How to Start a Startup, Part 1 of 5

How to Start a Startup
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In this episode of Startup Hustle, we begin a 5 part series about how you start a startup.  If you are interested in starting your own startup or improving the one you already have, then this is the series for you.  Matt Watson and Matt DeCoursey are seasoned entrepreneurs that are ready to share all of the ups and downs associated with starting your own thing.  Make sure to subscribe so you know when new parts of the How to Start A Startup series are added.

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Matt DeCoursey: Hello, and welcome to Startup Hustle. Matt DeCoursey here with my cohost Matt Watson. How are you doing today, Matt?
Matt Watson: Doing pretty good. What are we hustling today?
Matt DeCoursey: Well, we're going to start a five-part series about how to start a startup.
Matt Watson: Startups are a lot of work.
Matt DeCoursey: They are, that's why I look so tired.
Matt Watson: It's a five-part plan?
Matt DeCoursey: Yeah. Some of this stuff, we've already talked about. Ever since the podcast came out, I've had people asking me for more details on some of these stuff that we have hit on, and I think that I'd like to get into that. I think that you and I have some interesting stories to tell. I'd like to start today by talking about the things that you need to know before you start the next big thing. How do you feel about that?
Matt Watson: I think there's a whole lot of things you need to know. I think it all depends on the type of startup, but there are definitely a lot of things to know.
Matt DeCoursey: With that, and also in this five-part series, I'd like to talk about some other things. I'd like to also talk about how to plan your startup, how to implement your plan, dealing with growth and scalability, and should things work out and you make it down the road, how to determine what your startup's worth, and what you should be doing with it. I think those are all pretty good things to consider before you get started, don't you?
Matt Watson: I think they require a little thought before you get into it. I don't think most people understand how hard it is to get started. I think the first thing we could help them with is some good things they need to know before they get started.
Matt DeCoursey: Yeah, because sometimes the best decision is to not even start at all.
Matt Watson: You mentioned to me earlier today a great story about a guy who read your book, Million Dollar Bedroom. He gave you some great feedback on that. I think maybe that's one of the first things we should talk about.
Matt DeCoursey: Okay. Sure.
Matt Watson: You want to tell that story?
Matt DeCoursey: Right. Million Dollar Bedroom is my story, and I guess I should say thanks for being a part of that, actually, because Matt Watson was interviewed about the whole process of what he went through selling his first company for 150 million bucks, and with that, when the book came out in June of 2017, it actually did well. I got some really interesting feedback and interaction from people.
I did a book giveaway on Amazon, and one of the guys that won a copy of Million Dollar Bedroom found me on Facebook, and he sent me a message. He says, "Hey, Matt, wanted to just send you a note and say thanks for your book." I said, "What do you mean?" He said, "Well, I really enjoyed it. I felt like I was talking to an old friend. I just really wanted to say I thought it was a great book, and thanks for writing it."
I replied. I said, "Well, thank you for taking time to find me and say kind things. Hopefully, the book helps you in your current or future business." He replied by saying, "Well, I don't own a business, and I'm never going to." At first, I was a little confused. I said, "Well, what do you mean?" He said, "Well, after reading your book, I realized owning a business just isn't for me, and I think you saved me a lot of money." I said, "Wow, I really appreciate that. Now, I'm really glad you got something out of it, and thanks for the support."
I thought that was pretty cool. I sent him a copy of my other book, Balance Me, just because I really appreciated him reaching out. The point is, is this guy had read the book, and he realized, "Oh, my God, look at all this stuff that this guy went through on the path to success, and all the money, all the hassles, all the stress and anxiety, and different stuff like that, and maybe this just isn't for me."
Matt Watson: Yeah, I think that's a great point. I mean, our goal is not to scare people aware. If anything, we want to help people, and we want to help motivate people, and teach them some things that they can use to be successful. Sometimes, for some people, that is just letting them know that this just isn't for them.
Matt DeCoursey: Do you think that you do that by just simply documenting and telling people about all the things you were successful at?
Matt Watson: Well, or all the things we did wrong.
Matt DeCoursey: I think that's more important than the things we did right, in a lot of ways.
Matt Watson: I think it's a combination of those things.
Matt DeCoursey: Yeah. With that, I look back at my own path, and even my current path, and until you do something, you can't really determine whether you were doing it right or wrong. What I failed at, you might not fail at, or what I failed at might not even be applicable to what you're doing.
Matt Watson: I always say that about having kids. There are so many things about having kids you will never understand until you live through it.
Matt DeCoursey: Right, like not having kids and be giving you advice about kids.
Matt Watson: Yeah.
Matt DeCoursey: Well, I do have a couple of kids, but I'm not going to give you advice about parenting, because I'm going to wait and see how mine comes out before ... That startup experiment is still ongoing. When it comes to a startup, you've obviously ... When we talk about stuff, we're generally talking about things like software as a service. That's what your company Stackify does. That's what GigaBook does, but there's a lot of other things to consider, and we're going to get in to some of that a little later in this series. I think from the most foundational elements, we have to talk about a few things. I think the first one that really heavily needs to be considered is time and resources. How do you feel about this?
Matt Watson: Well, depending on your type of business that you are creating, I think people have to really be realistic about the amount of time it takes to start the business, create the product, figure out what your go-to-market strategy is, sell the product, and get those first customers. Especially with a software business, I don't think people can really truly understand at all how long that can take. I mean, it took with Stackify two or three years of having multiple employees to build a product that we could then eventually sell one day, right? It's not like a franchise that was turnkey, and you were just up and running. I mean, it can be a long road. People have to understand that and be prepared for it.
Matt DeCoursey: Well, why does it take so long, Matt?
Matt Watson: Well, because building software is complicated shit, right? It's hard. I've been writing software for 15 years, it's still hard, and especially if you don't know a lot about writing software, or you're not a technical person. It's even harder to find somebody to help do that. Granted, every software product is different. Ideally, you want to pick something that is a simple product that you can build a simple thing, and go sell it, and get some traction, and continue to improve. You don't want to build some big, complicated, hairy thing right out of the gate, and then go try and figure out if somebody wants to buy it. That probably brings up the first topic we should really talk about that relate to that is validation, right?
Matt DeCoursey: Sure.
Matt Watson: We had Laura from VideoFizz on a previous episode, and she told a great story about how she had wasted ... Well, not wasted, invested $250,000 of her own money, and figured out eventually that her product, nobody want to buy, nobody want to use. She went way down that road before she realized that she never spent the time to really validate that people wanted what she was trying to build.
Matt DeCoursey: Let's define validation. What is your definition of validation?
Matt Watson: Well, I think the first thing you want to do is meet with as many potential customers as possible, and talk to them about the problem you're trying to solve, and first of all, validate if that problem is a problem they even care about, if it's a problem that they're willing to spend money on. At the end of the day, people are only going to buy things if they have an acute pain that you can solve.
If you walk into somebody and say, "Oh, I can help you with this little thing," if they're like, "Yeah, that thing is not on the top of my priority list," then it's going to be really hard for them to spend money for whatever that thing is. It's got to be something that they really have a pain with, that there's ROI for, that they're wiling to spend their time and money on.
Matt DeCoursey: I agree and disagree, because I don't think that the acute pain is the only buying factor. There are other things that are associated with things like convenience. Oftentimes, it can also be status. You look at some of the social networking platforms or whatever, and the reason that some of them might even exist or find usefulness is, well, people like showing off their stuff, or sharing that experience.
Now, I agree with your point about the pain. If you can solve that part, you can win. It's a completely path and amount of time. If you're able to solve a problem, if you're able to help someone make more money or save more money, those two things are the first factors, then you have a really good validating, validation factors to be working with. Your time that you're going to need if you're not solving an immediate problem and your ability to generate revenue are probably going to be a lot harder if you're not doing that. Do you agree?
Matt Watson: I agree. I think it also depends a lot if it's B2B or business-to-business software versus business-to-consumer, right? The examples I was giving before really in regards to that B2B software, right? You know who your customer is. You know who that person is, what their job is. Can you solve a problem for them that they're willing to pay for? That's a lot different than the consumer side where you have social networks, all this stuff, like you have an example of.
The problem with those is you better also know how to monetize those, because they're not going to pay for anything. The type of product you want to build, you first got to validate who the customer is, how you reach those people, are you solving a problem they care about, and how to monetize it if it's not something that somebody is going to hand out money for.
Matt DeCoursey: I think some of the things that can be instant validation are related to ... The industry already exist where you're trying to plant your flag. We previously mentioned something about looking at an industry, and while you want to be first, sometimes, no one is there for a reason as well. There just isn't a big market or people that you're going to be serving well for this.
Now, that doesn't necessarily mean there won't be. When I've looked at my building of GigaBook, and I had the same path that you had, it was years and a lot of money before we collected a dollar, and I mean, literally one dollar. The reason for that was we quickly learned that what people are willing to pay for, and their willingness to do so on a recurring basis means you have to give them a lot more than what you might be expecting.
For example, with GigaBook, we didn't want to make it overly complex. That's a whole another subject we'll get into later, because we did, but we have things a little too simple, and people wanted a little bit more, and the problem was, is now all of a sudden, we had put all this time and energy, and we thought we were there, and we really could've done a much better job of validation by actually doing stuff like just letting people into our product to use it for free, even.
I talked to co-founders and other startup ... Excuse me. I talked to startup founders and future founders a lot about this, and I think that kind of ... Your customers give you validation that's stronger than anybody else can. You can't ask me if you think your idea is valid if I'm not your customer. You can, but my opinion only matters if I'm a buyer. Some of that has a lot to do with the time that you'll be able to get your product out, but what about the expense? How much does it cost to hire a programmer?
Matt Watson: Software developers are extremely expensive. I mean, in the United States, they make $50-$150 an hour, depending on if it's direct hire or contractor or whatever. I mean, they make a ton of money. If you're not a very ... If the founder and the founding team isn't very technical, I mean, you're at their mercy too, right? You're hiring somebody that's supposed to be an expert at creating a software, and they're just going to do whatever they're going to do, and you're just at their mercy.
That's a huge risk that you take. That's why for a lot of startups, I always recommend is like you need to go find that technical co-founder. That's what I was. I was the technical co-founder. I didn't even have the business idea. Somebody else found me, but I was able to help them with their vision and their idea and make it happen.
Matt DeCoursey: Now, you as one programmer can only do so much though, and that affects the timeframe as well.
Matt Watson: Yup, you can only do so much, but that comes back to the validation side of it, right? Before you even get programmers involved, or before you have them spend an enormous amount of time, you can make mock-ups of your software, and just screenshots of what it will look like and go meet with people and say, "Okay, what do you think? If you could do this, this, and this, will this be viable? Will this help solve the problem?"
Do as much of that as possible before you start paying all the money for the development, and then when you do bring the development in, yeah, absolutely, are you going to have one developer, or two, or five, or ten? They're extremely expensive. If you can get your product idea down to something simple, and if you can do that with one or two developers, that's the best thing you can do is get that simple thing that somebody will pay for, and they continue to grow it from there.
Matt DeCoursey: With that, you also have other options and things that you might need to know, and as you know, I operate an office and have for almost a decade now in Cebu City, Philippines. With that, I think a lot of people think they're going to offshore or find developers overseas. You and I in our daily interactions ... For those of you that don't know, GigaBook and Stackify are located in the same building here in Kansas City. Sometimes Matt and I see each other more than we might want to, but with that, we often find each other on the couch, their office couch, complaining, or yelling our misgivings out at what it's like to be a startup founder and the problems that we run into, and sometimes, they're different.
The idea that you're going to hire people that aren't near you and develop a product the way you want it is rough. I don't think that that's going to happen. We can reference Laura at VideoFizz, she mentioned, and I don't remember the exact numbers, but she had a couple different people build a product for her, and say, "Here it is," and then it didn't work. That's not abnormal.
Matt Watson: Yup. You really need somebody on the founding team that understands software if you're going to build a software company, otherwise, you better have a lot of money, and you better find a company that can build it for you that you really trust and you really know that comes highly, highly referred, and better have really detailed plans on what the software is supposed to do, how it's supposed to do it, why it's supposed to do it, all those things. Otherwise, you're just could be throwing a lot of money out the window.
Matt DeCoursey: We're going to get into a little more of that in the following episodes in this series, because Matt is an expert. I mean, I considered what I see him do at Stackify with his team and whit his product, I often referred to Matt as operating on a genius level. It's very impressive, and I'm looking forward to what you're going to share with people in this other series. Now, one of the things that I think isn't considered enough is competition. Let's put it this way, if it's something that can be monetized, there's probably already people doing it, and a lot more than you think.
Matt Watson: I think it comes back to what you said earlier. Most ideas are not unique either, right? Usually, somebody else is already doing this. I think GigaBook and Stackify are both examples of that, right? We're not the only people that are doing this. When we started, we probably weren't the only people that were doing this, but we were able to figure out how to do it a little differently, or in a different niche, or some other iteration of that.
For my current business at Stackify and my previous business that I had, part of our value proposition really was that we did several things together. You could go and buy one tool, and then another tool, and another tool. Really, the value that we brought was the combination of those three tools together. That created its own unique product, but we were creating a product for a market that already existed. There was demand for it. People already used these things. We weren't creating some whole new market. We were just doing things a little differently in the market.
Matt DeCoursey: Since we're talking about things that you need to know, the thing you do need to know is that even if you are first, if you are the actual pioneer in it, you're going to have people on your tail immediately. The moment that it's obvious that what you're doing is working, and you're going to have competitor two, three, four, and then the list goes on. I have literally stopped keeping track of my competition. I don't even care anymore. GoDaddy just became my competitor this week. They have a scheduling tool that you can build into their website builder.
Now, that's more validation for me. I'm okay with that. We still continue to sign up hundreds of new businesses every month. Hey, we started this a long time ago, and we had to have the foresight. Now, with that, if you're doing some planning and thinking about what you're doing, you need to be thinking about who your potential competition might be down the road. I honestly wish I had done a little more of that. I'm competing with mega-companies, and hopefully well enough that one of them will buy me. That's part of what I'm working on. I've given consideration to that fact.
Now, with that, part of this whole, the thing that you need to know, is this path to revenue that you have to build, and for those of you that have been keeping with this series or read it in my books, you know I sounds on some days like a parrot about that, like, "Path to revenue, path to revenue, path to revenue," because you have to know it, and you have to have a feel for it. When you're giving consideration to what you're about to do, you really need to estimate the time and resources that are needed, and then double or triple it, because it's going to be a lot worse than you probably think.
I think the biggest thing that I run into that people need to know is the likelihood that you're going to travel down your path to revenue, and it's going to be sunshine and roses the whole way is zero, zero, no chance that it's going to be smooth the whole way. Do you take that bet or do you disagree?
Matt Watson: I complete agree. I mean, with Stackify, the problem we originally thought we were trying to solve and how we were trying to solve it, we've changed considerably. Now, the first customer we got was actually a friend. They were paying us $15 a month, and, hey, we had revenue. We had path to revenue, right, but getting the next $5,000 was a lot harder, right?
Even sometimes you're going to have early adopters, and you can have people around you that support you, but it's crossing the chasm to the next group can be hard too. You have to understand that path to revenue and your go-to-market strategy, and how to get there. I talk to people all the time who go and build a product, they're trying to solve a problem. Maybe they're solving it for themselves, they really struggle with the how do I actually sell this thing at scale to more than just myself and my friends?
Matt DeCoursey: Yeah, and I think that's certainly something to consider. I'm looking back at GigaBook while you're talking about customer one. Our first customer is still a GigaBook user. After a year, we ended up giving this lady what we call the golden ticket. We just said, "You can use this for free forever," because after we actually got her as a paying customer, we still had so many things to fix. I felt so bad that she had to be so patient through these things. I just couldn't even ... I was just so happy just to have someone giving us more info about that.
Now, what you're talking about is understanding that growth. Just because you build it, does not mean they're going to come. This is not Field of Dreams people. You're not going to have a line of cars down the street just because you get a couple of people along the way. Now, the software as a service industry, especially, is remarkably competitive. If you're trying to stack up 10 and 20 bills at a time, you got to stack up a lot of them.
The number of people that you're going to get into your platform ... Let's say ... We don't talk about specific performance numbers for our companies on this show, but you're going to sign up a whole lot of people, and 80%, 90% of them, if you're lucky, aren't going to use your product, meaning, you're going to have 5% to 10% if you do well that are probably going to sign up and actually become paying customers.
Matt Watson: I'll tell you our numbers.
Matt DeCoursey: Sure.
Matt Watson: It's 7% to 12%.
Matt DeCoursey: There you go. GigaBook is right in that ballpark, and sometimes, we do things that increase that, and then we try to get better, and sometimes we make it worst, and there's just a whole lot of stuff going on. We've been talking about the time and the resource. Well, another thing that you need to consider too is advertising isn't cheap. The world is plastered with it, and most people aren't paying attention to almost all of it.
Matt Watson: Advertising for us doesn't even work. It doesn't even work.
Matt DeCoursey: Actually, let's briefly talk about that. We'll get into that in the growth strategy. I've witnessed you throughout the course. It was January of 2017 when you and I met for breakfast, and we talked about ... We did the interview for Million Dollar Bedroom, and you were telling me, I'm spending all this money on advertising, but I don't feel like it's working. However, I do think that marketing through content and some other grassroots methods that we can provide the input for might be the solution. I've actually watched you ... What's your web traffic up this year? 10 times?
Matt Watson: It's up 10X. Yeah, we were doing about 40,000 a month on our website, and now it's over 500,000 a month. I had a conversation with a guy yesterday, and the only reason he wanted to talk was because of our blog. He's like, "Hey, every morning, I drink my cup of coffee, and I get a message from you guys about your blog post today, and I read it, and I'm just enamored with the content that you create, the quality of it, and I just want to talk to you. I'm just a fan. I just love what you guys do over there."
Matt DeCoursey: I think the thing that's pretty cool about that is ... GigaBook finds a significant amount of signups from our blog as well. We kind of approached some of that a little differently, but what I love about the Stackify blog is that every article ... It's not a shill. It's like, "Hey, this is some information about how we might be able to help you with what you do, and while you're here, if you want to check out our product, we would love that. In the meantime, here is something useful that's going to make your life better, that's going to educate you, or it's going to make you better at what you do."
Matt Watson: Yeah, and most forms of selling software and products, one of the best thing you can do is give away something for free, and then hope to get business back from that, right? Our blog is actually, a lot of times, it's us giving away huge amounts of knowledge for free. We pay people as well to help write these articles and give away these free knowledge, these best practices.
Matt DeCoursey: It started with you.
Matt Watson: Yeah. I still-
Matt DeCoursey: Right? You literally, as the CEO of the company, writing blogs and seeing what worked, and once you saw that it did work, you were able to scale that. The blog went so well, and we've been doing this podcast. You started another podcast, didn't you?
Matt Watson: I did. There's a Stackify podcast that just launched called Developer Things.
Matt DeCoursey: With that, what do you cover, Matt?
Matt Watson: It's all topics related to software development, so DevOps, and cloud, and software development best practices, and interviews with people around the industry, and our customers, all those sorts of things.
Matt DeCoursey: I'm a nontechnical founder, would I benefit from listening to the shows?
Matt Watson: It might be a little too technical. It's really targeted towards software developers. That's a good question.
Matt DeCoursey: Yeah. I'm of the opinion that even if I didn't understand it, being exposed to different things can actually be useful. You look back at things you didn't need to know, or things you need to know, well, as a nontechnical founder, you have to be able to communicate with the technical people on some level. You know I don't write code. I don't attempt to. I really, on some levels, don't even have an interest in doing it. I do understand how to talk to a technical person. I do understand the basics of it.
If you're planning a startup, one of the things you need to know is if you're going to be a technology or software company, you need to at least get brilliant on the basics. You need to understand what kind of platform you're trying to build, meaning what kind of servers they're going to be in. I'm going to turn this over to you, because this is your specialty. What are few of the things that you think a nontechnical founder needs to understand, just a very basic checklist?
Matt Watson: Well, so to finish the last thought though first, I think actually, the Stackify podcast would probably be good for anybody who works or own as software business. It's not crazy technical, but yeah, I think a lot of them would probably be topics ... I'd be interested to have you listen to more and more of them, and give me your feedback.
I think some of the things you need to understand is things like server hosting, what does that cost, where would you host it. In this day and age, I would definitely recommend using Microsoft Azure, or Amazon Web Services, or one of those types of platforms. The last thing you want to do is go buy physical servers and put them on a closet somewhere. Azure and AWS, and these providers actually do special things where they'll give you a certain amount of monthly credit for free. You'll get 100, 200 bucks a month for free. You can go stay in that.
Matt DeCoursey: I actually use Rackspace, and I have a specific reason for doing that. Some of these companies have managed plans, and the ability to ... One of the mistakes I made early was thinking that a cheap server was a good thing. It is a horrible idea for the regards that, A, if you're paying 10 bucks a month, don't expect someone to pick up the phone when you call or care, because when your site went down, probably 3,000 others did too, and they're getting inundated with tickets.
We had a problem with that, with my ticket sites that we originally had. They were hosted at a company I won't name, and their server got hacked multiple times. With that, an injection virus was put into our websites, which meant that it spread. They injected it into the server, and it spread to all of our pages. The cleanup of it was terrible. Well, that happened once, then twice. The third time it happened, I was out, and went to a place, where I ... It was really important to me that if I had a problem, I could pick up the phone and get someone to answer it, and help me. Do the companies that you mention offer that? They probably do for your account, but do they do that for a normal prosumer?
Matt Watson: Well, I think ... It's a lot different, for instance, somebody like GoDaddy or something like that for $10 to host your blog, right? We're talking about a more serious hosting type of account. To your point, that's what you want, right? You want to have somebody that really cares about your stuff 24/7. You'd call and you get support. Yeah, Microsoft Azure, they offer phone support and all that stuff. I think they charge just a little bit of money for it. It's not very expensive.
Matt DeCoursey: Yeah. I mean, I pay a couple hundred bucks a month, and they update the server. I don't have to deal with that, because having someone to deal specifically with that is not a level of expense that I feel that I necessarily need or want to take on.
Matt Watson: Well, and we thank about ... The theme of this is all things to know. These are some of the more detailed things that you get into that you never thought about. I have a server now, and I have people's, potentially, private data. I have to worry about the security of that.
Matt DeCoursey: Payment card industry compliance, standards.
Matt Watson: Yeah.
Matt DeCoursey: Other stuff.
Matt Watson: GDPR.
Matt DeCoursey: I don't even know what that means.
Matt Watson: HIPAA. Yeah, all sorts of crap.
Matt DeCoursey: Yeah.
Matt Watson: Just more things to know.
Matt DeCoursey: There's a lot of regulation, and there's a lot of rules. Take a look at all these massive companies that have billions of dollars in revenue that have data breeches. If they can't keep people out, you're not going to keep people out, but you got to be ready for that. I think once or twice a week, I actually get an email from someone I have never met and don't really even want to know offering to sell me competitor data. That's occurring because they're breaching servers, and just other poor practices. You got to be ready for some of that, and it's better to be prepared. It's better to have an umbrella and have it not rain, than the other way around.
We've been discussing some of this, but actually, I would like to hear what the rest of the list of what you think a nontechnical founder needs to brush up on. I think understanding the basic workflow, and, we're going to get into that, and how to plan your startup, and then, really, how to implement it, but I think you have to have an understanding of how you ask a technical person to implement your plan.
The thing that I really learned is if a programmer doesn't know what something needs to do, if you say, "This is how I need this to appear," no, they need to understand why. Having that understanding really helps a programmer build that logic that modern programming uses to execute everything from your user experience to the way it looks or the way it reacts or all that stuff.
Matt Watson: Well, I think if you're one of the founders, the co-founders on a team, even if you're not technical, odds are you are still the product visionary and the product owner. This was your idea. This was your baby. You have the vision for the problem you're trying to solve, and so you still got to be very heavily involved in the software development process. It doesn't mean you're writing the code, but you're a key stakeholder in what work is being done, how it's being done, when it's being delivered, validating that it was done correctly before it gets to the customer, right, and that's one of the biggest challenges that people have. It's one of the challenges you've had, right?
Matt DeCoursey: Yeah. Yeah, recently as well. Since we're talking about things you need to know, Matt basically just told you, you might actually need someone to manage your developers, and with that, that's more resource, that's more expense. Sometimes, it's more time. That's the thing I struggle with is I'm a Type A, driven, salesy kind of guy. I want you to buy it now. What's taking so long? What's taking so long? What's taking so long?
With that, that's not always what people that are building your stuff want to hear. Sometimes, honestly, I think it pushes it forward, but at the same time, that expectation of it, what's it going to take, and how are you going to ... The things that I try to do are the things that keep my programmers programming. Having them do other stuff means they're not programming. Are they any good at what you're asking them to do. As your business and your web platform grow, you're going to run in to even more challenges.
One of the things with GigaBook we ran into is here we are stacking Legos onto this castle we're building, and now we're having to look back at it, and we're like, "This needs to be a lot simpler." Sometimes you build something the way that you want it, and you look at it, and you're like, "Whoa. This is a little overwhelming." I think that we can start heading into the last segment here, and talking about having a ... I think this is probably the most important part of what we've been talking about today, and it's understanding the amount of commitment that you're going to need, and the opportunity cost that comes with it. Do you work 100 hours a week sometimes, or have you?
Matt Watson: I would say I have worked 50 or 60 hours a week forever.
Matt DeCoursey: Yeah, to me, a 60-hour week would feel good. I find myself in ... Well, it depends.
Matt Watson: You should read a book called Balance Me.
Matt DeCoursey: Oh, wow. Yeah, I wrote it. It's really funny, because that, on the surface, a book about life balance, but the first thing I tell you is good luck, it's almost impossible. If you're on a business, it's even harder. Here's the thing is when you're starting something new, you don't have any protocol. You don't have an instruction manual. You have to figure out so many things. That's another part of planning that all these one-time expenses, these one-time instances, and it's nearly impossible to do that.
I actually earlier this year invested in a company that moves fitness equipment. I was amazed, looking back at it, that I got almost all of the stuff that I needed to estimate that we needed right. 10 years of experience, I finally got it right on one. I missed a couple little things, but they were minor. I know that's not related to software, but going back to the whole time commitment, it can be intense. If you think it's going to happen between nine and five, well, that's not the way it works.
Murphy and his laws definitely rule when it comes to the world of startups, in my opinion. If something is going to break, it seems to do it on the weekend, it seems to do it in the middle of the night or something like that, and those are the things that if you're now picking up some traction, we've got all these people that use GigaBook to manage their business, if something breaks, we have a responsibility, and especially if we want to keep them as users, to addressing these issues, and doing it quickly.
Sometimes, right now, if you guys could see me, I have got black circles under my eyes. I have been up working until 3:00 a.m., because I needed to have a more hands-on approach with people that work for our company that are in different timezones. With that, it's challenging. Then some of that, I'm able to structure the rest of my life. People think it's crazy because my daughter goes to bed at 10:00. Well, that's because I have a better chance of seeing her between 6:30 and that time, so we let her sleep a little later, and that's what works a little better for me.
For example, with an office in the Philippines, that's almost a 12-hour time difference. When I'm getting home, I need to get them started sometimes, and with that, that commitment. Another thing too is the financial commitment. If you don't have deep pockets, it's going to put a strain on what you're doing. It can be a challenge, and you will-
Matt Watson: I think I've heard before that most startup founders make 30% of the amount of money they were making before, and a lot of times zero, right, or you're working part-time. My first company, I was working part-time. I was a software developer at a medical laboratory, and I was doing that, basically, 30 hours a week. I was working another 40 hours a week doing this. I had a little bit of income, but I had less income. Then even when we started making money in the business, we started getting traction, I was not making market rate. I was making way less than that. You have to be all in and make that commitment, and you got to be financially ready for it is my point.
Matt DeCoursey: What's the total amount of wages that you ever see from Stackify since inception?
Matt Watson: It's been six years, and the number is zero.
Matt DeCoursey: I am also at zero with GigaBook. I pay money to work at my business as do you.
Matt Watson: Yup. On paper, it's worth money.
Matt DeCoursey: Yeah, and that's something that we're going to get into later in this series is trying to figure out what these things are worth, and with that, who you're going to sell them to. Now ...
Matt Watson: There's one more thing I think we need to talk about in commitment. I think most people that are really entrepreneurs are really driven at building whatever it is they're trying to build. I think you mentioned earlier, it's kind of a passion side of you that is on 24 hours a day. I went and had lunch with my team today, and I showed up with my laptop. I'm sitting here on my laptop with the team. They're like, "What are you doing?" I'm like, "Going through email. I got stuff to do." It never ends.
Matt DeCoursey: I'd like to tell people the internet never closes.
Matt Watson: Back to your point that you wrote about this, right, that life balance is tough. To be successful, a lot of times, that's what you got to do. You are all in, and you are working and thinking about this 24 hours a day.
Matt DeCoursey: In that book, the main thesis of it, and the biggest suggestion that give is that you have to understand when and where you're consistently engaging in low value activity. Low value activity is simply defined by things that don't move you towards your goals. It doesn't mean business goals. It means life goals. That could be personal, professional, or physical.
I legitimately went in to the other room and told my wife last night, "I'm sorry that I've been so busy. I'm hoping to see my family this weekend." That's the sad reality of some of it. For me, I just had some things that were very pressing with what we're doing. Now, I'm coming into the weekend, we're actually recording this on a Friday afternoon, I'm coming into weekend knowing that I'm going to get a day tomorrow. I'm jumping right back on it on Sunday, because that's what I got to do to keep momentum going.
Now, one of the things that I've heard in the past is people like to compare to the guy that spins plates on the end of a pole. Here you are ... Well, I think it's true, because I'm constantly running. You spin another plate, and another one is wobbling, you have to go spin it. Both being people that are involved in different enterprises past the one that we do that's a primary, that's a big thing for me. You have to put out a fire before it gets so big that it's now starting other individual fires around it. That's always my particular thing that I'm dealing with.
Matt Watson: You're doing a lot of hustling is what you're saying.
Matt DeCoursey: Yes.
Matt Watson: From one problem to the next.
Matt DeCoursey: That is an understatement, but it's what needs to occur for me to find success. I know that. That's the thing is, sometimes as well, you're going to find yourself disappointed in the people that you think are there to help you in their commitment level. You can have talent, or you cannot have talent, you can't always control that. The one thing you can control is your own output, and your effort, and your attitude, and how you approach things.
If you're going to start a business, not even a tech startup, but just a business, you're going to have a huge time commitment upfront, and it's going to create opportunity cost, which means you're going to miss out on other opportunity for things going in and around your life. Be prepared for that, and maybe even talk to the people that are around you. If you're married or in a relationship or whatever it is, whatever the things are that currently occupy a lot of your time, consider that you might not be able to engage in those the way that you have.
My wife and I, and your wife, our wives are very understanding. They have had a long time to adjust to "This is kind of the way these guys are." With that, if I didn't have the kind of support that I have at home, I think the rest of it might fall apart quickly. I think that also considering what kind of other support and understanding you have around you is a pretty big thing as well.
Matt Watson: Well, and some people may have commitments with their church or their family, or elderly people in their family they got to take care of. I mean, there's a million different things that people could have in their life that they have to spend a lot of time on.
Matt DeCoursey: Children.
Matt Watson: Their kids.
Matt DeCoursey: Yeah. You can't be late to pick up your kid at school. You don't want your kid being that kid, and they're, "Where are you?" These are things that you have to really take into consideration, and how they're going to affect other things.
Matt Watson: It's something that you always have to be thinking about the balance of.
Matt DeCoursey: Well, I tell you what, let's go ahead and end today's episode. Hopefully, we didn't freak you guys out. For those of you that we did, we are either sorry, or you're welcome, whichever applies.
Matt Watson: Yeah, thanks everybody.