Outright: The Pain (And Payoff) Of Going Big – with Ben Curren

This is the story of a former QuickBooks developer who launched a financial software company of his own.

In 2008, Ben Curren co-founded Outright, which makes simple online bookkeeping software for small business owners.

About 5 years later, he sold his company to GoDaddy.

Watch the FULL program

About Ben Curren

Ben Curren is the Co-founder of Outright.com, a simple online bookkeeping software for small business owners.

Raw transcript

Mixergy’s audio transcription is done by Speechpad

Andrew: First three messages.

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Here’s the 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 founders come to tell the stories of how they built up their businesses. And in this interview we’ve got the story of a former QuickBooks developer who launched a financial software company of his own. In 2008, Ben Curren cofounded Outright, which makes simple online bookkeeping software for small business owners. About five years later he sold the company to GoDaddy. Ben, welcome.

Ben: Welcome, thanks for having me!

Andrew: What did you guys sell for?

Ben: What did we sell for?

Andrew: What was the exit price, the sale price?

Ben: So the sale price is not public, both companies are private so we’re not disclosing the details of the financials. So I can talk about the sale in general though where GoDaddy is continuing to invest in Outright as a product. We’re continuing to grow and invest further so next year we’re hiring another 15 engineers, we’re planning to grow another 10x, and we’re continuing to build and improve on the product.

Andrew: OK. Did you guys get money from the exit too or what it just the investors?

Ben: So yeah, the employees did well, the founders, and investors.

Andrew: OK. And you raised, what, 17 million dollars, I think?

Ben: So we raised 7.5…

Andrew: Oh, of course, 7.5 million. I don’t know why I added an extra one to that.

Ben: So 7.5 from Sequoia, {??] Capital, and Shasta, and a group of angels.

Andrew: All right, let’s get into this we’ll talk about how the company got this big and what are some of the issues along the way and what are some of the successes. And it all started when, this is after you left intuit where you worked on QuickBooks, you had your own company, right? I guess it was a consulting company started while you were at Intuit?

Ben: That’s right. So even before intuit I’ve gone back and forth between consulting and working for startups. And after leaving intuit I was working on QuickBooks and I decided to start another consulting company. That consulting company I was pretty opinionated about the types of technologies I wanted to work in. We were really small so I was very particular on the projects, clients, and the technology. And it was really things that I was generally interested in and wanted to learn more about. And so I did all Ruby On Rails development, specifically on Greenfield type projects.

Andrew: And one of the issues that you had was that you didn’t like the bookkeeping software that you had to use, right?

Ben: That’s right. So previous to that consulting company I actually ran a business using QuickBooks so I’ve actually been through that learning curve and struggled with learning all the accounting jargon. However, this time around there was a couple of major differences. I brought on a business partner, Kevin Reeth, who also founded Outright. So head over and started sharing my books with him, and then I also moved from a Windows machine to a Mac, and I had to run parallels to run quick book. So those two things make quick books really painful for me on a day to day basis to run my business. So I spend time looking around for an alternative assuming I tried QuickBooks online and that only worked on iE6 so I to use Windows still. it was also very cumbersome. And so, eventually, I knew a lot about this space. We built a small version that we were actually able to use to run our consulting company.

Andrew: You build a small version of what?

Ben: Outright.

Andrew: Oh really? Just for you own company?

Ben: Yes, so we built Windrunning Bad Company, it was called Assembly [SP]. We built about five products so we built an expense tracking product. We built like a billion project. We built book keeping, and all of it was kind of eat your own dog food, like we used it and we would share it, put it out to our friends and family, get feedback, and try to turn them into real products.

Andrew: OK, and how are those products doing?

Ben: Well, so the one that, so out of those five, a couple got some traction. So we have expense tracking, it was called Actable [SP] and we had about 5000 customers. We had people paying us, but Outright which was called Bootstrap when we first started. That actually had more traction and a lot better feedback, and that’s where we ended up really placing all of our chips after these five were going and we raised a second round and then spent all of our time exclusively on that product.

Andrew: By the way, why is it that so many consulting companies create their own expense software. It feels like there’s tons of expense programs out there.

Ben: Yeah, that’s a good question. So it’s just every company you tend to have end up getting your own billing practices and the way you manage, like we happen to have contractors and only a couple employees and our contract, we did fix bid plus mark up on contractors so we had all these different ways of billing that we really, in particular, to the way we run our business, and I think what happens like to build software that can handle all these cases, it has to get really, really complicated, and we made something simple. And yeah, you always think like, oh, build this little thing for me because I understand it all and it’s simpler and it works specifically for us, and I think that, at least for me, why we did that.

Andrew: So Ben, what I see here are two different products. I know you launched several products but there are two different products that are scratching your own itch. One of them didn’t get huge. The other one got big enough to be acquired by Go Daddy. What’s the difference in the way you build them out? For scratch, you know, scratch your own itch thing, it’s supposed to be the cure all. You need a business product? Think about your own issues. Great, come up with your own to your own issue and there must be other people who share that problem, who are willing to pay for the solution that you were so desperate for, that you build it. What’s the difference in the way those two played out.

Ben: Well, I think, well that’s a good question. So definitely scratch your own itch is great because you are your own customer. So if you ever worked on products where you would not use the software, it’s really hard to put yourself in the head of a customer to make all those decisions. Now, to make decisions like, oh, I want this feature, that feature, you have to go talk to people, and then now your feedback loop is just slowed down a lot. So to me, that’s why scratch your itch really works because you can in your head really quickly iterate through, oh I would do this over that. I’m not sure about this one so I’ll test it.

Andrew: And that’s why keep Jason Fried of 37, I mean that’s what Jason Fried of 37 Signals keeps telling me when I interview him, and then my answer to him is always, good, what if you have a very specific issue, and you solve it in a way that makes sense just to you and you take it out into the world. People don’t necessarily have that exact issue you did and don’t understand the way that you solved it.

Ben: And that I would agree, and I think that’s like the next step which is just because you build something that’s great for you does not mean it’s great for everyone. Now you probably, I would say that you are more on track than building something that is not great anyone which is you are not understanding what you are building. But yeah, is it now skill able to the mass market and how many people are going to buy that product. That’s a whole other question, and when you start looking to build products, you want to have millions and millions of customers. it has to be really simple and to be simple, you can’t have too many options which means it’s that fine balance of simplicity with power that you really have to find that sweet spot

Andrew: So is what you did, basically you put both of them out to customers payable and Outright, which was called bootstrap at the time, and one just caught fire and the other didn’t and that’s how you know if a scratch your own itch product makes sense as a full blown business. You put it out there and you see if it catches fire.

Ben: That’s right. And people come up to me all the time now and they’re like, oh I have this idea, tell me what you think. I’m like, don’t ask me what, I don’t know if your product’s going to do well. The easiest thing to do is to think, what’s the core idea here? How do you test that and how do you get your potential customers to look at it and tell you whether they’re going to use it or not. And hopefully you get your data by then actually using it not them saying that they’re going to use it. So that to me is what matters When people come to me for advice the first thing I say is why don’t you, you know, I don’t know anything about your product and your customers. Hopefully, you know more than me about it. And truthfully you probably can’t possibly know so why don’t you try it out?

Andrew: What was the core of the product at Outright?

Ben: So the core of the product at the beginning was just track income and expense. it was very simple. We talked to lots of potential customers. We went out and said, okay, we know how we run a business. I’ve ran other businesses before. Well how do other people? And luckily I knew a bit about small businesses from being at intuit for a while. So we found some and we looked and most businesses who aren’t on QuickBooks use spread sheets, or they don’t do anything. And if you looked at spread sheets they really have two tabs. Like almost everyone we found had two tabs, a list of income, a list of expenses. So that’s literally our very first version of the product as tabs at the top, a (?) page which give an overview, a tab that had your income, a tab that had expenses and a couple of reports. That was our very first version of Outright.

Andrew: And I could have sworn, I used the first version that you guys launched, I could have sworn that it sucked in my data from PayPal.

Ben: Ahhhh.

Andrew: Or is that later?

Ben: Yeah, so our very first integration was FreshBooks, for invoicing. Because once again that’s what we, we used FreshBooks to do invoicing, so that was the natural first thing to bring in. And yes and then eventually we brought in PayPal.

Andrew: How did you know that people had two different tabs? Is this from your work at Intuit, you said?

Ben: Yeah, so some of it was from there and some of it is we talked to potential customers. So you just, you go out and put on Craigslist, looking for people with like one employee running their business. We’ll give you twenty dollars to talk to them. And you just ask them questions and find out what they’re doing and ask them for their spreadsheets.

Andrew: And for a couple of bucks people invited you into their homes or offices and let you watch their financial system.

Ben: That’s right.

Andrew: How many people did you do this with?

Ben: We did it for, if I remember correctly, it was between 20 and 30 people.

Andrew: Okay.

Ben: You find, I think it’s enough when you start to see like you talk to people and they’re saying the same thing. You’re starting to not learn new things anymore. You’re like oh okay, I’ve kind of heard that before, I’ve heard that before. You’re like, okay, so you’re starting to kind of see that. And you need to be careful, you don’t want to talk to all the exact same types of people. But I also wouldn’t say go too crazy about your methodology and spend forever worrying about it and not doing it.

Andrew: Did you try to look for a specific kind of segment? Did you say to yourself, I’m looking for people who have businesses that are all on E-Bay or all online or I’m looking for shopkeepers?

Ben: Yeah, so actually what’s funny is originally we were really focusing on professional services because that’s kind of what we did. And then a little bit later we pivoted to eCommerce because we really found they were a great segment.

Andrew: But when you were on CraigsList you said, is there anyone who’s a consultant out there that we can pay twenty bucks to or a few bucks to and come watch the way they keep track of their finances?

Ben: That’s right. And then we also, it’s the circles we ran in right? So I hired contractors so we had them. You know so you can immediately start, like we just knew a bunch of people in that area.

Andrew: I see. What else? What did you discover that you could have been distracted by? I understand seeing that trend of two different tabs open and saying, aha, this is what they need. But I also see distractions possibly making you, sending you in the wrong direction. Were there any?

Ben: Yeah. So like a good example would be taxes. So it was really tough at the beginning to say like, see, you’re going to bring in data and because of that we can help you run your business better, we can help you do your taxes. But like how far do you want to go on taxes is the really important question. You know, do you want to be like a Turbo Tax where eventually you’re going in and actually filled out all of the forms. But we didn’t really want to go there. So yes that could have been a huge distraction to really get focused in on taxes and to say, oh we want to handle C-Corp, we want to handle partnerships, we want to handle. So we really focused and said, look we’re going to work on sole proprietors who mainly will be filling their schedule Cs out, and then we said, hey, we’re not going to go further than a schedule C. Our software would create a schedule C, which will itemize what their income and expenses were, but then they’re going to go into Turbotax and put in their schedule C. I think that, to me, was the right step into taxes to get into.

Then we helped a little with estimated taxes. So, a lot of the times what we looked at was to say, if you were working for an employer and you were being W2d, like a normal employee, what activities would you have to do at the end of the year? Now, we’re like if you did that same job and you were a freelancer, what would you have to do? We tried to take the additional activities and remove them, or have our software and take those for you. Some of those things are estimated taxes in dealing with schedule Cs.

Andrew: All right, so you knew your own problem. You watched other people as they interacted with, or as they recorded, their income and expenses. it was time to launch a product at that point, or did you launch it and then go talk to them?

Ben: So, because we knew a bit about this space, because we were writing for ourselves, we actually built quite a bit while researching, and then launched it to validate. You just find that, I’m sure people have heard this before, but just like what people say and what they do are different. It’s great to go out and say, hey, would you use something like this, or what features would you like? But, at the end of the day, you want to put it out there and just see them actually using it.

Andrew: How long did it take you to launch?

Ben: Our initial version was probably four to six weeks of building.

Andrew: This had the link at the top for spending, a link at the top for income, and then an overview?

Ben: Yep, overview, and a little bit of taxes. Yes, a little bit of taxes, mainly on the schedule C.

Andrew: Of all of it, what do you wish, at this point, you had done differently?

Ben: Good question. A little bit later, we really thought (?) about automating dated. One of the things that we really did was, once we put all of this in the cloud, okay, what additional capabilities can we tap into by being online all the time? A lot of that is what you find you’re always tracking your spending twice. You’ll go spend money on your credit card, and then you’re going to go look at your bank account, and then you have to type that in as an expense.

The same thing with income. I go into FreshBooks. I would send an invoice. Then I have so say, okay, that person paid me $5,000. I have to type it in to my income. Being in software, that stuff drove me crazy. Why do I have to do that twice? That’s really when we started saying why don’t we connect right in to all of these various sources? We saw Wasabi, at the time, and Mint was around at the time, too, I remember.

Andrew: For personal finances.

Ben: For personal finances. We took that and said, well, for a business a business, you actually need to know a lot more about your income than expenses, so we really went after income sources, which you can’t get from bank accounts. That’s why we really tapped into FreshBooks, and eBay, and places like this. That’s where income is flowing through.

Where Mint, all they really have to deal with is paychecks mainly. Like, okay, you have this deposit in your bank account. It’s mostly likely a transfer, or it’s your paycheck, maybe some interest.

Businesses, on the other hand, they really want to understand their income. Like, oh, what products did I sell, to what customers, for how much, how many units? Those are the things that you can’t ever get from a bank account. That’s where we started.

Andrew: How long did it take you to make that key realization?

Ben: I think, as soon as we started using it and we were doing that with FreshBooks, we were like, we have to try this with FreshBooks. So, we tried it with FreshBooks. We did an integration. We put that out. Then we just started running analysis. We said, look, people who sign up and use FreshBooks, I can’t remember the exact numbers at this point, but there was something, you’d look up two months later and you were like, that person is still around. People that are manually typing things in, like 6% would still be around, and people who are automated with FreshBooks is something like 70% are still around. We’re like, ah ha! This is really important.

Then I dug into the data more, and I’m like, other interesting things are, if they’re going to add FreshBooks, they add it in the first 2-3 days after signing up. Then we’re like, right when they sign up we’ve got to make sure that they’re adding their FreshBooks or some of those data imports.

Andrew: To make all of this make sense and be useful, you have to have enough customers go through your system. How did you get customers in the beginning?

Ben: So, a lot of it, you had to drive traffic. So we did S.E.M. it’s always important when you’re building a business, you get a lot of this with engineers that I talk to, where they’re so into building products, that they start missing that, yeah, okay, you’re building your product, but you need a lot of people to be able to know about it, and to buy it, and use it. And, so you really need to focus on customer acquisition and where you’re finding these customers. One of the things that we have is like, oh, well let’s look at S.E.M. Can we drive down the costs of S.E.M enough to warrant that as an actual channel of customer acquisition?

We also wanted traffic to test. So it actually ended up working out well, because we could drive traffic through S.E.M, and then see, while we were testing, to see what the cost to acquire a customer would be.

Andrew: This is all along, with your own money, as you’re still bootstrapping?

Ben: Yes. Yes, because to run, because at the time we generally had a hundred conversions to test something. That’s a round the number. I know that’s not 100% scientific, but we’re looking for an order of magnitude between two different things. in general, it was a good threshold. We had to drive 100 people through. We were being pretty cheap on it. Then, eventually when we raise the C (?) we did a lot more S.E.M. testing. But, in the beginning, yeah, we ran some tests, drove traffic, and then would experiment.

Andrew: You told April, who pre-interviewed you, that you guys used to have find a way to make your customer work and your own product work fit together into limited hours that we all have during the week. How did you do it?

Ben: it was tough, I mean, really, really difficult. Especially when running a consulting company, you have people that are willing to pay you lots of money per hour, and then you’re essentially saying no. instead, you’re using your employees, who you’re paying, to work on a product. We used to do things like, we would say, every Friday we would work on it and nights essentially. It’s just hard. You would always get project work bleeding into Fridays, and bleeding in, you know. When something is important, you’re going to do it for your client on a weekend. it was a constant battle, really, of protecting that time. it was so nice when we finally were able to just focus on it outright, and just to iterate on it, you just move so much faster without switching contexts, and just (?) focus.

Andrew: What was the switch that allowed you to do it?

Ben: At the end of the day, what is was is that we saved up enough. We essentially closed down the consulting company, put the money we made into a bank account, and went about two months exclusively working on it outright. Then, after about two months, two to three months in getting some traction, we started raising capital. Actually, we raised capital. I was building the product, while Kevin was out raving (?) it up to investors.

Andrew: What was your experience at the time, raising money?

Ben: Both of us had zero experience raising capital. We’ve learned, one of the things I learned the most about, is just investors and really understanding the way they think about investing in a business. That really helps communicating your ideas to them in the right way, so they understand.

Andrew: What do you mean? What were you like before you understood this, and how did things change after?

Ben: I would go into original board meeting with, literally, ascii text of bullet points, of usually way too low level, but like, here is our road map and here’s the six exact things we’re working on, and how we’re doing it. It’s just the wrong level to speak to investors. It’s much better to talk about how is your product going to, how are you going to prove out product market fit. That is something that they are in, and that the details of every little feature you’re going to build is kind of like, oh, yeah, and we have this methodology, so we know (?) we’re building is accurate or not. They like to see things like whims (?), like we tested these many things, and these many worked, and here’s an interesting data point, this one worked better than that, like this feature. Getting into the details of the product is usually not the level at which they want to communicate. So, a lot of my time I had to (?) thinking higher level. it really, actually, was helpful because I was in the weeds (?) all the time coding, and building the product, so that monthly board meeting allowed me to really step back and think (?). it was extremely beneficial.

Andrew: So, how did you even get in the door with some of these, with, I guess first round’s (?) pretty open to new entrepreneurs, of course, right? But, how did a guy who never raised money before, if I understand this right, your seed came in on November 2008.

Ben: Yeah.

Andrew: it was the $2 million. How do two guys, who don’t have any experience, how do you do that? How do you pull that off?

Ben: By the way, that was the worst time, and the most difficult time to be raising capital.

Andrew: I remember, rest in peace good times.

Ben: it as rough. I think really, when easing that [??], you know, they really look a lot around the team and I think, you know, having the experience into it and really understanding small businesses. Also, attraction, like we actually had like, I think maybe 5,000, 6,000 customers at the time and we were able to, you know, show them actual customers and people actually using their software. We could show them our software. We had a track record of building product before so I think really those are the types of things that added to our credibility.

Andrew: I see. You said customers. Weren’t you guys selling access?

Ben: We would say users, I guess. So we didn’t have any revenue at all.

Andrew: And you were a bootstrapper who was building a product with no revenue. Why?

Ben: Well, so really when we started out it was for of us but we really wanted it to be, if you really look at it is about 24 million small businesses in the U.S. and a majority of them are using spreadsheets or actually nothing or paper. And I mean like 20 something million of them.

So we really thought that we could be very big. Like, we could penetrate and get millions of customers and make their lives a lot easier. And so because of that, you are trying to move people that don’t use any bookkeeping accounting, probably don’t even fully understand what that means and you’re trying to get them to use your product.

Now, the only way that we really found to get people to understand deeply what our product does is to get them to try it. And on top of it, when you think of marketing, how are you going to find customers? Well, you have a lot of companies that are really tiny and we wanted to use them to generate word of mouth to find other businesses.

So that’s really what the premise of how we were going to scale.

Andrew: But you’re thinking like an investor or someone who has an investor at the time when you don’t and I’m guessing that’s because your plan all along was to build a funded company, right?

Ben: Yes. I mean, yes because when we really looked at it we saw the opportunity, I think that we started at one of the best times and I think even at the time we were really excited about what we were doing and we thought it was the right time.

So yes, we were thinking big and we were thinking we would be raising capital.

Andrew: OK. You raise the money. How does life change after that, after the first round?

Ben: Well, one is you have a lot of smart people on your team now. We already had smart people but now you just get a different group of people that are looking at you to give you advice.

The other thing is that before we were like, oh, yeah, we wanted to be large at some point and that’s what we thought we were going to be at some point. We sign on for that. Like, we [??] lifestyle business generate tens of thousands in revenue a month was gone.

Andrew: So here’s what I understand about this space. And I don’t know nearly as much as you do but what it seems to me is that I sign up for a service like yours, my accountant says I don’t know what the hell this is. And I go, “This is so much better than QuickBooks. It’s easy for me to use and you can log in and so on’ and all of the things that you’ve told me. My accountant says, “i don’t have time right now. Send me the QuickBooks file and I’ll get your taxes done.” Boom, you’re shut down.

And the other side is before I even get to the point where I’m even that excited, I think well, who am I giving my information. I don’t know these guys. I know QuickBooks. I know putting software in my computer. It’s safe.

So how do you get past those two? Which of those two is the biggest? We’ll talk about that first since I just threw two different questions at you.

Ben: So surprisingly these issues are not as big as you think. We actually hear a lot of stories about people going to accountants and accountants saying use QuickBooks and they’re like and they try it and they’re like this is way too hard. That’s what you should use and then they end up saying [??] and then they find us. We get a lot of stories like that.

Andrew: And they still will, the accountant doesn’t shut them down. They still continue to use you.

Ben: Yes. So what we do is we just allow them to do a PDF of their schedule C. See, what we do is at the end of the day all of us offer eventually generate the Schedule C and you’re giving that to your accountant and then they do the rest for you.

And so that is like our integration point with accountants. And that’s worked with people that get really icky and want an accountant then yes, they will tend to use QuickBooks and we are not trying to move people off QuickBooks. if you’re large enough to use QuickBooks and you’ve gone through the complexity of learning QuickBooks and you can afford accountants and bookkeepers, and all this stuff, and you don’t have to deal with it. Well go ahead and use QuickBooks. We’re building our product for people that don’t have expertise, don’t have the time or the knowledge to work on that. So and they can’t really afford accountants or bookkeeper in the traditional sense. Maybe at the end of the year they have someone to help with their taxes but not the way you’d think of an accountant that works with you all the time.

Andrew: I see. I think that’s why I started using Outright back when you guys launched. it was, I just needed to know how much money I’m earning from the few small products that I’m selling and it didn’t make sense to hire a bookkeeper to tell me that. Products like PayPal don’t tell. You can’t get a good report from PayPal that says this week you sold 30 orders of product X and 50 orders of product Y, and if you’re the customer, you don’t get that.

Ben: Yeah, and not only that, PayPal knows that and they see the value in Outright and that’s why we have such a great partnership. I mean, they had us out to their call centers and teach all of their representatives more about Outright because customers are calling in asking these questions and they don’t have answers and they’re not planning on adding that anytime soon. So they now have a solution. They say “oh, here, why don’t you try something like Outright?”

Andrew: So, you quickly realized that you need to start working with PayPal. And with PayPal I think I can just authorize your account so that you can go and pull in my data, right?

Ben: in that style, the second question was “OK, well, now you’re coming into the software and you’re going to get (audio cuts out) your bank credentials and your accounts.” So I think a part of that is that we don’t officially touch the credentials so we get keys, like PayPal allows us this token to access your account which is read only. So at that point, it’s less about can this company move money around? Now it’s like there is a privacy issue here, right? Now I have your financial transactions. Can’t move money, so it’s a different level. So what we do for that is we just do, we work a lot on security. Making sure that we’re protecting your data and we spend time making sure that our site is safe and secure and we’re storing the data in a way that protects you.

Andrew: What things do you do to reassure people? To tell them all that when you’re just creating the landing page.

Ben: Some of the types of things you can do is you can show the types of SSL, you can say the types of security audits you do. What’s really funny is at the end of the day a lot of those things are words. That’s what you’re telling them these are the practices. But no end user understands what does 128 bit encryption mean, and where are you using that encryption. These things people just don’t understand. What’s interesting is Wasabi, the founder I think Mark, he wrote an interesting blog post about Wasabi and how when they launched they were so security conscious, they spent a lot of energy on this. They actually had a key that not even their support group could know what your financial transactions were to your account without you actually typing in your passwords. That’s one of the main reasons why Mint beat them. Mint, just give us the credentials we’ll connect to do that. Wasabi originally had a desktop plan that would upload to their website. I think essentially what he eventually said is that ease of use is more important, it trumps security. Mint really proved a lot of that where you saw their setup experience and you’re getting bank credentials, well, yeah they overcame that, and people continue to do that and feel comfortable. And I think we found the same, where people are a little bit nervous about it, then we do our best to assure that it’s safe. We do rate security faxes. At the end of the day they make that leap of faith.

Andrew: You add PayPal so that people can quickly integrate. What’s the next big milestone for the company?

Ben: Really, I think, first we added FreshBooks, we added eBay, and we added PayPal. And we really started proving now, how are we going to acquire customers. (audio breaking up) I can’t remember the exact, what the cost of prior user was, but it was too expensive. So we were going through various ways of acquiring customers and the one that ended up working really well is partnerships. I think that was the biggest thing that we proved right away which was we can actually acquire a lot of customers for very little money by partnering.

Andrew: What’s an early partnership that did that?

Ben: FreshBooks was the first one. We raised our C ground on it. eBay was the second one, we raised our series A on it.

Andrew: What was the partnership with eBay?

Ben: eBay, they actually have an eBay open apps. it allows you to imbed your product inside of eBay. Kind of thing like Facebook apps. What’s so great about it is you show up in an app store, they click one button, and you’ve just reduced the friction so much that they just start using Outright. We hook their eBay account to Outright, we create their account, we grab their data in less than one minute by clicking one button. And these eBay customers, they’ve never seen this data. There are people that have been running a business and they don’t have this level of detail, and they were just thrilled. And then immediately we had an app at PayPal, and you get another picture of their business. I think that’s really how we got over the bank and credit card. You build credibility by doing what people consider lower security, by giving access to Facebook or FreshBooks, people are less concerned about than adding their bank account. So, by proving the value with these ones where they’re not asking much, it really helps people get over the hump when they add that bank account or that credit card.

Andrew: I see. How hard was it to get that integration with eBay, to get eBay to work with you on it?

Ben: Well, so we had some good connections. Margaret Dreeson [SP] was an angel and Ben Harwoots [SP], they had an angel fund. They were angel investors, and they had very good ties with eBay. We happened to know some people in eBay. We were invited into being a launch partner in open eBay apps. So, it actually went really smooth. Because of that, we were one of the first people in their platform and worked directly with their engineering team to help them improve it. I think the biggest thing there was preparing for more scale than we were definitely ready for. I think we had a couple of code servers. So preparing for scale and a lot of the security audits we prepared for, that all sort of happened at that time. There were some big hurdles there, because eBay is, you know, you need a certain level of security and scalability to integrate with them, and we did a lot of that work then.

Andrew: Do you remember how fast your customer base grew because of that? How many were you adding a week before and how many were you adding after that integration with eBay?

Ben: I don’t remember the exact number, but I would say it was 6 to 10x from previous. For a while, eBay was our largest channel for growth.

Andrew: What took over after eBay?

Ben: Now when you hit a larger customer base, the word of mouth spreads more. I would say that probably is what ended up doing it, but eBay is still extremely popular for us.

Andrew: You became the number one app on eBay?

Ben: Yep, number one. They had a year where they gave away awards for their apps. I can’t even remember the award, but it was a little Einstein. We won that, for the developer conference.

Andrew: And then customer acquisition became zero from eBay, after you built it out.

Ben: Yeah, I mean. So, almost every one of our partnerships is not, it’s not like a bounty, most of these companies like PayPal and eBay see the value so much. Same with FreshBooks. They see the value for their customers. Their customers are asking for these things, so they actually (?) that’s what’s right for their customers.

Andrew: So, with FreshBooks, it’s just an integration. Anyone can integrate with FreshBooks. Then they list you in their list of software that they integrate with, and still that’s powerful.

Ben: Yeah, what you tend to find is people who do professional servers and do FreshBooks, they build a little mini community of people talking the software that they’re using and how they’re using it. So, you’re putting yourself into that conversation. When you think of small businesses, this is why it’s so hard to acquire small businesses, is they’re so fragmented. If you really took all these small business and you have lawyers in there and you have partners in there. How many lawyers are recommending Gardener’s [SP] accounting software? That’s not how lawyers are going to talk to. They talk to other lawyers. And so, how do you send a message to all of these people to use the software? it’s pretty tough, so the way we did it was through partnerships in trying to create smaller ponds where people are all talking to each other, and that’s the way we were trying to build (?).

Andrew: That little ding dong that popped up as we were talking is actually me being on SnapEngage.com where, of course, they pop up that little, “Hey, I’m live. Can I talk to you?” The founder of SnapEngage in his interview with me said that was the number one place for him to get new customers. He would just quickly integrate with other software, and boom, he’d get more exposure, most customers, and so on. in fact, I’m on his website right now. I see Desk.com, more logos of people who he integrates with. That takes up more space than his own logo, and I could understand why.

What I’m wondering is, once you get eBay and you get FreshBooks, do you start going on a tear and start partnering up with everyone? If you do, what’s the result of that?

Ben: We almost… We’re so close there. Actually, our back end is able to do that. We have a very general back end. The biggest thing is that we’re continuing to build and improve our product and now we’re working on a lot of scaling issues that we just haven’t been able to finish that vision yet, something that we’re working on. And, yes, you will see that soon because data flowing is some of the most important parts of our software is when you come in, you look for your business, here are the seven different accounts that I use, work them all in, be able to bring in the data, and then you have real time financial dashboard of what’s happening in the business.

Right now, if we only support three of those seven, you’ll see a portion of your business not the whole thing, and you can fill that in by typing it in, but that’s work and we want to eliminate work.

Andrew: I understand the way you partner up with PayPal. I understand eBay integration, but once you start to go to Citi Bank, which I think I’ve connected to your system, you guys need to work with Yodely, right?

Ben: Yes.

Andrew: Yodely gets that data for you from my account. Yodely is notoriously bad at this stuff. Their system breaks. You see people complain about them on Twitter. You see people complain about them on blogs like Tech Crunch. How many people did you need to have a day managing the Yodely integration?

Ben: When we added Yodely, we had a two to three person team working and iterating that, and we still have to work on that. They supply over… We use about 5,000 financial institutions through Yodely and maintain those. We still have a team of… Probably one person that’s maintaining and then, like I said, we’re heavily working on scale, like we’re preparing to scale 10X architectural changes. So we have another two people working on architectural changes to be able to support the growth.

Andrew: So basically to keep them going, you need to have two, three people who are working with you for Yodely. What about customer support? My data isn’t in your system. I’m pissed off at you. I don’t understand Yodely.

Ben: Essentially what happens is, yeah, there is a problem that occurs when someone talks to us. Now we have to go escalate it to Yodely to fix the problem, and if they aren’t going to fix it, that looks bad on us. Yeah. You can’t say, “Oh, it’s Yodely’s fault.” We chose to use Yodely. It’s our fault. I mean, that does make it hard, and we have been thinking of other things like maybe integrating directly to the top. (?) ten financial institutions in the country which cover (?) percent. So maybe, doing that, we actually control our destiny.

Andrew: What’s the challenge with doing that? I feel like, what’s the percentage of people that you said people use the top ten banks?

Ben: Something like 90.

Andrew: Ninety percent where mostly, people that are listening to me now are using Citi Bank. They’re using Chase. They’re using Wells Fargo, these major banks. What’s the challenge of just working with those banks? I would’ve just used to assume that that’s what you guys did.

Ben: No. it’s just like anything. You have limited resources where you spend your time. At the beginning and even to this day we have a team build that and maintain those things, but then they’re not building other features like making our product faster. it’s just a resource allocation thing if you think about it. It’s a cost thing as well, like Yodely have to now pay for all those financial institutions so that it is more expensive, and if you then do it yourself, you don’t have to pay those fees any more. So I think there will be a day where we have to do that. Just to provide the level of customer, the product to the level of which we want. I think we’re going to have to control that stuff up to some degree.

Andrew: I was just doing an interview, a rare interview with a restaurant owner. I usually focus on tech. But what I learned from him was that turn can really kill the income statement, or rip a big hole in it. Because, he says, think about it. We have to find a new person to come in, we have to take time out from all of our people here to sit and interview the person. We have to train them. We have to pay for this. We have to do all these expenses. It’s that waiter that ends up quitting within a couple of weeks, or you have to fire him within a month, it adds up and you just have to keep spending more money. I’m wondering, you get a lot of customers from eBay, but they’re small business owners who often will go out of business, or leave because of some other reason. What is the price of overturn then?

Ben: That is actually interesting. We actually did some investigation on turn and how much of it was because of businesses turning over. And surprisingly most of our customers have been in business for, I think it’s like, 2 to 5 years. When you look at the small business data, most of them are turning out in the first 2 years and then after that it somewhat stabilizes. We actually see less I started my company yesterday, I’m using Outright, and then they fail 9 months later. We more see the people who have done it for the first year and say “Oh man, taxes, that was gnarly.” And they’re learning from that and they’re going “okay, well, what am I going to do about that?” And then they talk to accountants, and the quick books are too hard, and then eventually you find out. Or something to this degree. So by the time the companies are a little bit more mature, like after 2 years, you’ll see that the turn drops significantly. I don’t have the exact data, I’d have to look it up, but that is something that we looked at to see the actual cost. So with that we actually correlate our customer base and you see we’re not losing lots because they’re going out of business actually.

Andrew: I see. You told April something that was surprising to me. You said that acquiring small businesses is very challenging. You want more coffee shop. Well it’s coffee shops, engineers, they all run businesses slightly different. Right. They run businesses slightly different, they don’t talk to each other. There isn’t an easy, I always thought that business owners would be easy to find. They’re not.

Ben: No. Definitely not. There’s just, you know really when, you see when really talking to our customers in small businesses it’s actually a fairly lonely, it’s a fairly lonely place. You’re kind of on your own. You may have one employee or not. They don’t have a lot of support in your network to talk about the challenges. And so, and that leads over, it’s kind of a lonely lifestyle for the business owner and also there’s a lot of them out there, kind of isolated. So there’s not a community that brings together all of these different diverse small businesses. There’s just none of significant size that you could just, I’ve got this offer, I’m going to advertise with this network and bam I have all this business. It’s just, doesn’t exist yet.

Andrew: is there a big community out there of a specific kind of person? Is there a Hacker News of dry cleaners? Or a Reddit for software consultants where they all get together? Is there anything like that?

Ben: I mean, that’s kind of what we do, is we start looking at the overall pie of small businesses that would be right for Outright. And mainly one of the things is that they’re not cash businesses, right? We tap 1into all your electronic data sources. So if it’s a cash business you just can’t tap into that. So, you take that, you look for people that have electronic data trails and then we start looking for pockets of communities. Because that’s the way we think about it. OK, so Spark will work for them. How are we going to find them? (audio cuts out) And so, yeah, I can’t say for dry cleaners, because I haven’t looked at dry cleaners. But we have looked at real estate agents, insurance brokers. You know you just can’t stop professional services like law firms.

Andrew: And what do you do if you find a law firm site? An online community for them. You start to advertise in there? Do you start to chat?

Ben: Yeah. So, I mean, a lot of things you do… I mean Etsy is a good example. We go to (?) we find out who is the Etsy, like, in most communities you’ll have a few who are really influential and the ones that are organizing and talking about things. Those are the people, you want those evangelists. You want to talk to them, show them your software, and get them on board. Then they are the ones who are really going to carry the messages across to the whole community. Believe in your product, take it seriously so it’s great and they believe in it, and they will do a lot of messaging for you.

Andrew: How big are you guys with Etsy?

Ben: Etsy is probably our third, well it’d be our third largest data source.

Andrew: So it’s eBay, Etsy, and -

Ben: it would be like PayPal.

Andrew: PayPal? Well, all right. So here’s some of the challenges you talked to April about in the pre-interview. You said that, I hate to even say this out load but you felt comfortable enough to put it in the notes, you have an issue with personal skills. Now we’ve talked for a while before for the interview, we talked about 15 minutes in the interview at this point. I don’t see it. How did it used to play out?

Ben: OK, so, over time I’ve practiced being better at going to conferences and talking to people. I would literally have to work on it. I would say like, “I’m going to a conference and there’s going to be this party. I have to talk to 15 people.” Even if I just say hi, I have to go up to 15 people I don’t know and say hi to them. So I would just constantly work on it. I would force myself, every year, to do tech talk. They did this yearly tech talk where you talk in front of the whole company, so I forced myself to do those types of things. It’s really continuing to practice and then it’s really on managing. So my role really changed from hands-on coder to managing a team, recruiting a team of engineers and making sure they have the freedom to get things done and give them the right direction to get things done, but don’t be micro-manager. It’s this balance that I never really thought much about (?) until I started making mistakes, like saying “Here’s the 8 steps to do it,” here’s the other extreme where it’s like, “do this thing,” and they don’t do it right. Well, I told them literally “this thing”. I think that’s the thing I really had to work on when building a team and growing a company.

Andrew: One of the things I’m looking forward to doing now that I’m in San Francisco, is having private conversations with people where they tell me what happens in secret. I had a drinks event the other day and I found out about a major entrepreneur, who we all know and respect, who, this woman worked with him and said, I saw a fight break out with him and two of his people and he didn’t know what to do. He just sat there quietly because he didn’t know how to interrupt, how to calm them down, because he just wasn’t experienced enough with inter-personal skills. I thought, I had that issue too. It’s still in my mind where I had two people argue and I can’t tell them to shut up – what am I going to do? I just stood there like an idiot, like a weakling. I still flash on that moment, I know exactly where I was. Do you have anything like that? Was there an issue like that that made you say, “I need some help here”?

Ben: I had some issues where I had more junior engineers when I coded. So they coded something, I was not happy with it, I told them I was not happy with it in public. I had no idea how much that affects people, especially when they’re younger. I look at it like, they make mistakes I probably would have made when I was a junior engineer. To have done and put myself in their shoes, that’s the stuff that, you know, that was one of the biggest mistakes I made. it really hurt their morale, and that doesn’t solve anything. All it’s doing is it’s making them feel bad.

Andrew: And you got a personal coach to help you with it?

Ben: I mean, so a lot of that stuff I just really, I would read. There’s this book called “Managing Humans”, I read that. I just read a lot, and I think about it a lot. I try to put people in the other perspective and to just think, “Well, if I were there, what would I have done?” And then you have to be careful because you are also running a business, so you have to make sure that you have empathy for what’s going on. But you also have to make sure that people are doing a great job. Some people try really hard, they just can’t get it. They can’t do it as well as other people. That is the facts, and just because they’re trying, it doesn’t mean that they should necessarily be on your team. That, to me, is kind of tricky as to where is that kind of… You tried. OK. But if you tried forever and you never get anything right, well, I want people who can get things right on my team. You want to build a team of people that succeed over time.

Andrew: Let me see what else. Here’s another thing that I wanted to ask you about from April’s notes. Learn the importance of presenting ideas from other people’s point of view. Speak their language. This was with investors, but did you do that with customers, too? Did you find that there’s a certain way that they talk, and if you talk their language, you’re more likely to get them as users?

Ben: Yeah. I mean, that’s just in general. I think you should always, always do that. When you work in your own circles, like I’m an engineer and when I work with other engineers in that circle, I’m already kind of seeing (?) the way because I see the same way that they do in general. We’re very close in our educational background. We really start switching to investors, like they’ve been doing totally different things for their whole career compared to engineering, and they just look at things totally different than you do. I definitely spent time on understanding how investors looked at PowerPoint or this chart, like a cohort’s chart. It’s amazing. Go put a cohort’s chart and an investor with all of these different lines. When I first saw a flow chart, I’m like staring at it, like OK, I’m really thinking hard about it. You show an investor a cohort chart, and they’re like, they can tell right away, “Oh, in August your conversion rate improved by X percent.” I’m like, “What the hell, how can you see that? Oh, the (?) moved by this much. It’s amazing the non- information they can gather from that one chart.

So what I did is as soon as I started noticing that, I actually went to the investors, “Here show me. How you do look at businesses?” Sometimes, they showed me (?) of other proposal companies that they presented. And then you start seeing these patterns, like of how they look at customer churn and the types of charts they expect to see when you show churn. You present. You’re no longer fighting over the form factor. You know the data is important. Put it in a way in which they can immediately understand it, and now they’re no longer having to actually think about the form factor, they’re just looking at the raw data right away. To me, that’s how when you start to (?) that and your whole board meeting is like that, you now cut through trying to understand the data, and it’s way more (?). I’ve seen data like this before. I’ve seen these two activities improve that. That’s the type of stuff that I think all of the board really helped on the most was that they see tens, 20s of other startups, and they can do a lot of pattern matching. They can say, “Oh, well, your churn rate is 30%. Well, I have nine other companies, and their churn rates are 50%. So, actually you’re doing a good job. Maybe, you shouldn’t use as much energy on reducing churn because I have data that says you’re actually doing really well there. Maybe, you should focus further on the top.

Andrew: I’m looking at your site to see… is this company growing after the sale to GoDaddy, or is it an (?) or what. You guys are really soliciting new people here on this job board. It’s kind of different when you’re hiring around here. I see that there’s outings, and you’ve got… is that you in a race car?

Ben: Yeah.

Andrew: And I guess you take your team out to do that. I see cycling. What’s it like to compete for people here?

Ben: it’s tough. I’m been really good at recruiting and understanding what makes engineers happy. I pay a lot of attention to this, but we’re a company that builds products and requires engineers. We need great engineers. So I build an environment that great engineers thrive at. That’s what I think about all the time. Yeah. We went to Laguna (?) and raced formula cars, but we also in six months grew 7x by engineers working really hard on that. So I think that you have to reward people for working hard and getting things done and real results.

Andrew: Are you a millionaire as a result of this sale? You can say that.

Ben: I think I’m…

Andrew: You’re saying you can’t say that.

Ben: I don’t allude toward anything, yeah. You have to realize that I’m actually really open so it really wouldn’t bother me. It’s more, we just decided not to disclose financials about it.

Andrew: OK. I think I’ve got an answer. I think I’m reading between the lines here and I got an answer. Let me take a step back. I’ll go bigger picture, like you did with investors. Why isn’t there a big mint sized exit in the business of financial accounting software web space? I would think that when it came down to managing money, that consumers would be the ones who are reluctant to do it. They would be the ones that would be harder to find, and the businesses would jump in there. That they would kill for and iPhone app the way that mint has it. That they would kill for a webpage that they could sit down and be their dashboard. That they would talk nonstop about it. That they would pull it out more than they pull out Twitter and events and see where is my money at? Where’s the health of my company?

Ben: Yeah. So I think, you know, I think if we execute it slightly different, I think we could’ve been halfway there.

Andrew: How?

Ben: So we had some real troubles, like getting activated people. So coming in and going through that funnel and getting their data set up. And that was a tough nut to crack, and one of the things we did was pivoted. And we pivoted away from premium, and when we did that, I mean that pivot, and then pivoting back. So essentially we go to say, oh we’re going to charge, and yes activation rates went, like, so high. Everyone activated after that.

Andrew: When you say we’re no longer offering a free intro, you have to pay if you’re interested, of course everyone who pays is going to activate.

Ben: We were like oh wow, look at all that activation. But then, how do you acquire customers? And we just couldn’t figure it out and you’re like, you have to do the premium and you have to crack the activation nut. So then we went back and we said, okay, we’re doing the premium and we actually got the activation rate working. However that whole stint there took, like, 11 months away from us. All of that. And that 11 months, I think, that if we executed really well in that 11 months, figure out activation that went on to finish a couple other things we could be in a different spot.

Andrew: Meaning, always go freemium, get as many people to use the software as possible, and then spend time figuring out how to get those people to use it. That would’ve helped you grow.

Ben: Yes. I think we would’ve been in a different spot. Now I think we’re still, I think 2013 is going to be huge for us. I think we will become the number 1 solution for small businesses in the world. And I think we will continue in 2014 to kill it. So I think we’re on the right path to win. Now to do it we were acquired first and now we have a huge pool of Go Daddy customers to market to. So I think we’re still going to hit the long term vision it just required this additional step. And I think if we potentially asked a little bit earlier we would’ve had another, you know, 10 months to execute. And I think, who knows, I can’t predict. But I think we could’ve potentially done it on our own. But I think it was the right…

Andrew: Why did you sell?

Ben: We sold because I think it was good for our investors, it was great for our customers, we get to now continue to build our product and have more people using it. It’s great for our employees. I think across every single thing that I look at when raising capital or an exit, it was a check mark on it.

Andrew: Did your investors try to get you to hold off?

Ben: No, no.

Andrew: Did you have enough cash to keep going for another year?

Ben: No. Not as it was. So we would’ve had to do it Series B. So our option was a series B, or an acquisition. We had both of those options. So it wasn’t like we, and we had multiple options. So this is not like one thing that we had left to do.

Andrew: You know what, I still don’t understand why more businesses don’t use it. And the reason that I say it is because I look at my, all I do, I sit down in the morning. I look at hacker news. I look at Drudge and Huffington just to get my mind going in the morning. I’ll sometime do that but I will always look at where my finances are. Did we screw up? Am I in trouble? Is everything OK? Because I have it, I use a different system. I also have an Outright account I that I had for years but I use a different system. Because it’s all there, I see it all. I see Citi Bank, I see PayPal. Boom, it’s beautiful. I don’t get why business don’t start out the day that way. You told me, I am not doing this for flattery, you gave me some insight early on. You said, it’s really tough to tag income and you are right. That becomes a real nasty pain in the butt to have go in and say, “This is income because someone paid me back for getting them lunch and they send it to me via PayPal but that is a new order for a product.” That’s one of the issues and it takes forever to do where Mint doesn’t have to do it. What else is there?

Ben: Well, so tagging, so I actually think tagging income is the thing, like the better you do there, the better the experience is and the better businesses can run. I think the next really hard thing is to move from the level of where’s the point will we give you lots of data, and you can run reports, but if you don’t know what reports to run or where to look at, it’s fairly tough. Like when I ran consulting, if you are trying to grown a consulting, so people have different goals, right? Some people are like, hey, I want a business where I get $10,000 a month and I am happy. Some people want to grow 10% a year. Who knows what these things are, right? So it’s really what they want to do and then giving them the insights. I think that’s the next real important thing we do is put real meaning into that data and to help people run their businesses more effective and they don’t know necessarily what to do, and I think that is a doable thing. When you look at different business models, there are different levers for those business models and if we can expose those things, back behind data, I think that’s going to be really huge for our customers.

Andrew: Right because for me, I love the report that says who is your most valuable customer but if I click on that, it doesn’t give me much because all my customers essentially pay the same, but I can see how that would be useful to someone else. For me, the more useful data would be how long is a customer staying with you and I wonder if that report exists somewhere.

Ben: And that is exactly right, and if you are a freelancer, if you are a consulting company, there is two ways to grow your business. You charge more per hour, you build more hours. That’s like those are the options that you have and if you are going to build more hours, well, you can only work so much and then have to start hiring. if you want to increase your hourly rate, well, there is only so much you can increase your hourly rate to. So if your goals are outside of those, you are going to have to start managing people or something to take this effect. So I think those are just things that, and every type of those business have those models behind it.

Andrew: Yeah, absolutely. You know what, I got to ask the audience, please tell me if you don’t start your day looking at this stuff, tell me why. Is it that you feel bad about it? Is it that you feel it becomes a distraction from the day. I’m so curious. I got to find out. What else do I want to find out? I think that’s everything that I want. Oh, you know what, here is a final question. I asked you the beginning before we even recorded this interview, what’s a win for you? What are you looking for? And what you said was, you know what, Andrew? When I built up my business, I got a ton of advice. It was all helpful. it helped build up my company, and now it’s my opportunity. I sold to Go Daddy. Life is easier now. I want to return what I got. And so, let me ask you this, what is one piece of advice that you got that was so valuable that you want to pass it on to the audience.

Ben: I think one of the most valuable things when starting a business that you want to get large, so if you are trying to build a large start up, I think is to really starting changing the way you look. So look at your business as a machine, right? You have customers come in. They are generation revenue. And understand the piece of that machine and what is important and what isn’t, and I think by really dissecting and really understanding those pieces and then measuring those is how you can have a chance at being successful.

Andrew: isn’t it easy to see what’s important and what’s not? What’s something in your business that would seem important but if you think about it, it’s not.

Ben: So, I would think some are, OK, customers think a lot, customers ask for lots of different features, and I think sometimes it’s hard to say no to people, but I think by keeping things simple, and saying no to adding complexity to your software, you make it better for everyone. And yes, certain people are going to miss certain pieces. I think like, keeping simplicity, like, we have simplicity as the number one thing. We want to be large, and so we always look at that and we’re always measuring, like, how we’re doing. That’s why we, like, for example, always measure net promoter score. It’s automated. We always see it, and we always keep a close eye on that. Making sure that, like, we have high quality and it’s easy to use. I don’t know if that’s a great example.

Andrew: I’m trying to think of what might, might seem more important. Writing checks, QuickBooks can print checks, but you wouldn’t think that that would be important in your business.

Ben: And we focus on electronics, yeah, electronics, so I think it’s the things though where there’s just so much data, like, we collect a lot of data and it’s like what data matters and what doesn’t? You know, like, when is a customer, you know, like you’re always trying to predict when someone, like, deletes revenue and then, and what that looks like, so, that’s, when I say machine it’s really, like, OK, when we, you want it to be a machine, like, if we ran an SEM campaign, we know, for $6 we can get up to this many users coming and signing up.

You need to figure out what that number is or if it doesn’t work. Like, OK, so if, for us, SEM didn’t work. Like, we had to acquire customers for like, $10, well, that’s too much. So we immediately cross that off the list and we say “OK, great. What’s our next idea for acquiring customers?” And when you’re racing at series B you really want to go in and say “Look, to run our business successfully, here are the six things we have to execute on and here are all the stuff that we’re doing now to show that those six things work, and we just need to put money into them.” And that’s, I think that’s what you’re trying to figure out, is you’re trying to figure out that scalable business models always have to think, what are the levers and how are we going to build processes to make sure that all of those pieces are working in unison. And I just-

Andrew: That makes sense. I remember when I interviewed Noah Kagan. He said that when he worked at Facebook, Mark Zuckerberg would keep saying in the early days “We want growth. Growth, growth, growth.” And so any decision had to say, had to lead back to growth, I mean, sorry, anything that they did either led back to growth or wasn’t important. And when he said when he started his own company soon after that, he didn’t have that. He had all this data and he just kept going for more and more data.

Ben: Yeah, and that’s where it’s really hard and you have to keep it simple. Like, if you’re communicating to 30 people, like if you communicate 40 things to them it’s like that means essentially nothing’s important. Like, you have to say, out of all the things you can do, what are the next two things that you should do and you should do them well and focus everyone around those things, and measure that they actually make a difference. Don’t just put features out and just say, like “Oh yeah, that’s great. We shipped a feature.” It’s only good if that feature actually makes it in one of your core business metrics, otherwise, what are you doing this for?

Andrew: All right. The website is outright.com. You guys can go and sign up and connect all your financial networks to it right away and if (?) is good that day then you’ll get all your bank data in, but actually, regardless, you’re going to get all your data in an easy to digest summary. Thank you so much for doing this interview, Ben.

Ben: Thank you for having me.

Andrew: All right, congratulations on the sale. Thank you all for being a part of it. Bye guys.

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  • Kevin

    One question you MUST ask in every interview: How did you get your customers? Break-down your traffic source by % (i.e. 20% social, 40% SEO, etc) – this gets left out in some of your interviews but is KEY.

  • http://mixergy.com Andrew Warner

    I’ll try to get you more details in future interviews.

  • Adam

    Andrew, your interviews are amazing. I’ve been watching through them non-stop for the past week!

    One thing I’d like to hear more about is the technical challenges involved with dealing with large amounts of traffic.

  • http://mixergy.com Andrew Warner


    And who do you think could talk about the tech challenges of getting large amounts of traffic?

  • TaphaNgum

    Can’t upvote this enough.

  • Erik

    Maybe someone like Jason Cohen?

  • http://www.facebook.com/jonathan.vanhorn.79 Jonathan VanHorn

    Andrew, the reason many small business owners don’t go over their finances on a daily basis is because they either don’t trust the technology, know how to implement the technology, or they use a proxy.

    I’m a CPA in public practice and work with around a hundred small businesses, mostly service companies. (Preparing taxes and reviewing monthly financials) Almost all of the owners use their bank balance as an indicator of health. It’s surprising how few business owner’s actually care about or track important metrics other than their cash. We try to educate but you can’t always do it for those who are stuck in their ways.

    And Ben, I could write a book on how great of a job you’ve done with Outright, but I’ll leave it at that. The Quickbooks era is going to continue in the short run but I hope to see more innovation from your industry. (It really needs it)

    I know I will try to send you a few sign-ups.

  • http://www.decalmarketing.com/adwords-book/ Iain Dooley

    Do an Ask HN!

  • http://www.decalmarketing.com/adwords-book/ Iain Dooley

    This was a great mix of tactics and strategy. In particular it was really interesting to hear a counter point to the ever popular “charge for everything from day one” mantra – a good reminder that there are a million ways to skin a cat.

    One thing I could really relate to was the transition to management of other people doing the same job I usually do and the trade-off between micromanagement (this is what to do and this is how to do it) and letting people solve their own problems.

    The biggest thing I’ve found is that, even though people (especially outsourced contractors) start off asking you loads of questions about every little detail of how to do something, the best tactic is to encourage them to make their *own* decisions, without asking, then make any corrections once you have a result.

    As soon as you *start* solving people’s problems for them, they lose their ability to solve (even the most basic) problems themselves.

    This works especially well for outsourced labour – one of the worst things when working with people in other timezones is waking up to an inbox full of questions and no results! At least if you encourage people to make decisions and solve the problems with their best guess, you have the opportunity to compromise by using what may be a sub-optimal result, rather than having to delay (or do the work yourself!)

    The other thing I’ve found really helps is a focus on process in your project management – removing the need to ask “how’s it going?” by building reporting into your project management process really takes a lot of the stress of the relationship.

    Also, by having a clear cut protocol for communication, you provide boundaries within which people can feel they have autonomy. So long as they’re “working to code” (http://www.youtube.com/watch?v=49p1JVLHUos) they’re doing their job.

    Your job then is to provide tools, process and staff resources within these parameters that get results. If two people use the same tools, processes and systems, and produce different results, then you know you have to get rid of the underperformer.

    However if you consistently find that *everyone* is unable to get work done or produce results, then there is a problem with your toolchain, management or communication systems that you need to fix.

    Recording this stuff (in particular I have a huge focus on time logging) makes your communication with people *much* less emotional and allows you to make much clearer decisions.

    I’ve had circumstances where I’ve felt quite exasperated with someone but then before I approach them I analyse their timesheets, communication logs in Basecamp etc. and apprise myself of the situation. Often I find that, if they only improve their performance by a minor factor, they will be really knocking it out of the park, and so the discussion becomes “Hey, I need you to ensure you’re working at least 6 hours on this project for the next 30 days and logging time as you go” rather than “You need to shape up or ship out, dude! I’ve had it!”.

  • http://mixergy.com Andrew Warner

    What are some metrics they (& I) should look at?

  • http://www.facebook.com/jonathan.vanhorn.79 Jonathan VanHorn

    Whatever metric is indicative of success or failure in reaching your goals.

    I realize that is a blanket answer but it really depends on the line of business and plans for the future.

  • http://twitter.com/LouisSayers Louis Sayers

    I was listening to this and kept hearing about S.E.M. and I had absolutely no idea what he was going on about. Usually you’re pretty good with digging into acronyms like this and for all I know he was talking about Scanning Electron Microscopes.

    I guess it’s not such a problem if you’re at your computer, but I was listening to the interview while biking.

  • http://mixergy.com Andrew Warner

    Search Engine Marketing.

    I’ve been wondering if I should keep spelling things out. My preference is to do it because 1) I want to bring people into our world, not make them feel excluded, 2) sometimes the audio is just hard to hear, and 3) it really doesn’t take any time for me to do it.

    But the downside is that I wonder if every time I spell out what SEO means, for example, I signal to experienced marketers that Mixergy is too basic for them. And, I wonder if having some aspects of this feel a little out of your reach will encourage you to stretch yourself and feel accomplished.

  • http://mixergy.com Andrew Warner

    My best systems have this built into them:
    “removing the need to ask “how’s it going?” by building reporting into your project management process really takes a lot of the stress of the relationship.”

    I hate being the bottleneck.