Aweber: Will They Buy What You Built? – with Tom Kulzer

How does a marketing idea turn into a business?

Tom Kulzer is the founder of AWeber, email marketing software that’s used by over 115,000 businesses including Mixergy.

The idea came to him when he sold hardware at a previous job earlier in his life. I invited him here to talk about how that idea turned into a business and how he got so many customers.

Watch the FULL program

Tom Kulzer, AWeber

Tom Kulzer is the founder of AWeber, email marketing software that’s used by over 115,000 businesses including Mixergy.

 

Raw transcript

Mixergy's audio transcription is done by Speechpad

Andrew: Coming up, well, actually let me tell you about two things that are coming up in this interview and then ask you for one favor. So thing number one that’s coming up, how do you know if people will really pay for what you built? We’ll find out one solution that worked for today’s guest and that might just change things for you.

Second thing that’s coming up, how do you know if the idea you have is worth pursuing or maybe just a failure and you have to accept it and move on. Hear how today’s guest learned from one of his projects.

Those are the two things that are coming up. Let me ask you for one suggestion and that is this: you’re going to see a couple of moments in this interview that I think are awkward because of my questioning. I want to ask tough questions but I don’t want to make it awkward because frankly that doesn’t yield all the right kind of answers, it doesn’t yield anything that’s helpful for you.

So here’s the piece of advice that I want from you. If you’re listening to these interviews and you catch this moment here and you got some feedback, let me know what you think I could have done differently. You can do it on the site or you can do it privately and email if you don’t want to embarrass me any further than I’ve already been embarrassed for a couple of moments in this interview.

And if you’re someone who’s a professional interviewer, please help me out. Let me know what I can do to become a better interviewer. You’ll find a couple of moments in here that you can clearly give me some good suggestions for how to improve. I want you guys to improve with your business but I also need to improve my own interviewing skills.

Almost 900 interviews at this point. You know I’m committed to doing this well. But I need some help sometimes. So give me feedback, watch the interview and I look for your comments.

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All right. Let’s get started.

Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart. How does a marketing idea turn into a business?

Tom Kulzer is the founder of AWeber, email marketing software that’s used by over 115,000 businesses including Mixergy. The idea came to him when he sold hardware at a previous job earlier in his life. I invited him here to talk about how that idea turned into a business and how he got so many customers.

Hey, Tom.

Tom: Thanks for having me, Andrew.

Andrew: What were you selling? What kind of hardware?

Tom: I was selling wireless modem hardware for connecting to the internet back before he was iPhones and Androids and other things in our pockets. So connecting back when everyone had modems connecting their computer to the internet, I was selling wireless gear on the side to do that.

Andrew: And were you selling it when you were working for another company or were you an affiliate of theirs?

Tom: I was an affiliate. It was like a resale consulting kind of thing. So I was working with a bunch of other folks as well that were also selling the equipment around the US.

Andrew: I see.

Tom: So it was kind of, there was a bunch of us collaborating on how to best reach our local audience to be able to sell that equipment.

Andrew: That explains something that I saw on the early version of AWeber, which I’ll get to in a moment.

But sorry, you were saying about the group that you were collaborating with.

Tom: The other guys and girls that I was working with during that process and kind of learning with that you were saying was working somewhere else. I was actually in a college at the time. So that’s kind of where that was. It was a way for me to be able to make some money on the side.

Andrew: What was the idea that you had?

Tom: I’m sorry?

Andrew: The marketing idea. What was it?

Tom: It was for working with these other businesses.

Andrew: Sorry. There was an email marketing idea that you used to sell modems.

Tom: So a lot of the guys and myself included would get a lot of lead. Like, I would go to trade shows and then I’d get emails from people asking additional questions and such.

So we’re getting leads off of the website that we had. And it was really hard and time consuming to follow up with people. It’s like answering somebody’s questions and send them back and you don’t hear from them.

And so we follow up with them. You don’t hear from them and then you follow up with them again. And then you follow up again and then they finally email you back with more questions or like, hey I’m ready to order I just haven’t gotten around to it. I’m glad you followed up with me a bunch of times. So what I ended up doing was I automated that email process, so that once they were kind of in the pipeline, once they were an interested candidate I put them in a sequence of messages that would get sent out to them over a period of several weeks that taught them more about the service, answered common questions that I would get from other people and it worked really, really well in order to be able to drive more sales for myself and then I, I basically turned that on to something that, other guys that were selling the same product could use as well. They would just tack their own name and other information at the bottom of those messages. So that was kind of the initial idea around the Bay Weber, so when I left, when I stopped selling this hardware on the side and kind of turned back to school to focus on school. A little important. I ended up leaving and a lot of those guys were like “Hey can I still use that email thing?” and I had turned it off at that point, and I was like “Nah, I just, I don’t, I don’t have time to be able maintain it.” and they were like “Oh no I’d pay you for it.” At the time I was also busting tables at an Olive Garden. And that was kind of a dirty, nasty job that was not a whole lot of fun doing and I had a lot more fun programming so, I was like “hmm. Well maybe I should figure out how to make this something that I can actually sell to people” and kind of took it from there. And that was the initial iteration of what eventually turned into A Weber.

Tom: Why did you give your software to competitors, to people who are selling essentially the same thing?

Andrew: Because we, we were selling the same thing but we weren’t selling the same things in the same areas. So, because we kind of had our own geographic area that we were focused on it wasn’t really competition and frankly I learned a lot from them by engaging with them on what worked at their level, you know at their local level on how they got the word out about the product. That even though, yeah, there might be sales from online that I might not necessarily get, the local audiences where I was doing best with that, so, it was, it was just helpful to engage with them.

Tom: How did you get the leads that you would follow up with?

Andrew: Most of it was like local trade shows and just being out and about and talking with you know, it was a lot of word of mouth you know one person got something and they would tell other people about it. So it was kind of a variety of ways but, you know I posted various online forms, I would engage in various forms and be part of my sig files and those sort of things…

Tom: and people would come to your site and give their email address?

Andrew: Yep. Yeah exactly they would inquire more information which is kind of…

Tom: what use is a lead magnet?

Andrew: for…

Tom: to collect the email addresses?

Andrew: to collect them? It was more just like ask questions. It was really simple it was just a, just a contact inquiry form. It wasn’t like there was a give-away or anything like that. So, yeah, it was pretty straight forward. It was like marketing, you know, the very basic marketing method, methodology there. Probably could have been a lot more effective certainly know a lot more about that process now and a lot better tools available now. But, yeah, at the time it worked. So.

Tom: Alright and so how long did it take you to launch the first version of A Weber?

Andrew: Between the time that I had left and the time that we had our first paying customer I would say probably 6, 7 months. It wasn’t a really long time because what I launched with A Weber is the initial version was really, really simple was literally one sequel of 7 follow up messages so, you know you opened an account you got a sequence of 7 messages that you could put content in and that was that one list and that was it. So it was really basic, it was all plain text. It was no HTML or any of that kind of stuff around. So, it was very, very simple product to do. The most of the stuff that I spent the time on was getting a company set up, getting a tax id set up, getting a merchant account set up. In fact when I actually, when we opened the doors. I always say “we”. It was me for the first year and half. When we got our, when I got the first order, our order form on our website actually allowed to collect credit card information. I had no way of processing the credit cards at that time because our merchant accounts had not been approved yet…

Tom: oh wow.

Andrew: It wasn’t a such thing as PayPal or any of those where you could do that through a third party to, to do, so it was like you had to have a merchant account at that time. So I was accepting credit cards and not able to process them for about, it was about 2 months before I actually got it fully approved and was able to do that.

Tom: So I’m looking at the first version of your site. It says “Discover how to capture hidden profits by delivering information instantly when prospects are hot. Then use automated personalized follow up to close the sale, increase profits and save you time. And as you say here on the site it takes, oh there it is, experts have shown it takes the prospect 7 or more exposures for your ad, of your ad before they purchased from you.

And so that’s all you allowed people to do. Just seven emails and then the drip stopped.

Tom: Yes. So you get eventually like a month or two after that out of the ability to add extra follow up messages. It was $2 a piece for each extra follow up message. So the initial sequence was $19.95 for unlimited number of subscribers and then after that if you wanted to add an extra it would be $21.95 instead of $19.95 to add for an eight message series and so on and so forth.

Andrew: I see. $2 per each additional message.

How did you figure out your pricing? Why did you do $19.95 a month or $14.95 if people paid annually?

Tom: Kind of pulled some numbers out of a hat. I asked around from the guys that were doing testing for us. Said ‘Hey, what would you pay for this?’ and that always kind of kept coming back to the number they were doing.

You know, when you’re a college student in college, you know, that’s a lot of money. I could get a couple hundred customers off of that and I’d be doing really sweet. And we did and it just kept growing and growing and growing. And at the time, with very little overhead it was something that became profitable very quickly, when you didn’t have the overhead involved with that.

So I was doing most of the initial coding, I did all of our customer service.

Andrew: I see your email address at the bottom of every page.

Tom: It was literally like tom@aweber was at the bottom of our website.

Andrew: It’s the same email I used to contact you. You still have that same email address.

Tom: Yes. So I’m not hard to find if you know how to look.

Andrew: There’s one other thing that stood out about this form. You say Choose your user name, blank@aweber. So I could say andrewwarner@aweber, mixergy@aweber.

What was that about?

Tom: That was just the list name for the account. You know, it was kind of your login name to at the time. And it was just more a personalized, it was more a list name.

You could also, at that time, you could subscribe via email as well. So like if you sent an email at mixergy@aweber.com you could subscribe that way as well. So it’s just like the different subscribe methods [??].

Andrew: How did you get the early testers that you mentioned earlier?

Tom: A lot of them were guys that I had worked with with the wireless modem company. So those guys there and I was also active on a entrepreneurial mailing list where we kind of swapped advice and other information to start a business. So it was other people that were in similar areas trying to market to a specific base.

[??] Beta testers usually if you kind of pick out a few audiences that you’re trying to approach. Just approach them. Most people are willing to, if it’s a product they actually want to use, they’re willing to Beta test. But if you’re trying to find Beta testers and you can’t find anyone that allow you the time to Beta test it, [??].

Andrew: You know what? I want to get back to the narrative in a moment. But first, you mentioned this group that you’re a part of. I reached out to you because of a another group that you’re a part of. Aaron [??] happened to tell me once that he’s a member of a group that you’re part of. Seems like you’re a member of several entrepreneurship groups, right? Why?

Tom: Yes. Why?

Andrew: Yes. What do you get out of it?

Tom: It’s important to stay connected with, you know, other people, other businesses. It’s not even stay connected. It’s that everyone has a different experience and those different experiences, even though they might not have the exact same trouble that you have, they probably runned into something similar and they probably solved the problem already. Or been able to seek out expertise to help them solve their problems so those experiences become really valuable in solving the problems that you have in your business.

You know, each step for us in the growth of aweber has been a different series of problems. You never solve all the problems. You solve the problems you have today but two weeks from now there’ll be a different problem. So, you know, a good part of being entrepreneur in a successful business is effectively problem solving so those problems don’t sink the business.

Andrew: Can you talk about that this group is that you and Aaron are a part of or is it a private group?

Tom: It is a private group.

Andrew: Well, so you can’t say what it’s about?

Tom: No, not really. We’re just, you know, entrepreneurs doing interesting things online so I can’t really talk about the membership.

Andrew: [??] those groups useful? I’ve seen several entrepreneurship groups that are just, the people don’t get real in them, they’re not very useful, they’re just people that happen to share an interest who are sitting around together and there are some others where, like you apparently have, members see real results. Anyway, I’m trying to figure out what makes one work well, and you seem to have gotten a lot out of it.

Tom: I’ve been really lucky. Some of that is just having good connections, being able to network with folks and ask them what works for them, and eventually you run into those kind of groups. Being able to ask and talk to other entrepreneurs is really important. I’m a member of another group called YPO. It’s a larger international group that has thousands of members around the world, and a local chapter here in Philadelphia. That’s something that if you achieve certain business size and meet their membership requirements, you can join. There are a lot of types of groups and I get different things out of the different groups. And those things change over time as our business changes. It’s kind of a constant evolution, to be looking for a group that matches the types of needs that you have.

Andrew: Can you give me one piece of advice? If I ever join a group, which I’d like to at some point, or if someone in the audience is part of a group, what do we do to make it work well?

Ton: Participate.

Andrew: What do you mean by participate?

Tom: Show up to meetings, if it’s an e-mail list or an online list, be an active contributor there. You only get out what you put in, so if you’re holding stuff back, you have to imagine that everyone is holding stuff back. I feel like when you expose the soul a little bit, you’re more likely to get other people to expose the soul as well. You have to be in a group where you can trust the information that you talk about is going to be confidential. Some of that comes with time, and just getting to know people. The group that I’m a member with Aaron, I’ve known most of the people in that group for close to a decade now. The level of trust that I have with them is different than with someone I might have met just last week. You’re able to talk about different things, and the level of confidentiality and understanding that you have. There’s certainly folks that I’m closer to than the general group. It’s just like when you have friends; you have the inner circle, and you have the ones that you hang out with here and there, and the others that you just drink beer with at the bar, but they’ve never been to your house. There are different degrees of friendship, and the same thing with the different groups. Eventually, in the groups that I’ve found have been most beneficial for me, I’ve become friends with all of those people. There’s people that come over to my house when they’re in town. They’re folks that I will go out of my way to meet up with if I’m traveling somewhere, to meet up with for lunch, or dinner. It’s just participating, expose your soul.

Andrew: You’ll just get together with someone, and just have a beer.

Tom: Exactly.

Andrew: Let me ask you this, why is that? You do want to do a pre-interview with us, which I get, it’s two hours. So I feel like, Tom is someone who watches every minute of his time, he is not someone who blows off even ten minutes, let alone an hour.

Tom: I was expecting you to tell me to go away.

Andrew: You were expecting that I’d say no interview, then.

Tom: I appreciate you doing that. You have to be governed about your time. There’s only so many hours in the day, and I don’t know anybody that gets to the end of their day and goes, “Wow, that was a really long day, I wish there weren’t as many hours.” Everyone always wishes there are more hours. I think you can grab a whole lot of those hours back by being more conscientious of how you spend them throughout the day. There’s a lot of crap that we all deal with, every day, and we probably don’t actually need to deal with it. We just think we need to deal with it. Some of that is an artificial thinking you’re more important than you necessarily are, or that, “I have to take this phone call, right now,” No, you probably don’t need to take that phone call right now. My friends often comment, “You never get phone calls when we’re out.” Yeah, I do, I just ignore them.

Andrew: That’s the thing I’m trying to figure out. I guess what you’re saying is, yeah, grab a beer with someone, and just hang out and don’t talk about business, and that closeness means when I do talk about business with them, it’s a much more valuable conversation. I can be more open with them.

Tom: Absolutely.

Andrew: Part of the reasons I pushed for this question are that Aaron and others have invited me to different business groups and I say, “I’m too busy, I don’t have time,” and here I have someone who doesn’t have enough time who says “Yes!” to those groups, and I wanted to see what you get out of them, and I think I’ve learned a little bit. Going back to what you did before: one of the first things that I noticed about your site is that there’s not a lot on there. There’s a lot of text, but not a lot of features, of course. There was an affiliate program right from the start. Why did you decide to do that?

Tom: Word of mouth. Word of mouth advertising, and there’s no better way to incentivize than word of mouth and also give some dollars behind it to back it up. It was something that I was familiar with, was a leading edge marketing methodology in ’98, and continues to drive a significant amount of revenue for us. We also drive a significant amount of revenue just from word of mouth that has no affiliate reseller attached to it. It’s something that I’ve found to be very beneficial for us over the years.

Andrew: How did you then get affiliates?

Tom: Word of mouth.

Andrew: What do you mean? How do you stoke word of mouth?

Tom: How do I stoke it?

Andrew: Yes, you’re not someone who would have launched an affiliate program and said, okay, now that it’s up, people are going to join because I built it. You did something to get the word out. How did you do it?

Tom: You have to deliver a tremendous amount of value for your customers, you have to overdeliver. One of our core values is: Be remarkable. When you deliver remarkable experiences for your team, for your customers, etc., the remarkable part is driving results for them, driving value for them, and in return for that, you typically end up with a lot of word of mouth. “Hey, these guys are awesome, they did this, this, and this for me.” And that’s not that they’re trying to advertise us, they’re talking about how they were excellent, they just happened to use our product to help them be excellent. Our tool is not awesome. Our tool makes our users look awesome. It’s allowing them to create e-mail marketing, newsletters that they’re sending out to their audience that looks amazingly professional, makes that business look really good. When I see a newsletter that someone sent out that looks awful, it kills me. It kills me when I see a newsletter that looks awful because I’m like, “How did they do that, how did they make it that awful looking?” Those are always the things we’re looking at, trying to improve. It’s hard for people to make themselves look bad. I feel like we fell down when someone creates something that looks really ugly with our tools.

Andrew: This was a time when there weren’t easy tools for people to talk about a product that they love, we weren’t all going on Twitter and talking about every single thing that we use. Frankly, even today, a company that makes an awesome product has got to do something to make people understand how awesome it is, to get people to try it. What did you do? Who did you talk to to get your first customers?

Tom: The first customers were a lot of the guys I had been working with, from the wireless modem company.

Andrew: How about the first customers that you didn’t know- do you remember the first customer who came to you whose name you didn’t recognize?

Tom: There were so many so quickly, to some extent, you don’t even know. It’s one of those things that just spread. It’s funny, you say there weren’t places to talk about those things, there wasn’t Twitters and Facebooks. I’d say that there wasn’t a Twitter, and there wasn’t Facebook, but there were plenty of e-mail discussion lists, and there were plenty of marketing conferences and things going online. It wasn’t like when the Internet popped up and people started doing business online, and there were people who were just figuring out how to do business. It’s funny, I often laugh at the perception that people have an online business. Very few people have an online business. You have a business that is marketed online. To me, that’s not an online business. We send a postal letter to all of our new customers. Every single new customer gets a postal letter from us with information about our customer solutions teams so they can contact us better. We’re an e-mail company, I still send postal letters to people. We get feedback back from customers that’s like, “Wow, I’ve ordered so many things from companies online, and unless it’s something like Amazon where they’re shipping me an actual product, I never get anything from them.” I can send a $0.40 letter with such an impact that they’re likely to talk about it, and they do talk about it. Who talks about getting postal mail, who cares? But when you do business, and so many companies have set this perception that they only do things online, and they’re only going to send things in e-mail, and you never hear about them in the physical world, you never really gain that market sharing, that mind sharing from somebody, to then go and talk about them when you are linking up with your business buddies over a beer, or at a conference, or something like that.

Andrew: I’ve seen those. I’ve also, as a customer of yours, gotten postcards from you. If I have an interaction with someone at the company through tech support, or maybe even on Twitter, they’ll send me a letter soon afterwards.

Tom: We send out a couple dozen of those every day.

Andrew: How do you make sure you guys get this done on a regular basis, that it’s part of your company?

Tom: Our CS team does it every day. Most people do three to six postcards every day, just based on various connections. If there was a particular connection that someone had with someone on the phone, or via e-mail, or livechat, or whatever, a memorable conversation. It doesn’t take long, it takes 60 seconds to write a postcard to someone and put an address on it. But it gives it that memorable, “Hey, we’re great people,”To get a hand- written postcard in the mail. It’s the same reason when you do a livechat with us, we try to have everyone’s avatar image up there, so you’re not just talking to Bob in our CS team, you’re talking to Bob that has a picture, there’s a person on the other end, it’s trying to humanize that. We’re not a big corporation or this big company kind of thing, we’re all people. We all show up here every day and we interact with our customers and help them and drive value for them. You have to be able to connect at that one-to-one level to drive things forward, and create an experience for someone that they’re going to remember, and then go talk about with other people.

Andrew: Here’s one of the cards that I got from you in May 18, 2012. I always scan everything that comes in. It says: You’re awesome. Hey, Andrew, thanks for using and recommending AWeber. Congrats on all the growth and success of Mixergy. Cheers, Justin Premic [SP]. And the stamp says, “I

Tom: About two or three years ago, now. It’s been a while. With the postcards, the postal letters, we’ve done that for seven, eight, nine years now? We’ve done that for quite a while, I’d have to go back and look. It’s little stuff like that. There’s no way that you can sit down and measure the ROI of the postage and the postcard printing and the time spent to do that, you can’t measure that.

Andrew: Do you do any cohort analysis that tells us: people that got a letter stay with us longer?

Tom: Every customer gets a letter.

Andrew: Are people that get postcards much more likely to stick with us?

Tom: I’d love to be able to answer that question “Yes,” but I can’t. We probably could, had it been something that we wanted to spend time on doing. It just feels right. There’s certain things that you do because you know they add to the bottom line, and there’s certain things that you do because you know it’s the right thing to do. That’s the right thing to do. You’re not the first person that I’ve had conversations about this with. I’ll frequently run into people at conferences who say, “Hey, I got a postcard from you guys, that was awesome.” You’re coming up to me at a conference just to talk about a postcard you got in the mail? I love that experience, too. Some could say that I’m priming the pumps to get those experiences when I go to conferences.

Andrew: Give me one other tip like that. What else do you do that’s easy and connects with people in a way that most other companies don’t.

Tom: We call every single new customer as well. It’s funny, because usually the first 30 seconds of that phone call is not the, “Hey, how are you doing,” sort of thing, it’s usually disarming the “Hey, what are you trying to sell me,” thing. Because when you just sign up for an account, and you get a phone call within two or three days, what would your natural reaction be?

Andrew: They’re trying to upsale me now.

Tom: That’s not what we’re trying to do at all. We’re trying to make sure that one, you got all your log-in information, you’ve been able to log in successfully, answer any questions you might have, and identify that we’re real people, we’re friendly. I’m not a random bot operator that you’ll call and be stuck on hold with forever. If you need us, we’re here, we’re really people, we can answer your questions. If you happen to have any now, I can answer them now for you. If not, you’ll be getting a letter in a couple of days from us. All of our information is on there. Please give us a call. And it helps tie all of those pieces together.

Andrew: Doesn’t it also mean that if people start using a (________), start integrating it into their business then they’re your customers. And if they don’t do it within a few days maybe you have the stats that show you’ve lost them.

Tom: Yeah, there’s definitely an on-boarding element of that. We want everybody to be successful. I don’t want to take money from anybody that’s not getting value from our service. That’s not a win-win situation. The win- win is when the customer pays us money and we’re able to provide 100 times the value back to them than what they paid us. I’m hoping that the value that you get from your account over exceeds the value that you pay us in your monthly subscription fees. I would imagine that probably does because you continue to be a customer with us.

Andrew: I’ve been a customer now for four or five years.

Tom: Exactly. So I hope that if that ever changes in any way that we’ve established a connection with you and everybody else that would allow them to say, “Hey, I’m just not seeing it here. Is there something that can drive additional value for us?” So it’s just about being able to open up those communication lines and make it a partnership that we’re all being successful based upon that.

Andrew: How long would you say it took you to quit the Olive Garden job?

Tom: I’m trying to think what the actual timing of all that was. Well, I quit that job around the same time because I moved. We got our first customer at the end of August in ’98 and the timing of that was mainly that I was supposed to start school in the Fall, so I went to Penn State for a year and then I was a mechanical engineering major and I changed majors to finance and I moved home my second year, so I was going to change, go to a different school. And so I was going to a community college my second year in school and that’s when I started getting this wireless modem stuff, I came up with the idea, and eventually decided to launch the business end. As I was going back to school that Spring semester, I was basically kind of deciding, “Hey, I’m going to give this a shot in the Fall,” and my goal for getting a product out there at launch was the Fall, so that I had this business. It wasn’t like, “Hey mom and dad, I’m working on this. I’m going to launch it sometime soon. Can I still live here for a little while before you kick me out?” So it was really something where once I had this off the ground, I moved out pretty much right after that, and I moved back in with a roommate that I had in York P.A., when I was going to Penn State. And I ran the business from there for the next year and a half before I actually hired somebody. Yeah, so the timing of that was around school and when I moved, then that’s when I had quit the job as well, so I quit the Olive Garden stuff.

Andrew: How long would you say it took you to get to a million in sales?

Tom: I should know that number. I don’t know that number off the top of my head.

Andrew: Roughly.

Tom: A couple years.

Andrew: A couple years?

Tom: Yeah, a couple years.

Andrew: That’s a lot of customers to get when you’re charging, what was it, where was that number again? Like, 20 bucks a month?

Tom: Yeah, here, I can tell you here real quick. Let me see here. Now I’m curious for my own just because I don’t know that off the top of my head.

Andrew: What are you looking at to see that?

Tom: It’s one of our internal metric’s tools. It was 2004.

Andrew: So it launched ’98.

Tom: To 2004, then.

Andrew: 2004 was your first million dollar year?

Tom: Yep.

Andrew: What did you do that other companies that launched around that time didn’t do? Why did you get to grow so much faster than others?

Tom: I don’t know. I wish I had …

Andrew: OK.

Tom: … something set. We grew so much faster. When I look back at it, it was more about, “What did I not do that I should have been doing that would have allowed it to grow a lot faster?” I actually just gave a (________) talk down in Philly two weeks ago about the entrepreneur’s success secrets kind of stuff, and for me it was, I should have hired people sooner. Now we have the cash flow to be able to do that and I didn’t because I didn’t know how. I thought it was more complicated than it was, and actually once after I actually did it, it was like, “That’s not so bad.” Yeah, there’s certain things that you kind of set as roadblocks in your head. You think they’re a lot harder than they actually are. And once you kind of come up against the roadblock like, “I have to do this. I must figure out how to do this.” Then you go and figure it out it’s like, oh, it’s not that hard. Why didn’t I do this months ago or a year ago. So it’s kind of overcoming the internal roadblock that keeps you from doing certain things.

Andrew: How were you even aware that you had this roadblock? Both people just say, “I’m not going to hire” without being aware of “Hey, I think it’s too hard.” Or, “I think I don’t have the money for it,” or whatever, we’re not even aware of those inner limiting thoughts.

Tom: I think some of that comes from talking to other people depending on your network of peers that you have around you and the relationship that you have with them. They can often tell you when you’re limiting your own potential. It’s much easier for somebody to see sometimes from the outside in than the inside out. When you’re in your own problem space all the time it’s sometimes difficult to solve those problems. Where somebody else can come along. You’re working 24 hours a day, you barely sleep, you need to hire someone. “OK, that’s really hard.” You verbalize things and it change how you think about them. And that’s going back to your peer groups. That’s one of the things that I think has been so beneficial for me is just being able to talk about those things and get them out there. It’s a business psychologist, almost. Other people might call them mentor or peer, there’s a million and one ways you can describe somebody that’s going to give you that kind of advice, but just having good friends that have experiences to take from.

Andrew: Who’s the first person that you hired? What position was it for?

Tom: Our customer solutions teams, our customer service team.

Andrew: People who talk to customers who have problems.

Tom: To help people through the software end of things. I was spending all of my normal business daytime hours doing that because we had a customer base that needs to be supported. And when there’s only one of you and you’ve got three people or four people on hold, you need to be able to multiply that effort to some extent. Even after I hired somebody I still jumped in and did customer service periodically. So it’s one of those things that just kind of evolves over time. So we hired that. The next person we hired was a developer, then business development, web designer. There were a number of things. I outsourced a bid of development engineering but most of that was the server installations more so than the actual software development. I’ve never outsources actual software coding for the A Webber platform itself. It’s always like I need a Solaris box which is what we were running back in the day, with Apache and (??) and this, that, and the other thing installed in it.

Andrew: What made you decide to go from drip to full on email software that delivers software as often as the sender needs to send it out?

Tom: A lot of that was internal usage ourselves. I needed to send newsletters to people that had signed up for the service. I needed to say, “Hey, we have new features.” So it was like, hey, we’ll build it for ourselves. I won’t say that’s a primary motivator in what drives our feature product life cycle now but it’s still definitely an indicator. I look at it as, hey, if we need this feature then there’s probably a lot of other countries out there in the world that need those same features. If I find something lacking in our earned product, one I can make those changes, and two those changes will probably be beneficial for other people as well. That’s what drove a lot of that. There’s feedback from customers themselves. There’s an interesting caviat with that especially from the software design perspective. The whole Apple paradigm, people talk about Steve Jobs and the influence he’s had there. Your customers and users will often tell you they need XYZ feature but they’re not actually telling you the problem that they’re trying to solve and being able to understand the root problem that they’re trying to solve will often allow a company to solve that problem in a more elegant way than the customer asking for a specific feature will necessarily do.

Andrew: Give an example of that, of a feature that someone asked but when you understood the root problem you created something better.

Tom: I’m blanking out on a really good one at the moment, but just little things about how people want to automate different tasks. When someone does this, I want to add them to this mailing list, and when they don’t do this, I want to take them off of this other list. So, use segmentation, and then those are all automatic based on their behavior. That’s a good one, actually, using the segmentation tool to be able to use and save different segments within one mailing list rather than creating an entirely different and static mailing list. That’s probably one. There are dozens of examples about how customers edit their messages, about how they add different content to things. I’m blanking on any other really good examples. You can’t necessarily implement features based on what people are asking for, you have to understand what the problem is that they’re trying to solve with the feature.

Andrew: I asked people who weren’t using AWeber why they weren’t using it. One of the answers I heard back was from one of your competitors, I’ll say the name: InfusionSoft. One of the people who I talked to said that “When someone takes an action in InfusionSoft, I can trigger a different e-mail based on the action that they took.” Germain Griggs, who did an interview with me in the past, who teaches people how to play piano by ear, he sends out an e-mail, he says “Which of these kinds of music are you into?” If you click on jazz, he’ll send you a certain e-mail, if you click on classical, you get a whole other e-mail. You guys don’t have that kind of if-then process.

Tom: Based on the example you just gave, yeah, you could do that. There are things that no, you cannot do right now, but everything is an evolution. The example that you just gave, we totally could do.

Andrew: So I could send out an e-mail to my audience that says, Do you have a business or not, and then if they click, Yes, I have a business, I send a sequence of e-mails, and if they say No, I don’t, I send a different sequence of e-mails.

Tom: That’s a different example.

Andrew: That’s what I meant before.

Tom: In the initial example, where someone is signing up, and they say I’m into jazz, I’m into this that and the other thing, that you can sequence them at the time of sign up, based on that. Afterwards, you could send broadcasts to them, you could send newsletters to them, you could send a sequence of messages.

Andrew: I don’t know that we could always do that, because I think we tie an identifier to the person’s URL so that if someone clicks a link, and they come to our site, I know who it was who clicked the link, but that means that I can’t then segment out based on the clicking of the link, because you see all of those URLs as separate, because each person got a link with a different identifier.

Tom: It depends on how you’re identifying those links uniquely.

Andrew: If I say “Go to mixergy.com/=?tom,” to you, and to me it says “Go to mixergy.com/?=Andrew,”

Tom: You’re probably populating a dynamic variable, so our software will only see the first part of that, not the end of that, the dynamic aspect of that.

Andrew: I thought you guys see that as different links. Anyway, the automation isn’t what it is for our competitors, and that’s why people are going there. Why?

Tom: There’s always a constant evolution. There’s always going to be some features that we have that somebody else doesn’t necessarily have, and like I said, that might not be a feature that’s a yet capability, so we have thirty-five engineers that are constantly working on the product, and we definitely have some really cool interesting things in the pipeline.

Andrew: When are you thinking of launching that?

Tom: What’s that?

Andrew: The segmentation stuff.

Tom: We don’t talk about unreleased product before it’s released- especially on interviews that are widely distributed. One of those historical learned lessons, I don’t go there anymore. When it’s released, or when it’s ready to beta, you’ll hear about it.

Andrew: I’m not allowed to e-mail people who unsubscribe from my list, yet you guys charge me for maintaining a list of people who unsubscribe. Why is that?

Tom: We charge for people in your account. If they no longer have business value for you, then you can certainly delete them. There’s an element of that that causes people to clean up old dead data rather than leaving it sitting around forever, that causes issues down the road.

Andrew: What kind of issues does it cause if I have 2,000 people who are unsubscribed? What kind of issues does it cause for you to maintain it?

Tom: Well, a lot of that is the statistics and other things around those subscribers, and the general bloat that comes. Like, 2,000 subscribers – probably not a big deal, but a lot of people have a lot of churn in their mailing list. And eventually you have 2,000 subscribers and 200,000 people that are unsubscribed, and that just causes things to kind of stack up, and not be as optimal as they could be. So, having that be part of the overall effect there, there is that, and, frankly, having people…cost-involved and managing account is not just sending an email. It’s also definitely a cost in managing and providing and storing all of the data that goes along with the account. So, that’s just part of it. And that’s not an uncommon thing; a number of other service providers do the same thing for the same reasons.

Andrew: You mean, the cost of keeping 200,000 email records, is that as high as it is…sorry. The cost of keeping 1,000 people who are unsubscribed in your database is as high as keeping 1,000 people who are subscribed, who get the email too? ‘Cuz we always charge the same price to…

Tom: Yeah, but, you’re….You’re looking at semantics of pricing. There’s a price-simplification factor. If you had two different prices for something like that, you’re just, you’re causing additional complications in understanding a pricing model. A pricing model, we try to keep it as simple as possible. It’s based on the number of email addresses that are in the account, whether you can email them or not. We don’t really get into the semantics of subscribed/unsubscribed, or otherwise. If it’s an address in the account, that’s what our billing is based upon. We try to keep it as simple as it is humanly possible to, so that everybody can understand it, and if there are a lot of ‘If/Then’ statements, or it’s…you know, if you have this, then it’s this add-on, if you have that, then it’s that add-on. We’re just trying to make it as simple as possible. It’s generally, historically, been the best way for us to manage that, for all the small business owners.

Andrew: How do you know that? What do you do to know that that’s the best way to do it? How do you know that that’s the best way to charge, how have you tested it?

Tom: What we do…we’ve done a lot of price-testing over the years. So, yeah.

Andrew: How do you feel about this question? I feel like suddenly the tone changed.

Tom: [laughs] Why? How do I feel about the question?

Andrew: Yeah. Yeah. [laughs] I noticed that suddenly the tone of the conversation changed.

Tom: Well, it’s the…no, I wouldn’t say the tone necessarily changed, it’s more the …what’s the best way…they’re very specific use cases that I don’t necessarily think would be applicable to a lot of folks. So, it’s more of the…it’s not something that I generally get questioned about, but it’s definitely something that does come up periodically. But it’s not something that is a major issue with folks, you know, I think price- simplification is much better over the, you know…kind of delve into the specific of…you know, trying to dive into it in three different ways, you know what I mean? Like, you could…like, there’s a number of analogies that you could kind of look at in the marketplace now. You’ve probably seen commercials for the little GPS units, Forcetrackers, that insurance companies are giving out to people, that if you drive this way, you can get this insurance rate, or if you drive that way, you get that insurance rate. But there’s not a whole lot of clarity about how those rates are derived based on the data that are being fed back from those little GPS trackers.

So, you know, it’s kind of hard…it becomes…there’s not a lot of clarity in how those are priced versus, you know, real simple, you call, you get a quote, based on the vehicle that you’re driving, the age of the vehicle, probably your age, and a few other areas that…But, you know, it’s, like, could I lower my insurance another 10% by driving five under the speed limit all the time? You know, and then there’s lots of other similar pricing complexities that you could get into with the different business models. But, yeah, a price that you necessarily pay for something is not always directly attributed to the direct cost of exactly what that particular element of that thing is. You know, could we break out our customer service, and put a cost on every single time somebody calls us? Absolutely! Do some business models do that? Absolutely! Do some business models not have customer service at all? You know, you can’t call them on the phone. Absolutely! So, it becomes, like, one of those, well, I didn’t call you last month, does that mean I get 10 dollars off? You know, no, that’s part of, it’s a fixed cost, is part of that. And that all comes into the pricing models that various businesses use in there, you know, in their business.

Andrew: I get what you’re saying, at some point it becomes too complicated to attach a price directly to the cost.

Tom: Every single cost item, yes, absolutely, it’s not, it’s not always about every direct cost. It’s the overall average of the cost that’s across an entire customer basing. Where a customer is seeing value, or not seeing value.

Andrew: Why didn’t you expand beyond email?

Tom: We do email really well, why branch out into other things that we don’t do well, that we don’t have core expertise in. Does that mean that we won’t ever expand out? No, I try to never say never, but it’s, I haven’t felt the need to do that. You know, there’s lots of, there are a number of companies out there that you’re probably familiar with that do a whole bunch of different things, and they do a whole bunch of things, not very well. [Laughs] Where, I think that when you maintain focus on a specific market and look to provide the best solution you can to that market. I think that in the long run that’ll do you better, so.

Andrew: I did a Google search for your name, and then I stepped forward, years, you know, how you can limit it to, the results from 2000, 2001, I tried to see when blogging was hot. Did Tom try to come up with a blogging platform to compete with Movable Type, and Word Press? You didn’t do that, did you try ever building, like a side business and then say no, this just isn’t for me?

Tom: We have had other products, we had a, an ISP Delivery product that would help track overall deliver ability. So, we had that product and that was around for five years, five, six years.

Andrew: That was for ISP’s who handled email for their clients, to be able to get deliverability?

Tom: It was for, it was for businesses like yourself that want to see how much of your mail is getting to the inbox, or going to the spam folder, or otherwise. Everybody says that they’re very concerned about deliverability and they are very concerned about deliverability and making sure they get the best, and we, so we developed some tools to help businesses actually measure that for their own campaigns, because it is [??]. And there was, there was a lot of like, oh, yeah I’d pay for that, but when it actually came time to paying for it, it really wasn’t that valuable and that the, it’d become a, it became a focus thing. You know, we had a certain amount of engineering time being devoted to that product. And the return on investment when you, when you looked at the balance sheet of like, what was driving the majority of the revenue. It was still the core, email marketing A Weber versus the other product that we had. So, you kind of always had to be thinking that justification of, OK, do we spend the time here to help make this a better product, to help grow its revenue? Or, or do we just continue to make the product that already has a substantial revenue base, and substantial customer base, better, in and itself? To be able to grow that? So it was kind of making those different choices and at the end of the day, there was, there were a number of decisions that kind of went into killing that off, that was definitely one of them, there were a couple of others. But it kind of came back to that focus thing, and we killed that off and we’re able to continue to focus on making A Weber the best product that we can.

Andrew: Have, someone in the audience who I talked to just the other day, said, how do I know? If I just haven’t been working at this long enough, and that’s why it hasn’t succeeded yet? Or if I just not the right fit, and no one’s ever going to love it? You were basically faced with that here, with this product, how did you know, it wasn’t a matter of just give it a little bit more time?

Tom: Well we had a substantial base of A Weber clients that we were working with, we were marketing, we were cross marketing to them, and the adoption wasn’t there. It was, it tended to be that there wasn’t a whole lot of customer overlap, the customer’s that we had on the other solution, were not also A Weber consumers, which was surprising to us. We figured it would be a pretty much, a if you need one, you’ll probably want the other once you get to a certain size. And there was going to be a certain size, was going to be somebody who was doing larger campaigns. And we weren’t seeing that, it was businesses that were using other solutions elsewhere that were not necessarily always in a market I was happy serving. And, you know, it was just, it was a variety of things around there. But how do you know when you’ve given it all?

Andrew: Yes.

Tom: I don’t know, I think you just have to kind of make a gut check about it, I think it’s easier to do if you have something to fall back upon, and that’s basically what we were doing there. We weren’t betting the farm on this new product. I never expected it to be as large as the core AWeber product was. I just thought it was something that was a tool that we had developed internally that I thought would be useful to other people as well. I had people tell me that it would be useful, but when it came time to pull out the checkbook, you know, the credit card, there weren’t that many people that voted with their credit card to say, yes, it actually was useful.

It definitely drove value for the people that used it, but there weren’t enough people that made that decision that it was valuable for them. I don’t know. I think you just kind of have to do some searching, and know that you’re giving it all that you can and it’s time to iterate. It’s definitely a tough place to be to be able to move those things forward, and make those calls. It was something I debated about quite a bit. I was like, oh, we’re going to kill it. Then I’d come in and somebody would talk me out of it.

Andrew: [laughs].

Tom: Like a month later, I’d be, like, oh, we’re going to kill it off. Somebody else would talk me out of it. Eventually, I was, like, no, I’ve had enough. It’s usually one of those things when the conversation in your head is the same over, and over, and over again. You’ve probably just not come to the point where you can say it out loud, but you probably need to. It’s the same thing with HR management, with management of a team and growing a team. If the same person constantly comes up as being a problem, in some way or another, they’re probably not a right fit for your team.

It’s usually when you’ve exhausted all possible avenues for making that better, and they still continue to be the person that’s coming up all the time in the conversations as kind of the problem child. It’s probably not something you’re not going to able to effect change on. You need to own up to that, and make the difficult decision and move on for all the parties involved. It’s just kind of getting to that point that is often the hard thing to do.

Andrew: One of the interesting things that I saw when I went through your Google history year by year was an interview that you did with the RO Star Act about six years ago. I started listening to that. Audio was so bad, but it was one of the early podcasts for business people. It was a good program.

There was one thing that you mentioned there that I wanted to follow up on which was you had trouble with deliverability in the early days. How did you overcome that? What was the problem actually, and then how did you overcome the trouble of getting your email delivered into different people’s inboxes?

Tom: I wouldn’t say that we had deliverability issues in the early days. Deliverability’s always something that you have to manage.

Andrew: Yeah. That’s what you said. Deliverability is always an issue. Not necessarily that it was . . .

Tom: Yeah. It’s not that it’s an issue in that you’re not getting delivered. It’s an issue in that you’re always managing it, you’re always trying to build your reputation. You’re always trying to manage the customers that you have on your network, and that they’re doing the right thing.

It’s not so much a deliverability management, it’s another way of saying it’s an abuse management. We’re always looking at customer base to make sure that they’re doing the right thing. That they’re delivering to people that have requested those emails, and that they’re delivering content that is requested. That their content that is requested, and that their content is something that is appropriate to be delivered.

It’s two ways of saying the same thing. That’s just something that has evolved over the years to different tools, different algorithms that we look at. A lot of that is automated these days, as far as abuse identification, and being able to identify customers that are doing bad things. That kind of outliers is probably the best way to describe that.

That’s always something that you’re doing. It’s not something that a lot of businesses have to do, but when you’re dealing with a network like ours where there is that potential for somebody to be abusing their other resources.

If you go to an office supply center, they’re probably not going to kick you out, because you’re abusing their paper when you take it home. It’s a different type of business model, much like an ISP might have an abuse quotient of somebody that’s downloading illegal content, something like that. Or just using their internet connection in some way. The car company’s probably not going to come and take your car away, if you start driving it recklessly, but your insurance company might take your insurance away. There’s similar anal- . . .

Andrew: Email is one of the most dangerous things to be in charge of. I could never do your job. People, when they start building their businesses, get kind of desperate. Then they get all those e-mail addresses that they have in their inbox, and all those e-mail addresses of business cards that they collected over the years, and they suddenly imagine that those people want to get their new newsletter and hear everything about their new business. They start cramming those e-mail addresses into a list, they start sending cheerful messages trying to get people to buy, and then they start sending more aggressive messages, and that’s a real headache. You have to tell them, no, this isn’t the way e-mail is done.

Tom: It can be. A big part of that is the education process, of talking about the right ways to do e-mail marketing. Most people don’t start and say, “I want to send as much junk e-mail as I possibly can. I want to send as much spam to people as I possibly can.” That’s not what most small business owners do. There are certainly people that have that intention, but it’s a tiny minority. Most people do it wrong because they don’t know any better. They do it in spite of themselves; they have good intentions but they just don’t know not to take the address book and start mailing that. The nice part about having very large customer bases and having done this for nearly fifteen years now is that we know what to look for. Those things are algorithmically programmed. We can generally tell when you upload your address book before you ever send a single e-mail.

Andrew: How can you tell?

Tom: I’m not going to tell you, come on!

Andrew: You’re saying that if I’m uploading my address book, versus the addresses of people who signed up, you’ll know?

Tom: Generally, yeah. There’s lots of different ways that people give that away.

Andrew: Do you do newsletters, yourselves? Do you e-mail your customers?

Tom: Absolutely. I’m surprised you don’t get a few of them.

Andrew: I’m on your website every single day.

Tom: You probably just read it and think that it’s a one-off, or that it’s something specific to that time period, but its newsletter content.

Andrew: You guys got hacked, a while back. I didn’t know that you guys got hacked until my customers complained about it to me. My customers are the most untrusting bunch I can imagine. I look at their e-mail addresses, it’s always Something+Mixergy@gmail, or Mixergy@theirdomain.com. They said, Andrew, you’re spamming us, and I said no way and pushed them off. And then, I started looking into it, and I said, Oh, you guys got hacked, your e-mail addresses were taken, and people started spamming. Why didn’t they tell me about this? I log into the site every day. I didn’t get an e-mail about it, I didn’t get those phone calls, or postcards.

Tom: There were definitely announcements sent for that, especially logging into your account, absolutely.

Andrew: I must not have seen it. Why not?

Tom: Do you have other people that log into your account as well?

Andrew: Yes.

Tom: They probably saw them, clicked through them, and it was something only displayed to them. It wasn’t how we do interstitials and those sort of things, it was probably something that they saw that you didn’t happen to see because they’d already logged in and identified that they’d seen it.

Andrew: That might have been. Why don’t you guys do multiple accounts? I feel so nervous about giving people on my team access to the account, but you don’t have user accounts.

Tom: It’s on the list.

Andrew: So why not e-mail about the hacking, if it were such a big issue?

Tom: Why not?

Andrew: It’s a big issue for your customers, it’s a problem that they should be aware of. Why didn’t an e-mail go out?

Tom: It didn’t affect all customers.

Andrew: You weren’t sure who it affected?

Tom: Not exactly. We did send notifications in accounts and on our blog, and so forth. There were absolutely notifications.

Andrew: I changed the tone of the interview again

Tom: I don’t know how else to answer that one.

Andrew: These questions are important to ask, because if I were listening to this interview, and all this guy did, all this Andrew Warner guy did was talk about how he got this postcard from the company, and he raved about how nice it was, I would say, you’re not asking the questions that I as a user care about. Why isn’t there automation like his competitor? What happened when there was a spam issue? So I have to bring it up. Is there a question I didn’t get to ask that you wished I would have included?

Tom: Not that I can think of, offhand. It really depends on what you think would be most interesting for your audience, as far as for them to know to be able to move their businesses forward.

Andrew: That’s a good question. I was going to ask about how to do e-mail marketing right. I saw that some people asked you about that in past interviews but…

Tom: That would be a good one.

Andrew: Alright, let’s do it. How do you do email marketing right?

Tom: It’s the end of the day. How to do email marketing right. The… on the same topic of managing abuse and so forth, most people don’t come in with the intentions of doing the wrong thing, they just don’t know any better. The biggest part about email, about doing email marketing correctly is setting expectations. One, only sending email to people that have explicitly requested it. Having talked to you in some point in the past does not mean that it’s okay to add me to a mailing list. Unfortunately, a lot of people do it. I would say the same thing about… a lot of people speed. That doesn’t make it okay. The police officer’s not going to not going to give you a ticket just because somebody else just sped by you at 80 while they were giving you a ticket. There are of things that people do in the world that are not the right thing to do and are not appropriate to do that people do anyway. It doesn’t make it okay for them to do. So make sure that you’re only mailing people that have explicitly requested it is important. Set expectations when somebody is signing up, so expectations are about the frequency of the mail that you’re going to send out, as well as the content that you’re planning on sending. So don’t send… don’t tell people at all how frequently you’re going to send and then start sending them multiple emails a day. I guarantee you that your unsubscribe rate is going to be really high, and you’re going to have a really high complaint rate. Those are the things I can guarantee, whereas if you tell you, “Hey, I’m going to email you once a month.” Send them an email once a month. Okay, you might be able to sneak in an extra one in there every now and then and you’re not going to see a whole lot of complaints about that. But don’t tell someone you’re going to mail them once a month and then mail them once a week, or once a day, or multiple times a day.

You have to set the expectations. Because when you go to a subscribe form and there is no expectation about how frequently you’re going to mail me, they’re making an assumption about how frequently you’re going to mail me. And so a lot of, most people like me make that reasonable assumption that okay, you’re going to email me monthly. And then you start sending them 3-4 emails a day, your expectations don’t line up, and thus the likelihood of someone complaining is much higher. So those are really the core fundamentals. You can get into creating a subject line, and creating the addresses that you send from. I think that from a small business perspective, one of the common things that I see people make a mistake of all the time, almost everyone has their own domain name. You know, Bobsplumming.com, or whatever. But they use a Gmail address or a Yahoo address or a MSN address or a Comcast address or a Verizon address as their reply address. It’s their email address that they put on their business cards, and that they put on their email marketing campaigns. You can usually have “Bob@Bobsplumming.com” as well, set up, and those are usually pretty trivial things to do, to configure, but it might take a 10 or 15 minute phone call to figure out to set that up in your email client. But from a branding perspective and a marketing perspective, it’s much better to have your old identity there rather than Verizon or Comcast or Gmail showing up there.

Andrew: Let me get one that I learned from Justin Premick. When I started doing courses on Mixergy at MixergyPremium.com, guys if you’re watching, go sign up, but when I started doing it, you guys were so helpful. Justin Premick was one of the first instructors, he came to teach email marketing, I was still figuring out how to do stuff then, and so it was really, he did me a solid by coming in when I was still trying to figure things out. And here’s one of the best things I learned from his course. He said most people don’t understand how to do AB testing through email. And he suggested that what we do is take our list and break it up into 5%, 5%… actually here’s how we do it. Before we send out an email, we break the list up into 5%, 5%, I think it’s 10% and then 80%. We run our first email test to two groups of 5%, and we see what gets the most open rates, what people click on, etc., and then based on that, we email the rest of the list.

Tom: Absolutely. Yeah, and that’s if you’re running larger campaigns, I absolutely recommend doing that sort of thing. Most people, most encouragement they need is just doing it to begin with, send something, because you don’t… a lot of folks, they get writers block. Or they just get to like “well I don’t know what to send”! Well do you email back and forth with customers? “Oh, yeah all the time”! Well, what do you email back and forth about? Do they have questions that they always… “oh yeah yeah yeah”! Well take one of those who already wrote to somebody else, and put it in an email, and that’s part of a follow up sequence. Boom. Done. Problem solved. Do you publish a blog? “Oh yeah, we do that all the time”! Well the stuff that goes in your email newsletter, it is your blog. Set up a blog broadcast that will turn it into an email newsletter automatically, or just reapportion some of that content that’s going there. It’s the same communication content that you would otherwise put on your website or talk to a customer directly. I think the biggest thing to remember is when you’re emailing, whether you have 10 people on your mailing list or 100,000 on your mailing list, you’re talking to one person at the other end of the computer or their smartphone or whatever. It’s one person that’s reading it.

Use the voice that’s talking that one person versus trying to talk to an entire stadium full of people. You usually get better results that way. And it also allows your mind to write to them more uniquely and to be able to address their questions and answers. Usually the campaigns we see that get miserable results are the campaigns that kind of set it and forget it. They send it out and don’t know how they interact with it, there’s no link to click on there’s no call to action. You get this newsletter and you’re like ” what am I supposed to do with this.” Doing something is always better than doing nothing. If you send nothing, there’s nothing for people to respond to.

Andrew: It took me a long time to start sending out those emails. I was nervous for a long time. What do I say? How do I get it right? I still feel we’re learning a lot. I’m still not doing how I’d like to.

Tom: You’re not going to learn if you don’t mess it up.

Andrew: How cool is this? We’re half way through the day and I already have 110 new subscribers on your list. I love that. That’s what I care more about than my traffic numbers. I didn’t explain our way of A-B testing. In the comments I will describe it in more depth. This is a premise system that we customized for us. Final questions, revenue, what kind of revenue are you doing now?

Tom: We’re a private company that’s not disclosed.

Andrew: Are you doing more than 10 million?

Tom: Maybe.

Andrew: Okay you guys are impressive I don’t know exactly how impressive but I knew the revenues are incredibly impressive. You gave the emails out before. If people send out a thank you note is that something that you’re open to?

Tom: How many people watch these?

Andrew: Maybe five. I always say, don’t ask Tom for anything just say thank you.

Tom: As you already said, I’m Tom@aweber.

Andrew: You had it at the bottom of your old webpage and you were using your old address.

Tom: I’m not hard to find, I’m on twitter and Facebook all the usual places.

Andrew: When you send your emails keep them short as a favor to me.

Tom: Thanks for having me Andrew.

Andrew: Thank you for being a part of it, bye guys.

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  • http://www.facebook.com/kyle.mccrary.12 Kyle Patrick McCrary

    Thanks for all the good notes guys!
    $ Everyone has different experiences and have already solved problems you may have in your business. Stay connected.
    $ Be guarded about your time. You can grab a whole lot of those hours back by being more conscientious about how you spend them…You probably don’t NEED to take that phone call.
    $ Be remarkable: Over-deliver value for your customers. Make your audience look good. – People will happily share this information with others.
    $ Very few people have an actual “online business.” Most have a business that they MARKET online.
    $ Identify you’re a real person: It takes about 60 seconds to write a post-card, but it lets the customer know there’s a person on the other end. This drives relationship forward.
    $ Keep the value you deliver worth more than what customers pay. Generate a relationship where customers feel comfortable asking for more value.
    $ Customers ask for specific features. Find the root problem, to create a solution.
    $ There are a number of companies that do a whole bunch of things. And they do a whole bunch of things not-very-well.
    $ Maintain focus on a specific market and look to provide the best solution that you can to that market.
    $ Justify whether you should spend the time to make a product better to generate more revenue, or continue growing a successful product.
    $ When the conversation in your head is the same over and over again, it’s probably time to act.

    $ First step of A-B testing… just send an email. (Use what you’ve previous emails to customers, if need be.)

    Andrew, you said you test 5% with email A, 5% with email B, but where is the other 10% you mentioned?

    KPM

  • http://www.sexylama.org/ Pedro Pináta

    hey, i´ve got a question. With competitors like Arpreach + cloudservices like Sendgrid/Amz/Whateverotheremailprovider aren´t you afraid of loosing market share? I mean i´m a aweber customer right now but with a growing list and tiered pricing i´ll be migrating to arpreach + e2 just to save a buck. Deliverability is not an issue so where is your USP?

  • sports_mike

    My expectations were very high for this interview because AWeber is such a great business. There are some good points of value, but overall the interview itself is a little disappointing. Andrew always touts the value of the pre-interviews that Jeramey and the gang do. I appreciate that a lot more because, I think this one suffered from not having that pre-interview to make it more structured and focused. It felt like Andrew spent a lot of time on things that he wanted to ask as a customer of AWeber (e.g. the bits about charging for opt out emails and some of the deep dives into specific functionality they lack). The interview seems to lack the usual deep dive into how the business has been built that is the strength of other Mixergy interviews.

  • Rob Rawson

    Great interview. Aweber is a VERY successful business. I do think that there are a couple of things not mentioned in the interview that I think are probably true:
    1. Partly his level of success is due to getting in the business relatively early, but also continuing to focus on the business and be consistent (that was mentioned, he said how he has not really done other businesses and I think that’s the big part of his success, get in early and focus over many years)
    2. Andrew was talking about the pricing model but didn’t really get the crux of the question, Aweber make more money from people because they charge per email and they include the unsubscribed emails. I didn’t at all buy Tom’s answer that this was because of simplicity of the pricing model. I guess that the real reason is that it makes them more money. Customers can delete emails and probably some (1%) do, but my guess is that 99% do not. I have an Aweber account and I have not deleted my unsubscribed emails and I hardly use the account even (because I mostly use other email services), but haven’t been bothered to switch out of Aweber because it’s too much of a hassle.

    I LOVED the point about sending customers postcards. Got me thinking we should do that in our business.

    So the big learning is that customers are lazy and once you get them on a subscription they will mostly keep paying and not bother to cancel.

  • http://twitter.com/robwalling Rob Walling

    You really see the value of a pre-interview (or lack thereof) with this one. A number of times when Andrew asks for more details, or for a specific example, Tom says “I can’t think of one off the top of my head.” Of course not…that’s why you do a pre-interview. Saving that two hours of time may have seemed like a good idea, but instead makes it seem like you don’t know your business or don’t have much to offer in terms of detailed advice to other entrepreneurs.

    In addition, I cringed at the defense of AWeber not mailing their user base when AWeber was hacked a couple years ago. I used AWeber at that time and my users started accusing me of spamming them. I denied it for months until I stumbled on a blog post buried deep in the AWeber website mentioning the hack.

    I never received an email from AWeber about this, and never saw anything in my account when I logged in…and I was the only person with the login to that account (which was the defense Tom used against Andrew). I shut down all of my AWeber accounts within 14 days of discovering that, and at that point I emailed every one of my users (even if they hadn’t been affected) and apologized for the breach.

    Emailing your customers after a breach feels like online business 101 and to this day I have no idea why AWeber never let us know about this.

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  • http://www.JiansNet.com/ Jian

    I was wondering about it too. I think probably just split test with 5% each and then send the rest 90%. So it is like 5% 5% 90%.

  • http://www.JiansNet.com/ Jian

    Really? Wow, then that would not look good when customer found out. This tells again being transparent is so important. I got a page that listed some good email service providers, http://www.jiansnet.com/topic/25446/MailChimp-Alternatives
    Now I am considering adding a comment under AWeber about this and also the pricing insight people mentioned here…

  • http://www.facebook.com/kyle.mccrary.12 Kyle Patrick McCrary

    That could easily be what he meant. But, I’d be suspiciously willing to bet there’s a 5% 5% 10% 80% Andrew knows something about…
    ;)

    I was thinking he was going to go somewhere with it like: Send 5% email A, 5% email B, 10% a slightly edited email of the better. Then 80% with either the original, or edited version (whichever converted better, percentage-wise).

  • accenture_survivor

    Completely agree re: his spin, deflecting, and, as Andrew liked to point out, the “change in interview tone” as the hacking and spamming issue came up. I’m sorry, but the notion of throwing it off on other people using your login, who were supposedly shown the notification, they must have ignored it, and that’s on them (ie, Andrew’s staffer who logged in at that precise moment) is just bad business and a clear deflection of responsibility.

    What Mr. Kulzer will have us believe is that his company will send postcards, based on meaningful little interactions with a customer, but all of a sudden can’t send an email because the hacking didn’t impact all clients? What? A company that is based on selling client communication services can’t pare down a list of affected clients and directly or personally notify them. I guess the statistical odds were not in the favor of two very notable users, Rob Walling and Andrew Warner? Odd… To me, it’s a difficult story to swallow when the preceding minutes of the interview touts their communication skills and efforts.

    Customer retention is much easier to deal with if you don’t point out the issue to all customers. You just sit back and wait for those impacted to figure it out, all the while that client looks like a spamming fool to those who subscribe. It becomes much, much more difficult when you admit to the masses what happened, or might have happened, with their mission-critical customer lists. To that end, well done, AWeber.

  • http://mixergy.com Andrew Warner

    Thanks Rob. I was feeling so insecure about bringing that up.

  • http://mixergy.com Andrew Warner

    What I probably should have asked about was the benefit of being early vs the challenges of making changes to an older business.

    I agree about the postcards. I think people who got them appreciated them, but even more than that, it felt great to send them.

  • http://mixergy.com Andrew Warner

    These are ballpark days & numbers, but it’ll give you a good sense of how we do things — and it’s all learned from Justin Premick at aweber.

    Tuesday 5% of our list gets version 1
    Tuesday 5% of our list gets version 2

    Wednesday if versions 1 & 2 suck, we send version 3 to another 5%

    Thursday, 85% of our list gets whatever version did best based on traffic, ratings & feedback.

    Ratings come from the links I include on the bottom of our emails.

  • http://www.facebook.com/arwin.sardana Arwin Sardana

    I really enjoyed this interview. I disagree with the comments about how no pre-interview was an issue. I didn’t find this interview lacking compared to the average mixergy interview. I got a lot of value from watching this, and there have been other mixergy interviews that probably had a pre-interview that I found less valuable. Having said that, I don’t own my own business, so my perspective may vary.

    One of the things that really resonates with me is when Tom talks about roadblocks that we perceive as being more difficult to overcome than they actually are. That’s something I’ve been realizing myself over the past few years. It was a big lesson for me that started in college. There were times where I was assigned engineering projects that felt insurmountable. So for me, completing something I thought I couldn’t finish made me realize that my perception of how difficult something is can often be very wrong. Now, for any large task, I assume I’ll be wrong in estimates of time and difficulty, so I think about it harder and more analytically.

    It sounded like Tom discovered this kind of the same way – being forced to complete things that you think are really difficult kind of changes how you evaluate problems. And it’s kind of interesting hearing “I thought this would be harder than it was” from an entrepreneur because often times interviewees say the opposite, “I would have never have gotten into business if I had known all the roadblocks that’d be in my way.” I don’t think they’re mutually exclusive philosophies either. Sometimes you’ll find people who aren’t afraid to dive into a big scary project, but that doesn’t necessarily mean they perceive all the smaller tasks as easy. And so maybe they’re not afraid of being able to do the big thing they’re trying to accomplish, but they can still have incorrect judgments and aversions to smaller tasks along the way.

  • http://mixergy.com Andrew Warner

    Thank you.

    Tom is fantastic. With or without a preinterview he’s one of the brightest and most accomplished founders around.

  • Brandi Young

    I hope this is the type of feedback you were looking for in the intro….

    I think you already realize it was the interjection of your personal customer support issues (billing/security) that changed the tone of the interview. In both cases Tom had to jerk himself into customer service mode when I presume the pretense he agreed to was that he’d be sharing his business advice and experience.

    I know you are looking to push the envelope with your interviews but I think you missed the mark on this one. In those two moments you pushed for acknowledgement and understanding of mistakes that affected you personally instead of for business insight that would benefit all of us.

    Sure, some of your listeners may have had these same issues/concerns with Aweber but the answers to them in no way serve to better the audience as a whole which is – as I understand it – one of the goals of Mixergy.

    Sorry Andrew, but all you did was expose (in an unbecoming way) some (arguably horrific) deficiencies of Aweber. In my opinion, those types of public “outings” are better done elsewhere and do not belong in an interview where the stated purpose is to guide and teach.

    All in all it’s probably not as bad as you think it is but certainly not something I would recommend you do again. I’m still a fan and still very appreciative of your work.

  • http://mixergy.com Andrew Warner

    Brandi, that’s very helpful. Thank you for being so open with me.

  • http://www.jeremyweisz.com/ Jeremy Weisz

    Hi Rob! great to hear from you. Yes, the pre interview makes everything more valuable for the viewer and you are very observant that you saw that right away.

  • http://www.facebook.com/idalisleon Idalis Leon

    Interviewing is an art. Get training- A short phone pre-interview would take care a lot of the issues this interview had.-IDALIS MEDIA.COM-
    Would love to work with you bro. But good effort- overall- prepare- prepare -prepare. Outline your interview and quesitons-keep on topic and move it along faster with a brighter more aggressive voice and manner, its a bit of a snore. Interrupt more often to CARVE the interview. Have one main story you want to tell about the interview. Cut it up into three parts, Open with an exciting most recent developments, ” Aweber boasts 12 million users and is the number one email marketing service used my business and internet marketers alike..so excited to talk to…”.

    create and exciting intro-and a slamming first question out of the gate, that’s when most of us decide whether we will continue to watch.

    Remember if the interview is boring, who gets the blame? Yep,

    So bully your interview subject into telling the story YOU want to tell ABOUT THEM. always. Honor yourself, then the audience then the guest… its your interview.:)

    And NEVER call out your interview subject unless you are on Dateline and interviewing the CEO of Abercrombie and Fitch… always honor your subject and make them have a GREAT experience..they are usually extraordinary people so treat them that way.- IDALIS MEDIA COM

  • http://mixergy.com Andrew Warner

    Your experience shows in this comment.

    What do you have in kind for working together?

    Email me.

  • Kane Mar

    Hi Rob,

    While Kulzer was struggling to answer the question about when they had their first $1M year, I thought to myself ‘This wouldn’t be acceptable to Rob Walling!’ As you can see I’m preparing to meet you in the street some day.

    What alternative to Aweber did you settle on?

    I’ve been thinking of moving from Aweber for exactly the reasons you’ve mentioned, but there’s no single competitor that has a clear advantage. Any suggestions would be appreciated.

  • Dermot Kilroy

    Brandi, I agree with your assessment that these questions came across as being personal issues and not necessarily something useful to the wider mixergy audience. However, I do feel that there were some nuggets of value from the response that Tom gave to these questions. In particular about keeping your pricing model simple, even though Tom laboured the point due to the awkward position he was put in.

    The thing that was lacking during those questions was context. The feedback I would give is, when putting your guest on the spot give some context as to why you are doing this. What the purpose of this line of questioning is and how it fits in with the broader scope of what the listeners want/expect.

  • Kane Mar

    Just checked the domain of the last email I received … incase anyone else is interested it’s the chimp! =)

  • http://www.salesprocessengineering.net Justin Roff-Marsh

    I too had high expectations for this interview and I was a little disappointed with how Tom handled himself.

    I think if the interviewer has experiences that have provided him special insights he *should* exploit that — unless it leads somewhere of no general interest.

    My biggest disappointment was that Tom made it sound like Aweber is asleep at the wheel where innovation is concerned. I’ve wondered why this successful company innovates so slowly and his answers weren’t reassuring.

    It’s bizarre that Aweber still doesn’t allow multiple users — let alone sub-accounts. And, considering that automation is a competitive advantage, I don’t understand why they haven’t extended this to allow proper workflows. I know they have an API, but so what. If I’m going to interface with an API it’ll be the SendGrid one!

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  • Donfelix Odoh

    Hello Kyle,
    This one has always been sticking in mt mind.
    ”Be remarkable: Over-deliver value for your customers. Make your audience
    look good. – People will happily share this information with others.”

    You just reinforced it.

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