A few weeks back, I spoke to Alex Hillman for The Lean B2B Podcast. We talked about entrepreneurship, job creation, market selection, customer research, Sales Safaris, and finding the right business opportunity.
Etienne Garbugli: My guest today is Alex Hillman. Alex is the co-founder of Stacking the Bricks. Alex developed, along with Amy Hoy, the Sales Safari methodology and created 30 by 500, a training program designed to teach people how to research, build, launch, and market new products. Alex is also the co-founder of Indy Hall, a co-working community in Philadelphia, and the author of the newly-released book, The Tiny MBA.
Alex, welcome to the podcast.
Alex Hillman: Thank you for having me. I’m excited to finally get a chance to chat. We’ve been emailing for a very long time. I was excited to hear from some of our students that we showed up in your book and, and now we’re here and I’m very, very excited and glad to be here.
Etienne Garbugli: Some of the students it’s even more than one!
Alex Hillman: Yeah. We had several folks, a bunch. Hey, I saw Sales Safari mentioned in here. I thought you’d want to know. And I thought that was really cool.
Etienne Garbugli: That’s awesome. That’s awesome. So, maybe first question. I saw on your website, I also saw on your Twitter. So, you have the stated goal of creating 50,000 jobs in the Philadelphia area over the next 10 years. Why that goal specifically, and how are you going about reaching that goal?
Alex Hillman: So, a few years ago, there’s a company you might have heard of called Amazon. Amazon pulled an incredible stunt where they convinced cities across America to compete against each other for the privilege to give Amazon a bunch of incentives, you know, tax breaks and things like that in order to place a new headquarters in their city.
And this, this is. It’s evil genius is what it was. And I watched, as many did, in horror as my own city entered into this competition. And I watched many months of discourse and debate and should we do it, shouldn’t we do it, whatever.
The truth is, Amazon had their minds made up from the beginning. Strategically, that only makes sense. They created this contest as a negotiating tool, again, evil genius, but a couple of really interesting things came out of the dialogue that weren’t the dialogue itself. That I thought were interesting.
One was that because of this sort of timeboxed competition, that. Organizations, individuals. There’s a bunch of players in the business ecosystem in Philadelphia that normally don’t play nice together. And sometimes they actively, you know, hate each other and undermine each other, suddenly we’re willing to play nicely together for a very specific project, with a very specific goal to talk nicely about Philadelphia and why a business would want to come to Philadelphia.
And that’s something that our city is not very good at. Philadelphia is an amazing city, but we’ve been very ineffective at positioning ourselves as a place that is good for businesses. We don’t need to get into the weeds of why that is. There’s a lot of really, really long-standing socio-political, racial, economic, like, there’s very real reasons for that. That’s for another podcast.
The other thing that I noticed was that people went bananas because Amazon promised 50,000 jobs. And I said to myself, that number doesn’t seem that big. I mean we’re a city of, you know, we’re the fifth or sixth largest city in the country, depending on exactly how it’s being measured and what year it is.
But we’re a major city. We’re a top 10 city, over a million people. 50,000 jobs is undeniably a good thing and we have our own issues with economics. And we’re the biggest poor city in America. Major, major economic disparity, especially among the racial communities, but 50,000 didn’t seem proportionate to the offer that Amazon was asking for from their cities.
So, my takeaway was well if 50,000 is a number that makes city hall and all kinds of other people do backflips, what if I said that I was going to create 50,000 jobs over the same 10-year period and Amazon said, because it wasn’t 50,000 jobs on day one, it was 50,000 jobs over 10 years. And that’s ignoring exactly what the makeup of those jobs are, who is going to get those jobs, things like that.
What would creating 50,000 jobs do for our city and how could we do it in a way that’s not Amazon because. If we think critically about this. 50,000 jobs is a good thing. One company creating 50,000 jobs is about the worst way to do it in terms of the liability that comes with it. And we already have a pretty tenuous relationship with our other biggest technology employer, which is Comcast. They do not treat our city well, and they sap us dry. So, to invite another, even more aggressive tech company seems like a disaster.
So, one company creating 50,000 jobs is a liability, but what are the other alternatives? And so, I sort of took the 30 by 500 model, which for those who are not familiar, 30 by 500 is the name of our course, but it’s actually a math equation that says that one of the ways that you could create a $180,000 a year salary, which when we created this course, that was actually a common developer salary in the Bay area. It’s now double that, whatever.
So, a way to do that is to get one job or to create $30 worth of value for 500 people on the internet every month. So, can you create a tool or product that 500 people every month get $30 worth of value. And obviously that math can go any which way, but it’s to show you that 500 people a month on the entire internet… the internet is huge. And whether we’re talking about recurring revenue through a subscription service or a one-off product, 500 customers a month is not that many and $30 a month is not that hard in terms of an effort to create that much value for a business.
So, if you approach with that math, you can easily, so long as you’re approaching things systematically achieve that number goal. And so, I approached the 50,000 jobs the same way where you can have one company, 50,000 jobs, and the other end of the spectrum, you could have 50,000 entrepreneurs. That’s not better.
We could have five 10,000-person companies, ten 5,000, and so on and so forth. And none of them are great, but somewhere in the middle I hypothesized there’s an answer. And that was where the number 10,000 came from because I started building sort of a mathematical model as well as a roadmap for what it would look like to over a 10-year period help 10,000 people become sustainably-independent, or another way I framed it is to create a job for themselves.
How do you create, how do you take the skills that you have, the knowledge you have, or that you need to get whatever may be and learn the business skills around it in order to create a job that is equal to or better than what you could get as a job, whatever that looks like in our local economy. So, the goal is to help 10,000 people first create a job for themselves, and then some percentage of those people will get to the point where they want to hire somebody.
80% of them probably won’t, 80% or more won’t. But if 20% do, and then some percentage of that 20% decides to hire two or three, and then some percentage of that decides to hire 10 or 15, and then so on and so forth.
The way I ran the math against our state’s data, we actually ended up generating over 80,000 jobs, conservatively, running this model. So, my hypothesis for economic development in 2020, where companies don’t need 10 employees to start on day one, what they really need is for one person to understand how to create a job for themselves that’s actually sustainable. It creates the opportunity for them to then become the next generation of job creators.
So, the work that Amy and I have been doing for the last decade has already headed down that path. And now I’m turning that locally and saying if people want 50,000 jobs, this is a way to actually do it. And look, if we fall short, let’s say we only create 10,000 jobs. We created 10,000 jobs. And we’re not beholden to the whims of some giant corporation that wants whatever it is they want.
And we’ve got a replicable model that any other city that participated in an Amazon’s game, I believe if they spent money on that campaign, which of course they did it cost time, therefore cost money. They owe it to their citizens to at least spend equal to whatever they spend on the Amazon campaign to try a playbook like this.
So, that’s why that number, and that’s how we intend to do it. The goal is to focus first on helping people reframe what entrepreneurship is and how to create opportunities for themselves. And then those folks are in a position to, if we help them get from the stage of surviving—I make enough money to cover my bills—to a stage of thriving and really understanding how to grow and sustain a business.
That’s our best shot at a generation of employers that is much more humane to their workers that is empathetic to the world around them. And ultimately, we’re living in a world where we’re coming to a reckoning with what happens when highly-leveraged technology companies have unchecked power.
I feel like if people start with a different measure of success, a different set of goals for success, and there are good role models and good examples and good playbooks to follow, we can help more people create businesses that are good for the world because they’re good for their neighbours first.
Etienne Garbugli: Yeah. I think I read a study the other day mentioning that 80% of all revenue from software is in California.
Alex Hillman: That’s not surprising to me. And the truth is, the internet is everywhere, so why?
Etienne Garbugli: Yeah. I think it’s a great mission. So, what roles do you see Stacking the Bricks and 30 by 500 play within your objective?
Alex Hillman: So, there’s three pillars to the objective. Pillar one is inspiring people who think that entrepreneurship is not for them to realize that it could be. Not to convince people to become entrepreneurs, but to show that there’s more than one flavor and for them to go, oh wait, there is a version of this, I don’t have to be the next Mark Zuckerberg or California Silicon Valley startup to create a technology business or any kind of like, it doesn’t need to be a technology business. Technology is just this amazing lever and tool. Indy Hall is not a technology business. My main business is not a technology business. I feel like I can say that with confidence.
Pillar two is that surviving to thriving, and I feel like that’s where Amy and I, and our experience, not just in teaching entrepreneurship, but in teaching entrepreneurs and teaching creative people, and breaking down a lot of the expectations and biases and frankly, misunderstandings about how business and sales works, or is supposed to work or needs to work.
We are prescriptive to a point, but at the end of the day, the prescriptiveness is a means to an end where the goal is really to show people there are more ways that work. And I honestly so long as no one is being hurt, don’t care which one you choose, so long as you choose, and don’t simply assume defaults.
So, we have, a decade of experience. We have curriculum that we can develop. We’re now in a position where we can make that curriculum more financially accessible. We could potentially teach people how to teach our material. So, there’s a scale. The most honest answer is I don’t know, but I do know that we have assets that have been successful in reframing entrepreneurship for people. And since that is such a big part of this mission, it makes sense that they fit together.
One of the most exciting pieces, essentially, because I think that there’s entrepreneurship belongs to everybody at every age. However, I’m really excited about the potential. I have a few friends that work in youth mentorship in particular, and thinking about the most disadvantaged youth in our city who struggle with not just life, although life’s so hard, but also opportunity because the systems are designed to shut them out.
And when you create your own job, it’s hard, but you’re also creating a new system. And so, the number of people who can shut you out suddenly starts to diminish. And if we can put those tools in the hands of young people that have the most time to do something with it, I think we can do some really exciting things.
So, there are some really, really smart folks that I feel fortunate to be friends with, who have spent time in our material and are helping do the, what’s the translation. It’s also like what’s the starting point. I can’t throw a young person into 30 by 500 without some context in its current state, but I don’t think we need that much to make it make sense to somebody who has, you know, whatever perspective they have about business and what they want to create is a hair salon or a skateboard shop, or sell their art.
There’s fundamentals that we teach that will translate. There’s fundamentals that we teach that need translation. I think that over the next few years, doing more of that… One of the things we’ve learned over the years with 30 by 500, is that in order to do that kind of work, there needs to be a tight feedback loop. That’s not the kind of thing where I get some insights and I go into my hidey hole and produce some new courses.
That’s going to be live instruction with students in person, if not online, depending on how this whole pandemic shakes out. However it happens, live instructions to guide and understand what resonates and what doesn’t, what translates and what needs translation. And then we’ll sit down and do the work to bake a scalable product, because that’s the way that we’ve created the stuff that we have up to this point.
Etienne Garbugli: I think you’re touching on a really interesting point. You were mentioning about how people kind of default, go with the default path a little bit. Which is kind of something I see a lot, especially with B2B founders where people will try and solve problems that are kind of always in the same universe while there’s still a portion of these that are not tackled at all.
So, it feels like you mentioned, like the internet, there’s so many opportunities, but people tend to focalize on more similar paths in some ways, which means that some opportunities are not being tackled and there is a…
Alex Hillman: A hundred percent. So, I actually just wrote an article that is not on our blog yet, but went out to out email list about the availability bias and how that shows up in exactly the problem you’re describing.
It’s kinds of businesses. It’s kinds of products. Somebody, a friend of mine tweeted this morning, she said, you know, what kind of tools, what kinds of products can developers make that aren’t software, eBooks, and courses, I’m having a hard time thinking of any.
And the reason for that is because the most recent things you’ve seen are software, eBooks and courses. And so, if you don’t have a system for expanding that, which is key, it’s like one of the biggest sets of lessons in 30 by 500 is how to turn real audience insights by running through a system. So, you’re not relying on your imagination. You’re relying on what’s effectively like pre-programmed remix algorithm, where you put in a problem and it’s ended. You have to do more work. It’s not an automated thing, but algorithmically, you can approach a problem and say, here’s a bunch of different variations. And some of them won’t make sense. Some of them won’t be feasible. Some of them your audience won’t want, and some of them you won’t be able to create. So, you eliminate those, what you’re left with is a bunch of options that will include things that you wouldn’t have thought of if you had a blank canvas and just your creative mind.
Etienne Garbugli: That’s a great point. So, maybe connecting that to the methodology that you guys have in place. So, I personally first came across the Sales Safari technique on Indie Hackers some of the posts you guys had mentioned. I also heard it mentioned by Hiten Shah and other entrepreneurs. I think it’s a really interesting technique, both in terms of research, but also in terms of entrepreneurship, what it can bring, what it can add in terms of value.
So, could you maybe talk about the genesis of the Sales Safari and how it relates to 30 by 500? Which came first, which came after, why?
Alex Hillman: Yeah. So, I want to start by making sure that Amy is credited for inventing Sales Safari. This is a hundred percent her, her brain baby. We have collaborated on refining it, on teaching it. We teach it together. Amy has more practice and therefore is better at it.
But, to more directly answer your question. When we started teaching 30 by 500, there was a set of steps that we thought were instructive. And they basically said, go out on the internet, find your audience and read what they’re talking about.
Sounds straightforward, right? And so, people would come back and say, I didn’t see anything. Oh like really? Where did you look? Oh, browsing Hacker News or Indie Hackers, whatever forum, Reddit. Whatever it was. And we’re like, well, what threads? And they’re like, I was just kind of browsing around and I was like, well, did you go into any threads?
And they’re like, yeah some. And I’m like, and what did you see? Ah, just people, you know, talking about stuff, a lot of them were complaining and I was like, complaining? That’s the thing you’re supposed to be looking for. Why did you ignore that? And they go, I thought it was just people complaining. And I was like, no, no, no people go on the internet to complain about things because something hurts.
Think about how much something needs to hurt in order for you to go on the internet, to a room full of strangers and ask for help. And there’s a difference between complaining and asking for help, but they were assigning people asking for help as complaining. And I was like, okay, we need more explicit instructions.
And so, the first wave of what became Sales Safari was Amy kind of reverse-engineering what she did when she would go on a forum and do research. Break it down into steps. First you look at this, then you look at this, then you look at this, and we broke that down and we showed people examples of Amy looking for it.
And so, we brought that to people and they were, oh my God. I didn’t see any of that, that’s unbelievable. And we’re like, okay, cool, now you go do it. And so, they would go off into their forums. They come back and they’d say, I just don’t see anything. And we’re like, what, what did you do? And they go, well, I did what Amy did and I go show me your notes. And they go, oh, I didn’t take any notes. And I was like, then you didn’t do what Amy did because Amy was taking notes. And I realized that this group of smart, many of them college-educated professionals didn’t know how to take notes. Fascinating. I realized that that is a researcher skill. And not necessarily a technologist skill or a creative skill.
And so, the next major wave of Sales Safari development was teaching people how to take notes. And that was when we developed the sort of core quadrants roughly of Sales Safari notes which are pain, jargon, worldview, and recommendations. And there are a few others that show up from time to time.
And those are actually subsetted in a few ways, but those are… basically by giving people a pre-created note-taking sheet, we could say, when you go to a forum, pass number one, you’re looking for pain, write down all the pain you see. Then do it again, and look for jargon. This is what jargon looks like. Write that down.
I don’t know if we can make it more paint-by-number then we have at this point, but the truth is people are now, they can. Here’s the differences is it’s kind of like, I would equate it to kind of… there’s two different ways. There’s a lot of ways to learn to play an instrument, but the two most common ways are by ear and somebody teaches you kind of step by step.
You learn to play a note, and then you learn to combine those notes into chords and chord progressions and whatever it might be. And I’m not a musician, so I may be speaking out of turn there, but I think the fundamentals translate. We were trying to teach people by ear and people needed to be taught progressively.
And so, 30 by 500 as a set of techniques is now a progressive thing. And most importantly, we teach it as a practiceable skill. So, a session counts as practice. And in fact, one of the biggest shifts that we made when we redeveloped the course in about 2013 was instead of having people’s first Sales Safari attempt to be on their own audience, we would assign them an audience, something that was general enough that they could understand, even if they were not that themselves. We chose freelancers because even if you’re not a freelancer, you kind of have a sense of how a freelancer works and thinks. And you can say words like invoicing and client, and that’s not gonna sound like a foreign language.
And so instead of sending people into their own audience for the first practice, we’d send them into an audience that was familiar enough, but not their own. And that the stakes were lower and they could practice a thing from a little bit of distance, get the practice in, and then come back to their own audience to say, okay, this might actually be harder on my own audience because I have blind spots and biases and things that I take for granted that other people, them asking for help, looks like complaining to me when in fact it’s really them saying I’m stuck and the documentation sucks. That’s my favorite is people just saying like, oh, in software forums, it’s just people complaining about the documentation or people asking questions that the documentation answers.
And I always say it’s easy for you to assume they haven’t read the documentation, but have you thought about or interrogated what are the reasons that they haven’t read the documentation? One is that they’re lazy and that is entirely possible. But what are the other ones? And then you start realizing, well, maybe the documentation is poorly written. Maybe it’s confusing. Maybe it assumes knowledge that they don’t have.
And I’ll be honest with you, we have quite a few alumni who have made pretty large amounts of money based on problems found that basically equated to the docs are garbage. And I think that that’s, not that that is the way to build a business, but I think it’s a really, really clear illustration of how you can observe a problem from a different point of view and realize that people are struggling because they’re lazy sometimes, a hundred percent.
But even within that, you know, let’s assume they have any energy for it. If they weren’t lazy to start with, if the docs were good and inviting, and well-written, maybe they’d overcome some of that laziness. So, that’s sort of the evolution of Sales Safari, where it started, where it came from and how we teach it today.
Etienne Garbugli: So, you mentioned pain, so what’s the focus area? What are you looking for specifically when you’re doing a Sales Safari? Are you looking for what Jobs people are trying to get done? Are you trying to look for tasks, or you’re trying to look for problems? What are you looking for specifically?
Alex Hillman: Emotions. Typically, a wide range of negative emotions, which could be things including struggle, confusion, disagreement, debate. Pain shows up as a lot of different things.
So, that’s a tough question to answer without having concrete examples. However, I will tell you that it is hard to find environments where pain is not being surfaced. People just aren’t used to seeing it. So, maybe like the easiest example is people asking questions. Again, you have to come at it from the lens of people are asking questions for a reason.
It’s not just because they don’t know, there’s a reason behind why they don’t know. Sometimes they don’t know. Sometimes they lack the confidence that what they know is correct. Sometimes they’ve gone and done the research they found three different answers that are shades of correct. And can’t tell which one is the right one for them.
All of those are variations of pain. But I think the easiest place to start is to examine when people have questions or variations of challenges that they’re facing to note, first and foremost, how are they expressing it? What are their words?
Not what is your interpretation of their problem, how do they perceive their problem? And that’s the difference between Sales Safari and many other approaches to customer research is. This is all about gathering insights into how they see the situation, not what you can do about it. That comes later. That’s an entirely separate part of the machinery.
The very first part is you getting inside their head and understanding their point of view, their worries, their fears, their anxieties. Also, the things that they’re excited about, like what gets them wound up? What gets them enthusiastic? What gets them manic?
And then, you know, what is the crash look like? What are their habits? So, I’d say, what is pain? What are we actually having people look at? It’s two things. It’s emotions and it’s patterns. It’s not about finding one pain and locking onto that, and then finding every example of that pain. The challenge of Sales Safari sort of poses is instead of finding one pain and then trying to validate that that pain exists elsewhere, which is once you’re in that mode now you’re back to another observable bias.
Instead you observe the entire landscape and you go, what’s showing up here a bunch on its own. And then you use that pattern to then deduce okay, is there an area of focus that I maybe want to invest some time into and look for the next round of patterns.
And it is a bit of deductive reasoning that goes into it, but the idea is to collect wide swaths of information, look for emergent patterns and then refine, and then kind of repeat that. So, a combination of emotions and how those emotions show up as patterns. I was describing on another podcast a couple of days ago, that if you come from a technology world in particular, this can start to look like debugging. Cause you’re looking for patterns, right?
You’re looking for, are there, if something is not working for somebody you have to look for patterns and why it’s not working for them. You can also look for inconsistencies, right? Inconsistencies is another kind of pattern. What shows up? As an inconsistency, but with some degree of consistency.
And that starts feeling very kind of circuitous. But again, that’s why we don’t start there. The way we teach Sales Safari is really, really focused. We send you into one thread and say, I want you to come away with as many notes as you can about the problems being expressed and let’s see what you come back with.
And then there’s things that are kind of obvious on the surface, but then sometimes there’s things that are lurking underneath, and those are the things that come from asking your own questions about why that thing is on the page in the first place.
Etienne Garbugli: So, in that case, so this is a technique that works for a lot of entrepreneurs in B2C. I know it’s worked with entrepreneurs in B2B, like Brennan Dunn, for example, with RightMessage, is the evolution of his research and other entrepreneurs as well. So, for example, in a business setting where people are maybe less likely to be sharing or expressing might be more limited in terms of what they can share publicly, do you see any constraints or do you see any ways to work around that to make the Sales Safari as effective in maybe a larger business to business context?
Alex Hillman: So, actually, B2B is what we essentially force our students to do. B2B is where it actually is stronger.
B2C is tough. It’s not impossible. Obviously, people do it, but it’s tough for two reasons. The biggest one is that consumer audiences are fickle and really inconsistent, so the patterns that show up are way, way harder to read, because you’re going to find so many conflicting variations. It’s not like in B2B, you may find two conflicting variations and you can pick one to focus on. And that’s where worldview comes into place. It’s like Apple versus Android. Right?
Well, you can’t really serve both effectively. So, I’m going to focus on the Apple worldview and what that contains. B2C is you’re dealing with hundreds, maybe thousands of variations and permutations. And it’s really hard to like suss out one that you can latch onto.
The other is buying on value. Consumer audiences do buy on value. They buy on lots of things, including value, but they don’t buy in value consistently. Psychologically speaking consumers buy on far wider and stranger reasons.
Sometimes people buy on value, but a lot of times they buy based on how they want to be perceived or style or brand, and those kinds of things. Businesses do that too to a degree, but far less. Businesses and individuals who operate like businesses, which, there are professionals who don’t operate like businesses.
One of our favorite examples is restaurants and music venues are really, really difficult to sell to because they operate more like consumers in that they are fickle they tend to be very, very resistant to a new thing. They things to be the way that they were, those kinds of things.
So, what you’re looking for is people who behave like businesses or businesses. Because for them buying on value is a pretty straightforward equation. I have a problem. This problem is costing my business money. Therefore, it’s costing me money. Solving this problem will either put money back in my pocket or stop the bleeding.
And that arithmetic is happening all day, every day for every business owner and even professionals who don’t necessarily think like a business owner are still doing some variations of that calculus. Right? So, the B2B space is actually much, much easier to the point where we explicitly, we used to early, early days, we used to tell our students, you should do B2B, but you can do whatever you want.
And we had zero successes in B2C. And so, we were like, you know what? Let’s just focus on B2B. So, as 30 by 500 has evolved, we’ve kind of put on guardrails to say, look, we can’t sit on you and force you to do anything. But in terms of your best chances of success, here are constraints that we’re going to provide.
These constraints are to your benefit. And choosing B2B is one of them. So, your original question also suggested that B2B was harder to observe. And I have not seen that to be true. What I have seen to be true is people assume that because they don’t hang out online in certain ways… I was just emailing with a prospective student who is more of a C-suite type executive, mid to late forties or older and in their head, they go, well, my peers don’t hang out on Reddit and Indie Hackers. So, is this really gonna work for me?
And I pushed back and say, do people in your industry not go anywhere for advice? Do you buy books? Do you go to conferences? And conferences are weird thing in 2020, but like, do you go to professionals? Do you have professional development resources you go to and they go, of course.
And I go, then they exist. You just aren’t thinking of them that way. And so, you’re gonna have to do a little bit of work to think outside of your bubble about what are these groups maybe that I belong to, but I don’t think of them that way or that I don’t belong to because of my own maybe, I don’t feel like I need it, but just because I don’t need it. It doesn’t mean other people need it. So, it doesn’t mean other people don’t need it.
So, I have a blog post if you Google “can’t find audience Alex Hillman“, you’ll find a three-part, increasing with increasing challenge, but for increasingly challenging to find audiences ways to find them.
My favorite example that I love is we had somebody reach out who is a private pilot. Like he flew planes for rich people and he was like, I like my job, but I want to be able to do other things that don’t require me to be in the air, will this work for me? And I said, do your peers—which could be your professional peers, people who want to get into your industry or people who hire you, that’s sort of the trifecta—do those people exist on the internet? And he said, I think so. And I go, here’s three or four things for you to go, try to go find them. And he came back and he goes, I just found a bunch of forms that I never knew existed because you gave me the way to think through what is the language and jargon and questions that I do know, map that to the things that people put into the internet.
Used this magic thing called Google and all of a sudden, these conversations that were a hundred percent blind spot to me show up and I can start participating in those conversations. I can start doing Sales Safari and learning from those conversations. So, if I can get a private pilot whose people are definitely not hanging out on Reddit or Indie Hackers, unless you’re Brennan Dunn, I suppose because he’s getting his commercial pilot’s license is that the next, but for the most part, just cause they don’t hang out in the places that you hang out doesn’t mean they don’t hang out. And that’s in itself is a really good meta lesson of the way you are is not necessarily the way that your customers are, you still have advantages and it benefits you to serve customers that you have those things in common with. But the line that we’ve, there’s been a part of 30 by 500 since the very early days when it was a bit more psychological and headspace, then practical and practice was you are not your audience.
So, if you’re making decisions based on what you do. And not what you’ve observed your audience doing. You are setting yourself up for a world of confusion, hurt, and probably failure.
Etienne Garbugli: Well, so, say in that direction. How would you decide which audiences you should be researching initially?
That person was a pilot, but would someone else target pilots right out of the gates. That’s not really a pattern people would do.
Alex Hillman: So, the reason he went after pilots. It’s cause that’s what he already does professionally. So, the constraints that we teach are so straightforward and yet people so often resist them I think in part, because they are so straightforward.
People expect there to be some kind of magical secret that I think part of this comes from the there’s a lot of talk on the internet about things like finding the perfect niche, right? There’s also a common theme among people who don’t want to create a business that’s in some way associated with the work they already do because of conflict of interest with an employer, perhaps. And that is, that’s a very real concern. However, I’ve yet to find a situation where we couldn’t work around it, where you can have a candid conversation with an employer, or you can read over your employer…
I mean, if you look at your employment contract and it says you can’t create stuff on the side, then you have to have a conversation with your boss anyway if you’re going to go down this route. Otherwise, you’re opening up massive liability. And if you can have that conversation with your boss, you can set boundaries and say, we will never go after whoever the customers of the company that I worked for is. In almost every case, that deals with almost everything that legal is going to care about, but every situation’s a little bit different.
So, the other reason that I think people avoid going after an audience that they belong to professionally is because they feel a certain way about their professional peers and it’s usually not good. And what I like to remind folks of is whoever you were surrounded by the majority of the time is not representative of your entire audience.
And you’re used to looking at them as a bunch of complainers instead of with a tool that teaches you how to observe that as pain and create opportunities to help them. And I’ll tell you what, when you become somebody who helps people, they start treating you differently. And that feedback loop looks and feels very, very different, but you can’t know that until you get into it.
So, can you serve audiences that you don’t belong to? Absolutely. It’s just a thousand times harder because you’re throwing away one of the biggest advantages that you have, which is you already understand them. Even if you’re not exactly like them, there’s jargon that you’re going to understand. You’re going to be able to see inside their heads more easily than an audience that you have nothing to do with, or that your cousin is embedded in. You can’t get inside your cousin’s head either.
So, use every advantage you’ve got is a core tenant of 30 by 500. And so, serving audiences that you belong to is key. The second step to that is audiences you belong to can go into one of three different paths. Like I mentioned before, that can include people who do what you do, your peers, it can include people who want to do what you do.
So, newbies that are a few steps behind you, or many steps behind you, depending on where you are in your own progression. It can also include people who hire you. And so, for the people who are already in the consulting game in some way, that’s an opportunity to look at this from the perspective of, okay, there’s an industry that, I may be a software developer, but I do mostly work in farming or aerospace. Sure.
And so, you can say, okay, let’s start looking at what a batch of my best clients have in common. And are there ways for me to introduce new products and services into my consulting business for customers who I already serve. Because again, I already have that built-in knowledge and I have some built-in relationships.
I have maybe some trust established in the industry. All you need is really one client who likes you to have any amount of trust in industries that appear really vast. And so, like it doesn’t take a lot. I think people imagine it takes so much more than it really does a little bit goes a really long way.
So, there’s really, I think, under-explored opportunity to look at well, here’s who my clients are. Here’s the kind of businesses that they are. There’s the people who already pay me. Whatever they pay me. There’s people who can’t quite yet afford to pay me. So, can I product or productize something for them?
Cause they already know about me. They want to hire me, but they can’t. So, there’s that option. There’s also the people who can’t afford to pay you. And now you can say, all right, in addition to that services that I do here are a few other things that you can buy. And for you, those things are much more time-cost efficient, because if you’ve got new clients coming in, it could be a package that you sell or a set of tools or kits, or like one of my favorite things where people who work with clients is what’s the stuff that you do with every client.
And what if you sold that as its own thing to new and existing clients at a premium price is totally viable so long as they see the value in paying that price. And then the key is, is like, even if you’re running a bit of that manually, or semi-manually, you’re not creating bespoke work every single time.
So, it’s extremely time efficient work, which is a really, really valuable middle ground between time-inefficient work, which is selling time for money and products, where you create something and sell it over and over and over. Sometimes it’s hard to have the time and resources to get from the one for this end of the spectrum to the other.
And so that’s why Stacking the Bricks is about incremental growth in saying, okay, maybe I can use some of my client time to create products that help me make it’s a great tool that help me serve my clients better. Now, the next client that comes along, I can sell that to them as a package. Now my time is more efficient and now I have more time to invest in a product that is entirely self-serve, and now you’ve made the progression along that path from time for money to a thing that people can buy off the shelf while you’re asleep.
So long as they’ve got a credit card they can come and grab it and do their own thing. And then those people who bought that are it’s almost becomes like paid lead generation.
If you want to keep consulting, which you don’t have to. But so many people do is you’ve got people that buy the thing and they go, that was awesome. I learned a lot, kind of bring you on for some expert time. And now you’re being paid as an expert rather than a other way I’ve started framing is the difference between hired guns. Oh sorry, hired hands and hired guns.
You’re hired hands, people just want you to do the work when you’re hired guns, they want you to come in and tell them what the right thing to do is, and then they’ll go ahead and do it. That’s some, that’s really the only consulting work I do anymore cause it’s all strategy. It’s extremely time-efficient. And it lets me be extremely high impact inside of an organization that either is missing some knowledge, is missing some outside perspective, doesn’t trust itself to take the right steps, or just doesn’t know how to put the pieces together even if they have all of the pieces available to them.
Etienne Garbugli: That’s super interesting. I think that’s in a way what Brennan was referring to when he was talking about, basically he learned from the community, the personalization he did ended up becoming a course, which ended up becoming software now, and then gradually scaling that.
Alex Hillman: So, and what what’s interesting is like Brennan has a case study, like Brennan moves along that spectrum all the time. He’ll launch a new piece of software and he’ll build in consulting opportunities that are premium consulting opportunities to hire the guy who knows the thing.
So, Brennan’s a student and a friend, we’re RightMessage customers, and yet there’s parts of the RightMessage implementation that I’m just struggling with, but I know Brennan can do it in his sleep. And so, he offered a package to have Brennan come in and do stuff for us. And I was like, where do I pay?
So, what’s cool is Brennan can do that because it’s to the advantage of his… The long-term advantage of a software company that has customers that actually use the tool they’re paying for, which is often not the case. It also becomes revenue that he can use to fund other parts of growth that are necessary. So, it’s a win, win, win. Everybody’s getting what they want out of the deal.
I’ve got the expert doing the implementation for me and then showing me how to build forward based on the foundation that he created. He’s getting upfront research opportunities to see why, why do I struggle with this?
And so that over time they can bake that into their onboarding, into their learning center and things like that. And he’s earning income that is fairly time efficient. Cause it’s something he’s doing across 10, 15, 20, however many people he’s doing it with. And that gives him that that revenue gives him the ability to invest in other parts of the day.
Etienne Garbugli: That’s interesting. So, if I flip that around, would you recommend a new entrepreneur go directly to software? Or would you recommend that they go gradually and progressively a little bit like the Stairstep approach from Rob Walling discovering what they can do to sell to value and then get to software eventually?
Alex Hillman: Software is incredible. Software is very, very hard. Even if you are good at building software, there is so much more to selling software, especially if we’re talking about subscription software, something that is extremely not obvious I’ve learned is that people don’t realize that the amount of trust that is necessary to get somebody to buy a $30 to 50 one-time purchase is much, much, much, much, much lower than to get them to put in a credit card and to give you permission to charge them 30 to $50 every month.
And what’s even crazier is it is easier to sell a $500 one-time purchase than it is to get people to put a credit card in and give you permission to charge them $30 a month or $50 a month over and over.
Even if again, it’s not a rational thing. It’s about, it’s a psychological thing. So, software again is incredible, but it is the steepest hill to climb. Even when you were working with all of the advantages. So, can it be done? Of course. Do we have students who have done it successfully? Absolutely. Do they all say it took longer than they thought it would? Yes.
So, the most common path to success is a hybrid approach where at the beginning you’re creating stuff for an audience that is fast to ship, easy to maintain, easy to support and stair-stepping your way towards bigger things. Or if you start with software, and this is where things get tricky. And this is where I do not advise this. It’s possible, but I do not advise it.
Would be to launch software and a productized service that kind of complement each other Where, I mean Convert Kit did this early, early days on where Nathan would basically sell a package where you would get 12 months of Convert Kit plus training on how to start an email list and, and get things set up on your website and all those kinds of things.
It was a good way to jumpstart it because it was revenue upfront. You were getting customers to actually use and implement the product, which is the high. Like people want this turnkey ready to go thing, but to do that effectively before, at the very beginning before you’ve got customers, it’s kind of a cold start problem.
You need customers to create good onboarding, but you can’t get customers who stick around without good onboarding. So, it’s easier to figure out how to do that with one-off products where you’re not banking on them sticking around for three, six, 12 months, whatever it is. You can also, I think people get hung up on recurring revenue, which by the way is amazing. Again, Indy Hall is a mostly recurring revenue business. Yeah. So, I dig it and I get why people go after it. But recurring revenue is just one way to look at a lifetime value equation. I can look at the 30 by 500 business, which got almost no subscription pieces to it.
And I can look at customer lifetime value. Even before somebody gets to 30 by 500, our flagship that is a significant investment. I can look at people who have over the course of months or even years bought basically everything else. And that means that a customer who buys things is and actually gets utility from them is also way more likely to buy the next thing.
So, taking a portfolio approach of small products is our number one recommendation. Because it gives you a foundation. It gives you an ever-expanding customer lifetime value, and you can use all of those resources including the trust you earn and the insights that you gain by selling things to people and watching them use it to build things that are higher leveraged like software.
Etienne Garbugli: Speaking of the next thing, you decided to write a book, a new book, specifically, the Tiny MBA rate was released, I think about a month ago. So, what made you decide to write a new book and, what can people learn out of the book?
Alex Hillman: So, I’ve tried to write a bunch of books. Writing a book is hard. You’ve done it. You know how hard it is, and it’s hard for a bunch of reasons.
The books that I’ve tried to write in the past, not exclusively for the Stacking the Bricks audience. Everything in Stacking the Bricks was either something Amy created and then we finished together and then I helped build sort of the sales and marketing systems around, or something that we’ve actively co-created.
So, things like Just Fucking Ship. She wrote that and then we kind of packaged it and sold it together. 30 by 500 was actively co-created. This is the first thing that I’ve created entirely on my own. So, I’ve been sort of jokingly saying this is the solo album so to speak, the band is not broken up by any means, we’re just trying new sounds.
And Amy and I have talked a bunch about this since the book has come out and has been successful and how excited she is to watch me be successful on my own within the business. We’ve talked about it a lot. One of the interesting dynamics of our business is for a very long time, even though we collaborated on almost everything, Amy was very much the face of the business.
She wrote most of the articles. I wrote some, and I’ve got certain kinds that are more my wheelhouse, but the vast majority of our business people’s first contact with our business was going to be Amy. Our podcast was actually the first thing that really shifted that for them to see that, oh, Alex is not just a behind the scenes guy. He’s actually a part of the business.
And so, when I set out to write this book, I think the key difference is I didn’t set out to write a book and maybe this is an expression of the 30 by 500 process in motion, even though I wasn’t deploying it intentionally, it’s in my soul, so I can’t help it maybe.
But, well the 30 by 500 process dictates that the format comes last. You create the thing that helps the customer figure out what that’s going to be, and then it can take, and then you figure out what forms are possible. And then you choose from among those forms, what people would want and what is in your capacity to create.
I accepted a challenge last December on Twitter to write 100 tweets that were strong opinions, perspectives, observations, pieces of advice, whatever they were about, a topic that I felt I knew a lot about. And so, the topic I chose was the long game of business, how to build a business that lasts.
So, not just business advice broadly, but like long-term thinking is very much where I believe my business wheelhouse lives. And so, I accepted that challenge and over the course of five days or so, and in sessions wrote 100 tweets. So, I’ve got Twitter as my writing constraint. Twitter was Google docs in this drafting case, which is maybe a kind of unusual way to start drafting.
But again, I didn’t know, I was writing a book. I was responding to a challenge to share something that I knew. And the advantage I had going into this is I wasn’t, I didn’t have to ask my audience, what do you struggle with because I spend all my life understanding what people struggle with. And so, off the top of my head, I can start plucking cards of oh, people always ask this question, let me write a few tweets about that.
People don’t ask about this question. And then, everything blows up in their face. What could I tell them before it blows up in their face and sort of running that gamut and once I started writing and then I’m writing within the constraints of Twitter, where I’ve got 280 characters to express a thing I realized sometimes, well, this is a bit too big. Maybe I’ll break it into its component parts. So, Twitter is forcing me unknowingly to me and Twitter, to be really granular with these pieces of advice, these perspectives, these observations, and things like that. And by writing in public, I did something that I had never done before, which is I finished.
Every book draft I had started before. I’d write an outline at best. I write some chapters and then I’d be like, no one wants to read this. This is not, this is not right. This is not, I’m not on the right path. And a lot of times it was because I wasn’t applying the lessons that we teach.
I was not following my own advice. And every teacher knows you know how that feels when you’re like if I followed my own advice, we would not be in this situation. So, finished this thread of tweets, which while I was writing I was also getting this live feedback loop. People were liking the tweets or replying to the tweets, quote-sharing them.
I wish everybody had heard this. Or where was this when I had this terrible experience. And so I’m like, alright, people are digging this now. I’ve also got the motivation to keep going. And I’ve got a little bit of ideas about like what people like and want more of what people don’t understand and what I need to go deeper on.
And so, I finish. And then it’s the holidays. So, I go not write a Twitter thread and went on vacation and came back about six weeks later. And that thread was still getting likes and retweets and comments and shares. And I was like, this is not normal. I’ve been on Twitter for a long time and I’ve had viral tweets, this is something else.
And so, I said kind of jokingly sort of quote-tweet my own thread. I said, this is still alive somehow, people are still finding it and sharing it. I wonder what it would look like to turn this into a book. And my tweets exploded all over again. Oh my God, that’s such a good idea. Those tweets were more valuable than the last five business books that I read. And I’m like, I need to take all of this with a grain of salt Twitter, but I hear you and I hear your enthusiasm and it’s all very interesting.
So, I downloaded all those tweets started reading through them. And I was like, there is something here and it’s not just what I wrote, it’s how I wrote it. And it’s not just that I wrote a book about business, or the long game of business, the constraints and the timeline and the framing. I had all, like each thing was kind of self-contained and can be used to… people latched onto it because the things were self-contained. They didn’t have to read the whole thread in order for it to be useful.
How often can you read one page of a business book, get enough context to feel like that was good and then put it into action right away. There’s a very short list of books that’s possible with. So, I went to a friend who is a designer. Who I’d worked with on a small publishing project a few months prior.
And I said, hey, I don’t know if you saw that Twitter thread from a couple of months ago, but it seems to want to be a book, but it’s not a book it’s something else. And so, we’re going to need to design it. And the book part of the Tiny MBA is the packaging. The book came last.
The problem that The Tiny MBA solved is that there are a lot of little things that people have heard before and ignored or forgotten, or they’ve only heard it in a way where they rejected it, or they didn’t know what to do with it, or, or, or, or. And this thread, one thing per page, created an opportunity for somebody to thumb through it and like a work shock test. It looks the way it needs to, like Brian Eno’s oblique strategies, it’s not going to teach you a thing so much as it’s going to make you think about a thing. It’s going to kind of mold your brain. It’s going to put your brain in a place where it’s going to do what a brain needs to do.
Or like the Zen Cones is another reference that I would have never plucked that out of thin air, but it’s been really fulfilling as someone who’s inspired by Zen Buddhism in particular, that it’s these short little parables that they don’t exist to tell you what to do, they exist to help you decide what to do.
And when I realized that that was where the book started feeling more like this is a product. There is a thing here. It’s not just a hundred ideas. Those hundred ideas serve a purpose. And that was where the foreword from Nilofer came from. That’s where my preface that encouraged people, and really to reframe this. If you’re someone who buys books, business books in particular for advice, this is different.
It’s not going to tell you how to start and run a business. It’s going to tell you how to think like somebody who starts and runs businesses, and it’s going to plant seeds of ideas that in some cases you won’t know what to do with right now, but if you come back and read this book six months further down your business journey, you’re going to see things that you read before in a new perspective, you’re gonna read advice that you read last time, and didn’t even realize that you applied.
That framing was for me the biggest gamble. Writing this was not a gamble at all, because it was a challenge. It was a fun thing to do on Twitter. The gamble was, are people going to get that framing? And is it actually going to work? And so far, the response has been yes. So, it’s a, I think we can tie this together with our conversation so far is I wrote the core to solve a bunch of problems that I know and understand intimately for my audience. And then once I had it, I had to figure out what the packaging was. And then part of the packaging was the onboarding. There’s a how to read this book section in this book, which is, I don’t think that’s normal.
But, it wasn’t in the drafts really up until about a week before we went to press. And actually, some of our books got printed without it by a technical mishap, but the installation of how to read this book was to make sure that if somebody doesn’t have the instincts to look at a page that’s got one to three sentences on it and don’t just read it and turn the page, read it and stop and go what does that mean for me? Does that conjure up any experiences in the past that I maybe want to think about or reflect on? Does it give me any insight into experiences or challenges that I’m having right now? And, if this doesn’t make sense to me yet, why might that be? Just some of the kinds of framings.
Some people are good at that instinct. Many people who have not been in business yet are. And so, the how to became sort of the onboarding, it was like passed these pages this book’s gonna look a little strange. Don’t be alarmed. We’re here to help. Here’s some tips for getting the most out of it. And that’s been really well received.
Etienne Garbugli: I think we’ve actually managed to go full circle as well. So, we explained part of the methodologies with how to make sure you ship the product forcing constraints, but also refer back to your long-term planning that we were referring to with the 50,000 jobs in Philadelphia, which is your super power as you were mentioning. Thanks a ton for taking the time to chat. Where can people go to learn more about your work and you and Amy’s work?
Alex Hillman: So, Stacking the Bricks is our home on the internet. Lots of articles, podcasts, and links to our products. You can find me on Twitter as my online watering hole of choice, @alexhillman. I’m on there a bunch. And if you’re into checking out The Tiny MBA, that is at tiny.mba available in paperback and eBook.
And we package the eBook with the paperback so you can buy it now, read the eBook right away while you’re waiting for the book to ship and be delivered. And then as soon as it arrives, you can read it a second time, which a lot of folks have been telling me how much they enjoy going through the book in that way.
So, if you do buy the book, I would, in particular, love to hear if you have favorite lessons. Each of the self-contained pages has a page number on it. So, you can tweet at me. You can email me firstname.lastname@example.org. Tell me what your favorite lessons were, why they were impactful? Did it remind you of something? Did it help you see something new? Whatever it is, why it was your favorite?
I’d love to hear from anybody who picks up the book and gets even one useful thing out of it, which, I mean honestly, it there’s a hundred things in here. I’ve got 100 chances to give you something useful. If you leave with nothing useful. I’m sorry. Write me as well. Cause I want to know what happened and why that might be, but if you get even one or two useful things out of it, I want to hear what those are and I hope that you’re able to get more out of it over the lifetime of you having the book.
Etienne Garbugli: So, I’m excited to do that as well. I bought your book earlier this week and I’m excited to check it out.
Alex Hillman: Well, thank you for having me and thanks everybody for listening.
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