Today’s guest is a Mixergy fan that I knew I’d get to interview one day.
I never expected to have him on about a week after he graduated from school.
They can also click links or fill out forms for the customer – all with no downloads or installations for the customer or the rep.
Andrew: Hey there Freedom Fighters, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. Today’s guest is a Mixergy fan that I had a sense that one day, one day, I would get to interview him here, that one day, he would be on here, but I never expected to get to interview him about a week after he graduated from school. I thought it would take a lot longer, but boy, this is fast.
Dan Shipper is the founder of Firefly, which offers download free screen sharing for customer support. With their co-browsing, a customer representative can connect up to a customer’s browser, and instantly show them around the site by highlighting different elements on the page.
They can also click links, or fill in forms for the customer, all with no downloads or installation for the customer or the rep. Super simple. As you’ll see, he came up with this idea when he noticed a pain that his father felt, and he solved it. This interview is sponsored by Walker Corporate Law. Go to WalkerCorporateLaw.com if you need an entrepreneur, and you’re a startup. I’ll tell you more about him later, but first I’ve got to welcome Dan. Dan, welcome.
Dan: Hi, thanks for having me.
Andrew: You’re just out of school. You graduated when?
Dan: I graduated about a week ago.
Andrew: This whole thing that you built up that we’re going to hear about you were building while you were still in school?
Dan: Yeah, exactly. The first version was built about two years ago, and it was launched about a year and a half ago.
Andrew: A year and a half ago, and you were listening to Mixergy interviews at the time. What kind do you especially like?
Dan: I mean, so probably one of my favorites was with Sam Ovens. Especially with early staged entrepreneurs that just started to be successful I think, because when you interview someone who’s really, really experienced, sometimes they forget a little bit of what it was like to be, you know, just starting out, and it’s easy to…some of the advice that they give isn’t as applicable, but someone who is just starting to be successful I think gives really good interviews.
Andrew: Cool, and I think that you’re just beyond that point. What kind of revenues are you guys doing now?
Dan: Right now we do six figures in revenue, so that’s between a million dollars and $100,000, somewhere in there. I can’t say exactly what it is, but it’s enough for…it’s me, and I have a co-founder, Justin. It’s enough for us both to take a reasonable salary, and start to hire people.
Andrew: Are you guys profitable?
Dan: Yeah, absolutely. We’re…the thing about what we do is it’s software, so there’s never margin. Basically, everything aside from what we pay ourselves, yeah, and pay the servers as profit.
Andrew: Cool. What about the 20,000 that you raised? You got it from the Dorm Room Fund, right?
Andrew: How much of that did you have to dip into to build a business?
Dan: Almost none of it.
Dan: We took it from the Dorm Room Fund, they’re a fund run by First Round Capital, which is…I’m sure you’ve heard of them. They’re one of the most active [SP] CHC investors in the world. They invest in student run startups. The fund is actually run by students, so it’s students making the investment decisions. We took the money. We actually didn’t end up having to spend any of it. One of the nice things about being in school while you’re doing a startup like this is that you have very, very low costs, so yeah, we never had to spend it.
Andrew: All right. All right, so now we have a sense of where you are today, and you’re close enough to the beginning of your company that we could figure out where the idea came from, what the first version looked like, how you got your first customers, how you got the next batch of customers, that one deal that you did that really helped you grow, and so many other things, but lets go back to before you did all of this. In the fifth grade, you read a biography of Bill Gates, and what were you thinking of after that?
Dan: [laughs] I read a Bill Gates biography, and it was just about how he had founded Microsoft, and I was like “I can do this. I want to do this,” so I decided to build a company, and I was going to call it [SP] “Mancrosoft,” and we were going to build an operating system, which I was going to call “Doors,” instead of “Windows.” [laughs] You know, after I made this decision, I decided, “OK, I’m going to go the bookstore, and I’m going to learn how to program,” so I went and bought some programming books. You know, I quickly realized that I was not going to be able to build an operating system, and I was not going to be able to compete with Microsoft, I was a fifth grader.
I think for me, I was always interested in starting businesses, and as a ten year old, really the only way you can start a scalable business is to know how to program, because it’s the only way to build a business where the only cost is your time, and so for me, I kept doing it because it gave me the opportunities to pursue the kind of projects that I was interested in pursuing.
Andrew: You kept a notebook of ideas. Do you still keep a notebook today?
Dan: I do. I carry one around with me every day, and I sort of write in it. I usually use it as kind of like my to-do list, but I do write ideas in it. I use my Evernote for ideas.
Andrew: What kind of ideas do you capture now on a day-to-day basis?
Dan: Just little things that occur to me. I’m working full-time on Firefly. That’s what I think about all the time, but in the future…it’s nice to be able to go back and be able to say, ‘OK. These are sort of the things that I’ve been thinking about over the last couple of years,’ so just little things that come up during the day that I think about.
Andrew: I remember when I was in school there were kids who would draw all the time. There were kids who would sing all the time and then there were entrepreneurs but not enough who did what you do. Do you feel it’s the same thing the way that I do? That you’re writing down ideas for businesses back then. You’re fantasizing about creating Megasoft to compete with Microsoft and your Doors to take over his Windows. Do you feel that it’s a similar artistic pursuit?
Dan: It’s definitely similar in that it’s a learning and a growth process, so it takes a long time to get to the point where you can take the stuff that you’re doing and really have a big effect. You go through a process of development where you start out, and you have basic ideas. Basic ideas is how business works and then as you start to do things…like if you’re drawing …as you’re starting to draw, you get better and better and better and finally, you get to a point where you’re producing things, producing drawings, or producing businesses that are sort of in line with what you want to be doing with what your expectations are.
Andrew: Okay. How did your father feel about this?
Dan: He liked it [chuckles].
Andrew: He did? Did he say, ‘Hey… relax a little bit. You need to enjoy yourself. Be more of kid, put down the Bill Gates book, and pick up a comic book’?
Dan: I got a little bit of that. I got that from my mom, too, so both my parents were a little bit like, you know, have a little bit more fun. They were both pretty supportive, especially my dad, as my dad is an entrepreneur as well. He’s in a very, very different industry. He’s in the cemetery industry. He buys and sells cemeteries and funeral homes, so it’s like a totally different view on [??] business.
Andrew: Buys and sells cemeteries and funeral homes?
Dan: It’s a family business. It’s third generation.
Andrew: Your grandfather did it too?
Dan: My great-grandfather did it.
Andrew: Really? Why do they buy and sell funeral homes? How does this work?
Dan: Basically, the way it works is you buy a group of cemeteries and buy a group of funeral homes. They’re sales driven businesses, and so they do a lot of cold calls and cold emails. You fix up both the service side to make sure that people have a good experience and the sales side to make sure that you’re bringing in enough business and stuff like that. As you build up the value, then you can go and sell it. There are a couple of big, public companies in the funeral industry that buy these groups of funeral homes.
Andrew: When you grew up and you found out that your family was in this were you scared?
Dan: No. I mean it’s one of those things where if you grow up in it it doesn’t strike you as weird until you’re in school and you’re talking to people and you’re like, ‘Well, what does your dad do?’ and you’re like, ‘Oh… Well, he’s in the cemetery industry,’ and they’re just like, ‘Whoa. Like what do you mean?’ [Laughter] It was a little weird from that perspective, but it was a really good experience for me getting to understand how this [inaudible] of businesses work. I mean being able to hear him on the phone and having him around to give me advice.
Andrew: Okay. By the way when your mic hits your lapel, it makes a little bit of noise, so…
Andrew: … just be aware of that.
Andrew: What were you embarrassed about with your parents if not that?
Dan: [chuckles] Well, that was definitely a thing, you know? It’s like you never want to stand out when you’re a kid. You never want to be that weirdo whose dad is in the cemetery industry, but I guess who [??] a little bit more then it becomes like a cool interesting thing. I could be embarrassed about it right now, and I could have said… like one thing I used to say is that he’s in real estate and that’s a way to sort of say what he’s in without inviting the obvious question, ‘He’s in cemeteries?”
Andrew: Okay. You have this entrepreneurial spirit. You’re leaning to code and you actually started to create businesses early on. Do you remember the very first one that you created?
Dan: Well…so are we not counting Megasoft?
Andrew: [chuckles] Right. Megasoft… how far did you get with that?
Dan: [Laughs] Not very far at all.
Dan: It was mostly just the impetus for me to start learning to program.
Andrew: Okay. You did do another one that, actually, I see on Mashable right now. What was that?
Dan: Okay. That was actually way down the line…
Andrew: It was?
Dan: Yes. That was in college. When I was in high school, I was building Blackberry and iPhone apps, and that was the first real business that I did. What happened was I had a Blackberry, and I kept losing it in my house. I decided, Look. I want to figure out a way to… so if I lose it in my house I can make it ring, even if it’s on silent.” I built a piece of software, and basically, what it would do is it would listen for all the emails coming in, and if I sent my Blackberry an email with a special string inside of it. It would ring even if it was on silent, so I could find it in my house, and that was called, “Find it.”
That was about two years before Find My iPhone came out, and no one really had done this before, and I eventually started…iterated it into a…it had a full-fledged web interface. You could backup, lock, track your phone, all from the web, and so I did that with Blackberry and iPhone apps. That’s kind of how I paid for gas and food in high school.
Andrew: Actually, I think your mic might be in the computer itself. Can you tap your computer?
Andrew: I wonder what it is, but I’m hearing a little bit of crackling as we’re talking.
Dan: Should I switch? I have different headphones.
Andrew: I’m worried that if you switch headphones, then the audio might sound totally different, but let’s try it. You know what, screw it. Let’s try it.
Dan: Let’s try it. Hold on.
Andrew: There goes these…yeah, it is the iPhone earphones. I think they just bounce around so much that when they hit people’s clothing, or for women when they hit their long hair it makes noise.
Let’s see, how do I sound to you?
Dan: You sound good. Is this better?
Andrew: Yeah. Yeah. I think it might be a little bit softer, but it should be good. All right. What about…what comes next then? All I’m seeing is, in my notes, the Facebook Google Maps app.
Dan: Yeah, so that was next, and that was when I got to college. I started doing a lot of web apps instead of like mobile development, and so one of the things that we built was…well, we had a rule, which was we would only build something that would take about a weekend to build. We were only going to build really small apps. The second thing that came out of that was called, “Where my friends be.” Right, and that was basically a small Facebook app that let you map all of your Facebook friends on a map.
We built it in about 48 hours, and it was super simply, and we sent it out to a bunch of press. None of them responded, except for Mashable, and Mashable ended up covering it, and it went viral. People were signing up. The service went down for like two days. It was crazy. I didn’t sleep for like a whole week. It was…
Andrew: You made it go viral. What was it about the way you created it, this Facebook app, that made it go viral once someone kicked it off?
Dan: Well, I think the thing was that when you saw all your friends on a map it was like a very cool experience to have, and so it really incentivized people to post that map to their wall, or to Twitter, or something like that. Once we got that Mashable story it really seeded everything so that it could spread really quickly. Unfortunately, it was the kind of the app that you kind of only use once, and so it sort of died down after a couple weeks, but while it lasted it was a really incredible experience.
Andrew: Why 48 hours? I want to make sure to emphasize that, because that seems like an important thing for you.
Dan: I think for us it was sort of about…we wanted to learn as quickly as possible, and we wanted to just, you know, throw a bunch of stuff at the wall, sort of see what stuck, and sort of learn, you know, what people liked, what they didn’t, what they would use, and what they wouldn’t. It was a way for us to try out a bunch of little things that…you know, people might use it, or they might not without a lot of investment, and to learn it as quickly as we could.
Andrew: Okay, and what about one mistake that you learned from building this?
Dan: Well, I think the biggest thing that we did wrong was that we didn’t…once it went viral, we were just sort of like “Okay. We’re going to work on some other project.” We didn’t really think about, “Well, what other things could we add onto this now that we have 50,000 users that we could really make it something that you go to repeatedly?” If we had to do it again that’s something that I would do differently. I would really start to think about like “What makes this appealing, and how can we add onto it to make people come back?”
Andrew: Okay. Domain Polish was one of the next sites. What is that?
Dan: Domain Polish was a site I built my sophomore year, and that was basically…what I was doing is I…when I was building all these sites, what I would do is I would build a landing page, and then I would put the landing page up on Mechanical Turk. Do you know Mechanical Turk?
Dan: Basically, Mechanical Turk gives you this like cloud workforce where you can…you know, you pay people like 10 cents each to take surveys, or like do like little small 30 second tasks. When I would build a landing page, I would post it to Mechanical Turk, and I would have people fill out a survey saying, “Okay, this is what I like about it. This is what I don’t like about it,” so I could understand what the average person might think about the site I was building, and how it was communicating its message.
Once I was doing this, I was like “Well, this might be a cool way to build a product,” and so what I did was instead of going and building a whole automated Mechanical Turk, you know, interaction between my site, and Mturks that you could, you know, enter in a survey, and it would automatically start it with the Mturk API. What I did was I just built a landing page, a pricing page, and a checkout page.
When people checked out it would charge them on site, I would get an email and then I would go and manually create a survey for whatever site they wanted the feedback on. I would start the survey, when the results came I would manually download, format, email it out. And that was just sort of a way to test out if people wanted it before actually building anything.
Andrew: I always thought that you’re kind of copying Feedback Army. Did the idea come from them?
Dan: No. I actually never heard of Feedback Army except what was on Hacker News. That was the first time I heard of Feedback Army. And so it’s very, very similar.
The problem with the business though is that is not a recurring avenue and people don’t necessarily tend to come back that much so it was sort of the revenue from it was very [??] so when I first built it it got to front page Hacker News, I got a bunch of customers and then sort of died down for a while and then somebody would write a blog post and then I’d get a bunch more traffic and get much more revenue and then it sort of die down. And so after that I decided I want to do something that has recurring avenues that when I get a customer, they stay for a while and I don’t have to continually go out and get more.
Andrew: It’s a great idea. I’ve even used Feedback Army in a similar way. It’s useful to see what other people think about your site and I’m always surprised that they understand it differently than I expected them to.
What happened with Domain Polish?
Dan: I ended up selling it. So this guy emailed me and he was like look, I love this idea, I’d like to invest in it. I said I’m not looking for investment and he said well, how about I buy it? So I said, “Okay, sure.”
Andrew: What did he buy it for?
Dan: You know, I can’t remember. I have a blog post about it. It was like, I want to say $4,000. It was like very, very low. But to me at the time it was like wow, this is pretty cool. I didn’t spend that much time building it and you know, for a college kid it’s a good result. And then he ended up, I think it shut down. I don’t think you can visit anymore. He didn’t do anything with it.
Andrew: So a lot of people start many different ideas and not one of them goes anywhere. We’re about to find out about the one idea that you built that really just took off.
What’s different about you, a guy who experiments with lots of little sites, who doesn’t ever build any one of them into something big? What’s different from you who made it and others who just keep launching these little things and nothing ever goes anywhere and they maybe are bouncing from idea to idea?
Dan: Well, so I wouldn’t say that, I can’t tell you anyone thing. It depends on the person, it depends on the situation, you know. It could just be luck, I could be like a very lucky and so I never want to say it’s like one particular thing. But there are a couple of things that I did that I think were very, very helpful.
So specially with Firefly, you know, once I’d done all these projects and I’d gotten a little bit of revenue and I sort of knew where I was going wrong, I really decided look we’re going to take this project and are going to work on it for a while. And I’m not going to think about are we making a lot of money today, are we not making a lot of money today. I’m really just going to like take six months or whatever and see like where we can get with this. And so once you have a lot of experience, I think the focus is important, but that is only important once you really got through the process of learning how to do this.
Andrew: I see. And so, the others were learning experiences. With Firefly, which we’re about to hear about, you decided I’m going to focus on this for six months, even if the first month is not very good, I’ll stick with it and maybe the second month will get better.
Dan: Yes. And really my goal with Firefly was I wanted to learn how you build a sustainable business from the ground up that made revenue from day one and do it automatically.
Dan: And so when you have a goal like that, you’re less likely to be thinking about okay, is it going to be a billion dollar business tomorrow? And I think that, like those really, really high expectations for what you’re doing is what makes people bounce around a lot. It’s sort of like going on speed dates and saying oh, do I love this person? Is this the person for me?
It’s very difficult to know on a first day or on a 15 minute meeting or when you’re working on an idea for a weekend. But if you put less pressure on it and you’re like this is a good learning experience for me to figure out how to do this it makes it a lot easier to stick with something for a while.
Andrew: All right. Let me do a quick plug here for Scott Edward Walker of Walker Corporate Law and actually, you know what? Instead of promoting him, instead of talking Scott-up, why don’t I just ask you for one piece of legal advice as an entrepreneur. What would you look for in a lawyer or what mistake do you think we entrepreneurs need to avoid or one thing that you did right?
Dan: Well, I would definitely say get a lawyer and don’t try to do everything yourself. Like for example, for us we incorporated the company ourselves with like a company corporation and some online thing and then we went and tried to raise money like the way that we had done it with Ram and it ended up costing us more money to get it undone and redone. And so it’s really important if you’re really going to be doing a business that you’re going to take money or you think it’s going to be around for a while, it’s very important to get it setup correctly.
Andrew: What didn’t you do right? What should we avoid if we’re looking to raise money?
Dan: Honestly I can’t remember but it was something about the way that we structured the company that wasn’t right for like [??] investment and they had to redo it [??] issues or something like that. So it was bad but it’s a balance, like everything else it didn’t matter.[??] set up a company where my friends be a domain called [??], like a little LLC that I would do it under. And so it’s really like this fine line where you don’t spend a ton of money on some little project you’re not going to be working on for very long but you also, if it’s going to be a big thing and you’re going to work on it for a while, it needs to be setup properly.
Andrew: All right. I won’t say any more about Scott. Instead I’ll just say go to WalkerCorporateLaw.com.
Then your dad had a problem that I mentioned earlier. What was the problem that he had?
Dan: So he called me one day and he said look, when you’re on the phone with someone it’s very, very difficult to explain to them where to go on a website. And he was like, well, what I want is basically an Excel spreadsheet or a grid that comes down on any website and it comes down on my website and it comes down on their website and I can say like look at E5 and they’ll be able to know exactly what I’m talking about, kind of like Battleship.
And I was like, “Oh, that’s like a terrible idea, it’ll never work, no one will ever use that” and you know, here I am two years later still working on it. And, you know, when I brought that to my co-founder I think they sort of saw something in it and they’re like yes, like, why don’t we go at a hackaton. So they originally built it at the Penn apps hackaton which is a 48 hour hackaton at Penn.
Andrew: And what were you going to build were you going to build this grid that laid on top of a website?
Dan: So it was inspired by that idea but it ended up being like you highlight different parts of the page instead of a grid and it was for Customer Support.
Andrew: Paul Buchheit, the father of Gmail, he was the first person to tell me, he said Don’t look for people solutions, understand their problems and then you build the solutions. If you built his solution it would be complicated and it wouldn’t apply to other people but if you understood his problem which is he just wanted to show people certain areas of his website then you can find a solution for it.
Dan: Yes. It’s kind of like the Henry Ford if I’d ask people what they wanted to be a faster horse, that kind of thing.
Andrew: Okay. But Henry Ford might have noticed they hated the bouncing and the feeling of a train and if they could get something that was a less [??] train or less bouncy train that stopped but [??].
So then how do you go from this need that he has and his expression of what this solution should be to figuring out what the actual solution should be? That’s a pretty big leap.
Dan: That’s a great question. And so basically what we did is we just tried to fill it and I think a lot of like the way that you discover what your product is and what kind of product you have and what kind of company you have and actually how to sell the product is by selling it. And so what you end up doing it, what we did is we came up with a thesis, this is the type of person that want this so one of the thesis was people who have chat applications on their website and do live chat with their customers. And so then what you do is you get a list of them.
We found this piece of software that gave us a list of people who use chat products and then we just went and cold emailed all of them, and we got on the phone with them and we tried to understand, you know, is this something you want, like what do you do every day, what kind of problems you have when you’re trying to support customers on your website, what kind of questions do they have and like what do you care about, do you have a matrix that you track that kind of stuff. And then we sort of tried to understand whether this is [??] that we fit in.
Andrew: So what’s the thesis that you had?
Dan: So the thesis was that people who use live chat products would want co- browsing.
Andrew: But then how do you get to the co-browsing part from that? How do you get to co-browsing when he’s telling you that what he wants is to be able to call E5 on the screen and have his customer understand what area he’s meaning?
Dan: Oh, I see what you’re saying. Well, I think that’s like a logical next step which is he wants to point out cell E5 but it’s much easier to highlight a part or a piece of a page. Like having it come down there’s a lot of problems with that so for example if you had different browser sizes the way that the page flows is going to be very different and so it’s going to be harder to, you know, point out, [??], and stuff like that.
Dan: It’s much easier to just, you know, highlight one piece of the page and have it show up on my customer’s browser.
Andrew: I see. Okay, and then, why didn’t you say to yourself, alright, if that’s what he needs, I just need to give him a Go To Meeting, account, and see if he’s happy with that. He doesn’t need another solution. How did you know that, that wasn’t going to be enough for him?
Dan: Well, so, I mean the idea is that it’s very, very difficult for him, and the people he works with to download and install something like Go to Meeting.
Dan: So, he, like, I’ve been on the phone with him when he’s tried to install Join Me, which is kind of like Go To Meeting, but it’s much, much, simpler. And it’s like, the most painful process in the world. And so, I knew, and my co-founders knew, that what we could do is, use Java Script to allow you to share just a webpage. And you wouldn’t have to download or install anything.
Andrew: I see. So you know how you’re, how you have a hard time relating to a business where the guy comes on here, and he tells me that he’s doing twenty million dollars this year, and next year he hopes to do thirty. You know, it just seems too big, and hard to relate to. I think a lot of people listening to this are going to have a hard time relating to this interview, because they’re going to think, oh, this guy understands what Java Script is able to do, he understands how to code stuff up on Facebook. He was five years old, and he was basically coding, as a kid, you know? What do you say to someone who has that reaction? And maybe is closed off to listening to this interview even?
Dan: Well, I mean, so what I think about that is, when you’re a kid, any progress you make in any given year, is like dramatically slower than the amount of progress you make when you’re like a college kid, or in your 20s. You can pack a lot of time and experience into like, into your 20s, that you can’t do when you’re a kid. Because, you know, you have to go to school, or you’re, you know, you want to go outside and play, right. And you have a lot more life experience, to bring to learning how to do this stuff.
So most of the people that I work with, actually started either in high school or in college. So and the people that I built [??] with, you know, he had started coding, like two or three months before. And he did all the back end coding for the app, and he’s the one that came up with the idea. And so, I’ve seen people make like, a ton of progress in a very, very short amount of time. To the point where they’re just as experienced as me, or even better than me. So it’s definitely possible to do.
Andrew: I see. So, we’re not talking about years of development of coding and learning, in order to be able to code up these sites that you’re putting together in 48 hours?
Dan: No, that doesn’t take, that doesn’t take that long.
Andrew: You go to the Hack-a-thon, with this thesis, and this idea, do you crank it out at that Hack-a-thon? The first version?
Dan: So, my co-founders were at that Hack-a-thon, I was actually not at that Hack-a-thon. I told them about the idea, and they were looking for something to do, and they were like, OK, this is what we want to do. So they went a built a very, very, very, limited first version that worked on a sample of Go Daddy’s website. And when they were at the Hack-a-thon, a company came up to them and said, hey, this is something that we want for us, for a process, can you come and meet with us?
Andrew: This was Kayak?
Dan: No, this was a company called Take a Leap.
Andrew: What was it called?
Dan: Out of Philadelphia…It was, Take a Leap.
Andrew: Take a Leap?
Dan: Take a Leap, yeah, they’re a Philadelphia based company.
Andrew: Take a Leap, Okay.
Dan: Yeah, and so that was the first sign, it was like, oh, you know, there might be something to this, where people were sort of coming up to us, and asking for it. At the time we were all working together, but we were working on another product, which I haven’t talked about, called Airtime.
Dan: And so we had these two, you know, Airtime, which is a full-fledged product, and Firefly, which is sort of an idea that had been built at the Hack-a-thon, in New York. So we were deciding, you know, which one to concentrate on.
Andrew: Airtime gave away, offered a way to change email signatures easily, put a link in there, and track it, etcetera?
Dan: Basically, yes.
Andrew: And that was a product you were building, and basically at this Hack-a-thon, you’re co-founder’s created something that, boom, customers were actually interested in.
Andrew: Alright, and so then you had an incentive to continue, after the Hack-a-thon, what did you do next?
Dan: So then, it was right around winter break, and they went to Boston, to Angel Hack, which was another Hack-a-thon, and, built another version at Angel Hack.
Andrew: A brand new one?
Dan: Yeah, a brand new one.
Andrew: What’s different this time?
Dan: So, in the first, in the first version it was built on Rails, and Rails is, it’s very good for prototyping, I actually prefer it, for like, if you’re trying to get something out very, very quickly, it’s good for that. But it’s not good for a synchronous type of communication. So, if you’re doing like an instant messenger, or chat app, or something like that, Rails isn’t very good at that.
So they rebuilt it in Node, which is Java Script based and it’s built for this type of like, real time communication stuff. And so that was the main difference. And while they were at that Hack-a-thon, Kayak came up to them, the CEO of Kayak and said, oh, this is something we might use. And so that was another, little sign, like, oh, this is kind of interesting, maybe this is a real thing for customers support.”
Andrew: Okay. Again you’re not there, it’s just your co-founders?
Andrew: So how are you a co-founder if they’re the ones going to these hackathons?
Dan: That’s a good question. Like I said, we’re all working together. We were working together on Air Time, I guess we are a company together and they were working on this little idea on the side. What happened was they came back from Interheight [??] and they were like “this is kind of exciting,” and we were, sort of, working on both for a little while and we were trying to figure out “what are we going to do?” We said “okay well we’re just going to, over the summer of that year, we’re just going to scrap this and work full time on Firefly,” and we started doing that in June or July.
Andrew: Okay. Kayak is interested. They bring you to their office and what do you discover?
Dan: We went to their office and we had this big document that we gave them which is all of our features and our pricing, which we just sort of made up. We gave this whole presentation and then they were just like “hey, actually we don’t do any of our own customer support. It’s all done by Expedia. We only do e-mail support so this isn’t really useful for us.” We were like “oh, okay well nice to see you.” We had driven up from Boston, paid for gas, paid for hotels and stuff like that. That was kind-of disappointing.
I guess it taught us a lesson which is you really have to qualify the people that you are talking to and try to understand why they need it and what they need before you actually end up flying out there, especially if you’re boot-strapped. If you’ve raised money it’s a little bit different.
Andrew: What could that first version do, the one that came out of the second Hackathon?
Dan: It was so very basic. It just allowed you to highlight different parts of the page and it only worked on a demo site. So the biggest problem with this application is that it’s very easy to get it to work for one site with very basic interactions but it’s very, very difficult to get it to work for website on the web. So if you drop our code into any website on the web right now, 99% of the time it’s going to work hopefully. The first two versions was just very basic, only worked on one sight and only worked on a limited set of browsers. Right now we run on any browser, Firefox, Coast, Safari, and all the way back to IE 8.
Andrew: And iOS?
Dan: Yeah, it works on iOS, Android. iOS and Android actually end up being a lot easier than Internet Explorer, that was the big monster to get them. We ended up building all that functionality over the summer of that year.
Andrew: But Dan, the current version, as I see it, will allow me to move my mouse on your screen so that I can point different things out and I can click around. The first version would only allow me to highlight my button and highlight different areas. Highlighting meaning, I think it’s yellow, right, that would come and glow.
Dan: Yeah, that’s a good point. The original version of highlighting was position based, so basically if you highlight the top left of the screen it would highlight the top left of the customers screen. We had to get rid of that because if you’re in two different browsers, if you’re in iOS and I’m a rep and I’m in Internet Explorer, the way that the pages are going to be laid out is very, very different. We had to switch to an element based highlighting, so if you highlight something on your side we’ll uniquely identify that on the agent side and then go and highlight it on the customers side, and just highlight that one thing. That was one thing that we had to change.
The other thing was, like you just mentioned, a real control, which is the agent can actually collaborate with you on the site. It’s kind of like Google Docs for the web where both people have, there are two mouses, and an agent can be typing into a form field while you are typing into a form field.
Andrew: Okay. You initially thought that was going to be used by people who have live chat customers, right?
Andrew: You’re on a site, chat box pops up, you use it to ask questions of the company rep, they talk back-and-forth with you and because of Firefly they can also highlight different areas of the site. That was your theory. What happened when you started to talk to customers who were using that?
Dan: What we found is that some people liked it and some people didn’t. The people that liked had really complicated websites so a lot of them were SaaS companies, so they had dashboards and complicated graphs or enrollment processes. The people that didn’t like it were like a retailer for example. Some retailers like it but a lot don’t because the kind of questions they get don’t lend themselves to co-browsing. A question that a retailer might get is “does this come in orange?” Or “do I get free shipping?” It’s not like “how do I find something?” Or “How do I add a new user to my account?” Or something like that. Co-browsing isn’t as useful for that.
Andrew: Okay. What’s a site where I can go see them use Firefly?
Dan: …for one thing, any site that has Olark, Olark is a live chat tool. So they have, they serve small to medium sized businesses, they have about five thousand customers on their platform. And site that uses Olark, uses us. We did a deal with Olark, so that Olark has a co-browsing feature, that we power. And Olark pays us for all their customers.
Andrew: Okay, I’m going to come back and ask you about that. Let’s continue then, now I see where the product is, I see you hunting around for potential customers. Help me understand how you get the feedback from them? Is it, do you cold call in, and say hey, would you use this? Do you look at an Ecommerce site’s live chat box, and start chatting in there, and saying would you use this, or what do you, what did you do?
Dan: We did a variety of different things, so especially with the live chat tool. You know, some of it was chat, you know, where you just start talking to people over chat. A lot of it was, cold emailing, that was like, that was a really, really big thing for us, where we would get a list of people, we went through, like, um, the entire Wharton Alumni database, and just found people that we thought would be interested in this, and just cold emailed them. And it’s actually a lot easier, when you can say, oh, I’m from Penn, you went to Penn, you know, can you talk to me. Some people were like, no, but a lot of people said, yeah, I’d love to help you. And so you can sort of get advice from those sort of people.
Andrew: Oh, that’s great.
Dan: Yeah, and so cold emailing, you know, those people, people at companies we thought would be interested in, and then really trying to listen as much as we could. You know, the tendency is to like, want to, like, go in and do your sales pitch, and, like, want to talk as much as possible. But, especially in the beginning, you don’t know what to talk about. Because you don’t know what kind of company you are, you don’t know the product you’re selling, you don’t know the industry that well. You don’t know what appeals to the people you’re trying to sell to.
And so you really have to like, ask questions to illicit that type of information, and write it down, so that you can get a good picture of how to sell it. And, so what we do is just try to understand how, these people did support all day, and like what kind of problems they had, and then sort of try to figure out whether what we had built would fit into what they were doing.
Andrew: Was this a set of calls with a dual purpose, to both learn and also pitch them on using you?
Dan: So that has, you have to be really careful with that line, because if go into people and say, I want advice, and then, try to flip it and say, well I’m actually selling to you, they’re going to get angry. And they should be angry, because you’ve got them on the phone under false pretenses. And so, at first for us, depending upon the type of person we were talking to. So, like a lot of the Wharton people, we’d be like, we’re just asking for advice. A lot of people that were using chat, the chat products, it was more like we’re, we’re really just trying to sell this to you.
Even, but even when you’re selling, you can be like, I want to learn more about your company, and I want to learn more about, like what you guys do every day. But, yeah it’s a very, it’s a fine line between sort of asking for advice, and selling, and you want to tread that carefully.
Andrew: So how do you cross it?
Dan: Well, if you ask someone for advice, and they give you advice, and they say, so how can I help you? You say, well, you know, is this something that, that your company would be interested in? And they’ve sort of invited that in and like, it’s OK to ask that in that case.
Dan: But in general you don’t want to go in and do a hard sales pitch to somebody that you’re trying to get advice from.
Andrew: But you’re looking for them to open the door to a sales conversation, and then go through it, but you don’t…
Dan: Yes, if they want to, yeah.
Andrew: You don’t even knock on it?
Dan: Yeah, but the people that you, that you cold emailed, like obviously you can do your sales pitch, but you also want to talk as little as possible, and really get them to talk to you. Because, they’ll like you better if they’re the ones that are talking, to you…
Andrew: Do you remember your first customer?
Dan: Our first customer was this company called Safe Food 360; they basically did like food inventory management. So like, you, if you want to know, like what food is going bad in your fridge, or something, like your industrial fridge, you can upload all the expiration dates for your food into the platform. And so they had a, like I said, like a complicated interface. And this is something that they needed because, when you have a complicated interface, and someone calls in, it’s very difficult to diagnose the problem.
So, it’s very difficult to understand, does the customer have a bug? Are they not familiar with the interface? And once you’ve diagnosed it, it’s very, very difficult to like help them resolve it, by like, you have to explain to them like where to go on the website, and that’s what we said is the most, is a really difficult thing to do. And, seeing what they’re seeing, allows you to diagnose it instantly, and allows you to resolve it really, really quickly, and so they really liked it for that reason.
Andrew: They have a really nice landing page, I don’t know who designed it for them, but it’s done really well.
Andrew: And you got them through cold calls?
Dan: I believe it was a cold email.
Andrew: Okay. What did you use to manage all of your cold emails, to see if people were opening them up, was it just straight Gmail?
Dan: So, we used Gmail, have you heard of Cout?
Andrew: Yes of course.
Dan: We used Cout, I always use Cout, we had a bunch of Excel spread sheets, we still have spreadsheets that we record a lot of the stuff that we’re doing. We sort of use it as like a lightweight CRM, we tried a bunch of different CRM’s, especially early on in the business. You know, you put a lot of stuff in a CRM and you spend a lot of time on it and then it can be not as useful because they’re not really built for what you’re doing. It’s a really, really small business so I think a lightweight spreadsheet is a really good place to start. Especially because CRM’s can be expensive.
Now, which is like two years into this, we’re starting to have to move into CRM because we have a more formalized sales pipeline. We want to be able to track where people are in the process. We couldn’t have done that a year ago. It was, we just didn’t know enough about sales, and the industries that we were selling into.
Andrew: You talked about Olark earlier, how did you get Olark.
Dan: So, Olark was our first big deal? Like I said they’ve got 5000 customers
Andrew: Are you allowed to say that, how many customers they have?
Dan: Yeah, it’s public on the website. So, the way we originally thought of Olark is because we were talking to all these live jack customers and they were saying, “Yeah, I like this.” So, the logical next step was well maybe we should just be talking to the live chat companies rather than signing up all these small business one by one. And so we talked to a couple of them and one of the biggest ones was Olark. We were a little bit nervous because, they already had their own product so we weren’t sure whether or not it would be a good fit. I ended up, I knew that I knew them through Jason Freedman, do you know Jason Freedman? He’s the founder of 42force?
Andrew: No, no. I don’t.
Dan: Okay, anyway Jason Freedman is the founder of 42force, he writes a really, really popular blog and I knew him because I had emailed him asking for advice and he had been really helpful to me and they, actually 42force actually posted a public job offer for me.
Andrew: I remember that in Hacker News.
Dan: And so,
Andrew: Why did you say no to that?
Dan: I mean, at the time I was working on AirTime which we talked about earlier and it just wasn’t, it was a great opportunity but it wasn’t right for me. It wasn’t right for what I wanted. And you know, I would’ve had to leave school and it was, I’m really glad it happened but ti just wasn’t something that was right for that time.
Andrew: That must have felt great. You’re in school and this company that’s well-known does a blog post about how they want to hire you. Usually it’s the other way around.
Dan: You know you put a lot of stuff and you see around him and you spend a lot of time on it and then it can be not as useful because they’re not really built for what you’re doing. It’s a really, really small business so I think a lightweight spreadsheet is a really good place to start. Especially because CRM’s can be expensive. Now, which is like 2 years into this, we’re starting to have to move into CRM because we have a more formalized sales pipeline. We want to be able to track where people are in the process. We couldn’t have done that a year ago. It was, we just didn’t know enough about sales, and the industries that we were selling into.
Andrew: You talked about Olark earlier, how did you get Olark?
Dan: So, Olark was our first big deal? Like I said they’ve got 5000 customers
Andrew: Are you allowed to say that, how many customers they have?
Dan: Yeah, it’s public on the website. So, the way we originally thought of Olark is because we were talking to all these live jack customers and they were saying, “Yeah, I like this.” So, the logical next step was well maybe we should just be talking to the live chat companies rather than signing up all these small business one by one.
And so we talked to a couple of them and one of the biggest ones was Olark. We were a little bit nervous because, they already had their own product so we weren’t sure whether or not it would be a good fit. I ended up, I knew that I knew them through Jason Freedman, do you know Jason Freedman? He’s the founder of 42force?
Andrew: No, no. I don’t.
Dan: Okay, anyway Jason Freedman is the founder of 42force, he writes a really, really popular blog and I knew him because I had emailed him asking for advice and he had been really helpful to me and they, actually 42force actually posted a public job offer for me.
Andrew: I remember that in Hacker News.
Dan: And so.
Andrew: Why did you say no to that?
Dan: I mean, at the time I was working on AirTime which we talked about earlier and it just wasn’t, it was a great opportunity but it wasn’t right for me. It wasn’t right for what I wanted. And you know, I would’ve had to leave school and it was, I’m really glad it happened but it just wasn’t something that was right for that time.
Andrew: That must have felt great. You’re in school and this company that’s well-known does a blog post about how they want to hire you. Usually it’s the other way around.
Dan: Yeah, yeah. It was pretty awesome. It was something that I could never have expected. Like, Jason tweeted me a week before and I was like, “What is it?” And he was like you’ll find out. And then right before, right after he posted, he DM’s me like, “Take a look at this.” And I was like in shock. I was working on something for a computer science class, I think. And I had to just go take a walk. I was like oh my god this is like the craziest thing. So it was an incredible feeling.
Andrew: Let me pause here before we continue with the Olark story. It feels like everything just worked out for you here Not just even here, with Firefly, but I’m scrolling through my notes. Every part of your life seems to have worked out beautifully. Was there any challenge along the way?
Dan: Well, I think that first of all, all the sites that I’ve built that no one has ever heard of, that were unsuccessful , no one has ever heard of. So, I can go through a list, I was going through an old computer of mine which had all my old projects and it was just depressing, the sheer number of projects that I’ve worked on over the last 8 years that either had never seen the light of day, or I tried to get running and no one would use.
Andrew: Were you depressed at the time, were you even aware of it?
Dan: Aware of it?
Andrew: Aware that people didn’t want to use your site or were you just whipping these sites out and continuing with your life and not…
Dan: Of course I was aware of it because the thing is when you’re building something, especially early on, it’s kind of like, your baby and you’re thinking, “Oh, this is going to be the biggest thing ever.”
Andrew: Talk more specific. Give me one specific example of something that you felt was your baby and everybody said, “Dude, damn this thing is ugly.” And made you question yourself.
Dan: This is a great example. So, in 8th grade I was working on this site called the Writ. And it was like Digg. You know Digg?
Dan: Big social news site and it was really popular at the time and I was looking at Digg and I was like, “I want to build something like that.” So I built the Writ which was like Digg except instead of submitting stories to the site, all the stories were collected by feed aggregators, you didn’t have to submit anything and you could just upload stories. And I was like, well the fact that it’s so much easier, cause now you don’t have to submit stories manually makes it a better site.
Andrew: I think that’s a Digg 3.0 before Digg 3.0.
Dan: Yeah and so that was my idea. And so I spent I don’t know 3 or 4 months building it. I built it in Python which I never used before and I spent so much time on it and I loved it. And I was thinking, “This is totally going to blow Digg out of the water.” And I released it, I posted it to Digg because I was like, “Well the main user base is going to, obviously, be Digg users who have realized that this is way better than what they’re using already.” And it got a couple points; I still remember that someone commented, “This is the ugliest site that I have ever seen.”
Andrew: And that was the only comment on it and then I stopped working on it after that.
Dan: But there’s just, I mean, there’s a lot of [??].
Andrew: And you took it to heart? Did you say, “Hey, maybe I don’t have a good design eye, maybe I’m just not in Kevin Roses league?”
Dan: So the thing about that stuff is… I wasn’t like, “Well I can’t design anything anymore.” I was just like, “Well I’m just not going to work on this particular project anymore and I’m just going to, like, do something else, I guess.”
Dan: And, yeah, it was depressing, I was like pretty sad for a while. But I always sort of stopped… I always, sort of, picked myself up and did something else. The next thing I did after that was this game, it was called Park-a-Thon, and basically you were supposed to be a valet parker and you had to park as many cars as you could in, like, a minute or something like that. No one ever used that.
Andrew: I see.
Dan: There’s just a ton of things.
Andrew: Alright. So, then, one of the things I notice a lot of smart entrepreneurs do is they don’t say, “How do I get customers?” they say, “How do I get a partner who has my customers because then I get a lot of customers all at once.” And you were smart enough to do that early with Olark. You see that they have a product of their own, why bother with Olark if they already have a product of their own then?
Dan: Well it was something that we were nervous about, we knew that their co-browsing was very basic so we thought, “Maybe, like if it doesn’t work that well, maybe we’ll be able to give this to them because ours worked better than theirs did.” And so I got the info from Jason and I got on the phone with him and I was a little bit nervous and he was like, “Yeah, this is something we’re really interested in, give me a demo account, I’ll take a look at it and we’ll let you know.” And so, what happened was they were like, “Yeah this is really great we want to do this.” And from that point, until when we actually signed a deal, it took about a year.
Andrew: A year, and they’re a fast moving start up.
Dan: Took a year.
Dan: Yeah. It was ridiculously slow and it was also depressing for us because the other side of the business, which was, like, direct selling to, like, small businesses, or medium sized businesses, or even large businesses, was also not growing. And so, from the time we launched until, probably, June of the next year we were doing 1000 or 2000 dollars a month in revenue.
Andrew: So why’d you stick with it? I understand committing to six months but when you’re doing, maybe, 1000 to 2000 and you’re three guys, and you have other things that could take your attention, why stick with it?
Dan: Well it was just one of those things where we had a bunch of things that we were kind of working on but nothing had worked out. Nothing had closed, nothing had, like, materialized in a way that meant we could, like… we were making a lot of money. And it was always like, “Well if this happened and this happened and this happened then we’ll have, like, at least a reasonable business.” And so Olark was one of those things where it was like, you know, we’d been talking with them, we were negotiating a contract, we’re like trying to get [??,] all this stuff, and it just kept taking more and more and more time.
Andrew: I see.
Dan: So there were always things on the horizon but they just didn’t materialize and then, after about 12 months, in a span of like two or three months, everything sort of came together and, like, business basically jumped, like, a couple orders of magnitude in terms of revenue.
Andrew: Because of all these opportunities like Olark, and the Olark deal is you get paid every time someone becomes a customer of Olark because your product is baked in, is that right?
Dan: Yes, exactly.
Andrew: That’s unreal, that’s like a Bill Gates type of situation where every time you sell a piece of IBM you have to pay me for Windows.
Dan: Yeah it was, I mean, it was a great deal for us, I think it’s a good deal for them, I hope they feel that way. They were a great company to work with because they’re really, like, nice people and they’re start up guys. They understood what we were doing because they had been where we were, like four or five years ago. And so, it was, like, it was the perfect first company to be working with in that capacity because they really tried to make it good for us even though it took forever to get it going.
Andrew: Alright, some one’s going to be listening to us right now and saying, “I’ve got software or something that I should be selling that have a ton of my customers.” and they’re going to reach out there and start to do it and they’re going to make a mistake that maybe you made, what’s one mistake that we can help them avoid?
Dan: A mistake that we can help them avoid, that’s a good question. I mean, I think for us, like, one of the biggest things was pricing. Because we didn’t want to go into a contract and, like, accept their price, and then realize it was the wrong price and not be able to get out of it. We didn’t want to give away our software for too low a price, and so there was a lot of, like, internal debate about, like, well, is the price that we’re paying good or isn’t it good.
And so basically what we did was we said, oh, Owen [SP] told us this is the price that you want to pay. And we said, okay, we’ll pay that. We’ll allow you to pay that. You’re our first customer and we’re going to give you a deal. But we also gave ourselves, like, a little bit of an out. Where it was, like, look, if this doesn’t work out that we’ll be able to, you know, sort of end the agreement, I guess, and sort of start over.
And so I think for us what was really important is realizing that the first couple of deals that you do, especially with your company is you’re probably not going to get the price that you want. You have no leverage. And what you should really be concentrating on is making them as happy as possible and finding someone who won’t grind you into the ground in terms of all the terms.
Because a lot of a lot of those companies can do that. And we had companies do that to us. Not Olark, but other companies that we worked with where they’re just like, for no reason at all, they just, like, smash you. And they just want to get every single penny . . .
Andrew: Because they can. Because you’re so small and you need them so desperately and you can attach a little bit of your website. So you should be happy with that as payment.
Dan: Yeah. So the key is A: not working for those kind of people. Recognizing when you are working with those people and trying to not work with them, which is a mistake.
Andrew: Why not? When you’re starting, isn’t it just enough credibility to say we’re baked into Olark?
Dan: Oh, I’m sorry. I’m not saying don’t work for Olark. I’m saying don’t work for people who will grind you into the ground.
Andrew: I see.
Dan: That was just not what Olark did at all. We had other people that just really hammered us down. And the thing about these people is that they’ll tell you while they’re doing it, oh, I’m just trying to help you. When people say that, like, you know if they’re not really trying to help you.
Andrew: I see. Someone who tells you I’m trying to help you is not trying to help you?
Dan: Generally, they’re not trying to help you. Especially is it’s in a pricing negotiation.
Andrew: Let me ask you this. I see Olark sending you traffic and is a big customer of yours. But so is something called Sportech. Sportechlabs.
Dan: Sportech? I don’t know what that is. Anyway.
Andrew: They’re a partner of yours. I think you might even have a sub- domain on your site for them. Sportechlabs.usefirefly.com.
Dan: So any one of our customers, when you sign up, you get a sub-domain. So if you signed up and you were Mixergy, you would get mixergy.usefirefly.com.
Andrew: Yeah. But they just seem to be a big customer of yours, and I thought maybe they had something going on that I’m not figuring out here, because I’m on their site and I don’t know anything about them.
Dan: I’ve never heard of them. So it’s possible they’re our customers. I’d have to look. We do have a nontrivial amount of customers that have signed up without us talking to them, but they’re not one of our big accounts.
Andrew: I see. Okay. But my researchers are telling me that they send you a healthy amount of traffic. That’s why I brought them up. But you know what, maybe . . . Yeah.
Dan: Another good example of a site that you could find us on is State of Washington. So they have a health benefit exchange like one of the Obamacare exchanges. And we just launched them. They bought about 300 licenses so their whole contact center is using it.
Andrew: Huh, that’s great.
Dan: Yeah, and so they’re helping people enroll in the Obamacare Insurance plans.
Andrew: There was a competitor of yours who actually sold out. What did they sell out for?
Dan: They sold for about $80,000,000.
Andrew: $80,000,000. Do you go to bed at night going, I could be $80,000,000 richer like that?
Dan: Uh, no. Not really.
Dan: I mean I think for us, it’s definitely like a motivating factor. We don’t know exactly what their revenues were, but we don’t think it was close to that. So we’re not sure exactly. They had about 20 employees and they raised a bunch of money, so they’re kind of different type of company than we are. They’re more of a like a really, really fast growth, and we’re, like, a little bit slower. It’s something that we might do in the future which is raise money.
It’s something that we would point to if we were going to get acquired. Which is like, hey, this other company sold for $80,000,000. So we should be valued higher because of that. The technology is really valuable. But it’s not something that I’m saying, like, tomorrow we could sell for that. It’s a long road.
Andrew: How do you figure out what to charge them on your site? And where was that? Actually I was on your site and now I clicked off. I see you have three different pricing options and a fourth one buried underneath all of those. That kind of came from 37 signals where a bunch of us learned you’ve got to hide your free option.
Dan: Yeah. So I can’t give advice because, you know, honestly, I think pricing is the biggest thing that we struggle with the most. I can give you some sort of tips. I can tell you how we think about it, but I really don’t think that we do a very good job of it.
Andrew: I think you guys might be undercharging for what you offer? Right?
Dan: Well, so it depends. With a…when you’re dealing with a big company, and they’re buying like lots of licenses, you know, 50 or 99 dollars per month for what we do…
Andrew: Oh, it’s per rep per month. I see.
Dan: It’s per rep per month.
Andrew: Got it.
Dan: That’s actually a lot. The way that we sort of thought about it, at least for what’s listed on our website, is we went and looked at some of our competitors, and we priced kind of around what they were pricing at. You know, when you’re starting out, you don’t know how people are using you, you don’t know how often they’re using you, you don’t know what kind of value you’re going to provide.
So a good benchmark is to look at other players in the space, and I actually just…I did an analysis of this, I have this whole Excel spreadsheet where I was looking at what do other people in the customer support space, who were doing kind of similar things to us, charge, and then we just sort of went with that as what we listed on our website.
When we deal with companies like Olark, or we have a partnership with a company called, “eMoney Advisor,” they’ve rolled us out to about 7,000 financial advisors, and we deal with those kind of like business to business like large deals. The pricing is significantly different, and that’s like a custom negotiation that we started figuring out what they want to do, and then you know, what the scale is going to be, and then find a price base on that.
Andrew: Okay. Have you gotten buyout offers that were serious?
Dan: Yeah, so we had one buyout offer. It was this company, and they were like “Hey, we’re interested, we want to buy you.” They flew us out to California, and you know, we met with the CEO. We had dinner with the whole team or whatever, and it was also a company that we were partnering with. You know, we get back, and we’re expecting…we flew back, and we’re expecting any day they’re going to give us an offer.
We get on the phone with the CEO, who says, “Hey, so we decided we’re just going to do the partnership for now, and after that like we’ll explore like doing an acquisition later.” We were just like “Ugh,” you know? Especially at that point. That was actually before Olark even closed, so we were still doing like one or two thousand dollars a month in revenue, and so like having that kind of…having someone who was really like interested enough in what we were building to like want to buy it was very distracting to us, and we really spent like two weeks kind of like very excited like “Oh, I can’t wait until we go to California, and like sort of meet this company, and see what they want.” That kind of thing. It was a pretty big like emotional low point in the process.
Andrew: Was that CEO Ben? Was his first name, Ben?
Andrew: No. Alright. That actually brings up something, I’m looking in my notes for it, and I can’t seem to find it, about…that’s one of your challenges. We asked you in the pre-interview what your challenge was, and it was staying positive in the face of situations like that where someone says, “No, I don’t want to buy you, I want to partner with you,” or someone was says, “I want to partner with you, but it takes a year.” How do you stay positive when that happens?
Dan: Well, I mean, so at least for me…you know, I think if you ask my co- founder like he would have a different response, but at least for me, I looked at what we were doing as a learning experience, so I want to learn how to build a real business. It’s not necessarily about like building the biggest possible business. It’s not like I need to build a billion dollar business tomorrow. You know, this is something that I want to do for a long time, and so these are experience that I’m going to have that will help prepare me to do that for a long time.
Andrew: This isn’t like…you’re not thinking of this as being the business that makes you into almost a Citrix, which is a huge company. You’re thinking, “It’s a learning experience. I’ll learn something from here, and maybe I’ll use it in Firefly, maybe I’ll use it somewhere else, but as long as I learn I’m cool.”
Dan: Exactly, so I mean, you know, I don’t want to rule out us doing that eventually, but it doesn’t have to be that.
Andrew: Why doesn’t it have to be that? Why don’t you feel the urgency to be the biggest and the best in this business to crush everyone else to say,” You know what, my dad tried to use LogMeIns. Product LogMeIn is not right for him. There are millions of people like him. I’m going to service all of them, and I’m going to make big money…”why don’t you have to feel that way?
Dan: I think…obviously like you want to be motivated to do all of those things, which is like be aggressive about what you’re doing, try to get as many customers as you possibly can, and sort of like act as though you’re trying to get as big as you possibly can, but this is more like in the back of your head thinking about, “OK. If this doesn’t work out…”it’s a way to manage your psychology, right? If this doesn’t work out, you know, the worst that happens is like I’m a much better entrepreneur for it.
Andrew: That’s it, so any time you start to feel negative, you think, “Well, I’ll be a better entrepreneur for this.”
Andrew: When do you feel negative? I’ve watched you. I’ve read you. I’ve talked to you, and never in person. It’s all been email, or online. You don’t seem like a person who ever gets negative. You don’t seem a person who ever has inner doubts.
Dan: I mean, I think [??] pressure is really hard because the psychology is very hard to manage. Like, how you’re feeling on a day to day basis is very difficult to deal with because the thing that happens is you do a lot of work over a long period of time and you get very little positive results. And you know what happens is like maybe one day like someone says oh, like we’re interested and you get like really jacked up, really excited and the next day you get two people who don’t respond to your cold email or say like this system isn’t for us and you get like really down and people don’t talk about [??] sort of like this rollercoaster and I think that’s the hardest thing of managing the day to day.
Andrew: What’s your process for managing your day to day when you could easily fall into the trap of thinking nobody loves this product, nobody cares about me, I need to just go get a job because I’m not meant to be this entrepreneur.
How do you deal with that?
Dan: I mean, so there’s a couple of things. One, while you’re in school, if you’re in school and doing it the worst that happens is you go to class the next day. So it’s a nice buffering factor when you’re just starting out that’s like look if this doesn’t work out I’m still getting my degree, I still have [??]. So that’s one thing that makes it easier when you’re young.
Second thing is once you have a lot of experience it gets a lot easier to not draw like really large conclusions from very little pieces of data. So tomorrow if someone says to me look, this isn’t useful for us, I’m not going to draw the conclusion that the whole product isn’t useful and like our whole business is going down the tubes. I’m just going to be like, that guy didn’t like it and he probably didn’t like it because the way he does support is very different from the way that most of our customers do support.
So it gets easier to like interpret data in a way that doesn’t make you either too jacked up or too low. And I think that that just comes as experience because when you’re starting out and someone says this doesn’t work, I don’t like it and you have like this one data point of someone saying I don’t like it, obviously you’re going to believe that it doesn’t work or it’s going to be difficult not to believe that or at least like emotionally feel that way. So I think the longer you do it the more even you are.
Andrew: I get that.
I’m going to do a plug and then ask you for feedback here right in a moment. The plug is of course for Mixergy Premium where over 900 entrepreneurs have told their stories. One of the things that I love about that is when I surround myself with stories of successful people, I become inspired the way that Dan was when he read about Bill Gates. It opens your eyes to new worlds of possibilities. And sometimes not even a whole world, sometimes a piece of a world that you could integrate into your life.
And that’s why I love doing these interviews, that’s why I go home and I read biographies. I learn, I pick something up and I don’t even have to work at it. I just hear a story, something will stick in there and then it’ll naturally come out. That’s the way stories work, they’re fun to listen to, they’re memorable because they’re stories and then because I focus on making these interviews useful, you will get something out of it, I promise, if not today, then tomorrow, if not today, then tomorrow and a year from now, maybe one day, when you’re selling your company you’ll think back to the interview that I did with a person who tried to sell his company and didn’t work out and he was tempted to be bummed and he still continued and you’ll learn something from that.
That’s the whole idea behind doing interviews, behind reading biographies, behind hearing other entrepreneurs tell their stories and if that’s something that you’re into, I would love for you to at least try Mixergy Premium where, as I said I’ve got over 900 interviews with successful entrepreneurs and all you have to do is go to MixergyPremium.com. Thousands of people have done it, thousands of people have signed up and I hope you, the person who is listening or reading this interview will go and be the next person to discover Mixergy Premium.
Dan, you know my work and I think you come from a very analytical place and a good place where you’re not going to tell me how I could take advantage of my customers or how I can, I don’t know what. I like your attitude on business and the way you break down your experiences on your blog.
My mission here is as I said, to tell stories of successful entrepreneurs to other entrepreneurs so they can learn from them. What do you think I could do to improve? What do you think I could do to make this more useful to the guy or the girl who is in their dorm right now listening and eventually will become the next Dan Shipper and maybe become the next Drew Houston or I don’t know how big they can get.
What can I do to make this work more useful for them?
Dan: That’s a good question. So I really like the video format because it’s something that you can sort of like turn on and like if you’re working you can tune in and tune off and you just have it on the background and it’s inspiring to have access to these kind of stories.
In terms of like how to be better, well I think anytime that you have, so you have Mixergy courses. I think those are important because when you have [??] right now and you ask me a question that I have a [??] for, it’s difficult for me to like fully give you like exactly what I think my response should be and to have a fully considered opinion of, you know, like how we send our customers, right? I can go into a lot of detail that we haven’t gone into right now by writing about it and being able to be like fully compared to list out all the points.
So I think the more kind of courses and stuff like that that you can have and the more written content the better because it allows you to be more detailed and more methodical in how you are talking about your company.
I think another thing that I think about is when you’re asking me questions, when you’re asking like any entrepreneur questions and it’s like in public and I don’t know if this is anything that you could do differently, specifically there’s a lot of politics in how you talk to people when it’s in public, right? And so I’ll tell you some things that I’m worried about but I can’t tell you like everything that I worry about in terms of the company. And so I think that’s kind of an issue. I don’t know how you would solve it but that’s kind of interesting to think about. It’s like how can you elicit more of that like, the real core stuff that people worry about or have problems with.
Andrew: What do you think I could do to get to that core stuff that you shouldn’t talk about publicly?
Dan: So it’s a problem to me because there are other people involved, right? Even if I want to tell you like all this stuff that I’m worried about, like, it affects other people that like wouldn’t want me to say it and it affects the business. And so I can’t get into that so maybe like when I’m like 60 and everything’s done and I’m just like you know I can say whatever I want, then I can sort of like talk about all that stuff. But it’s so difficult when you’re in the moment and you have all these people that you have relationships with that you can’t say certain things.
I mean, maybe the solution is to make it anonymous like you can you just write anonymous posts about like your [??] but even then those would be pretty obvious for particular businesses.
Andrew: You know what? There’s a pretty well-known entrepreneur who lives not too far here from my office who got screwed by his investors and he was dying after it happened to talk about it but he was smart enough to now that he shouldn’t and I told him he shouldn’t come and talk about it too. And it’s that kind of a story that would benefit from an anonymous airing by someone disconnected.
What I’ve done with that is talked about it here. I love talking to entrepreneurs long after they’ve sold their companies or failed with their companies or after the stories are a little bit old because I think at that point it’s easier to talk and essentially what happens to us is the same, you know? The person who is, the way you figure out pricing today or deal with a tough employee today is going to be the same as someone who is listening to this interview 20 years from now and that’s one way that I wait for it to be old. The other way, Dan, there’s something that you can be open about that others can’t be open about and so if I get you to be open about that then I reveal another piece of the puzzle, there’s someone else who says you know what? Screw it, I can talk badly about my co- founders but I can’t talk about my partners or my customers. Then I get them to talk about that and hopefully if you listen to all these interviews together you start to piece it together. I don’t know if that’s true but that’s been my sense.
Dan: That makes sense. And I think, at least for me, Mixergy was I definitely got some things out of it that we really applied. So I talked about the Sam [??] interview before where he was very specific about like these are the kind of questions that I asked and this is how I understand what problems people have and it was really instructive for me. I had [??] for me.
But another thing that I think Mixergy is really good for even if the stories aren’t like it’s not the most core raw stuff it’s incredibly inspiring and like really when you’re having a really tough time it puts fuel in the tank where you’re like, I can do this. This guy makes me feel motivated, watching this entrepreneur answering questions really makes me feel like I want to go out and kick ass, you know? And I think that’s really great.
Andrew: Well, one of the cool things you did was you heard a past interview and you contacted the interviewee and I noticed that successful people do that all the time, they don’t just watch. Like there’s this great story about Steve Jobs hearing about HP and calling one of the co-founders of Hewlett Packard and just asking the questions. And I think, that is so Steve Jobs that is such a successful person thing to do. You see someone who you are inspired by, you don’t just say well there is another character in the world, you say there is another character in my world then you reach out.
But most people who would hear that would say, well that’s Steve Jobs of course, he is so wealthy and so successful, any one should take his call. The odd thing was when I heard that story till the end, I realized Steven Jobs wasn’t even a teenager when he called up one of the founders of Hewlett Packard. He just did it because he felt that he was part of this world not [??] in it. I noticed you did it and many others in the audience. I say all this not to talk about Steve Jobs, but to talk about the persons listening to us.
If you are listening to us or even reading the transcript, because you preferred that and you got something out of it, I urge you and I urge everybody to find a way to say thank you to [??] to connect with them. You don’t have to ask him for anything. I wish you wouldn’t write long emails, because nobody loves long emails. But I do think you get a lot out of saying, “Hey you know Dan, I saw this interview and there’s one little thing that I got out of it. Hey, you know what Dan, I’m nine years old [??] and I got something out of your interview and I’m looking forward to one day being on there too”.
There’s so much that you gain from it. It’s not just what you get back from the other person, but what you put out there in the world. When you stand up and you say, I am on this stage I am a player in this field and I’m not just an observer sitting in the stance. Do you agree Dan?
Dan: I totally agree that’s actually how I met Jason Fried.
Andrew: Yeah, tell me the story.
Dan: Actually what happened was there was a twitter thread that he was involved and I responded to the twitter thread and he said, by the way [have you ever in] Chicago? I have no idea why he said that, but I was like of course I’m in Chicago [??] I’ll be in Chicago in January 1st or January 2nd or whatever it was. I just made something up all my girlfriend’s friends are there [??] and he never responded. I wasn’t sure what to do, so what I ended up doing was that I went through all these [??] pages and I did like a copywriting analysis of what they’re trying to do.
First is, like [??] their competitors [??] out there. I put it in the spreadsheet and I came with a list of ten questions that I wanted to know from him. I was like, “Hey Jason I was just thinking about it, I did the whole analysis [??] I have all these questions these are some of the things I’m thinking about by the way are you still available on January 2nd or whatever and he responded yes [??] bought the ticket. It was incredible
Andrew: Way to go Jason for inviting you.
Dan: Yes, I don’t think he knows that.
Andrew: Well, he does now. Thank you so much for doing this. Everyone else check out usefirefly.com and also Dan’s blog. Daniel blog is danshipper.com. That’s where I read about your analysis, your first years in business, specifically in firefly and I emailed the team and I said we’ve got to get down on here. And I’m so glad that we have you here. Check out the website. Thank you all for being a part of it. Bye guys.