Episode 38

How Niching Down Can Help You Dominate Your Industry [Karl Hughes]

by | Apr 7, 2021 | Podcast | 0 comments

Just because you’re in a competitive niche doesn’t mean you need to get out. Karl Hughes is here to share with us how he has managed to carve out a spot in the content marketing space by niching down. Listen in to learn how niching down has allowed him to create a profitable content marketing agency.

Nick (00:12): This is the Nine-Five Podcast. And I'm your host, Nick Nalbach where we get into the minds of entrepreneurs and people just like you. So you can start, build and grow your own online business. Okay, we'll come back to the Nine-Five Podcast. This is the show where we bring on entrepreneurs and business owners to help you start and grow your own business. And today we have Karl Hughes with us. So Karl, welcome to the Nine-Five Podcast.

Karl (00:44): Hey, good to be here, Nick.

Nick (00:45): So Karl, I'm excited to get into everything with you because you have a very niche business that you run and I want to get into all of that. So why don't you just to kick things off here? Why don't you give the listeners a little bit of an idea of who you are and what it is you actually?

Karl (01:02): Yeah, sure. So, uh, last year I started my own niche content marketing agency, essentially. Uh, we're called draft.dev. And what we do is we produce technical blog posts and tutorials for companies that want to reach software engineers. So because it's so specific, sometimes it's helpful to get sort of an example that might be a little more tangible. Uh, let's say you're a web hosting company and you want to reach, uh, software developers that are gonna, you know, put their products. They're building out onto the web on your, your servers. Uh, if you want to do that and you want to do content marketing, you've got to find a way to create content that's interesting and compelling to software developers. And the challenge there is that, uh, you can't just get a generic SEO copywriter to write something that's super helpful to software engineers. Um, so for example, in the hosting space, uh, digital ocean just recently went public.

Karl (01:53): Um, and yet they have done this content like developer driven content strategy for the last several years. They have over 3000 tutorials on their blog. Um, and essentially what they're doing there is hiring developers to write for other developers to showcase their products. So we sort of take that same model, that idea that digital ocean does at scale. And we zoom it down to the level where a small, um, series a or series B level startup can kind of get access to that same kind of content without hiring a whole team of editors and writers as DigitalOcean has done.

Nick (02:24): That's so cool. What made you like narrow in on this? Like why engineering?

Karl (02:32): Right. And like, it's, it's weird because there are very few other companies doing exactly what we do and, uh, that was kind of by design. So I have worked in, uh, funded software startups for the last 10 years or so, uh, mostly as a, as an engineer and then a manager and CTO at my most recent role. And so I knew, um, I guess I knew there's a lot of companies that want to reach developers, right? Because they were trying to reach me all the time. I had even written a few blog posts for some of these companies for fun. And then for, for profit, occasionally they would pay a few hundred bucks for you to write an article. And so I did that for some friends and then I did it for people that would reach out. So I knew there was some money in this space, but I didn't really realize until I started draft how much demand there was, how big the sort of market was getting.

Karl (03:19): Um, and so what happened was last year, I was with a startup that was an ed tech and we were selling to schools. COVID hit it, really put a big damper on the business's growth. And so I sort of took a step back and said like, what do I want to do next? I was kind of ready to move on and starting something on my own seemed like the next logical step I had Ben with like the first employee at two startups. And so I really knew what it was like to go from the ground up, but I had never been the founder. I'd never taken that level of risk. And so I kind of thought to myself, like, what are the skills that I have that are hard to replicate, but that I enjoy doing that I could then apply to make money from.

Karl (03:56): I mean, this is like fundamental, is that, is it, that was really how it started. It was like, I like to write and I like software, uh, what can I do with that? And so I started looking at who pays people to write. I started, uh, it's kind of like I, when I started this last may, I just was thinking like, well, maybe I can make some side money and figure out what I'm going to do next while I'm writing. And it was fun. It was interesting. And got my name out there a few months in, I had way more clients than I could handle. And so I started bringing on other writers and thinking like, okay, maybe there's a way to scale this. And it's just kind of ballooned this year has really gone. I don't know. It's just grown like, like way more than I anticipated. And so we now have about 50 writers. I've got a couple editors, I've got a, I'm trying to hire an account manager now. Uh, so basically all I do, I mean, you know, from these early days of like nine months ago, I was writing my every article almost. And then now I just do sales. That's like, it's so weird to have made this huge transition because I'm an engineer. Like I'm not a sales guy, but now I guess I have to identify as fun.

Nick (04:57): That's awesome. Well, congratulations, man. That's awesome that you've seen success just nine months in and I'm really, I have a couple of questions that I want to get into about the actual, like niche itself, like how you kind of decided on that. But before we do that, what I'd like to do with all the guests that I bring in the show, right. When we get started here is ask them what their superpower is. And for everybody that's listening that maybe new to the show by superpower. I mean, what does that one thing that you just feel that you are a rockstar at, like you think you crush it in this area, maybe people come to you. If they have questions about this specific thing, basically just something that you feel like you are the man at, what do you think your super power to actually be?

Karl (05:35): It's funny. Cause I've been listening to several of your, your guests answered this question because when, when I, when I heard it, I was like, I don't know how I would answer that at first. And a lot of them are because they're entrepreneurs. I think they have these, like they either say like it's a lot of things or it's a blend of things. And to me, that was what stood out when I thought about myself about, about this question too. So me personally at this point, I think what I'm really good at is a blending understanding of technology and communication in one form or another. So that means taking a really complex technical topic and breaking it down in a way that other people, whether they're in the field or not can understand it at least at a like rudimentary level, which is really, really powerful.

Karl (06:17): Um, and I think that's what lent, um, that's sort of what drove me into writing is strived me into, I've done public speaking a lot, uh, spoken in a lot of tech conferences and things like that. Um, and I think all of that is driven by this blend of like communication and technology. And I think what I've found in talking to a lot of service entrepreneurs is just that blends of skills tend to be very, uh, profitable in ways that you wouldn't expect. So if I were just a pure communicator, pure marketer, I never would have known about this software developer niche. I never would've been able to write about this. I would have just written generic content and maybe had a really hard time differentiating. And similarly, if I were just an engineer, I probably would have gone into being like a freelance software engineer. And so I would never have thought about this weird blend of content and content marketing. And so I think, you know, to me, it's like, uh, being able to have these two skillsets that are both growing at different, you know, different levels, but growing equally every or different amounts, but growing every year, I think has really led to where drafts has taken off.

Nick (07:17): That's really cool. What made you like marry those two things together, the technology and communication? Like what, was there something specific that motivated you to do that? Or was it just something where you're like, Oh, I like this, I like that

Karl (07:32): Let's do it. I mean, there's, there's two things that drove me to continue to pursue drafts. So initially it was, I liked these two things. Let's see how I can do both of them together and have a good time and learn something. And, you know, I, I kind of, when I first started, I thought doing this kind of business will force me to learn sales. I had never done sales or marketing before. And so I thought, if I just say, I'm going to do this, I'll have to go sell it. And I'll battle, that'll teach me sales and then I'll know this new skillset in entrepreneurship I've never had. Um, so that was the original motivation. But, um, actually I think going, getting in further, what I've realized is there's so much pent up demand for this, this like specific set of skills and this kind of content that the market has almost driven the growth more than me personally.

Karl (08:18): Uh, there's a guy out there named Justin Jackson who talks a lot about startups. And one of the things that he mentions and writes about in a couple of his blog posts is how the sort of force of your market, the growth of the size of your market drives your business almost more than anything else. And I think that's kind of true, like there's this right place, right? Time effect of like, I just happen to be offering a service that is really compelling right now at this moment in history. And if it had been 10 years earlier, nobody would have cared. If it's 10 years later, maybe nobody cares again. Uh, our markets move really fast these days. And so I think there's, there's, there's kind of this, like, just try a lot of things until you wiggle way into a market. That is all of a sudden just sucking you in. You can't stop.

Nick (08:58): I guess I want to talk about that a little bit, because that is really where as an entrepreneur, as you're getting started, a lot of that is just kind of testing the waters and seeing where you can kind of fit in, but also getting feedback. So obviously I'm trying to think there was a specific book out a feedback loop. I can't remember the name, if I can think of it, I'll throw it in the show notes for this episode, but we're talking about a feedback loop. So you put something out there and then you get feedback on it. If it's good feedback, it's bad feedback, whatever you're able to make an adjustment and then continue putting it back out into the world. And if you need to make pivots, you can make pivots, but it all stems off of getting that feedback. So I think it was really interesting that you started this thing and you kind of got that feedback. You were paying attention to everything going on and you're like, Hey, there actually is a need there's demand for this thing that I have to offer. How do we ultimately propel this out into the market further?

Karl (09:49): It did take a couple iterations to figure out the exact way to position it. Um, so, you know, when you say that, it makes me think like initially when I first started, I kind of said to my, or said on my landing pages, you know, we'll write any content that is aimed at software engineers. Well, that's really broad. So what it meant was that people would come to me and say like, Oh, could you write our technical docs for our product? Could you write our, um, emails? So we're going to send out to engineers on our email list. Could you write our internal company blog that tells about our engineering teams projects they're working on and, and then there'd be some people talking about marketing. And, and so I kind of tried all those things originally. Like I, I did a little bit of all my, I even did some like ghost writing and things like that that were, I'd never done before, had no idea what, what they were going to be like, but just wanted to see, like, what is the ROI of these different things and how repeatable would they be?

Karl (10:39): So when I went into this, I knew I didn't just want to be a content writer for ever. I knew that if this was either a stepping stone to something else or it was going to be a nice little placeholder. And so I looked at all those opportunities with the like, who's ready to spend money. Are they ready to spend a lot of money? Are they really price sensitive? And then which of these tasks could I actually pass off to someone else someday? So which one doesn't rely on me? I think a lot of service-based businesses go for the high ticket consulting, uh, products or services, because it seems like the hourly rate is there, right? So like I could have gone and offered technical content strategy services for $200 an hour of $250 an hour. Uh, and I could probably get to some really high rate where I would only have to work a few hours a week. I'd make good money, but it would never be without me. I would always have to require me to have really strong input into that business. Whereas draft pretty quickly, I was able to pull out of the writing and the editing and hire people that were better at those components of the business than me, because it's not so strategic and kind of built around my unique knowledge.

Nick (11:42): That's really, that's really interesting. Yeah. That's awesome. I guess I kind of want to get into before, before drafts started and then talk about like, I really want to get into down. Cause I think that's something that we all kind of don't take too seriously. It's something you hear all the time. It's a terrifying thing to do because you're saying, okay, there's all these people out there, but I only want you to target on this people and trust me at work. And you're like, Oh, I'm going to skip out on all those people. I wouldn't want to do that to myself. Um, but before, so you were talking about working for a couple of different startups and you were like the first employee kind of helping build those startups, essentially. What was it like with the pandemic and all of that happening? Was there anything specific that you knew either early on or throughout that process that made you say, like, I really just want to start my own business.

Karl (12:34): Let's see, you know, like a lot of people who are entrepreneurs, I've always been really, uh, I've always touched on entrepreneurship. Um, so while draft is my first full-time company that I've really taken seriously. I kind of put a big asterix by that because in college I started my career in web development. I actually studied mechanical engineering, but I learned to be a web developer by freelancing for local businesses. I told them I could learn to build a website and then I learned it and then sold that service. And I made, I realized I could make way more money doing that and learn a skill. Then I could work in the desk job at on-campus or whatever. Right. So, uh, maybe there's always been this side of me. That's been entrepreneurial. And then when I left, I got out of college, I got into being a professional software developer.

Karl (13:17): I went immediately. I was gravitated towards these really small companies because I wanted to see the whole process of a company being built. I didn't just want to get stuck at, you know, actually to zoom back even further. Like my internships in college were with huge companies, GE Siemens, places like that, where you're a tiny little speck in the world of their business. And it was just not interesting to me. Like I realized that was not fun. I didn't have any control. It was great money, but it's like, you just it's. Everybody is working for the weekend. So long story short, I knew I wanted to work with small companies where I could really make an impact. And I realized quickly that early stage startups also don't care about things like, uh, your, your technical credentials. They just want to know, can you get the stuff done?

Karl (13:59): Can you get stuff shipped? And can you make progress? And so it's not like you have to have an advanced degree. You don't necessarily have to have 10 years of experience to be a manager. Like all these things, you get to skip the line in a way. So again, the entrepreneurial side of me is always like those sort of really, uh, galitary in environments where you just like, if you can do it, you go do the job and you figure it out. So that part appealed to me. And then, you know, the other thing that was really helpful about sitting in working with these startups from an early stage is that you get to see the mistakes they made. And I think when you, you know, you want to talk about niching, every startup I was with before struggled with, with narrowing their market enough.

Karl (14:37): And I saw that. And every time I kept thinking, like, you know, the advice keeps people, keep telling us narrow down who your customer is and we're not doing it because we were afraid we faced this exact same problem. Like I saw it, not just because it was like a third hand, somebody telling me a story experience. I actually saw it living right there in the startup. And so I think that was really helpful. Like it's, I always think this about advice like taking advice from other people is just almost impossible. Like you can listen to stories and that's kind of helpful, but really you almost have to live some of this stuff and just fail and screw it up on your own. And I was lucky enough to do that while being a employee who's a little bit shielded from the risk of starting my own business. Um, and I think that was a lot of why it was easier out of the gate to get drafts started. Cause I had just seen this so closely first

Nick (15:21): And everything that you're saying there, I mean, with having to get yourself out there having to take that initial first steps, like you said, the experience is really what's going to drive you and propel you forward. And I feel like a lot of people, myself included get stuck in that pre launch stage, the planning stage, because we're so worried. Like everything's gotta be perfect. I have to, I can't get this out until I got it down. And really, like you said, you went through several different writing, working for different clients and doing the freelancing thing before you knew that this was the route you wanted to go. Had you not put yourself out there like that and tested the waters a little bit. You never would have known and you, I don't know, you may just be doing bios on someone's website or you may be on the next engineer job working for another startup or something, but it takes putting yourself out there and kind of taking that. I don't even, it's not even really a risk, but just like being willing to spread yourself all around, basically.

Karl (16:18): Yeah. It's, you know, the thing that was fundamental to me that I knew I needed to do because I'd seen startups do this so badly was I just need to get somebody to start paying me something for something that I was doing, you know, like a lot of startups get stuck in this ideation and market validation phase without actually going to market. And there's something really powerful about just releasing something, even though it's crap, you know, like just getting it out there and being like, this is who I am and what I am. So to give you kind of an example, even within drafts, like when I first started and I was freelancing, I was doing articles for two, $300 for 2000 word articles that took six hours. Right. I'm like, Megan, I mean, it's like, I'm, I'm making for, uh, again, coming from a six-figure software engineering job, very poor money per hour, uh, plus all the risk that goes into it.

Karl (17:05): So, uh, I realized though, after having conversations with several of my clients that, Oh, they would pay way more. They just like, they, they know that there's a lot of poor writers out there. So they, they sort of start you low and see what you do. And then they'll give you a bump if you ask for it. So I was like, okay. And so I start having these conversations, like how much do the big companies pay? Right. Cause I keep thinking, like if I'm making $300, there's another person over here says they can pay five or 600. I'm like, what is the, where's the end of this? Right? Like what does a, what is the cap? And I started talking to people and I realized there's companies paying a thousand dollars, $2,000 for a single blog post of roughly the same amount of work and skill that mine were. And I was like, okay, there's something here. There's there's margin here now. Um, now there's a, there's a lot more that goes into it than just purely the blog post. But it still made me realize that there was a bigger opportunity than was initially obvious. But I wouldn't have learned that if I hadn't started just making something, even if it was crap money, just to like, see what happens when you start charging money for a service.

Nick (18:08): Right. I think there is something very powerful to be said about freelancing. I've been seeing it more recently, but it's a great way to test the water. It's a great way to see if that's something even like you said, getting started, like starting freelancing, building a website, you listed your services before you even knew how to build a website. And after you found that you could get buyers, you figured it out. I mean, just dabbling in different areas. If you're someone who's like, I know I don't want to work a nine to five. I want to do something myself, but I don't know what to do. Like start testing the freelance market. And I'm curious with yours, when you started doing freelancing, was there a specific services or outlets that you were using to like showcase your work? Like I know there's like Fiverr and Upwork and companies like that or were you just reaching out? Yeah,

Karl (18:52): I did not now. And I also, I think in my experience, those are the bottom of the barrel, uh, both for the, the clients and for the writers. Uh, unfortunately, because, so writing is a pretty subjective field, right? Like some people think something is good and other people think something is not good. They don't know. And so anyway, what I realized really quickly, even I never really tried Upwork or anything or fiber, uh, maybe, maybe I did do one job on Upwork. Now that I say that I feel like maybe I tried it once. And it was like, yeah, this is not it. Um, but anyway, I went straight to my network. I had been working in startups for 10 years, so I immediately just started setting up meetings. I'm actually super, this is another, like if I had to give myself another super power, it's going to be this one.

Karl (19:35): I have a big list of people that I want to stay in touch with. And it's about 50, 60 people. It kind of rotates people in and out. And every week I go to the top of that list and I see who have I not talked to in awhile. And I just worked my way through and email them and say, Hey, let's catch up. So I built up this list of 50, 60, pretty influential important people scattered around the tech industry and who I'd actually not only just had as connections on LinkedIn, but I actually regularly kept up with, and that was immediately like, okay, there's five, like customer clients come in right through that. So that made it easy. I had also run. And this kind of goes to your whole, like what you're saying about just starting something is better than just, you know, thinking, thinking, thinking I had run this newsletter called CFP land for two or three years before this.

Karl (20:19): And it's a for tech conference speakers, just a weekly email of all the conference, speaking opportunities. It's all, it's all automated. It was like a fun little side project I was doing while I was working. And there's like 2000 people subscribed to it. So I started putting on that list like, Hey, we're draft out dev and we'll write your articles for you. And I got a couple of leads through that. So like all these little weird things I had done over the years just led to this being way easier for me than it would have been had I been starting at scratch. So there's, there's a little bit of this too, that it's kind of like the unfair advantage that I had going into this. That would be hard to replicate if you're just coming out of college right now. But I think that's the trick of entrepreneurship, right? Is that you kind of leverage the unfair advantage you have, whether it's a certain skill set or a network or access or a location or some combination of those things to get a better like foot in to whatever you're trying to do. And I think a lot of people try to just bang their heads against a wall thinking that, Oh, because somebody did it, I can do the same thing, like maybe, but they had different circumstances around them.

Nick (21:22): Yeah. And, and like you had mentioned earlier, the timing, like the timing could have been a huge impact as well. Timing again, think of any specific examples, but yeah. Yeah.

Karl (21:31): And even things like my, my wife has a, a good job with health insurance. And like, I mean, if you don't have that, right? Like what do you do if you had a pre-existing medical condition or a child who's sick or something like entrepreneurship is not necessarily open to all as, you know, as much as it seems like there's a lot of things that kind of have to stack up right now, if you're early on in your career and you're like trying to set yourself up to be ready for this, then there's things that you could do, like keep living simply save money, make connections, focus on meeting people and like growing your skill sets. Like all that stuff is super valuable. Even if you don't just go immediately, jump out and start a business.

Nick (22:08): Well, you were talking about keeping those connections and keeping in contact with them. That is something that I really wish I would have done more of in the last several years since graduating college, I've been kind of myself, very introverted, stayed inside my lane. Don't really put myself out there. And since starting the podcast, I'm realizing how powerful those connections can actually be bringing guests and being able to build a relationship with the guests on the other side. And a lot of those conversations ended up going offline after the podcast episodes is done and it's aired. And I realized that even the guests that I bring on and talk about how important those relationships are. So if I could give anybody any advice that's listening to this right now is to really try to put yourself out there. It's going to be tough if you're kind of closed off like I am, but those relationships that you can build can lead to some amazing opportunities. And whether that's for you or the person you're connecting with like, just work on building relationships and kind of getting yourself in that position because yeah, you never know who you might meet or the person you might meet, who they know. And it could just open up a thousand opportunities for you.

Karl (23:16): And it's not, you know, people, I think in engineering, the word networking kind of gets a salesy gross vibe. And I get that because it probably is used that way too much. It really doesn't have to be that complicated. I'll give you an example. Um, like early on in my career, when I was just starting to lead a team of engineers, like I had my first, or didn't even have a team, really, I was like managing some outsourced engineers in India. And I, I wanted to understand like how engineering managers and leaders thought as they got bigger. And so I, I saw a guy speak who, um, was the CTO of a tiny little company at the time called sprout social. They, uh, they were in Chicago and so I saw him speak at a meetup and then I followed up with him after. Cause I just like too nervous to go talk to him at the meetup, even though, you know, he was nobody at the time like, uh, and I emailed him after and it was just like, Hey, I'd like to meet up and get coffee and pick your brain, ask him questions.

Karl (24:10): I asked him a bunch of questions about himself and about his career and about his management and how he learned to do this. I just kind of went from the frame of I'm a beginner and looking to learn from an expert and, you know, zoom forward five, six years later or whatever, this is eight years later. I don't know. Um, he's now like they're publicly traded company and we still stay in touch regularly. And you know, like, uh, it's just knowing that I have that person that has done this stuff. That's incredibly, I mean, just so much more accomplished than, than I am in, in most ways. Like, it's just really good because it, I can go ask him questions about like how big companies buy technology tools. Like how do they buy services and things like that. And so you have to think about like all the, the ways that I dunno, the easy ways to just get in touch and talk to people and be honest and open with people. Yeah.

Nick (24:54): I love it. That's awesome. He, you can't, I see sprout social stuff all over the place. Like every time I go into Google stuff that I'm looking for, spiritual souls everywhere. So that's,

Karl (25:04): That's awesome. And like, I couldn't have planned that they were going to be big. I would have none of that. Right. Like, I don't know. And, and you know, it's also says something about, I think there are a lot of people in the community all over if all different size companies that are willing to help people that are, you know, that step or two below them. And I've had other similar experiences with engineering leaders who were very generous with their time because they, they realize that somebody did that for them at some point, or maybe didn't do that for them. And they, they would like that same, that same opportunities to just hear from another leader. So, and now with things being virtual, honestly, in some ways it's even easier. You can just say like, Hey, just like 30 minutes for a zoom. And you know, you don't have to ask them to go anywhere or do anything it's it's, but you know, you, you're going to get some rejections or some just flat out people ignoring you. That's fine. Like that's part of it. You have to get used to that too.

Nick (25:53): Well, and with, I don't know if you are on clubhouse or have been paying attention to everything going on in clubhouse, but that, especially with everything that's happening in the world right now, in-person is not as possible. Clubhouse might be a very viable option to get your name out there. Start engaging in talking with people. And don't, don't go to the big rooms. If, if anybody, if you're on clubhouse, you know what I'm talking about? There's some of those rooms that are just massive thousands of people in it stay away from those rooms, like focused on the rooms that are small and jump in, be part of the conversation. It's audio. Only if you panic and freak out, you can always just click the leave button and leave. Like, that's it, but start building the relationships there because I have like, after getting off, one of those calls shot someone or messaged on Instagram and said like, Hey, do you want to hop on a zoom chat and talk about this more? Like, I'm really interested. Like just continuing put yourself out. There is such a powerful thing to do. And yeah, like you said, I mean, it's opened up so many opportunities for you and me since I launched podcasts on the same. So it's, I can not speak to building those relationships and just giving it a try because what's the worst that could happen. Yeah.

Karl (27:00): And it goes the other way too. Right? Like in other words, people that are a station, a station below you in whatever way, that means, right. Maybe they're a few years less experienced. They're just coming out of college. Now keep up with them too. Like I've the people that I've hired in the past several years. I mean, a lot of them have been people that I've just, I met, kept in touch with for a year or two. And then we got the opportunity to hire them or whatever. It's like that that helps too. Like if you become a manager or you run your own business, like you, you're going to need to eventually hire people. So the more connections you have that are like good employees as well, the better you don't just want to meet people that can help you. You've got to sort of pass it both ways.

Nick (27:39): Yep. No, that's excellent. But thank you for sharing that I want to talk about. Let's get into the niching, niching down part of it. Here we go. Cause this is, this is the meat. I feel like we covered a lot of good stuff there though. That was awesome. So why, when, when you actually started writing and you decided this was the, the way to go, how, okay, how do I guess, first of all, how did you one say, okay, yes, I'm actually going to do this. I'm going to focus on this small subset of people without expanding that and opening it up eventually. And then to our people, like very specifically looking for exactly what you're doing or how are you actually getting yourself out there to find the people that are looking for like the way I'm thinking about it. Like people have this need that they might even not know that they have. And you're kind of having to say like, Hey, you have that problem. And I have that exact solution.

Karl (28:34): Okay. So the first part of your question, like how did you discover this niche and decide just I'm going to go for it. Uh, so I think if you're going to bootstrap a company, you have to start with an established market. That in other words, what I mean by an established market is people already pay money for this service or product. I don't believe bootstrappers especially like a first-time entrepreneur who's bootstrapping should ever attack a market that is like a completely new novel solution for, you know, a problem. Like that's what you go raise money for from venture capitalists who want to take big swings. And that's fine. That's a different route of business. Or maybe you're a repeat entrepreneur and you've got 10 million in the bank and you're just going to bankroll it yourself. Right. That's great. Go for it. But like when you're like me, first time entrepreneur have a year of runway in the bank and I like, no, I need to make cash.

Karl (29:23): I'd had to come into an established market and say, okay, what's a market where people are already paying money. And then does it match up with a skillset I have or combination of skills I have that I could deliver into that, that market existing market. Uh, so that was the first part of it was, yes, there's a demand people paying for it. So the way I knew that was that I had been approached by companies who wanted to pay for me to write. So I had already been like, you know, people knew that I had those skills and they wanted me to do that because I had been just writing on my personal blog for years. Um, and so that was part one, the, the next thing that was kind of the next hurdle I needed to clear for this to make sense for me is like more than just a hobby or side thing to do was could I operationalize it to the point where I did not need to be the one writing every single article?

Karl (30:09): Uh, because I think that a lot of service entrepreneurs tend to believe that they are unique and they must do all the service themselves. And if that's true, you're chained to your business, you're never going to be able to sell it. You're never going to grow it past a certain point. You're never going to retire. You're never going to take a vacation. You know, that all signs back. Yes. Like you built your own job and it might be a job you've liked to get paid well for, but like in that that's not bad. It's just not what I was going for. So like, I look at entrepreneurship as a chance to create an asset that generates a recurring income and wealth over time, without me having to put more and more time into it, more and more inputs. Um, now it takes a lot of work to get there, right?

Karl (30:47): Like I'm not there yet. And it's going, gonna take me years. I imagine to get to that point with draft. But I looked at this process of writing these technical articles and how much margin there was and how much, um, how many people out there, there were to write these articles. I started to realize there were other people like me, and that if you could gather enough of them together to write articles for clients, then you could probably make a viable business where I was just, uh, someone running it. And so, uh, I started to just try that out. Basically. First thing I did was I grabbed a couple writers who are people who were out there writing on the internet and just ask them to help me like write an article for a client. It was like 50, 51 was really good. One was really, really terrible.

Karl (31:28): And, uh, I learned from that experience, I got a little better at finding writers and giving them instructions. And you know, this took us months of iteration on that to figure out our processes is today. And I imagine it's still gonna change. But anyway, so those were the, the, we were kind of talking about how to pick that niche. There's an established market. And I knew that there was a way to operationalize it, or I believe there was a way to operationalize it. Uh, so those were my two big criteria. And then the second part of your question was what, again,

Nick (31:55): Were there actually people that are looking specifically forward? Like, were they looking for a person that offered exactly what you were offering or was it something that you kind of had to reach out to them and say like, Hey, I know this is what you're looking for. And I offer that.

Karl (32:09): Yeah. So that that's a little trickier. Um, because our, our, our, our work is so specific and there isn't like a huge estate, there are competitors, but they're all pretty small companies because of that. There's not, um, Google ad words we can buy for this yet. Um, there's not established search terms that are definitely exactly a fit for us. Then there's a few things that are tangentially related. There's a lot of things that are like, you know, maybe you could get us there, but like, it is not a direct one-to-one you can't just search. I don't know. It's maybe going to get better over the coming years as this market matures, but like, this is a pretty new emerging market anyway. So it was really hard to figure out, but what we did instead was we thought about, um, or I thought about, I guess, as a, we it's like this habitual thing that entrepreneurs do.

Karl (33:00): So forgive me. He is mostly Karl. Yeah, no, I know exactly what time, but I'll, I'll be writing like a blog post or something, and I'm saying we, and then I'm like, there's no way. I'm the only first, there's no way. Right. I mean, I actually, I do have a little team, uh, you know, to be honest with this market finding stuff, this was all when it was just me. So, um, what I did to validate some of this was, I mean, first I, there, I knew there was some demand because there were some people who had posted, uh, jobs related to this. So they had posted, like, we're looking for a content manager, content writer, who's technical as an engineering background. As I saw some of those jobs, I also found like a, a list of places that would pay a flat fee for engineers who wanted to write articles.

Karl (33:42): Right. And so I was like, okay, so there's some demand here. I also knew there was these companies, like I mentioned, digital ocean at the beginning that had a writer program where they paid everybody who contributed a few hundred bucks to write an article. So I knew there was demand and it was moving and there was money being exchanged, but I wasn't sure exactly how to capture it. So what I did was I said, let's just, I want to narrow even further than just companies that want to reach software engineers, I'm going to look only at companies that are series a and series B funded that have just hired or looking to hire a head of marketing or head of growth or head of content, something like that, some kind of title. So I went to Crunchbase, I went to LinkedIn, I kind of figured out how to grab those two, like things together.

Karl (34:22): And I started like sort of tailoring our offering and landing page to those people. And it actually didn't take much, I did a little bit of cold outreach, got a couple of people that way, but that has always been a really small part of our business for the most part what's happened is because we've tailored our offerings. And the way we talk about what we do so much people, either people just pass this around board of mouth and these communities are kind of small. Um, this is like joining the series a and series B companies mostly funded by Silicon Valley investors. So a lot of them have the same investment group. A lot of them have the same, um, people that go in between them. They go to the same accelerators, they all know each other. So there's lots of people passing around, uh, or passing things around.

Karl (35:05): So I've had two or three clients in the last month that said, you know, so-and-so mentioned you in a Slack group or, or existing customer mentioned you when we were asking about how they produce content. And so it's kind of like, I didn't do much in the way of direct outreach. It didn't have to do much in like validating th there, cause there was a market where people are already spending money. All I did was once I got a toe in and realized like people realized I could actually deliver quality work, they just immediately started spreading me around to their peers and people that had similar spots. Right. I guess for you, I mean, you did the,

Nick (35:38): You did the work up front cause you were, you kind of went in with a specific criteria in mind and you had to do the upfront research to kind of narrow that down and figure out where they're living. And then, I mean, that's awesome that once it kind of got rolling.

Karl (35:51): Okay. Let's say that the, in an alternate reality, I had tried to aim for these, these kinds of companies and not figured it, like they didn't bite. Right. Like, okay, what do I do? I changed my landing page and just change who I'm targeting. It's not that big a deal. Right. I could have gone like, okay, 2000 companies with 2000 plus employees who have a head of marketing who started in the last year. Right? Like the, all those things are easy to find now. So I could have easily just pivoted and tried to like, you know, move that. And that's what I would have done if there hadn't been an immediate, like influx of demand. So no, that, that just seems like the logical process is like, go really narrow. See if it works, if it doesn't, you know, adjust. And if it does great, just like go keep, keep diving in because you found something.

Nick (36:33): Was there a specific reason that you went that specific route, the route that you did take targeting the people that were like hiring the head of marketing or like the small series a and B companies, was there a reason for it or was it just something that you kind of like

Karl (36:46): A little intuition? Yeah. A little intuition. Cause I'd worked for these kinds of startups before. So partly I kind of knew what their path was. So, and just to kind of like explain this, if you're not in that venture funded startup world, what happens is a company raises a seed round where they get a few hundred thousand dollars, maybe a million and they get their first little bit of the product out. And then they raise a series a, which is kind of their first significant raise. Usually it's three to 10 million. And at that point they're going to really start to grow, like try to grow. They want to ramp up growth. They have about 18 months usually to double every three months or whatever the VCs want them to do. Right. They just have to like hit this huge inflection point. So they spend a ton of money on marketing sales growth.

Karl (37:26): And that's where I wanted to catch people because I knew they'd be like pretty price insensitive. Like I knew that they spent a lot of money because they had to spend it. Uh, and I knew that they would want to ramp up quickly. Whereas hiring is a long process that takes awhile. And it also requires a long-term commitment. Whereas working with an agency it's like 5k a month is way cheaper than trying to hire somebody, onboard them, get them up to speed. And so anyway, that was my intuition just from knowing the space. Uh, and then from there, it's kind of like, you just have to try that and see what happens. I also, as I got clients, I kind of assessed where they were at and saw that a lot of them that came to me or that I got referred to were in that same exact boat.

Karl (38:05): Like that was where they said, like, you know, Oh, Karl's service makes perfect sense for us. So it was a little bit of like the chicken and egg is hard to define. It's probably a little, both, it's just having these conversations. But I think, um, one thing too, that, that, that made me realize was that it was good that I went full time on this as quickly as possible. Even if I didn't initially operationalize everything, I was just doing a lot of work myself because I had tons of time to have conversations with clients. And that was by far the biggest learning. Like, I mean, I learned a ton. I still learned a time. And you know, when I think about all the different tasks involved in the business, the last thing I want to outsource is sales because I still learned so much from every one of those calls. And I think eventually, maybe I'll get there, but like it's, it's not, um, I'm not in a hurry because I still learn a lot.

Nick (38:49): What, what kinds of things, like, what, how does the conversation kind of go when you have these sales calls, when you get a potential client to agree to a zoom call or something like that?

Karl (38:57): Yeah. Um, so I, I have, uh, I don't know what the hell I'm doing with sales. Um, I I'm, I apparently like it's working fine, which is great, but I have no idea there's no, um, this is, I don't, I don't even know if I should give advice on this. Uh, I like, I'm pretty, I'm pretty honest about just like I lay out. Um, I lay out who we're for. So, eh, well first I guess back up, I usually ask them a lot of questions. First. I asked them about where they're at, as far as their, their fundraising journey, their, um, their growth journey, who their existing customers are. If they don't know those kinds of things, they're not ready for us. I ask if they have a content strategy in mind, or if they're just like looking to start from zero and they have no idea what they're doing, because we're, we're an execution only agency.

Karl (39:41): We don't do strategy. We don't do the like, you know, SEO audits or anything. And they're great people to do that. I refer them off to those people, but, um, we chose not to do that. So, uh, I w I need, like, I only take clients now that are really focused on getting execution stuff done. Um, they have a plan already. We're just, we're carrying it out. So, so yeah, I asked those kinds of questions to kind of qualify them and get a good sense of like what they're thinking. I asked how they're going to capture like this traffic as in, in leads. Like, so are they, they have an email list, they have a free trial. Like how are they going to get people who read the article to actually go into their product and become paying customers? And then I started, I kind of give them like overview of how we work.

Karl (40:20): Uh, the kinds of companies we work with, the kinds of content we do, because we sort of, we really, I mean, again, going to operationalizing everything, we bucket our content, our content we do into like distinct types. So it's very prescribed. We bucket our like goals of each of those pieces of content is very prescribed things. Uh, we have a very prescribed process for like how we get Arctic, like topics from clients, how we distribute them to our, to our writers, how we recruit writers. Like that's how you have to run a productized service type business like this. It's like, you've got to come up with so standards across the board. And what it does is it lets you build it in a way that is scalable and also really high quality. Like if you don't have these processes, you just, you drop things, drop through the cracks, you forget articles, you forget due days you let things slip. And we just like our system almost doesn't allow those sorts of things to happen.

Nick (41:10): Yeah. I mean, I could see, especially starting to hire on and bring in more team members, having those systems in place is crucial. Having clear guidelines and systems would be a massive.

Karl (41:25): Yeah. And the big thing I've learned is not to give them to not to overwhelm them. Like you can't expect someone to come in, pick up your whole system for the whole like workflow from client gets started to article comes back to client in one, you know, month or week or whatever. Like this has been taken me months to build up. So what I tried to do when I bring somebody new on is slot them into one very specific spot in that process. And I have a whole like method for doing this where I like basically track my time and look at how much time they're spending on each one of those tasks. And then I say like, okay, this task is starting to take a day or two it's time to like outsource that task, um, a day or two a week. And so, uh, I basically sought someone into that one task, the moment it starts to get to be too much for me to do on my own or to where it's taking a significant amount of time. And I, I wait to write SLPs until we are ready to slot somebody in that way. I'm not like trying to pretend like I know what it's gonna look like in six months or a year or two years, because it's going to change. And it needs to,

Nick (42:25): How, what did it look like in terms of like how much money were you bringing in and what was the business looking like when you started actually hiring and bringing on freelancers and team members?

Karl (42:38): So last year at the end of last year, we, yeah, I think, I think last year at the end of last year is when I first started, like having other writers consistently work with me and I was still writing over half of the articles that went back to clients in December. And then I really quickly like January, February, and now March, I, I I'm down to none. So it really quickly declined what money was like back when, you know, kind of the, trying to think of the best, easiest way to like to explain it. I think we were doing about 10 K in revenue towards the beginning of this year, end of last year. And we've gotten up, we're now on track. Like this month we're going to do 35 or 40 next month. It's going to be 45 or 50. So like it's and this is monthly recurring revenue.

Karl (43:24): So, um, most clients, when they're doing things like, like content, they, they keep doing it. It's, it's like, uh, if you're going to do a content marketing strategy, it doesn't make sense to do it for three months and stop. So almost all of our deals keep going and renew. So, um, that's nice from a compounding revenue standpoint. Uh, but yeah, I mean, so there's a really quickly went from like this 10 K kind of nice little freelancing gig to like, Oh wow. Now I have like a whole team that's starting to build, get built at the same time as I'm like trying to figure everything out. Yeah. Uh, yeah, it's still a little overwhelming at times.

Nick (43:59): I mean, that's, that's so awesome. The reason I ask, so I'm sure there's a lot of people that like, as they're building the business to like, okay, like I have a lot on my plate, but is this too early to start bringing people on? Like, should I hold off? Like at what point do I actually need to start hiring? Do you think

Karl (44:14): You have to decide how profitable you want to be and win. Right. So every time you bring somebody on, it cuts into your, your margin. So let's say back in December, I was writing about half the content we're making 10 grand a month in top line revenue. I was probably taking home five, six, seven of it, you know, like most of cause I was writing most of the articles. And so, um, I was just paying for a few articles and a little bit of editing time. Uh, now I don't take any, I don't take home anymore, but we're doing a lot more top-line and that's the way the business works, right? Like actually I've kept my salary intentionally very low so that we can keep reinvesting into the business as much as possible. Um, and you know, everybody has to decide like how low, how much am I willing to keep my salary suppressed for a certain amount of time in order to get to a certain size so that we can then like really, you know, uh, take home a big profit or maybe sell it or whatever you want to do.

Karl (45:06): So it's all just preference. I mean, like if I had, if I'd been at different stage of life, I didn't have money saved up. I might have needed to keep as much revenue as possible for longer. Right. If I had a big house payment and uh, I lived in a really fancy condo, right. That's just the reality. So you have to decide what's your personal financial situation, but if you do want to grow and hire people, you do have to kind of like, you take these dips in profitability in order to bring them on before they, they sort of justify themselves. So you just have to decide. And I, I model that stuff out. I don't think it's like, it's not something I do just by gut feel. There's like, there's a spreadsheet. It's pretty rudimentary. But like, it kind of shows me roughly how much business I need to be doing to hire that next person. Right.

Nick (45:46): Okay. That's awesome, man. Well, I know before we were starting recording, recording this thing, you were talking about a one sheet that you wanted to give out there for the listeners. What is that? And where can they find it?

Karl (46:01): So, um, if you are thinking about blogging, this is just kind of generally, if you want to use content as a strategy to grow your business, working with a company like us is fine. If you've already got a plan and you know what you want to do, you're just looking for an execution partner, but a lot of startups and smaller companies, when they're just getting off the ground, they really should do a lot of this stuff themselves just to kind of kickstart it. And so what I did is I came up with 50 ideas, uh, that I've, I've sent off to clients and use with clients to kind of get your blog started. So these are really simple things you can do to, uh, to kickstart any content marketing efforts. Uh, and those are up at draft.dev/podcast. If you want to download that, it's free. And then if you have questions, feel free to email me. I'm always happy to answer these kinds of content marketing questions generally, or dig into technical content. If that's your thing to Karl@draft.dev,

Nick (46:52): Before we get wrapped up here, is there any final tips, advice that you want to give to someone who's looking to take that leap, start moving into their own business, take an entrepreneurship head on anything you want to leave the listeners with before we wrap up. No,

Karl (47:07): I think we've kind of said this, but just get started one way or another. Even if it's a side gig, a side project, um, even if it's freelancing, you know, these things, don't a lot of times I think, um, some entrepreneurs or would be entrepreneurs think, Oh, well that's not the perfect business for me. Therefore, I shouldn't even pursue it, but the perfect business is not a end state that really exists. It's more of like a journey to get there that you discover what's perfect for you. And what's not. So if just by starting and getting self-employed, that's your first step, I think that's what you should go take, you know? And, and maybe that's not your first step. Maybe you're not there yet. Maybe you want to go work in a small business for awhile. Maybe you want to go work in a, um, a startup that gets funding for awhile and see what that's like.

Karl (47:50): Yeah. I think one thing that a lot of, uh, friends and colleagues who've asked me, it's like, how do you know where to start? When you're starting a business? It's like, there's a million things, right? Like, do you need to worry about patents and legal stuff? Or do you just get going and like, see what happens? And like, so if I learned all this stuff, by being the first employee at a couple of startups, I realized how, like, they didn't know what they were doing and they made it work. Um, and you can too. So that might be helpful for building your confidence. That was helpful for me.

Nick (48:17): Awesome. Thank you. And anybody listening to this hearing that I would definitely, if you have not read the lean startup, definitely go check out that book. I'll put a link to that in the show notes as well, but that whole premise of that book is starting with a minimal viable product. Something very basic at the very beginning and just putting it out there. And like we were talking about being able to get that feedback and then make some pivots or make some changes to the model or what we're trying to do. It all stems from getting something out there first kind of taking that first step. So I would definitely recommend that book to anybody interested in getting started. Okay, man. So we had the 50 ideas for the blog content at draft at dev slash podcast. And people can email you directly Karl at drafted that dev anywhere else. You'd like people to go to get in contact with you, reach out any other links, social media. Yeah.

Karl (49:05): I'm on Twitter and LinkedIn people can have, I'll send you links for that, uh, Karlisle Hughes, most places. Uh, and it's Karla K so well misspelled that, but that's all right. Um, yeah, I, I love connecting with people. I'd be happy to just, just chat or say, Hey, and just keep in touch. Uh, I'm pretty, uh, pretty open to that kind of kind of thing.

Nick (49:27): Awesome. Yes, definitely go slide into Karl's DMs over on Twitter and LinkedIn. And then I want to thank you for coming down here. This is, this was a blast. I, I definitely learned a lot. I'm going to go, actually, once we get off this call, I'll go download your 50 blog post ideas sheet there, because I'm interested to dig into that. But yeah, I mean, thanks for coming on, man. This was a blast. Yeah.

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If you haven’t done this already, go leave a review of the Nine-Five Podcast over on iTunes!

 

Show Notes

In today’s episode we’re talking with Karl Hughes, founder of Draft.Dev.

After working for multiple startups, sometimes being their very first employee, Karl has seen firsthand what it takes to get a startup off the ground and the struggles they face when trying to do so.

Like most episodes, we get into why Karl decided to start his own business instead of sticking with other startup companies, as well as:

  • Why niching down is so important
  • How Karl decided on his niche
  • At what point should you think about hiring employees or freelancers

Key Takeaways and Topics from the Interview

 

When it comes to the topic of niching down, it’s often intimidating to think about.

“Why would I want to limit the number of people that I can reach?”

It sounds silly, but when you’re targeting a smaller niche, you are more relateable. You can directly target a specific group of people who have a very specific problem.

If you’re business idea is too broad, you can’t get that specific. You’re trying to please too many people at one time, and we all know that you can’t please everybody.

Thank You!

I hope you enjoyed this episode of the Nine-Five Podcast. Thank you so much for listening!

 

What is your current niche/how do you plan to niche down?

Leave a comment below and let me know!

 

 

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