Today’s guests say that their previous company failed because of a common mistake that many of us have made.
Now they’re back with a hit company and I invited them to tell us how they did it.
Andrew: Three messages before we get started. If you’re a tech entrepreneur, don’t you have unique legal needs that the average lawyer can’t help you with? That’s why you need Scott Edward Walker of Walker Corporate Law. If you read his articles on Venture Beat, you know that he can help you with issues like raising money, or issuing stock options, or even deciding whether to form a corporation. Scott Edward Walker is the entrepreneur’s lawyer. See him at Walkercorporatelaw.com.
Do you remember when I interviewed Sarah Sutton Fell about how thousands of people pay for her job site? Look at the biggest point that she made. She said that she has a phone number on every page of her site, because, and here’s the stat, 95% of the people who call end up buying. Most people, though, don’t call her. But seeing a real number increases their confidence in her and they buy. So, try this. Go to Grasshopper.com and get a phone number that will make your company sound professional. Add it to your site and see what happens. Grasshopper.com.
Remember Patrick Buckley, who I interviewed? He came up with an idea for an iPad case. He built a store to sell it, and in a few months, he generated about a million dollars in sales. Well, the platform he used is Shopify. If you have an idea to sell anything, set up your store on Shopify.com, because Shopify stores are designed to increase sales. Plus, Shopify makes it easy to set up a beautiful store and manage it. Shopify.com. Here’s your program.
Hey there, freedom fighters. My name is Andrew Warner and I’m the founder of Mixergy, home of the ambitious upstart and the place where the ambitious come to hear stories of successes online and offline, actually mostly online. Today I’ve got an interesting one for you. Today’s guests say that their previous company failed because of a common mistake that many of us have made. I know I’ve made that mistake. Now they’re back and they have a hit company, so I’ve invited them to talk about what happened before and why this company is so successful. On your left, you see Evan Stites- Clayton and on your right, Walker Williams. They are the co-founders of Teespring, which allows you to create and sell custom T-shirts with no upfront cost. Hey, guys.
Evab: How’s it going?
Walker: Hey, Andrew.
Andrew: Good. So, I asked you why we needed to have two founders instead of one and you said, well, he’s really good at the story and he’s really good at the numbers. You know I like stories and numbers, so, way to go to convince me, of course, that this made a lot of sense. Let’s get started with the numbers, which I love. Where are your revenues today?
Evan: Our revenues, right now, are at 150,000. That’s top line and it’s a really feel good number for us because, at this point, we are break even. This is the first month that we can really say, we are truly making what we are spending.
Walker: We’re profitable.
Andrew: Almost. Just breaking even.
Evan: A couple of bucks, I guess. Yeah.
Andrew: A couple of bucks in the black. 150,000 a month? A year? Lifetime? What are we talking about?
Walker: We’re doing 150,000 a month right now. We launched in April, so it’s been a nine month journey to get here, but we had our biggest month ever last month, and we’re looking to knock it out of the park in December with the Christmas season.
Andrew: All right. What’s the lifetime revenue of the business?
Walker: We just crossed $800,000.
Andrew: Eight hundred thousand dollars in revenue with this business, less than a year old.
Evan: Yup, and most of that business has been in the past four or five months.
Walker: For sure.
Evan: The vast majority of it.
Andrew: How far you guys have come. Do you remember, did you have feelings of failure with the previous company?
Evan: Absolutely. So, before Teespring, we were working on a company called Jobzle. We were still in college, and Jobzle was a way for students to find part-time jobs and internships.
Evan: We got a lot of official recognition for the company. We won the state business plan competition or we were runner-up. We got accepted into an accelerator called Beta-Spring, a great program. We got a bunch of press. We were in the Boston Globe. There was an AP article. Everything, outwardly, seemed to be great. But, internally, we were having to battle for every customer and it was a freemium model, so we weren’t making any money. We weren’t making any progress. There was no growth. Literally, just to get an employer to post a free job listing, it was taking meetings and phone calls. It was really a battle, so, certainly a night and day contrast when you compare how it feels now at Teespring. We still have a long way to go. By no means do we think we’ve made it. We’re still very early. When I think back to what a battle, what an uphill push it was at Jobzle, it really does go back to that idea of trying to build something that people want.
Andrew: I’m going to spend a lot of time in this interview talking about the success of Teespring, and we’re going to be exuberant. Frankly, this interview is a celebration of an idea that worked out for you. I also want to talk about the emotion of having a business that doesn’t work out. I don’t want us to brush over that. I don’t want us to pretend that we’re super human who succeed at everything and leave the audience feeling, when they have a setback, well, it’s only me. Every time I watch a guy on Mixergy he seems to be, or she seems to be, killing it all the time. Really, if you could get in touch with the feeling of failure, insecurity, worry, or whatever the hell it was, go for it now. Really reconnect with that and be open with it.
Evan: I was going to say that I didn’t really get a big feeling of failure, but it was more of a feeling of denial, sort of this long, drawn-out process of realizing that it wasn’t going to work. We’ve grown up in this culture where they tell you that you just have to stick with it. Perseverance. Don’t give up. Build your user base, and the profitability will come. We really bought into that. I think it really came to us coming up with a better idea to realize how unviable our original plan was, I think.
Andrew: I see. You kept convincing yourself that Jobzle made sense. You kept persevering while you were building a second business. Then, when that second business did well, you said, what were we thinking? Why were we deluding ourselves?
Walker: Yeah. Like I said, it took that wind-at-your-back feeling with Teespring to really realize how far astray we had gone with Jobzle.
Andrew: Where was it astray? In fact, give me one incident where the world and everything around you said you guys are crazy, this is wrong, and you weren’t aware of it. What kind of feedback did you get like that?
Walker: We were meeting with universities to try to get them to sign up, to have official university accounts. In exchange, they would pay something around $10,000 a year. It’s a model that universities are already doing. It should have been a real easy sell. Our technology was better. Our product did everything the old products did. To sell this $10,000-a-year piece of software, it was taking ten meetings. We had to speak to financial aid coordinators, to deans. At the end of it, only 20% or 30% of the school said yes. There was this tremendous battle to get any paying customer and an equal kind of arduous battle to get the free customers who were just local business employers posting internships. We would look each day. We’d open up the database and we’d go down. We’d see how many users signed up for the day. We’d look at the traffic. A Boston Globe article would come out, and you’d assume that there would be 10,000 uniques. We would look, and we would have 500 visitors for the day and 20 sign-ups. I think it was a very hard realization to just accept that, “Hey, you know, this just might not be it. We’ve built a vitamin, something that’s a marginal improvement, as opposed to a pain killer.” Nobody is going to say that they cannot live without Jobzle. It took us probably 18 months to accept that, that this wasn’t going to make it. It wasn’t for a lack of trying, but it just didn’t have legs. It couldn’t cross the finish line.
Andrew: Jobzle was a search engine for part-time jobs and internships for college students. Who paid for it?
Evan: Nobody, really. The thing was, we had the premium model. We were telling people, hey, come try it out, post your job listing. The first five applicants that you get are for free, and all of the dozens of applicants after that you’re going have to pay $30 for. That obviously didn’t get us … I think we had a total of maybe 20 people who paid that $30 because there wasn’t ever more than five applicants. We were hoping to get some of these big-fish customers, the colleges and stuff. I think that we just found, like Walker was saying, that the work required to get those people to write a check was extremely prohibitive.
Andrew: And the mistake that you made, you told Jeremy in your pre- interview with him, was, you were trying to solve a problem that you didn’t understand. Tell me about that.
Walker: Sure. So, the original idea for Jobzle, I started as a designer and a freelance programmer. It’s how I made money during high school. It’s how I kind of paid the bills during college, and for programmers, there’s this incredible set of tools out there. There’s oDesk — [siren blaring] an ambulance went by — there’s oDesk, there’s Elancer, there’s these amazing ways that you can get connected to employers, work remotely, pick up a paycheck, and it’s all very painless. And so, when I came to college, I was looking for a local, part-time job, and found that the university tools, of course, were absurdly outdated and old, and broken, and it just didn’t have that same ease of use. But the problem was, Jobzle was built to handle babysitting, very, kind of, more labor part-time jobs, all the way through to internships. But for programmers and designers, it is a space right now where there’s a ton of demand. There’s a lot of jobs available.
And so, I never felt the squeeze from the other side, and therefore I didn’t really know the audience that I was building for. And I think it really hurt us. It was something that I wasn’t personally using. I think that should have been the biggest warning sign, is, when I, even throughout Jobzle, when I needed to work and pay the bills in college, I wouldn’t go to Jobzle to find a job. And that should’ve been a red flag.
Andrew: And you wouldn’t go because you had all these other places that were better, and they were better because they understood their customers better than you understood your customer. If you would have — because you didn’t understand your customer, Evan or Walker, do you have an example of what you missed out, of what floored you, what you just didn’t get because you weren’t your customer?
Walker: Yeah. I think that we set up all of these incredibly — you know, we’re programmers, at our core, so we like to build things. So, we built these incredibly complex technologies. You know, real-time filtering, really complex indexing, to be super quick. Really in-depth search features. And then we would go, and we would pitch these to the colleges, and to students, only to find that they really didn’t care, you know? The types of jobs they were looking for, they didn’t need all of that flexibility, and the ability to hone down on, you know, “Do I want part- time or lump sum?”
Walker: Between these hourly wages. It was a much more — they preferred the ease of use of Craigslist to the superior technology of Jobzle. And I think that was kind of a core failing of ours.
Andrew: So if I understand you right, you’re saying, “Hey, if I’m a developer, of course I want to figure out, I want to search for WordPess development versus Ruby development, on-site versus off-site, and all that stuff is important. But if I’m just looking for a babysitting job, all those things aren’t that important. I just need a quick way to scan the list of options and pick the one that I want, the way I might on Craigslist, or even on a standard college job board.”
Walker: Exactly. And even if our tools, some users did like our tools. You’ve got to come in with a really clear value proposition for why someone would switch away from the incumbent. And these small, marginal improvements that we built at Jobzle, they weren’t solving any true pain. And it goes back to that idea of vitamins versus painkillers. You know, we had built something that, it was nice. It was a nice little bonus. But it didn’t solve a major need. It wasn’t a painkiller. And therefore, we had to battle for our users.
Andrew: And a T-shirt company can be a painkiller?
Walker: We think so. So one of the ways that Teespring is different is, it was truly born because it was something that we wanted. So, when we were seniors in college, one of the local dive bars, kind of, college student favorite dive bars, got shut down for some violations. Probably for good reasons. [laughs] But we saw Facebook and Twitter, and just the campus, light up with activity. And trying to make a quick buck on that, and kind of do something fun, we decided to put together a T-shirt for it.
And when we put together the design, we called the local screen printer, and they said, “OK, you want these T-shirts, you’re going to need to know exactly how many T-shirts you need, exactly what sizes you want, and oh yeah, we’re going to need a check for $1,000, today, and the T-shirts will get here in two weeks.”
And none of those things really worked with what we wanted. We didn’t have any money. We didn’t know how many shirts we needed. And we certainly couldn’t wait two weeks. It was kind of a now or never. There wasn’t going to be that buzz. So instead, we just sat down, threw together a really basic website — it’s actually still up today. The premise was very simple. If we could get 200 people to pre-order T-shirts, we would print them, individually fulfill them to each buyer, and that was it. If we didn’t get 200, nobody would be charged, the shirts wouldn’t go through, and it would just be a failed attempt.
Andrew: The website that’s up right now is freefishco.com, where people can see that T-shirt.
I’ve heard that this is one way to find pain that then will lead to that successful idea. That way is to look at message boards, to look online, to see what people are complaining about, to see what they’re so angry about that they form groups, that they start to scream. I haven’t seen this yet played out. Can you talk to me about what you saw when you went to Twitter, when you went to Facebook. I see here in my notes, you said that you saw Twitter and Facebook light up. Specifically, what does it mean to light up? What were you seeing?
Walker: With this campaign, with Free Fishco, we saw that everybody was talking about the fact that a bar had gotten closed down that was a tradition on campus. People were talking about it. It was the first thing people were saying to their friends. We knew there was a bunch of activity and buzz around it. For that reason, there was almost a sense of community formed by all these people who were mourning the loss of this dive bar. We kind of capitalized on that.
In terms of seeing people light up for the concept of Teespring, what was more exciting for us–we sold around 400 shirts at the end and made a couple of thousand dollars–but what was more exciting than that was how many emails we got from clubs, fraternities, charity-based groups on campus saying,”Hey, I’ve got an idea for a tee shirt or a hoodie. Can you help me? How do I get a website like that? Can you make me something like that?” We had never experienced that organic outreach at Jobzle. Right then we turned to each other and said, “Hey, do we have something bigger here?”
Andrew: Let’s pause. Let’s just focus on that initial idea for a moment before we go on to what happened after and how that created the business that we see today. I’ve been wondering for a long time if, if you just understand your customers’ pain and show them that you understand, maybe even that you share their pain, that alone will get them to pay and get them to sign up and get them to be a part of your business. Yes, you should solve it. Even if you don’t solve it. Even if you just say I understand and you show that you understand by using the words that they use, by using empathy. If you show it, then you get customers.
That’s why I want to dig in here and ask you, when you sold 400 T-shirts, did you solve the problem of opening up this dive bar?
Walker: No, we didn’t, unfortunately. It closed down. It’s turned into another dive bar, so I guess that’s somewhat of a victory.
Andrew: Did you promise to solve the problem for people if they bought the shirt? Was it, if we get 200 people to buy this shirt, then we will print it and we will get to save it?
Walker: No. It wasn’t so much for the end goal of saving the bar even though it said Free Fishco. I think really what it was, and this has kind of proven true for the rest of our business as we’ve grown, was a reflection of the community. It was this sense of people who had been a part of this tradition. They lived it through their years of college whether they were alumni or current students, and they wanted to show that they were a part of that community. That’s what the T-shirt came down to. We didn’t make any promises or say we were going to try to save it. It was more just showing that there is this strong central community around this tradition. That’s actually proven true for a lot of our T-shirts today. We often say that we’re not in the business of selling T-shirts. We’re in the business of strengthening and recognizing communities. I know that’s a little cheesy, a little marketing speak.
Andrew: It seems to have played out here. Let me ask you something, Evan. Walker and I clearly have this energy about us for what happened there, and I know that you share it, too. As a CTO, as a guy who’s into data, if you were to analyze the psychology of these customers who weren’t solving the problem, weren’t getting even a promise of a solution to their problem but still were happy to pay and still were happy to get a T-shirt that they could then wear and show everyone else that I paid for this. Even though I didn’t solve it, I paid for it. Even though I wasn’t going to solve it, I paid for it. Analyze why would people do this? What is it about showing that you understand people’s pain that gets them to pay, or showing people that you’re reflecting what they feel. What’s going on here?
Evan: I think there are two kinds of pain that we solve. There’s the pain of the person who wants to buy that shirt. Thankfully, for those people, it doesn’t really matter whether that bar was saved or whether that dog got rescued or even if that fire department ended up being able to have a party at the end of the year. They just want to be able to show that if any of those things do happen that they were a part of it. I think that we’re solving that pain, but one thing that I wanted to get into was the pains that we solve for people who want to create their own T-shirt campaigns.
Andrew: Let’s continue, then, here. This is continuing with the narrative, which is, you guys start this T-shirt. You sell it. You finally have customers. Not only do you have customers coming in the door, but you have other people who say, make T-shirts for us. What’s the issue that they face, that they needed to come to you with and say, hey, solve this for me?
Evan: Well, they have the exact same challenge that Walker was talking about earlier: to get these shirts produced, to find a way to deliver them to each individual person and find a way to come up with the money to actually make that happen. Those are all problems that we could solve. What we realized is, really kind of like you said earlier, by feeling that pain ourselves when we were going through the process of making those shirts, we got a much better idea of what our minimum viable product really would be. Because we knew each step of that process and what the pains associated with it were, we were able to key in on the little things that we could do to make a difference in people’s experience there before we had the full- blown experience that we’d like to think we have now. We’re still building on it, obviously. I think something that was really helpful for us was solving that problem piece by piece for people because we had that understanding of their pain. It allowed us …
Andrew: I see. Because you understood their pain, you knew what pieces to focus on first and which could wait until later. You understood their pain. You understood that there were other customers who wanted a similar solution, a similar pain killer as Walker said earlier, not a vitamin. What’s the first piece that you built? Then I want to understand afterwards, how did you know to build that? What’s the first piece that you built?
Evan: Well, to be honest, I think the first thing that we built was a misstep. We originally built the T-shirt design tool, which is something that allows people to go to the website and design their shirt. The reason we started with that was because we thought it was the most difficult piece of technology. By building that, we would be able to prove to investors and to the world that we could build out this whole vision of the product that we had.
The piece of technology that we perfected first and the one that really useful was just that simple campaign page and the payment systems, the ability to check out with a credit card or PayPal and to have that bar that fills up as people buy shirts. Basically, creating a system that automated the generation of that Free Fishco page. We found that that just alone, having that one view functional, was really our minimum viable product. Everything else we could kind of orchestrate behind the scenes, whether or not the technology was really there.
Andrew: I see. Fair to say … tell me if my understanding of this is right. Don’t let me push another understanding on this story, but I want to take away the real message here. Instead of saying I understand this customer’s pain and now I’m going to build it, you said, “I understand what my investors’ questions are going to be” which is, “Can these guys build out software that lets people design the T-shirts? I first have to address that and prove … I see. First you were addressing your investors’ pain. Was it really your investors’ pain? Did they really need you to prove that you guys could develop this?
Walker: I think what we found was that that was kind of the easiest place to start because we are programmers. You know, try to go in and solve this really complex problem. It seems fun. As we started to battle against that and code it up, we realized that our customers would be happy if we just whipped up these mock-ups in Photo Shop, put them on the website and let them start selling. We needed to get out of the way.
Even though our investors were pushing us to prove that we had the technical expertise to build this, we went down that path for a little bit and ended up actually pulling back and saying, “Hey, we need to just let people start selling.” In the end, it actually proved much more valuable for us because then we could point to campaigns and say, “Hey, this girl raised over $5,000 for her fundraiser. This club was able to get their T- shirts”. We’re actually out there selling right now. The rest is details, and that can come. Instead of focusing on the investors’ pain point, we focused on the customers’ pain point, and I think it really made a difference in our path.
Andrew: If I were to create T-shirts, and frankly just hearing your story about what it takes to have T-shirts created, I get the frustration of saying, “I have to pay you up front before I get paid to get my T-shirts made and then wait a couple of weeks? I have to figure out what size these people are? I have no idea what size. I don’t even know what size I am in a T-shirt, and I have to predict all these future customers, what their sizes are? I have to predict that they’re even going to like the design or if this is goofy?” I understand that. Getting customers to pay up front before you design it and to tell you what sizes they want up front, to tell you that they’re happy with the design up front. I understand how that solves a big pain that a T-shirt maker would have, or that anyone who would want T- shirts would have.
What about this whole thing? How did you know that another pain is that they don’t know how to build a website? They don’t know how to build a thermometer that goes all the way up? They don’t know how to include Stripe or PayPal and charge? From the outside, and just also from hearing your story over the last few minutes here, I wouldn’t have guessed that those three issues were big. Still, Evan is saying that those are the big things that you needed to start off with. How did you know that?
Walker: We talk to customers. It’s something that is in every entrepreneur’s playbook. A hard thing for technical people and, I think, most people to do is actually get out there, show people what you have, and say, be honest with me. Tell me what’s missing. What do you guys need to start doing this today? One thing we heard over and over again, especially from the bigger organizations, is we’re not technical. We don’t want to do anything that even has the word code near it. We just want it to feel intuitive and just work. We don’t want to go into anything too complex. It’s just got to be a brainless process for us, and that’s what we’re looking for. We’ve got other options. If we wanted to get complex, we could …
Andrew: How do you talk to customers?
Walker: We started calling nonprofits in the Rhode Island area. One of the good things about Jobzle was it allowed us to meet some of this entrepreneurial community in Rhode Island. We went through the BetaSpring accelerator, and that gave us another tie into the community. We kind of piggybacked off that to get in front of a few nonprofits, pitch them on the idea and then say, “What could we do today to get you to sign up? Then we went for the smaller guys, people with cool T-shirt ideas or clubs. We talked to the rugby team at Brown. They’ve done a bunch of campaigns.
Andrew: What could we do today to get you to sign up? That’s the big question that helped you understand that they need a web page because they can’t design it themselves. You and I could fire up a WordPress site in ten minutes. They couldn’t do it. What about those initial people who emailed you and said, “Hey, we’d like a similar thing for us? How did you contact them and talk to them?”
Walker: The time between when we did Free Fishco and when we actually made the decision to stop devoting the majority of our time to Jobzle and focus on this idea of Teespring, there was a few months in between. We did contact them, and actually the rugby team came out of that and a few other clients that went through and launched fundraisers. Really, that was more a proof of concept. By the time things got around, we probably missed a little bit of that momentum.
For instance, we launched in early 2012. We went to Brown. Brown was the campus where all the students had emailed us. Brown Spring Weekend alone, which is concerts and fun and basically a week off school, we sold over 300 T-shirts and tank tops just in the Brown community. That was at a time where we didn’t even have a product. That was all just people who had emailed us or were emailing us. We would jump into Photo Shop. It was literally me doing all these T-shirt designs and saying, oh, do you like this? Can we do this? So we really tried to …
Andrew: You weren’t even at that point trying to get a certain number of people to agree to buy before you made it. You were sitting there and saying, would you like this, and then you were having the T-shirts made?
Walker: No. We had the campaign page up by then, so the pre-order system and the automatic payment and the fulfillment was all down. We handled it. There was just no designer. You couldn’t go in and design a shirt at that stage. You would have to email us, and we would email you back and call you. We were doing a ton of work for the amount of shirts we were selling, but it was really a proof of concept for us. We would learn so much from those early customers.
Andrew: I’m on Facebook, and on the right side of my Facebook page I often see these guys who basically are leaning up against cars, beautiful fancy cars, and they’re going to show you how to build a successful business. The people who are attracted to that are going to be so bored by how I keep digging in here. The people who are real entrepreneurs, they don’t want me to just get to hey, what kind of car did you guys buy? They don’t even care if you bought a car. They’d be disappointed if you bought a nice car. The few people who are real entrepreneurs are going to care that I’m going to dig in a little bit deeper. I’m not going to go too far because I know we only have an hour or so together, but I have to still understand. The first T-shirt you made was for this bar. The second tee shirt you made was what?
Walker: The second T-shirt we made was for an online programming community. It was literally just Free Fishco with a different skin. All the payments were processed the same way. Then, on the back end, we would quickly get the shipping labels together. We’d manually put those together. We’d call the printer and say, hey, we need 52 shirts. We were doing all the grunt work and the design. We were essentially using the same technology as we used for Free Fishco, just skinning it a little different for the different groups.
Andrew: All very manual, all you guys doing it, they keep the money after the T-shirts are sold and you get a cut.
Walker: All they needed was the idea. They probably didn’t realize how much behind the scenes we were scrambling. We probably have the same amount of problems we had then when we were printing 600 shirts a month as we do now. It was literally us trying to get everything together and really not understanding wholly all the intricacies of screen printing and fulfillment.
Andrew: Gotcha. One more thing, taking a step back, and then we’ll continue forward. You guys had this big vision for a job site. You guys were going to sell to big companies and schools and really revolutionize the way people found part-time jobs and internships. Here you are then, going and making a T-shirt. The thing that I see over and over is entrepreneurs who don’t start out with this big idea but start out just tossing little ideas out there. Then one little idea leads to a better idea and leads to this huge company that then, boom, takes off.
I wonder, though, if I were struggling, would I want to launch a small site if I had big visions of ambitious projects and big companies that were going to change the world, if I would then take a step back and say, let’s come up with this fun T-shirt idea. I have to ask you, why did you take this side project when you had this bigger vision and this bigger project going at the same time?
Evan: Well, I think that we saw it as kind of an immediate way to make ourselves some money. Initially, it was about doing something that would be understood and respected in our own community and that we would feel the gain. We didn’t have that big vision for it. We just thought, oh, well, we can make $2,000 by doing this. I think that that impulse, as the core impulse of the business, is a better impulse than the one that led us to Jobzle which was, you know, we watched The Social Network and we want to create a huge site with lots of users and save the world. The thing is, I think individual users just have a goal that they want to accomplish. If that goal is making money, I think that you have a good value proposition. We thought that with Jobzle we were going to help people make money, but they had a million other ways to do the exact same thing.
I really think that starting with that kernel of making ourselves a little bit of money and then saying, how can we do this for other people, that really was a key to this business treasure chest.
Andrew: OK. All right. There was a profit in it that you could see quickly. It would all work out fast. I guess for the same reason why scientists experiment on mice which have a short lifespan, working on a small project like this which has a small lifespan allows you then to go and take your learning from that experiment and try another experiment, and another, and another, and get quick results. The second campaign that you made for someone else, did you charge that company?
Walker: We did. I think that one thing we learned from Jobzle was don’t give your product away for free if you don’t have to, if it’s not part of your strategy. We kind of made a promise to each other at the very beginning of Teespring that, hey, if we’re going to do this, we’re going to make sure people actually want this. We’re not going to give it away for free and hope they want it in the future. We’re going to start charging from day one and hope that what we’re offering has enough of a value proposition that people will pay for it.
It was scary. There was always this kind of, oh, let’s just give it to them at our cost. Let’s give it to them cheaper. Let’s give them a discount. We decided that we couldn’t go that route again. It was too much of a nightmare for us with Jobzle. Thinking back, we made more money from that one day of selling T-shirts with Free Fishco than we made in months at Jobzle, and we had more unique visitors as well. Until you feel that downhill kind of wind at your back feeling. It really is hard to understand, where you are in a start-up and for us it was a wake-up call, about what the situation of Jobzle was. We just decided to dive into it.
Andrew: All right, let’s proceed. Now you’ve got to go out and get new customers. You try search engine marketing, where you pay for clicks, and how does it work for you?
Evan: Search engine marketing didn’t work out very well for us, and I think that a big reason for that is that when people go onto Google, they have a very concrete idea of what they’re looking for already. Our company is offering something that’s just a little bit different to the extent where people aren’t aware of this concept of this way of selling T-shirts, they should be, but they aren’t. That’s why I think, search engine marketing didn’t really work for us. We ended up spending about $10,000 for every thousand dollars of revenue that we were getting, and of course we were gathering data and going through it trying to optimize, but we ultimately decided that that wasn’t going to work for us. We thought that it was going to be our silver bullet. That we were just going to turn on the SEM, and people were going to start streaming into our website from Google searches and that that was going to solve all of our marketing woes, and we couldn’t really have been farther from the truth, unfortunately.
Andrew: Where were they going to come? Were you buying ad’s to get people create campaigns, or buying ad’s to get people to buy T-shirts?
Walker: We were targeting the organizers, so people who wanted to create and sell T-shirts because those are the people who really generate the most value for us. Like Evan said, we put it up there, the SEM firm we worked with was great, they were experts, they were making everybody else money. We thought. “Hey, we built it, they’re going to come, we can sit back, and rest on what we’ve done and the rest is just going to come into us.” I think that, again like Evan said, that we quickly realized that our business, it was almost a double sell. First, we had to introduce everybody to the concept, then we had to sell them on the idea of using Teespring. Part of that idea of where we decided that, hey let’s just put all of our money in something that’s going to automate it and just scale up, really boils down to the fact that, we’re not natural marketing people. When I get on a sales call, or a phone call, I still have that butterflies in my stomach. It doesn’t feel like something that I’m good at, and after a couple months of SEM, we really just sat down with each other and had a long talk and said, hey, if we want this business to be successful we can’t just stay in our comfort zone. We’ve got to get out there and sell it. We have to talk with as many people as we can. We’ve got to sit on the phone all day. We have to make a change in the way that we’re operating.
Andrew: Sit on the phone every day, not start blogging, not start tweeting, and not start any of that stuff. Why did you decide the phone was the best way to do it?
Walker: We saw the best results, in terms of bringing in customers when we actually talked to them via email, phone, chat. When we could get somebody on the phone and we could explain what we were doing and why it was better than the alternatives, we had a really high rate of success. We knew that almost from day one. From day one it was one of our best ways of gathering business, but it was such an uncomfortable feeling for us to call these people we didn’t know and nobody likes a sales call, so immediately when somebody picks up the phone and they’re already skeptical and you’re battling through that, and how many times we’ve been hung up on, I can’t even count anymore. It was just one of those things where we thought, oh don’t worry about it, we’ll just pour the money into Google, money will come back, and we don’t even have to think about this sales call, this uncomfortable process. When SEM failed for us, we knew that we had to dive in and we had to actually get our hands dirty.
Andrew: How much money did you guys spend on search engine marketing at your height?
Evan: Overall we spent, upwards of$20,000 on it, I think.
Andrew: How much money do you think you brought in from that?
Evan: I don’t necessarily know. I think that it’s definitely probably around $5,000 to $10,000. It’s not anywhere near the amount that we spent, let’s just say.
Walker: That’s generous.
Andrew: How did you know, did you guys start calling personally?
Evan: Well, no. We actually didn’t, I didn’t. Walker, I’m a coder, I actually still don’t really do that much phone call type stuff. But Walker got it there on IRC, on chat, he hit the ground running with emails and connections. He did a great job getting us out there on the Internet. He’s still not comfortable with the phone, he says he was on the phone a lot… What we did do was we picked up some young, scrappy guys who came to our office and blew us away by their brazen attitudes. A couple of weeks later we realized that we’d stumbled upon a gold mine of these motivated, confident, young employees who were able to work for very little money and sit there on the phone all day and sell.
Andrew: Hang on a sec before we get to the calls. You said something interesting, that Walker didn’t just make calls and you say he wasn’t comfortable. I guess Walker has said that himself. But you also said that online he got sales and I was one of the recipients of his email sales messages. He emailed me and said, “Hey, Love Mixergy, I’ve been listening to you for a long time. You need to make a t-shirt and I’ve got this platform that’s going to make a T-shirt for you. You don’t have to work.”
I said no and then he came back with an interesting response. I forget what it was but he handled my objection. I finally said, “No, I’ve got to focus on just doing the best interviews I can. I can’t get into design, it freaks me out.” So I saw that. How effective were emails like that and IRC chats like the ones Evan mentioned, Walker. How effective were they?
Walker: Surprisingly effective. I think we still get probably 30% of our business through direct outreach in program communities so I spend a lot of time with the start-up community, entrepreneur community, a lot of programming groups. Beyond just the fact that getting out there and talking to them, people like you, and maybe one day I can convince you to do t- shirts.
Andrew: I’d love a T-shirt. I just can’t deal with the design issues.
Walker: That’s fair enough.
Andrew: I’ve got to stick with what I understand. I’m going to get to how you guys, I’m going to ask you a question about that in a moment. So, go on. Give me one way that you got customers. The most powerful way via text that you got customers. Was it emailing like you did with me or was it going on IRC or something else?
Walker: I went to IRC and there’s a community called “start-ups community”. It’s kind of based around entrepreneurs, programmers, just generally almost an almost early adopter community. I went in there and instead of pitching the idea, instead of pitching, “Hey, who wants to print T-shirts?’ I came in and said, “Hey guys. I’m working on a project. We’re here so far, we’ve got $20,000 in sales. I want to talk to you about what we’ve been doing. I want to get feedback. I want to know what it would take for you to use it.”
I actually just went through and pitched it. The community is pretty brutal in terms of feedback and responses. I kind of handled each of their questions, and I spent a lot of time just talking about what we were doing, taking their feedback and responding to it. A couple weeks later, I got an email from a guy that said, “I’ve been watching you guys progressing on the start-ups channel. I want to do this cool design T-shirt from this programming designer, Substack [SP].
He launched a campaign and sold 50 shirts which was tremendous for us at that stage. Then a month after that I got another email from someone that said, “I saw that original programming design T-shirt and I have an idea. I have a big Facebook group for Sherlock Holmes fans and I want to do some Sherlock t-shirts.” We said, “OK. We’ll do that, too.” Then he launched a campaign and sold 400 shirts and all of a sudden this little viral network started to go out there. I would still stay in the channel, I’m actually on there a lot. I’m sure the guys probably wonder if I’m working or if I’m just chatting. But I got in there and I talked with as many people as possible and it’s actually led to our biggest client. That kind of chain of events that started with that one programming T-shirt, which then led to a big Facebook group, actually led us to This Week in Tech and Leo Laporte. They sold 2,000 something T-shirts in their first run and they just sold almost 2,000 mugs. They’ve become a big puncher for us. It just came out of being genuine and just talking to as many people that were similar to us and just getting out there and speaking about it.
Andrew: Man, you are using that for social proof and credibility like you wouldn’t believe. I get an email and you say, “You should create a t-shirt, Leo Laporte just did.” And I’ve got to tell you, it works. If Leo Laporte used it then I have to stop and pay attention. Alright, these guys are credible. I’ve been hearing Leo talk about his mugs, and you guys created a little mug with a place for a spoon or something?
Andrew: I forget who it was that talked about it on This Week in Tech. All right. Now we’re getting to phone calls. Here’s the thing with phone calls, or with hiring new people to do something. If you’ve done it before, you can train them. You can guide them. When they get it wrong, you can correct them. You can give them a path, and you can walk them down. I was going to say shepherd them down, but you walk them down this path. You guys weren’t experts at phone sales. How do you then have people who are good at doing it if you guys aren’t that great?
Walker: I think we learned in the opposite way. It’s kind of a funny story. We had this guy named Matt. He’s actually still part of the team. He came in. He knew one of our investors and was kind of a natural born hustler, that super confident type. He came in and just was going to meet with us about our marketing and give us any feedback. He was thinking about selling some shirts at his university. He came in, and we talked with him. He was amazingly charismatic, confident, and outgoing. We said, wow, you know, this guy’s got some great ideas. Maybe he’ll sell some T-shirts. OK. We’re done. We left. We went back. We put on our headphones, and we started coding.
All of a sudden, up comes Matt. No shyness. He just sits right next to us, puts his feet up on the desk, and says, tell me about what you guys are doing. How does this work, this programming? What if you did that? How can we improve this? That sort of initiative, that hustle, you just don’t see it that often. As soon as we could, we made Matt an offer to come on in and be part of this tiny team. Then it was just basically the two of us and one other. As soon as he got here, and that was probably just after we had made the conscious decision of hey, we’ve got to get out there and we’ve got to sell this thing.
We actually learned from him. He’s still amazing on the phone, has a great ability to make get past that initial sales call stigma. I think that in terms of my being able to cold call somebody, it’s improved dramatically just by being in the same room and hearing the way he speaks, the way he handles objections. It does go back to another theme of how we got here, which is just really trusting in other people’s abilities and trying to recognize our weaknesses and find ways around those weaknesses, and confront them in general.
Andrew: What you’re saying is you knew that making calls was a good way to close sales, efficient and profitable. You didn’t know how to teach other people to do it. You just hired a bunch of people who would take on the sales role, and you waited for some of them to do a good enough job that you could then say, aha, this is the way to do it. We’ve learned how to create this process.
Walker: I think we were doing it, but we were doing it very badly. We’d get lots of hang-ups. We’d probably be that awkward sales call that everybody dreads. Matt was actually our first sales hire. When Matt came in, he just showed us that there was a better way. We initially brought him on for an internship to come in here and help us learn. I think probably within a month of hiring him as an intern, we doubled our sales. Of course, as soon as we saw that, we made an offer and said, please don’t leave. He continues to be a really great part of the team, bringing in a huge amount of business. It’s all just getting on the phone, talking to people, talking to existing customers, and listening to what people have to say.
Andrew: How many calls a day would you say that he makes?
Walker: Oh God. During your average day, he makes probably 30-40 calls.
Andrews: Who is he calling?
Walker: Nonprofits from sources like Charity Navigator. We’ll look at companies that are using other competitor products like Cafe Press and seem to be under served, and we’ll reach out to them. We’ll go reach out to large Facebook communities, large Twitter groups. Pretty much anybody with a community or a cause we consider in our target users.
Andrews: I’m trying to think of what else we need to cover here while I’ve got you here. How about the time when you had a lymphoma campaign? Can you tell people that story?
Walker: One of our first campaigns was this great Sing for a Cure campaign. We were raising money for acute myeloid lymphoma. We went out there, over 300 shirts sold. I think it was our best seller at the time. We were celebrating. This was very early. We thought, hey, everything’s going great. This is so easy. We went, the campaign ended, and we sent the shirts out to get printed. They come back, and we open up the box, this big box. We look down, and I’ve misspelled lymphoma. It was just this nightmare situation.
Evan: Actually, it was myeloid.
Walker: Myeloid, that’s right.
Evan: I mean, most people don’t know how to spell that. I think it turns out it has an E in it.
Andrew: You misspelled myeloid on all these T-shirts.
Walker: Yeah. All of a sudden we had this situation where it was just one letter. For us, we were a small business. We didn’t have money. The idea of reprinting this $3,000 worth of goods was just terrifying. It was like, wow, that’s more money than we made last month. Can we really reprint all of these shirts? Maybe, they’ll be fine with it. Can we just give them a coupon or something? It really was a defining point where we said, no, this will be our way of teaching ourselves and punishing ourselves for screwing up, and we’ll bite the bullet. We’ll reprint all these shirts. We’ll ship them out. We’ll just get it done. Hey, you know, as painful as this is, we’re not going to do it again. Of course, we did it a couple of other times.
Evan: Yeah, it was not the end of Walker’s spelling woes.
Andrew: Can I tell you something? The reason that there’s no chyron on Mixergy interviews, like your names aren’t underneath your videos and your company name isn’t, it’s because I’m worried that we’ll have a typo and then I’ll have to back and re-edit it, or Joe will have to go back and re- edit it, and it will be a big headache. If I can’t edit it quickly, I don’t want it in there. As it is, occasionally we’ll get someone’s name misspelled on the headline of the post, but that could be fixed. Spelling’s a pain in the butt. What about this? Bill Cesare [SP]. Am I pronouncing his name right?
Walker: Yeah. Bill Cesare.
Andrew: Bill Cesare. He saw that you guys were doing way too much, that you had the standard problem that a lot of entrepreneurs who are successful, who are running growing businesses have, which is that you’re just taking on too many responsibilities, and he helped you. How did he help you? I want to understand this process because I have that issue all the time. How did he help you take stuff off your plate?
Evan: He actually helped us in a big way. Like we were talking about, the sales team, he ended up being the person who took the lead there. He managed our sales team for us. He took care of issues that are extremely arcane to us, such as raising money, talking to other angel investors, legal issues, incorporation–all of the stuff that, as programmers and a designer, we did not really feel we could tackle while also doing what we really wanted to do.
Having someone like him as our first investor, I think, was a huge thing for us because his skill set really did complement what we had. He had that sales experience, he had the business experience. Everything that we really lacked, he made up for in a lot of areas.
Walker: One thing that we noticed with Jobzle was one of our biggest failings. We got so distracted by legal and accounting and paying bills that only a minority of our time actually went to developing the product. When we came into Teespring we recognized, hey, we can build a great website and we can make it look somewhat pretty and very functional, but we’re not going to pretend that we know what a CEO knows or what a CFO knows. We need to find people who can complement our strengths with their own kind of skill set and let us focus on what we can actually do, which is build out the product. Even today we spend very little time worrying about the details of how everything’s working, getting the bills paid, getting the office paid for and much more of our time worrying about the sales and the hustle and the development. I think that has been the biggest change for us. I can’t even express, even when I think about it, I’m just overwhelmed with how much of a difference it is. It really is fantastic.
Andrew: When it was time to set up a sales department, you said, hey, you know what? Phone sales are working for you guys. Online marketing, SEM is not working for you. Let’s develop a team of people who will make phone calls so you guys don’t have to make calls, and I will organize this team for you. I will manage them for you. Not manage day to day but give them direction. Right?
Walker: Sure. He’s come onto the team full time now. He’s still an angel investor, adviser, but he’s almost like the acting COO. We had this really amazing hustler, Matt, but we had no structure around that sales department. Nobody knew who was reaching out to what organization or what they were supposed to do the next day. There was a lot of free form. As we started to grow, Evan and I had just no experience managing a sales team. We were not even good at sales ourselves. Bill was able to come in, set up a structure around it, allow us to expand that team without experiencing growing pains, and really kind of create some cohesion in the office, especially on that sales side.
Andrew: And you guys met him through Beta Spring, which is a mentorship driven start-up accelerator, and he was one of the mentors who invested in your company. Any concern that he’s going to displace you, Walker, as CEO?
Andrew: I mean, a lot of mentors who go to programs like these are looking for investments, but they’re also looking for their next gig. He’s a guy who, first of all, I should have in Mixergy because he had a hit business in the past that he sold. Second, now that he’s sold it, in fact, two businesses that he sold, he’s looking for the next thing.
Walker: Rightfully, he is probably far more of a CEO than I am. He is a mentor to me. One of the great things about our relationship with Bill is that we have a really kind of three-way partnership, kind of trust Bill relationship. If he came in one day and said, hey, I think I should be CEO, I’d probably actually hear him out. I don’t think he’s in it for that. His real passion is, like you said, he’s been a serial entrepreneur. He’s done this before. He’s had the big wins that everybody hopes for. His real passion now is getting teams like us off the ground, teaching us what he can, allowing us to avoid speed bumps that most first-time teams or second- time teams run into, allowing us to dodge those obstacles.
Andrew: All right. I think we should have him on. I’m going to ask you guys later on for an intro. He sounds like a great guy. I’ve been looking over my notes on him while we were talking, and he’d be a great guest. Let me do this quick plug, and then I want to ask Evan about something that has nothing to do with business that he does in his private life, that I think is very important.
The plug, of course, is for Mixergy Premium. If you guys have been watching this interview and saying, hey, this phone sales thing, maybe it could work for me. Well, we have a course by a guy named James Kennedy of Piehole [SP]. He’s an entrepreneur who’s listened to Mixergy for years. He emailed me over and over to say, Andrew, you’re missing it. Guys like me cannot make sales by buying ads on Google. It doesn’t work. SEO is taking me too long, and I’m not going to blog. It just doesn’t work for me. He says, you know, I’ve found this new solution. It’s making calls to customers.
Andrew: I said, all right, maybe it works for you. He goes, no, if it works for me, it’s got to work for other people, too. James tells me, he goes, I’m not comfortable on the phone. I’m a developer. I like to just work. I don’t want to have to talk to people. He did. He made sales. He showed us his process. If you’re a Mixergy Premium member, don’t ignore the James Kennedy course on how he made sales calls and how you can, too. It’s right there for you at mixergypremium.com. If you’re not a premium member, go sign up just for that course alone. James Kennedy of Piehole introduced me to a whole new idea. You guys are seeing it play out here with Evan and Walker’s story.
If you start listening to other interviews the way that I’m now starting to, you’ll realize that there are many entrepreneurs who say that they picked up the phone and made some sales. I haven’t been diving into it enough in these interviews. I will. If you want to do it, too, if you want to start making sales and start getting those results that you’re hearing people in my interviews get, check out that course. It’s right there, part of mixergypremium.com. I guarantee you’ll love it.
Before I actually get to that question for Evan, in addition to making sales calls, I always imagine that it’s also really good for customer development. When I call my customers, it’s not to sell to them. I have no upsell. I do want to understand, how are they using my program? What are they doing? When you make a sales call, can you still get that kind of feedback that goes back and helps the product?
Walker: We actually do a lot of personal outreach. We don’t have any automated re-engagement right now. That might be something that changes in the future. What we do is send an email. We have a basic CRM, and we send emails to campaign creators, both successful and unsuccessful. We just say, How did it work for you? What did you love, what did you hate, and how could it be better?”
Evan: I actually think that one pitfall we ran into that’s definitely worth touching on and sort of related to this issue is overreaction to the requests and desires of certain customers after we were already at a stage in our business where things were clicking and we had a product that was working for people. When we were just starting off, it was so valuable to know exactly what people wanted. What can I do for you to get you to start today? That was the question in the first three months of our business. When we were still doing that type of responsive development, six months into the business it became a detriment to the forward progress because we were listening too much to what people wanted and building out too many features that were specific to one client.
Andrew: For example?
Evan: A big example for us was this platform that we built specifically for this large enterprise customer that we had which was called a micro fundraiser and it was kind of like a meta Teespring for their brand. I know it’s kind of complicated which is why I think it didn’t work, but basically they had their own branded designer that people could then come in and design T-shirts where the profits would automatically be channeled to that organization so it was this kind of extra layer of metafication [SP] of our designer process. White labeling it…it was a bust. It really didn’t help. We thought it was going to be a multiplier on a number of campaigns coming in, but all it did was kind of chop into little bits and pieces the demand that was out there for T-shirts relating to these causes…because everyone was designing their own T-shirts instead of the ideal scenario of everyone purchasing on one big campaign page.
Andrew: Gotcha. All right, here’s the thing that I want to ask you. Lucid dreaming. Evan, you do Lucid Dreaming. You taught a course at Brown University on Lucid Dreaming?
Evan: That’s correct.
Andrew: What is Lucid Dreaming?
Evan: Well, Lucid Dreaming is when you are dreaming, but you realize that you’re dreaming. Unlike a regular dream where you’re just kind of walking through your dream, oh there’s a brown hippopotamus over there, but I know this is real. The point of Lucid Dreaming is you see that hippopotamus and then you say to yourself, oh wow that’s not real. This is a dream and then from there you can really experiment with your kind of inner consciousness. You can experience flight. Do all of these crazy things that you normally wouldn’t be able to do. It’s a sort of awakening state within the dream world that really is inspiring for me.
Andrew: So, if I see a brown hippopotamus and I’m dreaming, I might just let the experience happen. Maybe, the hippopotamus turns into a giraffe. Maybe, I start running away, maybe I…something else. In Lucid Dreaming I might say, “Hmm, I’m going to go and ride this hippopotamus and then I’m going to fly the hippopotamus and then I’m going to fly into the past and see where I was at 14, that kind of thing?
Evan: Exactly, yes, you definitely understand it.
Andrew: How is that different from daydreaming?
Evan: It’s similar to daydreaming. I think that what people’s conception of what daydreaming is can differ. A lot of times when you go into a little bit of a sleep in the middle of the day. Sometimes, I’m caught doing that in my desk here and you are having that type of experience. It’s similar, but the big difference with Lucid Dreaming is that you do it at night and it can last for hours instead of just…
Andrew: And I’m sleeping and getting rest while this is happening?
Evan: You are sleeping and getting rest at the same time. It usually only lasts for about an hour at the most if you do it at night.
Andrew: What’s the benefit of this?
Evan: The benefit, the way I see it is just you know, you’re going to spend a-third of your life sleeping it’s kind of sad that so much of that just goes to waste because you are not conscious. Also, because you’re not conscious during what’s really one of the most exceptional parts of your day, which is your dream. So, I think it just really adds to your life when you are living in both your dreams and in reality.
Andrew: I know it’s a topic that a lot of people in the audience are going to be curious about. Do you have a book? Since they can’t all go take your Brown University course and I know they’re going to be interested in it, do you have a book that you could recommend that will help them understand this?
Evan: Well, I have a website called thedreamhacker.com.
Andrew: I didn’t know that, thedreamhacker.com.
Evan: That’s my side project. In terms of a book, I can recommend “Lucid Dreaming”, by Waggoner. It’s a really good overview of the subject.
Walker: Sometimes, when Evan will fall asleep or take a quick 20 minute nap in the office he’ll wake up and come over and he’ll say, “God, I was trying to sleep but all I could see was you in your desk just yelling at me the whole time.”
Walker: Chasing me around yelling at me.
Andrew: Is that really happening or is it in his dreams you’re still yelling?
Walker: Yeah, I’m chasing him around.
Evan: He’s still telling me, you know code this. Close that ticket.
Andrew: All right, well, the website, I’m seeing here all the things that I wish we would have been able to talk about, but I think we covered all the key parts here. You know what, here’s what I should have asked you about. Are you guys operating out of a police department, or over a police department? What’s with all the sirens? What part of the country are you in?
Walker: I don’t know. You caught us at a weird time. It was like seven sirens.
Evan: We have a hospital that’s right down the block from where we’re working here. So that’s what the sirens are all about.
Andrew: All right. The website is teespring.com. T-E-E-S-P-R-I-N-G.com. You guys can go and create your own t-shirts. See if anyone wants to buy it before it gets printed and frankly if you don’t go to teespring.com it’s not going to be the end of the world. Walker, or someone from his office will email you soon and they will tell you about the benefits of Teespring and about how Leo Laporte did it.
In all seriousness, you know what, you contacted me Walker months ago. Because of that initial contact, I have been watching your website and your business grow, and it’s been inspiring to watch it grow. It’s been inspiring to hear Leo Laporte talk about the little spoon and the mug and see him get excited. It’s been inspiring to see that some guy who contacted me and is hustling and building and is getting somewhere and going further and further and further. Usually, I talk to entrepreneurs years after they’ve had their success and the only way that I can see the process is by going back to archive.org. Because of the relationship we built via email, I’ve just love watching Teespring develop as a business and seeing you guys develop as entrepreneurs and seeing the whole thing just unfold. Thank you for coming here. Congratulations on the success.