Funding for Indie Hackers with Tyler Tringas of Earnest Capital

Courtland Allen: 7s

What’s up everybody? This is Courtland from IndieHackers.com, and you’re listening to the Indie Hackers podcast. On this show, I talk to the founders of profitable internet businesses and I try to get a sense of what it’s like to be in their shoes.

How did they get to where they are today? How do they make decisions both at their companies and in their personal lives, and what, exactly, makes their businesses tick? And the goal here, as always, is so that the rest of us can learn from their examples and go on to build our own profitable internet businesses.

Today I’m talking to Tyler Tringas, the founder of Earnest Capital. Tyler, welcome to the show. Why don’t you tell us a little bit about what Earnest is?

Tyler Tringas: 37s

Earnest Capital is, basically we call it funding for bootstrappers. It’s a little bit paradoxical, which usually gets folks asking follow-up questions, which is good. But it really is that it’s funding for entrepreneurs, founders, basically Indie Hackers, folks building businesses that are outside of the traditional venture capital model and strategy and ecosystem that want to be profitable and sustainable, but they need a little bit of capital to get started.

We invest everywhere from very early stage, writing the check that lets you go from a side hustle to working full-time on your business, all the way up to growth capital for businesses doing maybe up to a million dollars a year in revenue. That’s the whole range we play in.

We do things a little bit differently, so we invest with a financing structure called a shared earnings agreement that we invented collaboratively, with a lot of folks in this community. It’s just better aligned for folks who want to build the next Basecamp or Wildbit and maybe don’t necessarily want to sell the business or ever raise other rounds of funding.

And then we try to do more than just write checks, so we have a community of mentors. A lot of them are pretty well-known CEOs, founders, operators in the space that are on-hand to provide mentorship and obviously a community of awesome founders, including the 11 companies that we’ve invested in so far.

Courtland Allen: 2m 6s

Very cool. I talk to a lot of founders, and by far for people who haven’t gotten started, the hardest hurdle for them to get over is the fact that they don’t have the resources. They don’t have the time to get started on something. They don’t have the money to get started on something. They’re working a full-time job. Maybe they have a family.

But raising money has not been an option for bootstrappers, for one reason or another. They don’t know the investors in Silicon Valley who are going to write the check, so they don’t want to try to build a billion-dollar company. Earnest is an option for them. What makes Earnest a better option for raising money than previously existing options?

Tyler Tringas: 2m 41s

You know, often I don’t find that we’re really competing with other options. In many cases, we’re not really making the case that we’re better. We’ve just found a huge group of entrepreneurs who are either looking to work with Earnest, or just bootstrap.

It’s the only option for capital that aligns with where they are and what they’re looking to do with their business. They just self-select. They say, “Look, I don’t want to build a business that’s a fit for venture capital, and I’m too early for revenue-based financing,” and that sort of thing.

So we often don’t find ourselves having to make the case that we’re better, per se, although that’s something I’d like to change. I hope there’s going to be a lot more funds moving into this space and that we will more and more have to make the case that we’re one of many but better.

Courtland Allen: 3m 27s

You want more competition.

Tyler Tringas: 3m 28s

I really do, yeah. Absolutely. I’ll tell you why. The reason here is that the number of companies and entrepreneurs that are a fit for this kind of backing is vast. It’s almost definitionally much bigger than the whole of the venture ecosystem, because every good VC tells you they’re looking for the outliers, the absolute most far edge of the risk-return profile.

And so there should be tons more businesses that are a fit for what we’re doing. So we need a lot more people in this space to help back new companies.

Courtland Allen: 4m 2s

That’s an interesting vision. Obviously, there will always be some self-funded, some bootstrappers out there, but do you think we’re moving towards a world where that number will diminish, where a much larger number of entrepreneurs will opt to raise funding, because there are different models out there that exist now that are more supportive and realistic for them?

Tyler Tringas: 4m 19s

I don’t think the number of bootstrap companies will go down in an absolute sense, but I think that on a percentage basis we’re going to see more of everything, and with the percentage of companies raising some kind of funding, growing.

So the problem has been, look. When you have folks on your podcast that are successful bootstrap founders that are let’s say 10 years in, go back and ask them about those early days. It was always just chaos.

They’re living in their parents’ basement. They’re using credit cards to make payroll. Everybody could use a little bit of capital at the early stage of a business. So if you can find the right type of investor to back those businesses, I think a lot more entrepreneurs are going to find that there is someone who wants to help them through that phase.

Courtland Allen: 5m 13s

Yeah. I totally agree. It makes me wonder, why hasn’t this been a thing in the past? The internet has been around for several decades now. It’s not exactly the most creative idea. There have been plenty of bootstrap founders as well who have been complaining about venture capital.

Why has anybody started an Earnest Capital in the past 20 years, and what makes the time right for something like Earnest now?

Tyler Tringas: 5m 33s

Well I can tell you my theory on why. This is getting a little bit theoretical here, but why this didn’t exist before. The reason is you had this alignment between venture capital and software companies that made sense 15 years ago, because you had to rack millions of dollars’ worth of servers before you could even get your website live to even see if anybody gave a crap at all about what you were trying to do.

But then if you got it right, you had all this green field space with no competitors, and so if you nailed it, you could just gobble up the whole market. So it was perfectly aligned with the idea of venture capital, which is this big lump of risk at the beginning, no idea if it’s going to work, but if it works, it’s going to be massive.

And what happened over time is the tools for launching and building got cheaper and cheaper, so you could start to build these technology businesses in niche spaces, and only targeting a couple of people or just a small derivation of a different product. And this is great. It vastly expanded the number of opportunities out there.

Kind of made them not really venture scale, because you can build them relatively cheaply, and you’re not necessarily going to take out the whole market because there’s a ton of competitors out there, but that’s actually okay. You could still build a great business there.

The problem is, they don’t have any collateral. When I sold my last business, it was three clicks. I handed over a Stripe account, a Roku account, a GitHub account, and that was it. That was my whole business. Now someone else owns it. And the entire banking industry is built around the idea of collateral.

They’ll write you a million dollars to go open an Arby’s, because they know if that thing fails, there’s real estate, there’s all kinds of assets that they can take back, and they just had no model for backing these kinds of companies even as they’ve massively proliferated. You’ve got data about the number of new Indie Hackers out there. It’s just growing exponentially.

Courtland Allen: 7m 31s

It’s staggering.

Tyler Tringas: 7m 32s

There’s just been no financing mechanism that was aligned with them, and we have this legacy idea that, “Oh, well, venture capital is financing for software businesses.” And that’s just not true anymore, so we need a whole bunch of new financing models that are for these software businesses that are just businesses. They’re not ventures, per se.

Courtland Allen: 7m 55s

Walk me through how an entrepreneur should be thinking about all this. Because for the last couple of decades, venture capitalists have been synonymous with raising money, which means that raising money has always been equated with doing things like going through this arduous process of sucking up to these gatekeepers and begging for money and probably being told no and wasting a ton of time.

Even if you succeed, it usually means, “Congratulations. You now have a boss,” in the form of an investor who can tell you what to do, that can take up board seats, potentially even replace you. They might drive you to have all sorts of unhealthy growth goals. There’s just a ton of objections to the founder to raising money. Should we maintain these objections or should their viewpoints be changing?

Tyler Tringas: 8m 31s

I think it should definitely be changing, because we’re seeing this big awakening of the scale of this opportunity, and what you’re seeing is investors respond to exactly those critiques.

What I think is, you need to disaggregate this idea of “raising money,” which like I said, for so long if you were a software business and you didn’t have a physical retail location, your option for raising money was a one-to-one relationship. It was raising money equals raising venture capital. And that was it. There was no other option.

Of course, if you’re going to open a bakery, you have a whole bunch of options. You can go to friends and family. You can go try to find a professional investor. You can go raise a loan. You can go get an SBA loan. You’ve got this whole spectrum of stuff, and you’ve got to figure out what’s the right fit for you in that moment in your business and all that sort of stuff, and we’re heading towards that equivalency for Indie Hackers for people building technology businesses.

There’s going to be a ton of different options and a lot of these are emerging. A lot of them exist, and you just need to figure out, well which one is the right tool for the job. Maybe that’s none of them. I tell people I’m not in the business of talking folks out of bootstrapping. Often, people come through our door and I end up telling them, “I think you should bootstrap. I think this business makes a lot more sense for bootstrapping,” which is fine. It’s about finding the right mix.

But I totally empathize with a lot of those critiques and in fact, if you go back to my Twitter account and my blog from five years ago, you’ll find me being one of the loudest voices making those critiques. But one of the reasons we try to this, and one of the reasons we did it so transparently and collaboratively with folks is, “Let’s try and work backwards from first me as a bootstrapper. What would I have wanted to work with? And then let’s expand that and get more and more input to say, is this a fit for you?”

And that goes for everything from the way we design the financing structure to the fact that we don’t take a board seat. We don’t do any of that stuff. We want to just be as aligned as possible with these kinds of entrepreneurs, basically.

Courtland Allen: 10m 37s

I like your point that a lot of the criticisms that founders have of investors, investors like yourself are actively listening to, and you’re creating new models and trying to accommodate these founders and address their concerns.

If this happens at scale, it means the entire ecosystem for raising money is changing, which means the founders need to update their existing notions and ideas of how it all works and come into the modern era. But it’s hard to do because this stuff changes so slowly. I mean, this is stuff that’s changing on the order of years or decades, not weeks or months. So people aren’t really used to updating.

It’s like if you asked somebody from my generation, “What’s the population of the Earth?” they’re probably going to tell you six billion, because that’s just what it was for so long, even though the answer today is closer to eight billion. They haven’t updated. Maybe the fundraising environment is a little bit like that.

Let’s say you have updated and you’re saying, “Okay. You know what, I’ve been a bootstrapper in the past, but now I’m going to consider raising money,” how can you determine if that’s the right decision for you? Because you mention that even companies that come to you sometimes, you tell them, “No, no. The better idea for you is just to stay bootstrapped.” How do you know if you should raise money or not?

Tyler Tringas: 11m 37s

It’s a tough question, because there’s a lot of nuance and situation-specific considerations. But one of the things that I’ve found to be a useful frame is you want to raise money when you feel like the money is going to clearly unlock value in your business. And that contrasts with raising money just because you need it.

And this has the benefit of both being a good lens to look through for yourself as an entrepreneur to say, “Should I be raising money right now?” And also makes it more likely that you will be able to raise money. An example would be, I have a side business. I’m only able to work on it 15, 20 hours a week. Obviously, it’s not my full attention, but yet I’m able to ship features, I’m answering ticket requests and the business is still growing.

That’s a pretty clear, almost canonical example of, “Look, if I could just have my full-time focus on this business, can’t you see how much value that would unlock?” Great. That makes a ton of sense, and it contrasts with, “I literally have no time in my l life right now. I have all these great ideas. If only I could just have six months of not working, I’m sure that I would be able to turn those into a vision, right? That’s just coming from the need. You need the money to take the six months.

That’s not a good time to raise money, because first of all you don’t have any good leverage. Second of all, you’re very unlikely to actually raise the money so you’re much more likely to just end up wasting your time. So I think, looking through it from that lens of, “I have this pretty well-defined bit of value, and if I can raise this much money, I can unlock it.”

Another example is, if you have a business that’s a little further along and you’re a small team. You have your core team that’s working on product, and you’ve got in-bound traffic that’s going. You have a pretty good funnel. You’re converting people from free trials and all that sort of stuff. But you want to hire a head of marketing and give them a budget to try to figure out paid acquisition. I think that’s a good time to raise a bit of capital.

That’s a scenario that we’ve invested in already in the past, where “Look, I can see that if I could just drive more eyeballs to this particular funnel, I think it would unlock a ton of value, but I need that upfront bit of capital to be able to hire a strong head of marketing and give them a budget.”

Courtland Allen: 13m 59s

Let’s talk a little about how you got here, because the last time we spoke on the podcast, you were working on a very different business. You were working on Storemapper, which is a SaaS application. I think you were episode 12 of the podcast, so that was well over two years ago.

You eventually sold Storemapper, which is a crazy process to go through as a founder. You have something that’s been pretty much you’re entire life, and you’ve poured your heart and soul into it, and suddenly it’s gone. How do you decide what to do next as a founder if you’re in that position?

Tyler Tringas: 14m 27s

I don't know if I can answer generally what folks should try to decide to do next. I did write a 9,000-word blog post about my decision behind deciding to sell my business, where it touched on that a little bit in terms of figuring out what you want to do next, before you decide to sell, rather than selling the business from a point of exhaustion with your current business and then sitting there and saying, “Oh, crap. What do I do now?”

Courtland Allen: 14m 55s

So step one is to have a step two

Tyler Tringas: 14m 57s

I think so, yeah. I mean, I think Derek Sivers has an example of this, of calling the Tarzan move, where he’s swinging from one vine and grabs the next vine before letting of the last vine. I think that’s generally good advice.

In my case, it’s kind of weird. If you surveyed the folks in Indie Hackers, I think what you would find is very few of them have a background in finance that I had. I actually started my career working for a startup that was advising investors in the clean tech market.

We got acquired by Bloomberg. One of the things I did throughout that career was explain a couple of very complicated financial models that were being used to finance wind farms and solar farms and stuff like that.

So I had this strange background in finance, and I pivoted my career to being an Indie Hacker, building a micro-SaaS, and now I came out of it with this angst around, “Wow. People really struggle to finance or to get their business off the ground. There’s a big problem with capital at the early stages.” In my case that was that I have $50,000.00 in credit card debt to get this business off the ground.

You know, it would be great if you could take all the good parts of the venture model, the community, the early-stage capital, and apply it to this incredible group of folks building businesses. But the model just doesn’t work. You can’t just be writing people willy-nilly checks on convertible notes. You can’t just take Y Combinator and just apply it to Indie Hackers.

But I was like, “Well, I don't know. Maybe I’m the kind of person who can sit there with a whiteboard and design something that bridges these two things.” So we started pulling that thread, just seeing if we could make it work, and so far, so good.

Courtland Allen: 16m 49s

This goes back to the question I was asking you earlier about why hasn’t this been done before? Why aren’t there already a ton of Earnest Capitals that have been in the startup investing space for a while and making this work?

If you look at the way that the VC investment model works, their returns follow a parallel distribution. So if you’re venture capitalist, you invest in 50 companies. Maybe 40 of them just outright fail, 8 of them give you a 2x or 3x return, but then one or two of them are these unicorn companies, these outlier successes that become worth billions of dollars and they more than make up for all the failed companies you invest in so you still turn a profit as a VC.

And if you don’t follow that model, if you don’t really encourage the companies you invest in to go for billion-dollar exits, then what you really need is the vast majority of the companies that you invest in to succeed, which is seen as an insurmountable, very difficult challenge. I wonder how you think about this with Earnest. How do you get over that hurdle?

Tyler Tringas: 17m 41s

This is the principle bent of Earnest, this idea that we will see fewer of the companies that we back outright fail. Because what you will hear - and this goes to the reason why stuff like this didn’t exist, is that for most folks who control dollars that go into early-stage companies, this is mostly the venture ecosystem and then the various things adjacent to it, the service providers and the LPs of venture finance, all of that.

They will tell you, “Look, there is an iron law of physics, which is that,” you know, they’ll use some big number, “80%, 90% of startups fail, and so to make up for the fact that almost all of them fail, you have to have your ones that succeed be as big as possible.”

Our position is, “Hey, I think that it is not an iron law of physics how much companies fail. I think that the venture model feeds back into itself, where it says, hey, when I give you a million bucks, and then I say you need to grow 11% per week for the next 12 months in order to hit the milestone to be able to raise your Series A or Series B, that that makes you, one, more likely to be a unicorn, correct, but also makes you more likely to fail, that you are going to take more risks.

You’re going to try to grow faster. You’re going to spend more. You’re going to hire faster. You’re going to do paid marketing when maybe it’s not as efficient as it could be. And you’re going to be more likely to also fail.” Our bet is that you can also run that back into reverse, in that if you get people capital that is sized appropriately and aligned with their outcomes, you don’t give them any growth pressure.

You’re not working backwards from a next round of financing. You’re saying it’s totally fine with me if you never raise another dollar ever again, so I don’t care what the Series B investors want to see. I want your business to succeed. Then they make tradeoffs where they optimize for sustainability and growth rather than growth, growth, growth, growth, growth.

That’s our central bet. I tell the folks who invest in our fund, we will fail, and failure is relative here. We may not provide an appropriately adjusted return, not that we’ll burn up. But we will fail if it turns out it is a law of physics. And 90% of our companies fail too, and the ones that succeed just don’t do as well as - you know, we don’t have next Airbnbs or Stripes.

This is our basic bet and to me, I think that aligns us a lot better with founders. I think one of the central critiques of venture is this idea that, “Look, most of you guys are going to fail, so my job is just to double down on the ones of you that succeed and write off the rest,” whereas we are really aligned to make sure that as many of the founders that we back as possible succeed.

Courtland Allen: 20m 21s

I love that. One of my favorite things is having a company whose incentives are directly aligned with your customers, or I guess in this case your portfolio companies. You have a no-company-left-behind policy. You need almost all of your companies to succeed for you to succeed, so anybody who takes investment from you knows that you’ve got their back.

Let’s talk about the reverse side of this equation, which is that as an investor yourself, you have people investing in you. They’re called LPs, and they’re the people who give you the money that you invest. What was it like finding people to believe in the vision for Earnest, and convincing them to invest in you?

Tyler Tringas: 20m 56s

It’s an incredibly painful process. One of the things that I say is that I get to take on the burden of fundraising so that our founders don’t have to waste an enormous amount of time doing that. They can come to us. We make a decision.

We write a check and that’s it, and then I still have to spend probably a third of my time talking to an endless stream of potential investors to make sure that we have enough funds in the coffers to keep investing.

The process is pretty painful. It involves lots and lots and lots of pitches, lots and lots of no’s, lots and lots of Zoom calls. But all that being said, I think we had an easier time of it than some folks do raising venture funds. A lot of people say it takes 18 to 24 months to raise a fund. We were about six months from starting the process to writing our first check into a company.

It’s an ongoing thing. You basically never stop fundraising. But we got to critical mass pretty quickly, and it came primarily from bootstrapped, successful founders who intuitively understood what we were trying to do. Basically, if you go to our website and you look at our mentor list, everyone who is a mentor in Earnest is also an investor in our fund.

We think that’s very important for skin in the game reasons, and they also represent a full, I want to say, 70% of our total investors. So we have some folks that are investors that are not mentors, but it’s a laundry list of folks that I find frankly very inspiring bootstrapper founders, like Natalie and Chris from Wildbit, Jason and David from Basecamp, David Hauser from Grasshopper, a lot of folks that you’ve had on this show. Moritz Dausinger from Mailparser. Just an incredible roster of folks who both stepped and wrote a check to back us and also are super generous with their time.

Courtland Allen: 22m 51s

Yeah, sounds like the past guestlist of the Indie Hackers podcast.

Tyler Tringas: 22m 55s

It is, yeah.

Courtland Allen: 22m 57s

You’ve mentioned a couple of really cool things that I want to talk about, because I think they’re very related. Earlier in this conversation, you talked about the fact that you want to bring much more than just money to the table, but you want to mentor startups and help them succeed.

A little bit more recently, you talked about the fact that you believe that significantly fewer than 90% of businesses need to fail, and if founders follow a particular model their success can come a little bit easier, a little bit more guaranteed. How do you use this incredible list of mentors and successful founders that you have working with you at Earnest to coach these fledging founders and help them succeed?

Tyler Tringas: 23m 34s

One of the things I find hilarious is if you’re on VC Twitter, which I increasingly have to be just to keep up with how things are going on over there, people say constantly, just flatly as an undisputed truth, that investors add no value or in many cases they add negative value.

Man, I just think that has a lot more to say about the people who are currently VC’s than it does about the idea of investors adding value. Because when you’re talking about early stage founders, there’s so many things that can just waste a gigantic amount of time but having a mentor group around you can just help you just knock that out.

Everything from tactical questions where you’re trying to figure out, “How do I set up payroll if I have three freelancers in Utah, one in North Carolina, one in Canada, one in South Africa. What are my options here?”

And you can just quickly poll 40 entrepreneurs who run the gamut across those kinds of remotes teams and get the best options instantly, versus going down the rabbit hole of reddit trying to get a million different suggestions.

That’s incredibly valuable and being able to have a group of folks who can help you rapidly iterate on features ideas to help you prioritize things, to help you think outside the box. Are you being too incrementalist with your pricing strategies or should you 10x those things?

Just having folks in your corner to help you solve those, to me, I think I’ve become certainly much less of a diehard bootstrapper, obviously.

But I just see the value that’s being created in our Slack, in our Basecamp every day. And frankly, as a former entrepreneur, I’m jealous. A lot of stuff that I know, I was sitting there banging my head against the wall for days, just gets knocked out. An example would be sometimes as sole founder, you’re dealing with these huge platforms that we all interact with now.

You’re building on top of, in my case it was like Google Maps, or you’re building on top of Salesforce or something huge like that. It’s hard enough to get a human being on the phone to help you with that, much less speak directly to a decision maker.

Honestly, I tweeted about this a little while ago, but we had an example where one of our founders was totally stuck trying to integrate with a platform that is a part of one of these giant big cos (companies).

And one of our most recent mentors just pipes into Slack and says, “By the way, I lead a 20-person engineering team working on that platform. Let me see what I can do.” He just saved that founder two weeks of work. I think it adds a timely value. Ultimately, it’s not like people can just hold your hand and walk you to business success.

A huge amount of this on the founders that we back to solve these problems, implement it correctly and make sure that they don’t fail. But I think it meaningfully moves the needle on making it more likely that you at least get your business to a sustainable place where you can keep working on it indefinitely.

Courtland Allen: 26m 48s

How do you evaluate whether or not a company that you want to invest in is going to be successful? For your model to work as a fund, you need the vast majority of the companies that you invest in to work out, so you probably have some sort of process for how you look at this, and I know that if somebody’s a founder listening in and they want to start a company, but they don’t have an idea yet they certainly want to choose an idea that has a high percentage chance for success. How do you go about determining that?

Tyler Tringas: 27m 16s

One of the things I’m trying to do is pontificate less and less on what are good business ideas. Being an investor is one of these jobs where just by officially becoming one, the job becomes so much easier, because all of a sudden, you go from just a random person with ideas to someone who sees hundreds and hundreds of pitches, of ideas, of what people are working on, their metrics, et cetera. And you just instantly start to get this much bigger perspective on what’s working.

The main thing I’ve taken away from that is very surprising. It’s surprising what is actually working in a lot of situations, so I think my opinion on that is evolving quite a bit. I’ll try not to predict the future here, but I’ll talk about two areas of interesting themes that I’m seeing people successfully build companies in and that I think probably will continue.

One of those is I think I’ve been converted wholesale from a skeptic, maybe even as recent as six months ago, to pretty diehard about the idea of people building legitimate businesses on top of no-code tools. I looked at this.

Obviously, people know Ben Tossell started as our head of platform and his side project, Makerpad, whose been on the podcast here, started making way too much money and he had to go fulltime on it.

And he is the hub of the no-code movement, so he sees across all the folks using these tools. I’ve started seeing folks coming in with very legitimate businesses that are built on top of no-code tools, and those have two really distinct advantages that are vesting that I didn’t internalize until I saw it firsthand.

The first one is the speed. I will frequently see Ben in our internal Slack Basecamp just brainstorming an idea. He’ll get feedback from some other founders. He’ll get feedback from some of the mentors. He’ll lock it in and say, “Okay. I think we’re doing this.” And I’ll be like, “That’s a great idea. I really hope they launch that sometime this quarter.”

And then I’ll wake up the next day and it’s live, fully featured, done in four hours. It’s remarkable how fast you can build with some of these, and ability to iterate at that speed is incredibly valuable.

The second thing is cost. One of the big challenges of building a micro-SaaS business is, you’re the founder. Maybe you're a technical founder and you can code. You don’t care that you’re not getting paid anywhere near your market rates, but eventually you’ve got to hire software developers and designers, and those folks are expensive these days.

Courtland Allen: 29m 49s

They want to get paid.

Tyler Tringas: 29m 49s

Yeah. And if you can build your business on top of no-code tools, that’s one thing that you completely sidestep. And maybe eventually you end up replacing them, but if you can get your business to a substantial run rate on top of no-code tools, it’s actually very valuable.

I think one of the companies we’re likely to invest in soon got themselves to just about break-even for two founders entirely off of no-code tools that they’ve hacked together. I’m excited about those opportunities. I’ve got another one. If you scan through our portfolio, I’m excited about niche-industry-focused B2B SaaS.

You have this pattern of folks who understand a particular industry. They’ve been working in it for years. They know where people are using spreadsheets and post-it notes and doing something incredibly inefficient, and the market is too small for a venture capitalist to say, “Look, I really can’t see how this is going to be a $10 billion business. “

But they see the opportunity. They learn to code. They find a technical cofounder and they build some incredible niche piece of software that only serves a relatively small market from what your VC had on, but for our model, these are great businesses. This is folks like Reilly Chase who does HostiFi.

He used to work for IT companies and noticed this one pain point around this particular piece of software they were using over and over again and built a hosted version of that. One of our most recent investments was Endcrawl, which is SaaS for rendering and collecting the end credits for feature films.

Same story. One of the founders ran a post-production house in Hollywood for 10 years and knows this is a huge pain in the ass for everybody in this industry. Nobody wants to deal with it and you’re paying incredibly expensive post-editors to do this grunt work, and they build software for it. It’s a great business.

I think folks should be looking for opportunities there in particular industries. I would contrast that with, like I told you, don’t think about the next email marketing automation platform. Think about email marketing automating for industry and start looking for those industries where you can apply some of these best practices in a focused way.

Courtland Allen: 32m 4s

I love those insights. For listeners who are curious about more details on both of those companies, Reilly from HostiFi was on the Indie Hackers podcast a couple months back and Alan and John from Endcrawl did an Indie Hackers interview where you can read about the details of their business on the website.

Tyler, we are limited to a half hour for this episode. I want to have you back on and we’ll talk more about the model behind Earnest and how you’re finding these founders, and the trends that you see in the future if you let me check back in with you. Can you tell founders where they can go to learn more about what you’re doing at Earnest and whatever else you have going on?

Tyler Tringas: 32m 39s

Yeah, I’ll take the opportunity to do a shameless plug. We are extremely remote first. We have a remote community of founders and mentors. We invest in entrepreneurs who are based everywhere, but I think it’s super important to get folks together in real life, and to that end we’re throwing a founder summit which is coming up next March in Mexico City.

The pre-applications are live right now. You can find it on our website, and we’re going to start releasing the first couple of batches of tickets in early to mid-November. I would definitely encourage Indie Hackers to check that out.

We are going to have a good number of sponsored tickets, both for Indie Hackers who are a little bit early stage and can’t pay full price, as well as some sponsor tickets for underrepresented founders so if any of that sounds interesting, there’s a part of the application form where you can tell us more about that and apply for a sponsored ticket.

Courtland Allen: 33m 34s

And where can founders go to learn more about Earnest Capital in general?

Tyler Tringas: 33m 37s

Easiest place is earnestcapital.com. It’s Earnest, E-A-R-N like earning, not Ernest like Hemingway. And I’m @TylerTringas on Twitter. We’re @EarnestCapital on Twitter. Pretty much everything comes out there.

Courtland Allen: 33m 52s

All right. Thanks so much, Tyler.

Tyler Tringas: 33m 55s

Thank you.

Courtland Allen: 33m 56s

Listeners, if you enjoyed this episode, I would appreciate it if you reached out to Tyler and let him know. He is Tyler Tringas on Twitter. I also recently started a podcast newsletter. Go to indiehackers.com/podcast.

You can subscribe, and pretty much every week when I release a new episode, I share some of my thoughts with people on the newsletter and discuss my take-aways. So again, that’s indiehackers.com/podcast. Thanks for listening and I will see you next week.