I bet you’ll have a hard time keeping up with all the different projects he’s taken on. He owns coffee shops. Does design for companies like Groupon. Creates his own software products.
How does he do it? That’s what I set out to find out in this interview.
Andrew: Hey, before we get started, tell me if you’re having this problem: your business is getting bigger and bigger and bigger and, congratulations on that, but at the same time, your email inbox is getting bigger and bigger and bigger and bigger. How do you manage it all? Well, here’s a solution. It comes from UserVoice. Watch this, it’s a form that pops up, that’s familiar to users, they can type in the subject of their message, and look at what happens right here if their issue was already addressed before, it’s right there, they get the answer, because UserVoice finds it in your system. UserVoice: it’s a one-stop solution for all your helpdesk needs, easy to add to your website, you don’t have to use GMail or whatever email program you’re using. You can use UserVoice to manage customer feedback and it’s easy to add. UserVoice.com
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Finally, who’s the lawyer that tech entrepreneurs trust? Well, they don’t go to the big guys, because the big guys end up charging them an arm and a leg and they end up wanting equity in addition. They don’t go to the mom and pop lawyers because the mom and pop lawyers don’t know the tech space, they don’t know the startup lifestyle, and they don’t know your issues. They go to Scott Edward Walker of Walker Corporate Law. I’ve recommended him for years, I’ve known him for years, I trust him, and I suggest you go to Walker Corporate Law. Here’s your program.
Andrew: Hey, everyone! My name is Andrew Warner; I’m the founder of Mixergy.com, home of the ambitious upstart. How does a consulting company bootstrap to two million dollars in annual sales? Joining me today is Philip Tadros; he is the founder of Doejo. Hey Philip, how did I do with the pronunciation of your last name, by the way?
Philip: You did good. Doejo.
Andrew: Oh, good.
Philip: Oh, Tadros. Because I would say a lot of people sometimes have trouble with ‘Doejo.’ ‘Tadros,’ you did well.
Andrew: Tadros, all right. And the company is Doejo, and what Doejo is, is a full-service creative agency that does web design, user experience, search engine optimization, and more. What the company is really passionate about, from what I’ve seen is taking an idea from startup to concept or launch. Sorry, from taking an idea or a startup from concept to launch. What I’m not very good at is reading my own notes here. So, why don’t I just turn it over to you? I’m better at asking questions and letting you fill in the important information. So, how about we start with companies that you guys have done work for. Give us a sense of who you’re working with.
Philip: Yeah, we work with Groupon, we do a lot of stuff for their Lightbank, their VC fund. We do stuff internally for them, as well. Umbra, which is a brand out of Toronto, a very big company, we did a lot of their UI and e-comm UI. Cartoon Network, Adult Swim, we have 12 bumps on there, and we did the national billboard [??] campaign. A good mix of . . .
Andrew: [??] a good sense of it. And you guys have also launched your own products, right?
Philip: Yeah, for sure. It’s definitely hard to not want to launch products in this exciting space, and so, you know, from Galaist to Texthog, we’re working on [??] right now, and we probably have about 12 to 15 products in-house.
Andrew: OK. All right, now I’m going to be asking you, the focus of the interview is about how you launched the consulting company, how you guru it, how you found customers along the way, and so on. But I’ll also ask you about your own products while we’re talking about your story. But, you know, I was looking at your LinkedIn profile, and one thing stood out that had nothing to do with tech: do you own a coffee shop also?
Philip: I own many coffee shops.
Andrew: You own many coffee shops. What’s the deal with that?
Philip: Well, when I was 19, 20, I dropped out of Columbia College. I was an advertising major, and I just decided that I wasn’t going to go sell ads for a company I didn’t believe in, or I wasn’t going to be able to go be a creative director somewhere right away. So, I dropped out, opened up a coffee shop because I couldn’t open up a bar, I was 19. And I just fell in love with the community of people, and they’re just, like, productive safe havens and I really, really liked what I fell into. And I’ve opened several since, and right now, I believe we’re on seven.
Andrew: Seven coffee shops.
Philip: Yeah. But the seventh, it’s, like, a concept store for a pretty awesome, large company that I like.
Andrew: What do you mean?
Philip: I don’t know if I can even tell you who it is yet, but basically, it’s a concept store for a well known national company that brought me in originally to be their coffee partner and, once they realized that we had Dojo as well, we partnered up with IDO and helped create this concept store.
Andrew: Oh really? So, you partnered up with IDO to create a concept store for a company that might roll this concept out throughout the country.
Philip: Yeah. We open our doors August 5th.
Andrew: All right. We’ll find out August 5th what happens there. But, I’ve got to ask you about coffee shops because I’ve spent a lot of time in there, and, do you consider people like me who sit there with our laptops to be nudknicks who are wasting your time for one cup of coffee?
Philip: It’s funny because I never got into the business for financial reasons, so I don’t think you should be in the coffee business if you’re just trying to make money on the coffee I guess.
Andrew: Why not? Not enough money in it?
Philip: There is the money in it if you have the volume, of course, and there is if you’re maybe roasting beans, but, if you have… I guess I’m trying to say this: I enjoyed the space and the people more than I enjoyed the business of it. Does that make sense?
Philip: I almost feel like I’m building offices and if they can take care of themselves I’m happy.
Andrew: I see. Not huge money in it but it’s like having your own living room six times over in Chicago.
Philip: True. And it’s led to other things that are better financially.
Andrew: Like what?
Philip: Well, the internet. The web business is amazing. Dojo just continues to snowball. We have no sales. We just respond to e-mails and clients get on phone calls and close deals constantly and we have no outgoing sales.
A lot of it is word of mouth, a lot of it is people. I have so many different shops and I do have so many different shops up and down [??] Drive in a sense that people just talk. I started this business not knowing I was going to start this business, as far as when Dojo happened, and a lot of it was because I knew a lot of people.
Andrew: Why don’t you hold off on Dojo for a moment. I gotta stick with this one question. What do you feel as a coffee shop owner about all of these people who sit in you coffee shop and one cup of $1.75 coffee and basically conduct office hours there for themselves. They sit there with their computers and work or bring in meetings and work.
Philip: I think they should pitch in more [chuckles].
Andrew: You think they should spend more. When you’re standing there behind the bar, do you go “What the hell is that guy doing? How about just buying a pastry from me? Buy a pastry and take it home to somebody else, but buy something to contribute”. Do you feel that way?
Philip: Yeah. It’s case by case. There’s always going to be someone who’s probably going to know you whether they buy a ton or not, so it’s case by case. But, I guess what I was getting at is, a lot of the spaces that I do open, they’re kind of unusual spaces; they’re large.
Noble Tree is a three floor house with a big patio, so you can go get lost up in there and there’s enough room who are going to be time burglars in a sense or are not going to contribute as much and there’s enough room for the in and out.
And, it’s always a problem of someone taking more than they give. I leave that up to the baristas to do what they feel. I’m sure some are snappier than other.
Andrew: I’m so glad I’ve never been snapped at. I try to buy a lot of coffee. I don’t need that much coffee and I don’t like pastries, but I’ll sometimes just buy because I’m in there, I should find a way to pay rent.
What about this? The average coffee shop, what do you think it brings in in revenue? And, I’ll get back to the tech stuff, but I’m fascinated by this.
Philip: If you have an independent shop and you’re running it yourself as a lifestyle business you want to do at least a grand a day.
Andrew: You think they can do about a grand a day.
Philip: Yeah. For sure.
Andrew: Average coffee shop – a grand a day selling two dollar cups of coffee, seven dollars, tops, lattes.
Philip: It depends, but it’s really about volume. No one really thinks about this maybe but I’m in Chicago and back in the day people would get coffee, Dunkin Donuts or even White Hen or 7-11, that’s where you get your coffee. Starbucks made it fancier and gave you room to hang out and then they got really cheap on how they did stuff cause they got so large. They did pave the way as far as people a different look at coffee.
Now you have companies like Intelligentsia, Metropolis giving a new respect for coffee and a new education on coffee and being similar to the wine world or any other specialty food world. People are starting to respect it more and more. People are starting to pay for it. Starting to pay for the right bean because not all coffee should be the same price. It’s a fruit, you know. There’s so many different prices that really go into each origin or blend or kind.
Andrew: The Intelligentsia people make it into such an art form. We actually had an Intelligentsia barista or two at our wedding with this whole little display and the beakers and the furnace.
Philip: Like the pour-over coffee? It’s called pour-over coffee. I own pour-overcoffee.com, I don’t know what I’m going to do with it yet.
Andrew: Pour-overcoffee.com, somebody in the audience will tell you exactly what to do with it. Maybe that guy domain [inaudible].com listens to the interviews that I do here.
One more question. Out of $1,000 that a coffee shop owner will bring in every day if he’s doing well how much money is he taking home for himself? After he pays everyone else and the rent and everything else.
Philip: It’s really hard to say only because I’m really good at leases and… You kind of froze up a little bit, are you still here?
Andrew: Yeah. As long as we’re talking I’m good.
Philip: I was going to say it depends. There’s a lot of people who get themselves in a lease jam where they’re paying three times what they need to be paying. I’m really good at leases. I’m really good at negotiating a lease. I’m really good at build outs. I like production and construction and kind of creating the deal on the space. That sets the tone for what wiggle room you have to survive there. A lot of people get into jams where they’re paying three, four times the rent and that could be their really decent income for the lifestyle business that they got themselves into. It varies. You could do really well but a lot of the factors of how you set it up, spend in the beginning, who you might borrow from, and your lease are very, very important.
Andrew: You know what, when I lived in Southern California I had this great coffee shop on the corner and it was always packed with people. Good spot right across the street from the library where people would come in for a cup of coffee and take it into the library or walk with it around the neighborhood. Terrific spot. He failed, closed down. I walked over to him and I asked him why because what I do here in my interviews I pretty much do in real life and he said exactly what you said. He said he didn’t understand the build out and the expenses that went along with the build out and how they would impact his business afterwards. That’s what took him down, he said.
I would love to do a whole interview just on that. On this brick and mortar, offline world, and what we can learn from it. I gotta believe that there’s about your world, the offline world, that we can bring online. The audience is paying me to do interviews about technology and how….
Philip: Yeah, but they all have their headphones on at coffee shops listening to you as well.
Andrew: That is true. Tell you what guys, in the audience, if you want it and if Phil’s willing to do it, I would love to do a whole hour on just the coffee shop industry and what he’s learned. Get back to me via email and let me know what you guys think.
Philip: I was going to keep talking about coffee shops, can I say something else?
Andrew: Of course. Yeah, you go one more thing? Then I’ll go back into Doejo. I want them to let me know if they’re interested in this.
Philip: OK. I guess the next time we talk I’m gonna explain what I think the future of the independent coffee shop business will be. How they can make a good living and base it off of something that’s affordable that can allow them to grow into something bigger. It’s what I’m going to be doing with my shop soon. We’ll save that for next time.
Andrew: All right. Also, how do you negotiate leases? If they ask for it we’ll have you back on, talk about how to negotiate leases, what a build out is and why it’s so important…
Philip: For sure.
Andrew: …to manage those costs when you’re starting out and how you manage it. We’ll let them ask and now I think we’ve given them enough teases that if they’re really interested they’ll come back and ask me and if they’re not then I’ve pushed as I can.
All right, Doejo, you said the idea somehow came out of these coffee shops. Tell me about that a little more. Where did the idea come from, how did it come to you?
Philip: Well, everybody is on their computer at the cafes so it’s basically an office. Everybody is online. It started with Myspace for me. It started with a Myspace and Craig’s List world. I had a lot of friends on Myspace and I was posting a lot of links and I was enjoying the interaction and it kind of snowballed. I also didn’t like the backlash of Myspace’s growth and what was going on with it, the ads, etc. I wanted to have my version of what would be a productive social network and it was called Metro Proper at the time. It was going to be, basically, Craig’s List with user profiles and feedback like Ebay. It was my first time building something and so I was my own worst client in a way. I had a huge success in marketing and building up this traffic to something and I wasn’t happy with the execution or results. I didn’t believe in it so I started over. Metro Proper, for me, was an entire experiment on learning a lot about what’s going on in this web world from developers, designers, hosting, etc.
Andrew: Let me stop you right there and understand this. Metro Proper you launched 2006. You said you were your own worst client. Did you do your own development or did you hire other people to develop it for you?
Philip: Hired other people.
Andrew: You hired other people. What did you do wrong in the way that you worked with those other people? You were trying to build a social bookmarking, fresh faces and local coupons is the way you described it on Linked In. What did you do wrong as you built it up? I want to learn from that.
Philip: One thing would be is I over-complicated it. As an entrepreneur it’s hard to sit idle because you’re moving really fast. To build something while you’re waiting for something, I probably was a little too anxious and started adding on more to this.
Andrew: Can you give me an example of some of the things that you added on that over-complicated the product?
Philip: Sure. Originally it was going to be classifieds user profiles, just some credibility on who was posting what and some history on them. Then, while I’m waiting for that to be developed, I find something like a [inaudible] type thing and the front page could be newspaper. Craig’s List took the backbone out of the newspaper industry with the classifieds. You’re up all night and you want to do stuff so I ended up throwing up even more things into the mix. I can blame myself for not being focused, keeping it simple, going to market, keeping momentum.
Also, the people around me, too, they really fought hard and believed and tried hard but the caliber wasn’t there. It was really hard when you meet somebody new, that is more talented, it’s hard for the other person to swap with them. I’m looking at it as a business, I would like a different developer to take lead that has maybe more experience. There’s egos there. There’s just a lot to learn. There’s people that protect things differently.
Andrew: You had one person working on the project and you told the project manager take that guy off and give me another person because I need someone else to work with?
Philip: No, it wasn’t that there was a project manager. A lot of these people just show up in my life. It’s not like I’m putting ads out and stuff.
Andrew: I see. You’re finding a developer, you’re hiring him, and then it doesn’t work out with him and you say I gotta get someone else.
Philip: It’s not that it doesn’t work out. It’s that, in this situation, somebody else showed up that wanted to get involved that was way more experienced. It’s hard to say hey, this guy should probably take the lead because you don’t want to hurt people’s feelings.
There was much more than that. There was a lot of different situations and a lot of learning. What happened was people just knew that I was doing some web stuff and they would ask me. They would be like, oh, can you help me with this? Literally three projects later we’re slammed. Next thing you know we’re just trying to help people out with their problems. In theory, small business wise, or even what’s going on technology wise. I was able to be helpful as a facilitator, and be able to advise and push things through. Then it’s been a good amount of years that I’ve been entrenched in it with an insanely awesome team of talented people that are all leads of whatever departments or specialties that they’re into.
Andrew: I want to slow it down so I can dig into it a little deeper.
Philip: For sure.
Andrew: 2006, I said, is when you launched the site. How long did it take you to go from starting the development work to launching the site?
Philip: I would guess six, seven months.
Andrew: Not bad. Hellish six, seven months or not so bad?
Philip: Yeah, because I advise people to hold off on promotion. What happens a lot of time is people want to start the hype machine, and they should probably take it easy and just trust that things are being done. Test things. How you go to market . . . you do want to go to market before your technology’s there. Or, you don’t want to over-promote too early.
I feel like that was a big learning lesson for me, basically.
Andrew: How did you over-promote it?
Philip: I had so much hype. I had so many . . . I don’t even remember. There was tens of thousands of people that were registered for something. There was thousands of people that showed up to this opening party of our launch that wasn’t fully ready yet. There was just so much hype around it . . .
Andrew: Registered for what?
Philip: For the site. Metrocard.
Andrew: So before you launched, you had over 10,000 people registered for the site?
Philip: Way over, for sure. There’s a lot going on . . .
Andrew: Way over. How did you get so many people to register?
Philip: How many?
Andrew: How did you get so many people to do it?
Philip: Because I have a large social network in real life, as far as in a land life. I started gaining a large social network online, and I naturally networked with people.
Andrew: So you had a lot of friends on MySpace and you sent out a bulletin to them, is that what you did?
Philip: Tons of things. Bulletins, collect email lists like during an event, just word of mouth, too. I talked to everybody.
Andrew: You collect email addresses or you did before you launched, how? How did you collect them?
Philip: Just like an email box, constant contact. It used . . .
Andrew: Gotcha. So you’d meet somebody at an event, you’d get their business card, you’d put it on a constant contact so you could reach out to them?
Philip: Not even that. Just having the link and promoting that around the Internet, and with friends and stuff like that, yeah.
Andrew: [??] I see.
Philip: There wasn’t anything like injections of lists or anything, no. It was all people actually being like, what’s going on? We had a big customer base as well, been around for a bit, ground floor level.
Andrew: Customer base from the coffee shops?
Philip: Sure, yeah.
Andrew: So you get all these people who are interested in the product before you even launch it. You finally launch, what happens?
Philip: I didn’t like it.
Andrew: You didn’t like it the day you launched it.
Philip: I’m at this party and I was like, I just don’t buy it. I didn’t buy it.
Andrew: What was it about it you didn’t like?
Philip: Just the way it looked, the way it acted, it just wasn’t what I was trying to put out there.
Andrew: Do you have something specific about it that helps us understand why you didn’t like it, or what you didn’t like about it?
Philip: The people around me at the time . . . their hearts were in it, but them getting it or bringing to the table what needed to be there, which can be my fault as well . . . I just wasn’t around the right team. I was just starting. Nowadays, the people that are around me I’m just blown away with. I probably don’t even have to comment much on most things, everybody’s their own . . .
Andrew: It really is hard. If you could sketch everything out beautifully, or if you could code the first version yourself and have somebody else take a sketch of the code and build on that, then it’s very easy to work with someone. When you’re just getting started, it’s an idea in your head, isn’t it?
It seems hard to communicate that idea with someone else, and give them the right understanding of it and guidance along the way, and that give and take is really hard to find.
Philip: I think that’s what Doejo’s strong point is.
Andrew: Today. How did you get to that place? I identify with the way you were the day you launched, when I have this idea, or a sense of what I want, and I’m not getting it. How did you go from that to where you are today, and more importantly, how can I and the person who’s listening to us do that?
Philip: Well, I . . . kept going. I was just basically ambitious with wanting to find who’s who, and who’s doing what it this industry. Just the local talent to start with.
Andrew: Were you looking for the talent that can understand what you’re looking to do, and create it better than you had envisioned it?
Philip: Yeah. The way I look for things is not a traditional way of looking for things. It’s like, put it out there life thing. Most people that work here probably reached out and said, “I want to work here.” Like Darren, who’s my co-founder partner here, he was at Noble Tree for a jelly
[?] co-working event, and I just looked at his computer screen and was like, “You’re a bad-ass designer.” So I just threw him gigs that were coming at me, and he just worked really well. We started going to meetings together, and just complimented each other really well. Then things just started moving a lot faster.
Andrew: Were gigs coming at you before you launched Dojo, the digital agency?
Philip: Yes. They were.
Andrew: So how were all these customers coming to you and asking you to do
work? You had one website, MetroProper, and you were a coffee shop owner at
that point? Why were they coming to you?
Philip: I think the fist step of it would probably be the fact that I had local credibility. I was known, or “I know you. Can you help with something?” “I can guide you through it, and if it’s something that…” I sell like I would approach people in the business sense, right off the bat.
Even today, as busy as we are, I’ll sit with tons of new people and try to consult them or help them with their project. If I can advise them to start without spending anything, then sure. I think this…oh, there it goes. The monitor closed up. I was like, “What happened?”
So basically it happened from real life social networking, and then after doing good work, people see that and they tell people. You know, “Dojo did this, and [??] here.
Andrew: I really admire what you’re doing, and if I’m digging in a lot, it’s because I want to know how you got to where you are. Why did you accept those requests? I mean, why didn’t you say, “Hey, I’m running a business here selling coffee. I’m also launching my own site right now. I’ve got to focus on those two things.” Why did you say, “You need Web help? Yeah, I’ll
build it for you.”
Philip: You have to understand that I originally went to school because I was going to be in the advertising world. I went into advertising because to me, it was an easy way to be in business and be creative. So, I like making things happen. I like producing things. My favorite part of opening up the cafes is the thought and the connection of everything so that it becomes alive. Then not only is it alive, you have to keep it alive. So as far as thinking of something, helping somebody, and then bringing it to life, I’m probably addicted to that. It’s definitely something that I love doing. [laughs]
Andrew: I see. OK. So this is the world you wanted for yourself. This is the work you wanted to be doing. And when the opportunities came, you took them, and then you started doing work on them. But do you have any development background? What’s your development background?
Andrew: No? Nothing.
Philip: I mean, logically, I can talk and figure out what’s feasible, and who things should communicate with each other in theory. But no development background. No.
Andrew: OK. So you launch it. You’re not happy with the first version, but you’re still at the parties smiling, talking to people and thinking, “We’ve got to change it.” What’s the next step? What do you do…
Philip: I told people I didn’t like it.
Andrew: You did. You told them openly, “I don’t like this version.”
Philip: Yeah, and I started over.
Andrew: You started over. Scrapped the whole first versions…
Philip: I started over.
Andrew: …and started over.
Andrew: How long did that take?
Philip: I started over, but it moved quicker because I had a new person take over, with the other person still involved. So I did start over. I started over with design, with just how the thing thinks and functions. There was some momentum, and it was cool, but what really started
requesting more time was client work. I mean, like people were…I couldn’t believe how many people wanted help with stuff. Our portfolio had like three things on it. Then four. Then five. You know, we’ve done over 300 projects in the last 2-3 years, you know.
Andrew: Can we spend just a little bit more time on Metroproper before we move on to Dojo [SP], the full case of (________).
Philip: I got Metroproper. I’m so in love with it.
Andrew: I’m glad you are. The second version, what did that feel like? What did that look like?
Philip: It was better. It wasn’t poppin like I wanted it to. Maybe I was just really obsessed about, you know, wanting to create new things. It might not have been, you know, necessarily about that product. It might have just been me trying to figure out how do I get into this universe, you know, this digital space where things that we do talk about can show up and act that way, you know. I think that’s sorta becoming more and more the thing because, you know, I wasn’t stimulated anymore by, you know, making this project work for me. It was more like, oh, this is the new problem that needs to be solved, you know. That’s where my strong point is. When a client comes in, a new business comes in, they can talk to multiple people. I love learning about them, you know, trying to figure out, you know, what makes them a sense for them, you know, with them as a person and with the industry for their specific niche or even realize their niche. You know, a lot of times, their initial, you know, meetings and discovery, you know, really turn and shape the entire project. So, for me, I’m most stimulated by trying to problem solve, plan, and execute the launch of the projects.
Andrew: Let me ask you this, the head game of this. . .
Philip: All right.
Andrew: . . .When building your first project, it doesn’t go so well. Why don’t you feel, the way others might, insecure about your ability since the first version, since your business, the one you should care about the most didn’t work out so well? Why do you still feel comfortable helping others, or, why did you back then?
Philip: What city are you in?
Andrew: I’m in Washington D.C. today.
Philip: OK. You know J.B. Pritzker? You know New World Ventures? Do you know that fund? Well, there’s a Chicago fund called New World Ventures . . .
Andrew: Oh, I see.
Philip: . . . and it’s headed by J.B. Pritzker, right. They had a meeting months ago with, like, Pepper [SP] Reid [SP] who was the CPO of Obama’s campaign, OJ Cupid and Sam was there. There was a good table of 30 people and they just wanted to talk to some people in taking Chicago. They invited the, what’s that pizza place, Homemade Pizza Co. Basically, it’s a pizza place, they’re prepped for you to take them home and cook them, so, there’s no cooking inside. It’s a really smart concept. He looked at the table and said, ‘we opened up our first location and nobody got it, nobody showed up, like, no business.’ And, so, he said, ‘We did so bad, we opened up another and then, there, they got it.’ Now, he’s got a really well done chain and he’s doing well, you know. I love his story because it was like, you know, just because it doesn’t work out, doesn’t mean that you don’t have the right tools to be in this, you know, things just need to be tweaked and if you want to fight for it and figure it out, you know, I’m sure it will work out. I don’t know, not to be cheesy about it, but, you know, I kept wanting it to work, you know.
Andrew: I see. You know what, so, the way that I might be programmed internally or program myself is, if I was building out Metroproper, I would focus so insanely on that that’s all I would spend my time on and not take on this other work. You would say, hey, that’s one version of what I have in mind for my future and my life, it’s going so-so, I’ve got this other option, it doesn’t mean I’m a failure because Metroproper isn’t going gang busters, it’s just the first thing that I’m trying. I’ll try something else and try something else,and help other people and then I’ll find my mojo.
Philip: Yeah, I don’t want to do just a couple of things. You know, there’s people out there who have thousands of things that they’re involved in. I know that’s a large number, but, you know, I feel that I’m getting really good, I’m getting better at practicing daily at mult-tasking so many different responsibilities and I feel like I get better at it. I don’t see myself wanting to stop and delay future business or the amount of projects.
Andrew: How do you do that? We’re gonna talk in a little bit about [Text Hog], one of the products that you guys created which is expense tracking software. We’re going to talk about Doejo finally, I promise I’ll get to it guys. We talked already about the coffee shops. There’s a lot of different things you’re working on. Don’t you have to focus? I think for most people just making one of those projects successful would be too much and most people would fail. Here you’re working on all these and more than I’ve listed here. How do you do it?
Philip: Well, right now our client work is our main focus but we build products on the side when we can and we have the resources to keep rolling out stuff. We give it a good push and then we usually have good press and some usership and then we sit back a second. Then we might launch another product. Right now we have about 12.
Andrew: 12 products like Text Hog which are independent businesses or could be independent businesses?
Philip: Totally. Right now, because we’ve invested in this group, it’s actually prompting us to create a separate group. We’re going to start our [DC] arm or firm.
Andrew: What’s your thing up until now that has helped you do this? Is it that you find one good person and you say I’m delegating the responsibilities day-to-day to you, you’re like the CEO of the operation, and you do it? Or is it that you’ve got lots of people in those roles that all know exactly those roles are and they’re keeping the thing going. What is it? Or is it you’ve operated like a [PC] up until now where you say I’ll just bring in the money and some creativity and some motivation to everyone but you guys have to run it cause I’m not here day-to-day? What’s your thing? How do you manage all this?
Philip: No, I am there day-to-day. I’m in the office probably pretty much nine to five but I’m always in the office cause I’m on my phone or at home on my computer. Everything Doejo is my primary focus but we’re lucky enough to have people that manage their own projects in a way. We don’t really like to layer it with project managers. If you’re working with somebody we like for you to work directly with them. If it’s a designer or developer, you’re most likely to be talking to the person that’s doing it. We kind of take away that layer.
For these projects that we’ve invested in, we’re bringing in somebody right now to help keep those on track and keep the business focused for all of those separate niches. Everything’s in motion, everybody’s taking care of their responsibilities, and everything’s working. We’re gonna keep doing it as we learned, I guess.
Andrew: OK. While you’re focused on Doejo who manages the coffee shops? Who makes sure that if someone is stealing from the register that they’re taken care of? Who makes sure that if there’s a new a store down the road that’s potentially siphoning off customers that they’re taken care of? Who comes up with the new ideas?
Philip: You have to delegate.
Andrew: You have one person who’s running it?
Philip: Different people. Maybe a manager per store and then overall. There’s people who own hotel chains. Can you imagine all of the commerce and activity going on in one hotel? It’s a lot to manage. Imagine them all over the world.
Andrew: That’s why I want to know how you do it. There’s different people who manage in a different style. I want to know your structure. What’s the structure that enables Phil to run so much?
Philip: I guess my structure is that I think people want to work with me. I think that they’re good people and they take on the responsibilities for that duty and I think they want to do good by me as I them.
Andrew: OK. All right. The reason I ask, by the way, is I recently did an interview with a guy named Nick who founded IB Insiders. I asked him how are you managing all of these SAT prep instructors all over the country who don’t officially work for you but need to be guided by you? He said I’m really good at creating structure. They know how they can get PR locally. They know how to teach their sessions. I’m handing them the manual to every little part of life. He also talked about how he created a points system to incentivize people along the way because there are several steps before you make a sale that are boring steps or frustrating steps. He said I’m going to create a points system where if you make a phone call today you get a point, for example, if you do something else today you get another point. Until that big win you have lots of little wins. What’s your structure?
Philip: I’m not good at structure.
Andrew: You’re not good at structure. Then how does it all work out? I want to hear from people like you too.
Philip: I guess I like for people to figure it out and if there’s a problem I like to help out. I don’t like to over-organize or plan even a person’s role sometimes. A lot of it is trusting the right people, experimenting, and then coming in with some direction if you think it’s needed then. That’s kind of how I roll with things, basically.
Andrew: OK. All right. When we last left the story you had a website running. You were also getting all kinds of requests for work. Tell me about how Doejo came about, what was the next step?
Philip: I figured we needed a name. I needed to call it something because we’re accepting business and we’re busy. Doejo was a domain name that I had in my roster of domain names. I had a lot of domain names and just looking through them. I’ve always like Doejo. It’s short. It’s just our version of spelling the word do-jo. It just stuck.
Andrew: OK. You said I’ve got all this work anyway, I need to give it a name and make this an official company.
Philip: Mm-hmm. Sure.
Andrew: All right. In the early days you were getting customers who were referrals. How did you upgrade your client list? How did you get the Groupons of the world?
Philip: How did we get the Groupons?
Andrew: How did you go from the mom and pops who come to you to the bigger named companies?
Philip: I don’t want to make it sound so simple that they just emailed but I don’t know. I think we just started running in the same circles. Umber is based in Toronto. I really don’t even know how they emailed us. They might have seen us on [Sortfolio]. I don’t know but they reached out to us and we went back and forth and it worked out. We even offered to fly out there and we didn’t need to. They trusted us, they hired us, they’re really happy with us.
Groupon Chicago, Doejo is known in Chicago. With Light Bank investing in so many new start-ups they need a digital arm, they need help, they need design, they need advice.
Andrew: Did they find out about you from the events that you go to in Chicago?
Philip: Yeah, that helps. I think if you’re in Chicago and you’re in the space you know who Doejo is. I’m guessing.
Andrew: Wow, what do you do that people know that you’re there? Most people don’t know I’m in DC or when I was in Southern California they didn’t know I was there.
Philip: Well we have almost 40 people that work at Doejo so there’s a good crew here. Our office is a store front where we can look out on the street from our desks. There is a wall but we’re in a store front. We’re expanding to a larger office right now. We’re going to keep the space, might turn it into a co-working space, not sure.
I’m all over the place. I’m very social. I have public spaces and, I don’t want to pat myself on the back too much, but I’m out there. I’m not even consciously trying to say I’m going here to do business. It’s just a natural thing, I’ve always been that way. If I say what I do people might need help in that. It just seems to, especially nowadays, and it’s going to be more and more like that, you could put anybody anywhere that’s in the space, that knows what they’re doing, and people need their help. I can go to the airport and talk to a random person and they would like to talk about technology. They would like to talk about new design. They would like to talk about what’s going on and they probably need help. In any sector, in any business. It doesn’t matter what you do. You need some consulting and help with technology and being online.
Andrew: OK. So, you’re in the same neighborhood, essentially, as 37 Signals. These are guys who started out in a consulting company and then launched products like Base Camp and Sortfolio and became a product company that’s envied, and everyone else is looking to them for advice.
Philip: Just like Threadless.
Andrew: Threadless also started as a consulting company?
Philip: Yeah. Skinny Corp.
Andrew: OK. So, when I interviewed the founders of 37 Signals they made the idea of creating a product sound really easy to me. You look at your own needs, you create that product for your needs, you wait it out, it will take a year, maybe, before you get some real revenues, but you keep on going and you look for, you know, your charge and all that stuff. But, their ingredients are very clear. They sound easy to understand if not to implement.
Andrew: You launched a few products including Text Hog, the expense tracking software and others, why haven’t these products become so big that they’ve taken over? What are we missing when we’re trying to follow 37 Signals?
Philip: We’ve launched 12 completely separate industries in almost a year or two, so, you know, 37 Signals is awesome. They’ve had that business for 10 years. I’ve only been in this entire business for three or four years, I guess…
Andrew: Oh, Dojo launched… Yeah. Dojo launched 2008, so you’ve been here for about three years.
Philip: Text Hog is a year and a half old and no one’s really running it. I guess, part of my focus now is to put more attention and have the right people pay attention, put more focus on these products that we’ve created, but I don’t want it to take away too much from all the stuff we do for our clients. So, I guess, in a short amount of time we’ve created a lot of start-ups that have the potential of making it.
Even today, earlier, we were assessing, “All right, which one needs the most folks right now? Which one is going to probably make it faster? Which one needs less work and has a [??] attached to it and can grow faster?”.
So, we definitely plan on having successes, but I think it’s so new in our game that, if I speak to you in 10 years, I hope that one of those projects is making recurring income like 37 Signals.
Andrew: So far, what have you learned about it that you didn’t expect, about creating products with recurring revenue?
Philip: What I didn’t expect?
Andrew: Yeah. What did you learn that you didn’t know before you got started? What were some surprises that you wish you knew about before? I want to learn from you because, first of all, you’ve done it, you’ve done it many times over, as you’ve said, secondly, I know Text Hog because I’ve been looking at it for a long time because I’ve read it all over the place, Mashable. Were you guys in the New York Times with that product?
Philip: We were on a one hour special on CNBC. So, they documented our development, so that was huge. That was played internationally.
Andrew: Yeah. You guys did really well with that and that’s probably why that one is sticking out, but, of course, there are others. There’s Galla, it’s the event planning directory, it seems a lot like Sortfolio to me is…
Philip: On the very bottom I link you to Sortfolio and say “Inspired By Sortfolio”.
Philip: What happened in that situation is Icha [Sp], who works at Threadless, lost her wedding space, and the woman who owned the venue for the wedding space was coming to me to consult her on something. So, I knew too much information, I told her to tell Icha what’s going on, so there’s a whole wedding [??] thing that happened that I was involved in, not knowing either of them that well.
And, so, I’m looking for a new venue for Icha, just trying to help out. Right? And, I was just kind of, you know, not so impressed. People spend a lot of money on events, corporate events. People spend a good amount of money, and there’s so many different parts of it, from catering to the venue to invitations and then furniture, it goes on and on.
Entertainment, whatever. So, I just thought it was something that needs to be done. There’s got to be a simple way. I can do shopping cart options and then narrow down my list based on price point.
Andrew: One of the challenges with those businesses is getting, since it’s a market place, you need both sides of the equation to come in together. You’re not going to get companies listing themselves in the directory unless you get users. You’re not going to get users unless you have a good collection of service providers. How did you deal with that? With getting people to come into the marketplace?
Philip: Well it was a mixture. I had two people on that were reaching out to companies and actually helping them get on there. And so, I think we had like six thousand businesses on there.
Andrew: How did you get six thousand businesses on there?
Philip: I had people literally reaching out.
Andrew: So you made six thousand phone calls?
Philip: Phone calls, emails, profiles and access to them.
Andrew: Building profiles on their behalf you mean?
Philip: True. And communicating with them to make sure that they’re cool with it, if they wanted to update their photo, if they want to take over the profile etc. So that was one way I thought, I might as well start with trying to educate people and help them out and get online. And then about, I think sixty to seventy pro accounts, at $149.00 a month, signed up. And then we did like a thirty day trial. We had a successful launch. But it’s the same story of putting something together, getting a lot of attention, having good momentum. And then us focusing on another project. And so, we know where we need to fix things or do things differently.
Andrew: I see. You’re saying that one of the challenges is, yes you can get the business up and running, yes you can get customers and revenue but you have so many great ideas that you divert attention from one idea as it’s starting to gain traction to another.
Andrew: And that like what Jason Freed told me about Sortfolio. He said hey it’s a great business, it’s kicking off revenue, other companies that could focus on it would do well with it. But we can’t focus on it and give it the attention it needs day to day. It sounds like you’re saying that’s happening to you, multiple times and multiple products. Am I understanding you right?
Philip: True. But at the same time, I learned somewhere that a VC firm might invest in ten to twelve projects hoping that one takes off.
Andrew: I see.
Philip: I feel like, the opportunities I have when I can, put different talent and resources on a project, are kind of me having fun and being able to be like I get to make something cool. You know what I mean? And so I’m just trying to plant seeds and have my roster in different industries that at the right opportunity, which is starting to happen right now, I can jump back in and refocus on all twelve, in a sense. With a different department and a different team that kind of separates it.
Andrew: You are going to focus on all twelve, and see what happens.
Philip: Yeah. And we have been investing other peoples projects too. So I want to be able to focus on client work on one end and then I want to focus on how we’re incubating people and investing in talent and people that come to us.
Andrew: Alright. I understand that, I understand the coffee shop business. I didn’t spend enough time on Doejo. Give me more about why you guys do well at Doejo. How do you get to two million in sales with an online agency? What do you do right that gets you there?
Philip: I mean, I feel like we’re just getting started. I feel like traditional agencies, I mean the amounts of revenue are ridiculous. And so, they’re leaning on us more and more because they’re just not able to do what we can do, in a sense. Not to generalize it, but it seems that they need a digital arm but they’re not really gonna take you anywhere. They’re just kinda try and keep you back, and want to grow their digital arm. We have an army of like, digital superstars, you know. And so we only see us growing. Like, while traditional stuff is shifting, I guess we’re on the up and traditional stuff, is not. And so because of how talented and relevant we are, I feel that that too, is just going to keep growing as it has. It has consistently gone like this.
But when you have money, we invest it. I mean we put it back into people. We put it back into hiring new people, we put it back into, you know, putting in new projects.
Andrew: For some of my audience, for the many people in my audience who are running consulting companies or running digital agencies like yours, or looking to grow their companies. What’s one piece of advice you can give them based on your experience that will help them go further than they would otherwise?
Philip: You have to love it, I guess, right? That’s the biggest thing.
Andrew: I mean tactical. Like, what is? Is it about up-selling clients? Is it about going to the right networking event? Is it about being in Chicago where there aren’t enough agencies?
Philip: I don’t think we’re good at up-selling clients.
Andrew: OK. So what is it? What’s one thing that you’re really good at? Phil, I know you’re doing good. I’ve known you now for a long time, because you’re a friend of Mixergy. I know there’s some essence here, and if I don’t capture it, we’re almost at the end of the interview. And if I don’t capture it I’m going to do you a disservice with my audience, and my audience a disservice.
Philip: I think it’s the motivation. People like you need to feel that they trust what’s going on and that they’re in good hands.
Andrew: You mean, employees of the agency need to feel that way?
Philip: No. Well, that too. But clients, I mean, ‘cuz basically when you partner up with somebody, it’s not just partnering up with somebody because you need some new [I, sounds like] real quick. And that happens. You know, you do that for sure. But if you’re doing this start up or doing a campaign and you guys have to really be meshed in to make it happen. To make a real spark happen, or else people won’t feel it. It’ll be fake, you know. And you can [next] up all day, but if there’s not a real connection; I think we passionately really care.
Andrew: So, how do you create that connection? Just by expressing passion for their project?
Philip: It could be about anything. I mean, I’d probably be excited and passionate about it if somebody said to me, like, I want to create this hat that allows me to fly. I don’t know. We can talk about it, and I can probably get really excited about and figure out what’s feasible or not. So I think a lot of it’s having passion, like wanting to help out, wanting to generally do something about it.
Andrew: All right. I want more. I want, like, the blueprint. You got no blueprint for me, Phil?
Philip: I’m just living life everyday, and things are flying at me, and we’re keeping all the balls up in the air, you know. There’s definitely [??].
Andrew: How kind of margins do you have on an agency. When you have $2 million, are you talking about 5% comes, drops down to the bottom line? Or 25%? What kind of margins do agencies have?
Philip: I’m really bad with math.
Andrew: Bad with that?
Philip: Oh, yeah. For sure. Yeah. But I do know that we make good money, and I do know that when we have it, we put it back in. And, you know, I definitely, as an individual here that’s bad at stuff, often could have benefited by large financial winds, as far as the percentage of profit. And 80 or 90% of the time I’m gambling it back in a person or a project.
Andrew: I remember when I interviewed Tim Sykes, he used the phrase, what did he say? He said, “I’m just Forrest Gumping my way toward success.” And of course, it wasn’t true with Tim Sykes, ‘cuz he plans everything. The guy is really good at what he does for a reason. I don’t want to leave my audience with the idea that you’re Forrest Gump. Tell me what you’re proud of doing?
Philip: I feel like I plan everything, but I’m not planning it by over thinking it.
Andrew: What is it that you do really well? Is it just letting go, ‘cuz that’s not enough. There are people who let go [??].
Philip: You’d be surprised how much really goes into connecting the dots. For sure.
Andrew: Give me an example? How? I want to understand that.
Philip: I mean, in a general sense, I guess. The universe itself is, you can’t explain how it’s going, really. So, I’d like to believe that there are natural things that want to flow and work with you. Humans aim a bunch of stuff that they throw onto the planet and if your intentions are good, and you know, you plant your seeds, but you let it go, and you’re forward moving, things will just connect with you more. Because it naturally wants to. So a lot of my day-to-day sometimes is obviously problem solving, like legitimate things of put that there, or let’s do it like this, or gotta take care of that. But a lot of times if I want a space and I say what space and I do the research and I go for it, and let it go, I might end up with that space. Because I really wanted it, and I planted that seed, and I let it go, and it comes back. It’s like, if you over obsess about something in kind of a, I want to use the word eeky though it’s not a real word, but it might want to fizzle away from you. I think it will naturally want to connect with you if you’re intentions are right and you let it go. You can’t just sit idly by and say, “I wanna do this,” and then complain about something. That’s not connecting you to anything solid. So, I say, plant the seeds, but let the dots connect on their own. A lot of people get super-excited about something, but then they fizzle out the connection. I let things go and I plant a lot of seeds, and it really seems to work for the greater story of it, in a sense.
Andrew: I’m really glad you handled that question the way you did. It would have been easy for you to say, “Andrew is looking for a certain answer here, let’s give him that answer.” I, as a questioner, have got to watch out for leading people in that direction.
I remember once I asked Gary Vaynerchuk, “How did you end up with the wrist band on your wrist that has the Gary Vaynerchuk wine logo?” And he gave me an answer, and I said, “No, give me more. Tell me more specifically how you got there.” And he finally said, “You know, we were playing basketball, we were drinking some wine, and we needed to wipe the wine off our lips. So, we did one of these, and that’s how we decided, hey why don’t we have a-”.
I realized later on, I don’t know if that’s true or not, but I was pushing him to give me some answer. He had to give me something, and that’s not right. So, I’ve got to watch myself with these questions, and I’m glad that you were able to express yourself in the way that you did.
Philip: Gary’s awesome, he definitely gives a lot. He just puts himself out there, and he’s awesome. He’s a giver.
Andrew: And he’s willing to let me push, push, push in my interviews with him.
Alright, before I say goodbye to you, let me just say this: someone in our audience has written a book that I’ve started to read, and I hope other people in the audience go out there and get to read it along with me. If you do, email me so that we can talk about it. The guy is Colin Wright. He wrote a book called My Life in Exile. He’s a guy who I met when I was in Argentina. He’s just kind of breezing through Argentina and knows the city more than locals do–he’s that kind of person. And then he kept traveling and traveling, and he’s letting his audience on his website tell him where to go next.
He wrote a book about the travel, it’s called My Life in Exile. I did an interview with him because I got so excited about meeting him in Argentina and learning about his life. He’s been on Mixergy, he’s listening to Mixergy. He’s been a big supporter, and I want to support him by getting the book and reading it and hopefully getting the audience to read it. So, My Life in Exile; get it so we can talk about it. It’s written by Colin.
Alright, Philip, thank you for doing this interview. Let me say, guys, check out Doejo–and I should probably spell this out for the transcribers, but these are really good transcribers that we have here at Mixergy, so they probably all have it already. It’s Doejo.com. Tons of great designs, and I know why your website just features tons of design and very little text, because your design’s fricking beautiful. I don’t even know how to communicate that. It doesn’t sound like I can get to the bottom of how you do it, but really good designs.
Philip: We have a new site going live soon. We hired a full-time copywriter because copywriters are really important–they get neglected a lot in this industry, because people think they can write, but you really need to hire a copywriter. We’re doing a lot of case-studies in our next version. We’ll have a lot more detail about-
Andrew: Case-studies on copywriting?
Philip: No, no, no. A copywriter to do the case-studies on each project. So our new site will have in-depth, of all that we’ve done for that client.
Andrew: I want to see that, please. If you remember, send me links, I want to spread links of that. I love those kinds of case-studies. And I love great writers.
Philip: For sure. Cool.
Andrew: Alright, what else? Also check out Text Hog. I really like your design. You have a good user experience–a good understanding of what I as a user who’s coming to a website and thinks of the website as a stranger–what I need to know. You’re [??] and probably have a better version in mind.
Philip: We just launched a dating site called Small Dates.
Andrew: Small Dates, what does that mean?
Philip: It’s just something I made up based on prompting people to go on a date, but not taking it that seriously. It’s not a big deal: go on a small date, whatever. Maybe the name can be tweaked, but it’s basically-
Andrew: I like the name.
Philip: Thank you. It’s basically this astrological algorithm that we’ve created to bluntly give you one-, two-, three-liners about your compatibility with somebody. And then we have compatibility charts based on astrology and other things. There’s a lot of people on it now. We just launched it, and we’re about to redo all of it, but it’s pretty fun. I don’t know why I brought that up. I thought you said something that made me think about it.
Andrew: Listen, if somebody in the audience has a question about their site, you would take that question. I’m not going to give them your email address, because I don’t want you to get flooded. But you would just give them feedback on their site?
Philip: For sure, yeah. I mean, all I do is talk to people all day and email people all day, and I’m not one for sleeping. I’m just really into all this. I like talking to people and trying to figure out what’s up. For sure.
Andrew: All right, I love it. I will take you up on that when I’ve got a new design in mind, and I hope my audience does. I hope, more importantly that they check out your website. Anything else? No, I think that’s pretty much it. I’m glad you and I got to talk. You and I have been emailing, you’re not kidding when you say, “I just email people.” I think I did a search for you name for this interview and I saw an email going all the way back to maybe the beginning of Mixergy.
Philip: Sure. Awesome, well, thank you, Andrew.
Andrew: Thank you very much, and thank you all for watching.