usually not the strategic important stuff.

And random and luck and stuff like maybe you say, 'Look, there's these three options.' and you weigh it all and option A is the best way to reduce risk and increase upside and maybe let's just say for the sake of argument you could prove it even though you can't, you prove it right, but there's still a chance for upside and there's a chance for risk and so even if it was the best bet that doesn't mean it comes up right. You know the best poker players clearly have skill that's why they're always at the last table because skill, but they don't always win because luck. Right? Like so this same thing except we have less skill and there's more luck.

Only like one or two because I don't have any time and I certainly haven't done any new investments in a long time because WP Engine has taken all the time and I don't want to dilute time. And I am clear that I want to do WP Engine and I want to be at home and since I'm clear on those two things I don't do other stuff. I used to have other hobbies and I used to mess with companies at the Capital Factory more and now I don't because I'm clear on that.

Yes. Especially in the early days of Capital Factory, which is sort of like Austin's version of what started out as Austin's version of Y Combinator when both were small when it was like a class of five or 10 for a summer. That's what we did, too. Now, Capital Factory is hundreds of companies. Some are co-working, some are inside of a funding program. There's a whole bunch of stuff going on with it. Um but early on there were many startups that came through some of which were in a program. So there you know kind of intense advisory and investment and others sort of just there and so by observation you can see some things and just by talking to a lot of founders you sort of get a certain sense of different kinds of personalities and what things and you kind of see what things work. None of that's very scientific obviously but you do get a gut feel of stuff and that's where this comes from. I don't have data that shows you should ask the following questions, right? This is just experience and trying to formulate something, right?

Yeah. So what would happen is they would say well here's our situation and let's say especially in the context of an incubator you're usually talking about raising money because that's what incubators sort of gear you to most of them not all. A lot of times the idea wasn't very big or the traction wasn't very good the story wasn't really one that would excite an investor and so I would say that I say look you know that you're saying these things and investors turn off when you say that because you know whatever the reason is. Um you emphasize the team but this team is not very investable because you don't have previous experience. Now if you were just bootstrapping, who cares? Don't even have a team slide. In fact, don't have a slide, get back to work. What are you doing? Right? The very fact you're pitching means you're pitching to an investor. Like I don't know why else you'd pitch. And then this team slide is bad because these are not the qualities that an investor is looking for. But there are different qualities we can emphasize that are what the investor is looking for. And you can be more honest. Going back to what you just said about appreciating being honest and straightforward, just be honest and say look this isn't the normal team that you see. So then how would you overcome that with an investor if the team isn't normally investable because you don't have prior successes blah blah blah. What would you do? Well you could say well we could prove that we are a learning machine. We could prove that every month we learn stuff change it and the business gets materially better and we never stop doing that. In other words, we could overcome the fact that we don't have previous success to point at by saying, 'We are such an engine for building a great company that we know how to do this.' And you just really emphasize it. Have proof points. Show look, we saw this, so we changed that, and then this was the result. We saw this other thing, we changed this, and this result was negative. So, we did this, and then it was positive. And then, and like you tell these stories, and no one cares what your bio is because who cares? You're able to do this, and that's obvious. So, let's deemphasize the team and emphasize these other things. Now, all this though is talking to someone in the sense that they want to go raise money. But then sometimes at the end of all that they go, but you know, honestly, I don't care about impressing that person. I'm like, well, what you don't? They're like, no, why not? Because I don't want to raise money. I don't want anyone telling me what to do. Well, then why are you in a pitch practice? Oh, they just said it would be good practice. But see, so the whole thing is like, wait a minute, the goals were different. So, none of this advice was any good.

Mhm.

You're constantly failing. You're constantly not doing the right thing and you have no resources at all. You don't have brand recognition. You don't have money. You don't have a big customer base to motivate. Your social media has four followers. Like you don't have enough time. You have nothing. Right? So, one of the few things that you have when you're little is you can move really, you can change directions really fast because you don't have any of those things like customers. Um, you can make changes. You can change the product or the brand or how you sell or the pricing or what features are there or delete features. You have the ability to move really fast. So, you should do that like you should use the advantage that you have that your bigger competitors cannot do. It's one of the few things you can do. Another one is being really human. Big company's a big company. Every time you call them, you get a different person. That's the nature of it. You're not when you're little. You should use that. You should be on the homepage and you should be on social and you so that people have a personal connection. That doesn't scale. That's okay. Who cares? A maybe you never want to scale. So that's fine. Or B, you do, but like first you have to get to the point where scaling is a problem. So move like on ways that a big company cannot do. So these are some of the few advantages you have. To me like you must take advantage of them since you have so few advantages when small. You got to. So one of them is this agility that you just mentioned which is to learn fast and react to it. A big company can't even if a big company learned fast it can't react fast and also it probably doesn't learn fast. So be a learning machine that's always getting better and that is a good recipe for since most of what you're doing isn't quite right yet by definition.

So the issue with that and I've done it too. I did it at Smart Bear for sure. So it's not like I'm not guilty of these things. The problem is that you cannot in fact act like a bigger company. You will not deliver like a larger company will deliver and that will come out and then it's embarrassing because then it's clear that you've kind of lied. The usual reason why you say 'we' and like act like it's huge is like but see this way people will trust us and become customers of us. And what will happen is though they expect 'we' to answer the phone and emails all the time because 'we' is enough people to do that and that when they do then they do talk to you they talk to different people because there's 'we' talk to the same person all the time it's not 'we' and they detect that. So in other words you're doing it to build trust. Trust that you're big but you've done exactly the opposite. You've destroyed trust because you lied and it's going to come out when they interact with you. How come you barely ever release features and barely answer the email? Well, because there's one of me. Now, on the other hand, if you're honest in the first place, there's one of me. People are actually happy with it. Why the email takes so long? Because it's just me. Oh, cool.

Oh, the servers went down. Like, yeah, because it's just me. Like, oh, that's okay, man. And that happened to us at WP Engine early on when our servers went down. They were like, 'Hey, I know you're trying something brand new. That's really cool, man.' Now, if a server, if one server out of 7,000 goes down for, you know, 4 seconds, there's Twitters. Like, hey, what? That's not what I'm paying for. And they're not wrong. It's just it's a totally different thing. Again, take advantage of the thing you can take advantage of, which is that humanity. It's great. And you can't have servers up all the time when you're one person or whatever the equivalent is for your product, right? So, don't set the expectation. And then actually, you get a lot of benefit of the doubt. You want to raise prices at a big company. There's a lot of well I don't know like why are you raising prices because you just want to pad the bottom line or whatever. When you're one person and you send out that email going hey everybody I'm just me I'm just trying to make ends meet I need to raise prices a little bit more so I can hire one person what does everybody say? That's awesome, great. What great that I raise prices, you know. So I mean talk about an advantage.

It's great. And you get these loyal people because by supporting you, they're kind of part of it and they are.

Yeah. Someday it won't be there. Well, maybe not. Maybe it'll stay there forever. It'll be small like 37signals have kept it forever.

Oh, yeah. I'm sure. But you want to take advantage of it while you can.

And that they're even part of by supporting the business.

See? Yeah. So cool. You can't buy that. Like Google cannot spend any amount of money on ads to make that happen for Google, right? It's cool. Like you have something even Google can't do. That's amazing. So do it. So don't hide behind a 'we' where you just threw away that advantage.

It depends a lot on the decision like a hiring decision, product strategy decision, should you move, like there's pretty different filters you would then apply for those things. So I don't know about favorite filters, but I would say you can't have too many, which is nice. Like you can have too many priorities. Well, this is important and so is this and so is this and so is this. And then you can't really make a decision because these options are going to have different peaks of what things they're good at and what they're not and then you're confused. So more priorities identifying more important things does not, it actually makes it harder to make the decision. Filters which are thresholds or negatives make it easier because they cut out things until there's not many options left which is good because that's helping you focus on making a decision. So you can't have too many. So that's good. You can have 20. It's all right. But so like if you're hiring for someone, are there some based on culture, others based on things that they've accomplished or things that other people say about them when you go around? Like there's a lot of things you could sort of pile on there that you're...

That's right. Yes, constraints are useful for making decisions and you know especially bootstrapped entrepreneurs don't like constraints. That's the whole idea. I don't want a job. I don't want this. I can be my own boss and do whatever I want. And then of course you realize very quickly like this doesn't feel like doing anything I want. This feels like I'm being crushed all the time about to die. This does not feel like freedom at all. And then you say things like, 'But at least it's mine,' which is true, but you're still being crushed. And then later on it's still crushing because like, you know, you have employees and you really feel like you're still serving them. They're all people that either have expectations or, you know, you want to provide for them and so forth. And so it's still crushing. And so are the customers because they gave you money and of course you're trying to make them happy. Like this whole thing of you don't have a boss. In a sense, it's like no, kind of everything is a constraint and coming back on you. It's just not exactly what you thought it was. You know, sometimes these things sound so trite. There are two things or you know, you can like Peter Thiel says, you can only focus on one thing at a time or whatever. You know, all these little rules and like no, they're probably all sort of extreme in a way that makes them a bit ridiculous. The reason why they're kind of useful anyway is exactly that it reduces options. And that is good because you sit there and you look at the blank screen and think what should I do? What should I work on? Should I write another blog post? Should I write this feature? Which feature should I do? Constraints like let's say you arbitrarily said here's my schedule for the day from I write code and then from here to here I do this like well you don't have to restrain yourself like that. You can do anything you want with the whole day. Yeah I know but if I do that it'll make sure that I'll do some of this and some of that and overall globally I want to do that. So although it's artificial, I'm going to do it anyway. Same thing with a diet. Which diet is right? I don't know, haven't we learned that that's not just not the right question anymore. But it's also probably true that just anything that says, well, you can have this but not this and it's sort of arbitrary, whatever. Yeah, but if that just means you eat less and more healthfully, it's probably good, right? So yes, but the constraint is helpful because it helps you make a decision and stop thinking about it and whatever it is is probably okay. I feel that way about a lot of frameworks in business. This is a framework for product strategy. Here's another framework for figuring out how to do like it's not really about what's the best framework or proving that this framework is right or there's four things that this card well not three not five sure maybe like it's not really about that it's just having any framework just kind of stops a certain part of the conversation you start filling in boxes instead of being stuck with too many ways to think about it and that's why it's helpful and so I do like frameworks and I do like some of these sort of truly arbitrary rules that self-imposed arbitrary rules. I like that because it just lets you get to some answers.

Get to work. Yeah.

Yeah, I love that. Like crazy.

Yes. There's a funny story about there's a mathematician named Littlewood in the UK. This is probably late 1800s or so. And he was proofreading a manuscript by somebody else and there was this quote in there and it wasn't attributed to anybody and he made a note in the margin that says this quote is amazing I wish I had said it and in the final version it attributed to Littlewood he had said it and forgot. It's amazing. Anyway so I feel like that with the old blog post like oh that's pretty good.

It's better than I come up with now. So I don't like the whole follow your passion that's crap like you can be passionate about stuff and chess and that doesn't mean you should make a company doing chess. I think that's silly. But I do believe in there's things where you do naturally throw yourself into it and it doesn't have to be a topic like chess. It can be designing things or writing prose or writing code or whatever kind of creation thing that you like. Clearly, if you're in your zone, if you're in the flow and you have energy for it many hours a day, not because you have to and you're not upset after, but because you love it and time flies by and you don't realize and you forgot to pee and all that, that's the good kind of all-in, it's clear that being in that is more productive and fulfilling both. So, and of course, you can't be in there all the time, but seeking things where that can happen, that's just logical. And exactly to this point of you don't know what advice is right. Actually, there's probably many paths to success and failure. Therefore, pick the ones that more naturally fit you because whatever that is, at least you'll maximize whatever that option was. And even if you make some math that says that some other option was better, but what if you can't execute that better? Then it's still not better. So going back to that notion of what drives you in that way that helps you say look even if it's a second best option in some objective sense it may be first best in terms of your ability to execute and that's a way to ask what can I execute well. The trap is especially when you're a founder because that means you don't have a boss telling you what to do or holding you accountable, the trap is that you do the thing that you love the flow thing and not do the thing the business needs you to do. So if you're an engineer the classic version is I will add another feature today when what you probably need to do is double the amount of traffic coming to the website because you don't have enough sales. Almost always the problem with any company is not enough sales. And I'm not saying that because VCs and growth, I'm talking about bootstrap companies, blah blah blah. Like probably the most impactful thing you could ever do is increase sales 10%. If you could add one feature and increase and double sales, then freaking add that feature. But I'll bet you that one feature won't double sales. But there's other things you could do that actually might. And so there's no doubt that it's better for the health of the business to double sales in the next say one to three months than to add the feature that doesn't double sales, but you love adding the feature and you know which feature to add and you will have customers that will genuinely be delighted to have that feature. Those are all true. Therefore, you do it instead of doing the thing you need to do. And since there's no one telling you what to do, the trap is to do the flow thing instead of the thing that must be done or should be done instead.

Exactly. And that's why we, you know, the world is littered with sort of version 1.2 products that no one buys or not enough people buy. And here's another way to look at it. Look at all the risks in a business. Again, bootstrap, forget the VC crap. Just bootstrap business. What are all the risks? Can I get enough customers? Will they pay the price that I need them to pay? Will they stay around if it's recurring revenue business long enough for that to work? Can I do the tech support? Can I make an ad where they can tell in a fraction of a second this is for me because that has to be pretty compelling and use exactly the right words because it's in the middle of all those other ads. And same thing with your homepage or landing page because same thing they land on it and you get one second. They better go whoa nice. That's a very difficult reaction to create somebody in 1 second. Can you do that? Can you cheaply enough acquire those eyeballs to go say that thing to then come in? There's lots and lots of questions. All these have to be more or less in the affirmative for the business to work. And I still didn't say features yet. So here's the one thing I know for sure a good engineer can do. I know for sure that engineer can build the features. There's actually very little risk of building the features. But will that same engineer be able to do everything else I said? Almost for sure not. That's where all the risk is. Zero risk in building the software, 100% risk in all the other things the business requires to exist. So what do we spend our time on? The thing that has no risk at all because we understand the reason it has no risk is because we know how to do it. That's why it's not risky. So a good rule of thumb is to keep in mind like the one or two things a business really needs to change. It's probably more sales and that's it. But it could be other things, but it's probably more sales. And then ask the things I'm doing today. Is it causing that thing to increase? And if the answer is no, it's a problem. Now, of course, that's a rule of thumb because you have to do your taxes and that doesn't make revenue up and of course you have to do it, right? No kidding. There's stuff you have to do and of course you need to make features because actually that is tied to revenue because if it doesn't do enough then they won't buy it or they won't stay or whatever. So that is true. Maybe you have huge cancellations due to lacking three features. That is a good reason to go to the features because it's for growth. Now we're talking. You're getting people in the door, but then they're leaving. Fix the reason why they're leaving. Oh, now we're talking. Yeah, exactly. Why get even more people in the door if they're just going to leave? Good point. So, that would be a reason to do features in order to grow. Good point. But usually, we're simply avoiding the things that need to be derisked and need to be addressed. Um, and so keeping in mind what is the number one, maybe two, like real actual business priorities that you have to be pushing forward and making sure what you're doing is actually doing that.

Well, one is to get help from people who have done it and are good at it. Help could mean advisors, but not advisors in general, advisors just on this topic. Um, sometimes you pay people for that, sometimes you don't. Help could mean, yeah, learning really fast. Just deciding like I need to be an expert in some of this stuff in 3 months. And that means I can't be an expert in all of it because that's just ridiculous to say I can be an expert in all of it in 3 months. So, I got to pick something to become an expert in. So, what am I going to pick? Well, what are these things that might move the needle on the business? Again, probably new customers or something like this. And also seem tractable like build a whole sales force. Well, that doesn't even make sense. I don't, we can't even hire. We don't have money to do that. So like that's not even on the table. So stop. So maybe not sales. Or maybe it's self-fulfilling sales. Or maybe it's building an email list. Or maybe it's I need to get one paid marketing channel to work. Doesn't matter which one, but like one of them has to work. So, I'm just going to I have to go ape and do nothing but live in paid marketing places doing experiments and blah blah blah trying to make one work because if I can unlock one, then we can pour money into the one because we can afford to because it's working. And then once that's established, then you could take a breath and ask what's next. Do I try to find another one? Maybe it is time for sales. Maybe I can hire someone at this point. Maybe hire someone part-time. I don't know. But I have a few options once I have one working. So, just getting one working really well. That's my goal. And when define really well as it's pulling in, it's creating, you know, 5k of MRR per month or I don't know, just make up a threshold that says that's really doing something. So yeah, just trying to focus down on one thing and then there's probably a few options of how to get there. At WP Engine there were some things like AdWords where I was able to find there's sometimes consultants who will work on a performance contingency so like if you don't get at least this much, the cost per conversion has to be at least X or else I don't pay you or I pay you some minimum amount. On the other hand if you blow out of the water you can make a bunch of money like that kind of stuff so that can work sometimes for a bootstrap company who's like yeah if it fails I can afford it and if it doesn't fail then I will have unlocked something that I can afford to pay for and then I can revisit at the end of that contract period what to actually do to make it sustainable. So I did that at WP Engine so that's possible. Same kind of thing with well really any paid stuff. It could be AdWords. It could be other channels. It could be affiliates is another whole universe. That's a whole different sort of a thing. It could be email marketing, although I think that's more of a longer term play like content marketing is where you can't just do it and get a return. You have to do it and work it and so it's strategic, but it may not be fast. And that might be okay. You might be all right with strategic and slow. You're already doing content marketing, which is that so maybe it's okay. Or you might say, look, I am already doing stuff that's strategic and slow. I need some things that are not slow. I need some things right. Pay a dollar and get a customer this month. So that's what I need to focus on.

All right.

Do I have to use a certain IDE? Like it integrates with something?

So is it like desktop sharing, but you're super smart about diffs, sending diffs and compressing that and I don't know things.