Check Out How This Guy Found A Business Idea That Customers Love – with Nick Crocker

How does embedding yourself in your customers’ lives help you build a company that people want to buy from?

Nick Crocker is the founder of Sessions, a network of personal coaches who encourage people to lead more active lives.

I invited him here to learn how he investigated people’s pain and built a health business that solved that pain.

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Nick Crocker, Sessions

Nick Crocker is the founder of Sessions, a network of personal coaches empowering people to lead more active lives.

 

Raw transcript

Mixergy's audio transcription is done by Speechpad

Coming up, the second to last question I asked today’s guest. We’ll show you the one thing you need to do if you want to build the company or product that customers will be eager to pay for. Don’t try to fast-forward to that section. It won’t make much sense unless you watch the whole interview but, if you do, it’ll make this whole interview and maybe even this whole site worth every minute that you invested in it. Also, why should you wait until you’re so frustrated, so fed up, so irritated, that you want to, actually pull your hair out, before you build your product?

Today’s guest makes a compelling point. If you listen to that point, it could save you… Well, he lost $10,000 in three months, suffering. He could save you that pain and enable you to build a successful company. Those two points, and so many others, coming up. I’ve got my notes here and I know you’ll want to take good notes on this interview because it’s that solid. Stay tuned. First, three messages:

Who’s the lawyer who founders in the Mixergy audience trust? Scott Edward Walker of Walker Corporate Law. Have you seen what Chris Prichard posted on my Facebook page? His new company’s incorporation pages that Scott Edward Walker helped him get. Scott Edward Walker is the lawyer who publications like Forbes trust. Go to WalkerCorporateLaw.com.

Next, when my friend had to close her company’s office but still wanted to give callers the impression that all her employees work well under one roof together, what service did she use? Grasshopper. With grasshopper, everyone who works for you could have an extension. They can pick up calls on their extensions, no matter where they are or what phones they use and they can transfer calls to each other, back and forth, with ease. Get those features and tons more at grasshopper.com.

Finally, when Dave Jackson and Dave Petrillo invented a product that keeps coffee at the perfect temperature, what platform did they use to create their online store? Shopify.com. Look at how beautiful their store looks. It’s because it’s built on Shopify. They did hundreds of thousands of dollars in sales. Shopify stores are designed to help you sell.

Patrick Buckley invented an iPad case and used Shopify as his online store. Within months, he sold over $1 million in cases. Get your beautiful online store at Shopify.com.

Here’s the program. Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How does embedding yourself in your customer’s lives help you build a company that people actually want to buy from? Nick Crocker is the founder of Sessions, a network of personal coaches who encourage people to lead more active lives. I invited him here to learn how we investigated people’s pains and how he built the business that solved those pains. Nick, welcome.

Nick Crocker: Thanks. Great to be here.

Andrew: Ah. You know what? Your video froze again. Just when we got it perfect, I dropped my coffee and I think I ruined it. Oh, there we go. Your video’s back. All right. The first question is this. You made a mistake before where you lost how much money in a previous company?

Nick: It probably cost us $10,000 but money is less the issue. It’s probably more three months of two people’s time that was the biggest loss.

Andrew: $10,000, three months of people’s time and what was the mistake that you made, looking back on it?

Nick: We built an entire product that didn’t solve a problem.

Andrew: What was the product?

Nick: We wanted to solve the block pick up basketball use case, which no one’s done to this day. So, we are trying to connect people around the sports that they love. The problem is is that we built it and we built the capacity for people to do that but, for the use case to work, you need 100,000 people in a single space and we just didn’t have a way to do that quickly. We didn’t have a way to… We didn’t have a distribution channel that was going to work. So, by the time we built everything, we realized, “Well, hey, we can’t launch this and then just have no one use it.” So, we went back to the drawing board and started again.

Andrew: I see. And the reason you thought that you needed, and you still do know that you need so many people to use it is, if I use your software and I say, “Hey, I’m looking for a pick up basketball game. Who wants to play?” and there aren’t enough people using it, chances are there will be someone who’s nearby and available at the time, to play basketball with me.

Nick: Yes. There’s no single player mode for that kind of app. So, basically, you need celebrity or some existing distribution partnership to do it and I had neither. So, as hard as I tried, I couldn’t get one that was going to fill the pilot with enough people. I still want that product to exist. It’s just someone else is going to have to build it.

Andrew: And it looks like a few people are on it, as you said on your website.

Nick: That’s true. Yeah.

Andrew: People are thinking about it.

Nick: Yeah. A lot of people want to play [??] more regularly, that’s true.

Andrew: All right. So, at that point you said, “I’ve got to rethink the way that I build businesses, right?

Nick: Yeah. That was my third business, and I thought I had a pretty good idea of things, but you always learn, I guess.

Andrew: All right. Well, we’re going to find out how you ended up building this new business, Sessions, using customer conversations and learning from your potential customers. And this time, instead of building the software, spending $10,000, spending three months building it out, the first step you took was what?

Nick: So, we actually sat down at a white board and we said, “What’s the problem hat we’re trying to solve?” And the problem was how do you help people exercise more? So, those eventually were the words on the white board. We wrote down every single solution that we could see out there, every single solution that we’d thought about, and we spent maybe, half a day in front of a white board picking apart each of those solutions and picking apart the pieces that we liked. At the end of that day we had a really, really rough blueprint of the kind of product we wanted to build and what we felt it would take to really help people solve that problem.

At the core of that was this idea that you could coach people to live more actively, you could coach people to improve, their health and a lot of fitness or exercise related tools are automated. They automated the process, and it’s just automated reminders, and we just couldn’t think of a way yet where an automated reminder could be smart enough and relevant enough. And so, we just said, “Look, there’s so many reasons why you wouldn’t want to build a human powered company but when we were being true to the problem that we wanted to solve we couldn’t avoid it. So, that’s what we started doing.

Andrew: OK. Let me first understand. Why was it important to put up on the white board – I’m looking here at my notes. You said, “How do you help people exercise more?” Why is that such an important thing to have up on the white board?

Nick: We really needed to focus our thinking on a single program. What we found is we probably spent the initial three months building the product because we hadn’t defined the problem well enough. And so, we spent weeks building features first that never even got released. The second time around the piece of advice we really had in our minds was, “How do we be more honest about the problem we’re trying to solve?” And really, in defining the problem in a much more narrow way we were able to come up with a solution that was more limited, especially in the early phase, to start out with no resources. Every startup is effectively destined to fail. You have to prove that statement wrong basically, when you’re a startup. So, the narrowness of it was incredibly valuable. It helps us to justify why we could launch a pilot with just 50 people for free which might seem like a crazy idea, but in our case it was the most valuable thing that we could have done at that point.

Andrew: I see. And you could have said, “How do we help people eat better? How do we help people…” What else is there around exercise? What were the other options for big problems that you would have solve around this topic?

Nick: So, most people who attack this program, and I think this is a legitimate way to do, it’s just the way we went. Most people try and solve all behavior change. If you think about what people are trying to change, most people are trying to drink more water, eat better, exercise more, lost more.

Andrew: I see.

Nick: There’s a range of things, and each of those requires a different kind of solution. I think behavior change, people lump all behavior change together which I think is a mistake. So, when we broke it down, we said, “What’s the single best thing that someone can do for their health is to be more active because that triggers a chain of events” so we really wanted to narrow it down to just one single change and get really good at that.

Andrew: That makes a lot of sense. All right. And then, some of the things that you put up on the white board as possible solutions for that problem were?

Nick: So, we had Fancy Hands for Health. We loved the idea of a personal assistant who tracks emails and books you restaurant reviews. You could probably justify having a personal assistant to help you be more healthy.

Andrew: Yeah. Fancy Pants is a service that will make phone calls to the doctor for you. They will do quick research projects for you. I think they charge 25 bucks a month for five different small tasks, and you were thinking, “Hey, that models works for them. Why should it just be for calling up the doctor? Why can’t we have a service that’s Fancy Hands just for health? OK. What other option did you have up on the board?

Nick: So there’s this classic article in The New Yorker I call the hot spotters which came out in 2010 and it talked about concept called a promotoro [??] which is a Central American concept of community based health workers who aren’t doctors and aren’t nurses but who sort of operate in kind of a, they operate at a community level to help people take their meds and get outside for walking and make sure that they get to the doctor on time and all those kinds of things. And we loved this idea of this kind of new health workforce that was much cheaper, much more efficient, but really got in and solved people’s problems. So that was up there as well.

Andrew: What about this? I know the product evolved after you starting talking to customers, but, was there a version of the current product up on the white board? And if there was, what did it say up on the board?

Nick: So the real insight as I said earlier was around coaching, was around connecting one person to another and building that human connection. Because, if you think about when you’re, the easiest to think about it is you’re committed to do exercise, if you said, okay I’m going to go to the gym tomorrow there’s maybe a 40 percent chance that that happens. But if you’ve committed ahead of time that you’re going to meet your friend at 7 a.m. then that doubles to 80, 85 percent because you know your friend’s there waiting for you if you don’t get there. So the power of human obligation and human relationships and human emotion is really, really profound. And we thought if we could try and capture that and then scale it up in a way that made sense commercially, that made sense commercially that we could really capture something valuable. So the other thing that was up on the board, so it was basically coaching and it was e-mail SMS. Because one of the things we realized, we thought and then we since realized it’s true, is that people don’t like taking meetings and they don’t like having to have a synchronic connection. They don’t want to have to be somewhere at a certain time. They much prefer that they can have an e-mail to deal with when they need it or they can have an SMS to deal with when they want to. So we love that idea of the a-synchronic communication because it’s so much more efficient and accessible for busy people. So it was like coaching, email, SMS and that was kind of an [??] for helping [??], that was kind of the outline that we had.

Andrew: Okay. So you started out with the problem, you have a list of possible solutions and then you started telling us about 50 people who you reached out to. Who are these 50 people? What do you mean by that?

Nick: So we put out a Facebook update, a short blog post and a tweet just saying along the lines of, if you would like to exercise more we have a program that will help. We had just the simplest landing page, text only, where you could just put your e-mail into register and then once people registered we sent them a Google form. So we had 50 people sign up in the space of a week or so, I knew about 20 of them, 30 of them had just read the tweet or the blog post or had been forwarded what we were doing. And we only needed that, I mean, I didn’t realize this at the time but you can learn incredible amounts from 50 people. It seems like an inconsequential number in the world of Facebook billion users, but 50 people tell you a lot about what you build.

Andrew: Alright, and I want to hear how 50 people tell you so much about what you build as we go on with this story. Alright, so you got 50 people, they were on a mailing list, what’s the first thing that you do with them to help you understand what their needs are?

Nick: So, the first thing we do is we gave them a survey which gave us some insight into their lives. Like how often did they exercise, how much did they want to exercise, why did they want to exercise? Just that amount of information. And really looking back now that’s like, we were not capturing nearly the amount of information we needed, but it was a starting point. And then…

Andrew: Before you go to and then, why did you want to ask them how do they exercise?

Nick: Well, we wanted to first, well first of all the idea was we were going to run a 3 month trial, like give people three months to see if we could solve their problem. And by solve their problem I mean sustain it, I don’t mean like get them to exercise a lot for a week and then leave them. I mean, like, build exercise into their lives in a way that it’s going to stay with them. And so, now I’ve forgotten the question.

Andrew: [laughs] Why you’re asking them about where they were? We’re you trying to understanding, were you trying to get a base line to see how much you were going to improve or were you trying to understand what was working for them and what wasn’t so you could build a product around that?

Nick: Exactly, we were trying to understand their baseline and the goal. And then have a sense of over time how close we could get them. So say they were exercising twice a week and they wanted to exercise five times a week. It was about, here’s where they are, here’s where they want to be, how close can we get them to their goal? And it was really just about establishing a really early benchmark.

Andrew: Gotcha. Because you wanted to see, can your process of whichever one of the items you picked from the whiteboard, help them get beyond where they were today, where they were when they started I should say.

Nick: That’s exactly right. Can we help them to achieve their goal? And it’s, yeah, there’s still some people who signed up who are still in the program now. I went back the other day and looked at some of their answers and it was fascinating. For some of them it really was like reading the words of a different person.

Andrew: Okay. So if you were looking for a baseline, how would you figure out which of the items on your whiteboard were the right ones to take them from where they were at the time that they filled out the survey to where you wanted them to be?

Nick: We hadn’t, honestly we, I looked back at the notes I was taking then and we just, I thought I knew so much about the problem and I didn’t really know anything. So there was not even a sense of, we weren’t even that aware at that point of what those elements were. Basically as soon as we started talking to people we started realizing, whoa, there’s things here we haven’t even thought about, we haven’t even prepared for. Like, part of the original whiteboard thinking was that there’s a suite of theories about how you can improve or accelerate the [??] change. So it’s like, you know, rewarding yourself or sending a series of small activities. Or punishing yourself if you don’t do it, or shaming yourself socially. All these theories that have been backed by research that say, here’s how you make a change in your life. And we thought, well, because we know and are aware of all these, every person that comes to us who has a problem we can just sort of throw one of these theories at them and see where it goes.

Now basically like day two of doing interviews with all these people I realized none of these people who have these problems, like they’re not even getting to the gym, so why would we like, and they feel terrible about it so why would we socially shame them for not doing it?

Andrew: Ah, so tell me about that. So you started out with surveys and then you apparently started talking to people?

Nick: Yeah, like literally we were just doing interviews and we had, just write down a list of all the things that we thought were relevant to ask them and to understand about them. And so we would just talk to people. Very, very quickly, again, we just realized that there was just this big gap between what we thought people needed and what they were saying to us in those interviews. We were just like, wow, hold on. Everyone who wants to exercise but isn’t exercising, it’s not about laziness to them. It’s not about, it’s not like they’re like incapable. It’s just that they have this really complex set of circumstances in their life that are making that change really hard. So, again, it’s like…

Andrew: Give me an example.

Nick: Okay, so you have two kids, you have a full time job, your husband has a full time job, you look after your mother on Saturdays and all your family lives in Boston and you live in New York. Like, there’s no one there to look after the kids. You have all these responsibilities, the way your family’s set up. You work from home maybe and so you get sucked into e- mail. It’s just people have really good reasons for not exercising it turns out, and it’s not just simple to solve.

Andrew: I see. It’s not just that they’re lazy. Hell, if they were lazy they wouldn’t be traveling from city to city, they wouldn’t be up at work as early as they were, they wouldn’t be working as late as they were. It’s not laziness that’s keeping them from doing it. In fact it’s the extra work that’s keeping them maybe from doing it, is what you discovered.

Nick: Yeah, absolutely. There were just so many reasons that people were being blocked and I guess in each circumstance when a new reason came out we had to think through like, oh, okay, how would we help them work through this? And really a lot of the answers came rather then us arriving at a solution maybe they were just over time, just experimenting and trying to work through things with people.

Andrew: Before we get to the experiments, you, let me ask you about, how formal were the questions? Did you have a list of questions that you took them through or were you just kind of chatting with them?

Nick: We wrote a list of questions, all the markers that we wanted to know. So why do you want to exercise, how much do you exercise and how much do you want to exercise? What do you love doing? Sort of basically…

Andrew: Was there, what’s keeping you from exercising on there?

Nick: Yeah, what are the things that are likely to stop you from exercising?

Andrew: Ah, good one, okay.

Nick: And what would happen is you would just get in these conversations that people were very, like they would tell us. The other one we used to ask them is what’s a normal week in their life look like? And when someone would explain that we’d start to see where in their week it’s going to be possible to exercise and where it’s not.

Andrew: So, what’s a normal week look like? Is it fair to say, and tell me if I’m just imposing what I learned from a past interview on our conversation, but is it fair to say that one of the reasons why these conversations worked is you were asking them, what were you trying to do and what was blocking you from doing it? It’s like, how often would you like to exercise and what kind of exercise would you like to do, and what’s keeping you from doing it, revealed, hey, wait, it’s the traveling, it’s the work, etc.

Nick: Yeah, I think that honestly the most valuable thing that the interviews gave us was the ability to really understand all the factors that were involved in someone not exercising. And until we had those conversations, and I guess if you worked in advertising you’d call it market research where you go out to someone’s laboratory and ask them why they don’t use Fabreze or something. It was just that level of this qualitative market research. We didn’t know it at that time. That could be what it was.

Andrew: OK. So now you have a clear understanding of your customer because you really just talk to them and absorb their lessons. You talked to 50 people.

Nick: Yes.

Andrew: 50 people?

Nick: Yeah. There are two straight weeks of interviews basically.

Andrew: What are the top two pains that you discovered that they had? And I want to get to the experiments that you ran on solving those pains.

Nick: Yes, and number one: No time. Number two is probably don’t endure: I don’t feel good at it so I don’t do something else that they do feel good at.

Andrew: OK. All right. So, then, you said that you ran experiments.

Nick: Yes. What’s a good example? So… we had, in the case of the woman who works from home and her husband left at 9:00, and so she sort of had the morning with the family and then she would have to work from home but also juggle looking after her child. With her we had to work out whether we experiment with her getting up at 7:00 a.m. and walking with the husband and daughter. No, that didn’t work because the husband didn’t fit with the husband’s schedule. So we just got her walking with her daughter and we realized that didn’t walk at 7:00 a.m. Once it hit 9:00 a.m., her day was gone. There was just no more room for the day.

Andrew: I see.

Nick: It was little things like that. Every single person in the program had something like that.

Andrew: So for every one of them you were customizing a solution based on the problems that they told you they had.

Nick: Yeah. It sounds crazy. At first we were just so overwhelmed by the amount of problems that people had. But eventually, slowly and over time, you start seeing themes and patterns emerge. When I think about it now. . . at that time I thought it very overwhelming. Now it’s like 28 things that you have to know about someone to know how their exercise routines can be going. It’s about limited.

Andrew: You mean, if you know 28 things about people, if you have them answer 28 questions, you can know how to solve their problems, essentially.

Nick: Yeah, pretty much. You’re going to have a very, very clear idea from those 28 answers what, where in their life it’s going to possible to exercise. And they’re really simple. One of the questions is “Do you have a dog?” Because if someone has a dog, then they get to walk twice a day or once a day. If they don’t a dog, another option. So it goes like, “Are you a morning person?” If you’re not a morning person, then you can’t do any exercise in the morning.

Andrew: So if I have a dog and I’m a morning person, based on your experience, what would you recommend that I do?

Nick: You just walk a little bit longer in the morning.

Andrew: Ahh, perfect. So you say, “Hey look, Andrew. You’re walking your dog anyway. Why don’t you walk instead of to the corner and back,” which is basically what I do with my dog, “say, take a walk five blocks out, buy your coffee there and come back home?”

Nick: Exactly.

Andrew: I should like that.

Nick: Yeah, it sounds too real. That’s, literally for some people, the only way that they’re going to get exercising, to go out.

Andrew: All right. OK. Before we continue I’ve got to ask you this. You don’t get to know what you’re doing but you’re giving advice to 50 people. I understand how critical it is for you figuring out your problem, but I also, in imagining the person in the audience who’s listening to this who’s saying, “I should do this, too. Talk to 50 people. Give them 50 different suggestions and see what works and, then, that’s what I codify as my system and, then, create software to perpetuate my system.” But, then, I could imagine, saying, “But if I don’t know what I’m doing, how do I give people advice? If I don’t know how to solve people’s problems, how do I, with confidence, tell them, ‘Walk an extra few blocks or do something else?'” Tell us how you do it. Help us get past that.

Nick: OK. That’s a very simple answer. I’ve been thinking and have been obsessed with this problem of “How do you change yourself in a decade?” I felt, like. . . I’d thought about this, just obsessively, for so long that I felt confident that I’ve thought through this more deeply than anyone, like I’ve had some level of expertise. That’s for starters.

The second thing is that I have exercised sustainably for my whole life. So I feel like I’ve lived this, I’ve got to the point where I have a solution. So I’d solved the problem in my own life and I’ve thought about this problem, it’s generally the problem of how do you change yourself for so long. I had a level of expertise and a level of confidence that I could confidently address or overcome any problem that people were solving. Now admittedly, I probably was a little overconfident and assumed that I knew a lot more than I did. But I think that people always talk about the necessity of naivety and starting something. I’m a good example.

Andrew: All right. Fair enough. Did you let on that you were experimenting? Were you open about it?

Nick: Absolutely.

Andrew: You said, hey, I’m not really sure how to do it but I’ve studied this and I’ve exercised myself, and…

Nick: Yeah, these are real people so there’s no element of bluffing. You just listen, a big part of it is listening to what they’ve said, talking it back to them, and then suggesting a solution. But they’re going to know straight away. So in the context of the women who needs to walk early in the morning, she knows straightaway whether I’m an expert or not it’s just after we’ve talked through everything and we’ve spent that time together thinking through things, like that’s the only solution for her. It’s not magic, there’s no sort of silver bullet where she’s just going to solve this problem. It’s like, let’s try that and let’s see how it works over time.

And really the role I played is listening, feeding back to her everything that I was hearing, making suggestions and then seeing which stuck. And in some cases they didn’t, and so it’s like immediately we’d stop. And like that’s how we learned, people who were morning people, people who weren’t morning people but who were like, oh no I can really make the effort to get up early, we’re like okay let’s do this. And straightaway we went if you’re not a morning person don’t get out in the morning.

Andrew: That’s way too hard a change to make and then make another one. The change of getting up early, changing your whole internal clock, and then exercising and changing your internal resistance. Okay, so you’re talking to all these people, you’re experimenting, how do you keep track of 50 different experiments so that you know, so that you can pull out patterns and see what’s working? You’re smiling, what’s going on?

Nick: Well because originally there was an excel spreadsheet and a Google doc, literally like write down everything that I have and sent by SMS or e- mail, make notes as I did the interviews, it was just words everywhere. So very quickly we were like, okay we have to build something that makes tracking this process much easier. So the first thing we built was the ability for me to track all incoming and outgoing e-mail in SMS. That was hugely helpful. And then the second thing we had to build was something which would be able to, so a big part of the program is about saying, about regular planning and reviews. So every week you’d sit down and say, this week here’s what I’m going to do. And so let’s talk about that woman again who has to walk at 7:00 a.m. So this week she’s going to walk Monday, Wednesday, Friday at 7:00 a.m. And I needed to keep track of that. So rather then that being in a document we needed to build almost a dashboard where I could track the communications, I could track what sessions she’d planned doing, and then I could make send her reminders.

So at first it was a Google, just Google docs and it was a nightmare, you know. Within I guess within the week or two weeks we’d built the basics of this communications dashboard and this basic ability to create sessions and track them, and that made it a lot easier. And basically that was the process was that every time we’d have something that was nightmarishly difficult. Like someone wanted wakeup SMS’s at 5 a.m. and they’re in a different time zone, so I was having to wake up and send them their SMS’s. So we needed to build something that would allow me to schedule SMS’s into the future.

Andrew: Oh, I see. I see. So you do something often enough and then you say, okay, this is so systemized I now need software that’s going to it, because software is better at executing systems then people.

Nick: Yeah, if I could reduce the task from a minute to 10 seconds then I’m getting, that’s a 50 x improvement every single day. That makes a big difference. And just, it’s just that process times 100 basically.

Andrew: You told April Dykman when she pre-interviewed for this interview that you imagined you’d need 2500 people to really learn what people’s problems are and then create solutions for them. Did you really end up needing 2500?

Nick: No, I mean, I thought probably it was much higher. I thought like you needed 100,000 people to really know what was going on. And we were just so shocked at how much we learned from 50 and once we’ve gone from that first 50 every 50 after that has effectively been a mirror image of that first 50. Like it gave us a really clear picture of what we were going to have to deal with. And even more so than that is when we started doing testing and we started building stuff for the people we were training to use, and we started testing that and we would see, so at first we would have 10 people and use our software and tell us what they though. And after, we would realize pretty quickly that after the third, fourth or fifth person basically you’re just getting the same information over and over again. So you can learn, I guess a big lesson for us is you can learn an enormous amount from small groups.

Andrew: How big a group would you say would have led you to the same conclusion?

Nick: So for any software somewhere between three and five. And then fifty actually just as luck would have it turned out to be a pretty solid number for us. I mean, I don’t know how high or low it could have…

Andrew: But you’re saying you could have done the same thing with three or five?

Nick: When it comes to user testing of the software, yeah. When it comes to building, understanding people’s problems when it comes to exercise I felt that 50 was probably the minimum number of people we needed.

Andrew: Because you needed to test your software.

Nick: Sorry, so there’s the testing the theories of behavior change, we needed 50 people. Testing how different features that were we building we only needed three or four.

Andrew: I see, okay. So can you tell me how you tried testing the feature? Actually, wait. You didn’t start getting into features for them until you launched the first version, right?

Nick: Yeah, exactly. So that, so the first version happened March, April. Around May we had to launch a consumer facing version of the product, so you know, something that people could actually pay for and so we had to build a dashboard where they could log in and that could be their account. So that was really the first consumer facing stuff that we [??].

Andrew: I see

Nick: You know, we had to build the sign up process and all those sorts of things as well. So we did a lot of testing of the product on those features.

Andrew: Okay. At what point did you start charging?

Nick: So, as soon as the pilot ended and we had, we used Stripe for processing credit card payment. So as soon as we had Stripe set up and we had a website where you could sign up, we just, we just needed to know as soon as possible whether anyone would pay for the product.

Andrew: And this is before you launched what you call version one.

Nick: Yeah, it was like we were still building version one as people started paying.

Andrew: Okay, so still in that Beta phase where it was you using a lot of Google docs and calendars and everything that you could piece together.

Nick: Yeah, we used development at that point. So it was, on my end at least, it was produced, on the users end there was still a lot to be built.

Andrew: Okay.

Nick: We did have an advantage though in that most of the value (inaudible) was in the relationship between the coach and the participant. So as long as the coach worked really, really hard and stayed really, really involved, that almost made up for some of the lack of [??].

Andrew: I see. And by coach you mean, it was you still.

Nick: Yeah.

Andrew: So you’re saying as long as you got up at 5 a.m. and sent a text message to the person or had software internally that started to take that work off your shoulders, as long as you or the software stayed on top of people, things worked out well.

Nick: Yeah, and one of the things we learned was that people can detect words, detect automation, with a really, really high level of accuracy. So we tested some automated features and they were just horrible. They were just like, please don’t send me any of these automated messages, so.

Andrew: So you had to stick with people.

Nick: Yeah, there’s an element of having to stick with people, absolutely.

Andrew: Okay. Alright you told April also that within two days, on day two, of you adding a payment feature you got an interesting e-mail internally. What was that?

Nick: I’m not sure. Can you give me some more clues there? I’m just trying to remember what that would be.

Andrew: It had to do with a guy from Northern Ireland.

Nick: Ah, yeah. Well that wasn’t an interesting e-mail, I’m telling you. That was the first person that paid us. We were just like, we were just waiting for that first. Wow, that’s the e-mail. Right, so every time someone pays we get an e-mail that says, user paid. And so we would, so it [??], just waiting, waiting, waiting for that first user payment. And at that point you have no idea. It could literally be months until someone pays you. And until someone does you can come up with all kinds of scenarios in your head. Yeah, on the second day we had a payment from a guy in Northern Ireland and we were just jumping for joy.

Andrew: So let me compare for a second here. First business couldn’t get a customer after spending 10,000 dollars and three months more importantly to build out software. Second business day two of you including a payment process you get your first customer.

Nick: Yep, that would be accurate.

Andrew: And we’re talking about four, five months ago at this point.

Nick: First paid customers made, yeah, three months ago.

Andrew: Three months ago.

Nick: Yeah, yep.

Andrew: Usually, I would ask this question earlier in the interview, I should have asked it earlier, but let’s ask right now. How much revenue have you made in the last three months since that first customer?

Nick: Just, it’s thousands of dollars of revenue. It’s still inconsequential but enough for us to validate continuing to invest in what we’re doing.

Andrew: How many paid customers have you had so far?

Nick: Still in the hundreds. Again, hundreds of customers, thousands of dollars revenue. It’s still a work in progress from that perspective.

Andrew: And what does it cost per month to be a paid member?

Nick: 30 dollars.

Andrew: 30 bucks. So assuming when you say hundreds it means minimum 200 people, we’re talking about 6,000 a month.

Nick: I mean, yeah, roughly.

Andrew: Okay. All right, so let’s continue with this story. You start adding payment, then you release version one which gives people a more software like interface.

Nick: Yes. All the dashboard did on day one was they could connect their RunKeeper account and their Fitbit account, they could watch a video that we wanted them to watch, and I think they could cancel their account. I think those are the five features the user had on day one.

Andrew: I see. Why did you want Fitbit and RunKeeper?

A: The best thing when you’re a coach is to have seamless integration, that’s seamless insight into someone’s life. So you don’t want them having to say “I went for a run for 5Ks this morning.” You just want them to switch their iPhone on, go for the run, and then you get the ping saying, “This person just ran 5 kilometers.” That kind of seamless integration also works on steps, as well, so you can see that at 11 a.m. that someone’s done 7000 steps. That’s going to be a great day for them, exercise-wise. So, that was one of the first things that we found, that when people were exercising they would say to us “well, rather than me tell you what I’m doing, you should just be able to see what I’m doing on RunKeeper or on Nike+.” And so once people were asking for it, I think of the 50 people we had 5 people request for RunKeeper, so we built it. That was enough for us to think it was worth us investing a little bit of time into it.

Andrew: All right. So where’s what I have, what you told April about the results of the effectiveness of your pilot program, the 90-day program you ran with a few, dozen people.

Nick: Yeah.

Andrew: You said 34 people increased the average amount of exercise that they did.

Nick: 34%.

Andrew: Excuse me. 34%.

Nick: So, over the 90 days people increased the amount of exercise by, on average, 34%.

Andrew: And there was an 80% correlation between what To Dos you sent out to people in a session and what they actually got done. So, if you sent them a To Do in a session, 80% of them got it done.

Nick: It would be along the line of if you and I set our goals to four sessions this week and we set those four sessions, that people would do those four sessions about 80% of the time. So really, really high levels of compliance.

Andrew: And I session could be “Hey, Andrew, when you wake up early and you walk your dog, walk him an extra 5 blocks.”

Nick: Yeah. It could be go to the gym for an hour, it could be go kayaking for two hours, it could be any activity. We define activity in the sense of anything that isn’t sedentary. So whatever it was for that person, whatever they were trying to achieve. Like if the person was running a marathon, it was four runs. So four runs in a week, plus a yoga session. So five sessions for them that week. Those kinds of things.

Andrew: You know, one of the things we found here at Mixergy, and when I say we I mean Bob Piller [SP], my mentor, and I, and April who’s been going over some of this research, is that one way to find people’s pain is to be a consultant and to maybe have five clients and see what kinds of problems they have. And then create software or create a business that solves it for those five clients and then for anyone else. You know, basically create a business that scales what you do for your clients. It seems to me that you did that on hyperdrive, or on speed.

Nick: Yeah, although I wasn’t getting paid for the consulting that I was doing. I did three months of free consulting to try to understand and get a better sense of the problem and then we put everything that we’d learned into the paid version. And it’s the same process again where we’re taking everything that we’ve learned from the last three months and putting into a better product now.

Andrew: But maybe that’s better actually that you did that because if you were charging you’d have a harder time getting 50 people to come in. You couldn’t get 50 people to come in.

Nick: No. I mean, at that point we had no product, we had nothing, so I had to charge zero dollars.

Andrew: And you couldn’t experiment with them if you were charging.

Nick: Yeah. And there was a relationship that built up there and there was a trust where they would be willing to try things. If it was a paid product, there’s a slightly different engagement. Although, that said, as soon as people started paying, we say compliance in sessions go up.

Andrew: Really? Do you have a percentage that goes along with that?

Nick: No. I guess it’s just more an anecdotal thing.

Andrew: OK.

Nick: But that was just really interesting to see as soon as we moved into paid that the number of inbound messages we were getting went up significantly. Like maybe by a factor of two.

Andrew: Wow.

Nick: So that was really good.

Andrew: All right. You told April also some non-obvious insight into the secret sauce of making the product work. Do you have a couple you could share with us?

Nick: Yeah. It’s just really fascinating stuff. Like, the first one is if you send someone an email or an SMS, and I think this actually works on anyone, and you put a single question there’s an 80% chance you’ll get an answer to that. If you have a second or third question, it’s like every extra question reduces the likelihood that it’ll get responded to. So we learned very quickly not to write long emails with two or three action points. We reduced every email, every SMS, every communication to a single action point.

The second thing we learned was if you specify the format of the response, engagement rates go way up. So, if you say, “Did you exercise today?” You’ll have a certain level of engagement if you say, “Did you exercise today? Y/N representing that you just want them to write back Y/N, engagement rates went way up. The other thing that we found is that if it was a Y we’d get a message back. If it was a Yes, we would get a message back. If it was a No, no one wants to admit that. So, we had this issue where if someone wasn’t doing a session, they would dis-engage from it.

So, we came up with this idea of Yes, No or Reschedule. So, we said, “Did you do your sessions? Y/N/R. And then, all of a sudden, people who were in the No category which meant no response, would reply because we were giving them almost this loophole where they could say, “I didn’t do it, but I’m going to reschedule at a future date.”

Andrew: Oh, that was awesome.

Nick: Yeah.

Andrew: I see.

Nick: Things like that. So, there were other things at first that were so, so tiny but actually take time to do and to really understand. There’s just lots like that, I guess.

Andrew: Do you need analytics in order to do that, or is this the kind of thing that you do just by talking to people and experiencing it?

Nick: Yeah. When it was just me and 50 people, the analytics… We have some analytics, but the most useful stuff is just that you know when people are not responding. When you wake up in the morning, you see a big list of responses from people. You’re like, ah, this is starting to connect.

Andrew: That’s right.

Nick: Yeah.

Andrew: I guess when you’re that close to it, you can see improvements quickly.

Nick: Yeah. I mean, you’re sending every message, so you’re also feeling every time a message doesn’t come back or you’re setting every session up for someone. So, when they don’t do it, there’s a direct impact on you and you can feel it as it rises or falls.

Andrew: Can you talk a little bit about how you used that insight to improve the product? How you used those insights beyond what you just explained, the Yes, No and Reschedule? I think it’s frickin’ brilliant.

Nick: Yeah. It was so surprising to us what a profound impact that had. I’m just trying to think what other insights do we have?

Andrew: Here’s one. People who you coached who exercise consistently, sit down and plan when they’re going to exercise you saw, right?

Nick: This is the most obvious thing in the world, but it’s surprisingly not talked about much which is, if you want to exercise more, the single best thing you can do is to sit down on a Sunday and plan out for the upcoming seven days what it is that you are going to do. Just that act of proactively thinking through what you’re thinking. On Thursday I’m traveling. On Saturday I have a wedding, so on Sunday I’m going to be hung over. That leaves you four days to exercise.

Now, most people go and launch into the week and they hope that the exercise somehow comes across there, but they’re actively proactively planning the week, they’re putting it in the calendar, really thinking, “When can I actually do this one? Is it really [??] I can do this? That’s like five extra [??] on the amount of exercise that you’re going to be right there. That’s the most important skill, and interestingly enough we found… I’ve been going through the academic literature on this topic, and actually there’s a study done on a huge number of interventions around healthy behavior, including eating and exercising more. One of the most important factors was regular review and planning, self-monitoring, regular review, and planning. It plays out in the literature as well that actively regularly doing something, regularly planning.

So, in terms of how that impacted the product, we created a shared calendar for the coach and the participant that synced then to the user’s calendar. You come into the shared calendar and you set up what exercise you’re doing for that week, and you can move things around and make them longer and make notes on them and then sync them to the user’s calendar. It syncs back to the coach’s calendar, and then that’s how you manage here’s what we’re doing this week. And then, over time you can use that to track. Here’s I did this. I didn’t do this – that kind of thing.

Andrew: And you actually built this product that ties in with Google Calendar and ties in with your internal dashboard.

Nick: Yeah. I mean, that was one of the biggest features in terms of the amount of time that we spent on it because it took a long time. We ran through a bunch of different iterations before we got it right, and actually building and working with calendars is really, really painful. And then doing the integration back to Outlook [??] is really time consuming, but because it was so important and because we could see the return that people were getting on it when they did it, we basically created this concept of anchor days. So if you, every Sunday is an anchor day. So and you think about it, like, if you’re in a boat, you drop your anchor and you sit down, you chart the course of where you’re going next. This is where I’m going, set it out on the map, pull up the anchor and go again. So every Sunday we created this concept of anchor days and on anchor days you fill your calendar and so that was one of the more complex sort of consumer facing and coach facing features that we got. And it took us a while to get around avoiding building the extra calendars and so on because it was just so time consuming. But we ended up, we just put aside two weeks and built it.

Andrew: So in the first business that you talked about early, the basketball pickup game software, everything that you built was based upon hypothetical uses. If someone wanted to do this, we need to solve it. And what if they want to do that then we need to come up with a solution here. You waited for people to actually need it, to demand it, for internally you guys to also need it and demand it, and then you built it.

Nick: Yeah. If we were losing sleep [??] it had to be built.

Andrew: If you were losing sleep, what?

Nick: If you were losing sleep or if we were tearing our hair out, like if we were actually feeling physical pain, we knew that the feature had to be built. And if you compare that to where we were we would just have these long like 35 minute hypothetical discussions about, well what if you’re on Facebook and you need to share but you don’t want it to be shared. You know like, just these long hypothetical about a product that no one had ever used before. I just think about all that wasted hot air, compared to you know building it this time where it was just literally we wake up it’s like, I can’t bear to do this again, can you please manage [??].

Andrew: Can you give me a few examples of features that you built because you were just tearing your hair out, frustrated.

Nick: The most painful one and the one that was making me lose sleep was not being able to schedule or SMS’s or emails into the future. That was really frustrating. We wanted an easier way to be notified when someone sent us a message so we created a notifications page that had messages come in. We wanted an easier way for the user to tell us that they had updated their calendar. So we built a notification system to let us know that there had been a change made to their calendar. Basically every single feature of the product is a result of some significant amount of pain.

Andrew: How do you prioritize? If you’re getting all these different pain points, internally now.

Nick: Yeah. I think just basically pain is a pretty good proxy.

Andrew: Whatever’s most painful.

Nick: Yeah, for the user or for us. And then I think, it’s not always clear, like it’s often a tradeoff. And there’s definitely, I look at the product now I can see a million things that need to be much, much better. But generally speaking it’s just when you sit down and it’s like, how much leverage are we going to get for these two days spent in the development? How much leverage is that going to give a coach? How much extra value is the user going to get out of this? And so when it comes down to like two competing pain points, it’s usually the bigger pain point that will win.

Andrew: All right, so it seems now that you’ve got a system where you know perfectly what features to create and because they come from demand they must all work, and because they’re solving your pain or your customer’s pain it must be heaven on earth. But life can’t be like that. Can you tell me about a feature that you created that missed?

Nick: Yeah, I mean the first time, so when I told you about [??]. First time we built that feature it was an automated, it was an e-mail that, so the coach would go in, create the sessions for the week and then the user would have to reply manually and say, like, no I want to do the Saturday running session at 9:00 a.m. not 7:00 a.m., something like that. And we persisted with that for like 8 weeks and we’d just see people just getting really, just not enjoying that process. Like, we’re getting low engagement on people wanting to, low engagement on people replying and then people would kind of leave it to Wednesday to organize their week. So this feature that we built was actually making the problem worse and not better. And now the system’s [??] way too long. We were just resistant even when we got into calendars. So that didn’t go well. I think, like, when we built the initial features around automation, like, sometimes the key types.

So if you’ve got a morning, if you’re exercising at 7 a.m. and you’ve got to be up at 6:15 to get there, like you can’t wake up at 6:55 to make a 7 a.m. session. So we built some automated reminders where you could attach a 45 minute reminder before the session, two sessions and they’d get an automated message. We just way overdid that initially, like people were getting way too many automated messages and just were hating it. They were just like, this is an awful experience, please stop this. So yeah, things that solved the pain point for us ended up creating the pain for our users.

Andrew: I see.

Nick: We had to fix those. What else? I think those are two good examples.

Andrew: When you launched, how did you get your customers? I understand how you get the first users for free but how did you get the customers?

Nick: We’ve been, sort of, generating a little bit of interest and just signing up . . . I think we had 100 people or 200 people on email [??] but one of the users in the pilot group, and I didn’t know this right until the end, was an editor of a mailing list and he said, “I really love this program. I’d love to share it with the people on our mailing list.” The mailing list ended up having 100,000 people in the database. So, he wrote about us. [Red Curry] gave us the first 40 paying customers and then, one of the people on the mailing list that he wrote for wrote a mailing list of her own and she approached us and said, “Can I write about what you’re doing?” and we said, “Yes. Go for it.” Those two sort of pushed us and gave us our first hundred customers.

Andrew: One of the reasons why you don’t have thousands of customers is, well, I’m talking to you early on in the life of the business but, the other reason is that you guys closed off registration. I went to the site to see what was there, to see what my audience is going to experience when they click over and what I saw, what they saw, what they will see is a waiting list form, essentially, ‘Give me your email address and when we have space we’ll let you in.’ Why did you decide to do that?

Nick: Originally we decided it because I couldn’t coach anymore people. [??] . . .

Andrew: Because it was still you, even with all the automation, it was still you and it was still getting tough.

Nick: We hired a coach. It took me a couple of weeks to create the training process for a coach and then a couple of weeks to actually train one. So, during the process, we just couldn’t have any more customers. So, the best way to do it was to make it invite-only. Now that we have the capacity it’s . . . We talked about just opening it up to anyone but, actually, the invite request is working very well for us because we get a lot of inbound interest from people who want to exercise more. Actually, we get a lot of industry interest as well. So, invite request is really just a great catchall to express an interest in the program. I have Reportive installed on Gmail so every invite request is just sent to my inbox and I can screen everyone who’s coming in and I can reach out, personally, to everyone who’s coming in.

I kind of think it was on your site or somewhere, but I read an article somewhere which is like, every CEO should know its first thousand customers. So, this is just a really great way . . . I think in the last two weeks, we’ve had inbound requests from executive creative directors at big companies, big insurance companies, all these things, as opposed to them just coming into a system and getting lost. They’re coming in and I can actually filter everyone who’s coming in. We’re still small enough to do that.

Andrew: Right. And Reportive shows you a picture of them, shows you what they do for a living, links you to their accounts, Twitter, LinkedIn, etc.

Nick: Yes. Exactly. It’s amazing. So we had an inbound request last week from a kid who’s just done an internship out of the World Health Organization. Right at the start of the interview, I mentioned an article by Atolga Wanday [SP] who’s a New Yorker journalist and doctor and he had just spent six months working for him. So, you can use Reportive to find out about people.

We have someone from Kaiser Permanente who’s studying online behavior change methods [??]. It’s amazing to know your customers, to know, like, “OK. This is where this person is coming from.” The other thing is, because I get all the invite requests, sometimes I’ll get this burst of 10 and I can just email and say, “Where do you come from? What’s happening [??] ?”

Andrew: I see.

Nick: There was a post on Pinterest, that was really popular for a day. So, we had all these inbound requests and we could figure out how that’s [??] . . .

Andrew: [laughs]

Nick: So, it’s still . . . It’s ultimately not scalable at one million customers but, for now, it’s super helpful.

Andrew: Do you have a new trainer now?

Nick: Yes.

Andrew: You do?

Nick: Yes.

Andrew: How long does it take you to train a new trainer?

Nick: It’s the first time we’ve done it, so it took me like two weeks to write what I thought was a training package and, really, two weeks of working with her to get there. Once you’ve got the basics, it’s quick, probably two weeks to get up to scratch.

Andrew: Why is it better to ask one of your clients, I’m looking at my notes here, “Are you going for a run today?” Sorry, why is it better to ask, “How are you feeling today,” than, “Are you going for a run today?”

Nick: [laughs] So, this is one of the other things that [??] about this is that most people would assume that if you have an exercise coach their primary role would be to do like, “do this exercise”. “Did you do this exercise”? Like, all exercise focused. Actually, what we found is that exercise output tracks to the engagement. So, if you have a high level of engagement with someone, with engagement being measured by inbound SMS or email from the end user… the exercise output will track to their engagement with their coach. And so, of those two, “did you exercise today” has a yes-no answer. “How are you feeling today” is a much more engaging question to ask. So, I’m trying to think of another example because you can only ask “How are you feeling today” so often. But there are other questions, like, if we know that someone’s recovering from an ankle injury, we might say to them, “how did your ankle feel on the run today”. Now these qualitative, engaging questions are much more effective at keeping people highly engaged in their exercise lives than just straight “did you exercise”, yes-no.

Andrew: I see. Because, if they feel engaged, then they’re going to do the work? Or, because if they feel engaged, they’re going to value the product more and feel like they should be buying from you?

Nick: So they’re paying us because at some point they’ve reached a level where they’re saying, “I want to exercise more, I’ve struggled to do this in the past, and I need help”. And so they’ve engaged us and they know our role in their lives is to help them exercise more. So in some ways whatever engagement we can have with them they are always mentally associating with exercise whether we say the word ‘exercise’ or not. And so the more that we can engage people and keep people thinking actively about their exercise lives, the more likely it is it’s going to help them. The more likely they’re going to make the choices needed to get there.

Andrew: I see. All right, I want to read a criticism of me that I got in a comment, a recent post. And then I’ve got to come back and ask you about two things. First, I’m going to ask you about advice for other people who want to do this. If they’re watching you, and they’re thinking to themselves, “I want to be, like, a consultant to 50 potential users, learn from them, and then build a product that worked for 50 million users based on their experiences what do I do”? So I want to know what your advice for them… what tips do you have for them to do it well and what should they change from how you did it. And then I want to ask you about a metric for a guy named Derek. We’ll finish up with that. Do you know who Derek is?

Nick: [??] the greatest?

Andrew: Derek is a pseudonym that we picked for one of your users whose… well, I’ll explain in a moment. He’s a guy who got big results from you.

Nick: OK. Awesome.

Andrew. All right. So, first of all, you’ve watched Mixergy interviews?

Nick: Absolutely.

Andrew: For how long?

Nick: Wow, we were around in 2008, 2009. Probably about [??]…

Andrew: I think so, yeah. Yeah, wow, so you’re one of the first people listening back when I didn’t know if anyone even paid attention.

Nick: Yeah. Yeah, yeah, a long time ago. I’m trying to think what it was. Maybe Josh Abramson at [??]. I can’t remember. I definitely watched that one. But yeah, it’s a lot of great entrepreneurs [??]… I watched the video and then read the notes.

Andrew: On the bottom of both the interviews and the courses I let people say whatever they want. And here, on the bottom of the interview with Jerry Swain of Jer’s Chocolates, Renee [SP] said, “Finally Andrew, I listened to your Mixergy Premium pitch in your free shows a gazillion times, but I blew it off because Premium made me think of hundreds of dollars a month. Have you ever actually said the price of 25 bucks a month in your interviews? Once I finally went to check it out, I signed up immediately and have spent a few hours a day going back to listen to all of the valuable courses. Now I see why everyone tells you that you don’t charge enough. Thank you so much for putting out so much value every single day.” And that’s actually a complaint I’ve been getting from a lot of people, “Hey, we think that it’s too expensive. You should talk up Mixergy Premium a little bit better. And you should explain the price”. And the reason I didn’t explain the price is because at some point I’d like to charge more. I can’t have all my customers telling me you should charge more, and not charge more at some point in the future.

So I’m afraid of locking here into this interview what my current price is. But, hey if people are complaining, Renee’s making that point, I’ve got to say it is currently 25 bucks a month. And if you sign up for it you get courses taught by proven entrepreneurs who walk you step by step through how they did something that helped them change their business. And what’s that something? Well, I’ll give you an example of a course that we will launch very soon. It’s a course by Jason Evanish, who works for KISSmetrics, who basically said, “I don’t want KISSmetrics to build any old feature.” “We need to talk to our customers, figure out what their pain points are, and build products based on that. And, because we’re an ongoing business that keeps growing and growing and growing, we need to have a system for doing this, for interacting with our customers. Or else, no-one here will know what to do, and no one here will know how to act on all that feedback.”

And so, Jason’s got that system at KISSmetrics, and when he taught a course here at Mixergy, he walked us through that process exactly, and basically said, “look someone taught me how to do this.” “I want you in the Mixergy audience to learn how to do it too. Copy this format exactly and go out there and build products based on it. So, if you’re a Mixergy Premium Member, you have access to that course by Jason of KISSmetrics and dozens of others. I urge you to go to Mixergypremium.com right now and sign up before I raise my prices. Regardless of what the price will be, I guarantee it’s going to be a good value to you. If you don’t agree, I’ll give you 100 percent of your money back. I know you’re going to see many times your investment in Mixergy back as you use it to build your business. So, Mixergypremium.com.

All right. Nick, why don’t we start with advice? Someone who’s listening, he’s saying, “Hey, I want to do the same thing.” What tips do you have based on your experience, both and bad?

Nick: The biggest thing that we didn’t realize was 50 people will teach you a lot, ten people will teach you a lot. Just talking to people about the program will teach you a lot.

One of the things we ignored when we built the first version of the product, like the [??] pick up thing, was that when we would talk to people about it, they’d say, “Oh, yeah. That’s cool.” It sort of struck me like, “Hmm. This isn’t resonating as a big problem for people,” but I just figured I’d work it out down the line. I think, just conversations with users can be a really valuable thing, even just with 10 people. So, I think that’s probably the most. . .

It sounds so simple, but it’s just go and ask people who are having the problem that you want to solve why they’re having the problem and some of that quote. . . Everyone talks about this kind of quantity of data or price, but some of the quality of this stuff up front I think can be really valuable, too.

Andrew: Jason Evanish said, in his Mixergy course, start off with one. I think he said it within the course. Do you agree, or is one not even enough?

Nick: Yeah, exactly. One will give you enough knowledge to know whether it’s worth doing a second, so yeah.

Andrew: So we don’t need the 2500 that you that you thought you might need, or the 100,000 that you thought, or even the 50 that you did. Start off with one, and then build from there.

Nick: Start off with one. Anyone who has the problem solved, come and ask them. It’s just so, so valuable way you can learn. It’s kind of humbling because that’s the fear, that’s only the huge solution upfront. I think just forgetting that and rather than presenting them with a solution, just trying to better understand the problem is a really valuable way to go, especially for an early stage company.

Andrew: You’re in an office. Who’s the dog barking in the background? Are you guys allowed dogs in the office?

Nick: No. I work out of the Skill Share offices here, in New York, and they’re just having lunch right now, so it’s noisy.

Andrew: OK. All right. So tell me about Derek. The guy was 310 pounds when he met you?

Nick: Yeah. He was part of our initial pilot program. I think the context of this is when we were doing the pre-interview we talked about a story that we were proud of. I think, let’s call him Derek, Derek was 310 pounds when he came to us. It’s not so much the. . . I think he’s down 35 or 40 pounds, something like that. That’s not the metric that’s interesting to me.

What’s interesting to me is he wrote to me the other day and he said his stress response, his response to stress now, which previously was eating, is walking. If you multiply that decision — let’s say he’s 60, oh, let’s say he’s 40, and let’s say over the next 20 years, every time he gets stressed, rather than having a doughnut he goes for a walk, the compounding effect of that small change in his life will be profound. It will add years to his life and life to his years.

I think that’s one of the people that I’ve most enjoyed working with where we’ve really got him from a point of not doing any exercise at all and feeling very much like he wasn’t succeeding at exercise to now, where he’ll go for a walk or do the elliptical, or do something, at least, every single day. If he doesn’t do it on a day, he’ll be planning actively for how he’s going to make it happen the next day.

We’re such a small company in such an early phase. It’s those kinds of stories that keep you persisting.

Andrew: Yeah. Yeah, I wanted to talk to you early on in your company’s journey because I wanted to understand this process while it was still all fresh in your mind. As a result, we didn’t end up with the huge vanity metrics that I often — maybe not vanity metrics — but the huge revenue metrics that I often try to start the interviews with.

We did end up with a company here that did well financially that was so different from the previous company that you told us about, where you couldn’t get customers. But, for me, that metric, that result that you got for Derek, is, in many ways, even more meaningful.

All this stuff, yes, it saves us from having pain as entrepreneurs. Yes, it gives us customers, which is great. Yes, it brings in revenue, which will allow us to have a nice living and maybe even have a nice nest egg if we sell the company.

But, the people that it touches because you’re solving their pain, because you’re really addressing a need that’s huge in their lives, and you’re solving that for them is dramatic and it’s inspiring. I appreciate you coming on here to tell us your story.

Nick: Thanks for having me.

Andrew: Cool. I hope, as I always say, if anyone got anything of value out of this, shoot Nick an email. Nick, what’s the best way for them to say, “Thanks for doing this interview?”

Nick: Nick@joinsessions.com.

Andrew: Nick@joinsessions.com.

Nick: Yeah. I’d love to chat to anyone who has any more questions.

Andrew: Cool. Especially people who are doing anything based on what you’re doing here in the process.

Nick: Yeah, for sure.

Andrew: Nice talking to your customers. All right. Nick, thank you for doing this interview. Thank you all for being a part of it. Bye.

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  • failedentrepreneur

    I think its interesting…that all of this idea extraction is put across as a quick and painless process…oh contraire–it seems to me like it is very time consuming and fraught with difficulty.

  • Guest

    oops I meant to copy and paste something else… :(

  • Kal

    “The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.”
    ? Randy Pausch

  • http://mixergy.com Andrew Warner

    I had to manually show this comment because it got flagged a few times.

    This is a good commet.

    It is hard. But I need more details on what’s hard about it so I could ask interviewees specific questions about how to get past the tough parts.

  • iaindooley

    Maybe that’s why it’s called idea *extraction* and not idea *discovery* ;)

  • failedentrepreneur

    In short:

    How does someone go from start to finish — idea extraction in one weekend — versus 6+ months.

    Long winded:

    Well…if you look at Nick Crocker…its taken a ton of time and effort to build a business that generates an estimated ~6k a month. He has spent months of effort and been at it full time. I’m sure someone less skilled than Nick Crocker might end up working for 6 months and have nothing to show for it.

    Most of the gurus I see online – Ramit Sethi, Seth Godin, Dane Maxwell, Clay Collins, Maria Forleo, etc all seem to preach the idea extraction process. But the process still seems to simple and visceral. In my estimation, idea extraction takes full time focus and effort.

    It just seems like a lot of ramp up time for an entrepreneur who is trying to feed their family and needs cash now versus 6 months from now — so maybe the question is…how does someone go from start to finish — idea extraction in one weekend — versus 6+ months.

  • Kal

    There can’t be shortcuts. I personally like this blog post by Remit Sethi
    http://www.iwillteachyoutoberich.com/blog/when-dumb-people-want-nice-things

  • http://mixergy.com Andrew Warner

    It really is a crap-load of time.

    But does it have to take 6 months? Nick’s process didn’t seem to take that long, right? Or am I misremembering.

    What do you think is a better alternative?

    Also, thanks for pushing back on this. I want to make sure what I’m getting out of these interviews actually works.

  • failedentrepreneur

    A nice post for sure. So it sounds like you feel that one must truly “cut the cord” and focus full time?

  • failedentrepreneur

    I recall it taking 6 months lol…but I could be wrong.

    I’m not sure on an alternative…I am just tired of failing as an entrepreneur. The most I’ve ever made as an entrepreneur was 3500 in a single month.

    Perhaps one could look at the market and see what is working and just copy that? I’m not sure how good that is for a strategy, but it might eliminate a long ramp up doing idea extraction.

  • iaindooley

    “I’m not sure on an alternative…I am just tired of failing as an entrepreneur. The most I’ve ever made as an entrepreneur was 3500 in a single month.”

    Ever tried selling something without building a product first? This is a fantastic video:

    http://vimeo.com/26415958

    It can be easy to look at the world and think that in order to succeed you have to build something first, but really you just need to sell *anything* profitably that doesn’t take up all your time. From that seedling you can then achieve anything you want.

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