[00:00:06] Hi and welcome to another episode of Digital Noir presents Humans Aren’t Robots. I’m your host, Sam Davies. And today we have our last podcast from PauseFest 2019. In our last chat today, last but definitely not least, is Ben Lee. Ben is the founder of Rootstrap, which is based in L.A. They also have offices in South America. They are app designers and developers and help founders and entrepreneurs get ideas up off the ground. And during this conversation we talked about a number of things Ben was actually talking about in his keynote at Paus last year about taking a different approach to being an entrepreneur and stopping focusing so much on self branding. We talked about short term success that exists in our current climate and how we can counteract that with longer term thinking. We talked about a distributed workforce, which he has, and the opportunities around offshoring and how to manage that from a business perspective. I talked about how the Australian startup market is different to what he’s used to in America and then what surprised him about that. I’ve got Ben Lee here with me.
[00:02:04] Founder of Roostrap. Yes, and a bunch of other things before that as well.
[00:02:31] So where are you based?
[00:02:45] I’m based in Los Angeles.
[00:04:14] So I didn’t actually get to hear you talk then, but I was down there watching. So I just read the blog post which I think was probably the catalyst for part of the talk. It’s interesting. Like, you know, I’m in a similar industry to you, right? We build apps.
[00:04:30] So I think I kind of knew that it might not be as well-received as some of the other kind of topics and themes. And I’m quite happy, really, because I’m going against the trend. Everybody is saying go out and brand yourself. You know, create content every day. You’re losing time. You’re losing money. And now it’s this fucking random guy who is like telling me that all this stuff is a big waste of time and it’s about ego and vanity metrics. And no real tangible results. So yeah, I think maybe people are just kind of like confused and they’re like, OK, well who do I believe because my endless QVC feed of TV commercials on Instagram is telling me that I should be doing something and I don’t know which person or which path to go down.
[00:05:30] It’s not scalable for everybody to do that.
[00:05:36] I don’t think it’s scalable. One of the big things that I kind of highlighted in my talk is I tried it, so I do eat my own dog food, so to speak. You can’t be a full time creator and run a high performance company.
[00:05:53] And it’s expensive, right?
[00:05:54] It’s very expensive. So if you are going to be Mr. in-house influencer, you’re going to be neglecting your company. Your culture is going to get affected by it. Your team is going to likely build some resentment towards you and a lot of other things are going to happen. So if you want to do that, that’s OK. Hire a CEO to run your business. I dipped my toes in and I was like, OK, nothing special here, nothing to see here.
[00:06:38] We followed a really similar path. Four years ago we went hard on Facebook with paid advertising and video content. And we ended up hiring like a full time video person in the office, basically just for internal stuff. And it kind of literally followed that same trajectory you have where we’re like, well, what is the, I think, brand awareness, it was quite good for initially, especially there was more traction on Facebook a few years ago, like we actually got quiet and just organically and that kind of died off.
[00:07:07] Can’t get organic reach any more on Facebook
[00:07:09] Facebook, pay for everything. You look at how many big jobs have we landed through directly related back to Facebook in the last two years? None.
[00:07:30] Yeah, that’s exactly right. And you mentioned something that you guys were doing it internally. I love content creation for the purposes of internal training. So I rolled out a personal podcast and just realized I was spending so much time on production. So I kind of shut that down. But we pivoted towards doing podcasts internally because we found that it’s such an amazing natural conversation that especially for salespeople, it gives them the context. So how do you transfer that knowledge and teach new people when you grow and scale your business? And I have definitely found the internal podcast to be a good tool.
[00:09:09] Yeah, it’s great because we started this literally as just an internal chat, right. And it’s interesting where things go and that’s kind of expanded, I think, into less of that, doing it for the sake of building and opening up new doors.
[00:10:07] Do you do podcast interviews too, or just in person?
[00:10:10] Mostly in person. We do a few audio Skype. I don’t like doing it as much.
[00:10:15] 90 percent in person.
[00:10:16] Yeah, it’s hard to get an energy read. Yeah, I totally agree with that.
[00:10:21] You mentioned in your post and it was funny because I was reading through you talking about exclusivity, right. So giving away everything doesn’t leave that space for exclusivity. I was reading that and I was thinking, OK, there’s obviously that thought process of around permission, marketing rights, giving away enough and then keeping a little bit back and that’s where the sweet spot lies. But without having to go down the road, I suppose that sort of pouring yourself out of social media. It’s not necessary.
[00:11:04] No, it’s not necessary. You’re setting yourself up for a little more longevity than a creator who’s just churning out for the sake of churning out every single day. [00:11:28] So then the back story there is you know, it is longevity, right? So it isn’t an overnight session. Even if you build one hundred thousand followers on Instagram overnight like that, it’s not going to mean anything and they’re not going to forget about you the following day.
[00:11:42] Well, I think that’s maybe why I chose the PausFest to do this talk, because it’s very different from what I’ve talked about in the past. But if I could hopefully get my message across to even a couple of entrepreneurs who do think being this rock star, creating this rock star persona is super important, maybe they’ll think twice or maybe they’ll just retool the strategy because a lot of us forget that the bigger we are, the harder we fall too. And I’ve had Aussie friends and kind of frenemies fucking crush it been on all the Forbes 30 under 30 list and make millions and their business tanked in 60 days because they didn’t have the sales. So I’ve seen what happens when you have too much exposure. And where and when that could backfire.
[00:12:36] We’ve been involved in a bit of the influence of culture and the whole network of people that are making decent money and sort of on the face value anyway. But that’s the whole thing. A lot of it is just kind of surface value, like it’s all about the show and there’s potentially not that much behind it so that when things do go wrong, there’s not all that sort where we’ve got 30 years of publishing and things to fall back on. It’s like, boom, you’re done.
[00:13:03] They’re all like one trick ponies. And I know a lot of them, like I see the sheets when, you know, I’ve been on both sides of the deal, the talent side and the brand side. And to your point, it’s just kind of a matter of time for them to not be able to maintain that fan base and just sort of burn out.
[00:13:39] And consumers spend. So we’ve had some clients that had a million followers on Facebook. If they posted about anything that’s outside of their sphere of influence, they got zero engagement. They would have had better engagement going to a niche person with a thousand followers. Can you talk about that?
[00:14:00] That’s yeah. I mean, I know tons of creators who kind of live and breathe by their numbers and keeping their engagement. But they haven’t figured out how that translates to real business opportunities. And I think it’s pretty dangerous when you go down that path because you’re really kind of like hoping and dreaming that something will miraculously come from you having a blue check and a million followers when you may never see the day.
[00:14:46] I think especially in the startup world and in Australia, I think we lag a little bit behind the ecosystem that you guys have had in the States. It’s improving, especially in the App side. There is the whole rockstar element or this stuff is alluring to potential founders because they’re like that’s where I want to be. So I want to get there, these guys out there, they’re going to help me get there. And how much of that do you think is really necessary and just good business acumen?
[00:15:15] Yeah, I think it’s really stupid and naive to take on that rock star persona, because I think as young millennials, we don’t realize that people love celebrating our failures, too. The bigger you grow your brand, the more exposure you get, the more vulnerabilities you have. I kind of like to be a little more selective in terms of where I’m doing things, publications, content. Some of it’s out of your control, obviously. But when I can control it, I’m at least in control of that narrative versus it just getting so out of hand that you gotta change your name or something because you’re Google SEO is fucked.
[00:16:23] There’s been two big houses that have tanked in Australia in the last 18 months, Napster and Bazinga. And they started at a similar time to us. And I’ve sort of always watched their eyes partially with confusion and partially with envy, because it’s like, they made all this money and how have they managed to scale so quickly? And I mean, obviously, it wasn’t sustainable the way they did it.
[00:16:46] I’m going to have to recuse myself because desire is a good friend. It’s something that there was no malice, they were really young and they lost the sales. I mean, it’s the most important thing in oury businesses, the services business, we’re not building IP, we don’t have assets, we have people, manpower and we have ourselves. And if you lose that, I mean, shit can go real wrong real quick.
[00:17:27] And make cash flows that are the bane of our existence. Right. So in terms of scalability, then, so I know that you work with quite a distributed workforce. If we’re going to say open up an office overseas, how do you go about dealing with that?
[00:18:05] It’s never easy. You got to do retreats, tech meetings, workshops, any opportunity to get people in a room together. It’s so important. We are distributed, we probably have like eighty five people in Uruguay and the rest in the US, some in Argentina.
[00:18:55] There are a lot of shops that claim to be all local and then don’t really talk about the fact that why not?
[00:19:03] I mean, we own that story. We’re proud of the story. And maybe that’s because we do have a little bit more kind of flex than when we were just starting out. I’ll be the first to admit that I didn’t know how to tell that story when it was year one, because to your point, people are like, well, if you’re not transparent it feels like a bait and switch. But if you’re doing offshore work, why isn’t it cheaper? Why isn’t it cheaper or I want to have people in one single room? And it’s just like it’s kind of a dinosaur mentality. I can’t compete with the likes of Facebook and Pinterest in San Francisco. So I’m going to move to other markets, other remote players. We’re very fortunate we get to play that kind of co-CTO role. So it’s fun when we get to kind of scale with our partners because that means we’re doing something right.
[00:20:30] So when you’re assigning, say, ten or seventeen people to one door, you’re assigning a dev team plus a strategic lead?
[00:20:36] It depends on every engagement. That’s more like a staff augmentation type of project where they’ve got the project management layer, they’ve got the strategy figured out, they need kind of warm bodies and dev muscle. Other cases, like working with Tony and everything from end to end strategy design, launch prep, all the strategy.
[00:21:02] So you took an app that he’d been trying to build for a couple of years, six or seven years, and build something in 13 weeks. Right. So like agile product development in that kind of sense can work really well. But your average client looking at an agile development lifecycle as opposed to a fixed price estimate or whatever it might be, are often kind of yeah, OK, that sounds good. But no, we want to know one estimate or one entity.
[00:21:42] Yeah. So I think it’s a good question. And to your point, like our work with Tony requires a tremendous amount of discipline and force to get them to follow your process, not the other way around, not be a yes man, say this is what we need. So our approach really to kind of tackling that problem is kind of finding a blended way of still keeping up with the agile framework, but guaranteeing some kind of a deliverable, even if it’s just velocity and making sure that we’re hitting our numbers, we’re hitting the amount of story points, we’re on track deliverable when we said we’re going to do it. We put a very heavy emphasis on discovery. And scoping really, really well and documenting that process before writing any code. So the client has sort of a legend and blueprint to follow throughout the process. But yeah, it’s not an easy sell for sure. Agile is a very complex sell that most people don’t know how to sell and most people don’t understand. And I’ve had to be on the phone with lots of lawyers and explain the concept.
[00:23:43] And the lawyers don’t like it. We’ve just had an agile contract gone over by client’s law and I appreciate from the lawyer’s point of view what they worried about. But it is what it is, right?
[00:23:56] Yeah, it’s an education call. It’s something that takes me two to three times. Luckily, I don’t really have to do that anymore. But in the beginning, I used to have to get on the phone, but kind of the opposing counsel, and then teach them how software really works. Because they didn’t really know and it solved it most of the time.
[00:24:19] I think that the clients that we’ve been able to convince are the ones that have been burnt before, have been through long product developments where the end result wasn’t what they anticipated anyway. So they can see the benefit, I suppose, coming along for that ride as a real key stakeholder that’s literally there. One, the process can go faster, but two, it can iterate and pivot at points where it wouldn’t have been able to otherwise.
[00:24:56] No, totally. I mean, we’re more than just coders or designers. We’re like accountability trainers, we’re therapists, we’re coaches, all these various things bundled into one. That’s why you hire agencies because you don’t have the way to develop an engineering culture internally. We’ve gone through the steps of doing that. That’s why we’re allowed to charge premiums.
[00:25:22] I must admit, one of the main reasons we don’t really take on startups in the apps sphere anymore is because we don’t have the resources to act as those other business coach and therapist and a strategist. And you end up getting pretty emotionally involved in that journey with those founders.
[00:25:39] And I mean, I learned something about the Australian market that is very different from the market we play in in the US, which is a lot of the startups are able to pull their initial cash from like home equity.
[00:25:53] And that would probably be 80 percent .
[00:25:56] It’s not like that in L.A. It’s like sugar daddies, it’s like mom or dad. I have a rich boyfriend, rich girlfriend, whatever, they’re fronting the bill. So it’s a lot less riskier. We don’t necessarily want to be working with clients for multiple years cause that means we’ve done something wrong, so hopefully we’ve made them successful enough where they can then transition internally, build their own companies.
[00:27:08] And I think that education early on that you are coming on essentially is kind of a CTO, our founding partner that’s going to get you to a point. And at that point, realistically, you’re going to need to scale and build your own team. Otherwise, paying an agency forever isn’t a good business model.
[00:27:36] We’re definitely trying to get a little bit more outside of the startup world or I should qualify that and say early stage startup later stages are great.
[00:28:27] And one of the things that you talk about, I suppose, if someone comes to you with a business proposition in a startup, they want to get off the ground, a mobile product, whatever it is, having to sort of, I suppose, go through due diligence to work out these are people that fit to work for what are the some of the things you look for in a founder?
[00:28:46] Yeah, I’d say the founder is the most important rating criteria. Yeah, it’s way more important than the idea, because ideas change. Yeah, always. Are they good collaborator. Can they listen, you know, minimal ego involved. Can they inspire people, all the various traits in being a leader. It is what we want in the founders we work with.
[00:29:13] One of the things that I always look for is how attached to that idea, if they can see a pivot already before it started.
[00:29:22] That’s tough because it’s your baby, right, it’s part of the process. And that’s why we kind of joke and we’re like we’re the dream creators and the dream crushers. So we’re not afraid to tell them that they need a pivot or explain that we may get to a certain point where you no longer are the ideal profile user for your own app. And that might make you uncomfortable. And it shouldn’t. So that’s, I think, just part of the process. I think sometimes if you’re a little too aggressive in the beginning, like, oh, you have to pivot, they might freak a little.
[00:29:59] Yeah, sure. But I suppose even outside of kind of the tech space, any founder in any business at some point should imagine themselves not necessarily being that people who were in the business or so eventually get to a point where okay well know, maybe I’ve built myself out of this or I’ve grown out of this or the businesses has outgrown me and having I think having the forethought to know that it’s going to happen and not just clinging on to the life raft or whatever.
[00:30:24] Yeah, yeah. It’s a tricky game for sure.
[00:30:55] LinkedIn. I’m pretty active. I post pretty regularly. I’m on Facebook, you can add me opt in my messenger bot for updates. Check out my book The First 100, Ben Lee.com did number two on Hacker News recently, so it’s fun to see that go kind of viral.
