Andrew: Coming up, wait until you hear the surprising way that today’s
guest found his co-founder. If you know anyone who is looking for a
technical co-founder or any other kind of co-founder, you’re going to want
to watch that part of the interview. Also, if you’re looking for big
customers, check out how today’s start-up lands giants. All that and so
much more coming up, so stay tuned.
Three messages before we get started. First, do you need a single phone
number that comes with multiple extensions, so anyone who works at your
company can be reached no matter where they are? Go to Grasshopper.com,
it’s the virtual phone system that entrepreneurs love.
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increases sales, but is easy to set up and manage? Send them to
Shopify.com, the platform that hot online stores are running on right now.
Finally, do you need a lawyer who actually understands the start-up world
that you and I live in? Go to WalkerCorporateLaw.com. I’ve known Scott
Edward Walker for years, so tell him you’re a friend of mine and he’ll take
good care of you. Here’s the program.
Hey there, freedom fighters, my name is Andrew Warner, I’m the founder of
Mixergy.com, home of the ambitious upstart. How does a founder who felt
like he could never come up with a business idea, end up launching a hit
company with clients that include the Miami Dolphins, Pepsi, Sony Music.
Irving Fain, the co-founder of Crowdtwist, which has incredible customers
and provides them with an advanced multi-channel customer relationship and
loyalty platform. This interview is part of my series of interviews with
founders whose companies were launched with the help of TechStars’ David
Cohen, the co-founder of TechStars, who help me put this and many other
interviews together. So, Irving, welcome and thanks for doing this
interview.
Irving: Hey, thanks so much for having me, I appreciate it. Glad to be
here.
Andrew: Yeah, me too. So, there was a time right, as I said in the intro,
where you weren’t sure what your next big business was and you were going
swimming trying to find it, right? [laughs]
Irving: [??] swimming was related to the finding of the idea. I did not
swim to find the idea, I think I swam to just get myself out of the little
rust pit from the search of for an idea as well as the day to day grind of
my job at the time. But, yeah, you know, I have always been an entrepreneur
at heart, always knew that I was going to do something entrepreneurial. The
question for me for a while was what was that right idea to really dive
into 150%.
Andrew: Can you talk a little bit about that time, because, frankly I was
remembering, not remembering this morning, I was feeling it this morning. I
said, “There needs to be a next step for Mixergy.” I am really struggling
with what it is and there’s no clear path for figuring out what the next
step is and how to do it and it’s frustrating. Maybe if I could see it
through your eyes, I could feel a little bit better about my experience and
understand what I can do to get it right, ‘cuz frankly, you’ve got it
right. So, talk a little bit about the struggle.
Irving: So, I think you’re very kindly generous to say you’ve got it
right and I think I would almost say that there is, it’s hard to say that
anybody’s ever gotten it right at any point. Even the big established
companies are constantly evolving and iterating to make sure they continue
getting it right. Which I think really shows it’s a process at the end of
the day and every business from early, early stage companies that a couple
of people hacking on an idea to companies that are thousands and thousands
of people. I think iteration and evolution is an underpinning of all those
different circumstances. To me what that really means is that the most
important way to start that process is to start that process.
It sounds intuitive in a lot of ways, but, there are a number of ways,
there’s millions and millions of ways that you can talk yourself out of
starting a company, talk yourself out of evolving a product, reiterating
your company because it doesn’t make sense, it’s risky, it doesn’t seem to
be sensible, it’s dangerous. There’s so many different ways of looking at
it. I think that one of the most important qualities is just being willing
to initially take that risk and take the plunge and actually start on the
journey. What you realize is on along the way of that journey, you’re going
to learn a lot from the customers, clients, from your users, from yourself
. . .
Andrew: There was this period where, here’s what you told Jeremy, our
producer: “At one point I felt like we were in constant state of waking up
in the morning to go swim, then go to work, then come home and work on
ideas until 11:00 p.m. and then wake up and do it all over again. There’s
an internal struggle there, as well as the external struggle to come up
with something for clients. What was that?
Irving: I think it’s just you’ve got to find something you believe in and
you have passion for. That was the struggle for us, was that I had been an
entrepreneur at heart. That was always my goal, was to do something of my
own. I’d been on the finance side and the buy side for awhile. I then
flipped over to really get some operating experience. I was working at
Clear Channel and I was waking up in the morning, going to the pool, then
going to work. Coming home at night with one of my co-founders at the time
and we’d sit around our kitchen table and we’d spend three or four hours
just talking about different ideas. There was a sense at that time of
really immense frustration just because we knew we wanted to be building
something, but we felt that what we were building, we needed to have the
passion and the excitement for, and we just didn’t have it for each of
these ideas.
Andrew: What are some of the ideas that you had that, looking back on,
[??].
Irving: [??]. One of the ideas I still think is interesting is something in
the ticketing space which we didn’t end up pursuing for a number of
reasons, but even there I look at it now and I say, ‘Knowing what I do
know, if I’d known that back then, we probably could have dove into that
idea.’
Andrew: What was the idea?
Irving: The idea was variable pricing for the primary ticket markets. The
same way you have variable pricing in the secondary market on StubHub, the
notion would be that you could offer variable pricing for a primary
ticketing market the first time someone sells tickets. A lot of
complexities, nuances.
Andrew: What’s the challenge for that? Right now, all the tickets cost the
same and then StubHub, or scalpers will often buy those tickets and then
charge me as much as they can get based on market demand. What’s the
challenge with cutting out the middle man and just having variable pricing
off the bat?
Irving: There are so many challenges. It’s a whole conversation of itself.
The big players own the big venues and the relationships and those are
things that they hold on pretty tight to and sometimes will even pay to
maintain. As a small company, to try to leverage your way in there is
difficult, and what we found is the easier inroad would be the smaller
venues and smaller rooms, but those venues and rooms typically didn’t have
shows that were as exciting, so the upside on the variability was limited
and the downside was the more likely outcome. You were creating a model
that would potentially depress the price of tickets, not increase them and
the venues where you would really see that revenue benefit were owned by
other players who were going to be very difficult to unseat. [??].
Andrew: What kind of research leads you to have this understanding?
Irving: This is the funny thing I think about, people ask me a lot when we
started Crowdtwist. ‘Did we spend too much time thinking about this stuff?
Did we spend not enough time thinking about pieces?’ We spent months and
months working on that idea. Everything from building a financial model to
creating a [??] to present to people, to researching the ticket market, to
talking to venue owners. Just to get a sense of, ‘How did the market work?
What did it mean? What were the opportunities? [??] what the product would
look like.’ We carried down a number of different paths to try to evaluate
whether that was, or wasn’t, the right opportunity.
Andrew: You also had one business idea that you followed for six months.
Was that this ticketing idea, or something else?
Irving: [??] idea.
Andrew: Six months of doing research, but not necessarily launching
anything?
Irving: Which was a tough moment for us. That was what Jeremy was referring
to when he and I spoke, is that I had invested an immense amount of myself
in being an entrepreneur, not in an idea, which is a nuance, but an
important distinction. We continued to build momentum around this ticketing
idea and what really hit us was when somebody handed us a couple of
contracts from Ticketmaster and showed us that they were years and years
and years long with immense amounts of dollars attached to them. We looked
at ourselves, like ‘Wow. This is going to be really difficult to build this
business, no matter how compelling [??] idea we have. That moment where we
had to look at ourselves and say, “You know what? You want to do something.
We want to build a business, but this isn’t the business that we should
build,” was a tough one because we’d invested so much of our time, so much
of our energy and we were, it felt like, starting from zero. In hindsight
now, looking back, and we weren’t really starting from zero because we
learned about the evaluation process itself and what was valuable that we
did, what work was not necessary and that allowed us, when we did come on
the idea of Crowdtwist to be much more efficient and effective in our
evaluation. [??] came and ask for tickets, and perform crowd twists, but we
didn’t spend much time on that one.
Andrew: There was something before crowd twists, but after the ticket
business- what was that?
Irving: We looked at a babysitting concept, that there was something around
the world of babysitting, connecting babysitters with families who needed
babysitters, but we spent much less time on that than six months on
tickets.
Andrew: So, what was one thing that you did right in evaluating the
ticketing business, and one thing that you wished you hadn’t wasted your
time on?
Irving: I think the most important thing we did right was figuring out
everything that could potentially be wrong. What I say to people all the
time is that if you can’t identity a number of potential issues and
pitfalls and problems with your business, then you’re not looking hard
enough. No matter what your business is, no matter how compelling of an
idea you’ve created, there are always pitfalls and potential problems.
Google, Facebook, Instagram, Pinterest- they are sort of the rock stars of
the moment in technology- even they have plenty of pitfalls, let alone when
they were starting up. So we were very critical of the idea, the market,
the opportunity as we were starting, to understand the risks that were at
play. I think the question then becomes, where is critical and where is too
critical? There is a point at which you can talk yourself out of pretty
much anything.
Andrew: That’s a good point. So that’s something that you did do right,
where did you waste your time in evaluating that first ticketing business?
Irving: I think we did a lot of great work in order to create as many
materials as we did, I’m not convinced we did, but that’s all in the
rearview mirror at this point.
Andrew: What kind of material?
Irving: We created a presentation, we created a whole pretty complicated
financial model, we included benefits because it helped us understand the
economic opportunity. I’m really a believer that you’ve got to build
business that have modernization. I know there’s a lot of attractiveness to
building a user base and then figuring out modernization later. I may be
old school, but I do think that thinking about the economics of a business
is important. We did spend a lot of time thinking about that. It’s hard to
tell if that’s right or wrong, but here I am today, right?
Andrew: Speaking of modernization, what size revenue would you say you are
doing now?
Irving: That’s not something we disclose, but we have had healthy growth
from last year to this year, which is the right trend. We look to have
healthy growth moving into next year also.
Andrew: Alright, I knew from my notes that you weren’t willing to talk
about it, but I would like to try. What were you doing just before, while
you were looking for ideas? What was that job?
Irving: I was working Third Channel in their digital division, so I was
working the digital arm of the biggest radio group in the world. We were
really the national organization, maybe a thousand-and-some stations across
the whole country, so we managed their sites, their technologies, their
different platforms, applications or opportunities that came out so we
could roll them out to the entire radio portfolio.
Andrew: OK. So even though you had that job, and you had other jobs before-
an associate, partners, private equity- you always were an entrepreneur at
heart. In fact, you did something that you mentioned- StubHub, the founder
of StubHub came here and told me about how he used to sell toys and candy
when he was in school- you did something like that too, right?
Irving: I was always looking for the next business idea. I told Jeremy the
story about when I was very young, I used to go down to the corner store, a
place called Harrison’s where I grew up in Providence, and I’d buy these
little rubber animals for 10 cents or whatever they were, and then I’d go
home and I’d siphon them off into a number of different compartments, and
I’d put all the animals in, and then I’d go to the playground and I’d sell
the animals out for 25 cents to all the kids at the playground. And I went
to a Quaker school, and playground commerce was not one of the attributes
that they were really trying to encourage, so that business didn’t last
very long. But between that, and snow shoveling businesses, and raking
leaves- and I had a quite lucrative business that started as a lemonade
stand and turned into t-shirts, roses, that I ran all the way up until I
was 19 years old that grew to be very sizable. So, I was always chasing
after different projects and building up businesses.
Andrew: And you shut down for the t-shirt business because you didn’t have
the right trademarks, you were just creating t-shirts.
Irving: We were creating t-shirts for the local college, and what ended up
happening was that we were victims of our own success. People liked our t-
shirts so much, they were so much better than the standard boring t-shirts
for the college, that they were going into the book store in groves asking
for our t-shirts, at which point the book store says, “Clearly someone’s
doing something out there and it’s not our t-shirts. We need to end this.”
Then all of a sudden the local campus police roll up on our place. They
took our t-shirts and so ended our business.
Andrew: I should move past this, but I can’t. The fact that you sold little
rubber animals while you were in school and were shut down for it really
irritates me. I hear this a lot in interviews. The same thing happened to
the founder of StubHub. The same thing happened to me. The same thing
happened to so many other kids. If you’re a kid and you pee your pants in
school, they will make you feel OK about it. They will make sure that they
treat you right as you go through this, but if you sell candy. Boom. They
shut you down and treat you like a criminal. If you sell the little dolls.
Don’t you think that’s wrong?
Irving: I think that the notion is that you’re preying on the lack of
judgment, I guess, would be for a [??] five year old.
Andrew: You’re selling it for 10 cents, 20. Buying it for 10 cents, selling
it for 25. We’re talking about penny commerce to teach you entrepreneurship
and encourage this talent that you’ve given.
Irving: Their argument would probably be that there are better ways to
teach and encourage entrepreneurship. It wasn’t as if they strung me up in
front of the whole school and made a huge deal about it. It was just one of
those, [??].
Andrew: So, did they teach you entrepreneurship in a different way?
Irving: No.
Andrew: No. They missed that. You’re given a talent. If it’s a Quaker
school, they should think that it’s a God-given talent and encourage it,
and if it’s a public school, they should think it’s a big-bang given
talent, but encourage it.
Irving: It was not a very religious school, that which [??], so not much
[??], but certainly encourage it, but probably in their own ways. Was it
right or wrong to stop me [??] selling animals? Who knows? I certainly
wasn’t hurting anybody, that’s for sure. I just know the bureaucratic
policies of large organizations, whether it be schools or government, or
big companies, don’t always make sense. That’s why we all do what we do.
Andrew: I’m indignant, my friend. You’re working at Clear Channel. Where
did the idea that became Crowdtwist come from?
Irving: As I’ve said at length now, we were really looking for an idea to
latch ourselves onto and I started and ran the Digital Marketing and Social
Platforms Division at Clear Channel, within the [??] Group. One of the
things I was responsible for was our loyalty platform, and we have this
loyalty platform across all of our stations, which was effective at driving
engagement. Very effective at driving engagement, but what never made any
sense to me was that the kind of engagement we were driving was not the
engagement that was actually valuable to our brands.
Andrew: What kind of engagement were you guys driving?
Irving: Page views.
Andrew: Page views.
Irving: Basically.
Andrew: So, what was it typically like?
Irving: [??] area of the website. We’re driving engagement in a cordoned
off, what we didn’t feel was a very well branded, or very well integrated
experience as a part of our radio station sites. I looked across and said,
“There are so many areas that are more important for us to drive engagement
and build brand affinity with that are being completely missed by this
platform.” Not only that, but it wasn’t very well integrated, the
technology wasn’t current with what people are doing and using today. We
just saw an immense opportunity in that alone because we did see the power
of what rewards and points could do, but what was lacking.
Andrew: Did you have rewards and points at Clear Channel?
Irving: Yeah. This was the platform we were wanting.
Andrew: Can you help me understand what the process was like at Clear
Channel? What you were working on and how did it work? Was it just tweet,
send people to a page. If they went to [??].
Irving: [??] any of that. It was a platform that we licensed from a third
party company and it was, literally, take a poll. Take a quiz. Play a slot
machine game. It was actions that really didn’t have much of anything to do
with our stations.
Andrew: Then when a user did it, he got points?
Irving: Yup. And the points can be used for varying types of rewards.
Andrew: Like t-shirts? That kind of thing?
Irving: That type of thing. Not even that sometimes. Sometimes, the
opportunity to get a t-shirt. There were different ways in which they built
the programs, but there was so much opportunity that was left on the table.
That was very clear to us.
Andrew: The way that they got people to those sites was basically
announcing it on the radio?
Irving: The radio’s a powerful promotional vehicle. It was part of our
sites, so it’s part of our radio station experience, so they can promote it
through the site, promote it through the actual radio station itself.
Andrew: Your co-founder, where was he at the time?
Irving: He was at Clear Channel with me initially. Then he moved from Clear
Channel to MTV and while he was at MTV, the other catalyst for us was he
was working with some of the biggest artists in the world who were coming
to listen. We’ve got the master fan clubs and the whole goal is to put the
best tickets in the hands of our best fans. But oftentimes we think we have
up to 50% of people in our club who are actually scalpers. So not only are
we not getting the best tickets to our fans, but we’re actually hurting our
fans because the scalpers are getting the tickets at base value and then
selling it to the biggest fans at five or six [??] profit. But we have no
idea how to figure out who’s a scalper and who’s a real fan. We sort of put
two and two together and we said, you know, if we built a rewards program
that didn’t just drive [??] but actually drove grand, valuable actions.
And coupled that then with the data that you were able to get back about
the people who were engaging, not only would you drive substantially more
brand value, on one end, but the understand you would get back could help
you know and understand your audience in a more effective manner than
you’ve ever had before. So we are solving both of those problems in a
really compelling way. We started to think about it more, and I think, why
did we follow our hearts with [??] more than our prior ideas, is the first
idea, we started to think about it more and more, we gained more conviction
about what we were doing, not less. And we just felt more and more like,
this was the right idea for us. And it evolved from there.
Andrew: One thing you discovered in a ticketing business seems to me was,
that, the real customer wasn’t the person who was buying the ticket. The
real customer was the venue who was getting paid massively in having to
sign big contract with the ticketing company, right? And it was their
frustrations and their needs that you have to take into account, and their
contractual obligations that you have to take into account. It seems like
the same thing here that if you are going to build a loyalty program that
it was, it wasn’t the end users needs and frustrations that you have to
cater to. It was someone else’s. Who was it?
Irving: Yeah. I think, really, what we like to say is we have two
customers. We have the clients who we sell to, the big brands who license
our platform and our technology. We need to make sure that they feel good
about what we’re doing, the platform overall for them. But equally, their
end users and their customers are our clients and customers as well,
because if those people aren’t happy, if they’re not gaining benefits from
the solutions, if they’re not getting value from the solution, ultimately
they won’t be happy nor will the big brands, and then we won’t be either.
So we need to satisfy both of those parties in the same manner as you said
that the ticketing business would have that dynamic.
Andrew: So, how did you know that the brands have this need? That they
cared enough about this to want your product?
Irving: I don’t think it was how do you know that brands cared enough about
this, I think, for us, this was more, this is an idea that makes a lot of
sense.
Andrew: Mm-hmm.
Irving: Loyalty has been around for decades and decades. And loyalty is a
really powerful and valuable tool. Step way back from the radio station
world, look at retailers, CPG companies, travel, hotels, on and on, they’ve
been using royalty for a really long time, and they’ve been using it
effectively, but what we started to see is we thought about this at a more
macro level is that the way royalty has been built no longer makes sense
for the landscape that has existed today. It was fundamentally focused on
the point of sale. It was all about what the customers spent. And the
reason that was was because that was the only trackable action that you
actually have. The only time you knew [??] was engaging with your brand was
when you were actually spending money whether it was with a credit card,
with a card from a retailer, whatever the experience was. I’m never going
to tell you that spending money in a point of sale isn’t powerful and
important part of customers, of course it is. But we realize that there
were a lot of areas and places with which people were engaging and creating
value and building relationships with brands.
The digital landscape had exploded. There was social platforms. There was
checking platforms. There were mobiles. There was email marketing. There’s
online. So none of these other channels fit into the understanding of
loyalty from a traditional place. And we look at this and said, you need to
be able to build a program that not just tracks from the [??] spend, but
really recognizes and incentivizes and rewards fans and customers for all
of the value that they create across the entire brand new system. So it’s
not just limited to spend, it’s anytime you’re engaging with a brand,
anywhere that you’re engaging with them.
Andrew: So, if I happen to buy a Kelly Clarkson CD from her publishing
company, they can clearly identify me as taking a step towards being a
loyal fan of hers. They can clearly reward me for that. What else would I
do that’s valuable to them in relationship to her?
Irving: Yes, whether [??] it’s music or the dolphins. There are so many
places you’re touching the brand or engaging with the brand. It could be a
special channel, so the influence that you’re able to exert across a
Facebook or a Twitter. It could be the influence in your ability to check
into a location and drive. You’d actually be on the premise via Foursquare
check-in. It’s reading emails, engaging in email marketing campaigns.
Andrew: I see. So, if I show up to get her autograph somewhere and I check
in, on Foursquare you want to be able to give me a reward for doing that.
Irving: Sure.
Andrew: If I tweet out that she has a new video and my friends go and click
to watch it, then you want to reward me for helping to promote her for
caring that much about her.
Irving: It’s about recognizing value that people are creating for brands. I
think from a consumer level we think about our product a lot of times from
a consumer perspective, and consumers are very aware of the value that
they’re creating for the brands that they patronize. And they’re aware that
they’re creating value many times earlier than they spend money and far
after when they spend money. That tweet that you send out has some element
of value, that Foursquare check-in has some value, the fact that you’re
taking time to read the email campaign, click in, that has value. Going to
the website, consuming content, sharing content has some element of value.
The fact that you’re taking the time to read the email campaign, click in.
That has value. Go to the website consuming content, sharing content. All
of that has some element of value for a brand.
So, what we’re simply saying to our clients is that it’s important that you
recognize the value that your fans are creating for you everywhere that
they’re created. That’s an expectation that consumers have and are going to
continue to have even more as the discussion about data only heats up.
Andrew: All right. You told us how you met Josh, your co-founder, but
neither you nor Josh are intense developers, right?
Irving: Nope.
Andrew: You needed to find somebody to build this idea out. How did you
find Mike, your technical co-founder?
Irving: Very serendipitously, I guess, is the answer. You have to look at
this in the beginning. We looked around and we were going to meet-ups and
we were talking to as many people as we could and doing everything that
people nowadays do when they’re looking for a technical person to join
their team, and we made the clear decision that it made more sense for us
to bring somebody on the team who is really invested in the project versus
hiring a shop or a development team just to build what we needed.
We put an ad on Craigslist, a couple of ads on Craigslist, and we had a
number of people who responded and were interested, and we got a resume one
day of this guy. We look at it and we go, “Wow, no way this guy is actually
who he says he is.” We go and meet him at the local Starbucks around the
corner, and we met him and he was a fantastic guy and can do, in fact, all
of the things that it said on his resume. On top of it, he was a great
person. We were kind of, “Wow, there’s just something that doesn’t add up,
something doesn’t make sense.” We continued to talk with him and continued
to chat with him. Truth be told, it was real serendipity. He was incredibly
talented, had done this a number of times before successfully, was a
fantastic and phenomenal developer and had a lot of passion for the same
ideas we were chasing. And so, it was a great match.
Andrew: What kind of ad do you write on Craigslist that leads you to find a
guy like Michael Montero?
Irving: It was a short ad actually. Someone asked me about it about six or
eight months ago, and I dredged it up and looked at it. I don’t remember it
exactly, but it was only like five lines, I think. So, it was short.
Andrew: Do you remember the gist of it? Were you saying, “Hey, I’m looking
for a technical co-founder to launch a business in the loyalty program
space?”
Irving: It sounds kind of cliché now because I feel like everybody’s
looking for a ninja, but I think at the time admittedly we said ninja in
our post. The headline in the post, I think it said… At the time we were
a music startup as well. We were better fan clubs for musicians was the
first incarnation, and so it was music startup looking for ninja CTO or
something of that sort and just gave a couple lines, experience in the
industry, looking for somebody great and he responded.
Andrew: And then, once you meet him…
Irving: [??] in some regards probably.
Andrew: How do you win him over once you meet him? Is it giving him equity?
Is it something else?
Irving: It’s about fit. He appreciated the vision we had for the product.
He appreciated the goal we had in mind for the company and what we wanted
to do and most importantly the opportunity we saw that was there. It felt
like it was a fit in that regard.
Andrew: I’m looking here at his CrunchBase profile. It says, “Mike co-
founded his first company right out of college, Community Connect, Inc.
which published niche social networks and grew to one of the largest social
networking sites at the time. It was sold to Radio One in 2008. Mike’s
second venture, which he co-founded, Photolog, started in his apartment on
his DSL and grew to the 56th largest site in the world. Photolog was sold
in the fall of 2007, and then it talks about City Realty providing services
for major companies, like Prudential. This is a guy who has a good
background. Do you win him over? Can you just tell me a little bit more
about how you win him over because I know there’s someone in my audience
who is saying, “I meet great people all the time. I want them to partner
with me. What do I say? What’s the magic word beyond just fitting?
Irving: I think, winning over is a tough way to say it because it’s a
different thing about for getting a client. It’s different for gaining a
client than it is for a partner, and it’s a different dynamic and it’s a
different relationship. So, the most important thing I think you need to
have is passion, enthusiasm and excitement for what you’re doing and what
you’re building. It’s actually critical. Once you have that, you need to
find somebody who has the same amount of passion, excitement and enthusiasm
and who fits well with you and the business that you’re building. And
finding that is the most important thing you can find.
Winning over somebody who’s not going to be a good fit for you ultimately
is going to be a bad choice. You want to find that person who is a good fit
who shares the passion, and the best way you can do it is to get somebody
excited who would be a good fit is to be excited yourself, be able to
articulate and express the vision that you have clearly, concisely but with
the passion that you have. Because my belief, what people are attracted to
in the early stages are passionate because that’s really, that’s the fodder
[SP] that you have. It’s the passion that drives you forward when you’ve
got no customers, when the features you wanted to build are taking twice as
long, when nobody believes and wants to invest.
There are all these typical moments you have in building a company. If you
don’t have conviction, you don’t have passion, it’s hard to move through
those.
Andrew: All right. I want to know and I will ask you later on about how
that passion helped you in some of the tougher times. For now, let’s
continue with the narrative. You’ve got Michael interested in this
business. The three of you get to work. How long did it take you to launch
the first version?
Irving: Too long. I think one of the things we probably would have done
differently is not build as much as we did to start. There’s obviously a
lot of talk about the Lean Startup Movement, right or wrong. There’s
definitely credence to the notion that you don’t have to build everything.
We launched the product in early summer of 2010. It was hard. Mike was
working at nights and weekends. I was working nights and weekends. Josh was
working nights and weekends. We had a couple of other developers who had
joined up and were working with us. Some of them were working full time,
but when you don’t have everybody focused all the time, it’s a difficult
thing.
Andrew: Other developers. How did you afford to pay other developers to
help out?
Irving: Oh, Josh and Mike and I really made the decision that we were going
to fund the business in the early days on our own to get it to a certain
point, so that’s what we did.
Andrew: How much money did you guys put in?
Irving: It’s not something we disclose.
Andrew: Really?
Irving: Yeah, we put in a fair bit.
Andrew: OK.
Irving: Between the three of us we invested a lot. My belief is if I didn’t
believe in it, if Mike didn’t believe in it, Josh didn’t believe in it, how
could we ask anybody else not to? We didn’t invest millions and millions of
dollars, but we put in a substantial amount of money to afford to pay a
couple of developers. The developers had some equity in it themselves so
everybody had the incentive to make this thing work, but we felt like it
didn’t make sense for us to go out and raise money until we had a product
that we could actually show them. I think the market’s even changed now
from then, but that was our feeling at the time.
Andrew: You know, can I tell you something? I didn’t push you earlier when
it came to revenues, and I’m not going to push you even here about how much
you put in, but I think you should talk about it. I think the amount that
you put in doesn’t give anything away to your competitors, and it does
nothing but show everyone in this space and everyone who you’re going to
hire how much you believed in it. I’m not going to push you to do it, but I
wouldn’t ask a second time if I didn’t believe that it was important today.
Irving: It’s a fair point. You kind of caught me by surprise, truth be told
because it has to do with Josh and Mike as well, not just me. I feel it’s
not right of me. I’d have to ask them before I disclosed something like
that just because it’s not only my finances it’s theirs as well. But
suffice it to say, it’s hundreds of thousands that were put in by us.
Andrew: OK. All right. So, you said “too long”. How long again did it take
to build?
Irving: I don’t know the exact time because it’s hard to know when we
started building, but we launched in the summer of 2010.
Andrew: So, is that roughly six months?
Irving: Yeah, somewhere around there, but maybe a little bit more. Probably
a little but more than six months.
Andrew: OK. And if you had to do it again, you said that maybe you’d go
smaller. What would you have taken out of the first launch to get it out
the door faster?
Irving: There’s all the nuances in the future I could talk about that
wouldn’t make a lot of sense to the people listening, because they don’t
know our product like I do. But after you kind of hit that critical point,
like what’s the core product you’re trying to build, there were probably
bells and whistles that we added because they looked good, they sounded
good, they made sense. Could we have added in a Phase two or a Phase three
after we arrived? Absolutely. Did they absolutely need to be there for the
first launch? Certainly not. So I think it’s making that distinction
between, what do you really need to get the product out the door and make
it function, and drive the results you want. And what are the other things
you can start to add on later? Because the other piece, you learn a ton
when you launch your product. A lot that you just never expected.
Andrew: Like what? Once you launched, what did you learn that you didn’t
expect?
Irving: It’s funny, we tested the hell out of it with the team that we had,
but ultimately, that was a small group of people I think, five or six of
us. Between, three of our co-founders, our two (?), and our designer at the
time. So we’re testing it, but that’s six people. So six people is six
people using the product. And all of a sudden when you have hundreds of
people using the product after you launch, the things that worked for six
people, may not actually work for a hundred people. Also when you have
strangers and people you don’t now, you’re curious about information about
them, and you want to learn more about other people in the program. Which
were dynamics that you could never really see when it was just six people.
Because we knew each other. We weren’t really gauging in the program as
much as testing the software itself.
Andrew: Can you give me an example? At this point in the interview, we’re
over a half an hour into the interview, so people do know your business.
Give us an idea of what you didn’t know about it when you launched.
Irving: Something as simple as, we felt like, ‘Wow. Here’s hundreds of
people who joined the program, who all share a common interest that we have
as well. And I’m interested in learning more about these other people. Who
are they? How did they (?) that they have? Where are they from? Where do
they rank compared to me?’ Things like this. That’s just not an issue you
ever saw with six people or a hundred fake user accounts created by six
people. That curiosity didn’t exist because it was all familiarities. So
when you took out the variable of familiarity, there’s this curiosity about
that existed about the community that had built around our program that we
hadn’t really built a product to cater to. And that is where we initially
(?).
Andrew: That makes total sense. If you and I were fans of Mixergy, and I
saw you on the fan list, I’d think, ‘Oh cool. Irving’s using the software.
It’ll be interesting to see if other entrepreneurs take to it the way that
he does.’ But if it’s someone who’s listening to us right now, who joins
the fan community, I’d want to know, who are they? Why do they listen? What
are they doing with this? Are they good entrepreneurs, or are they just
wannabees? And so on.
Alright. So I get that. I get the launch. What I’m wondering is, what was
the first fan club for? You didn’t have clients then, right?
Irving: A small artist in Brooklyn, named Rose Zeigelhand (SP). So, that
was our first client. And her manager, Dave, is a fantastic guy and we met
with him and Rosie at B Bar, down on Barry and New York, and we pitched
them the idea. We had our designer, Ruby, create these nice mock ups of
what it was going to like for Rosie. And we showed it to them and said,
‘Hey, what do you think?’ And, ‘We’ll give it to you. Can we launch with
you guys?’ And they loved it and they loved the concept and they said
absolutely. For us, as we built the company, we thought it was a lot better
to have somebody actually using it in live, versus trying to go out to
people and explain the concept, without having anything to show.
Andrew: And you picked Rosie because she was a smaller artist, who hadn’t
broken through big yet, and so she’d be easier to work with, without red
tape, without a million managers, and so on.
Irving: Listen, she’s had a really successful career. She’s a very
successful artist, actually. And Dave’s a great manager. It’s just, we had
a good relationship with Dave. We thought we could work with him. She was
the kind of size where, to your point, there wasn’t the red tape and the
bureaucracy, and we could get something up and running with minimal
destructions.
Andrew: And you knew about her because you worked with Clear Channel. What
was her connection to Clear Channel?
Irving: One of things I did was, we have a content team for creative time,
so I knew a lot of artists and managers and folks like that.
Andrew: You know what, let’s talk a little bit about this value of having
been an employee before starting a business. So many times entrepreneurs
say, ‘I would never,’ and anytime anyone says, ‘I would never,’ you think
that they’re not thinking. But, a lot of entrepreneurs say, ‘I would never
get a job,’ and here, as you and I talk I see that getting a job at Clear
Channel, having other work experience opened you up to opportunities and
understanding of the market that you wouldn’t have had if you were just an
outsider here. You found your first partner through Clear Channel. What
else did you learn as a result of working for Clear Channel?
Irving: I learned a lot working for all the companies I’ve worked for, you
know, in my career. I think that I would never tell anyone that there’s a
right and a wrong path to take. For some folks, diving right into the world
of entrepreneurship makes a lot of sense. For other folks, having a
structured experience and exposure is extraordinarily valuable. I think
certainly the climate that we’re in right now, I think it’s great for
technology and entrepreneurs as there’s more opportunity today than there
has been for really a long, long time. And for people who’ve never worked
anywhere, there’s places where they can get involved and early stage
companies they could get involved in and there’s more opportunity in
general. So I think that’s a great thing. For me, first of all, when I was
first interested in kind of getting involved in technology I just hadn’t
had a business background as much in college and I thought that having some
training and background was going to be valuable.
That was why I chose to go into finance, but I stayed in the part of
finance that was relevant to where I wanted to be. So I was helping early
stage companies actually raise venture capital so I was working with the
type of companies I eventually wanted to be involved with myself. So I
learned something through that experience, someone told me a long while
ago, you know, it can be valuable to learn on somebody else’s dime and so,
again, for some that’s true, for others you just have an idea and a burning
passion for a specific problem when they just say this is what I need to
do, this is what I need to solve, I’m going to go out and do it.
Thank God we have the ecosystem that we do now that people can go follow
their dreams and passions immediately, but for others I think, particularly
if you’re building a company that’s focused on enterprises and brands and
bigger businesses, having spent time at a bigger business, at a company
understanding how the politics work, how decisions are made, how things get
done, how quickly or slowly things can move, that’s really valuable when
you’re on the other side. When you’re in the company trying to work with
these types of things. I think managing you’re expectations can be really
effective and helpful.
Andrew: I started my first company right out of school. We had two
different ideas, the great idea needed partnerships with big companies like
AOL. I didn’t know the first thing about how to get in the door there and I
was just trying for weeks and getting frustrated for a long time and then I
finally went with a simpler idea that didn’t require big, big partnerships.
But if I had spent a little bit of time at those companies or working at
any company I might have had an understanding of how to network my way in,
how the business worked, as you said. I don’t regret it, I’m just saying it
would have been an interesting option and a useful option in that case.
Irving: Yeah. I don’t think that there’s a right or wrong path, you know,
like one of my great friends, Wiley Cerilli, had a fantastic exit for his
company, he single platformed to Constant Contact and, you know, he before
single platform was one of the earliest employees at Seamless Web. So he
never spent time at big established organizations. I mean, very, very quick
stints at early companies but he had never spent time with a big company
but the time he spent at Seamless Web gave him valuable experience and
exposure that he took to help him start his company, Single Platform, so
there is no right path. There is no prescribed path, necessarily, that one
needs to follow. I think it’s about what’s right for you, what makes sense
for you at the time, what your skills are and what you want to do.
Andrew: All right. So how did you get the next clients? Did you need
funding in order to get the next artist or business to partner with you?
Irving: I think we did go out and start to raise funding at the time, so we
were lucky to close that initial seed round in September, 2010. But I
wouldn’t say that that was a requirement for us to get clients. Really what
started to happen was we just started to talk to more and more folks about
what we were doing and it really resonated with people and it resonated not
just in the world of music but it almost resonated more power probably
outside of music because brands realized, hey, we’re no different than an
artist and same problem that artists have which is, you know, a distributed
base of customers and fans across many different platforms and channels is
the problem that we have as a brand and oftentimes brands have bigger
budgets and sometimes more savvy as well. So our ability to take what we
were doing in the world of music and transfer and translate it over to
bigger brands, it just made a lot of sense and we were lucky enough to sign
Live Nation as a client in the late fall 2010 and we ended up running a
very, very successful program with them and that was a great catalyst for
the business.
Andrew: How did you get into Live Nation’s office?
Irving: A friend of a [??]. He knew someone who worked there and ran one of
their big, big festivals and said, “You should check out this company and
the technology that they’ve got. It’s great.” He sent it over to this guy,
John Desposito. John looked at it and said, “This is exactly what I want to
do.” We came into his office, we talked to him. He’s like, “I love it. This
is what I want. I like to be innovative. Let’s do it.” That was the
beginning.
Andrew: Did John help you shape the product back then, too?
Irving: It was less about helping to shape the product, more about giving
it a much more powerful megaphone to talk to people about what we actually
[??].
Andrew: So, how did John want to use the platform? What was he going to
reward and what was he going to give people who collected those points?
Irving: What was cool was that John’s vision for the platform was exactly
what our vision was for the platform, which I think why he was a great, or
early client, was he wanted to engage and activate his audience across all
the different channels where they were engaging with this festival. That
was Twitter. That was Facebook. That was on their website. They had
Bamboozle Radio. Looking through their photo galleries. Engaging with their
artists and then, of course, buying tickets was important to them, as well.
This notion of cross channel engagement and multi-channel loyalty was
really at the core of what he wanted to do and what we were offering, so
there was a great intersection there. Then secondarily, one of our core
competencies, one of the things that we were really focused on is not
building traditional award programs that give you $10 off for every $200
you spent, but this notion of giving experiences and access and status and
opportunities that money can’t necessarily buy. John wanted to give away,
not things like, ‘Get a free hotdog at the Bamboozle festival,’ but more
importantly, announce your favorite band on stage, or get to go to a photo
shoot with your favorite band, or drum lesson with such-and-such band, or a
signed drumstick. Things like this that were really special and exciting to
his fans. His vision, not just for the platform, but also for the rewards
were very much in line with what our vision was.
Andrew: You mentioned earlier, “There are times in a business where things
just aren’t working, but your passion will help carry you forward.” For you
it was, there were times when people just weren’t getting the idea. Can you
talk a little bit about that and how you got past the moment where, for
every person who said, “This is a good idea,” ten people are telling you
it’s not going to work?
Irving: I think every entrepreneur is going to tell you that they’ve been
through the experience where people are going to tell them, “That’s a bad
idea. It’s not going to work. That’s going to fail.” Where every reason
under the sun of why your vision isn’t ever going to come into reality. We
had plenty of instances, whether it was when we were raising funding in the
early days and people didn’t believe in the music space, necessarily. They
were concerned about music or concerned about varying aspects of our
business and if we’d be able to take it to the next level. Then when we
were talking to early companies and they were trying to understand what it
all actually meant and why the platform made sense, there was just that
ability to stay positive, continue to maintain conviction and passion for
what we were doing. Invigorate and evolve the story and evolve the pitch
and evolve the product to a point where it did resonate with clients. It
did make sense to them. It did resonate with investors, and we’ve been
really lucky and I’m incredibly appreciative that we’ve been able to do
that.
Andrew: What’s one iteration that you took that had significant impact on
getting new clients?
Irving: It was moving away from music solely. We spent a lot of time
focused on the world of music and selfishly we really wanted to reinvent
the music space in a lot of ways and a lot of people have wanted to do
that. We started to realize that while that was a noble mission and
something that we wanted to do, for the sake of the business to be really
effective, we needed to broaden beyond the world of music. We needed to
bring our platform services to many more people and that was absolutely the
right decision because as we did that, we started to really pick up
traction and interest across the board.
Andrew: What about TechStars? At what point did you guys decide to be in
TechStars?
Irving: We met Dave Tisch in late fall, 2010.
Andrew: Who was running the New York [??].
Irving: He was running, he was the Managing Director. It was the first time
there’d been a program for TechStars in New York and we walked around the
park with him and talked about Crowdtwist and what we were doing and he was
really interested in the idea and he liked the concept and told us about
TechStars. We didn’t know a lot about it before then and looked at it and
said, ‘We’ll certainly apply.’ We applied for the program and we were lucky
enough to get accepted in the first round and the second round and then
went in, interviewed with David Tisch and David Cohen and we’re offered a
spot in the first New York program and then took it.
Andrew: So, they don’t give you a ton of money? You invested more of your
own money than they invested in your business. How did they help you beyond
that, how did they help you shape the product for example?
Irving: Interestingly enough, Company [??] has now involved themselves, so
I think that they give founders or companies now substantially more than
was given back when we were starting.
Andrew: Right.
Irving: I’m not sure of the exact sum, but around $100,000 or something
like that.
Andrew: Right.
Irving: But still, $100,000 isn’t going to make or break anybody’s
business. It’s a great start, it’s a helpful start, but it’s not the end-
all be-all. To me, Company [??] is much, much more about the network
they’ve built, the network of companies, the network of mentors, and the
exposure and experience you gain over the course of the three months that
you’re there.
Andrew: So what’s specific thing you’ve got out of being in the program?
Irving: We just met an incredible amount of people. Incredible mentors,
former entrepreneurs, current entrepreneurs, current investors, folks at
big companies, just champions in many areas and walks of business life.
People who were excited about what we were doing, excited about the vision
of the company itself, made phenomenal introductions in a number of places,
and really just had a vested interest in seeing us successful.
Andrew: OK, what about one of the other questions, can we talk about
LiveNation? Can you tell me about how you got either Miami Dolphins, Pepsi,
or Sony Music?
Irving: I mean, we. . .
Andrew: It’s an impressive roster you guys have.
Irving: I think our focus has been, first of all, there are people in the
world we see sometimes who believe in selling before you’ve got a product.
We really believed in building a world-class, investing-class product, and
then rolling that out to a set of clients that made a lot of sense for our
different verticals. And I think when we brought the product we did, with
the vision that we did, it really resonated with those folks. Ironically
after we sort of separated from music, we met Sony as they were looking to
really build a broader, reward loyalty opportunity across the Sony artists.
We met Zumiez [SP], which is one of the biggest action sports retailers in
the country, they had an association with LiveNation, they’d seen our
software, and they found it was very interesting as they were thinking
about loyalty internally. We had a number of conversations with them, they
reached out to us, we ultimately went out to Seattle to spend time with the
entire management team, we loved the team and the vision for what they
wanted to do, and they were excited about us as a team and what we were
looking to do- it was a fit.
Andrew. All right. Let me tell people about, if they want to take the next
step with Mixergy what they can do, and then I want to come back and ask
you one final question about what your advice is for someone who wants big
clients, like the ones I’ve just mentioned, who you’ve been successful
enough to land. So, if you’re watching this interview, and you want more
with Mixergy, go to MixergyPremium.com. What’s Mixergy Premium? Well, you
know how as an entrepreneur, you guys in the audience. . . Well, as
entrepreneurs, we all actually have issues we come up with. Like maybe we
create a landing page, and maybe we aren’t getting enough people to fill in
their email on that landing page, or to buy from that landing page. Well,
at Mixergy, we have a course from Dan Siroker of Optimizely where he
teacher what he’s learning about increasing conversions. His product,
Optimizely, is more popular than Google Website Optimizer, so he’s watched
a lot of companies use it and increase their conversions, so he’ll teach
you how to increase conversions.
What’s another problem that we have? How to increase customer service. So
we have another program coming up about how to improve your customer
service. If you’re getting flooded with emails, how do you handle those
emails? How do you respond to them in a way that makes people understand
that they’re heard? How do you even anticipate some of the problems that
you’re going to have, and handle them before they start coming in? We’ve
got a course coming up on that, with MixergyPremium.com. All these issues
that we have as entrepreneurs, I go out there and I find entrepreneurs that
are especially good at handling these issues, and I bring them on and ask
them to turn on their computers, show us how they solve these problems for
themselves, teach us how we can do it too. So that basically is what
Mixergy Premium is.
And if you join right now, and you don’t love it as much as I do, and as
much as thousands of other people do, let me know and I’ll give you 100%
refund. But my bet is, you’re going to love it, you’re going to say
subscribed, and you’re going to get infinitely more value out of it than
you’re going to pay. You’re going to get thousands of dollars, I would say,
for every dollar that you pay to be a part of MixergyPremium.com. So go
there and join now, and I look forward to having you on board. So what is
your advice, Irving, for someone who wants to land the kind of clients that
you have- Pepsi, Sony, et cetera.
Irving: There are a lot of different areas to that. I think the first is,
it sounds so simple and intuitive, but you’ve got to build something that
folks are looking for, that solves a real problem for them. You’ve got to
recognize that the bigger brands, these bigger companies are pitched all
the time by existing technologies but also new technologies who want to
solve their problems. So, understanding what the most acute pain points
that those folks have, where do they need to prioritize getting resolutions
and problems. What are the most important issues that they’re having? How
can you build something that solves it, or more important, if you build a
product, who are the big brands who value the problem that you’re solving
as much as you do. So make sure, as they say, fish where the fish are in
that regard.
I think the second piece is persistence. You’ve got to have patience and
persistence with big companies as much as you want them to move at the
speed that startups move, they don’t. There are more complexities. There’s
more people involved, more decisions to be made, so you need to stay
persistent. You need to stay on top of these folks and continue to move the
process forward, but you also need to be patient and recognize that it’s
going to take some time, and I think you need to cast a wide net. You need
to talk to as many people as you can because not everything’s going to hit,
not everything’s going to close. That’s the nature of our business, but
exposing yourself to as many different opportunities as you can is going to
give you the highest likelihood of finding some great partners, and
momentum begets momentum. So, success with big clients begets more success
with other big clients begets more success with other big clients.
Andrew: All right. I think that’s a good place to leave it. Thank you for
doing this interview. Anyone who wants to see the business that we’ve been
talking about can go to Crowdtwist.com and, of course, thank you again
TechStars for introducing me to Irving and so many other great
entrepreneurs.
Oh, one more thing. Speaking of introducing me to other great
entrepreneurs, Wiley from Single Platform, can you introduce me to him
after this interview is over?
Irving: [laughs] He’s got a lot going on right now with all that’s
happened, but I can certainly make that happen.
Andrew: I’ll shoot you an email. If you just pass it on to him, even if
he’s not interested today, I will continue doing these interviews for
probably the rest of my life. Just tapping him today and saying the
opportunity is here, maybe we’ll get him to do the interview. If not, maybe
he’ll do it sometime in the future.
Irving: He’s a great speaker, I hope he does.
Andrew: Now, I want him for sure. All right. I’ll follow up with you. Thank
you all for watching.
Irving: Great. Thank you.
