Here I sit, in a cabin on Lake Superior by the fire, with late-season snow pelting the windows and ominous waves crashing against the rocky shore.
Despite the treacherous terrain that surrounds me, I feel at peace with the decision I’ve been weighing. I’ve decided it’s time to take a step back from building Level as a standalone alternative to Slack.
I’ve become comfortable sharing the behind-the-scenes journey on my weekly podcast, The Art of Product, in hopes that it will be helpful to someone, somewhere. Keeping with that tradition, this my in-depth retrospective on what happened, the thought process that brought me here, and what’s coming next.
On March 3rd, 2018, I was filled with optimism. I had just left Drip, the company I helped start five years earlier, and I was eager to return to the startup phase.
To use terminology coined by Justin Vincent of the TechZing podcast, I had a strong case of The Madness. I was hungry to get back to designing, marketing, and writing code unencumbered by legacy.
In the short time leading up to my departure, I finally allowed myself to entertain what was next. (I held off for much of my post-acquisition earn out, lest I become too anxious to get started). I filled pages in my notebook with ideas, but one, in particular, I couldn’t shake.
When Drip was acquired, our small team of 9 joined the Leadpages team of around 150. I remember looking across the office, bewildered that there could be so many people working on a product of a similar size to Drip. I soon discovered there was a slew of challenges coordinating work, and nearly all of it was happening in Slack.
The larger my immediate team grew, the more I struggled to remain productive. My days felt increasingly chaotic. I was no longer focusing for long periods. I realized that the way we were structuring our communication was a significant part of the problem.
Real-time chat was making everything feel urgent. Moreover, the company culture had evolved to the point that people expected quick responses to all messages. Conversations were disorganized. Vital information was getting misplaced among the din of idle chatter.
We were not alone. People across the internet were beginning to recognize these shortcomings of chat. Maybe chat wasn’t the holy grail of workplace communication that so many believed it to be. There were signs that a movement was afoot, but no one was championing the cause with an alternative product in hand. Why not me?
Putting a stake in the ground
The Monday after leaving Drip, I published the Level manifesto with great fanfare: The War on Developer Productivity (And How I Intend to Win It).
The manifesto was the first step in validating that my idea had legs: make a bold statement about the problem (without too many specifics about the solution) and gather email addresses of people who wanted to join the movement.
The numbers were encouraging. Hundreds of people handed me their information and shared it on Twitter. Even a handful of haters came out of the woodwork – striking a nerve is a good sign you’ve transcended complacency.
Despite being encouraged, I was determined not to fall into the trap of proceeding to build without sufficient evidence that a reachable market exists. The next step was to email the list (about 500 people) and ask to chat with them for 20 minutes, to learn about their problems and their willingness to pay for a solution.
Around 40 people ended up booking a time slot! The calls felt productive, and by the end, I felt like I wasn’t learning much that I hadn’t already heard. Many folks echoed the sentiments from the manifesto:
“Ugh, Slack distracts me so often. You’re right; everything feels urgent even when it’s not. I’m super interested in what you’re building here. We’re pretty open to change at my company – I don’t see switching being too big of a deal.”
Some folks were fans of my podcast but were not really in my target market. Others were not decision makers, so I had to take their feedback with a grain of salt. However, I didn’t interpret much of what I heard as unfavorable.
Armed with lots of qualitative data, I set off to build.
I also decided to introduce an element of scarcity to my landing page: reserve your username on Level before someone else takes it. In the months that followed, over 6,000 people took the bait and claimed their handle.
Setting the public deadline
Before long, I began to feel a creeping sense of uneasiness. I was learning a handful of new technologies in the process of building, and it was taking a while. Was I still on the right track?
I decided to run a small alpha in early October. It quickly became apparent that Level would have to be further along before anyone could try it earnestly with their team. Without trying the product for real, they couldn’t accurately predict whether Level was going to be a good fit.
“It seems like you’re on to something here. I’m interested in trying it out when it’s further along!”
I was frustrated, but not deterred. I felt confident that I could get Level mature enough for at least some teams to start piloting it by late January. To keep myself honest, I set a public deadline on my podcast and sold $49 pre-orders to those who wanted to be in the first batch. Around 50 people bought the pre-order.
By the time the deadline rolled around, I was feeling good about where the product stood. It was still early, still missing trivial things like password reset, but the core mechanics were in place.
I decided it was essential to manually onboard each customer to ensure they started on the right foot, so I began scheduling onboarding calls with the first batch.
The response did not live up to my expectations. Only a subset of people who paid booked an onboarding session. Of those who did, some never touched the product. Some who did poke around the product never gave it a real go with their team (and didn’t show much interest in following up with me). A handful did convert.
Every conversion funnel leaks, but I was admittedly disheartened. There seemed to be a curious mismatch between the sentiments I gathered early on and the actions people were taking. If people were ravenous for a solution, why weren’t most people even attempting to pilot Level?
Getting a larger sample size
I knew I needed a larger sample size before drawing more profound conclusions, so I decided to forge ahead with my next goal of making the small base of currently paying customers happy.
Those who did latch on to Level had a plethora of feature requests, most of which were in alignment with my vision for the product. I spent the next six weeks building. By that point, my customers were loving the product – even my largest customer that started out highly skeptical of the paradigm. Everyone who had converted so far applauded the user experience and agreed Level was a beautiful product.
I decided to invite the 500 most recent people to try Level, in pursuit of more data. (I chose the most recent ones because Level would be relatively top-of-mind for them).
I sent a warm-up email to the first batch on the Thursday before Easter, in which I reintroduced Level and informed them that an invitation was coming on Monday. At 10 am on Monday, I sent the invites.
I observed how people were using it for about a week. There was a lot of poking around and, once again, virtually zero evidence of anyone piloting it with their team. I reached out directly to everyone who made it into the product: are you planning to test Level out? What can I do to help?
It became clear pretty quickly that the gap between interest and implementation was of canyon-like proportions. The next week, I repeated the process with another batch of 500, with very similar results.
Small teams (who have a much easier time making the jump due to their size) didn’t seem that compelled by Level. In follow-up conversations, I discovered that Slack was at most a minor annoyance for them. Suboptimal? Yes. Worth going through the trouble of switching? Probably not.
Every large team I spoke to had an exceptionally high bar and was unwilling to entertain Level until it was significantly more “mature.” They are the ones who need Level the most, and yet it was looking like I wouldn’t have a shot at converting them without months (or years) of development work.
The Turning Point
I knew what my gut was telling me. However, I’m far too rational to make such an existential decision based solely on intuition. I had to feel confident that I was not just weary from the slog and seeking greener pastures. I had to be sure I was not giving up prematurely.
Everyone is lying
As I was confiding in my friend, he recommended a book called The Mom Test by Rob Fitzpatrick. Once you understand the premise, the title makes more sense. The subtitle is more blatant than the title:
How to talk to customers and learn if your business is a good idea when everyone is lying to you
It’s a quick read and should be a mandatory prerequisite for anyone embarking on the startup journey. The gist is that it’s tough to get unbiased feedback during customer validation. I already knew this to be correct, but I underestimated to the degree to which everyone lies.
Reading this struck a chord. I felt betrayed by my early validation efforts since reality proved to be radically different.
Publishing a manifesto from the onset made getting untainted data more difficult. Of course, you have to get people in your pipeline to talk to them somehow, but coming out with a strong hypothesis meant that I needed to be extra vigilant and mostly ignore sentiments that tacitly confirmed my manifesto.
Instead of seeking confirmation, I needed to focus on specific scenarios in that past:
“What is your team communication workflow?”
As they point out flaws, follow up with, “Tell me about the last time that happened. How did you respond? How have you tried to fix that problem to prevent it from happening again?”
I did another round of calls, this time running the Mom Test playbook. What I found was troubling. Everyone expressed being “annoyed” by Slack, even calling it a “big problem.” However, when pressed with the question of “what have you done about it so far?”, almost universally the answer was “nothing.” No process changes — no trials of Slack alternatives.
I spoke to a handful of companies who have successfully tamed Slack — the outliers.
An engineer at Stripe told me about their careful balance of email, forums, and Slack. They recognize that Slack is not suitable for meaningful conversations, so they automatically delete chat messages older than a few weeks to discourage relying on it for long-term archival. In retrospectives, team members often reflect on whether they chose the right medium (email, chat, or forum) for various conversations.
The team at Honeybadger is small but acutely aware of the cost of distractions. They use Slack for chat-ops and quick back-and-forth conversations, but they are always experimenting with different tools (like Basecamp) to organize more permanent discussions. Most of the Honeybadger team has removed Slack from their phones, and they make a habit of frequently closing it on the desktop (or using Do-Not-Disturb) when it’s time to focus.
Each has clear policies around internal communication and consider deep work to be part of their cultural DNA.
Is this a problem I want to tackle?
If there is a growing movement around valuing deep work (and I hope there is), it’s still in its infancy. I’ve spent hours brainstorming the path forward.
- Should I offer a service to train companies and help facilitate that cultural change?
- Should I go freemium with the hopes of igniting grassroots adoption and someday converting 1% of them to paying customers?
- Should I hire a salesperson to help sway key stakeholders in larger companies that only have one champion?
Some of these might be good ideas, but none are compatible with my goals as a founder. I aspire to stay small, abstain from raising outside funding, and achieve profitability quickly.
For me, profitability means covering my family’s cost of living, necessary business expenses, and taxes – in the neighborhood of $10k - $15k MRR.
I’m fortunate to have a relatively long runway from my previous business sales. However, it’s still a finite one.
That means, given my constraints, I can’t reimplement all the parts people love about Slack before reaching profitability. I can’t hire a team of engineers to move faster. I have no desire to run a consulting practice.
Having robust filtering criteria is ideal when making hard decisions. I’m happy to be discovering my constraints early on before I find myself years into running a business that doesn’t fit me, and I wind up hating my job. I only wish I had this much clarity a year earlier, but you know what they say about hindsight.
One of the unique aspects of entrepreneurship is uncapped earning potential. (The opposite would be something like working in public bureaucracy, where you can look at a chart and know what you will make in 10 years.)
I find uncapped potential to be one of the most motivating parts of starting a business. If I do my job well, I can find a pain point that a large market will pay to solve, build the solution, figure out distribution, and watch the recurring revenue-based profits rack up while I retain the freedom to work on what I want, how I want.
The startup news cycle bombards us with unicorn stories about massive, unexpected growth experienced by a small team with a big idea. It’s an intoxicating fantasy. I would assert that even the most disciplined entrepreneurs hold on to a shred of hope that their company might blow up beyond their wildest dreams. I don’t think there’s anything wrong with that.
However, I do think it can yield trouble when that small hope of a big success starts to influence your decision making. Unless you are raising venture capital and planning to shoot for the moon, unicorn dreams shouldn’t bias your decisions.
On this much-needed retreat where I am writing these words, I reread Paul Jarvis’ Company of One. It’s a beautiful masterpiece that breathes new life into what many pejoratively call “lifestyle business” and is chocked full of tips for starting small and staying intentionally small.
In hindsight, I took on an unreasonably audacious endeavor with Level in part because of my internal “this might get big if I play my cards right” dialogue. It would have been far better to either deliberately go for the big idea (and probably seek venture funding to make it happen), or start far smaller and build my way into a sustainable company of one.
At the time of writing this, that is all I truly know about what’s next. I’m passionate about serving the needs of makers (developers, designers, founders, indie hackers, and the like) so I will return there. Perhaps there’s a way to deliver on the Level vision that is compatible with my goals – I am exploring that as well.
About one thing, I am sure: I can’t wait to see what’s in store in my next chapter.