How to survive a breakup with your business partner

Andrew: Hey there, freedom fighters. My name is Andrew Warner; I’m the founder of mixergy.com, this right here. It means home of the ambitious upstart. And my pinky finger got hurt. I actually whacked it on our clapboard. Chris, do you use a clapboard for your videos? You don’t need them, do you?

Chris: Almost never.

Andrew: Never, right? Because it’s all a stop, what is it called? Stop motion?

Chris: Motion graphics.

Andrew: Motion graphics just means graphics that are in motion on video, right?

Chris: Yeah, we’ll do a slate sometimes. I mean, we’re 20% live action. We do some of that stuff. So we’ll do a slate sometimes, yeah.

Andrew: My name is Andrew Warner, as I said. This is Chris Johnson. He is the founder of Simplifilm. Right? Did I pronounce it right?

Chris: Oh, yeah, you did.

Andrew: Doesn’t it bother you when people mispronounce your name, your company name?

Chris: As long as they’re talking about me, I’m all good.

Andrew: Really? I hate it when people say Mixology, but I let it go in conversations sometimes because I don’t want to be the pain in the neck that just stop the conversation and say, “Wait a minute, everyone, it’s Mixergy, not Mixology, not Mixenergy, not whatever you came up with.”

Chris: Yeah, but your brain is working away that’s subtly got that in. Even if you let it go, you’re trying to get that in later, right?

Andrew: You have to because if you don’t, then you leave it out there, then you’re basically telling them what they said is right and giving them permission to continue spreading it. But, at the same time, you don’t want to interrupt the whole conversation just to make sure that everyone hears your name perfectly clear. So I’m glad I got it right. Simplifilm, what they do is they help software companies tell their story with high-impact, short motion graphic explanation videos.

And Chris is a guy who I got to know here at Mixergy headquarters when our producer, Jeremy Weisz, put together a mastermind at the conference room. We invited these great entrepreneurs together, we spent the day talking about our challenges, giving each other tips, talking about what we do really well and teaching it to the others. It was a really helpful day. And at the end of it, we all had some drinks. And Chris started telling me about his company and I quickly snuck away to write down some of the things that he was telling me, like the breakup with his partner.

I said, “Oh, if he ever comes on Mixergy and I’ve got to remember to ask him about that.” And I know from the mastermind that he was really good about systems so I wrote that down for a note, just in case I ever had him back to do an interview. And then he has a good way of getting new clients so I wrote that down to make sure to bring that up in the interview. And he told me his revenue and I wrote them down just in case he wanted to come on here so that I had the number down. And for a while, I don’t think, Chris, you were ready to do an interview, were you?

Chris: I don’t think so, no. We were fresh off a breakup with my partner and it was a time that we had to get our systems built. Before we could get more business, we had to handle what we could do and be able to walk in integrity with our clients and be able to deliver what we promised and all that stuff. So getting more customers wouldn’t have done me any good when we were delivering stuff late, when stuff was not going as we had planned. So we had to fix our stuff first.

Andrew: I admire that. I hate when people come back to me, come to me and say, “Andrew, I just started a company. Can I do an interview?” I think, “Shouldn’t you be working on your company? This is not main to your business, not the heart and soul of your business, not doing an interview on Mixergy. Go build a business, and then when you have time and you’ve gotten far, then come back here and do an interview.”

So I’m glad you didn’t. And frankly, what I often do is when someone tells me what’s great in their company and I know they’re not ready, I take a note, I put it in my Evernote and I remember to come back to it later on in my interview with them. And that’s what happened with you.

Before we get into the interview and talk about where your revenues are, talk about how you built up this company. I couldn’t believe that a video company like this could be so big. I have to acknowledge my two sponsors, and they are Toptal. Toptal is back, baby. I told you people, huge sponsor, toptal.com/mixergy. If you go there, what you’re going to get is top developers. And if you use that /mixergy at the end of, they’re going to give you a good discount and they’ll take good care of you.

Also, go to designcrowd.com/mixergy. If you need anything designed, they will do it for you. They’re going to give you lots of options, you pick the one you like, pay for it, and they guarantee results. Go to designcrowd.com/mixergy. I’ll tell you more about them in a bit. But first, Chris, welcome and thanks for joining an interview here.

Chris: Of course, happy to be here. Glad you had me on.

Andrew: So here’s what I’m seeing in my notes. Top of the notes where our pre-interviewer asked you what’s your revenue, it says seven figures. Bottom of my notes where they asked you about any metrics in what you’re working on, you said, “Our goal is to hit 300k by the end of the year.” So are you doing 300k or are you doing seven figures, which is a million or more?

Chris: Yeah, we’re doing seven and we’re going for 300k a month and that’s the journey that we’re trying to get to. So that means that we have to add 40 or $50,000 per month to our revenue. It’s challenging and we have to grow the right way, which means that you have to serve your customers, you have to do what’s right for them every single time. And that’s the challenge there, is to both grow fast and to not have a trail of bodies in your wake.

Andrew: I can’t believe that it would be that big. But first, let me just say I made a mistake with the sponsor. Toptal is giving a two-week trial period, not a big discount, two-week trial period, which is incredible when you’re talking about developers. I don’t want to screw up my sponsorship promise.

So how do I describe for someone who can’t see what your videos look like, what they are? You go ahead.

Chris: Oh, no. First we try to understand the product and our team is very technically aware. And so we understand what we’re selling and that kind of is at the heart of it. And then they’re very short, nuanced, sophisticated videos that focus on telling the best version of the truth about a product. And so we’re not typically the character art, “This is Doug. Doug has a start-up,” kind of stuff. We try to be a little more sophisticated than that. We look for stuff that’s difficult, stuff that’s working in business intelligence, in stuff like that, that security. That’s kind of our typical client portfolio.

Andrew: One of my favorites is not one that you did for a software company but one that you did for a past interviewee here at Mixergy, Ryan Holiday. He had a new book coming out, “Trust Me, I’m Lying.” And you guys created this video that wasn’t quite cartoony. It’s images that move around where you explained what the book was about by teaching some of the ways that Ryan manipulated the media.

And then you showed his book and it was a trailer that also taught and it was beautifully shot. So that’s the kind of work that you guys do. You said that it’s really sophisticated and it’s not “Meet Doug” and so on. Maybe this is too early in the interview for me to say it, but the video on your homepage, the one for yourself does look like it’s clipart, as opposed to the one that you do for your clients that looks like it’s polished and beautifully done. What’s up?

Chris: What’s up is, there’s, I don’t know. That video we did a long time ago, it works pretty well. I don’t know that I take clipart, it’s isometric 3D stuff and we show videos coming off and it’s simply how they’re all the same. And we try to contrast from that.

And so it builds from a “Hey, every video’s the same, ours are a different kind of look.” And it was also our first short video. It was our first 30-second video, as opposed to 90, which is what we usually work from, one to two minutes. So that was the first time we attempted to do 30 because we had enough business. We put the video up because if you’re a video company, you have to have one and it was a good experiment. And I like that video.

Andrew: I like the one you guys did for Pavlok, where you explained what Pavlok is, the thing that will shock you.

Chris: That’s cool.

Andrew: But it wasn’t just explaining the product, it was explaining the psychology behind it and why it exists and we can actually watch the images being drawn on the screen and taken off the screen. It’s really well done. Does that hurt by the way? Now, I’m in my head about it, I just insult you at the beginning of this interview.

Chris: Oh, no. I mean, look, art is subjective and there are two parts of art, and if you see me shaking, I’ve got a desk my Mac is mounted. But art is very subjective and we can make
so you don’t like the choices we made on our own video, and that’s totally cool. Choices, different choices happen, part of the process. What we don’t want to do is have errors in our treatment. So a choice that’s different is, do you want a red sky or a blue sky?

There are different times that you’re trying tell a different story with a red or a blue sky. A problem would be is the sky shaking or is the stroke width’s different, not consistent with itself. So we made a choice that Andrew Warner doesn’t like, and I can live with that. But there are no mistakes in the video. It’s consistent with itself and it is the style that it’s supposed to be.

Andrew: I used to save my harshest questions for the end of the interview because I figured, oh yeah, we’re done now, let’s just go with the harshest questions. What’s he going to do, walk away? Well, I got my interview. If he walks away, it just gives me a great ending to it. And then I discovered that people, of course, will not walk away, but they will then have the whole interview colored by the last jerky question that I asked. And so…

Chris: Oh, that’s funny.

Andrew: Yeah, and so everything else if it was going well, if the last question rubs them the wrong way, then they feel insecure about the interview, then they get in their heads about it, then they ask me to edit, then they ask me to take it down, then they worry about too many things. So I’ve changed, but I don’t know that I should jump into the first question with that. It is like a nuance to it.

Chris: We do the same thing. And you see those stills right behind me there, those are canvas-covered stills from our previous videos. That one’s Breather. The one up above it is “The Dictionary of Dangerous Ideas,” which as a fantastic book. And we send canvas, instead of having the invoice be the last interaction, we send a canvas-covered something.

So the last thing they remember isn’t the money they spent, but it’s a gift. It’s something we didn’t have to do. The transaction was “over.” And now, we just started making SlideShares for all of our videos so we can say what we learned when we did this. So the last thing we do is a service and not a “give me your money.” So same idea.

Andrew: Interesting. So how did you learn that? You’re a systems person. My system happened when someone just called and ripped into me and said, “You know Andrew, I really like you. I’m a longtime fan, but I just feel like the way you treated me was awful.” And I had somebody go through the transcript with me, question by question. I was not awful, but the last question was a little bit painful.

That’s what it was. And so that postmortem that I did with a trainer helped me figure out that there’s a problem with the way that I end my interviews. I could tweak it a little bit and we could improve and leave everybody feeling happy and no more of this time wasting, “Andrew, please edit this out” thing. What’s your process for knowing that the last interaction should not be an invoice?

Chris: So I read an article in “Forbes: a while ago. It was in Forbes and it talked about how you hate it when you’re waiting for your check to come and that disproportionately impacts the tip you get. So you’re waiting for your check and you’re waiting more than three minutes and then your tips are going to go down because some study was done. And you can see it, right? You’re just mad because you don’t have your check yet, you want to leave the restaurant and this waiter…the whole meal was perfect, but then the check comes two minutes after you wanted it and you’re angry.

That happens to people. And I’m thinking, the last thing we do is send them a bill. And the last thing we should do is find a way to serve them, raise their prices so we can cover little extras, little surprises, delights, whatever, and do that. So we wanted the last interaction with us to be positive. And so what happens is about a month after you get your video now, you get a SlideShare that promotes you and says what we learned when we worked with Forter or what we learned when we worked with whoever. And that’s a better last memory.

Andrew: I say, it’s something where you got burned, but you learned from somebody else’s experience.

Chris: Yes, that’s right.

Andrew: Now, someone might be listening to us saying, “Hey, you know what? Chris is sending out a gift or something other than an invoice at the end of the interaction. We should do the same thing.”

Chris: Yeah, and so if you’re a service company, I’ll just say this, if you’re a service company, you should grow 100% per year, every year without exceptions, just by serving your existing clients. If you serve them at a level that is meaningful, they will refer and rehire you and getting new clients is adding to your size.

Andrew: Do you get clients who come back to you? Why would somebody, why would Breather…Breather is like Airbnb for office space, right?

Chris: Right.

Andrew: Why would Breather need another video next year if they’ve got a good one this year?

Chris: Well, how many videos does Airbnb have? They have 20 or 30 videos. How many different use cases did they have? As the videos help somebody grow, if we do a good job, they’ll rehire us. When we don’t do a good job, they’ll hire somebody else. And I’m fine either way because either we get money or we get feedback and both are very valuable.

Andrew: Okay. How do you get feedback if somebody is not happy with you?

Chris: If they’ve hired somebody else, I call them up and say, “You know what, we were not a fit for you. What did we do wrong?” And I realize that and sometimes we just wanted to go in a different direction, we wanted to go with a local company, we had seed money and the seed money was associated with this vendor, or sometimes it’s, “You know Chris, you’re a jerk.”

Andrew: What’s one time that somebody actually said that? Because I find calling up clients who cancel sounds like a really good idea in an interview. But then when you go and actually do it, people are too embarrassed to even take the call, let alone to tell you what you did to screw up. What’s one piece of feedback that you got that was helpful?

Chris: Sure. That we rushed the process and just we’re too focused on the finish line, and not focused on getting it right, and they felt like everything was rushed, and everything was rush, rush, rush. So that was a good piece of feedback. They felt like we just wanted to get this done so we could bill them.

Andrew: So what did you do to fix that for the future, for future customers?

Chris: So we hired a project manager, number one. Number two, got real specific with our process messages so we have a list of banned words. We don’t say approved, we say finalized. We don’t say animation, we say creation. That’s the sort of stuff that we did in order to just get really hyper-specific about our language.

Andrew: Why not animation? How does that change things?

Chris: Animation seems trite and it seems lower-end. Motion graphics is a more sophisticated way of saying the same thing, creation. And we don’t intend to always be just doing animated videos. We’re about 20% live-action right now. We want to be 50% next year.

Andrew: Finalize replaces what word?

Chris: Finalize replaces approved.

Andrew: Why? What’s the difference?

Chris: So if you’re letting a client approve you, they’re going to have some…it’s a more emotional word. “I approve of you.” Let’s flatten that out a little bit. “Is this confirmed?” “Oh, yeah, this is confirmed.” That’s a different thing than “I’m not seeking you approbation. I’m not like looking for Andrew’s approval, I’m looking for your confirmation.” And, it’s nuance, but it matters a lot.

Andrew: I see. Approval means, “Do you approve that I went with the blue sky instead of a red sky or a red instead of a blue?”

Chris: Yeah, that’s right and it’s more like “Maybe I don’t approve of this.” You have to think about what it means for you to approve of something.

Andrew: I want to get into so much in this interview. I’m going to rush a little bit because I want to find out more about your systems. I want to find out about how you give VIP clients. Brad Feld is a hard guy to get to do an interview alone. I mean, I know I had him on here to do an interview. As a client, I imagine it must be harder. I want to find out about breaking up with that partner. But I also want to know how you built up this company, just so we get a little idea of how you got here, and take some lessons from that.

By the way, I’ve got to get rid of the word lessons, now that you’re making me think of the language that we use. I’ve heard other interviewers use lessons, it just seems like I don’t want lessons. I’m running. I’m looking for something exciting. A lesson always bored me in school. Now you’re reusing that same language and that same experience. I don’t know what word to replace it with, but I’ve got to come up with something else. Before you were doing this, you were a WordPress guy?

Chris: More or less, I was a bad WordPress guy, in fact.

Andrew: What does that mean?

Chris: That means that I was in this
there’s no money in the shallow end of the swimming pool, right? If you dive off the diving board, you’re going to break your legs or worse. And I was working with realtors and Rotary Club people for $800 to $1,000 per project. And that was a living nightmare.

Andrew: What sucks about it?

Chris: Well, first of all, it’s harder to close somebody that can live for $800 in a website that it is to close at 12 to $15,000 video project. That’s just a fact. It’s way more difficult. It takes way more energy because this is a Hail Mary pass, it’s going to save their career. It’s their last $1,000 if they’re only spending $1,000. It was the worst. It’s Walmart versus Saks, Fifth Avenue, right? It’s just misery, untold misery.

Andrew: And $800 represents such a big amount of money for them to spend that they needed to be perfect and their anxiety must be high.

Chris: You’re right. And if it doesn’t go right, this is all they got. And then, if they bought this $800 website and two months went by and they didn’t get the results they wanted, they would want a refund, even though they have “Hello, World,” as their only blog post.

Andrew: In our pre-interview, you used the word crappy to describe the design of the sites that you’d build for them.

Chris: Yeah. I mean, look, these were…you had Chris Pearson on here in a famous Mixergy interview. These were Thesis sites in the days when Thesis was cutting edge and it was, still is in some ways
I’m not negging Chris at all, it is cool. They were very cookie cutter, very uniform and we couldn’t control the scope. So a client would see something that would be on a $20,000 website, want that thing, and we could sometimes approximate it, but not generally. And then we didn’t have a tight enough scope on our contracts so that they would want unlimited stuff.

And 80% of the time it was great, 20% off the time, a client would…I mean, if you had 20% cancer cells, even though 80% of your body was healthy, you’d have a huge problem. So it was kind of what was happening and I got out of that business. I knew the WordPress page really well. I made a list of 10 clients that I wanted. I had a video project that just happened from one of my coaching clients. I was working with a coach and he hired me, the same coach, hired me to do some video work and I sourced it to my high school buddy, Jason Moore. And it turned our stunningly great for what it was. It was way better than it needed to be.

This was a course that was teaching how real estate agents can benefit from getting on Twitter and Facebook in 2009 or in 2008. And that project went well. I knew the WordPress base. It was a theme called Headway. You might remember Headway.

Andrew: It’s still out there, too.

Chris: It is, and it’s great. Headway Themes, I saw them at BlogWorld and I insulted their video. I said, “Listen, you’ve got a great product, but this video is like antimarketing. Let me help you out.” And he’s like, “Yeah, this video sucks, but it’s the only way we could show how we’re different.” And so we made the first Headway Themes video and then we got WishList Member, we got Gravity Forms, we got a whole bunch of WordPress people working with us and it had a waiting list from day one.

Andrew: You insulted the Headway themes video.

Chris: I did, I did.

Andrew: They took you on as a…

Chris: They took a flyer, spent a little money on me because I…even though our business was hard, I was getting things done and I had a good reputation. I was a client of theirs as well.

Andrew: Who created those videos for Headway, for Headway and your early clients?

Chris: We did, my partner and I. My cofounder, Jason Moore, did a spectacular job.

Andrew: So you were doing the sales and Jason created the videos. What did he create the videos in?

Chris: After Effects.

Andrew: Okay.

Chris: Eighty percent After Effects, 20% ScreenFlow, probably.

Andrew: ScreenFlow, wow.

Chris: Yeah, well, if you want to do a product shot, ScreenFlow does a good job. There are a lot of filters, there’s a lot of stuff. You can bring in the footage. You can treat it in After Effects. It’s the best thing to record stuff that we know of.

Andrew: Yeah, I edit these interviews in ScreenFlow. It’s so easy and so versatile. Let me see, After Effects, how did he know how to do this?

Chris: He went to art school.

Andrew: Got it.

Chris: So we got together based on Facebook. I needed a header for one of these crappy website realtor clients.

Chris: And I said, “Does anybody want to make a header for me for $200 this weekend, or whatever?” And he did it and it was way better that it needed to be. It was sophisticated, perfect, and it salvaged the project. And then that got us talking.

We were acquaintances in high school. We were in the same circle of friends but we probably never once hung out together and we didn’t have any feelings about each other, just Facebook connected us and then turned out he said, “We should be doing After Effects work.” And I’m like, “All right. Cool.” And sold the project, not knowing what it was. “Hey, is this After Effects work?” And then five years later, we have a business and our partnership had a journey and it had its conclusion last November.

Andrew: When was it officially a partnership and not just you farming stuff out to him?

Chris: Well, he is such a good talent that it was from day one, that was our intention. We just wanted to see how it worked. We probably did 12 or 15 projects together and worked a year together as a “me paying him 70% and keeping a 30% commission/management fee.” That was how it started.

Andrew: And eventually was it ever 50/50?

Chris: Oh, yeah. It was 50/50 and now it’s 90/10, in my way.

Andrew: We want to find out how all that happened. I also want to hear, as I said earlier, about how you got clients? Before we started, you mentioned an e-mail you sent to Ryan Holiday. Do you think that if you search your outbox, you can find that e-mail that you sent Ryan all those years ago?

Chris: Yeah, maybe, yeah. No, I sent a few e-mails to him, thanking him for the book. He has a reading list if you go to Ryan Holiday.

Andrew: Do you think you can go back right now while I do my sponsorship message and find your first e-mail to Ryan Holiday just to give me a sense of what that was? Okay.

While you do that, I will tell everyone that my sponsor is DesignCrowd. Here’s what happens as an entrepreneur. You need something designed, you need a new web page, you need a new landing page, you need a logo, you need something designed. What you often do is look for the perfect person who’s going to do it. The problem is finding the perfect person is impossible. So you look for someone who’s going to be around and who’s going to be okay, and then you work with them.

And then you have a problem where the background is red instead of blue, or the sky is blue instead of red, or something is not to your liking and you have to go back and forth with the person and get it just right. And it really is a nightmare for you. And you don’t want to be the pain in the butt client, who no one wants to work with, so you hold back. But then you end up with a design you’re not crazy about it. That’s the problem with going the traditional route. What DesignCrowd does is ask you what you’re looking for, and you describe it, who you are, what your company is like, what you’re looking for in this, let’s say logo.

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So they all know going in that if they win, they get paid big, if they don’t win, if you don’t love them, but they’re still good, they still get paid. So they put in their real effort. All right. That’s me describing the process. You won’t know what it’s like until you try it. That’s why DesignCrowd is trying something brand new. They want to win over the Mixergy audience. They want to win you over. So if you go to designcrowd.com/Mixergy, I’m going to go it right now, you’re going to get a huge discount, 90% off your posting fees.

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All right, Chris, we’ll get into that in a moment, but were you able to find that e-mail?

Chris: Yeah, I was able to find an e-mail that he responded to. Yeah, the one that they got our relationship going, which is beyond productive for a few years. I recommended a book, first good read…

Andrew: Oh, hold on. I’ll get into that in a moment. I just wanted you to have it at the ready so that we can jump into it. The thing I want to learn from you I, how you get so many customers. Because you know what, Chris, right from the start, you got name-brand customers. You mentioned WishList as one of the many customers and Gravity Forms. Within the WordPress community, they’re respected companies that people see as real businesses in a community of people where sometimes people just do things for hobby and they never can make a lot of money. Let’s talk about the earlier customers, how did you get, say, WishList and Gravity Forms as customers?

Chris: So even today, I have a 10-10-10 list, okay. I have 10 people, 10 projects and 10 companies that I want to work with. I maintain it. And most of my sales efforts on the outbound side go after getting those people. Okay. The metaphor I use is you’re going to see the Wizard of Oz, okay, and you need to see the Wizard because that’s Brad Feld or whoever it is.

On the way to see the Wizard, you’re going to research the Wizard, you’re going to learn that you’ve got to follow the yellow brick road, you’re also going to see the Tin Woodman, the Scarecrow, and the Cowardly Lion, and you’re going to have a better relationship with those, the Tin Woodman, the Scarecrow and the Cowardly Lion, than you did with the Wizard. That’s what it’s about. So if you pursue people like, I’m obsessed with Dana White, I want to do a video for UFC at some point. And so I’m pursuing that.

On the way there, I’m going to learn who Dana White’s assistant is, who Dana White is surrounded by, all of that stuff and then I’ll be able to get into his head and then he will be referred to me when the time is right. They’ll say, “Okay. The time is right. I’ve worked with Dana’s gym partner, I worked with UFC gear,” or whatever. And then I get the referral that I want in a year, and it’s a lot faster than asking Dana White at a party, “Hey, can we work together?” 30 different times. That doesn’t work.

Andrew: What is the 10-10, it’s 10-10-10?

Chris: Ten-ten-ten, 10 people, 10 projects and 10 companies that I want to work with.

Andrew: I see, and these are 30 projects in general, 30 connections that you want to make, and that’s your hit list, and you keep thinking of how do I work my way into them and it’s not a direct way. It’s often working with people related. I see, and so, going back to the beginning, how did you get Gravity Forms, for example, the WordPress plugin?

Chris: So we did Headway and Grant Griffiths, the cofounder of Headway, was super generous in endorsing the heck out of us. At the time, it was the most sophisticated WordPress plugin video that had ever been created. I say that without…there has been nothing cloaked. We had a wide lead. Then, we wound up getting Brian Clark, a copy blogger doing Scribd, and that was a good video as well.

And then I had this list of people that I wanted to serve and so I said, hey, Carl Hancock was the person on Gravity Forms. I was an early adopter and an authentic advocate of Gravity Forms, I said, “Listen, I don’t know if it’s a fit or not, but if you did a video, I’d love to help.” And he had his cofounder partner, Kevin, get in touch with us and we worked together based on that. “And I don’t know if it’s a fit, if you’d like a video, I’d love to help.”

Andrew: How do you get referrals? You’re really good at getting referrals right from the start. What’s your process?

Chris: Well, first of all, you do awesome work so they never have to worry about what happens next if the video’s going to happen on time. You handle quality of work, which is the deliverable, how good the video is, quality of experience, which is how the video is packaged, okay; and you handle those two things, you get referrals. If you don’t handle those two things, if you’re…

Andrew: But a lot of times, you give someone a really good project, a really good experience, really good results, and they forget about you because they’ve moved on. You do something. What do you do to get referrals?

Chris: Well, I ask for them.

Andrew: How do you ask for them?

Chris: After you’re done being a customer, you get a little gift from us, which is one of those frames on the wall that we talked about. And then you also get me advocating for you for as long as I know you. So I’ll follow-up with your business and I use a CRM. I’m using Close.io right now. Close.io is a fantastic CRM and I’m following up with the people on an automatic basis. So I do a search and Close.io will track my phone calls and it’ll also track my e-mails. And I do a search from last responded so if you’re in my network, I hunt you down and I want to do that.

The other thing that I do is I have three groups of people that I network with. Okay. I have a posse, these are the twelve. It’s a 52x group. I talk to them, I try to add value to their lives 52 times, 50 times a year. So every week, I’m trying to…it’s 10 people in this group, and these 10 people are
it’s asymmetric, but these 10 people are our disproportionate source of our referrals. Ten or so relationships drive the heck out of my business. And so I make sure that I do something for them for free 50 times a year.

It’s five or six hours a week in work. Then I have the next group, which is 8x a year, eight times a year, twice a quarter. I try to say, “Hey, we’ve got a little time this Friday. Do you need anything? I’ve got some unused design time. Do you need anything?” Whatever, twice a quarter. And then I’ve got the 2x group, which is just people I want to remember me. And that would be where a typical client would go. So twice a year, they hear from me every year, and I use Close.io to help track that to make sure that I’m on pace.

Andrew: And you just check in with them to say, “Do you need anything?”

Chris: Can I help you with anything? Yeah, that’s right. Can I help you? Can I get anything for you? Do you need any…?

Andrew: So, well, if you e-mailed me and said, “Can I do anything for you?” I wouldn’t have anything, so it’s a “No, thank you.” And then, if I was one of the top…

Chris: No, I wouldn’t say, well I wouldn’t e-mail you, “Do you need anything?” I would say, “Hey, Andrew, I just talked to an amazing entrepreneur that I don’t think is on your radar yet, but he’s way, he’s a way above my level, would you like to talk to Steve? He’s got this little enterprise company out of Chicago.”

Andrew: What’s the distinction between the way I said it and the way you said it?

Chris: The way you said it was, “Do you need anything” is non-specific. You can’t respond to it. I don’t know. With the way I said it was, I cared about you, I said “Hey Andrew, I’ve got this entrepreneur that is better than me, he’ll be an awesome interview, would that be of service to you?” And the answer is, “Well, yeah, I’d love to hear more.”

Andrew: And there are those people who get that kind of treatment 50 times a year because they’re good referrals?

Chris: Well, yeah, once a week. I mean, my top six or seven relationships are 40% of my business or more.

Andrew: And what Close.io does, and other CRMs do it too, but Close.io is really good at this. It tracks when you’ve talked to them last by phone or e-mail, and then it allows you to see who you haven’t talked to as often as you’d like, and it also pings you and says, hey these people are on your 52, is it 52-week list?

Chris: So Close.io is about batch processing. So it’s not about making specific appointments, that’s not its strength. Its strength is I can do a look-up and I can see all of my clients and I can do it in descending order of last conversation. So the first thing on my list is to talk to this guy at this company and he’s the client that I talked to the longest time ago. And so I sort my client, pull up a client, we’ve got 400 clients and so if I talk to 10 past clients a day, every 40 work days, I’ll get through my list. And so that means that every two months, I’ll get through my list of past clients.

Andrew: Got you. That’s a really good system. And you’re not the only person at the mastermind who was raving about Close.io. There were several users of it in there. All right. So you’re still not showing me how you’re helping your customers. At what point do you ask? How do you ask a customer for a referral? What’s the Chris method for doing that?

Chris: So the Chris method is I pick, I look at…so like I’ve looked at your LinkedIn, okay, that’d be a good place, in your LinkedIn. And I stalked you on LinkedIn, and you’ll see that I showed up in your recently searched thing, and I’m fine with that. And I look at who you’re connected to. And if I’ve heard of somebody that you’re connected to, I would make a check mark or I would figure out how to do that. So you’re connected to somebody that I want, you’ve interviewed somebody that I want as a client, maybe I want an intro to Steli Efti…

Andrew: Yeah, let’s use him as an example. So I know Steli fairly well. He and I have been trying to get together in person. Let’s suppose you’ve never heard of his software, but you’d like to work with him somehow.

Chris: Sure, so I would find three or four people that he’s connected to on LinkedIn that I’m also connected to. And, in fact, it’s a small enough world that that’s not difficult. I’d say, “Hey, Andrew, after I’ve given you valuable things and made introductions and helped you out over the last couple of years and never asked for anything…”

Andrew: And you’d specifically say it that way or you’d imply it?

Chris: No, no, no. No, I would never say, “Hey, you owe me.”

Andrew: Yeah, I was thinking that’s a little weird.

Chris: I would say, “Hey, Andrew, I see you’re connected on LinkedIn to Steli. Do you know him well enough to make an introduction to me?” And you would say, “Chris, good to hear from you. I remember, in the back of my mind, all the five times that you’ve added value and asked for nothing. I’m happy to help.”

Andrew: Do you do it right after you do work for your clients or do you wait until you help them? So after you’ve done work for a client, you’ve sent them the gift, would you at that point, look them up on LinkedIn and see?

Chris: Anytime. I’d usually ask beforehand, but anytime it’s certainly appropriate. I mean, look, it’s always appropriate to ask for a referral if you’re a person of integrity and value, and if you have the client’s best interests at the core of your being. So it’s always a good time to ask for a referral.

Andrew: And that’s what you do? You just say, “Hey, I see you know this person, would you mind making an introduction?”

Chris: So you and I are acquaintances, right? We don’t know each other all that well. We’ve talked a couple of times. You have a good impression of me, I think you’re great. And if I ask for an intro to somebody that you’re connected with and you knew him, and you knew that it would be a fit, you would love to make the introduction.

Andrew: So suppose I make the introduction, and I’d be happy to do it, what do you do to follow-up, and make sure that someone who wasn’t waking up in the morning saying, “I need a video” understands the need for it and signs up?

Chris: Well, that’s done in a sales call. So you can’t convince anybody that somebody needs a video. If they’re interested in a video, you can sort them, okay. So you’re not selling anybody, you’re sorting people. And if you don’t understand the need for the video, I can’t convince you of that. I can’t…

Andrew: So let’s suppose I introduced you to Steli, what’s your e-mail to Steli, the founder of Close.io? What’s your e-mail to him?

Chris: “Hey, Steli.” Well, I e-mail anyway. But I would say something like, “Hey, Steli. Love what you’re doing. I don’t think people understand how powerful Close.io is. And I do think a video that we make helps. Here are a couple of examples of what we’ve done in the past. Let me know if I can be of assistance.” Then I’m out.

Andrew: I see. And if he’s interested, he follows-up.

Chris: Yeah, and then I might follow-up with him later or not. And if he’s like most people, he’ll say, “What’s the price?” And I’ll say, “I don’t know what the price is because I don’t know what you’re going to need. I don’t know what’s going to be our service. Why don’t we talk for half an hour and you’ll understand how to pick out a video company? You’ll understand this and you’ll be able to be in a good position to decide whether to work with us or not.” That’s it. And it’s not that I’m not transparent about prices. But if you want a video drilling down on the features of your service, that’s one price. If you want a video that creates
Andrew: What’s the range of your prices?

Chris: For us, $10,000 to $20,000 is about 90% of our projects.

Andrew: And how many clients do you have overall?

Chris: Currently, we have 15 projects opened, I think at the moment. And we’ve had 400 clients over the five-year history that we have.

Andrew: Four hundred, I see.

Chris: We started at 2500 and we’ve gone up, every year.

Andrew: Annual basis, how many clients would you have?

Chris: We served, we’ve done 27 videos so far this year, and we’ll do another 40 by the end of the year if we deliver everything. And then we’ve also sold another bunch of videos that have gone on hiatus and the clients have disappeared, because they’re… they’ve lost their job and there’s probably 10% every year…like an airline overbooks itself, 10% of our clients will pay us a lot of money and then wander off. And it’s part of the deal. Yeah, I know, it was shocking to me, too. But I could buy a house with that money. And we follow-up with them every month, we try to chase them and then reel them in, but that just happens. It’s bananas, I can’t imagine.

Andrew: You guys are incorporated at 2011, November 2011, April 2012, you come up with the name Simplifilm. You guys, you and your co-founder doing well. Where does the problem come in? You guys are building your revenue. You’ve got a process for growing. Is he a dick?

Chris: No, he’s a nice guy. He’s got integrity. I like him. He’s still one of my best friends.

Andrew: Okay. So what happened?

Chris: So we had an honest disagreement about the word quality. So what is quality? Okay. His opinion was that a video, nobody’s going to care, five years down the road, if a video is a day or two late, if it was amazing. And sometimes you have to pull out all the stops and do whatever it takes to be amazing. And my opinion is, if a video is a minute late, it wasn’t quality, it was a shame. And we had an honest conflict about this. He’s like, well.

And I had his back the whole time we’re working together, and I still do. And he said, “We’ve got to do this. We’ve got to make this really good, but it does take a lot of time.” And I found a different way to get there, I don’t know if the deadline will be okay. And I take their temperature, and if it was okay, it was cool, if it wasn’t okay, it was there but, putting all of his soul into one project because his name and his reputation were on the line caused a cascade of other choices and limited some of the things that we had to do.

So we had to…we’d built a process together. We had served hundreds of clients together and I couldn’t go through it anymore. I couldn’t be late because I was the one that was the public face that had to deal with the upshot of this stuff. And I couldn’t…if we know that l75% chance that we’re going to be late on a project, and we’ve not been late since March, we’ve caught up and we’re ahead of our deadlines.

We haven’t had any issues on any milestones ever. But if there’s a 75% chance you’re going to wind up late on a project, as a salesperson you cannot be in integrity and still sell it as if the deadline is real and if the deadline is going to happen. We just can’t. And so I had to make a choice, am I going to sell lies or am I going to address it. We couldn’t get it addressed. We couldn’t get the…we couldn’t get the stuff done. And it’s not that he couldn’t do it, he was over, he had another business, as well, and he was overextended by a little bit. So it…

Andrew: So he couldn’t do it. Why didn’t you guys just say, you know what, I know, a few months ago I can see you guys were hiring a salesperson, that’s your job, right? Sales and operation, you’re hiring somebody to do your jobs so that you can keep growing. Why not hire someone to do his job?

Chris: We did, and, the issue again was quality does take time. And we didn’t
we had a number of problems that we couldn’t address. We didn’t raise our prices soon enough. There are a lot of mistakes that we made that cost us our opportunity to work together
Andrew: Why did not raising prices cause a rift between you and your buddy?

Chris: Why, because we didn’t have the…why did not raising…a rift is a different word than I would use. It was…it…we didn’t have the money to operate like we should’ve. We weren’t charging enough so there weren’t margins in both time…we ignored the time aspect of being an entrepreneur. So we can get all these projects done and our ego always says, “Yeah, I can do it. I’m a…I’m a creative, this is what I am.” But we never…we didn’t charge enough to take breaks and feel good about it.

We never got to the point where we’re able to relax and that was a money
that was a financial issue that was largely my fault. So I let it slide. But then we got to the point where we couldn’t charge enough, all right, because if we’re delivering a haphazard, random and bad experience, then you can’t raise your prices, because then with more money comes more accountability, so we had to trade in this little…we had to play it small because our odds were not where we wanted them to be.

Andrew: Talk to me about the psychology of not feeling comfortable raising your prices, Chris, because I think I’ll identify with it and every real entrepreneur in the audience will. Why didn’t you raise your prices more before?

Chris: We didn’t raise our prices more before because I wasn’t satisfied with the level of our deliverables and because of my middle-class upbringing. I grew up in a small, tiny town in Ohio, a factory town without a factory, and like, I’m pretty comfortable making a six figure living, contrasts sharply with most of my peers who are not doing the same.

You have all your friends on Facebook that are really happy to go see a Buckeye game and it’s a once-in-a-lifetime experience for them and you feel pretty good about that and it takes a while to have the mindset of I’m really adding value, and I’m delivering stuff and I’m running a company. I need to be charging what this, these activities are worth and so
Andrew: It kind of feels like you’re charging more for your work than someone would pay for a car, at least where you were growing up.

Chris: Right! Or I mean, you can get a house in Piqua for $80,000 a year. I mean, you can
the Midwest is amazing. It’s still a place where
Andrew: A house for $80,000 a year sounds like San Francisco.

Chris: No, a house for $80,000 total, sorry. You can get a three bedroom, you can get a starter home, all brick, Huber-built home
Andrew: I think that’s pretty much what I am paying a year for rent here. I’m not messing around.

Chris: Right? Right, right, right. No, I’m with you.

Andrew: I see. And so that’s what went into it and that’s where the hesitation came from. And you ended up breaking up with your partner. How do you do that? Like, the conversation, I know, is hard but the mechanics of splitting up, what did you do?

Chris: Well, we were a C corp, so that makes it a little easier to
the company bought back its own shares and we could admit explicitly some of the things that were implied. That’s the mechanics. Leading up to the conversation, we said, “Hey, we have to have a serious conversation. I’m desperately unhappy with the level of service that we’re providing to our customers and you have to also…” I got coaching from Patrick [inaudible 00:43:14]. I got coaching from Pam Slim, I got coaching from a guy named Jesse McLeod and I said, “Hey, I’ve got to do this thing.

What do I do to make this go smoothly?” And it’s breakup advice and it’s tough, but, I wanted to…Pam gave me great advice. She said, “After this conversation is over, what do you want the relationship to look like?” So and then, I got good advice from Patrick. He said, “What are you willing to do?” And I was willing to quit. I was not going to, I can sell. A salesman can get off a plane anywhere in the country and be fine. And that’s true. So I was willing to give it away for free, just sign it over.

Andrew: You were willing to just walk away. All right. But still, now you need to…so the deal was, you take money out of the company and you give it to your partner and in return, your partner gives you shares.

Chris: Yup.

Andrew: And how do you come up with the amount that you give and where do you come up with the money considering that you didn’t have that much just sitting around in the bank?

Chris: Yeah I know, I know. It was scary. It was done over time. It…I personally had some money so we personally supported the company, didn’t take a salary for a while, and gave him what I thought was fair and what I thought was respectful and what I thought was…we have worked together a few times since and it’s gone well, unlimited stuff and
Andrew: So you give him some money and…actually, I guess, it sounds like what you came up with was over time, you will give him a certain amount of money and when you give him, for each milestone of money that you give him, he gives you shares back.

Chris: Yeah, it was a little…because he has integrity and because I trust him and he’s one of the most honest guys I met, he didn’t…that was not as much of a concern. There was no mendacity there. So the shares were signed over at the end of the year and then I had a debt and a prom note and that the company had, that he was to be paid money.

Andrew: Wow, okay.

Chris: And then we also sold…we had a product that was Floatility, which was a product that we had, and we sold that and that also helped to fund the breakup and
Andrew: So that’s Telstream, the makers of ScreenFlow?

Chris: I did, I did. Yeah and they’ve been wonderful
Andrew: You know Telstream as a company. Do you know the founder? That would be a great introduction for me.

Chris: I can make that introduction happen.

Andrew: I would love it. I’m in love with their software.

Chris: Okay. We’ll talk later, but there’s a technical founder and there’s a non-technical founder and you can talk to either of them. The technical founder is probably tougher to get but
Andrew: The non-technical is probably the guy to go to, for me.

Chris: All right, all right. Sounds good.

Andrew: All right. Let me do a quick sponsorship message and then I want to come back and ask you about that thing that you just found for us before. The sponsorship message is for a company called Toptal. Every time I say it, people ask me to pronounce it clear, so I’m going to tell you where the name comes from. Top as on top of the heap, they want only the best, tal as in talent. Toptal, Top talent, Toptal. Toptal.com/mixergy is where you go if you need a developer. Now, you might…if you’re listening to me, already have a developer. Maybe you have a team of developers and still you can’t get enough done. So what do you do?

You can go out and look to hire people. There are headhunters who will help you, you can put tons of Craigslist ads up, you can do all kinds of postings, and then you do your screening and hopefully you end up with the right person but definitely, you will take up a lot of time. And maybe you’ll end up with the wrong person, right? That’s what we ended up going with. I’m going with.

We had a situation like that. So then we said, “You know what? Why don’t we go to a freelance website?” Freelance websites give us hit or miss results. We finally went as a team here at Mixergy to Toptal. And when we went to Toptal, they gave us…we told…actually they asked us, “How do you guys work?” I said, “Well, I don’t like to be in an office. I’m here in an office today, but I don’t want someone to sit here in my office with me. I also want a guy who works with WordPress.

Here’s the way that we work and so on. I don’t even want to talk to the guy. There’s a guy on my team who will interact with him. That’s the way I want it all to work.” They said, “Beautiful! We’ll make it happen for you.” They introduced me to a developer. The developer was really good, but it wasn’t a good fit.

I don’t know why because I’m not the guy who talked to him. I do know then that they came back the next day and they gave us another developer. And he was one of the best developers we ever worked with, meaning me and our in-house developer, Michael. He was the guy that Toptal got us, he was fantastic and a fantastic fit for us. And what he did was, he redid our search. The search for years stinks on Mixergy. And he did it so well that we then tried to use our design, our layout to display the search results that this guy gave us and we said, “No.” He’s raising us to a new level here and our site has been garbage.

If I could say, Chris, something about your video, I can say way, my site is garbage. The site does not look good anymore. It was great when we launched it and it needed a lot more than even a new design. It needs a whole new rethinking of it, especially after we see how good the developer did it for us. Let’s take it up a notch. And so we redid the whole site, we’re almost done with it and ready to show people because this guy was so freaking good. We had to rebuild our company around him.

Andrew: That’s my personal experience with Toptal. Lots of other people have worked with Toptal. It is one of the most impressive Silicon Valley companies that you may not have ever heard of and I want to introduce you to them. Andreessen Horowitz certainly heard of them, they invested in Toptal. Toptal’s founder was a Mixergy interviewee, back when he was starting. You’ve got to go and check out this company and if you do go to Toptal.com/mixergy. They’re going to give you guys…oh look at this, 80 free Toptal developer hours.

This has got to be new. When you pay for 80, in addition, they have a no-risk trial period of up to two weeks. They are so good, I’m telling you, you are going to be happy. And they’re guaranteeing that you’ll be happy. Go to Toptal.com/mixergy to get your developer and to get this two-week free trial and 80 free hours of Toptal developer work. Toptal.com/mixergy. I’m really grateful to them for being a sponsor because I know that the sponsors that I have say a lot about who I am. And if you see a top company here on Mixergy, you think more highly of me, and I’m glad that they’re back because they are helping my reputation.

Chris: And that, what you just said at the end, making a good introduction to somebody that works out, being… introducing you to a vendor, that’s a huge benefit. That’s a huge currency and that’s something that salespeople underrate, saying, “Hey, I saw on Twitter that you needed this.”

Andrew: You know, that’s a really good point, that when someone introduces me to a vendor that changes my life, I love them.

Chris: Right.

Andrew: And I always underestimate that too, because I think that…sometimes I think software comes and goes, and no one needs another ad, but the truth is, a lot of the notes that I took in our Mastermind meeting were about the tools that you guys use and the way you use those tools and I was really grateful for that.

Chris: Right, yeah, and so that’s an underrated currency. If you’re starting with nothing, you can always make an introduction, you can always make a recommendation. Ryan Holiday, we talked about him earlier, built an empire based on recommending books to other people. And now he’s a book marketer, now he’s an author, now he’s this
Andrew: You read him back before he was famous. Ryan Holiday, the guy who was an apprentice for Robert Greene, one of the greatest authors, I think, of our lifetime. He’s like the Machiavelli without the evil, more research. So you read him a long time ago. How did you turn him into a client? What’s that email you found for us?

Chris: Sure. So I interacted with him several times to recommend books to him because he solicited that. He said, “Recommend me a good book” and he mentioned that he read one or two of them over a couple of years. And then in 2012, I said, “Here’s a good read: Lifespan of a Fact.” And that book is phenomenal if you haven’t read it. Lifespan of a Fact, just as an aside. And it’s about a fact-checker, a professional fact-checker and how they work.

And then second, I said, “I don’t know if you want to do book trailer or not, we haven’t done one before” and we hadn’t, we’d be happy to do so. We’d need two copies of the book if this is something you want to go with and some creative direction and it wouldn’t take you a lot of time.” And I used about 10 sentences to say what I should’ve in three or four. And I said, “If you want it, we’ll kill it. If not, no worries. I’ll always respect your work.”

Andrew: This is you said to him
Chris: Yeah.

Andrew: I want to create a video for your book.

Chris: He announced his book, but he didn’t say what the title was. He didn’t say anything about it, but I knew the quality of the stuff that he was putting out was going to be great. So that’s what I said and he said, “All right. This is awesome, it’s doable. I’ll have to get copy edits back in a couple of weeks.” This is way before his book came out. It came out in June of 12 and I emailed him like late February of 12. And then we talked about it and I said, “Yeah.”

And I said, “By the way, you know that most book videos are shitty.” And he said, “Yeah, they are.” We both agreed on that fact and wanted to do something different. And I said, “My suggestion is that we take some of the content from the book and to adapt it for the thing.” Because the publisher wasn’t involved, because we were doing this sort of fun experiment and we weren’t charging a ton, we got to do this together. And the more people you bring it, the more formulaic and the worse they become. Does that make sense?

Andrew: Yeah. You’re saying, if you bring in the book publisher, they’re going to have all kinds of requirements that then would kill your video.

Chris: Yeah, they’re going to make promos and they’re not working, man. I mean, they make… they’re good at making a book promo and the difference between a promo and a trailer, a promo just informs you that this book exists. The trailer should take you into the story and give you some content and if you watch the trailer, you should feel good. And it’s really hard to make a good trailer because you have to…there’s just a lot to it.

Andrew: This one must’ve taken you a long time. This is unbelievable what you did for them

Chris: Yeah it was fun.

Andrew: The design is stunning, the storytelling in there, and it was a trailer that does more than just say the book is coming out, here’s why you should be excited about it. I wouldn’t even say it’s a trailer. It’s like, a trailer plus a how-to. I know when I was first researching him before having him on Mixergy to talk about the book, I watched this video in preparation. I got the big picture of how he worked and how he manipulated the media, just from watching that trailer.

Chris: Yeah, I know.

Andrew: Anyone who wants to see it can just do a search for Trust Me, I’m Lying book trailer. It’s on YouTube.

Chris: Ryan Holiday book trailer works too.

Andrew: Yeah.

Chris: Yeah. And that…It took time. We…so we were working to promote Ryan and we didn’t have a…if an author gets a book trailer project and pays for it, the author’s going to talk about stuff that’ll lead to a career for them and their ideas. The publisher wants to do the same thing. The publisher’s going to want to sell books and they don’t quite understand that promoting the author is the indirect way to sell more books over a longer period of time.

They want to make a promo, an infomercial, editorial promo, and it’s okay. It can work, but it’s easier to make something that’s content. If you have a book that’s got valuable content in there, showcase the content, prove it. Say, this is what’s in the book. If you want more, here’s the book. Buy it or don’t. And it’s not sales-y. It’s…this is what the book is about.

Andrew: Okay. And the way that you…the reason that he paid attention was, first of all, you’d emailed them before you needed anything. You just sent him some notes. You said, “Hey, here’s a book that you told me about that changed my life.” You messaged him again and again and then finally you said, “I hear you have this book that’s coming out and I can show you how a video will help sell that book and also help make the whole experience more valuable for your readers.” That’s the message. And that led him to…I just want to understand how you sold. You’re selling and you’re getting more clients like this. Brad Feld is a client. How’d you get Brad Feld? It seems like you…

Chris: So Brad Feld, we got…that was the first book trailer we did and I knew…I emailed something to all of our possible authors. I’d also met Brad and you become fans and you don’t ask…if you’re looking to have VIP relationships, you don’t ask first. You don’t come hat in hand. You say, Thank you. That’s…if you don’t have anything to say, just say thank you because people love gratitude.

Andrew: What did you thank Brad Feld about?

Chris: So Brad Feld got me into running a little bit. I had given up on running for a long time and I run a little bit now. And you know, I thought I was too big to run and all that stuff and I run and it’s good and I’ve lost weight and I sent an email to Brad, saying, “Hey, you’re just an average guy and I felt like I was too stressed to do this.

I just want to let you know that I’m running every day and it was a big benefit. You spoke at this thing a couple of weeks ago in Portland.” He’s like, “Cool, thanks.” And then he wrote this really wonderful blog post and it came to my attention about thinly disguised contempt and it’s…He calls it TDC, thinly-disguised contempt, Google Brad Feld Thinly-Disguised Contempt.

That was another awesome blog post that was really well-written and it was about how we are all contemptuous of others and we don’t disguise it that well and it’s a way to…it’s a cancer for your company. And I really…it’s kind of popular to say, hey, we’re just giving you a refund. Get away. We want to make sure we have more empathy for our clients, customers, coworkers, everybody, than that. And I said to Brad, if all you ever did was that blog post, you’d have made a huge contribution to the world, because
Andrew: That was over 10 years ago. And so you’re sending him notes with no expectation of selling
Chris: No.

Andrew: There was nothing even for you to sell him on, because
Chris: No, I wasn’t going to pitch anybody. I was building a company that was bootstrapping. I wasn’t looking for funding, nothing, nothing. I mean, but you also realize that if you admire somebody, a relationship with somebody you admire is enough.

Andrew: But why is he on one of your list of 10? He was. I see, and that’s why you gave special attention.

Chris: After this…after he wrote Venture Deals, he made it on to one of my list of 10 and it was because I admired him. He was on a 10-10-10 list because I thought he was awesome. And I, over time, worked it. I didn’t ask him for anything. And then I showed him this thing. He’s like, “You know what, I’ve got a couple books coming out.”

I showed him the Ryan thing, and I thought it earned the right to get a tweet out of Ryan or out of Brad promoting Ryan’s book. And he said, “You know what, I’ve actually got a couple books coming out. Here’s my publisher. Why don’t you work out the details?” And that was it. That was how I got $20,000 or whatever it was out of Brad at the time. I think he was the first paid book client that we ever did, full-price.

Andrew: Interesting. All right. So the way that you finally worked towards a conversation about you doing some work for him was by telling him, “I created this for Ryan Holiday. Would you mind tweeting or helping
”

Chris: Right.

Andrew: I see. All right. I get a sense of how you work now. I’ve got a sense of where you are with your business. Here’s what I’m still not able to understand. Everything seems to be going well. You talked about how you put on some weight, right? This was during a period where
Chris: The founder breakup, yeah. It was so stressful.

Andrew: The founder breakup led to the weight. I see. And then you also…I know that you’re generating more and more revenue over the years but you told our producer at one point, there was no more money in the bank last year, actually 2014. You were broke. There was no more money. That’s when you started to put on weight. What happened?

Chris: Right. Man, I mean, everything was going wrong. We were running a high, spend a lot, make a lot. We have to outsell the last month. We have to sell, sell, sell, in order to get it out and we were trapped. There’s some sort of like
there’s a death spiral that happens. You’re not delivering something on time, so you don’t get rehired. So your sales efforts are wasted. So you can’t pay for top quality talent. So that’s a death spiral. And big companies do it and it takes years for that to unwind.

It was all hitting me. And I’m having anxiety attacks and I’m worried about this stuff all the time. And I don’t see a way out because the other part of the equation was, my partner was building a house at the time. And that was a weight on his mind and you just had to wait this stuff out for as long as you could.

And it…we had a good company that had clients and we had a place in the marketplace that we still enjoy, but you have impostors…you’ve heard of impostor syndrome. You feel like you’re an impostor the whole time. And I didn’t have control, nobody had control. So we had this ship that was driving and nobody had the wheel and we were both working really hard.

Andrew: So how do you fix that?

Chris: Well, you have to make a choice. You know, I had to buy them out.

Andrew: So buying him out added more financial issues.

Chris: Well, it was a bet on myself, man. I mean, look…I said, okay I can fix this. And it was an all-in. You know, I’m at the table, I’m short-staffed, pokerology, right? And I’ve got pocket Jacks. And you push all-in. That’s all you can do and if it fails, it fails.

Andrew: And what did you do now that you had full control, what did you do to turn things around? Full control and you lost your top guy.

Chris: Right. So the first…we had some people that stuck around and to them, I’m forever grateful. We…the first thing we did was focus on sales. So in January of this year, January of 15, I was in a new year, marketing budgetary reset, there’s stuff to go chase, went after it and closed everything with a pulse. And I…my rule was as long as they’re not a jerk and as long as we can be profitable, we’ll make it work. And so we took in a bunch of money in a short period of time and used that to fund the rest of our company.

Andrew: What’s one thing that you did that kind of walked the jerky line b you had to push the line outside your comfort zone?

Chris: We still do this actually to this day. We don’t engage with a client if they don’t make a decision within a week. So they ask for a proposal, we will not come back to them if they don’t make a decision in a week and it’s going to be three days very soon. So if you get a proposal from us, you’re going to have three days and that’s your only opportunity to work with us. And that does walk the jerky line and it does create falls, scarcity, but it also means that I have to close them in that amount of time and if I don’t I don’t get their money and
Andrew: And they know that. They know that you only want…

Chris: Yeah, yeah, yeah.

Andrew: I see in the way… how do you sell to them, how do you explain to them why you only want a week when really, you’re going to be working for the rest of your life?

Chris: Because a lot of our problem with clients, a lot of… If you don’t make a quick decision to work with us and if it’s not… Derek Sivers says, “Hell yes or no” and we’re not a hell yes then I don’t want you to work with us. And the way we do that is, if it takes more than three days to decide to do that and I don’t send a proposal until they’re three days from their decision date.

So you’re going to decide on Thursday if you’re going to work with us or not. Okay. Well it’s…I can’t send a proposal until Tuesday or Wednesday because I don’t want you to not have that opportunity. What do you mean? Well, one of the things that I did was, all of our problem clients took weeks to decide, all of them. So we, one way to eliminate that.

Andrew: I see.

Chris: And that’s in January, and then I got away from it, and then I got back to it. I played around, but that helps. The other thing that we did was, we listed and put on the wall all of our clients and we called all of them one at a time because in a lot of the cases, there were no good reason for us not having…the reason why I was not calling on people was because we weren’t delivering on time and I was embarrassed about the company that I was running. That’s the truth.

Andrew: I get it.

Chris: And I’m not now. We’re doing an awesome job. And now, we can call people and if you make a referral, Andrew, I’ll make you look good and I know that.

Andrew: I see. And once you started to take control of the company, you said, “I’m going to go back and call all of my old clients again and see if they could refer us.”

Chris: Yeah, that’s right and it made sense. It made sense to…when you’re doing a great job, it makes sense to spread the word. One of the market…one of the old-school marketing guys says, “The worst thing that a bad company can do is get the word out.” And until we were delivering at the level that I thought was in integrity, I didn’t want to get the word out. So we had to get our stuff done, do it as fast as we could and we did.

Andrew: Let’s talk more about systems. I love systems. I think they need a sexier name because they’re so helpful, but nobody cares about the word system.

Chris: Right.

Andrew: One of the simple systems that you have is a phrase called “Unless I hear differently.” What does that mean? How does it work?

Chris: Sure. That means that it’s a way to empower my team to work hard and to not loop me in on every trivial decision, while still feeling supported. So, “Chris, this thing happened, this script was a day late, this thing happened, the script wasn’t very good.” Unless I hear differently, I’m going to send it up for a rewrite. And that’s better than saying, “Chris, should I send it up for a rewrite,” because I don’t want to be the bottleneck to make every single decision here. That’s not a good place for an entrepreneur to be.

Andrew: I see. So when there’s a problem, you don’t want them to just email you and say, “Hey, Chris, there’s a problem.” You want them to email you and say, “Hey, Chris, here’s a problem and unless I hear differently, this is the way that I’m going to solve it.” And that way, you at least get them to think through a solution and ideally, keep yourself fully out of it.

Chris: And sometimes they’re wrong and I don’t hesitate to say, “Actually, we’re going to do it this way instead.”

Andrew: Okay.

Chris: Does that make sense?

Andrew: The thing that you told me you did, process documents, what are those?

Chris: So processed messages, we want to make sure that we say the same thing to our clients each time and we want to be super specific and…we have this thing called the hit list. And every day, our project, production manager comes out and say, “Here’s what’s going on and I can look at the hit list right now and say, this project is doing great, this project is doing bad. Everybody’s got an A project and a B project and we have currently opened one, two, three, four, five, six, seven, eight, nine, 10, 11, 12, 13, 14 projects, open with seven on hiatus. And the…”

Andrew: What did you put that up on, what software?

Chris: No, it’s Excel. It’s a…I’ll forward it to you, but it’s… I can share it, but we have to sanitize the data because we don’t want to… I’ll share a sanitized version of it with the customer names blocked out and it’s a super valuable thing. So…

Andrew: You use a software to keep track of how…your customer’s projects?

Chris: Yeah. So we have current project, due date, next commitment, due date commitment, notes. That’s five columns. That’s it, current projects, next projects. So project name, due date, next commitment, commitment due dates, notes. And that’s it. So it works for us.

Andrew: Interesting. So checklist, you said that you have a checklist that you run all your processes through?

Chris: Yeah, so all of our projects have… you know? We know… I mean, you’re making a video and you have to get the project management stuff out of the way. Clients are going to resist every project management software. They’re going to resist Basecamp because they’ve got to log in and that login is just another account and another marketer that’s just going to send message
Andrew: My… it’s not Basecamp, specifically. I resist it whenever I work with a new company that needs me to use their project management software. I resist it. I don’t want to learn your system.

Chris: Yeah! Nobody wants to learn a new system, so we don’t do that. We’d love to. We’re messing on the Trello and we may use that, but we can’t make it client facing for two reasons. First of all, only an idiot would ever send a message out to a client that says, “No reply at basecamp.com.”

That’s the reason why we can never use Basecamp and never let our client see it because that’s really unfriendly, that’s really stupid and that’s not the way we want to treat our clients. It’s just rude and we don’t want to be rude to them. So we have to do all that stuff on our end and it takes…costs a little more money, labor-wise, but it…it’s…the vibe that we want here is casual. Everything’s just handled. It’s just magic. And that’s what we want to be, just magic.

Andrew: So do you use project management, do you use Basecamp internally?

Chris: No. We mess around with Trello a little bit. We have a good…I mean, we use Excel.

Andrew: Excel Spreadsheet. Is it Excel or Google Docs?

Chris: Google Docs.

Andrew: Yeah, we all use the word Excel but it’s really when we’re talking about something that needs to be shared within our organization, we’re almost always using Google Docs.

Chris: Yeah. We are, we are, we are. We’re using Google Docs but, it opens up…it opens, what else
Andrew: I’d love to see that. If you share it with me, we’ll share it with the audience, even if it’s just a copy of it that doesn’t have any client’s data, it will help me see you…

Chris: Yeah. I’ll do the hit list. The hit list is the one-page summary that you’re going to read in about 30 seconds and see what the heck is wrong with everything. That’s the…that’s thing A and then thing B is the overall sheet. And then we have a work in progress sheet that talks about our money and I’ll send you a sanitized version of that as well. We want to know what’s in our WIP print now and the WIP is where…clearing your WIP is where it’s at. “Cracking the WIP” is what we call it. So there’s the other things that we do.

Andrew: What about…

Chris: And it’s pure…so let me just say why we do it this way. There are, is a software that will handle many of these things and automate more but we want to be high-touch on purpose because we… When a founder comes to us working on their project, it’s one of 100 videos we do in a year or whatever we do. It’s their life’s work, right? Now, it’s the most important thing in their life and if we don’t have that reverence, then we don’t belong in the, we don’t belong here.

We should quit. You’ve got to revere the work. Even if it’s a project manager at a company that has 40 projects, this is their career. Right now, this is their career. If you’re a marketing manager and you’re doing a product video, your CEO is only going to see…this is how they’re going to evaluate your performance, this one minute video that a vendor made because that’s the only time the CEO is going to get a jist of what you’re about. And we’ve got to treat it like that.

Andrew: So look at this, on…where was this? Yeah. On June 12, 2015, Andrea sent you a message to remind you that you need to book the interview with me. This is after you spoke with April, I think on June 4th to do the pre-interview, right? So she did the pre-interview, you didn’t book the interview…she… So Andrea, then, followed up and said, “Hey, we noticed that you didn’t do, you didn’t book your interview. Click here to do it.” That’s because we looked at our system and we said, “Where are we losing our guests?” This isn’t your problem at all. This is us, this is me showing up with our process here as a team.

We looked in Type Drive to see where are we losing our guests and a large number of them were saying yes and then disappearing on us and we said, “Let’s just add another step that says let’s remind them.” So, for example, someone does a pre-interview, doesn’t book the interview, we had to call to remind you. What’s your take on all of the things you learned when things fall apart and improve your process? What’s your equivalent?

Chris: So we do, at the end of every project, we do a postmortem and that’s internal. We do an internal postmortem and we talk about what is happening and we look at…Seth Godin had a great phrase called the Shoe Bomber Problem. We want to not make shoe bomber corrections, where we make everybody go through pain just because we’re undisciplined about a certain thing. So we don’t have any shoe bomber problems

Andrew: That’s a reference to the fact that someone gets on a plane with a bomb in his shoe and now, for the rest of our lives all of us…

Chris: Billions of shoes have gone through one scanner. Yeah, that’s right and sometimes you’re going to deal with assholes. And that happens like twice a year, if you’re doing a couple hundred projects, 2 or 3% of your clients are just going to be jackasses.

Andrew: And don’t create a whole system that deals with the jackasses that the rest of the world is going to have to deal with.

Chris: Yeah, you don’t want to treat everybody like a jackass.

Andrew: So let’s say you find something that’s not a shoe bomber problem…

Chris: Here’s a perfect example. We’re a little bit loose with our scripts. And we’ll have a client change his script because it wasn’t a big deal and then that one…the first change wasn’t a big deal, then they made four other changes. Now, what we do is we say, “Hey, a script is locked and new scripts require change orders. And, that’s it. That’s the…a change order is going to cost… a revision doesn’t cost but a change order costs, you know that.”

So locking that script is something we did based on a book that we are launching, a book project that we took because, we should have done it by being a little bit loose about it, it caused a cascade of revisions that we wanted to avoid and it caused a worst outcome for our client because it’s better to go and mark it with this script that we had and the corrected script that cost five days of delay while we’re getting that stuff straightened out.

Andrew: You mentioned Seth Godin. I’ve got to be done with this interview soon, but I have so many questions. We’re already 10 minutes over, but I’m going to ask you about Seth Godin. You’ve got coaching from him?

Chris: We got to do his book trailer for The Icarus Deception and he is what… he is an amazing entrepreneur. He is an amazing guy and he gave us at the time, some of our most harsh feedback. And he did it in a class…because we weren’t…he’s like, “Look, man, I don’t know if you’re understanding this or not. I don’t know if you’re getting it and I can’t help you see the world the way I see it.

You have to do that.” And it was…towards the end of the project, the ending of The Icarus Deception trailer was something that we created because of, based on Seth’s feedback. And he couldn’t help, he was just cool and, that we were paid a ton of money to be coached by Seth Godin. That’s how I looked at it.

Andrew: What’s the coaching that he gave you? I still don’t understand.

Chris: That’s it. He said, “You’ve got to see the world like I see the world and, I can’t help you get there.”

Andrew: So how I see, he’s saying, “You have to see the world like your clients see it and they’re not going to show you that. Your responsibility is to see it the way they see it.”

Chris: Bingo!

Andrew: How do you fix that?

Chris: Well, sometimes you can’t. And if you can’t relate to a product, and if you can’t service… if you can’t sell it and if you’re not sold on why this product is great, then you can’t sell it to others. You wouldn’t take a crappy Mixergy sponsor. You wouldn’t take Ashley Madison as a Mixergy sponsor or something like it because you don’t believe in that. You don’t believe in that stuff. So you can’t take something you don’t believe in and sell it. You have to be sold first on the inside before you can sell it on the outside. You get to see why this author wrote what he wrote. This…

Andrew: And let’s say that you do see something that you love, you still have to get inside the head of your customer and anticipate something that they haven’t even yet communicated.

Chris: Right, you have to do your discovery and you have to be
Andrew: So what’s your process for doing that?

Chris: Well, first of all, you spend 20 years following tech. That’s a big help. And you understand the ecosystems that you serve. So you have to be a passionate… if you’re a marketer, you have to be a passionate, enthusiast, not about marketing but about the segment that you serve.

Okay. So you’ll naturally have an affinity for it, you read every tech crunch article, even though the tech crunches hasn’t been good in 10 years because sometimes you get a sense of the conversation or whatever. That’s what you do. And if you’re not passionately invested in your stuff, you’ve got to find something that you love and/or that you’re curious about. So just feed your curiosity, read a lot of books to
Andrew: So there’s no process that you guys came up with after talking to Seth?

Chris: No, no, no.

Andrew: It was just the understanding that you have to get inside the heart and the mind of your customer.

Chris: Right, yeah. Every time and yet you have to really do it.

Andrew: All right. The final question, and again I have so much here. That’s the problem with doing so much research that sometimes…I have a hard time letting go of things that we’ve come up with and research because I care so much about it but at the same time, we have to end the interview at some point. So here’s the final thing I’ve got to ask you about. You were in a church group as a kid, where you were supposed to sell sandwiches?

Chris: Yes, that’s funny.

Andrew: Where do you sell sandwiches, by the way, in the church?

Chris: So I was in a thing called Young Life back in the…really early 90s, like ’91 or ’92. I think ’92 was the year because I drove and we were just selling sandwiches in our neighborhood, door-to-door. I mean, you…in a small town on the Midwest. You knock on people’s doors and sell them Girl’s Guide cookies and they don’t shoo you out. They think it’s fine, “Oh, cute!” And so I was, doing this and I was hustling. I went to the VFW and I took orders for sandwiches.

I went all over the place to take orders for sandwiches and I sold something… I don’t know, I don’t remember the number but when we got it back, it was more than our fridge, it was more than the back of my father’s pick-up truck and we had a huge delivery problem getting all of these sandwiches out before they got, before they rotted, these Italian hoagies, just normal sandwiches and…

Andrew: What did you do to sell so many?

Chris: Went to many. I went to the VFW.

Andrew: Oh, by going to the VFW, you’re not making a sale to one person the way you’re going to houses and someone might buy sandwiches for themselves. VFW is going to buy a dozen sandwiches…

Chris: They bought 100, yeah, and they weren’t open. So the sandwiches came on Tuesdays and they were only opened on Thursdays, so we had a huge problem of storing these things. And, right, going to break rooms at factories, I figured that out. So I went to break rooms of factories at lunch time, had a…

Andrew: People put the orders down…?

Chris: Yeah, and we had to deliver them to their houses and we were, “Do you want lunch? Do you want me to bring you a sandwich for lunch?”

Andrew: How did you make all those sales? You don’t get to keep the cash…it goes to the church…what do you get?

Chris: Right. It was a fun game. Like, look, you want to win? I mean, there’s a fun story that I have 20 years later. I sold so many sandwiches, it was more than my dad’s pickup, the back of my dad’s pickup truck and I did it in a week and it was just hilarious! I mean, like…

Andrew: How old were you at the time?

Chris: Sixteen? Fifteen?

Andrew: You know what, schools need to integrate this. They need to integrate sales into their education. No high school kid should leave school not knowing what a market cap is, not knowing what’s…forget market cap, what the difference is between revenues and expenses, what’s sales, revenues, expenses, profit, all that stuff means.

No kid should leave school without knowing that. No kid should leave school without knowing what a credit card and how it works. No kid should leave school without knowing basic salesmanship, without knowing one to many that you just taught us here today.

Chris: Right. It was a fun, it was an accidental lesson. It was one of the fun ones that I have ever had. That’s right.

Andrew: All right. So no kid listening to Mixergy is going to live without that understanding and I’m glad that you gave it to them. Chris, the website is Simplifilm. I’m going to pronounce… I’m going to spell it: S-I-M-P-L-I-F-I-L-M.com. My sponsors again, are toptal.com/mixergy. Go to toptal.com/mixergy if you need a developer or keep it in mind for when one of your friends or business associates needs it. Do we have business associates, we should say business contacts.

And then, our second sponsor is Design Crowd if you need to design or if anyone else you know needs to design, tell them to go to deisgncrowd.com/mixergy. When they go to that special URL, they’re going to get a really nice discount, 90% off posting fees. Chris, thanks for doing this interview.

Chris: Cool! Thanks for having me.

Andrew: You bet. Thank you all for being a part of Mixergy. Bye, everyone.