Kevin Hale and his 2 co-founders started building their business before they even knew what business they’d be in. They did something that I’ve noticed other Mixergy entrepreneurs have done: they built an audience first. Then, when they launched their company, that audience became a big pool of potential customers, evangelists and defenders.
The idea for their business came from investor Paul Graham, who suggested that the 3 founders build a web app that lets people create forms. But when they heard it, the entrepreneurs weren’t interested. “We looked at other form builders, and we were like, ‘All these people are crappy. And we don’t want to be in that space.'” Then it dawned on them. If everyone in the space is crappy, then they can stand out by creating an exceptional user experience.
In this interview you’ll hear how Wufoo, the company they launched, creates an experience that attracts users with a simple, elegant free app and converts them to paid members. (You’ll also hear the admittedly unscientific way that one Mixergy listener tested Wufoo as I was interviewing Kevin live.)
The FULL program
About Kevin Hale
Kevin Hale is the Co-Founder of Wufoo, the company whose goal is to be the easiest way to collect information over the internet. Kevin is the co-founder responsible for safeguarding the user experience of the Wufoo application and designing every pixel of Wufoo’s interface.
This is a raw, mechanical transcript.
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Hey, everyone. It’s Andrew Warner, founder of Mixergy.com, Home of the Ambitious Up-start. And you guys know that I love talking to entrepreneurs who built profitable businesses, because, you know what, building a business with the idea that someday maybe you’ll sell before the whole thing collapses. And until that day, you can survive by losing money every day. That doesn’t feel like a real business to me. Maybe I’m not meant for greatness, but to me, profits and solid revenue gives me a sense of comfort. Which is why I’m really excited to talk to today’s interviewee. His name is Kevin Hale. Kevin is the co-founder of Wufoo. And Wufoo is, actually you guys were profitable, Kevin, within nine months. Right?
Interviewee: Yes, I’m really excited about it. We were able to…
Andrew: What is…
Interviewee: build a prototype within, like, three months. And then we were able to get live within six months.
Andrew: And what is Wufoo?
Interviewee: Wufoo is an online html form builder. And we basically strive to be the easiest way to collect information over the internet. We help you create a contact form, design online surveys, or event registrations, and power simple, online transactions.
Andrew: OK, and I use this on my site. Anyone who wants to contact me can go over to Mixergy.com/contact, and the form on my site is actually a Wufoo form, where you can enter your name, your email address, and whatever message you have for me. And I only did that because people kept demanding it. I thought they wanted a link to my email address, so that they could use whatever email browser they wanted. But no. They kept insisting on a form. And then I tried getting a plug-in for WordPress that did the form. I tried creating the form myself because how hard is it to code-up a form? All those things were just such a headache that it just wasn’t worth it for me. Went to Wufoo, and I got a form that just did just about anything. Now, what is it? I could go on and talk to people about why I chose Wufoo, but what is it, as the guy who designed it, what is it that makes Wufoo beyond this? What is it that makes Wufoo so attractive to websites like me?
Interviewee: Well, one of the big things we try to focus on is ease of use, like there are lots of solutions out there. You can use any number, like whether you hire out to someone, sort of build it yourself, or use a lot of other services to create or collect information. It becomes really difficult when you start realizing all the different components that are involved. Database, scripting, validation, and then preventing spam…
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Interviewee: …and then preventing spam in all the sort of sources. So when you go to Wufoo what you’ll notice is that it’s very powerful stuff. It has lots and lots of features but the ease of use is…it actually looks like it’s designed by Fisher-Price. So like anybody with any program experience can build a very complicated sort of data scheme and collect that information and adjust it live and see their changes happen in real time. And so people really love that and you can create reporting and export the data and take it with you. And it’s all in the cloud and we manage it for you. And we actually have a lot of people say, “Wow. I put a Wu Foo form up and we’ve seen conversion rates increase. Our lead generation is up. It’s way better than having an email on there.” Because a lot of people are sort of hesitant about like, especially if they’re not on their normal email machine, to have to open up a window or set up something else and open up Gmail. They can do it right there through Wu Foo and it goes directly to you and then you find it in your inbox.
Andrew: I love what you’ve said there. That “it looks like it’s designed by Fisher-Price”. It’s dead easy to use. And you’re the guy who designed it, right?
Interviewee: Yes. I do all the design and most of the copy writing is designed by myself.
Andrew: Okay. I want to come back to it later on in the interview about how you designed it, how you keep it so simple. I know that to design something simple is hard work and it takes you a long time so that you save me some time when I use the site. But before we get into that, how are you making money? Where’s the money coming in?
Interviewee: Wufoo is based on a premium model. So it’s monthly subscriptions that are on tiered plans. We offer a free plan with three forms. You can collect up to 100 entries a month. And for a lot of people that’s perfect for them, for a simple contact form. For those who want more power, like payment integration, SSL for encryption, be able to create more forms and collect more entries per month and sort of removing the branding from the confirmation page, we offer those options there and it sort of tiers up. And it scales out to exactly what your company needs. And there’s no contracts so you can upgrade or downgrade whenever you need it.
Andrew: And actually I’m about ready to hit the limit on the free version. I think I’m now getting 95 form submits a month. So 95 emails are coming to me through the contact form that you guys set up. And I think once I hit 100 I’m going to have to start paying you guys. And what’s the payment? What’s the price for going beyond 100? The first level up?
Interviewee: 9.95 a month. And then the level after that is 24.95 a month and then 69.95. And then 199.95.
Andrew: What’s the breakdown, percentage-wise, of how many people are taking the cheaper offer versus the most expensive?
Interviewee: I can’t share that with you but we… it’s on average with…or actually a little bit above average of what you see in most premium models, business models. But exact numbers…
Andrew: What’s the average? What are you seeing from other people?
Interviewee: From other people, it depends on what you do. So if you’re like a kids’ social network you can get like 15 or 20%. Other traditional stuff ranges from 3 to 5%.
Andrew: What are we talking about; 3 to 5% conversion from free to paid or 3 to 5%…oh. I see. So can you give me a sense of how many people convert? From free to paid? You can’t give me that. Can you give me the breakdown of what percentage of people buy the cheaper version verse the more expensive version?
Interviewee: Our most popular plan is the middle bona fide plan.
Andrew: All right. And what’s the most profitable for you? The one that brings in the most revenue?
Interviewee: Probably the most expensive plan.
Andrew: The most expensive plan. So you get fewer people…Actually Neal Patel recently blogged about that and he said that with one of his sites, I think it was Crazy Egg, he should probably spend more time on the fewer people who are spending a lot of money on his site and forget the majority of people who are taking the cheaper offer.
Interviewee: That’s based on the premise from The Ultimate Question. So Fred Reichl and he talks about a lot about that. Like the people you should emphasize your relationship building skills on is on those higher sort of…like the airlines, focusing on your business class airline people. It’s a very interesting policy. We had actually thought about that when we started doing some relationship type of marketing stuff, in terms of thank you cards. We had started writing Christmas cards to all our users. So the first year that we launched we wrote Christmas cards to all our paying customers. It took us like 8 hours to write them all out by hand. And then our customers really loved that. The second year, we had so many more customers it was impossible for just the three of us to do that at that time. So we decided to focus just on the higher end people for those Christmas cards and what ended up happening in January that year one of our customers wrote, “I really loved you guys and it was really nice touch that you sent me a Christmas card and I missed out on it this following year. I was kind of disappointed.” So we sent him something and we had to rethink the whole problem. It was like this isn’t going to scale properly. So we’ve changed it to we just stopped sending Christmas cards and we focus on regularly sending out thank you cards.
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Interviewee: So we sent him something and we had to rethink the whole problem. It’s like, “This isn’t gonna scale properly.” So we’ve changed it to…we just stopped sending Christmas cards. And we focus on regularly sending out thank you cards.
So every week–we have one meeting a week on Fridays, and we get together. Everyone in the company has only two things that they have to do. Everyone has to do Customer Support, and everyone has to thank the people that basically pay their paycheck. And so everyone writes about 10 thank you cards to customers based on the list that comes in–how long they’ve been with us, and they just go out. So every week we just churn them out and say thanks.
Andrew: I love that you guys do that, by the way.
Interviewee: Our users really like it, and it constantly reminds us…the whole reason that we’ve had the success that we do. It never gets to our heads. It keeps us very humble.
Andrew: Do you measure loyalty based on those cards? Have you done any experiments [Overlapping] to see if people stayed longer, or are upgrading because of them?
Interviewee: [Overlapping] We haven’t actually–we’ve been meaning to do that. So one of the things we’d like to do is…we are tracking who we do send cards to and don’t send cards to. But we haven’t done too much more outside of diving into the numbers to see how they sort of affect things. We just know that…the users really appreciate it. And we see that come back through support. And we see it in the word of mouth that generates from other people.
Andrew: Okay, and I see that in the live chat, people are asking me if I’m seeing the chat on Justin.tv where our show is. Actually no, I’ve got to be honest. I don’t know where that is. I’ll look for it throughout the interview. And hopefully I’ll be able to jump in on what you guys–oh, no. you know what? They’re writing too much.
I cannot keep track of what’s going on in the chat room on Justin.tv. Talk amongst yourselves, we’ll have to figure out a solution for me in the future. Wow! We’re getting a lot of comments here. How profitable are you? How much money are you guys making?
Interviewee: I can’t share that, but we’re doing really well. There’s seven of us and–like I said, we’ve been actually increasing revenues on average greater than 10 percent month after month. Since we’ve launched.
Andrew: Can you give us a sense? Are you in the hundreds of thousands in sales? Are you in the millions?
Interviewee: [Overlapping] I can’t….
Andrew: [Overlapping] You can’t even give me a sense of that…. Now, you’re venture-backed, though, right? So they don’t want to see you guys make money.
Interviewee: We’re not venture-backed. We have some angel funding and we have some seed funding from [Phonetic] Y-Combinator. And they basically are very hands-off, and they trust us to do what they do best. They like what they see and they’re excited about where we’re going to take it and what we’re going to do in the future.
Andrew: Can you tell us how much money you guys have in funding?
Interviewee: Yes! So, we took $18,000 from [Phonetic] Y-Combinator. And then we took an additional $100,000 from two angel investors.
Andrew: And what’s their vision for the business? Are they looking to sell it? Are they hoping that you guys’ll just keep churning out profits?
Interviewee: I think you’d be surprised at how many…how angels are usually pretty hands-off. Since they invest in so many other companies, it’s hard for them to have a very specific agenda with every single one that they invest in. Or, micromanage them. That’s not an investor you should be interested in. They like the vision that we have for the company. And they’re letting us run with it.
And our vision is to grow it and make it as big as we possibly can. Sort of expand out the resources. And anything’s possible. But right now, our focus is focusing on…. Currently five major focuses. Because in the beginning, Wufoo as a form-builder, as you collect any kind of input, it can be anything.
And that makes it very complicated and frustrating to talk about with people in a very short amount of time. So we focus on contact forms, online surveys, event registrations, and simple online payments. And so we’ve been developing all these features to focus on making us a much better survey provider. And survey creator. And trying to go against services like Zoomerang and SurveyMonkey.
Andrew: Why are surveys so big? I’m noticing a lot of people jump into that space.
Interviewee: Surveys are big because the most powerful weapon in a company is information, right? And the best way you can get information is to get it from your users. And thanks to the Internet it’s so much easier to gather that stuff. And you don’t have to have manpower on the ground, and have people with clipboards, have all this paper, and then do data entry, and process it all.
When you can have a service that processes that all for you, that makes it so much easier. And so our goal is to make it even easier for secretaries…. Or, anybody at the lower end can collect that information, or even the smaller teams. And then help them guide their company properly. With a proper–
Andrew: [Overlapping] I see. And also with the contact form, even on my site where I get a lot of inbound emails, I’m getting maybe–as you’re seeing….
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Andrew: Even on my site where I get a lot of inbound emails, I’m getting maybe–as you’re seeing–maybe 100 a month. But with the survey, if I’m gonna survey my audience, I’m gonna get 100 an hour probably. From people just sending me feedback. And that’s gonna mean that I’m gonna quickly jump up and up in each of your pricing tiers, right?
Interviewee: Yes, yes. Definitely. So that’s our goal and hope. But it all depends on what people need. People jump up and down based on all the different ways we stratify the tiers. So, some people jump up because they need encryption, because their data needs to be protected in a very specific way.
Some people want payment integration. It’s very nice if you’re doing an event or a workshop, if you can take the payment right there at that process where they register at the event. So, people use it for that. And then some people like it for the reporting. We have these really nice reporting features where you can design your own reports and graphs–and then also embed those into your website.
Andrew: What’s the name “Wufoo” mean, by the way?
Interviewee: It’s basically–I’m a big fan of Wu Tang Clan and Foo Fighters. So that’s how it got started. So, that domain was available. One of the really interesting things about it is the two other founders–Chris and Ryan–they weren’t huge fans of it…. Until Ryan told his girlfriend at the time. He mentioned the name to her. And a week or so later, he asked her, “Do you remember what the name of the program was?” And she said, “I think it was Wufoo.” And so after that he was sold that it’s easy to remember–so be it.
Andrew: What about the spelling of it? I sometimes will type in, “W-O-O-F-O-O-,” “W-U-”
Interviewee: [Overlapping] Google’s really forgiving. And so it helps us out on that front. It’ll figure it out for most people. And we really haven’t had too many problems or issues with that, with people sharing it. And a lot of people will find it by going to someone’s survey or online form. And they’ll see the address inside of there. Also, when other people invite people to come and fill out the information.
Andrew: I see. Actually I’m guessing now that a lot of people, in a few months, if they forget who it was that I interviewed the guy with the forms, they might come back to Mixergy’s contact form, and just see who I’m using. Okay. Let’s go back in time and figure out how you got here. And then we’ll answer questions like the one that I’m getting from [Phonetic] Chris Dritt who wants to know how you guys are marketing–how you’re getting users to the site.
But before we even start out with your history, can you lower the volume on your side? I think we’re getting a little bit of echo here.
Interviewee: Sorry. Is that better?
Andrew: Let’s see. Testing one, two. Oh, so much better. Thanks. Okay. So you didn’t start out creating forms. You started out hating forms. And you were in a different business. What was that business?
Interviewee: Yeah, it was in Florida. Chris and I were working at the research department at a state-run university down in Florida. And we were constantly getting projects to do these little mini-database applications that were really annoying. And then Chris’ brother was the first employee at a startup that did document image scanning for insurance companies.
So at the time we were hating this sort of mini stuff that people were asking us to do. And building a form, building a simple database is not complicated if you know basic programming skills. But the problem…it’s tedious in all the requirements that are needed for it. And it’s pretty repetitive. And so we figured, “There’s got to be a way to set this up that people can help themselves.” Right? And sort of offload that info.
And so we came up with all these different ideas and designs. The problem at the time was we didn’t have a nest egg to sit on to build the software right up. So I had a background in publishing, and writing, and journalism. And I figured that after we went to South by Southwest and we saw Jason Freed speak about how to do big things with small team staff, we were like: “Wow. There’s no reason we can’t do what they’ve done. Or what anybody else in this room is doing. We’re just as good as everyone else.”
So we were like, “Let’s do what they do. We’ll start building an audience, and from that audience something will be born from that.” So we started a blog called Particletree. Particletree was tutorials and articles about design, business, and the programming aspects of running a web startup, or trying to learn all the skills for it. And the articles did very well. We tried to publish regularly, as soon as we’d get off work.
And then we’d constantly try to think of ideas, and write the articles, and put them up there. And what was interesting about our asset is that we saw a lot of tutorials that were being written. Like, people would write about programming code tutorials, or business tutorials, and stuff. And we noticed that they’d lack a lot of research, or a lot of them were on hearsay. And you wouldn’t have links back, and they wouldn’t document their sources properly.
And I was like, “We can do this in a way that’s much better and much more professional.” And so I used some basic inverted pyramid content structure for how they do in newspapers. You start with the most important information, and just work backwards. So most articles, at the time–the tutorials…
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Interviewee: the tutorials, they’d start off with sort of, ‘This is how I built the program’ and then have at the very bottom, ‘Here’s the code to download.’ And so we switched it out. We knew that what people wanted most was to see how it works. We put a nice design demo, put the source code and we said, ‘This is how you use the source code.’ And at the end would be the explanation of all the goodies of this is how we program it, this is how we came up with the idea. And the articles just did really well. And two of our articles, like back to back, got up on Slash Dot and it convinced Ryan, after we got like 100,000people come and read an article in a day that we should be able to convert this into money somehow. I mean just getting like 1% to be able to make money. So he quit his job right away and I quit my job and we decided that we’ll make a magazine. We’ll make a magazine based on the programming, the code, on the design aspects and the business side of web start ups. And we’d do interviews with other people and do book reviews and sort of set it up and we called it Tree House. And we said, ‘ think we can do a publication schedule that only involves like two weeks of the month and we can use the rest of the month to program and write our software.’ So we built all this stuff up and Chris kept his job at the time. Actually as we built the first issue to give out for free. And he was splitting his paycheck with Ryan and I. And he was actually extremely cranky during that period. He would actually come home from work and he’s like, ‘I’ve just been working in a cubicle all day. Show me what you got. And it better be good because I’m angry.’ It was good stuff. What we ended up doing…Can you speak, Andrew? Just for a second?
Andrew: You mean apart from this from the?
Interviewee: Oh no. I thought I’d lost you.
Andrew: But you can see the video of me, right? Okay. You know what, actually, as long as we’ve stopped for a second let’s make sure that I’m understanding everything you did up until here. You saw Jason Fried talk about how the first thing he did was build an audience and then once he had an audience, when he launched his web app he was able to tap that audience to convert them into customers of his web app. And he actually did an interview with me on Mixergy where he said the same thing. That first he got his audience and then he didn’t have to go and buy ads online to convert them into customers. And he shouldn’t have to go and do surveys and he didn’t have to go and ask random people what they were looking for. He could survey his own audience and find out what they wanted out of a product. And so he was able to build a product cheaply and with his audience by building an audience first.
Interviewee: One of the really nice things about building an audience, though, is that you’ve already started a relationship with them. They trust you from the get-go. A lot of products where there is no audience development or you don’t understand the founders or you don’t know about the stuff that they’ve done, you have no trust in them. So it’s a lot more difficult for you to overcome wanting them to try something out, giving people the benefit of the doubt, etc. We actually had some trouble at launch of WuFoo and it really played into effect the audience and trust we had gathered during that period. We launched with Tech Crunch and we had some misconfigurations with the servers and servers were crashing and it was like the second comment on Tech Crunch was it had gone negative. And so thankfully, our users who had known us, immediately said, ‘We know these guys from Particle Tree. I was with them with the beta program. They know what they’re doing. They’re really good guys. They’re going to overcome this.’ And it immediately turned the tide for us. That’s not something we did. That was our own audience and sort of fans.
Andrew: And you can’t buy that kind of support.
Interviewee: You cannot buy it. And you can’t fake it. People see it from a mile away and we have just always tried to remember that.
Andrew: Chris Drit, who’s watching us live, is asking, “How many people did you have in your audience? How many people were reading your articles? ”
Interviewee: At the time with Particle Tree, when Wufoo launched, it was about 20, 25,000 subscribers to the feed.
Andrew: To the rss feed? Okay. And then how many people were coming to your website? My guess is maybe 50,000 on average a month. Maybe 55
Interviewee: I think something like
Andrew: Okay. So it’s not huge. It’s big for a blog but it’s not insurmountable.
Interviewee: Actually, no. Sorry. It was like 100,000. 100 to 125,000.
Andrew: Because you were able to get into Slash Dot and other aggregators, right?
Interviewee: Here’s the thing: the growth curve is pretty linear. I mean, it slowly grew over time. So we had been writing articles for almost a year, up to that point. And that was a lot of Like our articles would take us three to ten hours per article every time we’d put something up there. So they were heavily researched; we tried to edit them really well and yeah.
Andrew: Okay. So then when you launched Tree House that was with the idea that you were going to get into the publishing business?
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Andrew: Okay. And then when you launched Treehouse, that was with the idea that you were gonna get into the publishing business, right?
Interviewee: Yeah, so we were…. It’s, “do publishing,” but we thought we could sell the issues, make enough money that Chris could quit, it would also buy us time on the second half of the month. So we were planning on bootstrapping Wufoo from the get-go. We were like, “We have plans to get something created and out there.” And we were hoping that Treehouse would work.
And overtime I think it would’ve worked, but we had committed ourselves to a six-month issue. And actually after the first issue was out we heard about Y Combinator, and we applied, and we made it in. And so after we got into Y Combinator it allowed Chris to quit, and we were supposed to do that fulltime.
So we actually had this very difficult problem where we were building the software, had our commitment to Treehouse, and trying to do those issues…. And then also have to worry about getting the funding that we needed to. It was an extremely stressful time. I sort of wish we had known about Y Combinator one month earlier. And we would’ve held off on Treehouse. But it was actually a really good experience because we made so many connections doing that magazine.
It prepped us for the importance of a publication. A lot of people think marketing is all about pizzazz, right? But a lot of times it’s about hard work and a predicable schedule of being able to put something out there that you really like. And it’s no different than Software Management. If you’re putting a publication out, putting out code is the same thing. It’s something you have to produce, and take some time out. And you want to put it out there on a regular basis in order to keep the buzz from going away.
Andrew: How many paid subscribers did you have at Treehouse?
Interviewee: That’s a good question.
Andrew: [Overlapping] I mean, roughly.
Interviewee: I think we had about 1,000….
Andrew: [Overlapping] I see.
Interviewee: Maybe…a month. And then after that we just held back on it. And we said basically, “After these six months, we’re not gonna be doing anymore. We’re going to have to hold off, because–”
Andrew: [Overlapping] And you said it was a print publication?
Interviewee: No, it was an online PDF publication.
Andrew: [Overlapping] You got 1,000 people to pay for a subscription to online content…?
Interviewee: It was great! It was like, 60 pages of content you couldn’t get anywhere else. It was tutorials: one tutorial on design, one tutorial on programming, one nice article from someone in the business field. We had really nice interviews with lots of different people that were really generous. Book reviews. We had a cartoon, actually. We had a marketplace for ads for people to put up job listings and such.
Andrew: I love this by the way. Chris [Phonetic] Dritt, who’s watching us on Justin.tv, is like a co-interviewer with me. He’s asking great questions, so I’ll ask them of you.
Andrew: So, he wants to make sure that he’s understanding this right. One year of audience building and then six months of development until launch?
Interviewee: Yeah, we’re still writing articles and stuff. Yeah, so we’re also writing articles on [Laughs] Particletree. Why we were trying to put Wufoo out there. One really popular article was called “Lightbox Gone Wild.” It was one of the first articles to write about how you’d sort of have a modal lightbox for a web application. There’s one other guy that had written it showing really nice photos. Like, doing a zoom in on it. But no one had talked about using it as an interface element. And so we showed some examples of that. And that just took off.
And actually, that script and variations of that have been used in web applications ever since. So that’s been really exciting. And that was during the period when we were working on Wufoo. That was some of the stuff that we came up with.
Andrew: The script that you created is now being used on other webapps?
Interviewee: Lots of different ones. And there’s variations of it. People have created their own versions. And there’s like…it’s really crazy, yeah.
Andrew: All right. For the people who are watching us, because they’re fans of News.YCombinator.com, let’s tell them how you got into Y Combinator. What was the whole experience like?
Interviewee: We actually had a very funny experience with Y Combinator. When we applied, we had two different ideas. And they told us to [SOUND CUTS OUT] prepare for both.
Andrew: Oh, sorry, sorry. We lost your feed for a second there, but you were saying you applied with two–can you start it off with you applied for two different ideas?
Interviewee: All right, yes. We applied with two different ideas and we had asked them, “Should we prepare for both of them? Or is there one that you’re more interested in?” And they said, “Yeah, prepare for both.” So we spent all this time preparing for two different ideas. And then it turned out, when we got there, they were like, “We’re not interested in the second one. The second one was like some kind of affiliate link program marketplace kind of idea. And the other one was this…
It was actually, Wufoo started off as an idea–as a content manager that you can sort of have…. It was a really bad description. It was like, “reversible forms.” So, forms that you can also collect on the backend but also to the front. So a comment form is something you collect publicly, and then you can also have a backend where you enter data and stuff.
Anyway it turns out during that interview, Paul Graham actually said, “You mean just, like, a form builder?” And we were like, “No, no, no. We want to be in Content Management!” And thank God for them….
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And thank God for them. Because they were like, “No. I think you should do form building and do some research stuff.”
We had looked at other form builders, and we were like, “All these people are crappy. And we don’t want to be in that space.” Not realizing that’s the opportunity, right?
Because we were looking at, like, WordPress and Moveable Type at the time. We were like, “We want to be in that space, because we can do as well as them,” not realizing that that’s a crowded space that’s difficult to get into. So that was really fortunate for us. But that interview process, you’re only in there for like seen minutes.
And the three of us were in there and we actually felt like we had done really badly. Because we were in there and…. So it’s RTM–who’s Robert Morris. There’s Paul Graham, there’s Jessica Livingston and Trevor Blackwell. The guys who run Y Combinator. And they’re doing the interview. And Jessica, when she interviews, she’s this really lovable mom character. She’s like, “Don’t forget to let me take a picture of your group. So that when we make the decision to see…we’ll have your faces and stuff.”
And we go though the interview process. And we actually are arguing because we don’t like the idea that they’re trying to convert us to. We’re giving our points out…it ended up being that this is what they really liked about us. And I remember Trevor is sitting on his laptop. And he’s typing away at stuff but he won’t share his laptop. Chris is just wondering what it was. And then Robert, in the middle of it, just gets up and walks away.
I think it was to use the bathroom. But we were like, “Where are you going? There’s not much time in the interview.” And then we leave, and they didn’t even take our picture. So we were like, “We don’t have this.” And they were supposed to call by like, 45 minutes after a certain time. At 10:00 p.m. that night. And we didn’t get the call until an hour and a half in.
And so Chris had already started flying back to go back to his job, ’cause he had to work the next day. And then Ryan and I were finishing up an issue of Treehouse. And we got the call. And so it completely surprised us. We thought we had the worst interview ever. And as I’ve talked to other Y Combinator entries, they’ve all had all different kinds of experiences–where they’ve gone from arguing, to, like, dead, it was super easy and they had a good time, they were laughing….
I have no real advice to tell people. I think it’s just, be relaxed and be yourself. And that’s about it. Because they’ll throw anything and [Laughs] everything at you. Mostly just try to be relaxed and just believe and trust in what you do, and do well. And they’ll like that.
Andrew: Were you at all intimidated by the group there? Because beyond being investors, they’re people who you read. Who you’d heard about for a long time.
Interviewee: Oh, they…yeah–
Andrew: [Overlapping] I mean, you were reading Paul’s essays, right? You read Jessica’s book that’s–
Interviewee: [Overlapping] Oh, that’s what led us to them. And I think it’s important–they’re the most humble and super-friendly people. They’re very warm-hearted. No ulterior motives, they don’t speak like any kind of investor you will ever meet. And so, what they’re really looking for is just people they want to hang out with for four months intensely, right?
And that’s really all about personality and being fun. They trust that you’re smart and they want you to show off that you’re smart, just in the way you talk. But [Overlapping] it was really easy to warm up and–
Andrew: [Overlapping] How do you show off that you’re smart in a seven minute conversation?
Interviewee: I think it’s like, grammar and diction. Or if they ask you to explain something, you know your stuff. It’s all little things. It’s no different than a date, right? If you’re on a first date with someone, you know pretty quickly. It’s not like several hours into the date that you realize that you don’t want to be with this person. You’ll find out within five to ten minutes whether this person’s decent or not.
Andrew: And how much money did they give you guys?
Interviewee: $18,000. That’s the seed money.
Andrew: Now, it sounds like you’re telling me that that’s significant. That that was a significant amount of money for you.
Interviewee: We took that, we rented out a townhouse, and we holed up, and didn’t do anything else. We cooked Easy Mac and Ramen for three months. Built a prototype and then showed it off to investors, I think in March. And then we met with VCs and angel investors all through April. And by the end of April we secured our funding to get us the profitability.
Andrew: $18,000. Couldn’t you just have taken out a loan on your credit cars? A cash advance?
Interviewee: I agree with you. You can definitely raise that kind of money. But here’s the thing. They have connections like you’ll never believe. You have a different sort of experience with investors than other people that you will talk with. And the opportunity to sit in a room full of other investors to pitch your product, you will not get for $18,000. You can’t give that money to anyone to just sit in a room with, like, Sequoia and etcetera.
You know– Hummer Windblad, and Kleiner Perkins, etcetera. You don’t get that, benefit of the doubt. And at that time, we were only the second session ever. Right? Now they have to do two…
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Interviewee: …At that time, we were only the second session ever. Now, they had to do two days’ worth of investor days just to cover all the investors that want to show up to it. I think they have even private one-on-one with Sequoia also as a coaching just to sort of like do an example picture as Sequoia partner and see how well you’ll do.
Andrew: No question about it.
Interviewee: It’s an amazing opportunity.
Andrew: If they charge you to be in Y Combinator, if they said, “Look, you’re a startup, you’re hungry, pay us $18,000. We’re not going to give you $18,000.” You’d pay, of course, you would pay and you would get it. But it sounds like you were also hungry for the money and you needed the money. You’re bootstrapping and building a magazine on the sides so that one day you can build Wufoo. Why didn’t you just go and take a loan out for $18,000 and build Wufoo on your own?
Interviewee: There were obligations also at home, so we’re [xx] for that. Even if you got the loan money, so have girlfriends that you’re tied to, like asking you [xx] met, we had to go across the country and leave everything behind. We’re actually able to focus 100%. So, that was an opportunity we wouldn’t have gotten. It was an opportunity we learned so much. There were weekly dinners, they bring in lawyers, IT people, other investors, entrepreneurs, it’s inspiration. That’s another thing that’s [xx] useful, weekly.
In addition to that, you meet with other startups within that Y Combinator session that you would have merit. I’m now lifelong friends with those people because we went through the same things. To have that kind of camaraderie, an outlet, and opportunity to show up is just invaluable. We would have been sitting at home and we could only show our stuff to ourselves. At Y Combinator, we come each night to the Thursday night dinner, and we have to have something to show because we don’t want to be the scrub that show off and had nothing new to show. So that was like a huge motivation for us.
Andrew: How would you show it? Would you formally show it to everyone at the dinner?
Interviewee: Show off the demo and people [xx].
Andrew: To everybody or one at a time, kind of sitting around the table?
Interviewee: It was really informal. There’s dinner that’s being served. So, in the hour where there snacks is up, you just sit down with one of the guys from another startup and show off the stuff and get feedback from. It’s completely organic, there’s nothing formal about it.
There is a practice presentation session, they call it demo dare or something like that that they have a month or month and a half into it, where everyone has to do a formal three-minute show up. This is just what we do. [xx] you sort of prepare and then you have also access to seasoned investors who have gone to a whole process of building a company and startup. You can sort of gauge what is important to worry about, what’s not important from them. It let’s you stuff that you just can’t do on your own if you’re just bootstrapping.
I have to say, it would just would have taken us forever. I don’t think we’re so concerned that we would have taken like a normal loan or something like that. We felt like we had a patience for stuff. We’re much more patient and much more methodical [xx] of our approach to building software and creating content. We could have waited just in our other process in doing Treehouse. I think that was our asset to getting in to YC, they saw that. Two of us had already quit, [xx] paycheck. We were determined we’re going to build this thing whether they’re going to be a part of it or not. So that was a really exciting thing for them.
Andrew: OK. All right. Let’s move on with the story. You then ended up with two angel investors who combined, I think, you said, gave $100,000? Who are these guys?
Interviewee: Paul Graham and Paul Buchheit.
Andrew: Oh, really? Paul Graham and Paul Buchheit, the founder of GMail and FriendFeed and so many other things. They just kicked in personal funds, $50,000 each.
Interviewee: Yes, we showed it off to them and they really liked it and they’re like, “We want [xx].”
Andrew: OK. How big is this market?
Interviewee: How big is the market for our forms?
Andrew: For your forms.
Interviewee: It’s every different category [xx] kind of data collections, so you have desktop software. So, you have Microsoft Access, Microsoft Excel, Microsoft Infopath. Adobe is in there with LiveCycle Designer. So, they do it for high end sort of enterprise markets.
Andrew: Is there a way to measure it? Is there a way to measure how much money is in [xx]?
Interviewee: I don’t think you can. Then there’s this online surveys. How much money is there just for lead generation? How much money is there for payment integration services? How much is there for healthcare forms and education forms?
Andrew: What’s the key for somebody who’s listening to us right now from being inspired by your story and decided to go out and create the same thing for free?
Interviewee: [xx] and there’s lots of people who are entering our space. There’s actually another one we’ve launched with three or four other Web-based form builders that are also launched. It has not affected us, but our goal is to do art flavor and take on software, which is one of the keywords is it’s making forms easy, fast, and fun. It’s about fun. It’s about the colors, it’s about customization, it’s about ease of use, it’s about personality. That’s what we focus on and we don’t think you can replicate that with any other software team. Our attention to detail is very meticulous. We’re very, very patient and meticulous in how we sort of [xx]. We actually think our software creation is, I think the verb that we use is, “We craft our code.”
Andrew: It’s absolutely stunning. I’ve used it because I love it. I love how you, guys, thought of every detail, even making it easy for me to explain to people what certain fields are in my form without over empowering them with information.
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Interviewee: Wu Foo has a lot of interesting ideas that we haven’t even been able to fulfill yet on it. So as a hosted solution, right, we have actually access to… what does a well performing form look like? So one of the things we’re working on is an advanced statistic model and bench marking module that will analyze your forms’ performance and tell you, ‘Look, this is where traditionally people go wrong. This is where people stop filling out your form. This is the where conversion rates taper off. This is the type of copy that usually doesn’t work very well.’ So that sort of aggregate data that we’re processing with millions of forms being created on our system is extremely valuable and we think we can leverage that also very, very well being a cloud based service.
Andrew: Okay. One more question and then we’ll get into details about how you grew the business. This one comes from Mark E.P. who’s also watching us on Justin TV and he’s saying, what percentage did you have to give up? What percentage of your business did you have to give up to get the 100,000?
Interviewee: I think it was 10% for that 100,000. So it was a million dollar evaluation.
Andrew: So overall you gave up 15% of your business and the three owners own a third of the rest?
Interviewee: I think it’s like 17 or something like that. So it’s 7% went to [XXX] for the seed funding, but yeah.
Andrew: And you won’t need funding again as far as you can see?
Interviewee: Oh no. We actually have this issue where venture capitalists keep calling us and we’re not interested in the funding so…we’ve been actually very disappointed by the VC’s take on how they think they should approach successful companies or companies that they think are going to do very well. So they send an intern out there to sort of data collect information; we can hear them typing in the background into a spreadsheet to collect info. And we tell them ahead of time, ‘We don’t want to talk to you. We’re not interested in raising any money. We’re happy to establish a relationship, if that’s what you want, but you’ve got to bring something to the table.’ And will call and they have done no homework. They don’t know what the product does. They haven’t signed up for the service. And they don’t know our business model. They haven’t read any of our articles on Particle Tree, which we publish all the time. We make a website that’s very easy to understand what we do and they don’t know it. And so basically we have to pitch to them even though we say we are not interested in pitching. And now it’s become a problem where it eats our time. And that’s the worst thing you can do. If you want to have a valuable relationship you don’t want to waste the other person’s time. I’ve yet to wait for a VC to come and talk to me and have an idea, at the table and say, ‘Look. I’ve looked at your business. I’ve looked at what you guys’ve done. Have you thought about these?’ Right? I don’t hear that at all. I don’t understand. That’s not how I would approach having someone be excited about wanting to be a partner in business.
Andrew: You know, I had some internet entrepreneurs over at my place here in Buenos Aries, guys from the US. And I asked them about their experiences with specific VC’s. And Mark Sooster’s name kept coming up as a VC who gets it. I kept asking, ‘What is it about him?’ Do you know Mark?
Interviewee: No, no but I’ve heard his name several times also. I don’t doubt…I think that Fred Wilson is probably another great one.
Andrew: What they told me about Mark, I kept saying ‘What is it about Mark? What do you love about him? Why do you guys keep talking about him?’ And they said, ‘He just will…he’ll spend time understanding y our business. That a lot of times when you talk to investors, potential investors, they don’t even know your business. They don’t know what you do. They haven’t, as you say, they haven’t even registered.
Andrew: Okay. Let’s go on into how you got your users. You buying advertising?
Interviewee: No. No advertising. It’s all word of mouth is how we’ve grown.
Andrew: So the first round came from the articles that you wrote. You tell me: where did the first group of people come from?
Interviewee: So we had Particle Tree and we announced that we were going to build a product…”
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Andrew: So we’ve got part of latire and we announced right away that for beta users so we got 5,000 beta users right away trying out the product. And then over time as we were building up the product, it was I’d say it was about 2-3 weeks after we had an interface demo. It didn’t hook up to a data base, it didn’t save anything. All it was was Java script, and it was an example of how the interface was going to feel like, because that was our main goal. We wanted a new type of interface that when you sort of drag-and-drop it felt like this was a very natural way of designing data base application, and we said “This works, this is exciting. Lets put it up and out there.” So we started programming in January and in early February we did a prototype demo that said “Try out the service and this is a sneak preview of what it’s going to feel like.” So people were able to play around and when they hit save it says “Thanks for trying out the demo. If you want to learn more you can send out for the beta testing and you can send your email address. Thats like typical regeneration flow. We had up to, like, 15,000 peopel who were interseted in our service when we launched so we were able to send out to all those people. And we also got a tech crunch at the time. I have to say, as great as tech crunch is, those users who visit from there the worst converting users that we’ve ever seen, next to beta users. Less than 2.5% will actually convert and pay for the service. And our beta users, we actually offered them lifetime, 50% for the lifetime of the product. And that was to test out the billing system, because we were we were gonna lanch and the first billing was gonna happen one month into it. So we thought if we did a week earlier, let the beta testers sign up early, we were like “Ok, we can get a guage for how much people like it.” That was really abysmal. When you see the 2.5% conversion rate, you just think “We made a mistake.”
And the thing is those people are not your users. They are not the people that are having a specific problem, which is the problem that you are when you fill somethign out. Their problem is what is the next cool thing that I can play with. That’s right. And that’s as far as they will go. It’s a mistake to put all your eggs into that basket on a big launch. Our focus has always been on slow, stead growth through spectacular customer support and a spectacular experience. So I’d say most of our efforts is in customer service; so engineer who to has to do customer support, everyone who has to partake into it. We have a seven man team from 9 AM to midnight every single day, seven days a week. From 9-5 you can probably get an answer to any support request within 3-5 minutes.
Interviewer: [overlapping] Right now if someone sends you a customer support request, they are going to get an answer within 3-5 minutes?
Interview: What’s a question, what’s an issue that comes up a lot?
Andrew: Well there’s lots of typical question about service. “Can I do this? What’s possible? What’s not possible?” And any troubleshooting. Sort of, that happens. And those troubleshooting, its that they don’t understand “How do I get a theme to work? How do I copy/paste.” Something like that. A lot of time it’s lazy users, because we have spent a lot of time on documentation and custom videos and FAQs and stuff. Just take the time to look at it.
Interviewer: Hey guys, lets take the time to test this. If anyone’s watching this live, will you go in under customer support. You know, I would say it or not.
Andrew: Go ahead.
Interviewer: Let’s go ahead. Let’s ask “How do I change the design of my form?” Or some question like that. Chris Dritt, can you do it? Or Will Lamm, if you are there can you do it? Brandon Watson is watching us live but he’s probably working at Microsoft. He can’t take time away from Microsoft to do that. But if someone can do it and come back to tell me, I’m curious to see how fast a response you get. So you do customer support also?
Andrew: Yeah, so on Tuesday evenings from 5pm till midnight I do support.
Interviewer: [overlapping] Do you have-
Andrew: And rotate a Wednesday day shift from weekend shifts.
Interview: Ok, so let’s go back to how you get users. Do you have any viral marketing that’s embedded into this product? Do you have any way of getting your current users to-
Andrew: [overlapping] One more thing. So on the free plan, if you submit a successful entry, on the comfirmation page there is a little link that says “Powered by Wu Foo.” One there, all users can upgrade– To show that everytime someone fills out your forms, they learn about Wu Foo. So there is a little bit of that. But we found out that’s not what most people, most of our conversions, come from. Most of our people just come in and sign up and its after they sign up for the application and they experience the service they do that. We also get a good number of users that after.
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Interviewee: We also have a good number of users after going through customer support and they sort of experience what we’ve gone through with them, they’ll have that. They’ll realize, ‘Wow. These guys are really there. They’re really personal and they’re really nice and I value this product.’
Andrew: And they’ll go evangelize for you because you give them such great customer support. Where else are you getting users?
Interviewee: That is…those are all the locations.
Andrew: So you guys don’t do much blogger outreach. You’re not going to ProBlogger dot net and saying, ‘Hey, we can write an article about how to get more user engagement.’ You’re not…
Interviewee: I’ve talked a couple times at some conferences, right? But that’s usually…I do my best to talk about whatever topic’s good for the audience and stuff. So I’ll talk about relationship marketing. I’ll talk about how to get better conversion rates for a premium type app. But we don’t do a lot of proactive, like going out there. We try and participate in as many…what’s it called…Bar camps as possible just to contribute back to the community. But there’s just Particle Tree, there’s WuFoo, we have a twitter and we have a normal Wufoo blog where we give out info and it’s almost all our users, our users are our greatest fanatics. And so it’s all to them.
Andrew: But you’re not doing anything to encourage them, right? You’re just…
Interviewee: I mean we love them. We give excellent support. We put out features as fast as we can and give them what they want. So that’s the encouragement that we supply.
Andrew: All right, it looks like Chris Dritt, at 12:01 pm Pacific Time sent an email to your support. Let’s see how fast a turnaround we get. I’m also seeing that the guys on Hacker News are watching us. It sounds like somebody voted this interview to the top. I love that site.
Interviewee: Oh yeah! I mean, Paul [XXX] build the thing from the ground up, man and it’s hard not to keep track of…and it’s also…it’s all our friends. So I try to go out and see every time each new Wycom intersession every time that they have one and meet with the new guys and do sort of a design review with the teams and stuff. That’s a way to keep track of our friends also. That are contributing and doing interesting stuff. And some of the best minds on Wycom…on the internet, actually, are up there putting up links and finding stuff. And the discussions, like you can’t beat them. It’s the best type of discussions you could ever like hope for.
Andrew: Yeah. No question about it. I’m reading a discussion on Hacker News and I say, ‘Boy. That’s a smart comment.’ And I look to see who it was that wrote it and it’s the guy Chris O’Hanlon, the guy who created Reddit. So no wonder it’s a smart discussion, the type of people that they get in there. If you guys are listening to us and you’re not on Hacker News then you should get on there now.
Interviewee: It’s like a liberal arts dream session to have that going on. To have that resource.
Andrew: What about converting free users into paid users. How do you do that well? A lot of the guys who are watching us from Hacker News want to make that conversion so they can bring in some revenue.
Interviewee: So I can give a very interesting kind of fun talk about this and I talk…we call it relationship marketing but almost in a literal sense. So our approach as if you’re trying to date someone. So we approach new users as if we were on like a first date. We approach existing users as if we’re in a marriage. And then we looked at all kinds of science and research to see what are the best things to do in those situations. So on a first date, it’s all about first impressions. Right? It’s all those first moments. It’s storytelling. And everyone remembers… If I was to ask you, ‘Tell me the story of how you met your wife, or your first date with someone’ everyone remembers that in detail. Like they’re looking for those moments. You can’t get anything wrong because you don’t have the value of an established relationship to get benefit of the doubt. So for example, if you are on a first date with someone and he starts picking your nose right in front of you, it’s over. You’re not continuing that relationship. But if you’re in a 30 year marriage with someone and you see your husband sitting on the Bark-a-lounger picking his nose, you kind of shrug it off and go, ‘Uh. He’s got a heart of gold at least,’ right? You don’t have that forgiveness. And our goal is to be meticulous in all those first moments. And we look at everywhere that a user might experience us for the first time. So it’s not just like landing pages, which is where most people focus on. Or the home page. The very first email we ever sent out. The first time you come to an empty screen. The first time you create a form. The first time you create a report. Like all the first times. The first time you have trouble with the service, customer support, every single one of those moments are crafted by us to make sure that it is memorable.
Andrew: Like, give me more details. How do you do that? How do you make that first impression memorable?
Interviewee: You know what, you try to think of where do you see a sense of wonder in something. Whether it’s in a book…I try to find inspiration in anything. Anything I was like, ‘Well, I can’t help but smile.’ So when you first sign up for WuFoo and you create that first account, we have this little loading screen.”
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Interviewee: And so when you first sign up for Wu Foo and you create that first account we had this little loading screen. And it’s not necessary but, you know, it says “Assembling Wu Foo powers”. And there’s like this loading graphic and it’s like an umbrella lighting up and an airplane and like a flower. And they have nothing to do with the service but it’s like someone’s like, “All right. This is going to be a little different.” And then when it comes up there’s no forms created. And so on that control panel, it says, “Holy tabula rasa! You don’t have any forms! Start creating one now.” So that sort of copy, which we’re very careful about, it’s not about being funny. It’s about being friendly because first dates are about making friends with someone, not jumping into the deep end. Not saying, “You don’t have any forms. You have three left. Start paying if you want more than three.” That’s a really sort of antagonistic copy and it does what it’s supposed to do but it doesn’t feel right. So it’s all about feelings for us. Customer support, for example. We added this drop down called “emotional state”. So in addition to what’s your problem, where did you find it, what’s your browser, what’s your operating system? We say, what’s your emotional state? We had actually heard this from Cathy Sierra. She was talking about there’s this disconnect, right, between people’s emotions when they’re having problem with the service difficulty and the copy and sort of the feeling of the support. Like it’s all super bright and fun and it doesn’t ring. People are like, “I’m fucking having a problem. “ So what ends up happening is if you knew how people were feeling – like if someone were to come into your customer support department like at Target, in person, you would act differently based on how they look with their faces. We can’t do face recognition from the web but we can just directly ask them. So we have “emotional state” and it says to tell us lik
e are you confused, are you angry, are blah-blah-blah?” We were just seeing what it would do. We didn’t think…we weren’t going to use the data for anything. It was just curious to see what would happen if we just know the states and see how they correlate. And one of the really surprising things was that lots of people filled that out. It was totally optional. And so like 72% filled out the emotional state drop down field. In comparison, the browser – to tell us what browser it is that you’re having a problem – was only 74.5%. Meaning that two people, in order to solve a technical support problem, people felt that their emotional state was just as valid or necessary to figure out how to solve the problem as it was what browser it was. The other really interesting thing about putting that drop down was, people had a really emotional impact by it. They saw the drop down, they were like, “Wow. I think these guys are really going to care. Like they’re going to look at that and they’re going to make a decision about the process.” But also, because language is so inappropriate for expressing emotions and what’s going on at the time, there’s only very few things you could do with the English language to sort of show off this emotion. There’s adjectives, right, but it’s also caps locks and exclamation marks. And we follow this and we noticed both of those dropped down. Less people were writing in all caps to us, right? And there’s not as many exclamation marks. And people aren’t using as strong language. Like they’re very calm and rational; like they say, “I’m furious,” or “I’m angry.”And it was a really calm, rational explanation of what’s going on and what’s going on there. It’s like they were able to diffuse the emotion through that because they’re showing it and then sort of resolve the problem. And the result is that it’s so much nicer for us. Right? As an experience for the people doing customer support because we’re not trying to make you angry.
But the fact that you said helping us with your problem and you’re not having to use all this weird, strong language and writing in all caps to us, we are more calm and we’re more rational in the way we approach it. So like yeah. It’s those kinds of details we’re always trying to think of. How can we get at their emotional core and strengthen our relationship? Thank you cards was another one we try to do.
Andrew: Thank you cards?
Interviewee: Yes. The weekly thank you cards that we write.
Andrew: How do you keep the tone consistent? I mean, from the beginning like you said, when I create a form on your site, you have kind of a fun tone there. And throughout the site, throughout customer support, through when I go and create my fourth form, through when I pay, it seems to all have the same voice. Is it only possible because you’re the only one creating these pages? You personally, Kevin?
Interviewee: Well, I do all the design for the site but everyone on the team looks at it. And you get a feel. Once you start creating, you get a feel for what the Wu Foo aesthetic is supposed to be. What is the Wu Foo voice? I don’t know. I have to say definitely it helps that you have a curator or a design dictator. We’ve always been interested in how things would play if we had two designers and how things play out for that. But…This is the kind of software that I’ve always wanted to design. Like software that was going to be like fun and gamey and…
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Interviewee: This is the kind of stuff where–I’ve always wanted to design. Like, software that was going to be kind of fun and gamey. And it’s a really boring idea, database creation and management. But I was like, “There’s a way that you can do this where you can smile and not be reminded constantly that you were in a cubicle and you were wearing a tie and stuff.”
Andrew: All right. Speaking of a cubicle, I’ve been looking over your shoulder throughout this interview. I’m seeing your bed; I’m seeing a cat running around.
Andrew: I’m guessing we’re in your bedroom, right?
Interviewee: Yeah! So, we don’t have a central office. Everyone works from home at Wufoo. And on Fridays we get together at each others’ houses and then we meet there. And that’s when the team meets. But we do video chat and we do regular chat. We use Dropbox to manage everything, and do everything remotely.
But we’re very picky about our teams, though, because of that. So, everyone has to be very self-driven and very disciplined in how they approach their work. But it works great for us. We find that–
Andrew: [Overlapping] I know, Kevin, that you’ve experimented with this, right? You’ve done some experiments. Can you tell people about that?
Interviewee: [Overlapping] Oh yeah! Yeah, so–in addition to experimenting with designs, and also programming and coding aspects, we try to experiment with our business model. We don’t take anything for granted. We try to learn as much as possible. So we started off with research for, “What is the best way that we should be working?”
Because if you’re going to be a small team, and you’re determined to be a small team, and keep as much [Laughs] percentage and shares of your company as possible, you have to be efficient. And we were like, “We want every percentage of efficiency and productivity that we can squeeze out.” And so we looked at five-day workweeks, we looked at four-day workweeks. We’ve looked at three-day workweeks. We looked at all different types of hours, and rotating schedules, and stuff.
We settled on this sort of four and a half day workweek schedule. The way it works is that Monday through Thursday, everyone is supposed to do the work that they do minus the support day that you have. On the day you have support, your only job is to address the customer. But all the other days, it’s do programming, and programming alone. Or design and development.
And anything that might be a distraction–so anything that you can’t resolve within two minutes in a conversation with someone, that basically requires a meeting, it gets tabled off. Everyone has a list of stuff that they have to do. And you say like, “Just go on to your next item, and we’ll table it off to Friday.”
And then Friday’s sort of a half day. So it’s more relaxing. People meet at about 2:00 at someone’s house; someone has snacks and all this stuff. And we do our weekly scrub. So we go over everything you did from the week prior, why didn’t you get anything accomplished, and what are you going to do for next week. And then we also write thank you cards and stuff.
But forcing it to be only one meeting–and we also tend to do most of our business development meetings also on a Friday. But what ends up being–it’s much more relaxing so you get more out of your weekend out of it. But also people are a lot more intense with their schedule on those four days. And it’s really nice that we’re able to limit ourselves to one meeting [Laughs] a week. Because that’s something that we always hated working in the government.
Andrew: By the way, I got an email–or Twitter message back from [Phonetic] Chris Dritt saying…. All right, so, the first Tweet that he sent to us said that he sent you guys a support email at 12:01 p.m. Pacific Standard Time. And then soon after that he Tweeted at me and he said at 12:01 Pacific Time, he got a response to his question from Wufoo.
Andrew: Did you–? Tell me the truth. While we were talking, did you send your Tech Support people an email telling them, or message telling them to respond right away?
Interviewee: [Overlapping] I think they’re actually–they’re watching, probably, right now.
Andrew: [Overlapping] I see. [Laughs]
Interviewee: So, they probably were braced for it. I’m pretty sure Andrew’s gonna be mad at me later on. He’s on shift today.
Andrew: All right. I’m looking at my notes to see if we talked about everything that I promised people we’d talk about. We talked about design and how you got it, we talked about the office hours. We talked about–I pushed you to say how much money you made, and of course you said no.
Andrew: You said you weren’t willing to tell us. And by the way, for anyone who’s watching there’s no sandbagging here. Kevin and I had a conversation before this interview. I said, “Do you feel comfortable talking to people about how much money you make?” He said, “No.”
I said, “All right.” I often will ask that. And then I’ll ask in the interview, and you can say no so that everyone else gets to hear that you’re not willing to say anything.
Interviewee: [Overlapping] I appreciate the effort. You’re not the first, so–
Andrew: I’m not looking to push or anything. I’ll tell you the truth that sometimes I’ve gone back and edited out people’s numbers when they said that they couldn’t have it out there. I can’t do it anymore, ’cause it’s too much work.
There are times when…like Lynda.com. I know what their revenues are. I specifically didn’t ask because I asked her before the interview if she felt comfortable talking about it. She said no, and we shouldn’t bring it up. And I said, “Okay.”
So even though I knew the answer to that, my goal wasn’t to expose her business. My goal was just to learn as much as possible. So that’s what I’m trying to do here. So there it is. Is there anything I missed? Anything that entrepreneurs need to know from your experience?
Interviewee: Don’t forget to have fun….
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Interviewee: Don’t forget to have fun. I mean, we’ve tried to design software that has fun. But we’ve given everything also to make our company fun. We actually had one employee, for the first year that he worked for us, he didn’t take any vacation time off. We give generous…it’s not tracked, the hours off. It’s all about, “You get your stuff done. And if you get it done, we don’t care how much time you take off.”
And he didn’t take anything off for the first year. And we were like, “Alex, what’s the deal?” And he’s like, “I took Christmas off!” And it was like, “No. Everyone got the Christmas break off. What did you do?” He’s like, “I took one day off to do Fantasy Football at a hotel.” And he flew immediately back, to be back for work.
So we were like, “You know what? You’ve generated more value to us than any other person in the company. And because of that, we want to reward you for that.” And so we said, “We’re making you go on a vacation. Research something, take your wife on it, and we’ll pay for it.” So it’s extremely important to us that the health of our employees…that they remember–
Andrew: [Overlapping] Aren’t you missing opportunities because of that? It sounds like you’re not experimenting with ways to convert people to get them to–to push them to pay you. You’re not being aggressive about bringing new people on your site; you’re not being as aggressive as you could be with your employees. I interviewed Jason Calacanis. The guy’s famous for pushing his people to death. And then just before they die, he says, “Come on out to Taekwondo classes, ’cause I want to make you into a fighter too.”
Interviewee: So we’ve done a lot of research about productivity. And we find out that crunching is the worst thing you can do. If you crunch somebody, if you push someone to work extremely hard, you’ll get more work out of them. But in the long–what ends up happening is when the work’s over, they have to have a recovery rate. And the recovery rate gets much longer in the area on the curve than the actual work that you–
Andrew: [Overlapping] What about this. You see where you started covering down with your hand? Like this? How about at that point, you fire them? Because at that point they start to tire out. And you go, “Goodbye. I’m gonna go hire somebody else. You don’t like working for me anyway, ’cause I’m too high-energy for you. Go work for someone else who’s gonna be a little calmer. I’m going to hire someone else who can keep that curve going up?”
Interviewee: There are companies that are like that. And that will never be us.
Andrew: [Overlapping] Because it’s just not your personality, or because you’re trying to build a company where–
Interviewee: [Overlapping] Yeah! It’s not our personality. It’s about establishing long-term relationships. That is our goal. That’s how we plan on winning. Establishing long-term relationships with our users, our customers, have them keep coming back. Our employees, so they never leave. It’s extremely valuable, the amount of investment that we put into them, right? We don’t want them to burn out. We don’t want them to be frustrated for it.
Same thing with our users. It takes a long time to teach a user how to use our software. And to have them just go away because we’re rude to them in Customer Support, or we’re off, or because we don’t respond or we don’t do features…. I think it’s a mistake, right? It’s a really bad way to run a company and to be a person. And I think those are always….
You spend a third of your life, almost, if not more working, right? To spend a third of your life being the kind of person that you kind of despise or…”is frustrated by,” or “is angry at,” that’s no way to live or work. And so that’s just how we approach things.
Andrew: All right. Thanks. I’ve got to ask you so many more questions but I’m looking here at the time. We’ve spent about an hour and twelve minutes on videoconference here together. At some point I’ve got to cut it off, but I’m dying to ask even more questions. For example, the two investors. Are they pushing you for an exit at some point? It doesn’t sound like they necessarily want one.
Interviewee: No, they would love to see an exit. But on our own time, and in a way that we’re comfortable with. They love the way we work and how we innovate. We’re thinking and working constantly all the time to refine this. And so, it’s not…. Good investors trust the people–they form a relationship with the team members. And they say, “These people are going to be able to do something amazing. And I’ve got to let them do that.”
It doesn’t do any good to be constantly looking over the shoulder and want something back in return. And they’re just not the kind of investors that would be like that.
Andrew: Paul Graham and [Phonetic] Paul Blueheight, are they still advisors? Do they still help you think through the business?
Andrew: What kind of advice do you get from them? What kind of feedback?
Interviewee: It depends on whatever advice that we want to get. Sometimes we’ve had meetings to establish things with them. And usually it’s just reporting. The…just, encouragement. I don’t know. We’re fairly…also very independent. Like, they kinda wanted us to stay in California. But we weren’t interested in that and we came back to Florida.
And so, it’s mostly that we’re going in the right direction to make sure we’re thinking about the right stuff. But it’s been a while since we’ve needed any sort of heavy-handed advice. Since we’ve been doing this for about four years
Andrew: What kind of advice do you get from [Phonetic] Paul Blueheight? What’s he like?
Interviewee: He’s a really funny guy. His idea is, he’s always worrying about, “Is the market big enough? Are you thinking in terms of…. The percentage of the pie that you want, is the pie big enough that when you get a percentage of it you can do well and run off on your feet?”
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Interviewee: …on your feet. And he’s always awesome, and she did it in like toppling the big guys. So he’s always having us look at those kinds of features, to be like. You know what? What are, what are the, you know, what are the big guys, say like Microsoft, Adobe, and stuff, and how can you, like, sort of do better than them? In that respect, yet with a completely different approach. So…
Andrew: The big guys are Microsoft and Adobe?
Interviewee: I can tie it in when we started talking about the idea with them. And stuff like that. So he was really excited about that. You know, we could sort of turn things on its head. Because when a traditional…
Andrew: So what is it you have for beating them?
Interviewee: Oh, no. He liked our ideas for how we were going to beat them. So his approaches don’t think about things like that.
Andrew: OK. How can people contact you if they weren’t happy with the list of questions that I had for you, and have even more questions?
Interviewee: Oh, if you have any questions about Wufoo, you can contact us at firstname.lastname@example.org. If you have questions for me about sort of like how we run the business stuff, you can contact me at email@example.com.
Andrew: All right.
Andrew: And what part of Florida are you in?
Interviewee: We’re in Tampa, Florida.
Andrew: You get together for meet-ups and bark-ins in Florida? So people can meet with you.
Interviewee: Yeah, well, we try to go to the Orlando one, the Tampa one. We try to make it to the Jacksonville one. As many as we can. All right.
Andrew: All right. I will come and see you in person there, too. I’m always pushing my audience to go and meet the people who I interview in person, or send them an email, or send them…
Interviewee: We’ll actually be in the San Francisco this weekend for the Crunchies. We got nominated for Best Bootstrapped Start-up, and so we’re really excited about that. We’re hoping we do well.
Andrew: All right. So vote for them over the next… Is there still time to vote?
Interviewee: Yup, the next couple days.
Andrew: Vote for them over the next couple of days for a Crunchie. And I’ve got to say this to Justin TV. Thank you, guys, for promoting me, and for getting such a big audience for me. And to the person who submitted me to Hacker News, next time submit the Mixergy link, not the Justin TV link. Justin TV gets tons of traffic already. I could use more viewers on Mixergy.com. Is that an appropriate thing for me to say, Kevin? Should I ask about, ask about…
Interviewee: It’s just what, just what something I would say.
Andrew: [Laughs] All right. All right. Kevin, thank you all. Thank you for doing this interview. Thank you all for watching us. I’m looking forward to your feedback. Keep sending it in. And, oh, I’ll see you in the comments.
Interviewee: All right. Thanks, Andrew.
Andrew: Smile, buddy. Thanks. Bye.
Full program includes
– What the name Wufoo means. (Kevin combined the first parts of the names “Wu Tang Clan” and “Foo Fighters.” Listen around minute 15 to hear how he tested it and why he doesn’t mind that you might misspell it.)
– Why you should build an audience before you launch your company — and why it’s more a more powerful way to build a business than buying ads. (Listen around minute 24 for more info.)
– How Kevin and his co-founders kept over 80% of their business. (Listen around minute 39 to hear how Paul Graham and Paul Buchheit personally invested $50,000 in the company.)
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