Don’t drink the VC Kool-Aid–You don’t need funding to be an entrepreneur – with Libby Tucker

Everyone says, “Do what you love and don’t give up.”

In this interview, you’ll meet a guest who says, “Well, maybe not.” Libby Tucker created Beer2Buds.com, a site that allowed friends to send each other a real beer over the Internet.

She gave it everything she had, including a house. She listened to venture capitalists. She followed the big moves in the market.

And it didn’t take off. If you’re a real entrepreneur, you’re going to want to learn from her.

Today, she’s a startup strategist at Elance, who also runs http://liveworkanywhere.com/, a site that teaches you how to create startups anywhere.

Watch the FULL program

Libby Tucker, Beer2buds

Libby Tucker is the founder of beer2buds.com which allows friends to send each other a real beer online.

 

Raw transcript

Mixergy's audio transcription is done by Speechpad

Andrew: Hey there, freedom fighters. I am Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. And lately, a very dapper gentleman. Check out the pocket square, here.

You know, in past interviews, I’ve complained that I don’t like the way I look on camera, that it’s not something that I ever cared about. But it’s becoming more important, because I am on camera. Sachet Gupta in the audience heard and said, “You know what? I think I’ve heard of a stylist.” And he introduced me to someone who took me out, bought me a bunch of clothes, and now I’m feeling a lot better.

All right, but this isn’t about my pocket square, or my jacket, or any of that. This interview is about you. And you know how everyone seems to say you should do what you love and never give up. Well, in this interview, you’re going to hear someone who says, “Well, maybe not exactly.”

Libby Tucker created Beer2Buds.com, a site that allows friends to send each other a real beer over the internet. She gave it everything she had, including a house. She listened to venture capitalists. She followed the big moves in the market. And still the site didn’t take off. If you’re a real entrepreneur, you’re going to want to listen to her story.

Today, by the way, she’s a start-up strategist at Elance, and she also runs LiveWorkAnywhere.com, a site that teaches you how to create start-ups anywhere. I know I’ve done that in Argentina, D.C., here. In fact, she’s going to actually interview me soon on her site, on LiveWorkAnywhere, about how I did it with Mixergy.

All right. Finally, this interview is sponsored by Scott Edward Walker of Walker Corporate Law. I’m going to tell you later on why if you’re a start- up and you need a lawyer, you’ve got to talk to WalkerCorporateLaw.com. But first, I’ve got to talk to Libby.

Libby, welcome.

Libby: Thanks, Andrew. I’m so excited to be here. Big, big fan. And I love your square. You look dapper.

Andrew: I’m working on it. Thank you.

Libby: I was going to mention that earlier.

Andrew: I like to see the progress here. You told me before we started about how guys will send each other a beer with four words. What are the four words, and why is it so important to you? Why is that the meaning of the site?

Libby: I think I said, “I miss you, man,” or, “Have one on me.” And I think, well, guys don’t send each other flowers. They don’t go to 1800flowers.com.

But in a short span, for me . . . in my case, it was studying abroad in college. But even in just college in general, everybody’s far away from home, and you tend to bond in that short period of time. It might be on an airplane, and you bond with somebody even in two hours more so than you do in sometimes several years.

So something about being in a space and time together that really brings people together. And so when you leave, or in my case when you’re far away, after you came back to normalcy, you miss those relationships, but you’ve all since gone back to working in a different city.

And it’s a way for friends to reconnect — beer buddies, in our case — over the mechanism of a beer, in this case.

Andrew: Yeah. And that’s a great point. Guys don’t tend to send each other flowers.

Libby: No.

Andrew: Daughters don’t want to send flowers to their father for Father’s Day, but they do send a beer through your site.

Libby: Right.

Andrew: So I can see how you’re not just building a site. It’s about this connection. It’s about the ability to reach out through the internet and send something tangible that people can see and feel.

And you were hinting at where the idea came from. Can you talk more about it? Where were you, and what were you doing when the idea came to you?

Libby: Sure. Well, I was . . . first of all, backstory. I was in college, and I studied abroad in Spain, and I was the only person who went over there from my school, so I had no real reference. And I could get into the whole story.

But basically, after classes . . . I took nine classes in Spain, and after classes, all of our friends, we would meet up in a particular area, we’d go have a beer together, and we’d talk about the day. And it was our only chance to really speak English. And we were from all over. From Sweden, England, France, all over the place.

And fast-forward six months after school, we went . . . I was working. I finished, came back to Wisconsin. Big beer area. And I finished school, and I was working on a Friday afternoon, and my friend from Sweden had sent me a beer in an email. Not Facebook. A lot of people were like, “Oh, you mean Facebook.” But this is actually prehistoric.

But he sent a picture of a virtual beer in an email, and he said, you know, “Cheers. I miss the times that we had together.” Again, it was that “missing you,” and the mechanism was a beer.

And it instantly took me back to those days when we would sit after classes and we would have beers together. And I thought, wouldn’t it be great if you could actually take this and send somebody the gift of a beer — an intangible experience — through the mechanism, in our case, of a beer.

So that’s where the story came from.

Andrew: What year was this?

Libby: This was actually in 2001. That’s when I lived . . .

Andrew: 2001.

Libby: Yeah.

Andrew: And when did you finally say, “All right, it’s time to actually launch and create a business around this”? What year was that?

Libby: 2005. So I’d moved out from Wisconsin to Seattle, and I thought, I’m doing international marketing, international business. I need to be in computers and tech if I want to create this and also if I wanted to live work anywhere.’ So I started doing tech, work in tech, moved out to the west coast and Seattle where start-ups were and I wanted to be in the environment.

In 2005, I left Adobe and I said, “I’m going to finally go after this.” And I started, in 2005 I started, actually had two business partners at that time, but I didn’t meet them locally. I met them both off of Craigslist, I believe. So I started from 2005 to 2007, I started working on the very first version of “Beer2Buds.”

Andrew: And when you started working on, what’s the first thing that you did to do it?

Libby: There were couple, two different rounds. In this case, I had taught myself a little bit of PHP and HTML. I went about it completely the wrong way the first time, definitely, but I taught myself as much as I could for skills. I built…

Andrew: Why is that the wrong way? Everyone says, “You know what? Don’t be just a business guy. Be the person who also knows…”

Libby: True.

Andrew: …how to develop.” Now there’s a big movement to teach everybody the code.

Libby: Right.

Andrew: Every kid needs to learn. Every adult needs to learn.

Libby: Right.

Andrew: But why is that the wrong move?

Libby: Well, I definitely think that you should know what you’re doing. I think it makes it, I think you should definitely give it a shot. I think you should try coding because it helps you be more relatable to the person that you’re working with. Helps you understand that helps you guys work together.

The other thing is, you don’t want to get into a situation where you’re building everything yourself and where you’re, knowing what you’re, I think it’s great that everybody knows a little bit about coding, but what are your core skills and what are your, what’s your core competency, and improve on that versus if I’m, PHP, I can only go so deep and then my mind starts to blow up. At that point, it made sense to work with someone.

Andrew: I get what you’re saying and I felt that way too. I remember my first business, my brother was the developer, I was the business guy and I thought, “I should learn how to code.” I spent some time reading, and my brother said, “Stop that. We need more sales. We don’t need you to be a half-assed developer. We need you to be the best sales person out there. Bring in the revenue. Get outta here.”

Libby: Right.

Andrew: So I took his advice and I put the book away and never opened it up again. Did you actually build the first version of your site?

Libby: I tried.

Interview: You did?

Libby: Yeah. And that’s where I realized I need more help so I sought out a technical person and then I sought out somebody who, I didn’t know really what UIUX products, graphics. I didn’t know what the difference was in design at the time. I didn’t know there’s a difference between all the different areas, so I sought out a design person when I needed graphics, product development and UIUX. Yeah, so I sought out people to help out after that point on.

Andrew: How long did it take you guys to get the first version out?

Libby: Too long. It took almost two years. A lot of that was scaling back into what’s the core concept? We thought what’s, the more people we talked to, the longer it got. We would say things like, ‘Is it just related to beer? Should it be related to wine, cocktails? Is it, who is our demographics? Should we be, is it, everybody, like we talked to VC and they’d say, “Well, that’s great for proof of concept or a minimum viable product but you need to have a billion dollar idea in order for us to fund you, so what’s your billion dollar idea?”

Then we thought about integrating payments. You’re really sending beer money, so let’s have money as a payment system on the back end. We started creating a payment system on the back end and that took us a really, really long time.

Andrew: Meaning at some point you thought, people won’t just be sending beer to each other. They’ll be sending money to each other?

Libby: Right.

Andrew: Gotcha. Who was it who was telling you that this is the way you need to think about your business?

Libby: I was talking to VCs actually. I spoke with a lot of VCs and they’re concerned about the 10 X exit and the billion dollar company so it went from the original idea, in this very simple concept of I want to send my friend a beer because I’m passionate about this connection and into this giant billion dollar business that didn’t really, that I wasn’t really passionate about. I was interested in it, but I wasn’t passionate about it.

Andrew: In the first version of Mixergy, the one that was an invitation site, an investor started talking to me about it. I said, “I’m not looking for funding.” He said, “You should, though.” He said, “Here’s the way you should think about it.” He said, “Go back and really write out a business plan or think about a plan that would get us to this number.” I went and I did it, but they push you to do it. Why do you, but we listen. I didn’t even want funding for Mixergy. Did you go out there with the idea that you needed to get funding in order to be a real entrepreneur?

Libby: I did.

Andrew: You did?

Libby: I drank the Kool-Aid. I thought, I have to, everything, like you said, I built out a business plan, spent a lot of time business plan financials. Some of that was very helpful to help me get grasp around the idea I’m really building. They said, “You need a board. You need an advisory board. You need to get a lawyer. You need to have a company formed.” Instead, we spent $6,000 on just getting company formation and spent months and months, you know, on business plans and talking to people and fishtailing. I really thought that that was truly the way to be a real entrepreneur and create a start-up.

Andrew: You know, I talk a lot about how I still have a chip on my shoulder about the way I was treated with the first company. It was profitable but still I didn’t matter to anyone, because if they asked me, anyone in the tech space, who’s your investor, I couldn’t answer. I’d just have to say, I have customers.

And as soon as you say that, they write you off in the conversation like you don’t even exist. And I, early on, did look for investors because I did want to exist, because I did feel like it’s not a business until someone gives you the okay. You felt that way too?

Libby: I definitely felt that way. I look back now and I’ve kind of got a chip on my shoulder too, because it’s not about that. It’s about your customers. On the second version, I ended up raising a convertible note with family and friends, because I wrote that family and friends, family and friends, then convertible notes.

So I did go out and I raised some funds and I spent it because that’s what you’re supposed to do is spend it on, like, I spent it on a salesperson who came on. We didn’t have the monetization to back it up. We weren’t converting enough sales to back it up, but I spent it like I was supposed to spend it and learned the lesson the hard way. So it’s about customers and generating revenue.

Andrew: And that’s the second version.

Libby: Right.

Andrew: The first version where you said, you know what, investors are telling me I should be thinking more than just beer. It should be about maybe even money even being passed back and forth. Is that the version you built without any funding?

Libby: Yes, that’s the version we built.

Andrew: Wow! All right. I’m going to see exactly how you did that because I’m looking at the expenses there. And that’s a lot of money to fund yourselves. You built the site. It took two years. You get up and running. Sorry.

Libby: No, go ahead. Sorry.

Andrew: Oh, you get up and running. At that point, at two years, do you have the ability to send, actually, let’s talk about this money thing.

Libby: Sure.

Andrew: You were using virtual Visa numbers. What are those?

Libby: Well, we started to use them. So we didn’t get the full first version launched. I would call it our alpha version. So virtual Visas were like debit cards, but you would get the number from the card and you would use it virtually, so without the physical card.

It would be considered a card not present transaction where merchants type in the number. Like if your card swipe isn’t working, they type in the number for you. So we were sending those via text message. So here’s your beer, Andrew. I’m buying you a $5.00 beer. Here’s your number. Go to any bar, because we didn’t build a bar network. We wanted to boil the ocean right away.

Andrew: Ah, I see. So you were saying, look, if I want to be really all over the world, or at least all over the country, I can’t talk to all these bars. I need a way for any one of my recipients to walk into any bar and get the beer. And the way I’m going to do that is when a customer buys a beer from me, I will take that money and then some, go buy a virtual Visa card, right.

The virtual Visa card will have, say, five bucks for the beer. It cost you a couple of bucks also to have the virtual card. And then you can just type out the number and text it over to the recipient and the recipient has, like, a Visa card number that they could walk into a bar and say, I’d like to buy a beer. Use this number in your credit card merchant system. That’s the process.

Libby: Yep. Yep.

Andrew: Got it. All right.

Libby: Yep.

Andrew: Actually, you know what, there’s cleverness to it. I don’t want to completely write it off. You had to find a way to get anyone in the country to be able to buy a beer, and you found it.

Libby: [??]

Andrew: How much did it cost you to do these virtual Visa cards?

Libby: They cost $5.95 apiece. This is one thing we found that was cost prohibitive. So in order to send somebody $5.00, you had to pay $10.95 to send somebody a $5.00 beer. And customers weren’t willing to pay that.

Andrew: Oh, the customer had to pay an extra $5.95 to send the beer.

Libby: Or we could, but then we’re actually . . .

Andrew: Out the money.

Libby: Right. So it just didn’t really make sense.

Andrew: Got it. All right. So now you look at this and you realize, um, this is not going to work.

Libby: Yeah, we talked to places like Visa, Discover and we thought about buying these in bulk in order to get the costs down, but they wanted minimum of, like, a million dollars. So then we’re back to fundraising and here we have this great plan, and, you know, we need to get a million dollars for it.

And my business partner at the time on the tech side had worked in banks and so we had banking execs on our board. I mean we really built up as much as possible. We really gave it a good shot. But all we ended up with in the very end was this alpha version. We had graphic design done and we were able to skin it, put it up on the site.

But it was really only one section of our entire MVP. And our MVP I would describe as sending someone a beer as you basically described. They take it. They’re able to redeem it and in the case . . .

Andrew: Mm-hmm.

Libby: . . . now the merchant gets paid. But back then it would be just redeeming. But version one was really just, I can send a user a beer and so we didn’t even have a full version. And then we put it up online even though we didn’t have it fully vetted. And just to use for testing purposes, I was running surveys asking people what they thought, asking them if five ninety-five was too much, questions like that, and figuring out what their frequency of use would be, how often would they send a beer, things like that.

A site launched in New York called buyyourfriendadrink.com. They were in the press and they just kind of blew up. They had bars already signed up, and they were using credit card machines. Instead of doing the virtual thing they actually bought and put in physical machines. They did have investors…

Andrew: Into the bars?

Libby: Yeah, into the bars.

Andrew: Okay.

Libby: They had, like, those terminals where you can swipe the card. Yeah. It was on top of whatever point of sale system or whatever they had inside the bar, and they were placing those in the bar. They had investment.

We were having a hard time getting investment. I felt really defeated at that time. Yeah, I wasn’t sure how to handle competition.

Andrew: I’m on their site right now. They’re who we are page has one, two people, three people, four people, five, six, six people at least. Then, they’ve got press. When you saw this happen, how did you feel when you were watching them just take off, seemingly?

Libby: Awful, awful. Yeah, I thought it was all of my dreams kind of coming to a close. Also, people told me hey, what kind of competition… Some of the investors I talked to said well, what’s your competition. I said I don’t have any, that’s a great thing. They’re like no, no, that’s not a great thing. That means you’re either too early or there’s no market for it.

So, when somebody else launched I felt in some ways really validated, like hey there is really a market there and people are doing this. But, I also felt really crushed. Because it took us two years to get to that point and we had fishtailed, and they figured out a system. I thought that was the end in some ways. I felt crushed.

Andrew: I get it.

Libby: Yeah.

Andrew: I said at the top of the interview that you gave it your all including a house. At what point did you do the house, and what happened with the house?

Libby: I think it was 2007. I sold my house, and I used the equity, the profits from that, to start building the next version of Beer2Buds from everything I had learned. I also went to work for a startup in Seattle. After the version kind of crumbled, we all kind of walked away.

I started from scratch. I sold my house. I used that funding and then started working for a startup in Seattle to learn the ins and outs of a real startup to see what lessons I could learn.

Andrew: Got you. Okay.

Libby: Yeah.

Andrew: One of the reasons why the site crumbled is your tech guy left for China.

Libby: Yeah, he left for China. We started doing some virtual Visa. We started looking at some companies in China for banking systems, because we were running into issues in the U.S.

We did a trip over to China to kind of study their system. We went deep into the payment side, probably too deep. That was his world, and he wanted to continue on that way. So, he left for China.

The only problem is I didn’t have my code. He had convinced me to put my code on his servers. So, that was a big lesson learned for me. I’ve never done that again.

Andrew: And then you never got it back.

Libby: I never got it back.

Andrew: Why? He wasn’t holding it ransom, was he? Was he just being careless, distracted?

Libby: Careless, distracted, and I think probably a little bit angry. So, I just never got it back.

Andrew: Angry at what?

Libby: Angry at probably the perceived failure and… I think one of the things is when you’re working very closely with people you tend to build personal relationships. Always keeping those separate is another big lesson learned.

Andrew: Yeah.

Libby: You can’t coax somebody to work with you because you’re friends. It’s very, very clear, very simple. Either you’re doing work or you’re not. I think emotions tend to get involved.

Andrew: I think now’s a good time for me to do a sponsorship spot for Scott Edward Walker of Walker Corporate Law. I’m trying to be clear, too, that this was a sponsorship spot. Because I say that Scott’s a friend of mine. I just kind of chat and talk about him within the interview.

And I have an interview coach who listens to my interviews, who reads the transcript, and says you know what, I know you like to really be honest with your audience. You have to be clear. This is a sponsorship spot.

So, now, here we go, sponsorship spot people. Actually, I think that’s a little much. I think that’s one piece of advice I may not take from him exactly.

But, here’s the point. You mentioned earlier you spent, what, $5000, $6000 to start your company, the legal part of it, to incorporate, et cetera?

Libby: Right.

Andrew: And, the deal that you had with your team, was it an equity split right from the start?

Libby: Yeah. It was a three way equal split which is a bad idea.

Andrew: Why is that a bad idea?

Libby: Because somebody needs to be in charge. At the end of the day somebody needs to have a final say and make decisions. Also, a lot of times you need to measure everything against clearly defined deliverables and milestones. Because some people may not be pulling their weight, and then you’re like well why did we give them this much. There’s just way too much ambiguity and…

Andrew: Yeah.

Libby: Yeah.

Andrew: You know, one of the other things about this is that, frankly, if everyone already has their shares right up front, what’s to keep someone from saying six months in all right I gave you everything you need, the site is up and running, now I’m going to take off, and I still own a third of the business because I have my shares?

Libby: Right.

Andrew: Obviously, that’s something that happens. It’s something that entrepreneurs want to protect themselves against and, frankly, protect their co-founders from. You don’t want to run out on your partner any more than you want your partner to run out on you.

If you need all that, set up your company, make sure that it’s set up right between the partners so that you have a really good relationship with them and can focus on the business, not on the worries and the issues that could come up. You want to set up an agreement that makes sense right from the Scott… right from the start.

Scott can do that for you for way less than five, six thousand dollars. He has a package that will get entrepreneurs up and running quickly, make sure that the partnership or the business agreements between the co- founders makes sense long term, and all that is packaged at a reasonable price.

Why? Because he’s not looking to make money off of the person who’s going to just start. He wants to help you get started so that when later on it’s time for you to buy a business, or it’s time for you to raise money, or it’s time for you to sell your company, that’s when he can really help you. That’s the part that he’s really built his business around, helping real companies.

So, you start off with him because he’s going to get you started right and do it fairly. Then, you’ve got a partnership and a relationship with him for later on as you build your business.

Even if you don’t buy the fact that I’m telling you to talk to Scott because he’s a friend of mine and because I told you he’s a sponsor who’s paying me, you should still take a look at walkercorporatelaw.com. You’ll see people whose names you recognize who are reputable in the space who also say great things about Scott, not being paid like I am. You should also call him up and really talk to him and his firm directly.

If you’re looking for a lawyer and you’re an entrepreneur, whether it’s right at the start or later on, you’ve got to consider Scott Edward Walker. He is a guy who works not too far from here in San Francisco who knows the tech scene and can be there for you as you build your business. He has the experience, the reputation, the connections, and the concern for you that you want.

Write this down, guys, walkercorporatelaw.com. You don’t need to write it down, maybe it’s just etched in their brains. But, I think they should write it down, because sometimes I get emails from people.

I should also tell you guys if you forget, it’s right underneath the transcript on the post that you’re listening to this interview on. Or, if you go back and look for this post you’ll see it.

All right. You walk away. How much space do you take as you work for this other startup that you told us about before you relaunch the next version of the beer site?

Libby: About two years.

Andrew: Two years, okay. And, the whole time, is it in the back of your head where you say I wish I’d done this myself, I can’t wait to get… It is?

Libby: Not that I wish I’d done it myself, but that I wish… I was still always thinking about how I could make it work and how I didn’t want to walk away but that I felt forced to walk away.

Andrew: How do you end up with a house? You’re an entrepreneur who spent a lot of time on a business.

Libby: Yeah.

Andrew: And it didn’t rain money on you. How do you end up owning a house?

Libby: When I worked for Adobe and I had the W-2 income I…

Andrew: I see, the dependability…

Libby: And zero down…

Andrew: …of that W-2 income gave you the house.

Libby: Right.

Andrew: I see.

Libby: That was before.

Andrew: And you were with Adobe for five years, 2000 to 2005.

Libby: Yeah, 2001 to 2005, four and a half years, something like that.

Andrew: Okay.

Libby: Yeah.

Andrew: Wow. All right. Then, you sell the house. You take the equity. What was your plan for it? Where was the money going to go?

Libby: What I learned when I was working at the startup in Seattle was how to… I didn’t know anything about development or managing developers, and I think that’s a really tricky part for business people, especially when you start. How do I find a good developer? Well, what does a developer mean?

I learned how to run dev teams. I learned about front end developers. I learned about back end developers. I learned to ask different aspects of design. I learned about [Inaudible 0:03:55] on remote teams.

So, I really just took with me as much as possible. My new goal launching out was to run a remote team taking some of the assets that I did have. Because even though I didn’t have the code, I still had the graphics. So, taking those assets that I did have and rebuilding using a team.

I started with Elance, actually, and hired a team out from Elance to work with them remotely.

Andrew: I’m a big…

Libby: The only thing…

Andrew: …fan of Elance. Yes?

Libby: The only thing is I did all the wire framing. I learned how to wire frame and I learned what specs were. I learned how to write out all of that – how to wire frame, how to spec.

Andrew: What’d you wire frame in?

Libby: At the time I think it was Visio. Now I use either Photoshop, Balsamiq, or just good old Notepad and take a picture.

Andrew: Okay. How much money did you end up with that you were going to invest in the business?

Libby: About 30,000.

Andrew: Wow.

Libby: Then, I raised an additional 60,000 friends and family.

Andrew: Okay. How did it feel asking friends and family to invest in your business idea?

Libby: Awful.

Andrew: Really?

Libby: It’s one of the hardest things I’ve ever had to do.

Andrew: Yeah.

Libby: But I said if I’m going to be a real entrepreneur I have to figure out how to do this because that’s what real entrepreneurs do. They raise funds and then they go blow it all. No, and then they go spent it on their business. I don’t think that way now. I think businesses make money from paying customers and . . .

Andrew: Do you still feel guilt about asking them for money?

Libby: I wouldn’t say I feel guilty. I felt at the time it was exactly what I needed to do, and I guaranteed them that I would pay back regardless of how the startup did. So I gave them my personal guarantee.

Andrew: So you still owe them money?

Libby: I still owe some money, and I’m working on paying that back. It’s just . . . For me I thought it was integrity kind of play versus a lot of my friends . . . I didn’t have a lot of friends and family who were used to investing. So for them it was also a very foreign concept.

Andrew: Boy, that’s a big weight.

Libby: Yeah, it’s a big weight. It’s been a big weight.

Andrew: You know what though? So I had, I think it was, $70,000 going into it after this first business, Bradford & Reed, $70,000 personal debt, and I felt that because no one . . . I kind of felt like it was a good motivator for me. I was happy with that. I felt like, even when I could of paid it off, I intentionally didn’t pay it off because I wanted to have this pressure that would keep me going.

There’s a point for some people where that would be too much pressure. For me it was just the right amount. At some point that could become so much pressure that you can’t focus on anything else that it distracts you. Have you had that happen to you?

Libby: Well, in a sense that I want to keep going to pay it back, yes. There’s still that pressure there, so in that sense, yes, definitely. But what was the second question, guilt part of it or . . .

Andrew: Has it gotten to the point where it’s too much mentally?

Libby: No, I mean, for me it’s something that I need to do. I promised my (?) I promised I would find a way to pay it back even if it was in the form of a loan. So I still think of ways that . . . That’s part of the reason that Beer2Buds is still alive is because I know that there’s . . . I definitely had some acquisition offers, but I want to make sure that this product itself is able to pay people back. I think that that’s part of what drives me to keep going.

Andrew: All right. So now you’re going to do it right. You’re going to do it better than the first time. You’re actually sketching it out. You’re hiring people on Elance. How long did it take the Elance people to develop it?

Libby: Well, it really depends. The first time I was doing it I hired a team, and I was managing them directly, and it was a lot of work managing them directly.

Andrew: What kind of work goes into managing people directly?

Libby: All the wire framing and spec’ing, so design it exactly the way that you need it to go, making sure that you’re doing . . . I do sort of weekly scrums or weekly milestones and make sure that they’re . . . some project management. Are you hitting all of these different goals, Q/a, bug testing. Are you making sure that the site’s working?

Andrew: Oh I see. Now you have to do it all. You have to make sure that the credit card will go through. You have to make sure that there’s no bugs. I see. You have to make sure that if they don’t hit a milestone that you’re on them, but you don’t want to be a jerk.

Libby: Right.

Andrew: And at the same time you don’t want to be a pushover. I see. All that’s on you.

Libby: It’s a lot of work, and it wasn’t really my specialty. So finally I said, “Oh, I’m going to . . . And I was out doing sales. It’s really hard to manage both. I’m better at being out and about talking to people sales marketing. So I decided to focus on my strengths. I went out talking to people, and that started to be too much, so I went back and I hired somebody who . . .

They had a project manager in-house. They did all their Q/A. They did all their testing. They had staging server, development server, and they also had the production server. So they knew exactly what they were doing.

Andrew: You were hiring them to build the site for you.

Libby: Yeah, yep.

Andrew: Okay.

Libby: So them I hired them to do the version, and it was a lot less pressure on me. I just did weekly check-ins versus . . . And they did the wire frames and specs, and there was great communication between us. So in that case it still took probably the same amount of time, but I was able to double my effort because I was able to go out and talk to companies and grow in the meantime. And support them . . .

Andrew: What does something cost to be able to . . . and we’ll see what the features were in a moment, but what does it cost roughly to put a site like that together?

Libby: I think that on all costs around ten grand when it was just . . . The first version, I think it was a grand and then it was ten grand to have somebody else manage it for me. And then April asked me this before this interview, what would I have done differently? And I thought about it, and you know what? Maybe I’m going to go back onto (?) and kind of rebuild it again.

So I have a very fresh answer with that. I just went and mocked up a new . . . created a new version. I didn’t do the project management route this time which I would again in the future. But I brought . . . We did wire frame specs. We did the graphics and then we had a developer come in and build the front end and also the back end based on those graphics.

Andrew: What’s the advantage now if you’re going to go back to Elance? What’s the advantage of managing your own outsourcers that you find on an outsourcing site like Elance beyond the price? How have you mastered the issues that were so distracting before, like dealing with bugs, making sure they hit milestone, et cetera?

Libby: Well one of the things is Elance and other platforms have that sort of built in milestones. I think part of it is just experience saying I know using different tools like Pivotal Tracker Trello and managing to expectations on there and also with inside a platform like Elance. I think that that’s been really helpful. I wouldn’t say that it’s much less distracting which I’ve learned, relearned again that…

Andrew: Sorry. What’s less distracting about it this time? The connection was breaking up a bit.

Libby: I’m sorry. The only thing that’s less distracting is I’m managing to better [??] milestones to using project management tools and knowing a little bit more now who to hire. I’m hiring and firing more quickly so if it’s… and I have backups now whereas if before if somebody ends up disappearing or something else happens then now at least I have that in place. Clear documentation so having that in place makes it easier but…

Andrew: When you say backups, do you mean that you hire two different teams to code up your site for you?

Libby: What I do was I did code reviews. I hired a few different people to just do a code review and then figure out the dynamic [??] if I want to work with them or not. I have people waiting and said, “Hey, if this doesn’t work out or at this stage I’m going to bring you in. “and so I have people who’ve actually seen the code.

Andrew: The connection again was a little bit funky right now, so let me see if I’ve understood you right. It happens. What you’re saying is you hire a developer, but you hire someone else to do a code review of that developer’s work. It’s not just upfront where you’re evaluating whether they’re the right person and the right developer to do your work for you. It’s even at certain milestones, and that way if the work isn’t good you always have up until the previous milestone everything developed, not just right but also verified by someone else.

Libby: Verified and then I’m interviewing them as well to figure out whether or not that we could work together and so their…

Andrew: How do you get someone to do the code review?

Libby: In this case, there’s a couple of different ways. I post it up on Elance for a paid code review. There’s a site called AirPair where you can do a code review. I can ask friends that are in the field to help me out.

Andrew: AirPair that will do a code review. I’m going to check them out right now. I didn’t know they did that. World’s best software experts at your fingertips, on demand, video chat, and screen sharing. You do a video chat screen sharing, have you used AirPair or it’s just one of the options that you have?

Libby: I did end up using it because I got the reviews from the Elance folks and I was moving on to the next milestones.

Andrew: Got you.

Libby: But friends have, yeah, I’ve heard good things about it. It’s peer programming, but you could also get a review and hire somebody in an hour. It’s not cheap but it’s definitely a great site.

Andrew: I see here right at the top of their site Airpair.com, code review. Interesting. I didn’t know that was available from them. Okay, so it seems like you’re doing this right. The model now is not going to be the blanket the planet or the country, you’re focusing.

Libby: I realize backing up, like trying to boil the ocean, I’m sure there’s some cleverness as you said built in, but if you’re not actually executing, if you’re not able to get results and feedback, then you’re not actually going to make any progress. I started thinking what do I have? What resources do I have available? What knowledge do I have, and what can I create with that?

There’s open loop systems, like VISA, that you can go anywhere, and a closed loop system like a gift card, so I decided I was going to create my own closed loop system with Beer2Buds. I may be right, I may be wrong, I may break this rule or that rule, but I’ll find that out as I go along. I decided I was going to take what I had, do with what I had, create this closed loop system. Instead of starting with every bar in the world that accepted VISA, I started with my own backyard, which is in Timeless, Seattle.

I went out to various bars in Seattle and particularly started in one neighborhood in West Seattle, and found five bars that were willing to test out and sign up for the program and brought on those five bars and created a closed looped system with this new company I was working with.

Andrew: Got you, and so that they could know if the person was entitled to a beer or not, you gave them iPod Touches. You allowed them to use those. You trained them. How did the training go?

Libby: That’s probably one of the biggest issues. Training was good but it took a lot of my time. I’m training managers and then there’s the bar staff rotates. They have high turnover so training and retraining, trying to work with the bar owner to train took a lot of time. It was difficult. And then training with an iPod Touch, we had to build an iPhone App for the bar owners only – I call bar owners merchants – where they could check, run the beer card by just typing it in almost like those machines that, like credit card machines but with an iPod Touch.

Andrew: Mm-hmm.

Libby: And so we could put an idea then. But a lot of the bar owners that I was working with at the time Smart phones did not exit. iPod Touch was new, and they weren’t even sure how to really turn it on. And so we had flyers printed out for training, all sorts of training, but one thing was getting people to use technology that they’re not ready for is a big challenge. I just assumed, hey, if I’ll give them this iPod Touch they’ll be able to use it, but there’s a lot of education, a lot of training.

Andrew: I can imagine especially when there’s high turnover at these bars, and they have all of these other things that they need to take care of like how do they manage sales, tips, and pick up women behind the other side of the bar. [laughs] They’re constantly distracted.

Libby: Sure.

Andrew: And then Groupon comes in, and Groupon starts to shift the market.

Libby: Yeah.

Andrew: What does it do for you and your business when Groupon comes in with their deals at local merchants?

Libby: Sure. There’s both good and bad. Groupon, one thing that I learned from them, instead of sending a beer here and there, they would send in a thousand for Daily Deals. And, of course, the bar was, oh we have to learn this, so based on volume they were able to get the bar owners to be incentivized to train their staff. So that was one great thing. They started doing, well, printed lists and then they started working on Smart phones where you could bring it in. So that really helped train the market. So that was one definite bonus and positive thing for us.

Also what happened is the bar owners became so trained that they wanted to see daily deals. So they started thinking we were Daily Deals site, and we’re gifting, we’re sending your friend beer. Bar owners started thinking we want Daily Deals and Beer2Buds is a daily deal. And so there was a lot of confusion as well.

Andrew: So then did you pivot towards daily deals at all?

Libby: Only because I remember specifically when the VCs I spoke with said, “Why don’t you become a daily deal site for beer?” I was like if I’m talking to our customers and talking to the market it doesn’t seem like that’s what they – taking away 50%, asking them to reduce by 50% plus charging 50% doesn’t seem sustainable for our customers, for our market.

So I said it just doesn’t seem like the right thing, but from talking to our customers they said things like, well, we don’t want to just have this limited to beer money. We want to be able to run our own promotions, and we don’t want to pay 50%.

So what we created based on that feedback, we started testing inside Beer2Buds. And we started creating – instead of sending a beer from New York to Sweden we were thinking how can we focus on Groupon and Daily Deals and start focusing on the local market. So we said, let’s focus on the local market. We tied it up with sports teams. We sent beer money across town, and we started running promotions inside Beer2Buds. And we confused our audience a little bit, like we started doing nachos, like what do nachos have to do with beer? So that was definitely a lesson learned.

So we ended up spinning off a product called PearlBomb, and it was . . .

Andrew: I’m sorry. Let me just make sure I understand this. When you were doing nachos, it was Deals for Nachos at a specific bar somewhere.

Libby: Mm-hmm.

Andrew: So if people were close enough to that bar, they were entitled to some big discount at that bar. It was your toe in the water of this group buying Groupon like service.

Libby: Right. So we would say, beer ends . . . Instead of just saying $5 off your tab for beer, we would say you get $5 off plus free nachos.

Andrew: Gotcha.

Libby: We were bundling these packages together, so adding kind of additional incentives and . . .

Andrew: The problem you mentioned earlier that you saw was bars said this is great, we want to be in it. But what’s even better for us is stop giving Groupon 50% of our already reduced revenue. So if we’re ordinarily selling a beer for ten bucks, Groupon is going to offer it for five bucks, people are going to come rushing in. We have to give $2.50 to Groupon, we only keep $2.50, make this pain stop. And you thought, all right, we’ll allow you to create your own deal site for your bar only. Yes, you’ll give the beer at a discount maybe of five bucks, but you’ll keep all $5. You don’t have to pay it. That’s the deal that you wanted to offer the bars?

Libby Tucker: Right. We said, “We’re going to give you a system that allows you to create whatever you want to create. It’s completely free to the user, and you’ll just pay a monthly fee instead of paying 50%.” That’s when we created, we actually, and we were seeing a 3X return on the amount of, on the user side, we were seeing three times more redemptions as well. We thought, okay, we have something here and we, but creating the inside of Beer2Buds we did that to kind of save time, money and test it out.

Now we realize testing was a good thing, instead of just building, building prior to testing.

Andrew: So how do you test something like that on a small scale? I see what you’re saying. You’re saying, “Look, I have a sense that this is going to work. People are asking me for it. I don’t want to invest tons of money in an outsourcing company or in a big development job.” What do you do to keep your tests small?

Libby: Well, instead of building an entirely new product, or instead of building an iPhone app or a Facebook app, we did the beer and nachos thing. We went into a local sports volleyball group that played beach volleyball and we said, “Hey, whoever is the winner of this, you guys get beer and nachos.” So we started testing, just very slowly, within the local group and something that’s a controlled test that we could actually see the results of pretty quickly.

Andrew: I see. Because the local volleyball team gave you a big audience of potential customers….

Libby: Right.

Andrew: …and you wanted to test what? Whether the software will work in the stores, or whether people will take nachos for free because it seems like this test is just testing whether people would take a freebie.

Libby: It was testing whether or not people would, when they came to the site, would they, what they were interested in using. Were they interested in just sending to their beer money, or were they interested in, after the game, going to use of these packages that the bar would be offering versus….

Andrew: Oh, I see. It was, “Will they go over to our site and buy beer, pay up front to get beer with nachos?”

Libby: Right. Would they be more interested in doing something locally, and after the game, or would they be interested in, are they more interested in sending each other beer? I think, I guess I was saying this. The first instance I thought of is, “Do you want to win beer money or do you want to win this package where a group of you can go to the bar afterward?” Maybe that’s not the best example.

On the site itself, we were saying to this particular audience, “By the way, you can buy your friend, or you can redeem it.” It wasn’t just, sorry, it wasn’t just buy your friend. It was, you can redeem this yourself. It wasn’t just you have to send your friend a beer across the miles. It was, hey, you can go get this deal locally. It’s a deal and something you can redeem yourself.

Andrew: Got it. And did you build the software out at that point for the deal site or were you doing something else?

Libby: Yeah. No, so at that point, we realized that it was interesting enough. We took the software that we had because it was so similar, but we decided to create it as a different product because when people would then go to the site they said, “Oh, it’s, I thought this was beer money. What is nachos, what’s nachos and why am I redeeming?” It was two different value propositions.

People didn’t completely, so we built this new site and it was [??]. It’s a subscription service that allows them to, bars and restaurants and retail, we actually expanded the market, the billion dollar ideal, to create, track, and distribute their own promotions and run it…

Andrew: I see.

Libby: …like a group in a box.

Andrew: I’m on [??].com and I can see the way it works is, if I have a store I can create my own promo and all I do is pay your guys a subscription fee in order to use your software to manage my promo.

Libby: Right. Exactly.

Andrew: Did you code this up again using Elance, or how did you get this built?

Libby: This time we had, I used money that I raised and with the house to bring a team in house, because again, drinking the Kool-Aid, I thought this is what you need to do. You need to bring a team in house. We started, at the point when we started working on this, so, we coded it all in house. I actually built the, it’s really ugly. I did the mock-up in Photoshop and then a developer in house came and built the functionality behind it. It’s not the best looking site, but it worked.

We were just trying, we thought, you know, instead of hiring all these people let’s do what we can in house. At the same, a lot of the revenue was going towards in house development and in house sales people. At that time, our lead developer, as we were kind of pivoting this product, he ended up passing away. We were scrambling, I’d say, a little bit because we were confused with all the stuff that was going on with daily deal sites. We were kind of scrambling and fumbling like, ‘What’s our real business model, or business models, and how are we going to make this look? How do we build this?’

We were kind of scrambling. We were running low on funds. Then Richard, who was our CTO, ended up. Suddenly he was at his desk one day and he had an aneurysm that led to a stroke, and he was just instantly gone. So that took some of a hit on us as well.

Andrew: You get hit from all sides.

Libby: Yeah, we were getting hit from all sides, definitely. Losing faith, a lot of teams were losing faith in the original idea. You know, we weren’t getting great feedback from buyers. We were trying to build . . .

Andrew: Because at some point the Daily Deal site everybody want to be a part of from the investors to local merchants to customers suddenly started to die. The novelty wore off. And so bars weren’t as interested in offering big deals. People weren’t hunting for them. I see. And that’s one of the problems.

Libby: Yeah, and I think we . . . One of the things I did to (?) was we built so much, like we spent time and money building. We wanted to be like one of the cool kids. You need an iPhone App, okay. You need a Facebook App, okay. But those in themselves can be businesses, an app, a Facebook App or an iPhone App. It just kept building and building and aiming and aiming, and not really focusing, on, okay, what do our core customers want and what’s the core need. We did listen a little bit to the Daily Deal, okay, as much as we tried not to.

We were listening to our customers who listen to the Daily Deal craze. I think that we did the right thing in not following that craze and not trying to build another Daily Deal site, but definitely there was a lot going on at that time, lots of noise and . . .

Andrew: I’m looking here at a list of some of the things that you built, that you yourself in retrospect say that it’s probably over built. All of these things sound great. They make so much sense, but we as entrepreneurs have to pass up on a lot of these that make sense. So here’s what you did, refer a friend system. It’s really important, really powerful, but you built it, and it’s one extra thing to build. The Facebook App, the iPhone App, but the iPhone App for merchants, Bump. What’s Bump?

Libby: Bump is an iPhone App where you could bump and exchange contact information. So we leveraged our API, and we built Bump of Beer so that you could actually bump your phone like you were choosing someone and you could switch beer money. So I would say, “Hey, you’re connected with Andrew. Do you want to buy Andrew a beer? And you say, “Yes.” And you say how much you want to send Andrew, and you would instantly be able to send somebody a (?). And I thought it was the coolest idea, a great way to promote Beer2Buds. It would be all over TechCrunch and everybody’s going to want to use this. And I think I bump tweeted it out, and we got press bump and that’s about it.

Andrew: That’s it.

Libby: TechCrunch didn’t want the story, yeah.

Andrew: This whole Bump thing, something feels shady to me. I’m not saying it is shady. It could all be completely right, but something feels shady to me. They were so talked about. There were all these different downloads. I never saw a single person use it. I saw one person try to use it, and I wanted to be a part of it with that person. We installed the app, and we couldn’t make it work even though she was excited about it.

And then they sold, and they closed up. And how could something that had all this attention, all this press attention, supposedly all these users, all this satisfaction it seemed like suddenly disappear. And we’re in tech. We don’t know what’s happening all the time. I don’t get it.

Something feels like there’s a story there. Maybe I’m putting it out there just like I put out the fact that I didn’t like the way I was dressed in past interviews and (?) jumped in. It feels like there’s a story out there. If you out there know what it is, please tell me. You could do it over scotch or email. I’ve got to know. What is it with Bump? All right.

At what point did you feel like all right enough is enough? I just need to stop this and focus on my own little thing but not Bump. I’ve got to scale it back and focus until I can make enough money to pay back my investors and have a business that’s a nice lifestyle generating business.

Libby: At one point I think just learning, all of the learning is from the original version. I thought it was dizzying going after all of the investors, the money, and never having . . . I like to execute. And not having something to execute, and I was tired of showing up with this idea and never having something tangible to sell or send. And I just needed to create something that was tangible that I could say, “Well, here’s how it works. It’s not perfect, but at least it’s something.”

And we have something from A to B that works. I can send a beer to a recipient. They can accept it. They can bring it to a bar, and the bar can actually (?). Every time, I guess . . . but still, we go back to, like, I guess, PromoBomb days, or . . .

Andrew: Yeah. We’re talking about Beer2Buds.

Libby: Yeah.

Andrew: PromoBomb is still out there, people can still pay for it, but at this point, development’s stopped.

Libby: Right.

Andrew: And you’re not growing it.

Libby: Right.

Andrew: The business that you’re still continuing, that you’re spending time on, or even, as you said earlier in the interview, considering rewriting from scratch, is Beer2Buds, Beer2Buds.com.

It took some . . . there was some decision that you had to make that said, “Look, I’m not looking for any more funding. I’m not going to keep this team of people that was on board. I think I just need to stop it, own it as it is as a lifestyle business. Hopefully it’ll bring in enough money to pay investors and bring in some cash on the side.”

When was that decision made because that’s not an easy decision to make?

Libby: I think . . . so after we had sort of spent . . . after spending the money on it, and Richard passing away, and not having anyone to . . . like I said, overbuilding. I mean, in hindsight, we overbuilt. I didn’t have it . . . there wasn’t anybody to support all of these different functions. And even if Richard, let’s say, had left to another company, who was going to support all of this stuff?

So it’s not just building, but you have to be thinking about support. And it just got to be overwhelming. And I didn’t have . . . I ran out of the funds. We didn’t have a strong team. Everybody basically had left.

And so I was looking at this like, “Wow, I raised this money, and I don’t know . . . ” It didn’t get us any much further. I mean, sure, it got us products. We got traction. We had 200 bars in seven countries, 62 cities, 21 metro areas, actually. So not 62 cities.

So we had some great traction, but there wasn’t anybody to support it. So I had to go back to . . . I realized, I think, at that point, that I had really drank the Kool-Aid, and that if you run out of funds, I mean, you either have to re-raise, or you have to fold the business.

And I didn’t want to fold the business, and I thought, well, since I don’t want to fold this and give up on my dream . . . because I did fall in love with it. It’s my passion. And it goes back to not just sending beer. It goes back to connecting friends. And I had investors to pay, also.

I thought, I have to do something to at least pay people back, and I don’t want to fold it. But I also know that I can’t go back and raise money. A, I’ve dried up my friend and family money, and B, I did talk to investors. I tried to get in some accelerators. And talking to investors, going back to that whole game, it just felt really . . . I got the same questions, and “what’s the billion dollar idea?”

And I also didn’t feel like that was right anymore. There was some sense that I was like, you know, if I had just not spent all the time going after investors and looking for money, and if I just focused on making it a great experience from A to B, making it the best possible site that I can within what I have, if I just did that, would that make it enough to get enough users or enough attention just to sell it? I don’t need to do hype. I don’t need to bill all this stuff. What can I do? Again, going back to, like, what can I do with what I have.

And at that point, I said, you know, do I want it to be a billion dollar business, or do I want it to be this lifestyle business? Do I want it to be what I originally wanted it to be, was something very pure, that if I didn’t list anybody else, it was just, “I want to send my friend a beer.” And that’s what I want to do.

So that’s kind of why I went back to that decision. And I’ve been maintaining it myself ever since. I did just build a new . . . we did a soft launch last weekend with a new version, with new graphics. A big difference, on Elance.

But my goal at this point is not . . . I’m not going to try and go out and raise VC money. I’m not going to sell a house. I’m not going to spend my . . . I’m going to bootstrap it, but I’m not going to overspend my own funds on it hoping that a strong monetization model comes in later. I’m not going to go after what the next craze is. I’m not going [??] other people.

I’m just going to build what I set out to build, which is . . . or maintain what I set out to maintain. We still have customers. Which is sending a friend a beer when you can’t be there in person. “I miss you, man,” or whatever.

Andrew: Go back to “I miss you, man.”

Libby: Yeah.

Andrew: I’ve got a list here — I’ve been reading it now as we’re talking — of the things that . . . the lessons that you’ve taken away from it. And we’ve covered a lot of it. Things like don’t overbuild and add too many features. Don’t listen to too many people. We talked about that. Don’t have a single point of failure. So if there’s one person who has the code on their server, and that person takes off, or something happens to the server, your business is done.

But if we can just come up with one thing that helps us . . . that we can take away from this. Because I worry that people might . . . I guess they . . . I think we got a lot of the points out there, but I want to send people away with one simple concept that maybe covers a lot of what you’ve learned from this. Would it be that you should start small, validate, and then build only after you validate? I saw your eyes open up. Is that it?

Libby: Yeah. I mean I think, going to the smallest piece that you can build, what do you have right now? What can you test and make work? There’s a lot of lean start-up stuff floating around right now and there’s even, put a click button on your site and see how many people click through. That may be one test, but I think if you have a, going to the next version, your MVP, what does it take to work A to B, only build that.

Even before you build that, trying to, validate in the sense like ask people. Throw up a quick site. Ask people, ‘What would you do with this? What would you, what is this? Does this make sense to you? What are your actions?’ It takes a lot of time to validate. It takes a lot of time to ask people.

Some of the best advice I ever got was, but didn’t follow until later, is get 30 people to pay for your product before you’ve even developed a thing. If you can start with the basic of, ‘What is your MVP? What is it? Who are your customers?’ You have to start with the smallest common denominator and try and find people who buy into that vision before you really even get your hands dirty.

Andrew: So before you would code Beer2buds.com, if you had to do it over again, you’d see if you can sell two people, or three people get, three people to buy beers for their friends and then you have an understanding that there’s a market for it?

Libby: A little bit different. I would, well 30. I would try and get…three, I don’t think, is enough. I think it depends on the type of product that you’re selling. I have a double sided issue. I have customers, users, and I have merchants. In this case, learning what I’ve learned, I’d go back and talk to the merchants and get them to buy into it. I would get 30 of them, or more, to really buy.

Andrew: Thirty merchants.

Libby: At least.

Andrew: Okay.

Libby: To sign up and say, yeah, this is something they want to do.

Andrew: Was it hard to get people to send beer to each other? We haven’t talked about the difficulty of doing that. It seems like it would be a tough concept.

Libby: True.

Andrew: You have to explain to someone that they’re sending beer to a friend?

Libby: Yeah, it definitely was tough. Tougher than I thought. I thought, everybody’s going to get this and they’re going to love it. Of course, they’re going to want to send beer, but a lot of people were confused. Is it physical beer, is it, cause trying to introduce a new concept is, which, I say [??] wants to give cards for coffee but it’s beer money. That’s a little bit helpful, but trying to introduce a completely new concept, you get a lot of questions. People think they’re sending real beer. People think they’re sending the cost of the beer. Do I get cash back? What am I….

Andrew: Am I sending someone cash? If I’m sending them a gift certificate? Am I sending them beer in the mail?

Libby: Right.

Andrew: You did manage to get some customers. What’s the number one way that you got customers?

Libby: The number one way? We did a lot of Facebook advertising in the beginning. We did a lot of [??]. We ran Beer Friday contests on Twitter, so we became sort of an authority on Twitter for Beer Friday. We did Facebook ads. We tied in to various different groups, piggy-backed Fantasy Football. We actually tried, did a lot of different things but I’d say that what we ended up learning, and the number one thing is, people send beer. We only learned this through launching it was people send beer on Christmas, St. Patrick’s Day, Father’s Day, 21st birthday. There’s really, it’s really kind of a holiday driven, or a motive driven….

Andrew: How did they find out about Beer2Buds on a holiday or a birthday?

Libby: We do some advertising. Also, it’s such a unique concept that we get organic, people will find us and they’ll write about us, fortunately, so we get people saying, ‘Here’s a great Father’s Day gift.’

Andrew: Okay.

Libby: That drives a lot of traffic around those holidays.

Andrew: All right.

Libby: If that makes sense.

Andrew: Let me see where we should close off. Oh, you’re a fan. You’ve been a Mixergy premium member. You’ve listened to interviews. In fact, you said just recently you were listening to a Mixergy interview.

Libby: That’s correct.

Andrew: If you could recommend one interview, or course, or program on Mixergy to someone who’s listening, it doesn’t have to be the best one that you’ve heard. I don’t want to put that much pressure on you. But if there’s one that you could give a shout out to and say to the person listening to us, ‘Go follow up by listening to this,’ what would that be?

Libby: Andrew, there’s so many. I’ve actually categorized sales ones, copy writing ones, membership site ones. What’s one that hit me probably more than? I don’t remember the name. There was a sales course on how to do cold calling. Let’s see.

Andrew: Yeah, with Jamie Kennedy.

Libby: Could be.

Andrew: He says that when you put up a landing page, and you ask people for their e-mail address, also throw up a field that says, “What is your phone number?” Have that phone number, go to the email list, but you also have the phone number come into your email inbox and then follow up with the person while they’re still on your site. You’re going to learn from them. You’re going to be able to sell to them. And actually he said don’t sell to them right away. He said, just talk to them and promise a follow up phone call. Put it on your calendar, and when you follow up when you said you would you’re going to blow their minds.

And then you can sell to them even if you’re not a slick salesman which Jamie Kennedy is not. He’s a sincere person. The goodwill that comes from following up when you said you would with someone who expressed interest by giving you their name and email address and phone number is going to be tremendous. And it led to sales for hm. He was upset with me for never talking about it. He then said, I’m going to teach to your audience and he did. If you’re listening to this interview, you should go and check that out.

Just type in the name Kennedy into the search box, and you will hear him talk about it. It’s also available, by the way, on MixergyPremium.com. If you’re a Premium member, you get access to that and over a hundred other courses, over a thousand other interviews. It’s all in here for you.

You heard Libby earlier mention the name April. Maybe you didn’t know what we were talking about. April Dykeman is one of our pre-interviewers. That’s part of our process here. We don’t just throw up interviews for you. We do a lot of research in finding guests. We do a lot of research to put the interviews together, and it’s all there for you as one of the 1,000 interviews. This is one of over a thousand interviews. If you’re a Premium member you get access to them all.

I urge you to go sign up at MixergyPremium.com. I should just slow down and say it again, MixergyPremium.com.

All right. So we’re going to finish. You know what? You mentioned that you’re categorizing. Do you actually have a list of categorized interviews somewhere? You do?

Libby: I do.

Andrew: Would you put them up on LiveWorkAnywhere.com/Mixergy. You don’t even have to make it available on your site to anyone except the people who go to that URL.

Libby: Yeah, sure. I’d love to.

Andrew: So if you (cross talk) people would also connect with you. I want them to get to see your site too and to get to know you on this interview.

Libby: LiveWorkAnywhere.com/Mixergy?

Andrew: Yeah.

Libby: Got it.

Andrew: Here, I’m going to send you an email so that we don’t forget.

Libby: Terrific.

Andrew: Where is it?

Libby: I wrote it down, too.

Andrew: So you wrote it down. You do paper.

Libby: I did.

Andrew: I don’t trust myself.

Libby: I’m a (?) person. I don’t like to . . . with the (?) I’m a minimalist, but sure every once in a while when I’m on a call I do paper.

Andrew: All right. I sent you a link to remind you an email.

Libby: (?)

Andrew: Sorry?

Libby: Okay.

Andrew: It exercises your brain when you write it down. All right. Let me thank you so much for doing this. Everyone else, please . . . actually, please what? Check out LiveWorkAnywhere.com. If you go to LiveWorkAnywhere.com/Mixergy you will find a list of interviews that Libby has categorized. I will be going on to that site but not just yet. Once we’re done recording I’m urging you, Libby, to do an interview on your site and I volunteer to be the first one.

I know your interviews are about people who travel and work and don’t just do it the same place over and over. I have a unique way of doing it. I think it’s going to come across very anal, and I’m looking forward to talking to you about it in the interview you do with me on . . .

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  • sonibvc

    Amazing! Its like I am talking :) Excellent interview from Libby! This interview should be a sticky on mixergy. It dispels the follow your “dream and passion” crap, which way too many people get fooled by! For 99% of entrepreneurs their passion does not correlate with what the market is willing to pay for and what follows is pure grief!
    From the bottom of my heart I wish Libby success because she has the done the work and suffering and she deserves a big slice of the success cake!!!

  • janis

    what is the link on liveworkanywhere.com about the interview met Andrew? I couldn’t find it..

  • Arie at Mixergy

    Thanks for the feedback :)

  • Arie at Mixergy

    Hi Janis–I don’t believe it’s up yet.

  • Allan Li

    I don’t normally comment on podcasts but after listening to this, I felt I needed to come here and voice my concern. I understand that Libby here is following her passion, but from the podcast I couldn’t help but feel she has fallen into the sunken cost fallacy whereby she has invested so much time and money (an entire house) into this business that in her mind, she must keep going because she has done so much already. I can’t say that I’ve done anything to the extent that she has, but I’ve been in a similar situation where I’ve slogged a dead horse for longer than I needed to in hindsight.

  • http://liveworkanywhere.com/ Libby Tucker

    I’m humbled by your comment, thanks so much!

  • http://liveworkanywhere.com/ Libby Tucker

    This is a very valid concern, and most people I believe would have given up. I could have folded it completely, and I do feel pressure to pay back friends and family which has partially kept me personally invested. But, I think it’s key to shift your mindset and to objectively look at what you have to work with. Instead of flogging the dead horse, I knew I needed to reshape it.

  • http://app.nodo.io Dylan @ nodo.io

    Unrelated Note: Your hilarious in your intros, haha

  • kathrynddaniels

    My Uncle
    Joshua just got an almost new white Kia Rio Hatchback only from working
    part-time off a home computer. try this R­e­x­1­0­.­C­O­M­

  • http://www.Spidvid.com/ Jeremy Campbell

    I’m just loving this episode, can totally relate to the funding challenges and emotions you had Libby, that was a hard time for me as well. It really is all about the customers, build them something they love over time and nurture those relationships. I’ll listen on, but thanks so much Andrew and Libby, this is perfect to listen to in the background as I build my startup!

  • http://www.joelalain.com/ Joel Alain

    I like the idea of pivoting until you make it. Like Allan is saying i think this idea looks complicated a bit, it doesn’t explains easily and naturally. I’m at 43:00 in the interview now and just came back from a walk and still didn’t get what the company was about. So I got on my computer and found your site and then i understood. When you need to explain in 3 different angle what a business is, it’s just a uphill battle that will never catch on. But i think it’s still a good idea, just too complicated.

    Pivot idea: I love microbrewery beers that is local or international. I love the idea of drinking ONLY one beer, but very slowly and feeling and understanding aromas, beer tasting (like what ppl do for wine. And i’m not talking about Budweiser here, but really elegant small volume special beers). Instead of this complicated setup for sending ONE beer one time involving convincing bars, people, having to explain everything, etc, why don’t you do a website where I can subscribe for 10+ $ per month and i get shipped to my house ONE new, different beer + explanation & cheese matching or recipe to go with it or drinking tips and story, etc. That way, you can subscribe for yourself OR send 1 beer to a friend for X months that is cool, original and you learn something in the process. I’d pay anytime 50-80$ for a 8 month beer-a-month gift to a friend, local or not. And that makes for amazing conversation.

    Joel

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