00:00:00 ◼ ► Welcome to Under the Radar, a show about independent iOS app development. I'm Marco Arment. And I'm David Smith. Under the Radar is usually not longer than 30 minutes, so let's get started.
00:00:10 ◼ ► So today I wanted to talk about the, I guess, in my mind I started to think of it as like the middle path or kind of, and I mean that in the sense of, as a business, I think, you know, Marco and I, we both have these businesses that started out and largely are just like one person things.
00:00:28 ◼ ► And this could be, you know, I think if you wanted to generalize it, it's that kind of the concept of the very small business, like rather than the small business, this is the very small business that it's either one person, two people, something along those lines.
00:00:40 ◼ ► And there are some benefits, there are some wonderful things about being a business that that's, you know, that size, that that's small. We both love it. I think, you know, been doing this bit that way for 13 years.
00:00:52 ◼ ► But I think as a result of being in that place, there is definitely some times in the back of your mind, there's this, this sort of like this, this pull this thought that like, hmm, where does it go from here?
00:01:04 ◼ ► And like, what could that look like? What would that benefit be? And I was recently reminded of this sort of this tension that I feel when I was listening to a recent episode of Thoroughly Considered, which is a great sort of podcast on here on Real AFM, where Dan Provost and Tom Gerhardt, who are the people behind Studio Neat
00:01:21 ◼ ► talked to Mike Hurley about their business, and they have a sort of an indie business, but not they do some software products, but mostly they make physical products, like they make awesome pens and notebooks and things like that. These are these tangible products that actually exist in the world.
00:01:38 ◼ ► And it was fascinating because they were talking about how they find themselves in this kind of awkward middle place between being the super small business and being a traditional small business where, you know, they're starting to get into paid acquisition. So they're, you know, doing Instagram ads and these kind of other ways to get people to be interested in their pens.
00:01:59 ◼ ► And then they now, which is great, but it means that they're now selling more pens. And if they sell more pens, they have to make more pens. And if they make more pens, they need people to make the pens. And previously, they've been making the pens, but now they need to hire someone who will make the pens.
00:02:12 ◼ ► And they're selling more pens, which is great, but their overheads are higher because they're paying someone to make the pens and they're paying Instagram to acquire the customer. And as long as you know, they're still making more money as a result, like they still have a margin there.
00:02:24 ◼ ► But all the margins and all the things change when you start to shift your business in that direction, that it isn't just the two of them, you know, like once a week, they just sit down and make the pens together. And then like, that's it for that, you know, there's no sort of additional cost beyond that.
00:02:40 ◼ ► And they're kind of finding that I think it's this really interesting tension between, it's almost like there's this like snapping function where, on the one hand, you would sort of like it's easy to stay small, like very small to be a very small business and to stay there because
00:02:57 ◼ ► there are so many advantages sort of structurally to that, that you have all these benefits of having no overhead by being completely in control, having decisions being straightforward by not having any kind of overheads that you have to think about that are you know, beyond just like the money overhead, but just in general and cognitively, it's so much simpler.
00:03:15 ◼ ► Or you end up as like a traditional small business, which is going to be like 10 to 15 to 20 people, you're going to have like payroll and you're going to have benefits and you're going to have to think about employee like growth and you know, development and all of the various things like you start having office space because you these people need places to go like it, there's all these questions that start happening.
00:03:37 ◼ ► And I think what was fascinating to hear in them and this is something that I as I think about this in my own business and kind of where I would go is, it's like there's it just snaps one way or the other that you stay where you are as a very small business and take the kind of difficulties of that or you snap up and suddenly like, Oh, it's not just only hire one person, because once you hire one person, it's very quickly seems to push you in a direction of hiring multiple people.
00:04:01 ◼ ► But like when you start hiring multiple people, then you start to get into like just traditional business that this is the like, you know, if you went to it, did any MBA or did any listen, watch any like business YouTube video or anything like these very standard rules and processes and things that are like known to work, that don't really work or like apply when you're just a very small business, but apply very well.
00:04:24 ◼ ► And you have to sort of educate yourself on like there where they were talking about how, you know, they were talking to a business consultant, and they said that typically, if you hire someone you can expect, like the best you can typically expect is to get like 20% return on that person's cost, you know, so essentially, it's like 120, like they were really return 120% of the cost that they that they that they you know, that they have to you.
00:04:48 ◼ ► It's just like a general rule of thumb. And it's like, conceptually, that makes a lot of sense to me that like, if you had, you know, if you hire a person that it's not like, you know, if I went from just me to one other person, it isn't that we get double the kind of productivity, benefit, income, general, everything doubles. It's like, it clearly doesn't work that way. Because that's just not how businesses generally work that if you you add one person, it's you start to get this marginal return.
00:05:13 ◼ ► But anyway, so just like this fascinating thing that I think we both find ourselves in where we're both, you know, very, you know, for these very small businesses, essentially, when people burn person, I mean, I have people who help with bits and parts, like I have an accountant who does my accounting and tax filing for me, which is, you know, a form of hiring, and I have a designer who does some of the icon work that I do on a freelance basis for me.
00:05:36 ◼ ► But you know, it's not something that is committed and ongoing and, you know, sort of stable in that way. And I have someone who helps me with help desk sometimes and like, that's great as well. But it's, it's a different, it's not like the core part of the business that is being scaled up.
00:05:50 ◼ ► And so anyway, it's something that I think about a lot that, you know, would I ever want to go down that road? And if on the scarier part, it's like, if I went down that road, what would be the first step on that path? Because knowing that it's very quickly going to probably expand out of just one step and quickly become 20, 30, 40 steps down the road.
00:06:08 ◼ ► You know, I've often thought like, you know, am I being basically, am I being a fool here for not expanding my business when I have the chance to? At most times in my businesses, I've made enough profit from them that I can theoretically hire a person or two if I really wanted to.
00:06:29 ◼ ► But usually I don't because, you know, first of all, I treat all iOS app money as temporary. And I think I should probably save as much of this as I can because it can go away at any moment because that's true.
00:06:42 ◼ ► So part of it is I don't want to spend the money on an employee. The bigger part of it is I historically have not really been great at being a boss, being a manager. It's just not among my skill set.
00:06:53 ◼ ► And it's also not something that I enjoy doing. I'm very awkward about it and not very confident in my skills in that area.
00:07:03 ◼ ► And so, and then finally, I'm also a control freak. You know, I've been spoiled by being able to do everything myself and being able to make all the decisions myself.
00:07:11 ◼ ► And so I don't want to give up control and delegate responsibility to other people if I can help it.
00:07:17 ◼ ► But I've often thought like, am I, you know, long term, am I going to look back on this time and say, man, I wish I would have tried to expand my business more because I missed huge opportunities.
00:07:27 ◼ ► And I've often thought like, you know, what would I hire for first? Where am I lacking? Where would I really benefit from somebody beyond just like supporting roles?
00:07:38 ◼ ► Like, you know, like as you mentioned, yeah, an accountant does my taxes for me. That's kind of a, you know, supporting role for the business, not really core to what we're doing here.
00:07:46 ◼ ► Things like answering support tickets, or, you know, support email. That's kind of core to the business, but it's also something that's fairly easily outsourced to somebody in a way that you don't have to do a ton of management.
00:08:00 ◼ ► So I'm talking about like working on the actual like core product or core business mechanics in some way. A programmer, a designer, somebody to do like your app store marketing, like that kind of stuff.
00:08:13 ◼ ► That is core to the business. In the past, I used to think that I would really benefit from a designer. And while that is still true, I don't think I needed as much as I used to, in part because my own skills have gotten better and in part because the system-wide default UI controls and default conventions that I've been able to use have gotten better as we talked in the past about things like SF Symbols and the new fonts and everything.
00:08:41 ◼ ► It's gotten really good. System colors, like there's so much now that we get for free design-wise that I think the need for a designer for small operations like ours is greatly reduced from where it was five or ten years ago.
00:08:54 ◼ ► And I've often thought where I would probably benefit most from another hire would be on the kind of promotional side. So kind of basically a marketing person. Somebody who would manage my app store assets, the screenshots, do a video promotion, run the social media accounts, design different engagement techniques and retention improvements.
00:09:23 ◼ ► And maybe start doing promotional notifications and run the directory and run promotional stuff there. That kind of person. App store optimization techniques, any kind of A/B testing, optimizing the paywall for conversions. That's where I actually need the help.
00:09:42 ◼ ► And I frankly don't really think I need another programmer. I could get more coding done, surely. I could definitely get more done if I had another programmer. But I think if you are a programmer and you hire a second programmer, what you're doing there is increasing the amount of that person coordination overhead that you're going to have to deal with because you're both doing the same thing on the same code base.
00:10:05 ◼ ► Whereas if you're a programmer, hiring somebody who's not a programmer is doing a better job of covering skills you probably don't have or skills that you're pretty weak on. And for me that's certainly the case.
00:10:15 ◼ ► The original reason I wanted to hire a designer was I didn't have design skills worth anything. Now I have some design skills. And so I feel like I can get away with that. But I don't have any skills in terms of marketing, optimization, running my search ads and stuff.
00:10:35 ◼ ► I don't have any of those skills, really. I do an okay job of it, but I think that's where I would have the most opportunity for growth because I look around at other apps that do well, that get a lot of installations, get a lot of customers and retain them and spam them with notifications and all that stuff.
00:10:53 ◼ ► And what I see is not necessarily nicely designed apps. I see nicely marketed apps and nicely sold apps and apps that have really good effective sales funnels and all that stuff that I really am not good at. People who know how to use data, you know, because I never do.
00:11:13 ◼ ► That kind of stuff, I feel like that's where I would see the most benefit. And because it wouldn't overlap a ton with my main work on the app, like my coding work, obviously there would be some changes to the app that this person would either do themselves or would direct me to do to help them do their job better.
00:11:31 ◼ ► But that I think would be where I would see the most benefit, would be that kind of higher. But even then, I worry. I mean, look, I already worry enough. Am I spending enough on ads? Am I promoting my app enough?
00:11:44 ◼ ► And I look around at the market and I see, like, you know, it turns out, like, Overcast numbers have been a little bit down since December. And that's a little unusual for this time of year.
00:11:54 ◼ ► I normally don't have this kind of seasonal dip. But my theory is that Overcast numbers historically have gone down whenever people don't go to work.
00:12:05 ◼ ► I think I had a larger than expected number of users who worked tech jobs in Silicon Valley. Because as soon as those massive job cuts hit, you know, over the last few months, that corresponds directly to when my numbers started sagging.
00:12:19 ◼ ► And, you know, that's my problem to deal with. But so because of that, I've been focused more on, like, all right, let's see what I can do to boost growth here.
00:12:25 ◼ ► Like, I bought, I've increased my search ad spend because, first of all, that's one of the only places I have to, you know, get more installations and stuff is paid installs, which sucks.
00:12:37 ◼ ► I hate having to do it. But it turns out because of the economic downturn and everything, search ads are cheaper than they used to be because fewer people are buying them.
00:12:45 ◼ ► That's what, you know, it's hurting the other areas of my business because my own ad rates are cheaper than they used to be. But, you know, it is, it's a benefit there.
00:12:54 ◼ ► But as I'm managing all that, I'm like, should I really be the person doing this? Like, wouldn't it be more effective if I hired somebody whose sole job was to boost my usage and sales?
00:13:07 ◼ ► Like, that's your sole job is, you know, do stuff that I either can't or won't do or I'm not very good at and boost sales and go out there and increase, you know, do whatever it takes to optimize my ad copy, you know, run promos, whatever it is, you know, growth hack my app.
00:13:25 ◼ ► And I hate having to say it like that, but that's really what I'm looking for. But, again, I think, what would it cost me to do that?
00:13:33 ◼ ► And, you know, both in terms of the direct monetary cost of paying this person and also funding whatever they would tell me to do, like, you know, buying more ads or whatever.
00:13:42 ◼ ► But then also, like, the overhead involved in managing a more than one person operation is so different from when you're working by yourself. It's radically different.
00:13:54 ◼ ► I don't know if I'm ready for that. I don't know if I want that. Like, I don't know if that's the lifestyle I want, you know, once I start doing that. Maybe it would be much simpler than I expect. I don't know.
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00:15:39 ◼ ► Yeah, and I think there's such this feeling of, I guess, opportunity, I think is the best word for so much of this. That it's this weird feeling of there's both the, are there opportunities that exist that would be tapped if I were a bigger business, if my business were a larger thing?
00:16:01 ◼ ► What would they be? What would that look like? And then I guess that's both the opportunity cost of that as well as just what doors would be open, what things might happen.
00:16:13 ◼ ► Then it's like, yes, it also is the tremendous opportunity to just be in this place that is the negative opportunity. Right now, there's not a lot of space, there's not a lot of opportunity for my business to get out of hand, for me to be unaware of what's going on, for things to be happening that I don't necessarily agree with or want or whatever.
00:16:35 ◼ ► And the business is so buttoned down and straightforward because it is so small that it's easy, it's straightforward, but it definitely is coming at a cost. And it's a weird thought that I have sometimes where I think of, if someone were to buy my apps, what would they do with them?
00:16:56 ◼ ► And it's like, generally speaking, I feel like, and sometimes there's things I think to learn from that exercise, because I suspect, you know, there's lots of opportunities that I'm not taking advantage of that they would, that the kind of company that would, you know, want to buy, you know, Widget Smith or pedometer plus plus or sleep plus plus or one of these things like, you know, either, it's like they would be looking, the reason they would be buying is because they thought it would be worth more to them than it would it is to me.
00:17:20 ◼ ► Right, like that's fundamentally the nature of what an acquisition would be based on. And I think, you know, other than the kind of like, they're buying it because it's some kind of complimentary thing, and it's more of an aqua hire, or they just want the technology, like that could be the case.
00:17:35 ◼ ► But otherwise, they could just look at what I'm doing and they'd be like, you know, like this fool doesn't know what he's doing. Like, oh, you know, if we if we got we got a hold of this app, we could do all kinds of things with it and, you know, take it in all kinds of different directions on the marketing side or like look at these screenshots, these screenshots are, you know,
00:17:49 ◼ ► are nowhere near optimal and could be, you know, I, you know, they could have a designer who's done this 100 times who, who makes some some really awesome screenshots or things that could, you know, have these incremental sort of gains to the business. But I think at the end, it's like, I find this really, the tension I find is in so much is this weird thing of, like, what is the actual goal of my business? Like, why do I do what I do? And you know, that becomes very personal and very kind of like philosophical. I think at some point,
00:18:18 ◼ ► but it really kind of ultimately is becoming those kind of questions like, do I want, you know, to be a business analyst and come into my app and treat it like I have an MBA? You know, I don't but if I did, like, I'm sure there are lots of things that you would do to the app that you would treat it in a different way. And like, sometimes I wish I was that person who would look at my app, like purely analytically and numerically, and it is just it's all spreadsheets all the way down. And that is, you know,