318: Louie Bacaj — Betting Small to Win Big
Download MP3Louis Bocce is an engineer turned entrepreneur. He used to work for Walmart with a large team under him, and then he went the VC route, and now he's co leading a community of bootstrapped entrepreneurs. Solopreneurs too. And it's a community that I am in, so today's episode is gonna be wild. It's sponsored by acquire.com.
Arvid:More on that later. Now here is Louis. I wanna start with the small bets community. I had Dani Vasalo on on this show just a year ago, and he was very proudly doing everything by himself at the time. And now what was just 1 has become 2.
Arvid:And I have to know what journey led you to become the after the fact cofounder kind of situation in what is probably the best and most well organized community in the in the software founder space. So how did that happen?
Louie:So great question. So I'm gonna give you a long winded answer here, Aubrey, but I but my entrepreneurial journey started around 2021. I actually raised some VC dollars, and I was building a SaaS for, estate managers. That wasn't working out that well. At least for me personally, I was eating ramen and and I stumbled onto this guy, Daniel Vassallo, who was actually at the time teaching a course called the portfolio of small bets.
Louie:And he was the philosophy of everything he'd learned so far. And, so so this guy basically is brain dumping everything he's learned. He's he's teaching us and he says, look. You know, there's ways to make money online where where you don't need to eat ramen. Right?
Louie:Like, you could you could put a small book out there. You could put a small course out there. You could put a small app out there. You could time box what you what you put into it, and you could have some sort of thesis. Look, you're not gonna make 1,000,000, but you can make a few dollars.
Louie:And so I tried it. In 22, I basically shifted my mindset. I said, you know, what do I have to lose? I've got a little bit of runway. So I I placed a ton of small bets in 2022.
Louie:I was a community member. It wasn't even a community back then. It was just a discord channel and this course. And so I placed probably 10 different small bets in 2022. And I made money.
Louie:I wasn't eating ramen. I was eating steak. Okay. Not like the why goo stuff, but, you know, it was it was it was I was eating good basically. And it was, you know, a couple of courses, a cohort course, a couple of recorded courses, a book, all these things I did in 2022.
Louie:I started a newsletter. I started a podcast around engineering career advice. All these different things that I had never thought of that that sort of Daniel exposed me to. And so, you know, I became convinced that actually you can make a pretty good living and some of these things, you know, might become bigger than others. And I think Daniel sort of saw that.
Louie:At at some point in 2023, he approached me. He said, look, you know, you're you're placing a ton of small bets. You're you're you're living this lifestyle. And and do you do you wanna help me with the community? Because, you know, you know, I I feel like there's some things we could do.
Louie:We could we could we could make it better together. And and and that's what that's how it happened basically, where I ended up partnering with him in in 20, last year, basically, around, the middle of last year.
Arvid:Yeah. I I was looking for that tweet when it was announced and I and I found it just earlier today. It was I I I was quite surprised when it happened, that it happened because I never thought that Dan would take it to a bigger kind of, you know, stage, the community, but it needed to happen because community was just growing and growing and growing. Right? Like, you saw it from the inside.
Arvid:Like, was that kind of an internal process? Because I'm I'm looking at this as somebody who is interested in building community himself and who knows that a lot of founders in our community, a lot of creators are quite aware of the power of a kind of an exclusive invite only or like paid community. Right? There's there's something, having a strong group of people who really all believe in the same stuff and all wanna follow the same dream to reach the same goals. So how was that from the inside?
Arvid:How did you see this progressing? What was there was it instigated by by anybody but Daniel or did, was that completely his choice to hire at this point?
Louie:Yeah. It was it was basically completely out of the blue. It's it's never something I I sort of expected in any way. It is really interesting. Daniel is a very interesting guy.
Louie:Right? Like, obviously, I admire the guy. You know, I learned a lot from him. Probably all the money I made in 2022 is because of the stuff he taught me. Like, he taught all of us.
Louie:Right? He just he just taught us what he had learned. And and so, obviously so so needless to say, you know, so somebody you admire wants to be business partners with you. You're, you know, you're really gonna I mean, you're really gonna consider that regardless of what you sort of have going on. But but what's interesting about Daniel, I think that that that I don't see in a lot of people.
Louie:He's incredibly pragmatic. Right? And there's this guy, Gurgay, that has the pragmatic engineer. Is this a new one of the biggest newsletters out there. I think Daniel embodies that.
Louie:He is the pragmatic engineer. And, I mean, he used to be an engineer. So so it's very, very interesting because the way he approached me was like, look, I've got this business. It's it's making money, but it's slowing down. And I actually think that if I don't do something, you know, it could disappear.
Louie:And there is a very real chance that you become partners with me in this thing and we make no money, right? And so he just this is the way he thinks. Right? And so, you know, we're gonna try things. Some of them might work, but, you know, most people don't most people, I don't think, view things that way.
Louie:I think most people, you know, are they want a pie in the sky. They wanna reach the moon. It's a very different kind of mindset. And I was shocked because I see this business. It's working.
Louie:It's making sales. I'm in love with the with the with the community, the people that it's attracting, all of these things. And here's this guy telling me that it could die off. And he says, look, if it dies off, I'm gonna be sad about it. Right?
Louie:But, you know, I'm I'm I'm also not not, not not expecting it to to become something huge. So do you want to become a part of that and and try to do something together? So that was the sort of the seeds for the for the partnership, you know, and I was I was I was shocked that he invited me to to to become a partner in it. And and I think his pragmatism, is contagious. Right?
Louie:And you're basically you know, a lot of the things we've done, we've done very thoughtfully one small thing at a time just to not basically, you know, overextend ourselves or or or dream pie in the sky stuff that might not never happen. You know?
Arvid:Yeah. Man, it it it sounds so so fun to hear you be surprised by a really cool offer. Right? Like, this is like, hey. Would would you like to make some money?
Arvid:Like, would you like to work on something you already love? Like, who gets this kind of opportunity? That's so cool. It's so cool to hear.
Louie:No. I mean, it really is. Right? Like, he it's a working business. He wants you to become 50% partners is what he told me.
Louie:And he said, you know, you don't have to pay me anything. You know, like, who lets you into a working business, makes you 50% part of the business? I was shy at at first. Right? I thought it was too good to be true.
Louie:I'm like, what is this? I'm pulling my leg like this is what people would. Right? Like this. And and I thought about it, you know, very quickly.
Louie:And, you know, I and I and I said, oh, of course, I'm gonna take it, but it's like, you know, very I
Arvid:mean, it it definitely is a much better deal than than anything you can get from a VC. We're just gonna say. Right? Like that, how does this compare to your prior experience there?
Louie:Yeah. So great question. I mean, look, VC look. We we rate So I I I started this SaaS with with a couple of partners. My brother was one of the partners, actually, it's 4 of us in that thing.
Louie:That thing is still going. And it's it's, you know, it's it's doing well. But, you know, when you do a VC when you do a VC back thing, I mean, you're all in. Right? Like you basically have to, that has to be the thing you do 247.
Louie:Right? Otherwise, people get upset and all of that. And so you're they they basically, once you take the VC dollars, you have to commit to making that thing huge because you took their money. And and this is the thing that was really nagging at me. Right?
Louie:Like, here I am eating ramen. Like, I basically making peanuts on you know, you can't take, you can't take a big salary on VC money. You can't you usually can't even take a salary. Right? It depends on where you are, what stage you're in.
Louie:And so, you're you're eating ramen and you're working on this thing 247 and you're stressed out. And so that whole experience really, I think, burnt me a little bit. You know, it basically when when and people think usually, right, the trade off that they're making on the other side is, look, you you could get a really high paying salary in big tech, which is what I had before I did the VC thing, or you could do the VC thing. But they don't see this whole other world where you could just put some ideas out there, actually make money with those ideas on day 1. Right?
Louie:They they're not they're never gonna be huge ideas, but but they'll make money. And so, you know, I I think I think, you know, Daniel exposed me to this whole other way of thinking with with, with with with with with these projects. And and and, basically, I I shed off a lot of that a lot of that, pie in the sky dreaming that that that, that I had acquired while I was under the VC umbrella. And one of the one of the really nice things is Daniel, right from the beginning, was like, look, you have your projects. This is one project that we're partners on.
Louie:Okay? And you and I, we're gonna work on this thing together, but you have all this other stuff. You know, keep doing that. You know? And I think VCs don't think like that.
Louie:Right? Like, now they own you. Like, you're on this thing, and you're gonna be on this thing forever. Until, right, either it sells or it fails. Right?
Louie:And it's a very interesting, I think, you know, mindset shift.
Arvid:Yeah. Yeah. For sure. Yeah. It's it's in many ways, I I'm still kind of convinced that these models are quite similar.
Arvid:Like, you you still you still wanna find the one that works. Right? Like, even even with a portfolio of many small bets, and I I do the same thing. I have the podcast, the newsletter, my books, and I my my 3 SaaS businesses that I run on the side. Like, all of these are small bets.
Arvid:I see one taking off right now, and I'm putting more of my effort in there. I even got some funding for this, not VC funding, but kinda funding. So the it's this VC model is the same thing. It's just that the person actually owning or the the gains from it. Right?
Arvid:The the person the person actually benefiting from it is never really the founder in the VC setting. Right? And we in the small bet setting, the owner operator of all these small bets is you. But, you know, and you get all the the benefits that come from it. But in the VC world, you might be 1 the one of a 100 businesses that work or you're one of the 99 that don't and nothing comes of that for you.
Arvid:That that's the difference that I see. Do do you see the same thing? Like, is is that similar for
Louie:you? Yeah. I mean, look. A lot of a lot of ideas come to mind on this topic, but but I I fully agree with you, basically. And I think there's just a totally different power dynamic when you have something that's working.
Louie:Right? You know, there there's nothing wrong with, I think the guys at 37 signals who are, you know, an awesome north star. They make they make software. They've been doing it for years. They've been bootstrapped.
Louie:They took they took funding from Jeff Bezos. Right? And it's actually you know, it's very interesting. You know, but they but it wasn't the VC funding. Like, when Jeff Bezos invested in that thing, it wasn't it wasn't with the idea that these guys are gonna become a $1,000,000,000 thing.
Louie:He just wanted to become a partner with them. He bought a small piece of the thing. And I think it's just a very different power dynamic when you have a business that's working versus you take money from, VCs when you have just an idea, you've got nothing, and then, you know, you know, the thing might not work. Most of the time, it's not gonna work. And so now you need funding over and over again.
Louie:So you're basically trapped in this world until you can make something happen. I mean, otherwise, you might not care about the VCs and you might fail and all of that, but I think that's bad too because you took someone's money. You know, you have an obligation to get them a return. And if you go with that mindset, I think, you know, it's just a lot easier when you when you don't take their money. You can you can you can try all kinds of things and then the things that are working, if you, you know, then it's a small bet for you to take the capital because now the thing's already working, you know, so and it's a very different sort of power dynamic.
Louie:That that's what I basically.
Arvid:Yeah. Make makes perfect sense. And I love the phrase trapped. I think that's that's the core. Right?
Arvid:Like, you you do something you wanna do. You have this dream. You have this idea, but you're kind of trapped in in a cage of somebody else's making around that idea. Right? The the golden cage in many ways.
Arvid:Right? The the VC money also is a golden cage just like the the golden cage exists in the world of semi high paid engineers. I mean, I saw you you tweet about this too very recently. I I wanna get back to to your life before this, like your engineering life, because I myself also engineer, became an entrepreneur over time, and then became an enjoyer of small bets at some point. So I guess we've quite a similar journey.
Arvid:What made you stop wanting to be a salaried engineer? Because many people listening to this very likely still have a full time job, like like most people have. Right? Because that's how the world works, but have this this inclination to wanna be an entrepreneur at some point, but they haven't really taken the step just yet. What what made you want to take that step?
Arvid:But even raising VC, what made you wanna take that step into entrepreneurship back in the day?
Louie:Yeah. So, I think I sort of always dreamed about going into entrepreneurship. I always had side projects. I would say for many of the engineers that are listening basically place lots of small bets while you have a full time job. There's nothing wrong with you having a side project.
Louie:And and some of the things that work out, you know, that's a really good way to off ramp. Right? I I I probably should've should've been more rigorous about that kind of an approach. I didn't do that. Right?
Louie:I decided, look, you know, basically, I was at Walmart for for a couple years. I got to Walmart because they acquired this startup I was a part of. I was an early engineer in the startup called Jet. They acquired it for $3,300,000,000. They acquired us for the tech and for some of those things.
Louie:Jet is where I got a lot of my engineering experience, a lot of my engineering management experience. And then at Walmart, they put me in charge of all the modern tech for pharmacy. It was really exciting for a little bit because COVID was happening. We were running these big teams. We were pushing features to apps that impact a 100,000,000 customers across the US.
Louie:It felt really impactful. But then around 2021, you know, the bureaucracy kicked in. All these things right now, they're not legal and compliance, and all these people are asking questions like, why did you do this this way? Yeah. Well, because, you know, we had elderly people and they needed pills, you know, and so we just said, screw it, you know, and and and we got it to them.
Louie:But it's a very it's so they they they stepped in and then it was just meetings about meetings and about and so I said, look, when am I gonna take a a shot at entrepreneurship if not now? And so in 2021, I decided, you know, screw it. I'm gonna quit. And I quit that job and I I went and, you know, for most people that quit, I think the thing that they think of is, you know, I'm gonna go raise some money. Right?
Louie:I've got an idea. I'm gonna go raise some money, and we're gonna do it that way. And that's what I did. I think that's basically a huge mistake because now you're trapped. Now that thing might not work out, and and you're beholden to these people.
Louie:I mean, you know, if you have morals and ethics and all this stuff, you're beholden to these people because you took their money. Right? So it's a very interesting, thing, I think.
Arvid:Yeah. Did did you have any, like, personal savings back in those days? Like
Louie:I did. So so the one smart thing that I really did that I highly recommend and and you go, you know, for people listening is I invested a little bit, you know, because I was getting paid really well. Obviously, I was a senior director of Walmart, you know, 50 plus engineers, probably, you know, teams all over the world. I was making good money, you know, at least for, like, 2 years. Well, after the acquisition, I was making really good money.
Louie:And I took that money, I invested basically in in real estate and I created some rental income. Not not a lot, but it was enough that I basically had, you know, at least the roof over my head is paid off. So when I quit, even though I'm not gonna be making probably nothing, I have some money coming in and my family won't start because I have kids, I have a wife. So I highly recommend for engineers listening to this to to to consider that. Right?
Louie:To consider something they wouldn't normally consider, some boring type of business, a laundromat, whatever. Just get some cash flow, something that's reliable, steady. And if you can't get the side projects to work out, at least take your money and and then make it produce some money, because then at least you have something coming in, you know. And so and so and and and so that's basically the thing that that gave me the the confidence to say, you know what? I can just I'm gonna I'm gonna quit, you know.
Louie:But But I wasn't making a lot. I mean, just basically getting by in the beginning was was was was all I had with the real estate.
Arvid:Well, that's all you need. Right? At at that point, that's that's kind of the baseline. I I I know that you wrote a book about this, and I know that you gave a lot of talks inside the community. I think even before you worked, like, for Smallbytes community.
Arvid:Right? What was that right? Like, you you already were teaching some of these these kind of real estate for developers things? Is is Yes.
Louie:So Daniel is very interesting. Right? Like, he he let he allows people in the community to, to to to teach guest classes is something that he tried as sort of a small bet. I'm gonna pay people $1,000 for an hour and a half to come and teach us something that they've done themselves. And it's very interesting.
Louie:And he said to me, Louis, I've seen your some of your tweets about real estate. You're a big you know, would you like to teach a class? I never thought about teaching a class on real estate. Come on, man. Like I thought it was, it's like a funny ask.
Louie:Like I didn't even think they was in the realm of possibility. And he said, look, You know, you're a beginner, and this is important because most of the people that are in the community are beginners. Like, it's better to learn from you than from some guy that owns 500 properties now. They they forgot how to even get started. So very it was a very interesting thing.
Louie:And then after I did the classes, I thought, wait. Maybe I could, like, take the transcript from these classes, put it into a book, and make a few dollars outside the community. And that was I
Arvid:love this. I love this so much. It's this is such a smart way of of taking your knowledge, like, from one medium into the other. 1st, you had it completely internal because you thought it was only for you, then somebody kinda pulled at it and said, hey. Actually, other people can benefit from it too.
Arvid:Then you taught it, and then you kind of productize that into into a book. That is genius. Just wanna mention that. This is this is something that so few people do even though most people could. I just I'm I'm getting excited just hearing about this journey because I would love to see people take their little niche, weird, unexpected expertise and first teach it to see how it resonates with people and then kinda manifest it into something they can sell while they sleep.
Arvid:Like, how how could you not want this?
Louie:Well, you know, Ari, you mentioned this, but, you know, I had mentioned earlier that I that I've read your books and I think you you give this advice in some of those books, right, embed yourself into these communities. This is how stuff gets pulled out of you because there's there there are things that you know that you don't even realize that maybe other people want it or they wouldn't pay you money for it because it's just something that, you know, you did a while back and and whatever. Right? Like, you undervalue things. Most people do that.
Louie:And so embed yourself in these communities and things get sort of get pulled out of you. It's a very interesting thing, I think. You see opportunities all over the place basically where where they would didn't exist before.
Arvid:Yeah. Definitely. And I think that the Small Bets community this is not sponsored by small bets even though it should be. But, you know, I I'm I'm myself am part of
Louie:this podcast.
Arvid:I'm part of the community. Right? I'm in there, and I occasionally teach in there as well, building a media business, which is literally what we're right doing right now. Right? Podcasts and that kind of stuff.
Arvid:So I've seen it from the inside. I've seen it from the outside. I've seen how the community outside of the community reacts to the community and vice versa. What I would like to know as somebody who is both part of the community and operating it, you probably see a lot of weird small bets, like people trying to build all kinds of things. And I'm always interested in the stuff you didn't expect.
Arvid:So is there anything, any particular kind of example of Small Bets in the Small Bets community right now or in the past that you never thought it would actually be something that could work, but they did work?
Louie:Well, I think there's there's, we're almost starting to categorize them now. We're we're we're thinking about them in, like, you know, for example, like, there's a whole class of info product type small bits that I think can get to money very, very quickly in comparison to, let's say, an app. Right? An app usually much longer ramp up. People need to know about it.
Louie:There's so many more things. And most engineering types would want would rather just write code, and they would, you know, not talk to anybody and just do the code. But there's just something really interesting about first sort of writing a book or recording a small course, putting it on a place where there are people already there and searching. So Udemy, for example, we've got a lot of people that are putting courses on Udemy, and and people are searching for those things every day. Sometimes their employer pays for the course.
Louie:So they're getting it basically for free, but it's part of this, you know, contract that they have with Udemy. And so and this is very interesting because now that suddenly gives you access to people. You just taught them something that you already knew, whether it's about real estate, whether it's about software engineering, whether it's about some tech that you know, something quick, a brain dump, something that you knew, and then now you have access to human beings. Now they they're gonna reach out to you. Now you're gonna have a call with them.
Louie:Now you're gonna hear there are other problems. And now maybe you could put an app out there. Maybe you could do something else. So we see a whole lot of of of this, basically, a chain thing where and and Small Bets itself is exactly this. I mean, if you think about it, right, it started as a course.
Louie:Daniel decided, you know what? Like, we gotta try, you know, people love the Discord. People love the community aspect. Let's open it up. Let's let people teach other than me in this.
Louie:Let's let's do more. Let's, and so one thing sort of leads to the other once you sort of have access to people, and I think that's a very, interesting thing. But but to go back to sort of your your original question, I've seen all kinds of small bets now that I didn't think. You know, we've, we've got this guy, Greg, in the community who who recently put out an app, that that asks you questions via voice. And so it just sends you a link.
Louie:And it's almost like a podcast that you kinda do asynchronously, but it's really great if if you have, if you have, a newsletter or something like that. The person answers the questions. It then transcribes them, allows you to edit it. It uses the fancy AI tech that's out there now, and it's really cool. And I think there's some really interesting use cases for this.
Louie:Like, even forget about podcast or, like, writing a newsletter. But even if you wanna write a book, like, just ask the questions, have this thing, you know, ping you, and then you answer the question and then suddenly you've got, you know, paragraphs and paragraphs of your book structured into this thing. So I think there's some really some interesting stuff. I mean, that's just one example, but there's so many, so many different things people are building. It's just most of them are small.
Louie:You know, I think I think this is this is the main thing is just try to time box it. If if you're spending 6 months a year, I don't tend to like those small bets even though, you know, people call them small bets.
Arvid:Yeah. Just not that small. Right?
Louie:No. I mean, I was at risk. Right? Now now, you know, what if it fails? Right?
Arvid:Yeah. Yeah. There's cost attached. That's also a thing. Right?
Arvid:Like, gross cost of living, you gotta pay for your your mortgage or whatever or you still have to eat, and it's not all ramen. Right? It shouldn't always just be ramen. I don't think that's a healthy way. I'm glad you're still with us because, like, just eating, like, the the cheapest of food is never really good, particularly in a in a stressful environment.
Arvid:But, you know
Louie:They made that, they made that, the I you know, it's it's funny to call that out, but the VC world has made that, like, their their their mantra, you know, like, ramen profitable, which is good, you know, but but it's just men, you don't need to live that way. You know, like, there are ways to make money right now on the Internet, more ways than ever, and one individual could do more than ever by themselves. And and and if you just, you know, Do do
Arvid:Do do people also look outside of the realm of kind of software specific businesses? Because I know that we all kinda come from an engineering background. We all know how to code. We know how to throw up a website or whatever. But do you also see, like, real estate being an example of this, something that is completely outside of the digital digital domain as well?
Louie:Yeah. We've got some people that are doing short term rentals. We've got one guy, I think, out in Portugal. So this guy Salaam, I I talk to sometimes. He's got he's got short term rentals via Airbnb out in Depot on the beach.
Louie:It's very interesting. I mean, people buy different things. Right? And they just it's a it's a cash flowing business, man. And I think it makes money.
Louie:It's it's sustainable. You know, and and you see a whole lot of that. You also see people go to micro acquire and and and, they they they basically, they struggle with the marketing aspect. So they think maybe I'll buy something that already makes money and I'll add the additional things to it. I think that's a decent path too, but but a little bit more risky because now you're putting money up and and and then these other things.
Louie:But yeah. So there's all kinds of stuff people are doing. Real estate for sure. I mean, it's one of those things, but people do newsletters, you know, they do what they paid they they try for a few months with a paid newsletter, see if it works out. They try, you know, all kinds of different things that that that are not just software.
Louie:But there is a lot of software. It attracts a lot of tech people. And so and I think the main thing that Daniel has done is, like, sort of get the tech people to think outside of just software. You know.
Arvid:Yeah. I've I've noticed that in in my own approach as well. Like, ever since I I understood Daniel's approach and also, like Rob Walling stair stepping approach. I think they're very similar, like the idea of like building small things and just building a foundation of income for like, I don't know, Shopify plugins or WordPress plugins apps, like little tiny things on somebody else's app store, and then slowly creating your path to whatever comes next. Right?
Arvid:Might be a personal brand, might be a SaaS business, might be some ecommerce, whatever it is, but you you kinda slowly aggregate stability into your life. And then from one that works, you just go further. I think there's a lot of compatibility between these two. And it's and it's really nice. It's it's nice to it's nice to hear that there's a strong diversity of these businesses, and there's still, alignment because they're all kind of built similarly.
Arvid:Right? Small bets look at what works and then act on that. One one thing you just mentioned was AI in in these things. And I I I have 2 questions, really. Like, how how much AI do you use inside the community to actually orchestrate the community?
Arvid:You know, like events or I think you have this very, snappy chatbot inside the the community as well. That's one use of it. And then also, how much how much do you do you see a shift? Maybe without how much do you see a shift in, what businesses incorporate AI as and with in the the businesses that are run by people inside the community?
Louie:Well, I mean, I think these tools, you know, AI in general has just made it so much easier for individuals. So just thinking about about them as tools that you can use to build things. I mean, I use it to help me with coding. Right? I can write code.
Louie:Right? I I I've been writing code for 15 years. Well, let's say 10 years because 5 years I was maybe in management, but I was still writing some code even when I was a director. So, I've been writing code for a long time, and I still use this stuff. Why do I use this stuff?
Louie:Because, man, I don't wanna write all this HTML and all this boring, you know, tailwind. I just tell GPT or or now Cloud Opus, just just, you know, produce the page for me. And it's just it's so good. It's so fast. So just as as a set of tools, it's really powerful.
Louie:Or even just I have a transcript that I spoke out that has errors. I give it to GPT and I say clean this up for me. Don't add extra words. Just clean it up. Just make it make sense.
Louie:And and it's good at that kind of stuff. Like, stuff that would take editing that would take you days now could happen very, very, you know, would take you hours maybe, not days. Could happen very, very quickly in seconds. And so this is the kind of stuff that I think speeds up people's time to get a product out. Right?
Louie:So you could you could you could place more small bits. But then you could also embed this stuff into your tooling, into the into the things that you're building. And you mentioned the the small bot, which is our witty I won't say who. It's got a you know, who it copies in terms of personality, but somebody on Twitter that hurts a lot and is very, very smart. You know, we admire this guy like crazy.
Louie:And and, you know, the personality is loosely based off of based off of that. Anti I'll just give a hint. Antifragile. And so, anyway, so so it curses like crazy, but it gives really good advice. And it took some really fine tuning on the prompt to get it to curse and to get it to behave the way.
Louie:So that's sort of the magic sauce behind it is is that and it's it's glued into our Discord so people could chat with it on there, but we we've recently started moving over to Campfire, and we're gonna make Campfire more of, more of a more of a thing. Discord has some issues. I mean, it's got great APIs. It's decent for running a community, but but the there's a lot of problems with Discord as well. I mean, you don't know who you're talking to for 1.
Louie:You have somebody with a nickname. They have no and so you you you have no idea. Right? But but we've got people's profiles in the directory. We've got all kinds of tools in Small Bets that are very helpful that, you know, when you're speaking to somebody, you sort of wanna know what projects they have.
Louie:You wanna know what they're into so you could have a better conversation. And and Discord doesn't allow for any of that. And so we wanna do all of that in Campfire. And, basically, this bot, the way it's integrated into Campfire now, it automatically creates threads in Campfire, and it's gonna do more and more. It'll register you for events if you want.
Louie:It'll it'll you know, it's and so, you know, we're gonna and and, you we're we're using AI in a lot of interesting ways. I mean, we we basically get transcripts out of the recordings. We have, you know, lots of insights about that. We're actually not necessarily do all of that right now, but we're not actually surfacing it too much. But very, very soon, hopefully, we'll let you chat with the bot, and and it'll tell you what happened in that event and and whether it's worth you checking out.
Louie:And so we're we're we're we're gonna do all of that. I mean, I think it's it's it's easy enough now that 2 guys can do it. You know, this is this is the thing that I really wanna call out is that most of the people watching this, they could probably do it. You know, they could use these tools and it just makes, yeah, it's pretty amazing time, I think.
Arvid:Yeah. That that is to me, like, the the result of Claude or Chechi PTO or whatever, even even the the local LLMs like llama 3, I'm I'm working a lot with that because I I don't wanna give my data to anybody on a on a platform, so I run it, like, on my own servers. But any of these are already crazy good at doing certain things, not all things. But if you tell them the right things and prompt engineering, I guess, is what you need to understand and learn to to get them to do these things for you. But once they do it, that's spectacular.
Arvid:But what it facilitates, like, what it enables you to do is just run things that would require 20 people working full time, and now you get to do it, like, all by yourself or with 1 or 2 people. That's the crazy part of AI for me. Not just what the the technology does, but how much it impacts a workflow and how it restructures work as a concept. Right? Yeah.
Arvid:It's, it's a lot of it's a lot of fun to see you build these things. It's a lot of fun to see people generally use them in their workflow. I was talking to Tyler Tringus of the the Com Company Fund who recently invested into PodScan, my business. So it was there's a whole thing going on, but he was he was he's using it internally too for the fund. Right?
Arvid:In the fund, operating the community of the fund where the mentors speak with the the people that are funded and all of that is just facilitated by AI, and he gives these tools into the companies that the fund puts money into as well. So now you get kind of an operating system that is built for you, but nobody has to be paid to run it. That is just spectacular. Like, building a business has never been as easy, and like doing work that you don't really know how to do has never been as easy and cheap as it is today.
Louie:Yeah. I I wouldn't say it's necessarily work that you don't know how to do. It's just work that you don't necessarily wanna do.
Arvid:Yeah. Like Right.
Louie:You you know? It's like Yeah. You'd rather not do you'd rather not do some of that administrative or whatever it is. Right? And and my by the way, you know, one of the things you have to be careful with, especially with the communities, because you could automate like crazy right now, you know.
Louie:I think we're trying to be careful with that because we do, you know, there's something really nice about this human connection. Right? Like, this is and a lot of people are lonely today. I don't think AI, I don't know. Maybe maybe maybe AI fixes it, but I don't think it fixes it.
Louie:I think people need human connection. So, some things you almost don't wanna automate, but but the the boring stuff definitely. Right? Like, I think it makes a lot of sense.
Arvid:And that's what I hear you say. Like, you say use it as a tool. Like don't use it to replace people, but use it to replace an hour of work and condense it into 20 seconds. Right? That's what it is.
Arvid:It's a it's a better tool. It's a power tool quite literally because it's, you know, quite quite power intense, I guess, all the computation and stuff, but it's just a tool. It's not a replacement for a person.
Louie:100%. I agree with that.
Arvid:Yeah. Wow, man. I'm I'm excited to see what the future holds for small bets, and you already kinda hinted at a couple things that are gonna gonna happen. Like, what do you want this community to look like over the next couple years? Do you have a vision for this or do you just take it as it goes?
Louie:You know, this is an interesting thing. I mean, I think Daniel's pragmatism has started to seep into me. And so now I'm I'm, you know, I like to think of things one step at a time, one small bed at a time. Anything we try is basically now ends up being, one small you know, I wanna I wanna not to go off on a tangent, but I wanna tell an interesting story. So so when I when I joined Walmart, when after they acquired us, you know, I was now in charge of this pharmacy thing.
Louie:I had to go to Bentonville, Arkansas. That's their headquarters. Everyone has to touch base with the mothership after they acquired. And when I was shocked when I got there because Bentonville, Arkansas is in the middle of nowhere. And it's a beautiful town.
Louie:It's, you know, it's got it's got this this wonderful museum there, the crystal bridges, the the original painting of George Washington that's in the dollar bill is there. All these things in the middle of nowhere. How did that happen? This guy, Sam Walton, started a company called Walmart, you know, 40, 50 years ago, and he changed his entire town. I mean, they got, you know, the largest museum of American art in the country in that town.
Louie:But not not just that. I mean, there's so many things there, and it's just an unbelievable thing. But think about how did that happen. Right? It's not like Sam Walton.
Louie:You know, this guy comes from poverty. You know, he he was he was a farmer. You know, he was still driving his truck with his dogs in the back. And so how did this guy do all of that? He started the company at 45.
Louie:And so you think about all that. Do you do you think he sat down and said, I got this master plan. I'm gonna change my I'm gonna start this retail thing. I'm gonna change my town. I'm gonna change my country.
Louie:I wanna do he didn't do any of that. Right? And so I think a lot of the best sustainable things happened just one step at a time. The guy literally opened a 5 and dime, which is like a penny store. That was his first store, and he literally sold whatever he could.
Louie:And then the next small bet was he put an ice cream thing in front of it and see if that sells and that sold. He was selling women's undergarment, whatever sells. He would he would he would bring it in and try to sell it. And next thing you know, he opens up a huge retail store, then the second one, then the third, then he's taking over the country. But it all happened.
Louie:It wasn't some grand scheme or master plan. He first, you know, found a small bet that works, then found another one, then kept layering on, and it just became this huge thing that is now very robust, I would say. Even in the age of Amazon, they haven't died off. You know, the the pharmacy business alone that I was a part of is a $35,000,000,000 business. You know, that's huge.
Louie:Right? And so it's just it's just an unbelievable thing that the guy built, but he didn't set out to do that. And so I tell the story because I wanna be like that guy. Like, I don't wanna be like these pie in the sky guys that that wanna change that gets all the dream and get wanna change the world. You know, I I just wanna build the next thing, and the next thing right now, you know, I think we we just added free free, like, I don't wanna call it free trial, but people could watch up to 3 recordings.
Louie:It's something that people have been asking for to see, you know, what kind of classes we have and all of that, so we just added that. That was a nice little neat feature. We're good and it's working really well, by the way. Conversion rate, we were getting a ton of traffic to the site, and it wasn't it wasn't we weren't capturing any of those emails. Now it's 4% conversion.
Louie:We're getting 4% of the traffic's emails, now we have those emails. We can reach out to them potentially. We could try to sell them the bigger thing later if they want it. But, you know, these are little things. Like, we do things like this.
Louie:Like, we're gonna try this thing, see if it works. If it doesn't work, great. We'll throw it out. We only spent 2 weeks on that thing. And and and so and so this is my mindset now.
Louie:You know, I hinted at those things with the buy, but, you know, every one of those things, if I can't layer it into a small bet where I could do it in a week or 2, then then I'm not gonna do it. You know, it's not for me. It's for somebody else to to build something big like that.
Arvid:Oh, that's cool. I I love that you apply like, you walk the walk. Right? You apply the principle of small bets to how the community works. You teach it to the people in the community.
Arvid:They get their bets going, and the whole thing itself is a bet in your life and Daniel's life. I love this. This is just authentic, like, using your own knowledge and and implementing it in a way that shows just yes. It's it's trustworthy. That's what I love about this community.
Arvid:There's no fakeness. It's just you do you walk the walk, and I really appreciate that. And I think, you've made a we man, you made a super interesting case for it too with the with the Sam Walton story. Like, there is if if you do something that has never been done before, how can you plan for it? Like, how could you potentially or possibly plan for something that just isn't even it has never been, like, codified into, like, a structure or anything like that.
Arvid:It it makes a lot of sense to just take it one step at a time, conscious step at a time, measured step at a time, but still just a step at a time. And I really like it. I'm here for it. And if the dear listeners of this wonderful show are here for this as well, where would they go to find out more about you and about the community and about all the wonderful things that you've shared here so far?
Louie:Sure. So we we got small we do earlier this year, we actually bought the dotcom. It's a very interesting story. It's told inside the community somewhere. You can find that thread, But we bought the dotcom for a lot of money.
Louie:So we have smallbits.com and they could go there and and and I think I think the link to my Twitter and Daniel's Twitter is right on the on the landing page of Small Bets as well. So I won't I won't, I won't spend too much time on that. But there is we're gonna we're gonna after this show comes out, we're gonna put a, a promo with with your name, Arvid, on it. Ah. The code will be Arvid.
Louie:You'll have to plug it in, find out, and then, you know, get a huge discount, to to this to the Small Bets membership. So we'll I'll set that up right after this call. It's not
Arvid:I appreciate it.
Louie:Dotcom is where they can find me and find everything about the community.
Arvid:That's awesome. Well, I I wish I would have been I wish the discount would have been around when I started joining the community, but I guess, you know, to I I'm glad 3.75. Me too.
Louie:You know? And so I I I I I I told Daniel, I think it was too cheap. You know? Yeah. But anyway, I'll get into the question.
Arvid:Don't don't tell that to the guys on Hacker News though. I think that's gonna start quite the conversation. Man, Luis, thank you so much for being on the show. This was a really nice insight into your story, into the small bet story, and kind of the synthesis of it all. I really appreciate this, like, how you kind of pulled it all together.
Arvid:That that was quite enjoyable, and I I just see so many similarities in, like, where we come from and how we approach entrepreneurship. It's really nice to talk to a like minded guy. Really appreciate it.
Louie:Thank you. Thank you very much for having me, Arvid. And, you know, it's it's awesome to talk to someone I've admired for a long time. Uh-huh. Thank
Arvid:you. Right. I gotcha. Thanks so much. And that's it for today.
Arvid:I will now briefly thank my sponsor, acquire.com. Imagine this. You're a founder who's built a really solid SaaS product. You acquired all those customers, and everything is generating really consistent monthly recurring revenue. That's the dream of every SaaS founder.
Arvid:Right? Problem is you're not growing. For whatever reason, maybe it's lack of skill or lack of focus or applying lack of interest, you don't know. You just feel stuck in your business with your business. What should you do?
Arvid:Well, the story that I would like to hear is that you buckled down, you reignited the fire, and you started working on the business, not just in the business. And all those things you did like audience building and marketing and sales and outreach, they really helped you to go down this road 6 months down the road, making all that money. You tripled your revenue, and you have this hyper successful business. That is the dream. The reality, unfortunately, is not as simple as this.
Arvid:And the situation that you might find yourself in is looking different for every single founder who is facing this crossroad. This problem is common, but it looks different every time. But what doesn't look different every time is the story that here, it just ends up being one of inaction and stagnation. Because the business becomes less and less valuable over time and then eventually completely worthless if you don't do anything. So if you find yourself here, already at this point, or you think your story is likely headed down a similar road, I would consider a third option, and that is selling a business on acquire.com.
Arvid:Because you capitalizing on the value of your time today is a pretty smart move. It's certainly better than not doing anything. And acquire.com is free to list. They've helped 100 of founders already. Just go check it out at try.
Arvid:Acquire.com/arbit, me, and see for yourself if this is the right option for you, your business at this time. You might just wanna wait a bit and see if it works out half a year from now or a year from now. Just check it out. It's always good to be in the know. Thank you for listening to the Bootstrap founder today.
Arvid:I really appreciate that. You can find me on Twitter at Avidkar, araveri, k a h l, and you'll find my books and my Twitter course tattoo. If you wanna support me and this show, please subscribe to my YouTube channel, get the podcast in your podcast player of choice, whatever that might be. Do let me know. It would be interesting to see.
Arvid:And leave a rating and a review by going to ratethispodcast.com/founder. It really makes a big difference if you show up there because then this podcast shows up in other people's feeds. And that's, I think, where we all would like it to be, just helping other people learn and see and understand new things. Any of this will help the show. I really appreciate it.
Arvid:Thank you so much for listening. Have a wonderful day, and bye bye.
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