Businessweek called my guest a “widget mogul” because when he was a teenager, he launched a company that created tiny software that was incredibly popular.
Ankur Nagpal created Facebook quizzes, like “Dr. Phil’s personality test,” which Dr. Phil wasn’t happy about. And mobile apps–but wait till you hear how he cranked them out.
Today he’s running Fedora lets you create a beautiful online school on your website.
Fedora handles content hosting, delivery and payment processing while giving educators and institutions an entirely white-labeled solution.
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Ankur Nagpal, Fedora
Ankur Nagpal is running Fedora handles content hosting, delivery and payment processing while giving educators and institutions an entirely white-labeled solution.
Andrew: Hey there freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. Boy, how many times I’ve said that now over the years? Hundreds? Over a thousand? Well, you know what it’s about. It’s about having entrepreneurs who’ve done something exceptional, extraordinary come on here and spend about an hour breaking their process down. Taking you step by step through the process they did to get there. And showing you some things that you’re not going to see anywhere else.
Like I think today we’re going to talk about the word spam. What you’re not supposed to admit. So I’ll save it for later in the interview. When the posers have moved on to other things and the real entrepreneurs need to hear it. And today’s guest who’s going to take us through a story is a guy who Business Week called a widget mogul because when he was a teenager he launched a company that created tiny software that was incredibly popular.
Ankur Nagpal created Facebook quizzes like Dr. Phil’s personality test which Dr. Phil was not excited about. And so many mobile apps that I think you’re going to have to hear how he cranked them out and what happened with them. Today he’s running Fedora which lets you create beautiful online web, excuse me. Not websites, not stores. But beautiful online schools for your website. You can add this school. Fedora will handle your content hosting, your delivery, payment processing, doing all of it for you the educator and for institutions and providing an entirely white label solution.
We’ll find out about that and all those other things that he did. And we’ll do it all thanks to Scott Edward Walker. He is the entrepreneur’s lawyer at every stage of your progress as you build your business, as you hire, as you fire, as you raise money, as you sell, as you buy companies. Scott Edward Walker will be there for you. And later on I’ll tell you why if you’re an entrepreneur, especially if you’re in the tech space, you want to talk to Scott Edward Walker of Walker Corporate Law. But first I got to meet my guest. Welcome.
Ankur: Thanks, man. I’m excited to be here.
Andrew: Me too. Especially considering some of the things we’re going to be talking about. Why don’t we start with revenue? How much revenue did you make from all of this?
Ankur: Okay. This is going to be fun. Yeah, hit me with what you’ve got.
Andrew: Revenue. I saw seven figures in my notes here from the pre- interview. I’ve seen all kinds of things online. Bottom line, did you put more than a million dollars in your bank account?
Andrew: And did you get to keep it in your bank account for more than six months?
Ankur: Post taxes, yes.
Andrew: Post taxes, you still got to keep a million dollars?
Andrew: How young were you at the time?
Ankur: Twenty-one was kind of when I crossed the threshold.
Andrew: Wow. Do you remember the day when you did it?
Ankur: To be honest, no.
Ankur: I don’t know. It’s funny because when you start in business and then you figure out if people are listening is obviously a motivator. Anyone who says it isn’t is lying. You definitely get to a point where, I mean my lifestyle is not extraordinary. I don’t really splurge on a lot of crazy things. So it just became a way of keeping score. It really wasn’t that important to me beyond kind of the threshold at which I realized I could pay for my own education. I did not have to feel guilty about taking money from anyone and just be able to do the things I wanted. Beyond that it was just a number.
Andrew: I’m on 123kidsfun.com. Is this a site that you created?
Ankur: So it never launched. A site that I created but never launched. It was my 10-year-old self’s project. My first website. After my parents dropped me off to learn HTML.
Andrew: So you don’t own 12, you’re not Rose Media, Ross Media?
Ankur: No, they stole my startup now. I feel like we’re going to have a problem.
Andrew: No, it looks like someone else then has the site. So 123kidsfun is not your website, but it’s a business name that you used when you were 10-years-old to create a business that was supposed to do what at ten?
Ankur: We were supposed to buy the domain name. We just never reached that stage. Our website was kind of stuck in development for a very long time.
Ankur: I had basically learned that this tool called Microsoft Fun Page could make you build a website and I use websites. I thought of myself as a kids and I thought, “Hey, let’s build a site for people just like me.” The site was incredibly stupid when I think about it. Since it was mostly just a collection of any information I could find. Like here’s a list of famous tennis players and here are their stats. Here’s a list of Pokemon characters. But it was fun. I recruited my friends. I recruited my brother. I gave him one percent of the company and every time he did not do the work that I asked him to, I threatened to withdraw that one percent.
Andrew: How did he react to this kind of…
Ankur: I mean, he’s a good younger brother, you know. So he got really scared. He said, “No, no, no, no, no. I’m sorry. I’m sorry. I’ll do it. Give me my one percent.” Now that we’re both adults, he looks back on this, yeah, and he tells me I essentially tortured him. There are certainly memories that he still has and I’ve forgotten, but he definitely was an asshole to work for.
Andrew: You were entrepreneurial then, you were already into tech then, you got yourself an internship at Amazon. You must have loved it, no?
Ankur: Yeah, I moved to America when I was 17. I thought I wanted to be an engineer. As an Indian kid, that’s one of the more obvious choices.
Andrew: You grew up in Amman, Jordan, right?
Ankur: No, I grew up in Muscat, Oman.
Andrew: Oh, Muscat, Oman, where’s that?
Ankur: It’s about a 45 minute flight away from Dubai.
Ankur: It’s in the Persian Gulf, great place to grow up.
Ankur: Nothing but good memories there. Why?
Ankur: Part of that is obviously nostalgia, it’s just drawing the fact that you tend to like where you’re from, but even now I go back every winter, it’s just nice. Great weather, well not great weather, but after a New York winter it certainly seems like great weather. It’s just a peaceful, beautiful country, my family still lives there, I have friends who live there.
Andrew: Did you feel like you were connected to this whole internet tech entrepreneurial world that existed online, or did you feel like…
Ankur: Absolutely not, not in the slightest. Which is why, when I came to America, I thought I wanted to be an engineer. I did not even think about, I had all these entrepreneurial experiences before, but I still did not think about being an entrepreneur because no one talks about it like that over there.
Andrew: I see. So at 17, you come in, was it the internship that brought you to the U.S.?
Ankur: No, I came here to go to college, I went to UC Berkeley.
Ankur: My freshman summer I got an internship at Amazon, I thought, “This is it, man. I’ve made it! This is exactly what I wanted.” Turns out I learned I’m a terrible engineer. That was the first learning, and so I did not enjoy the experience at all.
Andrew: What didn’t you like about it?
Ankur: Just the idea of being such a small, inconsequential cog in a massive machine. The entire purpose of my department was to manage one module under Amazon Seller Central. So our entire team just essentially managed one page and its functionality.
Andrew: What was the module?
Ankur: I should be able to tell you this.
Andrew: Wow, so it was that small of a thing for you? Okay, and here you are, a guy who, even as a kid, was creating businesses, and working with your brother on One Percent, so you had this whole instinct in you, and it must have been suppressed. So, is that when you stated to build these Facebook apps that I heard so much about, and saw?
Ankur: Yeah, the timing coincided. This was the summer of 2007.
Ankur: Socially, I was in Seattle, 18, new to the city, did not have a fake I.D., so my options were very limited, so I found myself with free time on weekends and it coincided with the launch of the Facebook platform. I saw this as an opportunity since I had been on Facebook for a while, I saw that it was growing pretty fast, and I am a diehard Cricket Tragic, so I thought. “How can I combine these two passions?” And I built a fantasy cricket game, which was my first ever Facebook application. It was done during evenings while I was working at Amazon up in Seattle.
Andrew: It took you about a month to put this together. What could it do? It seems like a pretty complicated piece of software, if it can do fantasy cricket?
Ankur: So, here’s the thing. When you’re not a good engineer, you actually end up saving a lot of time. It was badly written code that worked, but that saved a good amount of time. And fantasy football is a very, very well-developed concept, fantasy cricket is in its infancy, so its features were very, very tiny, but it was a labor of love. Literally, all my life I’ve been so passionate about the sport that this was something that I really, really enjoyed doing.
Andrew: Do you still play cricket here in the U.S.?
Ankur: I played in the Bronx two weeks ago for the first time in little over a year. I try to, it’s hard.
Andrew: Because it’s hard to find other players?
Ankur: It’s hard to find other players, and it’s not the easiest sport in the world to play, the version we play takes about six or seven hours, that’s an entire Saturday or Sunday morning. It takes a while to get there. But I definitely want to start playing more.
Andrew: Six, seven hours. That’s how long a cricket match lasts?
Ankur: You don’t know the half of it. That’s one format, there’s one format of cricket that lasts five days.
Andrew: Wow, no, I don’t know the half of it.
Andrew: And you were going to be a pro at cricket?
Ankur: That was what I wanted from age three to age fifteen, at which point it became evident that, while I was good for the country I grew up in, I mean, being good at cricket in Oman is like being good at Cricket in America, but if you were to go to a country where it was a major sport I’d be, I’d probably be better than a good club cricketer, but nowhere good enough to play professionally. But yeah, that was my passion. That was what I wanted to do.
Andrew: When you create this thing as a developer and don’t over complicate it. What’s one thing that you left out that if you were better, if you had more resources, you would have added?
Ankur: Initially I had to manually update everyone’s course.
Andrew: Oh, really? And if you had a million people, you couldn’t do it.
Ankur: Well no. I updated manually for the performances each player had.
Andrew: Oh, I see. So you just had to sit and type it all in because you weren’t, got it. Okay.
Ankur: It was so painful.
Andrew: Okay. How did it do?
Ankur: It was interesting. It generated a lot of interest from my friends and people I knew. And there were a lot of random cool things that happened just because I’m a cricket fan. I had got a few professional cricketers to use it which was kind of cool. But grander scheme of things, I mean, it made 15, 20 bucks a day. Which again, to me at the time I was thrilled. At the time I was like, “This is amazing. This is a business. I can now buy lunch and dinner.” In retrospect I look back and I think, “Wow. Financially it was tiny.” But it was a lot more than just about finances for me.
Andrew: Look at how big it got from there. This whole business that you launched with the cricket application. And the revenue came from where?
Ankur: So the applications kept getting sillier and sillier. So we started off with the cricket application. It took about a month to make. Then I think the next one was a testimonials app. So you’d tell your friends, you write them glowing testimonials. Which was a feature of Orchid, which was a competing social network at the time. It was really popular on Orchid. So I was like, “Oh that’s a good idea.” That did better. That sold for ten thousand dollars.
Andrew: You sold the app for $10,000. Once it had users, and it was active.
Ankur: Yeah. I got a great deal. There were maybe a few thousand users and it was on a trajectory to nowhere.
Andrew: It was ad revenue at the time that you were going for, right?
Andrew: Okay. So Fantasy Cricket revenue came from ads. Testimonial, also advertising?
Ankur: Yeah, but I mean, we probably sold it for ten thousand dollars like 150 bucks of revenue. So a good deal.
Andrew: We’ll see later on how you got really good a virality. That you got clever at it. The testimonial application, I can see the virality of it. That if I leave you a testimonial on your Facebook page, I’m telling you about the testimonial application. But was there more to it than that? More virality than I’m noticing here?
Ankur: Yeah, I mean, at the time we integrated with their profile. So if you got a testimonial it would show up on your profile as a tab on your profile. With that said, ultimate feet failed because its bio-mechanic was not strong enough.
Andrew: Okay, but you had some virality baked in from the beginning.
Ankur: I had some virality baked in that conceptually should have worked but in reality it did not. And very often you have viral ideas and they just don’t work so you never fully know until you test it. But the first kind of break out success came after that when we got to the simplest, stupidest app I’d ever made which took a day. It was called How Good a Lover Are You? It was this stupid personality quiz. You answer very Cosmo style, you answer eight questions and it generally tells you, “Oh, you’re a great lover.” Or, “You’re a terrible lover.”
Andrew: And where was the virality for that?
Ankur: Newsfeed stories. The vanity aspect. So when someone answered a quiz, we allowed them to publish to their feed afterwards and people loved that. People ate it up. It grew absurdly, absurdly fast. Faster than anything I’d ever seen before. That was kind of the first time I was like, “Okay, we’re on to something.” You know we went from, we were making hundreds of dollars a day now.
Andrew: We’re looking at Fantasy Cricket took a month. Testimonial took a week. Quotes application, under a week. The quiz, How Good a Lover Are You? Took how long?
Ankur: A day.
Andrew: A day to put together. You got it so good that you just kept getting faster and faster on it. You were learning what to focus on. What were you focusing your time on so that your time was best spent?
Ankur: As soon as I kind of had an understanding of how it worked, it came down to just launching things fast. I mean, you have a lot of theories about what might work, but when you can launch something so quickly, it’s more a case of just doing it and seeing what happens. And the advantage of having all of these preceding applications is that whenever I launch a new application, I have the first 20, 30 users to send me that direction. That was very, very vital.
Andrew: Do you have them because of the other applications?
Ankur: Because of the other applications.
Andrew: I see.
Ankur: Cross pollinate them really easily. And within hours, you can easily tell if something was going to work or not. Or if it needed work.
Andrew: You know, we talk a lot about people who are perfectionists and some of them are so proud of being perfectionists. I will not release anything or do anything unless it’s perfect. And those people end up often not releasing anything at all. I’m noticing that there’s another group of people who I would call the imperfectionists.
Ankur: They’re the anti-perfectionists.
Andrew: Yes. It seems like that is you. You take pride in just launching it and being perfect the same way that someone else might take pride in having every little bit polished.
Ankur: Absolutely. I mean, we had greatest security failures. There’s times that anyone in the engineer world might take a step back. When we made changes to our code, made editing live code on our server, so if we made a mistake the entire application was in doubt every single time. So, as I said, I’m not an engineer, but I can build things fast (?) future businesses I built.
Andrew: You had a list of people because you had apps so you can go back to that list of people and say, “Hey, I’ve got a new app.” And so things got started, got Kier (sp) started because of your past apps. You also learned how to create virality and frankly at the time Facebook really juiced the virality because they were allowing it to the degree that it wouldn’t take.
Ankur: Absolutely. We wanted to kind of produce those stories and they, in turn, could show how they were a valuable platform.
Andrew: Right. They went way overboard. And then they started scaling back. Today you can’t do the same. You were shaking your head. You feel like they didn’t go overboard?
Ankur: Yeah, I mean, it’s been interesting because kind of you can break that entire three or four year period into sub-periods where they were up, back down. We did some things right, some things wrong, obviously. They did go slightly overboard of what they allowed, but there’s also a ton of potential that I feel at some level has been lost right now. I mean, we are regaining some of them back, but right now the kind of success stories that the apps stores have been able to produce, mobile app stores, will have to at some level feel left out.
Andrew: Yes, the part that I feel they went overboard on was I would install an app and immediately it would show me a billion other people that I should spread the word about the app to. And it was all pre-checked, and then I would (?) and then it would become annoying to people to get all these.
Ankur: Whenever you were pre-checked, guilty as charged largely.
Andrew: You mean you did that, too?
Ankur: We never pre-checked, but yeah, I mean, we definitely realized that opening with inviters worked for a lot of people.
Ankur: For us most of the stuff came down to a test. We were not considering the human side of it as much as data. What happens if we do this, how would people react? And accordingly prioritizer in future decisions.
Andrew: And the part that they missed out on, I feel like, you’re right. It seems like they were going to be a platform to build on just like you build on Windows and Mac and now on iOS and Android. It felt like you could build on top, and that’s the way they wanted to go. And they dropped out of it. So we talked about the things that you did to spread the word.
As I said earlier, it was going back to the list of people who were already signed up using some of these viral hooks. It was also going to Facebook Groups. What did you do to Facebook Groups that allowed you to pull people in?
Ankur: So we had . . . Yeah, we definitely had a strategy, a slightly sketchy strategy, but it made me a little sad as to how well it worked. So at this time I brought my roommates in on this as well. I basically cut them a deal where they were all helping me create content, the word and that kind of stuff, and we soon realized that we could get a lot of users really fast by pretending to be an attractive girl.
Ankur: So we had fake accounts, female names, like the most obviously fake picture too, like it’s literally a girl with one picture like flawless makeup in a bikini and no proof that she exists. And we’d go to a couple of groups like, “Hey, if you want to be my friend, add me.” Within four days the account would reach its maximum limit of 5,000 friends. And beyond that it was as simple as being the status of, “Hey guys, my friend just launched this application. I would love if you would use it and send it out to all your friends.”
From those 5,000 people we’d often get like 100 people. Got enough to see a lot of applications.
Andrew: That was fantastic.
Ankur: It was definitely the strategy we employed.
Andrew: Do you feel guilty about saying it? I saw you were rocking back and forth as I asked you the question. I thought maybe you weren’t comfortable with it.
Ankur: I’m not guilty, just like I’m (?) but not guilty.
Andrew: Okay. What else did your friends do? You brought in your roommates and friends and asked them to help. How else did they help out?
Ankur: Content creation.
Andrew: What kind of content did you need to create?
Ankur: The questions, the answers, you know, just creating more quizzes.
Andrew: Did the quizzes take off?
Ankur: Yeah, so at this point we were doing mostly quizzes. We realized the vanity aspect of quizzes was so strong, like it was such a strong human motivator. We learned so much about human psychology through these quizzes. For instance, I realized one of the things that we did early that I now realize I could never do again is whenever we had a quiz like how good a lover are you, how big a drinker are you. Whenever we had the middle tier being like, “Oh, you’re the regular drinker or you’re average” people really disliked that. No one ever posted that to their profile. Something else we learned is, when people answered a quiz like, “Which Friends character are you?’ they would take the quiz again and again until they got the result they wanted. They would manipulate that answer, get the result they wanted, and then publish it.
So a lot of people, that just want to publish the story.
Andrew: I see. So you just want to give them something that’s either exactly who they think they are, or really outrageous so that they feel the need to publish it.
Andrew: Quizzes were incredibly hot for you. One of them was the Dr. Phil quiz. What is the Dr. Phil quiz?
Ankur: This is funny because the idea and inspiration for this came from no one else but my mom.
Andrew: Okay. Great.
Ankur: She received one of those email forwards that said, “Click Dr. Phil’s per-snobby quiz,” with the preface like, this quiz is so accurate, Dr. Phil showed it to Oprah, and Oprah couldn’t believe how much it described her.
Andrew: This is one of those chain letter type emails?
Ankur: Chain letter, entirely.
So my mother did that, she forwarded it to me. She’s like, “You have to do this.” And you know what? I can pretend keeping this working. And that, at the time, blew up bigger than anything I’d ever seen, reached 2 million users a week.
Andrew: What was the Dr. Phil quiz? What were people trying to figure out?
Ankur: There would be questions like, “When you walk, how do you walk?”
Like, “I briskly walk with my left for forward”, or “I walk with my left forward.”
Or when you sleep at night, how long does it take you to fall asleep?
And it would give you results like, ‘You are a very confident person,” things that everyone could relate to.
Andrew: I see. Got it. Okay. I see the app is no longer on. I was trying to grab it right now to take a look.
Ankur: I can guarantee you can look it up in the iTunes app store, the google play store. There’s so many knock-offs.
Andrew: I do see it. Actually. I even see PsychologyCentral.com now knocks it off and has it up on their site.
Andrew: I don’t know if they’re inspired by you.
Ankur: It’s not really my original as much as an email thread. But we were the original ones on Facebook that got super huge.
Usually walk fairly fast with long steps, or fairly fast with small steps, or less fast, head up looking the world in the face. Less fast head up, head down, very slowly.
Got it. Okay. This is the kind of thing.
And it just took off. You didn’t have Dr. Phil’s permission. In fact it wasn’t even related to Dr. Phil in any way, except that it’s psychological, and it uses his name.
Ankur: We all had fun with it. My advertiser actually sent me a wine bottle, and I still have it, with Dr. Phil’s face on it.
Dr. Phil did allude to the quiz in one of his TV shows. Someone sent me a clip and I wanted to save it. He talked about how people are impersonating him on Facebook. And the quiz on Facebook is certainly not him which was definitely a dear diary moment for me.
Andrew: Dear diary. Yeah, I bet. And the advertising came in from where? I see the virality. Where’s the revenue?
Ankur: Later on, if Facebook, we got into virtual currency, but at this point it was all just display apps. We experimented with virtual currency briefly on Dr. Phil where you could complete an offer and get a PDF that was a detailed analysis. We implemented that and a week later that one feature made 10K.
Ankur: That’s when we started to identify the power of virtual currency.
Andrew: So before that it’s was, after they hit submit, they share, and then they see an ad?
Ankur: No. There’s banner ads at the bottom. Some had banner ads in the header. It was never as intrusive.
Andrew: Okay. And the first part that took off was just running those kinds of ads. The next part was saying, “If you want a more detailed report, then go download this thing.” And you got CPA revenue for that.
Ankur: CPA conversion. Yeah.
Andrew: And then virtual currency. Why did virtual currency work? Or how did virtual currency work? I understand why.
Ankur: Quickly, in case someone doesn’t know, virtual currency is when you create some kind of currency that exists only within your application. In order to get that currency you can either pay money or fill out offers. Virtual currency only works, at this point we’re fast forwarding a year, year and a half later, when the application I had was a friend quiz.
I’d get a notification, for instance, saying, Andrew’s answered a question, “Do you think uncle knows how to party? ” If I wanted to find out what you thought, I’d have to go back into the application and answer questions about my friends to earn coins, and use those coins to redeem the answer.
Andrew: I see, okay. So there’s also more virality in me answering questions about my brother, and then my brother gets an alert saying, “Hey, Andrew just said something about you. Now go and find out.”
Ankur: Yep. Hyper-hyper viral. That kind of virality, in regard to those applications, it made quizzes look like nothing.
Andrew: I see. Because a quiz is really viral and really popular. But a quiz about your friends then is way more so because now…
Ankur: Yeah. When it was a brand new concept, like obviously people got tired, but when it was a brand new concept it was unreal. Like crash our server within two days unreal. So yeah, it was overwhelming at the time. Our launch coincided with my finals week which it usually always did.
Andrew: You created the first friend quiz?
Andrew: And then when other people copied it. How pissed were you?
Ankur: So in general I never got super pissed whenever someone copied an idea. It’s inevitable and it’s the nature of the beast. I spent a lot of time kind of algorithmically preparing a list of people who were likely to copy the application. And if you were even a friend of that person, you wouldn’t see the application. So I had my technical measures in place. But what really stung was when a guy a hired to scale my servers stole it.
Andrew: Tell me about that.
Ankur: We were going through scaling troubles. It was finals week. I already had one guy looking at the server. I needed a second guy just because it was going crazy. I had a chemistry final, I hadn’t slept. I found this guy on very short notice. Didn’t even sign paperwork. So part of it was my fault. He was helpful at the time. The applications died down a few days later and I went home for winter break.
When I came back in January, kind of disconnected from this world, I see this doing really well. And a good buddy of mine tells me, “Hey, do you know it’s this guy’s application.” I was like, “Wait, he worked with me.” And yeah after that my friend and I collectively sued him. We settled out of court. I didn’t have to take any part of the legal proceeding, but in turn, you know, my friend took care of for a share of the settlement. So we did get some retribution, but…
Andrew: Your friend who’s a lawyer?
Ankur: No, my friend who’s another app developer who wanted to build on this concept.
Andrew: I see. And so he said, “I’ll go and fight this guy.”
Andrew: What’s the app that this guy copied?
Ankur: It was a friend quiz. In terms of specific names, I couldn’t even tell you. I mean, all of them were called what my friends think about me or find out. There were all so similar.
Andrew: How many of these did you build?
Ankur: Friends quiz, once we initially in the first iteration we did about five or six. But later on, this is again fast forward 2011, we again set up a factory and set up a few hundred of them.
Andrew: A few hundred. And you can tell fairly quickly if one was worth investing in because, how long would it take you to know if one got viral?
Ankur: Generally 12 hours I would say at the most.
Andrew: Why 12 hours? What happens in 12 hours that signals to you that this is a hit?
Ankur: Sometimes you can find out a lot sooner. Like if it’s very viral, you send 500 people, you see I use to like to quantify by virality is that if I send a certain number of users manually, so I’m tracking that I’ve manually send my friends a new app, how many users come in organically. And 12 hours is about the slowest of seeing the new users replacing the users we sent. Sometimes a lot quicker, but if it’s slower than 12 hours, chances are it might never happen.
Andrew: You know what? The reason my mind just blanked there for a second is I was looking through my in mail from something from you and I came up with something else. I’ve got to say this and come back to it later. Especially the PS line, “Are you in New York? Come over to our office for free beer tomorrow.” Where did this come from, I’ve got to bring it up. Let me write that down.
Ankur: I’m a little worried because I have no idea what you’re talking about, but…
Andrew: No, I think you’re going to be proud of it. I think, like, I hope.
Andrew: Let me do this. Since we talked about using Dr. Phil’s name in a quiz, we talked about challenges with coworkers, we’ve talked about all these different things that we as entrepreneurs sometimes do when we, you know, push the envelope a little bit. If we’re going to do all that, one of the first things we should do is talk to a good lawyer when we’re setting up our companies. In fact, did you, Ankur, set up a company right away or because you were in school, you said, “It’s just a passion project. I won’t even go through the…”
Ankur: Yeah, I’m the last person to talk about doing the right thing legally. There’s a lot of things I would have done differently if I were to.
Andrew: You know, I get saying, “I’m going to use Dr. Phil’s name because it’s kind of a Dr. Phil inspired thing and it’s fun and all that.” The part that I never get is when people don’t incorporate or set up a legal structure for their idea because that’s the first thing that I do. And I’m not anal about paperwork. I just need my protection.
Ankur: I didn’t do it because I didn’t know better. It’s that simple. I just didn’t know.
Andrew: At what point did you then incorporate?
Ankur: Several, a couple of years down the line.
Andrew: So all the money was going to you personally?
Andrew: So the problem with that is, and I’m not trying to…
Ankur: I’m set up for liability. I’m personally accountable for…
Andrew: Yeah, totally. Dr. Phil can come sue you personally and then you’re personally bankrupt and this goes on your name. As opposed to setting up a company, then he stops at that company. He can’t come any further. He can, in some ways, but he’s more limited. Or, frankly, two different companies. One for the more dangerous stuff, one for th- . . .
Anyway. This is not the kind of stuff that I should say within a sponsorship spot for Scott Edward Walker. What I should say, instead, is, ‘We as entrepreneurs have different legal needs than the average business owner. We have, especially in the tech space . . .’
Your dry cleaner, your average entrepreneur with a small mom and pop store does not do the kind of things that we as entrepreneurs in the tech space do. We push the envelope. We have issues that others don’t understand. We need a lawyer that understands it. We need a lawyer who can help guide us through, who can be like a conciliar when we need him to be there and have a conversation with us.
And the goal is, frankly, not to stay small and try to figure out the tiny stuff and just get our protection through incorporating. The goal is eventually to raise funds or to buy companies or to be bought, or to go public.
And if you’re going to get to those levels and, frankly, if you are at any of those levels now, you need a lawyer who’s gone through it before, who had the experience. And I’ve recommended you at least call up and consider working with Scott Edward Walker of Walker Corporate Law.
I’ve used them to help me out. I say, ‘them’ because it wasn’t just him. I’ve used his firm. The firm has helped me out. Many people in the audience, many people I’ve interviewed have worked with Scott Edward Walker. And I can confidently recommend that, when you need a lawyer, either for the first time, or frankly if you’re not happy with your firm, check out Scott and his firm. You can check out their web site at WalkerCorporateLaw.com.
You were smiling a few times through that.
Ankur: I was enjoying your spiel.
Andrew: Good. Thank you. You’re building this thing out, it’s going great for you. But as you mentioned, there are problems. You came up with this interesting thing for dealing with your problems where if a user’s account number was divisible by two they got one thing, if it wasn’t they got another. What was that?
Ankur: That was the extreme when our servers were dying. We had so much traffic, we were so popular, I didn’t know what to do. We had so much traffic our hardware was not staying up. So what could we do? Let’s half our traffic so at least half the people see it.
We did a simple test. If you’re user ID was divisible by two, all you saw was an ad. That’s it. Then you just could not access the application so we did not have to let that hit our server. So only half the users would be able to see something.
Andrew: I’d have been pulling my hair out. I’d have been so pissed, or yelling.
Ankur: In general, I’m not the kind of person that gets stressed, but that shit was stressful.
Ankur: But the advantages, after that, other stuff does not seem that stressful.
Ankur: A lot of other startup stuff is like, “I don’t know if I can raise money.” That’s not as stressful as having millions of people, losing thousands of dollars every few hours because your hardware isn’t working, and you don’t have the technical expertise to fix it yourself.
Andrew: My last company, my brother created a page where if I went to it I could see how much money we were making per minute. It was a secret page which, only internally, we knew about. Did you have anything like that? It seems like you did.
Ankur: Half the fun from these kinds of projects is just the dopamine hit of just refreshing some kind of stats. We had a lot of stuff. It was very, very bad when I was working alone. When I had a technical founder we had an amazing console that could refresh that pulled some data out from six different sources. I had five tabs of each ad account, and I’d just refresh from that. Ours was not as sophisticated.
Andrew: Why did you stick around in school? Why didn’t you just say, you know what, I could always come back to school, but I’ve got something here. I’m smarter that these other people who are in class?
Ankur: Honestly, and this is probably a terrible thing to say, but school didn’t take that much. I didn’t go to class. I would just show up to finals. I definitely found ways to hack around the system, find the most efficient classes to take. I would triple-book classes. At one given time I had 3 simultaneous classes. I found ways to get around the system.
Andrew: What’s the point of getting them anyway, especially if you are not fully invested?
Ankur: It’s a good question. The standard answer is parental pressure, but that’s not even the case here, really. My dad told me he was fully supportive, whatever I wanted to do. My mom’s like, “Yeah, I’m supportive. Don’t do it, but I’m so supportive, but don’t do it.”
But that really wasn’t even a factor. I don’t know. Maybe at some level it was ingrained enough that I should. But it’s a good question. I don’t fully know the answer, especially when I think about it now.
Andrew: I don’t know why I continued in school. I think at some level I just felt like I should. I started something, I have to see it through. So much of your revenue was coming from ad networks, you must have been on the phone with them all day long.
Ankur: Yep. As soon as I reached the point where I had the technical founder taking care of the building and the scaling, that became my job.
Andrew: What’s involved in working with these ad networks that are serving up ads in your apps?
Ankur: Just calling their bluff every three days because they all tell you the same thing. They’re all like, “No, no, no. We’re giving you the best possible rate.” Just from their prospective they’re in a perfectly competitive space and anyone who has traffic is a very valuable commodity to them. So it was just constant negotiation. There were lots of tips and tricks they had. For instance if you ever told an ad network, “Hey, I’m testing you with another person, 50/50.” They always make sure you make more money during the test. Then slowly you see that dripping downward.
Andrew: Oh, okay. So don’t tell them that you’re doing that.
Ankur: No, always tell them. Sometimes we’d fake tell them we’re doing that so they…
Andrew: Oh, that makes sense. So what else?
Ankur: Just constantly shuffling between providers based on what their inventory is at the time. Doing direct deals. We eventually did a couple of deals with Microsoft where they paid for people to download IE9. They pay us like literally a dollar. So we blew through like a hundred thousand downloads a day. It was phenomenal. I just became managing those relationships. Always testing. Pitting them against each other. A lot of them then became good friends. It was definitely a fun space. They also took care of us because if we were to move to another competitor it would look really bad for them.
Andrew: I can’t believe how well you were doing at that point. And it seems like a lot of it was still on you. Did you ever get good at bringing a team together? Having other people act as your COO, CFO, et cetera?
Ankur: It’s something I’m learning even today. I’m much better now. But for a lot of time and I think that is one of the things that I’m learning the importance of is I need to be better at delegating. I did have contractors through it and I did have a technical founder that did take care of a lot of the stuff. So it’s a work in progress.
Andrew: It’s hard to have someone come up with these clever ideas. Who else is going to come up with the friend quiz that intentionally spreads the word to users friends and not be…
Ankur: What was so clever about it?
Ankur: You need to have an evil mind for that kind of stuff.
Andrew: Yeah, there’s a certain way of thinking and at the same time some people who think that way end up actually wanting to steal from you, right?
Andrew: So we talked about at the top of the interview how you did so many mobile apps. In fact before you and I started recording I said, “Give me a couple of examples.” And you said, “Andrew, there’s so many.” What was your process for doing mobile app?
Ankur: So at this point I’d already kind of had my success on Facebook. Mobile was a new challenge to me. I soon realized after messing around a little bit, and this is with Android, specifically not iOS. That using a combination of a few clever tools, I could automate the entire application process. So I’ll give you an example.
For one project we scraped all of WikiQuote. I don’t know if you’re familiar with WikiQuote, but it’s just a database. We scraped WikiQuote for about 275 TV shows. So every TV show, we scraped it. I wrote a script that algorithmically found the major characters from each TV show, categorized them really well, and built a website where it would be like the Seinfeld Quote Game. It would show you a random soup Nazi reference and was like which character said this and you have to answer which character. That was a relatively fun game for how automated the entire process was. Like if you found a TV show you liked, you could play the game.
So we took that multiplied by 275 and used a couple of libraries to compile that into an Android application. Then we searched Google images for an application icon. So even that was automated. We wrote two boiler plate descriptions, scraped IMDB for the list of characters and just came up with really good app descriptions. And then even automated the whole uploading and launching to the app store process. So the entire thing once complete was one giant play button that you press and you start watching it do the work for you.
Andrew: And it just creates icons, creates quizzes, creates everything. That is amazing. And the revenue from that came from where? Ads.
Ankur: Ads again.
Andrew: So how much money does that idea, this one idea that is all automated create for you?
Ankur: This was a different scale. It’s best scaled to hundreds of dollars a day. That was kind of the ceiling there. But again, it was one of those things that just kept on going until finally Google shut it down and actually changed the policy towards these automated app creators.
Andrew: I see. And you can never get into the iOS store with this.
Ankur: You could but not in an automated fashion.
Andrew: I see. Did you have a big hit in the mobile space yet?
Ankur: No, I mean, I only build, I was not even geared towards building one mobile application and driving all my resources to it.
Andrew: Okay. So this email that I’m looking at actually came to me and, I think it’s not nefarious, not as bad or not as shocking as I thought it would be. It’s a Udemy message that came from you via Udemy’s messaging system. It must have just gotten filtered in my system. Yeah, it says auto-filtered so automatically it got filtered. What were you doing on Udemy back a couple of years ago?
Ankur: So this I imagine would be 20, last year, 2012.
Andrew: Yeah. Maybe 2013?
Ankur: Yeah, sorry, 2013. My years are off. So this is post mobile. I knew I wanted to do something of value. I kind of reached a point where again, money was not that important a motivator. I moved to New York, which personally was a fun thing to do. Get away from the Bay area. And I realized what better way to kind of figure out what I want to do next. And do a little bit of teaching. So it may Udemy seemed like the platform of choice. I started teaching class on mobile growth on Udemy and another class that kind of broke down some of the best tactics I used on Facebook.
Andrew: Oh I see it here, yeah. Click here to get mobile acquisition with Facebook ads for only $99. And there it is. It’s now raised to 149 dollars. It’s on Udemy. Actually Nick is the instructor there.
Ankur: Yep. So Nick was one of my close friends. He’s also one of the people that I had mentioned as one of the ad network guys. He was the guy I worked with at the ad network. We then became friends and worked together on a couple of projects. And then I finally got him to teach a course.
Andrew: So you got him to teach a course on Udemy?
Ankur: No. At this point we had launched what my new company is. It’s called Fedora.
Ankur: So Fedora kind of came about organically while we were teaching on Udemy. And again, on Udemy we were making $2,000 a month. As an entrepreneur you think, “Okay, what can I do to take the $2,000 a month and make it $10,000 a month?” Or you know, “What’s the path to scale this out?” And it turns out there isn’t or at least to us there did not seem to be a path. Which is why we came up with Fedora which allowed you to sell these courses on your own site, but do a lot more things. Like actually own your audience and sell subscriptions.
Andrew: I see. Actually, you know what? I take it back. This is what I think it is. It is you guys using the Udemy messaging system to see that I am on there and email me about a course that’s a Fedora course that happens to be on a site called Growth Hack. And that’s the part that I thought was clever, that you are using their audience and their messaging system to get people to you.
Ankur: Again, they’ve changed their policy since. So now even you are Udemy, even if you have your own site, you cannot send your own audience your own site. And that was again, one of the motivators behind allowing people to sell to their own audience.
Andrew: Got you. So you build this whole thing from scratch. This is one of those plays right now where you’re looking to create a company that survives. That’s not based on gimmicks that are clever and grow quickly, but takes a little bit longer and sustains itself for decades if not longer.
Andrew: That’s the move right here.
Ankur: Yeah. This is so different from anything I’ve ever done. It’s so much harder, but a lot more rewarding. I know it’s cliche, but it really is. We have a strong target user. You know, these independent instructors. A lot of whom feel slighted by the lack of alternatives. So we have our target user and we’re just trying to served them as well as possible.
Andrew: And your target user seems to be, tell me if I’m wrong. It seems to be someone who has content already online, probably. Wants to start teaching and doesn’t want to do it using WordPress. Is tempted to go to Udemy and put their content on Udemy’s network, but you want to say to them, “Wait a minute. If you put your content on Udemy’s network, they have your content and you audience and your customer base, and so on. If you put it on your own site, then you have all that.”
Ankur: That’s largely it. The only exception is for a lot of people I still tell them you want to put it on Udemy. I mean as a content creator it makes sense to put some stuff on marketplaces just because you know marketplaces will drive you buyers that you would not otherwise have. Udemy is one of them so it definitely makes since to do that. But if you’re trying to scale your education business, your priority should be your own website with your own audience. So I don’t say don’t put it on Udemy. I say put it on Udemy. Put it on as many channels as you can. But your focus should always be your own website. If you really want to make a lot more money and own your audience. Also it does not make sense for you to drive marketing to your course on Udemy where they will get sold into competitive products all the time.
Andrew: So how many people are there out there who can create courses?
Ankur: There’s a lot. I mean every day I get surprised by kind of the breadth of courses we see because there’s obviously a lot of people that are in academia that are slowly starting to go independent just because adjunct professors are getting paid less and less. And a lot of the traditional academic incentives are going down. So there’s the whole side from academia, but there’s a lot of other content creators that are right now teaching on places like YouTube. There’s people that are coming from the DVD world. We’re seeing examples of people that used to write books, but now they realize writing a course is a much more efficient way of reaching the same people, making more money, and giving a better buyer experience.
Andrew: Much better experience, yeah.
Ankur: So I’m constantly amazing by the kind of new cases we’re starting to see. But yeah, I think the former writers is a really interesting example because we know people that used to have a book and a companion course and now they are contemplating, “You know what? The amount of money made by the book is so insignificant to what I made on the course that I might as well go in that direction.”
Andrew: I do see a lot of people who should be teaching who frankly do via blog post and they spend a lot of time and attention writing these long detailed blog posts that are incredibly helpful, but not helpful enough because how helpful is a blog post going to be on its own? And they should be creating courses. But they have two issues. One is that they’re afraid of charging people for it. Okay, you can get past that. The other is I think they need some guidance on how to do it. What do you teach? How do you break down your ideas? Where does someone go to learn how to do that?
Ankur: That’s interesting. I think one of the best ways to learn to teach to look at a lot of successful courses and understand what makes them successful. I think that’s one of the first steps that we recommend. Another thing is just do it. Like literally your first course is probably going to be terrible. Your second course is going to be a little bit better. And I’m always like weary of telling people set yourself a hyper aggressive deadline and again, this ties back to how I build Facebook application. Kind of my approach to all these things. Set yourself a hyper aggressive deadline and submit the best version you can complete in that time. And then iterate and keep getting better. I’ve seen too many people take months, sometimes even a year.
Andrew: Yes, but you know what? We create a lot of educational content here on Mixergy. We do a lot of courses or people who don’t ordinarily teach their ideas. We over the years developed a process for helping them shape their ideas into a logical progression. I think there are ways to guide people to do it so that they’re not on their own. I’d be happy to show you the process that we use or help you guys out. I think what you’re doing makes a ton of sense and I think more people need to be teaching on their site and more formally.
Ankur: Absolutely. Yeah, that’s definitely an aspect of our site we want to work on more too. Right now so much of our focus is on building a hyper strong marketing engine. I mean, most of our early users were marketers. So we spent so much time on having an inbuilt affiliate program, integrating with mailing lists, letting you charge subscriptions, letting you charge different currencies. Just doing all these really cool features to scale out a large business.
Andrew: I see so once you do all this work and create your course you’re not on your own trying to figure out how to promote it, but you have to tools built in like Mailchimp to promote it to your list and you have the affiliate tools that ordinarily would take a long time to build. I get that.
Ankur: Yeah, we give you like marketer, so you can see the lifetime value of any user based on their signup source. You know, that’s the kind of stuff that’s…
Andrew: I know, the way that we do it is using Wishlist and Stripe. I love both those tools, but I want to know lifetime membership. It’s just such a pain to get. That’s a really key idea. You need to know your lifetime.
Ankur: A lot of our people that migrate to us are coming from Wishlist member and a lot of other WordPress plugins. I think that’s kind of the most common path people are taking. It’s either their first attempt or they’re just frustrating with having learning management system, WordPress plugin, payments WordPress plugin, with Vimeo account. And then they install a [??] plugin and it all falls apart.
Andrew: You have an example of someone who used to be on Udemy and then came to you. What was the before and after on that?
Ankur: So one of the examples is Grow, Act, Learn. Obviously this is something that I worked very closely with. They were our first customer. But they went from being moderately successful Udemy business to a massively successful business be going independent. They already had a blog. They start selling different kinds of products. For instance, they started selling their $2,000 in-person boot camp. You can’t sell that kind of stuff on [??], but I’m not going to [??] works in this main office and is probably [??] annoyed.
Andrew: I know. I wish you hadn’t said the name because I have numbers here that I would’ve wanted us to get into, but alright..
Ankur: But in general, most of our inspectors see large revenue bumps [??] correctly. The other thing that I meant to do is charge subscriptions, as you probably [??] does this really well, but it’s very powerful for a lot of [??] keep selling one-off courses, but they produce content quite regularly so it makes sense for them to charge subscriptions. [??] So a lot of [??] from instructors that give access to all their contact [??] a monthly price.
Andrew: And if someone’s out there who wants to learn how to teach, I’m looking here at our site, Greg Roulette [SP] is a guy who teaches how to teach online and how to create content products. Some of the things he says are, I think would appeal only to people who are in this audience and heard this interview all the way through because he comes… Actually, here is one of the things that he does. I think I’m doing it justice. Cause, look, if you say you’re on NBC, you get so much more credibility when sell your content, so what he does is he gets a group of people who sell content together. They all buy time on NBC. They all put together a show where he’s recording it for NBC. It goes on NBC and now he has a clip that you can say, “I was on NBC and here’s a clip of my content”. It adds a lot of credibility to the content itself. But it does more than that. It’s that kind of idea that also helps him, that kind of thinking that also helps him create content for people Anyway, Greg’s one of the course leaders on Mixergy. If you’re a premium member, go to Mixergypremium.com and check him out before he asks me to stop promoting this because he doesn’t want this kind of stuff out there.
Andrew: [??] all those start-ups get a small mention in a blog post [SS] [??] and they’re like, “Ask me [??] Wall Street Journal.” and it’s just one side in a blog post by a guest blogger.
Andrew: All right. Jeremy Weisz is the guy that did a pre-interview with you. If anyone knows him personally, you got to ask him how he gets people who–he helps people book interviews at places and to get them more attention, he gets some of those interviews up on–I’m hesitating because I don’t know how much I should reveal for him–but on CNN, so that they can say “as seen on CNN”. You got to ask him, I won’t reveal it. But, those things are kind of fun to do.
When it comes to really teaching, though, I noticed that people who have the best business come from people who learn from you over and over again, and if you do it really well, you change peoples’ lives. I’ve seen people who just heard an interview on [??] who came back years later and said, “Because of the interview I heard on [??], I was able to build a business and now I’m coming back to teach.” Clay Collins [SP] is a guy who said that in his [??] interview. Today, he’s running [??].net. Years ago he was listening to [??] interviews and getting inspired by [??] entrepreneurs and seeing what’s possible. I’d like to talk about some of the fun, novel ideas that it takes to create content and it takes to promote them.
But really, at the heart of it, when you know how to create something that really teaches people, you will change their lives. They will e-mail you, they will send you notes, they will see one person. You will watch them grow, develop, and change other peoples’ lives and that part is so meaningful that there’s only one way to do it–by starting to teach. [??], your tool for helping people want to teach is his URL–usefedora.com and frankly, I think if anyone out there wants to use it, it’s a good time to use it because it’s in the early days and my sense is that [??] really wants to do well for you so that he can use you as a case study.
So if you’re already teaching or you’re getting ready to teach, get in there. I think this is the time when you’re going to get the most help and the most ability to shape what the product is like. It’s pretty well done right now, it’s really well done. All right, [??], thank you for coming on here. Thank you for being open. Thank you for using the ‘S’-word, spam, and thank you for being as open as you have been.
Ankur: Awesome. [??], man. All we need is to have Fedora running [??] next.
Andrew: See, that would be interesting, actually. I was looking at it and thinking about that. I don’t know how to integrate it with what we’re doing, but I’m up for talking to you about it. And maybe not the courses we do on [??], but those new products that I created side sites.
Ankur: Yeah, definitely.
Andrew: All right, cool. Thank you all for being a part of it. Bye, guys.
Walker Corporate Law – Scott Edward Walker is the lawyer entrepreneurs turn to when they want to raise money or sell their companies, but if you’re just getting started, his firm will help you launch properly. Watch this video to learn about him.