Gonto: That's the only type of competition that I like. Like, the competition that drives obsession and madness on the team to kill Goliath. 

Hank: Yeah, and don't worry about the other Davids on the field. You should all be slinging at the same Goliath. He's the guy with the giant spear coming at you. We got Biblical… 

Hank: So, a founder DM'd me he's mentally drained by competitors. 

Gonto: Did he say that? Or is he saying that he's mentally drained? 

Hank: He said that. He said it's mentally draining. 

Gonto: Okay. 

Hank: He's not the only founder that I've seen this in. And we had a neat little discussion in the DMs. And it's someone I've spoken to before.

And a couple things I didn't talk to him about, but that I think are good frameworks to think through is the two mistakes I see most founders make with competitors is they either dismiss them like, Oh, their product sucks. We're going to crush them. It doesn't even matter. Don't even pay attention at all. And then the opposite end of the spectrum is obsessing where every time they do even the littlest tweet or email, they show the team and they're like, why?Aren't you know, we got to match this. We got to top this, whatever. 

And I think a good reframe is to think of competitors as rivals, where there's room for both of you. You do want to win. If they're ahead of you a little bit, or if they did something clever, you don't get obsessed with it, but you try to learn from it. And then you move on. 

And one framework I gave this guy was, Hey, don't let your team obsess over it until they've taken business from you in a deal and you know it for a fact. Because a lot of times you get obsessed over technology that's still theoretical and hypothetical, and we're going to get into some of those type of founders later in this episode, but yeah, those, those are some of my thoughts that I shared.

I'm, I'm curious what you think about competition and how founders should think about it, especially in DevTools. 

Gonto:I love the idea of extremes are always bad. At the same time I'm always an extremist person. So hard for me to say that. Having said that, I'm more on the middle, like you're saying, but more on the dismiss vote than the obsess.

Like I think in most cases, if you have a really good product, It's better if you actually dismiss a lot of the things that the competition is doing, because maybe the competition is doing faster horses instead of doing cars. And if you think about it, like to me, it's more important to obsess on the problem, obsess on the problems your customers have, obsess on what your customers need, and not your competition.

Because if you're really here to your customers and the problem, then You'll make something that is truly differentiated and unique, and maybe even if you have competition, maybe your target market overlaps on 60 percent but 40 percent is different. And by actually hitting on that 40%, you can get like a huge or bigger, um, TAM, like, like the total addressable market than the other one.

So focusing on the problem to me matters more. Having said that, I do like the idea of looking at them and learning from what they are doing and stuff like that. But if you obsess, then there's a phrase from Paul Graham that I really like, which is that startups don't die off of hunger. They die of eating too much.

And what that means is if you focus, It's going to be okay. It's not like, Oh, we need more to do. And if you have a sense of what your competitor is doing and you want to copy every fucking feature, you're going to die because you're copying every, every feature instead of actually doing what your customers want and the problems that they have.

Hank: I love that term. I thought you're going to hit me with the startups die of suicide, not homicide, which it's the other side of this coin that we're talking about. One other useful thing is to dedicate somebody. To being a competition expert and building out internal docs on this so that once you encounter a competitor, you can just catalog them, put a little card, some quick thoughts. And then if anybody ever brings them up again, you can say, Oh, here's our like battle card on them. Here's the person who writes the battle cards, or maybe you can contribute. Or just go put your notes or link there, and that way you've paid a little attention to it. But now it's logged and you can move on.

Gonto: I agree, and I think, to be honest, competition to me matters a lot more for sales and marketing than for product. Like for sales and marketing, I really like the idea of creating this idea of like trap questions. Like giving your sales team questions that if they ask if they have a problem or not, they might realize they do.

And if they realize they do, they notice that your competition doesn't have that feature and you do. So it's like a question that triggers them, Oh, I do need this. And only these products have it. And similarly, you need to know how to answer questions about features that the other one has. And maybe you don't, or you do it differently or something like that.

That's to me, the most important thing for competition. For product again, I think It's focus and obsess on the problems rather than the competition because otherwise you just drive insane. And I think there's a lot of push, a lot of cases from board members, from VCs on competition. But if you are the founder, you should follow your intuition as well on that one.

Hank: Yeah, my last thought on thinking about competition is a lot of founders, because they're forward thinkers, they're on the bleeding edge somehow. And this, this founder I talked to is a great example. Right. His company is absolutely crushing it. They're on the bleeding edge and there are these other companies popping up also on the bleeding edge, but he's not actually competing with them.

He's competing with the status quo, which is what most people are still doing. 

Gonto: Yes.

Hank: and if you think about if you're fighting for the tiny market share of Innovators and early adopters you've shrunk your TAM too much and you actually need to constantly recenter your team and your focus and your product on “How are we just ten times better than the status quo” and our competitors might also be and then that's a different type of race, but you talk to the big market 

Gonto: Exactly. And if your product is new, I think what you fight “is build it yourself.” I remember at Auth0,  we were thinking a bit about Octa or Stormpath, but when we were selling, in 75 percent of the cases, we were competing to build it yourself. If you're competing to build it yourself, it's exactly what it's like competing to the status quo And you don't need to care that much about competition I really like what you say in the beginning on it You only care about competition when they start stealing a lot of deals from you before that I I agree like I don't think it makes sense There's only one type of competition that I really like which is like obsessing about a competitor that is absolutely huge.

So I know you have a competitor that is a public company and you're just a startup, but you only have an overlap of, I don't know, 30 40 percent but still some type of competitor. And I think obsessing over that huge competitor is good. On the sense of not, I will copy the feature, but rather I need to beat them.

I need to win them, looking at how they are doing. Because then I think you learn a lot and you motivate people on “We're david.” We're david  and we're gonna kill goliath. And I think that motivates the team. That's the only type of competition that I like. The competition that drives obsession and madness on the team to kill Goliath.

Hank: Yeah, and don't worry about the other Davids on the field. You should all be slinging at the same Goliath. He's the guy with the giant spear coming at you. We got Biblical. Um,  Okay, so speaking of giant companies and incumbent competitors, You had the next topic. 

Gonto: I do. I really like that. You're the hook guy. Like you're hooking our topics in every episode.

 So next topic, I don't know if you saw, but GitHub basically announced that Copilot has now a free tier, a free plan for anybody who uses BS code. And.  To me, what's interesting about it is if you see this launch, like there's an announcement from Satya from Microsoft CEO, there's one from GitHub for the CEO of GitHub, there was an email also in the announcement.

And what you see in most of them is that they do not talk about this idea of, you know, there's a free tier and a free plan that some people can use for specific use cases, but then the rest is paid. In the email, they made it sound like, oh, now GitHub Copilot is free for everybody and it's amazing. And then once you get to the limitations, you're like, oh, these are the limitations.

And I don't know how I feel about that for DevTools. I think in most cases, people end up announcing free plans in a way that sounds like it's free for everybody. And I think it's treats people as stupid. And I think like if, if I read that, I know it's just a free plan. And if you're actually honest about it with me, maybe it's original and pay more attention about it, but I don't know. What's your take on it? 

Hank” Yeah, see, I saw it, and anytime someone says free, I assume there's a limit. And I thought, oh nice, there's a free tier on here now. Unless you say it's completely open sourced, when I hear free, I just think, oh, I wonder what the limits are.

And I wonder how many people think more like me versus you. 

Gonto: I think like you as well. I just feel that they're treating me like if I don't understand. And I think if people were a bit more honest, it would be better. But, I don't know. I think most people do not do that. 

Hank: Wouldn't that undercut the announcement to some degree?

Like this is a thing, actually, I think we both talked to people about. in their marketing is you don't have to caveat every single little thing and be perfectly accurate in all your announcement because then you dilute your announcement too much. 

Gonto: So when I think about announcing free plans, I think a lot about two things. Either you can use use cases, like for example, what is a really good use case that this free plan is good for? Um, instead of just a paid account. And I think talking about that is great. There's companies that have this hobby plan where, I don't know, if you have a personal website, you can deploy it for free.

Like, that's a fantastic use case. The other thing, for example, I remember we did at Auth0 that was really useful was we were giving for free 7,000 active users. An active user that logs in at least once to the website. But people didn't know how many active users were. So we actually did the math based on average on our customers and we told them this works for websites that have approximately 50,000 users.

Because typically it's that 15,14% percent that are active. And in those cases where you don't care as much about security, so you don't care about as much about multi factor, and you have 50,000 users of more, more or less, sorry, use our free plan. And I think giving that specific use cases, how to understand it, I actually think it makes better the announcement because it lets people even better understand in which cases it fits instead of just, you know, letting people believe, Oh, they are a free plan, but it's likely useless and I need to pay. 

Hank: I don't really have other thoughts. I think, I feel like the email was pretty clear on what the limits were, but the tweet announcements did make it sound a lot more like, Oh, this is like a super free plan and so on. It was also interesting. They called out India as a big benefactor. Did you notice that?

Gonto: I did. 

Hank: I think probably people in India have been calling the most for uh, a free plan  and they've responded to that and they're leaning into it. I mean, India's developer growth is insane and it's going to be interesting how it goes, but they're notoriously stingy. So it's going to be interesting how this foothold or land grab by Microsoft's copilot goes.

Gonto: I agree. Um, let's switch to our last topic, which is.  I've been talking about how marketing sucks, which was interesting, but, uh, I'll let you explain it better. 

Hank: I didn't take it that way at all. I took it as, yeah, a lot of founders, they think that marketing is going to be what propels their new product to great heights because those are the products you see is someone posts their first tweet and their product just takes off. And you hear about this mythical PLG where the first users of the product share it with their friends and their coworkers. And it just exponentially grows. But the truth is to get your first handful of customers, you have to grind and you have to do unscalable things.

And that's what this tweet talked about. What happens if you show a hundred people, is your product good enough that if you show a hundred people, the product. Some of them will buy it. And how are you going to find those first hundred people? You have to do something unscalable. You can't just tweet and you know, put it up once on Reddit or product hunt and think that it'll blow up and sit around and wait.

And we see this a lot. With people who come to Hypergrowth partners asking for marketing help. And they're too small for us to help them. And, and we say, come back after you've done the unscalable things. Right. And some of them do and have, you know, in my experience, but …

Gonto: I read, I just read, reread the tweet actually. And I agree. They don't say that marketing sucks. Like what I really…

Hank: Of course, marketing doesn't suck. We're the best. 

Gonto: Exactly. Like what I really like from the team, like it's like 90 percent of founders who have never had a successful product think their problem is marketing. Right. That's to me the most important line of these tweets.

And I actually agree with that. Like, as you're saying, I think you first always need to focus on product. And I think once the product works, then you start to focus on marketing. And as you're saying, like in Hypergrowth partners we only take companies that are at least at 1 million in a ARR, and we do that mostly because we need a company that has done first founder led sales. Like they've found design partners, they improved the product through that, they started to pitch to customers and try to, sorry, to prospects and try to get new customers. They understand what pitches work, what they don't. And now that they've sold enough through things that do not scale, like founder led sales, they need to start scaling their marketing, scaling their sales.

And now it's when Hypergrowth partners, I think can help. It's all scaling the efforts that actually work from a product that is really, really good. And I think there's good and bad marketing as well in a lot of these cases. Um, 

Hank: Well, a lot of times these founders, they don't want to do the work. So they hire an early marketer. And that marketer, frankly, unless they're like an engineer and help with the product somehow, most of the time they don't have a clue how to market it or how to get to the right people. The trail has to be blazed by the founder. 

Something really interesting is in that like two year period where I was full time consulting, advising, fractional before I joined Laravel full time and you know, you asked me what am I doing with my life going to back to full time work…

 Okay. Um, I met with well over a hundred founders and some of them I met multiple times on this journey and I always go “Okay, how many customers do you have and what's your revenue at and how many employees do you have and what kind of marketing team do you have.” And yeah if they were small, sometimes I do smaller ones than like Hypergrowth would normally do, but usually if they're small I'd say you got to go do these things and I just give them like some homework and a lot of times they knew, okay, yeah, I do have to do that.

And then I'd follow up with them six or even 12 months later. And it's crazy to see the ones that actually went and do the unscalable things like magic. It works. And then there are the other ones where I meet up with them again and all their numbers are the same or worse and they haven't done anything.

And they've said, well, I decided to work on the product more to or I've decided to, you know, work on my SEO content so that people will come and find it and share it on their own. Uh, that doesn't work. You gotta, you gotta grind buddy. Like that's just reality. 

Gonto: And there's so many examples, like Airbnb sending like professional photographers to people's houses so they looked better and people booked it. 

And I think like, that's even more true for DevTools and most of them are product led growth, where if you don't first try with five, six companies and you just open it up to the world, maybe it's not what they wanted. Maybe it didn't work out and maybe it's different.

And I think what's really important about this is like. A lot of people think it's marketing because they maybe think the product is right or as you're saying because they're like I'm not gonna do things that don't scale. I need to scale it now. 

Hank: The poison pill is actually not marketing. It's PLG. It's they think if I build a great product then people will just magically adopt it and PLG has been bastardized into this magical self serve tactic that doesn't exist.

Gonto: And PLG has to start closed source and has to have a good onboarding for people to understand it. And has to have, like, talking to customers on why they churn and stuff like that. So I think that's important. And I think really good marketing at these first stages is not that's hard. Maybe I'd say otherwise, It's hard, but it's not complex. 

What I mean by that is just talk about what the product does and then make the product do that. Talk to customers, understand what they really like, what's the differentiation, just talk about it and explain it so people try it out. To me, there's so many problems now with early startups because the marketing promises that it's going to be the best product in the world, that it's going to have everything, and it will solve all of the things that you have.

But then when you actually try it out, it solves nothing because the marketing is promising something that doesn't exist, and that's when marketing breaks it. It's when you try to go ahead of what's really there.  

Hank: Yeah, I think, I think we both ranted about this, I, I, I think you and I could both rant about this for an hour, perhaps a special podcast where we just rant about PLG and what it actually is.

Gonto: But, overall, um, now that I read about it, I actually really liked it, um, this tweet and I think it's 100 percent right. So we should tweet at the guy that we talked about this and that we agree. I think that's it for today. Isn't it? 

Hank:  That's it.  

Gonto: Awesome. Um, today is the 24th here. So happy holidays, even though we publish this actually later.

So happy new year.  

Hank: Happy new year, everybody.  

Gonto: Cheers.