The first time he tried to raise money from TechStars, he got turned down. In this interview, you’ll learn what Andy Smith and his co-founder did to win over the investors. You’ll also hear how the program’s mentors helped them grow their audience, rebrand their site and raise their next round of funding.
Last week, DailyBurn, the company Andy launched 3 years ago, sold a majority share to a division of IAC, the company behind Evite, Ask.com and CollegeHumor. In this interview, you’ll hear how it all happened.
The FULL program
About Andy Smith
Andy Smith is the co-founder of DailyBurn, the fitness social network that offers detailed tracking, online accountability and motivation.
You can follow his workouts (and see a chart of his weight) on his DailyBurn page.
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Andrew: Hey, everyone. It’s Andrew Warner, founder of Mixergy.com home of the ambitious upstart. Today I’ve got with me a guy who took his company from idea, to investment, to sale within three years. His name is Andy Smith. Some of you have seen him in the news recently. He is the cofounder of Daily Burn, the fitness social network that offers detailed tracking and online accountability and motivation. Welcome, Andy. Congratulations on the sale.
Interviewee: Hey, thanks. Thanks for having me.
Andrew: Who’d you sell the company to?
Interviewee: So we are now part of Mind Spark which is fully owned by IAC, Ineractive Corp, so.
Andrew: And Interactive Corp owns eVite, City Search and the division that bought you, Mind Spark owns iWon and a whole bunch of other brands.
Interviewee: Yeah, that’s right. They own a lot of different companies, Match.com and different sites as well, so.
Andrew: College Humor, who’s been on here.
Andrew: So as we said before the interview, it’s not going to be about what happens after the sale. It’s probably not going to be about much around the sale, this interview, because my sense is that you can’t say much about it. And I think it’s too early to dive into what’s going to happen after the sale.
Andrew: So we’ll talk a little bit about that but mostly I want to know how you got here. How did you take an idea from just a thought in your head, make it into a business that hundreds of thousands of people have interacted with and created accounts on, got it funded, got incredible advisors like Tim [Farris] and then why’d you sell?
Andrew: So first of all, why don’t we start with this. You already had a business when you took it to Tech Stars, the mentorship based seed fund. Why’d you take it to Tech Stars? Why’d you bother working with them?
Interviewee: You know, we were still pretty immature as a company. And we had, I think, at the time we came to Tech Stars, we had tens of thousands of users, maybe 20,000-30,000 users.
Andrew: I see 35,000 users and 1.2 million paid views at the time.
Interviewee: Yeah, yeah. That’s about right. See, you know the business better than me. But really we wanted a mentorship, right. So for us -there’s two founders, myself and Steven [Blankenship]. and, you know, we were pretty much holed up in our [room cutting out Jiminy]. And we’re here in Huntsville, Alabama which is where I am now. And really for us we wanted sort of a business mentorship from people in the commercial internet space where that isn’t readily available here.
So there’s a lot of small businesses here in this area. Lots of them are government contracting. That’s kind of the area I came out of. But we just really wanted to have some sort of guidance and mentorship and that’s why we wanted to go to Tech Stars. In fact, we applied at Tech Stars the first year before we started the company in 2007 and didn’t get in. But we still decided to start the business anyway. And so, even though we were a little bit further along in 2008, we said we saw the value of it and still decided to join in with that.
Andrew: Okay. And Sammy and Pedro in the audience are talking about this. I’ll explain. [Jiminy] was the original name of the company. You guys switched your name to Daily Burn about two years into the business.
Interviewee: That’s right. That’s right.
Andrew: Where did the idea come from?
Interviewee: Well, we wanted to do something in the commercial internet. We wanted to work directly with consumers. Steven and I had a couple different ideas. The one that made the most sense for us was in the workout space. So Jiminy, we both liked fitness. I’ve been working out
Interviewee: I’ve been working out, training for a long time. And we thought that; we couldn’t find a site to track out our workouts well. There were sites like Trainio that had just come out. But it was really about we felt not enough information on tracking a workout to be actually effective for you. So, you want to track what kind of weight reps you’re doing, what kind of cardiovascular training. Not just how you feel about workout type thing. So we really saw the need for a workout tracking tool. Social networking was all the rage. And so we wanted to have a social spin on it too, which we think makes a lot of sense. You want to have people to motivate you and keep you accountable. So it really started out as a workout tracking tool with some social features and then grew from there to what it is today.
Andrew: How much did it cost you to launch the first version?
Interviewee: Not much. I mean, I think we both put in like $1,500.00 into the company. And we basically lived off savings. Right, so we had a small slice of this account and that’s it – just two guys. We had our own computers. So really no funding to get started. Just we did take the leap and quit our other jobs to work on it full-time. I’m a real big believer in that you can’t do things on the side. That you really need to take the leap and if you’re able to, go all in. And dedicate your time and your working hours toward your company instead of trying to do that on the side. So that’s it. That’s what it took for us.
Andrew: You really worked how many hours a day that you couldn’t have taken a side job?
Interviewee: I don’t think so. We really put in a lot of hours.
Andrew: How many?
Interviewee: I don’t know. From 12 to 15 hours a day. I mean, I have a family. So I didn’t totally neglect my family. But every other hour I was pretty much working. And it took us about 4 or 5 months I guess to get it ready to go for launch. And before we show any revenue. We didn’t get any revenue until January of ’08.
Andrew: Okay. And August of ’08 is when you got the funding from TexStar?
Andrew: You have a family. What is your family? You have a wife and child?
Interviewee: Yes. 3 kids.
Andrew: 3 kids?
Interviewee: 3 kids, yeah.
Andrew: Dude how old are you?
Interviewee: I’m 30 but I’m from the South. So we get married young here. Actually about to have my 10 year anniversary.
Andrew: Get out of here!
Interviewee: It’s just how we roll down here.
Andrew: Wow! So when you told your wife you had kids you had a wife. You’re I guess 7 years into your marriage. When you said I’m quitting my job, what was her reaction?
Interviewee: You know, I’ve always said she’s really great. And she’s always supported my dreams. And I’ve done this before. So actually this is not; the worst story was 3 years before that when I started the first company and we had negative money in the bank and a brand newborn starting a new business. So I didn’t burn her that time and I think she kinda grew a little bit more confident that I wasn’t crazy starting these businesses. And so we did decent from the first startup and this one. “Whatever” is kind of her reaction.
Andrew: By the way, my shock is because I’ve seen your picture online. I’ve read about you online for a long time now and you always seemed to me like a 22 year old. Now I saw on your Twitter profile that you said that…
Interviewee: Thank you so much.
Andrew: It’s unreal. I assumed you were in college you were building this. I saw on your Twitter profile that you call yourself a serial entrepreneur. I went to LinkIn to try find out a little bit about what you have done in the past and I couldn’t really find out much there or anywhere else in my research. Can you tell me about this previous company?
Andrew: That you quit your job for with the baby?
Interviewee: Yeah, so I came out of college. I really was in computer security space. That’s what I thought I wanted to do. So coming out of Purdue came back home to Alabama. Had a new born and all the grandparents are here so we decided to come back home. And quickly got into the government contracting space and found out very quickly I didn’t like working for a big contractor. So I started a company with a co-worker that did basically government contracting. We did computer security, research and tools. Primarily here for missile defense. So totally different world. Right, and that one was primarily funded through government SPIR grants. Which are ways, they provide 6 month 100k grants and then if you do well on those and they like your product then they’ll give another 750 to a million dollars to build it out for a couple years. So we won a lot of those awards and were able to build the company that way. Did that for a couple years and just kinda the bug to start something new again. We had, you know, 15 people and it just wasn’t too fun. Like I said we wanted to get into consumer space.
Andrew: What did you do with that business?
Interviewee: So that business.
[begin 13:00] Andrew: What did you do with that business?
Interviewee: So, that business is still barely going. I left, lots of other people left after I did. Steven actually worked with me at that company, so we came out of there. But yeah, it’s kinda fizzled out after we left.
Andrew: And Steven is Steven Blankenship, the co-founder of Daily Verve.
Interviewee: That’s right.
Andrew: Ok, so what did that first version look like that you launched four to five months after you got started?
Interviewee: It was pretty simple. I mean it was, you know, it didn’t look near as good as the site we have now, but we still always thought that we had a pretty good design, and really kinda focusing on the usability, the user experience. So you know, we thought that the first design was very simple – workout tracking with social features, so you have the ability to create workouts, track workouts, share them with others, and you have the ability to create groups, and what we called – I think we called them “gym buddies” back then, which is a pretty terrible name, but, you know, it was basically accountability partners. And that was it. So, we launched and people, you know, we got a little bit of coverage; I remember Mashable doing a story right when we launched, and a couple other sites … just started … You know, we did the whole beta invite thing to kind of get the buzz and that let people in, and that worked pretty well. But yeah, it was a pretty simple site at first. The biggest thing that people wanted and kept … like what we did was at the very beginning was, we just had this little box down at the bottom that you could type in a comment, a feedback and send to us and we would get it by e-mail. Of course, there’s a lot better ways of doing that now, but we would collect everybody’s e-mail feedback, and the biggest thing that people wanted was nutrition tracking … the ability to track their foods. And they didn’t want to use some of these other sites for nutrition and have their workouts on other sites; they just wanted this overall picture of their health and fitness. So, that’s where we moved the business and actually now, that’s the most popular thing on our site. So food tracking, I think, is the best thing that we have. Our workouts are pretty good; we are releasing some new features this week. I think we are going to revamp a lot of that, make them even better. But if you kinda look at our transition, we’ve gone to more nutrition tracking, getting people to … I mean … I personally believe that nutrition is 80% of your fitness anyway, so I think that’s a good thing to focus on if you are eating right – you can’t outwork a bad diet. So …yeah. So it’s kind of migrated towards fitness tracking … and even, see FoodScanner too right, the iPhone apps on food tracking are kind of a result of our focus towards that over the past, you know, six to nine months.
Andrew: Alright, let’s dig in deeper into this.
Andrew: So you had the beta box, the beta coming soon, register for your free invite …
Andrew: … you had that input box on your homepage before you launched anything.
Interviewee: Yes. That’s right.
Andrew: Ok, how many e-mail addresses did you collect from that, of people who wanted in when you launched?
Interviewee: I think we had around a thousand, if I’m about … if I had to guess. Thousand … [cut off]
Andrew: That’s a thousand people who not just knew about the site before it launched, but actually came in and gave you their e-mail addresses. How did you get a thousand people to do that?
Interviewee: Yeah, that’s a good question. I don’t really know. I mean, I think, you know, we had a lot of friends and people who helped spread the hype and I guess commenting on … I can’t really tell you. I don’t really quite remember how we got all that attention early, especially when we didn’t have the product out. Yeah, it’s a good question.
Andrew: You have no blog posts written about it.
Interviewee: No … no…
Andrew: Not at that point. You commented on other people’s blogs in the fitness phase [space?]?
Interviewee: Yeah, we probably did a little of that, ask for feedback. But yeah, off the top of my head … it’s probably an important thing to know for the next round. But yeah, I don’t know how we go that initial buzz. I mean, I do remember some of the first people signing up, some tech crunch people, e-mail addresses you see coming in. So I guess it doesn’t take too much to submit that you have a startup on, you know, some of these other smaller startup sites and you can start getting people at least watching you to some degree.
Andrew: On these … I’ve got an anonymous guy in my audience. He’s saying ‘He knows it, he just doesn’t want share it. He doesn’t want to give away that secret!’. Do you in fact, Andy, know it and don’t want anybody to know how you ended up with a thousand people [garbled – cut off by interviewee]
Interviewee: [laughs loudly] Haha! No, actually. I would share it if I knew! Yeah, no doubt. I mean, I really think we, you know, we commented on blogs, but it was, you know, we submitted our site to different startup directories and things like that, and we just got our friends to check it out .. and kind of … you know, we always have relied on word of mouth and some press that we got from blogs, and that’s kind of how it started, so [end 14:57].
Interviewee: [15:00] …thousand isn’t really that high. I wouldn’t think it would be too hard to get that many. That was before we launched, before we got any coverage on some of these other blogs maybe had 500 or something.
Andrew: ok. Alright. It’s not huge but its a nice start. It’s a nice start to know that there are hundreds if not thousand people who are waiting to see what you are going to launch. Let’s take a couple of questions from the audience. Mikee D. is asking, “Did you start it as a business or a passion?”
Interviewee: I think it was both. to be honest we thought there was a business there , I don’t think it was “oh, we started it because we loved it and it grew into a business.” We wanted to be a business from the beginning but it was an area that I am really passionate about and love to be in. So i think it was both.
Andrew: Ok. TrainMe is asking, “Do you use DailyBurn in your life or is it just your business?” Yeah , he uses DailyBurn, you can see his profile up on there. You can see how much he has been working out, how much he has been using the site. What’s your name on DailyBurn?
Interviewee: ABSmith is my name on there. I use it primarily now for weight body fat tracking and personal metrics. I think one of the biggest advantages you see DailyBurn users for a new user is just the awareness that you get when you type out all your food. After you start dothat for awhile, you start to know what foods to eat. Its not as important to track I think. But I tend to see from the new users “I had no idea this had so many calories, or this much fat, or this much carbs.”
Andrew: What was the responsibility breakdown between you and Steven?
Interviewee: Both of us are from technical background. So early on we shared the development load and get the work done. Design, building the initial code and all that stuff was both of us.
Andrew: Who designed it?
Interviewee: Both of us, I mean the early ones. We have designers now, but the early versions were developed by us.
We did all the everything, from manging the server to development in design. We transitioned quite a bit, I moved into the CEO role given I’ve done the business before and Steven is CTO now. And is in charge of the technical side of things. They don’t want me to mess with the code because I will get in there mess it up and not come back and fix it. I pretty much keep my hand off the development now.
Andrew: You two invested 1,500 dollars, where did the 3,000 dollars go?
Interviewee: We had an office that we got. We decided not to work out of our house. There’s an Incubator here in Huntsville called BIZTech. That is where I am now, actually still. Where we rented some space so it just covered our office space for a little while. We did raise our friends and family around, before Text Star. I think we got 45-50k there and Text Star gives you little money too. But we pretty much just drained our personal savings for the first year and a half or so. Until we got into the angel round.
Andrew: The friends and family, did any of that go to salary or to living expenses beyond the business?
Interviewee: Yeah, I think we started paying ourselves to 1500-2000 dollars a month. Once you got that money on.
Andrew: What are the benefits in being in Huntsville, Alabama?
You wouldn’t be able to get away with spending so little as you would in California.
Interviewee: It’s not enough to make it, but enough to ease the bleed a little bit.
Andrew: Right, you had the launch, people were able to track their workouts,they were able to share their workouts they were able to find accountability partners. When you say “share their workouts” how were they able to share it at the time?
Interviewee: You could basically, you just share it with the whole community. You could set the workout routines then group them as a plan and share it. And we got alot it was. I mean it was, last I checked was 20 or 25 thousand shared workout plans that people created and shared. We moved away from that so what, we have trained plans created by trainers. I think you can still do that but I think that is a more minor part of the site.
Andrew: And Accountability partners, that was an excuse to get people to tell their friends about the site. In addition to the benefit the user got, you as a business were looking for a benefit by bringing in their friends. Right?
Interviewee: Yeah, Of course. But i think the real goal there was if you work out with friends or if your friends know that you are trying to do a workout or have a weight goal. We wanted them to be positively influencing you. There is this idea of positive peer pressure. Where people know you are trying to lose weight, you are going to be more, you are going to be…[20:00]
Andy Smith:. Because maybe you are less likely to walk out of your office with a doughnut, because people will then say, hey you are on a diet kind of thing. So we really wanted to play into the whole social motivational aspect,so I don’t think it was primarily meant for only invite your friends, but ofcourse, we wanted to grow that way
Andrew Warner: How effective was that viral loop that you guys were creating through that?
Andy Smith: It was ok . I mean, people were buying, we dint put it on a very high, some of the other sites were putting in a very high priority ,like you had to sign up and you have to get five friends, but we at the time of joining up, we never had that level of priorities. it certainly helped, I mean, we grew for a long time on people telling other people . We got some pretty good blogpress and SEO’ s,for us earlier on, especially when other s couldn’t and workout plans and we made it and public facing stuff and so on
Andrew Warner: I see so when a user created a workout plan, he was sharing it publicly which meant,Google also saw it and saw another reason to send traffic to you.
Andy Smith:Yeah, that’s right!
Andrew Warner: Ok , so when you got to August, Actually it was before August, when you applied to Techstars, did you buy any ads, or did you just get to the tens of thousands of people just on viral or just by word of mouth
Andy Smith: We never really , we have done a very few ads, we have tested on facebook,google ads a little bit, but I think over the lifetime of the company, we may have sspent , I think like over five thousand dollars on ad’s. we don’t,
Andrew Warner: Really !
Andy Smith: Yeah , we don’t, we still don’t buy ads,at this point, so going into Techstars,was a very viral, I don’t really like to use that word anymore but you know, organic type of growth
Andrew Warner: Why don’t you like using the word,Viral any more?
Andy Smith: I don’ know, I think it is over used, similar to synergy, I took that out from my vocabulary because whenever somebody says synergy, I feel like they are full of it, so
Andrew Warner: I talked to David Cohen here on mixergy,He was a guest recently and asked what was he looking for in the entrepreneurs that he backed and essentially he said, he wasn’t really looking into them to have an idea, he wasn’t looking at the entrepreneur to have a company to back the entrepreneur, He was looking at the entrepreneur, What was it about you two that you think, and your partnership that drew him in?
Andy Smith: Well I think it stems , He is the one to think, but if I have to guess, in the first year that we applied, we made it you know a certain level,into the cut, you know we talked to him, we dint make it because,two things .First : we had to decide if we had to use the kiosk in gyms and that would have been very expensive and that didn’t make a lot of sense, so technology wise , I was bad, but really but at that point, we were working our other full time job,at that point, we had a idea, we dint really build a booth and we dint have much, but I think what probably impressed him was the next year, we come around and say , look we have been working on this for a year, we have paying customers , we have a real product and we believe in it, we believe in it so much,and we have been working on it with our personal savings,and I think that shows it, that shows our entrepreneurial drive,And then you know , when we applied for the next time, we made sure that we went out and met with him in border, we did not wait for him to come to us , we really wanted to show initiative and I think that’s important as an entrepreneur too right?
Andrew Warner: Now you saw him after you sent your application, right?
Andy Smith: Yeah
Andrew Warner: Yeah y ou did, Ok so he saw your application, and he liked it enough for him to invite you in for an interview,and his interviews have, Actually is that true, you send him an application and what was their response over techstars.
Andy Smith: Yeah,well you get a phone interview and then you make an other kind of cut, I dont know what they call it, but you are kinda pretty close to getting in, and we just said alright,we are going to have a long night, we are going to fly out there and meet
Andrew Warner: Wow
Andy Smith: You know , try to close the deal
Andrew Warner: Is he the big decision maker in this process or are there other people who you talk to?
Andy Smith: I think, he was the only one, you had to talk to, from our perspective, but I don’t know how they changed, but in 2008,he was the only one you had to talk to , I still made effort and talked to Brad and Andrew Hyde and some of the other people , so I din’t, I din’t know the process, I dint know how they made their decision, So I wanted to talk to as many as I could and that’s what we did
Andrew Warner: Ok so you get in the program , you are looking for mentorship,Whats it like in that first month?
Andy Smith: Its intense, get in and I think it is just a whirlwind, you get in there , you mover there, I moved my whole family to Border for that whole summer, and just moving there was a whirlwind and then just when the love of intensity picked up I
Interviewee: [25:00] ..world wind. And in, I just remembered the level of intensity picked up like a lot. I mean, we went from working hard to even harder, it felt like. I mean, it just the pressure was on but in a good way. It felt like you have to produce, you have to produce quickly. You start meeting a lot of people who give you feedback really quickly on your idea. So you are iterating on that. You’re meeting with outside mentors and Text Star teams and you are interacting with the other teams in Text Star that are kind of shaping your ideas too. So it’s the first month is really, really intense. Figuring, I think he says he likes to perk it up in to like the first month. you try to figure out for sure you’re going to do. The second month you are really doing it and the third you are really trying to get ready to pitch for “pitch” and “investor day”. That’s about how it was. We were a little bit different because we had kind of what our product was already and we really didn’t deviate from that. We added things like “community challenges” we were really exploring how we could partner with gyms and health clubs, we were doing that kind of thing. For some of the other companies that were just creating their idea it was a little bit different feel i think for us.
Andrew: I heard in other programs, if you come in there with a project that is already up and running you’re going to have a big advantage over the others who don’t have anything when they start. And that advantage carries through right to the demo day when you are pitching investors. Do you agree with that?
Interviewee: I think so. I remember we did just because I was already out pitching investors before we came into Text Star. So I already have my deck, i had a demo, I had a product and you know. So when we were up there, its kind of like 10 companies facing off. You not really competitive but you kind of are. It is the same investor pool. And so you get up there and your whole product and demo and you are more polished.
It is certainly a huge advantage. You get to “demo day” with an active user base. It can look like you can have more traction then the other companies just by the fact you have been around longer because we can go up there and say we have 45,000 users or whatever we set at the end of “demo day”. Where the other companies have just come out of beta. Where you can kind of feel you can say Jiminy has more traction because they have all these users. I think i would agree with that statement. It does feel like Text Star is getting more mature companies coming in then previously before. At least with some sort of product already but I may be wrong that just kind of my feel.
Andrew: Now you guys were already grinding away at 12-15 hours a day. Coming into Text Star as you are getting… doing more what? How is it bringing more out of you?
Interviewee: Its just “do more faster” is kind of their mantra. It’s just the additional push. When you are by yourself, You are working hard but you are kind of isolated. And wondering in a community of people who are all doing that it is a lot easier to move faster. It just feels like there is more pressure. Even though working a lot before we had to get more focused because we had certain deadlines to meet and presentations we had to make. It just get you more focused. We are working harder but just more focused work I think is the key difference of how we felt while we were there.
Andrew:What do you mean by Focused?
Interviewee: Well, I mean, a lot of the meetings you have would be like say we were meeting with David, we were talking about what we were doing and in a lot of the mentors you are talking to you get the feeling that what you are doing is kind of a waste. It’s busy work. And so these mentors can help you focus on what you should be working on and forget the tangential things. I guess that would be part of the focus. But really you know you have 3 months where you have to get to a point where you are ready to pitch to a big investor group. Before that we really didn’t have a time-lines, we would always work hard. But there is no time-line to a certain goal, we were just trying to get the features out as fast as we could. But here you are on a time-line and you have to make things happen.
Andrew: Here’s what I like in the two in my head. When I hear these stories. Tell me if this is true? When I run a marathon, I am not really running against people in a marathon. I am doing my own race, I know where i need to be. Having all those people around me makes me move a little bit faster because sometimes I will find 1 or 2 of them and i will kind of compete with them. run at their pace for a block or 2. and then find somebody…[30:00]
Andrew: pace for a block or two, and then I’ll find somebody else and run at his pace for a block or two. And that’s what helps me move faster. Is that the same thing that happens when you’re in an environment with other people who are starting their businesses and all making progress?
Interviewee: Yeah. I mean, I think that’s a great analogy. We would do updates every couple weeks and you feel like you can see the speed of what other teams are moving at and it’s that extra pressure that, you know, you need to move that fast or faster, right? So, yeah. I think that’s totally accurate.
Andrew: Okay. So far we’ve been talking about everything great, great, great, great, great. I’ve got an anonymous person in the audience who’s saying, ‘I want to hear more about the tough times.’
Andrew: So let’s spend a little bit of time on that. I that year when you launched it, when you didn’t get funding, when you were rejected by tech stars, in that one year of isolation what was it like and how did you keep yourself going?
Interviewee: We had a lot of drive. I mean, I think, you know, we didn’t get any tech stars so we went to a local incubator and so we made the most of that, right. We felt like it wasn’t quite as good, but we could still get some mentorship. And it turns out it has really helped, you know. Part of the money that we raised was local money during that angel run.
So, I mean, it was hard but I think we always really believed in it. And, you know, when you start getting some users early, you know, there wasn’t a lot of downtimes. I mean, it’s a lot of hard work, certainly, but, you know, towards the end of when we weren’t getting funding and I was kind of coming to the end of where I was really comfortable spending much more doing this, we were able to pull the angel run together. So that was probably a downtime right. We were getting close to where and the economy tanked at the same time. ‘Is this thing what we really should do?’ So we had a lot of ups and downs that way.
Andrew: Are you talking about 2007 when you raised money or are you talking the about 2009’s?
Interviewee: No, it was 2008. So like really through 2007 into 2008, I mean, you know, we spent five months. We thought it would take about that long to build an initial product. So there’s really no downtimes or I would [moving forward card.] Yeah, we didn’t get into tech stars but we’re in a new incubator. We’d let that go, you know. We’re going to work hard at it. And then we did get some initial good buzz. I mean, we got users. So once you start having some users interacting with them, it seems like there wasn’t a lot of bad times. I mean, it was hard to get growth but it was mostly good. I don’t have a lot of war stories of on like, you know, how bad it was.
Andrew: What about this? I found that when I worked with my brother, we were able to keep each other motivated. At times when I was frustrated, he’d be able to come in there and say, ‘No, you’re not being rational. Look, here’s the real downside. It’s not this big thing you imagine in your head. And here’s the upside and why we’re going to be able to get there.’ And vice versa. I was able to say, ‘Look. Here’s the big picture. Here’s the big future that we’re all fighting for.’ Having a partner helps that way. How did you and Steven interact in that way and how’d you keep each other motivated?
Interviewee: Yeah. Yes, that’s a good point. I mean, there’s no way I would have done it if it was just me. I mean, there’s absolutely no way. So, you know, Steve and I worked together, you know, in the previous company. So we worked together pretty well and we kind of knew that we both had a lot of work drive. I think what’s really great about our partnership is he’s kind of the more steady, you know…like so, you know, I’ll get all excited, ‘Oh, someone wants to buy us this week!’ and you know, so. And Steve’s like, ‘Yeah, whatever.’ just kind of the steady…and then I’ll be really down and he’s still steady, you know.
So I think that helped me when I had the ups and downs. And so, he may have had some ups and downs too in whether or not he thought it would work, but he’s always a lot more steady about it. I wouldn’t know, right? So hopefully I did the same for him with all my hype, when I get excited about things. But, yeah. I certainly think that, you know, that a partner is essential. And I couldn’t have done it by myself.
I really liked the fact that we were both technical so we didn’t have like a business guy out there trying to do things that really didn’t…you know, you don’t need a business guy till a little bit later, right. You have to have the core product, I believe. We’re both technical so we could get work done. So there was not this…there was never a time where I was trying to sell something that we didn’t have and all that kind of pressure because we could both, you know, build it. So I really liked how we set up early having two technical founders. I think that worked really, really well for us.
Andrew: Right. We talked to tech stars how you were able to get motivated by the other people, the other teams who were also building while you were building your stuff.
Andrew: But you also told me that mentorship is one of the big reasons why you joined the program
Andrew: You also told me that mentorship is one of the big reasons why you joined the program.
Andrew: Can you describe that? Can you describe that, maybe, a single example of how somebody mentored you and what kind of difference it made in the business?
Interviewee: A sequel [?] may be harder. I can tell you kind of how it works. What they’ll do is you have the mentors that are always there, like David. But then, they’ll bring in people to give a talk, but when they’re there they’re basically willing to meet with the teams during the day for one or two days. So, you actually get one-on-one time with these mentors as well. Now, I thought that was really cool because you can develop a relationship, and then they can give you specific feedback that can help you. So, actually not one specifically comes to mind. So, Dave McClure who actually became an ambassador through FF Angel. He has this whole pirates, right–metrics and all that kind of stuff. When he came and talked to us about metrics and we’d be able to drill in, at that point we had users and we had stuff going on. But we still had a hard time measuring everything. He was able to–that talk was specifically and being able to interact with him on that really kind of helped us. I think, let’s see. Another example, you know, Matt Mullinwick [sp], who is an investor, he helped a lot, helping us believe that we could do a lot of this stuff remote. What actually happened after Techstars is we split up, and now we have a completely remote team. There’s five of us, and none of us are in the same place. I think some of the guidance there that it could work helped. So, there’s lots of examples you can give, but the cool thing was I think it’s accelerated networking. I would never have been able to meet these people, especially from Alabama. And if I did, it would take me 10 years. And so, just this three month accelerated–being able to reach out to all of these people, made a huge difference and it just opened up so many doors. If you needed to talk to someone at Google or Microsoft, whatever, you get in through these connections. It just made a world of difference.
Andrew: Let’s break this down a little bit and get more information. Dave McClure, he is the guy that’s known for having been at PayPal. Now, he’s an investor with Founders Fund. He comes in and he gives you essentially the same talk that he gives at a lot of conferences, which is–I forget what it’s called. It’s the are pirate important symetrics. So, he gives you this talk, but unlike people who go to the conferences you get to spend time with him and say, “How does this talk, the ideas that you just gave us, apply directly to our business?” And he helps you apply that. How? What kind of metrics guidance did he give you? How is your metrics thinking shaped by that conversation with him?
Interviewee: So, I mean, we did some white boarding. I think just being able to interact. And to be honest, I know he’s done that a lot. But that was the first time we had heard a lot of that kind of talk before, so it was that early exposure. So, there’s white boarding. And with him, which is over a long period of time, lots of these metrics type discussions were important–it became important because these are the things we were starting to show when we wanted to get investors that understood the business. They wanted to see these kind of metrics discussions and not mark it pie in the sky. They know the difference between the registered user and an active user and how active the user is. And so, all of that kind of prepared us for those type of series because we started being able to track that information.
Andrew: What kind of metrics do you guys keep track of? There’s so many things that you can keep up with in your space, especially since you’re giving people a way to measure their own fitness and their nutrition and, you’ve got, of course, the business things that you can measure, how many registrations you’re getting. What was important out of all those?
Interviewee: It tracked a lot. I think for me, most days I’m checking user growth and broken versions to our pay subscription model and we do lifetime value, average value of a transaction are real important to us, how those change over time. And I think what Dave has helped us do, too, is do more cohort analysis. Instead of tracking just, like, the high level trends that doesn’t really tell you what the business is doing, but ifyou start tracking what cohorts do, you can make changes that you can actually change the shape. So, we have these graphs that we show, like how long a user stays active. So, you want to keep the curve. You work on the shape of the curve but also keep the area under the curve, meaning how long they stay active, the long tail. You need to watch that. So, you can do that for different cohort snapshots. We never would have done that before.
Andrew: What do you mean by different cohort snapshots?
Interviewer:What do you mean by different cohort snapshots? What’s Cohort Analysis?
Interviewee: Yeah, so it’s basically, you want to take, instead of looking at, ok, so instead of looking at what my overall pro conversion rate is, it’s better to say, ok, here’s a group of users that joined during this week or this month and compare that user group to, you know, another user group at a different time. So, instead of keeping this running tally that just kinda shows overall. It’s not very useful. You want to look at, you want to compare different cohorts. So, for us that’s users who joined at a certain time period.
Typically, we look at that on, you know, a month or week basis. So then I can say, “How good am I at converting people, you know, in January of 08 to 09?” And then we can judge whether or not we’re doing good as a business.
Interviewer: Ok, I think that, I think I might have to do a whole program just on this, to explain it. But, I think the best way to explain it is to show how, where it fails. Where we hear that 50% of all marriages end up in divorce. That number comes from somebody saying, “Let’s take all of the Divorces and divide it by all of the weddings that happen in that year.” Even if there’s no correlation between the people who got married and the people who got divorced in that year that’s how they’re going to do the analysis. And, it ends up giving you bad data. But, Toban in my audience, who has become one of my favorite auidience members here, has given us two links. One, to ABC.com a blog post there on the cohort analysis. I think that you guys are going to have to search it. Another one is, on Wikipedia, He says it’s got a good article on it, and he also, and this is why he is become one of my favorite people, He’s jumping in there with everything. Saying that Dave McClure’s talk is AARRR A-A-R-R-R metric for pirates aarrr which means Activation Acusition Retension Referral Revenue. We’re gonna’ have to have him on and have him explain all that. Let’s talk about Matt Molenway with what he told you about working remotely. How can you work remotely when you’ve got a funded company that’s grown fast and it changes so quickly? What do you learn?
Interviewee: You certainly get, There’s a lot of people who don’t believe that you can do it. And so you get a lot of Naysayers actually, especially when we’re raising money. There’s a certain group that really push for, you need to be in one place. And I think there is certainly an advantage to being in one place, especially around kinda company culture. But, Stephen and I, We built a company together for five months, but then he went to Denver and I was in Alabama, so we were already starting to do the remote thing. And then when we started hiring out after tech started we decided we would rather have better people, no matter where they are than settled somewhere where we are. So, I moved back to Alabama. We hired two developers. One is in upstate New York, one is in Victoria, Canada. And it worked out fine for us. We basically, Our workflow is we have campire open all the time while we’re working. We have Skype going. We jump on and off as we need to. We have a team call every Monday morning. Steven tends to interact with the developers alot more to keep Skype open but mostly we’re all interacting on Campfire throughout the day. We’ve also set up play station three so we can have the video conferencing, you can do six-way video conferencing and not have it on your machine, slowing things down, so that works really good. Another thing that we’ve done , which I think is cool and has helped alot is we have onsites intead of offsites. We bring everyone together for a week, you know, hang out, do some fun things, work on a project together so we can meet eachother and get to know eachother better. We went to, to keep things cheap, we went to Pheonix in the middle of the summer and we rented this mansion, for next to nothing, but it was really hot so we stayed inside and worked that was cool. We went to a cabin in Gatlinburg, TN once. And we brought the board so we could, just like this time when we could all come together, so I think that’s the kind of things that we have done to make the remote thing work. And it’s good right, so you can have people who woudn’t be able to get cause they’ve got to be around their family or for whatever reason they want to stay where they are. It’s worked good for us, up until this point.
Interviewer: Why did you change your name from Jiminey to Dailyburn? How did you know you needed to?
Interviewee: The first signs are when you start getting compared to a Children’s store, a clothing store.
Interviewer: ahh Gymboree, right? is that what it’s called?
Interviewee: Yeah, Gymboree. And then people couldn’t spell It was a big issue. the JIminey Cricket Joke got pretty old but basically we couldn’t buy alot of the spellings of Jiminey
Interviewee: Basically, you know, we couldn’t buy a lot of miss spellings of Jiminy. We never loved Jiminy. We kind of liked it but we never loved it. It was hard for us to find a domain in the fitness space that we could buy especially when we had no money so we just had to, you know, pay ten bucks. We didn’t have any budget to go buy a domain.
So, you know, a lot of the conversations had to do with Tim [Farris], [Garret Camp], and [David Plurer] wanted us to change the name upon investment. Actually, the commitment came to change the name when we were at dinner with Tim and we were going to split the bill and he said he would pick it up if we changed the name. So at that point, we were committed to change the name. Yeah. So then we went on the search to find the perfect name.
Andrew: Any downside to changing your name?
Interviewee: There’s a little bit. I mean, so we got people who obviously didn’t like it. I think we weren’t very forthcoming in it. So one thing that we didn’t say is, ‘Hey, we’re changing our name.’ People just showed up to our website and it was a new site. We had formerly Jiminy on there but we got a lot of emails like, ‘Who’s this company and why do they have my credit card information?’
So I think a lesson learned there is we need to announce that to the public first. But we also didn’t really want to, you know, we didn’t want to get a lot of user feedback on it because we know some people wouldn’t like it. And we thought it was the best move. And we felt good about just making it. And we knew people were going to have backlash. It was really positive. I mean, overall I would say 90% positive on the name change. I absolutely think it was the best move for us.
We did a rebranding along with it so it took us a long time to change the name. We also waited to release any information on our funding announcement until we had the name change going so that we could get some SEO juice on the new name. So that’s another tip, I guess.
Andrew: Cool. Who helped you with the rebranding?
Interviewee: The name or just the site design?
Andrew: The site design and actually, yeah. Let’s start with the site design. We’ll come back to the name change.
Interviewee: So we worked with an independent developer, a graphic design guy. Steven and I found him -I don’t even know how we found…we preferred to work with just, you know, kind of a contractor as opposed to some firm. We found someone that we liked, and he kind of helped us with the design. We’ve always had a good feel for a design, I feel like. And so, we kind of helped guide that. But, yeah. It was just an independent contractor that, you know, that we contracted on. So that was actually part of the reason why we raised the friends and family money round. We wanted to pay ourselves a little bit, but the other money was to pay graphic design because we like good design. We know how important it is, but we had reached the limits of what we could do in photoshop and things. So at some point…
Andrew: What did it cost you?
Interviewee: Good question. I don’t remember. Maybe we paid fifty dollars and hour, maybe less. I can’t remember exactly how much it was, but it was probably for the whole site design, less than $10,000.
Andrew: Okay, to get the design and to get the new brand, the new look and the new feel for the what the company was about.
Interviewee: Yeah. That’s right.
Andrew: Okay. And then the new name. How’d you guys come up with that?
Interviewee: So that was really, really hard. I said I would quit the company if one of the names they wanted would come. I’m not going to say what it is, but I think…
Andrew: Why not? You can say that.
Interviewee: Yeah. I guess I can say it. So you’re very, very good at convincing. So Jim Trip was one of the names that I thought was really terrible, but everybody knew I thought it was terrible so that’s okay. And I think we still have that domain. But we basically went through this week long process of trying to find every domain that we could think of. And we were trying to find one we didn’t have to buy. We came up with a list of five. You know, it was pretty cool.
So this is one when we really engaged our advisors a lot. So Dave, Garret and Tim were all very involved in the name change. And we were all on conference call trying to figure out the best ones. I can’t remember some of the other ones that we own. But Daily Burn we ended up getting for pretty cheap. That was my favorite so I was glad that we got it.
Andrew: Where’d you guys get that? Where’d you buy the name?
Interviewee: So we used, basically, a PR firm to disguise who we were when trying to get the name. So I think Tim [Farris] actually put a blog post out on this whole subject and we pretty much followed that to a T. We did this before the blog post. But the strategy that we took was you don’t want to say who you are. You don’t want to have
Interviewee: Who you are and you want to have a big firm represent you because they are saying you are a big brand and you have lots of money to spend, so we use this PR firm that was recommended to us and they handle interacting [50:13] honor, there is anything on the site it was just someone sitting on and we ended up, they came back and they wanted $2,000 for it and so I said okay, you could have probably negotiated it down, but at that point it was the name I wanted and so we just grabbed it, so Joe does know a good buy. We liked it, daily burn, burning calories is the connotation, also muscle burn, we work out with that, we really liked the daily indication, it is a daily process it is not a quick fix. We really like to name, and I think it was great.
Andrew: Okay, and the Garrett who you keep talking about is Garrett Camp the founder of StumbleUpon who I am going to hip you up for an introduction to. I would love to interview him here on Mixergy. Let us meet him. Throughout it seems like Tim Ferriss, Gary and other advisers were really helpful. I remember seeing Tim Ferriss doing a blog post on how changing the layout of your landing page increase conversions. So I re-read that in preparation for this interview and then I went back and I checked out dailyburn.com and a lot of the changes that he talked about seemed to have been gone like he said when you remove the number of links that were available to people who landed on your website conversions increased, I went back to the site and a lot of options, a lot of hyperlinks were put back on, why. Why didn’t you keep up with what he said?
Interviewee: We did take a lot, we learned throughout that process and I think applied to the new home page. It is a good question, we are still testing our current home page and it is converting as good as the gym new page was. I think we took away a lot of the moving elements, so one of the big things that helped in the conversion of the gym new page was we had this stuff that was scrolling down at the bottom, like people activity streams, we want to have this impression that we are really, really big and we had all these users because this is a happening place to join and we took that off, it did increase conversions quite a bit, it is less distraction and I think that drew your eyes downs towards away from the sign up button. I think we did keep a lot of the designing, and Tim was also involved in helping with the dailyburn copy and in stuff that was on the home page, so I think we learned a lot from it and a lot of it was incorporated into our new design. We need the links [52:52] today, link juice too. That’s the kind of why we have some of those links on there at workout programs and things.
Andrew: Oh I see, okay. Alright, do for us what a little bit of what Tim Ferriss did for you? Teach us what you learned about creating that premium program and getting people to register.
Interviewee: So Tim was really, when worked with Tim it was more on the home page, so lot of stuff, internal page we talked about a lot, but I think Tim’s biggest help for us was on that home page stuff, in just social media buzz he helped us a lot. When we came out with food scanner he was really, I think he was mainly helping us get a lot of buzz and get a lot of pick on that launch. So I think those are some of the things, and there are lots of things behind the scene he has done with [53:50] but I think good adviser.
Andrew: I would like to ask you about that in private but buzz I can see is huge, right. When you have got a guy like Tim Ferriss talk about you, he is going to get other people to talk about what he just said about you, which helps create a lot of buzz. What are some of the big lessons that other people can take away and apply on their own without him? Constant testing seems to be a big one.
Interviewee: Yeah, testing is important, making sure you are tracking a lot of things, it is really hard to add in the tracking tools and it takes a lot of time and I think it is really important, everything from so you understand the business but even when you get to a point where you are trying to raising money, the ability to show all these different things very accurately helps a ton. It shows that you understand the business well and so I think that’s a lesson learned. I found a lot when I reached out to people and I think in entrepreneurial community people will help and I think you are not doing alone is another important thing. We really had a great experience interacting with other entrepreneurs.
interviewee :we really had a great experiences interacting with other people in helping engaging the other people
in so..if you don’t have..you know..we didn’t note him what is rhis
yeah..if you don’t have..the way we got…was we got to text stars and met we were and met their connections and before that, we got to text stars
a lot of steps you take to to the point to get with intract with people that can help you, you’re gotta do all the steps..mean you gotta build your product that works, you gotta be agressive enough, but not overly agressive, but agressive enough to go help find people who can help you and keep followin up and keep working in change
andrew: he’s a guy who has a lot of his time and at the same time he doesn’t want to be that engaged, he still wants
how can you got most of the time out and in wiser? how can you got most of the time out and in wiser?
interviewee: ah…um..well..yeah..with him..is an some of them put their money on spend some time
andrew : still i have talked to two different companies who had backing from the different company to the same person, one of the company said he is the not engaged enough and the other said he is the most helpful person in my life,
he is the most engageful persn in his life. what do you do to get someone like Tim Faris?
interviewee: you’ve got to…with Tim..tou’ve got to…let’s see..how can i put this…he’s a good..a..
in help him, do what he does, and i think with him that is the important to honor them think, so you have to pursue him in a good life and help him do what he does, and so i think that’s really important
i found like in good life, do what he does . and i think that’s really importatnt. i felt like in other people how much i really try to encourage him
i found like in most people
andrew: that’s what i heard too. and when you say that Tim Faris
he needs..he can spotlight becase someone give him the light to shine. you said you need to give him reasons to grow his light, you need to give him data to bog him to access to the i-phone so he can show other people
interviewee: yeah, i think that’s important. we were gonna show . because that we actually. some of people are going to have what they need to be doing,so i need it’s important to get back to
andrew: all right..here’s a challenge. It seems like a challenge . i looked up some of your investor on your own site. i want to embarrased them all , but the last two activities on his page, and the one that people .they go months for engaging.
andrew: good, then i embarrasse him
specially, but i see the others they goes months without engaging
people get all excited in gym
interviewee: so i got a lot of comments in this site. first of all, and help us in different way . we’re decide for in person trying to lose . i think in generall though there’s a high perspective of our users that ,it’s just the nature of we’re american and people lazy and nod
we see because it’s not like .two a.m.
you’ll see it
Interviewee: I think in general though there is a high percentage of our users that are gonna come in and join, get excited about DailyBurn, they’re gonna fall off. I mean, it’s just the nature of 1) we’re a free web app and people like to go in and sign up and maybe not come back…and then, we’re Americans and people are lazy and say I’m gonna do it this week, and then I’m gonna fall off a week later.
So you will see in our growth that there is some drop off and we know that. We expect it, and so now we design for it and try to convert people to our premium subscriptions in the first 24 hours, because it’s not like we want to keep them on long and then upgrade them. We want to upgrade them right away because it’s the whole informercial mentality right? It’s why informercials work.
That’s why P90X works. You’re at 2AM eating Cheetos in your underwear and dude, I need to get in shape, so I’ll pull out my credit card and spend $200 on P90X, right. So it’s that same, there is some of that same dynamic in what we have. We as much as possible, we provide tools that makes it easier for you and try to make it as sticky as possible, but when it comes right down to it, fitness is gonna be a personal decision. There’s only so much that we can do. So there is gonna be some drop off for sure.
Now, what we do find is people who do engage, they engage hard and they’re checking their food all the time. So that’ll be a lower percentage and you wouldn’t see that from some of our advisors. They don’t, this is not there interest, right.
Andrew: Do you have a good technique for re-engaging people when they fall off or when they’re about to?
Interviewee: We don’t really. That’s something we’re gonna be working on over the next couple of months. We spend, basically with a small team of human resources, we wanted to spend the resources where we had the most bang for out buck. So we wanted to work on that front end stuff, because that’s where we’re seeing the most conversions. So we do email campaigns to get people back.
I also think that we’re gonna see a lot of activity…like what I expect to be the case is, someone has good interaction with DailyBurn, they fall off the wagon for sure. But maybe six months later, I need to get in shape, I’ll go to DailyBurn, especially you see that behavior around January 1 when people get excited about their health goals.
So I think there’s a lot of things we can do for re-engagement like emails and things, but we haven’t had the time to do that. I think now we’re gonna finally have the resources to be able to work on those things. We’re pretty excited about it.
Andrew: Why did you sell the business?
Interviewee: So, we didn’t sell the whole business. We sold, if you look, we didn’t release the details, but a majority stake, so we didn’t really see it as a complete sale. We saw it as a strategic investor, and you know, for us we were out raising money. We were very…we had a number of term sheets, we were doing pretty good, we had the ability to raise the money.
And with this deal we just felt that some of the talent that they already had on their team we were gonna hire anyway. And to do this, we felt like it was a win for our early investors, you know, for us, for everybody. So it just seemed like the best fit given the options that we had. So we worked really hard to have a number of different options on the table.
I was really excited by the fact that we had the ability to raise just from straight angels again. We had a couple of VCs that were ready to do it, then we had this deal and we could sit as a board and say okay, what makes the best sense for us? And then pull the trigger and make it happen.
Andrew: What share of the business did they take?
Interviewee: Oh, we’re not disclosing it.
Andrew: Is it more than 50%?
Interviewee: Yeah, it’s majority owner.
Andrew: Okay, all right, and actually I think this is something that Josh, the founder of College Humor said, that when he sold to IAC he had a similar deal where they didn’t buy the whole thing, but the bought a majority investment, I think.
Interviewee: Yeah, that’s correct.
Andrew: That’s our deal. Okay, I’m gonna leave it there on the questions on the sale. I feel like that at this point there’s no way to get anything but BS answers beyond this. If I dive into why’d you do this versus something else, you can’t really be open right now, you’re still going through the deal. You’ve gotta be private.
And if I dive into whether it’s a right decision or a wrong decision, it’s too early to tell. Who knows? We’ll know two to five, ten years from now for sure.
Interviewee: Right, we’ll talk about it in five years.
Andrew: I’m sorry?
Interviewee: We’ll talk about it in five years.
Andrew: Yeah. All right, let’s just fill in the gaps here on a couple of questions I didn’t get to come back to. A couple of people in the audience asked did you start the website because you saw a market of opportunity? Did you start it because it was your own itch you were trying to scratch? What kind of market research did you do? So I’ll combine it all into this one question, how did you know there was an opportunity here?
Interviewee: It was really gut. We did a lot of searching to see if we could find a site like this. We couldn’t, so we felt like there wasn’t one. And we went for it. I don’t have any lies about we did all this extensive research. We wanted to build it and we couldn’t find…
Interviewee: …all this extensive research. We wanted to build it and we couldn’t find anybody to do it. So we pulled the trigger and went. As easy as that.
Andrew: Earlier you said that you had a feedback box on the homepage when you first launched it. What was that like? What exactly did that look like?
Interviewee: It was just a big, ugly, green box at the bottom of the page with a text area that said tell us your comments and a send button — that was it — send us an email. So from the very beginning, we were getting comments from people. And we eventually turned it off because the volume got too high.
We also were really responsive when we got an email we’d respond back. And you can only do that up until a certain point until it just…but like it’s really important to do it at the very beginning because as your first power users and those are the ones who tell others about you and things.
Andrew: So you collected their email address and you had a box for them to give you their message, those two fields?
Interviewee: Yeah, well they were already logged in users, so it was basically feedback from users trying it out.
Andrew: Oh, that’s a great idea. All right, I think that’s everything that I’ve got. Anything you want to add before we end it?
Interviewee: I don’t think so. I think that pretty much covers it.
Andrew: Great ride over the last three years, don’t you think?
Interviewee: Say that again.
Andrew: It’s been a hell of a ride over the last three years.
Interviewee: Yeah, oh, yeah. It’s been fun. And I’ve gotta say, coming out of the security business, it’s a lot more fun. We get these emails from people losing a ton of weight, like over 100 pounds, and that’s really rewarding. Working on a site that has users, super rewarding. It’s been a real fun ride.
I’m really excited now we have resources to do a lot of stuff we’ve been wanting to do. We get to this point where people are screaming for a Droid app, we want an iPad app, we want this and that. Yeah, we want to give it to you because we think we can do really cool stuff, and now we’re gonna be able to do it. So I think you know, just moving forward I’m even more excited about it. I think it’s gonna be even better the next couple of years.
Andrew: And so usually I have guys on here who are like 22 years old who just built something and sold it, and everyone in the audience says oh, they have it easy..what are they gonna lose if they lose everything? They don’t really have that much.
Here you are, one of the few guys who started a company with nothing but a family. What do you say to somebody else who’s in your position?
Interviewee: So, I think it’s really important to know your spouse. I don’t think it would’ve worked if I was trying to do it and was constantly being questioned. So I think that’s really important for someone who has a family that’s about to embark on this. I think it would probably be more wise to have more money than I did starting out, but you know, it’s almost like you have to do it.
You’re so miserable working for this other company that you’ve just gotta do it. I think if your spouse knows you and knows you have to do it, then hopefully they will support you. I’m definitely blessed that way. But I also say you need to still spend some time with the kids, don’t neglect them. I mean, that’s just a recipe for disaster long term. So I think those things are important too.
And people think it’s crazy to start a business with young kids, but you can do it. You can’t do a lot else, but you can do your business and your family and that’s about it. I think you know, my thing has always been to go after it all the way. And quit the other job and do it, and risk it. Maybe that’s why I’m an entrepreneur. I don’t know have that risk tolerance level. I don’t know, some people think that’s crazy, but it’s just how it works.
Andrew: I asked Jason Callacan [? 1:08:49], it’s like I think a few weeks before I got married or maybe a couple of days afterward, I said Jason, you work non-stop. Somehow your wife is about to give you a child, she was pregnant at the time. How are you able to do it without pissing her off and having her tell you just shove it?
He said Andrew, here’s the secret, give her big dates…big marquee dates that she can talk to her friends about. If you can’t spend all the time with her, you might want to spend…you might want to have a picnic up in the mountains with special things involved so she can go talk to her friends about it and she can be happy with it. Do you have any advice like that? You’ve been married a lot longer than I have.
Interviewee: I think it’s non-neglect is very important.
Andrew: What’s important?
Interviewee: Just not neglecting. You know, being a bootstrap entrepreneur, I didn’t have the budget to do extravagant dates or anything like that, but I think it’s just keeping the communication going, and still being the family man and not letting work totally rule your life, even though it does a lot as an entrepreneur. You have to keep it in perspective…
Interviewee: …you have to keep it in perspective and you can’t you know…one of the things they tell you at TechStars, you’re there for three months and it’s so intense, you’re working all the time. But that level of work you cannot sustain for multiple years. You have to, at this point, what I’m doing, I work hard, but I don’t work a lot on the weekends and I take time. You cannot continue to do that forever because there is burn out.
So I think it’s okay to do short bursts — and I think this is important — because Lauren knows that I’m gonna do short bursts. I’m gonna be out of town for a couple of weeks and it’s gonna be hard, but then she knows I’m gonna not do that for a while. So just having that comfort I think is important. There you go, there’s my psychological advice.
Andrew: I’ll take it wherever I can. I’d much rather have it from you than have it from one of these marital advice guys. Before I got married, I said Olivia, I’m gonna be prepared for this. I’m gonna listen to guys on tape from guys who are gonna tell me how to do this.
All these guys were just so freakin’ out of touch with my life. They had these ideas that I was wimpy, let me give you a hug ideas….come on! You don’t understand my situation, and another entrepreneur does.
Interviewee: I don’t think they do. I went into counseling a little bit, but I think that was when we fought the most because these counselors telling us what to do and we just gotta do it on our own, so. I don’t know about…
Andrew: That’s another thing. When I started dating I said I’m gonna get somebody to get me advice. I went to a counselor who was so out of touch with what I wanted. She kept pushing me into relationships. I said no, I’m not ready for relationships yet, we can come back later.
All right, so finally I’m gonna say something here. I’m gonna say thank you to David Cohen who introduced me to you. David Cohen, who is the guy behind TechStars has been tremendously helpful to me. I’m gonna thank him publicly here, not just for this introduction, but for everything else, all encapsulated in this one situation where I said David, I’ve got to talk to Andy, can you introduce me so I can interview him? Boom, he made it happen.
David, thank you. Andy Smith, thank you very much for coming here and doing this interview.
Andrew: Congratulations on the sale. To everyone else who’s listening here, do what Andy did. Go out there get advice from the people I’m interviewing here through these interviews, or go out and connect with them one on one. Go build a phenomenal company then come back and do what Andy just did.
Right now he’s returning the favor. He doesn’t need to talk to my audience here, to spend an hour, I don’t know, an hour and a half. But you return it, it’s a circle of entrepreneurship. You get a lot of help early on, then you come back and you do an interview like Andy did and help other people. And if you were helped by Andy, let him know — at a conference, on Twitter, wherever.
Thank you Tobin for letting him know, thank you Dano, Ron Ware, thank you very much. Andy, again, thank you for doing the interview.
Interviewee: All right, thanks a lot.
Andrew: Thanks guys. I’ll see you in the comments.
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[Thank you David Cohen of TechStars, for into’ing me to Andy.]