Andrew: This interview is sponsored by Wufoo, which makes embeddable forms and surveys that you can add to your website right now, check out Wufoo.com. It’s also sponsored by Shopify.com, where you can create an online store right now, within five minutes, and have all the features that you need to keep selling online, check out Shopify.com. And it’s sponsored by Grasshopper, the virtual phone system that entrepreneurs love, because it has all the features that they need, and can be managed directly online. Here’s the interview.
Andrew: Hey everyone, it’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart, and, about a month ago, I had a no-show interview, a no-show interviewee, and so I put out a call for people to come in as back-up guests here on Mixergy, and Chris Dumas, co-founder of DonorTools e-mailed me and said ‘you know what, Andrew? If you need anybody, I’ll jump in there’. And, so, I got on the phone with you, and we talked a little bit about your business, Chris, and it seemed like an interesting story. It’s younger, much younger than my usual interviews here, but I figured maybe we could give it a shot, maybe we can talk to a younger company and hear what you’re going through also. So, why don’t we start off this way, with you explaining what DonorTools is.
Interviewee: Yeah, so we’re a software company, we’re web-based, and we help non-profits track all their donors and donations online. So it’s kind of like a CRM system that a for-profit company would have, but it’s really aimed at small Mom-and-Pop non-profits. People who can’t afford huge systems, or have users that need something simple. Is that what your looking for there, Andrew?
Andrew: I think so. I think from what I saw, the way it worked is, if I’m running a non-profit, and somebody sends me money, I can quickly enter them into your system, into DonorTools.com, and then I can send them a thank-you note by using a template, and just e-mailing that out to them, I can get reports, I can get to see where me money’s coming from, I can see who’s donating how much – Like you said, a CRM for non-profits and Churches. How’s that sound, my description there?
Interviewee: That’s beautiful.
Andrew: OK, and how long have you guys been in business.
Interviewee: So, we’ve been open to users for a little over a year now, and we’ve been working on the product maybe a year and a half.
Andrew: OK. How many users do you have?
Interviewee: So, in the last six months we’ve had 600 organizations, we have well over, I’d say, 1500 users.
Andrew: OK, and that’s 1500 users within these 600 or so organizations.
Interviewee: Correct.
Andrew: OK, and you told me that you guys are managing $55 million, what does that mean, that you’re managing $55 million?
Interviewee: Well, that was actually just nine days ago when I told you that, we’re up to $58 million now, and when I say that number, that’s how much money we’re tracking through all of these organizations. And again, we’re aimed at small non-profits, so maybe their overall annual budget is $100,000. Keeping track of these, for probably like the last year is… you add it up and that’s what that number is.
Andrew: OK, so this is people using your system, who are entering how much money they got from individual donors, and when you tally it up, because your system can, in addition to giving individual organizations the sum of money that they raised, you can also tally it all up and find out how much everybody is managing, and you came up with $58 million that way, right?
Interviewee: Correct.
Andrew: OK, so you guys don’t get a share of it, you don’t charge as a percentage of the money that’s managed, just what’s being managed.
Interviewee: Yeah, exactly, we were absolutely against getting in between a donor and the organization or cause, so rather than be transactional revenue, we wanted to be ethical, and we’re just a flat fee, it doesn’t matter how much an organization’s making, or what a donor gives.
Andrew: How do we know if these numbers are real, we don’t know, right?
Interviewee: I suppose somebody could do an audit, we’re not a public company.
Andrew: No, I don’t mean… How do you even know that the number is real? Have you looked through to see if somebody’s just typing in that ‘afgafg’ sent out $50 million.
Interviewee: So, we have a couple of scripts, and we cruise through by hand, most of these users, and if there’s somebody sitting on an account that’s not real, or not using the system, we just yank it off, because it’s just fluff that we don’t want in there.
Andrew: OK. You sent me a list of past users, and one of them was Seth Godin, what did Seth Godin do with DonorTools?
Interviewee: Yeah, so, we’ve been reading Seth Godin, seems like forever, and out of the blue one day, we get an e-mail from Seth that he wanted to raise $100,000 in 48 hours, and was curious if we could help him.
>>Interviewee: ………………in 48 hours and was curious if we could help him and ofcourse our answer is a ‘yes’. We will do anything for you. We worship you. And, you know, we kind of started having a conversation about what he can do with the launch of his new book ‘Linchpin’ and the hundred thousand dollar will all go to the Acumen fund. The Acumen fund, it is an amazing organization… we absolutely love them, but they tend to work with very very large donors. So how do you track all these small donations and then take it over and add it in to fulfillment, acknowledgements and your 501 C3 tax Id for end of year tax deductions. And so, you know, if we set them up, you know, our hero was this campaign and I think he raised over a hundred thousand and well under 48 hours.
>>Andrew: And what he was doing was just looking to keep track of who sent him money.
>>Interviewee: Sent him money and then being able to organize it a little bit better once into the system.
>>Andrew: Why couldn’t he just use a Excel spreadsheet? If Andrew sends him 100 bucks can he just go into excel and type in a 101 column and in another column my name and third column my address and be done with it.
>>Interviewee:I think, sure you could. What I think he is looking for is…our account was Paypal and we use something that’s called IPN which is Instant Payment Notification and we also do an automatic thankyou or acknowledgement with that gift. So, I guess how the money will be fund up will go to the Acumen part….how do you track that in a way that is auditable…people can say ‘yes’ they got the receipt. But not all organizations face…. they do not have a thankyou gift or a letter with a tax Id on it. So making sure that was handled was important.
>>Andrew: Ok, so how did it work? How did his system?… How did he use you guys? Did you guys just…did you create an account and give him a button which he could put in his website and people could click the button…go make payments and everything else will be recorded by donar tools.
>>Interviewee: So, our software has a public profile page facing about why you are raising money for…kind of cute…you can see who is giving what and we edited some of the CSS…. And nice little header graphic and I launched his blog plus the link to this page you could see kind of how far the progress was and then also…make your guest…. has a Paypal button on the page and takes you right through the payment process.
>>Andrew: And I think what he did was he said that he would give you an advance copy of the book if you donated it to the Acumen fund, is that right?
>>Interviewee: Yes, that is right.
>>Andrew: And so, the landing page that people saw was your site…you then gave him all the addresses of the people who brought books and their names…and how much..sorry their addresses and names of people who donated to the Acumen fund and so he could fulfill it and send them those free books.
>>Interviewee: Correct. So he has a blog in his account and manipulate the data by country or however, you know, he wanted to. We don’t actually look into his account to see what happened. So, he pulled out the data.
>>Andrew: What kind of dance of joy did you guys do when Seth Godin contacts you and say,”I want to use your service?”
>>Interviewee: That was probably a…. somehow I fear how to work that under my resume. That’s just cool. I can not figure out…you know… how on earth he found us in the first place and why he found us. It does seem like Seth Godin will be looking for our product. He has all these resources to make powerful things. Why would he use us? You know, it was just…
>>Andrew: I think you have a point of saying it by the way. I think it let me figure it out on my own…you said me three bullet points about you guys…you said..first bullet point, we are now managing 55 million dollars. Second bullet point….95% of our users said that they will be disappointed if they can no longer use donar tools. And by the way I was not sure what to make of that number or not even know where you guys are getting that number. But , I say, alright. Third one, was lots of people say nice things about us…and you link me over to your testimonials page which is donartools.com/testimonials…And I say, alright let me go and check out who they are…maybe I can find an interesting person there to use as hope for the interview and that’s how I discovered Seth Godin is on there and my eye went straight to him and I like the way they do reveal that. You didn’t beat me over the head with it…you let me discover it all by myself.
Interviewee: I guess you asked how we came up with that 95 percent number. It actually comes from one of your interviews that you did with, I think, Kismetrics doing a survey.io survey. If anybody out there hasn’t done one, go do it because this is so revealing. I think we have more testimonials because of that survey than anything else we could have done in our marketing.
Andrew: Ah, tell me about that. I’ve got Wufoo as a sponsor. Actually, they’re not even giving me forms. They’re a sponsor of mine. I’m paying for their fricking forms, but I’m happy to. The only reason I pay is because I did an interview with the founder, and I told people that I have a Wufoo form on my site. Wufoos ordinarily–I don’t want to do a commercial here, but I’ll say it–Wufoos are ordinarily free up ’til–I don’t know–a large number of form uses. But, all of these people who wanted to see what Wufoo was on my site went over to my contact page and just started submitting junk in there to see what the process looked like. And that sent me into the paid version. So, I got an e-mail from them saying, “Do you want to continue?” And I said, “All right. Let’s pay”. Anyway, my point is I don’t know how to use these forms right. I don’t know yet what to survey my audience, and I know from interviews that I’ve done that surveying brings out information that you can use to improve your business. So, I’d like to find out how you did it. That’s a long, drawn out way to say I’d like to find out how you did it.
Interviewee: Yeah. So, we went through this whole long process where we all sat down and thought about what information we want to collect. We also use Wufoo and love it. We use different contact forms, and we started building up a template. Finally, I think I was watching your interview, and then I read up a little bit more about Kismetrics. Then, I saw survey.io, something they’re involved in. I took one look at the survey, and I was, like, “What? This is exactly everything that I want and need and this is it”. I was, like, “Should we copy it into Wufoo?” I was, like, “You know, forget it. This is it”. For anybody who hasn’t played around with it, it’s designed to be very focused on companies like us that are web-based. But, it’s just such a powerful tool that, you know. We went back…
Andrew: So, you went to survey.io. You found a survey that you liked. Instead of paying them…
Interviewee: Are you familiar with survey.io?
Andrew: Yeah, it’s a survey platform like SurveyMonkey, right?
Interviewee: But, you can’t actually edit the survey. You kind of edit in your startup information. It cruises through, I think, eight questions. It calculates how long it takes people to answer it. I think it’s, like, three minutes or something like that and it cruises through. It asks great questions, you know. How would you sell your product? How would you refer our product to your friends? “Oh, it’s the most easiest used non-profit software I’ve ever touched. I compare it to Cupcakes, and I love it as much as my husband”. Giving testimonials like that–half of our user base responded. And so, we went back and we were looking at all of these and, like, “We have too many testimonials”, I mean, just too many, nice little snippets of things to say or for people saying things about us. That was huge, listening to your interviews with Kismetrics but also reading Dave McClure’s blog about conversion final. I think he has, like, an ‘r’ acronym of something like that. Some of the most enlightening and very real articles that have helped us through our sales and marketing process.
Andrew: OK. All right. So, you used it to find out what your audience was thinking about your product and also to collect testimonials, and that’s how you got those great quotes that I saw.
Interviewee: Yeah.
Andrew: I need some testimonials, too. One of the reasons that I wanted to talk to you and even do that pre-interview is I went to your page, and the thing looked so good that I said, “There’s a big organization possibly here. I want to find out what they’re doing”. Is this the first version of your site that I saw?
Interviewee: You know what? Pretty much it’s the basic template. I think we are constantly going back and upgrading and AV testing our signup form and things like that. That’s never done. But, for the most part, yes, this is what we initially launched with, more or less.
Andrew: All right. Who designed it?
Interviewee: That’s the other co-founder, Ryan. Ryan is not a designer in any shape or form, and he just tries really hard. It’s actually kind of annoying that our web site looks so nice. We get so much traffic from pattern tab, these web masters and web designers looking at our software
Interviewee: ..designers looking at our software that, look at Google analytics and you’re like, How do I read these conversions? It’s be great if we were at Design House.
Andrew: I see what you’re saying, you’re saying all the design blogs are linking over to you as an example of good design and what you’re ending up with is an audience of design nerds who are really into this stuff, people like me, instead of potential customers.
Interviewee: Well, in addition to potential customers.
Andrew: In addition to, right. So does he have a design background? Where does this come from?
Interviewee: No, he just tries really hard. So we look around at everything that we like, we look at the best practices. You know, we thought it was really funny because we were going through this huge headache of, “What’s our sign or button going to be, what should it say?” I think we got linked to two articles, one was like Best Use of Blue, and another one was Great Sign-Up Button. And we’re like how on Earth did we get dragged into that? You know, we keep doing our AB testing and it works, but like other people think it’s great and if designers think it’s great we really have them fooled.
Andrew: So you’re doing AB testing too?
Interviewee: Yes.
Andrew: On the button?
Interviewee: On everything.
Andrew: What have you found, oh good. I love it. I should do a whole website just on AB testing. If somebody out there knows of a blog that just talks about AB testing and the results, send it to me. I would love to see it. Because it’s so curious what people react to. I’ll give you one quick example. I wish I had, I know how to get the language exactly. If you go over to Neil Patel’s blog, QuickSprout.com, he has…..I should get him to reveal the numbers on these conversions. He came up with a QuickSproutPro, and he tested different language on his website, like Click to Sign Up, Click to Join. Listen to what worked best: Get Signed Up Now. The most grammatically awkward, bottomless phrasing there is is the one that ended up getting him the most clicks. Which is why I love and I’m so curious about AB testing. OK, so sorry, I interrupted as you were starting to say about your numbers. What did you find?
Interviewee: You know, the weirdest thing we found is initially we started off with it has to do a little bit with our pricing model, we played around with that and what are we going to do. And initially it was free, and then you put a credit card in, and there’s still that barrier. So we removed that barrier, you sign up, you start with a free account and kind of try and do as much lazy registration process as possible. And what we found is that works great for getting a lot of qualified leads, but a lot of non-profit people are so used to complicated software. I mean, these people are coming from a hacked-together access database or some weird file-maker-pro thing, you have to hit the computer twice before it works. So there’s been a couple of things where changing language or it might just say easier quick, things that have been more complicated and technical have worked a little bit better. And oversimplifying actually lost us some conversions. That was one of the weird things we’ve found, sometimes people…
Andrew: How do you make it more complicated and get a bigger response?
Interviewee: So on our website we’ve added a user guide. And basically we took the stuff from our support site and threw it onto our website. Adding just a level of technical documentation, just something that they can go and click through and read, and then try it out. You know, I always get confused, we have a woofoo [sp] form, of a request for information. You can either sign up or request information. And I’m always amazed at how many people hit the request for information button. Because they still get a free account, I think there’s just less steps in signing up than there is actually doing a submit woofoo [sp] form. And yet people will do it and ask for information, and I’ll just write them back saying, “You know we have a free account.” And they go back and do the registration process. But for some reason, it works really well.
Andrew: So you’re saying what works really well is to have somebody email you for more information, you email them back, and they then follow up and create an account?
Interviewee: Yeah. In addition to having the sign up button.
Andrew: I wonder if you’re losing some people because of that. If there’s some people who are confused but don’t have the patience to email you.
Interviewee: Most of the people I think that visit that form cruise through and finish the form. And the other people hit the Sign Up Now button. So it’s been something that we just sit there and are in awe of. It’s not like they write this detailed message….
Interviewee: And it’s not like they write this detailed message “Hey I’m curious if your product does XYZ. Does it work with Paypal and how?” No, it’s always “Can you just send me something?” And that’s- A lot of companies have this really drawn out, complicated sales process that’s really annoying. I think if you’ve ever shopped for software, at least at an enterprise level where you go to a webinar, you download a white paper…And people are so used to that and I hate it. And I don’t think the customers really enjoy it. I think they know that your white paper’s a sales piece, and it’s full of fluff and numbers that are made up and statistics that are easily generated by people who definitely have a reason to inflate their statistic. So for us, just having two steps to this- one, they’re able to connect with us. So having a process where they can sign up, either way, whether they want to go with something more complicated and go through a bunch of extra steps, or if they just want to sign up, somehow they still get to the end result. So that’s been a learning experience.
Andrew: Ok, allright.Let’s see what else we’ve got, what else we can learn from this. How long did it take you guys to build the first version of the site?
Interviewee: The site or the app?
Andrew:Actually, interesting… Did you build the landing page and the site first and then the app? Or the app first?
Interviewee: No, app came first and then the website. I think it took Ryan a couple of weeks to hack together the website
Andrew: OK
Interviewee: And the app has been… you know, it’s always in development, but I think Ryan worked on it for about six months prior to launch or so.
Andrew: I see. Six months of him coding it, with…
Interviewee: Yeah, him in a cave while working on another contract… and then decided he had a viable product and kind of put it out.
Andrew: Alright. Let’s go back in time then, before we get to him in a cave, and I want to ask you about this cave because I keep hearing about that in my interviews, and frankly I kind of think of Buenos Aires as being my cave. I came down here to just focus on my work and not have all the distractions around my passions here, and not have all the distractions of every day life living back in Santa Monica. And it’s been great. I’ve been pumping out more interviews since I got here than I did the whole time before, and I’m also more productive in everything else, too. But, let’s go back. What were you doing before this?
Interviewee: I’ve never worked for a software company. I’ve always worked for nonprofits. I’ve been in- they call it development- fundraising, and that’s really it. You know, I tend to work with smaller nonprofits, under five million dollars in revenue. In my last position I was helping them produce these series of bicycle events that you know…I’m sure you get these Andrew… Where somebody says “Hey, I’m bike riding! Will you sponsor me?” So I was coordinating thousands of people riding, and getting them to go ask people for money in a very wierd multi level marketing for charity type scenario…
Andrew: Actually, that’s very interesting, because yes, they’ve converted every person who’s a rider into recruiters of other riders. There’s a whole new viral marketing thing going on in the nonprofit world that I’ve gotta find out more about, because I always end up some how… You know what, I don’t even know enough about it to even bring it up in this interview. Maybe you do. What is going on there in that viral space?
Interviewee: You know, I think it’s a really neat space, and just in the last two years, online donations have grown tremendously. And people are looking for an experience of something to go do. They don’t want to just write a check. They want to go do something fun with their friends and family that maybe relates to the cause. And then it’s a lot more fun to go do these things with other people, so they recruit other people to fundraise on their behalf, or their team. It’s been interesting to watch how social media is playing into this. How are people going to use facebook and facebook connects to get into their friends and let them know what they’re doing with their fundraiser?
Andrew: Interesting..right…right.
Interviewee: So it’s something that we’re looking at, even yesterday was google buzz, and we’re kind of waiting for something to shake down a little bit more definitive before we build a whole architecture around one product.
Interviewee: And, you know, you see like a…there’s Charity Water, which is a neat non-profit and they do these great twitter fundraising campaigns. And it’s neat to see how that’s changing dramatically in the last couple of years. So…
Andrew: Here’s…I realize what it is that I saw. It used to be that if you wanted to support somebody you’d go to a page of the event and you’d just put in your information. And maybe they’d make it easy for you to add the name of the person who you’re supporting. Now, everybody who’s a cyclist in these races ends up with their own personal page with pictures of themselves riding, or pictures of themselves running for marathons to train, with a life story of how they’re working at this, with their own thermometer. So it’s not just, to use the Seth Godin example, Seth Godin just had his one single page. It would be as if Seth Godin had his one page but he also said, “Look I’m only going to give you a copy of this book if you’re really a linchpin, if you really have a group of people around you who see you as invaluable. And I’m going to give you a page and if you can get the people around you who see you as invaluable, at least ten of them, to donate on this page, then I’ll give you a book.” So now all of his fans become recruiters for him and get their friends to contribute money. And then it would be Seth Godin saying, “I’m not asking you, I’m not even going to take your money. I’m only going to give you this book and only going to give you this head start if you’re the kind of person who can get others to be supportive, then I’ll support you by giving you this book.” So that’s what I’m seeing in that non-profit space and it’s turning all of my friends into recruiters and getting all of my friends to send me links to their…I guess active dot com is big in this space, so I get an active dot com page. You know what I’m talking about?
Interviewee: Yeah, no. Absolutely. And it’s interesting too is you see how does content management play into this sort of stuff. And what is that…I think a lot of that legacy software comes from…it feels that way. It’s not very usable and it’s just a big headache for the donor and for the participant, for the organization running reports. The unfortunate thing is it’s a great way to raise a lot of money. The unfortunate part of this, though, is there’s a heck of a lot of work in producing these events. There’s a heck of a lot of work in building the software that can connect easily. And what we think’s really exciting and where we’re taking our company is since it’s web based and we have an open API how do we talk to other things. And a big cost center for these non-profits in doing these events and campaigns is actually just duplicate data entering. Which I think in the for-profit world is like, we get beaten up…
Andrew: What do you mean by “duplicate data entering?”
Interviewee: Here’s a good example. I used to pay somebody like $40,000 a year to go and put data into our fundraising software program and then also into Quickbooks and then we’d have like a third piece of software just to keep extra track of all this stuff, right? And none of them linked or talked to each other. So our goal on having our open API is for stuff to just talk and you only enter it once. And there shouldn’t be any problems with the data once it’s there. It’s a single set of data and it’s universal to all the components that you’re using.
Andrew: I see. So if they’re using Quickbooks the data automatically goes into Quickbooks?
Interviewee: Right.
Andrew: Okay. All right. Let’s talk about your co-founder. Before he got into his six month cave what was he doing?
Interviewee: He was either between a Ruby on Rails contractor and he was also an executive director of a non-profit called The Haiti Hope Fund. Which he still volunteers for. Ryan’s a neat guy; he grew up in Haiti, his parents were missionaries in Haiti and during the last couple of weeks he’s been sucked away into doing some volunteer projects there.
Andrew: In Haiti?
Interviewee: Well for non-profits. Not in Haiti. And it’s been interesting working with somebody who has experiences outside of… I’m in the San Francisco market and I feel like it’s very…you cruise around to some of the networking events and people are very much…they’re very similar. “Oh, you’re a VC. You’re this. You’re a founder.” You have the same story. “You know how to program Ruby on Rails.” Ryan grew up in Haiti. He was telling me just yesterday, we were talking about these audio and web interviews and as much as we think that Skype is okay and decent he used to have to take a ham radio and use the word “over” when they were finished with their sentences. And you know, that perspective is really enlightening when you cruise back to running a company. How do you keep it simple? How do you just do what works? And it’s refreshing.
Interviewee: That perspective of it is really enlightening when you cruise back to running a company; “How do you keep it simple?” ,”How do you do what works?” and that’s refreshing.
Andrew: What date did you guys launch, or when did he start creating the program?
Interviewee: Oh he started April, 2 years ago.
Andrew: Okay.
Interviewee: And then we launched in October, 2008.
Andrew: October, 2008 you launched, okay.
Interviewee: And I came on board right about then, and how this worked is I was having this huge pain with non-profit software, I hated it. I thought if somebody makes it a better way, then great, we’ll go be billionaires and help the world be a better place, because non-profits can run more functionally. So I was looking at all these other open source products, and our space, and looking at all the software, and “how do I do a software start-up?” I knew nothing about doing a start-up. Never done it. And then I was cruising around, and met with people, and was reading blogs, and today we said “Go find a developer”. “You’re a sales and marketing person, go find a developer and you guys will be a good match, and a team”. Developer people, they like to sit in caves gosh-darnit. So they don’t want to talk to people. So I’m cruising around and trying to find a developer that has like some altruistic philanthropic goals in doing a software company. And i actually just called Ryan out of the blue, and I said “I don’t know if you need a business partner, but I’m really interested in what you’re doing, and I think it’s great, I think we can grow this company and its on the right path”.
Andrew: How did you know about him and what he was up to?
Interviewee: I was googling around the web. Our space is really complicated. There’s so many different providers that do different niches, and I ran across Ryan when we were even more in it’s infancy. I came on board when there was something like thirty organizations.
Andrew: You’re saying that you googled around to see who was working on this software?
Interviewee: Correct.
Andrew: Okay, and you came up with his name?
Interviewee: Right.
Andrew: How? How did you know that he was building it? I guess the site was up and running at that point?
Interviewee: yeah so he had the site up and running, and it wasn’t to script. I think even now, we have a phone number on the bottom, he has a company called Art of Mission, which is a Rude Beyond Rails firm, that focuses just on his contracting work. He tended to focus with a lot of church management software, these kind of mission based projects and ventures. And I think somewhere after searching high and low I found a phone number for Art of Mission, I called Ryan, and I think he and his wife had been talking the day before I called like “Hey maybe we should find some sort of business partner that has a marketing background, and just has that other skill set”.
Andrew: Alright and what was the deal between the two of you? How did you get a piece of his business after he’s been in the business for months in the cave working hard?
Interviewee: Months in the cave? I think a lot of it came down to building trust over time. I think it’s one thing to go to a networking event and you meet your co-founder and they have a little bit of code that they’re doing something with and you think you feel like you have something in common and you guys can go have coffee, but for us it was just talking everyday. “What do you think of this, or what do you think of that?” He lives in Florida now, and we’ve only met once. So we’ve been working together for a year now, over a year, and we’ve only met once. This worked out I think just because having a distributed team really requires that we pay more attention to our communication, whether it’s e-mail, or setting up a time to talk via Skype, and that actually has made the huge difference for us.
Andrew: Okay but then what about the breakdown? If you’re a co-founder?
Andrew: If you’re a co-founder…
Interviewee: So vesting.
Andrew: Vesting is the answer. That in time you end up with your shares?
Interviewee: Yeah, exactly.
Andrew: Okay, can you say what percentage?
Interviewee: Almost half.
Andrew: Wow! Okay. So this actually is very interesting. I do see a lot of people out there who are business people who have an idea for a website, who have an idea for an internet company but they don’t have the development chops to develop it for themselves. And they don’t know how to get started. They don’t know how to find the right person. They know that every time they try to get funding they get turned down because, of course, if all you have is an idea but you don’t have the ability to carry it out no one’s going to give you money for it. You came up with an interesting approach. You found the guy who was already working on this and you said, “Let me help you out.” You started – if I’m understanding you right – you started talking to him back and forth a little bit, exchanging ideas, winning each other over until at one point you guys decided, “All right. Let’s go in. Let’s be partners on this.”
Interviewee: That’s exactly it. And if anything I went through this process of…I think other entrepreneurs will relate to this that have only a marketing skill set and not a programming skill set, of cruising through and calling development firms, “Hey, do you guys do some sort of equity based something or other? Are you willing to work?” And the answer’s pretty much always “no” or it’s very complicated. Which really means that it was “no” but they didn’t have the guts to say no initially. And that was a …I think I spent about three months talking to pretty much every developer I could find. And it doesn’t matter what they were good at. If they were PHP or they specialized in Droople and this one particular module of Droople, it didn’t matter. Talked to them and said, “What do I think?” Craigslist? I was amazed at the number of people that would sit down and have coffee, expert people, and CEO’s that would sit down and have coffee with me just because I had this idea.
Andrew: What did you put on Craigslist and you got people to come and talk to you?
Interviewee: I went hunting for developers. I was looking at resumes and…
Andrew: How’d you get these resumes?
Interviewee: You can post resumes to Craigslist.
Andrew: Oh. People post resumes on Craigslist…
Interviewee: And I would search them…at the time I think I was just looking for Web 2.0 or something like that. I didn’t even know what I was looking for.
Andrew: Okay. So you find all these resumes and you’d email these people and say, “I’ve got an idea for a business. Do you want to sit down for coffee and talk about it?” And they would talk to you about this idea for a business?
Interviewee: Yeah. They’d come in and say here’s what you’re doing and this is why you’re stupid and this is why I think you’re smart. And normally I would listen to them and then I’d take that to my next conversation with the next person.
Andrew: But the idea was that they were auditioning…or they were just talking to you about ideas. You didn’t say, “I want to hire you”? You’d just say, “I have this idea for a business. Would you sit and talk to me about it?”
Interviewee: Exactly.
Andrew: This is interesting.
Interviewee: I think coming and knowing nothing about the software world, just admitting that and saying, “Look. You seem like you’re an expert. You know what you’re doing” that’s gotten me into conversations with some of the most interesting people, most knowledgeable people that I could have ever imagined with very specific insight into what I could be doing better. Sitting down with people and saying, “You really should make sure you’re product is able to be sold before you go solicit VC money. It’s a waste of time until you can try and sell it.” Hearing that from somebody was actually really nice.
Andrew: This is such an interesting idea. This takes a little bit of guts too. People are putting up their resumes, looking for work, you’re going to email them and say, “I’ve got an idea. Sit down with me, let me tell you my idea, let’s go over it” so that they can help you improve it. And of course, I can imagine people who are putting their resumes up are in a position where they must feel at times that they’re needy. They must feel at times like they have to audition for other people; that they have to be put out all the time. And here, you’re treating them with the respect that they deserve, you’re saying, “Hey you’re the expert here. Can you give me a little bit of information?” giving them an opportunity to just turn the tables a little bit.
Interviewee: Through the whole process, I want to be very clear, there was an enormous amount of respect for people and their time.
Andrew: No question. You told them openly, you said this is what I’m about. You didn’t say, “Hey I want to hire you. I’ve got a hot business that’s coming up.” Or “Funding, it’s on the way.” You were open with them. It’s the kind of hustle an entrepreneur should have. I like it.
Interviewee: And you know it’s funny because I’ll go look on Craigslist every now and then and you’ll see people saying, “Oh! We’re backed by a celebrity.” Or “We have some VC money in the pipeline” or something like that. And immediately this internal sensor of mine just goes, “This looks like a bad deal.”
Interviewee: And immediately this internal sensor of mine just goes, “This looks like a bad deal” whereas I think it was almost refreshing just to have somebody say, “Look, I have no idea what I’m doing. You’re an expert. You’ve gone through a startup process before because you just said so on your resume. You must have some unique knowledge about what I can be doing. I’m not promising you a job or anything like that. I just want to pick your brain, and I’ll buy you a cup of coffee”. Through this process, it extended from people that were knowledgeable about startups, but also going around to different people at large organizations in the non-profit sector and saying, “Hey, I have this idea and do you think it would fly? What should I be looking at or thinking about?” If there’s one thing about starting a company, it was just sitting down with as many people as possible and hearing what they had as concerns and what it was they thought the market needed. That was also instrumental. The developers have done past companies, but also people who were going to buy the dog food or have been in the space long enough to know what will sell.
Andrew: All right. Let me ask you this. In this partnership it’s the two of you, right; who are running the business?
Interviewee: Correct.
Andrew: OK. In this partnership, what’s your responsibility?
Interviewee: For the most part, talking to people. So, you know, Ryan and I… A good example is we wanted to do an interview with you. We said, “Hey, we’d love that the two of us would do this, and you said only one”. And, you know, it’s my job. Our distribution channels tend to work a lot with payment providers or other pieces of software, basically, [?]. And so, my responsibility is really to do a couple of things. One, make sure good content is out there on the web, and it’s relevant to our readers. And making sure search engines can find it and that people are able to get into our file. The second is engaging our current existing customer base. Well, the only part that we don’t isolate Ryan in his little cave is being able to get in and interact with customers and to get in some feedback from them. We try and isolate Ryan and just let him code and not interact with customers. Actually, it works out better when they come out and customers, since we’re bootstrapped, their buying into the development process is key. That’s something we take, I guess, from the non-profit world that you have all of these stake holders, and for us it’s our customers. We have customers that go beyond what our price points are, actually, that are just interested in seeing us succeed. So, they’ll say, “Look, we have this idea for a feature. Your product is 80 percent of it. We want to see you grow, and you already have features in your development time line. We’ll sign a five year contract”. And so, getting them to buy from these people is important. Other responsibilities on both our parts is to keep each other in check. There’s a lot of times where we have so many great ideas and being able to tell the other one, “You know, we should wait on that” or “Let’s just put that on the icebox for right now”. And having that as kind of a core responsibility has been important.
Andrew: OK.
Interviewee: As I said, I just installed Ruby on Rails a couple of days ago. I have enough knowledge now to be dangerous and really screw stuff up. But I’ve started doing a lot of the editing on our contents on our web page rather than just writing content but actually updating and doing technical things, which is entirely new for me. Whereas Ryan focuses on “let’s make the product better” and “let’s refine what we have”. That’s primarily his core rule. That was a long answer, wasn’t it?
Andrew: No, no, no. It was a good answer. Here’s what I’m going to do now. A second ago, you said the audio cut out, and I said I’ll bring it right back up. The reason the audio cut out is I, sometimes, in the middle of an interview… I wonder if you noticed it, can the audience notice it, too. I, sometimes, hit the mute button just so I can sniffle because it’s frigging cold in here. I’m in an office here. I’m going to do it again. That’s why I’m telling you, but I might as well tell the audience. If you’re in the audience, let me know. Can you hear it or not? In a second, it’ll come on. But, first I have to explain. I’m in an office in Buenos Aires, looking to see if people can hear it. Everybody in this office comes in in a suit and tie.
Andrew: Everybody in this office comes in in a suit and a tie. Women in suits. It’s the middle of summer here. January and February is the height of summer with humidity and everything. They still come in in their suits. Now here’s the odd thing about it, because they have a sense of propriety. Here’s the odd thing about it. This is a [regis] office. There are people in here who will sit in their office all day long. Nobody’s coming to see them. They don’t have employees. They’re like me. They just need a space for themselves. So they’re wearing a suit and tie for themselves. So how does that impact me? Why do I have to keep sniffling in here? Because they put the air conditioning on to compensate for the suit and the tie and the clothes all these people wear. There’s one guy who wore a sweater here last week, with a tie underneath it. This is some country here. You know, in the US you’re used to flip flops. I’m talking entrepreneurs here who built these big multi-million dollar businesses, they’re in flip flops, have funny hair. These guys here, walking around in suit and tie. I love it but it means I need to sniffle sometimes. Let me ask you this, while I do that. Can you say – we won’t talk about specific profits but can you say…Can you give us an estimate of about how profitable you are? Can you give us anything about that?
Interviewee: Yeah. I think that the best way to answer that, Andrew…
Andrew: And by the way, I wonder if people can hear. Here, let me do it just to make sure. Can you guys hear? I’m going to turn it on mute, let’s not neither of us say anything, let’s see they can tell? All right. And I’m back. Send me an email and let me know. Okay, yeah. So what can you tell us about profits?
Interviewee: What I can tell you is I don’ think we were just interested in doing this for free. And I have a wife and she likes to make sure that we have money coming in. So my answer to the profit question is I’m able to support my wife and kids. And Ryan is able to do the same. And we’re looking forward to having our foundations and we hope that that’ll happen in about a year.
Andrew: Okay, so you guys are…the foundation’s going to come in a year. I like your attitude here. You’re saying you’re going to take so much money out that you could create your own foundation. I love that. Okay but what you’re saying is A, you’re profitable. B, you’re already at a salary stage. And C, you’re enough of a salary that you can afford to feed yourself and your wife off of this business.
Interviewee: Correct.
Andrew: Okay. Can you say at which point you guys turned profitable?
Interviewee: I think in about November we felt sustainable.
Andrew: So about a year and a month after you launched you had enough money coming in?
Interviewee: Right? Up until then it was always…we’ve always had side projects, whether I was with a non-profit consulting or he was doing a Ruby on Rails contract. But it was always…the company never felt sustainable, like this is clicking. And then we made some changes in how we were doing conversions and we went through this whole process of A-B testing and reading and listening to Mixergy…this has been amazing. And thinking, “All right. Well, how can we make it click?” And we knew from the beginning we didn’t want to take VC money. We wanted the product to sell. And we wanted our actual customers to buy it. So around November we kind of hit that point where we’re able to breathe. I appreciate that we’re not dependent on just one or two customers. We have lots of customers, so we’re pretty sustainable in that sense. So does that answer your question there Andrew?
Andrew: It does. Absolutely. It does. And then it also brings up something else in my head because we did a pre-interview. And in the pre-interview it sounded like there was enough of an interview here. It sounded like you guys were still young; you weren’t like the hot shot profitable [INAUDIBLE] type of business but interesting enough that there was an interview here. And you and I talked afterwards, about 24 hours ago, and you said, “Andrew, I’m looking at the people that you’re interviewing. Yesterday’s interview was with Paul Graham of Y-Combinator.” Said, “I’m not sure it’s a right fit.” So I started having my own doubts and I introduced you as too small a company or potentially too small. And frankly, I don’t know. So I will say this. First of all, you guys it’s not absurd for you to be here on Mixergy. And whether it’s appropriate or not, I can’t answer and you can’t answer; I’m going to turn it over to the person who’s listening to us. Whoever at this point has listened to us – I don’t know how much time we’ve talked together – you guys tell me. I tend to think that I’m not good interviewing young companies. I just don’t have…whatever it takes, I just don’t have it yet. But maybe somebody’s listening to this and says, “Hey you know what? This makes sense.” Also maybe they’ll say, “This isn’t that young a company, Andrew. They’ve been around for a while. They’re more than ramen-profitable. They’re wife profitable.” We know that’s bigger.
Interviewee: Well, you know it’s funny. There are people in our space. There’s one company and it’s public; there’s one that’s trying to do an IPO. There’s some smaller players. Sales Force has a foundation that they give software away. And we’re able to compete against them.
Interviewee: Salesforce has a foundation, that is they give software away and we are able to compete against them. And we are growing and getting market share at a rapid rate and that’s…..there’s been companies in our marketspace that have gone through, got Angelmoney, got VC money, all the stuff, never turned a profit, sold for less than what there is and you know, I would hate to been an investor in that.
Andrew: And by the way you know what that guy in his biography is going to say forever? Sold this business “To”, he won’t ever say sold it…
Interviewee: Yeah
Andrew: I don’t know this company, so I am not ragging on this specific company
Interviewee: Yeah
Andrew: But I see this all the time, on the bio is: “Started a business, raised money and sold it to” whatever big shot, big company and forever that’s enough of the reputation builder for this person because nobody goes and investigates.
Interviewee:So..so for us, I think it’s a big success just to be profitable. In such a market, it’s a complex bunch of software you have to deal with..accounting and all this other stuff. And you have to deal with people that aren’t technical. You are selling technical software to people that need to focus on their mission- “Making the world a better place”. So, I mean we are really proud of the fact that we have bootstrapped, its really beat us up, its been such a emotional roller coaster. I wish that people had told me that how much of a rollercoaster it was or maybe I had’ve the experience in order to know. I also know that as I talk to people is how to be patient all the stuff and you read some blogs about people who are bootstrapping their companies and what they don’t tell you is that they’ve previously sold a company for millions of dollars and so they are able to sit for 2 or 3 years while their company goes profitable. And I think that, that was a really important fact that was left out of that blog post, was that “Oh! Make sure that you can live for 3 months or 3 years and your wife is happy”. And so that’s been such a benchmark in November that ok we can breathe.
Andrew: I get that, and I get that, absolutely. I am sure there are some people who are watching me here do interviews and for a long time I wasn’t even accepting Ads, I don’t know where they thought I was getting the money from all this and they are saying “Oh well look Andrew is surviving, he is travelling the world on MIXERGY somehow, there must be something in this”. Meanwhile I had no Ads; I was living off on past glory. I had one of those, maybe not the sale that was super-profitable but the business that thankfully was. Andy Dang is saying “Send you an email and let you know if we hear you sniffle…ha ha”. That’s right Andy. Andy, I got this kind of relationship with my audience, it means that I spend like 3 hours every morning going through the emails from people that, but its good to get that kind of feedback and I want to start asking for different kinds of feedback. Not as to who should I interview but new form of feedback. Did you hear me say “sniffle” in this interview or not? Did the blue snowball do its job or not? Is that a good Mike? I got somebody here who is apparently a super fan of yours, who is saying that you used to be a DJ, saying that they want to hear from you a lot, and they could learn a lot from you. Do you…where you a DJ at one point?
Interviewee: Yeah so as a part of my entrepreneurial ritz in high school, I started out to be a DJ and it was very fun. And then, you know I went through this whole process of doing it through school and then…are you sniffling right now?
Andrew: You heard it! No you heard the mute.
Interviewee: No no…I heard the mute
Interviewee: And it was a lot of fun and then you get married and Djing goes right out of the window and you start focusing on things that are…its different kinds of late nights. Its not late nights at nightclub but late nights in front of your laptop where you have been through 20 hours answering support tickets.
Andrew: How long have you been married?
Interviewee: Little over a year now. So its her who started the process.
Andrew: Wow! good women you married there. That’s good. So here’s another bit of feedback that I would like first…actually I don’t even need to ask this. I am now using, I am going to talk about this on the side at some point soon, new software to show my videos. Again this is the end of the interview, there’s only superfans listening, they should know this stuff. I am now getting to know what point people rewind to listen to the clip so I know what they want to hear more of. I know what they don’t like and they fast forward, so that I get to see what I should stop talking about. Part of the reason why I am getting a little more personal, a little more chatty is I am looking at the stats and I get these graphs and heat maps and so on. I note, Oh I guess I could tell you its Vistia but I will tell you more about my relationship with them soon. But…we are getting some kind of partnership. But its showing me that people like it when we just chat, when we just talk non-business and now that I think about it when I listen to some of these other interviews, if it’s just facts I get a little bored sometimes and I tune out but if I get to know them.
Andrew: If i get to know them, like I listened to this week in tech, when they talk about tech, that’s what’s good, that’s what I’m there for, but when they talk a little bit about their wives, and private lives and the wine they like and whatever else, I do tune in a little bit more. It makes me care about them. So the stats are showing me the people are sticking around through that and the stats in my personal experience in addition to the stats is telling me this is good stuff. we’ll find out. Alright one more little bit of non-business business; if anybody knows out there how to say in spanish: please, raise the temperature, I’m sniffling and embarasing in front of a business audience, please let me know. I don’t even trust that to google translate. I need to know for real how to say that so that I don’t embarass myself twice here. And then I will call the receptionist and tell her that. I will read it word for word, from your e-mails. Okay, anything else that you want people to know about this? About the experience?
Interviewee: Ahhhh….you know i think that…
Andrew: That’s the most cop-out question ever actually. That’s me, I finally got off my tirade and I said I need a quick question what do I come up with and I say oh anything else?
Interviewee: About this experience or about working with you?
Andrew: Alright why don’t we go about that? Let me ask you this. You got a real business here, you got real users, you got real revenue, you got real money, it’s a real company here. And you’re still young. You’re the kinda person who I want to be helpful to. I don’t want to be helpful to the guys who at some point in the future dream of building a business. I don’t want to be helpful to the Darmesh-sha, I love that he’s listening to these interviews, he’s an angel investor who had an exit, and it gives me a lot of pride that he’s listening, but if I weren’t here, Darmesh would hire somebody in the right circles to get the kind of information he needs. You are the sweet spot that I’d like to help because if I can help you, I can have an impact on the world. So what kind of things are you looking for in these interviews?
Interviewee: I think like every entrepenure, we cruise around through blogs, looking for answers, benchmark stats, whatever. And the most important thing that I can ever hear is what doesn’t work. I hear so many things like “We did this, it was great, we raised all this money, blah blah blah blah” but I don’t want to hear that. I want to hear why you failed, why you think you failed, and what you think you should do better. I feel like you tend to get on that more than other people, more than certain start-up bloggers, you definitely hit that. You’re a little more direct about what sucks, and what people can do to be more effective. So that’s my feedback to you.
Andrew: I do get a lot of that, I get a lot of requests for Andrew: Talk about what doesn’t work. And I should do more interviews with companies that have failed, with companies that have had big setbacks and spend more time on that. Let me ask you: You’ve now been in business for a long time, not a stage maybe where you feel super excited to talk about your failures and set backs, it’s better after you’ve hit it big to talk about it, but let me challenge you, by asking you what didn’t work.
Interviewee: What hasn’t worked? I don’t know what hasn’t worked yet. A good example is, and part of this is being patient, so we ran this campaign and we’re like ‘Hey we’re young we have no money whatsoever, how can we market and get our name out there in this space?” I think our adwords and donor management cost ten bucks. So we went out and we started this webinar series called non-profit webinars.com. I think we went through ten webinars initially and had like ten people, fifteen people. And they were never a sales pitch about our product, ever. It was always some other consultant or expert. In the last couple of months, since we were patient and kinda waited through that, and I think we were going to pull the plug, saying that didn’t work, have have to try something else. Today, our teams running another webinar, on that webinar they have three hundred people about building a brand. And its all of non-profit executives in that webinar. So it’s not so much that it failed, it’s that we were kind of patient, or having patience through failing, and letting it kind of pick up it’s own momentum and traction. That’s been one of our big learning experiences.
Andrew: So these are your webinars, that now have three hundred people, that are well targeted potential customers of your product, who are in there? Or is it somebody else whose webinars you guys are participating in?
Interviewee: Our goal is to establish relationships, knowing that consultants of non-profits are probably a great sales channel. So we went out, found all these great consultants, ans said look: we will do all the technology, we’ll do all the webinar software, you just come to us with your presentation, and we’ll co-op our marketing efforts.
