Andrew: Three messages before we get started. If you’re a tech
entrepreneur, don’t you have unique legal needs that the average lawyer
can’t help you with? That’s why you need Scott Edward Walker of Walker
Corporate Law. If you read his articles on VentureBeat, you know that he
can help you with issues like raising money or issuing stock options or
even deciding whether to form a corporation. Scott Edward Walker is the
entrepreneur’s lawyer. See him at walkercorporatelaw.com.Do you remember when I interviewed Sarah Sutton Fell about how thousands of
people pay for her jobsite? Look at the biggest point that she made; she
said that she has a phone number on every page of her site because, and
here’s a stat, 95% of the people who call, end up buying. Most people
though don’t call her but seeing a real number increases their confidence
in her and they buy. So try this, go to grasshopper.com and get a phone
number that will make your company sound professional. Add it to your site
and see what happens. Grasshopper.com
And remember Patrick Buckley who I interviewed? He came up with an idea
for an iPad case; he built a store to sell it and in a few months he
generated about a million dollars in sales. Well the platform he used is
Shopify. If you have an idea to sell anything, set up your store on
Shopify.com because Shopify stores are designed to increase sales. Plus
Shopify makes it easy to set up a beautiful store and manage it.
Shopify.com. 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 and, yet again, I’ve got an
interview for you with an entrepreneur who used to listen to Mixergy
interviews, just like you’re listening to them right now. In this interview
I want to find out how a novelist, like today’s interviewee, who couldn’t
support his family by writing a book. . . What is this? The way I’m
reading this is awful. Let me read it from scratch. How does a novelist
who couldn’t support his family with his writing, build $150,000 a month
business? If you’ve heard me say in the past, “An entrepreneur should find
their customer’s pain,” wait until you see the first thing today’s customer
did.
Boy! I got to tell you Michael, I’m screwing this whole . . . and I’m not
even editing it out; I’m keeping the whole thing in. Instead of continuing
with this blundered intro, I’m just going to say, “Today’s guest is Michael
FitzGerald. He’s the co-founder of Submittable which makes it easy for
people to accept and review digital content.” Michael, welcome.
Michael: Thanks, Andrew.
Andrew: The $150,000 in business is not revenue. Before we started this
interview, you were explaining to me what it was and I said, “Let’s just
have you explain it.” Especially since I’m fumbling my own intro, I might
as well have you explain what the numbers mean.
Michael: Sure. People use us for accepting application fees, contest
entries, reading fees, and we create revenue from that; we get a per-
transaction. Many of our customers use us for free and we only make money
when they do that. So we do about $150,000 in transactions per month, and
then we have about a third of that in revenue.
Andrew: OK. And the first thing that you did to come up with this idea
was make a list. What was that list?
Michael: How the company started was in 2008, my partner, Bruce
Tribbensee, and I were at lunch; we were both developers. Bruce is a
filmmaker, I am a novelist. We had always paid our bills by writing
software. Bruce has worked at Borland, Oracle; I’ve done work for
Microsoft. The company that I worked for before, ProClarity, was bought by
Microsoft. We live in a rural part of the world; we live in Missoula,
Montana. We were both doing consulting work; we’d gone out to lunch and we
said we should start a company, mostly because we enjoyed each other and we
were getting to the age where we didn’t want to work for somebody.
So we were at lunch and I just said, “We should make a list of things we
don’t like or things that we think could be better.” In two or three
seconds; as a writer I send out manuscripts routinely and I had noticed
over the course of the last 10 years, everybody was using a different
system or they were using email or they were using post; there were all
these convoluted ways of getting your work in front of publishers or
agents. It seemed, technically, a really simple problem to solve, so it
must have been a Monday or Tuesday that we were having lunch and that
Sunday, what you usually do as a writer is send out most of your work on a
Sunday or Monday; you finish something, you work all weekend on something
and you finish it on Sunday night and you put it in envelopes or email it
to wherever, so I had just said, “The process of submitting work was a
nightmare.”
And I described how many different publishers had different systems and how
some used email and you never knew where it went; and [to use the] post
office, you had to print something out and bring it down. So, as Bruce
said, it’s a mishmash, which was what our first name was “Mishmash”.
Andrew: Mishmash.
Michael: We didn’t know what the solution was; we just said “Mishmash”.
Andrew: Let me pause right there, before we continue with the rest of this
story. I’m wondering why the first step to starting your company was to
write out a list of your own problems. Why wouldn’t it be to say ‘What’s a
good idea?’ or ‘What can we do better than the competition?’
Why did you specifically take this approach of saying ‘What are my
problems?’ Why go inward like that?
Michael: Maybe, I read that somewhere . . . We knew that we were sort of
in the middle of nowhere and we weren’t going to launch the next Facebook
or something so we knew we had to really, truly solve a problem instead of
creating an industry.
And it just seemed obvious that there are a lot of problems in the world.
I don’t know if they’re mutually exclusive; solving a problem or coming up
with a new, great idea. I don’t know why we thought that.
We did make a list and, literally, we probably said two or three things but
this was obvious to us; we knew the industry and, Bruce as a filmmaker had
the exact same problem. We later brought on a third partner, John
Brownell; he is a musician and he had a very similar problem, it’s mostly
about getting your work out there. So what we fixed was a little piece in
that process of getting your work out there.
We went home; the domain name was available and we just started writing
code. The original thing that we thought we would solve wasn’t at all what
we have; we built this social network around sort of the curation process.
It’s essentially a marketplace similar to Angel List or something where you
had “gatekeepers”, publishers or producers; you had creators, people making
stuff, and needed to get it in front of those people.
So we built this social network; publishers could create an account, accept
work and review it. Then we put metadata around it, the ability for
certain genres to find the right people. The problem with the marketplace
is the chicken and the egg. We built that for eight months, nine months.
It was pretty obvious as soon as we launched, the hurdles that we were
going to face. Then we ripped out 90% of the functionality.
Andrew: What were the hurdles?
Michael: The chicken and the egg problem is who comes first, right? Do
you get the producers and the publishers or do you get the writers and the
artists?
It would be pretty obvious that the numbers are with the creators, but I
called publishers directly and they straight-up said, “I don’t have a
problem of needing more content and I don’t trust you three guys in Montana
to take care of it.”
Andrew: At what point did you call up those publishers?
Michael: We were going to release on December 9th in 2009; I think it was
a Monday. I had slowly been talking to some of them over the course of
three months while we were. . .
I would get people to look at what we had built and I was showing it to
anybody who would look at it. As a published author, I sort of have some
pretty direct connection to a lot of publishers so I would just email them
and ask them if they would look at it.
They were all interested; it looked like real software but without content,
without thousands of people in it, it’s hard to really envision what a
marketplace is like. But the one thing they all said was, “This curation
bit is really cool. The ability for us to read, vote, comment, and easily
curate any object that comes in to their drop-box.”
Andrew: By “us” do you mean the publishers internally wanted to vote.
They didn’t want the community; they didn’t want other publishers to help
them. They just internally wanted a vote of the content that they were
getting.
Michael: That’s exactly right. They had a process. It’s very hard to change
people like, dramatically. They had a system, they went through “the slush
pile” and so what we really just did was digitize something that they were
already doing at a very low cost, and it makes them look professional. So
we took something that was an outward facing marketplace and made it a
software as a service.
Andrew: You told April who pre-interviewed you for us here at Mixergy that
you realized that your problem as a writer was caused by the problems that
the customers were having.
Michael: Yeah.
Andrew: That it was their problem that you needed to solve first, not your
problem. Their problem led to your problem, and you needed to address their
problem first, right?
Michael: That’s correct.
Andrew: So talk to me about the process that you took was a good one, of
saying where are my issues? If I were going to do the same thing but avoid
the mistake that you made, how would I adjust that process? If I were to
start with what my problems are, how do I avoid going down the wrong path
of solving my own problem and realizing that’s not where the money is,
that’s not where the action is, that’s not what drives the relationship.
And then find the person who does?
Michael: Well, so if I was going to do this over, the thing I learned very
quickly was one: I didn’t understand the dynamics of starting a
marketplace. I think that’s something that a lot of people have run into in
the last five or six years. People have tried to create Etsy-type
situations. So it’s a really nuanced thing, you need to figure out who’s
the very first customer, and not over-shoot, or shoot too broadly. And then
I think if I was to do it again, I would understand straight up a
marketplace is very hard to do without a boatload of capital. And two, what
problem are you truly, truly solving?
So my problem was that I couldn’t target people. I thought it was that I
couldn’t target publishers well enough, and I couldn’t get them to read
things. The reason I couldn’t get them to do it was because they had no
easy way of doing it. They had no easy way of engaging, no matter how great
the book is. My sense is the best novels in the world never get published
because it’s just a very different muscle to write a book or to create a
film, than it is to distribute it, sell it, and all that stuff. I think,
your bio – did you and your brother start your first company?
Andrew: Yep.
Michael: And you had an engineer, and you had someone who could sincerely
sell the product. And I think writers don’t always get that. It’s very hard
to understand how valuable sales is, and marketing and stuff until you have
to.
Andrew: You spent months where you didn’t talk to publishers, even though
you wanted them in your network, not formally. It took you a while to
understand ah, the way that they do things is they internally start to look
at the same document, they vote on it, they have problems making sure that
they’re looking at the same document in that they have trouble making sure
that they’re voting pro… what was the hesitation there?
Michael: There was hesitation on the part, on… the first one is as
developers, most engineers hold themselves to a standard and that’s sort of
an ongoing… you can never… you’re always terrified of getting in front
of real people. There’s always something you can add to it, and I think as
inexperience entrepreneurs we held onto it for too long. Two, I had a real
job. We were piecemealing our lives together. We had no idea how long it
would take. We were pretty much wrong about everything. We were wrong about
the original customer, we were wrong about… we thought we would release
it on a Monday, by Friday we’d be… our biggest problem would be how to
count the money. And then we were wrong about the problem we were solving.
So I think, I don’t know if I can say anything new about this, but get it
in front of people as soon as humanly possible.
Andrew: But here’s the thing: you eventually did talk to publishers, which
many people wouldn’t do. We don’t hear the stories of the people who know
that they need to talk to publishers and don’t end up doing it, or know
that they need to talk to their eventual users.
Michael: Yeah.
Andrew: I want to understand what you did to get over that obstacle, get
over that reluctance?
Michael: It was just pure fear. I had to make this work. We had worked very
hard…
Andrew: Why did you have to make it work? You’re a developer, you could
have gotten another job. You’re a writer, you could have said what am I
doing with this craziness of going and starting yet another business in
this world? I should just focus more on my writing. There are tons of
excuses that you could have given yourself. What was it that overcame all
those excuses?
Michael: Writing a novel was a very good lesson. Similar to starting a
company, no one asks you to do it. No one cares if you finish. You start a
book, and then the first year you’re telling people at cocktail parties
you’re writing a book. By the second year they’re kind of embarrassed for
you. By the third year they don’t go to those cocktail parties anymore.
Starting a company is a very similar thing. Everyone’s, like, great, you’re
going to be the next Facebook, or whatever. Then, very quickly, it just
gets ugly very fast. People are starting to avoid you.
I knew from writing a book that it was an ugly, bumpy grind. At some point
I was like, okay, this isn’t working. We don’t have customers yet. How do
we get customers? I’d done something that had taken five years to do, so I
knew I had that lesson in my back pocket. Well, okay, if it’s not working,
we’ll just change something.
Andrew: Still, the overcoming. I’ll tell you, it’s tough even for me. I
have conversations with strangers all the time, with people I admire and am
intimidated by. All the time. Still, picking up the phone sometimes and
talking to someone who could eventually reject my idea or say, “Hey, you
thought you were so smart? This is absolute crap.” It’s tough. It’s a big
obstacle. How did you overcome it? Did it happen a little at a time? Did it
happen because you were forced?
Michael: Well, we were forced to because we had to eventually get
customers. It was on me. I talked to these two people whom I really admire
into spending time. I felt their pressure. I’d taken away time from my kids
and my family. You sort of owe it to them. I think [Brad Feld] has a thing
about how your wife is your biggest investor. They had all paid for this,
too. At some point your back’s against the wall and you have to call
people. I also was very familiar with rejection. Your first year of
writing, you get 100 rejections. I was totally comfortable with people
telling me that it was idiotic. I don’t know if that’s a good thing. It
probably lets me screw up for a lot longer time than most people. I look at
rejection as sort of the bran of life. It’s just good for you.
Andrew: I want to come back to what writing taught you because the habits
that you developed there helped you become a better entrepreneur, but let’s
stick with this for a bit longer, this need to succeed. You’re at a stage
where many entrepreneurs in my audience will say it’s tough for them to
start a business, maybe even impossible because they have a family, because
they have a mortgage. You had that. Instead of saying, “Hey, it’s tough me
to have done this,” you say, “It was tough for me to quit because I had
that.” Why is it different?
Michael: I definitely didn’t have any–we were absolutely going to succeed.
We’ve been broke. We’ve had down months, especially in the beginning. It
never was like, oh, we should give up; it was how do we fix this? Failing
is never–I just knew it was going to take a lot longer than everybody
thought. I knew that from writing. That lesson was already there. I don’t
know if that’s helpful.
Andrew: Yeah, let’s talk about that lesson, then. You told April that you
used to get up at 5 a.m. to write.
Michael: Oh, yeah, sure.
Andrew: How did you get that discipline? How long would you write?
Michael: Again, it was just desperation. I had a family. I had a nine-to-
five job. It had to get done at some point. I had some success. If you do
this crazy thing, you wake up every morning from 5:00 to 8:00 and you just
put out two or three pages and it eventually works, then you feel like
you’ve learned that secret. You just work harder. You just don’t give up.
That’s the secret of not failing. It’s not allowing yourself to fail ever.
Andrew: You’ve also said that the pride of having accomplished it a few
times fueled you to continue a few more times and a few more times until
you got into the habit. Did I understand that right?
Michael: Yeah, like you get little pats on the back along the way. In the
beginning, you just never [??] go, well, I’m no good, right? Like
everything, you just get better and better. I think a lot of people outside
of the entrepreneur community think that it’s a good idea, like the
company’s all about some idea you have, like inspiration. That’s a very
similar conversation in the writing and in the art world, like, “Oh, I’ve
got a great idea for a novel.” The number of people who tell you that, you
know? I think anybody who’s ever done it knows that it’s really just about
doing it and not about the idea. I’ve found that entrepreneurship is the
exact same thing. It’s about showing up every day when you actually don’t
want to, when you’ve just had a week of rejections, when things have fallen
through. The sun turns if you’re just there the next day. You just keep
your butt in the chair longer than your competition and you win.
Andrew: How do you do that? You told TechNet back in October of 2012, “I’m
presently in a bad relationship with our own product. Wild swings from
loving it blindly to hating every screen. We break up every Friday night,
and then I propose again on Monday morning.” The whole business out of
almost embarrassment.
Michael: Right now, it’s actually looking good. We’re having a good month.
Andrew: How about back again in October? I want something concrete so that
we can follow along the feeling that you had with you.
Michael: Bruce, John and I, the three founders, we have a similar
development skill set. We’re pretty traditional back-end developers. If we
have a weakness, it’s UI and design. We’ll spend, like, three months on a
feature that was pretty heavy duty engineering. We release it, and we know
what it can do. We know how powerful it is. Say, something simple like
custom forms. The ability to drag and drop and build totally custom forms
for an organization. We empower anybody to do that. The first version, it
works. It absolutely works. It’s just not beautiful. There’s just this
stabbing feeling that you’ve worked for three months on something but you
know just purely, like, “I can’t draw. I’m not an artist.” That pains you.
You stay up at night thinking, “Maybe I should go to art school for six
months.” How do you get that skill set? I think most entrepreneurs are used
to just figuring something out, like I’m not a natural salesperson, but
I’ve learned to sell enough that we’re not out of business yet. But design?
The best designers do have some talent. Is that something you can learn? It
drives you nuts.
Andrew: In comparison to what you know the finished product should look
like, yours just looks like crap.
Michael: That’s right. We get 90% of the way there. That’s really the
biggest problem. You work so hard. You’ve got something that’s totally
valuable. It’s 90% of the way there, and I don’t have the innate talent to
put it to 100%. Obviously, there are ways of fixing that problem. I think
we did fix that specific problem, but it drives you nuts.
Andrew: I wonder how you get over it. For me, I’ll sometimes have a bad
interview. Even in this interview I’m worried, “Well, I didn’t really go
through a proper narrative here. We didn’t start with the takeoff point and
go through the ups downs along the way properly. There’s no arc.” And so
on. I would almost just say I’m a crappy interviewer; I’m never doing this
again. If not explicitly like that, I might procrastinate because there’s a
hidden feeling that I’m not even in touch with that says, “You’re a crappy
interviewer. Just don’t do it again.” The only thing that keeps me going
again is in about an hour I have another interview scheduled, and I have to
do it again. Maybe, that one will be good, and then I’ll want to do the
next one. It’s that schedule that keeps me going, even when I’m full of
self-doubt or when I want to procrastinate. What is it for you? What’s that
outside element that helps you?
Michael: The outside element is definitely that I’ve got two kids to feed.
That doesn’t sound very inspiring. There’s feeding them and then there’s
the mortgage, but you also–do you have children? Do you have kids?
Andrew: No, not yet.
Michael: They’re just these little people looking at you all day. You want
to give them both skills that they can go have productive, engaging,
hopefully fun lives. They listen to everything. They’re just like little
tape recorders. They say everything you say. They watch you sitting there
stressing out. I think it’s being inspiring to them, not inspiring but
being, I mean it sounds really sort of base but just being a good example;
I don’t want them to ever give up. But the 10% of making something perfect
is . . . With writing, it was similar that I knew that things didn’t pop.
Like Blondie has a quote “You learn to play the guitar and then you get
sexy.” I think that’s really true. You’ve got to be a journeyman; you’ve
got to just show up every day and do the thing. But eventually it sort of
like moves into being an artist, right? You have to have all the skills at
your fingertips before it starts to turn into an art. It’s got to go a
little past just being functional; it’s got to be different or interesting,
and beautiful, ideally.
Andrew: It’s interesting that you would say first you have to do the work,
then you get to be an artist. I almost feel like they must be two separate
things; that first you just be an artist and then never do the work.
Michael: No, no, no. There’s this idea of artists as sort of a
dilettante; actually, I’m pretty sure that’s exactly what my dad thinks
artists are. But I think anybody who’s gotten anywhere with it, knows that
it’s 100% effort and then a bunch of luck.
Andrew: Waking up at 5:00 in the morning and putting in three hours of
writing, that’s a lot of work.
Michael: Yeah but it eventually turns into fun, right? I loved doing it
after a while. In the beginning, the first year that I did it, I was like
“Oh”; there was something sort of cheesy and macho about it. That’s
actually one of the biggest things I miss right now; this is really
engaging and fun, like starting a company and hundreds of thousands of
customers, that’s wild, right?
But the three hours where I used to just sit in our garage and put two or
three pages down; you take your life and put it into some sort of
narrative; that felt like something that separates you from your dog. It’s
like what humans are.
Andrew: Separates you from your dog?
Michael: Yeah. Like as a species.
Andrew: Oh, I see. This thought that I put into my life is what separates
me from my dog and other animals.
Michael: I reflect on my life and I make something out of that reflection.
That’s what I felt you were doing when you’re taking art, you’re sort of
reflecting on all this, what we experience during the day.
Andrew: The reason that I screwed up the intro was, here’s what that first
sentence that I wrote was: How does a novelist . . . Let me wait for the
video to catch up. Can you hear me in real time now? Or is it still a
little bit slow?
Michael: I can hear you in real time.
Andrew: So the video is slow, but the audio is caught up. Here’s what it
said. It said, “How does a novelist who couldn’t support his family with
his writing, build $150,000 a month business?” It’s that first part that I
was too embarrassed to say, which is why I tripped up. Who am I to say
that he couldn’t support his family? Just even talking about that, not
being able to support your family; it just felt too awkward to say about
another human being. You lived it and I feel that it was OK for me to have
written it there because you told April that that was a challenge. If it
was hard for me to say it, is what I’m trying to get at, what was it like
to live it? To live, the inability to support your family doing what you
love.
Michael: Yeah. That’s pretty universal, every artist has that problem.
There’s Stephen King and then there’s the other million people who write.
It’s not something you learn all at once. While you can put it off for a
long time, it’s similar to not talking to customers. Because you can write
a book for five years and assume at the end there’s going to be a payday.
So you don’t really have to tackle that question. Then you actually get a
book and then you’re like “OK. Can I sell it?” We got it reviewed; it was
in the New York Times; it was in book stores and everything. There are all
these little things like, well, if it just does this then I’ll be able to
make enough money, if the book just does this. You learn all those things,
one piece at a time. It wasn’t this ongoing struggle. I would have a
problem with that sentence, too. That really isn’t why, oh, I can’t make it
as a writer. I should start a software company. It was more like I want
autonomy, and this is how I work, and I can’t imagine working for somebody
else.
You write books for a lot of reasons, or you do art for a lot of reasons.
You definitely don’t do it to be rich. There are some great things. There’s
autonomy. You don’t work for anybody. It’s a very engaging and enriching
process. That’s very similar to starting a company.
Andrew: But the acceptance of it seems–is that what it is? Is it
acceptance that, “Hey, you know what, I thought I was special as a writer.
I thought I was smarter than all those other people because I’m a
developer. I think logically. I should have made it.” And then is it just
acceptance of hey, you know what, this just isn’t going to work?
Michael: I haven’t given up writing. I’m writing a book called “Start
Down”. I didn’t start this company because I couldn’t make it as a
novelist. I just wanted something that was both. This in many ways both
satisfies the urge to create and the desire for autonomy, but it also makes
a lot more money.
Andrew: It does because you changed it. Early on it was going to be a
Submit Mash. It was going to be kind of a social network. It was going to
be a marketplace. Then you talked to the people who were really making the
decisions and driving this industry and you realized, wait, they’re not
going to participate in this. They want something different. How do you
change once you discover that? What do you do to change to get to a place
where you are today with a Submittable company that’s growing and doing
well?
Michael: You talk to your customers. Right now it’s much harder to make
decisions. If I make a decision right now that I’m changing 100,000
people’s–you know, if we make a UI change, 100,000 people will see that.
Back then, with that original decision, I called Bruce and John and just
said this what we’re doing. I’d have to ask them, but I think they might
have thought, “Ah, Michael’s losing it a little bit, but let’s just let him
go.” At soon as we got one or two customers, it was obvious. As soon as
people started using it, it was absolutely the greatest decision.
Andrew: I’ve had past interviewees get on the phone with me privately and
say, “Andrew, here’s what you need to do to really fix Mixergy.” Then they
started giving me all these different ideas that will send the business in
a whole other direction, and I feel like, yes, that makes a lot of sense,
but that is so overwhelming. I don’t even know where to start. Here, not
only did you start, but you fully adjusted your business. You called it a
pivot, I think, in your conversation with April, but it’s more than a
pivot. It’s a whole new business that found light where the other one
didn’t. Where do you start? How do you keep from feeling overwhelmed?
What’s the first thing you do? I just threw three questions at you.
Michael: The first thing is I think it’s always important to just do
something every day. Looking back at oh, I’m going to start a company,
starting a company now seems incredibly overwhelming. I didn’t know how
hard it was when I started. But I make a point to do something, no matter
what, every day. There’s always low-hanging fruit, even if it’s just like,
put a page on the website or call this person. My most productive hour now
is always the last hour before I go home because I have this list of things
that I haven’t done yet. You can kind of screw around, or get on the phone,
or work on the big things that are going to take months, but in the last
hour just get four or five things off your plate. I think it’s obviously
very incredibly valuable to do something every day.
Andrew: What was the low-hanging fruit when it was time to adjust from
Submit Mash to what became Submittable?
Michael: The low-hanging fruit was we were cutting out code. We cut out 90%
of the code base, which for all three of us as developers didn’t feel
great. I’ve said this like five times, but similar to writing, one of the
first lessons you learn is being able to throw away is just as important.
Andrew: So what did you throw away, and what did you keep?
Michael: We threw away the entire social network. We threw away the
entire outward facing, centralized system. We kept the authentication so
it’s centralized authentication. But then we made it business focused;
it’s an app that you plug into your business’ website. We threw out the
users; we had sort of these fake users and, ok, they’re not users any more
and “Who is this editor?”
The very first version was just built specifically for an editor; with no
money and wanting to create, wanting to find awesome voices and how do they
engage in that?
And the market; the next thing you do is listen to the market, the market
tells you. You might be building software that works for one individual
but there’s the obvious hurdles of getting them to sign up, getting them
comfortable with it, just getting them to plug it into their website.
Andrew: For the editor, a way for him or her to get submissions? That was
what, after 90% was scrapped, that’s essentially what the product was.
Michael: How do I accept digital content?
Andrew: Gotcha. OK. So you coded up a way to accept digital content.
Did you start taking that, then, to editors and saying ‘What do you think?’
Michael: Yep. And we immediately got some beta testers and we also got
very lucky to talk to some really super-smart; Adam Robinson who has a
publishing company in Baltimore called Publishing Genius. He’s a gifted
writer on his own but he’s also a bit of a “taste maker”; he tiptoed into
it and he just happened to be one of the first people we talked to.
Not just what his feedback was on the product, but I was like, “He is an
awesome customer”; he’s smart, he uses it to make books that I really
engage in and that I think are incredibly valuable.
So how do I get this person to be a customer? Luckily he was there and I
just asked him; so we could kind of, “What’s a palatable price?” Once we
made it for him, the VC probably don’t want to hear that I’m making
software for a poet in Baltimore, but if you can solve that person’s
problem, a total stranger to you, then you’re on your way.
Andrew: That makes sense. Before I continue, did you say “fake users?”
Michael: Yeah, sure.
Andrew: You did what Rhetta [SP] did, you created a bunch of users . . .
Michael: Oh no, no, no. I mean we had personas; fake people who are going
to use your software.
Andrew: Oh, interesting. How would you put those together?
Michael: Mostly I would just make them up and I would name somebody Mark.
I had actually ghost-written a book for Microsoft Executive about usability
so I sort of knew what personas were; I knew about trends and usability and
this was in 2006.
A persona is just a collection; ideally you go and do market research. We
did market research but not how an MBA would do it.
Andrew: Mostly it was you sitting down saying, “Will is a writer who wants
his stuff to actually be looked at. Will is this kind of a person; he’s
experienced these kinds of programs, Facebook, Google, etc. but he hasn’t
dug deep in and so on. He doesn’t do GitHub.” And then you have someone
else; Mark is . . . That’s the way you did it. And it’s essentially you
envisioning who you want your users to be, not based on tons of market
research.
Michael: That’s right. I would say 25% market research and 75% you; you
know, we’re not idiots, we can just sort of . . . Myself; I was the end-
user.
Andrew: Yeah. You’re living in the space. I could never have even
thought of this product, let alone started to build it. Even if I knew
that I was wrong with the first version, started having conversations with
editors, I don’t believe that I would have gotten as much out of them as
you did. And, of course, then I wouldn’t have been able to create
Submittable. What is it, as a person who’s lived in this space, that you
were able to pick up on that someone like me wouldn’t even notice; that an
editor was saying or that the process is lacking?
Michael: I don’t know. I think you’ve, personally, started very
successful companies and you have a very successful blog. I don’t know how
you describe Mixergy right now, but you do know all this stuff. You’re
doing it.
Andrew: I feel that when I watch certain interviewers who are not in the
tech space do interviews with tech entrepreneurs, I watch them glorifying
people who had graceful exits that were really not exits. The reason is,
they’re not in this space. They don’t know it. They don’t know these
problems. There’s a reason why I knew early on about Eric Ries before he
was the guy who wrote The Lean Startup. It’s because I was in a parking lot
with the founder of Lookout. Today people might know his software, but back
then he was just a guy. He told me about Eric Ries. Then he told me what
questions he wanted to know from Eric Ries because he was a nobody. He
wanted some access to this guy’s information. The reason I knew to ask
those questions, the reason I know who to have on is because I’m in it. I’m
living and breathing it. I’m wondering for you, did you experience anything
like that?
Michael: Well, I was sending out work. I use our software as a writer. I
send out work to publishers, so I experience it every single day. We later
launched an HR version of our software, and we use it every day. I’m like,
“Well, I wish it could do this.” I think that’s incredibly valuable, but I
think most people know that. You should get your own [??] and all that. It
just had to work. There was no choice but to make this work.
Andrew: You know, from anyone else, Michael, if you said it just had to
work, I would have to dig in further or just say, “Ah, I’ve heard it
before.” But the reason that I think it’s especially important for you to
say it, even though you repeated it several times, is because I do look at
the comments of past interviews and I do see that there are people who say,
not in so many words, but “I don’t relate to this guy because I’ve got a
mortgage, I’ve got a family, and for me it’s not possible.” When you say,
“For me it is possible because of that, it had to happen because of that,”
it’s very powerful.
Michael: Yeah, the 40-year-old thing. Mortgage, kids You just have to,
every single day, do some little thing. It all adds up. I run into people–
actually, I just talked to two friends who are thinking about starting a
company. I told them how hard it was going to be. I validated their idea
and told them, like, great idea and everything. I told them how to get
going. They immediately started talking, like, “OK, we can start this in
March. We’ll be freed up by then.” The obvious thing was, “No, you have to
start this right now. You’ve got to go home and go get the website, and
you’ve got to do something every single day.”
At YC it was even more, one of the first things we learned at YC. Some of
the YC partners were younger than us. We would sit down, and they would ask
what our problems were. We would say something, and they would get up and
say, “OK, let’s fix it.” Immediately. [??] I was like, “Oh, God, I hate my
front page.” He pulls out his computer and just starts making another one.
I think that that urge to not wonder whether it’s going to be hard.
I’m friends with very, very smart people, I’ve been a professor, and it’s
night and day. When you describe a problem or you describe a goal and
people immediately start listing how hard it’s going to be or problems
versus someone who’s like, “OK, well, we can do this today. Before we
finish this cup of coffee, we can write the . . .” whatever. They can’t
even help themselves. They have to do it. They have to move and get it
done. It feels haphazard, especially if you’re an accomplished person. It
doesn’t look 100%. It’s kind of ugly and weird. Whatever the thing you’re
doing, you’re jumping forward in some way.
I think what I would recommend to anybody who’s 40 and has kids and has a
day job, and they don’t ever see themselves getting out from under it, it’s
just to do something every single day and not even worry about whether it’s
going to be huge. This stuff just builds. I will not compete against
somebody who I know is going to show up every single day. I’ll compete
against somebody who has a 190 IQ. I’m not worried about smart or clever
people. I’m worried about sickos who never give up.
Andrew: You ran out of money a couple of times. Why? What happened?
Michael: You know, it’s just very hard. There’s not a “market” for early-
stage companies in Missoula, Montana. It always takes three times longer
than you think. I was selling to people like Adam Robinson, a poet. My
clients didn’t have money. It’s just hard. But I never ran out of money and
said, “Let’s give up.” I ran out of money and said . . . I have three
partners but I feel like I am the one responsible for the money. And, we
just made it happen. There were two times in particular. We have been
around for almost two and a half, almost three years and there were two
times in particular where we were out of money, just zero. We didn’t raise
a lot of money in the beginning. You know? We [??] most of it. We consulted
and stuff in the beginning, as well. When we talked John into quitting his
job so, one of us was not working full-time, and that was on us. But I’ve
looked, both those times, something sort of magical happened. And, I can’t
explain it. But, you just do the thing that makes it possible. We got very
lucky.
Andrew: And, you’re sickos who show up every day.
Michael: And, we’re sickos. One of our first investors outside of Montana,
you are an awesome person, he has a small angel company called 77 Ventures.
I moved to New York for three months. I was used to being broke. My family
was still here. I moved there to talk to customers, and I couldn’t afford
an apartment. So, I just said, “I’ll come to New York.” He wanted me to
come to New York to talk to big publishers. I said I can’t afford an
apartment and, he jokingly said, “Well, you can sleep on our couch” in his
office. I thought he was serious. I was like, “OK. Great.” Then he realized
I was serious, and I slept on my investor’s couch for about a month. He
probably doesn’t want me telling you this. At some point people would come
in, and one of our later investors came in and said, “Who’s the guy on your
couch?” and, [??] said, “It’s this crazy entrepreneur from Montana. He’s
got this company. They actually have customers.” He had me come out and
talk about the product, and this investor later came in. We five-x’ed his
money by the way. He basically just said, “I don’t really understand this,
and I can’t imagine making money in the literature market, but if you’re
crazy enough to sleep on the couch.”
Andrew: Unreal. When you say you five-x’ed his money, he’s still an
investor. You’re just saying the valuation has increased.
Michael: Yes.
Andrew: So, there is still even more to come.
Michael: Yes.
Andrew: I didn’t even get into what your predictions were for 2013 for
revenue because, who could tell with predictions.
Michael: I imagine we will hit a half million a month in transactions.
Probably by June. But, again, right.
Andrew: And, right now you have 4,000 clients. Half a million users who are
submitting to those 4,000 clients. So, there is a lot of activity going on
there.
Michael: Yeah. It’s crazy.
Andrew: It’s impressive.
Michael: Yeah. 4 million documents total. We did a count a couple of weeks
ago. Like, four or five thousand a day, documents. Submissions can be up to
25 documents.
Andrew: Here is something that I wanted to follow up on. Before we started
I talked about how I can make this a useful interview for you because, it
is going to be so useful to the audience. And you said, “I’m not really
looking for customers here because, we have a direct sales model.” And, I
thought, so confident that he doesn’t need more customers at this process
and, he’s got this machine, this direct sales model. What is that direct
sales model?
Michael: It changes all of the time, but in the very beginning I cold-
called people. I would email and I would cold-call them. I wasn’t really
selling anything. Actually you guys had a great, I can’t remember. I think
he is Irish.
Andrew: Yes. Kennedy.
Michael: What was his name?
Andrew: James Kennedy.
Michael: Yeah. He was awesome. Everything he said.
Andrew: The course that he did on how to do cold-calling.
Michael: Yes.
Andrew: He’s like us. He’s not the guy who feels comfortable getting on the
phone and chatting people up.
Michael: Right.
Andrew: Thanks.
Michael: Yeah. I watched it a couple of times. I didn’t realize what I was
doing. We had two very early investors in Missoula, Montana. These guys,
Steve (Joff[SP]) and Glenn Christal[SP] started the company called Remote
Scan. They are just guys. They sold it to Qwest, which got bought by Dell
two years ago. They’re multimillionaires. No investors. Very early on, they
gave me a little bit of money, enough to hang myself. They gave us a little
bit of money and then said let’s talk in four months. They wanted to see if
we would grow. They also met with me every single week. Steve said, just
come over every Tuesday and we’ll talk.
We talked about all kinds of stuff. I was stressed out and freaked out. He
would also do things like he would say, okay, let’s write a cold call
script to the CEO of Southwest Airlines Magazine. You know that magazine? I
thought this was a waste of time. That market I didn’t understand. I
understood literature and stuff. We would just sit there and write it. It
was very different than what a writer would write. It was very direct.
You’re talking to a CEO, so there’s only so much time in the day. It’s got
to be about revenue. You’re solving a problem. All these things that you
don’t think about when you’re writing literature you’re trying to be
entertaining.
We’d write it, and he’d be like, “OK. Great. Go home. Polish it. Come back
next week.” The next Tuesday I’d go over to his house in the middle of the
day and I’d have the script. He’d be like, “OK, here’s his phone number. Do
it.” That kind of stuff. We got incredibly lucky to meet those kinds of
people early on and later [YC] and stuff like that. I don’t know how you
replicate that, getting lucky to meet those kinds of people early on.
Andrew: There’s something about you that draws them in, and the audience
can see that. I’m not saying it as flattery. I’m saying it because I’ve got
to be thorough here, and I can’t dismiss things as luck when I can see in
front of my eyes that it’s more than luck. You, of course, can be humble
and you can say that. Let me say this first of all. I’m so glad that I
asked about that. I’ve got just a couple more minutes here, and I know that
we started a little bit late because we had some tech issues getting
started. Do you have about five more minutes?
Michael: Yeah, absolutely.
Andrew: Oh, great, OK. First, I always want to do a plug at this point in
the interview. At this point I’m going to keep it short because we kind of
got to the plug within the interview. Michael talked about the one course
that we have with an entrepreneur who decided, hey, I can’t wait for people
to come to my site and buy from me. I’m a little too desperate. He got over
his lack of passion, let’s say, for making cold calls. He started making
cold calls, and he had this process that he went through. His name is James
Kennedy. If you’re a premium member, it’s at mixergypremium.com. You’ll see
it right there for you to watch. If you’re not, please join. In addition to
getting all this value for yourself, you’re also supporting this site here
and helping us grow, bring in more pre-interviewers, researchers and making
this more useful for entrepreneurs everywhere. Mixergypremium.com.
Here’s what I wanted to close with. People have been asking me for tools
and books that entrepreneurs whom I interview use and read. I thought we
can go through some that you recommend, some that you use and maybe some
people in the audience can use. Why don’t we start with tools?
Michael: I think I mentioned Olark. Olark is sort of that little Contact Us
pop-up at the bottom of your screen. It’s great for sales, for people on
your site and if they have questions. What we found was really wildly
useful was that we plugged it into our application so when you’re in our
application, and there are 30,000 editors a day in our application, we have
that in there. You should make it configurable. They can turn it off if
they want because it can get annoying. Also, it’s a great way to
communicate. If your application is complex or if it’s close to Enterprise
software, it’s the hardest thing once you sell them, actually getting them
to use it a lot. This puts us right in their face. They can ask us
questions. That gets you so much.
Andrew: Ah, so not just to get people to sign up. You’re saying that Olark
can also help you get people to use your product more often. You pop it up
or you make it available to them so that if they have any issues or
questions and are about to drop off, you can come in and help them out.
Michael: Yes. It’s an incredibly useful help tool. We use UserVoice for our
help forum.
Andrew: Why do you use UserVoice out of all the different tools that are
out there, out of all the different options?
Michael: I don’t want to talk about the ones–we tried two or three others,
but we found that UserVoice is an API that our users don’t have to login to
another system; it’s a very, very well thought out tool.
Like all of them, everybody’s changing; everyone’s working on it so it’s
getting better and better. But the API sort of put it over the edge. We
use Mailgun for transaction emails.
Andrew: Mailgun, right?
Michael: Yeah, Mailgun. So that’s emails within the system for the non-
developers; it’s basically how emails can be sent to and from users within
your application. Simgrade [SP] is great, too. For whatever reason, we use
Mailgun.
Andrew: And the reason you need Mailgun, is because you want to ensure
delivery; you don’t want to have to figure it out yourself. Mailgun takes
care of the delivery issues.
Michael: The big one they do is they help to keep you off spam lists.
Andrew: Keep you off spam lists.
Michael: But they also help with tracking, it’s perfect for debugging; we
can see, make sure that emails, if it didn’t get there, why didn’t it get
there?
I use Mad Mimi for my newsletters. There’s Constant Contact and MailChimp
but what I love about Mad Mimi is the user interface. They recently
upgraded their UI and they have these buttons that I can only describe as
juicy.
Andrew: Juicy.
Michael: Yeah, juicy. They have juicy software.
Andrew: The thing is, their design, it’s always beautiful.
Michael: Yeah, yeah. I’m just sort of blown away by that.
FreshBooks, which I don’t use so much for our company, but I used it as a
freelance writer a lot. That’s going back two or three years so when they
first got started, I was always really impressed with their attention to
detail and their design.
Andrew: For tracking links, you told me about a program that you use.
Michael: Oh, Kippt [SP]; it’s a fellow YC company but it’s a great link; I
centralize all my links there.
And you can share them so there’s sort of social tools around that.
Andrew: Tracking links that you share with other people in the company and
outside.
Michael: That’s right, yes.
Andrew: And then there is one other one for voicemail that I’d never heard
of before you. VoiceGem. What’s VoiceGem?
Michael: VoiceGem is dead-simple way of sending voicemails. It gives you
an interface, let’s you talk directly into your computer. I used it when I
was at YC for sending my kids messages; I would send them an email at night
or, if over the course of the day something occurred to me, and I would
tell them a joke or do whatever; and you just put it in your email address
so it would go to my wife and my wife could hit play and my kids could hear
me telling them a joke or reading a book to them.
What’s nice compared to Skype, because we would Skype as well, but what I
liked about it was you’re not forced into this time frame, you can do it as
it occurs to you; it’s just a really fun, simple application. I think they
just launched an iPhone app, which I haven’t used it, but I imagine it’s
going to be great.
Andrew: All right. How about a couple of books?
Michael: I think we talked about how I sort of came to entrepreneurial,
the first thing that opened my eyes to it, was the “Founders at Work” by
Jessica Livingston.
Andrew: Jessica Livingston, Y Combinator co-founder. And I should also for
the transcribers, when he said YC, let’s get those letters right because
they’re new entrepreneurs out there who needs to know about Y Combinator,
YC.
So what is it about “Founders at Work?”
Michael: How I came to it was I read this book called “Please Kill Me”
which is an oral history of punk rock, which is also a great book. But, as
a writer, I was at the time really interested in how to make language
utterly natural. I was sort of studying, literally, the sentences of
“Please Kill Me”. Then I started looking for other, not oral histories but
either interviews or things where people would be transcribed from how they
spoke. And I don’t know what the actual road was to “Founders at Work” but
I somehow found that. This was in 2008 so it must have just come out and I
bought it. What was amazing, I liked it on a [??] language level; it
wasn’t quite as unique as say Eddie Pop describing his first concerts in
frat houses at, I think it was the University of Michigan.
But what it was, these people seemed like freaks; they seemed like people
that I would hang out with. I had always thought of entrepreneurs and
business as wonky, MBA, Excel sheets. But they just seem like friends of
mine. Their struggles were basically “I have no idea what I’m doing, how
do I keep going?”. I related to that from my writing life. So, it made it
all seem very possible. Jessica is an awesome interviewer. So that is one
of my favorite books. For actual business books, I like “Crossing the
Chasm”, which is how you get something from a niche into the mass market.
It’s a little bit wonkier. I like the Christensen’s books, “The
Innovator’s Dilemma”. That Marc Benioff book, “Behind the Cloud”, is
pretty great. It’s a little salesy, but I like what he was trying to do in
the beginning which was to create conversation around your software. As
I’m trying to use sales words right now it’s kind of a nightmare, I just
signed up. It’s just a beast. I like what he’s talking about in the
beginning. I think he’d be an exception from where most of us are coming
from. I do think what’s really valuable is how you get people talking and
creating a community around your software and how you get your early
customers to help you. They essentially take ownership of your company and
of your software. It’s uncomfortable giving them ownership, but that’s how
they make it awesome.
Andrew: You have to do it at your business. Thanks for coming here and
getting the conversation going about what’s happening behind the business.
Michael: Thanks for having me.
Andrew: We say this over and over, that if you get any value out of this
interview, or anything else online, you should find a way to thank the
person that you’re listening to. I had the founder of Greatest here in my
office. We just had a drink because he happened to be in town. He said,
“Andrew, the people who are in your audience are amazing.” They started
calling him and emailing him. He was telling me that he spent hours on the
phone with people just helping them out. Not because they asked for it,
and I’m not saying that people need to do this. All of my interviewees
should not do this. It was a natural extension of the relationship that
starts when you say “Thank you”.
Michael: One of the most illuminating things I found as I became an adult
is that people love helping. If you give them an easy way to do that, like
if someone sends me an email and they ask a specific question or if they
ask to meet me and they give me a time. I get these emails saying, “Can we
get some coffee sometime?”, and that’s like a nightmare. If someone says,
“Can we meet at 1 o’clock on Thursday and I can buy you lunch.” Then you
just have to yes/no it. That’s so much more valuable. The other thing
that people often forget is that people love helping other people. Even in
the business world. If somebody knows how to cold call or you know that
they have sold cars, they will absolutely give you lunch or whatever it is.
People think you’re bothering them, and sometimes you are.
Andrew: That’s good advice to be specific about when you want to meet and
also what you’re looking to talk about. If it’s just to have a pick your
brain session, then I don’t know where we’re going. Well, I’m honored to
have had you on here. Thank you so much for doing this interview.
Michael: Thank you, Andrew. Love your show.
Andrew: I shouldn’t have cut you off because you were saying you love my
show!
Michael: I do want to say one thing. You were sort of doubting your
ability. I think the secret sauce that you have is this sincerity and the
background of knowing exactly where most of your interviews are in the
process. I don’t think that’s something you can learn. That’s incredibly
valuable. And that’s why I enjoy your show so much.
Andrew: Thanks. I appreciate that. Thanks. Thanks everyone.
