The hard part of starting a software company is learning what customers will actually pay for. No coding your first product–or paying a coder.
This means doing the hard work of learning and validating with potential customers before building.
Rob Walling has published his Startups for the Rest of Us podcast every week since 2010—he recorded episode 855 the morning of this interview—and has written five books on bootstrapped SaaS, with a sixth on the way.
He started five companies before turning to investing, all of them bootstrapped, and sold Drip in 2016.
In 2018, he and co-founder Einar Vollset launched TinySeed, the first accelerator built for SaaS bootstrappers.
TinySeed now writes $150,000 to $250,000 checks to companies doing $2,000 to $40,000 MRR, funds one to two percent of applicants in batches of 10 to 20, and runs a year-long program instead of the standard 90 days.
TinySeed has invested in 241 SaaS companies so far.
This year TinySeed is skipping a batch for the first time since 2019 — not because the portfolio is struggling, but because Rob wants to do the work on which moats still hold in the age of AI before writing more checks.
Their portfolio’s SaaS revenue graphs are still climbing while the public market has repriced the entire SaaS category, a gap he calls the widest he’s ever seen between sentiment and reality.
Rob has just revised his popular book, Idea to Traction, for the AI age. It’s for founders to turn software product ideas into actual businesses with happy customers who pay you–for years.
Building software products used to be hard and slow. Now it’s not.
The biggest challenge has moved to validating with customers–before you start building.
“Just because people can build things now, they think they don’t have to validate. When I turned Idea to Traction into a video course, someone bought it and asked for a refund, which we gave.
“I wanted to know why, and they said the first third is about validating, having conversations with customers, and getting a landing page. They told me they don’t have to do that anymore, because they can just build a product in a day and launch it. And I told him, No, you are wrong.
“So I went back and revised my Idea to Traction book to address that exact objection. I have all these examples of second- and third-time founders who are doing validation, because they’re experienced and they know they need to. Steve Blank said the same thing: everyone was showing up with a vibe-coded prototype and hadn’t talked to a single customer, to their detriment. That’s the biggest myth I’m trying to fight.”
This problem exists for up-and-running companies too.
Check out Rob’s latest book, Idea to Traction, on Amazon.
Check out this candid interview with Rob Walling on the Practical Founders Podcast.
