This VC Taught Himself How To Code And Is Bootstrapping His Own Startup
Hello! Who are you and what business did you start?
My name is Phil Strazzulla and I run SelectSoftware. We are an expert online review site for HR software - basically the NerdWallet/WireCutter for all of the different HR software categories out there.
I started my career working in venture capital at Bessemer Venture Partners, went to Harvard Business School to get my MBA, learned to program, and then started my first business, NextWave Hire. NextWave is a b2b SaaS business that helps HR market their company as a place to work. 6 months ago we hired a general manager to run that business, and so I had time to work on something new!
Over the past 3 months, the organic search traffic to SelectSoftware has been growing at around 30% per month, and in August 2019 we had our first month of revenues with a little over $1k/mo.
What's your backstory and how did you come up with the idea?
I’ve wanted to start a business since college. I got the chance to intern at a 2 person startup and loved the impact I could have there. So, I took a few jobs after school that I thought could help me learn how to be a good entrepreneur, got my MBA, became a full stack web developer by hacking on fun side projects, and finally started a company.
As part of marketing my first business, I started a weekly whiteboard video series where I’d talk about one lesson for HR people, and then put the video on LinkedIn. These videos started to get picked up by lots of related media and were getting around 10k views/week.
I love to teach, love to learn, and so they were a really good natural fit for me. Because I loved doing them, I think other people enjoyed watching them. Here’s our most popular one:
When we hired a GM to run NextWave, I had some free time on my hands, and the itch to start another business. I’d built a personal brand in the HR space through this video series, and I knew how to distribute this type of content.
I also realized that there were 100s of new HR software providers coming to market each year and that it was getting really hard for HR people to pick which software to use and why. There were also new, confusing categories coming out like chatbots, AI, etc.
While there are several “Yelp for software” sites like Capterra, etc out there, I didn’t think these were great resources. I’d actually tried to use some of these sites to diligence investments I’d been making, and found almost no signal within the noise of uninformed reviews.
I should probably also mention that I’m a bit of a finance nerd and have been investing since I was 12. I actually went back and calculated my returns for the first 20 years of my investing track record recently:
Take us through the process of designing, prototyping, and manufacturing your first product.
The success of my business hinges on creating high-value content for HR people to better understand what software to buy. If I can do this, I get high intent eyeballs to my site, which I can then re-sell to vendors (in an ethical and transparent way).
After diving deep on their problems, I was able to write in-depth content that they found useful, would share with their friends, and talk about at conferences.
So, I need to deeply understand the HR team’s process of buying the software. In order to do this, I got 2 consulting gigs helping companies buy HR software. As I mentioned before, through the whiteboard videos, I built a personal brand in the HR space. This meant people were willing to hire me as a consultant (and I also did one of these for free as basically a fly on the wall).
After diving deep on their problems, I was able to write in-depth content that they found useful, would share with their friends, and talk about at conferences. It was now as simple as writing long articles and putting them online. For example, this piece on the best applicant tracking systems, or this one on recruiting chatbots - both of which see the average user spending 15 minutes on the page.
In terms of technology, while I can code, I actually choose to simply host everything on Squarespace. It’s not an amazingly flexible program, but it’s good enough to get started for me. This allowed me to focus on the key hypothesis I needed to prove for my business around creating, distributing and monetizing content.
In the next 12 months, there’s no doubt I’ll switch from Squarespace, but it’s good enough for now!
Describe the process of launching the business.
In terms of capital, I’ve taken the money I’ve made from these consulting projects and pumped it back into the business. I’m able to make around $100k/yr working one day per week as a consultant which is amazing and surprising. Beyond my personal living expenses, the business is incredibly lean and takes around $50/mo to run.
I’ve launched very slowly without a big “splash.” In fact, many people still think I am running my prior business. I’m not sure why this is as I write these words down. Perhaps I want to get to $10k in monthly revenues before sharing it and am afraid of failure, which of course is just a function of insecurity. I’m also worried that people will think my other business isn’t going well and that customers may leave if they find out I’m not 100% focused on it anymore, despite the rock star GM who’s running it.
I have done a few in-person events to 1) learn more about my customers and 2) get feedback in real-time on my product. These have been a lot of fun, and I’ve actually gotten sponsors for these so that I make $1-2k/event. These typically take the format of a small breakfast where I give an interactive lecture on a topic related to HR.
Since launch, what has worked to attract and retain customers?
I’ve spent the last 5 years building a personal brand in the HR industry, and that has allowed me to quickly acquire customers.
If you can build a community, twitter following, email list, etc before launch, that makes it SO MUCH easier to get traction when you do launch your product. For me, the best way to build a personal brand was to put out weekly content I found to be interesting via short-form videos. These videos led to speaking engagements, which led to guest blogging, podcast interviews, etc. All it takes is one format for work, and the rest will follow as there are so many publishers constantly on the hunt for high-quality content.
I really hate the thumbnail for this video, but the idea is that HR practitioners like Tracie have been kind enough to share my content and help me grow a following over the past few years, which has allowed my current business to scale fast.
The other thing I’ve tried to invest in is search traffic. This is a result of good content, using a CMS that is at least “good” at search in Squarespace, and getting links to our site. As you can see, the weekly search traffic has increased a lot and very consistently since the Spring:
How are you doing today and what does the future look like?
My company is 3 weeks into revenue, so we are far from profitable. We have just over $1k of monthly revenues, which is luckily around a 99% gross margin given our only “variable” cost is hosting. All of our vanity metrics - email subscribers, site visits, social mentions - are growing at around 30% per month. But, the main thing that I care about is growing revenues, all of which come from a cost/click sponsorship model.
While I want to get more customers on board, I’m much more focused on retaining and growing my first few customers. If I can make them happy, I can scale what’s working to other businesses faster. Because I’m selling a product that many marketing teams are used to buying, high intent leads, it is not a very hard sales process. Therefore I’m not worried about figuring that out - how do I get more leads, send them to the right place, and track the success.
My goal is to get to $5k monthly revenues by the end of 2019!
Through starting the business, have you learned anything particularly helpful or advantageous?
The number one thing I’ve learned through startups and working in VC is that a product either has market fit, or it doesn’t.
There are lots of things you can do to help a business launch, get customers, retain them, get them to tell their friends, etc. But, if your product isn’t great, it’s going to be like sprinting on a treadmill and eventually you’re going to have to turn it off.
Despite having worked in VC, I think most companies should be self-funded and that this is the path to a great life for the founder.
Conversely, I’ve seen amazing products that are led by mediocre at best teams which have done extraordinarily well. What this tells me is that the number one thing you can do as an entrepreneur is to launch, get feedback, and iterate until you have a fabulous product that people love. The rest kind of takes care of itself.
What platform/tools do you use for your business?
For my business I used MixMax for emails/scheduling, MailChimp for our newsletter, Squarespace for hosting, Google tag manager for analytics, and Headspace for sanity :)
Overall my advice is to not get married to a given tool because you may outgrow it quickly. This is especially true for something like a CRM that houses your data and will be hard to migrate from overtime.
What have been the most influential books, podcasts, or other resources?
I love the IndieHackers podcast which details the journeys of bootstrapped entrepreneurs. Despite having worked in VC, I think most companies should be self-funded and that this is the path to a great life for the founder. I also love Paul Graham’s essays, The Hard Thing About Hard Things, The Snowball, and The Everything Store.
I should also say that there is a lot of information I view as toxic for entrepreneurs. Basically, don’t read Tech Crunch or any other publication that is going to make you feel like you’re not visionary enough every time you open it. These blogs focus on a small subset of companies, and portray an image of entrepreneurs who are trying to “change the world.” The reality is far from what is portrayed. And besides, we all don’t have to be like Elon Musk.
Advice for other entrepreneurs who want to get started or are just starting out?
There are insane ups and downs with entrepreneurship. You need to have a lot of balance in your life. For me, that means daily meditation, exercise, healthy food, sunlight, and interactions with friends/family.
Don’t let yourself go down a black hole when you have a rough quarter or year. You’ll be unhappy, and unproductive. Just realize that the pain you’re experiencing is part of the journey and be grateful that you’re resilient enough to get through it!
Are you looking to hire for certain positions right now?
I am looking to hire freelance writers who are used to doing in-depth b2b style content, preferably about software/HRTech. I’m also looking for a hustler to help with SEO related outreach. If you or anyone you know fits the bill, let me know!
Where can we go to learn more?
Here are the best places to learn more about SelectSoftware/me:
If you have any questions or comments, drop a comment below!
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