Welcome to the panel where founders talk about building a better business and a better life. I'm Justin Jackson, cofounder of transistor.fm.
Brian Casel:And I'm Brian Casel. I'm founder of Builder Methods.
Jordan:And I'm Jordan Gal, cofounder at heyrosie.com.
Justin:And we have a special guest today. Brian, Jordan, and I are just gonna pretend that Jason's just one of the boys. But inside, we're all like, this is Jason Cohen. Jason Cohen, founder of WP Engine, and one of just the best thinkers about business. Good to see you, Jason.
Jason Cohen:That's very nice. Thank you.
Brian Casel:Yeah. I'm excited about, like, the the Smartless style kind of a surprise guest thing. Jordan and I both didn't know that that Jason was coming on until about two minutes ago. So so we're psyched.
Jordan:That's Normally, Justin would, like, hype it up with clues. Yeah. And then you have to guess who it is. And I I bet we could have done that. Well, I Jason, I've appreciated so much of your thinking and writing.
Jordan:I really have a problem with you around that maximum MRR formula though, because at some point a few years ago, I was trying to figure that out and it was very relevant to my business. And it was one of these things that you don't like to confront, but you have mhmm.
Jason Cohen:That's sort
Justin:of Jason's game. He brings up stuff that
Jason Cohen:The the hard truths that you don't wanna hear Yeah. Maybe even in the moment, especially when I'm talking to people face to face in the moment, they're like, that that was really harsh. I didn't like you right then. But then later, I was like, you're the only person in the whole day that told me the truth. Yeah.
Jason Cohen:So I was like, alright. That well, I like that, at least. I don't want the truth, but, That you know
Justin:I mean, that's what people need. Yeah. Jason, maybe just give us an update on what you've been doing Sure. For the past few years.
Jason Cohen:And just to just to apologize for for the surprise visit, what actually happened is Justin messaged me, like, three days ago. Hey. We're we're doing a show, and it and it's relevant to you because we're quoting something you said. Do you wanna come on? And then I didn't look at Twitter for, you know, days.
Jason Cohen:So a couple hours ago, I was like, sure. So that's why it's a surprise. It's my fault.
Brian Casel:That's that's how we do it here. We we don't plan. We just spur them.
Jason Cohen:Yeah. Yeah. So that's okay. We can improv. I actually left SmartBear about, two years ago.
Jason Cohen:I've been there for fifteen years.
Justin:Sorry. Is SmartBear or WP Engine?
Jason Cohen:Oh, sorry. It's WP Engine. I said SmartBear. That's how long it was. I left WP Engine about two years ago.
Jason Cohen:I've been writing a book, which is now in preorder. I'm not here to push the book. That's not why we're doing this. So I'll let I'll let Justin push it at some point.
Justin:Hey. I will push the book. All you want is It it's called hidden multipliers.
Jason Cohen:Oh oh, look at that. Yeah. I pulled up and everything. Okay. So if you go to hiddenmultipliers.com, there it is.
Jason Cohen:There. I did the pitch. So, yes, so it's funny. I we were just talking before the show. I think when founders or executives leave, they always have an excuse and the typical excuse is, I'm leaving to spend time with my family because we can argue with that.
Jason Cohen:Sounds great. Everyone goes, oh, that's so noble. And then they leave, and then three weeks later, you read, so and so has been, you know, been appointed the senior vice president of sales of North America for and you're like, wait a minute. That was not a lot of time with your family, dude. And so so I was really sensitive to that.
Jason Cohen:So when we were talking about it internally, I was like, look, it's just there's nothing wrong, nothing bad. It's just been fifteen years. It's just time. Like, I just want to rest a little. I'm older.
Jason Cohen:My daughter's about to go to college. I want to go visit colleges with her a little bit, But like, it's just mostly it's been a very long time. It's just simply maybe time for the next thing, whatever that is, which is not another company. I said at the time, I'm not starting another company. Here it's two years later, I have not started another company.
Jason Cohen:So there you go.
Justin:Well done. Yeah.
Jason Cohen:Not that anyone believed that at the time, but, you know, there it is. And, but what's ironic is I have spent a lot of time with the family. We've been traveling a lot for college and taking vacations every second we can. And so the truth is I have spent more time with the family, but that's not what I said.
Justin:Dude, that sounds amazing. Hey.
Brian Casel:Job well done.
Jordan:I'm curious to hear where your interest, has gone.
Jason Cohen:Yeah. I mean, it's really fun playing with clogged code, especially especially stuff that, like, both the coding of it, but also the, you know, running your whole life or, you know, I I think it's interesting as as since I'm writing a book, it's interesting to ask how can AI be helpful but not write the book? Like, the only reason people read what I write is because it's my experiences and ideas and my writing style out also. Mhmm. So AI can't do any of those three things, but that doesn't mean it's not helpful.
Jason Cohen:So for example, I have a skill just to find typos and things, which is, you know, obviously, that's a good idea. But also things like when I'm using a word slightly incorrectly. So for example, I I would use this phrase. I would say blah blah blah blah, but that begs the question blah blah blah, like some next question. And they flagged that, like, that's not what begging the question means.
Jason Cohen:I think what you mean to say is that that raises a question or right? Begging the question is actually this this philosophical fallacy, which is when you you you implicitly assume the thing you're proving and then prove with prove it with itself.
Justin:Really?
Jason Cohen:That you've secretly done that, so you're begging the question. And and and so that's not what you're saying. I'm like, oh, yeah. I'd obviously, I was confused about that. So typos, but also this kinda like like careful word usage.
Jason Cohen:So that's a great use of AI. So the skill's been very helpful to me. But again, that's not right in the book for me. That's like that's like a smart copy editor or something. So there's other ways, but, you know, that that's been very interesting.
Brian Casel:I I'm really interested to hear about your whole content process, like definitely for the book, but also just like over the years you've been, you know, such a prolific writer through your blog and and and Twitter and everything. I've always been really impressed with that, and I've always wondered about how you produce your like, get your your thoughts into such digestible form on such a consistent basis. I mean, and I mean, on my end, I'm I'm really going deep on that. I do a ton of content writing, especially writing scripts for YouTube, and I I am going deep on using AI in the process for that. So I I'm really curious to hear how that's evolved for you, especially over the last like two years.
Jason Cohen:Well, you know, since so I've been writing for almost twenty years as you know, and and and fortunately never for money, never trying to make my, you know, And so I've been able to do whatever I feel is best for me. So for I've had a rule from the beginning that it's supposed to be fun. And so for example, I have no deadlines ever for anything. And and so sometimes I've had years where I publish every week like clockwork and and years where I publish once or twice only the whole year. For whatever reason, I'm I'm I'm I'm I don't have the energy.
Jason Cohen:I don't have the time. I don't want to. It's but do whatever. So as a result, I've been able to keep the quality high because I'm allowing things this is like you said, consistency. When you said that, I thought, I'm not consistent at all.
Jason Cohen:I post very randomly. But but as a result, things like the the the craft or the style or the ideas or the the the the consistency of the of whether the idea is good enough, I've been able to keep up because I let things like deadlines, you know, not drive things. And, course, for algorithms, that's bad. And so a lot of people say, you should have 10 times the number of followers on Twitter or on, you know, blog. I don't know.
Jason Cohen:And it's like, yeah, maybe, but I'm just not gonna do that algorithm stuff because, again, I just have a different set of constraints that I'm running under. But it allows me to have the quality, at least the best of my own ability, whatever that is. And so for anyone who likes that, then good.
Brian Casel:I I do love the idea of, like, lack of deadlines. I'm I'm always really curious about what the the the life cycle of every so so if we see something come up come out on on Twitter from you or or an article drop from from you, what was the lead up to that? How many days of development? How many drafts? How how how do you get to the point of, like, this is ready to hit publish?
Jason Cohen:Yeah. Nothing's real time. Like, even the Twitter stuff, that's all buffered up. And so a lot of times, I'm surprised myself, like, oh, I wrote that, like, nine months ago. I mean, my my buffer is deep.
Jason Cohen:I'm not joking. With one of the It nice things does look
Brian Casel:that way from the surface. I I I assume that there must be some sort of like queue. Right?
Jason Cohen:It is a massive queue. And and what's nice about being so ahead of the queue like that is I can say things which in the moment I I I wouldn't if I didn't have such a deep cue, there's things I wouldn't have said because it was so close to the moment that the person or event or thing I'm talking about, they would know or other people in their team would know. And that's the last thing I ever wanna do to anybody. Right? Like, it's nice to say, here's something I observed or a lesson.
Jason Cohen:Very bad if I'm calling out someone even by accident. Right? Or at least I say, right, that's just my attitude. But if there's a nine month queue, I write that, there's no chance you could leak, you know, anybody. Yeah.
Jason Cohen:In the thing. They could maybe think, oh, man, was he talking about that thing from a year ago? But that that's so vague that at some point, like, it's just my experience. I have to relate it. So or I don't have to, but it makes sense.
Jason Cohen:So it's actually great because I can say more things that I might have otherwise said without worrying about what I'm what I'm how I may be affecting other people in that particular sense. The the posts, I have literally hundreds of posts and drafts, some of which are like an idea in one sentence and some are long things. I just don't I'm just not feeling it. Right? Just, you know, feeling the editing or or maybe the idea is not good enough yet or something.
Jason Cohen:And and of course, most of them will never work. And so it is again kind of sporadic. Sometimes I'll just have an idea and bam, I write the whole first draft, you know, in a in a when one sitting and then all it needs is editing and then other times and so even so that'll be hours because I go over it and I edit it a lot. I wanna find every problem. I want the style again.
Jason Cohen:I'm not just trying to put out something. So, like, is this written well enough? Is this is it structured well enough? That sort of thing. Are the examples good?
Jason Cohen:And, course, what's what's too long and all that. So it still will take a lot of time in editing. But sometimes the original's fast and sometimes the whole thing gets rewritten a bunch. There's one people like a lot that's called the elephant curve.
Brian Casel:Mhmm.
Jason Cohen:It's called the elephant in the room, but it's it's about the elephant curve, which is just a a name I came up with for this particular idea. That one is very long and has a million graphs and data points because I'm I have this thesis about how growth works or how how exponential growth doesn't work, you might say. And I have this thesis about, like, here's how growth works and why. And then I back it up with like the zillion data points from all kinds of companies, bootstrapped, venture funded, the biggest ones ever, old ones, new ones, and of course my own data. That one took ten years because I had this idea that long ago.
Jason Cohen:Like, I published this, I think, in 2022, but I I I had that idea because I I remember publishing it. Like, I've had this idea for so long. And the reason there's so much data is that I had this idea and I never got around to, like, making it into some sort of thesis. But every time I saw another example, I'm like, goddamn it. There's a there it is again.
Jason Cohen:And I would snag it and throw it in the file. Yeah. So the file ended up being like, I have 10 not 10. I have maybe three times as much stuff as what's in that article even, right, Of, like, accumulated. And then finally, for no reason I can I can explain to you, I was just, like, I had the bug and I and I just it's like, it's time to write this damn thing after all?
Brian Casel:It's ready to get it out.
Jason Cohen:You did. And and so that's part of why it's so deep. So it can be like that too. I I think so so that's not it's kind of a non answer of, like, what's my process? I guess the answer is
Brian Casel:I love it.
Jason Cohen:Yeah. Yeah. The answer is, like, different things just happen differently and I allow that. And I don't worry I don't sweat that. And a real professional writer cannot act like me.
Jason Cohen:You know? You you right? Like, if you need to publish every day, if you're writing for a newsletter or even if it's for money and so and and you're getting paid $20,000 for an amazing article in The Atlantic, you still need to go, like, do that thing for a few months or or, you know and so, like, since I don't need to, I I the freedom of that. But what that means is it's I can do my best work. I don't let it intrude.
Jason Cohen:I cannot let it intrude on the rest of life. But that means I can be the best writer I can be, the best thinker I can be, put out the work that I'm most proud of. That doesn't mean it's all great necessarily. It's just that my best that I can do is what that's why I keep repeating that. And that's something everyone can adopt and do.
Jason Cohen:Everyone can decide, oh, look, I'm not gonna be a professional writer, but I would like to be the best thinker and writer that I can be without letting it intrude. In other words, you could take that attitude and whether you call that a process or not, I don't even know. But you can do that if you want. And that's what I've done, at least.
Brian Casel:One of the things that that jumped out to me when when I mean, all of that it it seems like it makes sense as someone who's who's who's read your work for so many years, like, but the thing that jumped out to me was the idea of having like maybe a 100 half written ideas at any given time. And, I mean, I I have a lot of ideas kinda like swirling around, but I I tend to zero in on really only one or maybe two concurrently, because I have to I have to ride the momentum. And if I only get it 25% or 50% and then I leave it, it it'll be hard if not impossible to ever really come back to it and and get it to a shippable state.
Jason Cohen:Yeah. I think that's what happens when it's this fragment of an idea that's not that good. And so it just doesn't feel worth right finishing it. Because if it's something where you're like, I've figured something out. Now again, this is just your opinion and your feelings.
Jason Cohen:That's fine. But let's settle those those things aside for a second and or all those qualifications and just assume that. I figured out something out. Maybe someone else has already figured that out probably. But I nevertheless independently came up with it, which I'm very excited about.
Jason Cohen:I'm very proud of. I'm really using this. To me, it's easier to even come back like, oh, yeah. That was a really important idea. And I can I can, like, get re excited?
Jason Cohen:Another thing that happens to me sometimes is, like you say, halfway through, set it aside. And then two years later, I'll have the same idea and forgot that I already had that idea. Then I'll start writing it again. But then I'll find, oh, I have some of these ideas already. And then I'm like, wait a minute.
Jason Cohen:I can let me take all that stuff together. Obviously, together, it's not organized. But in this pile of things, is there is there some crisper better way to say the root idea that's actually interesting? Another fun thing is naming it. Like, I've named a million things never after myself.
Jason Cohen:Mhmm. Mhmm. Right? But I I you know, this Fermi decisions and or Fermi estimation and the bin stack and slick and we were just saying the elephant curve and all this stuff. I know this.
Jason Cohen:It's it's kind of silly, but also it it's almost like, well, I have to finish explaining slick. You know, like, it as opposed to this this, like, nameless, formless idea that's that's only half good. Right? I feel like I have to explain the thing. So that may be a little trick even if you don't use the name in the end at all, but it might be a trick for for that.
Jason Cohen:There's all these writing tricks. I'm sure you you know them already. And it's so personal writing, so, like, there's no there's no one trick that works for everyone, of course. But there's these tricks like, what is the central question that the reader has that this answers? I find a lot of times when I'm I, like, get a half a hit, I'm not interested.
Jason Cohen:Like, I I I also can't explain what that is. It's sort of like I had a half baked thought, but I can't really answer your question other than, like, a very boring answer. Whereas if I can answer that really crispy, like, for my book, for example, this this hidden multipliers book I'm working on now, the central question is, well, I I'll be even more specific. I'm a bootstrap SaaS founder at 2,000,000 in revenue and growth has slowed and I'm stuck and I don't know what to do next. And I I have a list of things I could do.
Jason Cohen:I know that just doing what I'm doing won't work because that's what I'm doing. And it's not yeah. It's like I have to do something else. I have a list of 10 things I could do. I don't know which one is really the thing that's gonna break me out.
Jason Cohen:And also maybe the thing that's gonna break me out isn't on the list. Not even sure. So what do I do now? That is the central question and ideal customer, you might say, of the book. Because I can say that so crisply and I talk to people all the time like that, it's very motivating to me to like, yeah.
Jason Cohen:Yeah. I've got to show you things. Like, I don't know exactly what will work, but I've got to show you really good things that could work. We've got to get you out of this. So on a smaller scale like a blog post, who is that for?
Jason Cohen:What is exactly that central question? That can be motivating to like, yeah. Yeah. Yeah. I got to I've got to tell them.
Jason Cohen:Another trick is once you have that in your mind, you can do the thing where you just say it like I'm doing right now. You just verbally spew, you know, of course, with AI turning your your spew into a text. And often just talking aloud, you end up with something which you can now reform. And if you don't care so much about your own writing craft, of course, you can use AI and say, alright. I have this half written thing.
Jason Cohen:I have this spew of ideas. Mhmm. Like, let's let's first decide what kind of article structure makes sense. Like, is it is like surprising thing, background context? Here's the solution and here's like a couple tips, which is a lot of mine to be fair.
Jason Cohen:You know? Mhmm. Like, is that the right? And so you could you can work with the AI a little bit, like, what's the right outline structure? And then, like, okay, we'll take all the shit I said and and, like, sort of do that.
Jason Cohen:And and it won't be very good. But, like, maybe as we all know, editing's easier than writing from scratch. And so even if the AI piece is something that's just okay, but it's structured fine and and and then you edit literally every single word, that was still really helpful that versus starting from from your quarter done thing and some and some spew and being like, oh, I don't know. So I think I think that sort of thing is a way to leverage AI to get you past, let's say, a writer's block a kind of writer's block. So anyway, these are
Brian Casel:just some ideas. Yeah. Those are I
Justin:mean, it's
Brian Casel:it's really been interesting to because I've I've transitioned from, you know, really focusing on on, like, SaaS for ten plus years and now my business is more of a content driven business and I've been really focused on that all those things that we're talking about here like and it's been interesting to map SaaS business concepts to the to the process of writing, like like job to be done or ICP, like who who is the reader or the viewer of this thing and what is the one idea or the one job or the one question this thing needs to answer And and when you're talking about like business content or technical content, there are so many branches that you can start to go down in any one piece and it's like, well, maybe maybe this should be separate pieces or just just stick to the one flame here, you know.
Jason Cohen:Know that I have pieces like that that are like, okay, this probably should be multiple articles. And since sometimes I do write that. And actually so here's a funny thing. I I just thought of this because I forgot I did this. Sometimes I'll do exactly that.
Jason Cohen:I'll be writing, and it turns out like, oh my gosh, of course, the rabbit hole goes deep and and and I can't cover it all here. What I'll do is I'll say, whatever. I'll still write this monster thing, but then what I'll do is I won't publish it and I won't I don't have to, like, polish it to death either. And then what I'll do is I'll look through and then these are all ideas for me for other posts. And so whatever I'm kind of excited about, I've got a paragraph or two because of the root post.
Jason Cohen:And then I'm like, okay. If I were to write this and I were to send the reader off to another post for details, what would that be? Now it's easier for me to focus on the one thing because in my mind, I still have the full idea over here. So it's it's almost like I've given myself permission to go focus on the one thing. So I've had posts like that.
Jason Cohen:In fact, the book I'm writing now was a post about what to do in growth stalls. That's the name of the post. And I had all these sections and each sections, it's like, oh my god. I could write a book about each one of these things. And I'm like, wait a sec.
Jason Cohen:So that's I I still have that in draft. So I literally have written an entire book about 300 pages in the in the technique I just said. That's how much I went into detail on each one. But yeah. And then some but then sometimes you could you can publish the master or or the main one because of the trunk.
Jason Cohen:And you have all these links, and I have a couple posts like that too. The Kung Fu one is like that. And the actually, the top one on the on the on the website right now is like that. The path to product market fit, except not really because it's not a strict path, but here's a strict here's a path idea anyway. And of course, that thing is just nothing but links to other stuff.
Jason Cohen:So that's another example of that. So, yeah, writing and not publishing it, using it for your own technique is is good. So I would I I mean, that sounds really useful to do. I think it's very different if, again, you're doing it for personal development and getting your ideas out there. You might even say legacy, although that's a big word like me.
Jason Cohen:Or it's it's or like you're saying, it's my business. I have to do certain things. I have these these goals I need to achieve. Okay. Well, I would use things like content calendars maybe a little like the old version of content calendars is not right.
Jason Cohen:But, like, maybe the the idea that I'm gonna be writing on different topics throughout a month and and and roughly what is the pace and schedule of that. And then how can I use AI too? Because AI is good at stuff like what are a bunch of topics in this area or what's an outline for something? These are kinds of things where AI is quite good. And so it's easy easy is the bad word, but it's possible to have a lot of ideas and things with some help.
Jason Cohen:And then I I think probably there's there's Music AI is really high.
Brian Casel:It's it's all I mean, I I'll I'll spend the next hour going deep on that if if you if you let me go on it. But Well Anyway, Justin, what do you got?
Justin:Well well, let's let's let's just change gears slightly. Because because Jason's book is about when growth stalls, I know that sorry. Jordan has a take on this because it felt like all of Twitter last week was talking about distribution, distribution, distribution. It used to be developers, developers, developers. Now it's distribution.
Justin:And Jordan, in chat, you said you had a little bit of a fiery take on this one. So what what's your fiery take on this distribution as the new moat?
Jordan:I don't know if it's a fiery take against the concept of distribution being a moat. Mhmm. I think my is in, like, the hand wavy easy sayings that are thrown out Mhmm. And then interpreted by the reader in a 100 different ways or maybe a 100 different readers in a 100 different ways. And I don't know how helpful it is to just hear distribution is the new mode.
Jordan:Like, okay. You want me to focus on distribution? Like, that's a word that stems into a 100 different activities and strategies and channels and everything else. Mhmm.
Brian Casel:Yeah. Thank you, Captain Obvious.
Jordan:Yeah. Okay. Great. So you you you mean finding people that are interested in my product, showing them my offer, and then then buying is the new moat? Okay.
Jordan:I think, really, it's just a a de emphasis of the well, the product's so unique be and and that's my moat. Okay.
Justin:Explain to me this this this meme you sent to me of of the person on the treadmill. Like, what what's what's going on there?
Jordan:The response to that tweet, someone, I think, quoted Lenny and said, okay. If distribution is the new moat, then, like, get ready to run forever. Mhmm. Because you're just gonna be marketing forever, which again feels to me like nothing new. Mhmm.
Jordan:So I think it just feels like that phrase is not helpful. Yeah. And what feels a lot more helpful is, like, what the founder at is it Lemon Squeezy?
Justin:Yeah. JR Farr.
Jordan:Yep. Yes. And what he talked about is, like, well, this is our moat is a set of activities that we do consistently over a long period of time that translate into an incremental set of, like, benefits to the company that over time add up to something really hard to replicate.
Justin:Yeah.
Jordan:So here's how we do features. Here's how we turn every release into some form of a marketing event that has an SEO impact, that has a new surface area for people to interact with. Here's how we think about integrations and why we don't just launch an integration, but here are the set of things that we do alongside of reintegration.
Jason Cohen:Mhmm.
Jordan:So it's not as pithy as distribution is the new moat, but it's it's doing founders and companies a much bigger favor.
Justin:Yeah. Jason, what's your take on this? All this conversation about distribution on Twitter, you're obviously writing a book on it. So what is distribution a moat? Is distribution the new moat in this world?
Jason Cohen:I agree with Jordan that the phrase, you know, you read into it what you want and therefore it doesn't mean anything. Mhmm. And it's also not new. I mean, to the to the extent that distribution could be a note a moat, that isn't new information. Mhmm.
Jason Cohen:Yeah. And to the extent that it's not a moat, it's not a the phrase is not accurate. Mhmm. There is a very so so in that sense, it embodies the very funny thing. I forget where this comes from.
Jason Cohen:It's it's very old. But there's like a a beginning of a of a paper or something and it says, there is much in this paper that is new and much that is true. But the stuff that is true is not new. And the stuff that is new is not true. So this reminds me of like, this is distribution as a mode is kind of an embodiment of that.
Jason Cohen:Like, this is a nonsense thing. It's either not true or or we it's not saying anything new. So therefore, this is so I think that's what Jordan was saying too, and and I agree. Mhmm. I do think so when I hear moat, I just think of Warren Buffett, of course, coined this phrase.
Jason Cohen:And so I think of the Warren Buffett version of it, which is just maybe you could have other ones. That's fine. That's just what I think of, which is that competitors cannot stop us from do from running the business we're running. To me, that's what the moan is. Now you normally think of it as you often think, and I've said it as a permanent competitive advantage.
Jason Cohen:Mhmm. I think that's a fine way to say it. But if we're being if we're being if we're going back to the original thing, it's it's sort of that there it's not even an advantage. Oh, it is. It's that a competitor can't stop me.
Jason Cohen:Mhmm. Because he said, I want a company that has a that's a castle with a moat with lots of alligators and stuff so that no one can storm the castle. Mhmm. Which isn't quite the same thing as saying that we have some sort of unique advantage over others. You might say it the other way.
Jason Cohen:Having a unique advantage over others could be a moat. Mhmm. Mhmm. But, you know, a moat isn't it right. So in that
Justin:sense Can you can you tell us how that manifested itself at WP Engine? Like, what was how why could nobody stop you from doing what you were doing?
Jordan:So many competitors.
Jason Cohen:Yeah. We had the reputation of we're the most expensive and also the best. A lot of people don't want the most expensive and don't need the best. In fact, most people don't. And I agree.
Jason Cohen:And that's why GoDaddy is a great business. Because for $3, you can get a lot. Like, what you get for $3 is insanely good. Like, the ROI of GoDaddy is insane. Mhmm.
Jason Cohen:So that's fine. So, like, they have that. Someone else could also be expensive and good, but that can't stop us from being expensive and good, and it can't stop our reputation for being sort of first and best at in that category. Mhmm. So in that sense
Justin:Is reputation the key phrase there? Like, is reputation the moat?
Jason Cohen:So again, like, I I guess I I go back to what Jordan says. Is this are these useful are these useful things to say? If you have a you a social media channel, no one else can stop you from having a good one. And so even if they have a good one, you can probably still do really well. On Adwords, it's not true.
Jason Cohen:You can have a really good Adword, but if 10 other people are better, then you're just not shown or it's too expensive to have good ROI or whatever. Right? So in that sense, AdWords is heavily competitive. Social media, while competitive, and even a big company with lots of money and customers, they can't they sort of can't stop you from from having a better social media channel than than that other company. Mhmm.
Jason Cohen:The big company can overwhelm you in AdWords actually. Not they won't necessarily. Like, it's a fight. It's just that you can't it's not like they can't they could. Whereas with social media, there's kind of nothing the big entrenched, mature, rich company can do to stop you from having a good social media presence.
Jason Cohen:So in that sense, you have this this this unassailable advantage. And to me, that that's that's this idea of a moat is that you have this unassailable position. Mhmm. Now just the social media channel, I wouldn't call that a moat. I'm just I'm I'm just making a simpler example.
Jason Cohen:So in business, it might be something like like, I mean, everyone says network effects. Okay. Yes. Because if someone else comes up with a better tool, they just they just can't stop the network effects. They can compete on features and try to steal people and maybe they will.
Jason Cohen:Mhmm. But what they can't do is is lower the value of your of your network effects. Effects. Mhmm. Right?
Jason Cohen:I can't I can't do anything. I can't launch a feature that that for that particular so therefore the the network effect is a moat. So in that sense, is distribution a moat? Well, if you just run AdWords, then distribution is not a moat for you because you're doing things that are replica not only replicable. See, that's another thing.
Jason Cohen:You think of it as being can someone copy you? That's not what a moat is. Right? Like if you have if you have a network effect because you're a social media app, the next social media app also has a network effect. Of course, they can copy that.
Jason Cohen:It's not even the point. In fact, part of the definition of emote probably is that even if they copy it, it it's still a moat for you.
Brian Casel:Mhmm. Yep.
Jason Cohen:Just additional help. So in that sense, like, this lot of distribution is not a moat in that. Other people can in fact outdo you and beat you. Yeah. But but if your distribution is good enough, then it can become a moat that can't be defeated.
Jason Cohen:If you have a YouTube channel with a million subscribers literally, that does seem like this kind of, like forever is a big word, but let's say long term advantage Mhmm. That no one can rest from you. Everyone's just gonna go, goddamn it. And no matter what they do, here you have it. So I think distribution could be a motive.
Jason Cohen:So like another way would be once QuickBooks got the CPAs to use QuickBooks, now that's the distribution moat to getting to customers because the CPA will tell their their clients, oh, use this because then it plugs into my thing. Mhmm. That's that sales system that's indirect through the CPA. That is a moat because no matter what you do on the outside that that to sell directly those clients, it doesn't matter if their CPA says no use this. That is a distribution moat for sure.
Jason Cohen:Mhmm. Yeah. So so again, like so I would say some distribution, if executed in a certain way, blah blah blah blah can become a moat. But just saying distribution is a moat, like, I I agree with Jordan. Like, I don't know I don't even know what that means.
Justin:Let's go with let's go with Brian then Jordan.
Brian Casel:You know, like reading through JR Far's post here, and and I'm such a fan of him and and everything that that they've built with
Justin:Lemon Squeezy?
Brian Casel:With Lemon Squeezy. But as I was reading this and I'm still going through it, so, you know, for those who who don't see it, it's like it's it's like a numbered list of what? Eight? Eight or nine or 10 Yeah. 10 different things that they've done to to like run their distribution or or things that like tactics that they've that they've worked on.
Brian Casel:But as I read through these like, especially items one, two, three, and four, like these are these to me all seem like natural byproducts of just product market fit. Right? Like like, have a a product and, like, so, like, item number one is, we we're shipping constantly.
Jason Cohen:Mhmm.
Brian Casel:And with every every feature that they ship, they're doing tweets and blog posts and change log updates and screenshots and videos. Like, obviously, like, just doing that is is not really distribution, but if you have a product and there's a market demand for it and then they're going to eat up that stuff and share it and then turning product work into distribution is number two, right? Like how do we package the work we're already doing into something discoverable? Again, like that, like the assumption or the reason why that works is that there is natural market demand for the product they decided to go for. Like scrolling down there was like an item, where was it?
Brian Casel:You've got obsessing
Justin:over onboarding, making docs part of the product, integrations everywhere, founder led content.
Brian Casel:There's one about like design, they who's the other partner
Jordan:in The screenshots.
Brian Casel:Yeah. The screenshots. Orman Clark did all the design for Lemon Squeezy, right? And his work is incredible. So again, like that's like product work, design work, comes in the form of screenshots, which like, like, I'm not even 11 Squeezy user and I always paid attention to the work they've done because it looks awesome,
Jason Cohen:you know,
Brian Casel:and I'm liking their tweets and stuff like that. So like to me, like, I don't even, I think it's a good point about distribution but all this stuff to me seems more like great product, great market, great timing. Mhmm. Jordan,
Justin:what are your thoughts?
Jordan:That just looks like good disciplined work. Just doing the things you're supposed to be doing that take time and effort and systemizing them and like that's how you run a successful company. Yeah. I think it's great. I I think people get enamored, especially in the VC world and on Twitter with media and the massive leverage that media can give you.
Jordan:Mhmm. That's why you see the big, like, TBPN fawning over that type of distribution. Mhmm. And, right, what's the what's the opposite of JR's post? It is Cluly.
Jordan:And just using negativity and controversy to gain attention Mhmm. And then trying to parlay that into some form of, like, a distribution advantage.
Justin:Interesting.
Jordan:In general, I think JR's advice is infinitely better while taking whatever lessons we can from the fact that the focus is more toward distribution because product differentiation might be a little it's different than it used to be.
Justin:Let's do a little speed round here. I'm I'm curious. What do you think, we'll start with Jason, then we'll go to, Brian and then Jordan. What do you think is Basecamp's moat? Start with you, Jason, if you have a thought.
Jason Cohen:To me, it's the very public personalities of the two founders. If you never had the 37 signals blog that went alongside Basecamp, no one would use Basecamp.
Justin:Brian, what do you think their moat is?
Brian Casel:I think that's absolutely true, especially in the early phase or you might even say at the first ten years of Basecamp and I'm sure it still has an effect. I think if you if the question is about like why why why does it work today in 2026 for Basecamp, I think it's their longevity, right? Like they've been around for so long that they have this customer base, they already have a well known established brand, at least in some circles, probably many circles, and I think that flywheel is just well on its way at this point, you know.
Jordan:Mhmm. Jordan? I think they got the boulder up the hill with their very clear contrarian thinking and great marketing of that thinking that established a spot in the market where they just have their own space, and people think of them in a unique way. And then once that boulder started rolling down the hill on the product, now the product fulfills the promise that they're making on the site, and it's unstoppable. Mhmm.
Jordan:It's beautiful.
Jason Cohen:I'd also push back a little to say that it is a moat. I I've never met someone that used base Basecamp. I know This is my point too. So I know a million people used Basecamp and that's not what I'm saying. What I'm saying is I could list to you a lot of other products that have a 100 times the number of users.
Jason Cohen:That's okay because that's not their goal. Mhmm. The goal is not to be the biggest whatever. Right? Mhmm.
Jason Cohen:So the goal is not in fact, the goal is is supposedly not to become Jira. Right? So so that's not a criticism. I'm just saying, like, let's put it this way. Let's say they the team didn't none of this existed.
Jason Cohen:What happened is they they vibe coded Basecamp to the point it is right now is a product and then launched it right now. Mhmm. Would they re achieve their market share in let's say five or ten years? So you're gonna give it enough time because of anything. Good marketing, the product's better, differentiated.
Jason Cohen:No. Because the product's not any of those things. It's it it is a little different than others. Like, it's good. It's a great product.
Jason Cohen:There's a lot of great products like that though. Are you telling me people who already used Notion for that would switch away from Notion into Basecamp even though they could have done that for the last ten years and didn't just on the basis of the product? I don't think so. So like the product isn't differentiated and it would not succeed now. And so it would be another indie indie.
Jason Cohen:I made a project management software. People say, yeah, you know, there are some nice things about this, but that we're to switch to it. Right. And so it isn't better. It's good, but it's not like, there's nothing special there.
Jason Cohen:That's why I go back to, like, it's the cult of the founders. Yeah. Right? Like like, the the I don't know what else there is that would make it succeed. Now with that with this cult of founders, could it succeed now?
Jason Cohen:I actually think, yes. We still love that.
Brian Casel:Mhmm. Mhmm.
Justin:Do you do you think that's gotten because I've always I think what's most attractive about Basecamp is the religion. It's like, I buy into the Basecamp religion. And what do I want? I want the Base Camp system. I wanna feel like I'm a part of the Base Camp thing, that magic.
Justin:Is that increasing or is that decreasing?
Jason Cohen:I I
Brian Casel:said I wanna I wanna push back on on some maybe this is more of like a yes and because I think all the all the all the branding and the personality of Jason and DHH, all that's true. We we all know that. But but I also think that a lot of that is like a little bit insider baseball for those of us in these industry circles. And if I think about their customer base of thousands, there is something to be said for their product design. Like, it's true that most people we know probably aren't using Basecamp because it is too simple, it's too constrained.
Brian Casel:They've decidedly gone a much simpler route from a product design standpoint, making it very like human and just no nonsense, just like if you need to write some text in the box, press send, like that's the that's the UI. It's simple. Right? And and like there there actually have been times where, yeah, I I I've been using Notion for years, but it is too complicated. There are too many things you can do with it.
Brian Casel:I want the constraints. I want the guardrails of something simple. And I think that the the average small business owner who picks up Basecamp, it's like, okay, this thing just works. It makes my business simpler. And I think that's what they're going for in their in their marketing copy, you know.
Jason Cohen:But but but how would the average business person discover Basecamp?
Brian Casel:That's the Yeah. That that's the question. I think today is is probably a combination of organic word-of-mouth search, you know. I I probably less probably less of like, oh, I liked that opinion of Jason Fried. I I would I would think that the majority of their
Jason Cohen:customers But if they starting over, they were starting over but they had this product, the product is the product of today. They get that. And they're starting over. And they're not allowed to use their personalities because we're assuming, you know, would it be would it achieve the success it has today?
Brian Casel:Oh, it would be way harder and probably not. Yeah.
Jason Cohen:Yeah. That that's all I'm saying. So that tells me it's not the product. Like, again, the product is fantastic. Like, that to me, that's not that's not even a a question.
Jason Cohen:It's a good product. To me, it would just be like, right. It would be a good product among, let's say, 10 or 20 good project management. It's like like, I know may way more people that use, like, a ClickUp or Notion or a conglomeration of other things or Jira or Linear. Of course, that's a different space that's, you know, that that but but, you know, like WordPress freelancers are off are kind of in the middle between these designer project manager type things and writing code and stuff.
Jason Cohen:So they they kind of flit around between all that, for example. Like with linear, it's much easier to point to this is this is their specific theory and and philosophy. And so if you subscribe to it, it is the best product on earth for that. And so the question is, is that market big enough and can they find it? And the answer turns out to be yes.
Jason Cohen:But like, I can really point to that. Whereas with Basecamp, it's simple. There's other simple ones like like but but it's really good. I know so is other things. Like, it just it just doesn't
Brian Casel:Yeah. There's probably a timing aspect of it. Right?
Jason Cohen:That's not a moat. Just that some people would pick it as not a moat. Right? Like, the moat is like, it's unassailable. With linear, it's like, they're so extreme in their philosophy and they're so far ahead in the specific things they value that I don't see how someone catches up to it.
Jason Cohen:Even if they tried to copy it, they're just they're just going they're just too far ahead.
Brian Casel:Mhmm. I guess that also begs the question of like, how do you start how How should like, let's say SaaS founders, SaaS startup founders think about starting up something new now? I mean, like, even like with Basecamp, if the question is like, would it succeed today or how could it succeed today? I think the question is like, well, if you're deciding to start a general project management app today, you're in the wrong year to do that. The the year to do that was 02/2008, 2009, 2010.
Brian Casel:I would
Jason Cohen:have said that about Jira and Linear did it. So I 100% agree. And if you're gonna do the same thing as everyone else, but 30% different, then I agree with you. No. But that's because there's no moat there.
Jason Cohen:Right? Yeah. But but when you but there is a way, but you you have to do something different. It doesn't mean that's be controversial or something, but you have to do something substantially opinionatedly different that appeals to people like Linear did. So it it takes it takes that amount to overcome.
Jason Cohen:I completely agree.
Jordan:I was gonna say the the word that we've avoided thus far is brand, and it does feel like that's a very important element to thirty seven signals and Basecamp specifically. It's just that their personality and reputation is part of the brand. Alongside the design and the logo and the feel and all that. If if we bring it down to today's issues, the distribution is the new mode. That comes out of an acknowledgement that it's really hard to differentiate on product.
Jordan:And if you do differentiate on product, it's much easier and faster to catch up to you. So, I mean, we're dealing with this right now. We have an AI voice receptionist. 18 ago, there were like five of them. Now, there are 500.
Jordan:So, we are looking not only at our brand and how people think about us and the reputation, but also where the product goes and differentiates. But it's really hard to pick a differentiated product off the bat. It won't last for very long. It won't be differentiated for very long. So you it feels like you do need to incorporate the brand and reputation element into it alongside all the other unique things that you're doing.
Jordan:I personally think that being a thought leader and and leading with that is not right for us because our ICP are like these one to 10 person SMBs in throughout the country. But we have a lot of more work to do beyond just the product being different or better.
Justin:Yeah. Well
Jordan:Because we we can't count on that.
Justin:This this kind of segues into the reason I brought Jason on, which was this post here, Things mostly fail even at the best companies. So the the thing I was thinking about is all the things we try, what works, what doesn't, and then what endures, and for how long does it endure. So here's Jason's post. Things mostly fail even at the best companies. Most ad viewers don't click.
Justin:Most of those don't click past the landing page. Most of those don't consider. Most of those don't buy. It's the rare wins that keep us going. A weird life, if you think about it.
Justin:I Jason, maybe just to go to you, like, what's kind of the thinking behind this one? What was the prompt? What what got you interested in this piece?
Jason Cohen:A a longer version of this is how I kick off one of the chapters of the book, which is a chapter about cancellation because I have this I've always had this feeling and I, you know, try to put into words of, like, how impossible it is that anyone would buy the damn thing. Like, first, you have to see your ad, which is already, like, what one out of maybe of 1% of people see the ad Mhmm. That you expose it to. That's pretty good. Just order of the magnitude.
Jason Cohen:Maybe it's point one. I don't know. And so then they clicked it. Well, let's click through rates. 1%.
Jason Cohen:That's good. Okay. Then they hit the homepage. And then what? 70% bounce?
Jason Cohen:90%? Depends on the source. Okay. Yep. That means they spend more than, three seconds.
Jason Cohen:And then they read it and they're like, oh, interesting. Really? Thank God. You're the first one today. And then they looked around and they didn't get bored and they looked at the features like, Oh, really?
Jason Cohen:Thank God. And then they looked at the pricing page and they didn't just leave. They're like, oh, that's reasonable or it's not too low and they think you're shitty or too high and they think you're, you know, out of their league. And they looked at the tiers and they're like, I can do this. And then maybe they looked at competitors, maybe they didn't, but supposedly they did.
Jason Cohen:Mhmm. Whatever they still decided to buy from you, they got out of credit card and it worked. I mean, that's already something, you know? Yeah. Like, it's a fall
Jordan:off there. Yeah. Then Series of miracles.
Jason Cohen:A series of miracles. And then they got in and then what? They onboarded, they typed stuff in. They uploaded a photo of themselves for the seven millionth time this week.
Brian Casel:Like, dedicated all this time out of their life to the Yeah.
Jason Cohen:Maybe they called tech support to get unfucked and and like that then they and also with if it's at work, I'm I'm usually I'm usually thinking of a b to b context. Everything I just said is absolutely true in b two c. I I I'm just I just am expert in b two b and not b two c, so I always think that way. And so, anyway, in a business context, they probably told their peers, like, oh, you need to check out the software. I checked this out.
Jason Cohen:It's really cool. Like they've they've started putting their own reputation on the line. And then after all of that, they cancel. And you're like, what?
Brian Casel:That's what
Jason Cohen:Like ice what Lightning in a bottle. And then you're like, nah. Like, what? Like, have to go you just emotionally, like, forget financially. Emotionally, you have to find out what is going on because they bought your argument.
Jason Cohen:They bought your thesis. They bought your promise. They have the budget. It wasn't too they they they chose you over a competitor. They invest all this time.
Jason Cohen:And they said, no. What did you do wrong? This is totally on you now. Right? Now maybe they were confused.
Jason Cohen:Okay. But, you know, it's I I'm being extreme a little bit, but to to make the point. So then, of course, I go on to talk about there is a financial aspect that's very important as well. And and and and and then what what shall what shall I do about it? What are things we can do about it?
Jason Cohen:So that's the chapter. But this tweet is just like this little microcosm of this feeling I
Brian Casel:have about it. And, course, you can
Jason Cohen:you can say the same thing about other things in business that's maybe maybe especially funny or or poignant or or evocative to think about that, you might say, presales and onboarding sort of zone. Also, because we all do it all the time. I look at a product every day that I might wanna buy and then this Mhmm. But my finger's hovering over the buy now button. I'm like, yeah.
Jason Cohen:Like, we we all do that. And so, like, we can we can imagine the customers doing that cause we do it for sure. And just like, press the buy button. Just press it. You know?
Jason Cohen:It's it's so rare. And it's just funny, like, how much has to happen. And so it's easy to say, like, well, that's just a funnel. And you're right. But I'm I don't know.
Jason Cohen:I think it's it is richer to think it to to to really have that perspective on, yes, it's a funnel, but but still.
Brian Casel:Yeah. No. Yeah. I mean, like, I was it's just funny to hear you talk about it because, like, we we we went deep on that about two weeks ago on on the show talking about, like, ICP and exactly that, like anytime I see a cancellation, you know, we know like how churn rate works and that it is a rate, there are always gonna be people who do, like it doesn't end up fitting, but yes, it's like the website did its job, the sign up form did its job, the onboarding did its job, and then still something, they were like, no, I changed my mind. Like what?
Brian Casel:But the other thing it really makes me think, just come back to is like it just comes down to product, I hate just repeating like product market fit, right, but like all the little tactical things that you hear people talk about like, oh, if you redesign your pricing page to show the higher price first instead of the the middle and the lower price and then maybe that's gonna have a a 4% increase in conversion rate. Like, okay, but like really, like what matters is like the person, are you solving the problem? And if they have the problem, they're gonna upgrade to the right plan that solves their problem. Like that's all to Yeah, you don't wanna like hide your buy button. You don't wanna make it difficult to sign up, but like all the little tactical stuff, how like, it doesn't really matter.
Brian Casel:What what actually matters is, like, make a product for a growing market and and and present it in a in a in a sane way, you know.
Justin:Jordan, what what are your thoughts?
Jordan:Yeah. The the word that comes to mind for me is is demand and just how strong the demand is and how strong you can make the demand or help it along to kind of get through all the obstacles. What the the story that comes up for me is when I first started online, I had an online store and it was so hard to get visibility. We're using Volusion. That's Yahoo stores and then Volusion.
Jordan:Great Austin company, I think, actually. And we wanted to get more insight. We were like, why why is everyone leaving? Why are people not buying? So we added live chat software.
Jordan:And the live chat software was for chatting, but no one used the chat. But what it did is it showed us where people were. So we got a live view into the funnel. It was the most emotional, like, impact on us because we would see people go from an ad to a product page. And then from the product page to a different product, which told us a little something.
Jordan:Then we'd see them go to the cart. And we'd see them abandon. Like, damn. You know, almost. We we we one step closer.
Jordan:Then we would see them go to the cart and then the about us page and then abandon. Like, damn. What what is that? Like, oh, they don't know us. They don't trust
Brian Casel:they don't like your photo.
Jordan:Yes. Let's put our well, we had a generic about us page that told nothing. Then we put a picture of my two brothers and I who were in the business, and we explained who we were and what our values were. And then we would see product page, cart, about page, back to the cart, to the checkout to finish. And we were like, oh my god, we have an impact on this.
Jordan:The emotions of the person on the other end, we have an impact on that. The trust, all these different things. So it's like the demand and the price, these, like, very straightforward, like, data points. Yeah. But what the the the brand, the feel, the reputation, the vibe, the the the demand that other people have for it, so you wanna be part of that same cult.
Jordan:The fact that you want to identify as the type of person that buys this type, all of these different things get mixed in with, like, the the funnel funnel fundamental fundamentals of, like, what each step does. And then you realize, oh, I actually have a lot of control over this, so I I shouldn't just be passive and, you know, wonder how amazing it is that people come through it, but you you can lean into that and improve it.
Jason Cohen:I have something for for that that funnel if you want.
Jordan:I'd love
Jason Cohen:to This hear is a thing that I had in the book, but I cut it for space. Okay. Therefore, this is an exclusive.
Brian Casel:Oh, yes.
Jason Cohen:Here you go.
Brian Casel:It's skin gel. So
Jason Cohen:it's exactly what what actually what Brian and Jordan were were getting at. Into because Brian was talking about ICP and Jordan's talking about looking at looking through the, you know, watching people and saying, wait a minute, there's stuff I could do here. Consider this. Let's say in your funnel, I put nothing but the perfect best customers like your ICP only is coming to the top of the funnel on the website. Even if your copy is just okay, but it just is talking to them essentially, like, you're gonna be you're gonna be okay.
Jason Cohen:People will still buy because because they want it so bad. Right? And if your sales team, if there is sales, is kind of bad, it's okay because like they kind of wanted to buy anyway. It's almost like it'll prevent the sale. In other words, even if everything even if you're bad at everything, if I only put ICPs in the top, you'll you'll be okay.
Jason Cohen:Now the opposite. I put nothing but garbage traffic. Yeah. Click fraud, whatever. Right?
Jason Cohen:Now I don't care how good your funnels are and your AB testing, your sales team. Like you're not going to get a lot of customers. What that tells you is the most important thing in the entire funnel is the quality entering the top of the funnel. Mhmm. We just said if the quality is great, it it doesn't really matter.
Jason Cohen:The rest of it doesn't matter. If the quality is bad, the rest of it doesn't matter. Mhmm. So of course I'm exaggerating when I say the rest doesn't matter. Of course it does.
Jason Cohen:But I'm exaggerating to make the point that the first thing enter it, not even a step in the funnel, but stuff entering the funnel, the quality of that is more important than every other step combined. Once you understand that, you realize what Brian said, go get your ICP because that's what it means to have quality at the top. You'd rather
Brian Casel:have fewer clicks.
Jason Cohen:Go ahead.
Brian Casel:Well, if we're if we're thinking about like new founders or people starting up today and deciding what business to go for, what market to go for, who it's that question of who. Right? Like like I that that one exactly that. Like, I I I observe this all the time in in in SaaS founder friends who who've been successful with their SaaS business. It's like in many of those cases, they've done a lot of things right.
Brian Casel:They they work their asses off, but in many of those cases, think they would also admit that like it worked despite their flaws, despite despite the whatever the subpar marketing site design or the or the the product was half built and it's still sold like gangbusters. Right? Like like you just see that demand and and the product market fit and and if you and if you unpack that a layer further or if you go earlier in their time in their timeline, it's like, well, they they chose correctly. They they listened and observed the right signals and and and moved themselves into that into that direction to, you know, to choose that ICP and build for them. Right?
Jason Cohen:If you don't do that but there's there's more to do. Like like someone just said, oh, well then only get ICP leads. Of course, it's a it's a vision statement. Right? But what's different is right now you usually think about how do I AB test and increase throughput through my site?
Jason Cohen:But that's the wrong question if you know the first incoming stuff is more important. So for example, I'd rather have an ad that gets fewer clicks, but the clicks are of higher quality. Mhmm. But that's not how we normally think about ads. We just think click through rate.
Jason Cohen:I AB tested. This had more bigger click through rate, so it's a better ad. False. Mhmm. It's if the ad is more opinionated and strong and so it filters out more people and filters in the right people And my overall clicker rate is lower as a result because it's filtering out the wrong people.
Jason Cohen:That's a better ad. That's not how we normally think, but that would be how you took this information and apply it properly. Or another thing would be how you segment, you know, in whether it's Google ads or Facebook ads or or, okay, social media, other things, like how you segment the the audience is is really important. And again, it's better to have fewer leads that are more poignant. So here's another thing.
Jason Cohen:If you don't do this, then your AB testing in your website also optimizes for garbage because most of the traffic to your site is garbage. Yes. And what do you do when you optimize a step in the funnel, like optimizing the pricing page conversion or optimize the homepage, even a even a landing page click to con go just go on to the next page. What you do is you say, I'm trying to up up the conversion rate. Right.
Jason Cohen:But if 90% of the traffic is garbage, the only way to up that conversion rate in a material sense is to convert the garbage. Mhmm. If you convert that 10% and you get you grow from 10 to 11%, that's actually what you wanna do. That's a 10% improvement. That's huge.
Jason Cohen:But you'll never even be able to measure that. The end is too small. The only thing you can measure is if the shit traffic that you don't want is nevertheless fooled to continue. Yeah. Then you're then the conversion rate of that step goes up.
Jason Cohen:So that's what the AB test will do. Just what you don't want. Again, this is assuming 90% is garbage, which again comes back to the top of the funnel. The more the top of the funnel is garbage, everything else is optimizing the wrong direction actually. So that that that so again, this is quite actionable.
Jason Cohen:Of course, you can't just buy the best leads only, like, of course not. Right? But it changes your mind about like, well, what am I spending my time on? What am I optimizing for? What how do I measure any of this?
Jason Cohen:Another example is like, because of course you can't help but get a lot of weird traffic. Like, I mean, like in real life, okay, fine. But like in real life. So another thing is is segmentation. Like, well, if you have a certain thing that's working really well and and a lot of that traffic is good, you always wanna segment those numbers off from the rest so it doesn't, you know, pollute this good measurement channel or stream with the garbage, and that that helps.
Jason Cohen:Another one is if you can measure end to end more. So like if you're part of the the fallacy here is measuring just one step. Right? This landing page to this next click, that's too myopic. If you can measure all the way to the sale, which for simple products, maybe you can.
Jason Cohen:For complex ones, you cannot. But let's just say the deeper you can measure into something useful, then it does work because you can say, no, I'm not converting just the next step of the funnel. I'm converting I'm I'm measuring my conversion rate to the end of the funnel. If that goes up a little bit, yes, now now you've done the right thing. Hooray.
Jason Cohen:So so expanding the what do you mean convert? Convert to what? The deeper you can convert to what, the more now you really are measuring the thing you wanted to measure all along. And now your testing's working again despite having garbage in the front because now you're measuring against that garbage. So that's another technique.
Jason Cohen:So in other words, there are very specific things you can do. Bam. Like those there are some. So it's not just so there is things you can do, but like, are you is that what you're focused on doing? Or are you not doing all because if you're not doing all that, it's garbage time.
Justin:Jordan, go ahead.
Jordan:Yeah. Have a comment and then a question. This sounds very familiar because it it's it's my problem. But it's not everyone's problem throughout the company and including outside services like agencies. Because only I am really thinking about it from, well, how much money do I have in the bank and how much money am I spending on advertising and how much money am I growing?
Jordan:Whereas others like the advertising agencies focused on their performance of the ads and the click through and who's coming through and how much is being spent and what's the CPC and CAC and all that. And then the marketing team is looking at the marketing side, the landing pages, and the messaging. And then the product team is looking at the onboarding. And then development team is looking at the churn. I'm like, yeah, but I don't care about any of that.
Jordan:Just care about how much money I'm putting in, how much money I'm getting out. And that seems to be more difficult to measure, more difficult to track. It ends up being a lot of gut. A lot of, like, oh, we're going in the wrong direction. This this new ad campaign is actually not bringing in the right people because what's coming out the other end doesn't feel right.
Jordan:The the question I have related to it is you you bring up advertising and ads in a lot of your examples. And one of the things that Brian and Justin and I talk about very often is the Bootstrap community, the let's build a real business community regardless of how how you've raised money, they look down on ads and advertising as like this waste or very risky. And I I I just wanna, like, double click on your always go back to to advertising. Is that because it's measurable or is that you think of that as like a a default channel?
Jason Cohen:Yeah. I mean, there's there's probably 40 legitimate marketing channels that you can do excluding, like, totally unique creative things, which is maybe the most interesting type. I think they just all trade off. So, like, yes, I think that community says ads are bad. And the arguments that ads are bad are very good arguments.
Jason Cohen:It's temporary. It costs money. You're not building an asset out of it. Whereas the ideas, a social media channel or SEO buildup, you're building an asset that pays off over time. It's it's free to to do social media and and and, and write articles and do SEO.
Jason Cohen:What I would say is, sort of like how energy is conserved. None of these are free. That's that's obviously to that the only way it's free is if your time is worth $0. But actually, time is worth much more than what you would spend in ads. You'd say, yes, but I have time and I don't have money.
Jason Cohen:And you say, uh-huh. Right. That's the point. It's not that it's free. It's that there's different forms of it, of of of of stuff like time and money, right, and other things.
Jason Cohen:Energy. I don't know. You could you could list other things. It might be interesting to do that. And I don't think there's literally a law of conservation of energy among these.
Jason Cohen:I'm I'm just metaphorically speaking. If you have money and no time, ads are really good. If you have time and no money, you can't afford ads. So it's easy to just to post hoc justify that by saying ads are bad. Well, no.
Jason Cohen:Like, you can't afford ads. If once you have money, you might try it. And then all of a sudden they're not so bad. So so the good thing about ads is you get immediate feedback. Like, you you do AdWords and, like, later that day, you know about which messaging's work better.
Jason Cohen:You cannot get that from SEO ever. Mhmm. But it's not an asset. SEO is. So all I would do is say, well, obviously, there's all these different kinds of things and they all have these pros and cons and timelines and different kinds of costs.
Jason Cohen:So they're different. And also, I agree that there are some businesses where some channels will never be right. Mhmm. Right? And so, okay, cool.
Jason Cohen:You know, you might be surprised which ones those are and you might not be surprised, you know. So I agree with that too. So I feel like a lot of that is kind of post facto justification rather than than actually understanding. But that's why when when they have the arguments against advertising, they're correct. They're just not acknowledging the the sort of totality that I just said, which is what I think reality actually is.
Jason Cohen:And then that was the second thing you said, but there was a a first thing before the ads.
Jordan:Oh, just the the challenge of viewing the funnel from end to end as the founder.
Jason Cohen:Right. And then how to manage Yeah. And different departments are myopic.
Justin:Mhmm.
Jason Cohen:So here's a here's a okay. Let's do another physics example. There's there's there's the, like, uncertainty principle. If the more you know about, you know, the less you know about momentum and vice versa or less you can be precise about. Right?
Jason Cohen:So to me, there are these in in complex systems, there's, again, not literally, but, like, figure figurative analogies of this. And one of them is in the stuff like data and funnels like you're talking about. So ideally, you would you might say everyone in the company would have the end to end funnel view. And although they may be working on or they may have control over one mech one set of mechanisms within that system, which is obviously true, they nevertheless are all optimizing across the whole system. That's what you would like.
Jason Cohen:Because, of course, you want maximum throughput or or quality, you might say, for the whole system. And then you have people who are specialized in different areas working on it. That's what you want. But you have this uncertainty problem, which is anything that's end to end has all these characteristics that make it very hard to operate. Like, it will take you a year to find out whether a new marketing source creates people who cancel more often than other people.
Jason Cohen:And you can't speed that up because whether they cancel in six months takes six months. Like, there's nothing you can do to accelerate the pace at which you can find out whether someone's gonna cancel in six months. You have to wait. And and also, like, if it's a brand new channel, you probably need to give them chances to optimize a little bit. Like, you can't just declare, you know.
Jason Cohen:So that's why I say it might take a year and there's nothing you can do. You can be smarter and less smart. You cannot make it faster than that. Well, people can't operate on a on a cycle on a on a feedback cycle of a year. They have to op they have to have something faster.
Jason Cohen:But those things that are faster are probably more localized and don't tell you the full picture. And and so this is the uncertainty principle of of metrics and timelines you might say. Right? So to me, it's like, okay. What do we do with that fact?
Jason Cohen:The and and timeline is only one of many things to me about metrics that you might you might you might you might observe. So to me, it goes, okay. That means there's not one true metric. That's a that's a stupid idea. We just explain why that doesn't work because you need different so you need different metrics for different things, different goals or operational or whatever.
Jason Cohen:You need different ones. So the real question is, what are the what's, like, the taxonomy of metrics that together tell me all the stuff I need to know? And we cannot think that what that that a given metric will tell us things other than what it actually tells us. None of them will be the totality of what we want. And somehow a synthesis of all this is how we have to operate even though we don't like it.
Jason Cohen:Just like, sorry. You're just never gonna know where the electron is and where it's and which direction it's going ever, but that doesn't mean you can't have some measurements and do some stuff, and that's what we're gonna do. And so still, I would come back. I would I would still it's still useful to me to do what you said, which which I think is right and come back and like, alright, everyone. Let's keep our eye on the on the prize.
Jason Cohen:The prize is overall optimization. Although we can't run our day to day based on that, comma, it is the like, this is why I like vision statements. Vision statement is something like you would like that to be the case. You you're you're trying to do that. You may never even reach it ever, but, like, at least it tells us what we would what we are trying to do if we could.
Jason Cohen:Mhmm. And that is still useful because it gives us like that anything that's worth toward that is correct. Anything that's like to the side or away from it is not right. So I I would use your statement as a vision statement rather than a mandate, an operational mandate, which is we're trying to make it so that everything that comes in the top of the funnel is perfect and and, you know, people stay forever and we're all trying to do that. We're trying to optimize for the whole funnel.
Jason Cohen:Now since none of us can day to day measure and do that, we will need things that as best we can tie into that vision. And we'll need to check-in. So I'll because we can measure that vision over a span of months. So we will. It's just that we know that, like, if we make a change today, we're not gonna see that number change immediately.
Jason Cohen:And and even in six months, we may not because it's multifactor. So many different other things go into it. We still won't know. We just have to acknowledge that's true, but we can still measure the overall vision, which is the overall funnel thing, like you said, that we're still going to measure because that's what we're trying to do. We will have to use our wits and our yes or intuition and where we can data.
Jason Cohen:And sometimes we'll think of a slightly better metric that still doesn't solve the whole equation, but like, oh, this one's better than before. And why did we even think of that in the first place? Because we had this whole thing in mind, and we were always trying to think how do we get closer to that impossible ideal. And so the uncertainty principle says we can never know both at the same time with complete precision. The more we know about one, less about the other.
Jason Cohen:But there's still there's still scenarios where we don't know about either one. And scenarios where we know a bit about both, just not in great detail. Like, there is better. Like, this is a limit. That doesn't mean there's not better and worse, like, things.
Jason Cohen:You know? Mhmm. Sure. There's a limit. We're never gonna ask you all to have the perfect metrics, but that doesn't mean we can't be better if we keep in mind the prize.
Jason Cohen:And so I think that's the right it's not a balance. It's simply like, let's keep the prize in mind. Let's have everyone thinking about that. Let's occasionally, like, maybe quarterly think, are there slightly better ways we could be getting at that even if it's intuitive? Okay.
Jason Cohen:But if you're if you have that in mind and you're and and you your your unconscious is is, like, processing your life with that backdrop, Your intuition might in fact have be have better things. So I'm okay with intuition as long as like we're sort of in the going in the in what we believe is the right way as best we can.
Brian Casel:Yeah. I mean, I that's I wanna go get maybe dig into that some more. What I'm curious about, I think for a lot of people who followed your work over the years, you know, you're such a clear thinker and writer and you present ideas and arguments and theories like in such a clear sort of like clear cut way. Right? I'm I'm wondering how that actually maps to your real on the ground experience, especially like if you can share any stories or anything from like the WP Engine years, especially because if I think about WP Engine, it's in the WordPress space, which is like notoriously noisy, right, like like I would imagine that you have all these marketing funnels and optimizations that have that have evolved over the years, but then you have these spikes of noise, whether it's like news in the WordPress space or maybe not even the word, just like randomness, right?
Brian Casel:Like how do you as a founder, how have you navigated that? How do you keep your head straight? How do you do it with your organization, your team? Like what how like how do you go from like the the clear cut theory in a blog post to here's how it plays out in the real world, you know?
Jason Cohen:Well, yeah. So I'll give you an example of the metrics. Yes, And I do have an article. It's I think it's called KPIs or something where I show my particular process of thinking about metrics. Like I just said, except I have a chart where it's very practical.
Jason Cohen:Like, you can take this chart and and actually make these metrics and and keep it straight. So for example, that article came because I had this idea for years at WP Engine, and I refined it and used it with teams over and over again and refined it until until it seemed to just work without having to be changed all the time, like, each time. Then I was like, alright. Yeah. That's it.
Jason Cohen:And I like, alright. This is my framework. Again, framework, you have to be careful. Like, you can't a lot of frameworks do work for one org and then not the other, just culturally another reason. So I'm not pretending like this is the universal thing that always works.
Jason Cohen:It just worked for us really well. So, you know, take it for what it is. Anyway, so I took what's what's in there, quite literally sent the article like like, just as an example, with the data team, which meaning the internal corporate data team at WP Engine. And they were they were sort of re rethinking how to do all their work and what tools they're using and what metrics they should use. So we used exactly this article.
Jason Cohen:In fact, I think the article was already published at the time. So I was literally using this article. And it was like it was interesting. It all the metrics on the data team were things like, are we syncing from the source to that source? Is this thing broken?
Jason Cohen:How would we know that? What are these time frames? And that's all true. Those are all good operational metrics for the team itself of like, are they are they is their own work and own systems doing whatever the team wanted it to do? Right.
Jason Cohen:Very team centric. But to your point, like, those are the easier ones because it's your stuff. What about the customer? Now in the case of the data team, the customer is the the rest of the company, especially the other data analysts in the rest of the company, but even other people too. That's their customer.
Jason Cohen:And they had no metrics and no conception about their customer. So I would say things so they would do things like, oh, so and so and so other departments mad at us because because, I don't know, we didn't work on this thing that they need and but it was really urgent. We didn't have the time. So in other words, they're talking about normal product development and client work. You know?
Jason Cohen:And but since it's all within the company, like, we can do whatever we want with it, which is a nice kind of microcosm. And so I was like, well so we were talking about this. Like, I don't even know what metrics we would use to to know to say, like, do we deliver something? Because, we may or may not be able to do any one task in any one sprint. So, that I don't even know what a metric would be.
Jason Cohen:And I said, okay. Well, just take a step back and ask, and this gets back to the vision. Just if you imagine, like, if just never mind our tech and how we do it, but like our customers, all these people in the company, what would it look like if if we were like just the best ever and just crushing it customers. What would that look like? This is, of course, what the vision statement is.
Jason Cohen:It's describe what the future looks like if we're crushing it.
Justin:Right? Yeah. Yeah.
Jason Cohen:What we look like if we're crushing it. And they're like, well, I don't know. They they get back to the numbers. I'm like, no. No.
Jason Cohen:Not numbers. Just like without numbers. What what what would and just like, they would just I don't know. Like, I guess if you just talk to any of them, they would be happy with us. And and then like, yeah, I agree.
Jason Cohen:Like if they all said, it's awesome working with the data team, then that would be success. Mhmm. Like, yeah. But we don't know what's awesome. We don't like, oh, I know.
Jason Cohen:I know. I know. They may not even know. But you just said it. You just put a vision statement that that you want everyone to and so how could we start to in fact measure it very poorly?
Jason Cohen:Like intentionally measure it poorly. Like, I know it's hard. Like, how would we measure this even poorly? Well, we could give them like a really dumb survey, really basic survey, not NPS, of course, because they're not referring us to a friend. Anyway, I hate NPS.
Jason Cohen:But just the basic survey about how they feel with it like a fill like a big fill in box so they can just type shit. And we could just send that every month to 20 of our so called customers.
Brian Casel:I love how, like, so many of your ideas start with, like like, just start with the ideal. Let's work backwards from that. What needs to be true and what needs to be true.
Jason Cohen:So they did. And the first thing that was interesting is it wasn't as bad as they thought, which is which makes sense because like if you deliver data to another person and it's just what they want, often what happens is nothing. They just use it. Right? So you have no positive feedback.
Jason Cohen:Occasionally you do. But usually people are like, oh, thanks for that. Right? But a lot of times, if you're doing your job well in data or security or web hosting, if you do your job well, you're invisible, then that's a good thing. Mhmm.
Jason Cohen:Like, hooray. I didn't think about my website performance today. Right? That's good. So that but that means you're not getting the positive feedback.
Jason Cohen:So when you do get feedback is when people are upset. And they're like, ah, upside down, whatever. And you're like, ah. So that's all you see. So your perception is there's problems all the time because there are problems all the time.
Jason Cohen:It's just that you're not seeing how that's how that's counterbalanced by by when there's not. So first of all, it wasn't as bad, which gate which was a morale boost because they kinda felt like maybe people were were upset with them. And I was like, oh, no. They're actually fundamentally not upset with us. They just want certain things.
Jason Cohen:You know? Also, just the fact that they were curious about whether their customers were happy or not made their customers like go, oh, oh, that's good. And all of a sudden they were more constructive in their feedback. Oh, you actually wanna improve. Oh, well, you know, it's easier to be nicer in that case, more understanding.
Jason Cohen:And if you think that maybe your feedback's not being heard, even if it is being heard, you think it's not. So the whole dynamics changed to be better right off the bat. And then, of course, they did look at this and they did blah blah blah, and the scores came up over time. And what's funny is both parties knew. Like, we know this is a score you're using.
Jason Cohen:And I know you know that I know. Right? And yet it was still useful because it was a way to just communicate about this thing. It's sort of almost an excuse. And then they started meeting more often with the with the customers about what they needed.
Jason Cohen:And even when they said no, no, no, if they explained why the customer was happier. So see see, it's not necessarily that they needed higher throughput. But if they explain themselves, that would also make the customer happy if the customer didn't get what they wanted. And they were like, oh, all we have to do is just explain it. I can do that.
Jason Cohen:I'm like, yeah. I know you can. This just makes you think of it because it's a number on a board somewhere, you know. A number that you and I know is gamed and not even that accurate. Yeah.
Jason Cohen:But just it's causing us to act in this in a better way anyway because we said what we wanted and then we sort of, you know, made a little something or other that made us act that way. The number itself is sort of irrelevant and even the questionnaire is sort of irrelevant. All these secondary effects is what's relevant, and it worked. So that's just a so I I I know you asked about external things, but what I think is interesting about this is how little it took to work and how actually not that meaningful the metric was for it to be useful. Mhmm.
Jason Cohen:We're all honest about that.
Brian Casel:Someone just like a mechanism to to get the team talking and observing these things. Right?
Jason Cohen:Right. Now if some if some VP somewhere thinks that number is more than what I just said, that's bad. Mhmm. If they're like bonusing you based on this number, uh-oh, now you just broke it because you now you're interpreting this as more than what it is. And right?
Jason Cohen:But as long as we're allowed, you might say, to use it in just the way that it is, no more, no less. Mhmm. Oh my gosh. It's so great. Right?
Jason Cohen:And of course, the smaller the company is, the more you can enforce that because it's it's not so much chaos to to to rein in. But but and and the fact that we controlled the whole environment because because we were the you know, we, WP Engine, we're also the customer. So that allowed us to so it's a much more controlled experiment, you might say. Because to your point, there's things that could happen externally. We do it.
Jason Cohen:But how do we really know? There's so much phony factors that go into that that end up into maybe cancellation rate or growth or whatever. It's just very hard to pinpoint what is it that we thought or said or did affect that. Whereas in this microcosm, I just said it was much more it was more clear. Such a smaller system, totally controlled.
Jason Cohen:So it's easier to see it in effect and see how it it does work. It is helpful. So that's why I thought it was an interesting example.
Justin:That's great.
Jordan:Very grateful that we addressed the danger of overemphasizing data.
Jason Cohen:Oh,
Jordan:yeah. And and and and the word allowance that you used, I feel like that's my communication strategy with my team. Mhmm. Is to say, you can come to me with data, but I'm also to say, great. That's one part of the picture.
Jordan:That's not, like, the end all be all of of what this means. And you need to be okay with that and here's here's why.
Jason Cohen:I I would go beyond that. Not only are you allowed to, you must not think that data is the only answer or even that the data is always right. Like, is are the data that's collected even right? We're not sure. Are we interpreting it correctly?
Jason Cohen:We're not sure. We're using stats. Are those right stats? We're not sure. Is this the full picture?
Jason Cohen:You know, certainly not. It is certainly not the whole picture. We know that definitely. We just don't know exactly how much. You know?
Jordan:People want it to be definitive. They they want it to be accurate. Not.
Brian Casel:And the
Jason Cohen:people bringing you the metrics are also should not be bringing you those metrics as if that's the definitive they should say, and yet and yet despite these metrics we think and that's and that's good. So metrics should be informative but never decisive.
Jordan:Yeah. That's awesome. Informative, but not There's
Aaron Francis:so many
Justin:great moments in this. Thanks again, Jason. Thanks to everyone in the chat that showed up. We had some great discussion. There's so many things the chat brought up, and I have I'd love to have Jason back and talk more about ICP, especially how do we get more of our ICP in our funnel.
Justin:So we'll have to have Jason come back. Everybody, go to preorder. Jason didn't tell me to say this. Go to preorder.hiddenmultipliers.com and get all of Jason's wisdom on this particular topic in one condensed little package. Why wouldn't you do that?
Justin:That's gonna be the best $24.95 you ever spend. So go check that out. I've pre ordered and yeah. Thanks, Brian and Jordan. Good to see you again.
Brian Casel:Thank you. Thank you, Jason. Awesome.
Justin:Thanks, everybody.
Jason Cohen:Thanks. This was fun.
Brian Casel:Bye. Alright. See you.