10 Questions with John Machacek: David Batcheller (Josda)

• There are “gotchas” all over in the process. Things like homes left vacant by a loved one’s death. Even if they are insured, and even if the policy is paid up, most homeowners’ policies don’t cover a vacant home—so you must contact the insurer and update the policy. Otherwise, God forbid something were to happen to the home, good chance you wouldn’t be covered.

Speaking of homes, there are security things that are super easy to miss. If a home is vacated by someone’s passing, then you should change the locks, garage codes, etc. Why? It’s impossible to say who has had access to that home from years of sharing keys, access codes, etc. with people. Caregivers, neighbors, old friends, etc. One can’t be sure that one of those people won’t let themselves into the home and avail themselves of some of its property. Notifying credit bureaus, canceling IDs, and other fraud prevention measures are often missed in the process of settling an estate, and sometimes it creates real problems.

Then there are a lot of confusing things. You often must file a tax return for the decedent, then create an employer identification number, and file another tax return for the estate. Often, more than one year of tax returns for the estate. Valuing assets in the estate has very particular rules—how to value stocks, for example, is done using the average price for the stock on the day the decedent died, not the value at the end of that trading day. Some assets need formal appraisals, and some do not. Things like firearms can have particular rules for transfer of ownership and need to be transferred through a gun dealer.

All of these are confusing hangups, and this is just scratching the surface of it.

3. So, this definitely sounds like a problem to be solved, but what led you to start Josda?

A friend of mine’s mom passed away. Her passing wasn’t necessarily surprising, but all the work he had to do as a result caught him totally unaware. There was much more to the process than he ever expected, and it was much harder for him to get the direction than he needed. As a result, while he was dealing with other challenges in his life and generally having a stressful time of things, his free time was a veritable buffet of dead ends, run arounds, aggravation, and confusion.

To me, this seemed like the kind of thing modern software and artificial intelligence are perfect at helping people through. There is a lot of complexity, but it is also rules-based. We believed that connecting a nice workflow and task management system, with all the tasks it takes to settle an estate, coupled with an AI assistant that would answer your questions along the way, would be a godsend to folks.

4. Is Josda a substitute for a Lawyer or CPA?

No. We don’t fancy ourselves a replacement for professional service providers, but we maintain that using Josda helps reduce your reliance on those service providers to answer simple questions—saving you money in the process

For example, rather than showing up to a meeting with an attorney partially prepared, spending that meeting exploring all the things you’re missing, only to return again nearly complete, and finally finish things off with the attorney in a third meeting—using Josda makes you prepared so you engage that attorney only for what you need them for and arrived armed with the information they’re going to need to work on your behalf. With providers billing at $350/hr., and Josda costing $50 a month, it doesn’t take much savings on billable hours to make our product worth it. Also, frankly, it helps the attorney deliver a higher-value experience for you as a client.

5. Have you had many significant changes, pivots, or learnings from when you kicked off your work on Josda to where you sit today?

Absolutely. I expect we’ll continue to do so.

I’ve been blessed to launch and grow products from ideas to tens of millions of dollars of revenue in my career. Never, not once, did we get it totally right the first time. There is always change. The important thing is getting the mostly-right product into the hands of people it can help, talking to them about their experience, listening to their feedback, and using that feedback to make something better.

So far, we’ve changed how we took the product to market, from a monthly subscription instead of an annual subscription; changed how we work with resellers like funeral homes to sell the product; and added a couple of significant features to the software every month in an effort to make the product better performing for current and future customers. Mostly, this is going to look like adding more and more automation.

To me, the two truths of product development are:

1. It takes longer. However long you think it’ll take to create the product that really takes off, it’ll take longer.

2. It costs more. However much you think you’ll have to spend or sacrifice to make the thing. It’ll be harder, It’ll take more and It’ll cost more

But it’s also worth it. When you get it right, you leave a little dent in the industry, you reshape consumer expectations for the better, and you really help families in the process. It’s rewarding in ways I can’t succinctly describe.

6. You and your co-founder recently went through the gener8tor North Dakota Accelerator. Both of you already have a lot of experience developing and scaling new products, so can you please tell me about your motivations for joining the accelerator and your positive outcomes?

I feel like I need to answer this question from two perspectives. One as a member of the community.

The other as a businessperson.

First, let me say that I think we’re fortunate to have gener8tor in our community. When we grew our last business, scaling from a couple of college kids in a research park office to hundreds of employees, we did it without raising venture capital. Growing a business like that is really difficult. Our lack of capital forced decisions that, at times, really were not the best things for the business but seemed necessary at the time.

That is all to say, sometimes you can grow a business without taking on outside capital, and that is great. That works for some businesses.

Realistically, some businesses can’t grow and scale without outside capital. Or, said differently, you’ll never build the business into what it could be because you’ll starve it. You won’t be able to afford the inventory to grow

You won’t be able to afford to invest in the right next product. These limitations stunt what the business could become, making space for competitors that shouldn’t be there

Whether or not to take on venture capital is its own decision. I will say that deciding to take on that capital can have a huge impact on a business. Properly capitalized companies have the wherewithal to make better decisions.

Let’s assume you want to raise money for your business. Doing so has the potential to build the next Bobcat, Great Plains Software, BNG, Bushel, Appareo, Phoenix International, or any number of great businesses that were started here and became major employers in Fargo. We want that kind of thing to happen. But it’s hard to do.

It’s hard to do because part of the problem is capital, part is network, and part is guidance. Twenty years ago, if you didn’t have those things and you wanted to grow a business in Fargo, good luck. Today it’s a different story. Gener8tor can give you all three, working with local, Midwest people who understand the business culture of the region. That is really cool.

We joined the North Dakota Accelerator because venture capital was new to us. We wanted a place where it felt safe to work with a VC outfit that would accommodate our ignorance. We know what we’re doing technically; we’ve built products like this before, but venture capital was generally new to us. Gener8tor has been awesome to work with in that area, and we’ve met a lot of fantastic people in their network that will be really helpful in growing Josda.

7. It’s been almost 20 years since I first met you, when you moved back to Fargo to co-found Appareo with your dad. A lot of time and blood, sweat, and tears went into scaling Appareo, as a hardware & software company that grew to probably a couple hundred employees. Do I assume correctly that a company like Josda wouldn’t need to get that large and complex, which may make jumping back into entrepreneurship a little less daunting?

Being an entrepreneur at 42 looks different than 22. There are a lot of different sides to this statement, and I could easily spend an article on this topic. I’ll try to be brief.

A person needs to think carefully about the end state of the business you’re trying to build and what it takes to make that business successful. That influences the kind of business you build, the market you participate in, the technology you’re leveraging, etc.

Some businesses you can start and grow successfully to scale. Some businesses you start and unless you scale first, you can’t be successful at all.

This is an important distinction.

The former is a business that can grow its way to scale, which gives you a lot of flexibility to grow the business at a natural pace. The latter must quickly achieve scale and urgently needs to transition to profitability, because it is large and burning lots of cash, and if it doesn’t achieve profitability quickly, it starves. That is, by nature, an unnaturally paced business. Everything must be very, very fast.

I’m a dad. I have three girls, and my partner in life, Victoria, has one.

In the former business, you can trade a little growth trajectory to be a dad and still win. In the latter, you can’t bet on having that luxury.

So yeah, I think it’s totally fair to say we chose a problem that gave us the flexibility to build a business that could grow into scale rather than needing to burn the proverbial candle at both ends to build a huge business that we hope to turn into a unicorn just before it implodes. That doesn’t mean we’re not grinding away at it; we are. It doesn’t mean we don’t believe Josda will grow into a large, successful business. It will. It just means we have a more forgiving business and industry that affords us the space for the business to find its way, rather than to force its way. Also, we’re in a SaaS space. Software as an industry has been turned on its head and shaken. The industry is very different from what it was ten years ago. What we accomplished with tens of thousands of dollars of investment and a couple of dedicated, hard-working people would have cost a million ten years ago. And it would have taken longer.

Sometimes it is much easier to build a brand-new disruptive business around a new paradigm of working and technology than it is to transform an institution in an industry that has always done it a certain way. We think that right now is an incredible moment in time to start a SaaS business on a very focused, high-value problem.

8. David, from knowing you over the years, I’m aware that you’ve started to advocate for making sure to better take care of yourself both mentally and physically. Would you like to share anything on that for entrepreneurs, or I guess anyone really, who may be reading this interview?

Zinger John. For real. The last question could have been an article in itself. This could be a series of articles.

I could provide a laundry list of cliches. Putting your oxygen mask on before helping others. So on and so forth. My entrepreneurial experience is littered with a graveyard of mistakes. Mostly around managing stress poorly. Feeling isolated. Not having the tools to handle the combination of those two things very well.

I ate too much. I drank too much. I worked too much. I added smoking as a cherry on top of these other poorly conceived stress management tactics.

I believe there is a link between the psychological load and the effect on your body. With all the stresses in my personal and professional life, I developed serious back issues. Enjoyed a pandemic neurosurgery. Spent the better part of a year recovering. On top of it, I was miserable for years.

That misery affected how I showed up as a dad, as a partner, and as a friend.

Suffice it to say, your psychological well-being is really, really, important. You need to take it seriously. Because, at the end of the day, you choose how you experience life. It all happens in the six inches between your ears. How you choose to perceive and process the events of your life dictates your life experience.

The best advice I can give entrepreneurs, in a general sense, is to love the process. Don’t focus on the end state. The goal of building a great business, selling that business, whatever. Do not cast your eyes to that place, compare it against your current state, and find reasons to lament. It is, unfortunately, often done and it never helps. It’s a lonely challenging thing that we try to do building these businesses.

I think you need to, instead, look at the process that produces the outcome that you want. How much of what activity, every single day, steps you toward the long-term goal. Then, throw your energy into loving that activity, learning everything you can about it, and doing it really, really, well. Love the process of achieving the outcome.

Because it takes a long goddamn time to build a business. Ten years if you’re lucky. That end state, the destination, whatever good looks like for you there, is a rather brief experience. You reach the summit, see the vista, take a deep breath, and then you’re faced with the reality that it is all done. The climb is no more, and you’ll need to find another climb. Covet another vista.

If it’s only about the view from the top, you’ll spend a crapload of miserable time in the ups and downs.

But, if you love to climb, the brevity vista is a rewarding bonus, but it is unnecessary to make the climb a good time. Also, I’ve got zero stats to back this up, but in my experience, people who are having a good time doing what they are doing are a hell of a lot better at doing it, and get much better outcomes than those who don’t.

9. If you could talk to David from years ago, aside from maybe what you already just talked about, what kind of hindsight advice would you give yourself as an entrepreneur?

It would be about not running from the stresses and difficulties of your life. That sounds kind of wrong now that I say it that way

By running, I mean not trying to cover them up. Being more courageous in the face of internal and external conflicts. Spending more time thinking and less time doing, when things were going poorly.

I think that is a common trap. Things are problematic; that is always true at some point in a business. Things just go absolutely sideways, and you’re reacting. I think I used to run into those situations just trying to work as hard and fast as possible in whatever direction was right in front of me at the time. I would use effort to distance myself from the internal or external conflict, especially when I didn’t like the direction things were going.

I think that I’ve learned that contemplative approaches to those problems are always more effective. The feverish action for sure needs to come, but it should follow serious consideration for the direction you’re going to point that intensity.

Responding. Not reacting.

I’ve learned that journaling and gratitude are transformative forces in the face of stressful and challenging times. So, in short, I’d tell myself to write a lot more. To process the circumstances of my life and the feelings and intuitions I didn’t really understand about those circumstances, rather than grind like a crazy perso,n assuming I’d ultimately grind through that discomfort and land in a happy place. I think if I’d done that, I’d have grown a much larger business last time around and been a lot healthier doing it.

10. What can we do as a community to help you and Josda succeed?

Check us out at josda.ai.

If you know someone who is settling an estate, we’d love to help them out. They can try Josda risk-free for 30 days.

If you have been through the process of settling a loved one’s estate, we’d love to talk to you about it, especially if there were parts of it that were particularly difficult. Those stories are places we go to find opportunities to make sure other families don’t have to experience the same kinds of aggravation.

About John

John Machacek has been helping local startups with the Greater Fargo Moorhead Economic Development Corporation for over a decade. Before joining the GFMEDC ream, John’s career path has varied in areas such as banking, accounting, and management in the nonprofit, food & retail sectors.

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