In this interview, I want to find out–if you have a business idea–do you have to start off on your own? Well, today’s guest started his business as an employee who spun off his idea from the company he worked for.
Andrew: Coming up: How do you grow referrals so you can grow your business by tapping the connections of your existing customers. Well, you guys are going to watch me towards the end of this interview use a tactic that I learned that I have used to grow Mixergy and continue to use. Hopefully by watching me do it, you’ll be able to do it in your own business and continue to grow it.
Also, what do you do if you lose all of your revenue? Or maybe a significant portion of your revenue? How do you recover? Check out how today’s guest did it and hopefully his tactics, his approach, his way of getting out of that jam will help you if anything like that ever happens to you. And finally, there is one thing that today’s guest did early on in his business that I almost forgot to ask him about. But as you will see, because he did this one thing when he had doubt, when he lost his customers, when he had other issues, when he almost lost his focus, he was able to bring it right back to what he wanted to do and use that one thing to grow his business. You’ll hear that, and so much more, coming up.
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Alright, let’s started.
Hey there, Freedom Fighters! My name is Andrew Warner and I am the founder of mixergy.com, home of the ambitious upstart, and the site that hundreds of entrepreneurs have trusted their stories with. Have come here and really been open about their challenges, open about their successes, open about their revenues, and they do it all so that you can learn and build your own success story and hopefully you’ll come back here and tell your story on Mixergy. That’s my goal. And in this interview I want to find out well, do you have to, if you have a business idea, start off on your own? Well today’s guest started his business as an employee who spun off his idea from the company he worked for.
His name is Russell Glass, and he is the founder of Bizo, a company that helps advertisers reach a business audience of more than 120,000,000 professionals. I invited him here to talk about how he did it. Hey Russell, welcome.
Russell: Hey there, thanks for having me.
Andrew: When you spin off the business idea, who owns the company in your case?
Russell: So, yeah, in our case it was initially owned by the shareholders of Zoom Info so we basically structured it as a dividend where on day one the same shareholders that owned Zoom, owned Bizzo. And then we carved off a piece of the company for management, new hires, more like your traditional option pool.
Andrew: And now you’re an independent company that happens to have your old boss as a shareholder.
Russell: That’s exactly right.
Andrew: Alright, and what kind of revenues are you doing? What did you guys do in 2012?
Russell: We did just north of $22,000,000 in 2012, and we’re shooting to do $40,000,000 this year, in 2013.
Andrew: Can you say what your revenues were in January? I know that you guys keep looking at your run rate and you watch it grow, and grow, and grow. It certainly has from the research that I’ve got here already. What was your January revenue?
Russell: Yeah so, we, one thing that’s a shame of our business is that it’s a very cyclical business, and so first quarter will generally be about 15- 20% of annual revenue. So, in Q1 we’ll do about $6.5 million.
Andrew: Wow. Alright, so what were you doing at Zoom Info?
Russell: I was running Products and Marketing. So I was charged with helping to develop the products that Zoom Info’s clients were going to use and then marketing to make sure everybody knew about Zoom Info and that sales were getting the right leads.
Andrew: And there was a problem that you were having where you weren’t, you were maxing out your impressions?
Russell: Yeah, so basically I was a D to B marketer and I was having trouble scaling the marketing program beyond where we were. So…
Andrew: Can you give me an example Russell? So that we understand your business, who’s one customer, what did you get for them, and how did you max it out?
Russell: Yeah, good question, June info was really targeting sales people and recruiters. It’s a service that provides lead type information, like a LinkedIn might provide, or a Jigsaw might provide, to recruiters and sales people. I’m always trying to find as many as recruiters as possible to tell them about ZoomInfos Solution, and help them learn more and buy the product.
What was happening was, I was maxing out my marketing dollars. I had more to spend, but I couldn’t find more sources to find recruiters. I was doing search. I was doing email. I was buying sites like hr.com, and sites like SHRM, or the Society of Human Resource Management professionals.
What I realized was that the innovation that was taking place to help scale consumer marketing wasn’t taking place on the B to B side. Right. Marketers that are trying to reach business people didn’t have the same kind of options.
That’s really what began the idea that became Bizo. It was that, if I could help target business people across the web with any degree of scale, B to B marketers everywhere would be interested in that solution.
Andrew: Why is that a challenge? I understand how it’s easy in the consumer space to find audience reach. I look at all the sites and all the tools that I use every day from Facebook to small apps on my phone. I understand why it’s easy to reach consumers. Why wasn’t it just as easy to reach business people?
Russell: I think for a few reasons. One is that business people are busy. They’re spending a lot of day doing what they have to do to be successful at work, not necessarily surfing on ESPN, or playing around on Facebook, or whatever. Although there’s surely some of that, but they’re not spending most of their day doing that.
The impressions available, the amount of opportunity to reach them is actually pretty limited with B to B space. What we realized was we had to get most of the U.S. business audience into our network. Once we did that, and made them targetable buyer networks, in other words, we understood who they were. We then could capture all of the available impressions in order to allow marketers to reach them more effectively.
Andrew: I see. Well, actually let me make sure that I’m understanding what you’re saying. You’re saying that if you could identify that Andrew is a professional, and then find ways to reach him on any website that he happens to be, and scale that, then you’ve got a business. That’s the idea?
Russell: That’s exactly right. Although, in our case, it wouldn’t just be Andrew is a professional. It would Andrew is the founder and principle of a small to medium-sized business based in a certain location. We get very rich in terms of the kind of information we can provide.
Andrew: Okay. By the way, just to hear you say small to medium makes me think, why am I still small to medium? How do I get bigger? This interview’s going to help me get there.
Russell: That’s right.
Andrew: It’s funny, actually, to hear that.
Russell: We’re working on that.
Andrew: You took this to ZoomInfo, why didn’t ZoomInfo say, that’s right? We have this problem. Let’s just create a division in here. In fact, let’s just start doing this right here.
Russell: Yeah. Actually, that is how it started. We created a division within ZoomInfo, and created a prototype, and starting testing this back in when it was originally called the ZoomInfo Bizographic Targeting Network.
Andrew: I see.
Russell: Bizographics, whom we spun the company out, is how we named the company Bizo, because it came from business demographic information. The reason for the spinoff, though, is that when you’re innovating inside an existing company, it’s very difficult to get the resources you need, and the focus you need to be successful, because that company has all kinds of revenue goals.
It has the board knocking down the CEO’s door to hit certain milestones in metrics. The new business isn’t going to return the same kind of revenues, or profits, that the old business is generating. By spinning it out, it really allows you to have focus, and it allows you to hire the right people. It allows you to have the right time to grow into your shoes and be successful.
I was very fortunate. ZoomInfo itself is a spinoff of a company called CardScan. We innovated this like before, and that made this much easier.
Andrew: CardScan are those little devices that I used to have on my desk that would scan business cards.
Russell: You got it. Exactly. The ones you saw in all the airline magazines.
Andrew: [laughs] One of the first things that you needed to do was you wanted to prove the idea, internally, to say, hey, this works. We’re not crazy. How did you do that?
Russell: Yeah. I found one guy at the company that understood ad serving, because we had hired him out of Yahoo. I said, hey, look, here’s what I want to do. Can you help me get an ad server set up, and figure this out? He said, sure, I’m in. Then I got a few engineers to help me. ZoomInfo had quite a sizeable data set. I used some of that data that ZoomInfo already had, and I integrated it in with the ad server. I used this guy. His name is Lee Byrne, one of our founders.
He’s still running operations at Bizo. We tested it. The first ad we ever served was this bright yellow banner that said, ‘executives’. Lo and behold, we watched it. It worked. We started to go out to customers and talk to them about, if we could do this for you, would you be interested? Sage software was our first client. They said, we would love this.
I actually just saw a Sage software in a contract coming around this week. They’ve been running with us continuously for about four and a half years.
Andrew: Sage software, makers of lots of software including CRM for businesses.
Russell: That’s right. That’s right.
Andrew: You said data. What kind of data did ZoomInfo have internally?
Russell: Part of Zoom’s strategy, that I actually helped develop, was to provide free services to help people understand the kind of value we could create, and then up-sell them to paid services. It was very much a premium kind of model, in the sort of parlance of the valley.
What happened was we drove tremendous numbers of people visiting the site. We had about 7 million uniques at the time visiting zoominfo.com to get this free information about business people. It’s those 7 million uniques that I used and captured their business demographics. What title did they have? What company do they work for? Use that data from ZoomInfo to help target the first apps. What we realized was, in order to really scale this, we needed way more data. But we could prove it out with just the data that we already had access to.
To give you a relative scale understanding, today we have over 4 thousand hardwares contributing data to the Bizo ecosystem, kind of starting with just that one ZoomInfo partner.
Andrew: I see. The idea is that when someone registers on their site, or gives information on their site. They contribute that to your data set. Then you use that to help identify people online, and target ads to them.
Russell: That’s exactly right. It’s important to understand that it was designed with privacy in mind. All the data is anonymous. There’s no ability to identify anybody as an individual. When they register for a white paper, or they download some content, or they log into a site that’s a partner of ours, they contribute that registration data. We organize that. Further anonymize it for privacy, and then use it for more effective analytics, more effective ad targeting, and personalization of web content for our marketers.
Andrew: How do those partners get paid?
Russell: It’s very simple. The partners get paid 20% of any revenues we generate using the data they’ve contributed.
Andrew: I see. All right. Now you’re internal and you get Sage software. Do you come to them and say, look, this is an experiment. It’s a prototype inside of this business. Do you want to participate? Be that open with them?
Russell: We really founded the company with a few core tenets. One of them was transparency. We’re a very transparent business. In fact, there aren’t many companies our size that just openly disclose revenues, for example. Right. We felt it was important to us that we created a transparent culture.
That’s absolutely what we did. We said to Sage, hey, look. You see what’s happening in the consumer marketplace, where a lot of companies are building behavioral advertising strategies, and audience-based demographic strategies. We’re going to do the same thing for B to B, and we’d love for you to be one of our beta partners. They said, sounds like a tremendous opportunity. Look, they were facing, as marketers, the same issue I was facing as a marketer. I knew that there would be some interest out there, but they were one of the early ones to jump.
Andrew: How did you know that they were facing the same issue?
Russell: Well, good question. I assumed they were facing the same issue because, as a B to B marketer, I had talked to other B to B marketers. We all sort of shared the same issue, that if you get to a certain level of scale, it’s very difficult to get beyond that. If you want to keep growing your business, you need to figure out how to get beyond that. In some ways, all B to B marketers face the same issues. Right.
Andrew: You know, I keep meaning to put myself in my listeners shoes and I think one of the first issues that they are going to have with this is, they are going to say, it’s not the privacy, they understand that I am automizing [SP] privacy and I think it’s a technically sophisticated audience too. But they are going to say, I have this great idea. If I take it to my boss, he is not going to be open minded about it. He is going to be jealous about it. Maybe he’s not even going to be aware of his jealousy but he is going to say this guy is about to go start this business here, not on my watch, not with me. Why should he do it? Maybe I have an even better idea, and dismiss it. How do you avoid that?
Russell: Yeah, that’s a good question. I mean first of all I think that, you go with, in an organization is if you have a great idea that you think could be a Spin-off or you think it could be a separate division organization. The first thing you do is go out to prove it. So, chapter some prove points and show the organization that you know what you’re talking about. I think that the Spin-off model is a great one for innovation but it takes the right kind of culture to see that and [??] pursue it and I don’t [??] sit here and say that this could work at any company. There are lot of companies that would want to keep it internal and the key there is, it’s going to be kept internal. That you as the entrepreneur trying to start this thing inside a company get the resources and the commitment from the organization to allow you to go off and give this. And to carve off the necessary resources to be successful and to make sure that you are not being bothered by the organization’s top level goals when you’re trying to get this thing started.
But the other thing I would say is even if I didn’t know, I’ll need to do this. I probably will [??] started it myself. So being able to keep great talents of people and have upside for share holders [??] mandate, all companies should be thinking about things like this instead of losing invoice [SP] to starting out businesses.
Andrew: Alright, I understand the argument for companies to do this. What about the argument for you? Why not take this outside and go raise some funding for it and not have to deal with these guys? You can always get other partners. You could always get even them as a partner if you are an outsider with historic connections to them. Why do it internally?
Russell: Good question. So, first of all there is no doubt that had I left the company started just by myself, I would have owned [SP] more than company could start and would have had more upside because of that. The downside and what’s pretty terrific about spinning a company up is I didn’t have to think about fund raising, I didn’t have to think about legal services, I didn’t have to think about accounting services, my first few employees who I already hired and I already knew that they were the right people because I’ve worked with them for years. So all of this stuff [??] I founded companies the other way by the way. So, I’ve done it from scratch. All of these capabilities that came with the Spin-off means that I was focusing on customers from day one. And not thinking about all this other stuff. And so it gave us a sling shot into the market that we wouldn’t have had without it. So, I attribute lot of our success to the fact that we had that because we founded the company in a terrible economic environment.
We launched in mid 2008 when Wegman Brothers was crashing and the stimulus [??] started yet but we were in the middle of the downturn. It would have been very difficult for me to raise funding in that environment and I think it may not have ever gotten after down.
Andrew: And a very famous rest in peace good times memo would been sent out to startups to tell them, Hey! Don’t expect to raise more pounds now.
Russell: That’s right, I think [??] probably sent that out about the same time we founded this up.
Andrew: You told April, who pre-interviewed you for us, that you got a 100% improvement in the beginning for targeted ads over untargeted ads. But you also said that the prototype was very basic. What was it missing?
Russell: Yeah, the prototype was just that. It was with bare bones Suresome [SP] ads so that we can see how much more likely is somebody to click on that ad? How much more likely someone to take an action for targeted ad versus an untargeted ad? Because, to me that was the crux [SP] of the business. If all this fancy targeting and data didn’t actually provide lift, then we wouldn’t have anything here. We would now be history. But what that prototype didn’t have was primarily the ability to scalp [SP]. So we were running 2.5 billion transactions a day right now. That prototype probably couldn’t have handled a million of them. Right. That’s one, is that it just didn’t have the ability of scale. The second thing is there’s a lot to the reporting aspect of the business, that that prototype didn’t have. All the analytics, the ability to optimize campaigns over time, the tools needed to manage campaigns. None of that was in the prototype.
All this thing did was serve ads and measure what had happened. Actually, 100% was on average, but sometimes as high as 3, 4, 500% lift . . .
Russell: . . . in our ability to drive success when we targeted an ad, versus having a non-target.
Andrew: You know. When I start something new, I always think, oh, all these people are watching me, because I’ve had some success in the past. Now, if I screw up, they’ll judge me based on that, and all this respect that they had for me will crumble. Now, I feel like I could get past that as an individual because it’s just me worrying about my reputation.
When you’re working for a public company that people are all watching, and has a reputation to uphold. Doesn’t that get magnified?
Russell: Yeah. it’s a good question. First of all, I think that entrepreneurs, in general, have a very positive outlook on life, and a very optimistic way of looking at the world. Otherwise, you’d never get started. If you actually took a realistic, even, or a pessimistic view, you’d realize all of the obstacles you have working against you to be successful, and you’d never found a company.
I think that the real entrepreneurs, and the ones that would start something like this in a big company, don’t worry about that stuff. They really believe they’re going to be successful. They believe in their ideas. They believe that they can kind of walk through walls when necessary to make something work.
Andrew: Does ZoomInfo believe that, or do they say, wait a minute. You’re about to give Sage software that’s not fully-baked. You’re going to hurt our reputation.
Russell: yeah. You know, I had built up enough credibility at that point that Zoom had confidence in me, and what I was presenting to Sage. I also think that, if you come at something transparently, and you . . .
Andrew: Let’s hope the connection picks up. Ah, there we go. Sorry. You were saying if you come at transparently, and then the connection broke for a moment.
Russell: Yeah. If you come at something transparently, and you come at something with everybody’s best interests in mind, then you’re trying to build a successful partnership. Even if we weren’t able to make Sage successful, we were transparent about what we were trying to do. They understood that this was risky. It might not work. Right. At the same time, a lot of marketing doesn’t work. At the end of the day, it was really fairly low risk and, fortunately, we were lucky the partner in Sage that was going to make an investment.
Andrew: Okay. First four months, how much revenue did you guys generate?
Russell: Not much. First four months. I would say we probably generated about probably 50,000 in the first four months. Then another 250,000 in the last three months of that first year. About 300, 350 thousand in the first year.
Andrew: Well, actually why is that?
Russell: Why is what? Sorry.
Andrew: How do you get to that number? Is it a couple of advertisers?
Russell: Okay. Yeah. We probably had a dozen advertisers. Maybe a little more. 12 to 15 in that first year.
Russell: The biggest of which were actually large financial institutions. American Express and Capital One, and an old small business card called Advanta, which actually went out of business during the cash crunch back in ’08, ’09.
Did about 350,000. A lot of that money was from those financial institutions. Then comes January of 2009, and we had lost all our customers. We performed great, but they lost all their budget.
Andrew: At that point, the business had already been spun-off. It proved itself, and it’s really to standoff on its own. You stand up, and then legs get knocked out from under you.
Andrew: On a personal level, it’s really easy to say, hey, you know what. This is one of those obstacles. All entrepreneurs have obstacles, etc. That’s something we can say in retrospect. But if you were to transport yourself back to that time, how did you feel about it, then?
Russell: So, I tell you. I was having a baby, my first, in February of ’09. We had lost all of our customers. The world looked like it might enter into a depression. That we hadn’t seen since the 20’s. So I felt pretty concerned. And as I said before I was an entrepreneur and so tend to be an optimist but I was pretty worried that this thing wasn’t going to work. However, we did one thing really right when we founded the company and I mentioned the [??] that we founded the company. We were really focused on culture. And hiring great people, entrepreneurs, self-starters, self-motivated people, positive people, and so even though we hit these tough times at the beginning of ’09, we had the right culture and the right group of people who say, you know what? We’re going to make this work and let’s put our heads down and focus on the few key things we need to do to be successful. And that’s what we did and we actually did about $2.5 million in revenue in ’09. So growth of company almost 10x, even though we’ve lost our customer who’s in [??]
Andrew: In that trade where you had every reason to be concerned. Did you ever find yourself overwhelmed with doubt and couldn’t really think about…or couldn’t find an opportunity because you were so overwhelmed with doubt?
Andrew: Why not?
Russell: I think it’s because I was building a solution for me. I was a [??] marketer. I knew that this need was out there. I knew that I could [??] to the Eco-system if we could get this right. And I didn’t think there was a technical challenge because I’d seen everybody do this in the consumer world. So, it’s not like we were inventing any kind of brand new technologies that I had doubts about. We were just checking a [??] technologies, importing them to this new data set that we were creating. So, I never had doubt about our ability to provide value and so it was all about survival while the climate was so difficult.
Andrew: I see. You had convinced yourself so much of this idea making sense. Based on experience it wasn’t just trying to pull the wool over your eyes, you convinced yourself, and that’s what was able to carry you through the difficult period and then maybe we need to take a step back and talk about this. When April asked you what the first step you took was to building this business? Your building [??]. You actually said something that I didn’t bring up until now. You said, writing a business case. That’s the first thing. What does that mean that you wrote a business case? Because it seems like that’s what helped you now. What does it mean?
Russell: Yes. I mean simply I had an idea. I had a pretty good background to understand why this was going to be valuable? But I felt that, the first thing I needed to do was put a business case down on paper. So, in other words, it’s one thing to have an idea, it’s another thing to have a big enough market and approach to that market. Differentiators, the competitors that we might have to face. So really put a [??] executive summary down on paper that helped me think through all the true possibilities of the business and where this could go. But then also use that as a document to present to others and convince them that this was the smart thing to do. And if you understand, every now and again I’ll pull back business case up and we are pretty much with some expansions on the concepts since the market’s change every time. Well pretty much to be exactly to what we wrote down in that business case.
Andrew: [pause] Fair to say then, that in those moments of doubt where you might have said maybe there aren’t enough customers, maybe this idea doesn’t make sense but your mind was able to go back to the case that you made and say, Oh! Wait a minute. This is how big the market is. I don’t have to guess that it’s a big market. I have it down on paper. This is why this opportunity works. I don’t have to guess that it is. I don’t have to trust that it is. I did the researches right there.
Russell: No doubt about it. I knew that there was a multibillion dollar industry and amount of spin focused very specifically on what we are trying to accomplish and disrupt [SP] and so I knew the money was there, I knew that there were clients out there looking for solutions like this and then it was a matter of, in a very difficult economic time, how do we position ourselves to be the efficiency play?[SP] How do we position ourselves? Say look! You’re spending this money on something in a tight economic time, I mean, we can give you better results for that same spend and that story really resonates in a tough time.
Andrew: I see, it’s not spend more money, it’s spend your money wisely. And then, once you do you’re going to understand why you need to spend more money because you can justify with…economic reasoning. Alright. Why did you scrap the first ad [SP] version that we talked about, when you launched in the summer of ’08?
Russell: One of the principles of, and creating good software and good technology is that you build your prototype, you cut your teeth on your prototype, you prove out the model and then you start from scratch.
And the reason is, you learn a lot in that first go around. You learn what works and what doesn’t? You learn, what scales and what doesn’t? And you’re just trying to build something quickly. You’re not worried about the scalability of it as a long term nature of it. And so once you’ve proven it, the idea is go back take all those learnings and build your long term scalable system. And so, I brought our CTO and Co-founder in, in about May of ’08 or April of ’08 and said OK, here’s what we have, here’s what we need. Let’s go out and build a system that will scalp to billions of impressions and transactions and that’s what he did.
Andrew: You started this business based on a pain that you were experiencing as a guy who is buying ads to reach businesses, business people. Often what happens when people do that is, they build a solution for their own problem, then they realize, Oh! Wait a minute, there aren’t a lot of other people like me who happened to be working with this kind of money and trying to reach us, how did you make sure that you weren’t the only person? That there were other people who were experiencing this pain [??] ?
Russell: Yeah. So it’s another part of the business case. So, part of that was one market. So, is there a market that’s out there for the same pain points that I have. And that was a pretty easy thing to prove because all of these publishers that are targeting the bid of your space [SP], all the investment in [??] marketing out there was pretty easier to capture.
Andrew: I see, the way that you knew that there were other people who were having this need is by saying how many people are buying ads targeting these people?
Russell: That’s right.
Andrew: Got it.
Russell: And so interestingly it’s pretty easy to even see who are the companies buying these ads? Who’s buying ads on Forbes? Who’s buying ads on Business Week? Who’s buying ads on these different endemic properties around [??]? And very probably that’s how we found Sage, we probably saw an advertising on one of the sales or CRM sites out there and reach out to them and not without [??]. Talking to marketers, so going out and saying, hey, I have an idea, if I could provide you with this kind of value and this kind of solution, what would you say? And hearing their feedback, and mostly what we heard was, I would test it. And that’s who you’re looking for is, is to hear them say yeah, we’ll need to test it.
Andrew: In this case it means I’m willing to put money to test it, not try a software the way it would in consumer space.
Russell: That’s right. I’m willing to pay some money and test it out and see if it works and so we felt pretty good about getting test by [??] marketers. So, the other side of that was, can we provide lift? Can we actually generate success? And as long as we could get both sides of those, we felt like we had a good opportunity for business here, the last piece we needed in order to close the loop, was enough scale. So we needed to be able to get enough data and enough sort of publishers and inventory onboard that we could scale this thing. And that actually, the weak economy helped us because all these publishers were hurrying for revenue and hurrying for new opportunities and so they were willing to talk to us, whereas as if it was 2007 or 2006 when things were hot it might have been hotter to get the scale that we needed.
Andrew: I see, publishers might have said, I’m not sure I want to work with you. You guys are new. Could I get my data or not? Now they said, let’s find the way to make this happen.
Russell: Let’s make it work because I need the revenue.
Andrew: Right. And you can give them revenue without forcing them to cram more ads on their site, raise their prices, come up with new products. All right. I see where this is going. You know what. Actually, let me ask one other thing before I continue with the narrative, which is once you do take it out to potential customers and then some real customers, they shape your understanding of the need. What’s one thing that you learned from taking it out to real customers, like Sage, that you didn’t know before?
Russell: Yeah. Good question. A big learning was that marketers didn’t all measure things the same way. I sort of assumed that everybody was sophisticated enough, like we were at Zoom, to measure based on conversions, so really get down to what’s driving success.
Andrew: Not just paying for hits, not just paying for clicks, but paying for real conversions.
Russell: That’s right. What we found was that a lot of marketers were still measuring just based on click-through rate. How many people actually click on an app? That was a challenge for us.
Russell: Because business people don’t click on apps as readily as consumers do. What we found was that we needed to provide some pretty robust analytics, and measurement capabilities to help show marketers the value that we were delivering. Give them value for pixels on their pages so we could measure conversions. Amazing, in the first few years, with almost a perfect correlation, if we were able to convince a marketer to put our pixels on their websites and landing pages, to measure conversion and measure success, we got their renewal. Almost 100% of the time.
Andrew: I see.
Russell: If we couldn’t, we rarely got the renewal. Right. That was a big lesson for us. A lot of our products and services, that we’ve built since then, have been more around increasing the robustness of our measurement, and proving value then even on targeting itself.
Andrew: I want to come back to that in a moment. First, I’ve got to pick up on something you said earlier, that I didn’t ask a follow-up for, which is, you said, the economy was bad, and we lost all of our customers. We have this great culture, and because of that, we did these key things that turned things around. What are those key things?
Russell: I mean we actually talked about it in sort of a different conversation. We realized we needed to accomplish three things. One was we needed to get test budgets for marketers. Two was we realized we needed to prove lift. Three was we needed to sign publishers up to get scaff. We knew publisher sign-up was going to be easy, because they needed revenue as much as we did.
So it was those other two things, really heads-down focus on getting those test budgets, and then heads-down focus on being able to prove success. What I’d would say to any entrepreneur that I think the two most important things to being successful in starting and growing a company. One is culture. Right. Having an intense focus on the culture of the organization you’re building. Two is focus. Getting down to the one or two things you need to do at any given time to be successful.
Andrew: What could have distracted you from that focus? What would another entrepreneur have been distracted by in your situation?
Russell: Well, having a baby in the middle of all this was distracting. I don’t remember a lot of the details of this period because of that. Right. It’s a little fuzzy. There’s always a lot of distractions when you’re starting a company. Part of it is brought on by yourself. As an entrepreneur, you always have these interesting ideas and directions you could go in . . .
Andrew: For example.
Russell: Well, for example we lost all of our contractual services clients. We were seeing a significant downturn in overall budgets. We could have said, right then and there, and we talked about it. Maybe we should expand into the consumer space. There’s more budget available there. Right. There’s bigger dollars available there. Let’s start getting some consumer data, and focus in on that. That would have been, in my mind, a huge mistake.
We actually had to stick to our roots and say, you know what, the whole difference that we’re planning to make in the world is that we’re going to focus on B to B. By making that decision then, I think we were able to build the company we have today that’s still entirely focused on B to B.
Andrew: Where was that in that notes, here? There it is. You did something that’s a classic mistake for early businesses. You didn’t talk to your customers, at first, because you were growing so quickly. Can you talk about that problem, and then how then you overcame it? What’s the problem? What happened?
Russell: Yeah. Well, I think anytime you’re growing very quickly, your tendency is to try to close deals, and move on to the next deal. Right. Then close deals and move on to the next deal. What we realized very quickly was that the more attention that we were able to pay to, what does success look like to you as a customer.
Really, at the very beginning, have a lot of conversation around, what is success? What makes you a hero? Right. How are you going to look at us and measure us? The more successful we can be in the back end. At the beginning, we didn’t do that all. We just closed the deal, delivered the deal, came back and said, okay, here’s the measuring, here’s the lift. Let’s get the next budget.
They would say, well, I don’t think we’re going to renew. We would ask why, and they would say, well, you didn’t hit x, y, z. We would be kind of caught flat-footed, because we didn’t even know that x, y, z was important. Now we have a huge account management team, and that team is entirely focused on customer success.
Andrew: By the way, what you might have noticed me doing is I hit the mute button yet again. That’s why you couldn’t hear me talking. I hit the mute button yet again, because I was pounding away at the keyboard. I wanted to make sure to take these notes on what you were saying without distracting the audience.
You wanted to find out, early on, from your customer, what does success look like to you. How are you going to measure success with us? I want to ask my customers that too. You’re saying you ask it, early on, when they sign up. Then how do make sure that they hit it?
Russell: The first thing it does, when you ask it early on, is it puts you in partnership together. If you really understand what makes your customer tick, and why they spent this money with you, and what they’re looking to get out it, and the metrics they’re going to measure you on. Now you’re in a partnership where, if you deliver on what they said was interesting, you know you’re going to make them satisfied, and happy and successful and all that good stuff.
The key to us was having that conversation, listening very carefully, and understanding, and asking when we didn’t understand. Then being in constant communication throughout the life of the campaign about, okay, we feel like we’re doing well on x, y, z. We’re not quite there on this. Here are the changes we want to make. Next week, you know we’re getting closer, but we’re still not quite there. Here are the changes we want to make.
Even at the end of campaign, even if you don’t quite hit all the metrics, if they see the effort you’re putting forth to get to where they want to be, and they see the trajectory going in the right direction, they’re going to want to continue to work with you. Right. Because you built that partnership trust.
Andrew: What’s a metric that you were surprised by then?
Russell: Well, I’m continually surprised. One metric that I mentioned already is that a marketer might come to us, and say, I know that Quickclear rate is not what I should be measuring by. However, my boss measures everything we do across everything by Quickclear rate. My hands are tied. You have to help me get Quickclear rate out.
That still goes on today. As much as that surprises you, you still have to help the customer drive success by whatever metrics they’re being measured by. Ultimately, if they’re successful, they’re going to get more budget, so you’re aligned in success that way.
Andrew: That makes total sense. I mean, it’s crazy, but it makes sense. You have to deal with the environment as it is.
Russell: That’s right.
Andrew: You’re successful now. Your business, Bizo, by the way, I love that you’ve got the logo over your shoulder. I love when entrepreneurs think to do that. is that because we’re on camera?
Russell: That’s right.
Andrew: I love that.
Russell: Hey, I’m not that interesting to look at. Right. We want something nicer to see.
Andrew: [laughs] I don’t think I am either. I wonder, actually, why people actually watch this video. Not why did they learn from this, but why don’t they do what many people are doing today, which is just read the transcript, or what I would do, which is download the MP3. There’s a reason why people are watching the video. I don’t know why. Please, somebody tell me why you prefer the video. I know many people do. I know you guys do. I’m just curious about that. All right. Here’s the other thing. I’m curious about that. Here is the other thing I’m curious about which is balance. You had a business before. You did’nt have a balanced life. How did things look before?
Russell: Yeah. So, my first business I like to call a crash course in everything not to do as an entrepreneur starting with hiring a lot of the wrong people for the wrong reasons, not creating a great culture, having very little focus, raising too much money and blowing [??] too fast. Two, not creating balance in sort of your personal and work life. Then you hear stories about entrepreneurs that burn the midnight oil and they are successful that way but I actually think that that’s the anomaly, and that it is important to be at peak performance to have balance, where your spending plenty of time not thinking about work, and not thinking about the day to day of what’s going on where. There is all kinds of science that proves that resting your brain and allowing it to focus on other things actually makes you more effective when you get back into the sort of work environment. In my first company, I was a bachelor. I had a dog, but that was it, and so my entire life was the company. In looking back on that, it was a very unhealthy period of time, where I feel like had I been able to step away and spend more time doing other things, I would have seen things that today look obvious to me about problems that I just could not solve at the time. So, one of things that was very important in creating this company was, one of the tenets we founded it with, was have fun. It is more than just joke around. It is more than just having a pleasant environment at work. It truly means go out and have fun. Take a vacation, right? Take time off. Don’t spend much time working on the weekend. Don’t go to sleep thinking about the business, right? Spend time with your family. Spend time with your loved ones. Have hobbies, right? Do all the stuff that makes you an interesting person because ultimately, that will make you a better teammate and employee at work.
Andrew: I had that problem. With my first company at Bradford and Reid [SP] what I did was work nonstop. If you were to say, don’t go to sleep working, don’t think about work all the time, I would have said, this is a guy who doesn’t love his company enough. I love my company so much, I did nothing but that. The problem was, when I ran into trouble with the business, when sales were going down or when there was some other issue, I had no place to escape. I felt like a failure because everything in my life was a failure because the business was everything. And, then I took up running and I took up other things, so when I ran in the morning before going to work, I felt accomplished. I said, “Whoa, I never thought I could run 5 miles and this morning I did, bring on the day.” Big difference. For you, one of the things that you guys do as a team, and I clicked over to Bizzo.com/careers. I am not going to click play on it. There is a video there. Well, maybe I should let you say it instead of me saying it.
Russell: Yeah. I’m glad you brought that up. I think one of the most important things we do is hire great people and help them see what kind of great environment we have created. That video is actually a great event that we put on a few times at Giant Stadium to kick off the San Francisco Giants’ season in April and we bring a lot of our clients and partners and employees to this event. It’s for charity and we raise a lot of money for the [??] in San Francisco, but what you see in that video is a sort of very transparent, honest group of people just kind of gushing about how much they love working at Bizzo. That video encapsulates one of the things I’m most proud about at this company it is that this is a group of people that whatever happens at Bizzo, they are going to move on in their lives at some point and they are going to look back and say that was one of the best experiences I had in my career. That’s just awesome. That’s kind of what it is all about. Andrew: It is nice to see that the people you work with are happy to be working with you.
Russell: Another piece of advice for entrepreneurs is, we are in a unique position where we get to choose who we work with. Most people don’t get to choose who they work with. They are placed with a bunch of people, right? Take advantage of it, right? Take advantage of it. Choose people whom you are excited to be around.
Andrew: It’s a good point. Let me do a quick plug, and then I want to ask you something as a guy who talks to a lot of businesses, and a quick plug is for Mixergy Premium. You guys might have heard me talk about the dozens of courses at Mixergy Premium maybe you feel a little overwhelmed. At the end of this interview I’m going to suggest one that you might not have considered taking but that I think is worthwhile. It’s actually a program let by Bob Berge and me; I just basically interview him about how to be a go giver. And the reason I’m suggesting it is one of the things I admire about you Russell is that I asked what’s a win for you here and often people say Andrew I’d like to get some more customers, send them over to vizo.com/whatever. Sometimes they say Andrew I’d like to get more employees, I didn’t say it you just happen to talk about vizo.com/careers because that’s where the video was, you just said Andrew I want to give entrepreneurs. And what I find is that when people give like that and when I give like that good things come back to me and so I’m going to urge you guys to check out that course and the program. Actually I wouldn’t even necessarily call it a course it’s him and me talking about his ideas and his book The Go Giver, and talking about how entrepreneurs can use them, go to Mixergpremium.com and sign up.
And where was I what was I going to say? You know what here’s what I’m going to say I’ll just got to the next step in the conversation there was one other piece of information that I was going to say in there, and I couldn’t remember. That’s what it was even if you don’t like me, even if you don’t want this conversation, if you’re not into Mixergy Premium whatever I don’t care whatever. Go and get his book the guy’s go and get it from the library Bob Burg is a guy who is incredibly giving, whose book is about giving, who talks about not giving as being a pushover and a doormat, but as giving as a way of just life and good things come when you do it.
All right here’s the last question are you writing that down?
Andrew: Cool. I hope you also get to meet him he’s a wonderful person and his books have been terrific. His first book Go Giver is more of a story with the message embedded in it, and that’s probably the one that I’d recommend first. All right…
Russell: Well given that I probably won’t end up watching this video, it’s something I should write down.
Andrew: Right don’t want to watch videos grab the book. Who do you know and admire as an entrepreneur that I should be interviewing here on Mixergy? My goal is to interview successful entrepreneurs like you and to learn from them. Who do you know that’s not so famous who I should be learning from?
Russell: That’s a good question. I mean there are so many entrepreneurs that I think are terrific and have varying levels of success, I think that there’s a guy named Marcus New up in Vancouver at a company called Stockhouse who I think is a terrific entrepreneur. There’s a guy who’s been on the opposite end a very successful guy named Joe Payne and I don’t mean opposite end because Marcus hasn’t been successful, but because he’s been very successful. But Joe’s company Eleco was recently acquired by Oracle for about a billion dollars so the numbers are on the opposite end who I think is also a wonderful entrepreneur and has been a great mentor to me those are two good names.
Andrew: Okay well I when I talk to Joe what’s one thing I should make sure to ask him in an interview?
Russell: Ask him what he thinks is the next step in the evolution of marketing, Joe is a thought leader in promoting the concept of modern marketing, and I think any entrepreneur should understand what those concepts are all about.
Andrew: And Marcus?
Russell: Marcus, so Marcus is an expert in the stock market, and in the market so I would ask Marcus how do you make money in the stock market.
Andrew; There we go I typed it out and didn’t even hit mute as I did it. Can I follow up with you via Skype to get their email addresses and I’ll send them an email and cc you?
Andrew; All right I’d love it. Thank you so much for doing this the company is Bizo you guys own bizo.com four letter domain names are so rare it’s impressive that you got it. And I hope if you guys got any value out of this that you find a way to thank Russell because you know, as the Go Giver says you give good stuff comes back. I’m going to do it right now and say thank you so much for doing this interview.
Russell: Thank you take care.
Andrew: Thank you all for being a part of it.