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The following is a full transcript of this episode. This transcript was produced by an automated system and may contain some typos.

Henry Lopez 00:16
Welcome to this episode of the How of Business. This is Henry Lopez, and my guest today is Tyler King. Tyler, welcome to the show.

Tyler King 00:22
Thanks, Henry. Thanks for having me.

Henry Lopez 00:24
Absolutely, we’re going to chat about Tyler. He’s going to share with us his interesting journey to entrepreneurship, and then specifically, we’re going to talk about his approach and philosophies and how he bootstrapped the launch and growth of his software business. So, Tyler King is the co-founder and CEO of Less Annoying CRM, a bootstrapped SaaS, which is software as a service company that helps small businesses succeed. He majored in computer science at university, had a successful career in IT, and a side gig as a guitar player in a heavy metal band, which is very interesting. But at that time, had no aspirations of starting his own business back then, based on the research I did. But the impact of surviving a layoff in 2008 got him thinking about starting his own business. And in 2009, he founded what is now less annoying CRM with his brother Bracken King. He lives in St. Louis, Missouri. So once again, Tyler King, welcome to the show.

Tyler King 01:21
Hey, Henry, good to be here.

Henry Lopez 01:22
All right, we’ll dive into it. So, I’m always interested in the journey, as I mentioned briefly in the bio. I’d like to you to share at a very high level the the brief story of what led you to launching Less Annoying CRM, especially that that point that I highlighted in getting laid off. You know, I got laid off twice in my corporate career. It took me two types to kind of wake up to. I knew that I wanted to be my own boss, but I didn’t have the wherewithal or the you know the knowledge how to do it. It sounds like you didn’t even have that as a thought until that happened. Is that true?

Tyler King 01:53
Yeah, that’s correct. And I I was lucky enough that I was not laid off, but almost everyone else at the company was, and that was definitely one of the you know kind of formative moments of my life.

Henry Lopez 02:03
So tell me about that. What was it that did happen that that leads you to think? Wait a second, maybe I’m doing this wrong.

Tyler King 02:10
Yeah, well, I I love entrepreneurs who have that story. Like when I was a kid, I had a lemonade stand type of thing, and I just didn’t have anything like that. But I was working at a startup. I I wasn’t interested in being an entrepreneur, but I was a programmer, and startups have a lot of good jobs for programmers. So I was working at one, and then yeah, in 2008, you know, a lot of people were getting laid off at a lot of companies, and the company I was at basically laid off everyone who was everyone except the five cheapest people at the company, basically because they couldn’t make payroll otherwise. And you know, very rarely is it good to be the lowest paid person at the company, but that one time it worked out for me. And so the CEO laid himself off. There were no bosses, nothing like that. So the next day, I showed up to work, and me and my friend Rick, who’s actually the other co-host on my podcast, we were like, “Well, I guess we’re in charge now because all of our bosses got fired. And so for the next year, I just kind of, without meaning to, played the role of a co-founder. It wasn’t my company. I had no official title or no official power, but there wasn’t anyone there to say no. And so I just realized during that year how much I enjoyed entrepreneurship.

Henry Lopez 03:12
That’s a crazy situation. So who who was making the big decisions at this organization?

Tyler King 03:18
It was kind of weird. There was a so the company had raised venture capital, and so there was a board of directors. The investors were still there. So, for example, regularly, like one of one of the reasons I wanted to start my own company is all the time we’d go to the board of directors and be like, “We’ve got this great idea. Can we go do it? And they’d say no, and I was kind of like, “I don’t even know any of you. Like, who are you? Why are you making decisions for this company? But they, you know, there were decision makers. I just didn’t really understand who or why they were involved.

Henry Lopez 03:46
I see. Okay, interesting. So, why is it though that you? What do you? Why do you think you never had the desire to be your own boss? Otherwise, was was that just not modeled for you in your life, or it just wasn’t something that you needed. You think?

Tyler King 04:03
Yeah, I mean, I’ll be honest. I was just kind of disinterested in my career in general. Like it’s it’s not that I wanted to do something else. I just I don’t think I really thought about it to be honest.

Henry Lopez 04:13
Yeah, yeah. Okay, so this situation happens. You’re getting increasingly frustrated. You realize that wait a second. I’m I’m making decisions. Somebody else is maybe going to get wealthy off of this. So, how does that lead to the idea for the business and and partnering with your brother?

Tyler King 04:31
Yeah. So the idea was actually second. So first, I my brother Brac and I said this seems cool. Let’s go do it. Let’s start a company. And technically, our company’s name is actually less annoying software, not less annoying CRM. Because when we started, we had no no idea what we were going to do, which probably I wouldn’t advise. Like normally, it’s better to start with a problem and go from there. But we knew we wanted to make some kind of software that would just take something complex and make it simple and easy to use. And then when we were bouncing around ideas, something I kept coming. Back to is that that previous startup I was talking about, but before the layoffs, two things happened. One, they put me in charge of setting up Salesforce, which is kind of the main CRM out there for people who aren’t familiar. And I have a degree in computer science. I’m pretty tech savvy. I could not figure it out. I spent a month on it, and it failed. I didn’t get it set up. Like we paid for it, but I never. We weren’t using it because I couldn’t figure it out. That was pretty eye-opening for me, and I was kind of like, “What does a company do? What does like a dentist office do? Or you know, some company that doesn’t even have me, like a someone who’s good with technology? How do they set up a CRM? And then the second thing is, we that business worked with a lot of health insurance agents. We didn’t sell to them. We they were sort of like resellers of ours, and I built a little tool for them to help them manage the leads that they were referring to us, and they loved this tool that I built. And it wasn’t exactly a CRM, but I kind of combined those two things together, and I was like, I guess there’s a market for this kind of really simple small business CRM out there.

Henry Lopez 05:55
So that tool that you you were doing that on the side, this tool that you built for them,

Tyler King 06:00
it was it was not on the side like it was owned by the company that I was working for, but it was sort of a tool that I built to help us with our partner relationships with the health insurance agents.

Henry Lopez 06:11
Okay, so then so that gives you the idea that this whole area of CRM you either have to be a large organization that can use the complexity of something like Salesforce, or you felt there was a gap in the market for something simpler that’s easy to use and easy to implement.

Tyler King 06:29
Yeah, that’s exactly right. the The stats at the time said about 50% of CRMs that people paid for didn’t get used, which is the exactly what happened when I tried to set up Salesforce. So the basically what we were going after was not let’s make something with more features or some unique kind of capability, but just what if we made something people could actually use?

Henry Lopez 06:49
Yeah. So you started this as you still kept this job that you had. I think your brother was in or is still in Boston at the time. You were in the Bay Area at the time, is that right?

Tyler King 07:01
Yeah, the the startup was in Utah. I moved to the Bay Area and went down to 20 hours a week with them. So I was I was sort of still working for them, but while at the same time starting lessons here, which was a

Henry Lopez 07:13
unique situation that you were able to take advantage of because at least you had that income and some level of safety net of you would while you were coding on the side for this for this new tool that you were developing.

Tyler King 07:24
Yeah, it’s it was really I got very very lucky there because I quit not expecting to have that income stream. I quit and then they came back to me and were like, “Well, what if you only worked 20 hours a week? And I was like, “Oh, okay, I can do that. So it really worked out well for me there.

Henry Lopez 07:38
So you were ready to quit. That means you must have had yourself in a financial position to make this transition, knowing you were going to have some ramp up time, or you just weren’t thinking it through.

Tyler King 07:48
Yeah, I was 24 years old at the time, so almost everything about the formation of the company, you could say I wasn’t thinking it through. I I knew I was going to do some kind of consulting or freelancing or something to pay the bills. I figured I’d just move to San Francisco and figure it out. It was very nice that I didn’t have to go pursue. Like you know, if you’re a consultant, some of your time is spent on billable hours, and some of it’s spent going and getting the work. The fact that I didn’t have to go get the work was was really nice.

Henry Lopez 08:18
Yeah, that’s huge. Okay, you talk a lot about you were in that the Bay Area, but of course you had a philosophy. It sounds like from early on that you were not going to seek any kind of venture or angel investors, any other kind of third-party investors, right? That was a decision you made early on. Is that correct?

Tyler King 08:37
That’s correct. Yeah, I said almost everything was I wasn’t thinking about it. This was really the one thing my brother and I knew is you know raising money for investors works for some people, but we knew it wasn’t what we wanted.

Henry Lopez 08:50
Why? A

Tyler King 08:51
lot of it was informed by my experience at that previous company, where I I we kept wanting to do stuff. The people actually working at the company wanted to do things, and I don’t think I had this language at the time, but now I understand what happened is that our interests were misaligned with the investors. And investors’ interests are going to be, in a very simple way, to make as much return on their investment as they can. But there are actually more constraints that are worth understanding, specifically with venture capital, where they have a business model, and it’s not just any way to make money works for them. They need to make money in a pretty specific way, and that just did not align with how I wanted to run a business. And I’m I’m happy to dive into more specifics there, but that was kind of broad strokes. Yeah, because we’ll come back to that

Henry Lopez 09:32
because I suspect that’s a part of where your your philosophy about not selling a company is also tied to that, right?

Tyler King 09:38
Yeah, yeah, that’s exactly right. I mean, the the biggest thing venture capitalists have to do is they need an exit, which means either getting acquired or going public. There’s no other way for venture capital to work, and that’s just not something I’m interested in.

Henry Lopez 09:52
Right. Okay. So is it because of that in part that you thought, well, why am I in Silicon Valley or the Bay Area? And you had grown up in St. Louis, so is that why you moved back to St. Louis in part?

Tyler King 10:04
Yes, exactly. It really the the the moment in time that we made that decision was it was time to start hiring people. I liked living in San Francisco, but when you want to hire someone, you think, well, every startup in the world is in San Francisco. There’s all this talent, but they all there’s only one way to run a company there-it’s the venture capital, you know, the Facebook, Twitter, Airbnb, Uber type of playbook-and it was really hard to get people on board with what we were doing because it was so different from the Silicon Valley model. So when we needed to hire people, we started looking around, and I’m not going to say St. Louis is the only city that could have possibly served our needs, but we wanted a kind of Midwestern vibe, like customer service, is a thing that people take pride in here, and a really big talent pool. So, a good university system and other you know companies that you can kind of hire from,

Henry Lopez 10:51
because often that talent in the Bay Area is looking for that same thing. What is your exit strategy? How can I cash in on an IPO here when you do that? And you tell them, well, we’re not doing that anytime soon. That’s a disconnect. Often, is that that part of the challenge?

Tyler King 11:06
Oh, yeah, it was a complete joke. You know, I again, I was in my 20s, I was young, so I’d like go out to a bar and be talking to people, and they worked at startups, and they’d be like, “Well, yeah, when are you raising money, and what’s your exit strategy? Those are the two questions, and I’d say, “Well, neither of those apply, and they’d be like, “Well, you’re not a startup. You’re not even a business. You’re not a business if you don’t have those. And I’m like, “We’re making money. That’s isn’t that the point? Yeah, but they don’t see it that way.

Henry Lopez 11:31
This is Henry Lopez with a quick interruption on this episode to let you know about a special offer that Tyler and the team at Less Annoying CRM are offering you, our listeners. If you’ll use the link on the show notes page for this episode at thehowabbusiness.com, either search for Tyler King or search for episode R361. Use that link on the show notes page, and that takes you to a special page at Less Annoying CRM that entitles you to a 60-day free trial of their great CRM system. So if you don’t have a CRM now and you just need something that covers the essentials, as Tyler explains in this episode, then take advantage of this opportunity. If you don’t like it, there’s no obligation. So once again, if you’d like a 60-day trial offer to less annoying CRM, go to the show notes page for this episode and click on the special link that I’ll have there. So you won this thing called the Arch. If I’m pronouncing it right, I think Arch Grant, which is a less annoying CRM, won the Arch Grant for global startup competition. I’m assuming it’s a local or regional thing there. What I’m interested in is why do you think you won that?

Tyler King 12:40
Yeah, so it’s it’s a kind of local startup contest here in St. Louis, and there are they kind of give these grants out to a handful of companies every year. I think we were at the right place at that moment in time, which was we were growing pretty quickly, had a lot of traction to show, but we weren’t there yet. We we were in a position. An arch grant is basically $50,000, but it’s not an investment. It’s just no strings attached. Here’s the money, and we were at the right size where that mattered. So I think if we applied right now, they’d be like, “Well, who cares? You know, you don’t need the $50,000. Let’s give it to someone better. But I think it was a combination of traction, and we had just moved to St. Louis, and I think attracted a really compelling team. And so we were basically saying we’re going to be a company that St. Louis is going to feel proud of, and we just need to ramp this thing up.

Henry Lopez 13:30
And do you think that was key to winning it? Is the fact that they saw you were dedicated to the area, you were dedicated to it longer term. That that’s what you think was a key component to you winning

Tyler King 13:42
it, I think so. Yeah, and Arch Grants is great. Other cities have similar things, where you know every city wants to be a startup hub or whatever you want to call it. I do think there’s a lot of value in trying to be a good kind of citizen in the community, and yeah, people are going to certainly be more likely to support what you’re doing if you also consider your impact on the community and stuff like that, so I think being a part of St. Louis was a big part of winning that award. Yes.

Henry Lopez 14:08
Yeah. All right. You also most recently were awarded best place to work in St. Louis for young professionals. Why do you think that’s the case?

Tyler King 14:18
Yeah. I don’t know how how specific you want to get here. I mean, broad strokes. They survey employees and decide where are people the happiest to work. And I’m very flattered that apparently our employees are happy to work at Lesson Wing CRM. I think it honestly comes down to treating, trying to serve employees the same way every entrepreneur tries to serve customers. Every entrepreneur. This is one of the hardest things. But if if you run a business, whatever kind of business it is, you figure out I am going to figure out a way to make my customers happy to provide value to them. Everyone does it differently, but if you take that same energy and apply it to employees and just say, what do they want? What what do they want? What are their problems? We’re just going to like iterate and fix stuff as problems arise. That was kind of our approach and. Apparently, it led to a culture where people are pretty happy, so I feel good about that.

Henry Lopez 15:03
I was hoping you might be able to share one or two tactical examples. I mean, when I think of that, I think of Silicon Valley, where they try to do that by letting you bring your dog and having the ping pong table, you know, and all those kind of things, or having food, free food. Are there some examples of things that you’ve implemented that have helped to foster this environment.

Tyler King 15:24
Yeah, I’ve got two examples specifically, and everything you just said is, I think, exactly right. We tried to kind of go swim upstream a little bit and not make it so much about whether or not we have a foosball table. One thing that we do that people think is just absolutely crazy, but has gone well for us, is we separated raises from performance. This sounds nuts, but basically we say you need to hit a minimum level of performance to continue working here. Obviously, like if someone’s not doing their job, they can’t work here. But beyond that, that has nothing to do with raises, performance bonuses, anything like that. Everybody has a guaranteed $10,000 year raise up to a certain point, and it doesn’t matter what kind of work you’re doing. What this did is it allowed us to hire people who just really take pride in their work and want to do a good job, but don’t particularly like all of the games you have to play at a lot of companies related to performance reviews and stuff like that. So that was one thing that was a little unusual that’s gone well so far. Another one I’ll mention is we have 20% time, which actually Google invented this, but then they stopped doing it, and that is one day per week employees can work on a different project. So the main people this helps is customer service. Customer service is a pretty repetitive job, and it’s easy to burn out on it. I think, but with this one day a week, people can say, “Oh, I want to. I’m going to be on the marketing team for that one day a week, or I’m going to learn how to code, or I’m going to do HR. I think that’s a weird thing to choose, but someone actually chose to go HR with their 20% time. So it just kind of gives everyone an opportunity to continue growing and learning beyond just the description of their job.

Henry Lopez 16:56
I love it. So going back to the raises were separate from performance. Does that has that resulted on the positive side in more of a teamwork environment? Because as you alluded to, you don’t have the individual trying to navigate ahead politically. Is that what it’s part of? What it’s resulted in?

Tyler King 17:17
Yeah, absolutely. Again, we’re small, so I’m not sure how what kind of politics we would have anyway. But yeah, it allows people to just say like there are a lot of people out there who are great individual contributors and kind of lousy managers, but at a lot of companies, the only way to get promoted is to become a manager. And what this results in is people being bad at their jobs, whereas they were good at their old ones and being unhappy in them. It’s just kind of bad for everybody. So I think it gives every employee permission to say, just find the thing that you enjoy doing where you can really contribute value. Don’t worry about you know is this the management track or something like that because everyone’s getting paid the same raises regardless. I

Henry Lopez 17:55
see. I see what you’re saying. So obviously I understand now you didn’t philosophically want to take the any kind of outside funding, venture funding, whatever you might want to call it. So that means you self-funded this. You didn’t get any loans. It was just from yours and Bracken’s savings. How did you get started financially?

Tyler King 18:13
Yeah, it was from our savings and really from the cash flow we were making because we were both working other jobs on the side. I should say all of the objections I’m going to say about investors do not apply to loans. I think loans can be fine. Software companies can’t get loans, and the reason is there’s no collateral. Like we’re not taking the money and buying a building or equipment or anything like that. It’s software doesn’t physically exist, so we tried. Banks will not give loans to software companies. But now that I’m just

Henry Lopez 18:42
curious, now that you have an established track record and you have recurring revenues, that you still find it hard to find lending, or you haven’t needed to.

Tyler King 18:49
We we haven’t needed to recently, but we tried to get a line of credit from a bank. Maybe when we were around a million dollars in revenue, they did not value recurring revenue in a way that I think they should. Like they they they care about contracted revenue. So like, do we have a contract with a customer? Which we don’t. We we have no contracts. So even though it was recurring, they didn’t count it because there was no contract behind it.

Henry Lopez 19:10
Interesting. Yeah, because you you do a month to month essentially. There is no commitment beyond my month’s payment.

Tyler King 19:16
Right, and you know you could we can say well look we have years of history showing that our churn rate is good, but the banks don’t really-they’re not used to dealing with like a recurring revenue business like that. I guess. All

Henry Lopez 19:26
right, so let’s talk about how some of the advantages and disadvantages from an advantage perspective. Certainly, what I what I have heard is that because you have to be so much more disciplined, you don’t have this huge round that somebody just gave you, and then you end up spending where you don’t need to spend. Has that been part of the, or was part of the benefit initially? That that discipline that you have to then have fiscally with the money that you do have.

Tyler King 19:53
Yeah, yeah. It’s I mean, like you say, it’s an advantage and a disadvantage. Obviously, having more money allows you to do more things. So. That’s a disadvantage, but something I think people don’t appreciate enough is just running a business can be very, very complex or very simple. If you have a, you know, you go raise millions of dollars from investors, you’re now basically doing the job of a CFO. It’s hard to manage that amount of money. If you just say, well, how much money did we make this month? That’s how much money we can spend. Yeah, it limits you in a lot of ways, but it actually dramatically simplifies things. Our business finances, even they’re not more complicated than a typical person’s individual finances. It’s the exact same thing. How much money am I making each month? That’s how much I can spend.

Henry Lopez 20:34
Early on, though, how did that affect you or impact being able to plan for growth when you were dependent on the the profits to reinvest, did it complicate being able to plan? All right, we’re gonna you know put this project together and has a six month life, and I need this kind of a budget. You know, you understand what I’m asking. How did it impact that ability? It

Tyler King 20:56
definitely hurts. That that is a challenge. I wouldn’t say we necessarily thought about it the way you just described, although we like we probably should have, but we kind of just said we’re going to make do with what we’ve got, and as soon as we have enough money to hire someone, we’re going to hire someone. For the first maybe six years, we were just always right on the edge of profitability, where we were technically profitable, but as soon as we made enough money to hire someone, we did. So it was less about what are our goals, who do we need to hire to fit those goals, and it was more about who do we have, what can we achieve with those people.

Henry Lopez 21:27
It just seems like from day one, even though you may not have been able to articulate it as clearly back then, it’s what you wanted.

Tyler King 21:34
It’s what I should have wanted. I think one of the mistakes I made is I didn’t think about this in the early days. I just thought I’m going to have it all. I thought we’re going to, you know, have a calm work environment. We’re not going to raise money for investors, but we’re still going to be a billion dollar company because I was in San Francisco, and that’s all I saw around me. But looking back on it, I never really wanted that, but I thought I did. So when did that adjustment happen? When when when did you kind of adjust that that vision for for the business? There was kind of a moment of truth where, in the early days of a business, I don’t want to say it’s easy to grow really fast, but you know, if you have $100 in revenue, going to 200 isn’t that big of a leap, and you can be like, “Oh, we doubled, amazing! And you can look at that trajectory and be like, “Well, if we just keep doubling, it’ll get really, really big. Every company eventually comes down to earth, and like the growth rate slows down. That happened for us, yeah, probably around a million dollars in revenue. Where we’re still growing, we are still growing now, but it wasn’t doubling year over year type of growth. And we had a marketing person at the time who basically said, you know, it’s my job for us to get customers. The business model doesn’t let me. We’re not charging enough money. We’re providing too much customer service, which hurts our margins. We haven’t raised money from investors, so I don’t have much of a budget. He basically said, like, we can’t be on a trajectory for a billion-dollar company given the constraints you’ve imposed. And so that was the moment we like reality set in, and I kind of had to say, well, either we’re going to change our values here, or we’re going to just accept them and say, okay, we’re not going to grow as fast. And we went with that second option. The

Henry Lopez 22:59
initial solution was your first version of a CRM, though. Is that what it was?

Tyler King 23:04
And even calling it a CRM is generous. It was basically a contact list, and you could enter notes about the contacts. I

Henry Lopez 23:10
see. I see. Did you? I’m curious. You know, when I work with, and I I have a failed software launch in my history of businesses, and I have got I’ve got a client right now, actually, as a coaching client who’s developing a software solution. What I always recommend and try to take is the MVP approach, right? The minimally viable product approach, where you you release the absolute minimum, get that feedback from those initial customers, and then iterate. Did you take a approach like that in developing this solution?

Tyler King 23:40
Yes, absolutely. I mean, I sometimes look back at the early mockups and screenshots from the early version, and it was definitely minimum debatable whether it was viable. But yeah, it was. You know, we launched very very quickly. I think only a two or three months after we started working on it, and yeah, it was it was terrible at first, but a few people found it useful and started using it. And then, if you look at our growth curve, really the first year we didn’t get any meaningful traction. But that during that time we were making the product better and better and better. And I’m kind of of the opinion: the sooner you get it out there, the sooner you get feedback from customers telling you what’s wrong with it. So if we’d stayed in our room working on it more and not put out that that minimum viable product, we probably would have built the wrong thing. I bet.

Henry Lopez 24:25
So a bunch of questions there. First, if you would have had a bunch of money, do you think you might have rolled out a bigger version one that would have not necessarily been any better?

Tyler King 24:35
Yeah, I that that’s a great point. I yes, and companies do this all the time where they they raise $30 million and then they that’s almost like permission like that’s validation for them so they don’t need to go get validation from the customer and that’s never good

Henry Lopez 24:49
right that’s a good point I’ve thought about that way you came though from a corporate development environment where you know I was a developer as well back back in the 80s I was a cobalt. Coder, so in that environment, you don’t release until it’s perfect, kind of thing. How did you have that mentality, though, to understand we can’t take that approach?

Tyler King 25:10
That’s a good question. I think side projects. I think I got some experience from like at work. I learned how to be a professional developer, but I really, really value the fact that I was always going home at night and working on like I was really into fantasy football at the time. So my brother and I built this pretty, actually, pretty sophisticated fantasy football site, and that did two things. One is it gave me experience with the startup thing without actually taking the risk, and two, I knew I worked well with my brother. So I think it’s a really good way to test out co-founders as well to work on side projects like that.

Henry Lopez 25:42
Yeah, brilliant. Okay, can you think back to when you were when you were first iterating here, 2010, 2011? Can you think of a of a good way that you measured that feedback on what were customers responding to? Obviously, it wasn’t maybe a lot of them, but how did you go about measuring that that you think was effective to get that right feedback on saying, got to drop this, got to add this, got to enhance this other section?

Tyler King 26:09
I’m. This is a great question, but I’m. I’m maybe going to give an unsatisfactory answer, which is like I’m just not that rigorous of a person. I love the idea of being very data driven and you know kind of quantifying everything, but a I don’t think that comes naturally to me, and b when you don’t have much data to work with, I think you can maybe draw the wrong conclusions if you pay too much attention to it. So this

Henry Lopez 26:32
sample set is just too small, and you got to be careful with that as well.

Tyler King 26:35
Exactly, and I this is all post hoc rationalization. The reality is I wasn’t thinking about it. I was talking to customers, and then, but using my intuition to say, you know, I’ve heard this thing two or three times, but I don’t agree with it. I’m not going to do it. Versus this other thing I heard two or three times, that that feels right to me. So, I I think people sometimes use data to like abdicate their own responsibility to have a vision for their business, and I think you need

Henry Lopez 27:01
both. I think that answer is brilliant because you touch on what I think it takes to be an entrepreneur, which is that we take that input, but then we have to make, and ideally, maybe with your partner, I’m going to ignore this as noise, and I’m going to go this way, and that’s what it takes, doesn’t it?

Tyler King 27:18
Exactly. Yeah.

Henry Lopez 27:19
Okay. Brilliant. So you you continue to grow as you articulated, you know slowly but measure growth. You talk about in another episode, another episode of a podcast I listened to. I can’t remember which one, where you and you mentioned at the outset you hired someone even before you decided to hire yourself or your brother on that. That’s a decision that that’s not easy to make. Tell me about making that decision.

Tyler King 27:43
Yeah, this gets back to what you asked earlier about what what are the downsides to bootstrapping, and one of them is you just you don’t have enough money, and so you have to make hard decisions like this. So we got to a point where we had enough money for either my brother or I to go full time, and we were having that conversation. Which one of us should it be? And then we just thought, well, let’s you know, let’s consider all possibilities. Do either of us have to go full time? What else could we do with the money? And it occurred to us, we were both putting in decent hours. Like, yes, we were working other jobs, but you know, in the early days, we we were young. We were happy to just kind of work really long hours. Like, what impact would it have if we just hired someone? So ultimately, we decided to do that with the logic being, we’re both technical people, and we we both make the product better. My brother and I. The more time we have to do that, the the more leverage we get on growing the business. So if we can hire someone to take the customer service side off our plate, arguably that actually gives us more time to spend on product development than it would for us to not be working our other jobs on the side, and so that’s what we decided to do.

Henry Lopez 28:42
And then, and so, help me again. What? How many years into it do you finally start saying, “Okay, we’re going to start paying ourselves a salary and start taking some profits, not reinvesting everything” Around what time did that start to happen?

Tyler King 28:56
Yeah, I think it was something like three or four years in, and you can kind of almost think of it as if we had raised money, we would have started there. So, like the consequence of bootstrapping was we had three or four years of ramp up before it was a real company, and even at that point, you know, we weren’t paying ourselves a lot. It was definitely less than I was making when I had a full time gig, but it was enough that you know there’s this term runway that startups use, which is the idea is how how much time do you have to build up speed before taking off? The longer the runway is, the more time you have. We had an infinite runway at that point, and that’s really what was key to me is just not having this like date where if we’re not profitable by this point, we’re dead.

Henry Lopez 29:35
And you had that infinite runway in part because you hadn’t put the pressure on the business to have to support a certain lifestyle for you or your brother at that point is that fair?

Tyler King 29:44
Yeah, correct.

Henry Lopez 29:45
And part of the reason I get at this is I think Tyler and you tell me if I’m wrong that one of the challenges that small business owners have when they bootstrap is deciding when is it enough. When when it when are you out of runway, right? Or do you spend the next 10 years? Putting it all back into the business. What do you say to people about that? What is your advice on that?

Tyler King 30:04
Yeah, I think it’s probably very personal. Some people have kids and a mortgage, and they really can’t make the decision that I made to live off relatively low income for a long time. But my general thing would be, the question is more about the trajectory you’re on than the actual point on the trajectory. If you’re if the numbers get better, even if it’s very very slow, it’s just a patience game at that point, and you’ll get there. But if you put in a year and nothing got better, I would be pretty discouraged by that. I think

Henry Lopez 30:35
fair enough. Okay, you have this philosophy that we’ve touched on already of you should look to run companies for life versus selling. My challenge with that is my recommendation is always that you build the company as if you’re going to sell it, even if you’re not planning to. I think we might be saying the same thing, but but tell me your thoughts on that.

Tyler King 30:55
Yeah, I 100% agree with you. I listened to I forget who the guest was, but one of your podcasts from recently that they were talking about this, like how how to build to to sell your company. I think that’s exactly right. That set aside selling it. We the the language we use at Lessing CRM is the hit by a bus language. It’s a bit morbid, but if any individual person at the company gets hit by a bus, the company needs to continue functioning. I’m not sure this has to be true at a one-person company. Like the, you know, it’s okay that some companies fail. But as soon as we started hiring people, and these people’s livelihoods depended on us, we kind of thought it’s our obligation to make sure that this company can survive us. And I think the same things that go into the hit by a bus scenario, it’s the exact same thing as the you want to sell to someone else. Scenario: It’s can the company run without you?

Henry Lopez 31:43
Okay, well said. And you’ve got in place, and you’ve built a company such that if you change your mind, or your brother decide he wants out, or something happens to you, there’s a plan in place for the company to hopefully survive and prosper beyond that.

Tyler King 31:57
Yeah, yeah. And the bigger we get, the more we feel that responsibility. So it is-it’s a work in progress. And I, you know, when I was listening to some of your episodes, I do think I’m probably behind where I should be on this. But I don’t disagree that it’s important.

Henry Lopez 32:09
Yeah. Okay. Fair enough. Why the focus on customer service? Why is that so important to you? It

Tyler King 32:14
was a total accident, to be honest. Again, I wasn’t thinking about anything because I was a stupid 24-year-old. I was making the website. I made a contact page because websites are supposed to have contact pages. I put a phone number on it because contact pages are supposed to have phone numbers. It was my phone number, and then like a couple months later, when we actually launched, my phone rang, and I listen. I’m an introvert. I’m a programmer. I’m not the type of person who’s supposed to be talking to customers, but I picked up the phone and I was nervous and bumbling and awkward. I felt like I was doing a bad job. The person on the other end was like, “Oh my! I can’t believe someone picked up. You picked up the first time I called. He asked me a couple questions. I answered. He’s like, ‘Whoa! You actually know the answers to my questions. Unbelievable! I’ve tried every CRM company and no one even picks up. And I kind of realized it just hit me in the face. Like this is this is an opportunity. Like every other company is giving terrible customer service, and it’s that easy. Like I’m bad at it, and I still blew this person away. It would just be stupid not to pursue this opportunity.

Henry Lopez 33:13
I mean, in part, it’s it’s. I think it’s part of your differentiator, right?

Tyler King 33:17
It’s the number one. Like at this point, now it’s the most important part of our culture. Most tech companies, the programmers drive culture. At our company, the customer service team does. It is our number one differentiator. When our customers leave us reviews, the number one thing that comes up is is the customer service. But again, it wasn’t part of the strategy originally. It’s just when opportunity presents itself, you kind of got to grab

Henry Lopez 33:40
it. Yeah, as an entrepreneur does, and of course, as you mentioned, it ties back to why it’s such a popular place to work, such a great place to work. Is I have found that when when you’re serving people well, that’s what employees really it creates a positive environment all around, right? When customers are happy, employers are happy, and vice versa. And I think that’s why it’s all synergistic for you in your environment.

Tyler King 34:04
Yeah, yeah. The term servant leadership I didn’t know at the time, but the more I learn about it, the more it resonates with me.

Henry Lopez 34:11
Yeah, here’s right quick, just to go back. I remember the question I was going to ask you about this environment where you pay raises independent of performance. It must mean then that you have an environment where the bad players get weeded out pretty quickly.

Tyler King 34:24
Yeah, I hope so. Well, when you say bad players, you mean the people who don’t perform well. People who don’t who

Henry Lopez 34:28
don’t who don’t fit. Maybe they fit for a period of time, but something happened. They no longer fit. They’re not no longer doing their part. They’re no longer a team player. What I have found is, I suspect in your culture, they get called out by the rest of the team.

Tyler King 34:42
Yes, I certainly hope so. Now we’ve only ever had to fire one person before, but one of our kind of keys to recruiting is a lot of the people we’ve recruited have been interns first, and that different companies do this differently. Some do, you know, first we’ll hire you as a contractor. Freelancer, there’s different ways, but by being able to evaluate people, we’ve actually hired 50 people, and we only have 19 employees because they were those 50 people were interns. We were able to pick and choose who really fits the culture.

Henry Lopez 35:12
Yeah, great approach, great approach. Because I, that ties to my philosophy is that no matter how well you do the screening, the interviewing, you don’t know how someone’s going to perform until they’re in the position for some period of time.

Tyler King 35:24
Yeah, yeah, exactly.

Henry Lopez 35:25
Okay, I want to talk to last point here. I want to talk a little bit more about your partnership with your brother. You’re doing two difficult things. I prefer to partner, but you’re partnering with a family member, which I’ve also done. People will tell you never do that. Why does it work between you and your brother as partners.

Tyler King 35:41
Yeah, first of all, I mentioned earlier we’d already worked together. I would be much more hesitant to do this if it was well. I know this person, but I haven’t actually worked with them, and we knew we were compatible. The things I like to do, he doesn’t, and vice versa. But the number one biggest thing is that greed is not something that either of us feel naturally, and I think a lot of the problems that could occur would be about a power struggle or who’s making the most money or something. I mean, we split it 50-50, but there have been situations that could have been problematic where both of us were happy to just say, “eh, whatever, it’s not a big deal. I, but yes, I think it’s risky, so I, I don’t want to say like, “Oh, it’s the best thing in the world. Go, go start a business with your family, but if the circumstances are right, it’s amazing. You know, it’s you get to spend so much more time with people you love, and it’s a great thing.

Henry Lopez 36:28
And you, so you knew because you’re his brother that he’s not a greedy person. He knew that about you, but you’re you’re 5050 in ownership.

Tyler King 36:36
Yeah, yeah. So there’s a slight nuance here. We’re 5050 financially. I technically have the tie-breaking vote. It has never come to that. We’ve never needed to actually, you know, have a board meeting and vote on anything. But if we did, I can overrule certain decisions.

Henry Lopez 36:52
Yeah, which is important because you don’t want it to come to a stalemate and that can kill a business.

Tyler King 36:56
Yeah,

Henry Lopez 36:57
but it’s interesting that you’ve never had to do that. So, what is your all’s process? I’m curious for making those decisions where you might disagree.

Tyler King 37:04
Yeah, I should start by saying this is made a little bit easier by the fact that I don’t think he particularly wants to be the CEO or anything like that. He has

Henry Lopez 37:13
he has allowed he allows and is okay with you being in that role.

Tyler King 37:17
Yeah, we even though we’re very compatible and aligned. I mean, he has kids and does you know wants to spend as much time with his family as possible. And I’m much more career like we both love the business, but kind of in different ways. So he’s happy to say I’ll come in and do my job. But like to have me, Tyler, do a lot of the CEO kind of having hard conversations with people and making the risky decisions and stuff like that, I always bounce things off of him, but I don’t think he feels particularly like he needs to be the primary decision maker.

Henry Lopez 37:48
I see. Okay, one last question, and then we’ll move on. Is there anything when you look back at those early days in 2010, 2011 that you would do differently now?

Tyler King 37:58
Yeah, kind of referenced this earlier, but to dive in, I think I didn’t do enough of like figuring out what I actually wanted. We kind of started the business, and then from there, that determined so many things about my life. And luckily, it all worked out, and I’m very happy. But I didn’t. There were a lot of things I made that I didn’t think. A lot of decisions I made that I didn’t think about at the time how it would impact my personal life. So, for example, by making customer service a priority, great decision. I’m happy we did it, but I didn’t appreciate. Well, that means we’re going to have to hire a lot more people. Like a pure tech company can run very, very lean, but you can’t scale good customer service without hiring people. And so, the the team’s a lot bigger than it would be otherwise. And similarly, moving to St. Louis, we just got an office for the first time. We were fully remote before that. I didn’t put together. Oh, this means I’m a nine to five employee for the rest of my life, probably. So I just wish I had been a little more deliberate about that. Again, not because I’m unhappy with anything, but it could have gone really wrong. I think.

Henry Lopez 38:56
Right. But thank goodness that the speed at which you were moving allowed you to adjust and evolve with it and make those decisions. In other words, it didn’t get away from you if you had gone a different route, like venture capital, that would have required you to move a lot faster. Is that fair?

Tyler King 39:12
That’s a fantastic point. I’ve I’ve said to people before, if we’d raised venture capital, I would not be the CEO because when you’re growing slowly, you have time to learn what you need to know, but when it’s a rocket ship, you just have to bring in someone who already knows it. And I didn’t already know it, so yeah, that would have that would have been the end of me as CEO if we’d raised money.

Henry Lopez 39:30
I understand. Okay, we’ve obviously been touching on it, but but give me the the pitch, the high level overview of what you offer today, what what the product does, and and how you serve your customers?

Tyler King 39:42
Yeah. So for anyone who hasn’t used a CRM, it stands for Customer Relationship Manager, and it’s just every business needs a database of their customer information so they can make sure they’re following up with people and all that. If I’m being totally honest, every CRM does the same thing. I know that doesn’t sound very fun, but like it’s it’s just a database to put in. Into what we focus on is making it actually something you’ll want to use. It’s just simple. It’s easy to use. It doesn’t have all these bells and whistles. And the core thing is most CRMs are built for really, really big companies. And what a really big company needs is they want to put together an assembly line. Everything’s automated. Everything’s impersonal. Small businesses don’t need the assembly line and actually don’t want the assembly line, and so you can strip out all those complex features, and that’s what we are-is just kind of the basic CRM core stuff.

Henry Lopez 40:28
And then your pricing model is for small business owners.

Tyler King 40:31
Yes, it’s $15 per user per month, and there’s no plans, there’s no contracts, there’s no extra charges. That’s the price for everybody.

Henry Lopez 40:38
And then I’ve enjoyed listening to your podcast, which is Startup to Last, I can find that everywhere I listen to podcasts. Is that correct?

Tyler King 40:45
Absolutely, and thanks for saying that.

Henry Lopez 40:47
Absolutely, yeah, it’s a great, great show. Who’s your your co-host? I can’t remember his name now.

Tyler King 40:50
Yeah, so he’s Rick, and actually, for anyone who’s listened to this, the interesting history there is Rick is the other person who was with me at my old startup after the layoffs. So he handled the sales and marketing. I handled the product, and we kind of got the business back to profitability.

Henry Lopez 41:05
All right, I’m always looking for a book recommendation. Tyler, is there a book that comes to mind that you would recommend?

Tyler King 41:10
Yes, my favorite book is called The Mom Test. Have you heard of this

Henry Lopez 41:14
one? I have not. The Mom Test.

Tyler King 41:16
The Mom Test. It’s kind of a weird name, but the premise is if you ask your mom if you if she thinks your startup idea is good, she’ll always say yes because she loves you. So you can’t get good feedback if you ask the wrong questions. And so the book is all about how do you talk to people like humans don’t want to say the truth to you for fear of hurting your feelings. How do you get the truth out of them by asking the right questions? And for someone like me who’s an introvert and not naturally like socially gifted, like that. I learned a lot about sales, idea validation, customer interviews, all that.

Henry Lopez 41:46
Love it. Great recommendation. As you were saying, and I say I got to read it, and I got to recommend it to this client that I referred to, who’s developing a software solution, because that’s that’s such a challenge. You know, going back to what we talked about, how do you get that feedback? How do you ask the right questions? Because we tend to ask questions. Either we ask them of the wrong person because they’re going to tell them what they’re going to tell us what we think they think we want to hear, or we lead with how we ask the question to kind of get what we want. Right?

Tyler King 42:12
Yeah. Like my my favorite one takeaway from the book is if you say like, “Would you buy this? People are going to say yes. If instead you say, “When’s the last time you tried to buy something like this? They’re going to be like, “Well, I’ve never tried to, and you’re like, “Okay, well, you’re not a customer. Like, totally different question.

Henry Lopez 42:28
All right, what’s one thing, Tyler, you want us to take about us away from this conversation about taking this approach of bootstrapping a small business?

Tyler King 42:37
Yeah. So obviously, I love bootstrapping, but the takeaway is not that everyone should bootstrap. The takeaway is I didn’t question, and so many people don’t question how businesses can run to fit their founders in in the very very early days. And so whether it’s bootstrapping or raising money or whatever, I guess the takeaway I’d say is just figure out what you want and don’t let other people’s goals become your goals.

Henry Lopez 42:59
Where do you want us to go online to learn more?

Tyler King 43:02
Lessannoyingcrm.com. If you think you might be in the market,

Henry Lopez 43:05
Tyler. Great conversation. Thanks for sharing. Thanks for being with me today. I’m glad we got connected and had a chance to chat.

Tyler King 43:12
Yeah. Thanks for having me on, Henry. This was a lot of fun.

Henry Lopez 43:14
This is Henry Lopez, and thanks for joining me on this episode of the How of Business. My guest today again was Tyler King. We release new episodes every Monday morning, and you can find us on Apple Podcasts, Spotify, and at our website, thehowofbusiness.com. Thanks for listening.