Under the Radar

210: Thinking Like A Business


00:00:00   Welcome to Under the Radar, a show about independent iOS app development.

00:00:04   I'm Marco Arment.

00:00:06   And I'm David Smith. Under the Radar is never longer than 30 minutes, so let's get started.

00:00:10   So today I wanted to talk about something that I feel like has been rattling around in my brain for a while recently.

00:00:17   And it's this observation I've been having about my own experience where time and time again

00:00:23   I find myself really wrestling or struggling with a choice I need to make in my business.

00:00:30   And ultimately when I come out of it and am settled on a solution,

00:00:35   when I can look back and I get this feeling that a lot of why it was such a difficult choice,

00:00:40   or why it was such a difficult decision, is coming from in some ways continuing to treat my business,

00:00:47   even though it's 12 years old at this point, like it's a hobby project.

00:00:52   And I'm doing that largely because that's how it started.

00:00:57   It started as a side project. It started as something that I did on the side of my other work.

00:01:04   And I think that in some ways instilled a lot of bad habits, or a lot of tricky mental gymnastics

00:01:11   that I continue to go through now around how I treat the business, around how I make decisions,

00:01:17   or how I make choices.

00:01:19   And it's a dangerous thing, I think, and I think it's held me back from a lot of choices over the years

00:01:25   that I can point to where I feel like in some ways it's like, "Oh, this is the indie way."

00:01:31   And I'm doing it the indie way. And we can pat each other on the back and be like,

00:01:37   "Yeah, we're indies. We're different."

00:01:39   But then sometimes that difference is actually just we're making poor choices

00:01:44   and making them sound like they're cool.

00:01:48   And this was crystallized. And like I said, it's been bouncing around in my brain for a while recently.

00:01:53   And I feel like it crystallized in a weird way for me with a comment that Joe Chaplinsky,

00:01:58   one of the hosts of the Release Notes podcast, which is also excellent.

00:02:01   If you like Under the Radar, you'll love release notes. I'd recommend it.

00:02:04   But Joe was saying something that I think was just in a slightly pokey way that he is somewhat known for.

00:02:12   He was talking about the app privacy badges.

00:02:18   In some ways there were people who I feel like in the indie community have been viewing the

00:02:23   "I collect no data" as a badge of honor, that they want to go into their app privacy

00:02:29   and they want to be able to say, "No data collected. Look at me. Aren't I awesome?"

00:02:34   And I just love that he said, "No data collected probably means that you're not running a real business.

00:02:39   In this case, it's a signal that this is a side project."

00:02:42   And it's a little harsh, a little rough, but I think what he was saying, it spoke to me.

00:02:47   For me personally, when I read this, it's like, "Huh. I wonder if I'm treating my projects as side projects."

00:02:55   Because so often that is the view that I have. And like, "Oh man, I wish I could check the no data collected box."

00:03:05   And it's like, "Why?" And it's like, "Probably because in some ways I still kind of view what I'm doing as a side project."

00:03:10   Even though it's my main business, it's what I've been doing for 12 years.

00:03:14   But just because in some ways it's just me doing it, I think I often just treat it like it's a side project

00:03:19   that I'm just pretending. Or I'm just like, I'm not treating this like it's an actual business,

00:03:25   making real business choices.

00:03:28   I think there's an important line to draw between being able to analyze decisions like a business would analyze them,

00:03:37   and how to teach yourself to do that when you started at Indie, or you come from a non-business background,

00:03:45   or you come from a modest background, which is true for definitely us.

00:03:50   And we find ourselves now running businesses, basically, but you have to train yourself to think like a business

00:03:57   to make certain decisions. And so that's one side of it.

00:04:00   But I think it's important to distinguish between that and the less clearly good side, or the actively bad side,

00:04:09   of excusing bad behavior with the thinking like, "Well, it's just business."

00:04:16   I think those are two separate things, and it's important to draw that distinction.

00:04:21   I was reminded when you were talking about it, I just pulled up this email, there's this company that,

00:04:27   they're like an automated privacy advocate service, and people sign up with them and pay them,

00:04:32   and then they send nasty legal threat emails to any service this person has ever claimed to use,

00:04:40   saying, "You must delete all information from this person, or we will sue you immediately."

00:04:45   These horrible, threatening emails. And I've gotten a few of these over the last few months,

00:04:50   and it's just automated. But I emailed them, I'm like, "Look, this is the nature of my service.

00:04:55   Here's my privacy policy. I don't collect any of this information that you think I collect.

00:04:58   All of the email, all the threats you've sent me so far, I've had no accounts with that email address,

00:05:04   because here's how little I use email addresses. Can you please reconsider whether I should even be on your list?"

00:05:10   And I get this response from them that says, "We hear you. To confirm with absolute certainty,

00:05:16   this means zero email marketing/newsletter lists, zero inbound leads, zero CRM use, zero customer surveys, etc.

00:05:24   No Salesforce, HubSpot, ActiveCampaign, MailChimp, Klaviyo, Marketo, Shopify, Zoho, Qualtrics, Freshworks,

00:05:31   Pipedrive, Zendesk, Copper, SharpSpring, Dynamics, Thrive, Infusionsoft, Insightly, GetResponse, Acton, Eloqua, etc.

00:05:39   In our experience, most companies have at least some of this info, and if so, no worries, that's just part of business."

00:05:45   And I responded back saying, "I don't even know what most of those are, and no, it's not part of my business.

00:05:52   I don't have any of those things. I don't even run Google Analytics on my website."

00:05:56   Which is like, that used to be considered like, "Of course you'd run Google Analytics on every website,

00:06:00   why would you not run it?" But no, I don't even do that.

00:06:02   And a lot of these things are, as you're saying, part of a smartly run or efficiently run business,

00:06:11   you would have some of these things. But it's important to distinguish between like, you must have these things,

00:06:18   or businesses of certain types would benefit from these things.

00:06:21   And you can make your business a type of business that doesn't need these things.

00:06:27   A lot of this is in the news now because the ongoing tensions between Apple with their

00:06:33   app tracking transparency requirement and companies like Facebook and Google, which their entire business models

00:06:41   are based on violating people's privacy in kind of creepy ways, and Apple has made their business model

00:06:46   mostly not based on that. And so, it's not to say that Apple needs to get into the creepy tracking business

00:06:54   just because other businesses in the same area are in that business. They've built their business differently.

00:07:00   And I've built my business similarly to that, where I've built my business such that I don't need to run all these

00:07:06   little analytics things and get all creepy with people's data and get creepy with my ad system.

00:07:11   I've built the business specifically not to do that. And so, there are certain things that I need to teach myself,

00:07:17   like think like a business and make this decision like a business. But there's also certain things that the

00:07:23   "business world" considers like, "Oh, just part of the game. Yeah, of course you're going to run."

00:07:30   Like if you run a weather app, just part of the game might be, "Yeah, of course you're going to sign up with one of those

00:07:33   location tracking firms that gives you money for creeping on people's locations." But that's not a give,

00:07:40   and you don't have to do that. So, I think, going back to Joe's comment, that's a good comment.

00:07:47   I mean, if you actually have an empty app privacy label, that means you aren't even collecting things like

00:07:53   crash reports and stuff like that. It's actually pretty hard to make an app that uses any web service at all

00:08:00   without checking some of those boxes or that performs any quality control, really. Because if you're just

00:08:08   relying on the crash reports from Xcode, you're missing a lot and stuff like that.

00:08:13   So, it's a blurry line. It's a very blurry area. And so much of this is like, "It depends on your business."

00:08:22   But I do think that just because businesses do things a certain way does not mean that you should do things that way.

00:08:31   But, at the same time, a lot of the things businesses do, they do for good reasons. And when you find yourself

00:08:38   running a business as an indie, there are certain things that you should be or need to be doing that you might not think of

00:08:45   or that might feel a little bit unfamiliar or analytical or cold. And one example of that, for me, I'm no saint in this way,

00:08:55   I don't answer most support email because I can't. I don't have time. I don't have the attention bandwidth.

00:09:04   And I get a lot of support email. And I'm very clear in the app about that. I've talked before a long time ago.

00:09:09   I basically say right there on the app that I'm not going to respond and that this is more feedback than support.

00:09:15   But I still get people who are upset about that, who are angry about that, who think I should respond to them.

00:09:21   I still get a couple of angry one-star reviews every month from a few angry people that, "Oh, well."

00:09:27   But I've decided that based on my business, it's not worth the very high cost of having me respond to these things

00:09:36   compared to my business needs. And that's a decision that a lot of indies find offensive or wrong or you have to answer support email.

00:09:45   Well, do you? But I've made that decision basically as a business to say my time is very finite and this use of my time

00:09:56   is not worth it and it's not worth the costs to not only my own personal sanity but also that time is then taken away

00:10:05   from making the app better for everyone. So there are certain decisions that I do make in this cold way.

00:10:10   But there's also a lot of ways that I've structured my business to avoid the need to do things that might be considered

00:10:16   borderline or creepy or unethical.

00:10:19   Sure. I agree with generally certainly what you're saying, but I think this is the observation that I was making for myself.

00:10:28   I feel like the part that I'm struggling with and the part that I'm observing in myself and wanting to grow from

00:10:35   is this feeling that if I find myself, in this case, pointing at something that feels like in any way could be creepy

00:10:43   or could be tricky or I have reservations or I have any kind of hesitation about.

00:10:52   So often my instinct is to just not do it or just discount it or avoid it.

00:11:01   I think rather than necessarily going through the place of saying, "Why would I want analytics in my applications?

00:11:10   Why would I want to include..." Say I'm going through the privacy checklist.

00:11:16   It's like, "Why would I want some of these things and what am I giving up by doing it?"

00:11:22   And making that a conscious, intentional choice and something that I'm being thoughtful about rather than I feel.

00:11:28   The place that I was coming from so often is this thing of, "Oh, that's not what indies do."

00:11:33   That's something that I'm telling myself that I don't think is actually helpful or actually true.

00:11:41   It's the funny thing too where Apple collects analytics. Apple collects all kinds of things.

00:11:46   In the main sign-up flow of the iPhone, one of the questions they ask you is, "Do you want to share data with Apple?"

00:11:53   As far as I can tell from my data, it's like 35% of people say yes or whatever.

00:11:58   They're collecting all kinds of data, I'm sure, about people and about how they behave and what they do.

00:12:04   It's this funny thought of when I think of why you wouldn't have, say, for example, analytics in your application.

00:12:11   I'm turning it around in my head and saying, "What I'm saying is there is nothing that I would learn from my customers by having more information about them."

00:12:26   It would not be better if I wouldn't know more about them. That's consciously what I'm saying, but I'm wrapping it up in something that sounded nice.

00:12:34   That was something that I was struggling with. At the same time, I went through and we talked about this a couple of episodes ago.

00:12:41   I added analytics to Widgetsmith and I learned a lot that was really helpful.

00:12:45   I understood what kind of widgets people are using and I can use that information to make the app better and more useful for them.

00:12:53   I struggled with it and it was this complicated thing. For a long time, I resisted it.

00:12:58   I think I resisted it because it's almost like I wanted a merit badge.

00:13:03   One of the indie merit badges is, "I don't collect any data," or "I don't do anything like that."

00:13:09   I think I was doing it for the wrong reason and that ended up being the thing that bit me.

00:13:14   I think we're both very much in agreement about avoiding, "We don't do shady things or do things just because it's business."

00:13:23   I have increasingly been realizing that I have more to learn from traditional classic businesses than I give them credit for.

00:13:32   While there are benefits about being independent and being small and there are advantages I have from that, it's so easy for me to discount the more traditional things.

00:13:40   This is something that I've applied in some funny ways.

00:13:45   Some of the best ways to deal with diversity and inclusion is to familiarize yourself with people with more diverse views than yourself.

00:13:54   This is in a variety of areas.

00:13:59   Something that I've found myself doing recently is subscribing to a channel and having a conversation with people who are not aware of it.

00:14:07   It's something that I've found myself doing recently, is subscribing to more traditional business blogs and following people on Twitter who are more traditional business, and abstract optimization, and advertising, and analytics people, and trying to understand that world better.

00:14:22   I'm the better for it, but I feel like I have a better sense of how things work.

00:14:27   In that, there are sometimes things that I see and I'm like, "Ooh, no, that's not for me."

00:14:32   That's cool. That's a choice that I'm able to make, whereas if I don't even expose myself to those things, I'm humming along, doing my own little, "I'm doing things the indie way."

00:14:45   I'm finding myself realizing, "This isn't helpful. This isn't probably actually good for my business or for myself."

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00:16:17   I think it's interesting to look at certain things as a business and to use that frame of mind.

00:16:24   You mentioned the indie merit badge aspect of having as small a privacy label as possible.

00:16:32   I think a lot of this is just virtue competition, but I don't think most users care to a large degree.

00:16:42   If you're Facebook, that's one thing. But if you have a privacy label that's analytics and crash reports versus a totally empty one,

00:16:54   I'm not sure that distinction is really buying you a lot of user goodwill.

00:16:57   User expectations change over time about what kind of privacy is acceptable and what isn't.

00:17:03   Right now, I think by today's standards, I don't think any user would care about things like automated crash report reporting

00:17:11   up to the developer about basic analytics of what features are being used.

00:17:17   But there was a time, not that long ago, maybe 10 years ago, that if a desktop app was "phoning home" to its manufacturer,

00:17:27   to its author, every time you launched it or every time you did something, that was considered a really scandalous thing.

00:17:34   That was really bad because people did not expect that back 10, 20 years ago.

00:17:38   But now, it's considered almost routine. Of course apps will ping back to their developer servers on a regular basis for some reason.

00:17:47   That's now considered widely acceptable by almost everybody.

00:17:51   Whatever that overseeing window is, whatever is acceptable at the time, if that can provide real utility to your business,

00:18:01   and it doesn't really do any significant harm to anybody, then you probably should be doing it.

00:18:08   That's not to say that every business would benefit from that sort of thing.

00:18:12   But I think it's important to recognize when you have one that will, and if it's something that almost all businesses would benefit from,

00:18:20   you've got to really look at that analytically and think, "Am I just avoiding this because I have some outdated view of this maybe,

00:18:27   or I personally wouldn't do it?" Email analysts are a good example. I don't do email analysts. I should probably.

00:18:34   By all measures, I really should. I don't because I don't like them.

00:18:40   But a lot of customers not only don't care, but like them.

00:18:45   And I can see myself, certain companies, I do sign up for their mail lists because I do want to know when they release new stuff.

00:18:53   And it's just this thing that I've avoided because I don't want to do it, and I don't like mailing lists theoretically.

00:19:00   But in practice, I should probably be doing that because it's a good way to reach your customers who opt in and who actually want to hear from you.

00:19:06   And I think this is something too that I was noticing myself, is this sense of the voices that I actually hear on a regular basis,

00:19:16   it's around my work, are the people I follow on Twitter and the blogs I read and things.

00:19:24   And they're not my customers, and they're not the people who are actually using my application, by and large.

00:19:29   My apps have much wider and broader user use than that. And I think it definitely colors.

00:19:35   I'm taking the experiences or the tastes or the preferences of this very narrow group and extrapolating it to everyone.

00:19:43   And I think about how I struggled for a while, whether I should have advertising in my apps.

00:19:50   And it's one of those things that's kind of funny where if I look at my apps and you look at the analytics,

00:19:57   and there are thousands of people who click on the ads, and I'm sure maybe some of those are unintentional,

00:20:04   but hopefully, I think generally, the majority of those people are clicking on an ad because they found it useful or interesting or included something.

00:20:11   Or if they don't click on the ad and they just don't care that it's there.

00:20:15   I added ads to WidgetSmith a few weeks ago, and I was bracing for blowback or people would be a grumpy, and no one said anything.

00:20:23   Nobody noticed. I think I had a few comments from people who just had this to the extent of, "Were ads always here?"

00:20:29   Because I don't know if they were. Were they there? Their expectation was that, of course, there would be an ad in WidgetSmith.

00:20:35   But did they just not get the, "I just wasn't getting high enough fill rate and they just never saw an ad before?"

00:20:41   That was the impression they were coming from. It was entirely neutral to positive.

00:20:47   Whereas in my mind, it was going to be this, "Oh no, I'm muddying the waters and it's going to be this big negative thing."

00:20:53   And it's like, no, my users either didn't care or it's a positive to them.

00:20:57   But in the world where I had so warped my world view around what my users might expect by the voices that I was sort of day in and day out listening to,

00:21:09   that it's like I'd been, in some ways, neglecting a business opportunity for a long time.

00:21:14   There should have been ads in WidgetSmith and there weren't. And it wasn't because it wasn't really necessarily even benefiting my users.

00:21:21   It was benefiting this imagined other, I don't even know, this expectation that I was putting on myself that I felt like the world was putting on me but didn't actually care about.

00:21:33   Yeah, I had a similar example. I've gone through ads in Overcast, of course, and I also dreaded when I activated them and also nobody cared.

00:21:41   Even when I had the crappy Google ads, nobody cared at all. I cared more than anyone else did.

00:21:47   But even when I made the current Overcast ad system where it's little ads that promote podcasts, initially I just set the prices arbitrarily based on whatever I thought a click was worth.

00:22:00   And whatever I thought a new subscriber on average would be worth to somebody.

00:22:04   And they just sold out instantly and they were constantly sold out.

00:22:07   And I started raising certain prices because they were constantly sold out and it was getting to the point where it was uncomfortable because I was raising it so high on certain categories.

00:22:21   I'm like, "This is going to end up being $2 or $3 per subscriber or whatever." And I was like, "That seems like it's not worth it. Who would buy that?"

00:22:31   But then people kept buying them. And so I eventually shifted it to a system where I removed all emotion from the system and I made it automated pricing.

00:22:40   So that every time someone buys an ad in a slot, the price raises for the next purchase in that slot by like 15%.

00:22:48   And then if a slot stays unsold for a couple days, it drops by 15%. Something like that.

00:22:54   So pricing became totally automated. Availability also then became totally automated because I was like, "How many slots should I sell?"

00:23:00   And eventually I made a system so that like, "Okay, if there's no unsold slots in this category for like 30 days straight, increase the number of slots by 10% or something like that."

00:23:12   And similar for contracting the slots if too many are sitting unsold.

00:23:16   And by making those things automated, prices went to wherever the market wanted them to go and have stayed there.

00:23:23   And I think after the first month I was making like two or three times as much from the ad system because I had this concept of what these ads are worth and what they're not worth.

00:23:34   Because I'm like, "If I was buying an ad, this is how much I would value a subscriber to a podcast."

00:23:39   But the market has different thoughts. And there are many people out there, it turns out, who are willing to pay more than I am per subscriber.

00:23:47   And by not treating it like analytical business thinking, by instead being like, "Well, I don't know if I want to charge this much," I was significantly missing out on significant money.

00:23:57   And once I automated it and made it just remove all emotion and perception from the process and just let the market decide what these things are worth, it was a massive win for me.

00:24:10   And not everybody has opportunities to make decisions analytically or algorithmically like that in your business.

00:24:17   But it is really useful to think about removing emotion from certain perceptions or valuations or decisions.

00:24:24   Again, in a way that I'm not hurting anybody by doing this because if people don't want to pay these prices, they will automatically lower themselves over time.

00:24:34   And sometimes that happens and it corrects itself and then it goes back up later. But by removing the emotion of the indie developer from this business decision resulted in significantly more income and no one complained.

00:24:50   It seemed to hurt nobody and everyone gets what they want because the people who are willing to pay more typically have more available ad slots to them.

00:24:58   And that's fine. It hurts people who can't pay that much. Again, part of business thinking, I kind of have to look at that and be like, "Well, that's actually not my problem right now."

00:25:08   My problem is I have a certain amount of inventory. I can't increase the inventory too much because I don't have that many impressions to sell.

00:25:16   My app is only so big. And so, again, I can look at that and say, "Well, it's just business. Here's what the slots are selling for. Here's what they're worth."

00:25:24   And I can feel good about that because it's okay for my business. It's great for my business. And the people who are buying the ads are getting exactly what I promised them.

00:25:36   And they see value in it. So, problem solved.

00:25:39   Yeah. I think what you're saying there, I think that taking emotion out of it is such an important part of this. And I feel like one of the things that I struggle with so often is this feeling of trying to value things emotionally.

00:25:56   And that leading me ultimately to a place that was tricky. And I have a recent example too.

00:26:02   So, I got my M1 MacBook Pro, which I love, and it's the fastest, best computer I've ever had. And it's amazing and I love it. But it has a tiny little screen.

00:26:10   And I was sitting there with my tiny little screen and using a sidecar to an iPad as my main developer workspace.

00:26:19   And having worked on a 27-inch iMac Pro for years, it was cramped. I kept doing it because it was the fastest, best, head-to-head and shoulders, the best place for me to work.

00:26:35   But it was cramped. And I was just making do, making do. And I didn't want to get any of the other monitors for it because I either had the bad monitors, which this is a perennial topic in ATP, all the bad topics.

00:26:48   I'm familiar with this dilemma.

00:26:50   Yes. Or you get the XDR. And I looked at the XDR and I think it was an entirely emotional decision. I'm essentially saying, "I'm not worth an XDR."

00:27:00   Ultimately, when I came down to it, I'm looking at this monitor and I'm like, "Oh, that's expensive. I don't know if I'm worth that."

00:27:07   And it's this very emotional calculus. And ultimately, I'm speaking to you now, sitting in front of an XDR. I've had one for a couple of weeks and it is tremendous.

00:27:19   I have zero regrets about it and I am so happy that I did it.

00:27:24   And ultimately, you helped push me towards this. But ultimately, the thing that helped me the most was having this slight shift in my thinking where it was the sense of,

00:27:33   "If I was a business that had one employee who was responsible for all the development, all the design, all the business management of that business."

00:27:41   And all of the income.

00:27:43   All of the income. This one developer, the entire business rests on his shoulders. And he came into my office. I'm just like Mr. Owner Man sitting there with my monocle.

00:27:52   And he says, "I have this $6,000 thing that I think would make me significantly more productive. Can I buy it?"

00:27:59   If I'm Mr. Monocle Man sitting in the business chair and I would say, "No," I would be a fool. I would be a complete idiot.

00:28:06   How would I have earned my monocle if that's what I had been doing? It just wouldn't make sense.

00:28:11   It's like, "No, you are absolutely worth this. The business needs you to be as productive, as effective as possible."

00:28:18   And the cost of that is in some ways immaterial. Don't get crazy, don't get silly.

00:28:24   If there's a tangible, honest, real thing that can improve your productivity and make you better at doing the thing that is the core business of what you do, do it.

00:28:32   And don't do it. The best reason you have is this vague sense of, "Well, you're not worth it," or "It's too expensive."

00:28:39   It's very emotional and very judgment-based. Like, "No, don't do that."

00:28:44   In my mind, now I'm starting to think of it as, "If I treat my business as a hobby, then yeah, that's the right thing."

00:28:51   Like, "This is a side project, and I have a side hobby, and I want to buy $6,000 worth of equipment for my side hobby."

00:28:57   It's like, "Maybe that's a bit of a hobby. That's not really a hobby at that point, man."

00:29:01   But like, "No, this is my business. This is what I should be doing."

00:29:04   And all the better for it, I think, trying to gradually flip that switch in my brain.

00:29:09   Oh yeah. I've faced the same dilemma so many times. I've waffled on podcasts endlessly about it.

00:29:15   Because I still think like the independent person. I still think like the kid from Ohio who grew up without that much money.

00:29:21   I still think like that at a large level. And so it's hard for me to make that decision, like you said, about like,

00:29:28   "Yeah, if this increases my productivity 10%, it's worth it."

00:29:32   And the reality is like, yeah, sometimes that's the right decision.

00:29:37   Anyway, thank you for listening, everybody. I'm going to talk to you in two weeks. Bye.

00:29:42   Bye

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