Smash Notes
Turning a Side Hustle into a $9k/mo Business, with Pat Walls from Starter Story
Pat Walls (@thepatwalls) is the founder of Starter Story, a site interviewing successful entrepreneurs, and Pigeon, a Gmail CRM extension. Prior to this, he co-founded Delite, a SaaS platform for B2B wholesale orders, that would shut down later on. From graduating from UCSB with a degree in economics to learning to code, find out how Pat’s drive for a new…
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Notes
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Pat Walls founded Starter Story, interviews with people who have built businesses, and Pigeon, a Gmail tool he describes as a CRM. On The Failory Podcast he is introduced as a 2013 economics graduate of the University of California, Santa Barbara, who joined Deloitte and, on the LinkedIn read on The Failory Podcast, handled an S-1 for a high-profile IPO. He also ran a project called You Don't Need WordPress and a 24-hour startup challenge. Before Starter Story he co-founded Delite, software for wholesale orders between brands and retailers, which later shut down.
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Pat Walls says he never knew what he wanted. He did poorly in high school, started at community college, considered law and English, then accounting, then technology, then code. He had been an Apple-obsessed teenager, but the family was outside the industry, and founding took more than ten years. After the University of California, Santa Barbara, he joined Deloitte because a Big Four job looked solid and San Francisco might lead to startups. He lasted under a year. It was too corporate. Startup accounting work there led to about eighteen months at Anaplan, closer to implementation. A coding bootcamp around late 2015 or 2016 made him a software engineer. At the time he was only taking the next step.
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Pat Walls says leaving a salary was another turn of the same habit: find the next challenge. Once he could code, he did not want to spend 30 years as an engineer inside someone else's firm. He wanted the skill so he could work for himself. A startup job is exciting the first time, and the second, and the third. After that he wanted to build for himself rather than carry out someone else's plan, and to have the impact as the founder. On the Failory episode, the decision leads straight into Delite, the first startup he created.
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Brandon does his typical question of asking the founders how would they describe their startups to a 10-years-old person.
In this occasion, Pat shares what Delite, his failed B2B SaaS, was about.
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About six months after a coding bootcamp, Pat Walls was a full-time software engineer on a roughly nine-to-four schedule. A roommate who ran a manufacturing business had an idea, and Walls, already building small side projects and looking for something real, joined immediately. They built Delite, software for wholesale orders, at night and on weekends. They never planned the selling. Because the roommate needed Delite, they treated the idea as validated and expected customers at launch. Nobody came. Walls then left the day job for demo calls in a coffee shop, and half the prospects missed the call. Delite already existed, so stopping felt impossible. He says that is where it began to fail.
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Pat Walls says Delite was a cool idea rather than something buyers had to have. He and his co-founder did ask, and people said they wanted Delite. They did not want it enough to set Delite up. The names he was counting as customers were not actually using Delite. The lesson he names is to watch usage. A customer count is meaningless if the customers never open what you shipped. He agrees with The Failory Podcast that Delite went looking for a problem instead of starting from one.
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Pat has applied to Y Combinator twice and has been rejected in both of them. He shares the story behind applying to YC and his view about funded startups.
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Comparing Delite's buyers with consumer subscriptions, Pat Walls says a bootstrapped founder will usually collect money from other operators more easily than from individuals. He does not pay for Netflix-style subscriptions himself. Operators will pay, because a tool frees time for more important work and because the expense reduces taxable profit. Teams that have raised capital spend even more freely. He pictures a San Francisco engineer at about $120,000 a year, roughly $10,000 a month. Software at $100 a month is about one percent of that single salary. Ask the same person for $10 a month to try a new Netflix and the answer is usually no.
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Besides the market problems, Pat Walls names two mistakes at Delite that he thinks were avoidable. The first was a first-startup belief that building something appealing would make customers appear. There was no plan to go get them. The second was co-founder alignment. Everyone still had a full-time job. Building was fun at the start, and when the day job got heavy, Delite lost. If one founder kept working and another vanished, the resentment was enough to pull Delite apart. He separates the personal failures from the market reasons, and he says the personal ones could have been prevented.
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Pat Walls ended Delite soon after a Y Combinator rejection. The will was gone, and the idea had belonged to his roommate. He still wanted to start something. He calls it catching the startup bug. He left a job he disliked, moved to New York, and took another software role. No one would co-found with him, so he went alone, on work he could do at night without ducking out for sales calls. He studied marketing writing, read Indie Hackers, and spent three weeks on a pet-niche affiliate site despite not owning a dog. He lost interest, scrapped the pets, and wrote about entrepreneurship instead, as a way to learn blogging and meet people. The new site was Starter Story.
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The Delite fact Pat Walls carried into Starter Story was that nobody used Delite. Starter Story was the opposite. People read it, enjoyed it, subscribed, and sent it to friends while he was still out promoting it. He also decided to start smaller. Delite, and the scale Y Combinator is built to fund, had been too ambitious for how little he knew. He did not have to create a giant startup. He could start a small blog, and he already knew how to code a website and ship it.
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Pat shares the behind scenes of getting the first interviews, going viral on Reddit and Hacker News, building an email list and growing a content site.
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Pat Walls ran Starter Story for a year before leaving his job. Each day was an argument with himself about walking out, and he thinks the job helped: it forced priorities, and nights-and-weekends work that lasts for months is evidence to continue. The resignation followed a stunt. He tweeted that he would build and launch something in 24 hours and stream it on Twitch. Pieter Levels and other makers retweeted it. About 10,000 people watched. It was number one on Product Hunt for the day and number one on Hacker News. Starter Story was already earning, and he had planned to resign in six months. He resigned the next morning.
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Pat shares the story of his 24-hour startup and how the success of it motivated him to start a challenge for people to do the same, in which +200 entrepreneurs participated.
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Brandon asks Pat about the science behind going viral in Reddit and Hacker News with what he publishes on his site. Is there any way to replicate virality or is more of getting lucky?
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Pat Walls says a revenue figure is the point of Starter Story. A founder who wants the front page has to say what they make. Plenty of people want the interview until they hear the rule, then withdraw, sometimes because investors forbid disclosure and sometimes because they cannot admit weak sales. He picked the habit up from Indie Hackers and from Pieter Levels. Naming the gap, too few customers or too little growth, is how you find the fix. He practiced on himself, writing about $3 in month one, his first dollar online, and about 1,000 visitors. A monthly post, win or miss, brought readers. He treats the honesty as marketing as well as a rule.
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