The Changelog: Software Development, Open Source - The Moneyball approach (Interview)

Episode Date: October 10, 2024

John Nunemaker joins us to share his new thesis for acquiring Rails based SaaS apps. He's early days on his next big thing called Very Good Software and recently acquired Fireside, a podcast hosting service started by Dan Benjamin. This comes after many years since John's acquisition of a lifetime of Speakerdeck to GitHub, which laid the foundation for these moves.

What up nerds, welcome back, this is the changelog, we feature the hackers, the leaders, and those who are moving software forward. On today's show we're joined by John Neudemaker, he's sharing his new thesis for acquiring Rails based SaaS applications. He's early days on his next big thing called Very Good Software and recently acquired Fireside, a podcast hosting service started by Dan Benjamin. This comes after many years since John's acquisition of a lifetime of SpeakerDeck to GitHub, which laid the foundation for these moves.

We discuss the importance of cash flow, customer retention, the challenges of SaaS, valuation of software companies, the risks and rewards of acquisition, his long-term vision for Fireside, and the other ventures. We go deep, and I know you're going to love it. A massive thank you to our friends and our partners over at fly.io. Yes, that's the home of changelog.com. Fly is a public cloud built for developers who want to be productive, want to ship, and that's us.

Over 3 million apps, including us, have launched on Fly, and you should too. Learn more at fly.io. Okay, let's do this. What's up, friends? I'm here with Dave Rosenthal, CTO of Sentry. So Dave, when I look at Sentry, I see you driving towards full application health, error monitoring where things began, session replay, being able to replay a view of the interface a user had going on when they experienced an issue with full tracing, full data, the advancements you're making with tracing and profiling, cron monitoring, co-coverage, user feedback, and just tons of integrations.

Give me a glimpse into the inevitable future. What are you driving towards? Yeah, one of the things that we're seeing is that in the past, people had separate systems where they had like logs on servers, written files. They were maybe sending some metrics to Datadog or something like that or some other system. They were monitoring for errors with some product.

Maybe it was Sentry. But more and more what we see is people want all of these sources of telemetry logically tied together somehow. And that's really what we're pursuing at Sentry now. We have this concept of a trace ID, which is kind of a key that ties together all of the pieces of data that are associated with user action. So if a user loads a web page, we want to tie together all the server requests that happened, any errors that happened, any metrics that were collected. And what that allows on the backend, you don't just have to look at like three different graphs and sort of line them up in time and, you know, try to draw your own conclusions. You can actually

like analyze and slice and dice the data and say, hey, what did this metric look like for people with this operating system versus this metric look like for people with this operating system and actually get into those details. So this kind of idea of tying all of the telemetry data together using this concept of a trace ID or basically some key, I think is a big win for developers trying to diagnose and debug real world systems and something that is, we're kind of charged the path for that for everybody. Okay. Let's see you get there. Let's see you get there tomorrow. Yeah. Perfectly. How will systems be different? How will teams be different as a result?

Yeah. I mean, I guess again, I just keep saying, and maybe, but I think it kind of goes back to this debuggability experience. When you are digging into an issue, you know, having a sort of a richer data model that's, you know, your logs are structured. They're sort of this hierarchical structure with spans. And not only is it just the spans that are structured, they're tied to errors, they're tied to other things. So when you have the data model that's kind of interconnected, it opens up all different kinds of analysis that were just kind of either very manual before, kind of guessing that maybe this log was, you know, happened at the same time as this other thing, or we're just impossible. We get excited not only about the new kinds of issues that we can detect with that interconnected data model, but also just for every issue that we do

detect how easy it is to get to the bottom of it. I love it. Okay, so they mean it when they say code breaks, fix it faster with Sentry. More than 100,000 growing teams use Sentry to find problems fast, and you can too. Learn more at Sentry.io. That's S-E-N-T-R-Y.io. And use our code CHANGELOG. Get $100 off the team plan. That's almost four months free for you to try out Sentry. Once again, Sentry.io John, the last time we had you on this network was the acquisition of a lifetime. thesis and these moves you're making because you not only were working at GitHub, you also pulled away some money as a result of this acquisition of a lifetime. Maybe that's the best place to begin. Just give us a synopsis, a real quick summary for those who don't want to go back and listen to Finers Talk 79. Yeah, sure. So basically I was in RubyConf in New Orleans and it was, you know, hotel and conference and bar and all that, like

all together and just walked into the bar. And I'd been friends with Chris Wansrothik from GitHub for a while. And so the year, Oh man, 2011. Yeah. It's actually, it's easy for me to remember. Not that we're into medical things here, but I had three hernia surgeries that year. Gosh, that would make it easy to remember. It remember it sticks out yeah it's like stuff that is not normal which one of these is not like the other years three is too many in one year that's i would i would agree with it was brutal yeah and and they told me the last one was it was like so bad they're like you're going to be back in in five years i'm like 10 years uh sober from hernia surgeries so nice yeah i'm living on borrowed time right now.

But anyways, we were like, I went into the bar. I saw Chris. We started talking. We were just talking about like GitHub, which is, you know, maybe like 40 people at that point. And then like the stuff we were doing at Ordered List. And there was five of us. And we, you know, talked for a couple hours and then went our separate ways.

And then he ended up messaging us and we connected in South Bend. And they're like, what if we just, instead of like, you know, me personally investing or something like that, what if we just acquired you guys? And we're like, cool. Yeah, that sounds good. So we did that and then worked there for seven years and then perfectly had a daughter in June of 2018 and went on parental leave and GitHub was amazing. I got five months off to full pay, do whatever I wanted. It's amazing. Yeah. I got four months with my son who's like three years older. And I thought that was just like unheard of my dad. You know, I was born at like whatever, 3am. He was back at work at 6am on the farm, you know, like, so that, that brain

can't even compute. And so, yeah, we had my daughter and then two days later they were like, there's rumors about the Microsoft stuff. And then like three days after that, it was like announced. And then basically I went on leave. And then I, my last day of leave, I had a Friday GitHub and Microsoft closed the acquisition. And that Monday was my first day back the one after that. And I was like, sorry, I'm out. And so that it just timing wise worked out like they asked me, I was like, I was totally planning on coming back. I was I had no intentions, because I'm like, you never know what's going to happen with deals. I'm not going to like quit in the middle of leave and have a deal not go through or things like that. But yeah,

so we were 45 through 50. Early acquired kind of like a strike team. And then we all went our separate ways and worked on different things. But I think it worked out well for both sides. And so that's kind of like the very fast forwarded version of it. And then done box out like kind of the last box out sports the last four or five years since then. So 2018, yeah, I would have been right at the end of 2018 when I moved on to that. Fantastic. You save the audience, let's say, an hour-ish when I moved on to, onto that. So fantastic. You save the audience. Let's see an hour ish.

I want to say of their life, unless they want to go right. 79 minutes of having to go listen to founders talk 79. Are you a GPT? Cause that was a pretty good summary. Yeah, I did. I piped it through before.

I just had a gut feeling and I was like, add some mumbles and some arms to make make it look real that was in the prompt so yeah edit did add any herniated discs or that was accurate already number three right three was correct yeah it was not hallucinating unfortunately all right so to set the premise of what i mean by foundation you shared a post i want to say about a week-ish ago, acquiring Fireside. But part of this post, you mentioned this thesis you have of acquiring Rails applications. Because you're a Rails developer. GitHub was an early Rails application, still is a Rails application. You're a Rails developer and you're in this position, and I'm not going to read the post for you.

But essentially, you're in this position to acquire and grow some Rails apps where the original founders may be ready to leave or looking for an injection or just something where you can begin to build out this portfolio of primarily, to my opinion, a financial foundation to set you in a groove, put you in a good position. And then I would say, and you could probably concur with this, that that has set you in a good groove or a good motion to accomplish this very good software motion that you're working on, which is part of that post. Yeah, that's definitely true. I mean, I feel like even Boxout before that, that was kind of, let's, that's definitely true. I mean, I feel like even box out before that, that was kind of, let's say that's the first investment. I mean, I worked there, so it doesn't really count. I don't know if that counts as an investment, but I bought in, I didn't like join. And then it wasn't like work equity. It wasn't stuff like that. I bought in for

like 25% of it. And then I've, you know, additionally worked there as well. And so I kind of saw like from there, I think I saw a little bit of like, you can, I've got this post on my website that's like cushion versus flow. And it's this idea of like, you have like, you can have like a cushion, which is like, you know, cash cushion, or you can have cash flow and you can use them interchangeably to create the other. And so it's just like at any given time, you have to kind of choose between which one, like, do you need a little bit more cushion? Then you can take your cash flow and you you can save some of that. And you can build up a cushion or vice versa. And so and so box, I was kind of the first one where I was like, Okay, I have a little bit of a cushion from GitHub, like, I'm not going to stop working, I have like a six month

old and a three and a half year old, I'm going to be at a desk for a while. And so I was like, what am I going to do? And I had some friends already that were doing it, they were doing well. They could use help. And so it just kind of made sense to buy in and do that. And then doing that, we're getting about the size where we're on, let's say, private equity radar. I don't know how they know. They just sniff it out and they can tell. And so they're like, oh, you must have X million in revenue. We'd like to get to know each other. Are you up for coffee in the Bay Area? And I'm like, no, not in the Bay Area. But I've done a lot of interactions and stuff like that.

Went through a lot of due diligence and a lot of deal structures and negotiations. And then I started getting this idea of like, and I listened to a lot of My First Million. I hope I'm allowed to mention other podcasts on this. Please do. Yeah. We'll bleep it out. No big that's fine you can bleep it out make it unnecessary censorship there but yeah like i i listened to that and listened to some other stuff and i was uh acquiring minds and i was like what if i just like bought something so i in and out of while i'm at a box out like i've been looking at that kind of a, a thing and just nothing came along that

was like, that was right. You know, like I just couldn't find the app. And then I was, I was working with Garrett, uh, diamond and I was paying him to work on flipper so that flipper could move forward while I was kind of working on box out the last year. And we were in kind of like a, a deal with, um, another company kind of related to PE and stuff like that. And I was like, I want flipper to be there in case, you know PE and stuff like that. And I was like, I want Flipper to be there in case, you know, something happens with that. And nothing did, which was totally fine and great. And so then I was like, Garrett knew Dan and from Fireside and Dan was looking to get out. He had kind of stopped podcasting. Use a full name. What's his last name?

Dan Benjamin. There you go. Yep. DB, Dan Benjamin. Here we go. And so yeah, Dan was looking, I think for a good home. Like he had, he'd went around to like, I think, and talk to like a lot of people. He's obviously well-known in the podcasting space and stuff like that. And he was like looking for someone who could take it over, who would like do the customers right. Who would like push the app forward, who would do new things, not just harvest it and shut it down. And so he mentioned something to Garrett and Garrett has been a founder. Garrett Diamond has been a founder in the past. Now I'm going to get those

names every time. So I'm ready. I'm trained. Well, once you say it once, you can just say Dan now and Garrett, but the first time, please say a full name just so everybody's tracking. You do it backwards now. First name once and then full name the rest of the show. Diamond comma Garrett. And so I was like, he was like, you know, I don't want to do this by myself, like, but like maybe John would be interested. So he reached out and, and he was like you know I don't want to do this by myself like but like maybe John would be interested so he reached out and and then we you know there's a lot of name please uh he's John Diamond Diamond Cup Garrett John Meade John Nunemaker yeah John Nunemaker sorry I went one level too deep I'm a little slow on the uptake man I'm not pros like you guys so

sorry so yeah so that's kind of like how it kind of came about it's like and we're like well hey, well, Hey, if we can get this one, I bet there's a lot more now. I don't know that we're ready to like, just go in there and like, we're not taking on outside investors. We're not making a fund. We don't have, we're not going to be private equity where we, you know, have like management and carry or whatever and all that kind of stuff. Like, we're just going to build like a nice portfolio of small things. We're starting with, with Flipper and Fireside because we already had Flipper. We were able to get Fireside. And now it's like, there's probably a whole lot more out there. People have been working hard for four to eight years or longer, you know, they're in the 10 to whatever, 50,000, they're over the 10 K mark a month. And so they, they've proven that there's a decent amount of value out there for it, for whatever they're building, but they're not so big that like,

we have to go out and get, you know, millions of dollars to acquire it and stuff like that. And they're just looking for liquidity and to move on to something else. Like it's hard. I mean, you guys have been doing forever. So props on that front, but I'm like, it's really hard to do the same thing for a long time right like so that's kind of my theory is there's just like and even after announcing fireside and being at rails world like i feel like i had three or four people come up to me you're like i'm in that boat right now which is really interesting so i think we're gonna let the dust settle on this one and see if we actually are any good at this i feel like we will be but yeah that's kind of how it how it kind of

came about i guess is the thesis came from, look, we know rails, we know standardizing things across multiple apps. Cause I've never done one thing. I've always had three things at a time and then I get too busy and I think, oh, I should get rid of one of them. And so I get rid of one of them and then I fill it with another one. So I finally accepted. That's just me. I'm just going to have three things. Speaker deck. Yeah, exactly. Yup. I'm, I'm kind of almost back in speaker deck as well again so it's like that's the in and out for the fourth time or whatever so how do you get back in on speaker deck where so my what where is in well uh equity sorry just equity so like my friend ownership yeah my so my i sold it to my friend and so he's been running it and then every so often i come in and i help

on it because it's a you know it gets a lot of traffic and a lot of scale so So not just anyone can work on it. People can work on it and build things, but eventually it's going to struggle. I've got a lot of experience from GitHub, from words of friends, things like that in the past of large scale rails apps. And so I'm able to come in and a week or two and kind of fix things up. And I was like, why don't we just come up with something? You can pay me if you want, or I can just, maybe we can just hammer out some kind of equity thing. And then Fireside dropped in and we're like, okay, let's figure out Fireside first. And he is also in on Fireside. He's one of the people that joined on that.

So, and he'll be doing the marketing and stuff. And so that's where it was kind of like, okay, like let's figure this one out first. And then we'll figure out the other one after that. You built words with friends. Is that what you said? The backend or something? So I didn't, I built, I scale, help scale it. So when I started, it was maybe, I don't remember like 60,

70,000 requests a minute and it was going down every night. And then I had some friends who were working on it. And one, one friend in particular, Jesse Newland. And he was like, I think, you know, noon's can help us. And so I was like, sure, I'll try. And it was the first and only time in my life. I think I've had imposter syndrome where I was like, I don't think I can actually help you. But I was like, I don't think I can actually help you. But I was like, let's try it, you know? And between the two of us, we were able to help get it a ways.

And I brought on some other friends who are much smarter than me. That was really my value in that. And so when I left, yeah, it was millions of requests a minute in Rails, all in Rails and just basically wrote Memcache for like two years, a year and a half or so. And so we helped them launch on Facebook and all that kind of stuff as well.

That was ordered list days before we got acquired by GitHub. Before you were acquired. Yep. That sucker's still kicking. I mean, I assume these games have like a long tail of people who just keep playing it forever, right? Yep. Just like SaaS apps.

And it is. Like my mom still, she still plays on it. I haven't. I kind of dropped games, but yeah. I dropped off as well, yeah. I think there's still a lot of activity. So I don't even know who owns it anymore, if it's on it. I haven't. I kind of dropped games, but yeah. I dropped off as well, yeah. I think there's still a lot of activity. So I don't even know who owns it anymore, if it's still Zynga or not,

because they bought them at some point. Games. Simple games like that are kind of cool, honestly. And the with friends phrase is kind of cool. It's great, yeah. With friends. It is cool, yeah. Chats with friends.

They had all kinds of stuff that were all with friends yeah it was smart right i've actually played a couple of handheld games to the end of their support where you can just tell at the end where it's like okay they were either this is like pre in-app purchase it was like one-time sale kind of thing where it's like you pay three bucks and you play it. And very popular. They're making a lot of money. Everything is good. Six months go by, a year, people move on.

But then there's like this group of people that just keep playing. And I was one of them, specifically a game called Hero Academy, which is one of the best turn-based strategy games I've ever played. And I loved it. It was like chess with more complexity because your players couldn't just, they could move a certain place, but they also had special abilities and there was teams and it was just, it was really well conceived. And I played it so, so long that eventually like things just started breaking, you know, and they try it and the community rallied, like, can we open source

the backend? And I was like, part of that whole thing of like, can we keep this game going? The answer was no, we could not keep it going. But there's a weird place where video games get where it's like enough of a, of a player base to be popular and to probably make some money, but not enough to actually support ongoing effort for developers, you know? And so like businesses come in and, and ruin the fun. So. Yeah. And I think that happens with everything. It happens with SaaS apps, like anything that, you know, has stickiness is going to have that same kind of like, I guess, like tail, a long tail of like, where it's just going to go like that for quite a while. I mean, just again, just since Fireside, I think I've had three or four or five people come up to me.

We're kind of in a similar boat and it's really fascinating to me because on one hand, it's like the first, I remember the first time I talked about it with anybody, they're like, dude, that's, that's a lot of money. Like, what if it goes to zero? And I'm like, they don't go to zero. They just don't like, think about all these apps on the internet. Actually, I talked to Adam. I forgot about that. We, we talked and he was like, well, what if it goes to zero? You said that, Adam? He said that. Oh, close to that. I think I did say that. Yeah. That's something he would say. Yeah. Go to zero. He'd say that.

It was close. It was close to that. It was maybe it wasn't exactly verbatim, but it was something along those lines. And I was like, that was my first thought too. And then I realized like, I can't think of anything that's gone to zero. The stuff that goes to zero is like the stuff that, you know, you put gas on the fire and you try to grow faster than you can. That stuff goes to zero. Like stuff that, you know, like this long tale, been around for a while, proven business model. I mean, Fireside's 2016. So we're talking an eight-year-old business at this point that's been rock steady the last three, four years. It's not going anywhere immediately unless podcasting disappears and then we all have

bigger problems, right? So. Well, it's mostly the saturation in the podcast space that I think I was concerned about because we are in that space. And there's been a lot of consolidation and there's also been like charitable just shut down. It's in the process of shutting down. Like it was acquired by Spotify. They're keeping the necessary features inside of the core. I think it's,

is it anchor Jared megaphone? Well, anchor is also gone. Spotify basically buy stuff and then closes it eventually. And then you got to compete with free, you know, this is a behemoth and they're going to closes it eventually. And then you've got to compete with free. This is a behemoth. They're going to put things out for free, so you've got to compete with free. Right.

And so I think my concern was really around just the saturation and the competing with free because that's hard, right? And what we talked about – can I share some of the things we talked about? Yeah. You cool with that? Yeah. You cool with that? Yeah. Were you just talking about the churn or lack of churn with customers and how there was not churn going away? They were staying there. There was steady income over a period of time that made sense to give you at least enough foundation to say this is a safe bet. And, you know, zooming back out a bit to maybe eight minutes ago, you were saying, could we do this?

And you have a lot of friends who say, yeah, you probably could do this. I also agree. I think you probably do this. We're betting hard on podcasting, obviously. We have gone the route of build it versus buy it in our case, but because that's our business model in terms of sponsors, partners, just the way we went, you know, infrastructure partners are core to our business model, really i think we're a unique scenario in the podcasting world in the fact that we podcast around software development software engineering business growth things like that and we also benefit from the various partners we can work with and attract because they have awesome platforms and uh you know i couldn't imagine us doing we do hosted somewhere else.

We just would not have the same clout, I would say, in those cases where we can actually eat the dog food or drink the champagne and share the sentiment of the taste of the grapes. It makes total sense. So Fireside then, rock solid, you describe it. Yeah. Growing? No. Shrinking? Shrinking. Yeah. I would say shrinking, but again, like, so there's different categories of SaaS apps, just what I've seen in,

you know, like my whatever, 10, 20 years of like doing it. And so there's like, like one example would be like, but way back in the day we made Harmony. It was a CMS, did great. I had the lowest churn of anything I've ever worked on. You know, it was like, I think we had two people cancel the entire like two, three years we ran it. And one person was Garrett, who was paying it because he thought it was cool, but wasn't using it. And he was like, I'm not going to get around.

So he canceled, I think. And the other person, they went out of business. And so I'm like, I've seen hosting and hosting is very like, it takes a lot to get in. Once they're in, they don't leave. And then I've also seen, you know, gauges, which is what we made to go against like Google Analytics. Yeah. And that was like- I was a customer. I just remember gauges. Were you really? Oh, that's amazing. I know, gauges, which is what we made to go against like Google analytics. Yeah.

And that was like, I was a customer. I remember gauges. Were you really? Oh, that's amazing. Yep. That's awesome. That was. Dot ES, right?

Yeah. Yes. Yeah. Yeah. Which was against Google analytics, right? It was like, it was cooler looking. Yeah. It was simpler, a lot cooler and way more simple.

It was just like, look, you care about these three things. And it was live. We had this awesome air traffic, like dropping pins. remember cool design yeah it was worth uh what was the price on that sucker was oh it started like six bucks i think the biggest customer we had it wasn't very much was maybe in the hundreds the like many hundreds but like most of it was pretty cheap but that one's not sticky because it's so easy to switch right you just yep you know new javascript snippet and you're out 100 it's super easy so there's right? You just, you know, new JavaScript snippet and you're out. A hundred percent. It's super easy. So there's no stickiness. Cause you can be like, you can run two at the same time and see if you like it. And you can use the free trial and be

like, no, I don't like it. And just take it off. So like, it's like super easy in, but super easy out. And so I've seen like both, I would say those are the two ends of the spectrum of SaaS apps. And so I'm like, well, if you've got those two ends, like where does Fireside fit? And I'm like, it's hosting. And like, yeah, sure. It's not that hard to move from like one podcast host to another in some cases. But you know, if you have something that's working, most people just don't want to touch stuff that works, especially in the hosting realm. And I saw like, I say growing up, geez, I'm really dating myself now, get off my lawn. But, you know, my first job out of school was working at this company that had hosting and email and websites and all that

kind of stuff. And I mean, just pulling in a fortune on hosting. It's just because people don't, they just want it to work. As long as it works, they're not going to change stuff. And so when I look at Fireside and I think rock solid, that's why I think it's amazing to me. Let's say it's basically not been marketed or like, uh, worked on actively, like aggressively, maybe in two year and a half, two years, two and a half years. I don't know the exact dates. Cause I, this is a different situation than like a typical acquisition where you would do intense due diligence. I'm like, I know the person, I know the person in between that person and me, which is, you know, I know Dan, I know Garrett and I know Garrett worked on it for person and me which is you know I know Dan I know Garrett

and I know Garrett worked on it for like a year and a half a couple years ago so he knows it well and so I'm like there's confidence in the code a hundred percent I'm like this is not getting into a mess I don't need to like you know select count star the number of podcasts and it's rails so I mean how hard could it be right yep exactly you know that pretty well even yourself you can take Garrett's opinion at its face value, but you can also dig in one layer. And you've worked with Garrett for many years,

so he's not going to wrong you. Exactly. So all those things make it rock solid for me. Dan, the jury's out on Dan. I'm sorry, Dan, I got to say that. Jury's out on Dan. I'm just kidding. We don't know.

We don't know about Dan. Yeah, that's funny. So for our listeners' sake, Dan Benjamin, creator, founder of 5x5.tv, which is a podcast network that we were once on back in the yesteryear before we went to this platform. So when Adam said, I can't imagine running on somebody else's platform, I'm like, well, we have done it before, but we've been free for so long, it's hard for us to imagine going back. The model wasn't in place, though. That's why. Because we ran it. The model of the business was different then.

Right. He built Fireside probably out of the code from 5x5, which I think was also a Rails app. And so that was something that he had dogfooded, so to speak, for years and decided to create a hosting platform and created a successful one. In the meantime, there has been a lot more people offering podcast hosting. Yeah, I mean, a lot. And even both in the small and in the large. So you have the big players like Spotify giving it away for free, but then you have, I would say, fireside competitors like Transistor who are killing it in the marketplace. I think Transistor, in terms of features, we are Transistor users

through our partner podcasts, which we help produce Big Tent for Grafana, for instance, and we host their Big Tent podcast on Transistor. And so I'm familiar with the feature set and the offerings of that platform, and it's just really good. Shout out to, is it Justin Jackson? Justin Jackson, yeah.

Yeah, Justin Jackson. Shout out to Justin Jackson, who's probably been on our shows as well, I think. It's been a bit. We haven't had him on in a while. I think the last show he was on was AFK. Okay. So a very long time. It's too long.

And that's not okay. He's been out there building Transistor. Started later than Dan, but actively building that. So when you acquire something like this, of course, I guess with this one, it's your first time. So how do you know what you're going to do? But what's the strategy? Is it just like, I'm going to maintain it and just continue to, you know, get maybe a little bit of growth, maybe not, but it's making money right now. Is it like all in, we're going to take it, you know, to the moon?

What are you thinking when you buy this? Yeah. So we're super conservative. So like, I would say like a lot of people are like, oh, like being an entrepreneur is so risky. I could never do that. I couldn't start my own thing. And I'm just like, I would say like, a lot of people are like, oh, like being an entrepreneur is so risky. I could never do that. I couldn't start my own thing. And I'm just like, I'm the opposite.

I'm like, it's the easiest way for me to reduce risk. Cause I'm like, then like you can control things. So, so for myself, when I look at like, what are we going to do with Fireside? I'm like, initially, like, we're just going to let the dust settle. So it's like, let's update some software. Like it's on older versions of Ruby rails. Again, just, just boring stuff. Let's show customers that we care. Let's be fast responding to support. Let's help people.

Let's actually actively market it. That's, I think, the biggest thing that nothing has happened with in the last, you know, like, let's say two years is that there's just no marketing. And so I'm like, that's one of the reasons why one of the people that I want to make sure was in it was my friend Chris, because I'm like, that's what he does. He does marketing. And so like, we'll get, you know, an email list going. We'll get like things when you sign up where it's like, here's how you can better use us. Like the normal things that like every SaaS app basically does to kind of hopefully increase

engagement and usage and stuff like that. Like there's a lot of low hanging fruit that I think we can do because it's kind of just sat in and in an awesome way chugged along. And so I feel like that's step number one is like the rest of this year is probably like, look, let's stabilize it. Let's start building some trust back up that we're going to do things with it and talk about it and like get to where we can start moving more quickly. And then, you know, next year probably be like, okay, here's some new features and things like that. And so as far as like what we have actually picked out to work on and stuff, we've definitely got some ideas. I wouldn't say we've, like I said, this is what we're going to do first. The goal is not

all in. The goal is not like, I'm just not that again, I always have like two or three things. So my goals never be all in. My goal is always, which has always felt wrong because everyone's always like, you got to focus on one thing. And if you're doing two things, you're stupid, you know? And I'm like, I can work at 110% if I do 80% on this and 30% on another, but I can't work at 110% on one thing. I just can't do it. It's boring. I just, I get, you get locked up once in a while on an issue and you know, your brain's got to process that in the background. Sometimes there's just no way past it. And so then I can just move on to another thing. And it's like my brain, let's go. And then it can solve that other thing while I'm doing something else. It's not full multitasking, but it kind of, I find it, it's helpful for me.

I'm able to kind of stay more engaged in things for a longer period of time because there's more things to keep my brain busy. So, so it's not an all in thing. So Garrett will be a couple of weeks on box out a couple of weeks on fireside. I'll be, you know, like my hours that I've, you know, worked with my partners that they're okay with me doing on box out every week. And then I'll, the rest will put towards, you know, fireside and flipper and stuff like that. And then the goal is definitely to grow it. Like I would say conservatively, you know, like I've never worked on a SAS that hasn't grown at like 20% consistently. And so I'm like, you know, maybe firesides the first where I can't do that. Cause there's just so many people

in this, but I have no idea. We'll find out. But in my head, I think 5% is totally reasonable. And, you know, in, at that rate, I've done the math based on, you know, the capital we started with the, the, and I, we financed it a lot of it, like based on those two things, like, I think I can have even at 0%, you know, we could pay off the loan and, you know, five years at, you know, 15 at five, let's say 5% growth at 5% growth. We can pay off the loan in like four years at 10%. It's like the end of year three, you know, whereas maybe it was the middle of year four at like 15%, you know, it's like three years and it's, it's paid off if we want to, again, from key free, free cashflow. And that's with taking money out of the business to pay ourselves some money as well.

So that's like, if we can just grow like a little bit, like, and take a little bit of, you know, so let's say whatever we have, you know, you have a hundred thousand in free cashflow. You do some amount each for some salary to work on it, and then you take out some more. It has more than that, but let's just say it's that. It's easy to do some math and say, okay, we're going to take 50% out for the people working on it, and the other 50% will go towards dividends and paying off the loan early. So that's kind of how we look at it.

We're like, look, we don't have to be full-time all in. We don't have to beat Transistor, Buzzsprout, any of the other, you know, whatever. There's a million out there that do this kind of stuff. All we got to do is like do the things we know how to do on every SaaS we've ever worked on. And the likelihood of us growing is good. Perhaps that's naive. Perhaps that's just like 20 years of experience and it will be accurate and it's not naive. I don't just like 20 years of experience and we'll, you know, and it'll, it will be accurate and it's not naive. I don't know on that. I probably need to come on in a year or two years and like, then we'll have a better, yeah, six months. We'll have a better idea, but that's kind of the process for us. So like, I'll be, you know, part-time on it. Chris will be part-time on it. Garrett will be part-time on it as it grows, which I believe it

will. Any, any good software that you keep improving, you keep listening to customers, you keep solving their problems, you keep telling them about what you're doing, that grows. I've just never been on a team that does that, that the software doesn't grow. And so assuming that's the case, we'll just go more and more full-time on it. And at some point it will be the only thing. And then we'll probably bring on more apps. We'll try and find more to actually go out and do the same thing with. Um, I think that's kind of, does that kind of answer the question? It's like, like it's, it's very much like a lifestyle chill. Like I have a Google doc that I made at the beginning and I was like, this is what I want to do. I showed it to

every person that was going to be involved. I'm like, are you, this is what I want to do. Do you have any changes? Are you cool with this overall? You know, and the number one thing is calm. I'm like, I want calm. I love calm. Like box out is calm. It does very well. It makes lots of money. It pays lots of people's, you know, bills and supports their families. And nobody's stressed out, you know, freaking out. That's totally a possible thing. So I'm like, I just want to apply the same thing over here just because of structure wise, it just, it just made more sense than trying to like roll a whole bunch of things in something over there on the other side. So. What's up, friends? I'm here in the breaks with Kyle Carberry,

co-founder and CTO over at Coder.com. Coder is an open-source cloud development environment, a CDE. You can host this in your cloud or on-premise. So, Kyle, walk me through the process. A CDE lets developers put their development environment in your cloud or on-premise. So Cal, walk me through the process. A CDE lets developers put their development environment in the cloud. Walk me through the process. They get an invite from their platform team to join their coder instance.

They got to sign in, set up their keys, set up their code editor. How's it work? Step one for them, we try to make it remarkably easy for the dev. We never gate any features ever for the developer. They'll click that link that their platform team sends out. They'll sign in with OIDC or Google, and they'll really just press one button to create a development environment. Now that might provision like a Kubernetes pod or an AWS VM. We'll show the user what's provisioned, but they don't really have to care. From that point, you'll see a couple buttons appear to open the editors that you're used to,

like VS Code Desktop or VS Code through the web. Or you can install our CLI. Through our CLI, you really just log into Coder and we take care of everything for you. When you SSH into a workspace, you don't have to worry about keys. It really just kind of like beautifully, magically works in the background for you and connects you to your workspace. We actually connect peer-to-peer as well, if the Coder server goes down for a second because of an upgrade, you don't have to worry about disconnects. And we always get you the

lowest latency possible. One of our core values is we'll never be slower than SSH, period, full stop. And so we connect you peer to peer directly to the workspace. So it feels just as native as it possibly could. Very cool. Thank you, Kyle. Well, friends, it might be time to consider a cloud development environment, a CDE. And open source is awesome. And Coder is fully open source. You can go to Coder.com right now, install Coder open source,

start a premium trial or get a demo. For me, my first step, I installed it on my Proxmox box and played with it. It was so cool. I loved it. Again, Coder.com.

That's C-O-D-E-R.com. so five years to pay it off with no growth to me sounds like a pretty good deal how do you value such a piece of software a business how do you value a business like that how do you guys come to that price yeah so i mean i mean price wise the multiple on profit was less than that it's probably more like you know two and a quarter or or less than that. It was probably more like two and a quarter or less than that. And again, it's because this is a massive credit to Dan. I want to give him props because he could have just waited and just collected checks. He could have tried to get a higher multiple for somebody that's going to harvest the customers. He could have tried a lot of different things. And he was like, I want the customers to be taken care of. A lot of these people are my friends. A lot of these people,

I've, you know, like served for a long time. And he's like, I don't want it to just go away. And so that I think was a big benefit to Garrett and I and the others is that like, we could come in and say, look, this is what we're going to do. Like, we're actually going to try to grow it. We're going to make it better. We're going to take whatever your baby, and we're going to hopefully, you know, help it continue to grow instead of just to sit and slowly kind of decline. So, you know, multiple wise, he gave us a much better multiple than perhaps like, I mean, if any private equity company or somebody else came in, they would definitely have given probably a better multiple. He had better offer that he turned down before us. So I think it was truly like, he's like, these are the right people to run it. So I don't have a

great example of like, here's how you figure that out. What I've always done is like, you know, it's basically napkins. It's like, look, you have this much in revenue and you have this much in profit and you got to just look at the business and say like, is it fair to just look at the profit or is it, you know, should I look at the revenue? And then because I can cut the, you know, the expenses and make the profit larger, or like, it's kind of a holistic thing. It's just like, look, okay, if it's at, you know, x 100,000, and the expenses are like 20%, the fixed expenses of no one working on it, just the servers and software to make sure it's up and running, you know, 10, 20%, whatever it is, then you can say,

I've got the rest of that 80% to, you know, pay debt service and also to like pay people to work on it or pay myself to work on it or any of those kinds of options. And if I did that, I've got this massive spreadsheet with all these adjustable variables. And I learned these like really cool functions. Thanks to chat to BT, where I was like, how do I amortize a loan over 15 years in an Excel function? And it's like, oh, well, you need to use PMT. And then how much principal is left if I do this? And so I used all those things and I basically got it to where I could say like, okay, if I grow 0%, negative 5%, 5%, 10, 15, and I'm conservative. So I'm like, I'm not going to say that I'm going to grow 50%. I don't feel like that's going to happen. I'm like, realistically, we're going to put in a good five, 10, 15, 20% effort. And I think we'll get it out of there,

you know, as time goes on, but there's not any, I don't feel like there's any fancy formula. I don't feel like probably other people do that are more experienced for me. It's just like, I looked at it. I'm like, it seems like a good business. It's built in the way that I would run a business, very low expenses, you know, very high profit margins. It's recurring revenue. I'm looking at all those kinds of things and I'm like, why would I say no other than maybe I'm too busy, but I'm like, it has money to pay people to work on it. So it doesn't matter if I'm too busy, really. It really just matters. Can it afford to pay, you know, people to work on it? And then it's just a matter of like, do you have the money or the, you know, the financing options or other things like that

to make it happen? And again, because of my fortunate past, I've got some of that stuff lined up. And so I was able to like, you know, finance this and because I never have financed anything like from a software standpoint. And I was like, let's, finance this and because I never have financed anything like from a software standpoint. And I was like, let's figure out how to do that. That sounds fun. And I learned a lot, you know, over the last two months of like how to do that, you know, little weird gotchas from the bank, like things like at the very end, we had to like change ownership percentages and things like that or other people were going to have to personally guarantee beyond me and which I did not want.

I wanted it just to be my risk and stuff like that. So yeah, that's kind of like the longer meandering answer is like in general, SaaS apps that are, let's say under a million in revenue are probably worth, you know, two to four times like profit, like that's or like seller discretionary. So it's like anything that the seller would pay themselves that times like profit, like that's, or like seller discretionary. So it's like anything that the seller would pay themselves that plus the profit, they're probably worth two to four times that if you get bigger, if you get to like one to 5 million, then you can get, you know, like, I mean, uh, you know, like box out has had offers, you know, hand, I mean, very comfortably in the six and a half range that we've turned down. We, you know, had some stuff

in the nine times range where we're like of revenue, not even profit, just of revenue. And we're like, okay, well, yeah, we would say yes to that, but it didn't quite work out. You know, like, so I would say like in that one to 5 million range that then, you know, you get your multiples can go up a little bit. And then if you get in the five to 20 million range or the 20 plus, you can get into 10 X really easily and higher multiples. Those are just like if you ask Chachaputee, that's probably what it would say. It's something like those ranges, two to four. So two if it's not growing, four if it is growing when it's under a million, and then one to five, there's some multiples in there. Probably people would argue with some of

those, but that's a general thing that I've seen. So. I think multiples are always challenging, you know, cause it's like you could sit there and, and split hairs over multiples, you know, one, two, three. And then especially when somebody built this thing and it's their labor of love and it's been this thing they care for and they got friends on the inside. It's like, well, now you're, now you're not just offending me on my multiple. Now you're offending me on, on my work. You know, you're not valuing what I've done, but that's good that, that you were able to come to terms fairly quickly, at least based on this text thread that you briefly shared on the acquiring

fireside blog post. It was a pretty quick deal. Yeah. Well, yeah, it was a pretty quick deal. The slowest part was the bank and, and like stuff like that at the end,

the attorneys and things like that at the end, the, the part of like, are we gonna do it and how much are we gonna buy it for was like a week like that was like really quick it was like i talked to dan once uh we hit it off we you know enjoyed each other's companies and stuff like that just phone call nothing fancy for like an hour on a i don't know sat Saturday night, Sunday night. I don't remember props to my wife for all the extra time she did, you know, single parenting while I was doing phone calls and stuff on this. But we talked and I was just like, and then he sent me all the info. So I've looked at a lot of PNLs over the years because of box out and because

of due diligence and stuff there. So I was like, I'm comfortable with that. And I looked at, I was like, I think this is what I would, I would feel okay with the amount we ended up at. It was like, I'm like, I'm a nervous guy. I'm run the foot, you know, run the ball out in the fourth quarter in the football game. Like I'm not aggressive by any means. Like the whole reason I have multiple things is in case one of them goes bad, like I just diversify everything. Like I, so yeah, from that standpoint, like I was like, I'm, I'm okay with this number. Are you okay with this number? And he's like, yeah, because it's you guys, I'm okay with this number. And so we got to that and we're like, okay, cool. Like, and then from there it was like, okay, who's going to be in and out of the company?

How much ownership are they going to have? How much capital they're going to put in for the ownership and how much is going to be work-based and all that kind of stuff and then is it a separate company is it a stock sale or an asset sale is it like all that kind of stuff and then you'll fund things at the end with the bank where they're like oh fyi if someone has 20 then they have to also personally guarantee it and they and then we have to take it back to the our bank board literally the people that run the bank and get it approved again. And that takes at least another week. And I'm like, we're supposed to close tomorrow. Yeah. Can't do that. Yeah. So stuff like that. You mentioned this was financed.

Yes. And that means that you're not technically using your own money or using future money. Now you've also based the payoff on cash flow. So you've weighed the risk. Is this one of the biggest risks financially you've taken in a software business? Cause it seems like everything else you've not homegrown, but like a bootstrapped and it's been sort of a safe growth and safe entrance, even if it's been a failure or not great or whatever the outcome, it seems kind of like your biggest risk. So's funny is i i was feeling that and then like once everybody who was coming in came in and i knew all the amounts and stuff

it won't be the biggest risk technically uh like technically box out would have been because box out was you know i gave them straight cash at a pretty good evaluation and that was definitely now that was also when i had the most cash. And so it was like maybe an easier decision. This feels riskier, but amount wise, it's not as risky. So like, technically, my part was mostly the collateral and the organization, the deal structure, and the stuff that like, if I hadn't done that, then it wouldn't have happened. So that was my part. And then each of the other three people that are in it, Garrett, Chris and Steve Steve, like all are putting capital in either this year or next year based on, you know, the terms we've worked out and stuff like that. And that will get the finance amount basically

like lower than what box out was for me. And so, and again, for me, like what I, what I brought to the table is the collateral. And so for me, it's like, I have a lien on my house now. Like I use my house because I learned that, you know, you can get 80% for your house. Like my house was paid off fortunately. So you can get up to 80% of the value of your house, whatever it appraises for, snap your fingers, bank will give you a loan for that commercial loan, you know, land or like farmland. I have some of that. I tried, I tried, I was going to do that at first. They're like, I will only get 50 to 60% of that. And I was like, oh, well that's, that might not work. So it's kind of interesting to see, like what banks will do based on the assets that they're really comfortable in dealing with, because they will not do it for software. So if

you do like, if you want to do it just based on the software, and then basically, you have to personally guarantee it, you don't have to put up any collateral, but you have to personally guarantee it, which is the same thing kind of. And then you also, you have to do like an SBA loan. An SBA loan is like a ton of extra paperwork and it's like 11% interest rate. So it's like super high interest rates, like prime plus two or something like that is what I was told. I just did a commercial loan with collateral. My house is collateral and I ended up with below six and a half percent. So like half the interest rate for me. Additionally, an SBA loan, you typically have to pay off in five to 10 years. So your payments are, they go way up. Whereas like, again, my collateral, they're like, what do you want to do?

Like 15 years? Like, I'm like, yeah, that sounds good. Like I'll do a 15 year, I'll lower the payment at the beginning, you know, and then as we grow or as we stay the same and I, whatever it is that happens, I will just apply more to the payment to pay it off early. But it gives me flexibility because, you know, basically I can snap my fingers, I can get some cashflow to run the app. And then the only risk is like a lot of things go wrong. Like the market goes down, I don't know, like 70%. So then my, you know, any stock that I have is worth nothing. And like, you know, all my cash is at zero because of inflation and the pot, everyone stops podcasting or goes uses free things. Like I can't count the

number of scenarios that would have to go wrong for this to be like really bad decision. And so from that standpoint, I'm like, if all that stuff goes wrong, no matter what I'm doing, I'm probably going to be in a little bit of all of us are gonna be in a rough spot. If it gets if all these industries, you know, collapse, we've got bigger problems. So I was like, I'm just gonna for once in my life, like, take a little bit of a bet. But I would say overall, it's not as big of a gamble as box out from like a purely money standpoint, because technically I haven't gambled anything. I've only gambled like possibly having to pay it off early, like myself personally.

And that wouldn't be fun. Or, you know, having to do that when the asset goes to zero, something like that. So it's like, well, I really made a pretty big mistake and the other guys made smaller mistakes, but I don't think that will happen. So I feel pretty confident that like, again, worst case scenario is this just keeps slowly going down over the course of like six, seven, eight years. It gives us the money back and we wasted our time. Like that's the worst case scenario.

And that's such a negative outlook on life. I'm like, I'm not, I'm not going to wake up in the morning to do that. I'm going to wake up in the morning. I'm going to see what I can do. You know, like, so that's, that's what kind of i don't know i i guess does that does that like the again meandering that's gonna be the theme of this but um that's okay i think so i mean i think it it seems like a big bet mainly because while you know rails and you know sass applications i think that hosting, there are some preeminent worthy

opponents out there. And while you don't have a ton of churn, you mentioned to Jared earlier that there is negative growth. So there is some churn. You now have to, you have to do something to grow this thing. Like, I just wonder how impossible it is for you to, like, with your outlook on even focus, you know, define, and maybe not in 2024, but maybe 2025, you start to define some of these feature sets that you can utilize and deploy to attract. I'm hearing your story.

We've talked a lot about business and financials and semantics really of the choice, not so much what you're actually doing or what you'll do with it. If I zoom out, I think it's very much the hub or could be the hub of the many spokes you can build with very good software, this company you're in a form or you formed. I think that when you have a media-esque or a media-styled business, which very much a podcast hosting business could be. The media side of it could be adjacent to it. And the core product software could be, you know, they could live side by side in terms

of brand, but in business, it could be literally two different businesses. This could be very much the beginning of a hub, a very big hub for you to establish more spokes to. I'm thinking like if this was very big for you, Flipper could be more well-known because you use Flipper to support and test your different feature sets with Fireside. You know, and as that gets awareness and growth, then so does Flipper and every other thing that you can acquire along the way to support this hub. Totally agree. I've watched you guys. I've watched MFM.

I've watched several people in, let's say, media build audiences. And I'm like, again, like the quote that's like, I think I put it in the post, but it's like, first-time founders focus on product, second-time founders focus on distribution. And I'm like, I think podcasts are an amazing distribution system. I absolutely love them. The people I feel the closest to that I don't even know are podcast hosts. And I'm like, that's just, that's a weird thing. Like you guys have these like mega fans who think they know everything about you. And they do, because it's just the format.

They kind of do in a way. They do. They know everything. I'm like, how'd you know that? Oh yeah, I said that on a podcast, dang. I forgot I told you guys that. I told the world. I think it's a great medium. I think it's a great, like, I love everything about it. And I'm like,

I've done a lot of consuming of podcasts over the last, like, let's say four years. Like probably like, again, like most people, like around COVID, it really started exploding. And because of that, I'm like, I wanted to do something. And my plan was like, well, I'll just start a podcast, you know? So I started going on like found request with those guys, uh, love them. I was just a third wheel. I could hop in, you know, add some accountability. Like, are we recording this week? You know, and stuff like that. And it's awesome. I don't do any of the work. I don't have to pay anything. I just show up and talk. This is like my ideal job. And I'm like, so that's cool. And then I was like, well, what if, you know, when Fireside dropped in, I was like, what

if it's just bigger? What if I hosted them too? I'm noticing that FunnerQuest is a transistor podcast. That's why I laughed. Yeah, yep, it is. And you know, I love Justin. I mean, Justin, he got me back into indie stuff. Like I was, I was completely out of indie.

I was at GitHub, you know, and even then I left and, you know, did box out, but I was still not, I was not in the indie space. I was not doing other stuff on the side. Like, and then I started listening to Mega Maker and some of the other stuff he did. And I was like, heck yeah, why am I not doing this? I should do this again, you know? And so again, for me, I'm like, I want to now have a podcast. I want to have my own.

So I think Garrett and I, you know, we're going to start our own, you know, fireside podcast. And it's going to be like, maybe two, maybe one is like the building of and one is like, here's how to better, you know, like we interview other podcasters and talk to them about their setup, what they do, what's different, like all that kind of stuff of like, things that teach people how to start or how to get better or how to improve. But then we also, I feel like the thing I'm passionate about, which you can hear when I'm talking about it, it's like, I'm passionate about the company side. I'm super fascinated about, like you said, with the hub and spoke of like, now we have like a nice chunk size business that can be kind of like a starter. And it's way easier to buy that than to build that. I mean, I'm building that with flipper flippers, like, you know, five figures, mid five figures. So you're talking like, that's of like, again, partial work on it and stuff like that. But it's not big, you know, firesides like more like mid

six figures, you know, box out seven figures and stuff like that. So I'm like, I've seen the ranges in there and stuff. And I'm like, it's way easier to acquire something than to start and build that from scratch. It just takes a long time and also a lot of like right, right decisions and stuff like that. So, so yeah, I think it can definitely be that kind of centerpiece and then it'll, because we have, you can't have a podcast host and not have a podcast, right? Like you, you have to, I think it's actually law. It is. It's law now. Yes. I passed at least in California. I'm not sure what other. California passed all them laws, man. I have to draw this corollary because I just have to.

Are you a fan of Silicon Valley? Yeah, I've watched it. Okay. When I say the name Keenan Feldspar, what do you think of? It's familiar, but it's been like years since I watched it. Okay, I'll prime you then. And the audience is right there on the tip because they're super fans like I am. So Ken Feldspar was introduced,

I believe, in season four. Okay. He was played by Haley Joel Osment. Oh, yeah. Who's from The Sixth Sense. Like that was his claim to fame was that very first movie. I think it was one of his first.

An AI, artificial intelligence. Yeah, lots of stuff when he was a kid. Yeah. And so he was a kid. Yeah. And so this was later on. And so you remind me a little bit of Kenan, not so much in demeanor and look, but mostly... Do you see dead people? No, not this at all.

But Kenan could not fail. If he wanted it, he got it. If he thought he can get more money. This is a compliment. He can get more money. It is. It was almost as if he could just fall bass-ackwards into something. Great.

You know? Sounds like less of a compliment now. That's good. I think you have, Keenan had good instincts as well. But it was like everything he touched turned to gold. It was a Midas touch. So he couldn't almost go the wrong way. His VR company, just to set the stage a little bit,

eventually sold to Hooli for billions. Yes. Oh, I remember that. It did make phones catch on fire, and lots of bad things happened. Sorry to plot kill for certain folks but whatever alert if you haven't watched by now man you got problems yes catch up so you kind of remind me of keenan feldspar i take that as a the highest compliment i do because like i don't again there's there's other people that like i didn't call you eric bachman so exactly yeah you know yeah that's

i could have called you eric yep it could have been worse, but yeah, I feel like, you know, I don't know the best way to answer it, but I feel like it's not even really a question, but more it's like, I very much appreciate that sentiment. It might, I don't feel like I have golden touch, but I feel like I have very conservative and methodical, you know, my favorite quote is that like, you know, consistency beats intensity. Like, I don't have to work on this 60 hours a week, you know, for three weeks. Like, I can work on this, you know, X hours a week for five years. And I can just keep doing that because I love the process of building software.

So that's like my, I guess, my advantage. And that's why I'm not really worried about it. It's like, I like the process of building software. I like talking to customers. I like solving their problems. I like building stuff and I like charging them money for it. And it's not going to, I'm not going to build the next GitHub. I'm not going to build the next of any of those kinds of things.

And I don't even have any interest in that, but I'm very happy to build something that's like someday is five, 10, 15, 20 people max. And everybody's really stoked. And we just try and pay everybody more every year. You know, like that, 15, 20 people max. And everybody's really stoked. And we just try and pay everybody more every year. You know, like that sounds awesome to me. So that's what I want to kind of do next is that kind of thing. I don't know how long it'll take or if I'll succeed, but.

I wonder if it could be bigger than this conservative dream. It's possible, but I've worked at bigger companies and that's, but I guess I wasn't at the top in bigger companies. I guess I don't mean bigger company wise, like people wise, but you know, trajectory and target in terms of ability to capture the market. And I don't know if you have to be necessarily bigger people wise to be bigger from a, you know, revenue target or market capture, really. Yeah, I mean, BoxOut was literally four people, well past a million, like four people,

maybe five people, you know, like some help and support and stuff too. Like you can, there's so much leverage if you can write software. The key is finding people who can also either, depending on, you know, the plans can either market it if it's lower-priced plans or sell it if it's higher-priced plans. I feel like it's just build good software

and then have one of those arms. No, you got that wrong. Build very good software. Yes, very good software. Yes. Buy it or not, we're not beggars. Parks and Rec, huge fan. There you go.

What's the right number of businesses to own in this holding company? Well, I think it's just based on the number of people and the amount of work that's necessary. So not, again, I don't believe every piece of software requires full-time work. I don't think that that's like a thing that you have to do. So I think the right number of businesses is how many can we work on based on the number, the people that we have and the revenue that's inside of it. So if we have the revenue to support, you know, three people, whatever, halftime, that's what we'll do. As soon as we have the revenue to support more, more, the people who are halftime will move off of other things, AKA box out, and they'll move up on this and I'll replace them at box out with somebody else, you know? So like, because they're owners,

I want owners in the company working on it more than, you know, randos. So that that's, I think the answer is basically, I mean, having done it now, I'm like, oh my gosh, I want to do it again. But Garrett is like a very good anti-force to that. He's like, dude, we, can we let the dust settle on one? Can you just like calm down? Because it's really cool. I think it's really neat to find like a good, but I think it's also very hard as well. So we got lucky. We had one drop in our lap. That's not going to keep happening, but maybe if I talk about it, maybe it will, I don't know. We'll see. So you're open to current acquisitions. Like if somebody had a, has a rail SAS that they were

thinking about selling, like you would, you'd hear them out even though you're not actively looking right now. I have some leverage left on my house. Yeah. So let's, yeah. They wouldn't let you bet the farm. That's the problem. Yeah. I mean, they would, just not for as much. Yeah. Yeah.

So there's other things. But again, if you can get something and you can get it for the right cashflow, and then you can, I have, again, so fortunate to have worked at GitHub. I have so many friends that from that era that I know would love to work together again. And I'm like, it's not hard for me to find people to work. It's harder to build the business to support more people to work. You know what I mean? So if I can find a business that just there, I'm like, yeah, I could hire people that are founder energy to start running them. If we can, you know, capital wise, make it happen. The goal is just to do it all in this

roof and align incentives. Like that's even like flippers currently in a separate company, but we're going to merge it in somehow we'll figure it out without messing up taxes and stuff like that because we want all the incentives aligned. And like, Chris didn't want to merge speaker deck in right away and that's fine. And I gave him all kinds of crap about it, but I was like, you know, you keep your little thing over there, but I'm like, maybe I won't help you anymore. You know, like I do, I'm just like, you know, teasing him. Cause I'm like, part of me was like, you know, you keep your little thing over there, but I'm like, maybe I won't help you anymore. You know, like I do, I'm just like, you know, teasing him. Cause I'm like, part of me is like, that'd be cool to have that in also, because now you've got like speakers, you know, and presentations and stuff like that. You've got, that's media. You've got media with

this. You've got software here. You've got lots of advertising space and across all of them, you've got lots of distribution. And so I could see that working, but we can also work with misaligned incentives and we can say, Hey, I'll build your new advertising system that advertises Fireside on, you know, anywhere we want and advertises this. And if we can figure out, you know, again, we'll have all that in-depth data. We can say, Oh, this is worth X to us. We'll give you this instead of the ads, you know, the ad money you're getting right now. So there's still things we can do, but I really like this idea of everyone aligning incentives in one company and just, we're, we get multiple shots on goal inside that company as well. I think

that's just really cool. So your strategy is buy and hold. You mentioned that box out has had multiple acquisition attempts, one that you were ready to receive or take, have you considered buy and flip not to reuse flipper pun, but like you could fix this up for five years and 10 X your, your equity, you know, just make it worth way more and find a new home for it. Have you considered that as a strategy? I haven't on this one and maybe I will in four years five years i don't know but like right now for me i have this again it's just another theory that i've sold too quickly uh like in the past and so there's a side of me that's like what if i didn't sell harmony engages and all those things because in some ways a lot of ways they were way ahead of their time they're pre-plausible

pre-fathom pre all these things gonna say plausible is killing it you know Right? I mean, you can't tell me if Gages wasn't still around and we were working on it. I mean, it's around, but it's some PE firm owns it, so who cares? But like, if we didn't work on it for the last 15 years, you can't tell me that it would not be killing it. I just, I would not believe it. I feel like it would be killing it.

And Harmony as well. I feel like Harmony was way ahead of its time on its template system and the control that it gave you and the ease of use for like people that are not devs to put content in and stuff like that. And I'm like, I just, there's a side of me that always wishes genuinely

that I could A, B test my life and see which path because I like control and I like return on investment and I like having an impact and it's really hard to do in a big company. Obviously things went great with GitHub and, and stuff like that. But I'm like, I'm just better in small stuff. Small pond is my, that's my, my thing. So I'm like, I'm really curious. So I don't know. I don't know. Like maybe it would make sense to like go bigger or to do other things or all that kind of stuff. But I'm like, I know those

other things. And so on this, on this instance right now, I'm like, I don't want to sell. I want to, as long as I can, I want to just like be like a buy and hold. And also the last three weeks I've been reading Warren Buffett. That's probably the, that's probably part of it. But, but I, I formed the thesis, you know, before that. So now I'm just like, okay, well, what does he do? Cause that's, he's a very notorious buy and hold kind of person. So yeah, so that's kind of it. I could be totally wrong. Maybe I am just like zero to one or zero to 1.5 or two and sell.

That's entirely possible. But I kind of wonder what would happen if I didn't. And I'm like, I don't have to sell right now. So what if we just created- Well, you just bought. So you definitely don't have to sell right now. Exactly. And we could probably, but yeah. You very much feel like you're in buy mode right now. Like you would love your, you just bought and you're thinking about buying more. You're not thinking about selling anything, but maybe five years from now you're thinking,

cause at a certain point, like Dan Benjamin, you know, we kind of get worn out or done. I'm not sure Dan's motivations, but he didn't want it anymore. He built it. He got a great business off the ground, very difficult thing to anymore. He built it. He got a great business off the ground, very difficult thing to do. And eventually he was looking for a new home for that. And a lot of us small business software people find ourselves in that situation of like, how do I exit this? Because, and what you're doing is you're collecting other people's exits. And then I wonder like, well, how do you then later exit that thing? Cause you're going to have a bunch of holdings I say don't don't exit yeah it's like tiny it's I like tiny model as well yeah Wilkinson's very smart what's the what's the tiny model so Andrew Wilkinson was one of the

co-founders I believe of Metalab he and his brother I believe were doing this they were very successful with being a great design company the services. They're famously known for their work on Slack, which I think Slack was so good, not just because it was a good idea, but also because of their tremendous work on that. And just like you, John, Andrew began to read and study Warren Buffett and was like, well, he took the same approach with acquiring companies, not having to think too deeply, going through all this crazy due diligence. It was more like if I can't in a short amount of time – and I'm paraphrasing because I haven't read the essays.

If I can't in a short amount of time understand if it's a yes or a no, then it's probably a no. I should be able to look at some key metrics and be like a yes or a no pretty quickly. And Andrew formed literally a fund, I believe, and then a holding company called Tiny. And I believe it's a tiny.co if I can recall correctly. And Tiny's model was to acquire, they acquired Dribbble, they acquired Designer News, they'd acquired so many others. Aeropress. Aeropress. The coffee company? Yeah. They just came out and they just made a glass one. Like literally it just came out. Oh, that's so cool. Yeah. They just came out and they just made a glass one. Like literally it just came out.

Oh, that's so cool. Yeah. Anyways, maybe I should buy the glass one. Coffee dreams. Yeah. Just his model was, let me just, you know, buy, I think just this model of tiny or smaller companies

and created a fund and has gotten very successful with that process of just vetting out worthy buys and holding them. Now, at the same time, I think he's sold a couple. Well, we know he sold Castro because we did a show with Castro, the fellow who bought Castro. Yeah, Castro was what he sold. So, okay.

The model of buy makes sense, but aren't we talking about the eventual exit? Yeah. So, I mean, you don't have, but I view like here, my obsession, I think the last, let's say three or four years has been cashflow. Cause I'm like, like I've seen the, I understand multiples and exits and stuff like that. But I'm like, if you can create a lot of cashflow, like then you can, you know, you can pay people to do the work and keep the cashflow coming. And then you can do less and less on it in theory. And so like, I mean, I've definitely seen, you know, I don't work as much on box out as I used to. I mean, that's, that's a true thing. I feel like once you can get

the cash flow, then you can pay people well to work on it. And they're probably better than you at those specific skills anyways. And so it's, it's fine. Maybe they're not. That's entirely possible. And I'm picky, so I don't know. But we have a couple of people in the development seat now at BoxOut that are doing things. And so we have to, obviously, it's not just

press a button and receive code. It's a lot of work to train people the way you do it or things like that. But I don't think you have to. Here's the thing. My kids are like nine and six. I'm a guy, I'm not doing anything. I'm going to be tied to, you know,

a location generally while they're in school and things like that. So I got like at least 12 years for sure. So again, maybe in 12 years, I might come back on, you guys will still be here and you'll, you know, everyone will have the fully gray beards.

Yes. And like, at that point I'll be like, no, I sold, I'm done. Like I, you know, that's possible. But either way, I'm like,'ll be like, no, I sold, I'm done. Like I, you know, that's possible. But either way, I'm like. Let me tell you about how I sold this company, Adam and Jared. Oh my gosh. I was a buying hold guy for so long. And then I did what? I sold it. It was so good. Sorry. I still suck on it. We're going to be here in 12 years. Adam, are we going to be here in 12 years? I just. Well, we said that 10 years ago, didn't we,

Jared? Like eight years ago. We're like, would we be here in five or i just well we said that 10 years ago didn't we do like eight years ago like would we be here in five or eight i remember i said something like that where would we be you're right and here we you know we are still here we are you are i think it's amazing i i mean that's one of the things i talked to adam i'm like how do you keep doing it it's amazing like to i mean i'm five years on showing up yeah i'm five six years on box out and i'm like you know it just kind of runs and it does great because there's a lot of people involved, you know, like we had our first Christmas party. We had never done a Christmas party. We had like, I don't know how many people, 20 people or something like, and we flew people in and all kinds of stuff. And we all got together and ate food. And so it was awesome. I was like, dang, this is fun. You

know, I don't know about, you know, GitHub summit size 50, a hundred, 200. I saw that path up to a thousand. I'm just like that's crazy that's a lot so i like this idea of small things that can do well you know like the below two million if they if they go up like over that that's fine but um i think there's a lot of there's and there's other companies that are doing this too like i've seen like third south capital i'm actually talking with justin the like who's in that the button down guy next week and there's other companies that are doing this too. Like I've seen like third South capital. I'm actually talking with Justin, the like, who's in that the button down guy next week. And there's some other people that have reached out smaller or bigger than that. Uh, or I don't know what size they are, but like what I've seen is they do some bigger deals more in the, like,

let's say two to five, you know, million, whatever range kind of stuff, but like below PE, like PE is usually like, they'll sniff around in the one, two range stuff but like below pe like pe is usually like they'll sniff around in the one two range but like they don't get super interested and excited to like five or ten usually but i'm just i'm seeing more people kind of move down market because they're realizing hey you can buy stuff there and then grow them and just you get multiple arbitrage if you are going to sell it you can buy it for a two to four x and sell it for a four to six x if you can grow it so it's just interesting i don don't know. Again, I have no idea. This is my current thesis right now. I'm just blabbing. Even as I'm sitting here,

I'm like, do I believe all these things? Like I'm not entirely sure. It's kind of funny though. You're hypothesizing from a lily pad, right? I think of this as like a frog in a pond with various lily pads, some further away, some smaller, some bigger. You know, maybe there's a crocodile in there. Maybe there's a predator that can get you or whatever. And you're on the lily pad and you're hypothesizing about which lily pad or path makes the most sense to get back to the shore or to get to wherever your goal might be. It could be this other lily pad with a flower on it and a fellow frog that you like. I don't know.

You may not know this, John, but this is the second lily pad analogy that Adam has done in the last month. I actually love it. I think it's great. I think the only change I would do- You're safe. You're on the safe ground.

You kind of know where you're at. You have some stability, some assurances. And so you can kind of gauge where you want to go next. That's a intended pun there. Yes. And so you can kind of gauge where you want to go next. That's a intended pun there. Yes. And I think like a big thing too, is that like, at Ordered List, you know, there, like there was Steve and I, but we had three guys working with us and, you know, the GitHub stuff happened and that was all great for them. And I was like, that's cool. Like, that's really cool. I was a part of, of like helping someone else. Obviously

they did the work and stuff like that too. Like, but I'm like, that was a neat thing. And now I'm in box out and, you know, Steve and I have been through this before, but you know, we got two other partners and I can see that like, again, all the four of us together have created something cool. It's cool that like, we've helped enable it because we know the software stuff, you know? And so I'm like, it's almost like, okay, well, who, who are the next group? Like, and so it's, and that's where like one of the things i think that's kind of driven me a little bit is just like who are some like other people that i'm really good friends with that like i would like to also be in like a on the

lily pad with or whatever you know that's right to bring it home like who do i i want to help them get to a bigger lily pad or whatever i think it it's cool. And so, you know, if I can help with people that I, who do I want to spend time with? You know, I'm going to work. I love the process. I'm not just going to like stop. I love building software. So I'm like, who do I want to do it with? And how do I find things that can pay for them so they can do it?

And it makes it worthwhile for both of us, you know? And I think that's even the fireside deal. That's kind of what happened. It's like, it's worth it for Chris. It's worth it for Garrett. It's worth it for me. It's worth it for Steve. It was worth it for Dan. Everybody kind of wins. And I think there's more out there like that too. It's just a matter of like letting the dust settle on this one. And then, you know, we'll see from there, but at least if I talk about it, then people will hear it. And then if it happens to them, they'll think of me and maybe maybe it will be something like okay yeah that's a rails app it's very stock and standard it's making good money you're tired

of it or maybe like i like you and you're doing this and like why don't you just merge our you know merry band of sass artisans or whatever like so yeah i just think there's some cool stuff out there for that. What's up, friends? I'm here with a new friend of ours over at Assembly AI, founder and CEO, Dylan Fox. Dylan, tell me about Universal One. This is the newest, most powerful speech AI model to date. You released this recently. Tell me more. So Universal One is our flagship industry leading model for speech to text and various other speech understanding tasks. So it's about a year long effort that really is the culmination of like the years that we've spent building infrastructure and tooling at Assembly to even train large scale speech AI models. It was trained on about 12.5 million hours of voice data, multilingual, super wide range of domains and sources of audio data.

So it's super robust model. We're seeing developers use it for extremely high accuracy, low cost, super fast speech to text and speech understanding tasks within their products, within automations, within workflows that they're building at their companies or within their products. Very cool. So Dylan, one thing I love is this playground you have. You can go there, assemblyai.com slash playground, and you can just play around with all the things that is assembly. Is this the recommended path? Is this the try before you buy experience? What can people do? Yeah, so our Playground is a GUI experience over the API that's free. You can just go to it on our website, assemblyai.com slash Playground. You drop in an audio file, you can talk to the Playground. And it's a way to, in a no-code environment, interact with our models, interact

with our API to see what our models and what our API can do without having to write any code. Then once you see what the models can do and you're ready to start building with the API, you can quickly transition to the API docs, start writing code, start integrating our SDKs into your code to start leveraging our models and all our tech via our SDKs instead. Okay. Constantly updated speech AI models at your fingertips. Well, at your API fingertips, that is. A good next step is to go to their playground.

You can test out their models for free right there in the browser, or you can get started with a $50 credit at assemblyai.com slash practical AI. Again, that's assemblyai.com slash practical AI. And I'm also here with Dennis Pilarinos, founder and CEO of Unblocked. Check them out at getunblocked.com. Unblocked helps developers to find the answers they need to get their jobs done. So Dennis, you know, we speak to developers. Who is Unblocked best for? Who needs to use it? I think if you are a team that works with a lot of coworkers, if you have like 40, 50, 60, 100, 200, 500 coworkers, engineers, and you're comfortable with the security requirements that we have. You connect your source code, you connect a form of documentation, be that Slack or Notion or Confluence.

And when you get those two systems together, it will blow your mind. Actually, every single person that I've seen on board with the product does the same thing. They always ask a question that they're an expert in. They want to get a sense for how good is this thing? So I'm going to ask a question that I know the answer to, and people are generally blown away by the caliber of the response. And that starts to build a relationship of trust where they're like, no, this thing actually can give me the answer that I'm looking for. And instead of interrupting a coworker or spending 30 minutes in a meeting, I can just ask a question, get the response in a few seconds and reclaim that time. The next step to get unblocked for you and your team is to go to getunblocked.com. Yourself,

your team can now find the answer they need to get their jobs done and not have to bother anyone else on the team, take a meeting, or waste any time whatsoever. Again, getunblocked.com. That's G-E-T-U-N-B-L-O-C-K-E-D.com. And get unblocked. it's very smart i think because you're so comfortable in the rails world i think it's smart because yeah rails is mature enough that there are several opportunities out there just sort of waiting in a way and you know you could be friend. You can bring something to it. You can give something new life. You can have somebody get liquidity out or some sort of exit that might make sense.

You can satisfy the existing customer base. You can bring it into the fold and grow it more and bigger. If we go back to the hub and spoke idea, I think, I don't know exactly how far you go in to begin to decide which really is your hub. But if you can, you know, start to surround this hub with various things that make, that complement, you know, this thesis, this idea of like, enjoy what you do, enjoy the process, create enough revenue to support other people, bring them in, everybody wins, and you just kind of rinse and repeat. I think the question Jared's asking is like, at one point, can you exit that? And I think if you're enjoying it for the next 12 years,

there's an obvious exit that can come about if you're building value. So I don't really, I personally wouldn't care that much or concern that much with the exit strategy. They do say every time you enter into a business or a room that you should, you know, Jason Bourne it,

you should plan your exitason born it you should plan your exit right you should never go into something that and you don't have some sort of like fail safe or what if this went to zero or exit strategy i mean it is smart but i think if you're enjoying if you're comfortable with this rails model and this is only rails sas apps it's kind of it would be kind of not so much easy necessarily, but you can see a clear path in terms of the word easy being applied. You can see a clear path that even the code bases

getting refactored the same way or having similarities across them or services that you're buying once or you have one relationship then benefit the whole entire pool. That's why I like the lily pad analogy. Yeah, that's definitely a thought process is like how do we you know whether it's cross cross sell or like any of the other i mean there's tons of different you know business acronyms and words and stuff you can throw out for that kind of stuff but that's definitely in the thought process is

like uh like the rising tide lifts all boats kind of all lily pads i think that that's a thing that is a real thing so especially if you stick to rails and you standardize really heavily and that's that's the thing that like steve and i have always done with all of our previous stuff is like we're super standard and like how we do all the stuff you know it's like it's always bootstrap it's always this it's always that even if it's like well we might be curious about tailwind or other stuff but we're like you know what we're standards it's it's not this, it's always that. Even if it's like, well, we might be curious about tailwind or other stuff, but we're like, you know what? We're standards. It's not about individual enjoyment. It's about, you know, across the board, all the things that we're working on, how do we make that enjoyable and fast? So there's definitely parts in bits that we share and stuff like that. And I can

see that big time for this kind of business as well without intertwining them so much that they would be hard to sell if there was some scenario where we wanted to what if you come across a sass app that has just an excellent business going on at a great price and you're friends with the owner and they just can't do it anymore yeah it's not a rails app deal breaker yeah it'd be a deal breaker for me yeah i wouldn't do it. Cause I like Ruby and I like rails that much. Uh, shout out to all everything else. What if it's a Ruby app?

Yeah. Ruby. I'd be fine. Yeah. That'd be fine. Yeah. You just convert it. It's Ruby.

Yeah. Okay. But, but if it's not Ruby, so it can be not, you know, it could be like a Sinatra thing. I don't know.

Sure. Yeah. That'd be fine. Still building Sinatra things. I don't know. They're not. No. Yeah.

No, they're not. Yeah. That would be fine. But if it was Python or if it's like, again, I don't have anything against Elixir. I like Elixir. I think it's cool. I've tried a bunch of stuff. I have all the, like a ton of smart people who like it. I'm just like, I just like what I'm doing. I don't really have a strong desire to like change it. What I'm more fascinated with, I'm less fascinated with tech and more fascinated with like,

how do I create more like jobs to work with people that I like and that I want to see like, you know, not have like, not have a, what's it called? Laid off, not be laid off or not get fired or not have like, how do I create more of that kind of stuff is just more interesting to me than, than those other things. Now, maybe I should just go into one of the other ones and like hire somebody to do that. But I don't know those kinds of people. I don't really know that many people who do whatever these other frameworks. So it would be harder for me to like figure that out. So like right now, and I'll maybe in the future, that's less of an issue, but right now it's like, you gotta be like, you know, ICP, like ideal customer profile. And the ideal customer profile would be like rails app, Stripe, even Bootstrap.

Like Fireside is Bootstrap 3. It's like, well, I've done the 3 to 4 upgrade. I've done the 4 to 5 upgrade. I've done all those things. I know it's 2.7 on Ruby. I know how to get to 3 and all the Quark stuff. And then I know how to get to 3.1, 3.2, 3.3. I know how to get Rails up to 8, all that kind of stuff.

I'm like, it's just, it's a straightforward path to like stabilization and then iteration. Predictability is good too, though. I mean, you're trying to do a lot. Your footprint gets wider. I think back to the lily pads idea is that really it's predictability. Yes. Right. Why do we got to go back to the lily pad again?

Well, because I think when you judge where you jump you think predictability is assurance that it doesn't go underwater you know you want assurance and predictability in these maneuvers especially as you widen your pool that's i mean that's how i would approach it is is you want some assurances you might be giving more credence to frog decision making than they actually put into it i think they're more intuitive than all this thought that you're putting into it. Sure. Maybe. You have me thinking now.

I don't know. I'm definitely processing live and I'm like... In terms of other languages? Yeah. Would I do another language or not? Well, if the business was right, I was just trying to feel like what's more important to you? And I would have to have a good team probably already, or I would have to have a friend

who knows the exact technologies being used sure that could just step in you know like because the marketing and things like that don't matter you can standardize that stuff at the top of the holding company or whatever it's just the the tech that i would be like i'd want to i'd want somebody again like i was listening to a podcast on acquiring minds and it's like a guy who buys manufacturing companies and it was like i mean i was just like not in my head profusely the whole time like first podcast ever i'm probably gonna listen to a second time and maybe a third time because i was just like exactly what this person is saying and it was all about like he's like look i'm not gonna buy a manufacturing company that i can't step in and like run the machine if i have

to like he's like i just want to all the through. I want to know that it worst case I could go in there by myself and I could, I could keep the thing going, you know, like, like he's that conservative on stuff. And but yet they're compounding it like, you know, 20% or, or, or more, they're doing great in growth and all that kind of stuff. And so I'm like, that's in my head i guess in my head is like i should be able to step in and like if if push came to shove and like run the thing and i just i don't know i'm maybe i'm too old too many gray hairs to like totally switch languages and frameworks and really feel like i could be it would take me some time i think to be successful doing that so let me give you another hypothetical. This is in a different direction. Let's imagine you come across a new business.

All the other things I just said are true. It is a Rails app, but you're out of money. Now, at a certain point, this is what cash flow people do, is they run out of money. They got cash flow every month, but they can no longer acquire because all they're doing is cash flow businesses. And so usually, then they open up to more people's money. Is that something that you've considered? I think I would, I would do it. I would just, I would have to learn more about how people do that.

Like, and even in that, again, that podcast episode that about like buying five, I can share the link later or whatever, but it's like buying five, you know, manufacturing companies in that scenario, that guy was like, they do like the kind of like a PE model where they like, basically but it's like buying five, you know, manufacturing companies in that scenario. That guy was like, they do like the kind of like a PE model where they like, basically they're like, look, we come in and we run it. And like one, there's, you know, six partners in the group. And each of those partners will personally guarantee one business. And so right now they have three guaranteed.

And then they have, when they do that, they do two things. So one, they charge a management fee to the business based on EBITDA. So like, if you know, they buy businesses that already have good profit margins, they take a slice of that profit margin for everyone who's in the management group. And then they'll also do you know, like, whatever first 8% preferred return in the event of a sale, you know, goes to the investor. And then after that, it's like split based on, you know, equity and all those kinds of things. So, and they bring in new, they bring in basically different people in every single deal. So I wouldn't say different people from the standpoint of like, well, you know,

Adam's in this deal and Garrett's in this deal or stuff like that. It's more like we've got five people each putting in like a hundred thousand or 50,000. And so now we have, you know, whatever, 250, 500,000. And then we're going to personally guarantee do an SBA loan for the other half. So their debt, you know, to like whatever ratio is basically like half. Cause again, then it's like, well, if the business went all the way in half, you'd still be able to run it, which is, it's pretty rare for a business that's been around for, they stick to like, you know, 60, 30, 60, 80 years, like, you know, 30 plus employees. So they know that it's like all the knowledge is not with one owner in a 10 person company or things like that. So again, the different scenario here where we have software

and leverage and stuff, and it's less of less of a concern but i'm like that idea is really fascinating to me and then so then you know the group the six each have a share in each of the companies they acquire one of them runs each of the companies they acquire one of them personally guarantees not necessarily the one they're running and then they also kind of for lack of a better word they shard their investors across all the deals as well so no investor is is heavily invested in one of them. And I'm like, I actually really like that model. I think that's sick. Cause that now they're doing the SBA loans, which means they can personally guarantee, but not actually put up the collateral. So you don't run out of collateral and run out of money. But I'm like, I don't know all that financial stuff yet. I haven't done any of that. So I'm like, I'm just going to start simple. And I'm like, look, I got some friends. They had a

little bit of cash too. I got the collateral. Let's put it together, make it look, you know, like a three to five year payoff. If it's an eight year payoff and we take more cash out, that's fine. You know, it's just like, ideally I don't want to have my house on the hook forever, you know, or maybe I pay off the loan at some point. Like let's say box out does sell for some reason, like that we, we're not planning on it now. We're not talking to anybody. We don't have any interest in that, but like if somebody came along with the right price, we'd be like, sure that happens. Now I've got some cashflow. So maybe I pay off the loan, get the lien off my house. And then I, you know, loan it back to the business at a lower interest rate or something like that. So that the lien is

basically gone from my house, but the, like, there's still some amount of like, you know, leverage of using other people's money to make money, which is kind of an interesting concept, I guess. Again, I'm all a rookie. I don't, I don't know any of this stuff. I'm just flapping the stuff that I've been researching for a couple of years and then heavily for a month or so. So I don't, I don't know, but that's just what I think of in my head. Makes sense. I just like to hear the ideas and think about them in my head. So we are listening. Uh, no, I don't know if that's a good idea or not, but it's not something that I had ever heard. So certainly interesting. Yeah. It's, I think it's, there's a lot of ways

to get capital. Um, it doesn't hurt. Like, I mean, I probably have, I mean, I've got the GitHub, you know, founders, other people in my phone. I mean, I could text them, but I'm like, I don't, I don't need to. Well, I wonder if you'd ever like start a fund or something, you know, like become. I don't know. And even just for the reason that the, again, I don't want to keep going back to the other guy, but I just, it's fresh in my brain. Cause I just listened to it and it was like, yes, I like what you're doing.

I'm headed to the ER cause my neck hurts, but like, cause I've been nodding my head, you know, profusely, but I'm like, I like this. Hernia again. Exactly, popping out the hernia. But I'm like, I like that idea of like, not running like a fund because a fund has to receive the capital and then deploy the capital.

And so you're kind of under constraints because you got to deploy the capital in a certain amount of time. But that means you're going to maybe have to deploy the capital into a deal that you're like not super excited about because it's like, well, it's time. Otherwise, you know, the fund's going to run out, et etc. Whereas, you know, this model is like, look,

we get people to commit, but then they don't have to give their capital up until the deal's actually here. And we know it's a really good deal. Because we have just been, you know, vetting them profusely. And so this is like, yes, this is, you know, their range was 500,000 to 2 million EBITDA, they're going to do x multiple, and they're going to, again, shard their investors, shard their individual personal guarantees. And I'm like, that's just a really cool model. If you can make it work, it probably takes a lot more smarts than I currently have. But I think that's cool. I like that idea of like, yeah, that, that process. The fund could easily be replaced by a pool of people that are just simply angel investors though. And it doesn't have to literally be a fund. Yes. Agreed. You know, that, you know,

has capital and it has to deploy by a certain timeframe, which is really how funds work in most cases. It doesn't have to be formalized. Yeah. Right. Yes. That I'm, I'll be, I'll be super interested in. And that's even why, like the first thing I did is I reached out to Adam because I, not even about investing, but just because I was like, he's in podcasting, you know, and everybody knows you guys are killing it. So, you know, I was like, well, Hey, Adam, like, no, I'm just kidding. Just killing it, crushing it. Then I was like, again, you know, podcasting, you know, this kind of stuff. Cause I'm like, he told you he was going to go to zero. You called him and he's like, this thing's going to zero. Here's what happened though. That was, that was the

first five minutes. And then by the end, he's like, well, how do I get in on this? You know, not really, not really, but kind of. I didn't see those words. You actually could see that story in Adam having a lot. I come in as a skeptic and then I come out as a believer. And in a lot of cases, not every case though, there's been several cases where we plotted with people and I'm like, nah, at the end still yet, even at the beginning. Sure, it happens, yeah. Well, the question you have to always ask yourself is when you take any bet is what if it does go to zero? That's the obvious prudent question to ask. Of course. Do I lose my house?

Regardless of conviction. I take a hit. That's what happens. I definitely did that math too, 100%. Yeah, you got to do that math. You got to do the worst case, best case. And then you also need to do the like worst case, best case. And then like, then you also need to do like that. What's more likely. Yes. Right.

We can't live in worst case and best case world though. We tend to make bad decisions if we just do those two. Yeah. Neither of those. That's a really good thing to say. Cause I feel like a lot of people just go right to the worst case. And I'm like, that's not the common case. That's one of the best things that I think has partnering with Steve has been,

is he's very much like a, not a worst case. He's like, I mean, well, worst case, you just get a job again. Like it's fine. And I'm like, Oh yeah, that's, that's a good point. I actually do have like marketable skills. So it's like, yeah, it wouldn't be challenging. Yeah. Change though. You still have to change, which change can be hard, but you, you know, you can float. The only constant is change though. Yeah. Positive or negative. Says the people who've been doing the same thing for 15 years.

But then I followed up with like 17, maybe 45,000 good ideas. And he wrote down immediately, at least two. That's the other thing that Adam gets. And I've told a lot of other people, you know, and then he was like, I can't give you any more because again, because he wants in. If he gives all the ideas,

he doesn't have he doesn't have a way in right so this is his leverage it's good ideas i tell anybody that i can only give you one or two for free yeah the rest you gotta pay me for that's right yeah he gave you the lily pad metaphor what else do you need he called you keaton feldspar i mean gosh come on get him in john get him in there you know we're obviously long podcasting i think it's a great medium. I've even posed this question to Jared a couple of times. Like, why should we ever do a host?

And I think, Jared, what was your sentiment always pushing back? It was always like, compete with free, saturation in the marketplace, things like that. I'm not sure that's where I would actually begin, though. Oh, why don't we turn our thing into a hosting thing? No, like spin off some of the things we've built as software into its own standalone business because we've got enough street cred to do it. Sure.

Heck yeah. I've always thought, I guess maybe I'm always less impressed with what we've built than maybe other people would be, so I discount it. That might be one part of it. The other part of it is, is that another job that we want? Because now you basically have two jobs.

And maybe it is, and maybe it becomes the main thing. I'm certain that if we came across a business model that we both liked and a software product that we could build, we could somehow use what we've currently built in order to promote that thing and make that the new thing that replaces this thing. But is that what we want to do? Do we want to have a different kind of life i don't know you know like if if that thing comes across maybe i would say yes let's try it let's go for it but so far all of our ideas have kind of been like meh yeah maybe it would work but now i just look

at what i mean you guys have the distribution. You have like this massive audience. Like, I mean, yes, the challenge though. So I hear you on that. But then if we begin to leverage our distribution, then it's like, well, are they saying this or doing this because yes, you have to be careful, you know, are they pimping their own stuff basically is the easiest way to, to phrase that, you know, it clearly would be. Yeah.

But I mean, yeah, but also like it's our stuff and you're listening to our show cause you like our stuff. So it's more of what you like. Yeah. So, I mean, there's, there's strategy about that.

You want to do it right. Everything we do, we want to do right. We try to be as best we can be calculated. And I think the thing that's kept us from doing other things has been keep the main thing, the main thing, which is our main thing is saying that to each other.

Let's keep the main thing, the main thing. And every time we feel like saying that to each other. Let's keep the main thing the main thing. And every time we feel like we're going too fast, we say what? Slow down and check yourself. Slow down and check yourself. Or you wreck yourself. And then the other thing we say is give them what they came for. Give the people what they came for. Yeah.

That's awesome. So we have our little sayings. Of course, we're podcasters. We say stuff to each other. We have sayings. It's so good. I love that. It's like kind of having like your own little

utility functions that you use you know yeah oh yeah we have our little sayings like this whole Silicon Valley thing

he's mined this thing so deep right now that you have no idea how deep the Silicon Valley references go on this show because well I'm on the money with Keenan Felspar

and John Nunabaker okay I mean when the audience hears this they're gonna they're gonna have to go to the hospital for their hernia in their neck oh yeah right I mean, when the audience hears this, they're going to have to go to the hospital for their hernia in their neck.

Oh, yeah. Right. Yeah. And they might even bust a gut. Gosh. That's funny. They get a new monitor and everything. They spit their coffee on their monitor.

See, now we all want in on the Keenan Feldspar, you know, the fund. That's why we're trying to get him to a place where he's got to take our money and give us some cash flow back. You guys got the distribution. So, you know. All right. All right. we'll talk yeah talk there is a big upside to what you could do i i do believe it could be the hub of your thank you model for this company that you're trying to build that you are building i think as you talk about this more i would find a way to give people a page to go to because you're going to have inbound people either DMing you or directly coming to you.

Yeah. Just something to say, okay, rather than come to me and ask me a bunch of questions, go here first. This is the lens you should – if you fit this model and you're in this world, then I want to attract you and I want to help you if I can. It may not be today. We should definitely become friends. Yeah. I want to put you on a list, maybe an unordered i want to put you on a list maybe an unordered list potentially put you on a list and if the stars begin to align then they do and i would definitely

if you like this and you do this and you repeat this a few times i would 100 begin to build that angel list investor group especially if you can help their interests align with your interests and everybody wins. And really at the end of it, it's all about having the fun, right? It's enjoying the process, having the fun, enjoying the people you're working with and really, really building very good software that you can really be proud of, have fun, have fun with and be proud of. Yeah. Yeah. Yeah. That's a really good way to put it. That's better than, than again, but you get to sit there and like analyze what i'm saying while i'm saying on the fly but that's a really good summary i think of of it is like hopefully it works i think i mean i think it will i believe in you it's going to work i believe in

you i i mean i say hopefully but i believe it will too i honestly don't like i don't i don't feel imposter syndrome i don't feel like it's not going to work i feel like i'll just figure it out one way or the other it might take more work than I thought, but I'll figure it out. So. Yeah. I think you collect the right kind of people to over your career in history as a person I've just known. And more recently, the last few years become more close with, you've been able to collect the right people and attract the right people to be friends with and to enjoy working with that. I think you'll, you'll do, you'll do amazing with this man. Well, when you work at a 1,000, 2,000-person company, you just run into a lot of awesome people.

I mean, it's hard not to find 10 really awesome people at a company that size. That's the one benefit of working at a really big company. If you stay at the small stuff, it's a lot harder. But again, it's conferences too. You got to show up at the conferences. You show up at those and then good stuff happens. I'd stop for 10 years and that's when the good stuff didn't happen and then now i'm back on it and i'm like it's awesome it's amazing i don't know why yeah

so speaking of conferences let's close with this give us a quick rails world recap because this is your first conference back or you've been doing a few of these i did rails conf in detroit okay um so i'm in i'm in indiana detroit's like a three four hour drive so i did that this one was in toronto rails world and then ruby conference in chicago so i was like i'm doing the triple crown i'm like going from no conferences since my kids were born to the triple crown in one year yeah so the recap of rails world electric energy the rails foundation just did like an amazing job of putting this like really cool venue partially outside partially inside the only problem was the bees there was like a lot of like not bees but like hornets or something you know they just that's worse yeah

they would not leave me alone it's like your flies but with like with stingers you know and then um the talks are great like dhh kicked it off with an amazing keynote as usual like they got everybody kind of fired up and then i i would like to say the rest of the talks were amazing i believe they were i was in the hallway track the entire time and i did not shut up i was just i was just meeting all my old friends making new friends and it was just it was awesome it was really good thousand people uh or maybe more i don't know. So something like that. So it was just, it was packed. Great energy, very low, like a shilling of services and things like that. It was just like lots of great people smashed together.

Shopify blew it out on the last night. I cannot even express how amazing the Shopify closing party was because they got this amazing three-story office and then COVID happened and like they just turned into an event space and it was it was killer i mean they had barbecue on the roof deck like legit just making barbecue putting it on sticks i ate like 10 in a row and the lady was just like you must really like this and i was like you guys are amazing and we became friends you know nice and i'm like it was just that kind of it was a great vibe so yeah it was it was it was really fun i feel like there's a lot of excitement coming back yeah to rails as things kind of swing like a pendulum like they always do right right you're coming back to the server side and i do think that rails is having a bit of a comeback

yeah late renewed fervor renewed uh people talking about it who wouldn't who weren't previously talking about it good bad or indifferent they're talking about it who wouldn't, who weren't previously talking about it. Good, bad, or indifferent. They're talking about it again. And I did see some of the Railsworld vibe remotely via social networks. And it seemed like I got a little bit of the FOMO, you know, I was like, Oh man, it looks like actually a pretty decent conference. Maybe I should have been there. So yeah, that's cool. I mean, we even had Laravel and Tailwind and like people, people like that, they were there. So it was good. There was a whole lot of different, you know, it was great. It was really great.

It would have been awesome if you'd been there. We did some live podcasting. Gosh, that's what we do, man. Speaking of ATO 2024, shout out to our All Things Open coming soon, coming end of October. So we will be there. So soon. It's a little bit far away from you, John. john yet to drive through some floods to get there probably unfortunately but uh the part of north carolina that we are going to is clear and dry right adam safe safe

raleigh north carolina the durham yes area is dry i have a couple friends there they said it was just wet but it was not it didn't get hit like like everything else. Yeah. Yeah. It's been, it's been crazy out there. On that note, John, what are you doing October 27th through October 30th? You have plans? I think I have a, we might have a camping trip that weekend, actually. I'm not sure. I'll have to check. But you know what? I have traveled so much. If I leave again, I'm going to have to find a new wife and family. Yeah. It's not going to work out. I'm already going to be gone in November. So I'm at my max traveling. So anyone, you know, you're welcome to come here. You know, we'll put you up in a room if you want to hang out. But yeah, I've been to Indiana. I never had a good, never had a reason to visit. Oh man, you guys,

we should, we should do like some kind of yeah through not is there a regional conf or is there a local thing that happens uh regularly there's nothing but you know what i was thinking when i was at rails world i was like what if i just invited like a bunch of my friends and did like a you know like well so we're we one of the things i'm in is like a real estate thing where we're doing like an entrepreneurship hub and a big building and stuff like that we did a groundbreaking like a couple weeks ago and i'm a very small passive you know part of it the other people are doing all the hard stuff but i'm like once that's exists and there's like a nice awesome event space that like like i was a part of i'm definitely having some kind of like

john conf just bring all the smart people together and see what i have i don't know whatever it doesn't matter to me what we call it but like it's just like a bunch of different skill sets and cool people i think that'd be really fun and then try and grow it every year not trying to make any money just try and break even you know like just like the good stuff from less exactly yes like i went on the less cruise and it was amazing is that what is the shirt you're wearing does it say less i was trying to figure it out it says less it's not one of theirs but shout out to i thought for sure it's like a less everything shirt or something no this says less but better yeah but i do i had a don't quit your day job shirt from them it was my favorite

shirt and then it just got like old and so now i just wear it on my way home from basketball after i'm sweaty that's it but it's it's still a great shirt or it says quit your day job sorry that's what your day job yeah quit your day job that's the opposite exactly your day job yeah i follow some people on youtube that rv they say keep your daydream keep your daydream we always say i'm sorry for what i said while we were parking the camper that's that's a big popular one oh yeah you have to yeah because you're always like on the phone backing up this trailer like your left or my left get it right what left. It's always a mess. Yeah, I think if you could, if somebody could recreate the essence of what they did well with less conf,

it would be amazing. It's a good idea. If you build it, we will come. Okay, for sure. 2026. 2020. Will you still be here? We'll still be here.

Yeah, exactly. You got at least 12 years. That's right. All right, John, thanks so much for coming on thanks for talking that was fun it was fun good seeing you you too okay a little existential threat there at the end of the show for jared and i questioning whether or not we'll be here in 2026. Now, it is 2024. 2025 is right around the corner. But you know what? There's so much change happening out there. There's so much change in the world. And the only constant is change. So will we be here? Will Jared and I be here? Will you be here in 2026 listening to the show? I sure hope so. I sure hope so. I'll tell you where I know we will

be. Jared and I in three weeks, we'll be in Raleigh, North Carolina at all things open 2024. We got some free passes to give away free passes to an awesome conference. Yeah. And you can get those by going into our community in Zulip, go to changelog.com slash community and just DM Jared. He'll tell you how to get them. But if not, we have a 20% discount to give you. That's available to everyone. So go to the registration website for all things open. Use our code media changelog20.

Check the show notes for links and the code if this is confusing but media changelog 20 20 off all things open there you go okay some awesome sponsors on today's show century check them out at century.io also big congrats to oss pledge part of something they're launching. You can learn more about that at opensourcepledge.com. Our awesome friends over at Coder, coder.com. Our friends at Assembly AI, check them out at assemblyai.com. And of course, our friends over at Unblocked, check them out at getunblocked.com. Get Unblocked, getunblocked.com. Those beats are banging. Thank you, Breakmaster. Gosh, those beats. Such good beats. That's it. The show's done. We'll see you on Friday. Game on.