How do big insights lead to a big success?
This is a story of a founder who discovered the right market and the right platform.
Rajat Garg is the founder of SocialAppsHQ, social media monitoring, actionable analytics, engagement tools, viral apps and so much more in one easy-to-use platform
Watch the FULL program
Rajat Garg, SocialAppsHQ
Rajat Garg is the founder and CEO of SocialAppsHQ which offers one of the largest platforms of Facebook applications for businesses to engage fans and promote their brand.
Andrew: I’ve told you about them forever so you probably already know the names of my three sponsors, right ?
For example, if I asked you who’s the lawyer that tech entrepreneurs trust because he understands the startup community, you probably know it. Scott Edward Walker of Walker Corporate Law.
And if I asked you where should you send your friends who want to build online stores, you’d probably tell me Shopify.com because Shopify stores are beautiful, they’re designed to sell and Shopify makes sure that there won’t be any tech support for you to do because they’re easy to set up.
Finally, if you have a friend that says ‘Hey, I want a phone number and then if somebody presses 1 I want it to go to Sales and 2 I want it to go to Tech Support cell phone number and 3 I want it to reach out my home phone number’ and all that stuff, where do you send them? Of course, you send them to Grasshopper.com
Three great sponsors, now let’s start with the interview.
Hi there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart and home of stories with entrepreneurs all over the world, as you are about to find out today. You’ll see why we’re talking to a guest who is in the dark today. Really interesting about where he is and why he’s there.
But first, I want you to know the goal of this interview. I want to find out how big insights lead to big business successes. This is the story of a founder who discovered the right maket and the right platform and what happened to him after that.
Rajat Garg is the founder of SocialAppsHQ, social media monitoring, actionable analytics, engagement tools, viral apps and so much more in one easy to use platform.
Rajat: Thanks for having me, Andrew.
Andrew: The first big insight you had was when you were building an app for Amazon’s A Stores.
What was that insight that you had?
Rajat: So A Store was basically [??] allow anyone to create a mini- Amazon store on any theme within 3 clicks.
We had a goal to have like 10,000 stores setup within a year and we got to like 10,000 within 2 weeks.
Andrew: Hang on. Let’s take this slow. I want to make sure that people understand it because it’s so significant that I don’t want it to just fly from one ear and out the other. I want them to pay attention to this.
What you were going to do was allow people to create mini-stores that had a small selection of Amazon products in those stores. Anyone could create it and they would make a commission on what was sold through those stores, right?
Andrew: And you were going to make it available to people like me. Maybe I say ‘Hey, you know. I want to create a small store where anyone who wants to do interviews like me can buy and see what the right mikes are, the right lights, the right computer. I just create that store within 3 clicks using your software. I get a commission on every mike that people buy, everything that they buy.
Rajat: Yes. And that’s when we realized that these army of small businesses kind of want similar features and want to do similar things as big companies do but do not have the technology and support.
Andrew: And this army of small to medium sized businesses most of us ignore but you worked at Amazon and you still didn’t know they existed or you didn’t realize their size, is that right?
Rajat: Not initially. Like we had lots number of affiliates in Amazon but when we launched is actually when we realized the potential that they had to offer.
Andrew: I see, OK. So you left Amazon. You created this product for them. Even you were blown away. You said you had this idea that you were going to get 10,000 stores over how long?
Rajat: Over a year and we got it in two weeks.
Andrew: So instead of over a year, within two weeks and how much revenue did you generate from it?
Rajat: We at Amazon, we generated like $32 millions in six months. So it was a mindblowing product and there was a lot of learning though that.
Andrew: I see. I apologize. So you’re saying this was when you were working for Amazon. You did this for Amazon, not for yourself.
Got it, OK. Got it.
Rajat: I would be rich and sitting on a boat.
Andrew: I was going to say, you wouldn’t be talking to me right now.
Hopefully actually you would still be talking to me.
I mentioned earlier where you were. What country are you in today?
Rajat: I’m in India. I’m in a city named Delhi, out of India.
Andrew: And how did you end up there?
Rajat: So two years back there were some family things where my parents had [??] dipping point. Professionally on Amazon I worked at a startup and worked several years there. I was looking for something new. I felt I had always wanted to do something, like there was a tide coming in which is social because of Facebook and mobile. I felt if I have to do it, then this is the time and no better time than this. Let’s do it. That’s howI ended up in India.
Andrew: You did see that incredible opportunity for small to medium size businesses. That was the big insight we will talk about in a moment the other big insights that you just mentioned specifically Facebook. But I am curious what life is like for an entrepreneur in India? For example, I went to Argentina because I knew Internet would be everywhere and it really was everywhere including local coffee shops. In India if you want internet for your office what is that like?
Rajat: That is a very interesting story. I actually didn’t have much of a working experience in India. I did my schooling, and then I left for the United States. I did my masters and everything there.
When I came back getting an office was a challenge. I went to like ten agents and saw so many offices. Finally I met the person who showed me what I was wanting and it was in a corner office.
I went to NTML which is the internet provider here. I said, “I want an internet connection. What do I need to do.” He gave me a form and said fill that out and stand in line. Sounds easy enough. I did that and then he said, “Oh it requires something else. You need to go through one other line.” I go to that line and they say you have to fill this out and go back to the other line. [??] I said just take it. I ask is there any ETA or any expectation of when this will be done? They say Yea, it will get done. Don’t worry.
So I am sitting in the office with no internet connection and no other person there. I am twiddling my thumbs wondering when this internet connection is going to show up. Finally I [??] I went to this lineman who actually does the internet connection and said, “You are like my big brother. You have to help me out. I just came here.” He said, “Oh I will do it for you man. You are like my little brother. I will help you out.” So he comes as a favor and installed an ethernet cable for me. I have no idea if I hadn’t done that how many days or weeks would have passed by before I would have gotten a connection.
Andrew: As a guy who lived in the US, worked at Amazon, where you are used to things just working it must infuriate you to be there and have to deal with lines and having to talk to a lineman who will just hook you up?
Rajat: It was initially. When I moved here I had some experiences like this that were infuriating. But in time you realize you just have to go with the flow. There is a different way of getting things done versus what used to happen in the US. You just have to adjust yourself. You can’t change the system. You have to change yourself to go with the flow.
Andrew: What about some of the benefits of being there? I know time is not one of them. You are now doing this very early in the morning. What time is it where you are now?
Rajat: It is 4:30 a.m.
Andrew: Unbelievable. Thank you so much for doing this interview that early in the day.
Rajat: Not a problem.
Andrew: So what are some of the benefits of being in India starting your business?
Rajat: There is a huge data bowl that is available here. A lot of people are very young and very energetic. There is a problem with finding the right person but once you find the right people it is actually pretty good. The second biggest thing is you can control the cost quite well. Especially for a startup, literally hiding in a cave and coding for a few months or a year. This was an ideal place to get started with. In states, those costs can add up very, very quickly. Here you can afford a little larger time and get shit done quickly.
Andrew: What about little things like if I wanted a coffee, I can get somebody to go bring it over or grocery shopping?
Rajat: Of course, of course. I think, family support is immense that is there. You can hire a guy, a peon, which is a luxury in the U.S., here for a very, very low cost.
Andrew: I can do what, I’m sorry?
Rajat: Hire a peon at a very, very low cost.
Andrew: Oh. A peon. You mean someone who will just go to the grocery store and do your shopping for you, who will go get coffee when you need it, who will go buy you the right light bulb if your light goes out?
Rajat: You realize that we are all getting fat because of him.
Andrew: All right, so then, we understand the first insight. You find this market. They have good money. They are good people to work with and there is an army of them as you described earlier. What was the other insight that led to Social Apps HQ?
Rajat: So we were looking at, as I was saying, we were looking at Facebook, we were looking at mobile, and we saw the tide coming. A lot of others did as well. The biggest thing that we saw was that the small businesses were looking at Starbucks and Southwest Air trying to figure out how they can do something similar as these guys are doing?
Andrew: Similar in mobile and social?
Rajat: Similar in mobile and social space.
Rajat: And we felt that if we can build a product that allows them to create a presence or start a campaign in these mediums without actually having to talk to a developer, investing time in thinking about product and everything else, there’s a market out there. That proved right because the moment we built the product there were a lot of takers for it.
Andrew: And so was the first product called Welcome Tab?
Andrew: What was Welcome Tab?
Rajat: Welcome Tab was a very very very simple app. It just allowed people to type in a device regulator, add some content that was there, create a Facebook tab, and add that as a formulated tab for the Facebook page.
Andrew: Just to explain it to people, I guess everyone at this point knows about it, but I will remind them. There was a time that before Facebook timeline for businesses that Facebook fan pages would just have a static page. Like facebook.com/mixergy was just a static page. I could design it using Facebook’s tools or I can come to you and use a wizzy wig editor which would make it really easy to design it nicely without knowing how to code, is that right?
Andrew: How did you know this was a problem that people had? Why didn’t you just say, hey, I know how to design Facebook fan pages. Facebook is meant for the masses, people will figure out how to use this, they don’t need me.
Rajat: So we saw some of the Facebook tools. We saw how people were trying to use it. We looking at forums and people were bitching about it, complaining about it, oh we need to do this, we need to do that, why is this so hard? So on and so forth. So we said, okay, there is these, if we can just make it a little easier for people to walk through these steps, publish it, and put it on their page, then there’s a market for it. We were able to get like, we went from zero to five million in a few months which was very, very well for us.
Andrew: I wonder how people even found out about it, let alone five million coming, but let me make sure that I understand how you figured out the problem. You went to message boards and you saw people complaining about trouble that they had?
Andrew: What message boards and what kind of problems were they complaining about?
Rajat: They were complaining about they were trying to upload a picture and the can’t. How many people came to our app? I have no clue. I use a Facebook tool for this thing and it’s not publishing right. I don’t know html. How do I make it look the way that the other person has? So it was all over the board. Original two that was out there but basically a text box where you can type it in and it will show the text as is. So we said OK, it needs a little bit of improvement and that’s where the site came up.
Andrew: What message boards did you go to to to hear about this? I’ll tell you why and the audience why I’m spending so much time on this. I’ve heard entrepreneurs say that they get their ideas by looking into message boards to see what people were complaining about. In fact, Heaten Shaw told me that if he were going to start a similar business to mine. He wouldn’t sit and try to come up with a great idea. He said he’s look at mine, at the time I had a feedback form that was public, he said, I’d just go back there and see what people are complaining about with Mixergy and then I’ll go and build a similar system, a site that solves those problems. That’s where I would start. So when I see that an entrepreneur has done it I really want to understand how. Where was the message board you went to?
Rajat: We went to search engine word, book master, we also went to a lot of Facebook forums that were related to that particular initiative. If you remember a couple of years back all of these applications have their own review section, their own discussion board section. You could find a lot about how people are using it, how people feel about it by going through those reviews and discussion.
Andrew: I see tools like Welcome Tab would have had reviews and I could have gone in there and seen what people thought of Welcome Tab.
Rajat: Yeah, you can.
Andrew: Who was the leader in this space whose reviews you were looking at?
Rajat: So at this time there was Facebook Status App that was built into the Facebook system and it was getting a lot of traffic.
Andrew: OK. Do you remember one complaint people had with that that was especially big?
Rajat: It was simply like, I think the biggest thing was people were looking at something else and were like how do I produce it? I don’t know html.
Andrew: Oh, OK. I see that beautiful page, I want to create something like it, show me how. OK. And it wasn’t easy for them. You told Jeremy, who preinterviewed you, he’s our producer, that you kept the product small. What did you include in the first version?
Rajat: In the first version we basically had a very simple (??) that solved that cold problem. And then we had a small graph showing how many people came to that page. At that time Facebook insides did not provide App analysis. So we had no clue as to how many people are coming and we solved that problem. People actually loved us for that particular craft.
Andrew: What did you leave out of the first version?
Rajat: We actually left out picture upload. It sounds funny but at that time we were like, I had one server and I really felt that one picture upload would exhaust all the space on it and I wanted to figure out a way to make money. I was saying if it is really trying maybe I can charge some money for uploading a picture. So, we give them on the hub saying you can upload it on Flickr, here’s how you can import it, you can upload it on Facebook, here’s how you import it. But we left that out intentionally for our first version.
Andrew: All right, so I understand how it fits a need that people have. But I don’t know how you went from zero to five million users in five months. How did people even discover you?
Rajat: We were a bit lucky, that’s what I’ll say. I think initially I emailed everybody I knew, just about everyone I knew. People just took off from it from there. Luckily I emailed a lot of movie actors, a lot of music bands, a lot of soccer teams, and every person with a big Facebook page said, hey do you want use our app, do you want to use our app? And luckily Vin Diesel basically took on and he started using our app. One of the big soccer clubs out of Brazil started using our app and then just from there it went viral. We had a small logo at the bottom saying powered by social apps HQ and create your own and people who just clicked there came to our site and start creating more and more and more tabs. So it just went viral from there.
Andrew: Vin Diesel, the actor from The Fast and The Furious, he responded to a cold call email that you sent him saying you can use this for your Facebook page?
Rajat: His agent did but we believe he knew about it.
Andrew: How did you know to reach his agent?
Rajat: You know, if you keep searching hard enough you’ll find email of the President of the United States.
Andrew: And is Vin Diesel a guy that you’re a fan of, is that why you chose him?
Rajat: Oh yeah, we are big fans of him. Once he’s tired of using us we did a little bit of tree dance in our office.
Andrew: And you said we. At this point you had people who were helping you out.
Rajat: Yeah, we initially got (??) and I think by the time Vin Diesel started using us we were four people. Two others had also joined us.
Andrew: And where was the revenue come from?
Rajat: We charged just five dollars a month in the start. Revenue started coming from basically people wanting to upload pictures, wanting social apps that could go at the bottom, so on and so forth. So we created a small pricing tier and said if you don’t want to have these couple of things, use Paypal, pay us five bucks a month and that will be taken off.
Andrew: And Paypal was the only way you were accepting money?
Rajat: At that time, yeah.
Andrew: And it was for uploading photos, getting rid of the image, was there anything else that was big?
Rajat: Not at that time. Later on as it picked up we basically added a ton of ads. We had not just a welcome, we started adding and we built them. In the year I had twenty nine different applications.
Andrew: In addition to the welcome tab it was twenty eight others?
Andrew: Oh wow.
Rajat: That’s basically when we started charging, not accepting Paypal because there were a ton of problems with managing subscription business.
Andrew: For example?
Rajat: For example, it’s not very easy to upgrade and downgrade a PayPal subscriber.
Andrew: People have to cancel and then re-subscribe?
Rajat: Yeah and people get confused with that. So that is a very big challenge. If they want to add more pages, that’s a very big challenge. It’s just not as flexible. And then upgrades and downgrades, even if you did go through this canceling and all of that, it doesn’t do prorating and all that stuff. So we started using a company named Recurly for our subscription billing.
Andrew: I know Recurly. And you’re still using them?
Rajat: Yes, yes we are.
Andrew: How long after you launched welcome tab did you start charging?
Rajat: After four months.
Andrew: Four months. Why did you wait so long?
Rajat: We felt that our product was not really ready and I feel that the biggest challenge we had was we were trying to be sure that we were providing some value to be used. Just convenience was not enough in my mind in terms of the value that we were creating. Someone else can come out and create that value. We actually talked to Rhine Club out of India and said hey do you want to use our apps and tell us how the results are because we’d like to a case study on you. They started using the welcome, we had a sign up at that time, and a few others. Within a few months they had two thousand sign ups out of which one hundred, two hundred of them actually became lifetime members paying them a few hundred dollars of money to become lifetime members. That’s when we realized that actually we are providing value. There are then customers that are actually going to make money using this product too. And at that time we started charging these people.
Andrew: I see, and did you get to use them as a case study to bring in other businesses?
Rajat: Yes we did, yes.
Andrew: How did you know what other products to build. I understand welcome tab, but how did you know that sign ups was one thing you should focus on or what else to do?
Rajat: So, there were two things that really drove it. One was that our customers were very vocal and very demanding. They basically said, “Hey, it’s nice that you are providing this app, but I have to go to x provider to get this app.” Or can I do this in Facebook and there was a form post somewhere and we will basically keep looking at it and saying okay, it’s asking for sign up app. People are asking to add a printer tab on the Facebook page. So on and so forth. So we built out based on what customers asked us and the other thing we looked at in this space a lot of competitions comes up in a very short span of time. We said, OK, we need to be complete and we need to be unique. So we had pretty much everything that everybody else had, plus a lot lot more.
Andrew: I see, so you saw that they built a sign up box and you said all right we should have that too. Or they built some, I don’t know what, you wanted to add it to. That was one.
Rajat: Yes, that was one and we added a lot more as well.
Andrew: You do have a ton of apps even today. Is part, how does actually being in India allow you to create so many apps, does it?
Rajat: I think it is not really being in India. We basically spent a year building them out because we wanted to make sure that all the customer cases are taken care of. Even if I was in the states I would have probably done the same. So I am not sure that there is an advantage there.
Andrew: But 28 apps, that’s a lot of man hours, isn’t it.
Rajat: Yes. So there’s definitely a cost advantage overall that we are able to afford here but I think from a matter of business plan, at least at that time, it makes sense to incorporate all the apps. One other thing is that we focused on a platform. In the later stages adding the app was literally filling out CNS with a user will enter the data and figure out the rendering so people can see it within Facebook. All the other workings were taken care of.
Andrew: It seems like also a lot of these apps are fairly similar. Where was the list here of the apps that you had. I just clicked off of it, social apps, here we go. So you have the Video Tab seems to me is very similar to the Photo Tab which is similar to the Multi Videos Tab, and the Tweet Tab and the RSS Tab, it seems like they’re similar, right?
Rajat: So the way you can divide it is the content display apps and there are engagement apps. Each of them solve a particular use case. So if you look at, you know, SMB, small businesses that were our target, if you say hey use that tab for incorporating a product feed. And you can find the product feed by going down looking at the right and there is one that you like, you click here, put the url, put that in, they will get completely confused. So when you’re looking at that particular market you have to make things very, very simple. So yes creates tab, analysis tab could be one tab, but creates tab requires only for you to just put a handle, your user name in there and that’s it. Where as RSS feed you put the URL of the block. So, it’s just from a customer perspective it makes sense to have a lot clear value proposition for each of the tabs. That’s content display. Engagement, you know the contest apps, like Photo Contest app and Essay Contest app, each one of them has their own particularities. Like people writing a lot of text in essay content so they want much more departmenting capabilities.
Andrew: So the reason I bring it up is to say it’s not brand new apps built from scratch. The code base is similar, the product is similar. You’re just take a use case and you’re productizing it.
Andrew: Like Twitter, like that’s what you said with Twitter and RSS. But how are you getting feed back on this? I’m looking on the site and I’m seeing frequently asked question, I know that there must be a way for people to email you, but there it is on the bottom, this contact us, but I don’t imagine that’s how people would say it’s too difficult for me to get my Twitter feed into your RSS tab. Please build something that is easier. How are they communicating with you? How are you figuring out what their problems are?
Rajat: We get to know by our emails. We just get tons and tons of emails.
Andrew: So where is that going? They are going to your site socialappshq.com and then going to the bottom of the page to click on the contact us link?
Rajat: Basically we send the weekly email and a welcome email when someone registers from email@example.com. It has my email and everything else in there. We try to keep an open dialogue with our customers. We just get tons and tons of emails on almost a daily basis. That is what we have been lucky with actually. Our customers are talking to us and telling us what is not working.
Andrew: It is helpful actually to hear people complain? Lets talk a little bit about celebrating. How do you guys do a lot of celebrating?
Rajat: I was talking to Jeremy about it and once we put a PayPal button on the sales page we got a few sign ups. Made $15 that day. We were so happy. This model proves that people are ready to pay for us. We went out there, my small team, and found a deals site and a [??] area that was listed there. Then the [??] to get him there. That was a crappy [??]. We spent a few hours there. We basically shut down each one of them one after one.
At the end of the day we feel we have to celebrate our mini victories whatever they are. It keeps our morale up. it keeps the ability to share whatever is good with the team. People feel good about building something that is solving some users problem.
We are very open in the company as to what the customers are talking about. Whether they like it or not. All the team knows about it. That has really been the best help.
Andrew: Those tabs we talked about. They were really big back when Facebook would send people click on Facebookcom/mixergy to a static page. It was beautiful. I would build my static page using software that was WYSIWYG. People would come to that page. Maybe that page would ask for an email address and collect email addresses. Maybe it asked them to like me in order to get access so I would set up a like gate. All that life was good.
Then Facebook said no more of this static page. From now on we will show a timeline of all the most recent things that you do and your industry went through turmoil. What happened to your business when that happened?
Rajat: That was actually a very, very, very interesting time. We were measuring everything. We saw our traffic drop to our apps by 90%. I saw all these people around us companies in the US and companies in the UK say ‘life couldn’t be much better after timeline. We are getting so many more visitors.’
Then were looking at our traffic and we’re like ‘what the hell is going on’. Are we missing something here. Of course a lot of people just shut down and moved away from Facebook.
We actually knew three months ahead we got a hint about this and knew this was coming. We kind of delayed it. That was our bad. We didn’t know for sure and we wanted to see it before we made those changes.
At that time I remember clearly we sat down, all of our team sat down, and said we are stuck. There are two ways out. Either we say it was a good run, let’s leave the [??] aside and move on or should we try to figure out how we go forward from there.
We looked at what marketers were spending time ad money on in this space. We found out people are working hard to manage social media. People are doing a lot of work in to social media monitoring, ad management, so on and so forth. So we spent the next six months working very, very hard to build out these products so we become much more involving.
Andrew: Essentially rebuilding your business because 90% of your traffic went away. You were charging on a monthly basis. What happened to your subscription revenue when the change happened?
Rajat: There was a pretty heavy initial drop. After that things began to stabilize. People started to see value in the other products as they started to come up. We released Social Platter very quickly. A lot of people who were going to quit thought that was great. We would then tell them what was coming next. They got excited about that. As we started releasing those products, people stuck on and started using the products.
Andrew: When you say you dropped off some subscriptions, what percentage of your business went away when Facebook went from pages to timelines?
Rajat: 30% dropped off right away.
Rajat: Yes, went away right away. That was a major hit for us. I think any business that is dependent on another platform, that is the [??] site. Do not really depend on someone else so much for building your business, because they may change the rules of the game. Then you are certainly in a [??].
Andrew: On the one hand you got to grow quickly because you build on the Facebook platform, that was the big insight you had. On the other hand, if they change you get hit quickly and you don’t have a say in it.
Andrew: Is it fair to say you were protected because you had a subscription based business?
Rajat: If it had happened only one time, I think it would be totally. We had a very, very big problem.
I think there was one other thing we enabled just a few months back before this change happened. We enabled a yearly subscription. We started offering them 33% discounts on Social [??] for paying yearly. That actually locked people down because people upgraded to the yearly subscription.
Andrew: Wait. So you are saying after the timeline change, people who would have cancelled went annual instead?
Rajat: Before the timeline change we started offering this. We didn’t offer this in terms of planning for the timeline change. It was just a natural thing. Let’s try to lock in more revenue. That really helped us out because people who had paid early stayed on. Then they got the chance to try out everything else we were offering.
Andrew: Social Media Planner is the ability for me to create a message that will go out to Twitter, Facebook, and LinkedIn. It will do it at the time I specify, right?
Andrew: That is something that people are going to hang on and wait for because they want to be able to schedule their Facebook timeline messages. It was very responsive to the timeline change.
I am curious, how did you know this was what you should launch? How did you know what to launch next? Your whole business was in turmoil. Most people would be freaking out. As you said many of your competitors just closed down. Under those circumstances you have to figure out the next big thing that will keep your customers sticking around. How did you know what it would be?
Rajat: At this point, we had to take certain risks. Initially our customers were saying build this and build this. At this time we were a bit clueless. You can say, the whole premise of launching the business is gone. If we stay, we need to know what people are spending time on right now. What are they doing in the social media marketing space right now to drive value? We figured out there are three additional things that we didn’t have. So we basically said we will build them and see how people will react. The problem is if you wait for customer feedback, they will give you feedback to an existing product or something aligned to that particular of product. They won’t tell you go build that, as at Amazon, go build Amazon [easy, too] because nobody’s really thinking about it. They think about Amazon selection. “This product is not available.” “Can I have a better shipping model?” So on and so forth. If you have to think beyond, you have to take a bet. Luckily for us, they have started to pan out.
Andrew: You know what, I have to apologize. I’m still not seeing it. Maybe it’s because I’m too much in my own head about this, the idea of knowing what to come up with, what product to build, is still a tough one. I understand that you can’t ask them because if you ask them, they don’t know what they want. They can’t react to just nothing. You have to give them something to react to. How did you know? Was it that all these products are fairly small and you said, “We understand our users; let’s just create some. We’ll ask them a few questions about their frustrations”?
Rajat: We looked at companies. What are the companies? There was an investment bank out of the UK that did some research on various social media-related companies. They divided them into 20 different buckets. We said, “Okay, let’s look at these buckets and say which are the areas that we need to attack and address,” and we came up with three of them. We said most of the businesses will have a Facebook page, one to increase fans, one to drive traffic from Facebook to their website. Giving them an advertising option for managing their advertising budget makes sense. Most of them are, of course, spending time posting on it. Otherwise, nobody will come to them given the new design, so let’s make that easy for them. There were companies like HootSuite and many others in that space.
Then there was the whole social media [marketplace], which we believe is where the real value is. A lot of conversations are happening, and you can try to understand a lot things about customer behavior, new product research, market research, computer intelligence, so on and so forth. That was the third thing that came about. I think the first two were still easier to come up with. The third was a little harder to come up with because it was a very challenging product to build. You have to crawl a lot of data and drive in sites from a product perspective, from a market understanding perspective.
I think that’s where it boils down to. It’s just that you have to take bets at that time.
Andrew: That’s what it seems like it was. You made educated bets. You looked to see where the industry was going, what your customers wanted, and then you took a couple of shots there. Has anyone ever told you that it’s a little tough to follow what the business does because you do so much?
Rajat: Yes. When people come and start using us initially, I think for them it is a bit too overwhelming. For people who have been with us for some time, they have seen our growth, they have seen us add products, and they are more comfortable with it. What we have tried to do is we have tried to send them emails that try to educate them about various use cases as to what can be achieved through the platform.
Andrew: I see. I guess if you spend some time on the site, it makes sense together. I didn’t know how to explain it when I started. Now, as I’m looking through it, to try to come up with questions that will help the audience, I was also getting a little bit of difficulty, but I get it now. There are those apps that we talked about before. There is the Social Planner that tweets out, Facebooks and so on on a schedule. There’s Social Ads, the page that I’m on right now where I could buy ads on Facebook. Pay Per Like to increase your Facebook fan pages. Then there is the monitoring service.
Rajat: The way we explain to our customer is, if you are a guitar sales company, enter a keyword, “learn guitar” in monitoring. You’ll find a list of everyone who is talking about learning a guitar. You can respond to them and engage with them through Social Planner and then drive them to your Facebook page with a sign-up app on it to get them to convert.
Andrew: Gotcha. That’s how I would get their email address and start the business relationship with them. What size revenues are you guys doing?
Rajat: Ha-ha, that’s [??]. We are cash flow positive. I think that’s the good part. We are cash flow positive and we are growing.
Andrew: You told Jeremy you wouldn’t tell me the revenues because of an incident that happened. What happened?
Rajat: You’re going to get a heart attack when you hear this, but when we made the initial hires, we were strict on referrals. What happened is we were very, very open within the company. We used to share all the revenue numbers. We used to share everything that was coming in. One of the guys just suddenly came to me and said, “Okay, I’m going to leave the company, and this is my last day.” We’re like, “Okay, what do you want to do? Why are you leaving?” “I have to just do it. I have to leave. I have this other thing I need to do.” He won’t talk about it.
Two weeks later, we realized that he left his friend. His batch [SP] mate was in our company as well. Those two were combinedly [SP] stealing our code. Luckily, they couldn’t touch the database, but they were stealing the software. I think, of course, they had something about setting something up of their own and so on.
We fired the second individual. We went to the police. We encountered a lady cop and said this, this, and they stole the software code. She’s like, “So they stole your computer?” I’m like, “No, no, the computers are still there. They stole the code. She’s like, “What did they steal? The computers are still there.” I’m like, “Oh boy.” Getting anything–that’s a challenge. People in law enforcement are not really educated about technology. They have not kept up with the technology changes.
We filed a complaint and made sure that they’re not going to use it and the things are destroyed. We stopped sharing the revenue numbers. It affected us on personal level because we’re a small team. We felt, at least I felt, that we were very close. We limited the revenue sharing and all those things to just two people.
I’m going to shift a little. Later on, what we realized is that getting too strict and getting too shut down is also not good. We have found a healthy balance. We do not share revenue numbers, but we share everything else as to why we are doing it and what we do.
Andrew: Have you done over a million in sales yet?
Rajat: Not yet.
Andrew: Not yet. What do you feel about guys like Nathan from Heyo who are in similar space. He is bringing in a lot of money, and I think he even got investors recently. I could start naming all kinds of competitors. Short Stack. I’m looking at my calendar. I just interviewed the founder of Short Stack a few hours ago. He’s in a very similar space to you. What do you think of all this competition in your space? How do you compete with them?
Rajat: All of them have been changing their strategies over the last year. Like Heyo, they were something else, and now they’re Heyo.
Andrew: They were Lujure, and no they’re Heyo. The name Lujure is hard to spell. I even misspell it. I should have it memorized by now, but I misspell it sometimes. They shifted their product, too. Now they’re going more mobile.
Rajat: Yeah. Again, it’s the same impact, like [??] happened and a lot of things moved. I think the competition is there, and it kind of keeps us on the edge, but it’s a healthy competition. The companies that are out there right now are in there, in a way, to push the boundaries and get customers to realize the true potential of social media. When I look at the competition, I think that’s great. We have also started thinking about raising some investment because we feel in a SAS [SP] type business, you need to spend quite a bit of money in terms of customer acquisition. So that’s one. The second thing we are also looking at is mobile, a lot of apps, we are converting them into being able to publish that in mobile as well. So we are making those changes to make sure customers get the full value from our platform as well as we do want (??) to get to a bigger one.
Andrew: Well, you know what, I just forgot the question. I hate I forgot the question I was going to ask you. I’m surprised that doesn’t happen to me more often because I have the question ready, I pay attention to see what else there is and, how may registered companies do you have?
Rajat: We have 400,000 registered users that represent around 1.3 million registered businesses.
Andrew: 400,000 companies that have given you their email addresses who are on your email list.
Andrew: Have you emailed them other companies offers? I fell like in the info marketing space when people having a mailing list they start to offer other info marketing products from others. No. You keep it simple, just you.
Rajat: Yes, yes. Initially we send them notification material then we start sending them case studies. So we do a weekly case study and we start sending them out. We just feel that strong customers give you their email based on trust, you don’t want to mess with it.
Andrew: All right, I’ve got a quick note here and then I want to ask you about almost dying. And this note comes to me from Christopher Claunch, via LinkedIn, he says, “If anyone hasn’t told you how badass you are lately”, and then he starts telling me about how badass I am. And basically what he is saying he signed up from Mixergy premium and because of what he learned there his third email campaign, which happened around the day that he sent it to me, got click through rates that are about fifteen percent higher, and then he says thank you. Without getting all mushy and cliched, “I love you man”. So Christopher, I love you man, too. And I’m glad to see that this stuff is working. I’m assuming that the email session he took was the one by Justin Premick, A Webber, and that’s one that I’ve gotten a lot of. One of the things, and I’ll give you a quick tip that I got from that session and I use this all the time. Justin Premick of A Webber who taught that course said don’t ever send an email to your whole list. Do, not A B testing where fifty percent get this message, fifty percent get the other. Take a small portion of your list, in our case we take five percent and another one gets five percent and do two different messages to those. Which ever one gets the most click through rates and open rates that’s what you send to the rest of the list. We actually do three different groups that get five percent to test and then whatever works best goes to the main list. That is one thing that we learned from Justin who has helped us increase our click through rates. Christopher learned from that. He’s seeing some real results. If you’re a Mixergy Premium member, take that sessions. It’s really well done and it’s not because of me it’s because of Justin of A Webber. If you’re not, sign up. You get dozens of courses like that and hundred of interviews like the one that you’re listening to today all available to you as a Mixergy Premium member. Learn from them, see your business change, and hopefully you will do what Christopher did which is send me a note because I’m always curious about how you guys are using what you’re learning and what results you’re getting from it. Mixergy Premium.com, go sign up right now. You almost died. How did you almost die? You know what I’m talking about.
Rajat: Yes, yes. So, I’m a pilot, I fly Sesniles and Vipers and so on and so forth. So I was in Seattle at that time and it was my first solo cross country. On my way to Portland from Seattle I kind of lost where I am and got into a wrong weather. The weather turned bad and a lot of bad things happened at the same time. Before I realized it, I was in the clouds. As a VR5 pilot we are not supposed to be in the clouds. I was like, OK, I just got in the cloud, I’m going to take some power off, go down, and I’d be out. And as I’m coming down, down, down and then like, Oh, boy. I was just like 50 meters or 100 meters away from tree tops and I’m like ‘Oh, boy. I’m going to die today.’ And I just put the foot power in and then I’m like Spiderman up and up and up and it was doing that for good 5-7 minutes. And the radio communication broke down so I was not in contact with the [??]. And like these clouds can go up to like 40,000 feet and I have no idea what kind of [??]I am.
So I don’t know what to do. And suddenly there was this thin layer of clouds, like I could see sunlight coming from there. So I just pointed the plane there and flew out of the clouds. And when I got out of it, there were like 2 layers of clouds and I was in the middle. It was so beautiful.
Andrew: Weren’t you a little confused though. Two layers of clouds, you don’t know which side is up. Or does that happen?
Rajat: No. In a Cessna no because you can not really do a flip on a Cessna. But it was beautiful and I was ‘Wow, this is great. OK. I don’t know where to go because I don’t know what is up with these clouds’. So I could keep flying but I need to find a hole so I can get out.
So that was an interesting experience. I got back in touch with the air traffic and then they directed me to the airport.
Andrew: You know. When I was a kid, I wanted to have a near death experience just so that I can have a real f* u attitude to the world. Because hey, I almost died. This is like my second life. I get to do whatever.
Do you have that? Did you change because of that?
Rajat: I think that actually makes you a lot more humble.
Andrew: Not more arrogant the way that it would have made me. It didn’t make you feel invincible? Bring it world. No?
Rajat: I thought about it earlier but after that no. Because it’s like you realize how [??] everything is. So it made me a lot more humble. I think the startup experience has also made me understand that a lot more pains that I used to before. And it’s been an interesting experience.
Andrew: Well, thanks for sharing that interesting experience with us.
If people want to say thank you, what’s a good way for them to connect with you?
Rajat: Just email me at firstname.lastname@example.org
Andrew: Cool. What city are you in, by the way, in India?
Andrew: Delhi. So maybe there’s some people in Delhi who are listening to us right now who can say hi to you.
All right. Now I’m going to be the first person to say thank you. Thank you for doing this interview and sharing your story with us.
Rajat: Thank you, Andrew. Thanks for having me here.
Andrew: Thank you all for being a part of it.
Walker Corporate Law – Scott Edward Walker is the lawyer entrepreneurs turn to when they want to raise money or sell their companies, but if you’re just getting started, his firm will help you launch properly. Watch this video to learn about him.
Grasshopper – Don’t make the mistake of comparing Grasshopper with other phone services. Check out their features and you’ll see why Grasshopper isn’t just a phone number, it’s the virtual phone system that entrepreneurs (like me) love.
Shopify – Remember the interview I did about how the founder of DODOCase sold about $1 mil worth of iPad cases in a few months? He used Shopify. It’s dead simple and very effective. To get a longer free trial, use this code: Mixergy