A fresh perspective on the stages of building a SaaS business

March 10, 2021

EP3: Josh’s failed startup that started him on the SaaS path

Nate and Josh go back in the time machine to talk about UberNote and how Josh got his start in what wasn’t even called SaaS yet
Searching For SaaS
Searching For SaaS
EP3: Josh's failed startup that started him on the SaaS path

Episode Resources

Lessons Learned from UberNote Failed B2C


[00:00:00] Nate: We’ve been talking in the past about Josh in the context Referral Rock.
[00:00:36] But today we’re going to kind of go on a time machine and we’re going to talk about Uber note. So Josh, you seem to like to build things. What what sort of things have you built in the past or that you’re working on now?
[00:00:47] Josh: Yeah, so I am working on a little something now, but it definitely has me exercising some restraint. Well, one of the things I think we’ve talked about in the past with referral rock is how I really had a very stripped down MVP. Like it was no code before no code was a thing like just using survey monkey or whatever so I am tinkering with something like that now. Obviously I even more time constrained now than I kind of have been in the past with, with growing referral rock. But yeah, I, I will tell you this.
[00:01:19] Well, I think I’ll get into it in another episode, but I am again, using a form software to prototype. This idea that’s been just urking me and bothering me. And honestly it is a little bit more of a tinkering thing. Yup.
[00:01:35] Nate: Yup. Okay. Mystery. That’s behind the veil. We’ll see. Eventually.
[00:01:41] Josh: Yeah, like I said, it’s definitely a little more of a, a tinkering thing because I don’t really have a business model in mind. And I don’t recommend this for other people that are kind of hunting for ideas per se, like you in the, in the pursuit of SAS as a business. So this is kind of like a more of those types of projects. You throw it out in the wind and you’re like, Hey, like maybe it’s like, I build a thing and let’s see if it. If anyone cares or I go a little further and you know, I’m bored now. Okay. No big deal.
[00:02:09] Nate: Yup. Yup. Well, good on you for not writing lots of code and you know, spending tons of time on it. It’s good that you’re just kind of testing the waters. It’s good. So today, I want to talk about Uber notes. So tell us a story. What started that .
[00:02:22] Josh: Oh yeah. So Uber note, so this is gonna date me. I’m an older web person, so to speak. This is definitely gonna, yeah, it’s gonna, it’s gonna turn back the time a bit. So Uber notes started, I believe in about 2005.
[00:02:42] Okay. And is around the timeframe. So looking at today’s date, 16 years ago.
[00:02:47] Nate: Right? So now Google Chrome.
[00:02:50] Josh: Yeah. There was no Google Chrome and there was a lot of things that weren’t there at that time. Funny enough, I was being interviewed for something else yesterday and the person did ask me, she was like, well, what was it like during that time?
[00:03:04] And it just felt very like, okay, well, let me, let me think about for a minute. And there was no Stripe. Yeah. Yeah. See, I did it for you too. It was like, there was no cloud. There was not, there wasn’t even jQuery,
[00:03:21] so yeah. Think about all the things. Everything is built on today and those were not there
[00:03:29] Nate: crazy. So like their, their landscape is bare and you’re like, what am I going to make? I’m going to make this awesome thing.
[00:03:36] Josh: Well, yeah, I guess, you know, it’s and it was the whole idea was a subscription.
[00:03:40]And it was, probably the worst, first thing that everyone jokes about building, I think the most common one is like a to-do list and probably close to second. Is notes, software.
[00:03:51] Yeah. So it’s like the hello world of typical software development and you’re like, I’m going to make a business. So
[00:03:58] it’s funny enough though, but at that time it wasn’t right. Like it wasn’t inconsequential to build. Like we talked about all of these things and the buzzwords then were Ajax and all that web 2.0 stuff, flicker was out all of these things.
[00:04:12] I was working at what is at SAS company, but wasn’t even called SAS then. With a benefit administration software, and we were building just subscription software for benefits.
[00:04:23] Nate: Yeah.
[00:04:24] Yeah. So tell us about that. You’re you’re working full time and then you’re doing this. How is that working?
[00:04:30] Josh: So, yeah that job, I started in 2000 and I was there and kind of worked my way up through just software engineer up , through to leading the dev teams, you know, doing a lot of product, I guess what’s called product management now and things like that.
[00:04:43]And then there was on nights and weekends that we came up with the idea for Uber note. It was not in a garage, but it was in my townhouse, the Baltimore. So me and a roommate and we were big. Note takers, like in terms of we used, I think software, like keynote, and I think one note was around then, like the very early versions of one note, my Microsoft stuff.
[00:05:06] And yeah. And, and were like, Hey, why do I have to like, either transport my stuff on a thumb drive back and forth, or like, why isn’t someone doing this online note thing? Like, it seems to be the ideal stuff. And I we’d have to go back and check the dates but I’m not even sure, , Google docs at that time.
[00:05:24] I’m not sure if that was a thing. There was, it was called like Wrightly or something. It was like before it even got bought. I don’t know if you know these stories.
[00:05:32] Nate: No, that’s before my time, I’m a spring chicken,
[00:05:36] Josh: this other software called Ether at some point that did this like real time way of collaboration, through, Ajax or web sockets and stuff like that.
[00:05:46] Nate: So, yeah. So, so you and you and your buddy, you figured out that you’re gonna, you’re going to build this note software. And so, so what next, like,
[00:05:55] Josh: so yeah, I mean, this was like a computer in our house, again, no cloud. So we had we had this. Software. And I think it was first running off of just our internet access at home, or, you know, just launched it to some friends and family and you know, eventually we are working on it enough that we just got like, so enthralled by like, you couldn’t sleep, you couldn’t eat, you couldn’t do anything else.
[00:06:21] Like you go with the office and you’re like, this is, I don’t, I don’t want to be here anymore. I just want to go back and work on my thing.
[00:06:28] Nate: Yeah. And, and so what did you, what’d you do at that point? Did you to, to quit your job? Do you stay on like,
[00:06:34] Josh: Yeah, I, I negotiated like a, kind of a, a half-time thing or just like a transition for maybe about three to six months.
[00:06:43] I think that’s what I did. And this was all in 2006, so it was probably like a year tinkering around with it and into the point of where we. Had enough of a bug that we wanted to kind of leave our full-time.
[00:06:56] Nate: Yeah. Had how did you feel taking that step?
[00:06:59] Josh: Like I said before, it was, it was mostly just, it felt good because I just couldn’t do anything else.
[00:07:07] Right. Like everything else was painful. And then it was like, I just want to be working on this and there’s something here and we’re just, we just want to keep racking away on it. Yeah.
[00:07:16] Nate: So you see go to this two to three days a week and, and you’re working on it at home with with this friend, I guess.
[00:07:25] And so, so what came of that?
[00:07:27] Josh: So speeding up a little bit. We, you know, eventually went full time and the other jobs ended and I think we did that for probably a good year and a half or so. And then we did get some. Early press. We were in like life hacker and a bunch of other stuff. And at this time again, it was, you know, if you got a little bit of press and you’ve got life hack that week, we got 10,000 users in one day.
[00:07:51] Oh
[00:07:52] Nate: yeah, that’s amazing.
[00:07:56] Josh: Oh, let me, let me add a caveat there. So probably go over this and lessons learned later on, but. So we didn’t charge anything. So this is all like the freemium dream, the build it, they will come and, and charge people later, figure out your, your, that, that people are gonna pay for this later.
[00:08:13] So we were all just like, Hey, how can we get buzz? How can we get users using it?
[00:08:18] Nate: Yeah. Get people in. If they like it, then we can figure out the pricing model later. Right. That sounds like a lot of startups do that nowadays.
[00:08:27] Josh: It does, but probably less on SAS, I would think nowadays, I think now some of those, types of lessons were, learned a lot faster now or there’s enough stories out there like, like these, so, yeah.
[00:08:39] Nate: Yeah. And so you’re, you’re doing that. You’ve got all these users that are using our platform. You must’ve been over the moon excited because all these people are caring about your software.
[00:08:48] Josh: Yeah, it was. And at that point we’re like, well, what are the next steps? And it is. Like, do we go raise funding? Do we do different things?
[00:08:55] So we actually applied to some startup accelerators. Y Combinator. Might’ve just barely been around. And this was at a time where incubators were popping up all over the place, trying to follow that model. And we applied and joined one in DC that was called Launch box digital.
[00:09:13] Nate: Okay. And so how did that go?
[00:09:15] Like how has the, the incubator experience.
[00:09:17] Josh: I mean it followed what was the incubator template then, which was pretty cool. So it was like over a summer, it was like a, you know, six or eight week type of program you’re supposed to be there every day. They brought in speakers, they did all kinds of stuff.
[00:09:29] And at the end, the crescendo of this was, you know, they set up a what do they even call it? Like launch day or, or whatever, you know, they essentially they bring all these investors, they brought all these VCs there. We had one on the East coast and then they arranged for one on the West coast.
[00:09:45] We all flew out there and there was a batch of maybe eight or nine companies which was the second year of a large box digital.
[00:09:54] Nate: Wow. Wow. So did you ended up taking money at that point?
[00:09:57] Josh: We did not. So unfortunately, this, this was now in. 2009. And w you know, you know, anything about that time, the 2008, 2009 timeframe, that’s when everything pretty much halted and dried up.
[00:10:13] So it was like a, you know would say a tech recession of that point in time, and the housing bubble, I guess, all of these other things were going on. So everyone’s kind of pocket books sort of dried up.
[00:10:25] Nate: And so you decided to not take funding because of the recession or because of other reasons?
[00:10:30] Josh: They’re just, well, I, I would say it’s a combination of things. So first when we did all this pitching, we got lukewarm responses. They were like, Oh, this is neat. You’ve got users using, but you heard the stories of like, Oh, well, you know, you don’t really have a market. Cause you’re you think your market is everyone, but it’s not .
[00:10:47] So it was a little, it was a little vague on that. And I’ll be honest since we were on the tail end, you know, if we talk about back this timeline, this is like four years in. And I think our energy was starting to wane a bit and we weren’t really like as passionate. And then we actually started charging and it was very lukewarm response.
[00:11:08] Nate: Yeah. And so all this time, how have you been funding yourself? Did you have lots of savings or did you get some money or? I
[00:11:16] Josh: wouldn’t say lots of savings, but we had some savings. I think, going into this, even when I quit my job, I, I, I had my first nicer car that I bought, like years before, after a couple of years in, of working and knowing what was going to come.
[00:11:31] I just, I sold that then, and kind of got a little beater car and some other things. So I think we knew we were just all like hunkered down, you know? Not married then didn’t have kids. So was, was able to do the ramen ramen lifestyle type of thing for a bit,
[00:11:46] Nate: So then I guess moving forward, then you said you didn’t take any money. You you’re kind of running out of steam. Did, did you fold at that point? Did you keep going.
[00:11:55] Josh: This is one of those ones where like, you know, in the story book, it happens differently, but it kinda just like waned on, right?
[00:12:02] You like a project that doesn’t die, you still have users you’re paying for the server. And it’s just like, yeah, I still use it. I don’t run it running, you know, two or $300 a month server for us. And it worked. And I think it was, if we meandered on I’d have to be. Have to check the exact dates, but probably at least for another, like two or three years of just where we weren’t really working out, we’re kind of maintaining it.
[00:12:30] And we all kind of went off and did our own. Yeah.
[00:12:34] Nate: So you kind of just, you just kind of left it there to simmer and had kind of sat there for a while.
[00:12:39] Josh: Yeah. And I don’t think there was any one point in time and that where we were like, okay, we’re stopping work on this. You know, I feel like that, that never really happens.
[00:12:48] It’s kind of like you go back and you’re like, Oh, I haven’t touched that in. Like two months or, Oh, it’s been six months and Oh yeah. What is my even login to the server again? I don’t remember.
[00:13:01] Nate: So I guess if you’re looking back over the experience, what would you have told Josh starting the project, Josh quitting, his job.
[00:13:09] What, what sort of things would you have told him?
[00:13:11] Josh: I don’t know. I mean, I overall, I kinda, maybe I’m just one of these people that goes back and looks at the experience and there’s definitely lessons I learned, but I don’t know if I would’ve been able to steer myself around it, if that makes sense. So I don’t know.
[00:13:25] I mean, we could have said maybe, you know, you should have charged faster, but at the same time would that have stopped us? Maybe not.
[00:13:32] Nate: Yeah, you’re just so excited at that point. Anyway, you were just plowing ahead anyway, but what sort of things have you learned from it?
[00:13:39] So, yeah, we kind of did later on did a little bit of our own personal retrospective with it.
[00:13:45] Josh: And honestly, that’s where. It did lead to kind of where I am today. So that’s where it’s like, it’s hard to go back and say what you regret or what you would change because you know, where you are today is really a result of a lot of those things. But the, the big one was having businesses instead of consumers try to pay for things.
[00:14:06]We still, I still liked the SAS idea, the SAS model
[00:14:09] And so what was the, like, what’s the takeaway there of businesses versus consumers?
[00:14:13] Well, I think, I think value is the big thing. Like, because consumers are really fickle and, you know, you’re, you’re when you’re spending your money personally, it’s a much different thing than you’re spending a business’s money or also that since it’s a business, you’re spending this to either like save time or make more money or, or, you know, what are those other key reasons? So the ROI and the value I think is very clear with a business and they’re used to spending money.
[00:14:42] Nate: Yeah, totally makes sense.
[00:14:43] Josh: One of the other interesting things too, is we, you know, I’m a person that does, like, as much as you would think, most people think entrepreneurs are, are risky.
[00:14:53]I pick I’m fairly risk averse and it’s, it’s a strange kind of phenomena when I tell people that. But one of the big things we missed the boat on was this is when mobile was coming up. And we were like, nah, I don’t know about this mobile thing. Like for whatever reason you go back and you look, you want to smack myself in the face.
[00:15:12] That that might be the one thing I would go back and tell myself, it’s like, don’t, don’t sleep on mobile. Like, what are you guys doing? Thinking. You know, the way was going to be this all in the browser, not the, that’s not the case, but we were thinking, Oh, this is all in the browser. It’s going to be able to run disconnected.
[00:15:29] Like you could. We had that built in. You could unconnect your internet cord and it would, everything was kept locally in the, in the browser cache at when it connected back up would sync everything back up.
[00:15:39] Nate: That’s impressive. Wow.
[00:15:43] Josh: And we built that ourselves too. And it had this like replay logs and all kinds of other stuff and conflict resolution for multiple browser endpoints.
[00:15:51] I mean,
[00:15:52] Nate: yeah. And looking back, do you think that , you built too many features?
[00:15:56] Josh: Maybe I don’t know, but what, what the thing is, we, we like, we ignored mobile altogether. Like we’re like, well, we’re on this path. We think this, this is our vision. So I wouldn’t say too many features, but it was probably more of like also, we’re not like picking our heads up to look at what the current of the market was. Cause at that point that’s when ever, and it was around two, we actually technically launched before them, but they were like the first in in the app store, one of the first, app store apps. So, you know, if we were in there with them or all those other things, you know, it could, it could be a different story.
[00:16:29] Yeah. Yeah. Oh, wow. So I guess just to, to kind of close out any, any things that you would tell other entrepreneurs that are listening to your story and, maybe feel like they’re in the same boat, they’re, they’re all excited about quitting their current job so they can start their idea. W what would you say to them
[00:16:49] think the quitting thing is fine.
[00:16:50] I think the quitting thing is like, you’re not going to be able to. Unconvinced someone that wants to quit because they’re so enthralled by it, they’re just going to need to take a run at this. Right. Like, I don’t think you’re going to stop that person. And it’s probably a good thing.
[00:17:05] Cause you’re going to need that as an entrepreneur, that, that get up and go. But yeah, what I would say is don’t build a notes app. Don’t build, don’t build a, a massive like thing that you think this market is big or is so oddly niche-y for each individual. Maybe Notion will tell you otherwise now, but they played a really long game.
[00:17:26] Nate: Great. Well, thanks. Thanks for sharing your story with us today.