I’m known for interviewing the founders of cutting edge tech companies, like Dropbox, Airbnb & SendGrid.
This is the story of a non-tech founder who had to find a way to launch an online business.
Wait till you see the simple thing he sold when he got started since he couldn’t code.
Brecht Palombo is the founder of Distressedpro.com and the creator of bank prospector is sales intelligence software and shows investors how to acquire the real estate or debt from the banks.
Watch the FULL program
About Brecht Palombo
Brecht Palombo is a real estate and sale and marketing professional and founder of Distressedpro.com
Andrew: Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. And I am known here for doing interviews with cutting edge tech companies like, well, Dropbox. Its founder was on here early on. The founders of Air BNB were on, the founder of SendGrid and so on.
But this is the story of how a non-techie founder had an idea and built it into an online business. Wait to see the simple way that he got started when he launched his business. Brecht Palombo is the founder of DistressedPro.com and the creator of BankProspector, a sales intelligent software. Banks own real estate. He shows investors how to acquire the real estate and debt from the banks. I don’t think I did a great job of explaining what it does. We will get deeper into it. Before we start it, he warned me, “No one else outside of my business understands what the business is.” We’ll explain it.
First I want to say two things. Number one, this interview is sponsored by Scott Edward Walker of Walker Corporate Law. He probably understand every part of this business, and he definitely understands the part of the business if you’re an entrepreneur. He’s a lawyer. I’ll tell you later on why you want to go to WalkerCorporateLaw.com. Let me say it more clearly, WalkerCoreporateLaw.com.
The second thing I need to do is welcome Brecht. Welcome.
Brecht: Thank you for having me.
Andrew: Let’s jump right into it. The first version of the product that you sold was what?
Brecht: It was a PDF.
Andrew: A PDF?
Brecht: That’s right.
Andrew: Just a document. What was on this document?
Brecht: So the way that this works is that banks would file reports and inside these reports there’s intelligence that you can gain into what’s happening inside the bank. It tells you what they have for bad assets, what they need to sell, wherever or not they’re healthy enough to sell, these kinds of things. And there’s just line items in pages and pages of CSVs that you can download. Now you can . . .
Andrew: How do you go to the bank and get the CSV, or sorry? At the time you could go to the bank, get the CSV file, and just comb it?
Brecht: So let me back up. So any banks that are insured in any way, FDIC, all report through a central aggregator. Right now they all report through the FFIEC and so each quarter they transmit the information and then that’s compiled. It’s delivered to the FDIC. They have spreadsheets on the stuff. They run some calculations on it and that’s available to the public.
Brecht: But it’s really unwieldy. It’s difficult to deal with. And so what I did is I learned about what those numbers mean, and then I took that app and it was so basic. It was a mail merge from Excel to Word. I put together a spreadsheet with it. I merged to a Word document, printed it to a PDF and then I sold this report as a product where it would give me a breakdown of each bank, all of the numbers that you would need to know in order to know who a good prospect for you would be.
Andrew: And a good prospect meaning who’s a good bank for you?
Brecht: Well, at the time we were in the crisis, you may recall. And so there was a lot of banks being closed. There were a lot of banks that were not necessarily in a place where they could sell and I wouldn’t put your audience (cross talk).
Andrew: You mean they could sell their property or sell debt to you?
Brecht: Yeah, so what happened was they put a lot of debt on the street, right? And then they had to go out and collect on it. And some people would approach this problem by buying the debt from the banks and others would buy the real estate which what happens is banks would go through a process. If the debt is late it goes into a thing called (?). It’s not accruing interest any more. Then eventually they’ll foreclose on it. If it’s real estate it’ll book it in or else the other way that they get rid of it is sell the debt, sell the bad debt.
Andrew: The investors wanted to know from you is where could they go buy this debt or buy this property from banks who were eager to sell.
Brecht: That’s right.
Andrew: Got it.
Brecht: Unless you’re a broker, you might go in and list their debt for that (?).
Andrew: List their debt and then someone else would buy from you.
Brecht: That’s right.
Andrew: So all you did was get data that was available to anyone . . .
Brecht: That’s right.
Andrew: . . . made sense of it in Excel and Word and mail merge or a combination of the two.
Brecht: That’s it.
Andrew: And the reason you were able to do it is because your background is in real estate. I heard you are an auctioneer. Are you the kind of person who did hey, bah, bah, bah, that whole thing?
Brecht: Yeah, I did. Give credit to me right there, yeah.
Andrew: How would it go?
Brecht: I knew you were going to ask me this. I knew you were going to ask me this.
Andrew: I’d love to be able to talk that fast.
Brecht: So there’s a few different ways to do this. I’m by no means any kind of champion bid caller, and I haven’t done it now in almost right upon two years, but I’m up in the northeast and I sold a lot of commercial property. When I’m selling something for a million dollars or two million dollars (?) fast. We take time. I’ll walk you around the corner. We’ll squeeze you for a price. We’re bidding in hundreds of thousands of dollars in increments, and so it’s not that kind of speed, like a cattle auction that you would. So . . .
Andrew: I see. It’s much more civil.
Brecht: It’s much more like the British.
Andrew: I see. Okay. And so when the crisis happened, what year was this?
Brecht: What year when the crisis happened?
Andrew: Yeah. We’re talking about ’98?
Brecht: Oh no, we’re talking about 2000.
Andrew: Excuse me.
Brecht: Exactly. We’re talking 2000. So I started getting . . . I was in real estate since the dotcom bust. So we’re going to go back that far, and then as my career progressed in real estate we worked with a lot of industrialists and developers. One thing that I started to see was just some really frothy deals, like guys doing deals, no money down, bigger construction projects. I said this smells wrong. This is not going to go the right way, and so I started getting positioned for the turn. So I got an auctioneer’s license and all of that.
This was in 2006 and at that time there wasn’t really much for me to do. You know, other than to call on folks. Everything was still going up. So (?) I didn’t actually launch that the PDF and whatnot until 2009, the summer of 2009.
Andrew: What made you decide to go and do that, to put this all into a PDF?
Brecht: It was so difficult to get some transparency and make sense of who I should be talking to with all the thousands of institutions out there that I thought that if this is where the game is at, if these guys, if the lenders are the ones who are in control, then that’s where the money is going to made for the next several years if you’re doing the kind of business that I’m doing, brokering or as an auctioneer. And I can’t be the only person that’s thinking this.
Andrew: What about this idea that if it’s just a PDF, anyone can copy it. There’s no copy protection. If it’s just a PDF, one of your customers could look at it and go, “This is what I paid for? Just this document?
Brecht: So I don’t think I was thinking about the former but the latter was a major concern for me. So when I first put that out, I was nervous as all get out. I mean, I figured everyone was going to want a refund. It was going to be totally useless to them and that was not what I found. That wasn’t the case, but I did think about that.
I didn’t think about the other part, mostly because there’s some (?) entry there because you’ve got to take some time to make sense of what all this stuff is. I mean, if you’ve ever looked at what these spreadsheets look like, it would make absolutely no sense. Codes, I mean, it would make no sense to anyone unless you took time and really invested in understanding what that was.
Andrew: How did you know that people needed that, that they wanted you to spend the time to do that for them?
Brecht: Well, this was the year when commercial real estate transactions dropped by like 93%?
Brecht: I mean, people were . . . I had gone from a really, really busy business to not at all, and I was not alone in that. Everyone that I knew in the business at that time we’d been making hay for a while, and it was not that.
Andrew: Why did that lead you to say, “Everyone needs a PDF. It shows all of the available properties and loans that they could buy.”
Brecht: It wasn’t properties and loans, it was a little bit different than that. It’s not everybody that needs it but a certain sub-set that needs it. So if you wanted to continue to transact, then that’s how you’re going to make your fee, and the only people who are transacting are the banks, that’s where you need to be. And that was my estimation of the situation anyway at the time, and so I figured that it’s not a game for everybody. You kind of got to know what you’re doing a little bit, but if you did then if you had this sort of data in hand, then you could really capitalize on what otherwise would be a really terrible time to be in that business.
Brecht: So does that make sense?
Andrew: Yeah, a little bit. You had the PDF. It’s time to get customers. How did you do it?
Brecht: I had a friend who was a member of an organization who sent an email for me. And it went out to a few thousand people. About a thousand people clicked. And I sold a few.
Andrew: And you got to make a share of your sales.
Brecht: No we weren’t that advanced…
Andrew: You just did it as a friend.
Brecht: We were buddies. He just posted the thing.
Andrew: How big was his list?
Brecht: I think it was about five thousand people.
Andrew: Wow. Okay. And you were selling the document for how much?
Brecht: I think I was about $200, as I recall.
Andrew: Two hundred bucks?
Andrew: Do you remember how many sales you made from that one email that went out?
Brecht: I did, all told, I may have messed with the price a little bit, but all told it was between one and two thousand dollars. It wasn’t a ton of money. It was like…
Brecht: I think it was 12 or 1500.
Andrew: Was it enough to encourage you and make you feel like this was something worth pursuing? Or did you at that point say, “What am I doing here?”
Brecht: Yeah. So that’s actually probably a big mistake. If I was going to go back and nail one is I considered that validation. Then was like, “Oh, good. I should build software.”
Andrew: Oh, I see. I got two thousand bucks, that means this is the answer.
Brecht: Yeah, that means that, well this was clunky and it was ugly and it was messy but hey, people are spending money on it so I should move forward.
Andrew: Why is that a mistake? It feels like it is validation. If a couple of dozen people, what did you sell? You sold about a dozen of them?
Brecht: I think it worked out to about a dozen and I had done some different things with the pricing. But yeah, it was about 15 hundred bucks. I think the mistake I made there was I should have just kept selling the PDF. There was no reason to…
Andrew: Oh, I see. The mistake was to take it to the next level and say, “Now I have to create software.”
Andrew: Why do you think you did that if it worked so well?
Brecht: I was hot to make a piece of software.
Andrew: Because it feels like software is worth charging for. A PDF feels a little small.
Brecht: It does. That’s exactly right. I was embarrassed by this thing. I didn’t have any way to protect it. I wasn’t sure how much people were using it or getting any value from it. And for all those reasons I thought this should really be software.
Andrew: You know, I’m looking at an early version of your site. Maybe even the first real version of it. And it looks to me like you were using aMember if I could read the data right.
Andrew: Right? Did you go into membership site before or after you did the PDF?
Brecht: So I did some weird janky things. I kind of duct taped this franken app together. I took aMember and I used that to control, well, the version of the site that you are looking at is not where I sold the original PDF. I don’t even remember what that domain was at this point. But that was, I used some Julip [sp] thing with a PayPal button. I probably spent way too much time on it because I wanted to look legit. Yeah, what you’re looking at is probably not that. I did then when I launched in August that year, what we’re talking about the PDF is like late June, July. When I launched in August that year, I did go with an aMember plugin.
Andrew: Because you wanted to start to get consistent revenue for memberships.
Andrew: So it was first PDF, then membership, then hey, let’s make software because that’s a real legitimate business.
Brecht: Sort of. The membership was the software. So you would get access to it. I used aMember to, you could use that to plug it into a custom PHP script and you could also plug it into WordPress. So it could manage the whole thing. So that’s why I did that.
Andrew: I see. Got you. The software that you created, what was it going to do?
Brecht: This was going to show you which banks you should call on. It was awful.
Andrew: What made it awful? I mean, it seemed like it’s the same thing you did by PDF manually. You now automate it through software. So why was it awful?
Brecht: I remember at one point I logged in and there was this, I guess we’ll call it an error, but some guy had just put his name in there. He was one of the developers and it just said, “Hi, Mamood.” Or something like that on a random page. I was using LinkedIn plugins that were way before they had a decent API, so it was terrible.
Andrew: I see. So so terrible that your developer left his name in the site by accident.
Brecht: Hanging around out there. Yeah, it was terrible.
Andrew: I see. It’s kind of like a doctor leaving a clamp inside you after sewing you back up. I see.
Brecht: Yeah. It was really ugly.
Andrew: What did it cost you to have this done?
Brecht: I think it cost three thousand bucks.
Andrew: Okay, not bad. So a little bit more than you made from selling the first PDF the first go around.
Brecht: Yeah, right.
Andrew: How long did it take?
Brecht: I started that, I guess it took about six, eight weeks, six to eight weeks.
Andrew: And during the sixty-eight weeks, were you still selling PDFs?
Brecht: Six to eight weeks.
Andrew: Six to eight, that’s what I meant. Not sixty-eight. Six to eight weeks. Were you still selling the PDF?
Andrew: No. There’s the big lesson in here. That that first version that worked, that people bought, you should have continued to sell because they were buying it. We need to stop being embarrassed by that first thing that we create.
Brecht: Totally. Yeah. If I could do it again, there’s no way I would have launched into software. I would have made four different versions of the PDF. I would have sold that for a long time until it didn’t sell anymore.
Andrew: And then start to create software and keep it as simple as maybe a PDF first version?
Andrew: You were selling your software for 80 bucks a month?
Brecht: I was. Yeah.
Andrew: It took you six to eight weeks to launch it. How long did it take you to get your first customer?
Brecht: I got my first customer the end of, so I launched August 30th and I think I got my first customer at the end of September. September 30th or something like that.
Andrew: Okay, that’s not bad. How’d you get your first customer?
Brecht: I spoke at a local real estate investment in a group meetup.
Andrew: Oh. And you actually pitched from the talk?
Brecht: So badly.
Brecht: It was kind of like because I was embarrassed. You know it’s funny because I’ve been in sales forever. But doing it from stage where I was teaching people and then I’m supposed to close and get you to the back of the room and stuff. I had a hard time with it. I was very soft on it. I didn’t do that right.
Andrew: All right. Well, not bad that you got a customer. Was the customer happy?
Brecht: He hung around a few months, I think.
Andrew: And did you make the mistake that a lot of us make when we sell things monthly before they’re fully ready where you didn’t contact the guy and say, “What do you think of this? How do you like it? Thanks for joining?” That kind of thing.
Brecht: I knew him. I signed him up personally. He came. He sat down next to me. I typed the thing in and he had my phone number and all that. So I think his name was Rocky. Did I check to see how he was using it and if it was useful for him? No, I don’t think so. I don’t think I did.
Andrew: Is it because of the thing that I just mentioned where especially if you know Rocky, you feel a little embarrassed that it’s not perfect?
Brecht: Oh, yeah.
Andrew: You do, right? But what we need to do is we do need to call them up and check in with them. And I have to keep pushing myself, frankly. I know to launch that MVP and not be embarrassed by what people think about me. It’s hard to contact those people afterwards and say, “What do you think?” Because I’m almost putting myself out there and saying, “This is so great that I need to know what you think about it.” Right. All right. But at least you got it out there. And then it was time for you to grow it. Is that when you started blogging? Interviewing? What did you do next?
Brecht: Yeah, both of those things. I started blogging and interviewing.
Andrew: Why interviewing? Most people understand blogging. I think very few people still get the power of interviewing. Why did you decide to interview so early on?
Brecht: Podcasts are a lot of what helped get me to a point where I could even do this business. So I had been listening to all the usual stuff. I forget exactly what was available in 2009, but I was listening to all of it that I could get my hands on. And I knew the power that it had on me and so I didn’t see anyone doing it in this particular narrow niche. So I thought that would be a good way to get it out there.
Brecht: I also wanted to validate it. I wanted to show that people actually were making money this way. Like this was a legitimate angle to take in you real estate business.
Andrew: Oh, you wanted to interview your customers or people like your customers to show what they did.
Andrew: I get it.
Brecht: That’s right.
Andrew: And was it originally just your customers or was it people you wanted to be your customers?
Brecht: It was experts in the field. Most of the time they were my customers. But just experts.
Andrew: Okay. That sounds great. I love that approach. I think by interviewing your customers you get to know them. By interviewing your customers others get to see, as you said, some case studies and get to see how successful they could be. I think Mixergy started that way. I wanted the world to see who was coming out to my events when I was doing events.
Andrew: And it was a good way to highlight the events by highlighting the people who were coming to them. Did it work for you? Interviewing?
Brecht: I think so. I think it did. I get a lot of qualitative feedback on that. I don’t have a good number I could point to for that. But I have a lot of people that tell me that they love the interviews and that they’re really helpful. And it’s why they bought and that kind of thing. For sure.
Andrew: Did you happen to take my interviewer heroes course at any point?
Brecht: I didn’t.
Andrew: Or any one that I did? No, you didn’t. Okay.
Brecht: No. I did sign up for your course for a while.
Andrew: I know you were there for three months and I made the same mistake with you by not checking in and saying, “What do you think?”
Brecht: I thought it was more than that. I don’t know if you want to talk about this on the show.
Andrew: It sounds like you are going to give me negative feedback. I feel safer taking things on the show than anywhere else.
Brecht: I’m busy, so when I want to get trained up on something, a specific thing that I’m looking to tackle right then. I found it difficult to get exactly what I needed easily in that way. It was kind of a buffet, which is nice, but I would pay more to have them compartmentalize. I wasn’t sitting down and watching videos on a regular basis.
Andrew: Cur-ration is a big issue for me and I need to figure out how to solve that.
Brecht: I actually followed your model to some degree. I started putting the interviews out and then putting them into a vault. They would be out for a while and anyone could air them and then they would go away. I also put one price on them. In retrospect, I’ve left allot out on the table by doing it that way.
Andrew: By charging once for everything as opposed to monthly.
Brecht: Or as opposed to having tiers. I had one price and for a while I had monthly or an annual price. One thing I discovered is that I have really different people coming to the site. Over the last year I have embarked on a discovery process to learn who is there and what they need and want. I have tiers and I’m not addressing them.
The price was so low that the people who were really serious and I was used to doing business with couldn’t take it seriously. The people that were starting off and getting started it was too much money for them. I made some real mistakes that way. I think doing one price like that was not optimal.
Andrew: I noticed that too, that if you undercharge people do not take you seriously. If you overcharge they understand that you are out of reach for some people. I used to think that was just marketing speak. No one would really be upset if you undercharge, you would capture them anyway. Then I saw the way that I evaluate things. If for example a meal is only 75 cents somewhere I think that’s a low deal, I wouldn’t have that.
I don’t care what is in it or if they have good intentions. The same thing goes for online content and software, except for the app store, it doesn’t seem to matter there. So you did interviewing and I’m glad to see that it worked for you. I’m glad to see the model that I use seemed to translate over for you. You also did some blogging, how did that go?
Brecht: It went okay. It was not a raging success, but there were not a lot of people talking about these really narrow topics so I did get some traffic.
Andrew: And you copied patio 11′s playbook?
Brecht: That is when I started really getting some traffic. I should say he got the bingo card creator, right?
Andrew: This is Patrick McKenzie. He has bingocardcreator.com, and one of the things he noticed was that teachers that use bingo cards to teach need them of all 50 states or Japanese leaders. So he created a landing page for each of those topics that would create a bingo card for those topics and be indexed by Google so that anyone who searched for them you would end up on one of the landing pages. He didn’t just do that, he taught people to do it as well. Several people have used it and done well with it. How did you use that model?
. . . several people have done really well with it. How did you use that model for yourself?
Brecht: What I did is I took the every database with every bank and every credit union, and I created those same pages.
Andrew: So there’s a page for every bank and every credit union?
Brecht: Yeah. That’s right.
Andrew: And what was the keyword that you attached to it?
Brecht: Do I want to go all the way into that for my competitors? I don’t know.
Andrew: Okay. Don’t do it then.
Brecht: Yeah. Okay.
Andrew: Does it still work to this day?
Andrew: It does. I was wondering about that.
Brecht: Most of the traffic.
Andrew: Did Google make some change to the algorithm or something that may have.
Brecht: I’m knocking on wood, and haven’t been hit by any barnyard animals of any kind. No penguins or pandas, or anything like that.
Andrew: And was this traffic going to DistressedPro.com?
Brecht: Sure. Yeah.
Andrew: All right. So those are the two things that worked for you. What’s one thing that didn’t work for you? You spent some time on it and it just didn’t pan out.
Brecht: Yeah. Hiring writers. I thought that it was really good. It felt good. I had a system. People were, I had articles coming out all the time, and then it just didn’t get any traffic. It wasn’t good.
Andrew: Interesting. I wonder why. What is it about finding writers that was so hard? It is hard.
Brecht: It is hard. And I don’t know. He was a great writer and he had experience in the business, but it seems like for certain things, the audience wants to hear from me. So it just didn’t, I spent a lot of time and money on it. And as I went back, I should have paid closer attention to it as I moved through it, but I didn’t. So when I finally sat down to say hey, is this working? You know, so many months later, it just really wasn’t. You know, there’s a few things that get some traffic, but mostly it did not.
Andrew: As you’re doing all this, is the software improving or is it still at the state where your developer’s name is stuck there, and LinkedIn isn’t working?
Brecht: Yeah. So actually, as you and I speak, there are a couple of guys who are working on the fourth iteration of this. I’ve been through a few rounds. The newest one is night and day.
Andrew: What about the second round? Was the second round any good?
Brecht: The second round was a little better, yeah.
Andrew: What did you do to make the second round better than the first?
Brecht: The first round, I had to actually go and manually import the CSV’s to get the data in. It was a horror show. It was terrible. Fortunately for me, not longer after I opened this, the FFIAC, the federal agency, came up with an API. That was a big help.
Andrew: I see.
Brecht: So, we started getting that automatically. We got much better. I plugged into Data.com, which used to be called Jigsaw. Plugged into LinkedIn in a better way. So it was just, I mean, it wasn’t even the same. It was a wholesale change.
Andrew: Wait a minute. You can plug into Data.com, which used to be Jigsaw, which is a site where you can go in and type in a name of a person and get their email address for a price?
Andrew: I see. And so you were able to not just give bank information, but the name of the person at the bank, and their potential contact information?
Brecht: That’s correct. Yes.
Andrew: Oh, wow. Okay.
Brecht: So then I bundle all that with training on how to do it.
Andrew: Got it. Before I get to the training, I want to do two things.
Andrew: One is, my eyes were going to something. I think I know what the keyword is. Tell me. I’m not going to say it to the audience, but I want to know for my own self, is my research ability strong? How is that? Is it that phrase? Is that one of the phrases that you use? I’m showing it in examples.
Brecht: Yeah. That’s one of them.
Andrew: Okay. Good. I promise not to say anything to the audience because I don’t want to reveal your stuff.
Andrew: But I do like to know that we can do solid research here.
Brecht: Yeah. It’s like that, and two other keywords make up basically 60 percent of my traffic today.
Andrew: I’ve gotten a little bit of info here, but obviously not as much as you.
Andrew: So actually, the second thing I need to do is say to the audience, you can screw up with your software and that is perfectly fine. In fact, that’s part of the business, especially when you’re getting started. But when you’re getting started, if you screw up with the way you have a partnership agreement with your cofounder, the way that you set up your company, it is so much harder to undo.
It’s so much harder to untangle. Especially if you’re arguing with your cofounder. Especially if something big happens and you need to move to the second, to the next step, with your cofounder. Especially when something big happens, it’s hard to undo mistakes that you made legally in the beginning.
So what do you do? Talk to my sponsor, Scott Edward Walker of WalkerCorporateLaw.com. When you’re getting started he can start you up right, by making sure that you have the right agreement with you cofounder. By making sure that you incorporate properly. By making sure that you do it so much smarter than the do-it-yourself guys ever could.
It saves you a lot of problems, saves you a lot of trouble, for just a little bit more money than starting on your own, and a lot more credibility. Why does Scott do it? Because he’s in the business of doing that? No way. He’s not competing with those lawyers who just get you started. The reason he does it is, he knows if he gets you started right, when it’s time for you to do a deal where you’re raising money, you’re going to know that Scott Edward Walker is the lawyer to go to.
Like many other entrepreneurs, when it’s time to sell, when it’s time to buy, when it’s time to raise money, when it’s time to do all those big transactions, he is the lawyer than many entrepreneurs, here in San Francisco in the tech world in general, turn to. He’ll help you out early on to get set up properly later on. So, no matter which place you’re in, if you’re just getting started or if you’re at that stage where you need to do a big transaction, raising money, selling your company, buying a company, etcetera, talk to the people at WalkerCorporateLaw.com.
So there it is, WalkerCorporateLaw.com. And Google him. Google Scott Edward Walker. You’ll see how many other people say very positive things about him. It’s not just because he’s my sponsor, he’s my sponsor because so many people have said positive things about him. WalkerCorporateLaw.com. The course that you said. How does this mini-course fit into your vision?
Brecht: What I discovered pretty quick was that nobody knew what the hell they were doing with the data. It didn’t make any, you know, I knew what it all meant and I had some information about what it all meant. But really, nobody knew what the hell was going on. So I was getting a lot of questions about how to use it, what the numbers meant and all that. So I knew I needed to educate people about that.
So one of the things I did was an email mini-course. It’s 14 emails that you get in a row when you first sign up. Basically, I walk you through everything you need to know in order to do the entire thing by yourself. So, you wouldn’t need my software at all. You could just go do it manually if your time’s not valuable, I guess.
And it’s been really powerful. People write and thank me all the time. I can’t believe you’re not charging for this, and things like that.
But the fact is that I did want to deliver serious value. Probably went too far. Probably should have more sales in there and should still tweak that. But it’s played a huge role. It drives most of my business, for sure.
Andrew: You do it all through Infusionsoft, right?
Brecht: I have been, yeah. I don’t want to badmouth Infusionsoft, but I’ve been looking around lately.
Andrew: Why? It’s okay. They’re open to issues that they’ve had. Others have talked about it here.
Brecht: Yeah. The cart situation is not good. Their deliverability I don’t think is great. They have some automations in there, but there’s a lot of like little janky [SP] things where it’s like, this is definitely designed by a developer, and it’s not great.
Andrew: Email will not hit the inbox of your recipient predictably enough.
Brecht: Yeah. Or it does to spam or different things, different things like that. I have people tell me all the time that they’re not getting things they signed up for. So I’m actually looking at Rob Walling’s Drip.
Andrew: At what?
Brecht: Get Drip. [SP]
Andrew: Oh, Get Drip.
Andrew: Yes. Rob Walling’s system. I didn’t not that Rob Walling, oh, I know he does that. But you then give up the automation, and you cannot have somebody say, I do this.
Brecht: Not any more. That’s actually why I’m looking at it. I didn’t look at it before because he didn’t have it, but now he’s building in all of the automation.
Andrew: Got it. I see.
Brecht: So know I’m looking at that.
Andrew: What is it about the shopping cart, with Infusionsoft shopping cart that you don’t like?
Brecht: It’s got way too many fields. It takes you to another domain. There’s a slew of stuff.
Andrew: Oh, yes. Going through another domain is so bad.
Andrew: I can’t stand it.
Brecht: I don’t know why I can’t just put it on my own domain, the way I do Stripe.
Andrew: Exactly. It doesn’t go through Stripe, it doesn’t integrate with Stripe.
Brecht: That is the worst [??].
Andrew: I’ve lost money with authorize.
Brecht: I’m OK with users going to another site. I don’t like that I can’t use Stripe. I love Stripe. I want to make out, I want to French-kiss Stripe, it’s so good.
Andrew: Me too.
Brecht: What else did I want to say about that? Oh, I want to say this, that is anyone is a member and you want to understand how to automate your emails and send emails out, the guy to go to is Jermaine Griggs. We have him as one of the teachers in Mixergy Premium. Just type in Jermaine and you’re going to see him.
Andrew: All right. So you were doing all that. One of your goals is to have recurring revenue. Did you have that recurring revenue? Did it start to come in?
Brecht: Yeah, it did. So, last year around this time I decided that my monthly customers were a pain in the ass, basically. They were the most demanding, they asked for refunds the most. And I deduced that this was because they had just kind of limped in. That was all they could afford, and that was the types of folks I was attracting at that price level. So I did shut that down last year, although I still have people who are still on it and have been for years. I guess the recurring really only has come from the annual subscriptions over the last year or so. It’s been okay. It’s been good. I’m working on moving away from that, but it’s definitely been okay.
Andrew: You mean to a one-time charge.
Brecht: I’m looking at quarterly and annual payments now on a three tier system.
Andrew: I see.
Andrew: You know what? I’ve talked to so many SaaS entrepreneurs just privately who are in the audience who will say the same thing you just said, that the monthly is a pain in the butt,…
Andrew: …too many cancellations, too many small dollar amounts, annual is where it’s at, and that’s what they’re moving towards.
Andrew: I know, frankly, even for me annual would do more revenue. But, I want more people and not more revenue. I have a different model than SaaS. More revenue with fewer people seems to work better for software as a service, and it makes it easier to do customer service, too.
Andrew: You don’t have a lot of customers. You have a few high paying customers who are worth more…
Brecht: That’s exactly right.
Andrew: …than the small.
Andrew: That makes sense.
Brecht: That’s what I’m going for.
Andrew: I think everyone who does software needs to at least consider doing that.
Andrew: What did you do to become better at project management? You’re not a guy who lives and breathes code like the guy who I interviewed yesterday who told me that he coded when he was seven years old. How does a non- developer know how to manage developers and get what he needs out of them?
Brecht: Yeah. That was hard. It’s still hard. I mean that’s probably the most challenging part of this business for me as a non-technical founder.
Andrew: Can you give me some tips, some of the things that you’ve learned about doing it right.
Brecht: Yeah. You need to really document the heck out of everything. I mean you can’t… Anytime I leave something up to chance or to developer decision, most of the time I end up wanting to change it when I get the deliverable. Now what I do is I do really, really detailed mock ups. I used to do them, kind of still do them, just in Pages which is like Word for Mac.
Brecht: I would go and I’d find… I’d take the template that I was going to use, then I would do… Basically, what I’d do is I’d use something like Sketch. I’d cut out the different parts of the template that I was going to use.
Then, I’d assemble them on the page so that I’d say this is what it looks like now. You click on this. Now it looks like this. But, I’d get really, really detailed.
Now, I’m a little better at HTML and CSS and whatnot, so a lot of times I’ll just hand off something. I’ll say put this functionality behind this.
Andrew: I see.
Andrew: So, if we were to get started right now, brand new piece of software, if we’re not developers the thing to do is to sketch it out as closely as possible to what the finished product needs to be.
Brecht: I would. I’d go and pick a theme that somebody’s already designed that looks good. You can go to WrapBootstrap or any of those themes. I would use something like that instead of trying to come up with your whole own thing, which I did twice, which was dumb and didn’t work very well. I would…
Andrew: This is wrapbootstrap.com. What they sell are themes for what? I’ve never seen these people before.
Brecht: It’s like admin themes for Bootstrap, Bootstrap being Twitter’s Bootstrap framework.
Brecht: There are other things. I don’t want to just promote that. There are other options that you can do.
But, the point is that especially when you’re starting off, and if you’re low budget, which I was, the design can be really expensive to get a good design done. So, if you start off with something that’s at least got the components that you need in order to make a thing, then start with that. You can always deal with it later if you want to change it.
Andrew: I see. It looks like I can have… Oh, this is beautiful, some of these. There’s something called Ace responsive admin theme. It just looks like an admin panel would on software that someone in the audience might create.
Andrew: It has all the pie charts and the visualization of the data that they want. I guess what they do is they would buy this for $18…
Andrew: …and say to their developer I want this pie chart and it should have this data. I want this…
Brecht: That’s right.
Andrew: …graph over here should have this data. The rest of it, kill, because I don’t need the rest. I just need…
Brecht: That’s right.
Andrew: …to start with that. Got it. So, they have the design, and they can easily communicate what they do. I think you could even probably import or copy and paste some of this stuff into Keynotopia so you can make it look like it would if it was actually working. This is a really good site.
Brecht: I haven’t tried that, but I have used…
Brecht: I haven’t tried that, but I have used Keynote a bit. Yeah.
Andrew: And you just use Keynote natively without Keynotopia to make it work? You just manually will do that?
Brecht: Same way that I did it with Pages. Yeah, I would go to something like the theme that you’re looking at now and just cut the sections that I needed into images, paste them into Keynote, and just assemble it like it was an app.
Andrew: I see. Wow, do you have any other resources like this? I really like the site.
Brecht: Ah, hmm. Nothing’s coming to the top of my mind right now.
Andrew: You met Rob Walling, the guy who created GetRipped.com is the site.
Andrew: You said that speaking at his conference at MicroCom gave you legitimacy. How does speaking at a conference give you legitimacy?
Brecht: I was under cover for a long time which was another kind of big mistake that I made along the way. And what I mean by that was I sort of had this (?) professional existence. I was working with banks and selling their stuff and all that, but then I didn’t really want to talk about what I was doing with them or with the other people that I was working with. And so I was really under the radar for a long time.
Brecht: I don’t know. Now as I look back at it, it was silly, but I think at the time I was afraid that it would sink my existing business, like that . . . I don’t know. I guess the same way that I was embarrassed about the PDF for whatever. I had some other concerns about it. So these were people I’m doing high dollar transactions with, and you know, I’m in their business. I’ve got fiduciary responsibilities, but I want them to know I’m playing a software entrepreneur.
Andrew: I see because you maintained your career while you were building this business on the side, and it became . . . Gotcha. . . at the time. It wasn’t the auctioneering that we talked about earlier, it was work.
Brecht: It was.
Andrew: It was that?
Brecht: That and yeah, investment brokerage and auctioneering, yeah.
Andrew: I see. Okay. You’re not doing it anymore?
Brecht: No, almost two years.
Andrew: How long did it take you? It seems it took about two or three years for you to get to the place where revenue from your business exceeded your salary.
Brecht: Yeah, yeah, when I did that (?) it gave me an opportunity to go back and look at what I’d been doing with myself over the years, and I had periods where I don’t know if I lost interest, I wandered off, or all kinds of things like that. And so it took a lot longer than it probably should have.
Andrew: To hit that number.
Brecht: To hit a number where I could walk.
Andrew: What do you mean you got lost, and that kept you from hitting the number?
Brecht: I got into things like shiny objects. I got distracted by all kinds of stuff along the way. For example, I decided . . . I discovered Twilio. I decided that I should definitely build a mobile marketing app that local businesses can use. It’s completely moronic.
Andrew: It’s completely different from your businesses.
Andrew: This opportunity came around. Twilio makes it so easy, of course, when you need it. Got it. And once you stopped and focused just on real estate, just on these businesses, life got better.
Brecht: It did, yeah.
Andrew: How long did it take you? Not how long. Where is the revenue now. Last year what kind of revenue were you doing?
Brecht: Last year I did a little under 170, just about 170.
Andrew: About 170,000.
Brecht: Yeah. Not huge numbers.
Andrew: When you started out, what you were aiming for, that’s really solid. When you starting out, what you were aiming for was a Ferrari as the goal.
Andrew: Now what is the goal, now that you can buy a Ferrari. What do you really want?
Brecht: Yeah, I think I can buy a Ferrari today. What I’m really interested today is just my freedom. I am fiercely independent. I like not having to be anywhere at any particular time or do or say things people want me to do or say. And it sounds maybe obnoxious, but I really like having control of my time and space and being able to be where I am, doing what I want to do without having to worry about what other people need me to be doing.
Andrew: I know. I want to find out about this trip that you and your family are taking, speaking of freedom and there are things that you can do. But you’re a guy who was an entrepreneur it seems from an early age. Like me you used to sell candy to other kids in your school. Do you remember what candy you sold and how you did it? I remember mine.
Brecht: Yeah, okay.
Andrew: What topics?
Brecht: They’re like these cinnamon flavored toothpicks.
Brecht: I lived in . . . There’s an arbitrage where I lived. I lived in close proximity where you could buy hot picks in a rural town. So I’d buy them for ten cents for a pack of ten and then sell them for ten cents apiece. And that got shut down, but yeah, I did things like that. I don’t know. You know, if it was my school, I wouldn’t shut it down, I’d probably enlarge it.
Andrew: I hate that. This is one of the things that bothered me when I was a student. It bothered me to this day. I still get emails from people who say the same thing happened to them recently.
Andrew: The younger people who are in high school and college will say, “If you were a kid drawing they wouldn’t tell you stop drawing they would put you in a class for drawing. If you weren’t a kid. If you were in a class singing they wouldn’t tell you never sing again, they would put you in a class for singing, for writing, for all those things, for science.
Andrew: But when it comes to business if you’re selling these hot pics, they shut you down and act like you’re a criminal. You might as well have been selling cocaine in their eyes.
Brecht: Oh yeah.
Andrew: But at least you didn’t stop, you actually at 15, you bought a shop. What was the shop?
Brecht: I bought a bike shop.
Brecht: So you can actually buy, how do you buy a bike shop at 15?
Brecht: You borrow money from your grandparents.
Andrew: Okay. How much does it take to buy a bike shop?
Brecht: Well, in 1989 in Raleigh, Massachusetts it cost $3800.00. Something like that. It was boxes of parts from Goodwill, the name, and some connections to vendors.
Andrew: How did the bike shop do?
Brecht: We did well. I mean, considering we were working nights, weekends and summers. We did $10,000.00, then $20,000.00, then $40,000.00 in our three years, then I went to school after that.
Andrew: So freaking impressive that you would do that. That you would take on that responsibility. That you would be able to run a bike store. How do you even run it when you’re in school? Don’t you have to be in class?
Brecht: It didn’t feel like that at the time, I guess. We just wanted to do it and had the support. It was hard, I mean, I guess you probably did the same thing. I’ve listened to enough of your interviews I should know. I had a job from the beginning, if it wasn’t a paper route then it was sorting bottles and cans or it was something else. So, this was just another way of work, another form of work. I didn’t really consider it anything else, we just did nights and weekends. Then in the summer we just worked all the time.
Andrew: Nice to see the bikes over your shoulder. To me cycling feels like freedom too, I love that.
Brecht: Me too. It’s my main outlet. For sure.
Andrew: Is it? It’s so hard to do it, at least here in San Francisco, I guess it’s not that hard. I hate riding with all the cars here, it feels so dangerous. The only place I feel like I can go a long distance is over the Golden Gate Bridge. I feel even Oakland has better paths. When I lived in L.A., I could show you so many different paths.
Brecht: Yeah. I lived in San Francisco for a while, it was hard. We got out of town [??] went south.
Andrew: You drive up there to do rides?
Andrew: Then once you do, the roads are so narrow. There is no giant bike lane for you. Sometimes when I drive around there I feel like I could crush a cyclist. I go so slow just to make sure I don’t hit them.
Brecht: Yeah. I’m more of a mountain biker now.
Andrew: I’m worried now that I have a son, that I won’t be able to travel as much as I did before. That I won’t be able to do a lot. Today, I’m going to head home soon after 5 o’clock. I think I have an interview that ends at 5 o’clock, I’ll finish recording that. I’ll answer 1 or 2 emails that are urgent before I leave and then I’ll rush right home. Where before I would take my time. I worry that it’s going to get worse and I won’t get to do any traveling and here you are, you’ve got something called Nomaticbrood.com. You’re doing something that most people without kids don’t feel they could do. What are you doing and how do you freakin’ do it? I want to know how to do it so I can do it.
Brecht: Well, I don’t know necessarily that I can do it Andrew. I’m going to try and prove that I can.
Andrew: You’re committed enough that I can’t believe you’re going to fail.
Brecht: I’m committed. That’s for sure.
Andrew: What is it that you’re doing? For people who don’t know.
Brecht: I’ve been struggling with being up here in Southern New Hampshire, outside of Portsmouth. There’s a nice little tech scene. The weather kinds sucks and it’s not the kind of tech scene I would like to be in. We started thinking maybe we should move and where would we want to move. We came up with a couple of places, we we’re thinking about Austin.
So then we thought if we are going to move to Austin, what would that look like? Time wise. I would have to go out there, I would have to buy a house. We’ve got to figure out all the logistics for getting everybody everywhere. Then we thought, why Austin? Was it because we went out there for a couple of weeks and we liked it, it’s got a great tech scene and the weather is better? But then we started saying, what if we didn’t have rules about that. What if we didn’t have a time that we had to be there, or we could just figure out what we wanted to do. That’s what we’re doing. We’re liquidating everything right now and we’re packing into a gigantic van. May or may not tow some kind of trailer. [??]
Andrew: How long’s a while? A week, a month?
Brecht: We’re shooting for a year.
Andrew: Wow. So how do kids go to school when you’re traveling around like this?
Brecht: We’re going to road school. We’re kind of blessed with our kids don’t have any challenges. Like educational challenges or anything like that. And so we’re don’t have those concerns I’ll say. And so we’re just going to, we’ve got programs and we’ve got curriculum and we’re going to take it on the road. And…
Andrew: Road schooling meaning you and your wife are going to teach.
Brecht: Yeah, that’s what we’re going to do.
Brecht: I mean you’d be surprised. So we’ve got her second, my oldest kid is my daughter. She’s in second grade. You’d be surprised how much time they have in school that is just completely wasted.
Andrew: Oh, I’m not surprised. I remember it myself. When you’re at your most energetic, they try to snuff out your energy.
Brecht: Oh yeah.
Andrew: When you have so much that you could do, they send you to school and then you sit home in front of the TV because what else are you going to do?
Brecht: Yeah. So we’re already plowing through, you know, half way through second grade in a lot of ways. I’m talking to here one week out of school.
Brecht: So we’ll see.
Andrew: What’s the hardest thing to liquidate?
Brecht: I’ve got this vintage land cruiser that I love that I’ve cleaned up to sell a few times. I’m just having a really hard time letting it go.
Andrew: Any chance you’re just going to put it in storage?
Brecht: There is a chance, yeah. After yesterday it looks really good. So there’s a chance.
Andrew: You know what? I did that and I foolishly, I guess who thought about it? I decided I was just going to backpack through Europe. I put my car in storage and because I didn’t disconnect the battery, I had all kinds of trouble. You have to do a couple of things before you take off. You can’t just park it and move.
Brecht: Yeah. It’s eye opening when you start looking around and realizing what your stuff is worth. And the stuff that you’ve accumulated, like why do you have this stuff? As I’m going through I’ve got things, and I’m sure most people do, that I haven’t looked at or touched in years. And they’re just clogging up my space I’ve been moving around. And so actually it’s been pretty liberating to let a lot of stuff just go. You know?
Andrew: I feel that way.
Andrew: The place where people who want to find out about this can go is Bootstrappedwithkids.com. And they can follow the adventure and see, actually it’s more than that, but that’s one of the things you talk about there. Before I leave I want to end with a couple of things here. The first is we asked you in the pre-interview, April did, what is it that if someone wanted to learn from you, what advice would you give them? You said start with building an audience.
Brecht: I would.
Andrew: Before you even sell. Why? Why the audience first?
Brecht: I mean that’s where you engage. That’s where you’re going to learn about what you should even be selling and how you’re going to selling it and what their problems are and everything else. I kind of did that just because I was in the community. So I already knew about it. But I would have done more for sure. I mean I don’t think that there’s anything more valuable than having an audience that is listening to your every word. You know?
Andrew: Yeah. The feedback you get from them is spectacular. The fact that when you first launch something there are people who actually get to use it is incredibly helpful. The guidance that they give you, even if they don’t end up buying from you. Just the fact that they can come in and say here’s where I would change it or here’s how I can help you make it tremendously valuable.
And the final thing that you said was the book that you recommend other entrepreneurs who are listening to us go grab is “The Ultimate Sales Letter” by Dan Kennedy. Why “The Ultimate Sales Letter” by Dan Kennedy?
Brecht: Because it gives you a real introduction, I think a lot of people, a lot of the sites that I see, people are not selling hard enough, probably. And I think that a lot of times they want things to look clean and nice and they’re just not selling hard enough. And I think that that’s a good introduction for how to get started with selling in print.
Andrew: Selling in print.
Brecht: Selling with the written word. Yeah.
Andrew: I agree with you. It’s we’re not selling hard enough. We’re embarrassed of what we’re creating. We’re embarrassed to sell. And to be surrounded by people who do do it is incredibly helpful. Frankly we put so much, I put so much work into doing Mixergy back in the early days. And then when it came time to sell, I was so hesitant to sell anything. Anything at all. I even turned away sponsors. I would get emails from sponsors all the time. Many of them were listeners to Mixergy who would say, “Can I sponsor because I love the work? Can I sponsor because you’re reaching people like me?” I’d say, “No. I don’t want to ruin the quality of the show. I don’t want to do this and that.” You know? It’s so hard. It’s so hard sometimes.
Brecht: I’ve been listening to your interviews for a long time and a lot of the feelings that you have like that really resonate with me. I feel a lot of what you feel.
Andrew: I’m glad that you say that because there were times when I used to feel that I was the only one that felt this way.
Brecht: No, you’re not alone.
Andrew: Well thank you for listening. Thank you for being a part of Mixergy. Thank you for being Mixergy premium, and now for doing something that I dreamed of when I was starting. You know this.
I used to say, ‘I hope that someone out there will listen to this interview, get something out of it and then come back here.’ And I used to say it with conviction. Because I believed it. But there was no basis for believing it. It was just this hope.
And now here you are, you’re doing this. And I can say to the audience, if they want to follow along with you and see your progress, and just get to know you better, there’s so many places I could send them to because you’re doing so much. Because you’re not a consumer. You’re a creator.
Andrew: And they can go to, nomadicbrood.com. They can go to, and I love this phrase, but first let me get the URL, bootstrappedwithkids.com, which is a podcast that you do where you talk about the entrepreneurial experience for someone who has sass, but also has a family. And the phrase that you have on the home page that I love is, “Where Ramen profitable does not exist.”
Andrew: For a 19-year-old entrepreneur who’s starting out, as long as he’s Ramen profitable the rest doesn’t matter. He can afford to eat Ramen. He can afford to live. Everything else is fine.
You can’t feed your kids Ramen. And you need yourself for them.
Andrew: It’s a whole other world. I’m glad that someone’s talking about it.
What else do we have? The final site I should send people to is distressed pro.com. That’s where they can see the software that we’ve been talking about. I think they can sign up for the course right there, right?
Brecht: Yeah. Depending on which bucket you put yourself in, there’s a few different ways you can get started.
Andrew: It’s a site worth checking out. Even if you don’t fully get it. I don’t know if it’s for our audience or not. How many people, if you’re listening to me, know what R.E.O. is? Do you want to tell me what REO is?
Brecht: REO is an acronym for Real Estate Owned. It’s a shortened version of OREO, which is Other Real Estate Owned, which is the line item on a bank’s call report that says what estate they own.
Andrew: If you know what REO is, then you’re really going to love distressedpro.com. If you don’t, take a look at it because I think it’s just a well laid out web side. I was trying to see what theme you used for WordPress for it. And then I did an inspect on it and I think you created your own theme. It’s called the Distressed Pro WordPress theme, I thought.
Brecht: It’s customized.
Andrew: It’s a well done site. Okay, thank you so much for being on here.
Brecht: Thanks for having me.
Andrew: You bet.
Brecht: I had a good time.
Andrew: Thank you all for listening. Especially thank you Rob Walling for introducing us and making this interview happen. And, frankly, Rob for opening my eyes to so many great guests and friends. All right. Bye, everyone.
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.