Hatchwise: Bootstrapping With No Coding Experience – with George Ryan

How does a guy who couldn’t code and couldn’t design, bootstrap a profitable site where thousands of people come to buy designs?

George Ryan is the founder of Hatchwise, an online marketplace for design. When customers post a request for a design on Hatchwise, they have access to thousands of artists who compete for their business.

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About George Ryan


George Ryan is the founder of Hatchwise which offers affordable, quality custom graphic design.

Raw transcript


Mixergy’s audio transcription is done by Speechpad

Andrew: Two messages before I get started. First, have you heard people say that their businesses grow because they buy ads from Google? But when you go to buy those ads you blow through cash, it’s a waste of time and it’s a waste of your patience? Well, if that’s you, Iain Dooley, a long-time Mixergy fan wrote a book that I think can help you. If you want to check out that book, type this phrase into your Google search box: “your first three months on ad words.” That’s right. All you have to do is type that. You’ll see he’ll be the first result if you type in “your first three months on ad words.”

Next, if you’re a startup founder and need a lawyer, check out what Neil Patel says about Scott Edward Walker of Walker Corporate Law. He says, “Scott is a great lawyer. He’s affordable, responds fast, doesn’t charge you for five minute phone calls and always gives great advice.” So if you’re a startup entrepreneur and need a lawyer, go to WalkerCorporateLaw.com.

Alright, let’s get started.

Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, the place where I interview proven entrepreneurs so you can hear their stories, absorb as much as you can and you will see you if you do that over and over that naturally you’re going to start to think smarter. Naturally, what you hear, what you learn will come out of you, and will be expressed by you. Don’t sweat it, just let the process happen and enjoy the process, enjoy the interviews and the stories in them.

In this interview we’re going to find out how a guy, who didn’t know how to code, who wasn’t really a designer, ended up building a design site that’s now profitable even though it’s bootstrapped.

Today we have on Mixergy George Ryan. He’s the founder of Hatchwise, an online marketplace for design. Their customers post design requests on Hatchwise and then they have access to thousands of artists who compete for their business. I invited him here to see how he did it. Welcome, George.

George: Thank you so much for having me, Andrew.

Andrew: I’ve interviewed entrepreneurs in the past who I’ve called bootstrapped and in the middle of the interview I discover that yeah, they bootstrap but they had tons of money so they invested maybe four or $500,000 in their business which they don’t consider a lot of money. How much money did you invest in your business?

George: From the very first day that I started I think I spent maybe $100 on a computer and I spent $50 or $60 on a little bit of advertising. This was way back when I first started.

Andrew: How did you get a computer for $100?

George: My very first venture was trying to start a little computer repair company and I ended up with people saying they didn’t want that computer. Honestly, I had a little laptop, I didn’t even own a computer and I was trying to repair computers, and they said, “Hey, we’re just going to get rid of it,” and I said, “Well, I’ll give you $100 for it if you want because I could use a computer.” That started me off.

Andrew: I see. How much money are you guys making now?

George: I can’t give out any numbers as far as that goes, you know, it’s a privately held company. I can say we have done a couple million in sales since we launched Hatchwise.

Andrew: When did you launch Hatchwise?

George: We launched Hatchwise in April of 2008. I started about two years before that to start my own business. I went from zero to Hatchwise in about two years and I had a whole bunch of different . . .

Andrew: Oh yeah, some really interesting projects here and we’re going to talk about those throughout the interview. Since 2008, about $2 million in revenue and what percent of the money that I pay a designer on your site does Hatchwise keep?

George: Hatchwise gets any listing fee. We charge $29 to list a project and then we have some upgrades that will get your project in front of the designers, options for privacy, stuff like that. Then you select the amount you want to pay the designer. There’s a minimum of $105 for a logo project. We take 20% of the earnings the designer gets and that covers the cost of us processing the payment from you, the cost of us paying the designer out via PayPal, and there’s a little bit of profit built into that, too.

Andrew: So when you say that you’ve got a couple million dollars in revenue roughly, are you including just the 20% you take in the fees or are also including the overall amount that I pay a designer?

George: Including the overall amount.

Andrew: I see.

George: I would’ve loved to have made a million dollars in the past four years, or a couple million, but no, we’re not quite there.

Andrew: So it’s fair to say you’re doing. . . You’re personally taking out of the business, the business is making between a $100,000 and $300,000 a year profit.

George: Again, I’m not going to confirm or deny anything, but it’s doing well and that’s not out of the ballpark there.

Andrew: Okay. What’s shocking to me as I said at the top of the interview is where you got started. You were working in a lumberyard. What were you doing in a lumberyard?

George: Yeah. I was working in a lumberyard. I got married when I was 19. I met the love of my life and locked that down, and I ended up, I needed some money. So I got a job working in a lumberyard making $10 an hour working 55 hours a week, and it was just driving a truck around delivering sheet rock, stuff like that. Honestly, obviously it didn’t pay that well, but driving a truck around is not a bad job. You listen to music. I like to solve problems, so there’s a little bit of getting from point A to point B the quickest, but I’ve always had a desire to be part of something bigger, to have something I created, something that brings a lot of people together and get stuff done. And that just wasn’t happening, driving a truck.

Andrew: Why do you end up driving a truck when you have this desire to do something bigger?

George: That’s a good question. Like I said, I ended up getting married and I needed to bring some money in. I looked around and ended up with that job. I wasn’t planning on it being a long-term thing, but then you start doing it. You end up working 55 hours. You don’t have much free time. It took me a little while. I’d say I actually did it for about five months before I realized I have to do something different. I can’t do this anymore.

Andrew: What were you getting per hour? Are we talking about a $10 an hour job?

George: Yeah. I started at $10 an hour. I think by the time I left I had gotten it up to $12, but it was mostly $10 an hour for the most part of it, and it was 55 hours a week. So it was 10 hour days and five hours on Saturday.

Andrew: You were married at 19. You had a child soon after, right?

George: Yeah. My first child was born when I was about 20 and she’s great. We actually have four now.

Andrew: Four children?

George: Four children. Yes.

Andrew: Did you feel trapped? Because here’s the thing. When you’re just a single guy, you can take a lot of risks, and it doesn’t matter where you live. It doesn’t matter how much you earn. You’re fine. Then you get married. It matters a little bit more because now you’re two people. You have to take care of each other. And then you have a child, and then you can’t take as many risks. You can’t sacrifice a lot of revenue. Am I talking about this the way you experienced it, or am I exaggerating?

George: Most definitely. It’s one of those things that can be the problem you’re describing, but it’s also an incredible motivator. I was 20 and working in a lumber yard. I could do whatever I want in the evenings. There’s always that old thing that it will work out eventually, but when you actually have people you’re responsible for you have to take care of, it gives you that motivation and that drive to actually push forward plus, at least, for me my wife is my best friend. I couldn’t have done anything that I’ve done without her, and it’s actually because of her encouragement that I am where I am today.

I had someone ask a while back. They said, “What would you have done if your wife had said, ‘I don’t want you starting your own company.'” I said, “I wouldn’t have started it because she’s my best friend and I needed her behind me.” I needed her help to do it. I think definitely it’s helped me a lot more than it hindered me being a family man in that situation.

Andrew: So you come home one day, and you say to your wife, “I can’t do this anymore. I’m going to move on.”

George: Mm-hmm.

Andrew: What was her response?

George: I went home that day. I was frustrated. It hadn’t been a good day at work, and it a fairly basic job. And then there were some drama at work, that sort of thing, and you’re like, “What’s the point?” I went home, and I was just frustrated and to Katie I said, “I don’t want to do this anymore. I don’t know what to do, but I wish I had my own company, could be my own boss.” She looked at me, and she just was like, “Then why don’t you do that? She’s like, “You should. You should start something. You should do something. I’m 100 percent behind you on that.”

And I thought, “Okay. I’ll give that a shot.” That right there in my mind, that was the definitive turning point for me of actually trying to start out on my own.

Andrew: Jeremy Weise in the pre-interview asked you, “What’s the first step that you took?” And you said, “I made a flyer.”

George: Mm-hmm.

Andrew: What was on this flyer?

George: I made a flyer. I didn’t actually even have Internet at our apartment at the time. So I had to go to the library to do all my research and print stuff out. I went down there, and I’ve always been interested in computers. Back when I was like 15, 16, back in ’99, 2000, I was very interested in computers. I actually ran a few websites back then, and they were like really basic websites. I ran one called Pet Pony.com. That was about pet rabbits. It actually had quite a few people who would come and participate on it and lots of articles and stuff.

Then I gave that up and stopped doing that for five or six years. At the point we were talking about was when I was 20. Hey, I’ve always enjoyed computers. I worked with them a little bit, and I’ve always been good at figuring things out as I go along. So I’ll make a flyer. I’ll say “computer repair $50, any problem, and you pay for parts.” And I figured I would go pick up the computer, take it home, and then work with it until I figured out what was wrong with it. It would basically be a free education.

Andrew: Okay.

George: And so I stuck that out at a few grocery stores, and I got a few calls.

Andrew: What are the people like who take you up on an opportunity like that?

George: Well, number one, something I had to learn the hard way over the years is that people, when you sell on price, you do not get the cream of the crop as far as customers go. I did some work for people at work. They hear you work on computers, and they ask you to take their computer home and work on it. I did that a few times, and then I worked on one, I told you, I ended up buying the computer from them.

Then I had one, which was the last project that I ever did. It was one of those, “This is not the direction moment for me.” I got a call from someone. He said he needed his computer fixed and drove over to the next town. It was a nice, little neighborhood, and the house didn’t look bad. It was a nice, little front yard and everything. I walk in, and it’s one of the weirdest situations I’ve ever been in.

This is after work, so it’s 7:00, 8:00 at night. I step in there, and they’re just newspapers piled everywhere. The front room is empty except for newspapers everywhere, a morbidly obese woman in her sweatpants sitting there watching a little tiny TV sitting on a card table. The guy leads me through that room into the kitchen. There’s open cans of tuna fish all over the counter and cats everywhere. There’s all sorts of junk piled on the counter and a 20-year- old computer sitting on the counter. He was like, I need this fixed.

So I think that just ended up reinstalling Windows on it for him which means you’ve got to sit there for three hours while it goes through all the prompts. And then at the end, I got it done, and I said, “That’ll be $50.” And he tried to talk me down.

Andrew: [laughs]

George: It was like, “Can’t you do it for $20?” I was like, “No. It’s like midnight. I want my $50.” I swear he had tears in his eyes when he was giving me the $50. Then I got home, and I was like, “Okay, I don’t think that’s going to work out.”

Andrew: [laughs] Hey, as we’re talking, the more we talk the darker you get. What’s going on in your environment there?

George: It’s starting to storm outside.

Andrew: Do you have a light that you can put in front of you?

George: Do you want the light on? I can try that.

Andrew: Let’s do that. What part of the country are you in? That’s a huge help.

George: Is that better?

Andrew: Yeah.

George: I’m in Connecticut right now. The hashtag says I’m in upstate New York, but I’m down in Connecticut at the moment.

Andrew: Alright. So now this thing doesn’t work.

George: Mm-hmm.

Andrew: I end up going from this into design, and the way that you got there had to do with a need that you had, right?

George: Yeah. That’s right. I enjoyed working on the computers a little bit. That was fun, but the most fun I had there was putting together the flyer, and I broke like a million laws of design putting it together. I had this little statue that I liked, just like a carving of a man’s head. I took a picture of that with my digital camera and put that in and turned it into a little logo. It was like breaking all of the laws. I wasn’t outside working on the logo. I worked really hard on it. I really wanted to have a decent brand for this. I’ve always thought that if you have a good brand, it helps people’s perception of your company. So I ended up just getting stumped with that.

I had gone online, and I looked around to see how much a professional would charge to do that work for me, put together a logo, and everything on there was like four, five, $600 for three logo concepts with a few revisions. Some of them, you had to pay extra, for revisions. And I mean I wasn’t even making that much a week at the time. You know, I couldn’t justify spending that on something I wouldn’t even, might not even like.

And so I thought, hey it can’t be that difficult to make logos. And I didn’t know anything about design, really, at the time, but I download one of those free clip art packages, which again, is a huge no-no. And I made a little website, I called it overnight logos dot net. Stuck it up there, and got the 50 dollar free I think it would be yahoo-sponsored search ad listings at the time.

And I put an ad up saying 49 dollars and I’ll design a logo. I didn’t make any claims as to it being original artwork, anything like that. I think I might have even said it was clip art, but I had a few people place an order, and they about broke even between the advertising and what they paid me, and they were happy with the logos that they got. I only did three or four projects there, but I saw that was a direction, that there was a market for that. I just was…

Andrew: Before you go any further…where did you learn to even do this? To go and buy an ad on yahoo, to start the business the way that you did?

George: I just researched online. Whenever I am interested in something, I just dig in and try to read as much as possible. I spend a lot of time on…

Andrew: Do you also read books about this, or is it just looking online for solutions?

George: I’ve heard of few books. I find that generally, books tend to be outdated so quickly. Being on the internet, especially forums, is where I learned most of it. Namepros dot com, it’s mostly about domain names. I was interested in that for a while, but everyone on there, people that, there, are learning at the same speed as you and there’s people on there that have been learning and successful for a long time. It’s right on the cutting- edge, when you’re on a forum. So that’s where I picked up a lot of stuff, and other parts of it where just you’re on Google and you see the ads and you’re like, what is this? You know, and you fool around and you’re like, hey, I, too can advertise here.

So I let overnight logos, I let that go, I didn’t really do anything with it, and I think it was like a month or two after that. I was actually on vacation with my wife, we were visiting family out in California, and I think the downtime just gave me time to think, process some ideas, and I remember just having this epiphany, and I was like, remember that guy? ‘Cause I’d ran across a guy on eBay, I was bored one day on eBay and typed in logo design, and there was this kid that was designing logos that were some of the best I’ve ever seen. They were completely custom artwork, with mascots in them, and he obviously loved what he did and he was selling it, three concepts with unlimited revisions for 29 dollars.

This is on eBay, and I thought, hey why don’t I put together a company. I know where there’s people that want to buy cheap logos and here’s someone that is apparently willing to sell it fairly low cost. Why don’t I put together a company and sell that and I’ll find somebody else that does web design on eBay, and I then found a guy that did oil paintings of company logos and he charged like 50 dollars.

I actually have a couple of them that he did for me. Really artistic versions of company logos, nice oil painting, just really cool, and so I built a company and called it mycompanynow.com. Stuck it up there, and I contacted all these people, and I was extremely upfront with them with what I was doing. I told the guy with the 29 dollar logo package, I said I’m going to be selling it for 49 dollars and I’ll pay you 29 and I get whatever in between I can manage once you take advertising costs out, and he said that was fine. So I put it up there. I sold…I think 50 projects, in like, two days, and he got completely overwhelmed. It was like a three day turnaround on it and I don’t think he hit the three day turnaround once.

Andrew: Why were you able to get so many orders?

George: I think I found at that time, everybody wanted a lot for logo design. I just found the sweet spot there, a place where there wasn’t a lot of competition on the low end, it was really high quality artwork that this guy was doing and I just found it really easy to sell that, and it’s when you’re working for ten dollars an hour and then you’re sitting’ there and you just see people paying 50 dollars, 50 dollars, 50 dollars, you know every few minutes for a couple days. It changed the way I viewed business and money.

Andrew: How’d you collect money?

George: I used PayPal.

Andrew: I see, so we just send people over to PayPal and when money came in you knew it was time to take care of the order. George: Correct.

Andrew: So what happened now that you’re overwhelming your designer and he can’t even one time hit the deadline?

George: We had a lot of very angry people calling me on my cell phone, ’cause that was what I put up on the website, so I was handling all the customer service. Well I was at work, carrying sheetrock around and I remember talking to one person. It was a really hot day out and I had to unload a pallet of cement, and I’ve got the phone on one ear and I’m carving around 80 pound bags of cement and I’m trying to act like I’m professional or in an office or something, and we finally ended up, we shut the site down.

We finally ended up wrapping up all those projects. And then, let’s see, I was like, I can’t handle this anymore. One guy is not enough. There’s not enough for me to do out there. There’s obviously a market here, but one person can’t handle all of this as quality as the team might be.

I had noticed that they were sections on a lot of different forums where people were running design contests. You just post up a post there where you say I am needing a logo. I’ll pay $50 if someone does one that I like. And I thought, “Hey, maybe I could set something up like that, but I’ll do it from the back end where the customer won’t know that that’s what is going on in the front end.

And I’ll sell them three concepts with unlimited revisions and I’ll have a whole other site where I’ll post the project, select the best designs, close it as soon as I have the best designs, and pay those designers like ten bucks apiece.

Andrew: Okay.

George: So I made a few posts on like Elance and Freelancer.com. You could get Freelancer back then and got a few designers. I think at the most I had about 200 designers participating on. . . I called it OutsourceYourLogoDesign.com, and that was something I had to hire someone to do because I did not know how to code. I thought of a lot of my ideas on how to do stuff were actually were very complicated.

As a programmer I had to point out I can just really easily just automate that for you. She did a great job. I think she charged me $200 which was pretty much. . . I had no profit from my company, Fiasco, with the projects there which I put that into designing at a website, to sell logos on a website and get the designs created.

That took me a couple months to get together, and I called it MyCustomLogo.com where I was selling it. It was a pretty professional looking website. It had examples of logos I had worked on before. I put them up there and charged $99 for three logo concepts, unlimited revisions, and I knew a few people personally. I told them. “I’ll pay you $20 to manage each of these orders as they come in. All you have to do is post it over to the designers, select the three best logos, drop them over into the client’s side that I put together and just do changes for the customer and give it to them when you’re all done.” It wasn’t all that much work.

Andrew: There were businesses that already did this, right?

George: There were.

Andrew: Behind the scenes I think Hewlett-Packard owned one of them.

George: Yeah. LogoWorks was one of the first, and I think they did that behind the scenes. Again, they’re one of those ones I don’t think they were paying that much more. I was definitely on the low end what I was paying the designers because I wasn’t charging that much. They started at $299, $399. I think one of the bigger packages was like $1299.

Andrew: Again, it was what you did in the computer fixing business, computer repair business where you were undercharging at the time.

George: Exactly. Like I said, it’s a lucrative way to make money. It definitely brings the customers in. A lot of customers because they’re not coming because of the quality they’re coming because of the price. They’re not the world’s best customers sometime.

Andrew: You’re not discovering all these ideas on your own. You’re reading that it’s happening. Other people are doing it, LogoWorks as an example.

George: I actually didn’t know. Don’t hold me to this, but I do not remember knowing about LogoWorks. I saw their site, but I didn’t realize what was happening behind the scenes. . .

Andrew: Yeah.

George: . . . until a year or two later. I read an article in Inc Magazine about them. They hide that part. I did, too. But they had this entirely different company where they actually got the designs out. For me, at least, it was what inspired it was the design contests on the different forums and saying, “I could do the same thing except that people getting paid $20 if they win the project, I’ll buy all the design that come in if they’re quality designs.”

Andrew: I see. What was it called? It was called DesignTennis or something on one of the forums.

George: Yeah. Yeah. Something like that. I had the design contest on NamePros, like DesignTask or something like that on DigitalPoint, I think.

Andrew: Okay. SitePoint.

George. Yeah. SitePoint. I think DigitalPoint still does it. I think SitePoint was spun off into 99Designs.

Andrew: Alright. I see where you’re going with this. I see where things are starting to get better for you. You’re a guy who was making ten bucks an hour, maybe five hundred bucks a week, something like that, right?

George: Mm-hmm.

Andrew: Suddenly you’re bringing in first, dozens of dollars at a time. Then hundreds of dollars are starting to come in. How are you feeling about yourself as an entrepreneur?

George: It was a great feeling. It was really bizarre, especially like coming home and making like $80 after taxes and seeing it brought in like $700 or $800 in orders while you were working. That was a really weird feeling, especially when it got to the point where for a while I was making double by working in the evenings with my company. You know, what I was making working 55 hours a week at the lumberyard. And the only reason I stuck around was for health insurance.

Andrew: I see.

George: You know, my wife was pregnant with our second child, I couldn’t afford or I didn’t want to pay to go on COBRA, so I stuck around there for a while until finally I think I was distracted enough with work. It’s hard to put your all into delivering Sheetrock when you have a business you’re running. So they laid me off and said, “It might be best if you go do your thing.”

Andrew: They laid you off.

George: They laid me off.

Andrew: Because you were so distracted.

George: Because I was so distracted.

Andrew: And it’s the kind of business where there’s so many people that they could pick from, and they churn through people all the time, so if you were a little distracted, that’s just the way the business goes.

George: And my bosses knew that I was running my business in the evenings. And I was planning on giving my notice two weeks later, anyway. It really galled me, because I wanted to give my notice, and they’re like, “No, we think we’re just going to have you move on right now.”

Andrew: Aren’t there advantages to that? If they fire you, can’t you get unemployment? Can’t you get severance?

George: They could, yeah. Well, if they fire you (if you did something wrong) they can’t, but this was just a lay-off. It’s more like, “We just don’t need you at this time.” So I could have gone on unemployment, which I actually couldn’t because I was making so much money with my business at home that qualified as income that I wouldn’t have been able to go on unemployment anyway. But, yeah, going from being employed to being self- employed is something I think would have taken a lot longer to do if I hadn’t gotten kicked out of the nest, so to speak.

Andrew: I always wondered if, after I sold the last big assets of Bradford and Reed, if I could have gone on unemployment. Because, basically, I fired myself. I’d been paying unemployment insurance for all that time. Could I have collected unemployment? I would love it if someone in the audience who had any knowledge of this could tell me if I was a fool for missing out. Frankly, never mind whether I was a fool or not. Could I have done it? Is it possible that if a CEO fires himself, he still collect unemployment?

George: It’s really funny you say that, because I’m quite literally moving to Connecticut, but my business is in New York, so I have to set up payroll and stuff for myself. I’ll be the only employee of my company in Connecticut. But they’re making me pay unemployment tax. So, I was arguing with them on the phone. I was like, “I can’t collect that. Can I?” And they were not clear on it. So it’s really funny you say that, because I was having that exact conversation with the Secretary of State here in Connecticut yesterday.

Andrew: Yeah. I mean, right. As long as you’re paying, you should have some path to collecting it.

George: Exactly.

Andrew: All right. So I see how the business is now developing. You go from doing the logos yourself using clip art to hiring someone (basically the kind of person you’d find on Ebay) who couldn’t keep up with it, to suddenly hiring several designers. And you pay the top three designers and give that work over to your customers. What’s the next evolution of this idea?

George: The next evolution of the idea was that as soon as I quit my job (was laid off), business had been doing well. I think at that point I was personally making, for a while there, about $1000 a week of profit. And I got laid off at the end of July, I think. And by the end of August, business had just tanked. The ad words stopped working like they had been. The costs went up, I was not converting customers like I had been, and I was dealing with pretty slim profit margins there, too. Because when you’re dealing with advertising against someone that’s charging $800, they have to sell one project for every fifteen that you sell in order to make the same amount of money.

Andrew: Yeah.

George: So, that just tanked. And I managed to pull through. That was incredibly stressful. That was a lot more difficult than I thought it was going to be, and I immediately took on all the cares of the business owner, the things I hadn’t seen coming. You know, people think, “Hey, you own your own business. You’re your own boss. You get to do whatever you want. If you want to sleep in, you can sleep in.” And I’m like, “No, it’s not like that. It’s not like that at all. You are your own boss, which means that you’re responsible for your paycheck.” So that was very stressful, and it took a while for the business to climb back up a little bit more, but I was looking around trying to find other ways to bring money in.

Andrew: You told Jeremy in the pre-interview that you got sick from all the stress.

George: Yeah. Yeah, I did. It’s one of those things where I was so wrapped up in myself that I wasn’t even really paying attention to how I felt all that much, and my wife ended up saying, “You should really go to the doctor, because you have not been acting well lately. Your stomach’s been messed up, you’re tired all the time.” So I said, “OK, OK, I’ll go in.” And I went in, and I went and talked to the doctor. And I told her my symptoms, and I told her my symptoms. I said, I’ll wake up in the morning, and I’ll feel, perfectly, fine.

Then, all of the sudden, my stomach will just start to knot up. It will start to hurt. She looks at me, and she’s like, “You’re under a lot of stress, aren’t you?” I was like, “I guess so.” She’s like, “Everything you’ve just mentioned is a symptom of stress.” She’s like, “You’re under a lot of stress right now, and you need to try to relieve that however you want or however you can.” I don’t know if I found a way to handle that. It’s not something I’m good at, dealing with stress, but just knowing that that was stress, definitely, helped a lot, you know, being aware of what was causing it.

Andrew: You didn’t leave the house, also, because of this? I’m looking at my research.

George:Yeah, I didn’t leave the house. I remember that was a, fairly, dark point in my life. It’s not the worst, but I pretty much just sat in front of the computer for six months, just trying to figure a way out. You know, when you’re depressed, I sort of lost my mojo too. I didn’t have as many ideas as I had previously. You sort of feel powerless when you aren’t really in control of the orders coming in. My method for bringing them in, previously, wasn’t working all that well. So, it took me a little while to climb out of that, but I just focused on bringing the company back up, working on our customer service, stuff like that.

Andrew: Let’s talk more about the depression, because I don’t think we talk enough about entrepreneurial depression. We’re alone in it. We can’t tell the world that we’re feeling this way, because out employees are going to lose confidence. Our customers might lose confidence. Our people that we work with outside, our partners, are going to lose confidence. I don’t know if that’s true or not, but we believe it’s true, and so we have to suffer in private. What was your personal suffering like? Say it, and I bet that if you talk about it openly, the rest of us are going to identify with it, because, I think, many of us are going through this, or have, or will.

George: Yeah, I think there’s a certain level of confusion there. For me, what caused it if that you’re going along a specific track. It seems to be working well. You think you’ve figured things out and then it just wasn’t. I didn’t really know where to turn. You know, I didn’t really know what to do. I just didn’t have the drive anymore. I didn’t have the desire to keep doing what I’d been doing. I used to get really excited, and I do now. It’s come back, but I used to get so excited when I’d see an order had been placed.

You know, a customer, someone liked my website. They liked what I’m selling, and when customers would call, it would be, like, “Thanks. Really liked your design a lot. That’s really great.” That was really good, and it just became a chore. You know, and it was something I had worked really, really, hard to get to, and then I finally had it. I was finally my own boss, and I just didn’t enjoy it.

Andrew: I see.

George: Part of that, I think what, ultimately, helped me out of that was at the time we were not rich. We’d bought a trailer and a trailer park. It was down in Connecticut. It was right on the coast. It was in a nice area. It wasn’t your stereotypical trailer park. There wasn’t a yard. There wasn’t much to do outside. We ended up moving to upstate New York, which was more out in the country. I had more home owner responsibilities, stuff to actually get me out of the house, do stuff. I get 13 feet of snow there in the winter. I was clearing snow constantly, and I think that distracted me enough, and put a separation between the business and my personal life, something you lose once you start working at home.

Andrew: I see, and that’s, actually, the other thing. If you’re not moving out of the house. If you’re not moving at all, you tend to get depressed.

George: Mm-hmm.

Andrew: I think that just, for me, having an office, even though it’s just me in this office, or at least, when I was starting out, it was just me going to the office, and I felt ridiculous. I could have done this at home. Why was I going out? But forcing myself to get up and go every day, forcing myself to move out of my home environment, kept me from getting into a depression.

George: Mm-hmm. Definitely, I completely agree, and that was something I set up, once we bought our place in upstate New York. There was a free- standing garage that was several hundred yards from the house, and I converted that into an office.

Andrew: I see.

George: And I’d make a point to get up, and to go out there and to sit down, and that was my office. That was not living space for the rest of the family. That was where I went. My kids wouldn’t come out there. That was my space. It gives you a separation there, too. When you’re home, you’re home, as much as you can be when you have your own business. You’ve always got your cell phone, you know.

Andrew: And you know what, it’s tough for me as an entrepreneur, as a person who thinks that my mind is the most important part of my body. It’s tough for me to even care about my body. It’s tough for me to even care about my body.

George: Mm-hmm.

Andrew: It’s tough for me to think, hey, if I’m not feeling good, then going and exercising and moving is going to fix it, because I think, no, I should have the will power to get over this stuff.

George: Mm-hmm.

Andrew: I should mind over matter it.

George: Mm-hmm, definitely. I completely agree.

Andrew: That doesn’t work.

George: Mm-hmm, well, especially because if you don’t take care of your body, I think your mind tends to suffer too. I consider my brain to be my main asset, and when it just doesn’t generate any ideas, because I slowed down as a person, it’s a very helpless feeling.

Andrew: Alright, you’re starting to build this business up and you keep evolving it. How do you end up with this evolution that is what we see today, a marketplace where someone comes online and hosts a design request, and then a bunch of people create designs in an effort to win his business?

George: I had the idea to do that ever since I started hanging out in the forums and seeing that people were doing design contests. That’s probably my biggest regret in my business, that I didn’t do that. Instead, I started my custom logo where it was, essentially, a logo work style set up, especially because the back end part of my custom logo, where we went back and forth with the clients, there was a kid that, on one of the forums, he created a logo contest market place. It flopped, but I paid him for that script. I had him modify it into what I used for the back end of my custom logo. I think we gave him 50 dollars or something, and I shouldn’t have done that. I should have just gone ahead and made a design contest market place, and that was years before anybody was doing that on a large scale.

Andrew: He built the design market place similar to what you have, similar to 99 Designs and a few others.

George: Correct.

Andrew: It flopped, but you bought his site? You bought his script?

George: I bought his script.

Andrew: Not that script for the market place, a different script?

George: No, it was a script for the market place. To his credit, he had a great idea, but I think he was a fairly young guy. The flow wasn’t right. It wasn’t set up very well. he didn’t really have any way of marketing it. I looked at it and I said, can you just give me a copy of that script and change this, this, and this? He did that and he wasn’t even that good at programming. The idea was there, and I regret not having gone with my gut on that idea, and being like that would work well.

Andrew: Because I looked online and it seems like the first version of Hatchwise was launched in late 2009. The first version of 99 Designs was launched in mid 2008.

George: Unless I am incredibly wrong on this, which I’m pretty sure I’m not, we launched April, 2008. We just hit five years, and they launched in February, 2008, I think.

Andrew: OK.

George: And [??] was somewhere in between the two.

Andrew: And so, did seeing them launch, did that make you finally say it’s time for me to go back and trust my gut and launch this product?

George: No, actually, seeing them launch kicked me in the gut, because I’d started work on the script. I’d hired someone to put it together for me in December, and I didn’t know they were launching 99 Designs then. So, I was working on that, and it was one of those things where it was on the back burner.

I wasn’t positive it was going to take off, and then all of the sudden I see there’s this new site that just spun up, and I’m like, oh no, I need to get going on this. You know, and I got in a little later than they did. I didn’t have the excite point behind it, pushing it. I started growing it very organically. I initially called it ‘Elogo Contest,’ when it started, which might be where you’re seeing it, if you’re looking at the registration of the domain name. Hatchwise was not the first name on the site.

Andrew: I see. So that’s why I don’t see you launching when they did.

George: Correct.

Andrew: So, you’re working on your site. As they’re launching, why launch it? Why not say, these are the guys who are some of the most well-known people. Side point is, they’re about to launch a similar version to my idea. I can’t compete with them. I better go and find another idea. I have tons of other ideas. I’ll go pursue a next one.

George: Actually, I took it as a confirmation that I had a good idea. If someone else is doing it, then there must be something there to it. It gave me the impetus and the push to go ahead and proceed with that. Plus I think it’s important for there to be competition. I mean, obviously, I believe in competition. That’s my whole business model, but just between companies. People want to have choices. If you have multiple companies, the whole idea of not having a monopoly. If you have multiple companies, they’ll push each other to be better. In the end, the consumer benefits.

Andrew: But I don’t want choices. I want one market place that has the most people. I can’t put my logo request on two market places. I want the one the has the most designers, and the one that has the most designers is the one that has the bigger brand behind it. Isn’t that what you’re worried about? No.

George: No, no, because I think you don’t want…

Andrew: Worried about? No.

George: No, because you want the best marketplace, but what creates the best marketplace is each marketplace trying to be the very best they can. This is why you have GroupOn and LivingSocial. It’s why you have Verizon…

Andrew: Was it your plan to compete on price again; to say, 99 design is going to charge x and I’m going to charge x minus 20 percent?

George: Actually, no. Not at first, that’s sort of where it’s gotten now, we’re definitely a lot cheaper than 99 designs and I personally think we give a higher quality product. I mean, that’s my personal opinion there, but no, that’s not where it started. I think my pricing was pretty much in line with what theirs was when we first started. It made them raise their prices considerably and I haven’t really raised the prices much in…quite a few years.

Andrew: Don’t you get depressed watching them grow, watching them cash out of their business, watching them get all the attention and…and you’ve got something similar and, you must feel that yours is better, and it’s not getting nearly the same attention, nearly the same evaluation. I’d be pissed.

George: I definitely am incredibly proud of Hatchwise and I like telling people about it, but I think the 99 designs guys, they’re brilliant, and I think they’ve had [??], the [??] point…They’ve done a really good job with what they do, and they deserve everything. I personally prefer Hatchwise, I think we have an incredible community, I think we have a great system for handling projects and for interacting with the designers. Mostly the reason 99 designs is bigger is ’cause they just hit the curb just right and they got the press and they had the people talking about it and that just pushed them up and they tipped and we haven’t hit that point yet. But…

Andrew: What’s the one thing that, if someone’s listening to us right now, would make them go to Hatchwise instead of one the other competitors? I don’t want to pick on any one, there are a few others. What’s the one thing, that if they come to Hatchwise, they’re going to love more than they are going to love the other products?

George: Well, one thing is, we have a much smaller community. I think we just hit 15,000 designers registered on the site. To a certain point, that doesn’t matter as much because the same designers participate on most of the sites, they spread out across them. So there are certain power users on every site. Maybe one site has 200,000 designers, another has 8,000 designers…if you were to ask them who does the most work on a site, and it’s going to pare down to about 1,000 designers on each site.

There are power users there, and there are the people that come in and just made a few designs once in a while, but our smaller community, we have people there who’ve been with us for a really long time. I can’t speak for 99 designs or crowdspring or anyone else’s customer service, but we’re obsessed with customer service, and I’ll do absolutely anything to make sure that our customers are happy. We work right alongside with them, and we worked hard to fine-tune our process so that from beginning to end everything falls together so you get a design that you love.

Andrew: Right…maybe not from the very start, I don’t know actually, early on…you started asking people for feedback after every project, right?

George: This wasn’t right away, it’s actually only about a year and a half now since we have been doing all that.

Andrew: Okay, and so, one of the things that you heard when you started asking for feedback was, in the beginning, the process was confusing.

George: Yeah, people said that the process was confusing and that the order process was confusing. It was something I thought was pretty straightforward, but we worked hard to streamline that. We actually, just a couple days ago, released a new version of the final page where it totals everything that you’re getting and so we’re paying attention. People start a project and we keep track of the steps they get towards completion and there were a lot of people stopping at that last page. So I tried to figured out what it was, talked to some people, restructured it, and that number has dropped dramatically just since then.

Andrew: What was it? What was it that was confusing? Help me understand that, because I know we’re supposed to talk to customers and get feedback, and based on that, improve it…but I want to understand the way that process worked for you. Why don’t we, in fact, start off with how you asked for feedback, and then walk us through the whole process. How did you ask for feedback?

George: Well, before I go into how I ask for feedback, the reason that I ask for feedback is very important to me. I had a very difficult time about a year and a half ago, and I talked about it with Jeremy Weise, and that’s what led me to engage with customers more and to actually try to. Before that we just sort of [??], seemed to work. You can’t keep track that easily, especially when you have a lot of designers whose bouncing off a site, if it’s actually a customer, or who isn’t. So it hadn’t occurred to me that much.

Andrew: Okay.

George: But then I had a situation, and it wasn’t really a big deal. I won’t go into too much detail, but we had some fraud on the site beginning of 2012. And it’s something that happened before. It’s something that will happen again. Anyone that has any sort of e-commerce site, you deal with a certain number of fraud. That just happens.

Andrew: Okay.

George: I definitely dealt with it before, but it freaked me out really badly, to the point where I didn’t even want to go into the office. I wasn’t sure why that was. I wasn’t sure why it was hitting me so strong. We didn’t really lose any money. It wasn’t that situation, and then I realized what bothered me so much was the site had grown so quickly so fast, and I had thousands of customers, thousands and thousands of designers, and I didn’t know who any of them were. I didn’t know how they were finding us. I didn’t know what they liked about the site. I didn’t know what they didn’t like. I didn’t know if they walked away happy or not. I didn’t know who these designers were, what their backgrounds were, why they were doing this stuff.

I was pretty much facilitating a community without actually being a part of it at all. That really bothered me. I thought about it for a while, and then I started a new policy where with customers at the end of every successful project once they selected a winner, if it’s their first project that they run, we give them a quick phone call and say, “This is not in any way a sales call. I just want to touch base, make sure that you’re 100 percent satisfied with the project. If you have any problems, any complaints, please tell me. We’ll work it out. And also to make sure that you understand what’s going on from here forward as far as copyright, files being delivered, stuff like that. ”

And then I have people calling or I’ll call myself sometime. We’ll make notes on what the customer says, and I’ll read all those notes. I’ll go over it. I continue to build the company and our policies based around feedback from customers.

Andrew: Okay.

George: That’s my main reason behind that. With the designers we set up a forum where we can ask questions. We can go back and forth. They can ask us questions. We try to reply to e-mails within hours, if possible.

Andrew: Alright. So I’m going to be a part of this. I’m going to start looking for feedback. I’m going to start to engage my people and how did they express to you that the process is confusing? I’m asking specifically about that because it’s a problem where people don’t like to tell you that they’re confused. They feel like it’s their fault. They’re the stupid ones. And so they don’t tell you, I couldn’t figure out whatever. How did they express to you that the site was confusing?

George: To be completely honest with you, I remember talking with Jeremy about that. I don’t remember. I think this was shortly after it happened when I talked with him.

Andrew: I see. You don’t remember, but I’ve got notes.

George: Yeah. Okay.

Andrew: I’ve got my notes. People kept saying the process was confusing. We saw that people were filling out the design brief, and this one page asked how much they wanted to pay and they stopped there and abandoned the project.

George: Oh, yeah. I do remember.

Andrew: You called them up and they wanted to start the project at $49. Oh, I see. You called them and the site was telling them that to start the project it would cost them $49. And then the site asked them for $300, and people were confused by that. And they said, “Why are these people trying to raise prices on us?”

George: Correct.

Andrew: You were calling customers after they called you. You were even calling people who abandoned the project.

George: We did. Yes. That’s when we started it. We didn’t do that for a while, and then we noticed a lot of people stopping at a certain point. So we started randomly calling people up saying, “Real quick. Sorry to both you but we saw that you were interested in what we have, and we just wanted to know why you walked away and if there’s any feedback.” The problem there was we do only charge, which is something that is different from most, if not all, other sites similar to Hatchwise. We only charge $29 upfront to start a project. You don’t have to pay $300. You don’t have to pay $400. You pay $29 upfront and list your project, and you’ll get entries. If you don’t like anything you get, you just walk away from the designs.

What was confusing was we did have a page where you have to select a price, an amount, an award for the designer. How much do you want to spent, $100, $200. So people would see $200 and they’re like, “I thought it would cost me $29. So all those fees were on one page. There were upgrades and everything. So we split it into four different panels where the first one says, “How much do you want to offer for the price? It’s not due now. You only have to pay this if you get a design you love.

The next one is, “Do you want feature your contest?” And then the last one, “How long do you want the contest to run for?” We split it into screens, and everybody just freezes through the screens now and just checks it out.

Andrew: How did you know that that was the right solution? What process did you go through to figure it out?

George: I broke it down to like. . . I was proud of the page that we had. I worked hard on it to get everything all on one page. It totaled it up as you went along. I had a nice, little number at the bottom. But I thought what would be the simplest way for me, if I was going through there.

I thought just seeing different panels one at a time with the description of what that panel is for and I can see that on step one, two, three, four. So I just built it like I would want it.

Andrew: You were just putting yourself in the customer’s shoes and then that worked?

George: Exactly.

Andrew: I want to breeze through how you got both sides of the market place on your site at once because it is tough to get any single group of users on a site but to get two groups of users who have to be on there at the same time, it’s the chicken and egg problem.

My imagination is and my search is showing that it seems like you went after the designers first and then once you had the designers you can go after customers to send them work. Is that right?

George: Yes. That was pretty much how it worked. I did have the benefit of having built up the community of 200 designers previously where I was outsourcing logos.

Andrew: Taking orders on line and sending them mysteriously to some mysterious group of designers who would give me the designs and you were showing it to the user and saying ta-da, my company served you well. Okay, so you had the designers there?

George: I just sent those designers an e-mail and said, “I just started a new site and if you’d be interested in it, come check it out”.

I took $200.00 to $300.00 and I put up some projects of my own for things I needed or I made up a couple companies, sort of just seeding this idea. I worked on both projects, people got paid out for participating in them. So that gave something to start there and I think I threw up a little bit on AdWords.

My original idea, I thought I would be able to compete against LogoWorks and all the other logo design firms on AdWords, really, really well. Your offer is 100 entries as opposed to three or four or five. For some reason it didn’t work out like that. I wasn’t able to convert customers from AdWords all that long. I think I got one order from there.

I purchased a text link on a forum, one of those design context forums. I purchased the text link, bringing it over and at that point it just started rolling organically. I was still running my custom logo, I was still making my.

Andrew: Organically. If ads weren’t working for you then how are people discovering you? I’ve noticed that it bothers my audience when an interviewee says, “I didn’t do any advertising, people just found me”. People in my audience, entrepreneurs who are listening to us, know that doesn’t happen to them. So what happened? How did you get users?

George: I understand how irritating it can be when someone says that and honestly that is how I would describe Hatchwise’s growth. The most intimidating thing for me about the company is that I don’t know where the majority of our customers come from.

We do have a section on the order form where we say, “How did you hear about us” and they can type in whatever they want and 90% of all of those, maybe 95% are all from a friend.

It’s mostly word of mouth and I’m not going to say we never advertised because I have advertised. Over the past few weeks for example, we’ve been experimenting a little bit with AdWords, you know $20.00 here and $20.00 there just trying to see if something, I think we’ve seen one order convert because of that.

Part of it for me, the reason we did actually grow organically and the reason I say it is organic is that we got one or two projects I think, from some advertising and I did put a link up on Name Pros. I paid for a little ad for $60.00 for the year, a little text link and I think I got some projects from there and that helped to speed it up.

For the most part I was not counting on the site for income so I just let it sit. I actually thought at first, this is sort of a blog and I let it sit. Then orders started coming in and it started speeding up and before I knew it, I was making more money with that than I was with the logo design firm I had been running online.

Then I thought, maybe I should put more effort into this, maybe I should look at this and see where it’s going. That’s when I decided, a year and a half into it I think, about a year after I launched it. I launched it as “e- logo contests” and then I thought, “Hey, it’s not the worlds most professional name, I want an actual brand name and I want to be able to do more than just logos”.

So, I renamed it Hatchwise. For me I think that’s when it actually took off. I also raised the price from $19.00 to list a project to $29.00 and for some reason, I don’t know if it’s the whole perceived value thing but orders jumped up right then. We got a lot more orders after I raised the price.

Andrew: Really? Wow.

George: Yes and I set the minimum, before I had no minimum. So it would surprise you, you can put in whatever you want. If you want to pay $10.00 you could, you just wouldn’t get very much in the way of design. I raised the actual $100 minimum, and it only did things for orders. The process was slow. It was very slow. That was my goal with Hatchwise was for it to be slow. Besides, like I said, with my custom logo of the previous company I had, I realized I went on 100 percent advertising for that. And when advertising costs went up, I didn’t have a company overnight.

Andrew: I see.

George: My whole business model was gone. You can’t take away more than that. If you’re doing something right and you keep doing it and you listen to your customers, it builds a solid company. I don’t have to worry about a sponsor dropping me or getting outbid on Pay Per Click, that my SEO rank is falling. I know that people are going to keep talking about me, talking about the company.

Andrew: Speaking of can’t take away word of mouth, my researcher sent me links to SiteJabber and what’s his other place, RipOffReport.com where there are people talking about. . . Well, here’s one person from 2012. Horrible. I have used many logos and competition sites, and this is the worst I’ve ever experienced. This site is dysfunctional. The help pages lead to bad links. The owners are rude, rarely respond and arrogant. There are numerous complaints of winnings being held four to six months for no reason which I believe is fraudulent and illegal, and it goes on from there. This is DDB and Hatchwise, George, Ryan, Geek Face, LLC fraudulently hold winner’s payments for four to six weeks, Georgetown, New York. That’s from RipOffReport.

There have been some things online that people are complaining. What’s going on there?

George: There have been a few. Most of them are from the beginning of last year. I shared. We did have some issues with some fraudulent activity on the site, and part of dealing with that we did have it written in the terms and conditions that we can put a hold on the payment to the designer for up to six months, and there were a couple of cases. We’re talking like a very small minority of them where there were either concerns about the originality of a design or a designer had just jumped on the site with one entry to that project and they won. And we wanted to make sure that this designer wasn’t just using clip art. And so we put a hold on a few payments, some of them for a few weeks, some of them for a few months.

We explained to them this is what we’re doing, and we paid out every single one. That’s a big deal for me just in general. I would sell my house to debts. You pay people what you owe them, and everybody has been paid. You know what they say? People that like what you do may sometimes leave a good review. People who get mad at you will always leave a bad review.

Andrew: [laughs]

George: So there are a few people that have complained about that. They are mostly isolated to a specific point there. They were all paid in the end, a lot of them a lot quicker than we had initially had put the hold on it for, and that almost never happens anymore.

Andrew: In April, 2012, you did a post on your WordPress.com blog where you said, “After much thought we decided to stop accepting new designers here at Hatchwise for the foreseeable future. We currently have a little over 11,000 registered designers and you went on from there. This is, again, related to the fraud?

George: No, it wasn’t related to the fraud. Like I said, I felt like the company was sort of getting a little out of control for me. There was so much going on. There were so many people. There were so many designers, and we were having issues where you do have people come on and they don’t understand the rules. They’ll roll up a clip art sun and the other designers get angry. We had a lot of designers, 11,000 designers. That’s a lot of designers to be participating.

So for a while we just want to focus on working with the people we were already working with and figuring out how to introduce newer designers and give them a better idea how the site works, what the rules were. We added some new policies and stuff.

We opened it up again a while after and went up 15,000 designers, I think.

Andrew: I see.

George: It would be a much larger number if we hadn’t shut it down for a while but, like I said, it was a very small issue. It just opened my eyes to the bigger picture. In fact, I didn’t really know what was going on with the company.

Andrew: You did that on your own. You’ve got no advisers as far as I could tell. You have no investors. You have nobody with a lot of experience in this space that you can turn to and say, “I don’t know what the hell just happened on my site. I’m flipping out here.”

George: Exactly. I bring everything on myself.

Andrew: You feel alone, don’t you, at times?

George: Yeah. Oh, definitely. We had a situation fairly early on which is part of the reason Hatchwise didn’t grow as fast as it could. I had the site coded by someone in China that did a great job. At first the site ran really, really well and then as more and more projects started getting posted, the site started to slow down. And I could not figure out why that was doing it and did I need to go to the page that listed all the projects that they had participated on? And it would take fifteen minutes for that page to load. I was like that will kill a site.

No one is going to stick around on a site that takes fifteen minutes to load and that went on for a long time and I didn’t know what the problem was until finally I just started going on forum after forum and saying this is what’s happening, what could it be? And then someone was like, “You have indexed your database, right?” I was like, “What’s that?” Now just go in and click the little “I” next to all the rows in the database and so I did that and I go back to the site and everything is like just moving really fast…

Andrew: And you have to figure this out on your own. My friends who have funding will go to conferences and events organized by their investors where they are supposed to talk and get to know other entrepreneurs who their investors have backed, where they have a safe place to meet people and be open about their… You don’t have any of that.

George: No, I don’t. I mean I went there for the first time about a month and a half ago. I went to one of those meet up things.

Andrew: Yup.

George: You know it’s just a bunch of local entrepreneurs just talking and that’s the first time I’ve ever done that. You know and I went and it was just talking. You know it was really cool because you know Hatchwise is pretty much me and my brother. We are the ones doing things full time for the site right now. And other than us I don’t know many people that understand what I’m talking about at all. You know they are like, a logo?

That’s like the Wal Mart letters, you know. They don’t understand so actually talking to people and they understand the lingo, they understand about running a business. You know that’s something I haven’t gotten to do and I did it for an hour like a month ago and it was an incredible experience. I’ve pretty much been on my own with this whole thing.

Andrew: Well, I wonder what you could do about that?

George: Yeah, I was excited about the meet up. You know it was just a bunch of entrepreneurs starting their ideas you know and it also helped to see a lot of people starting trying to do what I’ve already done and seeing how far I have come on my own you know. So that was encouraging as well. It’s easy to sit back and not feel like you have achieved that much. You know like I have gotten a lot done but it’s taken a while. And like I have a legitimate company. You know I have a company that’s very successful.

Andrew: So you could do something more than just a meet up. Like…

George: Yeah, yeah

Andrew: Like with experienced entrepreneurs who have dealt with these issues.

George: Exactly.

Andrew: I’m happy to introduce you to other Mixergy interviewees. I do that all the time for people…

George: That would be wonderful.

Andrew: If you think of someone who is a good connection let me know and frankly I would even reach out to Matt of 99Designs.

George: Yeah, I got an e-mail from I think it was Matt like two days after I launched e-logo contest and he just sent a message like, imitation is the sincerest form of flattery or something.

Andrew: Ooh. That’s a painful thing to get.

George: Yeah (laughter) But you know I’ve gone back and forth with them a little bit and I like those guys. They seem like you know very smart, cool entrepreneurs.

Andrew: Can I ask you a personal question? I don’t think it’s that personal but… You come from a family of ten kids. You have now four kids. Is this a religious thing?

George: No, no. I like kids. Four is where we’re at.

Andrew: I see.

George: Works for us. I like kids you know and four is a nice even number. You know, you put them two to a bedroom and they’ll keep each other company. But, no I was raised in a fairly religious household, but I’m not incredibly religious myself.

Andrew: What was the religious point of view?

George: Just conservative Christian.

Andrew: Ok. Alright. Let me do a quick plug and I’ll ask you one final question and the plug of course is for Mixergy Premium and as a follow up to this interview I’ve been looking at Mixergypremium.com, at the list of courses that are available there and here are two that I think would be a good fit based on what we’ve just talked about now. If you’re watching this interview and you’re looking for the next thing to take. The first one, where is that? There it is. First course

I am suggesting that you take from Mixergy Premium is Co-founder’s Lab. The co-founder of Co-Founder’s lab, Shahab Kriviani [SP] created a course for us about how to find a co-founder. If you are at early stage and you are looking for that one person who is going to help you build your business, check out that course where he talks about not just how to find a co- founder, but some of the ways that you want to structure your relationship with your co-founder. What are the responsibility break downs?

What are the ways that you want to talk about how you’re going to work together as you build up this business. So that’s one course and the second one is the one led by Dan Penya. Where is that? How To Get a Mentor. And apparently, you guys might remember when I did the interview with Dan before this course. I said to him, “And is it okay if people from my audience come to your castle”, which is where he was doing the interview from his castle and he looked at me and he goes, “No, don’t you send these strangers to my castle.” Well apparently someone from the audience with Dan’s permission made it into his castle and got some advice from him and he said that this person was a great guy but a little naive and apparently Dan straightened him out.

So, if you want to be straightened out a little bit by Dan, check out the course where he talked about how to find a mentor. Those are two of over 100 courses taught by Proven Entrepreneurs here at Mixergy.

As you can see, we don’t just get one guy who happened to get a co-founder to teach you how to find co-founders, we get the guy who runs an organization that show people how to get co-founders that’s a match making organization for co-founders.

We don’t just get you someone who wrote a book about how to find a mentor, we get you Dan Pena, a guy who built a very profitable oil business who talks about how he got his mentors and how he became a mentor for many other people.

That’s the philosophy behind mixergypremium.com Go in there, take those courses and if you’re not a member, sign up for mixergypremium.com and I think you’ll be very happy with those courses and off course if you’re not happy, 100% of your money back.

Alright. Final question is this. For someone who is like the you that you were when you started out. Not fully connected to the tech community, you didn’t know how to develop and so on. What advice do you have for them?

George: I have people ask me a lot, “I want to have my own business, I want to do something on my own, what should I do?”. They’ll say, I have an idea what if I knit socks for dogs or something or whatever they’re idea is, and I say “Just do it”.

Just do whatever it is. Think of something, try to do it and I guarantee it won’t be successful, it almost never is. You’ll never talk to someone who says the first idea that I had once I hit 18 is what I’ve done for the rest to my life.

You know that, I know that, it’s how it works but one thing leads to another. When something fails, it opens up other doors, opens up other opportunities so just actually getting out there, taking your ideas and trying to bring them to life, it will lead to something else.

Andrew: Your saying do this, even if you’re trying to build involves development and you’re not a developer. Even if you’re trying to build involves design and you’re not a designer, just start it, it will probably fail but you’re going to get started on the right path.

Who does your development now? You’re not a coder, you don’t know how to oversee developers.

George: I’ve actually taught myself. For a while I was a decoder by which I go in and like I said I initially had all my sites. I knew how to do some HTML, not that good, you know in Dream Weaver or on Front Page just sort of click and drag around.

So I would make really, really basic pages, really hideous looking things with little buttons here and there that didn’t work and then I would write a word pad document where I’d say on this file I want this to work like this, this to work like this and I’d find someone and give it to them and they would put it together.

After that, you can’t just let someone keep coming back and getting into the code on your site so I would go in and I would start trying to figure out what stuff was and then look at it logically and say, “Why is this doing this and if I change it what happens?”

So for a while I did most of the coding on the site and the one thing that I did that I’m really proud of and it does set us apart from most other companies, not just my designs or other competition, there’s something that I personally created in the back end of Hatchwise called design port.

Obviously if anyone can participate in a project, it’s open to anybody and they can’t use clip art, they’re not supposed to, we ban them immediately if they do, but you don’t know where they’re getting their inspiration from. You don’t know where the design is coming from but the other designers do.

There’s nothing better than to have thousands of designers looking for a reason to get that entry disqualified. So we have a thing where they can just click a button, they choose what the reason is that they are reporting it for and it gets pushed over to design court where any designer that’s previously won a project can vote by whether or not they think that it belongs there. If it’s found guilty, it’s taken down immediately and the designer is either banned or issued a warning for whatever it was taken for.

I coded that all myself from scratch not knowing how to do it and when I was done, yeah. It was a great feeling.

Andrew: It’s got to be a great feeling and that is a huge issue with these market places where you don’t know who’s designing your logo and which of your competitors they might be stealing from.

George: Exactly and it’s true. Honestly I have people ask that a lot and I genuinely think that an open market place like Hatchwise is a better place to know you’re getting a genuine design.

Let’s say you go and hire someone over the internet and it’s one person. You have no idea where they’re getting their ideas from.

No one but you is looking at those, if you show it to some friend, they’re not going to say, “Oh yes, I recognize that unicorn from Livestock photo clip art set”. They’re not going to tell you that, the designers do. They see it. You basically have an entire watch force taking care of you on that front, although it’s always a good idea to talk to an attorney that specializes in copyright and trademark, regardless of where you can sign.

Andrew: You know what, the designs look terrific. I’m now on the site on www.hatchwise.com and this company uphill vineyards posted a contest for 400 bucks plus I guess 29 dollars paid to you guys. They wanted a new logo for their vineyard, and they got 300 and 56 logos. 300 and 56 logos to pick from. They picked one that I don’t like as much as one of the other ones. They picked the one that works for them. That’s what they pay for and the rest they can just keep breezing through and all of us can look through them, right?

George: Exactly.

Andrew: You can look at all of them. Even the ones that were rejected?

George: Uh-huh. The best part about is that when you come to hatch wise, you get to see what we do. You get to see what’s going on. If you hire a designer in your town, they’re going to show you a cherry picked portfolio of their very best work. You’re not going to see the stuff the customers hated. On hatch wise, what you see is what you get.

Andrew: So if I see someone here whose logo I like. Where is that? You know, I’ll just pick someone at random. Here’s one. Jay Lamden, I like his logo that he did for uphill. What if I don’t want to work with him through you guys. What if I want to just hire him directly? Can I hit that send message button to Jay Lamden, and say I love your design and I want to work with you directly?

George: You can’t. We don’t allow interaction between people unless it’s between a designer and the contest their running. We have people all the time send us an email saying they love this design and can I buy it. We’ll be happy to facilitate that. You might have to pay the 29 dollar fee that will cost to list your project, and then negotiate price with you and the designer. That happens all the time. We have thousands and thousands of projects, so people will just search through their category and find logos they like.

Andrew: I’m now half paying attention, because I keep looking at all these designs. There are so many different things to look at. The website is www.hatchwise.com. Check it out. George, thank you so much for doing this interview and for being a Mixergy fan for as long as you have been. I appreciate it.

George: Yeah, I’m a huge fan of Mixergy. I haven’t watched as many interviews as I would like but the ones I have, I genuinely appreciate it. I love how you dig down into stuff and it’s not just surface question.

Andrew: I didn’t mean to dig down here.

George: It’s great and fun participating.

Andrew: Thank you. Thank you all for being a part of it. Bye guys.

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  • http://mixergy.com Andrew Warner

    I didn’t get to talk about it in the interview, but George recently got to cross something off his bucket list:

    http://hatchwise.wordpress.com/2010/04/06/hatchwise-featured-in-article-about-logo-design-in-april-issue-of-inc-magazine/

  • Bix

    Andrew, you made a very astute comment when you said that your audience doesn’t like to hear interviewees say “traffic just showed up.” Keep
    pressing them! I’m still confused as to how George generated so much
    word of mouth, that usually requires some kind of personal involvement
    in a community or planting an initial seed to get the ball rolling (such
    as ads or pr). From the interview it wasn’t clear which of these
    George did.

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

    This interview was incredible (not just because I got a shout out at the start ;)

    The thing that killed me was that for the first half of it I was just thinking “what the hell?? It seems like this guy just NEVER MADE A MISTAKE!!”.

    I really appreciated that you guys got right into the “dark time” but I would have loved to hear even more about how George managed to “build the business back up” out of that slump. I mean, traditionally that kind of slump where ads were working, but now they’re not, or where you find that although you have a market you find out that you can’t sell profitably – that can really kill a business.

    I guess the problem was that you had to pack such a huge journey into a single interview.

    I’d love to hear more of George’s story, he sounds like an incredibly talented business person.

    Also George if you want to connect with some other Mixergy fans, join the Google Group https://groups.google.com/forum/#!forum/mixergy-inner-circle …. we only have like 20 members now but I’m trying to get more.

    Activity has been dull recently (and one of the members wrote to me just last night and asked for “post mortem” advice on managing a mailing list because the Mixergy Inner Circle had obviously failed ;) but I’d love to keep building up the membership and have a thriving community of Mixergy fans where we can openly discuss our successes, failures, and actionable insights around interviews and courses on Mixergy.com.

  • George Ryan

    Thanks again for the opportunity, Andrew, I had a blast!

  • George Ryan

    The reason I find it hard to explain where the growth came from is because I DID have an initial strategy to promote it that fell flat on its face. I had planned on advertising on some large design related sites that sold ad space, even though I knew that the design community was generally hostile to design contests. I figured that the sites would still take my ad dollars and that the buzz (good or otherwise) that the ads generated would help to get the site off the grounds. The sites all ended up refusing to sell me ads, so that didn’t work.

    What I ended up doing instead is as follows, as best as I can remember it: I bought a text link ad in the design contests subforum of a fairly popular internet forum, paid a couple hundred dollars for a sticky post in a entrepreneur forum, did a interview for a small business podcast about four months into running the site (I think I had around 700 designers signed up at the time), and I spent some money on Adwords (I can’t remember how much, but I know that I ended up considering it wasted money). I don’t think any of the above contributed all that much to the sites growth, I think the fact that it was brand new idea helped with the word of mouth, as just about everyone that uses the site seems to tell their friends about it.

    Anyway, other then that I just sat back and let it grow slowly, taking care of the orders and users as they trickled in.

    I’ve always been a firm believer in “if you build it (well) they will come”. I’ve found that a well designed and programmed site with a quality product or service will always fair better with no publicity then a sub par offering with all the press in the world.

    Anyway, that’s my two cents. Hope it helps.

  • Bix

    Thanks for the reply George. Although none of these on their own directly brought much traffic, it sounds like they contributed to planting those initial seeds that got the word of mouth going. Your story is very inspirational…keep up the good work!

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

    Right, so from an “abstract strategy” perspective it sounds as though your problem was that you didn’t have your “numbers” controlled tightly enough (ie. you found you were squandering money without that spend being accountable for producing a return).

    I’ve run into the same problems a LOT in that I’ve never really had very good bookkeeping practices. I’m actually just now on the tail end of having a bookkeeper go through and do a 4 year bank reconciliation (the first I’ve ever done) and automating all my accounts through Xero which will mean I know ahead of time whether or not I’m actually making money.
    Of course the tactics will differ but it sounds as though the key take away is that solid bookkeeping and financial accountability/control can make or break a business! (seems simple when you say it like that but I certainly had to learn it the hard way :)

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  • Jimbo

    This is a totally awesome story. We got a guy that comes from a blue collar background working at a lumber yard, and gets fed up with work one day and wants to be his own boss.

    Despite having a wife and an infant, he just pushes through. He doesn’t know anything about business, coding, or design, but follows his newly discovered pleasure of designing his own logo – and then tries to monetize it. He got his minimum viable product out, and discovered a market. Just grinding through different business models, he finally finds one that works for him.

    And he even answers some of Andrew’s tough questions about the inner turmoil and loneliness of being an entrepreneur and dealing with better funded/better advised competition.

    This is very unlike the college drop out whiz kid with lots of family and social connections that lucks their way into some silicon valley incubator.

    Totally amazing.

    Great interview.

  • http://www.staff.com/ Rob Rawson

    Nice interview and I admire George creating this from scratch with no experience. I have to say however that $2 million cumulative revenue is pretty small for this type of company started in 2008. Based on 20% margins that’s $400k gross profit over 4-5 years before expenses. Would say it would be hard to keep expenses below $200k for this period as a guestimate, so profits of maybe $200k or $50k per year? This is not great. It means he would be able to take a salary of $50k per year out of the business during this time.

    He is getting killed by 99designs which has $51 million cumulative revenue.

    Admittedly however 99designs has had funding of $35 million so it’s not even in the same ballpark as a bootstrapped company. Hatchwise can afford to have lower prices and lower margins whereas 99 designs has huge margins and can’t afford to lower them because they have to pay back this $35 million that was invested, so there are some advantages to keeping costs low like he has done.

  • Arie at Mixergy

    Thanks, Jimbo

  • http://mixergy.com Andrew Warner

    This is a great breakdown. I’m so proud that you listen to my interviews and can break them down this way.
    I wonder how much equity he’s building in the business.

  • George Ryan

    Hi Rob,
    Thanks for the comment, glad you enjoyed the interview. I do want to point out, though, that I never said it was a 20% margin, just that we take a 20% commission off the designers earnings, which are only part of the site’s income. All listing fees and upgrades for each project flow directly to the bottom line.

    Anyway, the main point I was trying to convey in the interview is not how large the company is, as there is certainly plenty of room for growth, nor was I claiming to be wildly successful. My message at the moment is that it is possible to start with nothing and build a profitable company. Even if I was only making 50k a year at the moment, I would still be very proud of that. I know that I was intimidated when I first started to build my own company with no money, no formal education, family responsibilities and a 55 hour work week taking up my time, and I want people to know that none of those should be excuses in your journey to owning your own company.

    Again, thanks for your thoughts :)

  • George Ryan

    Thanks, Jimbo, so glad you enjoyed the interview!

  • http://www.staff.com/ Rob Rawson

    I think this is a big advantage of this type of business. There are not many design marketplaces out there, and with 99designs valued at I think over $100 million, even if Hatchwise is only 4% of the size, that’s still theoretically a $4 million business. So maybe I should take back what I said previously when you think about it this way! $4 million exit is nothing to sneeze at.

  • http://www.staff.com/ Rob Rawson

    HI George, for sure it’s a great credit to you to build a business like this without initial technical expertise. It shows it can be done. To go from driving a truck to building a tech business is pretty cool!

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

    Anyone who builds a business that pays them a salary AT ALL and that can support them, and their family, that can pay OTHER people and generate value in the community, that can service clients — anyone who does this in even a remotely sustainable fashion is a fucking superhero.

    To do it in the absence of mentorship, funding or any sort of peer support group is nothing short of miraculous.

    Who cares what the competition are doing?

  • Geoffrey Barrows

    “…but when everything is going really smoothly and lots of
    cash is coming in I find it is easy to just assume that everything is
    working well without looking at it to closely…”

    So true. It is amazing how lots of money can vanish in a hurry if you stop paying attention even for a short time.

    Fantastic interview BTW!

  • Jessica Edwards

    This was a really great interview! Thanks for sharing this story!! :)

  • George Ryan

    :)

  • George Ryan

    Thanks, Geoffrey!

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