How to Bootstrap a Software Company and Take on the Giants with David Siteman Garland: An EOFire Classic from 2022

0:02Who's ready to rock today, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. The only daily show interviewing the world's top entrepreneurs seven days a week. Today, we're pulling a classic episode from the archives, and we'll be breaking down how to bootstrap a software company and take on the giants. To drop these value bombs, I brought David Seitman Garland into EO Fire Studios. He is a co-founder of Nerdly, and besides bootstrapping a company that sold over$10 million in online courses, which was Rise to the Top, he is known as an expert in new media, online monetization, and more.

0:33In today's information, we'll talk about how to focus on one strategy, how to be great in creating products and marketing, and how you can scale your software business by having a niche and being lean, mean, and fast instead of being broad and expensive and oh, so much more. And a big thank you for sponsoring today's episode goes to David and our sponsors. Franocity has helped hundreds of people leave unfulfilling jobs, invest in recession-resilient businesses, and create legacy income for their families through franchising. visit franocity.com, that's F-R-A-N-O-C-I-T-Y.com to book a free consultation and start your franchising journey with expert guidance.

1:11David, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. That's a tough one. Well, you know, first of all, thank you, JLD, for having me. And what's up, Fire Nation? Here's what I'm gonna go with. I'm gonna go with a little bit of a, a little tricky one here, okay? So a lot of people think that you should always be open to new opportunities in business. So maybe new businesses or something to invest in or something to start. And where I disagree with that after coming off of this after a few years is that that's all well and good.

1:45But really, when you're locked in and focused on what you're going to do, maybe two to three things, maybe it's one business, maybe it's two businesses for a lot of people, right? Whatever that is, a lot of times you have to put on horse blinders, contrary to popular belief and work on building those and kind of take the noise out of it if you want to have big results in your business. That's what I'm going to go with. I love that stellar answer. As always, I would expect nothing less from the legend DSG. And as you heard Fire Nation in the intro, we're talking about how to bootstrap a software company to take on the giants.

2:20And before we specifically talk about that topic, you have partners, David, and employees all over the world? I mean, we're talking different countries, even different continents. What are your top tips for managing a virtual workforce? Yeah, that's a great question. And it's funny because we've got every time zone, I think, covered in the world, right? We've got Philippines, we've got England, we've got all kinds of states in the US, we've got everything going on. And a lot of times that can be overwhelming to someone that's thinking about doing a business like this. And the first thing I would say is you need to have a simple hub where everyone can communicate with each other, And so we use Slack for that case, but we have a simple hub.

3:00We're not sending 500 emails in the middle of the night or doing anything like that. So the first thing I think about is kind of a central hub for people. The second thing is that the types of people to hire for a virtual position, especially when you're spread out all over the world, it's not like someone's looking over their shoulder to make sure they're doing work or anything like that. So you really want to focus on self-starters because at the end of the day, you're going to be flexible in terms of hours, it's going to be more about output. It's going to be more about output. Now, of course, people are paid a salary or whatever it might be.

3:34And a lot of times it can be based on hours, but it's all about output and what the goals are, especially with a virtual workforce. It's not just clocking in, clocking out or anything like that. So a big thing that we do is reporting. So we have weekly and monthly reporting where depending on the position, we can see exactly what people have done that week or that month. So we know what kind of the output is and where the expectations are. So I think those are just some kind of things to think about because you can't look over someone's shoulder and that's a good thing. And so a lot of times it's just coming down to the proper training and trust, but don't be afraid to go virtual things.

4:12I mean, I don't know. I've been doing it since I was 22 years old. I'm 37 now. So I've been doing it a while. So those are a few quick tips on it. Yeah. And on that note too, one thing that I've recognized over the years is the importance of hiring motivated individuals, not specifically just on skill sets. Cause I've hired a few people whom I was just like, man, they are just so skillful. They have all the skills in the world, but even when I interviewed them, you could just tell they had no motivation. They were just, you know, just so dry, just so deadpanned, just no enthusiasm seemed in life in general.

4:45And despite having all the quote unquote skills in the world, they just weren't self starters. They weren't motivated. And so they just weren't getting the kind of stuff done that I wanted to get done. So that was just one thing that I've kind of learned as well. I wanted to add in here when you're looking to go virtual and like you're going to be sleeping at night and people in the Philippines are going to be working. You want those people to be self-motivated, self-just driven. You want those to be the kind of individuals that you have because you can always teach skills and that training that David talked about.

5:12I know he does very well and very consistently. You can train skills, but you really can't train self-start or self-motivation. Now, one thing that you have learned in what sounds like now over 15 years of being at this game is that marketing is tough. So in your vast experience, what is the number one key to marketing a software company? It all comes down to, you can have the best product and it can be the best kept secret. And you don't want that, right? You got to get the word out there. And I noticed a lot of people with their businesses, a lot of times they fall into one of two categories, either are great at creating products or they're great at marketing.

5:51And you really have to be good at both, right, one way or another. And so there's a lot of different strategies you can do with marketing. And here's what we do. And here's what I recommend. And this is for a software company or a lot of other ones, is that, first of all, you can't do 10 different strategies at once. If you do that, it's going to be a disaster waiting to happen. So we like to laser hyper-focus on something, and what we do is partners. So for Nerdly, it's all about partners. That's what we focus on, and this is, in my opinion, what I've seen from other companies that have done amazing in the software space.

6:24So really, I did this a lot for years on the other side, and JLD, you do this now, is where you promote a software or whatever it might be, and you're going to earn a commission on it, right? And it's a win all the way around because, number one, as the entrepreneur, as the software owner, you're not spending a zillion dollars on marketing. We're not taking a risky big ad campaign or doing this or that. It's lower risk because let's just say Joe Blow promotes for us and doesn't make any sales. Nobody's really worse for the wear. It's just some time was kind of spent on it, right? But what ends up happening is when you do make sales is that the people that promote, so the JLDs of the world, right?

7:05They get to promote something awesome that will help their audience or their customers, and they also get to earn commissions on it, and the software company continues to grow. So, for example, we give 30 % commissions for our software company. So having that focus, that is all we're focusing on, and that's the advice I would give people that are thinking about it is to laser focus on one strategy. And I really think for software, there's no better strategy than the affiliates and joint ventures. I love how you started that, too. I think it's so important. Fire Nation, you do not want to be the best kept secret because so many of you know you have the best product or the best service in a specific niche that you have just nailed.

7:43Don't be the best kept secret. Now, we hear all the time that the money is in the SaaS. You know, it's kind of like back in the day that the money's in the banana stand. No, the money is in - I like it. The sass. So tell us, why is software such a lucrative business that you've found to be the case? Yeah. You know, it's interesting because there's so many different business models out there, right? Like when I started, I started by doing online interviews. Then I did a course on interviews. Then I did more courses. Then I did a course on courses that we all know, right? Sold that company. And I've been doing software since 2015, right?

8:23With the original software idea, which was CourseCats, which has now evolved, right? And what's interesting about that is I've seen different business models. And what's great about software is you can run it very lean. You can run it very lean. You don't need a big office space. You don't have physical products. You don't have all the this and that of those things, right? Well, we don't have an office, right? But here's the difference. There's a difference between lean and cheap. lean and cheap. Like there's right places to spend, you know, spending on the proper team, spending on the proper ways to run your business, things like that.

9:01But, you know, software is very high margin business. And one of the reasons for that is that you can keep expenses relatively low compared to a lot of other businesses. Right. And it's not taking your time necessarily, like, you know, coaching or consulting or something that might be, which, you know, I also do as well. And it's also great, but it's very different when you have a software do things for you. And it's a high margin business. And a big reason for that is recurring payments. Your MRR, your monthly recurring revenue. And that is the magic. That is the magic of software and why I love that business model.

9:38Because I'm not going to give the kind of BS, JLD, that someone would say, hey, you can go take a nap for three months and the company's still good. But no, this is an active company. Software is going to be an active thing that you're going to work on and grow, right? But having that guaranteed MRR coming in, of course, it could go up, it could go down. That, in my opinion, is what makes it lucrative because you know that there's revenue coming in every month. Fire Nation, you've heard me say the phrase, niche, you're flipping face off before. But guess what? you're going to hear David say something pretty similar when we get back from thanking our sponsors.

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10:51Don't know anything about franchising? That's the beauty of it. Franocity provides personalized one-on-one coaching at no cost to you. And they have access to over 600 franchise brands. And Franocity doesn't just help you pick a franchise, they help you understand the business model, investment risk, scalability, and operational reality. Ready to explore business ownership through franchising? Visit Franocity.com. That's F-R-A-N-O-C-I-T-Y.com to give free consultation and start your journey with expert guidance. DSG, we're back, brother. And people love, and I mean love, to go broad with their idea because they want to serve everybody.

11:26They want everybody to be their potential customer in the world. They want to be able to serve 9 billion people, but tell us, why is niching down with software so gosh darn important? Yeah, and it's funny. You talk about this, JLD, in your trainings all the time about podcasts, right? Nitching down on a podcast. We talk about niching down on training or whatever you're doing. Software is really no different. And this is one of the biggest secrets because a lot of times when people think software, they're thinking broad. We got to get everybody to use it. We're going to be Zoom, right? Or something like that, right?

11:56But the way to compete with the big boys and big gals is to get more specific and own a portion of the market, okay? So let me give you a concrete example of this, right? So instead of creating a software that you're trying to market to, say, small businesses, which is a very broad category, right? It's software for fitness studios, Or perhaps it's even more niche. It's software for karate and martial arts studios, right? So why do you get so niche like this? Well, that's how you can compete with the big, you know, crazy funded venture capital type companies, right? So for example, with Nerdly, we have, we're taking on things like Squarespace and Wix.

12:41These are really, really big companies. And the way we compete, we're not going to compete with dollars. We're not going to compete with the amount of employees that we have, right? And neither should you. But instead, we can do things that big companies can't. And you'll be able to do this with software as well. So for example, we can take our software and make very specific website themes for different niches. You know, Squarespace isn't going to worry about that. Wix isn't going to worry about that. But we can create a specific theme for Brazilian jiu-jitsu studios. We actually did that, JLD.

13:10A specific Brazilian and jujitsu theme, right? We have a special podcasting and entrepreneurs one for JLD and Fire Nation, right? And so being able to niche down and focus, that's how you can compete by being lean, mean, and fast versus trying to go broad and expensive. I want to be lean, mean, and fast. That's kind of my theme in life. And that's where I want to be. So I'm glad you broke it down in that way. Now, most people aren't just scared, David. They are terrified when it comes to finding and hiring developers. Are they going to be trustworthy? Are they any good? I don't even know what they do, so how can I check up on them?

13:50You've done this. I'm sure you have some scary stories that you can share. I'm sure you also have some really great stories, but what overall are your biggest tips in this area? This is a tough one because a lot of people, especially if you're in Fire Nation here, which you are listening to this, you're more on a lot of times on the entrepreneurial side of the brain, right? Kind of on the business side of the brain. And what's interesting is, and I'm totally stereotyping here, but you know what? It's a pretty true stereotype. Developers, they're their own unique animals. They are their own unique animals.

14:22God bless them. They're awesome, but they're their own unique breed. Okay. So a couple of things to think about is the first thing is that development, I don't care what the software is that you create. Development is an ongoing thing. So you're going to kind of be in bed with this person for a long time, right? Because I don't care if you want to just, you know, there's not really a case where you're going to create a software one time and then that's it. And you're never going to need any technical help or anything like that. It's just not going to happen, right? So realize this is going to be someone that's going to be with you, I hate to say forever, but kind of forever, right?

14:56Now, the question is when you look for the right developer and, you know, this could be as simple as putting a project out there and seeing if a developer can do it, right? Like a sample project. Or you can use your social networks to start to go with this. But in my opinion, the best thing that you can do, and this is what I've done in all our software companies, because my partner Brad is a developer, right? And we have two partners in Nerdly. The other one's Nick Stevenson. But Brad's a developer. The game changer is equity for the right developer. That's the game changer, okay? So what we mean is a developer will actually own a percentage of the company.

15:34One, that lowers a lot of risk involved for everybody, right? Because you're not going to go out and pay a developer$100 ,000 or something, right? Number two, they've got skin in the game. And if they think it's a good idea, that's a potential great developer for you. If they say, oh, God, I don't do equity. No, no, no, I don't want to do that. Well, that's not probably the person for you, right? You want someone that's a developer, but also does have that entrepreneurial kind of motivated mind. You talked about that earlier with employees. Same thing here. It's thinking about, okay, is this someone that you can grow the business with?

16:06Because really at the end of the day, they're going to be your partner in this. And that's what we do with our businesses. And that's what I would do as well on the development side. Now, you want to know an interesting fun fact, JLD? Yeah. A lot of people don't know this interesting fun fact. So Brad Hogan, who's an amazing partner, he was a partner in Course Cats, a partner in nerdly. He's been developing things for me going all the way back to 2008, 2007. Brad and I have been working together then since basically 2007. So now we're in 2022. So do the math on that. It's about 15 years. And Brad's originally from St.

16:38Louis. I'm from St. Louis. We have never met in person. Never met in person in 15 years, my friends. What shocks me about that is that he's never come to cheer you on at a softball game. Well, I mean, yeah, I mean, come on, you know, Because I think Brad's got two things. He's either canoeing or developing, I think. He's in the woods. And so it's just interesting, though. I just find that the state of business that we have now is just so fascinating that you don't need kind of these traditional things that you would think in business. And I know this is kind of an extreme example, but it's just crazy what you can accomplish.

17:12And we've had numerous successful companies and growing a huge one now without physically meeting, which is such a weird thing. But I figured that'd be kind of a fun fact for Fire Nation. That is a fun fact. And you did mention the word nerdly. And I want to spend the rest of the time we have here today talking about that. I mean, you are the co-founder of Nerdly. What exactly is Nerdly? What does Fire Nation need to know? How can Fire Nation get involved? Sure. And Nerdly, very important thing. I know we're going to give out a link as well, but Nerdly, there's no E. So it's N-R-D-L-Y. So if you type in the E, I don't know where you're going to end up, but not in the right spot.

17:49So just a little background on what Nerdly is. What nerdly is, is it may, it allows making a website extremely simple and look like you spent$10 ,000 on a developer, right? But it requires no design or development skills. And it's also not one of those like really bad cheapo templates that you see out there as well, right? Because we used to see that, JLD, you've done a lot of websites, right? Like for EO Fire, you do it for all your courses and things like that. And, you know, I've been involved in this online business for 15 plus years. So I've seen all the good, bad, and ugly of websites. And what I noticed is that there's kind of two extremes.

18:26There's the design development side, which could cost you, I don't know, 10 grand plus ongoing stuff. And it might be slow to get a change on your website. Like you might want to change a color to purple and it might take three months, right? That's the design development side. The other side is like the cheapo depot template, where basically it looks like, you know, like the little guy construction with a construction digging in the 1990s on the website. And it's a template and templates are awesome. We have a lot of templates as well, but they're cheaply made with really no instructions or help on what to do.

18:56And you end up kind of creating a Franken site, right? So we want to combine that and find a middle ground where it would make it really easy. So if you're a podcaster or a personal brand or a coach or consultant, or you have a small business that you want to have the appropriate look, but also all the tools that you need as well, the landing pages, all the different skills. We found this middle ground with Nerdly. And I think what separates it besides the design and how easy it is to use, because it's all visual, drag and drop. But at the end of the day, what I think is a game changer is our concierge service, which is included free with Nerdly.

19:33And what the concierge service is, is they will set up the basics of your website for you and then hand you the keys. So you choose, you say, hey, I want it to look like this. They'll go in there, they'll set it all up for you. They'll kind of do the framework and then boom, you can add your content. You can add whatever you want to, you want to add your podcast. That's great. And there's specific instructions how to do it. And it's for a fraction, fraction of a cost of other sites. And so that's really what we've been doing. And we've seen just great success with people loving the design and how easy it is and our customer support.

20:06And so that's kind of nerdly in a nutshell, if you will. All I want to say is where were you in 2012 when I had to build the first iteration of eofire.com? What a nightmare. Where were you in 2016 when I was trying to build the Freedom Journal, 17, the Mastery Journal? I mean, every one of those was like just this undertaking. And I love this concept of you have a conscious years, Fire Nation. You know what you want. They make it happen. And then you can adjust on the fly. man so so tempting it's just something i wish i had over the years and i love that phrase you used nobody wants a franken site nobody wants a franken site fire nation nobody wants that and don't fall into that trap so dsg bring it home for us brother where can we go to find more about nerdly no e nerdly and what else we need to know oh yeah for sure so we actually set up something special just for Fire Nation, just for JLD and Fire Nation for you guys.

21:06So got the hookup, right? So Nerdly, it's N-R-D-L-Y. Go to nerdly.com slash, you know, this one's coming, fire. So nerdly.com backslash fire, F-I-R-E. Okay. So it's a special thing for JLD. You can kind of browse, you can check out what Nerdly is and some of the things that we custom made for Fire Nation. For example, we have a specific template that you can use designed for podcasting, if that's what you're doing, or designed for more of a general small business. You'll be able to see it, or online courses or whatever it might be. So you'll be able to see that you can easily get these. And by the way, you can switch between them as well, which is pretty cool as well as you go.

21:47So we've hooked it up for you. And what we've got is a 30-day free trial, and that includes concierge. Wow. So I mean, your site will be set up and everything, and you'll be ready to go. and also if you decide to stick with it, which we hope you do, 25 % off your first payment as well. So we've got that set up at nerdly.com slash fire. And JLD, one thing I want to mention kind of on the way out is that you mentioned softball, which you know I'm big into slow-pitch softball, like a crazy person, right? And I needed to create a website for my team, Siteman Softball, and I was able, and anyone can go check this out now, sitemansoftball.com, right?

22:24Or my consulting site, which is sitemangarlandconsulting.com. Both of those were created on Nerdly and you'll see that they look very different. They all each have their own personality. They're each very different looking sites, but they were both created on Nerdly and they were both created in less than 24 hours. And I can tell you that right now that that's the simplicity of this and kind of the beauty of it is that you can get it up and obviously it's easy to change as you go as well. And I remember I used to procrastinate on doing sites, you know, hiring someone or doing it, like you said, in 2012 forever.

22:56And now the idea that you can kind of go from idea to site that quickly and have it look amazing and actually work is, in my opinion, pretty revolutionary. So feel free to check out those examples as well while you're at it. But it's nerdly.com slash fire. Game changer, Fire Nation. And you know that you're the average of the five people you spend the most time with. And you've been hanging out with DSG and JLD today. So keep up that heat. Head over to eofire.com, type David in the search bar. The show notes page will pop up with the seven total appearances that he's had on this show. Lucky number seven.

23:31I love it. Yeah. Let's go on a little DSG binge. I mean, let's just go back to back to back. Let's see what was happening back in definitely 2012, by the way, when I interviewed you for this show. So that would be crazy for people to go on a little Hall of Fame walk, so to speak. But Fire Nation, your direct call of action is nerdly.com slash fire, N-R-D-L-Y.com slash fire. David, thank you, brother, for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Thanks, JLD. I appreciate it. Always good to be here and a 10-year anniversary, it sounds like, of my first appearance and lucky number seven.