Andrew: Before we get started, have you ever wanted to visit the land down under? Australia is a hotbed of innovation and has a thriving entrepreneurial community. And the heart of that community is fishburners. Fishburners is a co-working space in Sydney, Australia which is home to the single largest community of entrepreneurs and business people in Australia. If you’re thinking of coming to Australia for a visit or if you’d like to try working from Sydney, start your trip at fishburners.org. They have a range of membership options for all kinds of businesses and individuals, and they host regular events where you can connect with some of Australia’s most influential business people.
Next, do you need a single phone number that comes with multiple extensions so anyone in your company can be reached no matter where they are? Even if they happen to be in Australia. Go to grasshopper.com. It’s the complete virtual phone system that entrepreneurs, like me, love.
Next, do you need a lawyer that’s not the local guy who doesn’t really get start-ups, not the really expensive guys who want a piece of business. But one who really understands the start-up community and is there to help you. if you do, go to Scott Edward Walker of Walker Corporate Law. All right. Let’s get started.
Hey there, freedom fighters. My name is Andrew Warner, and I am the founder of mixergy.com, home of the ambitious upstart. And the place where entrepreneurs who start out, in the back of their minds say, one day I would like to be on Mixergy. I would like to do an interview and talk about what I’ve learned as I built up my business.
And my hope is that you, the person who’s listening to me, will learn something from today’s interview. And from all of our interviews, build a successful company, and then one day you’ll be willing to come on here, do your own interview, be vulnerable about your setbacks, be open about your accomplishments and teach other people.
It’s the circle of Mixergy. You know the circle of life that didn’t introduce us to. It’s the circle of Mixergy I just introduced you to. And in this interview, we’re going to meet a Mixergy fan who’s been wanting to come on here for a long time. He built up a business in a way that we’ve heard a few entrepreneurs have done. But not enough, and so I’m bringing him on here so that you can learn from his process, and, as I say always, hopefully use it.
What Josh Isaak did is he had an idea. He pre-sold the idea. He not just pre-sold the idea but got the cash from customers of this idea that hadn’t officially launched yet. And then he built it. We are recording this interview a couple of days, within hours of his launch. And I wanted to hear how he did it. Josh is the co-founder of MySky, contact management software for small businesses. It helps them manage leads, sales and follow up more effectively. I invited him here to talk about how he did it. Hey, Josh.
Josh: Hey, happy to be here.
Andrew: So, as a fan, you know where I’m going to probably start. I want to hear about the numbers. Partially because I had an entrepreneur on recently, and my audience said, he doesn’t have any revenue. We don’t care.
Josh: [laughs].
Andrew: So [laughs], I guess the audience has been trained to understand . . .
Josh: Yeah.
Andrew: . . . that business means not just cool software, but also revenue. So I know you’re just getting started, but where’s the revenue right now for MySky? What are the numbers?
Josh: Sure. Yeah, we’re at, right about, $47,000 in revenue. So that was all pre-sold before we launched.
Andrew: Okay. Let’s break this down. One of the customers that you sold to said, I’m going to pay you how much? . . . [SS] . . . customer?
Josh: $40,000. Yeah, one was $40,000. That was the biggest one we had, because we had about 105 businesses that we’re building it for.
Andrew: Okay.
Josh: And the other ones were anywhere from $400 to $50 that we sold the other ones for.
Andrew: And the $400 to $500 is all up front or over time?
Josh: The $40,000?
Andrew: Excuse me. $40,000.
Josh: Yeah, we had three installments. So we had a third of the payment come right when we agreed to build the system for them before we even started. And then we had another third that came when we actually launched our beta version of it. And then we have another, the last, started coming when we actually launched the full product. So it’s been a bit of a process, but, yeah, it was amazing to get that $40,000 without even doing a software coming forward. It was pretty fun.
Andrew: And the others are paying you over time. They paid you before you launched, and they said, we’re going to pay you monthly to keep building the software?
Josh: Yeah, for sure. So we actually sold the other ones by offering them to be part of the beta version of the product, and part of us building it with them. And they gave three months of the software up front to be able to be in that set, that program.
Andrew: Okay. And so how much revenue can you count on month to month to month? And I promise the audience I’m not going to spend too much time on the revenue. I want to know how he got there. This isn’t going to be a spreadsheet.
Josh: Yeah.
Andrew: An audio-video spreadsheet. We’re going to really get to the story of how he did it.
Josh: Sure.
Andrew: But just to understand where you are, how much of is going to be recurring and you can bank on month to month, do you expect?
Josh: Yeah. Out of this, it’s probably going to be, again, we don’t know until we actually launch and how long it’s going to take us. It’s probably going to be anywhere between $4 to $6,000 monthly when we start launching.
Andrew: Okay.
Josh: And then from there, where we’re just getting people in and we’ll get them through the pre-trials and into that revenue cycle again. So, yeah, arguably, between four and six grand.
Andrew: Okay. Already a few questions are coming into my mind that I’m going to ask you later on in the interview.
Josh: Sure.
Andrew: Like do you ever feel like a fraud, selling something that you haven’t built? It feels great to have cash in the bank, but it also might feel like it’s a lot of pressure.
Josh: Mm-hmm.
Andrew: Now you have to build it and it has to come in properly for this customer who paid you. And it has to hit their expectations and so on. So I’ll ask you about all that . . .
Josh: Sure.
Andrew: . . . and how did you even get the customer to pay. What’s the tactic that you used there? But let’s get to know how you built up to here.
Josh: Okay.
Andrew: One of the things that you told me is, before we started, this is not your first company. In fact, you had another company where you copied a site built by a friend of mine. What’s the site that you copied?
Josh: We actually tried to copy AppSumo. Noah Kagan, you’re referring to.
Andrew: Yeah.
Josh: Yeah. I loved their model and I loved what they’re doing. And I thought, hey, you know, why not. It works. Why not try to copy it? And . . .
Andrew: What did you love about it?
Josh: You know, I just love Noah Kagan. I love the fact that he took a model that he was going to be able to make a lot of money with in the first 18 months. I listened to his whole interview and thing with Andrew Chen about that. I loved that he was able to interact with small businesses. That was a really big thing for me, as I love small businesses. So I wanted to be in that space somehow. And I just ultimately really respected Noah Kagan and said, hey, maybe I can do this too.
Andrew: But there’s also an elegance to the model. A simplicity that might have attracted you. Wasn’t there?
Josh: Oh, absolutely.
Andrew: What was it? First of all, for people who don’t know what that model was before he changed it recently. What was it?
Josh: I believe he first started trying to sell apps to people. And then it started going to more information products and then just deals on applications and different things like that. So I think he started pivoting over time making it simpler and simpler as he started targeting the market a bit more.
Andrew: And I think when you saw it what it probably was is a deal every single day . . .
Josh: Mm-hmm.
Andrew: . . .where he gives you a lower price on software or information products than those creators will give you on their own websites.
Josh: Mm-hmm.
Andrew: And he’s got a mailing list of people who are expecting it. His profit comes from what he’s charging you minus what he has pay the creator. So that’s really elegant. It seems so simple. You said, all right, it worked for him and he’s dealing with a customer base that I’m excited about.
Josh: Yeah.
Andrew: It should work for me. But?
Josh: No. And you’re right. I mean it seems so simple. But I think that’s the beauty of it all. Simplicity takes time.
Andrew: Mm-hmm.
Josh: And it’s always messy when you start a business in the beginning.
Andrew: Mm-hmm.
Josh: And to look at someone’s business model and think, oh, that’s so simple. I can do it. They didn’t start that way. It started messy, and it started just, like, trying things to make it work. And it became simple over time. And that’s what I find with our business too. It goes right from your website to your marketing copy to what you actually do as a company. It doesn’t start that way.
Andrew: Mm-hmm.
Josh: You know, you start in the trenches.
Andrew: By the way, speaking of simplicity that’s really not as easy as it seems, this interview model that I have must seem like a snap to anyone. And then they start and they end up with a problem like you and I just experienced right now, where I have my recorder set up and it suddenly crashed on us. Right. You noticed that?
Josh: Yeah, I saw that. [laughs]
Andrew: And I know that when most people hit these issues, they say, all right, screw it, it’s not going to work. But for me, I feel like that’s my moat. They’re not going to pull through the first time they have a tech issue. I’m going to pull through and that’s where I’m going to beat them.
Josh: Yeah.
Andrew: So you have a simple model. If you’re going to copy it, what happened to you when you created your version of AppSumo?
Josh: It didn’t go anywhere. We had five guys that were really pumped about it, and I was supposed to have this vision behind it all. And we started planning and planning and strategizing how we’re going to get customers and how it was going to grow. And then we built this website, and then, like, shoot, how do we get these customers to it? And that was the biggest thing, like, we had this idea and we started planning. But we didn’t know how to get customers, and that’s when I started seeing this other model that was way more viable. But yeah, we spent months into this strategizing and went nowhere.
Andrew: Months trying to get people to buy software and information products at a discount?
Josh: Yeah, and nothing happened. It was ridiculous. We didn’t know what we were doing.
Andrew: Knowing what you know now, what’s the big mistake that you made there?
Josh: Yeah. I think the biggest thing is we didn’t validate it with the customer demographic we were looking at doing. I think the biggest thing that we didn’t do was talk to the customers that we thought were going to be our customers. We thought we knew what they were going to want to buy or want to use, and that was the biggest thing, is just not going to the customers first, and kind of starting with what we wanted.
Andrew: I remember Noah in those days with AppSumo and when he and I would chat on Skype any time he had an idea he would immediately like lose focus on me, you know, we were talking, video Skype, and suddenly I could see that his attention went somewhere else. And I finally said, no, what are you doing? Every time we come up with an idea I feel like you just don’t care. And he goes, oh, no, I’m sending a chat message to a few people who are on my list to see if they’re interested in it.
And what they wanted is something a little bit different from what we’ve been talking about. And then I realized that’s the way Noah does things; that’s the validation that we don’t really get to see. He’s constantly checking in. And so that’s what you learned from that experience, too, that you need to do some of that.
Josh: Absolutely, for sure.
Andrew: Okay, so you saw that you were having some trouble, and you wanted to join this program called The Foundation, run by Andy (? Droish) and Dane Maxwell.
Josh: Yeah.
Andrew: And I would think that you’re a competent person, but you didn’t feel competent about getting into that program. Why not?
Josh: Oh, it’s just the constant mental battle, like yeah, the challenges, you know. You look like you’re competent but I don’t think anyone really is at heart when they really tell you who they really are at times. I didn’t think I was good enough, point blank; that’s the truth. I didn’t think I was good enough to get into it, so I started trying it before, because I just accepted I wasn’t going to get into it basically in my mind.
Andrew: Why did you think you weren’t, in fact, never mind you? Why didn’t you just say, this is just a gimmick for these guys; they’re going to accept every single person and they charge a monthly fee, why would they not accept every single person, and of course, I’m a shoe in.
Josh: I was hook, line, and sinker. They’re marketing to me was so good they hit me so well, and I truly believed that they were going to reject people, including me, so that’s why I started it.
Andrew: And did they reject people who applied to pay them monthly hundreds of dollars to be part of their program, to learn how to build a business?
Josh: I don’t think much. I don’t they rejected many, but I think maybe a few, but no, I think mostly everybody got it.
Andrew: Okay. And even though now you can say that, a part of your is kind of impressed by it. I can see you’re smiling and not angry. Why?
Josh: Oh, man, it was, when I came to that program and got accepted I was so happy because I was basically feeling like I was a part of this group of celebrities because I idolized Dane and Andy in a sense of like how much they sold me in their marketing tactics. It was just unbelievable to me. So even getting my first call of Dane, I was so nervous. Yeah, I was very impressed with them. I wasn’t mad at them at all, I was impressed. Absolutely.
Andrew: I see. So even if they didn’t keep out a whole lot of people the fact that they got you excited enough about it and that it made the program feel more valuable to you makes you happy.
Josh: Absolutely.
Andrew: And that’s value for you. All right, well, in the period where you weren’t thinking that you could make it in you decided that you were going to start your own thing.
Josh: Yeah.
Andrew: Well, what was that business?
Josh: Yeah, so I basically heard some of their idea extraction calls and said, hey, I can do this. Because like I told you before, I had done free selling in a different type of business model. And so I started with my . . . I just said I’m going to start with my past companies that I’ve been in and I started with one company called College Pro Painters and I went up to the president and I did an idea extraction session with him and it worked, and I got ideas and thought, hey, this process works. And then finally, you know, we pursued that and nothing came out of it. And finally there was another company that basically . . .
Andrew: Hang on a second. Let’s stay with that idea. What is it? It’s a painting company?
Josh: Yeah, exactly. A College Pro Painters.
Andrew: So they paint walls?
Josh: Yeah.
Andrew: Okay, they paint walls and you said I’m going to go extract ideas from them–figure out, the idea extraction model is something Dane came up with where he said you talk to a customer, find out what they want, in fact not what they want, but what pain did they have that’s so bad that they’re willing to pay someone to create a solution for them.
Josh: Yeah.
Andrew: And so you heard them; did you hear them on Mixergy talk about this?
Josh: Yeah.
Andrew: So you heard them on Mixergy; you heard the process. Why the hell do you need to go take The Foundation when you can just say, I heard the interview; I know the basic model, I know I need to just talk to customers, find out what problems they have, and ask them if they’re willing to pay for it? Why did you say, if you knew all that, that you’re going to pay Dane and India hundreds of dollars a month?
Josh: You know what, because it is a lot harder; it’s easier to say but it was really hard to do. And I think that the biggest thing was that I knew the community around me, because let me tell you, like I had a lot of failures within The Foundation, especially around (? Peg and back) that phone to call. I’m having that community around me, which is just absolutely vital and then also having access to their coaching was just something I needed, in myself I knew I wanted to get through it.
Andrew: All right, but you were on the phone for this painting company?
Josh: Yep.
Andrew: And you got an idea from them?
Josh: Yeah, well actually they have franchises so I actually went to the president of Canada, who runs basically all the franchises, 200, 300 franchises, and I wanted to extract what was his pains as a corporate entity. So I actually met with him out in Vancouver, and we did an idea extraction call. I knew a few questions to ask, and we went with those, and it worked.
Andrew: What was his pain?
Josh: The biggest pains was actually tracking the goals of all of his franchisees, so being able to understand where they’re at and just being able to help them at that point. So we looked into software around there, as well. Very similar to what we’re doing now, one of their pains was actually lead slippage, because you’d have these franchisees getting hundreds and hundreds of leads, but the percentage of those leads becoming sales was really low.
Andrew: So that’s a software that you have right now. MySky solves that pain.
Josh: Yeah, absolutely.
Andrew: Right?
Josh: Yeah.
Andrew: But you didn’t build that, right? Even though you extracted . . .
Josh: No, not for them.
Andrew: Sorry?
Josh: Yeah, not for them, no.
Andrew: Okay. You extracted a good idea, but you didn’t build the solution for it. Why not?
Josh: That one’s a bit more complicated. They have their own CRM they built and spent millions of dollars building in the corporation, so that one’s a bit tougher. We pitched them, went for it, they didn’t go for it, so then we moved onto another company and did the same thing.
Andrew: Okay.
Josh: Yeah.
Andrew: All right. But then you built another business that you actually did launch. What was that?
Josh: Yeah, so that’s MySky. Basically MySky came out of actually talking to another corporation, and we found out that they wanted to implement Salesforce [SP] for all their 105 businesses in North America. That was Phantom Screens. That was the business name. And basically I knew how to idea extract. I knew that SAS [SP] software business was where I wanted to go, so I put up my hand and said, ‘Hey, I want to build it for you.’ And we ended up getting the $40,000 contract to build that for the 105 businesses (?)
Andrew: And, again, is this before the foundation?
Josh: This is before the foundation, yeah. Yeah.
Andrew: So you got your biggest sale before the foundation?
Josh: Yeah.
Andrew: Using the ideas that Dan and Andy already teach publicly?
Josh: Yeah, absolutely. Yeah.
Andrew: Okay.
Josh: Yeah.
Andrew: All right. So you have all that. Again, why go to the foundation then? You already made your call. You already got a customer who’s willing to pay you $40,000 . . .
Josh: Yeah.
Andrew: . . . already is giving you clear marching orders.
Josh: Yeah. Yeah, I think it comes to confidence and belief in it. Even when we got that $40,000 contract, I still didn’t believe that that business was going to be viable and was going to work. It was just the whole inner battle and this mindset that I had.
Andrew: Tell me about that. Anyone who is listening to you is going to say, “The guy just got $40,000 from a customer. He should be walking on air. He should feel like Superman. He should go and make 20 other phone calls every single day in order to get more people. He’s got no problems.” What are the bugs going on in your head?
Josh: Yeah. Absolutely, I’m not going to say it wasn’t like . . . when we got that contract, it was unbelievable. Are you kidding me? I can’t believe we did this. But still, for me, there’s that constant disbelief, because I’d never done SAS software before, I’d never done anything, so just even to think, okay, now we’ve got build it. Now we have this money, now how do we build it, like how to be provide it, how do we get these other business on it so we can actually make money? It was a constant struggle, so that’s why I went into the foundation, and then I started another business within the foundation, because I just wanted to hedge myself.
Andrew: In case this idea that this one customer was willing to pay for didn’t work out, you said, “I need something else?”
Josh: Exactly. Yeah.
Andrew: Okay.
Josh: Yeah.
Andrew: You know how I asked you why did you even believe that Dan and Danny were not going to allow everybody who had a checkbook or credit card to come in the program, and you said, ‘Because I just went for it. I believed it.’ You’re a believer, I’m a skeptic. Maybe it’s because I’m an interviewer, or maybe it’s because I’m from New York. I’m such a skeptic.
So the reason I say that is if I was in the audience, I would be just like the person who is listening to us right, who’s probably saying, “Andrew is in the pocket of Dan and Andy. He is doing this whole thing as a promotional piece.” I swear, I would think that, and the only way that I can get myself to stop worrying about the person who’s doubting it is to acknowledge that . . . if you’re listening to me right now and you are doubting whether this interview is sincere, if it feels like I’m shilling for some foundation program, I give you my word, I do not.
I probably am an idiot for not asking for a commission or affiliate revenue or something, because I can see that this interview is going in a very positive way, I can see that this interview is going to send a lot people to the foundation. But the reason I don’t take money is because I want to be skeptic. I want to also say, “Hey, maybe people don’t even need the foundation.” I want to be willing to say whatever I want and not have anyone say, “Because of that, you’re not going to get money.” Does that make sense, or am I now just addressing my own inner doubts?
Josh: Yeah. No, I mean, that’s fair enough, and I think that it might even work to make it more believable that people should join the foundation, because you’re expressing what your skepticism is. I completely agree with that, your question, “Why join the foundation if you can do it outside?” And really I’m going to say it comes to the community around you when you’re in the foundation, having that coaching. But, no, that’s a fair question.
Andrew: Okay. So you’ve got this thing, you’re starting to feel really bad about even taking their money. At what point did you collect their money, soon after they said, ‘Yeah, do it,’ or . . .
Josh: Yeah. Yeah.
Andrew: Right afterwards?
Josh: Yeah, right away, so we got a third check, so that would’ve been around $12,000, $13,000, $14,000, around there. So, yeah, we got a third to do that right away.
Andrew: What was the process that you went through to understand the frustration that these people had, that the frustration was so big that they were willing to write a check for something that didn’t even exist?
Josh: Yeah, so that one, like I said, is very similar to (?) story. That one was something that was encumbered [sounds like]. I was just open to actually doing SAS [SP]. That was a conversation that basically the CEO said that, ‘We need Salesforce for our businesses,’ so she expressed her pain, and at that point, I just said, ‘You know what,’ I clicked, I’m like, ‘Wow, that’s a SAS business there. Why don’t we build it?’ And I just said, ‘I want to do it for you. I want to build (?)’
Andrew: She just said, ‘I’m going to spend money on Salesforce?’
Josh: Yeah.
Andrew: But that doesn’t seem like a problem. How did she express the problem that she had?
Josh: Yeah, the problem was that her businesses in North America didn’t have any way to track leads, sales, follow-ups, so in a sense they just weren’t capitalizing on the revenue that they could be.
Andrew: But doesn’t Salesforce solve that problem?
Josh: They do, absolutely. However, what we found is that Salesforce is a very good company, but for small businesses it gets very cumbersome, because it’s really big, it’s bulky, it does 350 different things. So we came in, and the pain that we were solving with these small businesses when we started calling them was that they didn’t need the 350 things that Salesforce does. They needed a really simple CRM. So we actually started calling the businesses and preselling them after, and that’s when we found that they needed a simpler version of Salesforce.
Andrew: How did you find her? How did you even know to talk to her?
Josh: So she was the second company that I talked to after (?) again, I went through my network. She was a friend of mine that I worked for before.
Andrew: Okay.
Josh: So I went to another company that I worked for.
Andrew: And did you feel like, well, she doesn’t really need this, she just is doing me a favor as a friend, she’s giving me charity?
Josh: Oh, absolutely. But then when the $40,000 came, I thought, hey, it must not just be because I’m friends with her, because $40,000 is a little bit of money. So, yeah, no, absolutely.
Andrew: I see.
Josh: Yeah.
Andrew: Why didn’t you think, hey, you know what, she’s about to get Salesforce, yeah, she’s feeling a little nervous about implementing new software that’s tough, but she’ll figure it out, she’s smart, I should go and pick on a problem that’s not solved by such a big company?
Josh: At that point, like I said, I wanted so badly to run a SAS business that it was an opportunity, and I didn’t want to pass it up. I’ve had experiences in the past where I would pass up on opportunities, because I wanted something better.
Andrew: For example?
Josh: I knew you were going to ask that. It’s a really funny example, actually. Do you ever play video games, PlayStation 3?
Andrew: Yeah.
Josh: Yeah. So when PlayStation 3 came out, there was a really big buzz around it, and if you got in line to get the few that they released, and you actually bought them on the release date, you could sell them for a lot of money, because there were none left, people wanted them, and we were hearing people getting $5,000, $6,000 for a $700 machine. So my friends and I actually waited in line for a day and a half, so overnight, to get these PS3s, and we were one of the first ones to get them. I got it.
I had an offer for $2,500 to buy this PlayStation 3, which I paid $700 for, and I said no, because I thought I was going to get $5,000 for it. I gave up that opportunity, and I sold it for $900, because I couldn’t get anything more for it. So that’s one little example, but my philosophy is that when you have an opportunity, take it, take action right away, and that’s what it was, that there’s an opportunity, we’re going to take action on it. Even if we don’t know how to build it right now, we’ll figure it out.
Andrew: Okay. So you have a person to talk to. You have a process that works. She gives you a check. Why not go and start talking to 20 other companies? Like I said, every morning, I’d be getting up and trying to get another $40,000 sale.
Josh: Yeah. That was more integrity, and we had a commitment to build it for them and tailor it towards their businesses, so we started doing that. And then our process after that was actually to do the foundation process and talk to all of the businesses that are going to be using this, and then we started preselling them. So it was good, because if I had started going to a bunch of other businesses, I wouldn’t have stuck with the problem at hand and actually solved it well enough. Our next step was actually to idea extract and make sure we’re going to build the right system for them.
Andrew: Idea extract on the same customer?
Josh: So there’s 105 businesses that she ran. So they’re all individual businesses so we actually start idea extract on those businesses after.
Andrew: I see.
Josh: Yeah. Yeah.
Andrew: Okay. And so you said, maybe I can get more people like her, but then I’d get really distracted . . .
Josh: Mm-hmm.
Andrew: . . . instead of focusing on all the businesses that she’s bringing me.
Josh: Exactly. Yeah. Yeah.
Andrew: Okay.
Josh: So we started talking with them.
Andrew: All right. So now you get into the foundation, . . .
Josh: Mm-hmm.
Andrew: . . . and you say, I’m going to hedge my bet. And I’m going to also learn this new process from start.
Josh: Mm-hmm.
Andrew: Not bringing any of the baggage that I had. So what’s the first thing that you do to figure out the new business to go into?
Josh: Yeah. So the first thing the foundation was basically listing of 20 different potential industries I could idea extract in. So I listed industries like junk removal companies, plumbers, roofers, security companies, all these different industries to try and pick the one I wanted to start with. That was the first step.
Andrew: Just making up a list of 10 to 20, you told April Dykman in the pre- interview.
Josh: Yeah. Yeah, making lists of industries that you want to potentially idea extract from.
Andrew: Was there any criteria?
Josh: Yeah. The main criteria was that you’d want to be able to reach them by phone or email so that they’d be reachable. And that they actually have their sales focus and they want to grow. So, you know, most companies like that where you want, like, for instance, like lawyers, they not be the best company to idea extract on. Because they actually want to spend more time, because they charge hourly for clients. So if you’re going to idea extract to try and to try to find time for the pains and save them time somewhere, that might not work out the best.
Andrew: I see.
Josh: Too many [SS].
Andrew: Are there businesses that you can’t reach by phone or email? I noticed that that was a big criteria?
Josh: Yeah, something that you don’t want that’s really difficult, actually, are dentists. People who idea extract in that industry is really tough to reach them. You get receptionists and they’re always working on their clients.
Andrew: I see.
Josh: And they get sold to all the time. So you can try it, but when you start doing some of these industries, some are really tough to reach. So I do like the businesses where the owner answers the phone. It’s really easy that way then.
Andrew: Okay. Alright. So now how do you pick from the 10 to 20 markets that you’ve listed for yourself.
Josh: Yeah. I always try and do something that I have a little bit of advantage in already. So I chose security patrol industry in America as a market. And the reason why I chose that is because I already knew someone that ran a security control company. So I had my first person I could already idea extract on before I started with everyone else in Canada, which I started. So, yeah, I give myself a little bit of advantage that way where I actually had someone I could talk to like the next day.
Andrew: Did it help to have someone who you knew? Or was it more difficult because they were trying to make you happy?
Josh: No, it was really good because going into the idea extraction process, I come from a background of sales, and I thought that was going to be the easiest thing for me. But it was so hard to pick up that phone and call people and idea extract. So having that person where you could just, it’s a bit less risk, you know, call them and talk to them and idea extract them just to get your feet wet was vitally important. And that gave me the confidence to start going from there.
Andrew: All right. You also told April in the pre-interview that you sent hundreds of emails to security patrol companies.
Josh: Mm-hmm.
Andrew: How do you get hundreds of security patrol companies email addresses?
Josh: Yeah, that was a whole new learning for me. It was a combination of using oDesk to have a person overseas to gather the emails and then a few websites. So I hired someone from oDesk for around two bucks an hour that would actually go on manta.com and basically get me lists of companies within my industry. They would get their email address, their name, their company name, and everything and go from there. So I can stick them . . .
Andrew: What’s manta.com?
Josh: It’s just a list of businesses that you can section out through industry, so you could put any industry you want in different regions, and they would come up all over the world. It actually also gives you a market too, so I knew there was around 18,000 security patrol businesses and over 108,000 in the world because manta.com told me how many there were so I get to see how big that the market was too.
Andrew: Isn’t that spam to reach out to people who didn’t give you permission to email them?
Josh: You know what. I thought of all that after. And it’s funny because I just kind of let it go when I was doing it. So now, as we approach companies, like, my one big thing is going to be outbound, I have to decide are we going to individually email these people, or are we going to use something like Toutapp to do mass emailing. Because, yeah, with spam laws, one way you can think of, what is that, if it’s a business email address, and you’re contacting them to help their business? Is that spam? I’m not sure, but I didn’t look, maybe it was wrong of me but I just didn’t look into the spam laws as much because I knew I was going to do this process. But yeah, it’s hard with the spam laws to do that, for sure.
Andrew: Is that one of the advantages of having a group of people? That you don’t get so deep in your head that you start to question everything, you just know “This train is moving. All of my peers are on the train and moving. Maybe a few are getting left behind, but I want to be with the people who are moving forward and I don’t want to be someone who’s left behind.”
Josh: Yeah, and that was in my mind all the time. When I was in the foundation I was scared of being left behind, so I just kept pushing, pushing, pushing. There is some truth in that, that we say, “You have to take action, and if you think so much about things you’re going to stall.” You want to be ethical, absolutely, and that’s a whole other discussion with it, but at the same time you do want to just keep taking action. If you need to pivot or do something differently then you’ll know, you’ll figure it out.
Andrew: Okay. You’re emailing all these people, and the goal of the email is to do what, to get a phone call?
Josh: Yeah. You have your process. The goal would be to get their interest and see if they’re interested in talking to you about their pain problems or their challenges in their business, and the first step would be to get a phone call from that email, so you can idea-extract them on the phone.
Andrew: Why can’t you just them a follow-up email and idea-extract via email, or send them to a survey? I know my buddy Ramit Sethi loves surveys. Why not do it online so you don’t have to make those phone calls, and you could be more efficient?
Josh: That’s a great way of doing it. I like the phone calls because I find it a lot more personal, and that way you can actually get a bit deeper. I think that people will get a little deeper when you get them on the phone, however it is a lot harder to get people on the phone. There’s a give and take there, you probably have to send more emails to get people to respond and to idea-extract via email.
Andrew: You send out an email. Your goal is to get them to let you make a phone call to them. Do you, as soon as they open the email, know “Okay, I’ve got their phone number because my O-desk [sounds like] guy pulled out their phone number, now it’s time for me to call because they expressed interest,” or do you have them schedule a call with you?
Josh: Is the question do I have the O-desk person schedule a call?
Andrew: I guess my question is, what’s the process for getting them on the phone after you send them an email?
Josh: This is how I did it, I thought this was the most effective way. When you use something like ToutApp or an email marketing software, you can see which people open and click your emails, so what I would do, there are very few people who would actually respond. Those are really awesome people, so you want to call them right away. What I did is, I followed up on all the opens and clicks. I knew when someone opened my email, I put a Linked-In profile of myself so I know when they clicked my Linked-In link. I would start calling all the clicks first, and then the opens, and I didn’t worry about people that didn’t open my email. That was how I was most effective, because I was sending hundreds of emails, right? That’s how I was the most effective, because I was sending hundreds of emails. That’s how I was most effective,and that would be the next step for me.
Andrew: People in this business will actually answer the phone, it won’t go to voicemail?
Josh: Yeah, it’s surprising. The big fear of myself was actually picking up that phone and having people responsive to me. It was very, very interesting to see that. People are very responsive when you call them the right way. If you call them to just try to sell them something, they’re not going to respond to you. When you call them just being honest and open and tell them what you’re doing, it’s really, really easy to have a conversation and people are very open to talking.
Andrew: Paul Sang who went on to be a part of 500 start-ups, the accelerator, he did an interview here where he said he used to call up anyone who was a potential customer and I think the first thing he said was “I’m not trying to sell you anything, I just need to learn.”
Josh: Yeah.
Andrew: That’s essentially what you’re doing. You’re disarming yourself in the conversation.
Josh: Yeah. The main principles I follow when I call someone is being, number one, telling them why you’re calling, and then number two, giving them value. If you can do those two things when you call someone it’s not a sales call any more, it’s just helping them. Those are the main things I found that worked when you start doing a process like this.
Andrew: All this stuff makes sense. You’ve seen it work for other people, you’ve seen my interviews here on Mixergy where people have crowed about being able to build these successful companies by using the exact same process that works for you already before you even got in the foundation, and the same one that you were going through the foundation. Yet, you told April in the pre-interview that cold-calling was very hard, very frustrating. I quote, “The phone felt like it was 100 pounds, it was so hard to pick up.”
Josh: Yeah.
Andrew: Why was it so hard, if all of this is so logical?
Josh: That’s the crazy thing about it. Someone might listen to this interview, or listen to some other ones and think “Hey, you know, I can do that!” and I absolutely believe that with a bit of drive anyone can do it, but when you go through that process, you’re going to meet yourself and you’re going to meet these like inner battles with the yourself because you’re doing something that scares you. I mean I think that for me like I’m always on the edge of doing things that scare me. I think that’s like what you were saying earlier, that’s what makes you different than other people and why you’re going to succeed because you’re always pushing past those.
And for me I came into this process and I was in sales before so I thought that the easiest part of this process was going to actually be calling. And then when I got to calling I couldn’t do it, I was sitting there I was like well what is the person going to think? And like they’re going to think I’m selling them and they’re going to yell at me or do those things and I literally couldn’t do it. So I reached out to the community and I asked for help just so I could start calling.
Andrew: What does the community do that gets you to get over this fear?
Josh: I didn’t know what they’re going to do and that made me actually really scared to tell them because I had this persona that I wanted to carry and be like you know? I’m the sales person, I can do this really easily. So I was really nervous to say that hey I can’t call I’m really struggling with this, I did and it was probably the most impassable thing that happened to me during the whole foundation experience. I had, there’s a guy named Mitch Boler that responded to me when I said hey I’m having trouble calling, I need help here.
And I was expecting people to be like you know? Pick it up, like suck it up, like come on just start doing it because this is what I was telling myself. What you told me something that was most impassable thing that was said to me. He said that Josh, I give you permission to be outrageous. And I was like wow. Really like you’re actually okay with me not being able to do this and you’re give me permission to fail basically you’re saying? And that gave me permission to say that kind of fueled me moving forward to be able to call and I can be outrageous. Like it doesn’t matter if I fail, it doesn’t matter if they say something you know? That stands whatever happens doesn’t matter, just be outrageous. And that was me.
Andrew: You needed to overcome it because yes you walked in with this feeling of confidence like you are a sales man. What you also are someone who before we started to record and we were just messing around with the technology trying to make sure that it recorded is properly, you said I was more comfortable as a kid on the bench band in the game.
Josh: Yeah.
Andrew: When was this?
Josh: This was when I was really big into basketball when I was younger.
Andrew: Right.
Josh: I played an elementary school, high school and by University and exactly what you said there. I look back and I could’ve gone I think a lot farther in sports if I had the mentality and the mindset right around it because I literally, if I’m being honest and not a lot of people will know this but they do now as I’ve been telling them and interviews, is I really was dead honest or comfortable on the bench that I was on the floor. And that killed me but it was true.
Andrew: What were you afraid would happen on the floor?
Josh: I was afraid that I was going to screw up. I mean I was afraid that everyone was watching me and everyone was expecting me to be this star and to be this person that succeeded and brought the team you know? Victory, but and when I had one of the balls in my hands I just didn’t believe I could do it. So it was a lot easier to watch my teammates do it and then me just cheer them on and it killed me because I didn’t know how to fix that. So I felt like a quitter.
Andrew: I have that same issue and high school. I went to school in Brooklyn, Brooklyn Tech. People were fantastic basketball players and at least they talked a good game and then I became a chicken. And so when I was pushed onto the court and my team had the ball I would intentionally stand behind one of the defenders so it look like I was defended like come on, be guys are clearly afraid of me. And it would be no way for me to get the ball and I would be safe. It was painful.
Josh: Totally and that was me too. Like you know? Specifically on coming to the post and I’m going to the block and I say therefore second I don’t get it so I moved then. You know whereas in like if I was a check it was like give me the ball alright, but I…
Andrew: Right.
Josh: … But it was just a mental battle and it happened over and over in my life and other sports as well where I just, I was scared.
Andrew: So how do you overcome that?
Josh: I you know? They came to a point when I again with track and field like I didn’t run the 100 m when I was one of the fastest kids there because I was scared to fail at that. Like I went to do the track meet and I didn’t do it you know? Other times where I would like too I just didn’t follow through things and then it finally came to a point where I was like so intensely felt myself that I wasn’t just quitting but I was actually a quitter. Like I felt that was what I was and I wanted to change it.
So I had an opportunity, the first opportunity I had was when I started working out with the trainer and it was the hardest thing I’ve ever done, I couldn’t sit on the toilet for a week it was so hard and I wanted to quit and this is what I was 17 and I saw my parents I was like I can’t do this, I can do this, I got to quit. And I said no you’ll stick through it, I stuck through it for the very first time I stuck through something I didn’t want to stick through and I met a goal of being a certain weight by entering grade 12. That was bad feeling of actually sticking through something and actually thinking and knowing that I didn’t have to be a quitter was exhilarating.
And then going from there my second opportunity was when I started my first business in university by running a painting company. Again, I started the pre-selling process and I pre-sold a ton of money worth of painting before I knew how to paint. And then it came to the point where I had to produce this painting work for customers.
And again, I wanted to quit during that and just throw in the towel and say I can’t do this. But I stuck through it, and that was the start of my business journey in going where I am now. So just believing that I didn’t have to be that quitter and just pushing through things really changed me, and that’s why I draw that from right now.
Andrew: You pushed one of the people who you did an idea extraction phone call with to meet in person.
Josh: Mm-hmm.
Andrew: Why?
Josh: All comes back to there. I wanted to succeed in this process. Up to that point, we had the $40,000 pre-sold, but I don’t think I had much more pre-sold with other companies. So to really prove to myself that this worked, I wanted to get another pre-sale. And I felt that I could potentially pre-sale this person that didn’t really want to be met with. But I said to myself, I’m going to do this and I’m going to succeed in it. And I need to give it a little push to meet with me. I knew if we met we were going to do something.
Andrew: And did you get more out of an in-person meeting? What did you get that you couldn’t have gotten on the phone?
Josh: Yeah, absolutely. I like seeing people face to face, because that’s where I can see their body language and actually connect with them a bit more. And it’s really hard to do on the phone. So I found that doing phone calls was fine, and it was something that you had to do especially when you’re calling out of state or out of province. But anytime that you could meet someone in person, at least with me, I felt you can connect more with them and actually sell. And it’s easier to usually find their pain and actually offer the solution to them. So I aim to get people in person.
Andrew: Heaton Shaw came up with a question about the magic wand. If I could wave a magic wand and solve the problem . . .
Josh: Yeah.
Andrew: . . . what would that solution look like, or what is it, what would the finished product look like?
Josh: Yeah, if I could wave a magic wand, and you can have any solution you wanted out of this to solve your problems. What would that be? You know, basically, an really open-ended question. It’s a great question.
Andrew: That’s one of the questions you used. Do you remember what the answer was to that?
Josh: Yeah, in that in-person meeting, I asked that. So our person meeting, my business partner and I sat down and we again went over their problems, and just got them talking about what was challenging for them. And then it came to the point where that after they’ve expressed their pain for literally, it was, like, an hour. We asked that question. Okay, so that’s great. You know, and so what I really want to know is if you could wave a magic wand, what would you want as a solution to this. And for that point, that was with the security industry, so it came to they needed a scheduling software that worked really well within the security business. And they went through everything, all the details they’d wanted of that, so it was a great question.
Andrew: And then they gave you the money.
Josh: Yeah, we didn’t get the money yet for it. But after that, basically, we had to say, you know, like, we’d like to build this. But the kicker is that we’re not going to build it unless we have people that buy into it before. And you are the first person. Like that was the first person, so if you want this bad enough, we need the first person to say yes and our offer was to pre-pay three months of the software up front. And you’d be the first person to say, hey, I want this, and come in on the beta. So we closed that way, and they, to our surprise, I mean, again I didn’t believe until it actually happened when they said yes, and they gave us a $300 check.
Andrew: Wow. On the spot?
Josh: On the spot. Yeah. It was the craziest thing ever.
Andrew: It’s really tough to close a sale. I remember when I worked for Dale Carnegie, one of the things that, actually not one, a lot of the books that we were advised to read had to do with sales. And I remember that the big section in all those books was how to close a sale. Closing was tough. You can do everything right, but if you don’t have the guts to ask for the money, none of the rest of it is worth it.
Josh: Yeah.
Andrew: Isn’t it weird when sometimes in the middle of a question, I realize I’m going way too long. And I’m not sure how to explain it. But I guess what I’m getting at is, how do you get to that point where you’re selling nothing. Where you’ve got nothing there. Where you’re not even sure of your own technical chops and their ability to hire even someone who can develop it for you.
Josh: Yeah.
Andrew: And you’re still asking for money. How do you get past that?
Josh: Yeah, that’s a great question. I think there’s a few different things about that. Number one is you have to believe that you have the integrity to fulfill what you’re saying you’re going to fulfill. So if you get money for something and you’ve told them you’re going to build this you’ve got to field that, and you’ve got to believe that you’re going to provide that. That’s number one, so that whole integrity piece.
Another thing that really helps, too, and it takes the pressure off you and off them is you know what if you can’t build it, what if you don’t get more pre-sales and what if this just doesn’t work out, so in that case the thing that takes the pressure off is to say, you know what, if we don’t end up building this or you know if something happens and we can’t fulfill this then we’re going to give you your money back. And just having, again, the integrity is to actually tell them you’ll give them their money back if something doesn’t work out is really key as well.
Andrew: And did you have the money to give back to them?
Josh: Did I have the money to give back to them?
Andrew: Yeah.
Josh: We would have given their money back to them, yes.
Andrew: So what if you would have paid for a developer and you couldn’t get it built properly?
Josh: Yeah, I would have. I would have found a way, I mean, you have friends, you have family, I mean, you have to. In business you have to have integrity and you have to do what you say you’re going to do, and if you tell someone you’re going to do something, if you don’t fulfill that, if you don’t follow through with that, it’s going to come back to you for sure. And I’ve had experiences, you know, in my businesses where I look back, especially in painting, when I first started business and I was so young, I look back and I like, I really wish I would have dealt with that customer better. Or I really wish I would have done this, like, and for me I don’t want to look back and $300 or $1,000 or whatever it is doesn’t mean anything (?) things.
Andrew: But it’s not $300, it’s tens of thousands of dollars.
Josh: For us, yeah. Absolutely.
Andrew: And you just feel like I’ll find a way to do it. You just had that confidence?
Josh: You know, I’m extremely confident now, like, going through the process, it was hard, but right now I mean we’re so deep into this and we have so many customers all over North America now–even throughout the world–that have come into MySky right now, and having that validation from them and how much they love our product. There’s no way in my mind it’s not going to work. So right now I’m very comfortable with them, with them, with the money . . .
Andrew: You showed it to me in Vegas in person just a few weeks ago–maybe it was now a couple of months.
Josh: Yeah, it’s been a few months for sure.
Andrew: All right. It was buggy.
Josh: Very.
Andrew: It was. You were trying to show it off and there was stuff that you wanted it to do and it wasn’t working well. Doesn’t that freak you out, don’t you wake up in the middle of the night going, holy crap, I can’t even get it to work right for Andrew. I’m about to give it to this person who’s going to pay me money>
Josh: Well, I was sweating, and you put me on the spot there. I was in the lobby and you know, like show me.
Andrew: I saw that, yeah.
Josh: And I had this laptop in my hand and was showing you. Yeah, that was probably the most nervous conversations I’ve had and I wasn’t prepared for it. But yeah, like, that’s what this process is, I mean, is that you have people in our program that’s not fully built yet, and it’s not full, and there are bugs in it. But the reason why they’re staying with you is because of the why behind it, and if you can give the why and where you’re going and what you’re solving. But yeah, it’s come a long way since then for sure.
But it’s very scary, but I think the biggest principle I offer too is launching early. I kind of follow Eric Reese’s mentality there and launch a product and get the feedback on it, and be prepared to get some backlash, but also be prepared to hear what’s good about it, too. That way you can develop and you’re a bit more agile.
Andrew: I’m glad you felt comfortable being open about how you felt about it, and not too mad, but those are small bugs; it wasn’t my computer and brush it off.
Josh: Yeah. I was nervous, I was very nervous.
Andrew: I talk to entrepreneurs all the time; hell, it even happens to me where a competitor comes in, someone doing something similar, and we all, as entrepreneurs, go oh, crap, people are going to like their stuff better. They’re going to get more attention than we are, they’re going to get more coverage than we are, they’re going to be more trusted. You’re in a space where I’m looking at my own experience; I have (? CoBook) software on my computer right now for CRM. We use Pipe Drive as a team for CRM. There’s CRM coming out of our ears; there are so many different options. You mentioned Sales Force–huge company–I walk past their building every day to get into work; huge. What do you say to yourself when you start to worry about how all these competitors in this space that you picked?
Josh: Yeah, that’s something that I really struggled with in the beginning, and that’s why I thought that, that’s why I sort of get distracted again on different markets, because I looked at the CRM space and was almost embarrassed to say, yeah, I’m building this CRM, and there are tons of them out there, right?
Andrew: Yeah.
Josh: And so that’s why I want to hedge myself and have something else, too. But what I found was that the CRM business took off ten times at the pace of the other one, and the reason was because we look into this CRM market and we say, oh, it’s flooded. You know, there are so many to compare with it. But when I actually started calling people and calling small businesses and talking to them there are 95% of them that just didn’t use anything even though there was so much out there for them to use. And then when we started pre-selling them into it, it gave me so much confidence that, yeah, it may be flooded but there’s still tons of room in the market. And I think the biggest thing is going mobile right now, is that they’re a lot of desktop CRMs. And if you can hit the mobile market, that’s tech crunch that’s going to grow by about 500% by 2014.
There’s some big space in there if you do things right. And there’s so many businesses that still don’t use it that we found when we called. And that all comes back to talking to your market. So that’s kind of where I looked at it. But still it makes me nervous. There’s lots of people. So we have a few things that we want to do a little differently. And we have a few things and we have people coming over from Highrise and different places, and . . . [SS] . . .
Andrew: What’s the one thing? If you’re at a party and someone says, . . .
Josh: Mm-hmm.
Andrew: . . . oh, I got so much CRM.
Josh: Yeah.
Andrew: What’s the one thing that you can say that makes them understand, this is different . . .
Josh: Yeah.
Andrew: . . . and it may not appeal to them, . . .
Josh: Mm-hmm.
Andrew: . . . but it appeals to someone because of this? What’s this?
Josh: Yeah.
Andrew: This difference.
Josh: If you’re looking at it as computer sales force, the biggest difference is that it’s a lot simpler and easier to use and that’s just a common thing. But there’s a lot that are like that. But the one thing that we want to tackle quite well, which some are doing, but some, like Highrise, aren’t doing it that well, I find, with my experience in small businesses is that there’s a really big slippage when you get a lead and then you get that lead scheduled.
So that time frame in there, there’s huge revenue growth. And what we found in our business is that before [??] is managing that process the best you can and decreasing that slippage. It actually increases your revenue so much. So we do a few things around statuses, and that flow there. A lot of CRMs do the deal Pipeline quite well. So when you actually have that appointment, you give a quote or a price, that deal Pipeline has managed quite well, and other CRMs. But we want to manage that process before.
And all the follow-ups and the statuses of leaving messages and trying to get a hold of them to get to that appointment and decreasing that slippage. That’s something I talk a lot about with small businesses is that is a big opportunity and that’s what we’re trying to be the best at.
Andrew: I see.
Josh: Yeah.
Andrew: And to get people to pay you up front for that, you gave them an incentive.
Josh: Mm-hmm.
Andrew: It seems like, again going back to my notes here. You know, I had an interviewer say, what do I do? I have these notes. I don’t want people to see that I have these notes. How do I hide them? I go, screw it. Tell them that you have notes. Let them watch your eye wander to the right and know that you’re prepared. It’s not something to hide.
Josh: No.
Andrew: So I’ll point out, in my notes I see, it seemed like there are two things that you offered people that got them to give you money up front.
Josh: Yeah.
Andrew: First is a price discount. And the second is influence over the product.
Josh: Yeah.
Andrew: Am I right?
Josh: Yeah, absolutely.
Andrew: Those are the dual incentives?
Josh. Yeah.
Andrew: And what was the discount that you gave them if they bought before you launched?
Josh: The discount that we gave, actually we changed it. So we kind of iterate on it a little bit. The first discount that we gave people was that they pay three months up front for the software, they got 10% off for life of the fees. So that was the first discount. And then again, like you said, access to the beta program and to give us input as we develop it, and that whole beta program would be free for them. So that was the first one we did.
Andrew: Okay. And then the other part of that, I think, is maybe even more challenging. Where you tell people if they pay you up front, they have influence over the product.
Josh: Mm-hmm.
Andrew: That means that you’re going to get a lot of feedback.
Josh: Mm-hmm.
Andrew: You’re going to have say no to a lot of it because you can’t do everything.
Josh: Right.
Andrew: And you’re going to have to say no to people who paid you and believed in you.
Josh: Yeah.
Andrew: Did you have something that you had to say no to?
Josh: Yeah, that was just last night. I got, like, eight different requests. It’s really hard for me because, like, again, like I was saying, you bring in these customers and it was really good that we brought 80 to 90 pre-sales. But the tough part of that was that you’re going to have to say no to some people. Yeah. I find it really tough to . . .
Andrew: So how do you say no? Do you say, I’ll come back to you later with this? Do you avoid them?
Josh: Mm-hmm. I’ve been using user voice with that and saying, that’s under review. And you can basically change the status. And it’s planned, or it’s under review, or whatever it is. So I find personally that it’s really trust building and relationship building when a customer says, can it do this? And you’re actually, like, no, we’re actually not going to go that route.
When you do that people. And I’ve had experiences when people ask me, especially even in the beginning, you know, when you’re trying to sell your product. And when you say that, they just build more trust. Because it’s not like everything they ask, they actually want. They’re just speaking their mind, right. And so I think when you can be honest, I find it trust building.
Andrew: I see.
Josh: Yeah.
Andrew: Yeah, I get that. But just to be acknowledged is enough, you’re feeling. That they understand, all right, this guy can’t build everything.
Josh: Mm-hmm.
Andrew: He can only do so much, but at least he heard me out.
Josh: Exactly. And that’s where it comes to. You know. Again, if you can be open and honest, I mean, and then when they hear you out, that’s kind of what they want. And if you can tell them, hey, I’ve loved it, but we’re not going that way. And they’re fine. They were heard.
Andrew: All right. So this idea, MySky, is just building and building and building. But you have the other idea that you built when you started the foundation. What happened to that other business?
Josh: Well, I thought I could do two businesses at once. I was hedging myself because I didn’t know which one was going to be successful. So it came to a point where I just was burning out and I realized that I can’t believe two businesses. So I ended up giving 90% of that business to my business partner I was building with, and he’s kind of taken over that. And he’s working on that business while I spend my time on MySky.
Andrew: Was he in the foundation also?
Josh: No, he wasn’t. So he kind of started with all the free fountain that was out there. I was the one that joined the foundation so I was kind of bringing all the insides of the foundation to that business.
Andrew: I see. Alright. Oh, you started out with a niche that you were focusing on. And then you, I think, expanded beyond it. Right?
Josh: Mm-hmm. Yeah.
Andrew: How did you know that it was time to expand beyond the niche?
Josh: You know, we felt we had 105 businesses, a really, small niche. And we pre-sold 20 of them in a month and a half.
Andrew: Mm-hmm.
Josh: So we pre-sold quite a big portion of the list in about a month a half. And then it became increasingly harder to start pre-selling, so I came to that point where we got all the low hanging fruit and the people that were actually really interested and had the pains we were solving. And then we started just going over the list, and over and over again. And the volume of pre-sales weren’t coming in as high.
So then we actually had a friend that actually knocked some sense into me and said, why are you still working on this list when this program, obviously, can help tons of small businesses. And at that point, he gave me two of his contacts that he felt could use this. And I talked to them on the phone, and both of them bought the program on the phone when I talked to them. And that’s when I really realized that, hey, this can work for more businesses than just this small niche, and we started expanding from there.
Andrew: I guess I’m not following the 105. How did you get the 105?
Josh: Mm-hmm.
Andrew: This came from the one customer who gave you $40,000 who had 105 businesses underneath her?
Josh: Yeah.
Andrew: And so even though she paid, she also wanted these other companies underneath her to pay?
Josh: Yeah. So she’s the CEO of the corporation and they have distributorships that are privately owned underneath them. So the $40,000 the agreement was to basically start this program and start building it for these businesses. But the 105 distributors underneath this corporation which are all privately owned, they still are responsible for actually buying the software and paying monthly for it.
Andrew: So she paid you even though it doesn’t get her people free access to the software?
Josh: Exactly. Yeah.
Andrew: So what does it get her? Couldn’t you just take the $45,000 and hire a company to build the software for her?
Josh: Yeah, actually we could have. But the thing is it’s hard to get her businesses to do that, because they don’t know how, again, this all comes in to, they don’t know how to get developers, don’t know where to hire them, don’t know where to go. And it would cost probably a lot more than $45,000 once you start building a big system, before it gets into that over $100,000. So it was just a little bit of a medium ground for her to get something a bit more custom to what her businesses could use.
Andrew: Is this something that a person listening to us could do, or did you just happen to luck out on someone who was willing to pay you $40,000 over time and let you charge customers . . .
Josh: Mm-hmm.
Andrew: .. . and introduce you to those customers?
Josh: You know. I’ve thought about that, and is it something that you could replicate? And then I started thinking that that’s almost exactly how, you know, very similar to how Paperless Pipeline started. You know, Dane was in the real estate business and someone just came and said, hey, the real estate companies need [SS] so you need to build it. So would it replicate exactly the same way? No, I don’t think so.
But the principles are still the same. Be open. If you want to start something, be open to listening to what the challenges are and the pains that are presented to you. And when you find something and you hear a pain, jump on it. And those are the main principles I follow with this, and I think that can be replicated. Exactly? It’s going to take different forms. But the process of just being open to solving people’s problems, no matter how they’re presented, that’s what you can replicate.
Andrew: And so once you hit just about everyone on that list of 105, why didn’t you go out and find more businesses that are similar to theirs within your niche, instead of going outside of your niche?
Josh: That was the one agreement we had. So in paying that $40,000, we weren’t going to actively target other screen companies. So . . .
Andrew: I see. Okay.
Josh: So that’s why we went outside of that niche.
Andrew: And these are screen companies that install screens like we have at home that keep the bugs out?
Josh: Yeah, bugs and help with solar shading and stuff, yeah.
Andrew: All right. Here’s something I didn’t understand from the notes that April gave me. You were offered $75,000 of funds. What does that mean, investment?
Josh: Yeah, so we also have an investor that gave us up to $75,000. We’ve used about $20,000 of it right now, but it was kind of like an angel investor that gave us up to $75,000 in funds.
Andrew: What do you mean ‘up to’?
Josh: We have up to $75,000 in funds at a certain percentage interest rate that we can draw from. Then after that it would go to equity, but right now, it’s basically like free money up to $75,000 from a (?)
Andrew: Really? Who’s the investor?
Josh: This is going to be [sounds like] an interesting story. The investor actually is the CEO that gave us the $40,000 [SP] to begin with.
Andrew: Really?
Josh: Yeah, once we had a discussion around expanding past the screen industry, and at that point she realized that this could be a bigger thing than just a product for her screen companies, and she believed in it so much that she offered investment for us to keep going with it.
Andrew: Okay. Just so it doesn’t become this interview about you basically lucking out and finding one person, tell me again how many other customers or how much revenue you’re getting from other customers.
Josh: So on the screen companies, we have 26 people that are presold, and we have around 90 that we presold in total, so we have around 60 other companies from . . .
Andrew: Sixty other people who you sold, who paid you beforehand, who you are expecting are going to pay you monthly, because this is a software service?
Josh: Yeah. Exactly.
Andrew: Okay.
Josh: Yeah, our other markets tripled what we’ve done in the screen industry.
Andrew: Is it just you picking up the phone and calling these customers and selling them, every single one of them?
Josh: Yeah. So we started doing that through meet-up groups, and we did a lot of different processes. We had started it through meet-up groups and just being where our customers are. We’ve since then had our website up, which we get leads from through Facebook and Twitter, so it’s basically ground and pounding the first 100 customers, just going to where our customers are.
Andrew: Okay. Who’s ‘we’?
Josh: I say ‘we’, because I have a business partner that does it with me.
Andrew: Okay. So even in this business, you have a partner who’s different . . .
Josh: Yeah.
Andrew: . . . from the partner before? OK.
Josh: Yeah, exactly.
Andrew: All right. So, let me see, I think we’ve got everything here, except for the last question that April asked you, which is, ‘What books or resources do you recommend?’ Most people give us just a list of books. You gave us one idea, one course, one book, and two Mixergy programs. So let me hit you with them, and we’ll do kind of the lightning round where you tell us why you recommend them.
Josh: Okay.
Andrew: The book is “Integrity: The Courage to Meet the Demands of Reality” by Dr. Henry Cloud. Why do you recommend that?
Josh: Just like what I said, I read that book, and I didn’t expect much from it, but it just went to this model of leadership and how to be a leader in your organization and with customers. I think that nowadays, especially doing the preselling model, I think integrity and trust is a huge thing. You can’t presell people if you’re a salesy-type person. You have to have integrity to do it, and I think that’s very, very key if you’re going to embark on this journey. So that was one definite reason why I recommend that.
Andrew: Okay. The foundation course, you said a lot of good things about the foundation. How about we make sure that it feels more honest by saying now one good thing about the foundation . . .
Josh: Sure.
Andrew: . . . and one thing that you wish was different . . .
Josh: Sure.
Andrew: . . . that they’re not making you happy with.
Josh: Yeah, so I’ll start with the good. A really good thing, like I said, was that you have the community behind you and the coaching, so you’re doing this journey that’s really tough, and you have the support. So that’s really good. One thing they could definitely improve on was it was a very start-up-ishy feel in the sense that not everything was working correctly. I mean, the content, how it was delivered, it wasn’t the best, so I know the next round what they’re going to be doing is making it a bit more action oriented. It was just basically PDFs and webinars, which is great, the content is unbelievable, but I thought that could’ve been delivered quite a bit better.
Andrew: How?
Josh: How could it be delivered better?
Andrew: Yeah, what’s better than PDF and webinar?
Josh: I think that one reason why is everyone was given the idea extraction month, and then everyone was given the preselling month, and not everyone was at that stage. Some people took four months to idea extract, and some people didn’t even get a presell. So being able to have specifics on just getting what you need and not having to think, “Oh, shoot, now they’re going on to preselling. I’m not even there.” That’s really tough when you just want to kind of stay in what you’re doing. So I think that content delivery can be a lot better (?)
Andrew: I see. Okay.
Josh: . . . delivery can be a lot better.
Andrew: I see, okay.
Josh: [??] Yeah.
Andrew: So not until you’re done doing idea extraction do we get to [??].
Josh: Yeah.
Andrew: I see, okay. For interview, you recommend Sam Ovesn Interview on Mixergy, why?
Josh: That made me believe this is possible, like listening to you interview Sam, and listen to his process have made me realize a whole other, you know, side of business I didn’t know, and that you could, you know, in the software sense, go and pre-sell people for your software problems [??], and just hearing Sam’s firsthand experience made me believe, and that’s one reason that made me want to join the foundation.
Andrew: If you’re on Mixergy watching us, just type in the name Sam Ovens into the search box, and you’ll see the interview. I think it was one of my best interview. Dean’s Pool Extraction call on Mixergy, what is that and why do you like that?
Josh: That was a live idea extraction being recorded, and that, again, it was just more proof to me that, you know, what Sam and you were talking ago, I actually heard that in real life, and I remember I was actually in another business going to an estimate, you know, to book someone for a job, and I listened to that before. I went into the appointment, I was like, oh my goodness, I got to stop do what I’m doing now and join the foundation [??], because I just, again, it made me just believe, really see that it was possible, and not just hear it from Sam and you, but it was incredible.
Andrew: It’s just [??] matchful in making a phone call to a guy who runs a pool cleaning company, I think?
Josh: Yeah.
Andrew: And he just gets a sense of what the guy’s problems are, and he’s fishing around for what he can sell him.
Josh: Yeah.
Andrew: And what he can feel, actually, to sell him.
Josh: And he came up with a $400 to $500 a month solution that he was willing to pay for, and that’s incredible to hear, yep.
Andrew: All right, again, just so we keep it honest here, you said two good things about Mixergy. One thing that sucks about Mixergy, or one thing that made you feel like, that’ just not enough, I need to go to the foundation, or I need to reach outside of these interviews and programs.
Josh: Well, you know, I stopped that, some, that whole Sam Ovens interview on Mixergy, and I went to the foundation, where the biggest reason was that, well, I really respected Dean and what he was in, but I need that community around me, because I know that having other people around me do this and struggling through at the same time would be really vital, and me kind of succeeding in it, so that’s why I looked for big thing in a foundation.
Andrew: That community of people who are all serious, doing it all together. All right, finally, lean startup. People don’t talk about lean startup anymore. My feeling is that it’s because Eric Ries is now knee deep in consulting gigs, knee deep in speaking opportunities, he does not have as much time to keep telling the startup community about his ideas, and so we’re just not taking his ideas seriously enough anymore, but you do. What is it about lean startup that you like?
Josh: You know, I do because I was very, you know, I’m not, I don’t live in San Francisco, and I don’t live and breathe that startup tech community, so hearing his process and hearing, you know, launching early and measuring your results, and then inhibiting all different stuff, was just insanely valuable to me just to, again, realize that there is a different way to start businesses, and I don’t have to, you know, I can literally launch, or interact with my customers a lot sooner than I thought, and I’ve got a website up and a name and all different stuff, and that, for me, I read it a long time ago, that was kind of an introduction into this whole new world in tech, because I don’t really get a lot of it when I’m, you know, I’m in Canada here, so.
Andrew: Right.
Josh: I’m [??] great to hear.
Andrew: All right. Is the website, is it, yeah, there it is, getmysky.com, that’s where people can sign up . . .
Josh: Yes.
Andrew: . . . and see how you’re building the software.
Josh: Absolutely.
Andrew: And if there’s one reason for someone who’s listening to us to sign up, and actually be a paying customer of yours, what would that be?
Josh: Yeah, one reason is I’m offering 10% off for first year, for Mixergy [??] that comes in, so that’s one, for sure.
Andrew: And what do they do to get that, just type in Mixergy in some . . .
Josh: Yeah, when they sign up we’ll get a hold of them, and we’ll ask them where they heard us from, and they’ll just say Mixergy.
Andrew: All right, that’s a nice to have thing. Let’s say if you already convinced that you’re going to sign up, and then you might as well get the 10% off, but 10% isn’t going to convince someone who is married to, I don’t know what, highrise to switch. What’s one reason to switch from whatever it is they’re using?
Josh: Yeah, I think I’ll go back to this thing I was saying before, is that we really want to do, we want to manage the lead to kind of schedule appointment process, I don’t feel it’s done that well in other CRMs, because that’s a really big opportunity where people slip a lot of leads, and losing a lot of revenue, and that’s where we’re managing really, really well with our software . . .
Andrew: All right.
Josh: . . . through statuses and everything there, so I think that’s going to be the biggest thing if you want to capitalize on the . . . you know you get a lot of leads, and you don’t schedule all the appointments, I think that that would be the, I want the person to come and join us and see our software, and see how we can help them.
Andrew: Josh, thank you so much for doing this interview. Everyone, check out getmysky.com. I should say things slower when I want people to take action, getmysky.com, and thank you all for being a part of it. Bye, guys.
Josh: Thanks a lot.
