Don’t have funding? Don’t have software skills? Don’t have [insert any other excuse here]? Dane Maxwell says he can teach you how to build a software company — based on his real-world experiences.
You’ll learn how to find a profitable idea. How to test it. How to use a backdoor method for getting a hot designer, cheaply. How to get a top 10 developer to code your app for you. How to manage the development process, even if you can’t tell the difference between Python and Ruby. And how to get paying customers (using a marketing method that other founders I interviewed on Mixergy refused to reveal because it’s working too well for them).
Andrew: All right. Before we get started, imagine you have an idea for a new product. Maybe it’s a mobile app for students, and you need feedback. Well, you can ask your friends, but few of them area still students. So what do you do? That’s where this site comes in. AYTM is where you go to have surveys filled out by potential users. They’ll find the people to take the surveys for you. They’ll make sure they’re the right fit for you.
So look, you come here, and you can specify the income that you’re looking for, the gender of your potential customers, you can specify their careers, and in this case I pick ‘students’. You can ask for a specific number of people to complete surveys for you, and then, when you create the surveys, look at how many options you have. Video. You can ask them for feedback on photos of your potential product. You can ask open-ended questions, you can ask close-ended questions, lots of different things that you can do. Finally, you get a report just like this one. It’s beautiful, but it’s also actionable.
Imagine showing this report, or something like it- your version, to potential investors, to potential partners, to employees, and making decisions based on something that’s useful and comes directly from your potential customers’ feedback. Go to aytm.com, here, let me scroll up to the top. There it is, aytm.com.
Next, do you want to know a secret for customer service that will actually wow your customers? Check out Assistly. With Assistly, let me pronounce this right, assist-lee. Not only, with Assistly, not only will your team respond to email in an organized way, but it can field issues on Twitter, Facebook, and other platforms, and Assistly, which I just pronounced properly this time, Assistly comes with a built-in help center, which means you’ll have searchable knowledge base, community Q & A discussions, contact forms, optional live chat, and so much more. Go to assistly.com.
Finally, who’s the lawyer that entrepreneurs like me and you trust? Well, I’ve said this now, I think it’s been years since I’ve been saying this. I’ll say it again, Scott Edward Walker of Walker Corporate Law. I keep getting feedback from entrepreneurs who’ve worked with him, who are grateful to me for making the introduction, so I’m going to keep making it. Scott Edward Walker of Walker Corporate Law is the entrepreneurs’ lawyer. Check him out, and let’s get started. Hey everyone, it’s Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart. The website where you come to hear proven entrepreneurs teach you how they did it. So how do you build a six-figure software product from scratch, even if you don’t know what to build? I invited Dane Maxwell to walk us, step-by-step, through the process he took to do that with Paperless Pipeline. His web app, which enables brokers to take transactions and related documents online. Dane, welcome.
Dane: Thank you.
Andrew: So what have you been able to do with Paperless Pipeline? Describe what you’ve been able to do, and then walk us through how you did it, so we’ll be able to learn from your experience.
Dane: Well, you said something about ‘even if you don’t have a product idea’, and it made me think about how lucky 37Signals is, because they just solve their own problems, so they know what to build. Well, I wasn’t doing anything, so I didn’t have any problems to solve. So I had to get those ideas from the customer. For Pipeline, I had no idea. Over a thousand registered companies, 1.2 million contracts submitted to the system, hundred of thousands submitted over a day over 79,000 some closed transactions, and it’s all been done without any venture capital, with one developer, and me. And now, a CEO who I’ve hired to run the company, so I just kind of kick back do whatever I want at this point.
Andrew: All right. Is this something that the rest of us our going to be able to duplicate, or are we just going to spend an hour at how impressive your business has been over the last few years?
Dane: That’s one of the reasons why I wanted to do this interview with you, Andrew. After the emails that came in from people asking, ‘Dane, how do you launch products? How do you start and test ideas to see if they don’t fail? How do you create the squeeze page to get people to opt in to your product that will be released in the future? How do you get stuff developed, even if it’s not a software product? So I’ve spent, you know, the last few days thinking about every step I took with Paperless Pipeline, and how universally applicable it is. I’ve created seven different products, or eight different products now, some software, some not, and they’ve all followed the same process that I used to create Pipeline. So I thought, what I want to do is take my most successful product, and break it down step-by-step into exactly how I built it. I mean, I want to read you guys the emails I used to launch the product, the emails I used to hire the developer. All the specifics that you guys use
Andrew: So you’re going to give us the exact emails that you use to hire developers, the exact emails you use to get customers.
Andrew: OK. And when you say that people have been asking you all these questions, one of the reasons people have been asking you all these questions is because you’re one of the most popular interviewees on Mixergy.
You and I just connected because you were a Mixergy premium member, I heard a little bit about your story; another premium member I think said “you’ve got to interview Dane”. I said alright let’s give it a shot, had you on here, you blew me away, you blew the audience away, you’re one of the most popular interviewees by far and then you did a course where you taught copyrighting which was, I believe, our most successful course.
I think more people took your course on copyrighting than they took anything else that we did. And so people don’t just stop there by consuming your information and learning and using your ideas, a lot of them as I understand it, as I’ve seen, email you directly and say “Dane, give me a little bit more information, Dane help me out with this specific issue here, teach me this other thing there”. And, I got you back on here to do a second interview where we go in a little more depth, and you walk us step by step how you did it.
Now, there was a story you told me about a diamond ring that will help our audience understand the mindset that you go into business with. What’s that story? Can you share it with the audience?
Dane: Yeah. Somebody asked me once, Dane how are you able to be so successful at such a young age? It was actually, how are you so profitable with your company, was the question. And it was like oh I don’t know. I just didn’t think about it for a little bit. And I was like; oh I know exactly what it is. Every single thing I do in my business is all centered around one single question.
And this one question helps me when I’m deciding what to do next, it helps whether I want to decide to start a new feature or not do a new feature, it helps me if I want to start a new product or not start a new product, basically it guides my entire thought process for everything and that one single question that drives my entire life for business is “what is most important to the customer”? And it sounds so simple but you see people building products and building software things, and you’re like, why did you build that?
And they’re like “oh I really liked it”, or a number of reasons never all the customer really wanted. Very rarely do I hear that. So, what’s most important to the customer? I was going out, to help my buddy pick out an engagement ring. He needed a lot of support for proposing, he was very nervous but he wanted to do it, so I said yes and we were sitting in the diamond store an hour, an hour. And then he’s just holding this ring in his hand and just looking at it for an hour. This same ring. It’s not like there was like five to decide from, just one ring.
And, the salesman was trying to talk him into buying it and so the salesman is like, you know what; we have the largest diamond selection here in Iowa. We’ve been around for sixty years, we’re not going anywhere, it’s fully insured for life, we have a world class sales team, we’re in this location, and we’re not going anywhere. You know we’re not going to be gone the next day. Just circled through all these credentials and ego based vanity metrics is what I like to call them.
Vanity metrics would be like how many twitter followers you have. It doesn’t friggin’ matter.
And so after an hour of this I just got so tired, I was trying to wait and let the sales guy try and figure out that he was screwing us up, but he just never, the light bulb never went on, so I interrupted him and I said hold on a second, I said “Ben, what’s most important to you right now”?
He looks at me and the salesman kind of stops and looks at me, and there’s this like, awkward tension, and then Ben looks at me and he says, “Well Dane, there’s just this one little spec in the ring and so if I could pay a little less than full price, I’d be happy with this ring. But what’s most important is that there’s this little spec, and I’d like to get like five hundred bucks off”, or however much off because of this.
And then the diamond salesman looks at me and he goes, holy crap, you could have saved me fifty minutes. And so he bought the ring, he’s got the ring now and it was all centered around that one question. And that one question saves you, that saved him fifty minutes but imagine how much time it saved me and Billy on Paperless Pipeline. It’s incredible and that’s what I want to get into when I talk about how I built that product from scratch.
Andrew: Alright. See when you give an example, it makes the message so much more, so much more useful, memorable, and it feels real. I want to understand now, how did this idea, how this concept plays out as you build up a business. So, you said that you didn’t even have an idea before you launched Paperless Pipeline, of what the business would be, so tell me how that idea came to you.
Dane: I was thinking about where my ideas come from, where the best ideas or the most profitable ideas, you know I’ve said this before and I’ll say it again, every single idea that I’ve come up with has failed. Like every single idea that I’ve personally come up with, I sit around and try to think of cool ideas and they’ve all failed. They all suck. And so I don’t come up with any ideas anymore, I just ask customers what their problems are and I solve those.
So, actually I’ll probably start by reading the first email. Paperless Pipeline came to be because of a marketing email I was sending out to promote another product. So this marketing email is complete swipe-able. Use this, in fact, if you’ve got a list of customers right now, and they aren’t buying your products, try to send this email out to them. The email I sent out was ‘Bad News for Recruiting’. The subject line is ‘Bad News for Recruiting’. This thing got opened like hotcakes. ‘Bad News for Recruiting’. Use bad news for anything. ‘Bad News for Project Management’. ‘Bad News for the Economy’. ‘Bad News [??]‘. Whatever. Anything you want. It’s totally perfect.
The broker opens up an email, and it says, “Depending on how you did for recruiting in 2008, I have some partially bad news. You could’ve done better. I mean that in a good way, but I’ve never seen any good [??] so I’ll just share this inspiring story with you the best way I know how. Just like it is. I work with a Re/Max broker in [??]. Last week she recruited five producers in [??]. That could be the same top five producers in the area joining you.”
Andrew: Sorry. I’m sorry, Dane, but for some reason our connection is not as strong, just as you were reading that. If you have Chrome running in the background, or a browser of any kind that you don’t need, let’s turn that off.
Dane: All right.
Andrew: All right.
Dane: Pause your video.
Andrew: I wanted make sure that this comes in really clearly.
Dane: Yeah, pause your video.
Andrew: Pause my video? Oh, pause the guest, the audience’s video?
Dane: Yeah. I’m going to copy paste. Easier now so I can get out of Chrome.
Andrew: Oh, I see what you’re doing. OK, great. But no editing here. We just go right through. The audience has to bear with this part.
Dane: All right. All right.
Andrew: While you’re doing that, I’m going to tell people that if they’re watching the video, we’re going to talk about what’s behind Dane over there. Because I’m kind of curious about why it says, ‘Power Verse Force’. Dane’s shoulders. And I’m trying to read what’s above that and can’t figure that out actually. So, we’ll see what that is. Actually, the connection now seems a little bit better. Have you done anything?
Dane: Yeah, I did. I closed Chrome.
Andrew: OK. All right, great. So why don’t you take it from the top?
Dane: OK. So this email starts off, “Depending on how you did for recruiting in 2008, I have some partially bad news. You could have done better. And I mean that in a good way. But I’ve never been any good at hyping things, so I’ll just share this inspiring story with you, the best way I know how. Just like it is. I work with a Re/Max broker in Florida, and last week she recruited the top 5 producers in her area. That could be the same 5 top producers in the area joining you. She sent an email yesterday, telling me about her victory. Here’s how she did it.
And then I have a testimonial of her talking about how amazing the product is, and it links to her recruiting website. Agent Care Center website. And then, “Thanks so much, Dane. You’re amazing.” Blah, blah, blah. You’re the best. And then below that it says, I come back in, and I anchor the emotion that the broker is now feeling. I anchor the emotion. Don’t just like, people will send out a testimonial and then they don’t elaborate on it. They don’t anchor in the emotion. They just expect the testimonial to be enough. So you want to anchor whatever the emotion is. So, I start off, “Wow! Isn’t that an inspiring email to read? Congratulations to you, Paula. You took action. You made a decision. And look at what happened. Results are attracted to decisive people, and you deserve every agent you recruit. Thank you.”
So this email I got sent out, one of my most successful emails ever. One of the top 10 Re/Maxes in the country read this email, called me up, and he said, “Hey, Dane. I’d like to buy your Agent Care Center product.” And I said, “Well, hold on a sec. I don’t know who you are. Tell me about your company. Why do you even want the product?” He’s like, “Well, we have
greater than a 200 agent office. We have 8 locations. We’re one of the top 10 Re/Maxes in the country, and we have a intranet right now, but we’re looking at yours.” And I was like, “Why use mine when you’ve already got one?” Whenever anybody ever calls me about one of my products, I always try to talk them out of buying it. Always.
Dane: I don’t know. What happens when you play hard to get? Two reasons. Initially, I was kind of trying to be holistic and a good Samaritan and be like, “Look if I can talk you out of buying the product, then I’m saving you and I both time.” But then what happened is I started talking people out of the product, and they’d be like, “Well, no. No.” And then I’d start
like talking about disadvantages. I’d go, “Well, you already have an intranet. It already has this feature. Why switch when you’ve already got the feature over there?” And they’d be like, “Well, it actually doesn’t work exactly how I like, and I’d really like it to do this, this and this.”
And so, I end up talking him into buying the product by trying to talk him out of it. Just try it on the customer, just try and talk them out of it. It just really works really well.
So, he’s like, “All right, Dane. I want to buy your product.” Now before I continue, some of the best ideas in the world, are 3 or 4 layers deep. So you’re not going to get your best ideas just sitting around thinking about them. You’re not even really going to get your best ideas by initially talking to your customer. You’re going to get your best ideas by digging three or four layers deep under that initial interaction.
Dane: So, we’re one layer deep with this email. The second layer is I’m talking to this broker and he wants me to build him a feature so he can buy [??]. He wanted me to build him a feature where his agents could post something on the site, the staff could go to the site, and then approve that post and then spit it out to all the other agents. Kind of like a Google group, except he wanted for his company and he wanted to pay me $50 a month just for this one feature.
Andrew: Let me pause the story here and make sure I understand what you’re saying so far? First of all this is going to real estate brokers on your mailing list, right?
Andrew: OK. Do you have a product that you’re actually pitching them at this point or are you just pitching them an idea that they think is a product that already exists?
Dane: This was a marketing email for a product that already existed.
Andrew: OK. And what was the product?
Dane: Real estate intranet. Files, calendars, message board.
Andrew: Just enabled the real estate office to stay together, to stay connected to each other and pass information back and forth. The part about losing recruits, how does that tie in and why is that important to real estate brokers?
Dane: Because the intranet helps that broker and the testimonial recruit agents by showing them that product.
Andrew: I see. If you have a brokerage office and you want to bring in new people, one of the first things you do is say look, here’s how great our software is, it’s so incredible. We get to stay on top of all the data here, you’re going to have access to this kind of power, sign up, be a broker here. The reason they want brokers is because the office then gets a commission on every sale that they make.
Dane: You got it.
Andrew: Got it. OK. All right. So, this person calls you up, you’re trying to say no you don’t need this and you’re this because you’re playing hard to get and wanting him to come to you and you’re also trying to figure out what he really wants. As you’re talking to him you’re realizing they’re a couple of features he’s dying for, right? OK and then what do you?
Dane: Exactly. Thanks for summarizing. That actually helps me too. Then he said, ‘I want this feature built.’ I said, ‘OK, well, give me 30 days to build it.’ I knew it would take me three. I said 30 days. It was a Friday, after I got off the phone, I emailed my developer and said, ‘Please work the weekend and I will pay you extra.’ I wanted this feature ready by Monday. It’s Friday, he got the feature done by Monday. I call up Rob on Monday and say ‘Rob good news, you’re a priority to me, this feature is already done. I know I told you 30 days, but I’m sorry it’s done in three, and it was the weekend.’
He called me back up in ten minutes and is like, wow, signed up for the product, absolutely loves me, totally blew his expectations away because, you know, a lot of times in business if you want to stand head-and-shoulders above everybody else, you just do what you say you’re going to do. Especially in the development world. Take any estimate that a developer gives you and times it by four and that’s probably how long it’s going to take. It’s very rare for people to underestimate development. So, blew him away, signs up, a week goes by, I don’t talk to him — this is three layers deep now — I just demonstrated an incredible value by doing this three day thing, a week later I call Rob back up and say, ‘Hey Rob, how are things going? How are you liking the product?’ He’s like, ‘Dane, I absolutely love it,’ and then he goes, ‘But, Dane, let me tell you about this other problem I’m having,’ and that’s where Paperless Pipeline was born. Imagine, if I wouldn’t have called him up a week after to follow-up? Imagine, my life would be incredibly different.
Andrew: You call up customers to follow-up, why?
Dane: I don’t do it anymore. When I had fewer customers, and every customer meant the world to me and they still do, the numbers are just getting bigger and bigger I can’t do it personally. I call them up why, just like Zappos wants to keep people on the phone for the longest time, you develop raving, raving fans and you’re best ideas come from talking verbally with people. They don’t come from surveys. They don’t come from getting replies to emails. They come from being on the phone and that’s the truth. I don’t ever get product ideas [via] email or survey. It’s always on the phone.
Andrew: OK. His idea that led to Paperless Pipeline, what was that? What was the next step in the process?
Dane: It’s kind of funny. He asked why I followed up. Well, if he had been a five agent office, I might not of called him a week later, but since he was like the top ten in the country, I got to treat this guy like a king, cause he is. So, he’s like, ‘Well Dane, I’ve got this product, I’ve been looking for a year for something to go paperless with and I can’t find anything I like. I’m about to sign up with this other company over here, but I don’t even want to use them and I’m going to have to pay them $300 a month for this software.’ ‘What did you say? $300 a month? What do you want me to build?’ and he explained it to me and I was like, ‘I have no idea how to build that Rob, I couldn’t even begin to start,’ and he’s like, ‘It’s OK Dane, I’ve envisioned the entire product. I know exactly what I want you to do. Just listen to me and build it exactly as I say.’
Andrew: He’s figuring you can do it because you’re a guy who had took a project that should have been 30 days and made it happen in three days. I see, and he’s already been using it. OK. That’s when he created the product for you, essentially? All right. So you take the idea, what happened? By the way, that’s an interesting way of coming up with a product, 37Signals, as you said, their founders have come here and talked to me about how you have to find your personal need and find a solution for your personal need. Keep it simple and understand that there will be others out there who have similar problems and they’ll sign up.
It feels like we all end up then creating base-camp like products, if we think about our own needs, right? We all have the same need to collaborate with people who are working remotely, who are all techies like us. You’re saying here’s a new way of doing it. Go to your customer and ask them what do they need. Find out what pain they have and then build it for them and he would of paid you for it, right? You had a built in customer with that request.
Andrew: OK. So, what’s next?
Dane: What’s next is I ask him, ‘Rob, there’s eight other competitors out there, are you sure there’s nothing else that you like?’ This is the most, transaction management paperless stuff is the most competitive space in real estate. It’s actually interesting, we’ve, Paperless Pipeline has recruited, stolen, whatever, I don’t actually steal the clients, we’ve taken clients from every single one of the biggest competitors in the Paperless Pipeline and it’s not because we do more, it’s because we do less. And that’s what brokers want.
Andrew: By the way, why is this important? I’m not in real estate at all. I have no idea why brokers would be especially eager to go paperless and why they can’t just scan stuff in and put them on a drop box or put it in their intranet or keep it really simple. Why do they need a whole new solution?
Dane: Well, first off, if you ever want to be sick to your stomach, we’re all in a text-based, if you want to be sick to your stomach, just go into a real estate company and sit there for an hour and watch how they run. It is awful. An agent gets a new signed listing, they come into the front desk; the front desk makes a photo copy of it, puts it in their filing cabinet, gives the original back to the agent. Then the agent has to run another copy to give to the buyer and seller and now they’ve just killed three trees because of this one listing.
Versus just going under the scanner and it goes right into the Paperless Pipeline. The staff can review it in Paperless Pipeline and fire off a note to the agent if something’s missing, review it against a checklist. An agent can log into Pipeline and see all of his transactions and see the ones that are green, he’s going to get paid and the ones that are red, he’s not going to get paid and you just can’t do those kinds of things with drop box.
Andrew: I see. All right. That makes sense. All right. So, now he’s asking you for this product, he’s offering to pay, what do you do next?
Dane: What I do next, I ask him, ‘Do you think other brokers would actually buy this?’ He said, ‘Dane, I talk with dozens of brokers, all the time, in fact my network of 50 brokers are all looking for this solution.’ So, I wasn’t OK, this one person wants it I want to make sure that everybody wanted it. Usually I’ll set up a squeeze page and get opt-ins, but I had no idea how to even sell this yet because I didn’t understand the problem myself. It’s a very complicated problem, transaction management. I asked him to validate the idea for me and he gave me some more brokers numbers. I talked to them and they’re all like, yes, we absolutely want something like this. I said OK, green light, now I need to find a developer.
Andrew: By the way, are you a developer at all? Are you someone who can code up anything? No.
Dane: No. No way.
Andrew: No. OK. Good, because I know there is a lot of demand in my audience for stories of non-developers who have software built, especially for guys who do it like you did without finding a technical co-founder.
Dane: I outsource everything except for words, I think. I outsource everything except for words to sell stuff. Everything else I outsource like the developers, so here’s the thing, the best developers in the world, the A players, the ones you want to hire, they are not looking for work. They’re too damn busy. They’ve got multiple projects, they’re working on three projects at once, but they’re getting all of them done because they’re amazing. So, you want to hire these developers, you want to recruit them and sell them on joining your cause instead. They’re not hanging out on oDesk. They’re not hanging out on rent-a-code. They’re not on eLance. You’re not going to find those A players there.
Now if you’re just building, a kind of soft, semi, I don’t want to say shitty, but you know not great software, you can get away with oDesk. But if you want to build something like Paperless Pipeline so, there’s like change the world of the real estate office, it’s going to be the heartbeat of the office, it’s never going to go down, it’s never going to crash, it’s rock solid Fort Knox, you need the best developers in the world. Jason Fried says you hire open source and you couldn’t get much better than that, but you can. You can go to Google groups and pick the programming language you want to pick, I happen to pick Jango, which is like Ruby on Rails, I picked Jango and I go to the Google group and I find the top ten posters in that Google group and then I email all ten of them. I actually have the email that I sent them, if you want me to read it.
Andrew: Absolutely. By the way, how did you even know Jango was the right language for you? Why not go with Ruby on Rails? Why not go with something else?
Dane: Picking a programming language is like picking a wife, picking a girl. Like, all programming languages are going to get where you need to be. The programming language doesn’t matter, it’s the marketing of the product, the vision of the creation of the product, that’s what’s important. I’ve heard developers talk about programming languages like women, like developers will switch between different programming languages trying to find happiness. It’s pretty funny. I picked Jango because I’d done Ruby on Rails before, and it felt a little slower to me. That could have been my developer. But I was researching Jango, I was researching people who had switched from Rails to Jango, and how much faster it was, and I knew Google was built on Python, and Python is the fastest-executing programming language in the world. With that said, if I had gone back it would be a tossup between Rails and Jango. I just done it with Rails before and I wanted to pick Jango this time because it was supposedly the fastest.
Andrew: OK. But you haven’t coded in both of them, you hadn’t at that point experimented with both of them, you could have made a wrong decision but you saw that others had made this decision too and it was working well for them, so you said, ‘I’m going to go with that.’
Dane: Exactly. And Google search Ruby on Rails alternative or, I don’t know.
Andrew: Gotcha. OK. So now I’ve got a sense of your research, and really for many people, the fact that they’re listening to this is their research, they’re understanding now the two languages that if they’re not developers they might consider going out and looking for developers to code in. So yeah, I’d love to see the email that you sent them. First, to bring us up to speed, you went to the Google Groups related to Jango, and you said, ‘this is where-’, actually, why there? What was the goal there?
Dane: Well, kind of the smarter people hang out on Google, but more importantly you can get their email addresses if you enter a captcha code.
Andrew: Interesting. OK.
Dane: This idea is going to get butchered – this is the single greatest idea you could from the interview, how to hire a great developer. Your product either will fail or succeed based on your marketing first, second your developer. I might not be able to do this anymore after this. . .
Andrew: You know what? I always wondered if people could get my email address every time I respond to a comment in a Google Group or join a Google Group. But you’re right, you just enter a captcha code, as soon as you’re in the group, everyone’s email address within the group is visible, right or available to you?
Dane: Yeah. And you see the top ten posters, and who are the people who post the most? The people who know the most. It works, it’s so brilliant.
Andrew: Gotcha. So then you’ve got the people who post the most because they know the most, and you said, ‘I’m going to reach out to them.’ What did you send out? Let’s see that email.
Dane: OK. So I sent this to ten developers, and it was so funny, I got like two or three being like, ‘this idea is so stupid, the real estate economy’s crashing.’ This is during the mortgage collapse that I’m starting all of this. So I send out this email: ‘I found you on the Google Group’ – or the subject line is ‘Impressed – Want to Hire You.’ – ‘I found you on the Google Group for Jango, and damn, your background and skills impress me. I need your [inaudible] genius to simplify a problem that plagues real estate [inaudible]. You could really raise the bar and put your passion into a project that has a deep meaning and value for my clients. I’m sick of working with lowlife, no-passion coders. It’s all about organizing the transaction process with’ – you’re smiling so hard right now – ‘It’s all about organizing the transaction process with digital files until the property is closed.
I’m looking for two things: one, an experienced developer that can implement and finish products on time (all caps). Two, a developer who can strip away features to the app’s core to get the first iteration up and working within two weeks. 37Signals line set. With that said, I would like to invite you to work on the project to be written on the Google App engine using Jango. I now use [??]. This project is simple, but solves a very large problem for real estate offices. Let me know if you’re open for projects and I will send you over the project plan. Thank you, Dane.’
Andrew: And the response was, from some people, ‘this doesn’t make sense.’ Did anyone say, ‘hey, why did you email me, this feels like spam?’
Andrew: You did? Then how many people were interested enough for you to take it to the next step with them?
Dane: Two out of ten.
Andrew: Two out of ten? That’s pretty good.
Dane: And the two out of ten, they were like, ‘this looks like a template email to all Django coders on Google Group.’ And I replied, ‘yeah, it’s a template email, but it’s not to everyone, it’s to you because you’re one of the top ten posters.’ And they’re like, ‘Oh, yeah, thanks for being honest. Yeah, I’m interested.’
Dane: Yeah, I’m not trying to put anything past you, you’re smart. Now, I don’t know if I said it, but what’s most important to the customer could be what’s most important to the developer. I could have expanded on this email and been, like, look, if you’re tired of working of people who don’t have a clear vision of what they want, who don’t pay you on time, who don’t move projects forward and get customers to give you feedback, and you want to be in that kind of environment? I could have added that on to the email but I didn’t even need to because this just works so well. I don’t know if I even said that what I think the number one skill of an entrepreneur is salesmanship. If you can’t sell anything, you don’t money to pay employees, but if can’t sell employees on joining your company, then they won’t join you. Bar none, the number one skill of any entrepreneur is salesmanship. And so, this email, to a developer, has salesmanship. It’s not just salesmanship to sell your product, salesmanship permeates through everything.
Andrew: Yeah. You know what, I’m thinking about- we have a mutual friend- you have this group of friend who are all thinking this way, like, ‘what’s import to the other person? How do I give them that so that they give me what I want?’. One of your friends is Andy Trish [sp], I think he’s the guy who introduced us.
Dane: Yeah. He’s my roommate.
Andrew: He’s your roommate here. You guys are just constantly thinking about marketing, constantly thinking about how to present ideas. He and I went out to lunch, and then you and I got together afterwards, and you said, ‘Andrew, do you know how he got you to put everything aside and just go to lunch with him and spend that time with him?’ And I thought about it, and I said, ‘oh yeah!’ He said, ‘Andrew, I’ve got, you’re looking for feedback to improve your courses? Let me tell you what you could do’. And then he started telling me stuff, and I was starting to seek him out to see if I could find more time to sit down with him. But he knew, I guess, from listening to the interviews, that I’m passionate now about courses, more than about anything else, and I’ve always just loved any kind of feedback.
Tell me how I can improve the stuff that I’m doing. I’d love you for it. And he won me over right there. I would have set aside, I would have told my mother that I had to put her off and not have lunch with her because I’ve got to get together with Andy Trish. But, the reason I bring that up is because, it just comes natural to you guys. It just permeates everything that you do, and it’s just the way that you interact with people. What’s he looking for? I understand that, I’ll give it to him, and I know if I give it to him, I’ll get what I want. So you’re saying the same thing you do with customers, you’re also doing with developers, and that’s how you got the response. What’s the next step? Now you get two guys. How do you pick the right guy?
Dane: And I think it’s important to say that even at this point, I’m not invested in the project like, ‘oh this has to work, my life depends on it’. I see a lot of business owners, they’ll get really attached to their idea, and they’ll hold onto it for, like, five years. I’m not attached to any one of my business products. Burn it to the ground tomorrow. It doesn’t affect me. I’ll start right back and build something from scratch, right to be back where I’m at. You can take a million dollars away from a millionaire, he’ll build it back. You can give a million dollars to a bum, and he’s going to lose it. It’s the mind set that’s important. So my mind set at this point, I’m not attached to the [??], I’m still not attached to it. If tomorrow, every single one of my paying customers was, like, ‘hey Dane, your product sucks. This is worthless. I don’t want it anymore.’, I wouldn’t be attached to that. I’d go create a new one. So how did I hire the developer? Was that your question?
Andrew: Yeah. How did you pick the right developer?
Dane: Just emailing back and forth to finally get a feel.
Dane: Now, the first thirty days of hiring a developer is the most important, and I had a very specific process I used for that. I use a Google document, and I put my highlighted conversations in red, the developer puts theirs in blue and at the end of every night working with me, they have to answer four questions. And I got this from Eben Pagan, and Eben Pagan sells marketing information products. I use those principles to build software. If you listen closely, you’ll find principles to use in whatever you’re doing, even if you sell children’s toys. I don’t know. The first question is, how many hours did you work today? The second is what did you accomplish? Not what did you do, what did you accomplish? Three is what problems did you encounter? And four is what questions do you have for me? OK. This is in my Google doc every night for- my powerstrip kind of screws up sometimes, so I’m just going to readjust it- there we go. Every night, for the first thirty days, I watch this thing intimately, and within the first three days of them posting nightly updates- maybe they miss one on the second day because they’re not used to this- so you just say, ‘hey look, it’s really important that you do this Google doc for me, it allows me to have complete transparency so I know everything that’s going on. If you want to be paid on time, and you want me to be happy, please be doing this. If you don’t want to work together, then continue to be inconsistent’. So the second night, they kind of wish, they don’t update it, so I send them that email typically. Then they start doing it. Like, the first week, you get a really good idea for what kind of mindset you’re dealing with. You know, they’ll be, like, ‘oh, I had this problem where I couldn’t figure out this’ and then, they’ll be, like, ‘dot, dot, dot, but by just typing it out, I know how to solve it’, and then they’ll come back, like, ‘OK, that problem’s not solved’. I love those nightly updates. Then I’ll say, ‘if you don’t work that night, I want you to go in and say, ‘today I did not work’. Every day is a daily update, no matter what you did or did not do’.
Dane: And so, in the first thirty days, you know if you’ve got an A player or not. If it’s the first thirty days, you don’t like them, you fire them. And that’s what you say. You say, ‘look, we’re going to do a thirty day trial, I’m going to pay you 50% of your pay for thirty days, and if I’m really happy with you, I’m going to pay your full price. So we’re not, I’m not going to try and negotiate you down. I want to pay you what you’re worth, but I want to do it being fully comfortable. So we’re going to do a thirty day test period. You’re going to work with me thirty days, nightly updates, 50% off, at the end of thirty days, we have a discussion, you either continue working with me, or you don’t.
Andrew: And a great developer is willing to work thirty days at half his price?
Dane: I haven’t had any resistance to that.
Andrew: OK. What do you pay for a great developer?
Dane: 85 bucks an hour.
Andrew: OK. All right. And how many hours did it take you to launch the first version?
Dane: For Pipeline, we built the first version in three weeks.
Andrew: Three weeks.
Dane: Yeah. That’s how you use the best developers, too.
Andrew: The best developers work quickly, you’re saying.
Dane: Yeah. I said I would risk eight grand. I would not risk more than $8,000 for this product, for this idea. If I got more than eight, I would just toss it.
Dane: So, I told him, I told him that it was eight grand. This is my budget. We have to get all of this done, and then we got it done and the brokers started using these, OK, I like it, let’s continue doing it. So, then I started calling up other brokers and doing webinars and demo-ing the product and getting them onboard.
Andrew: Let’s hold off. I don’t want to get into the marketing just yet. I want to take it really slowly and just explore all the questions that are in my head as you were saying up until now.
The first question, I’ve got to be honest with you, Dane, is: what are you doing with a roommate? You’re the second guy now, the second entrepreneur with a successful company who’s got a roommate. What’s the deal with these dudes, with you dudes? Why do you need a roommate?
Dane: Dude, I sit at home all day. I’m bored. Do you know the most lonely person in the world is an entrepreneur?
Dane: Oh, yeah.
Dane: Especially an Internet entrepreneur, especially in Iowa.
Andrew: I see.
Dane: But I like Iowa. I don’t want to leave this place. So, actually there was nobody around like me, so there was, maybe, one person. OK, that sounds really stupid. There were a few, but Andy was not. I met Andy when he was working at Principal 9 to 5. I’ve seen been able to kind of convert him to entrepreneurship, so now he’s doing his own thing.
We talk about lead capture and copyrighting, squeeze pages and upsells, all that stuff all day long. Why do I have a roommate? It’s not for the extra rental income, even though I charge him. It’s for friendship. It’s because I’m lonely.
Andrew: You know what? That’s what this guy said. The guy’s just killing it. He will not do an interview. I won’t even reveal his name or what business he’s in, but he’s killing it. I said, what are you doing with . . . I think he has three or four roommates. He says, look, they’re all women. They’re always doing stuff. They just graduated from college. They’re always doing stuff and meeting new people, so I get forced into these opportunities to connect with people and have conversations. It’s great. It’s the only way I can get it done.
All right. I asked it because if it’s on my mind, it’s going to be on our audience’s mind, on their minds too, and I want to clear it up.
Back to business here, what is in the first version that you create? You said to the developer that you’re looking for someone that can come up with that core idea and only launch that. What was in that core idea?
Dane: OK. So, this is really important. When we developed it, he started telling me all these things that he wanted, and I was like, what is most important to the customer, right? But you can’t let them guide you completely because they’ll guide you down to destruction. There are a couple downsides to this question. You’re not going to create the next Model T Ford car. What’s most important to you? They’d say faster horses. They would say they wanted a car that doesn’t exist yet.
I actually don’t want to create cars and revolutionary breaking ideas, so I’ve just used this question for me, but that’s not one downside, in fact, not in fact. He starts telling me everything. I said, whoa, whoa, whoa. Tell me this. What is the least amount that this product can have and still be valuable for you? He’s like, oh, I just want a transaction page and a working docs page. I want the working docs page for them to upload documents to this page, and then I want them to be able to assign documents from the working documents page into a transaction page. I don’t need anything else.
I said, oh, that’s a lot different than the five or six things you said you wanted. He’s like, well, OK, you’re right, but I really only need these two things. I just took a product. I could have taken 24 grand and built it in eight by asking that one question: what is the least amount you need?
Andrew: What about, what I’m wondering is does Dane Maxwell build a revenue model into the first version?
Dane: I didn’t have the payment system until six months.
Andrew: Six months. So, for six months you were getting new users and ignoring revenue.
Andrew: I’m surprised by that. Why?
Dane: Because the product was so young in its infancy, it needed time to mature and transaction management. It was more of an insecurity thing, really. I was insecure as charged. When I set my prices; that was really fun how I set my prices. I didn’t build the thing for six months because I just kept listening to the users until it got to the point where they were like, man, Dane, when are you going to start charging us for this?
Andrew: I see. But the first person, the first real estate firm that wanted you to build this out for them They were offering to pay, but you said, “No.” You didn’t charge them.
Dane: Oh. Thank you. I charged him.
Andrew: Oh. I see.
Dane: I forgot about this. Thank you. I didn’t have the payment, so I used my authorized on net-recurring billing and just charged it manually $300 a month.
Andrew: OK. But his friends he introduced you to, did you charge them?
Dane: I feel guilty. No.
Andrew: OK. All right. And the people who did webinars, and we’ll talk about how you got your first users, did you charge them?
Andrew: No. But you were getting $300 a month coming from him and you knew that someone was willing to pay for it.
Dane: Yes. And he now pays 50% of what everyone else pays. So I guess it’s not that bad. But I tried to get him to be an investor in the product stuff because I was really insecure about that money. I tried to get investors just to help offset. And the way I get my investors is I go to my customers. I went to my customers and was like, “Hey, pay me $5,000, use the product free for life.” And I wanted five customers to give me $5,000; $25,000, I can build that product. My customers fund that product, not investors. Don’t bring investors in. Use your customers for investing.
Andrew: At what stage did you do that?
Dane: When I was developing two projects at one time and I had all this money going out and I was really nervous about it.
Dane: Instead, I just cut the project that was failing and just stuck with Pipeline . . .
Andrew: . . . stuck with this. How many months into it did you do that, ran the new model?
Dane: I tried that two months in.
Andrew: Two months in. So two months in you said, “I’m not going to charge the world for it. But I’m going to look for five people who are going to pay me $5,000 each. That’ll give me $25,000, which will fund all the Jango development and design work that I’ll need to build this out.
Andrew: OK. And everyone else was not paying even though these guys were?
Dane: I didn’t get investors. They all told me, “No.”
Andrew: Oh. These guys who you were offering the $5,000 life-time membership, they didn’t want it?
Andrew: Got you. OK. All right.
Dane: I think I did a shitty job selling it. I was coming from this place of total not power, total insecurity, like, “Come on, guys, please help me. I need this money.” I’m really happy. I own 100% of the product. Even the guy who gave me the idea. This thing is mine, 100%. And I’m so happy that it happened that way. It was funny, though, because I called up Robb Campbell, the guy who gave me the idea like, “Hey, Rob, I’d like to start charging you for Pipeline.” That’s, like, a month and a half in. He’s like, “Oh.” And I was like, “Is there a problem?” And he’s like, “Well, you know, I just thought you’d give me a break and all for giving you this idea and everything.” And I was like, “Well, I can shut your account off.” No, I’m kidding. I didn’t say that. I said, “Well, you know, I’d love to give you a break, but right now, I’ve got server costs and developer costs and I’m barely able to keep my head above water. So if you could just help me out and pay the $300 a month for like four or five months, that would be amazing to me.” And he was like, “Oh sure. No problem.”
Andrew: OK. So what . . . and it cost you, roughly $8,000 to do the first month’s work?
Andrew: OK. All right. What about the design?
Dane: This is very important. I had the front-end scanned and designed before I ever had the developer do anything. So, I used the Backpack template from 37signals. I took Backpack and then I changed the information around to match real estate. It’s not at all very similar to Backpack at all, but you’ll notice, if you check the product out, it looks very similar to the look of Backpack.
Andrew: I see. You basically just copied and pasted Backpack on a brand-new HTML page. You adjusted things to make it look like it was your site and your product, and you, of course, you made it . . . changed the text and images a little bit so that it’s yours. But that’s how you did it, you used them as a template.
Dane: Yes. And I didn’t copy and paste any HTML. What I would do is I would take the screenshot and I would put it in Fireworks and I would just start dragging things around. Like, I didn’t know about MockingBird or all these mock-up things. I just used Fireworks and just like drag it around. And then I would send that ugly-looking thing to a designer and have him design the scan.
Andrew: Where did you find the designer?
Andrew: You just posted it up and you said, “I’m looking for this design to look good”. People bid on it, people started submitting responses. You give them feedback. They go back and forth, you find the one that you love, that’s the one that you have done.
Dane: No. Thank you for asking me. 99designs might not be happy with me saying this, but what I do is the same thing I do in Google groups. I go to 99designs and I find the people that are making the best HTML screens and I private message them.
Andrew: So you don’t even have to pay the full price. You just go directly to them and you say, “How much is it going to cost to do this?”
Dane: Sort of.
Andrew: What do you do?
Dane: Not sort of, yes. It’s like, I go to the thing and I was like, “Wow. I really like this guy’s work.” Or I’ll apply to them and say, “Hey, I really like your work and I’d like to hire you. But instead of the chance of getting paid if someone picks your project, I’d like you to guarantee you payment.” I get the project every time.
Andrew: You know what, actually? I’ve talked to Matt Mickiewicz, the co-founder of 99designs, he’s happy that people do that. He’s fine with that.
Andrew: Yes. It’s a clever solution and I’ve actually heard of people developing software to help them figure out who the best designers are, so that they could start soliciting them for projects. That’s an easy way to do it. You just go and see whose designs you like, and you say, instead of getting potentially paid if you land the job, I’ll make sure that you get paid if you do the job. Perfect. So you get the design, you take it to the developer, the developer gets the project done in a couple of weeks, you take it out to Rob, what does Rob say?
Dane: It’s all wrong.
Andrew: It’s all wrong?
Dane: Yeah. Oh, you did it wrong. You’re not supposed to upload the transaction, you’re supposed to be able to upload to the working docs page and assign from there, I just don’t want you to upload documents to that page and for them to sit there. That’s all wrong. You’ve got to change that around. So we went back to the drawing board for two weeks, made it exactly like he wanted, then got it out. Can you imagine if I spent twelve weeks building it and then he showed me it’s all wrong. The whole three weeks thing is possible because you hired the best developer in the world, but number two most importantly you design the front end first. The front end first is the biggest thing, a great developer is the second biggest thing. The front-end design took me a week to develop and that saved me probably three, four weeks in total.
Andrew: That’s the part that you were working with the 99 Designs guy.
Andrew: You take it out to Rob, Rob likes it after months of works, he finally likes version number two. It’s time for you to go get new users. Did you then go to Rob’s friends?
Andrew: OK. And what did they say?
Dane: Sign me up.
Andrew: Sign me up? OK.
Dane: To beta it.
Andrew: So they’re the ones who are getting the free version. It’s time now to go and reach beyond Rob and his friends. You start doing webinars. I want to learn how you use webinars to get people to sign up to buy software.
Dane: The initial name for Paperless Pipeline was Transaction Filer. Doesn’t it sound terrible? Terrible. Whenever I want to name something I go to my friend Adam Carroll here in Des Moines and he mind maps out this whole process and we use alliteration and rhyming and all these things to name our products. So we got paperless, we got transaction, what else is a transaction like, well it’s like a pipeline, it’s like this, it’s like a filing cabinet, it’s like this, and I saw paperless, and I saw pipeline over here, and I put them together. That’s how we named the product Paperless Pipeline with alliteration.
To do the webinars, what happens is I would do recruiting webinars, but then I would sneak Rob Campbell in, and I’d be like ‘Hey Rob’ – I’d unmute his mic – ‘hey Rob, what’s going on in your world, have you recruited any agents?’ He’s like, ‘Oh yeah, just the other week I recruited an agent by showing him my Paperless Pipeline system.’ I’d be like, ‘Oh, what’s that?’ and then he’d be like ‘it’s this sexy new system’ and I would log into and show him it and then brokers would be like ‘I really want that.’ Now can you imagine if I tried to do a webinar actually selling the product. Brokers’ biggest hot button is recruiting, so you get them on the biggest hot button then you kind of weave in how your product ties into that hot button. There’s a lot of positioning to how I watch the pipeline which we can get into.
Andrew: Interesting. So you’re not saying when you’re first promoting it and getting people to pay attention to your sales pitch, you’re not saying ‘ I’m not going to reduce all the headaches you have around paper, I’m going to eliminate the back-and-forth within your office. No, you’re saying what they really care about is recruiting. I’m going to show them how to recruit more brokers because that’s going to put more money in their pocket, then I’ll sell them on this. What this helps me understand is, when I first had you on, I did a ton of research – you know I do a lot of research on guests – everything I saw had to do with, ‘I’m going to help you recruit, there are these videos with clip art guides on recruiting, there are these landing pages on recruiting with good text, there are these sales pages, no video, no pictures I think with recruiting as the big message. Now I see why. So you’re just hooking them in with recruiting. Who are you hooking in? Who are you reaching out to, to get to pay attention to your offer and then to hopefully sign up for your webinar?
Dane: Well, I take offense to you saying ‘clip art’, because. . .
Andrew: There was one with clip art.
Dane: . . .that clip art increased my conversation rate by twenty-something percent, just so you know.
Andrew: To have the clip art in the video?
Andrew: Is it insulting for me to have said clip art?
Dane: No way, dude. I don’t care. Higher conversion rate. I don’t care if the page looks ugly as sin if it converts higher.
Andrew: You know what, it’s interesting that you pointed out clip art. If you noticed, after I said that, I then said it’s high quality content, high quality sales pitch, there’s something in me that picked up that you were uncomfortable, or I thought maybe he’s uncomfortable with the fact that I said clip art. Maybe I better also balance that out by saying that the stuff looked good and talking about the pages that looked great. It’s interesting how video impacts the questions that I have and the way that I go through these interviews. OK. So who are you promoting these pages too? Who are you trying to get to sign up?
Dane: I’m doing my questionable email marketing tactics through every real estate broker in the country about recruiting.
Andrew: OK. So you’re just going out and you’re saying ‘if they’re in real estate and they’re brokers, they’re going to want to hear my message. I’m going to reach out to them.’ I thought when you first said that in a previous interview that we get a lot of hate mail. I don’t think – maybe one, maybe two. I don’t know that anyone complained about that. It’s surprising. So, that’s what you do. You then send them an email to get them to pay attention, to get them to sign up for it and come to the webinar. Do you have that email?
Andrew: I’d love to hear that.
Dane: Oh, let’s just skim by it. It’s actually not that important.
Andrew: You don’t want to read that email?
Dane: Sure, Andrew.
Andrew: Good. I’ll tell you why. Here’s the thing. I have been talking to people who have web apps, who sell web apps for $4-500 a month, and what they’re telling me is that webinars are what helps them sell their software, more than anything else. So, I say, come on and do an interview about how you use webinars to sell their web app, and they say, absolutely not. Wait until this thing dries out, and then I’ll do an interview in like five years or two years, maybe even one year when it dries out about how I did it. But they don’t want to reveal this as being a big secret.
Apparently, it works with software, not just with information marketing, the way we all think. And for Enterprise, saying sign up . . . The offer of Enterprise of a free month or free trial, apparently doesn’t work. They don’t want to try it on their own because it’s too involved because they often need other people in the organization to use the software for it to be helpful. And they don’t want to lock other people into using other software for a month, with the chance that they might use it. They want webinars.
Anyway, I’m rambling here because I’m glad that someone is talking about webinars because most people who I have tried to get on to do interviews about it will not talk about it. Anyway, you were going to the email.
Dane: We could spend an extra hour on webinars, and I actually would be more than happy to out the people that are trying to keep it a secret because that’s just scarcity based thinking, and I think it’s bullshit.
Dane: Yeah. I think they should abundantly share everything they are doing, say, even get better at webinars. No one is going to be as good as the teacher. Very rarely does that ever happen. Webinars are the foundation of the success of Paperless Pipeline, the foundation. It’s like, marketing and then developer under marketing. The first thing under marketing is webinar.
Dane: I launched Paperless Pipeline, and I had people paying for it before I ever even had a website in existence. I didn’t have PaperlessPipeline.com up. I had app.paperlesspipeline.com, but there was no marketing site. There wasn’t even a logo, nothing. Most people when they design their web app, whether they design a logo, whether they get their website marketing, I didn’t have any of that. I just got the product in the customer’s hand, and then I used GoToMeeting, GoToWebinar’s landing page to capture emails for webinars. Then, I would sell them into the app product. I would actually not even have a marketing site. I just used webinars.
Andrew: You send an email out, and when people click the link in the email, they don’t go to your site, they go to the GoToWebinar site. It comes in a $100 a month package, a page that says enter your name, enter your email address. You can even ask them a question, like what’s most important to you from this webinar. They hit submit. You get that. You can add them to your mailing list. It’s all kosher, and then they get an email when you start the webinar
Andrew: OK. Actually, let’s hear the email that you actually sent out, and then I want to know what you do in the webinar to get people to sign up.
Dane: OK. So, I had an entire script that I scripted out at Google Doc. It’s like ten pages long, the entire script of every single word I said on the webinar and how I closed and how I made the offer and the bonuses I made at the end, just like an infomercial. If you sign up now, I’ll give you this bonus. I did all of that, and it killed it. It was absolutely wonderful.
In fact, after I finished the webinar, my uncle is a Re/Max broker here in town and he was not on it, but he was getting calls from all these brokers and be like, hey, Dane, your nephew, he’s launching this Paperless Pipeline product. All the brokers in the country are talking about it. What is this thing? Should I buy it? This webinar stirred up the entire country of Re/Max brokers when I launched this.
And here’s how I launched it. The webinar title is, Recruiting secrets of the 200 plus agent office in Tennessee, not how to reduce your paperwork, not transaction management, not project management like every other software company does. Recruiting secrets of a 200 plus agent office in Tennessee.
The mortgage collapse of 2008 shook up real estate offices everywhere, and times have been tough. So, let’s meet this challenge head on. I am going to tear apart one of the top 100 Re/Maxes in the world for one hard hitting hour, digging for every possible trick and shortcut.
We’ll get some insight into a Rob Campbell, a Re/Max Elite in Tennessee has done to survive and thrive the mortgage collapse. You will learn recruiting. You will learn retention, and you will peak behind the curtain of a powerhouse real estate company.
Andrew: You specifically said Re/Max because you were only emailing this to Re/Max, and you wanted it to feel like it was meant directly for them. Rob is the first user of the software?
Andrew: OK. All right. I understand that they want more brokers. Actually, do they want more brokers if the market is down? Why do they want more brokers? Don’t they want to keep more of the deals for the people who are already hired?
Dane: They don’t think like that. They want more producing brokers, people that produce.
Andrew: Who get listings?
Andrew: I see because when they get a listing, anyone who sells it, no matter what brokerage firm they’re in, he firm that got the listing gets a share of the sale, right?
Andrew: I see. OK. All right. So, now you get them into the webinar, they’re expecting one thing, you’ve got another agenda, how do you make that flow properly so that they feel like they’re getting the value they wanted and you’re getting the results you’re looking for?
Dane: Well, you have to put on your Ninja suit for this stuff, I guess. I don’t know.
Dane: Everything is positioned around the mortgage collapse. The mortgage collapse has caused real estate companies to go under because their expenses are too high, they have brick and mortar, and the economy is pushing everything towards this e-model, Netflix versus Blockbuster. I use Netflix versus Blockbuster for an example, I think, and then I say, if you want to survive, I showed the share price of Blockbuster going from $38 to $2, and I showed a share price of Netflix going from $20 to $120. Look at the trend. Do you wan to fight this, or do you want to be a part of it?
And then, it says, Rob, what are you doing to survive the mortgage collapse? And he’s like, I’m becoming more mobile. How are you becoming more mobile? Oh, I’m becoming paperless. Oh, well, how are you doing that?
Andrew: Rob is on the call with you. It’s you and Rob together talking.
Dane: Yeah. And there are 130 people on this webinar.
Dane: 260-300 people registered, 120 show up, 16 ended up buying at the end.
Andrew: What’s in it for Rob to get in on a call with you and help you out?
Dane: Successful people want other people to be successful.
Andrew: So, he’s not getting a share of this. He just wants to see you successful because he’s successful.
Dane: Yeah. I mean, it’s kind of agreed upon that he would help me get this off the ground, too.
Dane: When I started. I wasn’t like, I need an agreement that you will help me do a webinar. It was just like, Rob, I’m doing a webinar. I’m doing everything I can to help your office. I went and did a video of Rob’s office. I’ve changed his life. I’ve changed his transaction manager’s life. His transaction manager used to walk through her office and trip over stacks of paper. Her office is spotless. She gave me the biggest hug when I walked in there.
Dane: We’ll do lots for them.
Andrew: So, what you’re saying to them is: the way to get more brokers is to go paperless.
Dane: Is to be mobile.
Andrew: Is to be mobile, and he way to be mobile is to go paperless.
Andrew: It’s all there. Do you give them any tips on recruiting first, or do you just say this is the way to do it?
Dane: I didn’t give any tips on recruiting in this.
Andrew: Nothing. It’s just the way to recruit is to have my software.
Dane: Well, now Rob said it. I didn’t say it.
Andrew: Why the distinction?
Dane: I almost try to never make my own point personally. I always like to have third parties make my point for me. There is a distinction as I’m not a broker. I’m not a top ten Re/Max; I’m a tech guy, like, why listen to me?
Andrew: I see.
Dane: It’s just more powerful for someone else to say it than for you to say it.
Andrew: You said that in the copyrighting course, too. You said, look, try not to make your biggest points or the most persuasive points. Get one of your customers to make those points on your behalf and quote them in a testimonial. I think you even showed Huddle.com and how they did that really well for their software. Instead of a list of features, it was a list of quotes with people praising the features. And that’s how potential customers understood the features that were in Huddle.
Andrew: So, you’re getting Rob to do this. You have to now, after he’s explained how he’s used your software and how it’s changed his business, you have to close them in that sale. That’s how you got 16 people. You said you have a few tactics that you used. What were they?
Dane: Again, it’s unfair for me to try and convince the [??] quickly because you can listen to 20 hours of how to do webinars, and that couldn’t be enough. There’s a lot of things that I do. So, at the beginning of the webinar to get people to stay on, I say for everybody on, I have a special treat for you. By the end of the webinar I will reveal that, or for everybody that’s on, ask me a question right now. I will answer questions first come, first serve, and at the end of the webinar I will answer your question.
And then, when people ask me their question, I’ll be, oh, Andrew Warner, you ask me this one. That’s a great question. I’ll be answering it at the end of the webinar.
Andrew: Now, you’re getting them to stay on for an hour to listen to the whole thing.
Dane: Exactly. Now, we get to the close, and I just counter all their objections, like what if my agents don’t use it? How do I get my staff on board? What about training? What about security? What about back-ups? What about answering all their objections, and then I close then.
Andrew: How do you know their objections because they’re asking questions throughout?
Andrew: I see. So, you’re getting them to tell you how you should pitch to them because they’re telling you their questions throughout the webinar.
Andrew: OK. And they’re just typing in that little chat box, GoToWebinar offers.
Dane: Yep. And then I go to the offer and like when I made the offer I just nailed it. I can’t remember exactly how I said it, but it was like here’s the pricing tiers, here’s the price to sign up. You either want to be mobile or you want to struggle in this collapse, those are the two decisions. There are kind of like three types of decisions you can make right now; yes, no, or maybe. If you make a maybe that’s crippling you. If you can make a no, I’m happy with that, but don’t make a maybe decision. Make it either a yes or no right now. Kind of get them in that framework and I say it a little harder than that. And I think I maybe even told a story about like Babe Ruth. Babe Ruth was the biggest home run hitter of all time, what you may not know about him is he was the biggest strike out person of all time. He always swung, there was never a maybe. He never had a doubt in his mind, never maybe-d a baseball.
Andrew: Why are you spending so much time on maybe with them, what’s the mindset there?
Dane: Brokers can get paralyzed with decision, just like all humans can. And so I just want to get them in the decision yes, or no, not maybe.
Andrew: You don’t want them putting it off, because putting it off means you’re not going to get the sale.
Dane: Right. Next I throw in a bonus, if you sign up for Paperless-Pipeline, it’s going to help you recruit agents. It’ll help you recruit agents because I’m going to create a five part recruiting campaign, including four emails and one press release you can use to send out to all the agents trying to recruit, letting them know you’re now a mobile company. This is a five page PDF that I spent an hour making. That five page PDF is worth tens of thousands of dollars to me, that little bonus I made. Not a single other transaction management company in this space does this stuff.
Andrew: It’s the bonus material that you made, the PDF that teaches them how to recruit is what helped close the sale quickly?
Dane: Oh, yeah.
Andrew: Because they wanted that. Why do you think others don’t do that?
Dane: They don’t know how to market, I don’t know. They’re trying to sell their product, like they’re ultimately in the product business and I’m in the lifestyle business. I don’t know what it is.
Andrew: So, I’m actually imagining my audience and I’m thinking that there are some people who are in software who are going to think, I’m trying to sale software, why am I now getting in the business of writing an e-book. Why am I now in the business of trying to convince people that e-book is good when I should be creating software that stands on it’s own and can convince people to buy, and if I can’t do that, I don’t deserve to be in the software business. What do you say to people that have all those kinds of thoughts?
Dane: If you’re the only competitor in your space that’s fine. I have eight competitors, I need to stand out some how. I’m the only transaction [inaudible] with the focus and emphasis on recruiting, that’s my positioning statement. So I have software features that help [inaudible] recruiting aspect, but a five page PDF that took me an hour to make one time which is a nice little bonus aspect that pushes people over the edge. If there were ten other base camps out there, and I had no idea how to do project management, but I just got hired at firm to do project management, and I was trying to decide between these ten. But if I signed up with Basecamp I got the top ten management mistakes that could get me fired, like I would want to probably sign up with Basecamps, and I just made that up right now.
Andrew: Right, so that’s one bonus, what other bonus do you give them?
Dane: That was it.
Andrew: You said you sold 16 people in that call, how much is a customer worth to you, how much was a person worth back then?
Dane: Customer is worth about a couple hundred bucks a month, maybe 150 bucks a month to me on average. We’ve got about 185 or so totally paying and the revenues well over 25 grand a month on average for this product, on Pipeline. And the average user pays like $125, $150 a month. Some people pay 450 some people pay 75. But when I launched the product the payment system wasn’t built yet. Like we set the webinar date was September 16th, and I waited a week to sign up for RainTree, and I realized that like had to fill out all this paperwork, and so when I launched I had no payment system. And so I told Andy and friends and Clay Collins another good marketer online, guys, I don’t have payment system, should I just let them sign up for free at the end. They’re like no, figure out how to charge them.
Andrew: So how’d you do it?
Dane: I used my old a authorized dot net account, hooked it up through e-junky, charged them $75 once, and I knew my payment system would be built in a month, and then that thank you page would forward them to that free registration page.
Andrew: That’s very clever, I see that’s really easy to do. That’s almost like saying I use my PayPal account, have them enter information there and then the confirmation page is where they sign up, dead simple.
Dane: There’s some [inaudible] behind this too like event based marketing is how I do everything. Event based marketing forces you to be consistent, it forces you to be creative.
Andrew: What’s event based marketing? We only have a few minutes left, but let’s get in as much as possible. What’s event based marketing?
Dane: Event based marketing is a webinar on September 16th. Event based marketing is [inaudible] the iPhone was released.
Andrew: Here’s what?
Dane: The iPhone, the iPhone will be released on this day.
Dane: It’s all in the marketing preceding the release of something.
Andrew: But, Dane, you’ve got software that is always available. I can go to PaperlessPipeline.com and sign up right now. How do you create an event around that? I understand Steve Jobs. He has a new iPhone, and he has a reason to create an event around it, but you and I and people listening to us don’t have a new iPhone coming out every year. What do you do?
Dane: Your event could be one webinar a week for everybody that’s a free registered user.
Andrew: Gotcha. So, it’s just the webinar itself could be the event. You don’t have to have a brand new feature that you’re launching every week to announce. Just, there’s a webinar. Sign up. I imagine a lot of people don’t show up to the webinar. You still have their email address. What do you do there?
Dane: I’m kind of lazy. I don’t do anything with them.
Andrew: You don’t do anything. I know that some people who do sign up don’t end up buying. Of course, you ended up with 16 people, but over 100 people did not buy. What do you do with them?
Dane: This is another little webinar trick. I say, “If you want a recording of the webinar, email me one idea you’ve learned, and I will reply with the recording.” So, I had 30 people email me one idea they had learned. I turned all 30 of these emails into 30 testimonials for my product.
Andrew: I see. So, it’s not you saying you’re going to learn a lot. It’s your attendees saying this is what we learned, and that’s more powerful. I see. Interesting. That’s something that I like about your marketing. You’re always looking for other people to make the points for you because it comes off as more authentic.
Dane: And it’s easier. I don’t have to be as creative. I can focus my creative energy wherever else I want.
Andrew: All right. I’ve got notes here on things that I promised the audience that I’d follow up on. You said earlier there’s something about the way that you set pricing that’s interesting. We didn’t get to talk about that. What’s that?
Dane: I set pricing to be 10% of the value. So, I call up my clients, and I say, all right, how’s Pipeline going for you? Oh, it’s amazing. How much staff time do you save per day? Oh, gosh, probably three hours per day. What do you pay staff per hour after taxes and everything? Oh, about 15 bucks an hour. OK, so that’s 45 bucks a day times 30. Let’s just say that’s $1500 a month in savings right there on staff. Or if they work five days a week, say $1000.
What do you save on paper costs? Oh, gosh, I don’t know. We order paper twice a month. Now, we order paper once a month. Well, I see you save half your money on paper. What about storage facilities? Are you paying less? Oh, yeah, our storage cost has gone down $300. What about any new agents you’re recruited? Do you think that Pipeline has had a hand in them? Oh, yeah, at least, two agents. What are those worth to you? About ten grand a year. OK. So, another thousand bucks a month.
Do you think Pipeline has helped you retain, at least, one agent a year? Oh, absolutely. That’s another ten grand. That would be a thousand. All of these specific questions. How about your time as a broker? How much time have you saved? Oh, it saves me an hour a day reviewing files. What do you value your time at? Oh, about 200 bucks an hour. OK. So, we’re like at eight grand a month in value.
What do you want to pay for Pipeline knowing that it’s eight grand a month in value? He’s like . . . His voice is real nervous because he’s like, I’ve got two other partners and they might hang me if I say a price that is too high. I was like, well, just throw a number out. I already have my price set, so it’s not going to change, but I’m just curious. I didn’t have my price set, but I said that. He’s like, gosh, I would pay 5-600 bucks a month for this. I was like, OK, cool. Thank you for that. I’ll let you know what pricing will be soon. He pays $225 a month, but that’s how I figure. That’s how I factor pricing.
Andrew: I know that people are going to be excited that you said that, but I’m thinking that that makes sense for someone who you just walked through that process with because now you’ve got these big numbers in their heads. But afterwards, you have to take that price out to people who didn’t go through this exercise with you, who haven’t been anchored on the big price, who haven’t come up with a bigger price than you’re going to charge. And are excited that you’re going to charge between 100 and 200 bucks.
How do you get those people to accept that they’re going to pay $150 on a monthly basis for software?
Dane: Do we have another hour?
Andrew: Actually, I wish I did. I’ve got now a past interviewee who’s calling me right now to do our scheduled phone call, but I keep staying longer and longer with you than we should.
Dane: First off, he said $600 was what he’d pay. So, I could have done that. I did 225 bucks a month.
Andrew: What about the stranger who’s just reading your sales page and deciding whether or not to buy, or listening to your webinar and deciding whether or not to buy?
Dane: That’s easy. The cost in your file folders alone pays for Paperless Pipeline, the cost you spend on file folders alone.
Andrew: That’s the way you do it. You just come up with a short way to say what that guy in his series of responses expressed to you.
Dane: Yep. I don’t use file folders. We already keep stuff on our computer hard drives. Oh, do your agents have access to that? No. How often do they call and ask for paperwork? All the time. How much time do you think you would save for your staff if your agents accessed that when they wanted? I don’t know, an hour or two a day. What do you pay for staff? Oh, $15.00 an hour, that’s about $1,200 a month.
Andrew: So, this is the other thing that I remember from the course that you taught. You’re anchoring prices, you’re not just saying it’s $150.00, you’re connecting that price and anchoring it with a much bigger price that represents the value that they’re getting. Either with the savings that they’re going to get, because they’re not going to have to buy paper and folders and all that, or with the profits that they’re going to earn. Because as a result of this, they’ll be able to recruit new people, and recruiting more brokers is worth X amount and being able to close more sales is worth thousands of dollars, and so on.
You’re always just connecting that price with a bigger price to make it look smaller and to make it make sense for the person who is listening to it. It’s not just a price you’re throwing out because you just need it out.
Another note I have is to ask you about the stuff behind you. What is that? Can you tilt your camera up on the laptop so we can see what that is? That looks like a menu on my webcam. What is it? I know it’s not a menu.
Dane: This is one of books that changed my life, it’s called Power Versus Force. And the guy spent 20 years quantifying power, and it’s about pride or shame, it’s not about power, obviously but like joy and glory and all those things and acceptance. When you’re in a prideful state where you want to puff yourself up or exaggerate your numbers, that’s not really power. When you’re humble, that’s power.
So there’s two pages in the book, where he’s quantified, he’s measured scientifically all the words that give you power and then the opposite words that give you negative power, or force, if you will. I took those two pages and hired a designer to design, and these are actually the four different options, that I am deciding between. I’m leaning towards this dark gray one right here, and it’s going to stand the entire wall, with all these words. Like “Worrying is Force”,”Surrender is Power”,”Thinking Globally is Power” “Thinking Locally is Force”, “Judging is Force, Accepting is Power”.
So I’m just going to look at this wall every morning and think about how I can be in a state of power all the time. I’m going to look at the wall and go “When have I been inviting, which is power”, versus when I’ve been urging someone, which is force. So these things will all kind of transform my life if I look at them every day.
Andrew: Can you say the name of the book again? It’s Power vs. Force?
Dane: Power vs. Force
Andrew: Is there anything that I missed? Is there anything else about how you built Paperless Pipeline that we have to include here in this section?
Dane: Maybe, just, I’m thinking about starting a software roundtable, to help people actually create a software product even if they don’t have any ideas or anything. So if you go to DaneMaxwell.com you can check out the application to see if you would like to learn how to build software with a group of like ten other people, all building software from scratch.
Andrew: Now, get comfortable again, in your seat, so that I can ask you about this. What I found after your previous interviews, what people were emailing me was actually one person. Can we talk about this? You’ll stop me if we can’t. One person who actually ended up showing up on your door to work with you. Can you talk about that?
Dane: No, go. I have no secrets.
Andrew: You tell it. Someone who heard you here on Mixergy, and you got a lot of emails, you got a lot of people who approached you on South by Southwest, when you and I were walking together I saw that you were getting to know people who heard you on Mixergy. But one person, actually came to your home.
Andrew: And? Well why did he come there? It wasn’t that he just randomly showed up, it was something that he was looking for.
Dane: I wish he would have randomly showed up, that would make the story a lot cooler. He emailed me and he said please accept my offer for free labor. And I thought it was like some Russian chick who wanted sex, when I got this email. But he said, “Dane, Oh my Gosh, please mentor me, I’ll do anything. Can I intern for you in the summer, I’ll do whatever you want, I’ll work for free, just mentor me. I was like “Hell yeah man, come on down. I would love to help, come down for the summer, hang out for the entire summer, I will mentor you, I will reshape your mindset, I will rip it apart, put it back together”.
That kid left, and he’s going to be a millionaire so much quicker now. I got a few things done for free, not a big deal. He basically just hung out all day and like, one of the days he was in my room, you can see this little like nook up there in that corner.
Dane: One of the days we were bored and we just started climbing up there and just like jungle gyming, like that was part of the mentoringship program.
Andrew: It did look like you guys were just hanging out, and constantly tossing out ideas and coming up with different ways to launch ideas. And I think you helped him launch a product.
Dane: Yep, helped him launch a couple of ones. He’s doing discount radio advertising sales, he’s also doing eCommerce masterminding roundtable, a couple of different things he’s working on.
Andrew: Can you say his name or do we need to keep it…
Dane: Yeah, Chris Howard.
Andrew: Chris Howard, cool. I actually even saw a lot of people go back and forth with you by email. I don’t know why my guests do that but I’m so grateful to you for doing it – for taking the emails from my audience, for responding, for helping people out. I know that you’ve got a busy day. I know even for me that the best way to reach you is not email because you’ve got a flooded inbox. I’m not going to tell people what the best way to reach you is but it’s not email because you get a lot of emails and so you’re helping people out.
We were talking about this upcoming interview and we said we’re probably going to get a lot. You’re probably going to get even more emails now because people who didn’t respond to you the first time are now going to say I’d better email Dane. I’d better catch up with him or ask him for advice or whatever. And you were thinking of a way that you can help people and what’s the idea that you said? You said it was a roundtable. I don’t know much about this but tell me.
Dane: I want to create a six month software roundtable where I take a group of ten people who have no idea about software. By the way, software as a service is the most lucrative industry in the world. I don’t know anything that’s been more profitable for me, even software as service. So I want to take people through the moves of how to build the most lucrative business in the world from picking a market, extracting the idea from that market, getting it developed, and having your first profitable product with at least ten paying customers in six months.
So I want to take them through that process and hope maybe some people that have already built software just kind of see a different approach to it or learn something new. They could also apply to join. There’s a fee to join. I haven’t figured out the price. I’m not even sure if I’ll do it yet. I just want to see if people will apply and actually want to do it so if you do just DaneMaxwell.com and it will forward you to a Google spreadsheet. Fill that thing out, apply, if I like you you’re accepted, if I don’t sorry. That’s all.
Andrew: Oh, cool. DaneMaxwell.com – find a way to connect with Dane. I keep saying this and I’m glad to see that people do it. I actually interview Sanjay Parekh, the founder of Startup Riot, and he said that, here, actually I’ve got his email in front of me. It says, “Someone came up to me and my wife this weekend at my kids Hindi class and told her that she saw my Mixergy interview.”
I love hearing stuff like that. The guy is going to take his kid to Hindi class and someone in the audience walks over and says hello and gets to know them. What I love about that is I don’t want an audience of people who sit on the bleachers of life. I want them out on the field and the way to be in the bleachers is to just listen to this and say this is great stuff. It’s so cool to see that people are building great companies in the country and in this world. I’m so proud to live in here. That’s just being in the bleachers. Drink your beer and watch the show go on. I want them to be in the field and being in the field means using the ideas that you just shared with us here today and finding a way to apply them. Letting them sometimes sit in the head and stew a little bit and think about how you can apply them and then when it’s time, use them.
I mean, I don’t want to pressure you that you have to go use it tomorrow but use it at some point. Being in the field means you see Dane, you find out that he’s got a website; you find a way to connect with him. You find a way to say thank you, find a way to say, “Dane, I heard your idea. Here’s another twist that you might want to try or here’s how I’ve been doing this or let’s connect next time I’m in your city so that we can talk about some of these ideas or maybe I can hang out at your place in your nook and we can talk business.”
Climb up there in the little nook jungle. So I love that. I want people to keep connecting with you and I’m glad that you gave them a way to do it. I’m thinking maybe I should find a way for every guest to connect with the audience.
Dane: A lot of people run and really they’re like full business. Business is their full life. I really want to teach and help so it makes sense for me to connect. I love to connect with people. You mentioned that person approached them all. I’ll never forget when I was sitting at the New York airport and this guy comes up to me and he’s like, “Are you Dane Maxwell?” I was like, “Uh, yeah?”
“I saw your interview on Mixergy.” It’s like the New York airport.
Andrew: That’s so freaking cool. I love that.
Dane: Yeah, I’ve only had one though. I didn’t have any Hindi class. That’s a lot cooler than the New York airport.
Andrew: Well, if you happen to see Dane at a Hindi class or you happen to see him at the airport, go over and say hello. Until then DaneMaxwell.com is where you can go and connect directly with him. No need to forward emails to me in order to get to him. Now you guys know how to do it and if you’re smart you can even use like betterwhois.com to find his email address. Is that inappropriate for me to say Dane?
Dane: I guess not.
Andrew: Don’t use email. It’s not the best way to connect with him.
Dane: You said email – my assistant just filters through everything. I’ll tell her not to delete your stuff. I check my email like once a week right now but I’ll have my assistant put everything in a folder so if you email me I will read it.
Andrew: Okay. Get any kind of help that you can from Dane. The website DaneMaxwell.com, I’ll keep saying it. The number one course on Mixergy is Dane Maxwell’s copyrighting course. If you’re a premium member, go to Mixergy.com/premium and find it. If you can’t find it, let us know, and we’ll find a better way to make it available to you.
The guy freaking kicks butt and I appreciate you coming here and kicking butt again in the second interview with me.
Dane: Thanks, Andrew:
Andrew: Thanks. Thank you all for watching.