Master Class:
How to increase your online business’ value
(To sell it for more)
Taught by Thomas Smale of FE International

Master Class: Increase Your Startup’s Value

Course Leader: Thomas Smale, FE International

Thomas Smale is the founder of FE International, which specializes in advising and brokering the sale of established websites and online businesses.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is about how to increase your company’s value before selling it. It’s lead by Thomas Smale. He is the founder of FE International which specializes in advising and brokering the sale of established websites and online businesses. So if you have a blog about max, for example, and you want to sell it, Thomas is the man to talk to. He focuses on companies that sell for 20,000 to $2 million. I’m going to help facilitate. My name is Andrew Warner. I’m the founder of Mixergy.com who’s about to go hoarse because all I do is interviewer entrepreneurs about how they built their businesses. In this case we are going to teach you what Thomas has learned from having brokered millions of dollars worth of sales.I invited him here to talk about- … frankly all the things that he wishes everyone who came to him did before they sold so that they can increase their value and allow him to sell their business for more money. Thomas, welcome.

Thomas: Hey Andrew, thanks so much for having me on.

Andrew: Thomas, before you started you told me that you had a client whose name you changed for the purpose of this conversation, who said hey I want to sell my business for seven figures. I liked to do a million plus dollars worth of sale of this business and you told him what?

Thomas: I said to him … and this is a very common question people come to me with a certain number in mind. So I gave him some quite generic advice based on [inaudible 00:01:35] and some similar sites I had seen in the past. So I said to him, “I suggest you speak to your affiliate network and try and negotiate a slightly better affiliate commission.

Andrew: You gave us a … sorry to interrupt what you are saying but here’s the email you changed his name in this email. But this is what you sent to him. I’m sorry you’re describing it?

Thomas: Yes, so I was saying in … speak to your affiliate manager and get a better rate on the CPA deal he is getting with his network was quite a quick win. Generally working on increasing conversions on a site to extract maximum value. So one of the things he did, for example, is added a video for the sales page to help increase signups. Another thing he was doing he wasn’t placing content very regularly. So I just said to him increase the regularity of the content you’re posting, gets you more exposure in search engines, encourages users to come back and from a buyer prospective it generally shows the business has kind of been well loved and looked after so that’s a good sign.

Andrew: So I get what you are saying here. You’re saying, “Look I know you want to do this for seven figures, but you’re just not there. I want to be honest with you but I also want to tell you that the changes that I want you to make won’t take years and years. They will have dramatic impact quickly, and you gave him some advice some of which we’ll talk about. But it seems like advice that you give any entrepreneur. What’s the difference between someone who’s coming to sell and someone who’s just looking to improve their business? What is the difference in the advice?

Thomas: I think a lot of the points are the same so you can grow your business with the majority of the points we are probably going to discuss. There are some points in there that are essential to if you want to sell a business. But aren’t necessarilyy going to make your life easier on a day to day basis. In fact, some might make your life more difficult. But the majority of the points … I mean, ultimately my aim is to help someone maximize the value for their business. So whether they are looking to sell or not, the advice should still apply.

Andrew: All right, fair point. So even if the sale doesn’t go thorough, they’ve improved their business and, of course, what you’re trying to do is not to look to add some window dressing here you’re talking about sound business advice that would work at any stage in a business. Some of it is especially important to talk about with people who want to sell. All right, so you did give him … let me look at this email again. This is the email that you sent him. You said, “No, I can’t do the number that you’re looking for, here’s some tips to improve.” As a result of him taking this advice … and by the way people don’t need to exactly read it, I just want to show you the email comments. Thomas, you did a great job of explaining what you told him. He took your advice. What happened?

Thomas: So this is thing was back in June, 2013. [inaudible 00:04:26] run by couple of young guys and unlike a lot of people … I speak to a lot of different clients. I always try and give easy advice, the quick wins. I don’t want to make someone’s life extremely difficult. I want to give [inaudible 00: 04:42] that’s simple to implement and well quite easy to add value. So in this case they went away, listened to me and they came back about a year later. So some time in the middle of 2014 and their business, we have it listed at the moment. It did $110,000 last month [inaudible 00:05:02] …

Andrew: Is this your listing of your business? This is it?

Thomas: Yeah, that’s the one.

Andrew: So now he actually is … he’s got yearly revenue of about $1.2 million. He’s got asking price. Not just of a million but 2.7 million and nice profit too, 1.2 almost. Wait, so revenue and profit are almost exactly the same 1.2?

Thomas: Yeah, it’s a content site and it’s very much owner runs those partners who do the majority of the work [inaudible 00:05:36]

Andrew: Meaning, like a blog, a WordPress site.

Thomas: Yeah, exactly. It’s built on WordPress so it’s a very lean model. I think a lot of people look at it with a similar skepticism that you did but we find the vast majority of online businesses we sell [inaudible 00:05:51]. So it’s not currently on common set business making that sort of revenue with low cost.

Andrew: Cool. Go figure. I had no idea that you can do that well and if you are the guy to talk to when it comes to selling it I was looking online actually before we started. I want to get into the big points here. We have a big board of techniques that we’re going to be talking about. But before that you and I were talking about this. This is a Flippa account. It’s actually pretty interesting that you had 40 transactions on Flippa totaling $1.4 million. That means on Flippa you sold 40 companies total sale price combined of $1.4 million. Is this all that sales that you have? Is this where you sell on Flippa?

Thomas: No, so back when I started the business in 2010 Flippa was [inaudible 00:06:41] so to speak and continued … I was selling mine on Flippa which I started out doing. I eventfully got into brokering and the majority of the sites I sold in 2011 and 2012 were on Flippa but since then 2013 I barely sold anything on Flippa, 2014 and 2015. I don’t think I’ve really logged into my account. The vast majority of clients we have now we’ve built out of reputation kind of a standalone reputation. Got our own list of buyers [inaudible 00:07:15] —

Andrew: People buy and sell directly through you not through Flippa. What are your sales now? What were your sales, say, 2014?

Thomas: Twenty fourteen we did about eight million in transactions on behalf of clients.

Andrew: And ordinarily that’s what you do. You work to help a customer and not improve their business in time for a sale even though that’s what’s we are going to be talking about today. You will actually go out there and find a client for your customer. Your incentive is to maximize the sale price and what’s your commission?

Thomas: Yes, so the commission varies between 10 and 15% depends on size of the business. So a $50,000 business would be 15%, a million dollar business would be 10%.

Andrew: Okay, so if I were to do a quick back of the envelope calculation, last year your money the money that you got as a result of all those sales is roughly a million dollars.

Thomas: Yeah, just over that number yeah.

Andrew: Right, impressive especially since you still broker companies that sell for 10s of thousands of dollars and, of course, as you told me before we started up to two million in sales. All right, up to two million in sale value of the business itself. All right, let’s go to the big board here. Let’s not mess around. Let’s start with the first big idea that we are going to talk about which is. You say this is something that every entrepreneur needs to know about before they sell it’s to keep more accurate accounts. Can you describe for me what is the typical entrepreneur’s accounts. What do they look like when they come to you?

Thomas: Yeah, I’d say, to be honest, I don’t really look like anything most entrepreneurs especially online because they are quite a [inaudible 00:08:44] you find a lot of my clients are quite young. So generally in their 20s or 30s might not have run a business before. So generally speaking their accounts they come up with are not very accurate at all, or they just don’t even exist. So I would say, at least, 50% of the time I’m providing them with templates to fill out. As you go up the value chain slightly bigger businesses and older business owners do tend to keep better accounts, but I would say the vast majority of people I deal with have extremely messy accounts or they don’t they [inaudible 00:09:18] that’s assuming they keep them at all.

Andrew: You told Ann Marie Ward who produced this session that you had a client who came to you who wanted to sell their business and I think they didn’t even have a bookkeeper. What did you see and what did you say to that client when they came to you?

Thomas: Yes, so what I saw was a lot of messy numbers that didn’t really add up to anything from an owner’s perspective, assuming you get it past the tax man. Having messy numbers is really a major problem on day to day basis. A lot of people just get the end of the year, send the numbers to their accountant and then pay whatever taxes they have left over. But from a buyer perspective if you don’t have accounts that are accurate, then they are not going to be interested.

Andrew: What’s the difference between a buyer wants to see and what the IRS wants to see or what you need to prepare for the IRS once a year?

Thomas: Yeah, I think one of the key differences between what would be on your tax return and what we present to clients. So the key difference is on your tax return assuming you have an LLC or an Inc. or whatever you’d have your net profit of the business, and generally as your accountant draw up an obligation to get your net numbers low as possible to reduce your tax liability. From a broker perspective it’s our job to do the complete opposite, and show a company make as much as possible. So what business brokers use especially if you’re dealing in the [inaudible 00:10:45] million range is a figure called seller discretionary earnings. You might see seller discretionary income or cash flow but that’s effectively the net profit of the business. And then you add back anything that’s discretionary to the owner. So you might find health insurance, car, any owner drawings or salary. I guess how they [inaudible 00:11:07] the business so you effectively get a like for like comparison of the business. Where let’s say both to get two businesses both made $10,000 in profit to the IRS but one owner paid themselves $50,000 and another owner paid themselves $150,000. When you do that active is got different value which is why we sell it on seller discretionary earning.

Andrew: That’s fairly simple. Well that’s fairly easy to undo. You go through and you say which of this expenses are really paying myself in a way that the government allows me to. Yeah, they said I can write off my car so I wrote off my car, but the new owners may not even care about a car. That’s fairly easy. What about the rest of the income statement that we need to keep organized properly. My hunch is that I know the IRS doesn’t care whether I spend money on SEO or Facebook ads or Google ads, but a new buyer might want that broken down. Is that the kind of thing you are talking about? More detailed expense reporting?

Thomas: Yes, that’s another thing you find a lot of people especially if they use an accounting program like QuickBooks or Fresh Books, anything along those lines. They tend to lump a lot of expenses into one category. So you might have marketing, for example, is someone spending $5000 a month for marketing. A buyer would want to know is that an employee … a multi employee you are paying $5000 a month. What are you spending $4000 a month on AdWords and $1000 a month on Facebook ads. So from what you might present on your tax return it might be quite generic is just like the cumulative number for the whole year. But from a buyer perspective they want to see the numbers on a monthly basis which is another key difference and they also want to breakdown the expenses that are relevant to the business.

Andrew: I see, okay and you know what? And I guess on a extreme even though I can’t imagine running a business this way. I can see somebody saying, “I operate my business on a cash basis not accrual basis. That means, I will take all the money that came in from whatever account I have strive[SP], PayPal etc. [inaudible 00:13:14] and I’ll see how much money is left, put it all in the bank, and see how much money is left at the end of the year and the difference will be my expenses and that’s what I’ll use to figure out how much money I made and report to the IRS. That’s kind of an extreme case. It’s a little even hard for me to describe but it makes sense to, say, maybe I think what the government is saying here is all the money that came in, here’s how much I left, the rest must be expenses.

Thomas: Yeah, that’s quite common especially with younger clients who have college, for example. I know when I started out I didn’t have a clue about accounting or bookkeeping. So I probably fell for the same traps. I think a lot of especially younger clients have the same issues. A lot of people they are not numbers people, they are not accountants, they are not bookkeepers. They generally just forward the information to their accountant once a quarter or once a year and pay what’s left.

Andrew: Okay, right. On to the big board. Let’s go and take a look at the second big point that we are going to talk about which is to increase content posting frequency. That means post more often. What is this chart?

Thomas: So this is another interesting one. It shows the net profit of a business over a of period of time. So the x axis is months and this is the business where I spoke to a client … one of the reasons a lot of our clients come to sell. They don’t have time for business, they are no longer interested, they have another project. Just very common to see sites where especially if it is a blog where I know it might only post so once a month, once a week, once every six months. In this case the client was … and [inaudible 00:14:58] and quite a popular bloke, he was only posting once a week. My advice to him was go away and post more often. Content especially if you’ve got a reliable writer is generally quite cost effective and affordable.

In this case he had an outsource team of writers so an article wasn’t costing him much money. I think he was paying $30 an article, $40 an article. The advice is literally simple as instead of posting once a week, post an article every single day. And see what sort of compounding effect that has on income, and we can see very early on he was making under a $1000 a month then in income and after posting daily for six months now it’s got to the level where it’s $6000 a month. So it seems very simple but I like to provide advice to people that is simple, easy to follow, easy to execute. Quite often it’s literally just a case of post more often you will get more traffic, you’ll pick up more regular return in business and it’ll keep you happy.

Andrew: And I get how it is when often when we are ready to sell the business is at that point where we’re just done with it, we’re ready to move on and that’s why people don’t post as often. That’s why they don’t pay attention to those kinds of details. You’re saying pay attention to it. If you’re about to sell, pay attention, get back to it, publish more often and as a result you’ll see often that your business revenues will grow. And then you’ll be able to do right. You know what’s interesting is a lot of the advice you are going to give is what people I have interviewed have said they did after buying a company. They’ll buy a company and then they will start posting more often. They’ll buy a company and then they will start to work on the conversion rates. They will start to negotiate little things. As a result of making this small tweaks, they get all the up side. You’re saying as a seller get the upside.

All right, let’s go then to the big board again and take a look what the next … here we go. Actually I’ll highlight it right now. Improve your site’s conversion rates and let me take a look here at my notes on that. Actually I’m going to show your website and show how you did it. This is one way that you did it. I don’t know if people can see, but I’m just kind of clicking this box up and down. It says download your free guide to buying an online business. This is Drip, right? Get Drip.

Thomas: Yeah, get Drip.

Andrew: Created by one of our past interviewees on here on mixergy. What did you do? And how did it impact your business?

Thomas: Yes, I must admit I give clients a lot of advice and often I find myself not following the advice I gave to the client. So this is only quite recently increasing conversion rate is quite generic general advice. So everyone says it sounds quite cliché but in reality it can be quite easy to do. And increasing conversion rates can relate to anything. So it could be getting increase in the conversion rate of people clicking on a button, increasing the conversion rate of people signing up to your email list. Increasing the number of people who [inaudible 00:18:08]. It can be all sorts of things. It’s quite all encompassing wide advice and in this particularly case we had been collecting email addresses on our website for three or four years but we only have a small opt-in box at the very top of the …

Andrew: The one that says join our business network right at the top.

Thomas: Yeah, it’s in the top right and it converted reasonably well. We get relatively targeted traffic. People want to buy the sites they come across but didn’t convert particularly well at all. So we added get Drip plug-in, created an eBook [inaudible 00:18:49] website which is very relevant to what we do. The vast majority of people that come to our site want to read that content. We added the plug-in and it made a significant difference to subscribers. I think within a month we had seen about 150% increase in signups versus the previous month. So quite a significant difference is quite an easy thing to do effectively in this case we were turning a low conversion rate into a more normal conversion rate but it always surprises me how people don’t even bother collecting email addresses. It’s very easy to [inaudible 00:19:26]. They don’t test the color of buttons, they don’t test different price points, they are all sorts of things you can test.

Andrew: And you are saying start doing that before the seller does it. You want as much to the upside as you possibly can get.

Thomas: Yeah, absolutely. If you had a value of a subscriber, say, one dollar per subscriber and you could double the number of subscribers you’re getting on a daily basis. Then you’ve effectively doubled the value of the business if you look at that very simple way. And if you are a buyer of the site, you’re generally looking for sites where these kind of things haven’t been exploited. You can go in there and you know you can triple the number of sign ups and email list that’s revenue generating. Then that business becomes a little bit of a no brainer to you and that’s a pretty good reason to buy it. But from a seller perspective I’d say on [inaudible 00:20:19] I want the seller to sell for as much as possible so I’m always pushing people to go for easy wins.

Andrew: Yeah, the more they sell for the higher your 10 or 15% is.

Thomas: [inaudible 00:20:31].

Andrew: Cool, all right. Back to the big board. The next thing you say is interact more often with your email subscribers. What’s this chart? Let me bring up the chart, there is it. What is this chart?

Thomas: Yes, this is an analytics account and it shows a one year difference. So the orange line is a one month period into [inaudible 00:20:54] just over a one month period in 2013. And then … sorry, 2014 and then you got the exact same period 2015 and you can see that’s the blue line which is higher, and basically the only variable in that time period was email mailing list more often. We come across a lot clients who do have a mailing list and they never email them. It’s a very common thing people come along and they say “Hey Thomas, I haven’t an emailed to anyone for a year.” The more you find if you do start emailing people you can see this spikes almost on a weekly basis where the number is slightly higher than the average. Where the emails are going out and you just find over a course of doing that for 12 months the effects of emailing have just compounded. People just naturally come back more, often more people linked to you. More people talk about you, more people recommend you.

So it’s one of those things that can take a little bit of a while to build up momentum but over time it’s very sustainable from a buyer perspective. Buyers are looking for sustainable businesses. So doing things like emailing more often it’s really not very difficult. It takes five minutes to send an email to a list once a week, or you can even just set up a auto responder and just even an hour of work well in advance of the sale can make quite a big difference versus not emailing at all. Which is more common than I think a lot of people would think.

Andrew: Hey Thomas, what’s the multiple on profits? I guess there’s a multiple on profits right? That used to sell a blog. What’s the multiple on profits for a blog?

Thomas: Yes, we do sell a discretionary earnings not profit but for the purpose of most blogs it’s usually the same number.

Andrew: How much money can the seller if he wanted to take and put in his own pocket or use to buy stuff that the seller likes. So it’s multiple of that which to me means essentially profit.

Thomas: The multiples vary but the majority of sites we sell in the two to three times’ annual range. Some will be higher, some will be lower, and a lot of businesses we look at value and will be worth significantly lower than that but the average sell we have is somewhere between two to three times.

Andrew: Two to three times, so the buyer is thinking either I can actually … do buyers except to keep the profits the same and earn back their money over two or three years, or are they thinking we can increase the profits dramatically using our bigger mailing list or something else.

Thomas: Yeah, it really depends on the buyers. We have a real range. You might have a first time buyer who might come from a off line background. They might have a background, say, in real estate investing and they know less they buy a website that’s three times earnings, hire someone to run it because they don’t know what they are doing. They might quite usually get a 25% annual return not really having to do everything and then you get buyers who are very much gross[SP]buyers and they’re [inaudible 00:23:55] buying a site if they can triple or quadruple that. So we get a range. I’ll say it makes people who buy a site just to run it as it is. Which is why it’s important to make sustainable changes versus clients who buy a site and try and grow it aggressively With generally speaking some of the ideas I’ve gone over here, and when we sell a website to someone I’ll pass on exactly the same advice I would to a client who is looking to sell. Because again it’s in my best interest for them to do well with the business, grow the business, and hopefully come back and sell it with us two or three years down the line.

Andrew: Right back to the big board, next big point is cut down on unnecessary expenditures. So you actually had a client who had … I’m trying to think of a way to put a camera on you or not. I see that you’re scratching around. I don’t know if I want to put the camera on you just you’re doing it. Is it awkward for me to point that out?

Thomas: No, it’s fine. Sorry, I get distracted if I see [inedible 00:24:55]–

Andrew: Don’t worry. I do the exact same thing if sometimes I show the screen for a little bit longer it’s often because I need to hit the mute button and sneeze or blow my nose or something weird. Actually nothing weirder than that. Let’s go back to … actually I think it’s a little weird that I brought that up, don’t you?

Thomas: A little bit. I’m kind of used to it.

Andrew: You’re used to more …

Thomas: [inaudible 00:25:20] you moved the screen and I assumed that’s what I thought you were looking at. I didn’t realize you were looking at me and I tend to be quite fidgety [inaudible 00:25:19]–

Andrew: I see that.

Thomas: [inaudible 00:25:30]

Andrew: You know what? In researching I saw you are doing a lot of interviews. I feel like with all the interviews that you do and all the on camera appearances I feel you are comfortable on camera but I’d like to see you get better lighting.

Thomas: Yeah, I think it’s definitely our office. We’ve only been there … We keep upgrading, we keep growing and hiring so we keep upgrading the office and one this light sensors … I must admit most interviews I do tend to just do podcast and then [inaudible 00:25:55].

Andrew: Used to audio?

Thomas: Yeah, the camera I haven’t gone on camera for a couple of years now I think but it [inaudible 00:26:03] I need to get a good setup.

Andrew: I get it. I would do audio if I were you too not because of lack of video but because you got that accent. Where are you from? That’s a great accent.

Thomas: London.

Andrew: London, yeah, that to me says that’s the guy who’s going to manage my money right. That’s a guy who can communicate prestige.

Thomas: Yeah, it’s amazing how many people perceive Brits as trustworthy.

Andrew: Yes.

Thomas: It’s obviously true but it’s definitely a perception thing. I speak to a lot of clients who go “You’re a Brit, you must be honest.” You probably make stupid sarcastic jokes and you might sneeze on camera.

Andrew: I remember when I worked on Wall Street as an intern in college, there was some guy who clearly was not British, but he practiced the British accent just so that he could communicate the trust that he knew people associated with that British accent and I think eventually he was caught for doing something illegal. It became a big national story. I forget the guy’s name.

Thomas: [inaudible 00:27:03]

Andrew: No, no, you got a real accent but I always thought a lot of the stuff that guy did was kind of weird but that is a smart idea. Take on the accent, imagine if I had that accent. Alk right back to business here instead of me talking about the more superficial stuff. You had a guy who worked with you or who’s a client of yours who had a full time customer support person. What’s up with that? What’s wrong with that?

Thomas: So what we intend to find is a lot of clients who came to me may have a successful business in the past, but due to neglect or lack of time or lack of skill the business might have declined. So this particular business, one that I was doing really well, the owner had hired a full time customer service rep. Which was required and needed for the 45 hours a week which was great. She was paying him a full time salary. But over time as the business declined, revenue kept going down but the cost stayed the same. He continued to pay the same person full time the same amount of money but for less and less hours. There was less revenue, less customers call to deal with, less problems, less sales.

So what I found when looked to the business from a slightly more critical and objective perspective is that he was paying $2500 a month for someone to work effectively 20 hours a week. So it’s very hard for people often to negotiate with staff who have been with them for a while but when you explain the difference in value between paying two and a half thousand dollars a month and cutting that in half to reflect the actual amount of work. So that done so it’s 1250 he ended up doing. That’s quite significant up lift in value and from the worker’s perspective they are only working 20 hours a week anyway. So it’s quite a fair deal. It’s not like I would advise clients to give everyone a pay cut just before selling, this is a justifiable decrease based on a 50% decrease in workload, yeah.

Andrew: Yeah, let’s take a look at how that played out. Where is that? There it is. Here are the expenses so you see … This guy had decent expenses $371 in refunds a month, $7 in charge backs in his first month. Those all numbers tend to stay fairly consistent same with customer support 2500 and overall expenses were roughly $3000 a month. Let me see. Suddenly all those expenses dropped. Suddenly the expenses for the customer support person gets cut half and as a result overall expenses go from anywhere from 2500 to roughly 3000 a month to only 1400 a month, 1500 a month. That’s significant. Great, all right and on a bigger level, of course, that kind of change will have a lot more impact. So you’re saying, look at your expenses and start cutting out the things that aren’t necessary. That’s what the buyer is going to do anyway.

Thomas: Yeah, exactly. They also do it in a sensible way. I think a lot of people try and get rid of costs that are actually necessary. So, for example, they might stop emailing or stop adding new content. That’s not what you should be doing but you should definitely look to optimize things that are in place. If someone is working too many hours or if you are paying too much for saying say if you’re on hosting server and you’re paying $500 a month, but you can get for $50 a month elsewhere. Then move it now because if not a buyer is just going to do that and they can extract all the value that you’ve left on the table.

Andrew: Back to the big board and next you say negotiate better deals with third parties. We’re talking about suppliers, ads networks, everybody. One of your clients had a deal with an affiliate program that’s pretty common in this space. Every time this client of yours referred one of his users to a web hosting company and that user signed up for the web hosting company, your client got 75 bucks. Seventy-five dollar payout for hosting is pretty standard. You talked to them and as a result what happened?

Thomas: [inaudible 00:31:18] more background when you find a lot of people … still a lot of people do affiliate sales with various networks, but very few people ever try and negotiate. They’ll never ask. Most affiliate networks can pay you more especially if you send them qualified leads or good sales on a regular basis. So in this case this guy had been consistently sending sales at $75 a sign up which like you say is common in the hosting space. It’s usually quite a good starting point but he’d never ask for more money. He’d been quite consistently. He’d send them sales for over a year, good quality traffic. He wasn’t doing anything funny. It was all good genuine traffic and all he had to do was ask. Ask the affiliate manger, “Hey, I have been sending you traffic for a while now and sales. I’ve spoken to some other networks that can pay me more money for a similar sort of volume. So can you increase my rate to $150 a month” which is what he [inaudible 00:32:17]–

Andrew: Let’s see if we can bring up their response. Actually that’s an old chart. I want to bring up just this, here is that person’s email. Like you said, I have been running traffic to you for around a year now and I was wondering if you could increase my CPA above 75 bucks perhaps double that. I have been talking to other networks that can pay more but I value our relationship. And the response that he got back was your leads have been solid so far so we are happy to do that so you are now set up to get $150 CPA going forward, look forward to continue our relationship. So this is a little tiny different people see on the screen that’s why I read it for them. But that’s what you’re saying to do. Look around, see who you can negotiate with and then just start negotiating.

Thomas: Yeah, just ask. I think all you need to do. A lot of people say, “Hey Thomas, what’s the trick in negotiating?” But what you find it’s the difference between not doing anything and just asking. If they say no, it’s not a problem. You can move on to the next one. But in my experience if you have been a consistent customer for a long time, the vast majority will have some movement.

Andrew: Right and now our final point. This one is especially relevant when people are selling their business. You’re saying build a team and have the team members sign contracts. What kind of contracts?

Thomas: Yes, so I think it depends on the kind of employees you have if they’re have genuine employees then have them sign employment contracts. If they are freelancers, have them sign freelance agreements but generally related to that specific business that they are working for. So it’s quiet common. Similar to not keeping accounts. There are a lot of people who hire freelancers. You might have been with them for, say, three, four, maybe eight years. They have been working forever but they got nothing in writing. Which is fine for the person who is running the perspective because they have known that employee or freelancer for a number of years. They turn up every day, they are loyal, they get paid, kind of on a hand shake agreement.

From a buyer perspective that’s quite a big risk. They don’t have that existing relationship. They don’t know who the freelancer is, they don’t know they are going to stick around. So if you are ever thinking of selling a business, it’s important to get people to sign contracts. It doesn’t necessarily need to be anything overly official or strenuous on the freelancer employee. But generally speaking stating what hours they work. Stating what company they work for, stating how much they get paid. Just so you document the whole process and it adds up peace of mind to a buyer that the freelancer or employee is going to hang around for your sale which is also important that you quite often a team can make or break a business.

Andrew: You told us in the pre-interview you did with April Dykman, I think, that you had a client, I’m looking at notes here, with the business listed for a quarter million dollars. The business had three employees none of them had contracts in place. Buyers found that very risky and worried the employees will leave. The best offer as a result was $170,000. So then the owner went away, got employees to sign formal contracts which assured the buyer and it led to the full asking price. I see how that’s a winner from doing it but what about buyers who are buying not because they want to keep the team on. But because they have their own team. They want to just take the asset and have their team run it without adding more expenses, in fact, reducing expenses of having existing team in place. By signing contracts aren’t you preventing them from doing that?

Thomas: Yeah, generally speaking I would say the vast majority of the time the buyers choose to keep on the existing team. Generally speaking for, at least, six months. It is quite rare for a buyer to come in and have a complete shake up very early on. Especially if you’ve got freelancers or employees who are quite key to the business. So you’re correct in that a lot of buyers do look it in that way and a lot of sellers think that’s what might happen. But generally speaking if you’ve got loyal staff who’ve been around for a while then it shouldn’t be a problem., And generally speaking most freelancer contracts have break clauses in them. Maybe like two months or three months so it’s rarely going to work against you having formal agreements in place. In my experience 90%, at least, 90% of buyers will keep the existing team on beyond the sale.

Andrew: I see. I would never expected that. I mean, at the number that we are talking about here. When we are talking about a sale for quarter million dollars, then it seems like the asset is more important than the people but you are saying you’re finding that it’s a people too.

Thomas: It really depends. Some businesses might not have any employees so the point is irrelevant. In other cases they might have five freelancers in the Philippines who work on the business, have been for years and they basically do all the work. So in that case it’s slightly more critical to the process. So it really depends on the business. Everything’s
different but generally speaking if you do have people working for you, get then to sign something.

Andrew: All right, thanks for talking about how you do this and teaching us what we can do to prepare our business for sale. Your company is called … and what you do is you sell businesses. Your company is called FE International. You changed the name. What was it before?

Thomas: It used to be called [inaudible 00:37:40] but we went to a slightly more formal name kind of more in keeping with the kind of businesses that we sell now [inaudible 00:37:52]–

Andrew: Which is …Basically it sounds like that is connected to Flippa. You’re saying if you’re thinking Flippa, if you’re thinking about buying company and quickly flipping it and selling it we’re the company and now it’s no longer about that.

Thomas: Yeah, 2010 that was what the company was about basically buying, selling, flipping websites, but four years on we’re now a full service brokerage firm. We don’t flip sites anymore. So the name was no longer in keeping but anything else is still the same company just different name.

Andrew: Same company, same people, the site is FEinterbnational.com My guess is a good person to follow up with you is someone who has a business that’s doing consistent revenue. What’s minimum revenue and profit that you like to talk them with?

Thomas: Yes, generally speaking anything over $10,000 a year, sometimes smaller than that $5000 a year.

Andrew: Even someone who is making $5000 a year you could sell the business?

Thomas: Yeah, we are funny. At the moment businesses making $5000 a year or selling for $15,000. We’ve got quite good over the years we’ve built quite a processes. I’ve got a good team in place. So we’re quite efficient in sales. We can get them through in a way it is profitable for us but a lot of other companies in the space can’t get those through in an efficient way to justify it.

Andrew: Yeah, because it does require a lot of work to sell a company. All right, feinternational.com. Thomas, thank you so much for coming in here and talking about this and teaching us.

Thomas: Thanks, Andrew. Appreciate having me on.

Andrew: Great. Thank you all for being a part of it. Bye everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to boost your productivity
(By journaling)
Taught by UJ Ramdas of Intelligent Change

Master Class: Journaling

DOWNLOAD VIDEO DOWNLOAD MP3 Report Bugs

Course Leader: UJ Ramdas, Intelligent Change

UJ Ramdas is the co-founder at Intelligent Change and the author of The Five Minute Journal which teaches you how to apply the principles of positive psychology.

Master Class Toolbox

Course Cheat Sheet Mind Mapping Software Accountability Software with a streak Write a letter to your future self Double Double (book)

Transcript

Andrew: This session is about how you can boost your productivity by journaling. The session is led by UJ Ramdas. He is the founder of Intelligent Change and the author of “Five Minute Journal,” which teaches you how to apply the principles of positive psychology. My name is Andrew. I’m here to help facilitate, and I’m the founder of Mixergy where proven entrepreneurs like UJ teach. UJ, welcome.UJ: Thank you for having me, Andrew.

Andrew: There was a time that you were living in India, and you walked over to your doctor and you asked for what?

UJ: Well, I basically said I needed to be off school for three months, so I need a note from you that will help me do that. And I used the same note over and over and over again for almost three months, where I didn’t go to school at all. And I stayed at home and I did my best. I studied my ass off to get to Canada, about six or seven months later. It was an incredibly painful time in my life and I’m happy it’s over.

Andrew: That’s one of the reasons why I want to start with this pain. I want to show people that journaling isn’t just about writing your thoughts down on paper or writing like in elementary school, it was “Who do you love?” And “Who loves you?” There is, yes, deep emotional release and work that can be done through it, but there is a meaningful change in your life that can come as a result of journaling. So you were in this place where the academics were so rigorous, where you weren’t happy about what you did in school. In fact, I think we even have a photo of you in school. Let me bring that up here. Which one of these shadows on the screen are you?

UJ: So I’m on the right, the guy with glasses. There’s only two guys there, it’s easy.

Andrew: I see, on the right, kind of on the bottom.

UJ: Yeah.

Andrew: What is so bad about there? You’re smiling there, everyone’s smiling there. What was so bad about being in India that made you feel like, “I’ve got to break free,” and journaling was one of the ways that you did it and built a business and so on. What was so tough there?

UJ: Well, first of all, when there are pictures, everybody’s smiling.

Andrew: Right, good point.

UJ: And the other thing is that in India, very similar to China and Russia, the academics are ridiculously rigorous. So in comparison, high school in North America is laughable because people do everything but study. You know, there’s cliques, there’s this, there’s that, there’s no time for that. We’re covering, in grade 11 and grade 12, I later would find out that, in engineering colleges, they taught what we learned in grade 11 and 12, in year one and two.

Andrew: So what’s so bad about that? Everybody, I think, who’s listening to us aspires to do more. And if there’s an academic system that pushes them to do more, that feels like a great environment. What’s so bad?

UJ: It does feel like a great environment, but when you have teachers who don’t always support you, and you have a student to teacher ratio of about 30 to 40 to 1, you really start feeling the pressure.

Andrew: I see.

UJ: And there’s also, in an environment like that, the academics are the only thing that’s prized, everything else doesn’t count for anything.

Andrew: Right.

UJ: And so as somebody who is always used to doing things myself, and is used to have a rebellious nature and nearly dropped out of university multiple times because I knew what I wanted to do. And I just had to stay in the system to get to where I wanted to go. And so pretty much all your audience can relate to the fact, as entrepreneurs, as wanting to do things your own way. And not giving a crap about, can we swear here?

Andrew: Yeah, you can, yeah.

UJ: Good. Now I’m going to talk about how existing systems exist for a completely different reason. So it was painful because I wanted to get out of it and create my own system where I could thrive.

Andrew: All right. So I understand how a plane ticket could get you out of there. I understand how a great job that pays you over the course of 20 or two years and you save up enough money can get you out of there. How does journaling allow you to break free of this life you weren’t happy with and get you to Canada, whereas I’ve said you built up your business and built up your reputation. How did journaling help you get there?

UJ: Well, because journaling helps the unconscious become conscious, how journaling helps you solve problems. Journaling helps you work with your emotions. Journaling helps you figure out plans and execute on them. Journaling helps you stay on track of things, to ensure you follow through on something. Journaling helps you make sure you’re making reliable progress, and not just lying to yourself.

Andrew: What do you mean by lying to ourselves?

UJ: Because everybody would like to think they’re making progress, that’s the truth, right? Somebody who’s 35, 36, 37 would like to think every year of their life was spent in progress, yet age does not correlate with wisdom. So you could be 37 and reliably not have made progress during a significant chunk of it, unless you test it, unless you had metrics, unless you kept tabs on things. And my biggest fear is not making progress, is not making sure I’m better every day, and I’m doing everything I can to do that. Assuming I did everything I could, and the results are there, let reality speak for itself. But I didn’t, that’s massive mistake on my part and I can’t forgive myself.

Andrew: That’s one of the differences about the way you see journaling from the way others do. You want it to be a way of keeping track of progress, a way of ensuring that we grow as people and also a way of working through. Do you remember the day that you were on your flight to Canada?

UJ: Absolutely.

Andrew: What was so exciting that is making you smile?

UJ: Well, it was freedom, that’s what it was. It’s the most beautiful thing you can ever taste, touch, smell, or experience, freedom.

Andrew: What’s one of your proudest accomplishments as an entrepreneur? And we’re going to go into breaking down your process of journaling, and more importantly, how can someone listening to us who says, “I’ve done it before and never stuck with it,” how they can stick with it now, who someone says, “I don’t have enough time.” What they can do to still journal even they don’t have time and will keep showing how there will be benefits, benefits, benefits, productivity, change in your life, if you do what UJ’s talking about. But what’s one thing your especially proud of accomplishing since you flew to Canada?

UJ: So there’s this moment that I had, and some people are also lucky to have, when you recognize somebody you admire, admires your work. And you could talk about revenue, you could talk about profits, and you could talk about numbers, but really, what human beings crave is freedom and love. And in whatever ways that might mean, for everybody it’s different. But for me, it was having the people I really respect and admire use a journal. I’m a fan of Tim Ferriss, his work inspired the “Five Minute Journal” and him and a bunch of other people I really respect and admire using the plan.

Andrew: Here he is.

UJ: It kind of allows me to feel grateful and proud of what we’ve created.

Andrew: Yeah, there’s a guy who values every minute of his day, talking into a camera and talking about your journal, your process, and how he advocates and gets a lot out of it. All right. So he’s a believer, I’m a believer, you’re a believer. I’m sure that the person listening to us now is starting to understand. Let’s walk them through how to do it, starting with the very first step, which is you say, “Look, keep a five minute journal.” What is a five minute journal?

UJ: So before I get into that, I just want to mention one major principle. Every journal has a purpose. Every journal, there is an end goal to get somewhere or something with that journal. You don’t just journal for the heck of journaling. I don’t journal for the heck of journaling. Other people do, they might, that’s fine. That’s just not how I approach it. For me I need to get something out of it, to do something. And so each of the tactics we’ll talk about has a purpose. There’s something you do it for, and there’s tangible things you get out of it, so we’ll cover each of those purposes throughout the tactics.

Andrew: Okay. So …

UJ: So let’s start with the five minute journal.

Andrew: Yeah.

UJ: So the purpose of the five minute journal is really to improve happiness, improve well-being and keep on track with the things that happened in your life. And it’s really simple. I think the format is on the …

Andrew: Here, I can show it actually right there on the screen. Wait, it’s taking a sec, there we go.

UJ: There we go.

Andrew: This is what it looks like.

UJ: So the format is fairly simple. There’s five questions, each of them take about a minute each and you move through them. There’s the white portion at the top, you do it in the morning, and the shaded portion at the bottom, you do at night. The idea is that it’s like a toothbrush for your mind. You do it as soon as you wake up, right before you go to bed. You start and end the day with it. And those are two very powerful windows of the day to set the direction and do a wind-down. And the questions are very targeted, they’re very specific, they help you do very specific things. I don’t want to get into the research behind gratitude journaling, but let’s just say writing three things you’re grateful for and experiencing the emotion can go a long way for your happiness in the long-term.

Andrew: So the questions that you have here, or the guides that you give people are one, “I am grateful for …” and they list three things. In this example it’s, “I’m grateful for the warm bed that I sleep in, I’m grateful for the body that is working in perfect harmony. I’m grateful for the incredible friends in my life.” Second question is, “What would make today great?” And I’ll just read one of those three, and that is, “Sleep before 10 p.m. would make it great. Send a thank you note to mom would make it great.” Then you say, “What’s my daily affirmation?” And it’s, “I am confident and comfortable in my own skin, and I live with passion and purpose.” Those are the three things that you want us to do in the morning, and then at the end of the day we list, “Three amazing things that happened” that day, and “How could I have made today better?” So this seems very simple. Here’s one of my challenges when I see your work, it seems excessively simple. It almost seems too simple. What happens because we do these questions?

UJ: So first of all, in the world of behavior change, simple works, complicated fails. So actually the idea of the journal came from one of the journals I used to keep at night before I used to go to sleep. I used to take 20 minutes. I showed my friend and business partner, Mal, [SP] the format. And there was no way it took 15-20 minutes. There’s no way that a regular person was going to do that. He was like, “Dude, you’re too intense, this is not going to work.” And so we had to consistently whittle it down, whittle it down, whittle it down. I used to write 10 things, 10 amazing things that happened that day. And we actually decided to shorten it to five, and eventually, because of massive feedback we got from multiple people, had to shorten it to three because most people can’t think of five. Surprising and sad but …

Andrew: I see, but you’re saying, if we’re going to do this consistently and have everybody who’s listening be able to do it, we have to keep it this simple. Yes, we could make it more complex and add all kinds of benefits, but if they don’t do it, then none of those benefits will ever mean anything. Okay. So then why gratitude?

UJ: Because, frankly it’s one of the most researched emotions in positive psychology, and it will give you the best bang for your buck, in terms of time, in terms of making your life better. You don’t have to ask me this, you can look up the science, there’s lots of it. Martin Seligman talks about it. There’s just lots of research behind it. And starting with gratitude is something that a lot of people talk about who you wouldn’t normally think would talk about it. Like ex-Navy Seal officers, people who are into physical training quite a bit. What I’m grateful for basically can be rephrased as, “What’s good here, right now?” That’s always a good way to ask yourself to train your mind to look at, “What are the things that are working?” Because in order to be more productive, in order to be happier, in order to be more positive, in order to solve more problems, you have to ask that question, “What’s working?”

Andrew: Yeah.

UJ: And you train yourself to ask that question every day in the morning as soon as you wake up. You train your mind in a very specific way.

Andrew: So when there’s an issue and there’s a challenge, I’m aware of all of the things that I have going right so that I face it with more confidence, but also that I face it with an awareness of all the tools I could possibly use.

UJ: Any time there’s a challenge, you fall to the level of your training. This is just training.

Andrew: Okay, all right. And I’m looking here at my screen where you say, “What would make today great?” That simple act of planning for the day just by making a list of three things that would make it great. I can see how helpful that is, affirmations I can see that, end of the day we talk about what happened that’s great today.

UJ: [inaudible 00:13:22] the affirmations in a second, because some of the audience might be like, “Affirmation is a little touchy-feely for me. I don’t know if this is going to work.” Well, what if it was a question like, “Who do you want to show up as today?” “What kind of person do you want to be today?”

Andrew: I see.

UJ: You get to choose every day in the morning, just by writing it down. And there’s enough research, there’s stuff from Cialdini and influence talking about commitment and consistency. People are a lot more willing to follow through on something if they write something on paper.

Andrew: That’s a good point.

UJ: And here’s your opportunity, put it on that paper because you’ll find yourself in the day kind of aligning itself a little bit more in the right direction.

Andrew: I like that you already anticipated that the audience here is going to be so against touchy-feely that we have to deal with that because that’s the reality of who they are. They don’t walk into an environment saying,
“I’m so open-minded I’ll try anything just because it sounds great.” They walk in saying the same thing you said at the beginning, “What am I going to get?” Because I have limited resources, limited time, and I have a lot that I want to accomplish in my life. All right, then finish it off with three amazing things that happen that day and then how could I have made today better? As a way of kind of a post-mortem for the day.

UJ: So three amazing things, same thing, gratitude in reverse, right? So I’m not going to speak to that very much. And the last question is, “How could I have made today better?” This is an iterative question, Kaizen, you’re all familiar with this. If you consistently change 1% of your day over time, in 70 days, you’re 100% better, right? So assuming you are …

Andrew: No, 1% is more than 100% better.

UJ: Well, in 70 days.

Andrew: Oh, in 70 days, okay.

UJ: So the last question is basically an iterative thing. You give yourself feedback, and don’t beat yourself about it. This is not an exercise in self-loathing. This is more of a detached exercise. So like if I were someone else and I were looking to tweak out my day, how would I do today better? The first 50 pages of the journal are just a guide in how to do this. So if you want to learn more about this, you can look it up online. We have the entire format there for free, including the writing. You don’t have to buy it. If you want to, great, awesome, but you don’t have to.

Andrew: All right, so let’s emphasize that, that they can get it for free. Where do they get it?

UJ: Well, FiveMinuteJournal.com, the entire format is there.

Andrew: Right here, the page I’ve been showing. There it is.

UJ: Yeah, you go down, and you can just flip through it.

Andrew: Let me click it right here.

UJ: Yeah.

Andrew: This is where we got our screen shot.

UJ: So if you flip back for the writing stuff and you flip forward for the pages and the quotes. So you flip back for the written material.

Andrew: Super. It’s a pretty ballsy thing for you to do, as long as we’re cursing I might as well say it. All right.

UJ: Well, the thing is most people who see it and see the value in it, will buy it. That’s just fact. If people would want to copy the format, go for it. They can do their own journal. That’s what I did for seven years, so I’m happy to share it.

Andrew: All right. Let’s go back to the board. The next thing you say is, “To get to know yourself better, use traditional journaling.” You did that, and it led to something like this. What are we looking at here?

UJ: All right, okay, cool. First of all, let me kind of talk about what it is, and how I got into it and how the story came to be. So traditional journaling is what you probably all heard and experienced when you think about journaling. And it’s the idea of the Morning Pages as made popular by the author, Julia Cameron, in her book, “The Artist’s Way.” And really what it is is it’s free-flowing your thoughts in a way to allow yourself to gain more awareness of who you are, what your thoughts are, where your feelings are, what the result is. And so the text that Andrew put on there was text that I sent this wonderful woman that I was dating at a certain time. And I had a few interactions with her and I was left feeling uncomfortable. I was left feeling disrespected, and I didn’t know what was going on there.

So I opened up Evernote, and I do most of my free-form journaling in Evernote because my mind moves very fast, and I like my fingers to be able to keep up with them. If I write, my hands won’t be able to write as fast as I’m thinking. So typically when I have that feeling of “Oh, I don’t know what it is, I’m feeling this, I need to figure this out.” I usually open up Evernote and go at it and ask myself questions. Ask myself what’s going on here, why am I feeling this? What’s the lesson here? What can I learn from this, and how do I ensure this doesn’t happen in the future?

Anyway, a long story short, about 30-40 minutes or so of doing this, I realized that in every other area of my life, except dating, at the time, it was really important for me that people respected my time. And they had integrity, you know. I’ll be here at a certain time. If they’re not there, stuff happens, I’ll call them and see what … I’m really sensitive to that. Somehow, in the dating sphere, that hadn’t been the case, and I realized very quickly, that if I was going to date someone successfully in the long-term, that had to be one of the requirements. It was a must and I was very surprised it wasn’t there. And so, in a short period of time I came to the conclusion, and that’s when I sent the text, I said, “Hey, we’ve tried doing this multiple times. Stuff keeps happening at your end, mostly bullshit excuses. That’s okay, Figure it out, and I wish you well.”

So that’s just one of the things of so many insights that you can get when you’re feeling a little off, or you know you have an idea ruminating in your unconscious, but it just needs to get out. It’s like airing your unconscious out for nuggets of gold. And those nuggets of gold can rapidly shorten learning cycles. It can increase your ability to anticipate things, in this case, your dating life as well.

Andrew: So I had a similar situation, not around dating but an epiphany that came from doing this kind of journaling. I went on a retreat with a journal and a list of questions, and like you it was a digital journal. It was an old phone that didn’t let me do much beyond just sit with the keyboard that I attached to it and journal so that I wouldn’t have any distractions. And I had a list of questions that I walked in there with. And one of them was, “Why am I being such a jerk?” And the reason I wrote that down was I wanted to be a speaker, and there was a group of people who I was masterminding with, who I got to meet through Toastmasters. And we were supposed to be helping each other out, but instead I was being a jerk to them.

And I had to sit down and really answer that because if I got distracted the page would be empty and I’d know that I was avoiding the question. If I was filling it with words that had nothing to do with why I was being a jerk then I could see that it’s not really answering the question. And I started to really push and say, “Why am I being a jerk?” I said, “I’m not being a jerk.” I said, “Then what’s going on?” And I wrote down, “Oh, I’m doing this. I’m saying this. I’m saying this other thing that really bothers me.” I said, “Why am I saying it?”

And through this confrontation with myself, I realized that the problem was I’d already sold the last piece of my last business and I didn’t have another business I was working on and I was just in personal growth mode. And one of the things that gave me satisfaction when I was running a business or when I was going to school was saying, “This is the direction I believe you all need to come with me on.” So if it was a business it was, “We’re going to do affiliate programs. Here is why we have to do it. You all have to get on board,” and I would keep championing that. If it was going to school it was, “I think I need to be an entrepreneur. Here’s why entrepreneurship is great. You have to understand it.”

Well, once I didn’t have anything that I was championing, I still had this need for them to accept me as the leader or something, and to convince people to do something. So I would say something to the group like, “I think we should do a mastermind over the phone.” And they would say yes, and I would think I better push them to really follow, to make sure they’re really here and I’d say, “We can’t just do it over the phone, you have to do it on my schedule.” And then we would get on a call and I would say, “Well, we have to do it this way.” And they would say, “Yes.” And I would go, “No, with this twist, you’re not aware of it.”

What I realized was I just wanted to make sure that people were following me, that I had something to convince them was right. And it wasn’t until I confronted that that I understood what was going on and I could then repair the relationship. And as a result, become a better speaker and someone who could come here and have a conversation with you. And journaling forces me to have that kind of insight. Well, I was going to say all of the time, but whenever I can sit and have those long sessions.

UJ: And that’s good material, right? That’s amazing material because once you have that, you improve your life so much more. You’re so much better to other people. You know your boundaries so much more, and you know all those triggers of when you’re kind of moving forward towards old patterns.

Andrew: Yeah, right. So the next time it happens, I understand why I’m doing it, and I recognize it, and that’s what journaling does. It’s going to be, yeah, it’s incredibly, incredibly powerful. What do you do to make sure that you find the time? We talked before we started about how I’m feeling like now that I have a son, he’s about eight and a half months, I don’t have that time to sit and do these long-form entries, the ones that helped me.

UJ: It’s typically like as soon as I start my work day. The first 15 to 20 minutes are just writing, just journaling, and figuring out whatever’s going on, and this stuff just starts popping up. And if it’s something really important, I’ll just stop and follow it all the way down. If it’s not, I’ll just shelf it and move on to getting work done. It just becomes part of the work day. So I don’t really start work before I do it.

Andrew: I see. The way I start my work day with email sometimes, you start your work day with Evernote and journal through.

UJ: Exactly. And once you get a streak, you don’t want to stop.

Andrew: Because you’ve done a streak of entries in the journal, right?

UJ: Right.

Andrew: Okay. On to the big board and the next thing we want to talk about is to use a problem solving journal to flex the idea muscle. What is that?

UJ: So this is different from the traditional journaling stuff. This is just zooming in and getting your scope out, your sniper scope out, and figure out what the problem is. Let’s just destroy the problem with lots and lots and lots of ideas. As opposed to the Evernote, what I use for free-form journaling, this is on pen and paper, right? I do this specifically for figuring out problems and one question, and one important question that really makes all the difference. I don’t need to write a lot of stuff. The majority of the processing happens here and I just need to write what really needs to be written. And this is an example …

Andrew: What we’re looking at here on the screen is an example of something that you would have written down. This is what it would look like if we’re doing it the way you’re suggesting.

UJ: Absolutely. And it’s remarkably simple. I set a timer. I use the Pomodoro technique. Some of your audience might be familiar with it. It’s 25 minutes of single tasking work. You cannot get up during it. You should make sure you’ve got some tea, go to the bathroom before, all that. All you do is there sit down, for 25 minutes, just cranking out ideas for how to solve the problem. Typically, what you don’t see on this page, is I’ll spend the first 10 or so minutes refining the question. Initially, the questions might have been, “How do I make more money?” Or something. And then you refine it to, “How do we increase profit?” And then you’d refine to, “How do we increase profit by improving distribution?” Because distribution is really important, we reach audiences we normally wouldn’t be reaching otherwise.

Andrew: I see. So the way that at the top of this page it says, “How to increase profits while improving distribution?” That’s not the first question you asked yourself. Your first question is maybe something like, “How do I get more money?” “How do we get more profits?”

UJ: Exactly.

Andrew: You spend a lot of time just writing down the question in different ways until you get to the one that you really want to solve. And then what do you have underneath it?

UJ: Underneath it you just write ideas. And you can write as many ideas as you want. There is no filter on the ideas. What matters is you’re allowing your ideas to flow freely from your brain to your paper. The reason why you won’t take a lot of time is because ideas don’t take massive amounts of space. They’re like four or five words max, right? And that’s why you can …

Andrew: I see, I’m looking right here at the screen and it says, “Podcast advertising, sponsor events, incoming.” Oh wait …

UJ: Incoming blog traffic.

Andrew: Incoming blog traffic, got it. So that’s the kind of stuff that you’re thinking of. Just sit down, write, write, write, all the different ideas that you can come up with. I see. Why not just walk around and think about it? Why not take a walk somewhere, or maybe on your commute say, “I need to come up with a way to increase profits. How do I do it?”

UJ: You can. But most people do that anyway. I find, for myself, this is a way to concentrate all my attention, all my energy on one thing. And guess what, try spending even half an hour to an hour on it, I might not solve it. Some of the best ideas I get during restorative yoga, where I’m doing nothing. I’m barely even moving. But that’s not a reliable strategy for solving problems for me. It’s nice when you have an idea, but there’s no way to direct what idea you want and how it’s coming from. And so lots of people take walks for having good ideas. That’s great. It’s wonderful you’re having great ideas, but I don’t know where that idea is coming from. I had an idea for a website a week ago, in restorative yoga. I looked it up and someone already had it. But the point is I didn’t know if that idea was going to come. I had no idea, I wasn’t looking for it. How do I find the ideas I’m looking for? This is how you do it. Direct your conscious attention and awareness almost like a laser beam on this thing and do not move until you see something moving.

Andrew: That’s another thing about accountability, that the fact that I look at a page that has this question at the top and only two answers, or three possible answers, three ideas, tells me, you know what? I think I could do a little bit better. I think I need to push myself to come up with a few more items because when you see it be so sparse you know you’re cheating yourself. You know you’re trying to get away with something. So I’ve had the same experience. I do it digitally. Why are you recommending it on paper?

UJ: This is how I do it. You can totally do it digitally. If that’s what works for you, great. But to me, the tactile experience of pen and paper, I do this and interesting things with my hands.

Andrew: I see the flipping.

UJ: Yeah, it’s exciting for me. I usually get a cup of coffee and that’s my routine. Caffeine fuels my thinking sessions, but that’s what works for me. Again, you can totally do it …

Andrew: I see, but unlike the traditional journaling, as you called it, where there’s so much writing that your hand can’t keep up with it and a pen is too slow, this doesn’t involve a lot of writing so you might as well do it with a pen and paper.

UJ: Exactly. James Altucher also calls this “Flexing the idea muscles.” That’s where the title comes from. His concept is if your brain isn’t hurting, you haven’t gone all the way through it. That’s also a metric you might think about.

Andrew: Make sure your brain hurts.

UJ: Exactly. Don’t stop until your brain hurts.

Andrew: Yeah, he starts every day with those ideas, and then he’ll sometimes mail them out to people. Say, “Here are my ideas for you.”

UJ: He’ll have waiter pads. That’s what he uses, right? And whatever works for you, waiter pads, this bound notebook, right? Evernote, it doesn’t matter. As long as you’re doing it, and you’re treating it as if you’re concentrating the rays of attention on one point and you’re searing the problem, you’re good.

Andrew: All right. Back up to the board. Next big thing we’re going to talk about is to create content, to create your plan, use mind-mapping. This is not something that we expect people to read, but we want them to just get a sense of what it looks like. What is this?

UJ: Okay. So this is my entire screen. It’s kind of built … This is kind of shortened down, but this is my idea on how all the things I wanted to cover in this course. Before I started this I had no idea, how or where, or what I was going to talk about. But this mind-mapping, if the analogy for the problem solving journal is more of a sniper scope, mind-mapping is more of zooming out. You’re zooming out completely, and you’re looking at the big picture. You’re getting a 10,000 foot view on what’s going on here. A lot of people use this for organizing books, content, courses. Whenever you have a large amount of material that you need to organize in some way, use mind-maps. It’s also typically how the mind works. It works in associations you would’ve seen [inaudible 00:30:57]. Lots of lines connecting this topic to this topic to this topic. And all it does is it allows you to look at it visually and associate relationships between those things that you might not have connected before.

Andrew: Let me show it here. Again, we don’t expect people to be able to read it, but it does say “Mixergy Course” here. You have a few phrases that are circled, including “Creativity journal, letter to your past self, five minute journal, problem solving journal, mind-mapping, keep track of your goal.” It sounds to me like these are the big points that you want to cover.

UJ: Yeah.

Andrew: And if you had another one, you’d write it down. It seems like when you circled it you meant, “Yes, this one’s in. This is what I want to cover.” Am I right? And this one, which is called “Resources, or think visually”, you decided not to circle so they’re not included.

UJ: Yeah, well, not everything is included even in this course. This was just created when I thought about it. But the circled ones are the main titles.

Andrew: Main ones. And then I’ll read one of them, the one that we started out with, “Five minute journal,” and then it says, “For happiness.” Then there’s another line from the, “Five minute journal.” It says, “Gratitude journaling.” Another line from the phrase, “Five Minute Journal” it says “Priming your brain, etc.” What are those?

UJ: Those are just ideas and concepts that I thought would be useful for your audience.

Andrew: Okay. So you’re just coming up with different ideas for what you might talk about around the concept of “Five minute journal.”

UJ: Exactly. It’s just putting everything, all the stuff on there. It doesn’t mean it’s going to show up in the course, it doesn’t mean anything. All it means is it was somewhere in my head at the time.

Andrew: I see, and so “Problem solving journal,” I see James Altucher. His name is on there because he’s someone you might want to talk about his process. All right. I see.

UJ: Yeah.

Andrew: What are some issues that we would use a mind-map to deal with?

UJ: So creating a course, writing a book, creating content, organizing content. So whenever you’re looking to create something and you have no idea how you’re going to create it and how it’s going to show up as, this is a great way to do it, and put everything on a mind-map, and then start connecting. So first you put everything that you think would be valuable, or useful, or important to mention on there. And you could just start writing, typing up 100 things, 200 things, it doesn’t matter. As you saw, it was fairly large. You had to zoom in on specific parts. All of it actually doesn’t even fit an entire screen.

Andrew: What program did you use to create it, if it doesn’t fit?

UJ: Scapple.

Andrew: What is it?

UJ: S-C-A-P-P-L-E.

Andrew: S-C, I’m going to write that down and include that in our session notes. S-C-A …

UJ: P-P-L-E.

Andrew: P-P-L-E. So you know what? I’ve had people, I’ve had entrepreneurs in here talk about you and, of course, what they know you for is the “Five Minute Journal,” the guy who’s going to show you how to make journaling really easy and fast and not take up a whole day. And now we’ve talked about mind-mapping. We’ve talked about problem solving idea journals. We’ve talked about the traditional journal. We’ve talked about the five minute journal, and we have so many different journals that it feels like it’s going to take up our whole morning.

UJ: First of all, you don’t have to do this every day, right? You do this when you need to. I do mind-maps when I need to. When I need to create content, I need to create a course, I’m looking to create a new product, whatever. I don’t do this every day. So there’s one issue right there, right? I will also say, I’m a little bit different. I have about four to five journals going on at any given time. That doesn’t mean you need to or you should. It just means I find it useful and effective for me. There are some ways and systems that you can allow yourself to do this consistently every day and become better at it, like the “Five Minute Journal.” That’s what it was designed for. Look at each of these journals as a prescription for a problem, right? So if you have a problem you want to solve, use a problem solving journal. Ideally, if you can do it every day, your muscle is going to get stronger, and you’re going to get better at solving problems. But if that’s not so much of a priority in your life, don’t do it.

Andrew: I see.

UJ: Right? So if the pain is big enough in your life, you’ll do it. The only reason people don’t have behaviors and have this in their life that they want and don’t yet have, is the pain isn’t big enough. So if the pain isn’t big enough, don’t start.

Andrew: Okay. So when I feel overwhelmed I’m acting like the guy who opens up the fridge and says, “How am I going to eat all of this in one sitting?” And the answer is “No.” In the morning you can have some cereal and milk. In the afternoon you can have this salad, etc. So you’re saying, “Here are a bunch of options for you. When you need them, go to them.” The “Five Minute Journal” sounds like the only exception to that where you would want us to sit down every morning and think and write and every evening end the day with the two.

UJ: Absolutely. You got it.

Andrew: All right. Let’s go on to the next big point which is to find the delta with a goal tracking journal. I think I got, here, what is this? I can’t believe you sent this over, and I’m glad that you did, this is you.

UJ: This is me, yeah.

Andrew: How did Anne Marie get you to send over a photo of your chest?

UJ: Yeah, well, preservation skills.

Andrew: Sorry?

UJ: Preservation skills.

Andrew: I guess, because you know what? I went working out earlier this morning with a few people who I know from Mixergy and I thought, “I’m not even sure that in this locker room I’m comfortable with them seeing me with my shirt off, or in just a towel.” And now you’ve got the whole Mixergy audience seeing …

UJ: That was my before picture. Just so we’re clear.

Andrew: All right. Way to go, Anne Marie. But there’s a bigger point here. The reason we’re showing this is because this relates to one of your goals. What was your goal?

UJ: So about a year ago I nearly died in a motorcycle crash, and I decided that I would show my body who’s boss and the only way I would do that is consistently keep on track of how much weight I’m gaining and how much muscle I’m building. And so this is what you do, at the risk of looking like a frat boy. I had to take selfies in front of the mirror every week. And keep on track of working out, keep on track of workout journal. I think we have a picture of that as well.

Andrew: Yeah, here let’s take a look at that. So were you taking a picture every day like this? And also doing this?

UJ: No.

Andrew: No.

UJ: So every week or so, and also weighing myself every day. And so there’s a calendar I used to keep, I still have it and as soon as you wake up, just weigh yourself. So you’re weighing yourself at the same time so you’re accounting for water weight, so to speak. So this is just a quick example of a workout journal. I’ll be honest, I don’t have the best workout journal in the world. Other people have different tactics and tricks and interesting things that they do with it. But all you do is you track one metric over time consistently, you’re going to get better. And that’s what this is here to show, right? If you’re working out without metrics, you’re compromising results.

Andrew: And so you’re journaling what you’re doing every day as a way of measuring your progress and not kidding yourself about how I’m going to the gym every day. Why am I not getting healthier? Why am I not looking buffer? Well, if you look at your journal and you see that you’re doing the exact same thing all the time, or maybe you’re doing fewer of it than you realize, I’ve been making excuses and that’s why I’m not getting the results. So that’s one thing. The other way you want us to journal for goal setting is to have one metric that we follow on a regular basis, and so you would weigh yourself. For me it was revenue, I might journal about my daily revenue, right? That’s what you’re talking about.

UJ: And also, Tim Ferriss is a really good case study in this book, “The Four-Hour Body”. And I don’t remember his name off the top of my head, but there was someone who said, “You know what? I just want to lose weight over time.” And all he did was weigh himself every day. And he had a target weight, and he plotted this on Excel, and had a target weight where there was a red line and he would never allow himself to go under the red line, or so over the red line. And he didn’t take any conscious effort to diet, to exercise, to do anything different. And in about seven months he was some 20-25 pounds lighter, I don’t know the exact number. But just the act of measuring himself every day over time, and keeping track of that number led to results that he wouldn’t even have gotten if he didn’t do that. He wasn’t consciously taking effort at all. No dieting and no exercise. So just by measuring it you can make significant improvement over a period of time.

Andrew: You know what? I was Googling it over here on this computer to see if I could find the guy’s name very fast over here, but coach.me is so good at SEO, and they have so much content related to weight loss and 4-hour body that basically all my responses, all my results in this Google search are coach.me. That’s the company that used to be known as Lift.

UJ: Lift. I still prefer the landing name, Lift. I think their new branding sucks.

Andrew: You do?

UJ: I still use Lift all the time. I use it right now.

Andrew: Lift is an app that was used in the past to just make sure that you were doing things on a consistent basis. If you went to the gym, you would mark off that you went to the gym, and you would get to see how many days you did it in a row. And you could compete with your friends to see if you had achieved it. Then they added this coaching feature where, if you’re going to the gym every day, you might want a coach, and they were connecting you through the app to one. There’s yours, and that’s why they rebranded. Tilt the top down a bit.

UJ: There we go. Better?

Andrew: No, tilt the top of the screen down so that it doesn’t reflect.

UJ: I see.

Andrew: No, not your computer, sorry, the phone. Yeah, like that, and closer and all right. That’s about as good as we’re going to get.

UJ: Yeah, okay.

Andrew: All right, cool, and I think we’re cutting off the top of your head. I’m going to include that also in the session notes. What do you use coach.me for?

UJ: Keeping track of things that I want to do on an everyday basis. Nothing crazy. Just making sure I like the streak function. I like the fact that it gives me a high five. I love it.

Andrew: And do your friends get to follow you on there too? So if you don’t hit …

UJ: Yeah. Exactly.

Andrew: That’s one of the other benefits, that you can see who’s on the leader board, who’s been doing this for the most days in a row, and your friends get to see if you’ve been doing it.

UJ: I’m also, in a total aside, but I thought this would be of interest to you and your audience. I’ve been doing this thing that’s called a prop bet with a good friend of mine who originally came up with the idea, and he’s a professional poker player, so this is how it works. Every day we have X amount of habits. I think I have five habits right now, and he’s got about six habits. So every day the total fee is about 50 bucks. So if I don’t do one habit, it’s $10 off for me. And if he doesn’t do one habit, it’s just under 10 because he’s got more habits, so 50 divided by six. And we’ll do it for a two to three week stretch. And whoever loses, the money goes into a pot, and we decide what we’re going to do with the money. Give it away, give something, we don’t use it for ourselves. And what’s really great about that is you can use each other for motivation.

So then there’s a competition thing. I started flossing. I’ve never flossed before, a foreign habit, and the only reason I started flossing was because I put it on this thing, because I didn’t want to lose money on it. And it’s one of the best things I did for just making sure I’m staying on top of the habits, because you know, every day you update that and you comment each other on this Google spreadsheet. It’s an incredible way to make sure you’re on top …

Andrew: And that’s how you keep track of it, a Google spreadsheet that you both share.

UJ: Yeah.

Andrew: I’ve seen people do it with also getting up at a certain time. You have to be up and texting, “I am up” into this mutual text, and if you don’t then you’re dinged 10 bucks.

UJ: Oh, brutal.

Andrew: All right. On to the big board for our final point which is travel to the future, then think backwards.

UJ: Actually, we’re missing one.

Andrew: Am I missing one? Oh, right. Yes, here, let me highlight that, do a review to stay on top of your goals. A weekly review. This is one that came to you from a friend who said what?

UJ: It’s really interesting. So I have a really good friend, Dan Gel [SP], and we were having coffee on a Sunday morning and he said, “You know, I’m going to do my weekly review. Have you heard of the five things exercise?” I’m like what? And he shows me this template, and he said, “I do this every Sunday.” And I said. “You’re kidding me?” How have I not thought of this, and how have I not been doing this for all this time? And so I started doing this, and it’s the most significant thing I’ve done in the last few months of my life. Just by making sure I sit down every Sunday and make sure I do it in an environment that’s not work related, so usually in a coffee shop. Where I can just sit down and look at all of the things that I did the previous day. So I think there’s a template.

Andrew: Yeah, this is. Here it is, and we can give it to everyone who’s watching. This is your weekly review template. and this is what you’re going to list. Five things you’re grateful for for the week, your intentions for the upcoming week, what are five things you’re proud of for last week.

UJ: And so what’s interesting here is this is a weekly review and weekly planning all in one, right? So you look at all of the intentions for this week, maybe look at the intentions for last week and you see what happened. Did you follow through? Did you not? If you did, there’s a “done” next to it. If you didn’t, you start talking. you got to explain yourself. So it’s more like you’re monitoring yourself and seeing how much you’re actually saying you’re doing and how much you actually end up getting done.

Andrew: How can you keep this from being another to-do list, in a life where it feels like we have emails to-do list, we have our reminders app on our phone that’s a to-do list, we have to-do lists everywhere. How do we keep our weekly accountability journal, our weekly review from being another to-do list?

UJ: Because there are things there that are specifically meant to evoke pleasure, not the sense of “Ah, I got to do this.” For example, I have five things I’m excited about. Are purely experiences for me, right? Five things I’m excited about is purely experiences, all the things that I’m looking forward to, when I don’t have to do shit, frankly.

Andrew: I see, yeah. So you’re saying it’s not just about the to-dos or what did you do, it’s also about what are you excited about having done in a way of touching into the things that are going well in your life.

UJ: Absolutely, and there’s one final question that’s actually my favorite, which is five lessons I learned. And how I’m going to implement them in the future because that’s the feedback loop right there, right? So if there are some things that you learned this week and you have to bring them up, you have to dig them up, and you journal about it, and then you ask yourself, “How am I going to implement this next week, moving forward?” You can learn something, for example, my gym bag got stolen a couple weeks ago. And as a result, my internet security is tight as hell.

Andrew: I see, that you learned to stop …

UJ: Yeah. So I learned to realize where else in my life am I not as secure as I want to be. And I realize I hadn’t changed my passwords for a long time, longer than I’m willing to admit. So I realized, shit, this is a massive pain point, and the gym bag was $200 nothing, right? But all the internet security stuff is worth a lot more. And so I’d much rather that be a lesson that allows me to get that security tighter than anything else. And so a lot of people …

Andrew: How long does it take you to do all this?

UJ: Huh?

Andrew: How long does it take you to write this whole thing down?

UJ: Half hour to an hour, tops? The first time it takes longer, because you’re trying to get the hang of it. But once you’ve got it down, half hour to 45 minutes is all it should take.

Andrew: On to the big board for now, our final point, the one that I jumped ahead to earlier. This is the one where you say travel to the future and think backwards, and do that as a way of reaching your long-term goals.

UJ: So this is the most touchy-feely part of all this …

Andrew: I think we’ve earned the right now to be a little touchy-feely. People know that we’re not just coming from a place of do it because it feels good and for no other reason. We understand that we have …

UJ: That’s right. I appreciate the fact that we’ve earned it but I still want to earn it one more time. I want to ensure that this is legit. So Cameron Herold has written really good books, I’m not sure if you have interviewed him, but if you haven’t it would be a great guy to interview. He’s the guy behind 1-800-JUNK, and is really good at scaling companies.

Andrew: 1-800-GOT-JUNK.

UJ: GOT-JUNK, that’s what I mean. He wrote a book called “Double Double,” and the first chapter is the only chapter I’ve read by the way. It’s called A Painted Picture. And he talks about the process that he takes the COOs of companies through, to build the vision for the company. And that’s the very first chapter of a book, on how to scale your company by a long shot. It involves walking away from the office, sitting somewhere where you’re open to creative ideas, and just write down, in three years from now, or until whenever you hit your goal, what does your environment look like? What does your company look like? What does your day-to-day operations look like? How do the people interact? How do your customers interact with your employees? What’s the culture like? What time do people go home?

All of the details, to envision this whole thing, this whole idea of how this company is going to function day-to-day. Not how it’s going to get there, how it’s actually going to show up as when the result is reached. And consistently, time over time, this has been an incredible exercise for COOs to do, to scale our companies. And so this is kind of where it comes from. It comes from the ability to imagine and put yourself in a position where you’re already there, and you’re walking backwards, trying to figure out how to do it.

And there are many ways to do it, and the simplest is very similar to what Cameron suggests, to go somewhere and write a letter to yourself. Write a letter as if you were three years from now, having achieved whatever you want to achieve, in business, in life, whatever. And write back to yourself as if you’ve already achieved everything you want to achieve. Write back to yourself talking about how life is now, what time you wake up. This can also be called the ideal average day exercise. In fact, Kern talks about it quite a bit. Where you move through your day, what time you wake up, what do you have for breakfast, what your bedroom looks like, what time do you start work, what does your work involve, how do your customers look like, what kind of products and services do you offer, how large is your company, what revenues or profits.

Of course, you want to get all that in. But also you to get into the experience of it, into the emotion of it, into the full flow of actually being there and who are your friends? What do you eat? What does your body look like? What do your relationships look like? Do you have a wife? Or a husband? All of that. How do you end the day? How does your year look like? It’s more of an imagination exercise, as if you’re writing back to yourself. Kind of having achieved all of this, how do you feel? And how you want to tell the person who you’re writing to this is all possible and I’ve done it, so here’s how you think. How I think you can do it.

Andrew: You actually had a friend who did it, wrote it down, and what happened? Can you tell his story I think this is …

UJ: This is a pretty fantastic story. This is actually a really good story to end on. He’s a good friend of mine, and at the time when he wrote the letter he was 17, and he was in a really dark spot. He recently had an injury in his elbow, and it was a nerve injury too so it took about a year for his hand to heal. And he was really angry, was really frustrated and he was broke and he wanted to change something. He wanted to do something desperately and he started writing. In this emotional intensity he started writing about all the things that he wanted, as if he had already accomplished it. And talking to himself backwards in time. And he talks about how he has this multi-million dollar business, how he has this beautiful wife, how he’s overcome obstacles over and over and over again, how he has this great life and then he forgets about it.

He forgets about it for years. He forgets about it until he’s about 24 or 25, I believe it was 25. He’s cleaning out his house because he’s moving, and his mom brings out this letter to him and she gives it to him and he reads it and he starts crying. Because at the age of 25 he had accomplished everything he had written in that piece of paper. It was incredible for him to read, and he shared it with me about a week or two later, and incredibly for me to hear, because I had seen his life. I hadn’t seen him when he was 17. I’d seen what his life was now.

Andrew: And he’d made money. He had the family, he’d had the travel, he’d had the comfort. What’s his name?

UJ: He’s my business partner.

Andrew: Oh, really?

UJ: Yeah.

Andrew: Oh, cool. I’d love to see that letter. Is that something he’d be willing to show?

UJ: I’ll have to ask him.

Andrew: All right. He’s got to post that online if he can. You also say that there’s a site where we can send letters to ourselves if we prefer to do it electronically.

UJ: You can do that, yeah.

Andrew: Futureme.org.

UJ: I like to do it on pen and paper and give it somebody and have them give it to me next period of time.

Andrew: Oh, wow. Okay.

UJ: But you can do it whatever way you please, as long as you get it down. That’s good.

Andrew: You know what’s interesting? This site, futureme.org, allows you to read the letters that people post publicly, and see what they want for their futures and where they see themselves going. It’s all anonymous but if they want they can post it for everyone to see. Wow, that’s a really touching story what happened to your business partner that he actually used this idea and had his life reach what he wanted it to be.

UJ: And so this is a very powerful exercise, guys. Like you have to get over this whole touchy-feely thing and just do it. If COOs who want to scale their companies are currently in the multiple seven figures and want to scale to eight figures, are doing this, then you can take an evening out and do this for yourself. Trust me, it will be worth it.

Andrew: Your website is, let’s bring it up on the screen, FiveMinuteJournal.com. People can get the journal here by buying it. It’s on Amazon, where your reviews are frickin’ off-the-hook. Or they could get it here on your site. Let me just bring that up, because I’ve never seen anyone, well I don’t know never, I don’t want to exaggerate but, your reviews are fantastic on Amazon, aren’t they?

UJ: They’re good, they’re all right, thank you.

Andrew: All right? That’s great.

UJ: Thank you.

Andrew: Most people are hated on Amazon, it looks like …

UJ: Well, our audience typically is positive, so we have that going for us.

Andrew: Or they could just click and read it right here on your website and see the whole process. Thank you so much for teaching this. Thanks so much for being willing to be open with the world about the process and not just hide it all behind, I was going to say behind a pay wall, but frankly I do that. So I can’t put that down, I could just say, “Whoa, you’re putting me to shame.” Impressive that you do it, but also more impressive the impact that you’ve had on other people. Like I’ve said, before we ever had a conversation I’ve heard people talk about you. I’ve seen the impact that you’ve had on them, and I’ve admired your work for a long time. And it makes me so proud to have you up here on the site.

UJ: My pleasure, Andrew. Like I said, before we started this conversation, Mixergy has done more for me than you can imagine, and I’m just thrilled that you are just at it and that you continue to produce great content. I’m happy to be a part of it.

Andrew: Thank you. And if you’ve got anything of value, please let him know. Find a way to connect with UJ and tell him in person, via email, on the site, on Twitter. I just had someone email me and say, “Andrew, I did it. Here’s the guest I did it with, and look at the response.” And the response was basically, how can I help you? How do we connect? Here’s my phone number. I couldn’t believe it. From a guy who I interviewed who is really busy, and it all comes from just expressing gratitude, not seeing the person who’s on the screen as just another set of pixels on your computer screen, but seeing him as a person who’s just helped you, and reaching out and saying thank you, here’s what I learned, here’s what I got. Incredibly powerful, it’s a great way to start a relationship, or just also show appreciation and have somebody else be as touched as you were. UJ thank you, I’m going to start off by saying it right here, thank you so much for teaching us.

UJ: My pleasure Andrew, happy to be here.

Andrew: You bet. Thank you all for being a part of it, Bye everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to find your calling
Taught by Jeff Goins of GoinsWriter

Master Class: Find Your Calling

Report Bugs

Course Leader: Jeff Goins, GoinsWriter

Jeff Goins is the author of four books and a popular blog that you can read at GoinsWriter.com.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is about how you can discover what you’re meant to do. It is led by Jeff Goins. He is the author of four books and a popular blog that you can read at GoinsWriter.com.This conversation and everything we’re going to be talking about is based on his book “The Art of Work: A Proven Path to Discovering What You Were Meant to Do.” I’ll help facilitate. My name is Andrew Warner. I’m the founder of Mixergy, where proven founders teach.Jeff, thanks for being here.Jeff: Thanks for having me, Andrew. I love the show. I’m a big fan of Mixergy, and excited to be here.

Andrew: Thanks. You know what? The reason I was hesitating is I was looking at my beard there in the OneShot. Here, let me bring my OneShot up on my phone. Maybe I should actually trim down here. I’m trying to figure out what the length is of my beard.

Jeff: I don’t have that problem.

Andrew: No. You just shave right off?

Jeff: It just doesn’t grow.

Andrew: Oh, it doesn’t grow. I see. Okay. That is a whole other issue.

Jeff: Yeah.

Andrew: I’m glad you’re here. Because frankly, little things like that — do we grow a beard or not, do we send out this email or not — are challenging. And you’re about to show us how we can find what we’re meant to do? That’s the goal of this book? That’s the goal of our conversation?

Jeff: Absolutely, yeah.

Andrew: And you’re a guy who didn’t always have that figured out. In fact, let me just talk about one thing that I noticed here. This is an old photo of you, right?

Jeff: Yeah, very old.

Andrew: One of the things that I noticed here is — not a big detail, but a small one — you’re holding the guitar. And I heard about a time that you used a guitar to woo a girl, a girl named Lane. And I think that’s helpful for us to see one of the issues you were wrestling with. What happened with Lane?

Jeff: Yeah, I was just looking at that photo, and that’s probably from . . . I don’t know, six years ago, and I’ve got a . . . you know, and that’s the same kind of sweater. And actually . . . you know, we’ll point people to the book site. I think you show that later. But I’m wearing that same exact sweater. It’s . . .

Andrew: No way. Let’s take a look.

Jeff: Nope, the . . . yeah.

Andrew: Yeah.

Jeff: Same sweater. Oh boy. I need a wardrobe consultant.

Andrew: No you don’t. It’s working for you.

Jeff: Hey.

Andrew: Why waste time on a wardrobe?

Jeff: Classic.

Andrew: Let’s waste time . . . or let’s spend our time on things that are much more important.

Jeff: Indeed.

Andrew: I think. Go ahead.

Jeff: So one of my favorite stories to tell is about this girl named Lane that I crushed on in college. So it may surprise you that I’m in my 30s, because I realize I look — and if my voice cracks, I might sound — like I’m 14 years old.

And in . . . but when I was actually in college — which was, you know, whatever, over a decade ago — I had this crush on this girl named Lane my freshman year. And Lane was my freshman orientation leader. So she was a junior, I was a freshman. I thought it was a little scandalous to ask her on a date my freshman year. And so being the gentleman that I was, and having nothing to do with the fact that I was deathly afraid of girls at the time, I waited a good long year before I asked Lane on a date.

And so sophomore year rolls around, and I decide that I’m going to ask Lane out. And I tell my friends. I make the mistake of telling a couple of my friends, who were these, like, uber-romantic guys. And I said, “Hey, I’m going to ask Lane out.” And they’re like, “Oh, finally.”

And one of them said, “Well, how are you going to do it?” And I said, “Well, I don’t know. I just thought I’d call her or something.” And he goes, “Jeff, Jeff, Jeff, no, no, no. Dude, go big or go home.”

And I was like, “Okay. All right. Fine. I’ll go big. I don’t want to go home.” And I did what I think any well-intentioned college male with a guitar sitting in the corner of his dormitory room would do: I wrote Lane a song.

And I practiced it for probably a week. And it was, you know, this short, 90-second love ballad. And one Saturday afternoon, I felt like I was ready. I had memorized all the lyrics. I was ready to go big. I called Lane on the phone, and it rang and it rang, and then she picked up, and then I hung up. Because now I knew that Lane was home.

And so I grabbed my guitar, I raced across campus. Somebody let me into the girls dorm. And I knocked on her door, and she opened. And I stepped in with my guitar into a room full of people.

And for the . . . you know, at this point, I sort of had this decision to make. Like, do I take another step in, and risk embarrassment and rejection in front of all these people? Lane had, like, half a dozen friends hanging out in her room. You know, as you do in college. And they’re just hanging out on a Saturday afternoon. And I could do that. Or I could take a step back, retreat, say I was knocking on the wrong door or something, and probably never do it again. I just knew myself, and I knew that if I didn’t do this now, I’d probably never do it again.

Andrew: Yeah, I get that.

Jeff: So I stepped in, and I just started playing. I didn’t think about what I was doing or what people were thinking. Everybody’s staring at me, and Lane’s looking at me, and I’m looking at her. And I play this song. And the song was basically asking her to the homecoming dance. And I somehow figured out a way to rhyme the last two lines — you know, the second to last line with the last line — which was, “Will you go to the dance with me?”

And so I strummed that final chord, and I locked eyes with Lane, and she looked at me, and everybody looked at her, and then there was silence for a minute. And then she said, “I can’t. I’m sorry.”

And then something worse happened. I didn’t leave. Like, I don’t know why I didn’t do this. I don’t know what was broken in my brain that made me think, like, playing a song, getting rejected by a girl, and then, like, blending in and not leaving, and pretending as if nothing ever happened, was somehow less awkward than just doing it and leaving. But I . . . that’s exactly what I thought.

And so I just, like, sat down, you know? In a chair, and tried to join the conversation at this party that I wasn’t really invited to. And, you know, I’m just hanging out.

Andrew: That is awkward. That says something about you, that you would sing to her, and that you wouldn’t understand why you should leave, or why, frankly, leaving is not as big an issue as . . . why didn’t it work?

Jeff: Yeah. Right. So eventually I kind of excused myself, after 10 minutes of awkwardness, and Lane walks me out and says thanks for my song. And I said, “Well, I aim to entertain.” You know, as cynically as I possibly could.

Andrew: Yes.

Jeff: And it would be a long time before I ever did something audacious for a girl, or in my life. I mean, years.

And looking back on that, I thought about that for a long time. What did I do wrong? Was it the fact that Lane didn’t like me, or was it because she just didn’t know me?

And looking back, I can now understand that. Because the next time I played a song for a girl was for the woman who became my wife. And the way I pursued that relationship was very different from the way I pursued Lane. I took time to get to know her. You know, we started dating, we got to know each other. She found out I wasn’t a crazy person anymore. And then I wrote her a song, and then I asked her to marry me. Looking back on the thing with Lane, I realized I didn’t say more than, like, 100 words to her in a year.

And I shared that story in the book because I think this is the way that we tend to treat a dream, or some big idea that you have that you want to share with the world. We think it’s all or nothing. And in “The Art of Work,” I talk about why I don’t think that’s the case. Why some of the best dreams take time. It’s less about taking a giant leap, and it’s more about building a bridge.

Andrew: I see. And so if you would have done this . . . if you had an opportunity to do it again, you would have spent some time getting to know her, talking to her, not just going for that all or nothing, asking for the date day one.

Jeff: Yeah. Yeah. I would have . . . you know, instead of spending that year fantasizing about what it would be like to be in a relationship with her, I should have spent that time getting to know her, becoming her friend, hanging out with her. I don’t think there’s anything wrong with, like, big, audacious, crazy leaps of faith. But I think in . . . you know, especially in the space of entrepreneurship, that we sort of glorify this as the only way to do it. Like, you have to risk bankruptcy and go all in.

Andrew: I see.

Jeff: And I’m just not so sure that’s the case.

Andrew: And we’re going to talk about this process and how it can apply to the thing.

Jeff: Yeah.

Andrew: The thing that is the most meaningful thing that we’re going to be doing in our life, what we’re meant to do. But I want to understand you. You got on this path of being a writer, and putting out books, and blogging, and getting your ideas out for the world, because of a friend named Paul. What happened with Paul?

Jeff: So a few years ago — several years ago now — I approached my boss. I was working for a non-profit at the time. I was a marketing director for this international non-profit. And it was a good job. I liked it. I wasn’t miserable. But I had this feeling . . . I was in my late 20s at the time. I had this feeling that I think a lot of people get, which is I just kind of felt like there was something more that I was missing out on.

So around that time, I decided to invest in this personal coaching program. Like, a group coaching thing. We met for a year, kind of like a Mastermind-type thing. And one of the other members of that group was a guy named Paul.

And I actually . . . I call him a friend. He’s a friend now. He was not a friend at the time. He was this random guy that I had known maybe a month. And we’re sitting around, and he goes, “Jeff, what’s your dream?”

And I was so burnt out on seeing my friends and colleagues pursue dreams, burn out, and then go back to working at Starbucks or whatever, that I just thought the whole thing was a farce. I said, “I don’t have a dream, and I just think that’s for kids. I have a good job. I’ve got a wife and a good life. I don’t need a dream. I just need to do good work.”

And he goes, “Huh, that’s interesting.” Remember, Paul didn’t know me that well. But he did know that I had a blog at the time, and he said, “I just . . . that’s interesting. I would have thought that your dream was to be a writer.”

And when he said that, like, so nonchalantly . . . and he was, like . . . he’d been through some serious therapy. He knew, like, the Jedi mind tricks to mess with me. And he said . . . he goes, “I guess I was wrong, then.”

I said, “No, no, no. Wait, wait. Yes, if I have to have a dream, it would be to be a writer. But that’ll never happen.”

And he just looked at me for a moment, and he said, “Jeff.” Got real serious. “You don’t have to want to be a writer. You are a writer. You just need to write.”

And something about that conversation really changed me. It changed my life. The next day, I got up at 5 a.m. I hadn’t done that in, I don’t know, years. And I started writing, and I didn’t stop. I haven’t stopped since.

And I learned from Paul that I think activity follows identity. That before you can go do something, you have to become someone. And the idea of the book is figuring out what you’re supposed to do with your life is really a process of figuring out who you are.

There’s this great quote by a guy named Parker Palmer, who’s an author and activist. He says, “Before I can tell my life what I want to do with it, I need to listen to my life telling me who I am.” And that conversation with Paul kind of opened up the process of me understanding who I was.

Andrew: I just took a pen out to write that down. I love that phrase. “Activity follows identity.” You’re saying that once you said, “Yes, I am a writer,” once Paul helped you see that you were a writer, then the activity of a writer naturally flowed from it.

Jeff: Yeah.

Andrew: And that’s what you’re suggesting that we do. Take small steps like that that get us to the path of whoever we’re meant to be.

I have a list here of different tactics that we pulled out of your book that we’re going to be discussing today. Some of them we touched on already, but we’re going to dive in deeper on them.

The first one, though, is to reflect on your life and look for common themes. And you talk about, in your book, about someone named . . . here, actually. This woman, Jody. It’s going to bring up her photo.

Jeff: Yeah.

Andrew: Why don’t we talk about Jody, and then I want to show you something that I’ve seen about her. Who’s Jody?

Jeff: Jody . . .

Andrew: And how did her friend Larry Elliott help her?

Jeff: Jody Noland . . . the book is these different stories of these different people, each of which kind of teaches a different lesson about finding a vocation. So again, if you’re listening to me and, you know, I’m 32 years old, I look like Ron Weasley from Harry Potter. You go, “Well, what does he know?” Well, maybe not that much. But these people I got to talk to when I was writing the book have a lot of wisdom.

Jody had this really interesting story. When I talked to Jody, she was a widow. She was in her late 50s. And she was really starting the thing that she felt like was her life’s purpose. And when I asked her to unpack that story a little bit, it was very interesting.

So for, like, 15 years, she worked for IBM. And then she quit that job, and she became a wife and a stay-at-home mother for about a decade, and she helped her husband with his business.

And then, kind of around the time when she was feeling like, “What am I supposed to do with my life? What else am I supposed to do? You know, I’ve worked a job, I’ve been a wife, I’ve been a mom, but I still feel like there’s something more.”

And she was thinking about that. Around this time, her friend Larry got brain cancer. And so she runs to the hospital. He had just checked into this hospital. His family . . . he had gone on a vacation in Europe, and they had to cancel the trip because he had this headache that, once they got to Italy, they did a CAT scan and realized that he had a brain tumor.

They flew him back home and brought him to the hospital. And he didn’t have much life left to live. You know, it was looking pretty bleak.

And so Jody goes to the hospital, she meets Larry, and he asks for a pen and paper, because he wants to write his daughters a letter telling them how much he loves them before it’s too late.

And Larry ends up living several months longer, but then he dies, and his girls, his daughters, cherish these letters that he wrote. Just telling them, you know, “I’m proud of you. I’m proud of the women that you’ve become, and that you’re going to be.” And then just held onto that.

So fast-foward a little bit of time. Jody’s husband gets cancer. And she pleads and pleads and pleads with him — because she saw what happened with Larry — she pleads with him to write a letter to their children. He refuses. He thinks that he’s got more time than he does. He just doesn’t want to do that. He’s sort of in denial. And then he dies. You know, the cancer kills him pretty quickly.

And Jody . . . that kind of . . . you know, that puts her into a tailspin for a while. But as she comes out of it and grieves the loss of her husband, she realizes, like, “I don’t want what happened to my kids . . . ” Because her stepdaughter, her husband’s daughter, comes up to her right after the funeral and says, “Did Dad write me a letter?” And it just breaks her heart. She said, “No, he didn’t. I’m so sorry.”

And she starts an organization called “Leave Nothing Unsaid,” writes a book, and now teaches workshops to people about how to do this, so that you can leave nothing unsaid, so that you can tell your loved ones exactly what you think about them.

And Jody actually teaches, don’t do this on your deathbed. Do this now. But she’s seen the power of the words of affirmation that you can give a loved one, and she’s seen both sides of it.

And what’s interesting about Jody’s story is I asked her, I said, “Did this one thing that happened to you in your late 50s, like, was this the thing? What about all that other stuff? Could you go back and just, like, not work for IBM for 15 years?”

And she said, “Oh, no. All that stuff prepared me for what I’m doing now. And if I wasn’t paying attention to what life was teaching me . . . ” And the main thing that she learned was . . . she had this great idea, and she kept telling people, “Hey, my friend Larry did this. Isn’t this a great idea?” And everybody’s like, “Yeah, yeah, that’s a great idea, but I’m not a writer. I don’t know how to do that.” And she kept, like . . . it just seemed obvious to her, and easy, and yet it wasn’t obvious and easy to other people.

And she realized, “Maybe this is a calling. Maybe this is something that I’m supposed to do. And it’s not obvious to other people, but when I tell them, they recognize it. Maybe I need to do something with this.”

Andrew: And I see her site right here.

Jeff: Yeah.

Andrew: I can see the work that she’s doing on it. But how do we use that? I feel like maybe for her it was easy to find the common themes in her life because she had these two really poignant moments, one where a father does leave a note, another where a father doesn’t leave a note. And those two points are obviously going to leave a mark on us.

What if we don’t have anything that dramatic in our lives? What kind of themes can we look for that will help us find out path?

Jeff: Yeah, it’s certainly a dramatic story. One of the things that I talk about in the book is that I think stuff happens. Like, things don’t go according to plan. At some point, something has arrested you, that’s grabbed your attention, that stops you in your tracks. And I think the people who end up finding their purpose in life . . . and I argue that you could miss it. You can . . . you know, life can be sending you signals, and you can miss out on your greatest work if you’re too caught up in how you feel, or . . .

Andrew: What are some of the things that we could look for that will help guide us?

Jeff: Yeah, absolutely. So one of the things I think you need to look at is look at pain. Like, what hurts? So we all have pain. Maybe it’s not losing a loved one. But at some point, you know, something happens, and it bothers you.

What bothered Jody was that other people . . . that she was going to have to see the pain that she saw in her stepdaughter. That she was going to have to see that in other people.

Andrew: I see.

Jeff: And so when you see something . . .

Andrew: So what’s so painful that we’re almost turning attention away from it.

Jeff: Yeah.

Andrew: Not being aware of it. You want us to be aware of that, because other people are probably feeling that pain, and maybe there’s a solution out there that’s a common one for you and others.

Jeff: Absolutely.

Andrew: All right. What else?

Jeff: Yeah. So when you’re . . . yeah, look for pain. Look at past experiences. There’s this great anonymous quote that I came across that basically says, “Everything in your life is preparing you for what’s to come.”

So Jody didn’t like her job at IBM, and she spent 15 years there, and she took her job . . . I mean, when she looked back and kind of remembered the things that she had done, she realized what she really likes doing . . . because she would do these employee evaluations. But instead of doing the typical “what have you done for me lately” kind of conversation, she would just ask them, “How is life?” You know, “How are you?”

And she realized that she was a really empathetic person, and she could help other people who maybe struggled to share their feelings — like write a loved one a letter — she could help them express that.

And so she looked at the stuff that she was good at, the stuff that bothered her — you know, the pain — and then she saw an opportunity for that. And the reality is, Jody didn’t want to do this. I mean, her husband died. She said, “I’m done,” you know? She had actually started writing letters for people. When her husband died, she couldn’t convince her husband to do it. She felt like a failure.

And then this family came and found her and said, “Our mom’s dying. We need . . . you know, we want her to write a letter. We want to . . . ”

Andrew: “Will you help us write the letter?”

Jeff: Yeah, and so . . . yeah.

Andrew: So maybe that’s the other thing. If there’s something that you’re doing on a consistent basis that you maybe are not valuing enough, that’s an indication.

Jeff: Yeah.

Andrew: So you’re saying just look for those commonalities, look for those themes. You don’t have to have two people who you care about in your life, or anything that dramatic happen, for it to set you on this path.

Jeff: Yeah.

Andrew: All right. Good advice. Let’s go on . . .

Jeff: Sure.

Andrew: . . . to the big board here, and see what the next big idea is. The next one is . . . you say don’t go in search of mentorship. Instead, find mentors who are around you. And in fact, you give us the story of Ginny, who’s someone who started every day — there’s a photo of her — started every day with this excitement and gratitude for another sunrise, and then every night she’d go to sleep, crying herself to sleep. Why?

Jeff: Ginny, Ginny Pong, the woman who would eventually become Singapore’s first full-time doula.

Andrew: Yeah.

Jeff: She was . . . she had a baby out of wedlock, and there’s a big taboo for that in Singapore. And she wanted to have the baby, but her boyfriend was giving her an ultimatum. You know, “Have an abortion or I’m going to break up with you.” Her parents — she was living with her family — she had failed her exams. She didn’t have a lot of options. They were threatening to kick her out. Again, because of this social taboo.

And so she had a tough decision to make. She was about to have the abortion, and then her aunt called her and said, “Hey, if you don’t want to do this, we’ve got a place for you.” And so she flushed these pills that were going to start that process, and she moved in with her aunt, and her aunt took care of her.

And she had a hard life for many, many years. And you can watch Ginny’s story on a TedEx video. It’s really inspiring.

But what ended up happening is, you know, Ginny has this incredible story of going from being this single mother to becoming a doula, a birth coach, and then starting a business, managing a whole team of doulas. How she got to that place is not by a plan. She was working late nights and trying to take care of a kid, trying to survive.

It’s very difficult for single mothers to make a living for themselves, make a life for themselves, in Singapore, just because they don’t get . . . you know, they’re sort of treated as second-class citizens. They don’t get a lot of special treatment. There’s these taboos. And so she was having a hard go at it.

One night, she’s talking to a friend. She doesn’t have a lot of friends, and a lot of her friends were young and partying, and she just wasn’t connecting with them anymore. She had this friend online, and the friend said to her, “You would make a good doula.” And she’s like, “What’s a doula?”

And so she kind of goes through the classes, just, you know, curious, and then gets paired with this mother. And, you know, a doula walks a mother through a birth plan, helps them do whatever they want, whether they want to do a natural childbirth or they want drugs. Whatever they want to do, they can do that. Ginny just walks them through that.

And she said the day that she helped this woman do this thing that nobody was there to help her for. Her parents were saying, “We’re not going to help you.” Her mom was in the room when her baby was born, but couldn’t help her because, you know, her mother had had a Caesarian and Ginny wanted to do a natural childbirth. And when she helped this mother, she said it felt like slipping into a pair of old shoes. And after that moment, she knew she had found her calling.

When I asked Ginny, “Did you do this all on your own? I mean, all these people abandoned you. Who in the world helped you?” She started listing all these people, like her friend Amy, who told her that she could be a doula. Like her friend who helped her . . . you know, let her move in with her, that she could help her pay the rent and watch her kid. Like her aunt who said, “Flush those pills. We’ll take care of you. If you want to have the baby, we can support you.”

And I think what we learn from a story like that, and lots of stories, is that you can spend a lot of time going and trying to find somebody to teach you or help you. And sometimes you get lucky and that happens. Most of the time, we feel like we’re alone in life, but I don’t think that’s actually true. I think that we are all apprentices in a craft. It’s just that the mentors and masters around who can help us are sometimes hiding in our everyday relationships, as they were with Ginny.

Andrew: But Jeff, what about this. When we look for mentors, we don’t want people who are on our level and are accessible to us. We want people who are so far beyond where we are that they can help us make those giant leaps to get there. And yes, our friends can give us advice, but they don’t compare to those kind of mentors. People who are leaps and bounds ahead of where we are.

Jeff: Yeah.

Andrew: What do you say about that?

Jeff: I think that’s great. I mean, I’m a fan of seeking out people who are above and beyond where you are. I just know that I went through a season of life where I was looking for one mentor. You know, one person who was going to, like, make it all happen. And I just don’t think that’s realistic. I think you need to be looking for a multitude of mentors.

And what I mean by that is, yeah, I’ve got, you know, older men that I learned about how to be a better husband or a better dad from. And then I have, you know, friends who are 20 years ahead of me in business, and they teach me about entrepreneurship. None of these are formal mentor relationships. They’re all sort of cobbled together in what I call an accidental apprenticeship. A bunch of different relationships where you sort of, like, craft your own syllabus about how you’re going to learn.

So I’m a fan of seeking people out, but I think there’s this idea in our culture that you can just have one mentor for 25 years, you’re going to sit together and have coffee all day long, you know, once a week or whatever, and you’re going to learn all this stuff and become as successful as them. I think successful people are busy. It’s hard to get attention, you know, from one important person all the time. And I think it’s unrealistic. I think it’s much better to have a multitude of mentors, people that you can learn from in different fields, and use that to kind of create this self-education that’ll get you to where you’re going.

Andrew: All right. Back to the big board. Start by working on your calling right now, today. What is this, Jeff? Let me show you this page. This is not the prettiest page online, but it exists. It is on . . . what’s the URL that we found it on? Is it BubbleUnder.com?

Jeff: Yeah, that’s right.

Andrew: BubbleUnder.com.

Jeff: Right.

Andrew: By Martin Chamberlain. What is Martin trying to do there?

Jeff: So Martin is a senior in college right now. And all of his young adult life — you know, through his youth and teen years — Martin wanted to be a painter. In fact, he was flown out to California to feature some of his oil paintings in an exhibit. And then when his brother, his older brother, went off to college, Martin grew up in the home of a Baptist minister in Oklahoma. They had one family computer. Martin didn’t really use it. He was an artist. He wasn’t really concerned about that. He, you know, played guitar and didn’t really care about computers.

Then when his brother left, he decided that he wanted to get into web design. He started playing around with the computer. His brother gave him a book about how to design websites. And one of the websites in the book was that site right there, BubbleUnder, where basically they teach you how to build the website and make it look as beautiful as that one does.

And what was interesting about Martin’s story is, you know, he kind of exhibits this idea that you see throughout the book “The Art of Work,” which is that what you want to do and what you’re supposed to do don’t always align. Like, we think we want to do one thing, and then we start doing it, and then we realize that the thing that we’re practicing for is actually something else.

And so Martin was spending all this time as an artist thinking that, you know, I’m painting and doing all this stuff. He thought he was preparing to be an artist. And then he realized, “I’m actually preparing to be a web developer.” And now he’s dedicated. He’s got a web design company. He’s actually designed several of my websites. And he realized that his . . .

Andrew: [inaudible 00:27:01]

Jeff: . . . preparation, what he was doing with art, was actually . . . yeah, that’s him.

Andrew: That’s his current site.

Jeff: Yeah, yeah. That’s his, you know, one-page thing.

And yeah, so what he realized was that . . . he thought his calling was something out there. You know, something that he would do someday. “I’m going to be an artist someday.” And what he didn’t realize was that . . . I mean, he is . . . you know, he was 16 years old when he started a web design company, and I met him when he was 18, and now he’s 20-something, and he’s doing it.

And I think there’s this idea that we have to wait for permission, or enough experience or education, to finally live out our purpose. And that’s not true at all. I mean, here’s this kid who’s doing it, and he thought it was going to be one thing, and it ended up being something else.

And when he had this moment of, you know, what author Daniel Coel calls a spark moment, when you see something that connects with your desire and interests, he went after it. And he spent hours every night learning how to build websites.

Because, you know, you’re not going to find your calling, live out your purpose . . . it’s not just going to happen to you. You’re going to have to work really hard. You’re going to have to master that. And I think that’s one of the things we learn from Martin, is you have to practice. And practice doesn’t begin tomorrow. It begins today.

Andrew: Right. Did he actually create . . . which of your sites did he create? Where is that site? There it is.

Jeff: He’s worked on probably all of my sites.

Andrew: All of them.

Jeff: He’s done that.

Andrew: This . . . where’s the one . . . this is the one. I love this.

Jeff: Yeah, we outsourced that, actually. That was somebody that the publisher hired. But, yeah, he actually emailed me and goes, “Hey, who did this? This is great?”

Andrew: This one’s actually a theme. Sorry, he did what?

Jeff: He emailed me and said, “Hey, who did this? This is great.”

Andrew: Okay.

Jeff: But we . . . the publisher actually hired . . .

Andrew: Hard to see if there’s a theme here that I can catch. Wait, where is that? Can’t I just do a search for theme in your . . . yeah, no, it’s a custom theme. Okay.

Jeff: Yeah. I’m pretty sure it’s [inaudible 00:28:56].

Andrew: But I really like the design of all of your stuff. Wait, I’m on the wrong page. Here’s one of the things I really like. Where is that? Was it this one? No. Earlier as we were talking, I was looking through your site, and . . . I like how you have your pull quotes on a page of an old-fashioned typewriter. I love that stuff.

Jeff: Yeah.

Andrew: I love your whole design sets. I love how when you take a photo to use online, it’s not just an author photo. It looks like this.

Jeff: That’s totally my wife.

Andrew: Oh, she’s fantastic. She took that photo?

Jeff: Yeah. She’s a photographer. She takes all my photos. And she, like, stylizes the shoots and everything.

Andrew: You have a really good sense of design. Even the backdrop is fantastic, too. We’re not seeing most of it, because you’re just on a computer. But in the video on your site, I was able to look behind you and check it out.

Jeff: Yeah. Thanks.

Andrew: All right. So let’s go back to the big board.

Jeff: Let’s do it.

Andrew: Build a bridge to your calling. That’s the next big idea from your book that we’re going to be talking about.

This . . . these guys . . . this family here. I’ll bring them up on the screen. They want to become social entrepreneurs in . . . is it Burundi? Is that where they want to do it?

Jeff: Yeah. The world’s second poorest country.

Andrew: Second poorest country.

Jeff: Yeah.

Andrew: All right. So that’s an ambitious goal, to go to the second poorest country to start a company there, and have it not just make profits, but also help people around them. Most people would just say, “Great. I’m going to fly to Burundi.” Or, actually, most people would say, “That’s a great idea. I’ll do it when I get a chance.” If they decide to get started, they might think, “I’m going to go to Burundi, and I’ll figure it out.”

What did they do instead?

Jeff: So when I talked to . . . their name is Ben and Christy Carlson, and those are their kids, and they run a coffee company in Burundi. And they’ve done that for the past few years now.

Andrew: Yeah. This is their website. I’ll zoom in on it.

Jeff: Yeah. The Long Miles Coffee Project.

Andrew: It looks beautiful.

Jeff: And what you have to understand . . . I mean, it’s a complex story, but what you have to understand is coffee is a commodity in Burundi, and it accounts for something like 80% of, you know, their total GDP. And yet . . .

Andrew: Wait, hang on a second. Anne Marie, you’re zipping something over there. I’m going to call it out, just so people don’t think I’m zippering something inappropriately while the camera’s on Jeff.

Jeff: Can’t see her hands.

Andrew: She’s zippering her backpack. She’s working here out of the office on her way out.

Jeff: Keeping it real. To the launchfest. All right.

Andrew: So she . . .

Jeff: Yeah, you threw me off.

Andrew: I’ll say bye. Wait, let her show the door, so it doesn’t seem like I just disappeared. Thank you.

All right. Now no side noises coming in. No zippers, no snaps, no doors.

So yeah, so you’re saying it’s a complicated issue.

Jeff: Yeah.

Andrew: It’s a complicated task. And largely because coffee’s a commodity in Burundi, and frankly, in the world.

Jeff: Yeah. And, I mean, basically these farmers are working themselves to the bones. They’re selling the coffee beans, getting, you know, a minimal charge for it. And then people are . . . you know, companies are taking these beans and then redistributing them to roasters and whatnot, and making a lot more money off of it.

So they saw this, and they said . . . Burundian coffee apparently is incredible. I mean, it’s really, really good coffee if it’s done right. And they saw an opportunity, and they went after it.

So they moved their family into this French-speaking, very poor country to pursue this dream where they didn’t speak French, didn’t really know the industry. Ben loves coffee, but he had never really, you know, done anything with this. Before this, they worked with a non-profit.

And so I asked Christy, I said, “How did you do this? What did the transition look like?” And this kind of goes back to the Lane thing. She said, “Well, we took a leap.” I said, “Great. What did that look like?”

She said, “Well, first we moved our family to South Africa, and we spent 10 years there doing leadership development with this non-profit organization. Towards the end of that 10 years, I realized I really wanted to write,” she said, “and take photographs, and Ben really wanted to do something with coffee. And we started looking for opportunities, and we saw one in Burundi, and we went after it.”

And then when I . . . we kind of, like, went back to it, I said, “So you took a leap that took 10 years.” And she said, “Yeah, well, actually it was a lot of small steps.” And there was . . . you know, there was fear, there was risk. She told me about the first day she dropped her son Miles off at this French-speaking school. He was scared. She was scared. She felt like she was throwing him out into the ocean.

But I think when we think about pursuing a dream, it’s sort of that all or nothing mentality that you mentioned, Andrew. Either it’s, “Hey, that’s great! I’m going to do it today!” Or I’m probably never going to do that.

And the story of the Carlsons moving to Burundi and starting Long Miles Coffee Project was really a truer story of transition, in that it’s more like building a bridge, less like taking some giant leap. And it requires a lot of daily work taking small steps that get you there.

Andrew: Okay. But you’re not saying 10 years is . . . you’re not advocating 10 years, necessarily.

Jeff: No.

Andrew: You’re not saying it has to take even multiple years. You’re saying you don’t have to go from an idea to starting this business in a foreign country with this big goal of changing other people’s lives. You could first say, “I’m interested in going to Africa.”

Jeff: Right.

Andrew: “And maybe I’ll take a step towards there. And as I look around, then I’ll get an understanding of what my next step is.”

Jeff: Yeah. I think most people don’t know what they want to do with their lives. I don’t know about you, but I talk to a lot of people, and they either don’t know what their passion is. They have a bunch. They don’t know which one to choose. Or they have this big idea and they don’t know how to make it happen.

And what I’m trying to say in the book is if you don’t know what your passion is, join the club. If you have a big idea and you don’t know how to make it happen, join the club. If you’re one of those special people that knows exactly what you want to do and you know how you’re going to accomplish it, and you’re doing it, well, hooray. Like, that’s great. But that’s not the rule. That’s the exception.

And the Carlsons is a great story of . . . we didn’t know what we wanted to do. We wanted to get to Africa. We wanted to help contribute. And when we got there, we realized that we really liked doing this thing, and then we started exploring and looking at these different opportunities. And then when we saw one that made sense, then we took the leap.

And really, it was about taking the next step, because they had been slowly building a bridge by basically looking for opportunities for their passion, and then listening to their lives, paying attention to what resonates with me as I’m taking these small steps, and how can I course correct along the way if I happen to go in the wrong direction?

Andrew: I feel like that’s good advice for a lot of things.

Jeff: Yeah.

Andrew: I see every year people . . . every January people come to my gym. They’re fully decked out. They’ve got the latest shoes.

Jeff: Sure.

Andrew: They’ve got outfits. They’re signed up, some of them, for a year, to make sure that they’re fully committed to working out for a year. And then by . . . I wouldn’t even say February. Mid-January, they’re done.

And I think it’s so much better to say, “I’m going to try running, and I’ll try going to the gym, and I’ll give it some time to see, do I click with it?”

Jeff: Yeah.

Andrew: You know, you don’t click with the gym necessarily. I know I don’t. I just go there to shower after my run. You don’t necessarily click with running. You want to try it a little bit . . .

Jeff: Yeah, agreed.

Andrew: . . . without fully investing in it.

All right. Let’s go onto the big board here. The next big idea is to see failure properly. See it as an opportunity for growth.

And one of the people that you talk about is a guy named Matt McWilliams. I’m going to bring up his current website so we can see his face and get a sense of who we’re talking about. There he is. The guy who’s in the upper right corner.

And here’s a guy who one day opened the door to his place, and a detective asked him for his laptop.

Jeff: Yeah.

Andrew: That’s a shocking thing to have happen to you. Why did this detective show up at Matt McWilliams’ place?

Jeff: Well, it probably wasn’t that shocking to Matt, because it was the fourth time in less than a decade that he got fired.

Andrew: Yeah.

Jeff: And in this case, he was being laid off from his current job. And he was actually glad to give up his laptop, because he had had a conversation with his wife the night before saying, “I really want to go do this full-time consulting thing that I’ve been thinking about doing, but I have a really good job.” And then the next day, this guy shows up and knocks on his door, and it was this, like, “Okay, I guess this is what I’m supposed to do, because I’m being . . . you know, my hand is being forced.”

When I talked to Matt — and he’s really honest about this — I was intentionally kind of looking . . . you know, I had my . . . I was writing this book, and I had my antenna up for stories of, you know, radical transition from doing one thing to doing something else in terms of careers. And Matt came to me, and he kind of laid out all of his successes and how much money he was making, and how successful he was as a marketing consultant.

And I said, “That’s great. That’s awesome.” And in the back of my head, I was going, “I’m not telling that story.”

And then I got on the phone with him, and we talked a couple of times. And then at the end of the conversation, he basically said in passing, “Oh yeah, I got fired from this job. I got fired from this job. My dad fired me.” “Wait, what? Your dad fired you?” And we had a couple of conversations and unpacked it.

And basically, he had this season of failure. Of trying to be a professional golfer, getting hurt, then having to go work at his dad’s golf course. Getting fired from that because he was too distracted, you know, building websites for friends on the side. Then he started a company with a friend that, early into the start-up, was making a ton of money. Really cocky. You know, would chew people out. Got fired by the co-founders that he kind of helped start the company with because he was a jerk to work with.

You know, just one thing to the next, the next, all a bunch of failure. And I said, “Matt, that’s the story. That’s the thing that people want to connect with, is this feeling of, ‘I missed it.'” As he started to unpack it, I said, you know, “Could you have gotten to where you are now without all that failure?” And he said, “Absolutely not.”

And so I think of when we . . . I think that when we think of failure, we think that it’s an obstacle that keeps you from success. We look at successful people and we go, they succeeded in spite of all the failure. Michael Jordan succeeded in spite of being cut, or making, you know, the JV team instead of the varsity.

And I don’t think that’s true. I think successful people succeed because of their failure, not in spite of it. That the failure is a means to help you find out exactly what you’re supposed to be doing. It gets you to where you’re supposed to be.

Andrew: Why? But Jeff, didn’t Matt just fail, fail, fail, fail, fail? How did that help him? Maybe you can say you can learn something from it, but I don’t even see how those failures would lead him to become a better consultant, to become a better entrepreneur.

Jeff: Yeah. Well, he would say that every failure had two things that happened. One was a lesson, as you mentioned, and the other was, he was doing something that didn’t quite work, and failure wasn’t . . . it wasn’t like, “Go back and try it again.” It was a pivot point where he could run into some, you know, big mistake, try something and go, “I’m doing something wrong here, and I need to shift my focus and head in a different direction.”

You know, so in the case of getting hurt as a golfer, they told him, they said, “You can keep doing this, but it’s going to take this reconstructive surgery.” And he was a great golfer. He won all these championships in high school and college. So he could have done that. But he said, “You know, I’m not that passionate about it. I’ve been doing it like crazy, and this is an opportunity for me to go do something else.”

And so I kind of re-describe failure as a pivot point. You know, you think about in basketball, when you’re running down, dribbling down the court, and you stop, you just run out of options, right? Because if you take another step, you’re traveling, and you’re going to give the ball over. You’re too far away from the basket. You can’t shoot.

Andrew: Yeah.

Jeff: So what can you do? You’re out of moves. Well, except for a pivot. If you have one foot planted, and you’ve got the other foot that you can kind of, like, kick around and 360 degrees, you can still move in any direction and then pass the ball down the court.

And I think there’s . . . you know, a great example of that was Groupon. They started out as this non-profit organization. They lost $1 million. And they had this great idea, like, “Let’s get people to volunteer their time around a specific need.” So they used social media to say, “Hey, let’s go give clothes to homeless people in downtown Chicago.” And everybody would say, “Okay, I’m going to pledge my time to that, and it’s going to be great.” If they got enough people to say yes to it, they’d go do it.

It failed. And they made one little tweak. The founder said, “What if we try to make money with this?” And $13 billion later, you know, it worked okay. At least for a while.

Andrew: It’s still doing well, actually, surprisingly.

Jeff: Yeah.

Andrew: I’ve been looking at their numbers. It’s still a multi-billion dollar company.

Jeff: Yeah.

Andrew: You know, Jeff, I introduced you, I think, as a writer. I should have introduced you as a speaker. You’re fantastic.

Jeff: Thanks.

Andrew: I like your storytelling style.

Jeff: Thanks, dude.

Andrew: I hope I didn’t just inhibit you and cause you to pay too much attention to the fact that you’re a good storyteller. But I like it.

Jeff: Thanks.

Andrew: I think most guests really undervalue the story, and I think that by giving examples, you really help illustrate your points. And frankly, you just remember the details of these stories so well. I’m impressed.

Jeff: Thanks.

Andrew: All right. Let’s look at the big board here. The next big point is to build and combine multiple skills. You talk in your story about this guy, his name is Jody, he’s unpacking in his new house. He is talking to his wife, and suddenly this thing that he heard from . . . I guess it was another . . . from a park ranger?

Jeff: Yeah. Right.

Andrew: What was it that he heard that set him off on this new path in life?

Jeff: So Jody was a financial consultant at the time. He was working with a bank. And he had moved out to Washington. He’s from Illinois. He’s from my home state. And he had moved out to Washington and, you know, married this woman, and they were helping somebody move.

And he always loved parks. Ever since he . . . he was a business major in college. Ever since he took a trip out to Washington, went to a place called Deception Pass State Park. And he would say that . . . you know, I use this word “calling” a lot. He says, “Sometimes places call to us. Sometimes being in a location, you just feel this resonance in your soul that says, ‘This is what you’re meant to do.'”

He felt that as a college senior at the state park in the state of Washington. And years later, he feels this same sort of sense when he’s talking to his friend and he’s going, “We just heard there was an opening for a park ranger. You should check it out.”

And he had to go study. He had to spend a year of studying for it. And then he went and pursued his dream, moved cross the state, you know, had his family kind of follow him later. And he got to fulfill his dream of being a park ranger, at least for a little while.

Andrew: And then what happened?

Jeff: And then he started a family. And he . . . I mean, you have to understand that Jody loves parks. I went to Washington. He drove me . . . we spent an hour driving up Mount Spokane, which is this mountain in Washington. And he’s just telling me story after story, because he used to work there as a park ranger, and he’s just telling me all this stuff. This is years after him not being a park ranger.

And what happened was he realized that he had to choose. Because being a park ranger is a very demanding job. You know, you live on the facilities. If anything happens, they radio you or whatever, and you have to go respond.

And during the time Washington State Parks were doing a lot of layoffs and downsizing, and a lot of guys were losing their jobs. And Jody was just realizing, “I have to decide, am I going to keep pursuing this or . . . and kind of not see . . . you know, see even less of my family? Or is this something that I need to kind of let go of for a season?”

So he let it go, and he’s now a business consultant. And the really interesting thing about him, and the cool thing about him, is that his story’s not done. But he has this podcast now called the Park Leaders Podcast, and it’s basically a podcast for park rangers. And one of the guests that he had on recently was his old boss, who was sort of his mentor.

And he . . . you know, Jody was just saying, “I miss being a park ranger.” And his boss said, “Don’t, because what you’re doing right here is . . . if you love parks, Jody, what you’re doing right here is doing more for the industry than you ever could as a park ranger. And so I know it’s hard to not be out there every day, but your expertise as a businessman . . . ”

Because he spends a lot of time on this podcast and working with other park rangers now. He helps them understand that they don’t have just one job. Like, they have a bunch of different jobs. They have to understand business and communication and leadership. It’s not just driving around and making sure people aren’t breaking the law, or that there aren’t, you know, trees on the road or something. It’s a portfolio type of job. You have to have a lot of different tasks and skills.

And so he’s beginning to realize that maybe I wasn’t just . . . maybe I wasn’t called to be a park ranger at all. Maybe I was just called to parks in general. Maybe the calling, the thing that I’m supposed to do, is bigger than I realized, and all these things that I’ve done in the parks, out of the parks, working for a bank, working for a business, maybe all of this combined in a portfolio is really what my calling is about.

And as he’s embraced that, his life has become a lot more fulfilling, as opposed to thinking he’s just doing one thing.

Andrew: That’s a good point. It kind of . . . it’s really easy to look back and say, “I really wasted those three years by not doing this, and I gave everyone else a three-year head start on me because I was doing this other thing.”

Jeff: Yeah.

Andrew: And you’re bringing up a good point, which is often that those three years, or the time that you spent doing something else, often helps make what you’re doing now — even if it seems different — helps make what you’re doing now so much better.

Jeff: Yeah. There’s this great quote that Robert Green, author of a book called “Mastery” and many other great books, he says the future . . . I mean, this is a book about mastery. About, like, mastering one skill. He says, “The future belongs to people who can take a few skills, unique skills, and combine them in interesting ways.”

And I think that’s absolutely true. The days of you doing one thing, and doing it really, really well, and getting paid a ton of money, are over, I think. You have to take a skill like writing and combine it with technology, or a skill like speaking and combine it with humor. I mean, you have to combine skills in an interesting and unique portfolio that’s going to help you stand out.

And I think it’s also the most fulfilling way to live. Because we’re not just one thing. We’re multi-faceted people.

Andrew: Onto the big board for the final point, which is to make others the focus of your calling. And you had a period in your life where you had money in the bank, you had good savings, you actually didn’t feel motivated. What was it like when you weren’t feeling motivated?

Jeff: So I quit my job. I spent all this time . . . I was a writer. I had sort of this blog. All I wanted to do was get published. I thought, “This is what I’m supposed to do.” I got published. I made $6000 off of my first book contract, so I was, like, rolling in it. You know, not really.

And then my wife and I got pregnant, and I . . . she and I were talking about whether or not she was going to go back to work, or whether or not she was going to stay home and be a mom for a while. And we could not live off of my salary. We could not afford to do that. And so I wanted her to be able to do that. She wanted to do that. It was not possible.

And so I got really tenacious about, you know, finding time in the margins of life — early in the morning, late at night — and I started building an online business. And I built this online business helping other writers do some of the things that I’d done. Start blogs, get published, and start making money online.

That became wildly successful. You know, you talked about, does it have to be 10 years? It doesn’t have to be 10 years. I started my blog, and I wrote on that every day for a year. And then the next year, you know, as we were sort of counting down the months until it was baby time, I was . . . like, that was the clock counting down on me to make enough money that we could replace my wife’s income.

By the end of that year, I’d replaced my wife’s income, replaced my income, replaced my wife’s income again, and then mine again. I mean, I think we tripled our income that year.

Andrew: Wow.

Jeff: So it kind of became this no-brainer, where my wife quit her job, and a few months later I quit mine. Which was a really cool experience, because I went to my boss, and I thought he was going to be disappointed, and he was, like, waiting for the conversation. Because he just had seen all this stuff happening in my life, and he saw how excited I was, and he goes, “Man, I’m so proud of you. You need to go do this.”

And so this was a really cool transition. So I was like, “This is it.” Like, “This is the finish line.” March 31st was my 30th birthday. April 1st, I was a full-time writer, entrepreneur. I was doing . . . I was living my dream.

And very quickly, I got depressed, because I did not have a reason to work. I didn’t think I did. Like, I always worked as a means of making a living. And my wife told me around that time, like, “We’re set for the year. You don’t need to make any more money this year. We have enough to live on and then some.”

And I was like, “What am I supposed to do?” And she says, “Well, you can do whatever you want, I guess. I’m going to raise your kid. You do whatever you want.”

And that was, like, the worst thing that I could . . . that someone could tell me, is you can do whatever you want. Because I didn’t know what I wanted to do, and I didn’t realize how important work was.

So I had this weird crisis of purpose. Like, what am I supposed to do with my time if I don’t need to work? And I did the four-hour work week thing, where I just worked a few hours a week and I was, like, watching TV the rest of the time, and screwing around, and hanging out with friends. And it was fine, but I realized I need to work. Like, I need to do something, and I need to have something to work for that’s so much bigger than me.

And around that time, I met a friend who told me that . . . he goes, “Jeff, I stopped working for myself years ago.” And he was an entrepreneur, and so I knew that he understood it.

Andrew: This is Stu McClaren.

Jeff: Yeah. That’s Stu.

Andrew: Yeah. Here he is.

Jeff: Yeah. [inaudible 00:50:46]

Andrew: [inaudible 00:50:46] There he is. This is from his Facebook page.

Jeff: Yeah. So Stu told me that . . . he said, you know, “I kind of struggled with that, too, when I started making frankly more money than we needed or knew what to do with.” And then they took . . . his wife asked him to take a trip. His wife is a teacher.

And they took this trip to Kenya, and he just saw . . . you know, he didn’t . . . it wasn’t this, like . . . he wasn’t pitying people or feeling sorry. He just saw, wow, like, education make a big difference. Education creates an opportunity, and we’re in this community where there just are no schools. Kids cannot get the same kind of opportunities that I was born into, because there are no schools.

So he came back from that trip, and he realized, “I’m not going to . . . this isn’t about me. I’m going to work to build schools in Africa.” And he and his wife started this awesome charity doing just that.

And every day Stu goes to work not to make more money or fund his retirement. Partly because he’s been so successful that he doesn’t have to worry about that, and partly because he knows if I’m living just for that, it’s not enough. It’s not enough for him, and frankly, it’s not enough for me.

And that was permission for me to realize that I need to work not just for myself. I need to work for the joy of working. You know, the value of doing stuff that’s contributing to the world. And for being part of something that’s bigger than me.

And I would argue that we all need that. That we’re not actually searching for happiness, you know? Victor Frankel would say that we’re not looking for . . . we’re not looking to be happy. We’re looking for a reason to be happy. We’re looking for meaning.

And I think work is the best way. Having meaningful work that you do, that you contribute to the world, is the best way for you to find meaning and a life that has purpose.

Andrew: And for you, that had to do with Mumbasa, Kenya.

Jeff: Yeah.

Andrew: These women there. Who are the women?

Jeff: So about a year ago . . . well, two years ago, I talked to a friend of mine who had started this non-profit called Know Think Act. And he told me about these projects that they were working on. I was like, “Okay, yeah, that’s great.” You know, people hit me up for money, and it’s fine.

And he just kept . . . he’s like, “That’s cool, man. No pressure.” He says, “I just think it’s an interesting story.” And he just kind of, you know, kept sharing every once in a while. And I was like, “Okay. Tell me more.” He just started telling me more about this story in rural Kenya, really outside of Mumbasa, about this community, this leper community, that he had kind of stumbled upon in his travels.

He had basically taken a trip to Uganda years ago, and just kind of accidentally started a non-profit really helping local African leaders kind of create development programs locally.

So in Mumbasa, there is this camp called Blessed Camp. It used to be called Tumbe, which means, you know, “place where the forgotten people go.” Because what it is is it’s a squatter camp for lepers. These people who have leprosy would go to this leprosy clinic, and then they would . . . the leprosy clinic actually closed down, and they would just stay there, because their families wouldn’t let them come back home.

So you have this camp of hundreds of people, lepers, you know? And there are these women there that needed a place to make these handbags and these uniforms. And my friend came to me and he says, “We need to do this. Would you like to be a part of it?”

And it was, like, a $10,000 project, you know? And we had just had a really successful launch of one of my online courses, and I said, “Yeah, I want to be a part of that.”

And so we did that, and it was great. And then just last year, I went there, and I walked around this camp, and I was shaking, you know, these people’s nubs of hands, feet, and seeing it. And I go into the workshop where these women, on a Saturday afternoon, with their babies on their backs, you know, in their little sacks or whatever, they’re sewing. They’re sewing these handbags and these uniforms. And then they go into the market and they sell them.

And I asked the local leaders there, I said to, you know, the guys kind of running the operation — it’s really a pastor and a couple of his friends — I said, “What’s going on here?” And they said, “Well, we’ll take these bags. We’ll sell them.”

And I said, “You know, do you . . . ” I felt like I knew some stuff, right? Because I’d been running a business for, like, a year and a half. I was like, “What’s your profit margin?” Like, I’m going to stump these Africans, because they don’t know anything, right?

And they go, “Oh, our profit margin is this, and our overhead is this, and we try to limit it to that.” And I said, “How much do the women get to keep?” He says, you know, “Once we pay for all expenses, they get to keep everything. And if they make more, they get to make more.” And I was like . . . I was stunned. I was amazed.

And they sat me down and showed me this five-year plan about . . . you know, because they’re getting some funding from this American non-profit, and they have this five-year sustainability plan where they’re going to start doing . . . you know, creating more products, doing organic gardening so they can go sell these organic fruits and vegetables in the local market.

I was just stunned. It was amazing.

Andrew: I saw the YouTube video of you . . .

Jeff: Yeah.

Andrew: . . . looking at it. Is this it?

Jeff: Yeah. All the sudden, I went from feeling like I had done something good to being grateful, honored to be a part of something that was so much bigger than me. And that’s what . . .

Andrew: And that’s what you’re talking about. Taking it outside of yourself . . .

Jeff: That’s what I think we ought to be working for. Yeah.

Andrew: . . . to increase motivation.

All right. I think we were just talking over each other, but . . .

Jeff: Okay.

Andrew: But I think we’re saying the exact same thing. Make others your focus, make them the focus of the calling, and it becomes a more motivating experience.

Jeff: Yeah.

Andrew: These are just a few ideas from your book. Anyone who wants to follow up . . . I actually recommend they check out your main site, which is GoinsWriter.com. And right now you’ve got a link on there where you’re giving away the book for free, and along with it, people can get a PDF of the book, not just a physical copy. They get a workbook, a community, and so much more. And that will be linked to from your site.

Thanks so much for doing this.

Jeff: Thank you, Andrew. It’s a pleasure, and I hope it helps a lot of people.

Andrew: It was great to talk to you. Thank you all for being a part of it. Bye, everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to create an inbound sales machine
(to maximize conversions and paying customers)
Taught by Steli Efti of Close.io

Master Class: Inbound Sales Machine

Report Bugs

Course Leader: Steli Efti, Close.io

Steli Efti is the founder of Close.io, modern CRM that eliminate data entry and integrates calling and emailing within the product.

Master Class Toolbox

Course Cheat Sheet Ultimate startup guide to inbound sales

50% Discount code for Steli’s book: mixergy

Transcript

Andrew: This session is about how you, the person who’s watching or reading the transcript or listening to us on MP3, how you can build a sales machine so you can grow your sales. The session is led by Steli Efti. This guy is fantastic when it comes to sales. He’s been doing it for a long time. He’s currently the founder of Close.io, modern CRM that eliminates data entry and integrates calling and emailing within the product. This is the machine; this is the software that salespeople use to close more deals. Before that, he launched ElasticSales, basically its sales as a service. His team of sales people would call up and I think even still do, call up customers, excuse me, do sales on behalf of their customers and am I explaining that right, Steli?

Steli: Yeah you are. We’re not doing that anymore, but that was what we were doing. We were calling customers or calling prospects and closing deals for other startups.

Andrew: That’s a pretty gutsy thing to do. Most people would be afraid to sell for other customers because they’d say, “How could I as a consultant create a sales team here that can sell better than my client?” But that’s what you did. That’s where you learn sales and that’s where we’re going to get a lot of what you’re teaching here today. You showed me something in your hand earlier before we started, you just flashed it, what was that?

Steli: Oh. This is the book that we’re about to release. It’s “The Ultimate Startup Guide to Inbound Sales,” describes all of our strategies we’re going to talk about today and some more. And we chatted about offering a special discount to the Mixergy community, if they want to have it after the master class.

Andrew: So show the book again. What is it that you wrote?

Steli: It’s “The Ultimate Startup Guide To Inbound Sales.”

Andrew: Great. All right, so you’re the guy who did sales for the companies. You do it now for your software and you wrote the book on sales. My goal here is not to keep touting how great you are, but to make sure that anyone who’s watching this becomes a better salesperson, and more importantly, build a sales machine for their company.

Now, you weren’t always this good. In fact, I don’t want to spend too much time on this because it’s kind of painful, but there was a time when you ran a business. Here it is, this is a screen shot from archive.org of Supercool School. And when you ran it, there was a time that you and your teammates got into a huge debate. Debate about what?

Steli: Yes. So, this had happened after we abandoned the plan to do enterprise sales for Supercool School. We talked about this in the enterprise sales master class that people should check out. So we failed at closing these massive organizations. So we decided to go the other way and offer a self service platform with Supercool School, so people could just signup and then pay us 15, 25 bucks a month and use the product. And all our energy and effort was on making this fully self service and we spent a ton of time, for instance, on things like debating if the onboarding screen, once you signed up for Supercool School, should have a three step onboarding process or a five step onboarding process or even an eight step onboarding process.

Andrew: And as a result of all these debates, did the company turn around?

Steli: No, it had no impact on the future of the business or how successful…

Andrew: And that’s your point here with our session. A lot of entrepreneurs a lot of sales people focus on the wrong things. As a result they don’t grow their sales. What you want to do, is give us the right things to focus on and show us how to do it systematically so we can grow our sales. And you did it, you actually launched, as I said earlier, software. Software, the transition from consulting where you do in sales for other people to actually creating software that stands on its own is really challenging. And frankly as a consultant, you make much more money, especially at first, then with software, where you’re looking for monthly recurring revenue from one customer at a time. But you did it. You flew to Vegas to celebrate what with Closed.io?

Steli: Yes, we flew to Vegas with the team here to celebrate the moment where the revenue we made with Closed surpassed the revenue we made with ElasticSales. It was a big milestone for us.

Andrew: Huge milestone for software, right? A lot of entrepreneurs have trouble even setting aside enough time to build software on the side. You not only did it, but you actually got more revenue from your software than your services. I want to beat this to death because I’ve got to get into the points here that we’re going to teach, but there’s one other milestone I want to talk about. You went to Walgreens and you got cheap champagne one day. What was the cheap champagne for?

Steli: The cheap champagne was for when we hit the two million in annual revenue run rate. So once we hit that milestone and in hindsight we thought once we get to that point we would do a huge celebration. But what it ended up being is we hit that point, we were really proud. I went to surprise the team, went around the corner to Walgreens, bought some cheap champagne, came back. We all cheered and then we went back to work because it was a really busy day.

Andrew: All right, well that’s an appropriate way to celebrate. Quick and then go back and see if you can grow beyond two million. So that’s setting up your credentials and showing people what is possible. Let’s now get them to that Promise Land and here are the points that we’re going to use. The first thing that you say is, you tell us to shorten our trial period. In fact, I was on your site, this is what Close.io has on its sales button. It says, “Get started, 14 days free, free trial and no credit card required.” Why are you telling us to do 14 days or a short period? It has some to do with a client of yours that had a 60 day period? What’s wrong with a 60 day free trial?

Steli: Yes. So nothing is wrong with the 60 day, nothing is wrong with 120 days. There’s nothing particularly wrong with any trial period whatsoever. It depends on how you want to run the business and what your hopes and aspirations are with it. So with that particular client that we had with Elastic, they were operating under this illusion unfortunately, that their product was so sticky that the longer the people who used it for free the more locked in they were. So after 60 or 90 days they would get a better conversion rate than if the free trial was just 14 days or 30 days. And once we actually checked the numbers, it was clear that that was absolutely wrong. There’s no reason to assume that.

And for most products, we all want our product to be as sticky as Evernote or Dropbox or something along those lines. But for most products it’s just simply not true that people during the trial period, it’s not even true that they’ll use it beyond the first day, beyond the first log in. Most people, they’ll login, they’ll create a free trial and then they’ll leave and forget about you and never come back. And the ones that do come back, it’s not like if they keep using it for 30 or 60 day for free that that means that they’re going to convert. So a lot of times companies waste time with sales cycles and they put their hopes on things that don’t match reality. And the 14 day trial has the benefit of shorting the decision period for the customer.

So as a user, when you see you have 14 days to figure this out, it gives you a little bit more of a sense of urgency of like, “Let me check this software out, let me play around with it and make a decision if I want to use it or not.” And for you as a company what I advocate is that you’re going to be reaching out to them really proactively with drip emails, with calling them, with lots and lots of things, to then activate these people and help them in the decision process in the 14 days. Not just leave it up to them, but help them make a decision within a short period of time if they want to buy or not.

Andrew: You know what? That’s counterintuitive. I would actually, frankly, think that with clothes, that people would be adding more contacts with each day. They’d be making more phone calls using the software, sending more emails, and then all of those records would be in the system. You experimented with 60 days too, for your software?

Steli: No, we never experimented with 60 days.

Andrew: You just went to 14.

Steli: We went straight to 14. There’s a caveat to be said that I think that the question is, how much money can you spend in customer acquisition? Right? If you raise a hundred million in venture funding then you should have free plans and you can afford to invest heavily in things that might pan out in revenue two, three, years down the line. But if you’re small, you’re a bootstrap, you want to get to real revenue numbers really quickly, you need to be proactive. In 14 days, the thing is this with our software for instance, the CRM in general, when people trial it, they don’t typically trial it full force. They’ll have one person on the team look into all the different options. They’re not going to import all their data. They’re not going to add all the sales people to the system. They’re not going to use it as a fully operational system. They’ll play around with it and poke in it.

Andrew: I see. Fourteen day trial is not, start using it fully for those 14 days. It’s 14 days to look around. Okay.

Steli: And some people might use it fully but many won’t. Many will just look around. And also you can be very proactive in extending the trial. That’s one of the times where we reach out two days before the 14 day trial is over and you’ll get an automated email personalized from somebody on the team here that asks you, “Hey, did you have enough time? Do you need more help? Do you want us to extend the trial?” And many times that’s the beginning of a real conversation where people go, “Yes, please give me another week or two,” and this and this question and then we start engaging and closing these much more successfully.

Andrew: It almost triggers reciprocation because you’re giving them something for free that they didn’t expect to get it and didn’t feel earned and so they feel obligated at least to continue the conversation, not necessarily to buy. Is there anything magical about 14 days? Is it, you just want us to have a shortened trial period. You’re not specifically saying 14 as opposed to 7 as opposed to 10 as opposed to 1.

Steli: Yeah. No, I’m not dogmatic about it. There’s not a single number that I think beats all of the numbers for all businesses. But I think that for most SAAS products, two weeks is a good time. Many people are fearful of having a higher price or having a shorter trial period. But I don’t want you to make decisions based on fear, I want you to make them based on real reasoning. So if fear is all that stops you from making the 30 day trial into a 14 day trial, you should try it out and see if you get more engagement, more active users and more customers through that in a shorter period of time.

Andrew: So somebody signs up, they try it. But you don’t just leave them to try it on their own. Let’s go back to the big board here. You say, call your trials, the people who are trying your software within five minutes. Is that number specific? Do you really mean five minutes?

Steli: I really mean five minutes. And again, I do realize that oftentimes as a startup, you don’t live in a perfect world with perfect resources. So you’ll have to adjust this. But generically, the philosophy here is that you want to call your signup, specifically if you’re B2B, you need to call your signup your trial users, and calling them within five minutes the reason why that’s so important is that your reach rate is going to go up dramatically. There are studies that show it goes up by 100% even. Some professor ran some studies.

Andrew: What was it for you? When you’re saying in the past what you guys used to do is wait how long before… in fact, before we talk about why five minutes. Why call them up at all? They just signed up. They want to try it. Nobody seems to want a phone call. Why call them up?

Steli: Well for multiple reasons. Number one is you want to call them to welcome them to the platform. You want to call them because you want to qualify them and figure out, who is this person or this company? Why are they interested. How did how did they hear about us? Learn more about your market, your customer, and then you want to see, what is the goal that this person has? Why did you signup? What do you want to accomplish? And make sure that you point them in the right direction to get to that goal and accomplish that. So we would reach out, we’d tell people, “Hey, I know you just signed up three minutes ago. I wanted to say a personal welcome and I want to see what do you want to do with a platform?”

You’ll see a lot of times people will say, “Well, this is too early for a call. I don’t know yet. I’m still playing around with it,” and then once you ask them, “Why did you signup in the first place?” they’ll start talking for 15 minutes telling you all the problems they have or the issues the team has with the current solution. They’ll give you this wealth of information that will then help you help them get something real out of it. Or you might just discover within five minutes, a lot of times that happens, we’ll discover in the first five to ten minutes on the call they’re not a good fit. We will not be able to make them successful and then we’ll point them in another direction to save them time.

Andrew: I see. I guess we’ll get to qualifying later on. So did you try saying, hey, you know what? Whenever we have time or maybe we’ll batch it and once a day we’ll make calls to all the customers who joined within the last 24 hours. Did you try something beyond five minutes?

Steli: Yes. Yes. So at the beginning we would just call randomly whenever we had a chance to call. So maybe it was an hour later, maybe it was two days later, depending on our workload. The most painful thing about calling and why lots of startups don’t want to call their signups or one big reason why calling seems ineffective, inefficient is that, you spend the majority of your time listening to dial tones, voicemails, just not talking to human beings. It takes so much time. You can’t just batch call a thousand people like you can do with email. You just sit there manually one by one, takes up all your mind share, and your own time.

So we realized that we wasted a ton of time. Although these were inbound leads, we would still not talk to most of them. Most of the time we would just listen to dial tones and voicemails and not reach a human being to have that conversation. And once we shifted into calling within the five minute mark, what happens is that because it happens within five minutes, the likelihood of that person still being on their computer or on your website actually, still checking it out, having some time, not being in a meeting on something else that’s important. The chance of that is just dramatically higher. And then when you call, they’ll still know who you are, they’ll have full context of what this is about, and you have a bit of their time. And it makes a massive difference in your reach rates, which makes calling a lot more efficient, a lot more effective, a lot more worthy of your time.

Andrew: I see. You were going to give us studies but you know what I think is even more interesting is one of your clients went and did that, actually cut down from, I forget what it was, anything from 3 to 48 hours, whenever they could. And that got them a 10 to 15% reach rate, which means that sometimes 90% of their calls would end up with just voicemail, which often is not returned. They then switch to this five minute call suggestion and they got a 67% reach rate. Sixty-seven percent of the time they got to talk to a customer which is amazing.

So I want to know how you do it? What do you do to make sure that you can get on a call with someone within five minutes? And this is what you gave AnnMarie Ward in the production call that she did with you. What is this?

Steli: So this is actually a screen shot of a part of our own software Close.io. In Close.io what happens is that when a lead signs up, the software creates an automatic task, assigns it to a user and tells that user to call within five minutes. What happens as a result of that creating that task is that you as a user you get an email notification. You open that email there’s a link, there is the note that says, “New signup, call within five minutes.” And there’s a link. You click that link and it loads up Close.io, it starts calling that particular signup.

Andrew: I see.

Steli: So it’s a super efficient model and we’ve had to tweak it when we first started and we had a few signups a day. We religiously were calling them within five minutes. And as the business grew and we had too many to call within five minutes with the amount of people we had, we started prioritizing leads and doing some more magic to prioritizing; call the most important leads within five minutes and maybe the ones that weren’t as high value sources of opportunities, call them a lot later. Or not call them at all and automate that process.

Andrew: Okay, so Close makes it a lot easier to contact customers. But no matter what system we’re using, if someone has a trial, even if we just have a Gravity form or a Wufoo form as the onboarding process, we could have the phone number and the name of the person who signed up, emailed to us and we can use it to call from our phone. The important part is, that we do that. Your software just makes it easier and it also helps prioritize. What about if a call comes in after-hours? What happens if someone signs up at midnight, if someone signs up at 4 a.m.? You’re not expecting a five minute response are you?

Steli: No I’m not. So what we do in the early days was, we were just working very late, or even when I was at home at midnight still checking an email, doing something, if I saw a new signup coming in I would just decide to be proactive and call them and wow somebody. Like somebody from Europe or South Africa or anywhere else in the world would signup and then get a call and their mind would be blown, especially when I told them that I was calling from California. So it was just a way to wow people but we didn’t expect to call people within five minutes 24 hours a day. That’s something that you want to do once you have the resources and the bandwidth and the people. But the early days you’ll have to make certain adjustments and sacrifices. And one of them is that you can’t call people within five minutes at 3 a.m. in the morning if you have a team of four people, somewhere in the U.S. It’s not going to be possible.

Andrew: Right. Get the trial, get it quick, then make a phone call. Then the next thing we should talk about is what you mentioned earlier. You say set up drip emails to activate your inbound leads.

Steli: Oh, yeah.

Andrew: What kind of emails are we talking about? I would think that the phone call would activate the inbound lead, meaning they signed up for the trial, get them to actually use it. What is the drip email do?

Steli: Yes, that’s a great question. The drip email does the same thing. It just does it in different ways. So we’re big believers in over communicating and being overly proactive during a trial. For every inbound lead you want to be as proactive in communicating to them and with them as you can to get the maximum of out of every single lead that comes and checks out the website. These leads are worth so much to you.

So what we have done is, you get a lot of email when you signup for a trial for Close.io and one layer of email for instance is these drip emails that we set up where you get personalized emails that are automated. When you signup for instance within five minutes you’ll get a little welcome email. But it’s not going to be in a beautiful HTML welcome email from noreply@Close.io with like big logos or just super generic. It’s going to be an email coming from a person on the team here. It’s going to be somebody saying, “Hey, I’m your personal account manager. My name is Kevin. If at any time you need anything, let me know. Here’s all my contact information. Let’s do this.” That’s going to be one personalized email.

Two days later they’ll get a personalized email from me saying, “Hey, I wanted to welcome you. I’m one of the founders of the business. If you ever need anything, have feedback, want to chat sales or sales software, I want to talk to you. You can always get in touch with me.” A few days later, depending on if they’re active, depending on if they do an import of their leads into our system, if they make a lot of sales calls, depending on their activity, we’ll send them an email that either tells them, “Hey, it seems like you need some help. We haven’t seen that you haven’t been able to try these free features out. Let’s get on a call and make this happen.” Or if they’ve been very active we’ll congratulate them and tell them, “Hey, you’re trial is going really well. It seems like you’ve been using this a lot. Let us know what else can we do to make you really successful, really kill it with Close.io.”

And then they’ll get an email from me that’s super long about the story of our company. After seven days I’ll send them an email, an automated email will be sent to them from me that shares the entire story and journey of our business. And it’s a super long email but it’s one of our best converting emails and people are really touched. People go right back sharing their story and it’s a really emotionally engaging email. And a few days before the trial end they’ll get an email saying, “Hey, your trial is about to end. Did you have any more questions? Do you need more time? Let us know, we’ll make it happen.”

All these emails, maybe seven or eight emails within a 14 day period and that’s just one layer we have. A lot of other emails that people also get additionally, they get our newsletter, they’ll get four emails that are a little bit of a tutorial on how to use Close.io. So people gets lots of emails from us with great content hopefully. And it makes our conversion rates go up, it makes our activation rates go up. It makes people respond and start a conversation with us which we want to accomplish with as many of our inbound leads as possible.

Andrew: You mention that the salesperson will send a personalized email and then you will send a personalized email. How can you send a personalized email, as the founder of a company with lots of obligations, to everybody who signs up?

Steli: That’s a great question. So what we do is we use a drip email tool. So there are tools out there, there’s GetDrip, there’s Customer.io which is the one that we’re using. That’s a tool that allows you to write email templates and then select what is the email user this should be sent from. It allows you to have little tags, so it changes the first name and it can just customize little bits of information.

Andrew: I see. So by personalized you’re not saying, “I checked out your site,” etcetera. You’re just personalizing using mail merge, essentially.

Steli: Yes.

Andrew: And then you evaluate the responses here. This I think, I mean the details of this aren’t that important but I’ll zoom in a little bit so people can see it, this is your drip campaign emails. These are the emails. I see that each one you see the open rate, you see the clicks, you see the conversion rate and that’s how you have a sense of how effective these emails are. That’s what you’re keeping track of.

Steli: Yeah.

Andrew: Okay, so the ones that are important are the ones that get people to… here’s what I have. You want them to know that it’s a real person and see if they will reach out to you because if they talk to you, they’re much more likely to tell you their problems, their needs, and then you guys can sell them. Especially since you have real sales people. You also want them to know the story of your company. That’s why that big email converts, the long one. And you want them to know how to use the software itself. That’s why you have this four sequence email. Did you also say that you have an email that goes out when someone doesn’t use a feature that they might want to check out? You do?

Steli: Yes, so in a drip email tool you can specify certain things based on how people behave on your platform. What kind of pages they look at, if they went to the billing page or not, if they’re using certain features or not. Based on that behavior, you can tell if somebody is slipping away in the trial and you’re going to lose them or if somebody is very engaged and very likely to convert into a paying customer. And based on these activities you can customize and automate very specific emails to be sent to them.

Andrew: So Steli, this feels very overwhelming to someone who’s listening to us and realizing they should set it up for the first time. Out of all this stuff, the newsletters, the how-to’s, the emails from the founder and the salesperson, the activation for features that they hadn’t used. If we wanted to start, what’s the first email that we should send out as part of our drip?

Steli: A welcome email.

Andrew: Just welcome to the system.

Steli: “Welcome to the system. I want to talk to you and help you get the most out of it. When’s a good time to chat?” And you want that email to come from a personal email address. Steli@close.io.

Andrew: Even if you’re not manually typing it out, you still do not send it from no-reply?

Steli: Do not send it from no-reply, do not send it from hello@ or support@ or any generic email. The reason for that is that anything that feels generic, like something that’s been written to many people, not from a human being, will automatically get less response rates. We don’t respond well to messages that don’t feel like they’ve been written and addressed to us personally.

Andrew: All right, cool. Let’s go back now into the big board and the next big thing for us to talk about is qualify your leads to close better customers. You started mentioning this earlier and people might have noticed that I intentionally cut you off so that we can focus on it right here.

Steli: Yeah and before we go into this, I want to just say one more thing on the email side of things. One main message that I have to people out there is, you need to send more emails to your trials. You need to. Whatever number it is that you have today, just double it.

Andrew: Really? I would think they just signed up. Leave them alone, let them experiment. Don’t be a pest.

Steli: No, no. When they signed up, it’s your obligations, your responsibility to make them successful and successful means get whatever they wanted to get because they invested time in doing the trial. It doesn’t matter if it’s information that they wanted to get, whatever they wanted to accomplish, it’s your responsibility to manage their trial and help them accomplish that.

They have other responsibilities. They have families, they’ve little children, things happen. They forget. It’s not their job to make this trial a success. It’s yours. A famous SaaS VC once told me if some people don’t think you’re spamming them, you’re sending too little email. And I do believe that your email should be high quality, great content, sincere. You should be trying to service them and make them successful. Not be selfish with emails. But if you do so, you have to send them a lot of emails because otherwise they’ll forget and they will not have the information, the assistance that they need to get what they wanted out of the trial. Really, I can’t over stress that whatever the numbers that you sent today, just double that number and you’ll see your conversion rates rise and people will appreciate it.

Andrew: So I’ve got to tell you, this is now your third appearance on Mixergy. You did the interview, you did a course, you’re now doing a second course here with us. I can see such a dramatic change in you, I can tell, even if you hadn’t told me at the top of the interview that story about getting the champagne to celebrate a two million dollars, I could tell that you’re doing really well. There’s swagger, there’s confidence, there’s experience and there’s the ability to tell people something that’s scary and dangerous. Like email people to the point where some of them think you’re spamming. You guys really must be killing it now.

Steli: We’re doing well, we’re doing well.

Andrew: I can tell.

Steli: I appreciate that feedback. It’s an honor to be playing a really small part of the Mixergy community. I told you I’ve been a huge fan. When we were doing Supercool School I was watching your interviews. I’m watching them today and learning lots. It’s super. It’s a little bit of a trip to be on here as it is.

Andrew: I’m glad that you are. And one of the coolest parts is that people aren’t just listening to you, but I sometimes say if you hear something useful, you should let the person know. And before we started you said “Andrew, I’m actually hearing from people who both are signing up because they had learned something from me, but in some ways even cooler who just are sending a note saying I learned something from you. Thanks so much. It was really helpful.” And I know I do learn from you all the time.

Apparently I should be spamming people more. Let’s go on to the next. I shouldn’t say spamming. But you’re saying get rid of the fear that you are over emailing and take the brakes off. That’s something that frankly I need to do more of and I don’t know that I’m going to get to the point that will make you happy. But I should do more than I do right now.

Steli: Just double what you’re doing right now.

Andrew: All right. I do know actually talking to my customers, they want specifics like that, even just saying double where you are right now is actionable for many people. All right, so you had a situation where your salesperson was trying to close a deal and spent 14 days on the trial with the person, talking with your customer and then again and again. Talk to me a little bit about the issue as you experienced it with dealing with unqualified customers.

Steli: Yes. So a lot of people think that because we’re selling, we’re selling to everyone we’re trying to get everyone’s money and that’s a bad idea. You don’t want everyone’s money. You want the right kind of money. You want money from customers that you are certain you can make successful, that want to use your product in the right use case with the right workflow, that have the right type of needs, the right type of environment, whatever that is for you. In our case we know that we don’t want enterprise clients so we’re looking for small businesses, mid-size businesses, startups. We know that we’re looking for companies that do inside sales and not field sales, knocking on doors because our software was not made for that.

So we know who our customer is and we qualify people before we sell them. First thing we do is we’re trying to figure out, should you be a customer? Is our software really the best piece of software for you. And we’re not trying to sell you if we can’t answer that question with a “yes.” If it’s a “no,” we’ll tell you don’t buy us, go somewhere else. If it’s a “yes” then we will try to sell you and get you on with real conviction.

Andrew: Is that because you talk to your customers that if you just had software like Highrise for example with no sales team, and somebody decides hey I’m going to use it to keep track of my grocery list even though it’s meant for CRM. You say, you know what? Who cares? Do it. Enjoy it. We will make it available because you’re committing human resources; their time on the phone, their emails etcetera, that’s where it just doesn’t make sense. Am I right?

Steli: Yes and no. So it’s not just because of that. It’s because truly, if somebody wanted to give me tons of money and they use it in a way that’s going to make them very unhappy or unsuccessful, I don’t want that because the problem with that is that whenever somebody else asks them, “Hey, have you ever heard of Close.io?” They’re going to say, “Yes. It’s a really shitty like laundry list, a shopping list tool.” And people go, “Shopping list? I thought it’s a project management tool.” And now I’m creating confusion and creating a bad reputation. I want people to be raving that not just that they’re paying us money, but that they’re getting a lot more value from it than what they’re paying us and to accomplish that it needs to be a good fit.

Andrew: Okay, I don’t know if you can see this, but this is an email from someone, actually this is a note.

Steli: A note on in Close.io.

Andrew: On someone’s account. It says, “We’re changing the way we’re growing our business and do not need this software at this time.” This is someone who canceled.

Steli: Yes.

Andrew: Why is this?

Steli: This is particularly painful because this was not because the business really changed direction or anything like that. It was because they weren’t qualified properly. So here’s a deal where the prospect tells our salesperson that if they’re going to hire all these new remote workers to do certain types of sales and they have all these grand plans and how to do that. And if you ask a few more questions in the qualifying process, we would have learned that what they’re trying to accomplish is probably not going to happen. It’s not a good idea, it’s not going to work well within our system. But we got, or our team got too excited about the positives and didn’t really investigate enough in the qualifying process to uncover the red flags.

What happened as a result, is not just that they canceled and we got a little bit of money. Is that we invested time in closing this deal in extending the trial, extending the trial again. We serviced that account, we gave them extra engineering support. We jumped on multiple cause, we onboarded them, we trained the team. We invested a lot more than what we got just in a few months of being paid. And then they leave, which is always a super painful and demoralizing process because you’ve invested so much in a relationship that never had a chance to succeed. And it’s especially painful to me because if you look at why that happens, it was because we didn’t qualify as well as we could. And I just hate that we missed out on that and we did a bad job at that.

Andrew: At what point you qualify someone to know whether they’re worth pursuing as a customer?

Steli: That’s the very first thing that I do. It’s the very first thing I try to do so.

Andrew: You mean on the site itself?

Steli: On the site you can do a bunch of things but that’s not perfect. So on the site itself the things that you can do to qualify is it has to do with your pricing, it has to do with if you require a credit card or not, it has to do with how much information you’re asking them for, like if you asked for a phone number or not, if you ask them to tell you how big their team is. The more things you ask them for, the more you communicate to them who your ideal customer is, what your price point is and things like that. That can discourage certain people that you think are not a good fit of signing up.

So you can do a bit on the messaging and marketing side. But real qualification happens on the phone or in the conversation with somebody. And when we reach out to say hello during the trial, we’ll try to understand what are your needs and understanding what you’re needs are are the first step in the qualifying process. But the first thing they’ll do when I communicate with somebody is trying to qualify them very first and figure out, can I help this person or not.

Andrew: I see, just by asking basic questions like tell me about your company? What kind of company do you have? How do you sell? That kind of thing. If you ask, how do you sell? And they tell you, “Well we have sales people out in the field,” then you know it’s probably not going to be a good fit.

Steli: Exactly. You know who your best customers are and then you try to find out what do they have in common. And then based on that you’ll see if this new prospect fits that criteria or not or if they want to do things with your software that you think are just a bad idea, will not work well.

Andrew: All right. No grocery lists onto the big board. The next thing that we want to tell people, is give a demo that actually sells. You had a client who did what instead?

Steli: They gave demos as if a demo was a training course for customers, that went on forever, with no direction towards the end, which is what many companies do. Many companies set up the product demos, the one-on-one product demo with a customer even when they do webinar demos of the product. They set it up in a way that is more training than sales. And a demo should be sales. You should demonstrate value, not demonstrate all features and functionalities. Not train people in being proficient users. But demonstrate why what you have is really addressing their need, so they should investigate more time and energy in becoming customers and then proficient users.

So the demo that this specific client had was an hour and a half long demo and they would go through every single click in the universe. Like, “Oh when you click this,” and they would do stupid clicks and they would explain everything that a page can do and then you set up your analytics and then you would click this button to save the information, you would click the button and you watch them, watch the save thing spinning wheel spin and then three seconds later, it’s safe. Now, we saved it.

And I was wondering why the hell do we have to see this? You explained how the page works. You showed how you set up the data. Why do we have to watch somebody click a stupid button and for two, three seconds look for a little safe icon to pop up. So this person would just click on everything and show every little detail to the degree where after 10 minutes you’re just like you were brain freezed out of your mind.

Andrew: Overwhelmed. What did you tell them to do instead?

Steli: Well, what I told him to do instead is to shorten the demo to a 10 or 15 minute show me the most important things.

Andrew: Ten or 15 minutes?

Steli: Yeah.

Andrew: Okay.

Steli: Even that could be too long if you don’t know what you’re doing. So first you qualify me to understand what do I care about, what other functionalities and features and things that I need, why do I need them? What do I want to accomplish with them? Then when you demonstrate a product, you can focus on these things. Maybe I should just check out the big two or three items that really relate to what I care about and what I need. You demonstrate how your software accomplishes these things and hopefully in an impressive way.

You do a 10, 15 minute show me really broadly and quickly how this thing works and how it does what I want it to do. And then you give me another 10 to 15 minutes to ask my questions. Go into more depth and say “Well what happens when I click this link and how do I exactly do this and this and this? But you have to keep the prospect focused so that they don’t run off with a million questions that might not even be relevant for what they want to accomplish. But you kind of rein it in and make sure that we focus on the top priorities in the demo and demonstrate the most important things versus demonstrating everything.

Andrew: And when you did that, at what point do you sell? Now we’ve got 15 minutes of show and tell and then 15 minutes of question and answer. What point you sell?

Steli: At the end.

Andrew: Right afterwards? “You want to buy?” Is that what you say?

Steli: I mean that’s not a bad question. It might be a scary one for you to ask. But that’s why it might be the right one. Maybe you’ll say it a little bit more elegantly and you’ll say, “Hey, what did you think? What’s your first impression? Do you think we are the right fit? Did you like what you saw? Is there anything that would prevent you from becoming a customer after you’ve seen the demonstration? Is there any open question that I haven’t answered yet?”

Andrew: I see.

Steli: You’ve demonstrated the product, now turn around and ask them, ‘What do you think? How do you feel about this?”

Andrew: One of things that I noticed, this is a screenshot from your demonstration. The important part for me is that lower left, first of all looks like you just used “join me,” right? Just simple screen share. What is that clock on the lower left doing?
Steli: That’s a timer to keep us in check, keep myself in check. It’s 15 minutes that I have and that forces me to prioritize. The problem is that when I have an hour block, is that I’ll try to fill it and I don’t feel any sense of urgency, I don’t feel any need to prioritize. So I’ll just give anything and everything as much attention and time as the next thing and I will not be in control, I’m not going to be managing the time, I’m not going to be managing the demo.

Andrew: Okay, and that’s just an online clock. I forget which one it is but I’ve used that too. And you just keep it for yourself. Stopwatch, yeah.

Steli: Online Stopwatch. You just take joined up, meaning you set up the page that you have and I’ve done it with calls where I’ve forgotten to set it and people saw the time and I said, “You know what? I want to make sure that we’re focused. I want to make sure we get the priorities done, so we’ll have this thing to keep us in check.” And people will smile and appreciate that this is not going to be an hour long rambling that at the end all the parties that were involved feel like, “Was this really worth our time?” But that this is going to be focused

Andrew: I’m looking it up because I don’t know if I got darker or my lights are not directly on me but I’m looking dark today.

Steli: I didn’t notice a change.

Andrew: Angle it just like that. They never do this at Lynda.com. There’s so much more professional and lighter maybe I don’t know. Back to the big board. Actually, that did make a difference, that little twist of the light. Next big thing is you say go for the close. You actually started talking about this right now. But you watched a customer of yours, do what?

Steli: I’ve watched so many customers end a conversation with the fear of closing and just leaving a big void at the end. People would go through a really good conversation. It was clear that both sides were very engaged, that this was a good fit and at the end of the call I would listen to CEOs and founders go, “Well yeah, I mean this was great. It’s very exciting stuff. Well I’m going to send you more information and then I’m looking forward to hear from your team.” I’ll be like, what the hell was that all about?

Why can’t we just ask the question, “Hey, do you want to become a customer? Are you guys ready to roll?” Why are we so afraid of it and instead of just asking for the close, we just avoid that and we end the call with no direction. Basically leaving the responsibility to the customer to close themselves. Well I’ve done my part, now you guys go and convince yourselves. No, it’s your responsibility to help them make that decision to close the deal.

Andrew: So you mentioned that the way to lead to it is to say, “Do you have any questions? Is there anything that would keep you from buying today?” What do you do to make the sale right there? Are you offering a discount? Do you say, all right, now here’s a link, go use it and buy. What do you do?

Steli: I mean it depends on your product. You could just go, “Hey, do you have your credit card ready? Let’s get this done right now.” We don’t want people to give us their credit card numbers for Close.io. We’ll want them to put them in the system themselves. But before one of our guys went to lunch, I heard him say, “Are you ready go? All right, let’s do this. Let’s set you up. Do you have your credit card ready?” “Yes.” “Okay, log into Close.io. I’ll make sure that this works out. I’ll be your virtual assistant at this. Go to this page, click this type in your credit card.”

Andrew: So I’ll be here in case you have any problems. Let’s do it together.

Steli: Yeah, it might be that it in some cases it might be that I say, “Hey, I’m sending you a contract over right now by email.” The close might just be to decide what the next steps are. Maybe they’re not ready yet to buy but you need to decide, what is the next step towards the buy? Maybe it’s for them to look at the contract and sign it. Maybe it’s for you to schedule a follow-up call with more stakeholders. To close means to get to the next action step, an action item on the way to them becoming a customer. And philosophically what I want people to know, the way that you need to think about this is that, you need to ask for the close often and early. And you need to be expecting the yes and embracing the no.

What I mean by that is that, you need to be comfortable asking the question, “Are you guys ready to buy?” And when they say “no,” it’s not the end of the world. It’s just the beginning of the deal. When people say, “I don’t think we’re ready yet.” You go, “Of course you’re not. It’s still early, but I wanted to check in. You seem like smart, sharp and ready to go. But we’ll come back to the question later on. Most of our customers are not ready yet. But you’ll be ready by the next time we talk.” And I realize that this is not something everybody is comfortable with.

But it’s not so much the words, it’s more the basic philosophy. You have to get good at closing deals. You have to ask a lot and be okay with the shots that you’re missing, just like the Michael Jordan thing with like more missed shots than made ones. You have to get comfortable with asking this question. And a lot of times the first reaction you’re going to hear is not going to be “yes” and you need to get comfortable with that as well.

Andrew: You know, I’m surprised that you are making a lot of calls, a lot of demos. I was going to say, your product doesn’t seem like it’s expensive enough to have enough margin to do that. But I guess it’s one of those things that people buy on a perceived basis and then they implement it throughout the company and so they’re more likely to want a phone call and a demo and to interact with you. Do you recommend this kind of call based sales process for other SaaS and at what point does it make sense and at what point is it just too much?

Steli: So that’s a great question. Here’s my answer to this. At the beginning when you’re just starting out, everybody should do this because the economics don’t matter as much. What you’re trying to do is you try to learn as much as possible about your market. So call everyone, visit everyone, just drive to their offices and just give presentations. It doesn’t have to scale. It doesn’t have to make economical unit, economic sense. You’re just trying to figure out get the first customers, make the first learnings. You need to go the extra mile and do what doesn’t scale and really hustle.

Once you have that initial thing going, eventually you have to ask yourself, how much can we afford to acquire a customer? How much can we spend in terms of time, energy, resources, money? In that case typically, what you’re looking for is that you’re probably not going to… to do this type of sales, which is basically inbound, light touch inbound sales, leads come to us and we’ll send them a bunch of automated emails and we’ll jump on a few calls and demos. You usually want to be in the B2B sector, so customers that are businesses. And you usually one to have at least a few thousand in customer lifetime value. Probably at the healthier pace at the 5 to 10 to 15,000 over the entire lifetime of the customer.

Andrew: So what is the cost to have an outbound sales process per customer?

Steli: Outbound is different.

Andrew: Sorry, inbound with a personal touch like this.

Steli: Yeah, it’s hard to say because it depends so much on where you are. If I have some junior CEOs inbound sales reps and I hire them in Las Vegas, it’s going to be different than if they’re in San Francisco or New York. So it depends a lot on that. It depends on a lot of factors. But generically speaking, you want to make a few thousand dollars per Close customer to be entertaining the idea of having sales reps.

Andrew: What if we talk about it on a time basis? How much time does a salesperson usually have to invest to close a sale, and that would include the no’s.

Steli: Yes, so in our case typically two to three weeks, that’s our sales cycle.

Andrew: What about number of hours total that they would spend over the last two to three weeks?

Steli: It’s so hard to say. It also depends. Our sales guys, they will talk to a new young startup that might just be $300 per month in total value for us for the first few months. And then they might talk to somebody that’s worth $4000 a month to us. Obviously the sales rep will invest a lot more time, will have to invest usually a lot more time, for the $4000 deal than for the few hundred dollar deal. But honestly, at this stage, what we’re looking for is overall productivity. So we’ll see, is this sales rep bringing in a lot more than what they cost to us. Is that profitable, because if you raise a hundred million in venture money, you could be spending $100 for every dollar in revenue. So you don’t care that much. All you care about is ramping up revenue as quickly as possible.

Andrew: How much did you guys raise?

Steli: For Close.io, nothing. It’s basically all bootstrapped.

Andrew: ElasticSales that did it.

Steli: It was actually even one thing before ElasticSales. So the company, the business was called SwipeGood back then. That raised over a million in seed funding, pivoted to Elastic. Elastic had a little bit of that money left and then it was growing by revenue and profitability and Close.io had no venture money whatsoever.

Andrew: I see, okay. So if I’m understanding you right, what you’re saying is, look if you’re getting started make calls to all your customers so that you learn from them. It’s not about being economical. It’s about getting to know the kind of person who’s going to buy from you and what it’s going to take to get them to buy and so on. After you do a little bit of this, you’ll get a sense of what it costs you per sale, per close, and then you can decide whether it’s economical to keep it going or maybe you raise your prices or you stop.

Steli: Yeah, and typically you should raise your prices. Double your price, that’s another good advice that generically is good advice. But once you get this going you could look at your salesperson and say I’m paying this person 4K, 5K, 6K, 7K a month and they’re bringing in X per month. And if you’re bootstrapped, the math is simple. At the beginning you might want to recoup what you’re spending immediately and over time you might be able to afford to recoup at a later. So you’re going to hire more aggressively or less aggressively.

Andrew: Okay. Let’s move on here to the next big point, which is deal with discount inquiries properly. I’m going to bring up my browser here because there’s a tweet I think that we should look at. Here’s one from a guy named Craig Clark and what he’s saying is “@Close.io I’d pay more for you than I do Highrise” which is a competitor. But the pricing structure is too prohibitive if I wanted two to three for a small business to use.”

So essentially he’s saying I like you better. But I’m afraid of the costs because I’m going to have two or three people use it and I’m a small business. I should actually even zoom even more though. I read it and I think we got his point here and I’m sure you get this often. What did you do, how do you handle this?

Steli: That’s something that we deal with every day. People reaching out asking for discount or complain that our price is too high or telling us that they will buy our competitors product because they negotiated some really crazy deal with them and asked us if we could match or beat that price. And our basic philosophy is that we’re never going to negotiate on price. We’re always going to negotiate on value. And what that means is that our response always is, if all you care about is getting the cheapest product, please go with our competition. We’re more than happy to help you get a better price with them. So we will be a tool in your repository to get the best maximum price. But we are looking for customers that want to crush it in sales and want to get the most value, not the cheapest price. So that’s just generically a philosophy.

So a lot of times we’ll offer them and tell them, “Listen, you haven’t trialed the product yet or you haven’t given the product a real run for its money. Sign up for a trial. Really use Close.io for two weeks, three weeks whatever it is and once you truly know what the values that we can provide to you, at that time we’re more than happy to talk about price and we’ll promise we’ll make you happy.”

Andrew: But are you then frankly on the down low, are you talking to them one at a time? This is what you said to him. Let me bring up the browser again. There’s a browser. That’s his question, the one I read before. Your response or someone on your team said, “Give the trial a shot, play with the product. If you’re happy email us and I bet we can work something out.” And here’s this great response back from him. “You guys sure know how to say all the right things. I’ll set up a trial soon.” But are you implying with the “give the trial a shot. Play with it and if you’re happy, I bet we can work something out,” that privately you will give him a discount because he has a small business? Is that your policy.

Steli: Our policy is that, sometimes we give discounts. We’re not like completely opposed to discounts. But it depends on why and how much and it depends on a case-by-case basis what we’re able to do. What kind of plan you want if you used telephony within Close.io, call internationally, different costs to us so we have different ability to give you a discount than if you’re using something without telephony. If you signup a one or two year contract, it gives a different room to work with.

But what we’re saying is let’s set the right priorities. First, let’s decide that we’re the best product, that we’re the right product for you and then let’s figure out the pricing discussion. Let’s not talk about pricing before. And the reason for that are simple. There some of them are very logical for the customer which is like they’re negotiating on something that they we both have an establishment that we’re even the right solution. But also selfishly for us, it’s the right sequence in negotiating because once they’ve invested and figured out we are the best thing in the world and they want to buy it, then the negotiation is a completely different one than when they have invested zero in it and they don’t care about us and they’re just trying to get through a number that [inaudible 00:51:39].

Andrew: That makes a lot of sense. I see. By the way, this is a side track completely. But here’s how this whole conversation started. This guy Craig says what is like Highrise CRM but with excellent, dare I say seamless Google Apps integration, just for small business. So cheap is good. And then CRM Online, which I guess is a Website for CRM recommends a couple of things. You guys respond and say, “Check out Close.io.” He says, “Sure I will check it out.” And then he says, “Can I tweet back?” which of course, you can tweet back.

But you also give an email address and then he has more questions. And basically you’re getting him to try this just because he asked a question about CRM. He wasn’t directly engaged with you, he was just curious. I thought that was a really interesting sales process. A really interesting way to catch somebody who’s at the right point in the consideration process and frankly from what I can see here, never even heard of Close.io.

Steli: Yeah that’s absolutely true.

Andrew: Back to the big board here, because we have so much to get to and we’re already running late. Next big thing is to say, give customer references at the right time. When is the wrong time? Why not just say, “Here’s great software.” In fact, if I look at your home page I was really impressed by the people who you got on here. I don’t know if anyone noticed it.

But you have both Jeff Zwelling, who is one of my most popular interviewees on Mixergy because he is the founder of EchoSign among other things. And you have Joseph Walla the founder of HelloSign. Two competitors both like your software and they’re both talking about how good it is. Why not give more references early on? If someone’s interested say, “Here, this software is so good. Here are 12 people you could talk to.”

Steli: Yes. So the reason for that is that you don’t want to burn out your references and you want to make sure that any time one of your customers talk to a prospect of yours, the chances of that prospect becoming a customer and having a shared success story is very, very, very high. It should be almost 100%. You should be almost 100% certain that when you put your happy customers with new prospects, that these prospects also become customers. Because your references will know, your references will hear later on that, that call lead to that prospect becoming a customer or lead them to not become a customer. And you want to make sure that they get as much success as possible.

To do that, what you need to do is you can’t give out references as if it’s free candy at the beginning of the sales process. A lot of times people will check out the software, just on the website, they’ll just check out Close.io on the website. They haven’t even set up a trial. They’ll send us an email and say, “Here’s the 400 requirements I have. I have met all these and I need to talk to four of your customers as references before we can move on with this.”

And what we’ll tell people, we’ll engage with them, we’ll call them. We’ll tell them, “Hey, we’re absolutely happy and thrilled to give you references, as many as you want at the right time. Once both of us have really investigated this deal and we’re both sure this is the right deal and we have the pricing figure out and we have everything ready. All you have to do is now sign and you’re ready to go. The only thing that’s still missing is for you to make sure that you could talk to some outside customers to get that assurance that we deliver what we promise. We’ll give you as many of these references as possible.”

When we tell people that, “Hey we’re happy to give you many references at the right time. Let’s first figure out that this is the right fit. Let’s make sure that the deal is right and once both things are figured out we’ll get you references.” Everyone, not a single time somebody complained about that, every single time people say, “That makes perfect sense. I’m happy with that.”

The difference it makes is that when we do put them in touch with our successful customers, if they become customers, because we’ve made sure that we give them the highest value prospects, and then what happens is that our customers feel part of the success and responsible for that success. So they’re excited when we tell them, “Hey, can you take a quick call?” They’ll know I’ll talk to somebody and these guys also are going to become Close.io customers [inaudible 00:55:50].

Andrew: I see. They’ll feel like, “I did that for them. Last time I did this. I closed the sale. Another time before that I helped somebody find software that they’re happy with. So yeah, I’ll do it again.” It’s not, “Last time I did it, I wasted my time.”

Steli: Nothing is worse than taking up the valuable time of a customer. The customer talking to a reference for an hour and then figuring out that oh, they really needed this feature that we didn’t have so they went with a competitor. What the hell? You wasted somebody’s valuable time and then you deliver failure as a result to them. That’s super frustrating.

Andrew: I think you’ve even said half the time they don’t even want the reference. What they really wanted was just to try the software, make sure it was real and they had this request for reference because they thought let’s just cover all of our bases. Not necessarily something that they want.

Steli: And that’s also true for the discounts by the way. Half of the time or a majority of the time when people tell us, A, the price is too high at the beginning when we convince them to give the product a try before worrying about the price, by the end they just buy. They don’t even mention discount pricing anymore. They just convince themselves of the value. We don’t have to talk about that anymore.

Andrew: Back to the big board again. We have lots to cover here. The next big point is, use peer negotiation to avoid costly mistakes. Let’s illustrate this because I don’t think I’ve heard peer negotiation as a term before. The problem you had was, do you have an example of where this goes wrong, and why something called peer negotiation is important?

Steli: Typically, what happens is that the longer you invest in a deal, the more invested you get. And the more invested you get, the more emotionally invested, the harder it is for you to let go of that. Which means that if you’ve worked on a really important deal for very long time, you will lose your ability to be an effective negotiator and you will tend to give in more and more and more because it’s too painful to losing the deal or risk losing the deal. And this is such a strong psychological factor that it doesn’t matter how much of a sales guru, it’s how experienced you are in sales. Everyone falls victim to this problem. So you need to be aware of that and we found a hack to manage that.

Now when you’re a big business, the reason why these large companies are so great at negotiating is that that there is never one person that goes from A to Z with a deal. You start with one person, that’s a champion. They get really excited about what you do. They have you jump through all the hoops. They get all their questions answered. They do the demo. They do the calls. They do everything. And then when they’re really excited, the point where you’ve invested a month or two and they seem ready to go, they push you over to the legal department. And in the legal department the person you’re talking to has not invested any minute and it does not care at all about this deal. It cares about completely different things.

So this person on the legal department will have you jump through more hoops and give in on things that two months ago you’d just have said, “No, I’m not going to change our contracts. No, I’m not going to change the terms of service.” But now you’ve invested three months, so you’re like, let me do this one thing and get this deal done and this other thing. And then when legal is through they’re like, “Now you go over to the procurement department,” and they push you over to one more department. And every time you start renegotiating with somebody that has no stake in this deal, doesn’t care and has different priorities and you give in a little bit more, a little bit more, until at the end of the whole process, you’ve given them a deal you would have never agreed to at the beginning. A deal that maybe is crazy and it’s all because you’ve invested so much time while the big company didn’t because they have so many people and so many departments they have to go through.

Andrew: Do you think they do that intentionally? That that’s part of their process of not just covering all their bases and making sure that legal is protected, but also let’s wear the guy down because it doesn’t cost us much and it gives us long term savings.

Steli: Some companies and some departments do the procurement departments, so instead of buying departments, they’re set up to negotiate, squeeze the last little bit of blood out of your system. But I think in many cases the individual in the organism or in the organization doesn’t know that, is not maybe aware of it. But the organization is set up in a way where one individual doesn’t have the entire negotiation power over what the company buys or not and it has to go through different departments and a side effect of that.

Andrew: I see. So the main goal is not to wear you down and get a lower price. But it’s a nice by-product of a process that wears you out. As long as they’re going to spend all these resources, they might as well get a discount. So your solution, sorry to interrupt…

Steli: One second. I think we have the cleaning crew.

Andrew: You’ve got to show me. You said that this might happen.

Steli: I don’t know if you’re going to be able to see them. They’re probably trying to hide. Let me go over and talk to them real quick.

Andrew: Okay. We’re going to see if they will hopefully pause things while we finish up one last point. We had a whole lot to set up before we got started. One of things that we did was, he put earphones on so that if people come back from lunch, they won’t hear him in the office. And the other thing he did was he sent a text message to the cleaning people to see if there was a way to keep them from coming in. That text message apparently didn’t land. Good, it looks like they’re good to… by the way, beautiful office.

Steli: Thank you.

Andrew: In Palo Alto. What are you spending for an office like that? That’s really sweet.

Steli: This is just a really beautiful apartment on the 12th floor, we have a view of Stanford campus and so we spend a lot less than we used to with ElasticSales let’s just say that. It’s just a few thousand dollars a month.

Andrew: Okay, I’m paying now 14, 1500 a month for an office for two people here in the heart of San Francisco.

Steli: So, we’re paying probably like double that but it’s for six people and it’s a really, really beautiful [inaudible 01:01:38].

Andrew: Yeah looks like it. So if that’s the problem that we’re trying to avoid, which is that a sales cycle can take so long that the salesperson’s worn down and basically ready to take anything because there’s so much time in on it. What is peer negotiating and when does it come into play?

Steli: Yes, so our hack for this is that whenever somebody, it doesn’t matter who it is, if often times involves me as well. If I’m working on a deal for more than a month and I haven’t closed it yet, I cannot close it myself without getting the approval of somebody in the team. And in our case, it doesn’t matter who it is. It could be anyone in the team. Junior engineer, doesn’t matter if they’re sales people or not, any one of the team has to okay the deal. And the way this typically works is that after a month in the negotiation I’ll pick somebody from the team and I’ll have them as a critical sounding board and go, “Well you know this is what I initially offered. This is why they’re seeing this, this is where we’re on the negotiation. Here is what they want.”

A lot of times the interesting thing is that, the person and this includes me, I will take on the role of the customer and I will sell really hard, why this isn’t a reasonable request. I will even describe the negotiation a way that should make the other person go, “Okay, let’s just give it to them.” And then the other person in the team will ask some really critical questions, we’re a pretty critical group of people here that are very high on the BS calibration level. And even the most junior engineer that we have, I’ll talk to him and he’ll go, “Yeah, but why do we offer them this?” “Well because they really need this because of X, Y and Z. And this and this and that and that” and the person will go, “Yeah but it doesn’t seem to make sense. All of the customers get this and…”

Andrew: So you’re saying its a sounding board. Its not like you then have two different people on the call with the customer. It’s not like another person calls on their behalf. It’s just, hey, it’s been about a month, they’re asking for this. I think I should give it to them and what you want is somebody else on the team to splash some cold water on the face of the person who has now been exhausted through a long sales cycle and says I don’t think that makes sense. If you were doing this in the first week, you’d know that this wasn’t right okay.

Steli: Yeah and the crazy thing is that usually the dynamic of the conversation will go something like this where the other person will challenge it, then the salesperson will defend it and will push against. And after a little bit of back and forth, I’ll go, ” Shit you’re right. Damn it.” And now I’m forced to go and risk losing the deal by telling a customer “no” for something.

The other day or a few weeks ago where one of our sales reps would be like, “I think that I should give them… we’re negotiating on price. They’re really such a large team and they’re really price sensitive for this and this reason and I think I’ll offer them a 15% discount that’s going to get the deal done,” and the most junior person the team goes, “Why 15, why don’t you offer them 5 to begin with?” And the salesperson is like, “Well I don’t think it’s going to be enough and this and that and that. “And we all just look at each other and the salesperson is like, “Damn it you’re right, you’re right. Why don’t I just start with 5?”

Andrew: Let’s start with five if you’re going to.

Steli: And this is somebody that’s awesome at negotiation, has just worked so long on this deal. It’s such a big deal, so this person is afraid of losing it. Saying something that might risk the deal. So you know what happened? He offers 5% and they take it. They’re happy with it and it’s just like ah.

Andrew: What a great example.

Steli: Yeah, we would have offered 15 for no reason whatsoever.

Andrew: One thing I noticed about your sales page and I’ve got to get to the last point, but you actually list the price for enterprise customers. I notice a lot of interviewees that I have on will have an enterprise level but they’ll say, “Call to talk.” Why do you do that? What do you think about that?

Steli: You know, that’s a good question. Our enterprise plan is not really truly enterprise in the sense that large Fortune 500 companies should use that plan because we don’t want those customers. They’re not a right fit for us. But enterprise for us, it was just like that the basic plan in the business doesn’t mean that basic, those are not businesses. They’re just using a different pricing plan. So enterprise for us are the most serious customers that we have that have 100, 200, or 300 sales people that are much larger than just a two person, new startup that’s using us. It’s just a lot more sophisticated as a customer. And we like to have per user pricing, so we don’t like to have the “call us” if you need it. But in some cases makes sense. If you sell software that’s worth millions, call us if you need a price, is the right way to go.

Andrew: Final point here. Create a follow up system so that you can recover customers that seem at times to be unwinnable. Here is one of the people who followed your advice, this is Brandon Gracey. He says, “Steli’s philosophy on follow-up sent me back to significant prospect that had gone very cold. A mix of 41 emails and voicemails later, I got my response. You win. Let’s connect at the trade show.” Long story short, they’re onboarding this month. That is the founder of Handshake.com, a software that eliminates paper order, taking orders on paper. What is this follow-up…

Steli: He’s not the founder. I think he is the VP of Sales over there.

Andrew: VP of Sales, excuse me. I just assume now everyone’s founder that I talk to. I don’t call my dad, my father anymore. I just say, “Here’s the founder of Andrew Warner.”

Steli: I also refer to our kids as like we launched the oldest one two years ago and…

Andrew: The lingo is stuck in my head. When I talk to my parents I go, “Hey this is Andrew Warner.” They go, “All right, I know the last name. Hi son.” Anyway, so what is the follow up process?

Steli: So the follow-up process, it’s a simple philosophy. The thing that I want to share here is that silence does not equal rejection. So people go silent. People you’ve engaged with in the deal, people have checked out your product, people that were really excited. They go silent eventually. You sent them emails, you don’t hear from them, you call them, they don’t call you back. And most people will assume that, that means rejection and they’ll create a very elaborate story in their mind. Usually they make it very painful of how much of a rejection it is.

So to not get more virtual rejection and to not be annoying and feel like you’re the type of person that annoys others, which doesn’t feel good, they’ll just stop and assume this didn’t happen because they didn’t like me, they didn’t like our deal, they hate my shoes, whatever it is. They’ll come up with a story in their mind. I think that’s crazy and it’s really harmful and it’s very bad for business.

My basic assumption about this is when I don’t hear from someone, is that they are busy. They have different priorities, something came up, something in their personal life or in their business life came up and this not a priority right now. But it’s my job to keep championing this deal to keep following up until it becomes a priority again and they can respond to it. So my personal follow-up philosophy is that when I have a good conversation and when somebody came into us as an inbound lead, we will follow up indefinitely until we get a response. And it doesn’t matter if the response is yes or no, both are good.

What kills startups is not a yes or no. What kills startups is the [inaudible 01:08:59] gets the big in-between, we don’t know why they didn’t buy. We have to make up stories in our mind. Or, we will keep the hope alive that they might come around it someday but we’re not doing anything proactively to make that happen. That’s what screws companies and entrepreneurs and founders. So, I, with sales I’m in the business of generating outcomes and my follow-up philosophies, follow-up indefinitely forever with somebody if I had a good initial conversational connection until I get to a result. Yes/no, are both good.

Andrew: So follow until you get a result. If they don’t respond, keep going back.

Steli: Yes.

Andrew: Interesting. We did one follow-up process just for potential interviewees and course leaders here at Mixergy where our process used to be very straightforward, find a potential guest. Have somebody else approved to make sure that you’re not just excited about a person and there’s no substance there. Then find their email address. Then send out a request to do an interview. And then if they didn’t respond, we would just let it go. We just added a follow-up step and saw dramatic responses. I think people respond to the follow-up more than they do to the initial request. But we do just one. You’re saying if they have an interesting conversation, like if somebody says, “Yes I’ll do the interview,” and they don’t book it, you’re saying just keep following up with them until they either say I don’t want to do this interview or until they book.

Steli: Yes. Again, we can make the same basic assumption as earlier where in the early days when you start your interviewing show, you might follow-up indefinitely with everyone. Eventually once you are where you guys are at today, you might have to decide how much is an interviewer worth to you and if it’s Bill Gates it might make sense to follow-up indefinitely for five years. And if it’s Steli Efti might just be two follow-up. You have to move on with life because it’s just not worth the energy and time. But generally you should follow-up a lot.

Personally I try to have a very high level follow-up and it’s opened doors and created opportunities time and time again when they seem closed before. And I’ve taught this, I’ve been you singing the gospel of the follow-up every single day and it’s the one thing that consistently people come back to me with results that they’re just amazed by. And maybe one thing that I forgot to mention earlier but I want to share now is, we talked about these drip emails and setting up kind of somewhat of an automated process. A really effective drip email I’ve seen in B2B startups and B2B software companies, is that they’ll send a couple of emails like the ones I described, “Hello, here is our story. When can we talk?” Blah, blah, blah. “Here’s a discount code,” whatever it is. And then after seven, eight, nine emails, they’ll send a breakup email. And the break up email is basically, the subject line could be goodbye from Steli, a goodbye from Close.io.

Andrew: Yeah, because that’s dramatic. It gets attention.

Steli: Oh yeah, and then they say, “Hey, I’ve tried to reach out multiple times. I’ve left voicemails, I sent you all these emails. I’m really excited about you, but it seems like it’s not a priority right now. I’m going to take you off my list. You’re never going to hear again from me. But when the time is right and you want to talk, here’s all my contact information. I’m going to be excited. Good bye.” And that email gets incredible response rates.

Usually that’s the email that I will respond to something that I’ve ignored to all other emails because it’s you’re taking this away from me and you’re like, “No, no. I’m actually interested. I was just busy with all these other things.” So it’s a very powerful email to use in the automated follow-up. But you can also personally use this if you follow-up with somebody 20, 30 times and eventually before you’re ready to give up just send that email. When you’re like, I don’t want to keep following up with this person, just send the breakup email. You’ll see a lot of these people will respond and thank you for reaching out and apologize that they didn’t respond earlier.

Andrew: I get that. I get it completely. A fear of loss, loss of version. All right, we’ve got a lot here that’s substantive. I think that any one of these points, I’ll bring up the big board, any one of these points on its own is useful, especially that follow-up. Together, they’re incredibly powerful and I can see why you guys keep growing at Close.io. What’s the name of the book? In fact, can you hold it up again?

Steli: Yes, the name of the book is “The Ultimate Startup Guide to Inbound Sales.”

Andrew: Inbound, because in the past you wrote “The Ultimate Startup Guide to Outbound.” You have them both there. What’s the difference between inbound and outbound?

Steli: Well outbound is all about you cold calling prospects, you cold emailing prospects, you reaching out to businesses and people that have never heard of you and didn’t show any desire to know of you. And you try to educate them of the existence of your company and then get them interested and close them. So that’s outbound, you’re going out to generate business. And inbound is when you do marketing, PR, whatever it is, you create awareness so people come to you and want to know more and then you sell them on what you do and try to close. So that’s inbound and that’s outbound.

Andrew: And now you’ve got Inbound. We’re now recording this before you officially released and published it and you still don’t even have a landing page for it. But we will have one by the time the session is up and we’ll link to it. And you wanted to give a discount, my guess is you want to give a discount not because you’re the kind of person who gives in on price very quickly, but you say let’s see how effective the Mixergy audience is. Or let’s see how effective promoting to the Mixergy audience a book is. And that’s why you’re offering a discount. What’s the code?

Steli: The code is going to be “Mixergy” and honestly it’s a bit of both. So in this case, even if I didn’t know what the numbers were, I would want to offer a discount code because I just love the audience and I was the audience. And I want people to read this not because selling this book is going to make us rich or anything like that. But because I want them to be successful. I want less companies to fail and less companies to go through the painful experience that I had to go through just from a… these are my people, like entrepreneurs, startup founders. But it’s also good business. Its good for us to know how much of a response we got from the audience.

Andrew: All right. I’m curious about that too. Congratulations on the book and the success of the business. The business people have heard us say all the time, Close.io. But I will say that find a way to connect with Steli and say thank you. Great relationship to have and to start today. So if you’ve got anything of value, do it. I’m going to say it right now, Steli, thanks so much. I learned so much from you today.

Steli: Hey Andrew, it was a pleasure

Andrew: You bet. Thank you everyone. Bye.

DOWNLOAD TRANSCRIPT

Master Class:
How to productize your service
(And break free of hourly billing)
Taught by Brian Casel of Restaurant Engine

Master Class: Productize Your Service

Report Bugs

Course Leader: Brian Casel, Restaurant Engine

Brian Casel is founder of Restaurant Engine, a productized web design service for restaurants. He also teaches consultants how to launch and build a productized service through his course, Productize.

Master Class Toolbox

Course Cheat Sheet Nick’s conversion optimization service Productize, by Brian My Content Sherpa How to delegate Monthly Creative Direction

Transcript

Andrew: This course is about how to turn your service into a product so you can break free of the hourly billing. It is led by Brian Castle. He is the Founder of, let’s bring up his site, Restaurant Engine, which allows restaurants to get beautifully designed websites easily and without spending an arm and a leg. Brian launched the company after being a freelance web designer and developer. I’ve invited him here to talk about how he did this. How he transitioned himself into a product I service. He also teaches this and if you want more after you finish watching us here today, he teaches this process in a course called Productize, which you can see on casjam.com/productize. I’ll help facilitate. My name is Andrew Warner. I’m the Founder of Mixergy, where proven founders teach.Brian, good to have you back.Brian: Thanks, Andrew. Great to be back. I love everything here at Mixergy, so I’m always thrilled to talk to you and your audience here.Andrew: Thanks. I appreciate it. You were listening back in the very, very early days of Mixergy. I remember talking to you, exchanging emails, and showing your website and different things that we were doing. Different courses and interviews. So it’s especially great to have you on here today.Brian: That’s very true.

Andrew: Oh, thank you and I’ll try not to keep interrupting you. You know that over the years I’ve gotten better at not interrupting, but I still do it. The problem we’re trying to solve is one that you experienced. And so many other people who are consultants, freelancers, and designers for hire. Experience, which it is. Actually, why don’t you tell it? What happened with this client that you were telling me about before we started?

Brian: I come from a background, I started out as a freelance web designer. After a couple of years doing that I just kind of fell into this rut of working or living project to project billing by the hour, and just feeling like I didn’t have this freedom or the ability to scale up and build something that was larger than just selling my time for money. Just one memory, and it happened multiple times, but this one thing really sticks out is I had this lead, a potential new client, contact me. At the time I was getting lots of referrals. People just emailed me asking for a website design. So this guy contacted me saying he wanted to build a new web application from this new thing he was starting up. I said, “Great.”

I did a couple of pre-qualification questions. He asked me about budget and what not. Once I determined that he sounds like he was a pretty serious prospect, the budget is in line, so let’s move forward with what a lot of people call the discovery process, which is you go through a series of phone calls or meetings, and in this case I did both. I had a couple of long phone calls, and then I met him in person. Now I’m getting out of the office and I’m spending half a day meeting him at Starbucks for half a day here or there. Ironing out, what does he need? What is the scope of what he’s looking for? Then I’d go back and write a long proposal. I spent about half a day on that. I sent that to him and he gets it and says, “Oh, I think things changed. I actually want to do a mobile app instead of a web app.” Now I have to go back to the drawing board, rewrite this whole proposal, give him a whole new price quote. It just went round and around. By the end of it, I think I had spent 40 or 50 hours, not getting paid for anything. It turned out he flaked out. There was no deal and no contract.

Andrew: No deal for all that work?

Brian: Right. It was a total waste of time.

Andrew: Meanwhile, after you made this transition, you, your wife, and you have a new baby daughter around the same age as my son, you guys took a trip to Acadia National Park. What happened to the business while you were away?

Brian: Well that was fast forward a couple of years. This past August my wife and I, and our baby daughter, and my dog, by the way, we brought the whole family, packed them in a car, and we spent a whole week up in Maine at Acadia National Park. I was able to completely disconnect for the week and enjoy a little summer vacation. Meanwhile, my business, Restaurant Engine, continued to operate. We actually signed up six new clients that week. Got them set up with new websites, did sales, on-boarding, and set up. Happy customers and I didn’t need to touch them or do a thing. My team kind of carried it all out and basically the business continued to run without my direct involvement systematically.

Andrew: That’s the key part here. It continues to run. It can grow even when you’re not there, and instead of you having to hunt down sales that often don’t materialize, sales are being developed, processed, and taken care of, and revenue coming in, even while you are away. That’s what we’re going for here. The very first thing that you said in this process, and there it is upon the big board is to shift your mindset from freelancer to business owner. We talked about this before we started. I said, “Isn’t everyone who’s listening to us right now, they already shifted their mindset. They’re just ready to go. Tell us what to do. Be practical. What’s the first step? Why is that so important for us to talk about?

Brian: For me, maybe people can relate to this or not, but I was watching Mixergy interviews and Mixergy courses when I was a freelance web designer. At least for a year, maybe longer, before I really took action toward building a product and productizing my service. So I started to learn about the things that I would learn on Mixergy and elsewhere. But it wasn’t until it clicked in my mind, “Okay, I need to actually start investing my time and energy and focus into working on my business, and not in my business.” I had to get out of this mindset of being a freelancer selling my time for money to becoming a business owner.

And that’s building up a value proposition and building systems and processes that I can then build the team around and scale up, so that at the end of a long year of freelancing, all I’m left with is my time, and that’s really not worth very much. But as I start to build a business, now I’m building an asset that has value which grows over time. That’s kind of the mindset shift that I’m talking about here. Working on your business, not in your business. And the point here being, this kind of frames everything else that we have listed here today. You’re making your business the project that you’re working on.

Andrew: Okay. All right. So the next thing is to start positioning your service as a product. So before we started, I was thinking that what we were going to talk about was how to turn what you do day to day into software that runs without you, and you said, “Actually Andrew, you’re not expressing it right.” What is the right way to express what we’re doing here?

Brian: What we’re talking about here when we say productize services is starting with some kind of service, some kind of value proposition, and it very well might still be delivered as a service, manually done, manually delivered, but packaged, positioned, and sold just like any other product that you would buy off the shelf, or buy at Amazon, or subscribe to. What we’re talking about there is getting away from billing by the hour, and putting together a predefined scope with a set price, non-negotiable. This is what’s included. This is the problem that this service is designed to solve. This is the price tag. Are you the right customer or the right fit for this?

Andrew: So I’m looking at your website right now. Restaurant Engine will create websites for restaurants. But it’s not like they sign up, fill in a form, and then they end up with a website that they can customize. No, it’s they sign up and then your team of designers and developers and people who you work with will create a website for them, based on the restaurant’s need. But somebody or some group of people are doing it, and that’s the distinction. It’s not software. We’re not competing with Square Space. We’re doing service on a consistent repeatable basis.

Brian: Yeah, exactly. So this is a little bit jumping ahead, but it’s kind of like a done for you service. Restaurants sign up and they get their website designed, launched, populated with content, all done by my team. It’s done systematically, and when we’re saying position it as a product, when you go on restaurantengine.com, you can browse around the website. You’ll find the price. You’ll see exactly what’s included, which features and services are included for what price. And that’s it. It’s kind of non-negotiable.

Andrew: Where was that price? A price you can sign up right there. So you’re saying anyone who clicks here can see a standard pricing, just like if it was a product on the shelf of Amazon. Before we continue, why not then turn it into software? Why productize your services as opposed to just creating a software product?

Brian: Again, this is a bit jumping ahead, but it’s a really great question. I found that there is a really high value in the done for you aspect versus the do it yourself aspect. There’s a lot of great software tools out there that they solve a problem, a pain point and a solution. That’s like any good product does, but at the end of the day, the customer, the user still needs to use the product. Install it, set it up, implement it into their work flow. And then they need to use it on a weekly, monthly basis, whatever it is, whatever type of product it is. For example, this week I just signed up for accounting software. I still needed to spend all of last week setting it up and connecting my bank accounts, and it was a huge time to set it up.

Andrew: I see. And you’re saying customers value having it done for them much more than value a piece of software that does it. I see. And actually, that’s reflected, frankly, in your pricing them back to your web page. If I click on the pricing page, these are higher prices than someone who only sold software for web design would charge. What I thought you were going to say is, “Hey Andrew, not everyone can create software. Software is a very competitive market, and frankly do you want to start entering that market with a finished product, as opposed to entering that market with a service as a product. But then you keep taking the people out of it and replacing more of what they do with software.” I thought that was what you were going to say. But now I see it from both sides. Great for you, great for the customer.

Brian: Exactly, and that is the other really big point to be made here. You’re right. For folks who are like me, a couple of years ago, I know there’s a lot of people out there, freelancers, consultants. You’re trying to make that huge leap from billing by the hour to selling a product. It seems like everyone I talk to these days wants to make that transition, but it’s so hard, especially when you look at building some big software as a service tool. Software is a very big build and lift to do that. A product has services kind of the path of least resistance in a way. It’s kind of like …

Andrew: Yeah, and how many times have I seen, really, either full time dev shops or even individuals who say, “I’m going to get into software.” And then they get stuck trying to build even the first minimum viable product because it takes a long time. Or they build that and customers expect the next step. And then their developer runs out on them or they have issues with it. You’re saying, “This is a different way to start.” You’re not the only one to have done it this way. You actually gave me an example of a guy named Nick, who did it too. Here’s a screenshot of his site. I obviously don’t expect people to see it. We can include a link to it in the course notes. But what did Nick do that you’re telling us we can learn from?

Brian: Yes. So this is the site of Nick Disabato. He’s one of many folks I’ve been speaking to and interviewing as I’ve been researching, not only what I’ve been doing, but talking to others who are doing the productized services and productized consulting. What Nick has done here, his service is called Draft Revise. Basically he does conversion optimization. What his service offers is he’ll run one AB test on your website every month. He’ll implement the successful result on your website and that’s the service. The next month he’ll run another AB test, and then another one the following month. It’s just a set price like a retainer subscription model. He’s clearly defined the scope of what’s included, the one AB test and all that. He lays it all out there on his website. So it’s positioned as a product.

Andrew: I see. That makes a lot of sense and I can see how he can get up and running with this, how he can build it easily and continue to grow it. You’re saying also, only AB testing. He’s not also going to redesign your email. He’s not also going to install WordPress for you. He’s not also going to bah-bah, bah, bah-bah. Only one thing. AB testing. That’s what he does.

Brian: Exactly. And if we get back to that whole discovery meetings. I did so many of them where it’s like, “Okay, Mr. Client, what do you want? What do you need?” “Well, I want a Facebook app. I want a web app. I want a WordPress.” It’s kind of doing anything and everything. You don’t really have a value proposition. You’re redefining what you do. You’re reinventing what you do every single time you have one of these meetings. Whereas you look at a website like Draft Revise or Restaurant Engine, and this is what they do. They do this for customers again and again. They’re the experts at solving this problem. We’re jumping ahead, but if you’re that exact ideal customer, then it just speaks directly to you.

Andrew: Let’s get to that next step then. All right. So the next step is to find that ideal customer. Before we talk about how to do it, you’re saying find the ideal customer before we even figure out what the product is?

Brian: Well, I think a lot of these things kind of happen in conjunction and simultaneously. You want to take a lot of this stuff into account as you go, and you want to continuously refine it. You might start in one place, serving one ideal customer, then you might learn even more. For example, I’ve even found that in Restaurant Engine. A restaurant itself seems like a pretty tight niche, but even within that, we started to find, okay, now we’re serving a lot of food trucks or now we’re serving a lot of pizza and take-out places. So you can even get more targeted within a niche. So it’s really about focusing on one ideal customer. You want to move away from working with everyone and anyone, the way that most freelancers do, and get to the point where you’ve defined and you’re communicating this in everything you do. Like, who you’re speaking to, who you’re serving, and who your solution is really designed to benefit.

Andrew: You could have gone with websites for medical professionals. You could have gone with websites for e-commerce companies. You could have gone with websites for restaurants, in fact, that’s what you’re ended up going with. How did you pick that? How did you know, of all the different kinds of clients that were out there, and all the different clients that you had, that restaurants were your ideal?

Brian: I kind of landed on restaurants. I get asked this a lot, like, “Did you used to work at a restaurant?” I mean, I did used to wait tables back in the day, but that had nothing to do with it. I was looking for a type of business that has very standardized requirements specifically for websites. I looked at restaurants thinking, well, every restaurant needs to showcase their food menu on their website. Every restaurant needs to show their hours and their location. Many of them need to take reservations online.

This is a standard set of functionality that I can build into a very standardized service, through templates, and a set of functionality. Whereas if we were offering it to a whole variety of clients, like some e-commerce, some portfolio artist websites, or medical professionals, then we’d have a huge line of different options and configurations that we’d have to deal with. Then it’s like I’m back to square one as a freelancer reinventing what we do with every single client. It’s impossible to scale that up and systemize it.

Andrew: All right. You’re not the only one to have done this. You told me about a few other people. Let’s go into my browser here. Who is this person who created the site?

Brian: This is Jane Portman. She’s a designer and she offers a productized design consulting service similar to the model of Nick Disabato, where it’s a monthly retainer, a set price, packaged up as a predictable service. But she targets it specifically at software startups. She works with a lot of SaaS companies and digital software startups. She’ll network with these types of people at events and get involved in these kind of communities. That’s who she offers that service to.

Andrew: You also gave me another person. Let me bring up again the browser. There it is.

Brian: Philip Morgan, he created his productized offering which he calls My Content Sherpa. He’s a writer and again with the retainer model, he will write content for your blog and for your newsletter. He’s targeted it specifically at technical agencies. So if you’re running a software shop or some kind of technical firm, that’s where his writing and his skills really excel and that’s the problem/solution that he’s offered.

Andrew: We have lots of courses on Mixergy about how to figure out what product to create, so I don’t want to spend too much time on that here, but once you find your ideal customer, how do you know what product you will create and systemize for them?

Brian: I think that’s right into the next tactic here, which is doing one thing exceptionally well.

Andrew: Here, let me bring up the board. There it is. Right there, to put it in order for us. How do you find that one thing?

Brian: You’re really looking for that problem/solution fit, the same thing we hear again and again in all of these courses and elsewhere. Building a product, the way to do it right is to solve a painful problem. The process that I’ve been teaching to freelancers and consultants as you’re starting to productize your service is, number one, look at the range of services that you’ve been offering yourself as a consultant. Typically it’s a lot of different things.

For me, as a web designer I used to do WordPress sites, e-commerce sites. I did logo design, email design, mobile design, all these different things. Then you want to go through that list and identify the most commonly sought after items. Think about those conversations that you had in those discovery meetings, the questions that the clients are typically asking. If they’re repeatedly asking for mobile websites, maybe that’s a high value requirement that you can potentially productize.

Andrew: I see. Look for what it is that your existing clients are asking you for over and over again, that’s similar, that can be systemized, that can be productized, and that’s probably what you’re going to build first.

Brian: You also want to factor in how valuable is it to the client, or how painful is it. You’re looking for a painful problem that they’re willing to spend money on to solve.

Andrew: I see. It’s kind of a pain in the butt for me to restart my computer everyday, but I’m not going to pay somebody to do that. I can spend some time doing it. But building a website for a restaurant is critical. It brings in revenue. It allows people to find them and it’s something that you can charge a lot of money for on an ongoing basis. I see. You also say to us, be disciplined about what you do. You don’t want to do, not even everything that your customers ask for. You had a client, a restaurant who asked you to help with selling bottled barbecue sauce. And what else?

Brian: Like on Restaurant Engine, we had two or three of our customers ask about, “We want to sell t-shirts.” “We’re a Texas-type barbecue restaurant and we want to sell our bottled barbecue sauce through our website. Can we do that?” That would have probably meant that we would have to build in this e-commerce system built into Restaurant Engine. A very small subset of our customers were asking for that. So I saw that as, it’s not really worth the investment in time and complexity to add that. Not only the functionality into website building systems, but also for our team. The extra procedures that they would need to follow to serve a few customers here and there who ask for that. It was just way too much overhead and complexity.

So I decided to say no to those requirements respectfully, offering good support and all that saying, “No, it’s not something that we offer right now. We can add a button, and that can point you over to PayPal. That’s one way to do it. We can do that for you, but it’s not built in.” And those customers still stuck with us because they still were getting value in everything else that we were offering them. I guess the lesson there was just saying no to these fringe requests is okay. It’s not necessarily going to turn those customers away if the core value is there.

Andrew: By the way, I like how we’ve not only have the same mic, we also have the same haircut and beard.

Brian: Yeah.

Andrew: That just occurred to me, but you don’t play with yours the way that I do. I play with the bottom part when it gets long. I just can’t help but get distracted by it.

Brian: I did trim it today for this interview though. It was much longer this morning.

Andrew: Smart move. I try to do it on a regular basis. This thing grows so fast. WP Curve is, again bringing up my browser, a site you want us to learn from. What is it about their process that you think we can learn from?

Brian: Yes. Talking about doing one thing really well. WP Curve, by my friend, Dan Norris, they’ve been doing really, really well this year, if you’re following along with what they’ve up to. This is …

Andrew: They write a lot on their blog about what their process is.

Brian: Yeah, totally. This is really a productized service built up almost as successful as one can be.

Andrew: By the way, this page, for some reason, isn’t coming up on my screen. They will even reveal their revenue numbers on an ongoing basis. In December, it was $56,000. That’s what I was trying to look at. Sorry, go ahead.

Brian: They’re just killing it right now. Basically they offer one thing, and that is customer support for WordPress site owners. That means you can subscribe to their service. I think, currently it’s 69 a month. They’ll be there with chat and email support to help you out, like installing plug-ins or tweaking your logo on your site or changing your theme. Small tweaks like that, just ongoing support and questions if you’re running a WordPress site. That’s all they do. They don’t do complex redesigns of your whole website. They won’t do that. They won’t work with your site if it’s a Drupal website or expression engine or something else. They only work with WordPress, and they only do small tweaks and support.

Andrew: Let’s go back to the big board. The next big thing is to give them the result with no work. What do you mean by that?

Brian: Up until now you’re hearing us talk a lot about doing things manually and delivering this service. The question becomes isn’t that the same as freelancing or consulting? You’re still doing the work. What’s the difference? The difference is the systems that you’re building. That really is the unfair advantage. You’re streamlining this to the point where, we’ll talk about it in a minute, you can remove yourself as the founder to the point where the business really runs itself.

Andrew: When you say no work, you mean because the systems allow the company to do all the work, the client has no work.

Brian: Exactly.

Andrew: Unlike software. They sign up for, I don’t mean to put Square Space down, I love them, but when someone signs up for Square Space there’s still some work involved in creating a website. When they sign up for Restaurant Engine, there’s no work. They don’t have to figure things out. If they have a WordPress site, yes WordPress is easy, but you still have to some work to do, like upgrade and plug-ins, maintaining security. They sign up with you. They don’t have any of that work.

Brian: Yes, exactly. Thank you. I kind of jumped ahead there.

Andrew: No, that’s fine. In fact, I was looking at this piece from your site. What’s this?

Brian: With productized services, we’re talking about done for you aspect. Right there that’s a piece of our homepage where we briefly outline, look, when you use Restaurant Engine, we can get your new site done by this weekend. We’ll do the work for you. Step one, you just send us your content, your food menu, your Facebook page, whatever you’ve got. Step two, we’ll get to work. We’ll start in-putting that into a template. We’ll make a couple of configurations. And then step three, we’ll connect to your domain. We do all that work for you while you get back to focusing on running your restaurant.

Andrew: I see.

Brian: I think the idea here is, getting back to the idea of software is do it yourself, and that’s fine. A lot of software provides a lot of value. A productized service goes a step further in that it solves a certain problem, there’s that pain and solution. But it’s like a double edged value proposition where you, the customer, you’re not the one doing the work, setting it up, implementing it. You’re saving that time and having the expert, the provider implement the solution for you.

Andrew: They don’t do any work. You do the work for them. Your systems will keep you from personally having to do it, but your company will do it. Let’s go back to the big board. Systems are your unfair advantage. That’s what you were starting to say earlier. Why don’t we look at this site here? In fact, this is one of your clients.

Brian: Yes. That’s a restaurant, one of our customers on Restaurant Engine. They’re called Mama’s Boy. They’re local here in my town, one of our only customers that’s pretty close to where I live. Here we’re looking at their site. It looks fairly tailored to their brand and customized and whatnot, but it is using a template. One of our standard ones.

Andrew: I did a view source on it before we started and I can see here. You’re putting this up on WordPress. There’ll be WP content. You’re using a theme. It’s called the slate theme, right?

Brian: Yes. That’s one of our themes that we’ve designed and we use on a number of our customer sites, but we customize it. We even have a standardized set of customizations that we can make. We’ll put in the client’s logo. We can change some colors, change out some content, layouts, and whatnot. Really, the idea here is building these systems so that it’s an unfair advantage. When you look at Restaurant Engine compared to, say, hiring a local web designer or local web firm, what they need to do, the web designers, they need to go out and custom design something from scratch, try out different options, and show you different mock-ups, and back and forth. That’s many months of work and thousands of dollars whereas we have a standardized way of doing things.

The way that I teach this is, number one, you need to standardize the work. That means settle on one way of doing things, one methodology, and make the work as predictable as possible. At Restaurant Engine we use a set of templates. We always set up sites the same way every time. We make it as predictable as possible, so that it’s easy to delegate. It’s easy to bring my team on, and they can churn out new websites in literally under a week. We can get a new website from zero to launch.

Andrew: With a new design that looks like it belongs to the restaurant. I asked you before we started, is this just about themes? And you said, “No, you are actually going to start doing email marketing on behalf of your clients. How did you use this unfair advantage when you were thinking about creating that?

Brian: Yeah, absolutely. This is something we’re just rolling out right now. We’re calling it Marketing Boost. We’re continuing on with this productized service idea. It’s an add-on service on Restaurant Engine, where we will start to manage your email marketing for you, you being the restaurant. We’ve had restaurants asking us for this, like, “Can you handle our email newsletters for us?” I had enough requests for that, that I started thinking, “Okay, that’s a way that we can really add value and we can do it for them.” We have some customers doing this now. We’ll write the email newsletter and we’ll send it out for them to their subscribers. The way that we standardized this is we’re only using MailChimp for this service. If they’re already using MailChimp, then we’ll use their MailChimp account. If they’re using Constant Contact, then we will migrate them to MailChimp. Or if they’re not using anything, then we’ll set them up with MailChimp.

Andrew: If they insist on using A Webber, you say, “Sorry, we can’t work with you. We’re only using MailChimp.

Brian: Yes. Right. Exactly. Because it’s part of our standard process. This way I can train my team on using MailChimp and using their interface and our template in MailChimp. We can make the same recommendations to all restaurants.

Andrew: That makes so much sense. It’s such a hard decision to make, but once you make it, it just keeps you from going crazy. With all these different options and then someone else has a new email marketing platform that they want you to use and you have to figure that out. Then before you know it, you’re not systemized. You’re not creating a product, you’re creating chaos internally.

Brian: It is also getting back to who is our ideal customer? I’m sorry. It’s kind of loud in the other room. I don’t know if you can hear that.

Andrew: Let me see. Don’t say anything, and I’ll look at the levels. No. I’m telling you this road podcaster is a cool mic

Brian: There’s a couple of people that are talking. It’s pretty loud, but okay. That’s good.

Andrew: All right. I’m glad it’s not being picked up. I used to use this exact mic, I think it was this mic, in Argentina, where people would talk in Spanish, right outside my door, because sometimes at the end of the day they would want to relax and I would want to record. No one could pick up on it.

Brian: Yeah, it’s amazing.

Andrew: What my trick was I would hit the mute button, then I would put them. Wait, I was actually doing that on you. Then I would put the thing up here and go, “Guys, please be quiet.”

Brian: That’s pretty good.

Andrew: I figured how to say that in Spanish, but I didn’t even need to. It was a very U.S. style audience there. They all understood English. It was a professional crowd over there. A lot of financiers were in that office space. Anyway, all I have to say is no problem. You’ve got a great mic. We’re on track. Move onto the next point, true?

Brian: Let’s do it.

Andrew: All right. Get everything out of your head and document it. I wish I’d started doing that early on, but I do it now. Talk about what that looks like specifically. What kind of software do you use? How do you document? What do you document? What level do you document?

Brian: The idea here is get it all out of your head and document it into procedures, standard documents, guidelines, and whatnot. I mean, today we’re using Google Docs. It really doesn’t matter. Whatever tool you feel comfortable with for documenting, as long as it’s something that you can quickly and easily use and maintain and share with your team.

Andrew: This is what your doc looks like. I always think it helps to see a sample of it. You know what? It’s a little tough to see on this screen. Would you be able to give anyone who’s listening to us a link to one of your docs, so they get a sense of how you’re organizing things?

Brian: Yes. Absolutely. I could export one of these as a PDF template that you can look at and include as a link.

Andrew: I’d love that. Tell me what goes into this.

Brian: Here you can kind of get a glimpse of the amount of detail here. What we’re looking at there is one of many procedures that we have. This one is titled, how to send a MailChimp campaign for a new blog article. This is a procedure that we use internally. Every week we have writers who write a new article on the Restaurant Engine blog. Then someone else from my team prepares that article as a newsletter, and they send it out in MailChimp to our list. So they’re just following this procedure. Step one, they’re grabbing the title of the blog post. They’re pasting it into the MailChimp template. Step two, grab the excerpt and put that in there. Step three, change the call to action button to point to the article and then schedule it. A long procedure details exactly how to do this so that they can do it predictably, repeatedly, week in, week out.

Andrew: That’s all you do? You do blog posts via email? Do you, as part of the service, if the restaurant sends you some content, you’ll email that out for them too? Or is it just the blog post?

Brian: Yes. This particular example is actually our own email newsletter that we use to market Restaurant Engine, but the same thing applies to our email management services.

Andrew: I see.

Brian: We’ve have these standard set of procedures for delivering and creating the email. Basically, to answer your question there, the way that it works is we have a form that we would send to the customers once a month. We call it a content questionnaire form. They fill it out. It’s five questions long. What’s new at your restaurant? What are some new happenings, new promotions that are going on? What are food specials? Just tell us what’s new and then my team can take that and craft the email newsletter and then get it created and scheduled out.

Andrew: I see. And these docs walk people step-by-step through that process. I saw what goes into the subject line? Where do you get the content? You specifically even say copy and paste the content. To that degree you want us to document?

Brian: Yes. Really getting detailed. The end goal, whenever you’re documenting anything, is to make the job of your employees, your team as easy as possible. You want to put so much care into these procedures so that when they’re following the procedure, someone new, especially if you’re training a new employee coming in, you want them to come in and feel like, “Okay, I get this. I’m not lost. I’m not confused.” So just give them everything that they need to be successful in their role.

Andrew: Brian, what level of expertise are you hiring for this? You’re building websites for people. Are you hiring web developers? I said the word designer earlier and I looked at your face, and it seemed like no, you weren’t hiring developers. What level of expertise do you need in order to run this business?

Brian: Different roles require different types of skills. They are designers with some front-end development skills, so our customer support team who handles, not only answering customer questions, but also setting up these websites. They have some basic website chops, writing some custom CSS here and there and HTML. They’re familiar with WordPress so they can use our interface pretty well.

Andrew: And are they working for you full-time or part-time, or how are they connected to you?

Brian: Today. we have two full-time support people. Probably adding a third one pretty soon. Another good example is our other teammate who is a part-time sales person, she basically manages our inbound consultations. That’s another whole part of the business that I’ve systemized and made really predictable. This goes back to when I took that vacation in Maine. This is how we’re able to bring on those customers without me being involved. As we get traffic and inbound leads who request a consultation, she is the one who calls them up, follows up, and then ultimately on-boards them.

Andrew: I really like this process a lot because I can see how it scales. Ordinarily, I wouldn’t think of services scaling. I can see how this scales. I can see how there’s clarity for you as a CEO of your company, for what to do with the business. I can see how there’s clarity for potential customers. I can see how others can use what they’re learning from you, to do it for themselves, too. Let’s move on to the final point here. That’s to delegate and remove yourself. There’s a problem when we start to delegate. You experienced it yourself. What was that?

Brian: I think so many people run into this, especially kind of freelancers who are starting to grow and starting to make that leap into becoming a business owner. You have trouble delegating because it’s so easy to do yourself. You look at something as simple as sending out an email blast to your list. You can train someone on how to do that, but you’re thinking, “If I just do this myself, I can get it done 10 times faster, so I’m just going to knock it out myself.” Then next week comes and you got to do it again. It’s still on your to-do-list, and not someone else’s.

Andrew: But you do it so well, right? You’ve done email marketing for years. You can handle it in a few minutes, if that. Why? How do get yourself to stop passing it on to someone else who’s probably not going to get it right the first time?

Brian: The reason why you should break out of that hurdle is that you need to be focused on other things, on the bigger picture. Whether it’s pushing forward a new marketing strategy or growing the business or improving your system. You need to be working on your business, not the day-to-day nuts and bolts of delivering the service or doing the repeatable tasks. The way that you get started with that is you ease into it. You can start with hourly contractors, part-time remote workers, contractors. Between the documentation that we talked about in the last step and standardizing the work, like we talked about earlier, all of that put together makes it easier and easier to hand this off to someone else.

Andrew: And not have them screw it up and do it worse than you. And in fact, if you document it right, they’re going to do it as well as you.

Brian: Right.

Andrew: What’s the first thing that you delegated out, using this method?

Brian: In the early days, the first kind of part-time contractor was our content writer, someone to write the blog posts on the Restaurant Engine blog. And that same person …

Andrew: Oh, that’s a tough thing to do.

Brian: …is still with us today. They do that and then the next person that I hired was a customer support person. In the beginning, the first step was I did do all of this stuff myself. From day one, I was writing blog articles until I delegated that. Then in the very early months of Restaurant Engine, I was doing all of the customer support and all of these website setups myself. I remember really painful days of inputting these restaurant food menus myself by hand. It was like a Sunday afternoon, and I’m just doing this work, thinking it’s going to get me one more customer. I’m just going to do it until finally I got to the point a couple of months into it, when I felt, okay, I’m ready to remove myself from that process and get someone in place so that now that’s delegated. Now I can focus on, okay, what’s our marketing strategy? How are we going to grow this thing?

Andrew: All right. The web site is, let me bring it up, it’s restaurantengine.com. That’s where people can see what you have built and hunt around and see a little bit more about how you did it. If they want to learn even more, they can go to casjam.com/productize. Casjam is your personal site and now you’re teaching people how to productize the way that you did.

Brian: Yes. Absolutely. Productize is the course that I’ve been teaching. It talks about a lot of this stuff in much more detail. Of course, right on casjam.com, that’s my blog where you’ll find plenty of articles and my newsletter where I write about bootstrapping. I do have a free crash course on productizing your service. You’ll find that on the homepage of casjam.com.

Andrew: Let me go to that. Actually, before I do, Joanna, we recently did something exactly like what you’re talking about. I thought copywriting. You can’t productize that. I can’t believe she’s in this business. It won’t scale. It won’t grow any bigger. But she’s in the information business. Terrific. Then she recently launched a service that will do copywriting for people, very similar to the process you talked about here today.

Brian: Yeah, Joanna, she’s one of the case studies in the productize course.

Andrew: I see a case study with her about how she did it, how she turned writing into a productized service.

Brian: Yes, and this was actually a productized offering that they’ve been offering for a couple of years. What that one is, I think, they were calling it Website Copy Reviews, or The No-fluff Website Copy Reviews, something like that, I think where it was one price, like a buy now button. Anyone can just click that. Basically they then fill out a form, enter their website or the page that they want Joanna to review. Then Joanna will just go and record like a 30 minute screen cast of her going through the copy, giving you feedback, telling you what’s wrong with it, and some suggestions, and then sending that back to you. And that’s the service, just a one time productized consultation.

Andrew: It’s not just her alone. I met this guy, Listen, who is a student of hers in her copywriting course. He is one of the people now. Now that he’s graduated the course, he’s one of the people who she trusts to do some copywriting work too, and copywriting feedback like this. I can see how she did it. I can see how you did it. It’s really cool to see that this is out there, and frankly, I’d seen it forever, obviously, but I never even noticed that that is what it was. That it was a productized service. Here is your website. Where do we go if we want to take that crash course, as you called it?

Brian: Right there. I think you’re showing it in that box.

Andrew: Of course, it’s right in front of me. Subscribe and get the free crash course productize your service. It’s available on casjam.com. Brian, it was so good to talk to you again. Congratulations on all this progress. I’d really like this process. I’m hoping that someone out there who uses it will follow up with me, and let me know how well it’s going for them. And of course, if they want to follow up with Brian, the best place to do it is to go to casjam.com. What does casjam mean? You’ve had that site for a long time and your Twitter handle. I keep meaning to ask you.

Brian: You know, the name casjam, it doesn’t really mean much.

Andrew: It’s just your last name, Castle, and then jam?

Brain: My last name is Castle. It actually goes back to when I was a young teenager. Casjam was my handle on AOL Instant Messenger, whatever. So Cas was my nickname growing up and jam, I don’t know. So I think I was around the age 18 18, I saw that casjam.com was available. I registered it and today that’s my personal blog.

Andrew: Gotcha. Cool. Thank you for being here. Thank you all for being a part of Mixergy. Bye everyone.

DOWNLOAD TRANSCRIPT

Master Class:
Connect with influencers
(To accelerate your startup’s growth)
Taught by Selena Soo of S2 Groupe

Master Class: Connect with Influencers

Report Bugs

Course Leader: Selena Soo, S2 Groupe

Selena Soo is the founder of S2 Groupe which is a consultancy group that focuses on marketing and publicity.

Master Class Toolbox

Course Cheat Sheet Free Gift for Mixergy Members

Transcript

Andrew: This session is about how to connect with influencers so you can accelerate your startup’s growth. It is led by Selena Soo. She is the founder of S2 Groupe, a consultancy group that focuses on marketing and publicity. I’ll help facilitate. My name is Andrew Warner. I’m the founder of Mixergy where proven founders, like Selena, and as you’ll see she is really proven when it comes to making connections, where proven founders teach. Selena, welcome.Selena: Thank you, Andrew. I’m so happy to be here.Andrew: It’s great to have you here. You and I went to the same school. I went to undergrad here. You went to business school at NYU, and they always had us do these presentations in front of big groups of people. What was your experience like when you did that?Selena: Oh God. I mean, I’m someone who, for basically all of my life, had been afraid of the spotlight. I’ve always been that behind the scenes person supporting these big leaders. So being in business school and having to get in front of the group and talk about myself or even introduce myself in front of small groups at orientation was always extremely nerve-wracking for me. So even with the most basic thing like an introduction, you know, my legs would shake and I would just be so embarrassed. And fortunately over time I’ve gotten better at that, but public speaking is not something that I am naturally comfortable at.

Andrew: And you’ve gotten really good at not just talking to people now but connecting them with each other. You helped us here at Mixergy make good connections. I’m looking at your website using what you’ve learned. I’m looking at the bottom here. You launched this site with quotes, with testimonials from Marie Forleo, Danielle LaPorte, an editor from O, the Oprah Magazine. You’ve gotten a lot of connections. Can you give me one example of a connection that you built because of what you’re about to teach us?

Selena: What is it?

Andrew: Or did I just give them all away here?

Selena: Sure. I mean, let’s see, so Danielle LaPorte. She’s someone who I’ve admired for a long time. And I’ve been in touch with her a little bit over email, and I reached out to her when her book was coming out, “The Fire Starter Sessions” because I thought, you know what? She should really connect with the people at Oprah Magazine. They need to know what she’s doing. So I just reached out to Danielle and said, “Hey, I know your book is coming out. Have you been in touch with the people at Oprah because I would love to reach out on your behalf and let them know about your work.” And she was just like, “Yes, please do.” And so I put together a beautiful care package for them.

Andrew: Hold on. We’ll actually show it in the session here, but as a result of that, what happened to her?

Selena: So, yeah, she developed connections at Oprah Magazine and other places that really helped with her book launch.

Andrew: All right. I want to get into the details of it. I didn’t interrupt because I don’t want to hear it, I interrupted it because I want the process of doing it and I want it not just for myself but also for my audience. This is really important stuff. If you’re going to build a business, you need to know how to connect with the people who are going to help you build it stronger, faster. That’s our goal here today. And the very first thing we’re going to talk about is deciding who you want to connect with. And the problem here is that, what? How do most people do it?

Selena: You know, a lot of people come to me and they say, “You know, I want to connect with these influential people, but I have no idea where to start. I don’t even know who these influencers are.” Or maybe they’re thinking, “Okay, influencers, you mean Richard Branson or Oprah Winfrey?” And they’re trying to get the attention of those people, and that’s really the wrong way to think about it.

So when you think about influencers, you know, there’s really three categories of people that you want in your network. One is mentors, so these are people who are ahead of you in their careers. Two are colleagues and referral partners, so people in your industry or related industries who are already working with your ideal clients and are their trusted advisors and who can basically send business to you. Those are important people to know.

And then the third category are people who have reached, so this could be people in the media that have a large platform, or it could be another expert or colleague with a really big online audience. But it’s really important to think about, you know, who do I know or who do I want to connect with in those three categories. And I always tell people to start with thinking about who would be great mentors, people who are where they want to be.

Andrew: And there’s something about just being clear about who you want to meet. In fact, there’s someone who came to one of your events. Do you recognize this photo?

Selena: Yes.

Andrew: Who is this?

Selena: That’s my client, Daphne Chang.

Andrew: And Daphne came to your event, and she said that she wanted to meet with whom?

Selena: Yeah. So Daphne is a vegan chef, and, you know, I had this exercise for the group. And I had them write down what were their most important goals. In their business, in their personal life? And then looking at those goals, you know, who did they want to meet? And so Daphne wants to have a book, and she wants to open up her own restaurant. And so she made a list of these really popular vegan chefs that she would love to meet one day, and this was actually a small group that I was with, a group of 10 people. And she shared the names of people she wanted to connect with, and two people in the room said, “I know these people. That one person you mentioned back when I was doing book publishing, I helped publish his book.” Another person in the group said, “Oh yeah, that guy’s a family friend. I’d love to connect you two.” And so it’s just amazing that in just a small group of people, but as soon as it got clear on how she wanted to meet, people were like, “Oh, let me put you in touch. That’s easy.”

Andrew: I just interviewed Ryan Hoover, the founder of Product Hunt, and in the interview I did some research on him. Actually within the interview I really did. I started Googling him, and I found this one post that he did about a year and a half before our interview which listed the 13 people he wanted to meet.

Selena: Okay.

Andrew: And sure enough, I was on the list and he got to meet me, of course. But I think more than half the people on the list over the last year or so he got to connect with. It was incredible, and it’s all because he started to get clear about who he wanted to meet.

Selena: Yeah, that’s so great. For me, you know, I don’t know. I kind of know different people that I want to meet, but I also don’t feel like I need to rush it because in my mind I’m really clear about who they are. I even share that with people, and I know that when the time is right I will connect with them. But I think when people aren’t clear, then it just doesn’t happen.

Andrew: I see. So don’t make a list and then go out hunting for them and start to really sweat them. Give them space, but just be aware that when you put it down …. Do you want us to be clear about the names of the people or just the kinds of people that we want to meet?

Selena: I think that you want to be clear about both because you don’t want to just get so fixated that you need to meet these top two people in my industry and that’s it. You also want to think of people who are also maybe just a couple steps ahead, maybe two or three years ahead. So let’s say you want to have a book deal. Tim Ferriss isn’t the only person who could, you know, be a mentor, although you probably can’t get him as a mentor. There could be other people that you know who are going to … book writing workshops or who maybe know book agents or publishers. And so it’s really important to think expansively versus just the top two people in your industry.

Andrew: All right. Back to the big board. The next big thing that you want us to be aware of is we should think friends not business contacts. And you actually had somebody who you met. Is it … Am I pronouncing the name, right? Abbe Wright?

Selena: Yes.

Andrew: Who’s Abbe Wright?

Selena: Abbe, so she is an editor at Oprah Magazine. She recently moved over to Glamour, and this is just, I really think, an important point because I think when people are looking to build their network and grow their business sometimes it’s approached in a very transactional way. And the truth is that people do so much more for a friend that they care about than someone who is just a formal business contact.

And so Abbe, I met her at this event. There were a lot of people there, but we managed to talk for a little bit, and then I sent her a followup email. And rather than just focusing on business, I just said, “You know, hey Abbe, I loved meeting with you, and I would love to get to know you better. You know, I’d love to take you out for dinner and I picked this really amazing restaurant that would be really fun” and she said yeah. She’s like, “Yeah, that would be great.”

And the thing is these magazine editors all day long they have people saying, “Oh, will you write about me? Put me in your magazine. Will you get on the phone with me or have a cup of coffee?” And it just becomes another to do on their to-do list. So I just wanted to make it a really fun thing where I could get to know her on a personal level. And we talked about everything from family and our career ambitions and even dating. And so it did really go very deep and develop a friendship but in a formal business setting we wouldn’t have had that. And so that one on one dinner was just really, really powerful, and it ended up being really great for my business because I do organize these events for my clients where I bring together media influencers. I really feel like they should meet because they’ll accelerate their careers.

And so Abbe is a friend of mine now, and so she comes to these events, and she brings her friends from all these other magazines, like Oprah and Glamour, and all these great places. And so now I have an expanded network of influencers that connect my clients with. And I think that, you know, if I didn’t take the time to just develop that friendship none of that would have happened.

Andrew: You know, I’m wondering how you did that. So I remember I met Rich DeMuro at a conference, and he was the tech reporter for KTLA-TV. He came to cover the tech conference. I talked to him, and then we went out to lunch and we got to know each other. And then our wives and we became friends, but I remember what I did to start that conversation was chat with him and then say, “Hey, do you want to go to lunch? I’m curious about how you do your work, and I can tell you a little bit more about what’s going in the tech scene over here because that’s what you’re covering.”

I don’t know that I could always come up with the reason for doing it. Sometimes I just want to get to know the person because maybe we’ll hit it off. Maybe frankly, there will be some work for us to do in the future, but I can’t just say that. It’s a little creepy. Maybe we’ll hit it off. Do you want to go out for lunch?

Selena. Yeah.

Andrew: How do you say it?

Selena: I think that, you know, you really want to establish a personal connection. I mean, in that case, I had met her at an event so we had a little bit of a connection there. But I think when you’re reaching out to anyone, you really want to make it feel very personal. And that it’s just not a copy and paste that you’re sending to all the magazine editors or influencers that you want to become friends with. If you can reference something like, you know, I was reading the latest issue of your magazine, I really loved that article about this and this or when we were at the event you mentioned that … I thought it was so cool. You know, I see synergy. If you dig deeper and know something about their personal life or their goals, then always bring it back to that. But I think if something is just very kind of bland, like meet with me or appear business, it’s not exciting for people.

Andrew: I see. So here let me take a look at her Twitter feed. So you might do something like, come back home, look at her Twitter feed, see what she’s into. If she’s got a website, maybe there’s something I could help her with that, and maybe she into reforming the criminal justice system, I don’t know. Equal pay, so I’d look for something here, look for something in our conversation and use that as a hook as a reason for us to go and have lunch. I don’t know that people can see that. I should have zoomed in.

Selena: Yeah, and you know I have a quick story around that because Twitter is a great way to connect with influencers. And there was this magazine editor. She’s at Elle Magazine, I’ve been following for a while. I actually pitched her before, and she didn’t respond which is not a big deal because they get hundreds of pitches, but she was on my feed and she posted one day, “Oh I’m so tired. I’m feeling like going to yoga.” And I just responded to her tweet and I was like, “Oh, yeah, I’m getting ready for yoga too, something like that.” And she was, “Oh, that’s great.” And then she looked at my Twitter profile. I mentioned that I write for Huffington Post and Forbes and that I support visionary entrepreneurs. And I guess my Twitter profile intrigued her and she’s like, “Do you want to get drinks?” I was like, “Yeah”. So I think for her, she gets so many emails all day long that it’s just like if you send these people an email, sometimes it can seem like another thing on their to-do list to get to versus Twitter is kind of her mental break. And it wasn’t even about work. And it just kind of happened more organically, so yeah, social media can be pretty powerful.

Andrew: All right. The bigger takeaway though is the friendship part.

Selena: Yeah.

Andrew: You get to know somebody. You look for ways to connect as friends with them, and one way is dinner with them. I don’t want to overstress the dinner, but I’m always curious about how you can take a stranger out. We have other ways, and we’ll talk about it in a moment. But first, let’s go back to the board and the next one is to add value above and beyond. And here’s where that Danielle Fire Starter story that you were starting to tell really fits in. Can you remind us what you wanted to do with
Danielle?

Selena: Yeah, sure. So Danielle’s book was coming out, and I just thought that more people needed to know about her work. And so I asked her if she would like for me to reach out to the people at Oprah Magazine. And she said, “Yes.” I think that’s important. I just want to emphasize I didn’t say to Danielle, “How can I help you” when she was in the middle of getting ready for her book launch? But rather I identified proactively how I could add value.

Andrew: Why is that important? Because a lot of people do say, “Hey, how can I help you? Is there any way that I can help you? What can I do to help with what you’re working on?”

Selena: Yeah, I’m glad that you asked that because the thing is with someone who’s really busy, if you’re asking them how you can help them, you’re actually adding another to-do on their list. You’re actually taking up their time. And the other thing is they’re thinking, you know, can I really trust this person. Like, you know, is this going to be a waste of time? Because a lot of time people offer to help me and then they have never followed through or they’ve done a bad job. Or why would you tell a stranger what your priorities are and needs are? So with Danielle, it just showed that I was someone who was proactive, who was exciting about supporting her. I already had an idea, a plan, I was ready to go, but I just wanted to make sure that it was cool with her. So that’s a real way of adding value.

Andrew: So, of course, she’s going to want the book in Oprah’s magazine, in O. So what did you do to help her get that?

Selena: Yeah, so what I did is I put together a care package, got a copy of her book, and put it in this brown bag with red fire paper bursting out, Fire Starter tattoos, yeah.

Andrew: That was it, huh?

Selena: I bought some nice stationery, some orange flower stationery. I bought a chocolate fire chili bar. These are just all of my ideas. And then I hand delivered it to Hearst Magazines, and then I also wrote a really thoughtful pitch that was just, you know. There was so much heart that went into it that it couldn’t get ignored. And so they thanked me for that. I forwarded the pitch to Danielle. I also took a photo of the package and sent that to her. And she was just so happy with it. She sent me an email just saying, “Selena, thank you so much. The pitch is impactable every single word. You’re so in your zone, and just for the love of God, thank you.” And so that was a way that I built a relationship. It was really coming from just a place of passion and just kind of connecting the dots between people and opportunities.

Andrew: Did you get to know her because of what was it called? Inspired Coach Magazine.

Selena: No, actually I got to know Danielle many years ago. I think it might have been eight years ago when she had this business called Style Statements. And you would take like this task, and they would give you these two words that described who you are. And I just reached out to her saying it was really cool and offered some help. I don’t remember exactly what I did. I was just like, “I want to help you with something.” And we just kind of … You know, we were on each other’s radar. So I reached out to her long before, I guess, she is as big as she is now. But she just always knew me as somebody who is helpful and never really needed it or wanted anything but just believed in what she was doing.

Andrew: I see. And then you had a client, Julie Parker, who wanted to work with her.

Selena: Yeah.

Andrew: What was Julie Parker doing at the time?

Selena: Yeah, my client, Julie, she’s amazing. So she is a life coach in Australia who has a coaching certification school and also her own magazine called Inspired Coach Magazine. That’s a pretty new magazine. It’s been around, I think, for about a year now, and she wanted Danielle to be on the cover of her magazine because a lot of life coaches look up to Danielle. But the thing is, you know, it’s one thing if it’s a huge national magazine with millions of people reading it to reach out to Danielle. But if you’ve got a podcast or an online magazine, there are quite a lot of them nowadays. Danielle just can’t say yes to everything.

Andrew: I get it.

Selena: Yeah, you get it. A lot of people want to be on Mixergy, for example, but it’s just not everyone can be on these shows and get these opportunities. So with Julie, we worked together on an email, and one mistake that I see is when people are ca-ching. The emails are all about them, like oh my podcast is so great. And then it comes with a copy and paste thing where you’re just kind of adding the person’s name at the top. And it’s not personal at all, and for Danielle to say yes, it really needs to be all about her. You know, why is this going to be a benefit?

So we really spent some time thinking about how we could get Danielle to say yes. And so while Julie doesn’t have magazine circulation in the millions, she does have a niche audience of coaches in the thousands. And Danielle LaPorte is actually launching a desire map licensing program which is this big offering that she’s rolling out in 2015, and that’s a major priority. And so we wanted to make sure to really focus on that. And so Julie, when she reached out, let Danielle know that she wanted to do an interview with her about the desire map licensing program. And she wanted to promote it to all the coaches. Also mentioned that she runs a Facebook community with 800 life coaches who are really the target market for becoming a licensee. And so just really focusing on how this would be good for Danielle’s O launch and then also letting Danielle know that she’s been following her for years, bought her products, is part of her Facebook inner circle. And so this is not just an email that she’s sending to the top 10 people, it’s really a very heartfelt personal email and that she would really love to support Danielle in whatever is a priority for her right now.

Andrew: And it led to this. It’s a great cover.

Selena: Yeah, it’s such a beautiful magazine cover and, yeah, it just generated so much excitement and a lot of new people who hadn’t heard about Inspired Coach Magazine ended up jumping on Julie’s email list. So Danielle ended up posting this on Instagram, and I believe that Instagram feeds into Twitter and Facebook. What ended up happening … I haven’t really seen this happen before, but just from that social media post 600 people signed up for Julie’s newsletter.

Andrew: Wow. And so the big point here is that you want to make it about the person who you’re trying to recruit. In this case, Inspired Coach didn’t have hundreds of thousands of readers. In fact, very few magazines today do.

Selena: Yeah.

Andrew: But they realize that by doing some research that Inspired Coach had the right audience, and that’s what you’re trying to get us to do, to think about our needs from the other person’s point of view. Sorry, what are the needs that the other person has that we’re trying to get will help them with.

Selena: Yeah, and the truth is a lot of times we do have something to offer people that people aren’t taking the time to really identify that and communicate that to the other person. So not that Julie would ever do this because she’s a thoughtful person, but if she had just sent a quick copy and paste email, even though she had the perfect audience for Danielle and it was really synergistic, if it was not communicated in the right way, she would not have gotten Danielle on the cover.

Andrew: All right. Back to the big board. The next one is to get testimonials from influencers. All right. So now in this case you got Danielle to help out …

Selena: Yeah.

Andrew: … one of your clients and you also got this. This is a quote from your site. I’ll read it because I think it’s a little bit small here the way that I’ve posted it. But it says, “Selena, this pitch is impeccable, every angle, the whole spirit of it really is so good. I’m so impressed. You’re so in your zone. For the love of God, thank you” in capital letters. So how did that come about?

Selena: Yeah, so that testimonial, along with a lot of other testimonials, came about because I’m somebody who just naturally enjoys helping people. And with Danielle, as I shared with that story I pitched her, and she sent that email in response to the update I gave her with the pitch and the photo. And I was doing this for Danielle before I had a business. But I was graduating from business school, and I realized I’m ready to start my own company and have a website. And I knew how important testimonials were for a website. And so I reached out to Danielle and I said, “I’m launching a website for my new business. I’m so excited, and I would be so honored if I could include a testimonial from you.” I said, “I know you’re really busy, but I was wondering if perhaps we could use these two or three sentences from the email you sent me. Let me know if that might work,” something along those lines.

But I basically did the work for her because asking someone to write a testimonial is another thing on their to-do list. I personally am someone who … I’m a slow writer. I’ve had people ask me to write LinkedIn recommendations and things like that. I like think about it. I’ll put it off. I write something. I’ll rewrite it. It takes like a week, it’s a law. And so if you can simplify it by providing them with some points, drafting something if that’s what they want, or maybe even giving them some sentences that they can use that they have given to you. And all they have to do is just say yes, then you’re going to get a lot more testimonials.

Andrew: Aw, it’s such a big help. You’re right. People who are good at this often will send back something that I’ve said before, maybe with a little bit of editing and say, “Do you mind if I use this as a testimonial?” Or here’s a couple of things that I think you’re feeling. Feel free to either write your own or do nothing at all, but here are a couple of samples. Because you’re right, I do the exact same thing, especially with testimonials because I never know how long do you want it to be. Do you want it to be a paragraph, two paragraphs? Are you looking for just one sentence, two words, you know. And then I have to sit and make sure that I say something that’s both meaningful and also feels powerful for you. I’m not that kind of a writer. It’s really tough.

Selena: Yeah.

Andrew: Yeah.

Selena: It is happening.

Andrew: So you’re saying write it for them or give them a couple of samples. Make it easy for them and that’s what you did.

Selena: Yeah, you obviously have to do it in the right way because if it’s someone who you’re just like, “Hey, want a testimonial from you and I’ve already drafted something up.” Then they’re going to be like, “Whoa.” So you have to kind of say it in the right way, but in Danielle’s case she had already given me these sentences. Usually, for someone else, I might say, “You know, I want to make this as easy as possible for you, so let me know how I can help, whether that is drafting something up for you, sending some ideas or giving you some samples, just let me know.” So it’s always in their court, but I make it as easy as possible.

Andrew: I had somebody be upset because I asked them for a sample of what he’s looking for. He said, “No, if you don’t know what to say, then you’re” … I forget, “If you don’t know what to say, then forget about it. You must not really care.”

Selena: Oh my God.

Andrew: I guess I don’t care then. Now I don’t care. Not with that reaction, I don’t care any more.

Selena: Yeah, I guess that person has just really a lack of perspective and not understanding the bigger picture. I mean, because a testimonial is so valuable. And yeah, again, I don’t think it’s probably going to get that many testimonials then if that’s the attitude he has.

Andrew: No.

Selena: What he’s saying to people.

Andrew: And you also don’t know, again, like I said, what size. I’ve had publishers push back on some of my testimonials because they were either too long or too short. They wanted them to be consistent with what others were saying on the back of the book or whatever space they had allocated. All right. Really good advice. I’m glad that you’re saying it. It would help me if anyone who heard this actually used this advice with me.

Selena: Yeah.

Andrew: All right. Back to the big board and get back away from me and on to the person who’s listening, who’s the most important person in the world to me. And here’s our next point for them. Consistently build your network before you even need it. I know a client of yours who is a health coach, helps women stop hating their bodies.

Selena: Mm, yes. So I have a client. Her name is Isabel Foxen Duke. She is an amazing health coach, and her work is just so important. I really feel like everyone needs to know about who she is. And so we started working together. She had moved to New York relatively recently, and while her work was really powerful not a lot of people knew who she was. And she felt like she really wanted to become friends with the other health coaches and life coaches and influencers in New York City. And also with people in the media. And so that’s why we started working together and she became a coaching client. And one thing that I said to her is that, you know, you really want to be systematically building your network. You want to build it before you need it. And she knew that she was going to have launches coming up where she would be looking for partners, and that’s not when you want to start beginning a relationship.

And so one thing that I tell my clients to do is if they’re really looking to expand their network to make it a point to connect with one new person a week. Because if you do that consistently over the course of the year you’ll have 50 powerful influential people in your network. And if you want to double up and do that two times a week, then you’ll have a hundred ones in your network. It’s really not that hard to do when you make it a practice and you make it really systematic.

And so what I tell them to do is when they make their list of who you want to connect with, and I had given people the three categories earlier; the mentors, the colleagues, the people who you have reached. Also referral partners, super connectors that … developing that list and then reaching out to them.

Andrew: Mm-hmm.

Selena: And when you meet with them, you know, at the end of the meeting you can say something like, “I loved our conversation together. I’m so inspired by what you do, and I feel like we have so many synergies. I’m just curious. Based on everything I’ve shared, is there anyone that you think I should meet? Anyone who you think that we would just really hit it off?” Or you could also ask, “Just curious. Who’s the most connected person you know?” That’s such a good question because then people are going to connect you to all of the super connectors in their world. And basically the super connectors, I mean, their favorite thing is just natural is to connect people with other high level people.

And so when you do that, it’s very easy to get one meeting a week, whether it’s a phone meeting, a coffee meeting. And by the end of the year you’ll have a hundred powerful people in your network.

Andrew: You said be systematic. What is the system for doing it? Are we talking about almost a CRM-like system that you have your funnel for getting to know people, or are you talking about something simpler than that?

Selena: Oh yeah, way simpler. I mean, just an Excel spreadsheet where you just put down the names of all the people that you would like to meet with. And then with every single meeting you go into say, “You know, who are two or three people that you think would be good for me to know about to have on my radar or to connect with?” And then they’re going to give you three names, and then the list is just going to grow and grow. And then every week either reaching out to someone or ideally having that person that you just met with connect you to that new person. So the system is having that Excel spreadsheet with a list of people that you continuously add to. And then when you do connect with the person, you know, at the end of the conversation say, “You know, who else do you know that I should connect with?” And then having them connect you to them, and then that’s all you really need to do to get those 50 to 100 people.

Andrew: Let me ask you. Let me take a step back away from our agenda here and ask you … I see a photo here of you and some people who have really big reach, big audiences. Is that you there?

Selena: Yeah, that’s me in my apartment.

Andrew: Oh, so they’re all coming over to your house. First of all, it’s impressive, but what’s the point? What do you get out of getting to know people like Lewis Howes?

Selena: Right.

Andrew: Getting to know people like Derek, Ramit?

Selena: Yeah, absolutely. I mean, you know, for me I connect with people first and foremost because I’m passionate about the work they’re doing. If someone was to say, “Oh Selena, I can introduce you to Beyonce or Katy Perry or some really famous person.” It doesn’t really mean anything to me because there really isn’t any synergy or commonality. I mean, they’re amazing and cool, but I’m not really drawn to meeting with them or trying to meet with them. But there are certain people who I find really inspirational, who I really believe in, and who I want to support. I want to help them reach their goals.

And so with all of these people, these are people I’ve developed friendships with, and that I’ve, in many cases, identified ways I could help them. I’ve just started helping them and being a valuable person. It’s not like I’m thinking, “Oh let me help them so that then they’re do something for me.” The kind of mindset is really that, you know what? They’re amazing. They’re inspiring, and the opportunity to help them is the gift. I don’t need anything else. And I think that sometimes people forget that. I’ve had people get very angry when maybe, for example, there’s an influencer that I know, and her book came out. And someone was like, “I reached out to her. I offered my support. I did some stuff on Twitter and in my newsletter, and then I reached out to her to do something for me and she said no.”

And it’s like, okay, when a person launches their blog, they’re kind of leveraging their entire community. And so it’s not like she can repay in kind to, you know, hundreds of people and send solo mailings. And I think if that’s your intention, that’s the wrong intention. It’s not going to work. And people are kind of repelled from that. And so I think with the people that I develop relationships with, they know that I don’t really need anything from them. I just value their friendship, and what usually ends up happening is there are such powerful synergies that good things do come from these relationships. But I’m really thinking about them and how I can give. And so, as a result, these people enjoy having me in their world, and that’s why I have these friends and mentors.

Andrew: I see. I get not thinking about it as an IOU with an unspecified requirement, an obligation. I understand that there are a lot of people who help out with this idea that at some point I’m going to need something in the future, like the Godfather. And I will come to you and you better give me, or else I’ll break your legs or maybe I’ll walk away upset. I get that that’s the wrong attitude to come into it with. But to just say, “I’m going to help people because I enjoy it” feels like it just doesn’t make enough business sense, right? Shouldn’t we at the end of this say, “There will be some good that comes to my business, and I know it will be there. And I know that I can’t predict it here, but I can depend on it in a certain way. And I can learn how to call back on it.”

Selena: Yeah. I mean, that’s the other part to it. So I think for the people that I’m passionate about, that I want to support. There’s a reason why I’m passionate about them. It’s because there is someone who is doing amazing things, who’s going places. And in my mind I can see the synergies. I can see the possibilities. But I don’t need it to happen today or right away, but I just know that it is there. And when I get to know these people, it’s not just giving to them, it’s also them getting to know me as well. Then getting to know what I’m up to, what my goals are.

You know, when I started my business I had a point where I wasn’t really happy. I was doing work as a publicist, and I knew that I wanted to make a switch and move into coaching and consulting. And so I invited people, like Ramit Sethi and Derek Halpern, to come to my place and we had a mini focus group with them and some other people. And so I also, you know, I give, but I do also ask sometimes like, “Would you be willing to help me?” But I also say that you have been such an important mentor to me, you really inspire me, and I know that your time would make such a massive impact.” And they’re happy to say yes to these things. That’s usually because one, I’ve added value first. Second, they know that I’m someone who is hard working, and I’m actually going to implement their advice. And then we also have a friendship.

So it’s not that I never lean on my network for support, but it’s just something that I know that they will be there for me, and I’m also not afraid to ask. I think a lot of people are afraid to ask. I think I know how to ask in a way that’s very kind and respectful and …

Andrew: How do you ask in a way that’s kind and respectful and gets the results?

Selena: How do I ask in a way that’s kind and respectful?

Andrew: Yeah.

Selena: Well, I think first, these busy people get invitations from so many people, right? I mean, everyone can benefit from their help. And so you want to make them feel like they’re the most important person. So as an example with my focus group, I reached out to Ramit and I said, “You know, hey, I’m going to organize this focus group. Would love for you to be there. And also if you can’t, if you’re willing to help, like let me know if any of these dates work for you because I’m going to organize the focus group around you.”

Andrew: I see. That’s flattering to him that it’s organized around him.

Selena: Uh, yeah, and it shows him how important it is that he’s there specifically. So then he’ll come to my focus group and then I’ll reach out to Derek who’s also a friend and a good friend of Ramit’s as well.

Andrew: Like you said, if Ramit will be there, Derek is more likely to want to be there.

Selena: Exactly. And then, you know what? I’m also going to organize dinner, have lots of nice food, lots of cool people there. And so I just make it a win and win and invite more people. Hey, Derek and Ramit are going to be there. Now everyone wants to come to the focus group.

Andrew: I see. So they all know you’re putting together an event that makes sense for them. Even though they’re coming for you, they are also getting there to get to know the other people who are coming to the event. All right.

Selena: Yes.

Andrew: I think that brings us up to the next point that we should talk about which is organizing your own events. You say if you want to connect with the influencers, it helps a lot to organize your own events for them. I agree with that completely, and I think we just saw a way that you do that. Bring one people in like the anchor tenant. Then you start to follow other people around them, and if they’re all good people for the anchor tenant, as Keith Ferrazzi expressed it to me, then the anchor tenant’s happy because you’ve done all this work to get him together with a group of people he likes. And all the other people are happy to get together with the anchor tenant. That’s how you do it.

Selena: Yeah, and that’s always how I do it when I do my [inaudible 00:35:20] events, for example. I’ll reach out to the most high profile people first, the person that Oprah Magazine or the Today Show. I’ll make sure that they’re coming and then I reach out to all the other media. Because media, they also want to become friends with other people in the industry. You never know when you’re going to need a new job or just wanting to build your network. So always have those anchors first because that’s really part of the marketing, and that’s part of the invitation. These are the types of people who are going to be there.

And earlier me and you talked about building that network of 50 to 100 people over the course of the year and being systematic. But after you have those one on one phone calls and one on one meetings, it’s not like you can meet up with those same people one on one, you know, two times again over the course of that year. But you do want to keep those relationships alive. And so a really powerful way to do that is to organize events, and I think you should also think about making that systematic, whether these are monthly happy hours, quarterly gatherings, weekend champagne brunch. So just name that as regular on the calendar.

And then invite 30 people, 50 people to a single event. And what’s really powerful about that is that you’re reconnecting with all these people, and you’re adding even more value to their lives because you are now introducing them to your network of friends, mentors, clients. And so they’re reconnecting with you, but they’re meeting all these amazing people in this very curated way. And people love that. They love going to these events knowing that in just one evening they’re going to be able to meet 30 amazing people that you’ve curated for them.

Andrew: Who pays for the event?

Selena: So it depends on what kind of event it is. It also depends on what your situation is. So if it’s, you know, drinks I think it’s nice for the host to buy appetizers for people and have that out there, and then people can buy their own drinks. You know, if it’s something that you’re hosting in your home because I’ve hosted brunches in my home and dinners or things like that, and definitely you want to provide the food. But I don’t want people to think, oh because I don’t have enough money to pay for 10 people’s dinners that I can’t hold these events. You know, you need to think about, you know, what makes sense. Sometimes a casual brunch, which is more affordable, may be better or just drinks.

Andrew: Yeah, that makes sense. I tend to overpay. I want to pay for everything, for some reason, but it creates a bad dynamic with people where they’re coming to my event instead of all of us getting together for a mutual event. I like happy hours where people get to pay for their own drinks. And, yeah, even if I buy a round, then at least I’ve not bought everything for everyone.

Selena: Yeah.

Andrew: I do love dinners at my place.

Selena: Well another thing that people can also do is they can co-host with someone. So if you want to expand your network even further, it’s you and someone else who just knows a lot of people. And then you can bring everyone together. When you’re working with a co-host though, sometimes a co-host might be like, “You know what? I don’t want to pay for anything.” And then it becomes a little bit complicated.

Andrew: Right.

Selena: So you really want to establish what makes sense, but if it’s a potluck where everyone is like bringing something and the hosts are announcing we’re going to have the entrees, you bring the appetizers, or whatever. There’s ways to do it so that it’s cost effective.

Andrew: All right. Happy hour, simple way to do it. Get together with a bunch of people. It doesn’t even need to be as many as you said. Even five people for happy hour, brunch, even dinners. I’ve noticed people will pay for their own, and you create a nice atmosphere when you take people out to the right place for dinner. Anchor tenant is the important thing for us to have, right?

Selena: Yes.

Andrew: What else? What’s one more thing that we should think about because I do events all the time. I feel so comfortable doing them, but I think a lot of other people have a lot of hangups about it. What if they don’t find the right place? What if people aren’t happy meeting each other? What if only one person shows up? I’ve learned if only one person shows up, that’s fine as long as I pick the right person.

Selena: Yeah. Oh, then let me give you a few more tips because, yeah, this is an important topic.

Andrew: Yeah.

Selena: So whenever I’m trying to get people to come to events, I’m not someone who does mass emails. I mean, definitely not in the beginning, at least. So what I’ll do is get my anchor tenants. I’ll individually email, let’s say, 20 people and have them come. And then if you want to do a mass email, then you can invite more people once you know you have that base of 20 people. Although I have to admit that I actually email every single person individually, but usually I’m working with an email that I just modify slightly. So if you do that, people will show up. I’ve got your anchor tenants and they feel that you actually care that they’ll show up because you took the time to write a personal email. Then they will be there. So there’s no surprises. So that’s powerful.

And then the other thing that I think about, which I imagine you think about too, is that your events … You want to make sure that people are connecting. You don’t want to just show up, and then everyone is in their small groups, and this person feels like uncomfortable, unwanted, and then you’re kind of in a conversation. And so what I do at events because I’m always at the door greeting people as they come in. So even if I can’t have a 20 minute conversation during the happy hour, at least, as soon as they walk in the door, I can give them a hug, “I’m so happy that you’re here. By the way, Jennifer is here. I think that you should meet her. She’s in that corner. Say that Selena told you to say hi.” And so I just have that personal touch in the beginning.

Andrew: Yeah.

Selena: That makes it everyone feel so much better.

Andrew: Yeah, Mixergy started as events organized by a handful of co-hosts with me. One of the things that I would always say to the co-hosts is, “Let’s have somebody greet a guest at the door because if they come in and they’re not comfortable, if they come in and they’re unsure of the environment, then it makes it so much tougher for them to get out of their own heads and go and talk to people afterwards,” right? Because then they’ve gotten into this whole self-critical judgment mode, and it’s hard to snap out of that. So, yeah, meeting them at the door helps. Introducing them to each other helps. Cool.

Let’s go on to the big board here. Next thing you’re suggesting is we should attend specialized conferences. Now you had a client, Dr. Tara. How do you pronounce Dr. Tara’s last name?

Selena: Yeah, Tara Cousineau.

Andrew: Cousineau. This is her right here?

Selena: Yes, that’s her.

Andrew: How did this happen?

Selena: Yeah, so that’s her Awesomeness Fest. So Tara, she’s a clinical psychologist doing amazing work but really wanted to get out there in a bigger way with the book and more media. So we started working together, and she’s a busy mom. So she doesn’t have a lot of time, and what I really recommended for her to connect with these influencers is to go to specialized events and conferences. You know, events that maybe it’s a couple thousand dollars a ticket, but it’s way better to do that and go to one event where you meet, in that case, there’s really hundreds of influencers there versus going to three events or $10 events which it’s really hit and miss. And you’re kind of doing that every week and not meeting anyone.

And so she met this person there. His name is Dr. Bob, and he is a media personality and has a book. And they connected, and he said, “You know, I love what you’re up to. Here’s my personal email. Let’s stay in touch,” and he’s becoming someone who is like a mentor and a cheerleader for her work. But she wouldn’t have found him at a $10 event. So I really think that, I mean, one of our most precious resources are time, and so we can go to one event a year or a couple of events and meet tons of people. Do that instead of thinking that, “Oh my gosh, I need to go to two networking events per week in order to connect with the right people.

Andrew: Yeah, that makes sense. I’ve heard so many good things about Awesomeness Fest, but I also understand the resistance to go. It costs money. It takes a lot of time, but for the end. They also have a screening process, right?

Selena: Yeah, I mean.

Andrew: You could apply and they could reject you.

Selena: Exactly. Because I’m someone who has planned a lot of events myself, I understand what goes into an event. So with an event like the Awesomeness Fest, I imagine that they are planning this event one year in advance, and they’re spending a lot of time and money on the marketing and on the team to put this event together. And they’re getting their amazing keynote speakers and inviting all these influencers back, and they’re spending an entire year curating this event just for you. All you need to do is show up. If you try to create that own event for yourself, it’s like, do you know how long it would take you and plus if you don’t know these people, it’s probably be very hard to get those 100 influential people to show up.

So I think that people don’t always see the real value of these events which is why I really want to bring it up because it can be a game changer to go to a couple of these events per year.

Andrew: All right. On to the big board for the final point which is to express gratitude when people help you, even publicly. I’m going to do it right here. Can I say the name of the person who you helped us introduce to?

Selena: Yes.

Andrew: So we met and you said, “I know Tony Robbins’ people. Can I introduce you to them?” And we said, “Can you? Of course, we’d love it. What do we do for you? How do we …” So we said yes, thank you. I think we might have actually been a little less effusive, but we definitely said thank you. And internally we were really just excited about it. You introduced us to his people so that we could ask him to do an interview, and we’ve talked to him. And so far, no interview yet, but boy, it was such a great introduction and so considerate of you to have offered that before you even came on here. You didn’t know if I was going to be a jerk to you or not.

Selena: Well, I mean, the thing is I’m familiar with Mixergy. I know how your interviews are great.I mean, so many people have said to me, like, Andrew is the best interviewer that I know. He is born to do interviews. So I also felt like it would be a great opportunity for Tony to be on this show. So it seemed like a huge win-win, but before kind of making any introductions or doing outreach, I always like to ask for permission first because I don’t know if you’re already in talks with him or if he’s not the ideal guest. I never know what’s happening behind the scene, but I’m glad that that’s the kind of person that you want to connect with. And I really hope that it works out down the road.

Andrew: I do too. Thanks and your reach is impressive. Now I’m glad that I said this now because I know what it’s like when people don’t do this. In fact, you had an experience recently where someone said that she was looking for a job. And how did you help and what happened?

Selena: Oh gosh, yeah. I mean, I’m glad that we’re talking about this because I think this is something everyone needs to hear. I’ll share this story first, and then they’ll see what the big point is. But basically there was someone in my world, and she had been out of a job for quite some time. And she had reached out to me, and she described what her dream job would be. And I thought I know the CEO of a company who’s looking for a marketing person. Basically, it would be her dream job. And so I reached out to the CEO, put them in touch, and I was happy to do it.

And then weeks later, it might have even been months, because it might have been a bit of a process, but I see a post on Facebook. And she announces that she has gotten this job. And by the time I saw the post, it was like, 30 people had already congratulated her and I was like number 31, “Oh, congratulations.” And it was a little bit of a turnoff because she never really thanked me for that. And she got a job. I don’t know if it was a six figure job or what, but it was a big deal job. And it wouldn’t have happened if I hadn’t put her in touch with this CEO. I just kind of felt like I was the last person to know. And for me and other people who enjoy helping and connecting people, I mean, we’re not looking for even a gift or you want to connect with a client. You don’t need a referral commission or anything, I’m doing it because I want to help. But I think that, if I am to be honest, and maybe it’s being a little bit selfish, but I kind of do want to feel that I’m being appreciated for the time and energy that I put into things.

And so I think it comes from a place where I’m so excited to make the connection. I’m so excited to help this person get their dream job. When I feel like they’ve just forgotten about me entirely and that I didn’t matter to them, then I just don’t feel good about it. So I think a lot of times people think, “Oh, how can I add value to these influencers and super connectors and mentors and all these people?” They think it has to be so complicated. And I think a lot of people just want to know that you appreciate their help, that sometimes just really that simple. And when people express appreciation, then you actually want to help them more.

You know, when people tell me, “Wow, what you did was so helpful. It led to this result” and they thank me. And when they thank me publicly, that’s even better sometimes, you know. I just keep on helping them over and over again, but the people who act like they don’t care or just have forgotten and didn’t take that time to just say thank you in a meaningful way, I usually don’t continue helping them.

Andrew: Well, that’s a really good point and here’s the way that you do it.

Selena: Yes.

Andrew: This is just simple and effective.

Selena: Yeah. So what happened here is my friend, Spencer, said to me. You know, I met someone who writes for a [inaudible 00:48:17] company. I think that she should do a story on you, and I was like, great. I would love that. So he put me in touch with this woman. Her name is Elizabeth. We had this amazing interview, and the story came out. And wow, I got so much attention for that story. I got new clients and things like that. And I shared on social media. When I shared it on social media, I didn’t just say, “Oh yeah, I’m in fast company. Look at me.” I said, “Oh yeah, I’m so honored to be in this piece in [inaudible 00:48:47] company”, and I kind of gave a shout out to the writer.

Andrew: Yeah, I see it.

Selena: Thank you.

Andrew: Thank you, Elizabeth, for interviewing me and Spencer for the intro. Right there at the top above it. And that’s what you’re talking about when you say …

Selena: Yes.

Andrew: … thank them publicly. I was starting to imagine this whole big public thank you, but know you’re saying it’s as simple as that.

Selena: One sentence. It’s all it takes. It can make a big difference.

Andrew: If anyone wants to learn more, these are just a few ideas that you’ve taught me, that now we’re sharing with the Mixergy audience. You have many more ideas, many more tactics to share. We’ll, of course, include a link in the course notes, but here’s your URL for anyone who wants to go directly to it and see what else they can learn from you. It’s a tiny URL that you can use to go directly to the right spot. It’s tinyurl.com/mixergyvip. And, of course, we’ll include a link to it.

Wow, Selena, thank you so much for teaching all this.

Selena: Thank you. Yeah, this was so much fun, and this is my favorite topic to talk about. And so if they want to go to that link and check out the video there, I have a video called “Get VIP Access to Media Influencers and Online Stars,” and I go deeper into how I built relationships with these people and the media. It’s very specific tactics that they can apply to their own businesses so I hope that’s helpful to people.

Andrew: I’m sure it will be. And I always say at the end of a session here or an interview, of course, anything. If anyone heard something that was useful, they should find a way to say thank you. I’m saying it because now people who have listened this far now understand how important it is for a person who does something to feel that, hey, this has helped. It’s good feedback.

But also I’ve had interviewees who happen to be … I remember one guy. I said he happened to be in China. Somebody reached out and said thank you from China, and as a result they connected and they had lunch together which was fantastic. I remember somebody who saw me on Leo LaPorte’s show, This Week in Tech, sent me a note and because of that we ended up, actually this was fantastic, at his vineyard in Argentina. That’s where I happened to be at the time. He said, “Oh, you’re here? Cool seeing you on there” and anyway the reason I’m saying that is you should never watch something or read something online and feel like there’s an invisible wall separating you from the person who you just heard and learned from. You should always feel like they’re reachable, and the best way to start interacting is to say thank you.

And I’m going to do it right now. Selena, thank you so much for teaching here.

Selena: Thank you, Andrew. One thing I’ll just add is if anyone just wants to say thank you or hello, I mean, I love connecting with people. My personal email is hello@s2-groupe.com. People can just feel free to send me an email. I always love hearing from people and just connecting with people who resonated with my message.

Andrew: All right. I was actually starting to type it out. Here we go. This is what it looks like, hello@s2-groupe.com?

Selena: Yes.

Andrew: Super. Thank you so much for doing this. Thank you all for being a part of it. Bye everyone!

DOWNLOAD TRANSCRIPT

Master Class:
How to get featured in publications
(Like TechCrunch)
Taught by Conrad Egusa of Publicize

Master Class: Getting Featured

Report Bugs

Course Leader: Conrad Egusa, Publicize

Conrad Egusa is the founder of Publicize, a company that’s changing the way startups approach PR.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is about how to get your startup featured in publications like TechCrunch. It is led by Conrad Egusa. He is the founder of Publicize, a company that’s changing the way startups approach PR. I’ll help facilitate. My name is Andrew Warner. I’m the founder of Mixergy, where proven entrepreneurs like Conrad teach. Conrad, thanks for being here.Conrad: Thank you so much for having me.Andrew: Thanks for coming back, I should say. Conrad, the problem that we’re helping people solve is one that was experienced by this company, Shirley.Conrad: Yes.

Andrew: What’s the issue that Shirley had? Is is called “Shirley”? On their site it says “Shirley.” On Kickstarter it says “Shirley Box.”

Conrad: Yeah, I think “Shirley” is just for short.

Andrew: Okay.

Conrad: I think the issue that the company was facing is they were hitting this turning point. They were about to launch this Kickstarter campaign and it was critical to the company, to the point where, “Hey, if this Kickstarter campaign doesn’t work out, is this an initiative that the founders should continue pursuing?”

Because of a number of the PR efforts, the company was able to exceed its Kickstarter expectations. It ended up raising a little over $150,000.

Andrew: So they were counting on Kickstarter as a new way of getting funding, almost like a last-ditch effort and to get anyone to contribute to Kickstarter. These guys did not have a big mailing list of potential customers. They did not have a huge following of people who were reading their blog. What they needed to do was reach out to people who did have that kind of following. Right?

Conrad: Absolutely.

Andrew: Okay, and these were your clients? You helped them do it?

Conrad: Yes.

Andrew: Okay, and one of the ways that you helped them do it was by getting a post — there it is — on TechCrunch. Here it is. What did TechCrunch write about? Why was TechCrunch interested?

Conrad: Yeah, I think sites like TechCrunch, and VentureBeat, I believe Gigaom, as well, covered this story, I think the biggest thing is we look to make the story much larger than it really is in a lot of ways. With Shirley Box, they were introducing essentially a new way to sync a lot of files. We essentially looked to introduce that they were bringing a new paradigm to the table for this specific industry.

Andrew: Okay. All right, and as a result of that article that I just showed a moment ago, which is right here – let’s zoom in one more time – they did hit their goal and exceeded it, actually almost more than twice what they were aiming for. So the company is up and running, and I see then that they are active.

That’s what you want to show us how to do, to understand how to use publicity so that we can do it ourselves and get in publications like TechCrunch. In this case it was TechCrunch, but throw off some names of publications that you’ve helped entrepreneurs get into.

Conrad: Really, any of the top 100 largest publications, anywhere from The New York Times, to The Guardian, to The Financial Times, to sites like TechCrunch. One of the things that’s important is what I’m about to explain is applicable to any vertical, it’s not just to tech sites like VentureBeat and TechCrunch.

Andrew: Okay. All right. So the first step to doing it is actually finding a story. You used to write for VentureBeat. Right?

Conrad: Yes.

Andrew: When you did write for a very popular blog, VentureBeat, what are some of the mistakes that you saw entrepreneurs make when they were pitching what they thought was their story?

Conrad: Yeah. I think the biggest thing is that the media, and journalists, they’re looking to cover essentially meaningful story lines. What happened a lot of times is people would reach out to the media without the story line.

I remember a specific case. I was walking around New York City and a friend ran into me. He said, “Conrad, I know you’re writing at VentureBeat. Can you write about my company?” I said, “Sure, what do you have to announce?” He said, “Oh, we don’t have anything to announce.” I said, “If you don’t have anything to announce, then there’s no story. There’s nothing I can write about.”

Andrew: So they can’t just say, “Look, I’ve had this company for a while. It’s a good company, good product. All we need is some press, and if we get that, then people will actually start to come to it and use it.” That’s not enough? That we’ve been around for a while and we have something good?

Conrad: No. It needs some type of action.

Andrew: We have to announce something.

Conrad: Exactly. There has to be action. Something has to have happened.

Andrew: Give me some examples of what announcements you mean.

Conrad: The most prominent, the most common would be something like a product launch, maybe a funding announcement. So it could be an angel round or a VC. It could be a milestone, so maybe your mobile app reaches 100,000 downloads. It could be an acquisition as well, kind of across the board. It could even be something smaller. Maybe your company hosts a hackathon.

Andrew: I’m going to show an example of that.

Conrad: And we’ll make that really newsworthy.

Andrew: You know what? I hit 1,000 interviews a little while back. Did I miss a big opportunity to get some press by saying I hit my thousandth interview? Is that the kind of story that you’re looking for?

Conrad: Yeah, I think that is a perfect one. I think one of the things that’s important is that ideally an entrepreneur can map out the next six months of these meaningful announcements. Some are obviously going to be stronger.

Let’s say, Andrew, you raise a million in funding, or whatever it is. I don’t think, but hypothetically, so for that, that’s a big announcement. You should aim to get that on, let’s say, The New York Times and The Wall Street Journal. But let’s say, hypothetically, it’s a smaller amount spin, like 1,000 interviews. Maybe you’ll only try to get that on a smaller site, maybe on Gigaom, or whatever it may be. So you can have different expectations for different announcements. What’s most important is that these are really good opportunities across the board that you should push for.

Andrew: What’s another everyday event that many entrepreneurs wouldn’t realize is announcement-worthy?

Conrad: I think there are a lot of smaller things you could do to make announcements seem larger than they are. As an example, let’s say a company does a redesign of their website. Well, nobody really cares about a redesign of a site, unless maybe you’re a Facebook. But for smaller startups, but if you launch, maybe instead of announcing a redesign, you announce a next-generation platform, that suddenly sounds like a much bigger announcement. So there are things you could do to make these announcements seem much larger than they might actually be.

Andrew: All right, and we’re going to see an example of how you did that in a moment with Lingua.ly, one of your clients. But one of the things that you also advise your clients is to not lump multiple announcements into one, what they think is a giant announcement. Even if events happen at the same time, keep them as two discrete, different announcements, or more.

For example, here is one of your clients, bop.fm. In fact, before I show them, bob.fm, what was the mistake they were going to make?

Conrad: The big thing was, and this happens to actually a lot of my common era, modern tech start clients as well, is when they are about to make an announcement, go to the media, to TechCrunch, they announce let’s say a company or a product launch, and at the same time, they announce let’s say $1.5 million in funding, whatever it may be. Usually if you see those articles that say, “TechCrunch” [inaudible 00:07:25], the primary article is about the new product launch, and at the very end they say, “This company is also announcing they raised $1.5 million in funding.” By doing that, they’re not optimizing press coverage.

The best thing they should do is actually divide it into two announcements, let’s say two to three months apart. By doing that they can essentially double the amount of PR coverage that they would have gotten otherwise.

Andrew: Okay, so here’s how you help them. They did do a redesign? There it is.

Conrad: In this case, they . . .

Andrew: Oh, excuse me, a relaunch.

Conrad: Yeah, it was a relaunch, yep, and they got on TechCrunch.

Andrew: That’s the TechCrunch article, and then, a few months later, they got . . . here, I’ll zoom out.

Conrad: Yep, it was Business Insider, Wall Street Journal.

Andrew: About their funding.

Conrad: Exactly.

Andrew: Got it. And otherwise, I could see an entrepreneur saying, “I’m going to bring it together. We have a brand new platform, and it’s backed by all this funding, and now we’re ready to get some press.” For them, they could have . . . you were saying that the funding came around the same time as this launch, and you had to explain, “Let’s separate into two different things.”

Conrad: Yeah, absolutely. One of the things to keep in mind, specifically for funding, a lot of entrepreneurs think that if they raise funding on August 1st, they have to announce it in August. As long as the information isn’t public, online, they can really announce it a few months later.

Andrew: Okay. All right, so if we’re going to relaunch our site, and also launch a mobile app, we might want to separate that into two different events.

Conrad: Absolutely. That’s a perfect example.

Andrew: All right. Then, now that we’ve found our story, you don’t want us to just tell the story. You say, “Lead with the vision.” That’s the example of Lingua.ly that I was bringing up a moment ago. In fact, we have their press release.

Before you even talk about what you did here, or why this makes so much sense, what did you do here? I know we’ll give people a copy of this so they can read it on their own, but I just want to show a quick screen grab of it.

Conrad: What happened, when I first spoke to the founder, essentially they had created this Google Chrome extension to help people better translate words online. What I talked to them about is, “What’s the bigger vision of the company?”

The best way, I think, to ask yourself this question, is for most entrepreneurs when they’re let’s say in the gym, or they’re about to go to bed, and they’re day-dreaming about their company and how in three years it’s going to be a hundred-plus-person business, and growing and taking over the world, what do you see then? Describe that. Lead with that larger vision.

In this case, with Lingua.ly, the larger vision wasn’t about a Google Chrome extension. It was about changing the way languages are learned online.

Andrew: Yeah, I do see that. I kind of wish, actually, that you would have said it the other way, here. When we were going over these notes you were saying, “Well, look, these guys are going to change the way language is learned online, and they also have these degrees from whatever school.” What school was it?

Conrad: Yeah, it was Stanford.

Andrew: Stanford. “So they didn’t recognize that that was valuable, so we made sure to include that in there. We made sure to talk about how they’re going to disrupt this $60 billion industry,” etc. And I said, “Interesting. What did you do there?”

You said, “Well you have to understand, all they had was a Chrome plugin, and we added the jazz to that story, and we made sure that people understood that they went to Stanford. We made sure that people understood that this was part of a bigger movement to change the world.” Frankly just, period, to change the world by helping people learn languages.

Conrad: Yeah, and speaking at the very beginning with social proof, when I was speaking to the founders, at the very end of the call they said, “Oh, I don’t know if we should even add this in the press release, but we have our PhDs from Stanford.” I said, “How could you not have told me this before? We’re not only going to include it. We have to lead with that,” because when you first read that, even in the first line, I think there’s a certain connotation. It stands out, the fact that this is a Stanford PhD.

It’s really important, I think, that entrepreneurs identify one or two things about themselves, that they can lead with in the story. If I was going to email The New York Times about an announcement of mine, I would say, “I’m a former VentureBeat writer.” That would kind of stand out, so people would read further.

Andrew: Interesting. What are some other characteristics, or experiences that are worthy of including in a press release or in an email?

Conrad: Yeah, I think a couple of things. One is any prior companies that you’ve worked for, so maybe you’re a former engineer at Facebook, or Google, etc. Maybe it’s a university you’ve attended; maybe it’s an award. If you were [inaudible 00:12:03] with an Ernst & Young Entrepreneur of the Year, that’s huge, the fact that you can present that.

A lot of entrepreneurs talk to me and they say, “We don’t have anything like that.” It’s important to then think, “What are one to two things that are kind of different about yourself, that separate?”

It’s really funny. There are a lot of, let’s say, 16-year-old entrepreneurs who say, “Hey, it’s not worth me writing TechCrunch, because who cares about a 16-year-old.” I say, “That’s really interesting. There are very few 16-year-old entrepreneurs that get featured on these sites!” On the same note, there are older entrepreneurs who might be over 60 years old, who don’t even bother, when that is a key component to the story.

Andrew: I can see, and they probably don’t even bother because they think, “No one is writing about people like me.” You’re saying, “The fact that people aren’t writing about people like you means that that’s an interesting story.”

Conrad: Exactly.

Andrew: So any awards, any degrees might help out, working for major companies. So Microsoft engineer leaves to found this other thing, that’s worthy of including. And any personal characteristics that are different, so age might be one. What’s another one that’s a personal characteristic?

Conrad: I would say anything that really makes you stand out as an entrepreneur. I think a mistake that a lot of people make is that they will email a journalist and say, “Hi, my name is John. I’m a bootstrap entrepreneur.” Well, there are 50 million other bootstrap entrepreneurs! It’s not really unique. But any specific characteristic that, hey, if I’m in a room with 100 other people, it’s very unlikely that these other people also have that characteristic, I think it’s worth including.

Andrew: I noticed that I do that myself too, in Mixergy interviews, that if there’s someone that I want to make more interesting, I look for parts of their past. Maybe you used to be in the military and worked with fighter jets somehow. I’ll talk about that. Maybe it’s the fact that he used to be a professor.

Conrad: Exactly.

Andrew: I’ll say, “How did a former professor launch a company that . . .” whatever. That kind of stuff really does help.

Conrad: Yeah! It could even be something that’s potentially seen as “negative.” To say, “This person is now a successful entrepreneur, but he used to be homeless,” as an example. That’s very unusual and that makes him stand out to the media.

Andrew: Interesting. So if we don’t have anything going for us, we might want to just go and live on the streets for a week, so we can get that streak read and be the former homeless entrepreneur. Do you encourage your clients to do stuff like that? To maybe go and do stunts, like, “Go live on the streets for a week, just so I can sell you as a former homeless entrepreneur”?

Conrad: I don’t. And I think it’s important that everything I explain, I don’t want people to look at is as, hey, this person is trying to manipulate the media in any way. I think it’s really about optimizing and just understanding, “What are the media actually looking for and how can I position my story to make it as easy as possible for a reporter to write about it?”

Andrew: I kind of want the manipulation of the media. Maybe you can come back and teach that?

Conrad: No, well, it’s really important though because – and a lot of what we’ll talk about as well – so many writers today are paid per article. If you can, when you first contact a journalist, usually they can tell, at least I used to be able to tell, “Is this article going to take me 30 minutes to write? Is it going to take me five hours to write?” If you can present everything a certain way to reduce the amount of friction, you’re going to be much more likely to get a lot of media coverage.

Andrew: All right. Back to the Big Board, and the next big topic to talk about is crafting that convincing email. So now you’ve found your story. You understand that you want to lead with the vision, and you found your bigger vision, something beyond the fact that you’re selling a plugin, or beyond the fact that you’ve got another mobile app. Now it’s time to actually write that email to send out to a reporter.

Actually before we get to what you recommend, what shouldn’t we do? What are some mistakes that are easy for us to avoid?

Conrad: I always joke with a lot of journalist friends of mine that the three words that journalists hate the most are “For Immediate Release.” It’s so common. I still get a lot of emails every day.

Andrew: Why? What’s the problem with “For Immediate Release”?

Conrad: It’s in capital letters. “FOR IMMEDIATE RELEASE.” Just as a press release. It’s not personalized at all. My thought, “It doesn’t matter if this was a huge Apple announcement, I’m just going to remove it because it almost looks like spam. As opposed to if someone said, “Hi, I’m Conrad. I’m an alumni of the university that you attended, and I wanted to reach out to you with an exclusive.”

I’m going to read that email. Even if I decide to decline the article, I’m going to go through and spend more time on it.

Andrew: So something that’s personally connected to the person, to the . . .

Conrad: Absolutely. And that’s as easy as just including the person’s name. I mean, you would be surprised at how rarely that’s done.

Andrew: I’m doing the search in my inbox to see did I get any recent ones that just say “For Immediate Release”? So someone will actually just email and say “For Immediate Release” in the subject?

Conrad: Yep, yep.

Andrew: I don’t really get a lot of press releases, thankfully. I do have some here that I can . . . well, it’s kind of a pain to show, unfortunately. I have some, not that many. But it says in the headline, “For Immediate Release: LA Fashion Week Recap.” “For Immediate Release: Brazilian Bikinis at Fashion Week.” “For Immediate Release: Man Eats Dog in a Five . . .” Oh, never mind, that one is actually making a joke of that whole thing!

All right. So find something that’s personal to start off with. That’s what you would start off an email to a VentureBeat writer with? You would say, “Hey, we both went to college together?”

Conrad: Yeah.

Andrew: Or, “We both went to the same college”?

Conrad: It could be as simple as searching the journalist on LinkedIn and seeing, “Hey, this journalist attended UConn. I didn’t attend there, but several of my friends did.” Then the email saying, “I’ve always been a lifelong UConn fan. And congrats.”

Andrew: That’s it. Who gives a rip!??! I say “rip.” Who really gives a rat’s ass?

Conrad: The thing is, when you’re contacting these journalists, one of the things you have to fight against is almost — I’m going to mispronounce it — but basically being anonymous. You want to show that this is a human behind it. Writing something like that is surprisingly rarely done.

Andrew: I see.

Conrad: And you can build a relationship and connection through that.

Andrew: I see, so even if I don’t care that you care that I went to NYU, it’s flattering that you checked it out. It shows that you really did some work and this isn’t just another email that was sent by a machine.

Conrad: Absolutely. And something else you could do with the media is say, “I saw that you recently covered this trend, and this article obviously has to do with that trend, which is why I’m sending it to you.”

Andrew: Okay.

Conrad: Just that small bit of effort.

Andrew: Something that’s a personal touch, or a personal connection to what they’ve said, or a story that they’ve written that’s similar to what you’re about to talk about. We start off with that.

Conrad: Exactly.

Andrew: What else do we want to include?

Conrad: Then you want to lead, similar to the press release, with the greater mission of the company, and a lot of social proof as well, to say . . . probably one of the biggest fears that a journalist has is that they’re going to write about a company that is going to turn about to be fake, especially actually with Kickstarter campaigns, or any fundraising.

One of the best ways you can fight against that is to say, “Hi, my name is Conrad Egusa, LinkedIn or Twitter.” Like, “I’m a real person. You can see that I have this reputation, and it’s not something that’s going to be a fake announcement,” something like that. Anything you can add to include is really important.

Andrew: Let them know you’re a real person. Then at what point do you say what the actual product is?

Conrad: Usually in the first line, the first paragraph, which usually consists of two or three lines, I talk about myself, and in the second paragraph I would talk about what the announcement is.

Andrew: Oh, first paragraph about yourself and your connection; second paragraph is what the announcement is.

Conrad: Exactly.

Andrew: So it might be, “Hey, Andrew, I’ve got a lot of friends who also went to NYU like you did.” What’s the next sentence?

Conrad: I would probably say something . . . you know, this reminds me. I just emailed Frederic from TechCrunch. He attended UConn.

Andrew: Okay.

Conrad: I would say something like, “Hi, Frederic. My name is Conrad Egusa, LinkedIn,” link to it. “I didn’t attend UConn but I’ve been a lifelong fan. I saw you attended the university. I’m writing to offer you an exclusive for this specific announcement.” Then the second paragraph would say, “This company . . .” the big story about it, and maybe two or three lines explaining the specifics of it, summing it up saying that I really appreciate their time.

I like to say, “I completely understand if you aren’t unable to respond, but I have attached additional information in this press release, and I would love to follow up if you may be interested.”

Andrew: What’s a good subject line for it?

Conrad: I would say something like, “Hi, Frederic. This is Conrad Egusa (former VentureBeat writer) in regards to an exclusive.”

Andrew: That’s a subject line?

Conrad: Yes.

Andrew: Your name in regards to an exclusive.

Conrad: Yeah. Oh actually, I would say, “In regards to an exclusive,” and then for the specific company. I might say something like, “In regards to an exclusive for a Y Combinator company.” Something that kind of stands out about that.

Andrew: In the subject line, are you putting your name in again even though it’s in the “To” line?

Conrad: I’m sorry. Yes, I would say, “Hi, Frederic.”

Andrew: In the subject line?

Conrad: Yes, yes.

Andrew: You would say, “Hi, Frederic” in the subject line?

Conrad: Yep, absolutely, just to make sure, especially with a lot of these journalists who might get a thousand emails every day. Just the fact that we’re including their name, to say like, “This isn’t an email sent out to 5,000 people.”

Andrew: It sounds like you’re writing the whole message in the subject line. “Hi, Frederic.” What else do you say in there?

Conrad: Someone could say for example, “Hi, Frederic. Exclusive for a Y Combinator startup.”

Andrew: I see.

Conrad: Something like that.

Andrew: So it’s not, “Hi, Frederic. I’m a former VentureBeat writer. Here’s an exclusive with a Y Combinator company”. It’s not that elaborate. It’s just, “Hi, Frederic. Exclusive Y Combinator company”.

Conrad: Yeah, I think it depends. I want to make sure to add at least one piece of social proof, so if there isn’t any social proof that I can use for the company, then I would use it for myself, which is, “a former VentureBeat writer,” which would make them pick up.

Andrew: I see.

Conrad: I hope that makes sense. It kind of depends. If it’s just an exclusive for a Y Combinator company that would stand on its own, I don’t have to mention anything about myself, because it really wouldn’t matter.

Andrew: Boy, that VentureBeat writing is really going a long way for you. How long did you write for VentureBeat?

Conrad: Let me see. I wrote for them, I guess in total I think it was about four months that I was writing about two to three articles a day.

Andrew: I see, so it is a lot of articles.

Conrad: Yeah, I think now, there are so many different things that you could use for social proof. Now I’m a guest writer, for example, for The Next Web, just as a contributing author. There are so many different things.

Andrew: I was just going to say, it is so much easier to be a guest writer somewhere, and then you get to say, “I’m a guest writer for, or a writer, or I write for, or I’ve written for,” whatever the publication is.

Conrad: Yeah. I would say just that I feel very differently as a writer than I do as a guest writer. Because a writer, where you’re in a newsroom everyday, essentially kind of tapped in with this and speaking to reporters every day. As opposed to guest writing, where maybe you submit an article every two or three weeks.

Andrew: I see.

Conrad: But there are many different things. You could say something like, “Hi, my name is Conrad Egusa. I’m a Y Combinator alumni.” I’m actually not, but as an example, but I’m a founder and student mentor. Or “I’m a Stanford graduate.” There are a lot of these different things that will pique people’s attention.

Andrew: All right. You mentioned “exclusive” a couple of times. Let’s talk about that.

Conrad: Yeah.

Andrew: That’s one of the things that you tell entrepreneurs to do, to give one publication an exclusive.

Conrad: Yeah. When you think about it as an entrepreneur, you’re going to face this conundrum with the media, which is that the TechCrunch covers are launched on Monday. You email The Next Web the following week. They’re probably not going to want to cover the story because it’s already been written about.

You basically have two options. You can create an embargo, or you can offer an exclusive. With an embargo, you email 20 publications on Monday and say, “We’re about to launch on Thursday at 12 p.m. Do you want to cover the story? If you would like to, you have to agree to cover it at that time.”

Ideally, multiple publications will cover the story and you get a lot of press coverage. No one essentially will break the story, because everyone is writing about it at the same time. I think the downside of that is potentially there won’t be any journalists that cover the story, and then you essentially miss this great opportunity.

The other option is with an exclusive. You essentially email let’s say the largest sites, TechCruncher or Wall Street Journal, and say, “Would you like the exclusive, the first right to publish this story?” The reason why it’s important is that most journalists that are looking to break stories, the strongest publications are the ones that in general have access to the most stories. In general I recommend an exclusive for anything smaller than a seed announcement, a seed round of funding.

Andrew: For anything smaller than seed.

Conrad: Exactly. Let’s say, in particular if you are a first-time entrepreneur that is about to launch a mobile app, and you don’t have a ton of experience. If you set an embargo and you don’t have any kind of social proof, anything to stand on, I wouldn’t recommend it. It’s very likely that no one is going to cover that story.

As opposed to if you email VentureBeat and say, “Would you like the exclusive, first right to cover this story?” It’s a way to break through a lot of the noise very quickly.

Andrew: Right, you did that for this company, Lucky Penny.

Conrad: Yep.

Andrew: All you did was you said to TechCrunch, “I’m going to give you the exclusive to cover their launch”?

Conrad: Yep.

Andrew: That’s what got it.

Conrad: Yeah. One of the things too is when refer in coverage and end up getting picked up as well by VentureBeat and these other publications. But basically we guaranteed to a certain extent that this startup would be featured on some very meaningful publications.

Andrew: All right. So let’s go back to the Big Board here. The next big idea is to further coverage, as you said a moment ago. So now we’ve got our story. We’ve got the vision that we’re leading with. We’re crafting a convincing email. We’re giving one person, or one publication, an exclusive. Things are starting to go well. We’ve got a little bit of coverage.

You’re saying, “Don’t stop there. Further your coverage.” How do you do that?

Conrad: I think the biggest thing to remember is that some publications are more time-sensitive than others. As an example, particularly with tech publications, every day it’s almost like yesterday’s news is very old. So with a site like Lucky Penny, we knew right away, right when that TachCrunch article comes online, we have to email all their tech publications within a 24-hour period to see if they want to cover that story as well.

Immediately after, we targeted more general publications. For example, Time magazine, BBC, sites that have a broader audience. And at the very end, you can target industry verticals. An example with Lucky Penny, we might target music publications, who might not care that a week earlier, TechCrunch covered this launch. They’re just looking for basically interesting announcements.

Andrew: How did you guys do it here? Let me show, this is some of your own coverage. Right?

Conrad: Yeah.

Andrew: How did you guys do it? Walk me through the logic behind it.

Conrad: Yeah, ESPACIO is a co-working space. It kind of summarizes everything for what I’m explaining. The story that we initially announced wasn’t about a co-working space. It’s not that interesting. We made it much bigger, which is to turn the city of Medellin into the Silicon Valley of Latin America.

We got that as an exclusive, Anthony Ha covered it on our launch day. Immediately after, we furthered it with more general publications, so then we got it on the BBC. Then we specifically targeted publications that focus on Colombia, kind of more industry verticals. We had Colombia Reports, most of the national media in Colombia covered it as well.

Keeping in mind that any start up can apply this as well to their own company. Let’s say you have a mobile health app and you’re targeting TechCrunch. There are also all these publications that cover health and fitness. They might be interested in covering it as well, so keep that in the back of people’s heads.

Andrew: Walk me through what you mean by this process. Start off with where, and how do you proceed.

Conrad: Okay. With ESPACIO, I reached out about 10 days ahead of time to Anthony at TechCrunch, who covered the story. Immediately after, when the article came online, we actually had the launch party and it came on as the launch party was happening. I went home and was emailing BBC and these other sites, general publications.

About 48 hours later, then I said, “Okay, I’ve already contacted these general sites. What are some industry verticals?” In this case, the vertical is publications that cover Colombia. That’s when I emailed sites like Colombia Reports, sites that specifically covered Medellin as well, which is where we launched. They were much less time-sensitive, so there were sites that covered us a week to two weeks after. Just the nature of the publications meant that they were less time-sensitive.

Andrew: Okay. All right. Back to the Big Board for the final point that we’ll talk about today, which is to repeat the process at every opportunity. How often do you say that we should be going back to the media?

Conrad: I think ideally people should aim for every 10 to 12 weeks for media announcements. I think one of the mistakes a lot of founders I speak with make is you’ll speak to a founder and they’ll say, “In the beginning of 2012 we raised $1.5 million in funding and we got on TechCrunch and VentureBeat. Now it’s the end of 2014 and we just raised another round. We want to get on these sites again.”

There was basically a period of, let’s say, two-plus years where they didn’t promote any of their announcements, and I think because they’re doing that, they are not optimizing their PR coverage. There are so many different announcements, whether it’s a mobile app, these milestones, where it’s worth contacting the media to try to get their companies out there.

Andrew: Here’s one way. Is this a client of yours? Fordham University?

Conrad: Our client is Fordham University startup incubator. It’s called the Fordham Foundry.

Andrew: I see, and so that’s part of Fordham University, and they hired you guys to do PR for them.

Conrad: Exactly, exactly.

Andrew: Wow, I would have thought that Fordham would have their own, internal PR department.

Conrad: I think they likely do. I think that there is a lot of flexibility that the incubator has as well. This was an example.

Andrew: Yeah, let’s take a look at that. The article was about how an “Evernote-Backed Hackathon Brings More Tech Activity to the Bronx.”

Conrad: They’re looking for some PR coverage and they were hosting a hackathon. When you think about it, hundreds of hackathons are held every single week.

Andrew: Everybody seems to be having a hackathon. People will do a conference and then as an afterthought almost, say, “And we’ll also through in a hackathon. Come on over and develop something here.” Yeah, it’s not a big piece of news.

Conrad: Exactly. But by following this process we were able to get into Wired magazine. Even more, there are a lot of publications, for example, Gigaom, I think it was New York Daily News, Crain’s New York.

Andrew: All covered it?

Conrad: Half a dozen, so Wired was the largest one that covered it, but these publications wrote back and they said, “Hey, we haven’t had enough notice, so we’re going to have to pass.” Because in this case, we actually emailed a little over 24 hours ahead of time. We didn’t have a lot of heads notice. But they were like, “But please keep us updated, because we are really interested in covering that [inaudible 00:32:09].”

Andrew: How do you get anybody, let alone Wired, interested in a hackathon, in something frankly as ordinary and as everyday as a hackathon?

Conrad: I think two things. The first was we tied it into a much bigger story, which is that we didn’t just focus on Fordham University startup incubator. We focus it on the Bronx, which is where Fordham is based. The story was about this startup community growing and all the initiatives involved in that.

The second thing is that we did try to tie in a lot of social proof. For example, Evernote’s CEO, Phil Libin, is from the Bronx. He was very active in donating support and money as well to the event, so we did try to tie in social proof as well.

Andrew: I see, and so nobody cares about a hackathon, but people do care about Evernote. And they do care about how a small community that doesn’t really have any tech startup roots, like the Bronx, would suddenly be embracing it. That’s what you used.

Conrad: Absolutely.

Andrew: All right.

Conrad: Exactly.

Andrew: Your company is called, here, let me actually bring up the site. It’s Publicize. I clicked throughout the conversation, because I like the way you’re doing things. But I think, “What if I just don’t want to do them? What if I don’t want to do it myself?” So I went to Overview. These are your prices?

Conrad: Yep.

Andrew: What do I get if I pay $100? I see here I get an hour or press release.

Conrad: Yeah.

Andrew: But what I’m wondering is results. What kind of results can somebody who spends $100 a month, or $400 a month expect?

Conrad: Yeah, I would say 95%-plus of our clients use the the $399 service. Essentially the idea is that traditional PR firms charge about $10,000 a month, six-month retainers. Most people can’t afford $60,000. With all this, can we introduce a solution that was closer to $400 and it follows a very specific process?

The first week, we create all the PR material, the press release, etc. Second week, the client reviews. Third and fourth weeks, we secure an exclusive in a leading publication. Then every week we do different things to further coverage. And we’re actually completely transparent, so people see, we actually list out each of the journalists we’re going to contact. We list out the emails and the press release, so a client will see exactly what we’re going to send.

The results. One example, we had a client who paid $5,000 for the other PR firm but didn’t have any results. The first month he was with us, we got him on The Wall Street Journal, second month, Forbes.

Andrew: You will help us come up with a story? Just writing the press release you could get somebody on oDesk to do fairly easily, right? But finding that story is a lot harder. Is that what you guys will do?

Conrad: Yeah. I think a lot of what we do with finding the story is the conversation where we propose ideas like, “Have you guys had, or are you guys planning on doing any of the above dozen-plus things?” Usually the founder will say, “We actually did do that, maybe two months ago, but we didn’t announce it,” or, “We do have this upcoming announcement that we’re planning on making.”

Andrew: All right, and so you will help them uncover the announcements that they might not have considered otherwise, and then take it all from there.

Conrad: Mm-hmm.

Andrew: All right, the company as I said earlier is Publicize. Website, Publicize.co. Thank you so much for doing this session with me.

Conrad: Andrew, thank you so much for having me.

Andrew: You bet. Thank you all for being a part of it. Bye, everyone.

DOWNLOAD TRANSCRIPT

Master Class:
Generate 200% more traffic
(Through referral campaigns)
Taught by Dan McGaw of Fuelzee

Master Class: Growth Hacking

Report Bugs

Course Leader: Dan McGaw, Fuelzee

Dan McGaw is the founder of Fuelzee, a mobile app company that helps you find the right gas station and get the best deal on gas.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is on how to grow 200% more traffic using referral campaigns. This session is led by Dan. He runs this site called Fuelzee, a mobile app company that helps you find the right gas station and get the best deal on gas. What we’re going to be talking about today is a system that he learned and implemented at Code School, which is a site that teaches coding online. My name is Andrew Warner, the Founder of Mixergy, and I’ll help facilitate. Dan, thanks for being here and teaching us.Dan: Thank you very much.Andrew: Dan, when you got started with Code School, how many subscribers did they have?Dan: We had just over 4000 subscribers.

Andrew: Four thousand subscribers. Is this what the site used to look like?

Dan: Yeah, that’s what it looked like when I started.

Andrew: Wow! And when you say 4000 subscribers, are they paying subscribers, or paying, I think, $25 a month?

Dan: Yes, it was $25 a month at that time.

Andrew: That’s great, but the grow rate was?

Dan: Well the growth at that time, we were only growing 2% a month, so it wasn’t really fast. It wasn’t enough to really make it a stable business forever.

Andrew: And afterwards where did you get it? After you did what you’re about to teach us?

Dan: We were growing about 15% a month in certain periods, but we basically had a 300% growth in 15 months.

Andrew: Three hundred percent growth in 15 months, so what you’re about to teach us you did deliver on. I see that you created a campaign that got 5500% return on investment, and I’ll talk more about that. All right, let’s talk about double user base, double subscriber, double traffic; everything just went up across the board. It’s not like one metric suddenly shot up.

Dan: Right.

Andrew: Let’s talk about how you did it, and this is the Big Board of topics that we’re going to be talking about. You can see on the bottom of your screen there the word more. That’s because we have even more than this and we’re going to try to zip through as much of it as possible, as quickly as we need to in order to get it all in. So, the first thing that you say is you suggest that we create a free trial. You guys had some hesitation about creating a free trial. What was the hesitation about it?

Dan: When you have educational content people can just take advantage of all of the content if they’d like if they have enough time. At Code School each course was about three hours. If you give somebody too much time in the free trial they can get through all of the content.

Andrew: And then that’s it, and then they say, all right, I got the free trial. I got everything I need, so long, and I don’t actually need to pay. And that was the hesitation. So then what led you to actually create a free trial then?

Dan: One of the things that we paid attention to is we created what we called a delayed free trial, so when you came to the site it wasn’t like sign up today and get 30 days for free. You would come to the site, and of course we have some free content you could play with. But instead of giving that free trial right away, we would wait two days after you registered and then send you the free trial. So in that way if you’re going to buy we let you buy. And then if you decide not to, then two days later we just sweeten the deal to get you to come back.

Andrew: Oh, that’s clever. I see, but how did you figure it out? But I guess we’ll get to how you figured it out two days later. So the flow is, someone comes to the site, and it looks like this. They click on ‘view courses’, and I know things change a lot. Then they would try to access one of the courses and be told that they need to enroll to play. And then after enrolling, that’s where you would get their email address?

Dan: In that flow that one is a little bit different. And some of the site has been rebranded. There was a big rebranding that happened. But when you typically get to a course and you would join the first level, for the first level you would have to give us your email account before you got into that course. We’d say, “Hey, you have to register for an account so we can track your progress.” You would then be able to jump into that course and be able to accomplish the first level. Usually there are anywhere from like eight to fifteen levels per course. Now if you didn’t enroll, which would be the goal anyway, and two days later you weren’t enrolled, we would send you that pre-trial email.

Andrew: And this is what that looked like. You actually called it a hall pass.

Dan: The hall pass, and we tried to keep things as branded as possible through the whole school part of it. Nothing was better than when I was in high school and I got a free hall pass and I could just go do what I wanted to do. So by connecting it to that it made it a lot easier, because people kind of fell into the gimmick and went with it.

Andrew: I’ve got it, so it gave them an opportunity to try the software. After they tried it for a little bit you asked for their email address. You have their email address, so if they don’t buy within two days, then you trigger off an email to them and say, here, try it for free. And the free trial also required a credit card, right?

Dan: No, that pre-trial did not require a credit card at all. It was a two-day pre-trial, and then there was a referral mechanic that was attached to it, and that’s where it really started to take off.

Andrew: All right, let’s get into the referral mechanic, because if we look at the Big Board, that’s the next big thing you suggest; to build a referral component. And how did that work for you?

Dan: It took a lot of testing to create the right referral campaign. And I have to give credit to the guys over at Dropbox. They did a fantastic job. Shawn Ellis over there, I mean, the program they created was amazing. So we looked at how we could give somebody a free trial, but also get them to give someone else a free trial. And we worked a lot on that. And what it came down to was the reciprocal incentive. If there was an incentive for you to take the free trial, you get two days free. But if you got one of your friends to also have a two-day free trial you would get an additional two days. And that reciprocal incentive is the most important part of our referral campaigns now. Because people no longer just want to give stuff to their friends. And they can’t give stuff to their friends and just get something in return. Both people have to get something out of the referral. And there has to be an action, and it takes some time to figure out what those incentives are. But once you get it, I mean, it’s golden.

Andrew: And here’s what that looked like. You can see that in the upper right, but I’ll read it just in case. It says, “Your hall pass ends in two days. Earn an extra two days when someone activates from your URL.” And then you give the URL, and we’ll discuss why you put Twitter and Facebook there in a moment. But that’s the process, and you said it takes a while to figure out what the incentive is. What are some of the incentives you tested that didn’t work?

Dan: We tried to figure out how many days of the trial we needed to give people, so one day give them a one-day trial and see how far they’d gone. Or give them a two-day trial and see how far they’d gone, and even all the way up to seven days inside that trial. We even tested out how many days that we’d have to limit the trial for, so you could only get a maximum of 30 days for free. And again, you could just get as many days as you wanted, and there were a couple really smart people who had amazing Twitter followings. The next thing we knew they had like 3000 free days, [inaudible 00:07:01] campaign. So we had to put the kibosh on those. But there were a lot of tests to see how many courses and how many levels that people actually get the advantage to take. How many of those people actually purchased, how many people were we able to capture to come back after the fact? We really found out that two days was the perfect amount, because it was just enough to get you knee deep in the multiple courses, but it wasn’t enough to get you to complete one single course. Because people tried to go at [inaudible 00:07:29] and take a little bit of that, a little bit of this. But by the time they got into it they were too far into the course to be like, “Oh, I can’t just leave this now. I have to finish it. I’ll pay $25 and finish the course.”

Andrew: That’s fantastic. And they get an opportunity to test out the site before they get to fall in love with it like that. All right, you give them the two days. Then you give them an incentive to tell their friends by offering them two more days, terrific. That’s where we are right now, but that’s not where you ended. You also say we should personalize the media sharing options, and that goes back to what I said before. I happened to see on the previous screen shot Twitter and Facebook. But you guys did something behind the scenes to decide whether Twitter and Facebook were the right media options. What did you do?

Dan: Well, there’s a company called AddThis.com. And what they allow you to do is when AddThis has a JavaScript on a site it will read the other cookies that are there and then display whatever social network is your preference. For an example, that screen shot had Facebook and Twitter primarily because I was the one taking the screen shot. I was either on Facebook or Twitter. Sometimes it would show LinkedIn, sometimes it would show Gmail. But what we really noticed was that when you’re working with developers, they are inherently introverts. They prefer their own networks. A lot of them like Hacker News, or Reddit, or [inaudible 00:08:48]. If you’re able to personalize that share and that button that they see as their network, they are more likely to share. That’s because not all developers are going to share everything on Facebook, so we had to tailor that experience to each individual person, and AddThis made it really easy.

Andrew: They are reading cookies to see which of sites your users are visiting the most and that’s what they end up showing.

Dan: Exactly, and it was awesome. We incorporated that and it worked out great.

Andrew: And it looks really simple and elegant on the site. And from what I see here in my notes, you guys doubled your social shares just by doing that.

Dan: Yes, we even expanded that. We learned in the referral campaign how successful it was. We moved that same program into almost all of the sharing that was on the site, so it was a tremendous help for the campaign.

Andrew: And what I notice going through the site is that after finishing one stage, I get a badge and then there is a button that says, “Share this badge,” and the button for me wasn’t actually a button, but was a Twitter button and a Facebook button. That’s because that’s where I spend most of my time. And if I happen to spend most of my time on Reddit and not on Facebook, then I might have seen a Reddit share button.

Dan: Yes.

Andrew: Okay, and on to the Big Board. The next big thing is send an activation email. I wouldn’t have thought that this was such a big deal. But obviously in preparation for this conversation I looked through the notes and I see it was. Why is the activation email such a big deal for growing user base?

Dan: Well, when you have an activation email, primarily in the [inaudible 00:10:17] campaign, it allows you to put specific pieces of information you need the user to accomplish. And what we did in our activation emails, we sent them the referral link. We sent them sharing buttons, as well. So that way in the email you didn’t have to go to another landing page to share. You just click on the Facebook button. It immediately opened up a Facebook sharing request. And your customer’s URL is already in there. And it helped the campaign expand even faster, because the people weren’t logged in. They were just able to share it right from their inbox.

Andrew: I see, right there, so that’s the reason you care so much about bringing this up in our conversation, because it encourages more sharing the way that you have it. I see it right there in the middle of the email. This is the email that you would send out, right in the middle of the screen. It says, “A quick way to share Facebook, Twitter, and email,” or I could just copy the URL.

Dan: Yes, we tried to make it as simple as possible. The email should be your landing page, and that’s what a lot of people really need to look at. Make your email the landing page. There’s no point in them clicking and going to another landing page and have to fill out information there. Do as much of it in the email as you can.

Andrew: What was your title there?

Dan: It was Vice President of Growth.

Andrew: Well you definitely did grow the company a lot. How long were you at the company?

Dan: Seventeen months. I was the first employee there, which was great. And I worked heavily with the founder and we did a lot of cool things with the company.

Andrew: Did they offer equity in the business?

Dan: They did not, because I had a side project they couldn’t agree with.

Andrew: Really?

Dan: But we won’t cover that today.

Andrew: I thought because they were self-funded they didn’t do equity for their team.

Dan: They do have equity, but they don’t do shares. They offer real straight up percentage points, and very interesting stuff.

Andrew: And on to the Big Board. Next you recommend that we send a ‘you’ve got a referral’ email, and I think this is what it looks like. I’m so glad you have these screen shots. You must have taken them before you left.

Dan: Yes, I actually did multiple presentations on this whole campaign while I was still there, so we shared a lot of this while we were still there. But the ‘congratulations, you’ve got more referrals’ was always a really good help, because it reminded people and congratulated them that they’d accomplished something. One of your friends joined and you earned four more days. But it that same message again, here are quick ways to share this again. You’ve already had success, so let’s continue this process, and continue to grow the business.

Andrew: All right, let’s go back to the Big Board. We really are moving quickly through these. Next is, “Send an up-sell email when the free trial ends.” This is how you take someone from just a trial member to a customer, and I’m going to show the email that you sent out.

Dan: When the campaign is over, obviously you want to get them to enroll, and you have to make it was enticing as possible. The call to action on this, of course, is enroll. We did do some testing with enroll, and in this email and with enroll I did perform the best. But you have to make sure you’re trying to convert that lead at the end of the day, because if that person just finishes their trial and goes on, and you don’t reach out to them, they might never come back.

Andrew: And you do something even more than that, but this actually is a huge help, and I’m looking at my notes again. You got 666 new subscriptions in nine months from that part of the process.

Dan: Yes, that was a huge help. When we first started there were not all the email integration, and there was not all that stuff. We had to continuously bulk things onto it. But it was a good help. Six hundred and sixty-six times a lifetime value of $150 adds up.

Andrew: And on to the Big Board, “Send a follow-up email with a promotion.” Now this is something that if someone didn’t become a customer, well what would you send to them, before I show it before I describe it?

Dan: If you did become a customer we wanted to send a way to sweeten the deal. The first offer was to sign up for $25. What we then did was say sign up for $9 for your first month. Let’s figure out a way to see if we could incentivize them to get them in, because once they sign up for the $9 first month, of course the next month is $25. And by that time they’ve already tried more content. We have their credit card on file, and we could still grow the business through that method.

Andrew: This is what that email looked like. I say looked like, because we’ve changed so much online, at any given moment things change. There it is, “Enroll now for $9 and get full access to all of the Code School courses; access code TV Screen cast, with no contract or commitments, and the ability to vote for future Code School courses, etc.” This was just for the first month. You’re just trying to get them to sign up and then afterwards they are regular members like everyone else.

Dan: And as you can tell on this one compared to the last email, this one has a lot more visual cue in trying to explain the value that they are going to get for that $9. And the email worked really well. We were able to capture additional people, and it definitely helped out. You got a lot for $9, but after that first 30 days you went right up to $25.

Andrew: This is what the previous email looked like. This is the one that use send when their hall pass, two-day free trial ends. The interesting thing about that is that yes, you do say Code School enrollment is just $25 a month. But ever completed course earns you $5 Code School cash. “Play often and enjoy payments of only $20 a month.” How did that work?

Dan: If you completed a course, any course on the platform, you got $5 off your next month, so there are a lot of people who actually only pay $20 a month. Since I left, or right before I left, I had that program killed, so that’s a little bit outdated. There is no longer $5 off.

Andrew: Why did you kill it?

Dan: It wasn’t helpful. People didn’t know that they weren’t getting the credits half the time. People didn’t understand, and it just ended up throwing off internal metrics. And when you’re trying to run business metrics, and you’re like wait a second, they paid $25 a month for three months, and then they paid $20, and then they paid $25. It just wasn’t helpful, and it wasn’t a sticky reason why people came and did the contents. They weren’t eager to save $5. They were more interested in doing the course. Probably about three months before I left, Eric Allen and one of the other gentlemen here who helped out the company, we agreed we just had to get rid of it. When you look at the business argument, if we get rid of this next year we’re going to make $550,000 more. So it was okay, let’s just get rid of this, because nobody cares that we have it. We’re just losing money for no reason, and we did eventually kill it.

Andrew: And to the Big Board, “Promote free trial to the right target market.” Did you ever promote to the wrong target market, and what happened?

Dan: Yes, you can’t promote free trials to Russia. We learned that lesson. They didn’t take advantage of all of it, and we had to make sure that we focused on which markets would use it correctly, and who would convert. So what we would do is dynamically change the homepage and offer free trials to certain people, and not offer it to other people out of the gate just because we weren’t going to earn money off them, and we wanted to get the profits over with. You had to be very conscious who you give your free trials to, because if you’re giving away money, and basically that’s what a free trial is, you want to make sure you’re going to give it to the people who are actually going to convert.

Andrew: What would you use to figure out that someone was in the wrong market? And by market, we mean specifically where in the world they are.

Dan: Yes, the region. We actually used Optimizely to do that. Based upon whatever region you were in, we would say if you’re based in this country, show this. If you’re based in that country, show that. In that way instead of using Optimizely as an AB testing tool, which everybody else does, we used it to dynamically change our website based upon certain attributes. If you came from Russia it would say get this free trial immediately so that we can move on. And then, of course if you were from Brazil, you would never have seen a free trial. So it made it very easy and quick to do.

Andrew: That’s a simple solution for it. I thought because you guys were a Coding company that you would have coded some great solution, and I’m so glad you didn’t.

Dan: No, I was working at a company that was full of engineers. I started at the company, and everybody was an engineer but me. Trying to get an engineer to do something for a developer or a business guy is not always the easiest thing to do. We would hack together a ton of stuff to make things happen; dynamically changing the homepage based upon referrals for us, you would land on the homepage and it would say, “Hey Facebook user, how’s your day?” And it was only because Optimizely knew that they were a referral from Facebook, and we didn’t even change the content. None of the developers there would have built that because it would have been by manipulation, or it would have been creepy. But I said, “Listen, this is what people love.” So we just hacked it all together.

Andrew: You also would encourage companies to get free trials, because companies were more likely to convert. In fact I’m looking at my notes, and ThoughtWorks had 300 employees sign up.

Dan: Yes, and we used the same hall pass mechanics to do this, which was quite interesting. When we first built the sales process we were kind of shrewd with it. “Hey, Stark, we’ll give ten of your employees a free trial. Just give us ten emails, and we’ll send in the advice, and they’ll each get 30 days to try it out.” And that’s because we’re talking about bigger accounts. All right, that’s sweet. If we get ten people that’s $250 a month, and that’s great. And then randomly one day it hit me. We should just get them to invite their entire company to a free trial, and give everybody 30 days free. What happens now is, if those people don’t buy a corporate account, we just gained access to all their developers who now have an account on Code School, which is great. But when that account ended you also had 600 plus people thought wait a minute, I just lost access to Code School. So it gave you this army of people inside the company who would turn around to their boss and ask, “Where is my Code School account?” And because there were so many people now with the ball, the boss would say, all right, let’s get the account. That’s actually how we got ThoughtWorks to be such a big account. It was because we gave their whole company a free trial.

Andrew: How would you know that it was a company that was coming through? I understand how you can figure out where in the world someone is, but how would you know that it was a company, and therefore you should offer them the hall pass for the whole company?

Dan: A lot of that was that we would notice the email address, if certain emails came through. I got an email of all of the emails that came in every single day, and sometimes I would scan through that. But a lot of these were relationships where we had reached out to them and started talking to them. ThoughtWorks actually reached out to us.

The funniest thing ever is how we got ThoughtWorks as an account. We had a rogue developer from ThoughtWorks who was using Code School all on his own, but he had a ThoughtWorks email. So somebody thought it was a great idea to put ThoughtWorks’ logo on the homepage, and say that ThoughtWorks was using us. Well ThoughtWorks then sent us a letter from inside the company saying cease and desist. “You have to remove our logo, as you are not using this with our approval.” And I talked to the guy and he was cool, and then three months later we had a 300-person account from ThoughtWorks. So somehow we spun that into an account, it was amazing.

Andrew: That’s fantastic, and I’ve heard of companies doing that. Of course, if you see someone from a company who is using your software you want to tout it so the rest of the world knows that that company now has your software inside and they’re using it. But I’ve also heard that some companies don’t like it, because they have all kinds of criteria about who can use their logo, and how to use the logo, and what it looks like.

Dan: Right.

Andrew: Most entrepreneurs will do exactly what you guys did and it’s nice to see that there is a positive outcome that could happen when you do that, even if the company isn’t happy with it.

Dan: Yes, and it worked out great for us. I was quite impressed myself. I couldn’t believe it.

Andrew: Way to spin that, and on to the next point, which has something to do with the flu. This one says, “Test your incentives until you get them right.”

Dan: Yes.

Andrew: And you tested day amounts, and what was the longest that you gave to people as a free trial?

Dan: We did seven days at one point for the initial trial, and it was just too much time. We didn’t get the conversion back. People had enough time to go through the courses, so there was definitely a lot of testing on those incentives and figuring it out. But we also did a lot of testing on how many days from the first time that they signed up would we send them that trial email. And we did it all the way up to 15 days, and we found out once again that the magic number was two, yet I don’t know why. But two days after was always better. But we also tested the day of the week, and we found out that Tuesday, Wednesday, and Thursday were the best days to send the email to get people to start their free trial, and were also the best days to get people to actually buy. If you sent it out on Monday they were too busy. They might have been at meetings. We don’t know the reasons, but it just didn’t convert as well. So we were testing not only how long the trial was, but on what day the email goes out is extremely important.

Andrew: I’m going to follow-up on that in a moment, but I’m curious about the software that you used to do all this. Is this something that you did get the developers to build for you?

Dan: It was primarily built in the MailChimp, and we used MailChimp as a giant user table, so we stored every date in there as well. So every single date that had to do with something was stored in there. A registered user was a date, and not true or false. And then what we were able to do was set up automation rules, so I could then change anything I wanted inside of MailChimp.

Andrew: So all this, two days, seven days, etc., was all within MailChimp. But you needed something within Code School software that says this member’s account works for free for the next seven days, or this member’s account works for two days.

Dan: The sharing URL that was given to them had its own information stored inside of our user table at Code School.

Andrew: Then that part you guys had to develop?

Dan: Yes, that part we had to develop. Now there is a way to get around this. You can’t use it for member services. There is a company called ShortStack App.com, and they have an internal referral component, which actually works really well. It’s typically used for baseball contests, but we’ve been able to hack it together so that way you can just imbed it on your site and then create a referral campaign, and issue a standardized promo code for a discount. But ShortStack is actually the easiest one that we’ve been able to hack together for more junior marketers.

Andrew: Is this the right site, what I’m seeing here?

Dan: Yes, you have the right site, but you’re just on an inside page. Just click on the ShortStack logo.

Andrew: Okay.

Dan: Maybe it’s just stuck on that screen.

Andrew: I can’t change it.

Dan: They started as a Facebook application company, and then since Facebook got rid of the default landing tab they kind of changed it into being able to embed things on your website and things like that. But if a user signs up for one of their referral campaigns, they get their own referral link, and they can share that. It integrates with MailChimp and a whole lot of other things. I’ve used ShortStack for referral campaigns at my company now, [inaudible 00:25:22], without having to get a developer involved.

Andrew: That’s fantastic. I’m guessing this is the way that the flu spread, right?

Dan: Yes, this is the R value, which is basically how many times it reproduces. And when you look at any type of referral campaign, if you are not hitting a reproduction rate of three, you’re not going to be able to really grow very fast. I had a scientist reach out to me at a recent conference, and I think the actual number is 2.7. We found three, so if a user did not get three people to join, we had no way to exponentially grow. So it has to be a reproduction rate of three people for every originator, and that’s actually scale.

Andrew: And that’s what you reached?

Dan: Yes, we got an R-3, and a 3.2 at one point. But we were able to get it, but it fluctuates, obviously. But until we hit that point, it wasn’t going to double every month.

Andrew: Wow! That’s pretty impressive, that a Code School, that an online school could actually get that kind of virility is really impressive, and especially one that charges. We’re not talking about Khan Academy where people can just go and click around for free, and so they’re more likely to spread it. We’re talking about a real school where people have to pay, and that it’s getting that kind of virility is fantastic.

Dan: It was the focus on quality. That was one of the greatest things about Code School. The courses are amazing, and the product is entirely solvent. But we struck a very niche market that nobody else was serving in that coding world. Everybody was either focused on entry level, or college, and we were in the middle of all of that. We couldn’t teach entry level people, but we were able to teach people who were intermediary and higher. And developers run in very small circles. They are all on Hacker News, they are all on Reddit, and they hang out in groups. You just can’t advertise to them. So if you can get one developer to tell another developer to tell another developer, that’s when you’re actually going to be able to grow. And that’s how GitHub got wildly successful. They created a social community for developers. It was genius, and that’s what we focused on at Code School. How can we create that, too?

Andrew: The thing that strikes me is I think you guys were fantastic before you implemented all of this, but fewer people knew about it. What’s great about these techniques is that they helped spread the word, and so many of them are reproducible. So, let’s go to the Big Board and look for another one. Here’s something that you mentioned before; you want to test your deliver day. What you’re telling me is that you’d wait to see if somebody paid. If they didn’t pay, then you’d offer them two days free. But you wouldn’t send those two days free the same day they joined, or the next day, or necessarily even two days later. You would send it a minimum of two days later, or the following Tuesday, Wednesday, or Thursday.

Dan: Yes.

Andrew: That’s the thing.

Dan: That was a huge thing for us. We looked at the conversion that happened each day and examined the open rates and click rates, and all the way through the conversion. And when we first started it was two days after you’d registered and that you’re were getting this email through [inaudible 00:28:41] subscriber. Then we started looking at different times of the day, and different days of the week. And of course we did send it on Tuesdays, Wednesdays, or Thursday, which were the best days. Saturdays were atrocious, Sundays were atrocious, Mondays were okay, but Tuesday was like hands down the breadwinner. We definitely set it on that, and it only would go out, if my memory is still there, at 6:00 a.m. It always went out at 6:00 a.m. so we could get the international time.

Andrew: At 6:00 a.m. Eastern Standard Time.

Dan: I can’t see that, of course, because it’s really blurry on my screen.

Andrew: Let me zoom it even more, and move it right there.

Dan: Is that Eastern Standard time, and 6:00 a.m. still?

Andrew: No this is 8:00 a.m. Eastern Standard time, Tuesday, Wednesday, or Thursday. I didn’t even know that you could do all this using MailChimp.

Dan: I love MailChimp; it’s great.

Andrew: I thought that only automation software, like Confusion software, or AutoDesk could do it.

Dan: No, and it’s funny.

Andrew: AutoDesk, or OfficeAutoPilot, sorry.

Dan: MailChimp now has an automation suite, and it’s based upon triggers on your website. So if somebody reaches this page, you can send this email out, but if they reach this page, and it’s during these hours, they send that email. They really have done a big overhaul of their auto responders. And we did a lot of testing on this, but the thing for us is the Code School was an international company. We had more user outside of the country than we did necessarily inside the country. We had to find a time that worked well for the U.S., but also catch people before they went to bed when they might have been in Germany. So there was a lot of time testing that had to go on.

Andrew: I really wish that it was easier to do that; to say, give it to them wherever they are in the world, and then when they sign up you can figure out where they are.

Dan: MailChimp now has that; they have their time warp feature, which allows you to send at 9:00 a.m. in every single time zone. They now have an IP tagger, which will also store the IP address of where that person is from. We actually use that at [inaudible 00:30:46]. We now use [inaudible 00:30:49] for our geo-targeted campaigns. We stopped asking people where they were located, and now we just know from the IP. So that stuff is primarily built into the solution now. And if you had developers, and had them hacking into a mandrel or transactional system, you can get very nitty-gritty on that.

Andrew: What did you use to tell you whether Monday was more effective than Tuesday? How would you tie the emails that you send back to orders?

Dan: In the beginning stages of course we used MailChimp to track the opening clicks. But we used KISSmetrics and we also used Mixpanel. We used both in tandem to attach the users and what messages they received back to the conversion. And of course we had UTM campaign codes on everything so we knew all of that information. But definitely KISSmetrics was the winner when I was at Code School.

Andrew: But you would at first look at open rates and click rates, and then that tells you that Saturday is not a very hot day. But it’s actually not the most reliable, because Saturday may not be a hot day for open rates, but anyone who is up on Saturday checking their email might be eager to start learning.

Dan: Yeah, but you have to look at the conversion. That’s a huge thing that we paid attention to. A lot of people forget this, but you have to look at the full funnel and figure out what your business metric is that you really need to increase. Because it’s great to say I had a 40% open rate, but it’s even better to say that I made $40,000 today. So we definitely looked at that full funnel, and then we would compare things back and forth, and even try to change it so maybe we got a really high over rate this day, but we got a better conversion from subscribers that day. We would try to figure out why there is that reason. Is Brazil a market that’s changing? Which day is more successful? And all we were able to come out of it with was that people don’t actually work when they go to work. They play on Code School, and that’s what we gained out of that. People don’t work when they go to work; they play on Facebook and Code School.

Andrew: Let’s keep going, because there’s so much more that we want to cover. The next one is to design your programming to be non-developer dependent. That goes back to what we talked about earlier, which is that you wanted to be able to do it without your developers having to help you with every step of the way.

Dan: Yes, and everything that we built we built so that a developer wouldn’t have to do it. Typically with a referral campaign, or something like this, you would build it all in a transactional system. It would all be hard coded. I knew that it would be a bad idea, because if you needed to get one change done it could take two weeks or two months. It just depends on what sprint the developers are in. It wouldn’t be your priority. We build everything we could in something that a marketer could edit. We had MailChimp, we used Optimizely. We used Unbounce for all of our landing pages. But everything we did we tried to make it so that we could edit it on our own.

Andrew: Did you use WordPress?

Dan: We did use WordPress there, but just because of how we built the program. But every other company I now work at we have put our marketing site as WordPress. We separated the application out so that it’s its own product. But WordPress is definitely probably the best and most flexible CMS to use for a marketer.

Andrew: I understand. The part that faces the non-customers is WordPress. It’s easy for marketers to edit, and then the app itself gets a sub-domain like App.yourdomain.com.

Dan: Exactly, and you see that a lot now. It’s a lot more prevalent than it used to be. At Code School when since we couldn’t edit every single page, we just used Optimizely to edit every page. So everything was dynamically changeable, and we could hide sections. That was the great thing about Optimizely. It’s a WYSIWYG or a website builder in essence.

Andrew: I know what you’re talking about actually. It’s so much better to instead of even asking a developer to change this button, to just go into Optimizely and say you’re changing the button yourself. Now this is not even part of an AB test. I’m just going to change the button, because I know the one AB test. And then when the developers are ready they can get to that.

Dan: Yes, they’ll finally change it and then you can turn off the Optimizely test.

Andrew: That’s cool; I didn’t even realize companies with big developers do it. That kind of justifies the whole approach, and this is such a bootleg solution, a good hustler approach. The next big idea is to get other companies involved. So everything we’ve talked about so far is about how you grow more engagement with your current users, and get them to bring more people in the door, but you guys did this. Here is Summer Camp. What was Summer Camp?

Dan: Summer Camp was awesome. It was a nightmare at the end of the day, but we did think about the logistics. We had a lot of people that wanted to get access to developers. A lot of companies that wanted to partner with us, do something, they always are trying to get us to do something. That campaign solved two purposes. One was to get everybody who wanted access to our developers to leave us alone. But two was to reward all of the developers with all this cool stuff that people wanted to give them. We came up with Summer Camp and we always tried to do holiday theme kinds of things and keep with the times, and keep engagement high, because it’s always personalized them. We partnered with 20 different companies. The requirement was that they had to give our developers something special. One company gave us $10,000 in pre-processing for every single person that bought a backpack for Summer Camp. We had another company give us three months free service, so everybody gave us all kinds of things, which was great. But what happened was that all of those 20 companies also promoted Summer Camp. We had the bigger email list. We had the bigger promotion funnel, and they all gave us free stuff. So we charged $100, and you got a Book bag. We shoved all this free stuff in it, and then you got three months free of Code School, and we shipped it to you. Well, you got $1,500 in free stuff. We sold out of 250 bags in 23 hours, so it was way faster, and we were way more successful than we had planned. But we got all these other companies, and there was so much more promotion than we anticipated that it was overwhelming.

Andrew: They gave you the stuff for free. You sold it to your audience at $100 per?

Dan: Yes.

Andrew: And they didn’t get any cut of it. All they got was your users who bought this trying out their software for a limited time.

Dan: Exactly, and an introduction to their solution. It was sent out in an email and also the Book bag. Now after the fact we didn’t think about the logistics that Amazon goes through every single day. We had to take 20 different things and then shove them into a Book bag and ship them wherever.

Andrew: Why didn’t you do it all digitally?

Dan: We thought about it, but then you wouldn’t have anything go in the Book bag. And the whole point was to have a full bag show up stuff with our logo on it.

Andrew: I see.

Dan: It was actually a mistake, because I had one of my guys in a room for three weeks just stuffing bags, and then putting them in bigger bags with labels on them and sending them out. That part was a little bit of a nightmare. But at the end of the day, to sell out of that in 23 hours, I was magically impressed.

Andrew: That’s $25,000 in less than a day.

Dan: Yes, less than a day.

Andrew: And I have here in my notes that you only lost $10 per student. What does that mean?

Dan: Based on the normal price of $75 for three month, with the book bag it was a total of $102.

Andrew: With the cost of actually buying the book bag?

Dan: Yes, with the cost of buying the book bag, and printing the logo and then shipping it there. Off the normal price that we would typically have, we only lost about $10.

Andrew: What’s the coolest thing that you were able to give away for free?

Dan: I don’t really know what would be the coolest thing that we gave away for free. I think the shirts that we gave away, the Summer Camp shirts, were pretty awesome. The bootcamp shirts were really cool. I don’t know, I can’t remember.

Andrew: Here’s what I see that was included in the list, and I’m not going to be able to get them all, but I see GitHub by C Intercom. I see StickerMule, I see Clickee [SP]. I see Active Campaign, EngineYard, New Relic, Benchmark Email, GoSquared, Geckoboard, just so many different things. And all these guys gave you something free, and it had to be more than just a free month. It had to be something that felt big.

Dan: Yes, it had to be something of value. We really turned down quite a few people. They were like, “Yeah, we’re giving 15 days, free,” and I’d say, “That doesn’t cut it.” And you have to send us something. And that was the hard part for some people; that we said they had to send us something, because it had to go in the bag. So, there were a lot of companies that made postcards and fliers and things like that.

Andrew: Just to be included in this.

Dan: Just to be included in this.

Andrew: Do you think that this would have worked out if somebody is listening and saying, “Hey, you know what, I would like to do this, too, but I can’t send out a book bag. I just want to partner with these companies. They can promote my thing and I will promote them in this bag and give it away to everyone. But it would be a virtual bag.

Dan: For us it was more about putting something in the hands of these people. When you think about it that’s the opposite of working in the Internet. We are so used to everything being digital, so the moment that you put something into real life you’re kind of changing the perception of the value, and that was the goal. You can definitely do digital. Maus has Maus perks, right. You can get these awesome deals from being their customer and get all these other perks, but to me it’s just a wall of stuff I can go take advantage of. To actually get something that’s in my hand, I think is even cooler.

Andrew: This is the email that you guys sent out.

Dan: Yes, the Camp day was a lot of fun. And that sale [inaudible 00:40:18] actually moved on the landing page, which was cool. [inaudible 00:40:21]. But the email went out to around 350,000 people on our side, and then obviously it was promoted all over the place. So it went really, really well.

Andrew: Well, let’s talk about “May the 4th be with you.” I’m bringing up the Big Board here. The next big idea is to run limited time discounts, and you recommend that they be centered around holidays like this one.

Dan: Yes, May the 4th be with you was awesome. We stuck it with developers, and I’d say this in no negative way possible, but they are nerds and they like Star Wars, which is great. We tried to follow that theme and that premise, and it was Star Wars Day on May 4th, so May the 4th be with you. And we offered an exclusive discount, and I think it was only available for 24 hours, or maybe a couple of days. But we did $35,000 in sales that day.

Andrew: Just from that discount, a 30% discount. What did you do when someone says, “Hey, I see this discount is available online, and I’m already a customer and have been paying for a long time? I want that, too.

Dan: We would usually just credit their account. The email didn’t go to current customers, but if someone was to complain about it we would always just credit their account.

Andrew: Okay, the next big point is to find other companies that have an interest in your users. We talked about the book bag, but that’s not the only way that you were able to do that. You guys also did that with New Relic. Do you remember what you did there?

Dan: Oh man, Relic was awesome. The New Relic was a big company, and wants to get more developers on their platform. What we did was we came up with a way for them to buy non-customers of ours for three months free, and they had to pay us full price. So if you deployed on New Relic, and you came through this campaign, they would buy you three months of Code School and send you a unique code. And then they would pay us $75 for you to have the three months for free. We definitely leveraged that campaign to make a lot of money.

Andrew: How?

Dan: When it first started out you would come to the web property for us. You would sign up and then we would send out an email from time to time. But the real way that we grew it is that we started a retargeting campaign. Once again we had a delayed start on it. If you did not become a subscriber within the first 48 hours, we actually shut off hall pass for this campaign, which was a bummer. But you would then start receiving, “Get three months free at Code School,” sponsored by New Relic, and you would see those ads everywhere. We would pay a lot of money because we knew that we had $75 to make back, guaranteed if you deployed. So we had a $25 budget for the retargeting campaign. And people would go and sign up for that and go deploy it with New Relic on their application, and then get a code for three months free at Code School.

Andrew: I see, so you were advertising them, so there was something in it for them? Now there’s a new person going out there and promoting them.

Dan: Exactly, and they were able to get a pretty engine. I worked down to just over $500,000, and it was about nine months that we did that. And I think they actually just ended another one of those campaigns recently. I don’t know if they did it the same way, but I got an email from them, “Deploy New Relic and get three months free at Code School.” I remember at the time we were the most successful campaign New Relic had ever had. And it was just because we leveraged their emails and we leveraged their targeting. We really went out and exploited it.

Andrew: They are basically paying you $75 to go bring in a new customer for them. Did they do much to promote it?

Dan: They sent their email to people who were non-current customers, so it definitely helped us. They did have an email system set up on it. I don’t think they ran any ads, but I do know that they did send emails out on our behalf. It just worked out really well, because it was they knew the cost per acquisition for any given user and what their lifetime value was. So the business venture for both sides worked, and it was really good. The only thing that after the fact that we didn’t really like was it made our churn look pretty high a few months after that, because all those accounts ended. So in one month we had a really high churn and then it went away. We still converted a lot of them. We worked really hard to do that. But when you give somebody something for free they’re not always going to convert at the end of the day.

Andrew: Did you get their credit card information on that one?

Dan: No, I think later on we did set the system where we did get the credit card information. The actual Big-a-thon that we had with that, which is how we track it on the back end; we actually gave everybody this internal membership thing to make it work. And we ended up having 700 members we couldn’t see. We couldn’t tell if they were actually paying subscribers, so there were some interesting things that happened, but nothing with credit cards.

Andrew: And here’s what that looked like. It’s actually pretty cool here, that you guys are having trouble, too, because it seems like it stalled so simply for a company like Code School. There it is; this is what you would send out.

Dan: We started with Geek Cry Day and we actually got some press for it. Once again, we stuck to a lot of the holidays and got a lot of stuff out there. When you attach the things that they can be relatable to, it inclines them to do something. And it was Geek Cry Day, so we actually got some press out of it, too, which was really nice. People signed up and it was for a limited period of time. There were people who went through 15 courses in that weekend. It was just amazing amount of work.

Andrew: The final point that we have is cross promote, but that’s essentially what we’ve just talked about here. Is there another partner that you guys did this kind of thing with where you said you pay us every time we get you a new customer and we’ll email our mailing list?

Dan: Yes, we cross promoted with a lot of companies. The company was very much bootstrap driven, get money. Obviously it’s a business, but we partnered with companies like O’Reilly. They needed a course on R, so they paid us to make a course, and then we gave that course away for free. We had a new free course, and then they had a course that helped get people to buy more books. So we were cross promoting all the time. We did relationships with GitHub. We have a huge relationship with GitHub, Google, O’Reilly books, Pearson, Block.IO, Flatiron Schools. We tried to work with as many people as we could inside the industry, and cross promote their products, and they cross promoted ours. But we never looked at anybody like a competitor. That was one of the things that I really took away when I left Code School. We didn’t have competitors. We looked at everybody as a friend, and just wanted to work with them. We wanted to help out in any way we could.

Andrew: What do we follow up with you? How do we read more about the ideas that you use today to grow your business, Fuelzee, or any other ideas. I love these growth ideas, because they are easier to implement. They just have simple logic behind them.

Dan: I would definitely call me up on Twitter. It’s really simple; @daniel mcgaw. There is no R in my last name. I show a lot of stuff on Twitter and on Facebook and things like that. I typically host on LinkedIn pretty often, as well. I’m pretty crappy at making a blog. I try to do that, but I just can’t keep up with it. I don’t like typing that much.

Andrew: That’s when you go to a mail-in list. With a mail-in list you don’t have to publish as often.

Dan: Exactly. I have a mailing list set up, but I’ve just never actually done it. I’m too focused on my business now and trying to knock that out. But once a month in Orlando I run the Growth Hackers meet-up here, so every month I’m doing something like that. But I typically share all my slides on Slide Share and stuff.

Andrew: This is your site, Fuelzee, and your Twitter account, and I hope we’ll get to see you. Are you speaking at any conferences any time soon?

Dan: I’ll be in, and I can’t remember the country. It starts with an A, but I’ll be there in March. I was supposed to be in Turkey next month, but I decided not to go. I can’t remember what it’s called now. That’s going to drive me nuts.

DOWNLOAD TRANSCRIPT

Master Class:
How to launch a profitable YouTube campaign

Taught by Eric Siu of Single Grain

Master Class: Profitable YouTube Campaign

Report Bugs

Course Leader: Eric Siu, Single Grain

Eric Siu is the CEO of Single Grain which is a leading digital marketing agency based in San Francisco.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is about how to setup your first profitable YouTube ad campaign. It’s led by Eric Siu. He is the CEO of Single Grain, a leading digital marketing agency based in San Francisco. Their clients include many companies whose names you know, including Intuit, Yahoo and Mint. My name is Andrew Warner. I’ll help facilitate. I’m the founder of Mixergy. Eric, thanks so much for being here.Eric: Thanks for having me, Andrew.Andrew: We agreed that we wouldn’t give the name of one of the first companies that you tested, what you’re about to teach us on. But they were desperate. And that’s what got them to try YouTube. What was this situation that they were in?Eric: Yeah. So, the situation was they only had five months of cash in the bank. This is a technology startup. And then, the CEO pulled me aside and said, “Hey, Eric. There are 54 people’s families riding on your shoulders right now. And, you know, you need to make it happen this month or else,” pretty much.

Andrew: I see. “Or else” pretty much meaning, company’s gone, these people who work at the company are not going to have a salary anymore, and some of them are going to have to go back home to their families and explain why they are going to have some challenging months ahead. And there was someone who was managing their marketing for a while. They tried a bunch of different things. How did you know, “Ah-ha” of all the different things that they tried and all the different things that you, Eric, knew, YouTube was the place to go. How did you know?

Eric: Yeah.

Andrew: I just knocked my cup over. It’s all right, though. Yes.

Eric: Yeah. So, this company, there is a lot of… its online education, so there’s a lot of video involved. And naturally you would think that when people are looking to learn things online, whether it’s DIY stuff to fix your home, whether it’s to learn coding or web design, you would go online to learn the stuff. So, I said, “Hey, there has to be something here with YouTube.” So, I opened up a campaign and I took a look. And, what I saw was, I saw traction. And that’s the number one thing you look for when you run any type of paid advertising campaign. You’re not looking for it to get better over a day or a week. You’re looking for traction.

So, I saw a hint of traction where there was a good amount of views coming from it. There was some engagement, people were watching the videos, and there were maybe one or two conversions from it. And the cost per acquisition, for something that was just starting out, the number wasn’t that high. So, I was like, “Hey, there’s something here and I think this is worth betting on”.

Andrew: And once you did, what were the results?

Eric: Yeah. So, I decided to go all in on this. The results were that we increased annual run rate for by about six million dollars. And it took about eight months to do it. And it’s been their number one user acquisition channels since then.

Andrew: And that’s important to point out. It took eight months for you to figure out what you’re about to show us, and to test out the process. It also cost you some money along the way. You say $50,000, big mistake. What, what did you do that cost you 50,000 that you can help us avoid doing as we go through this session.

Eric: Yeah, great question. So, the first three to four weeks we started getting traction, but I burned $50,000 because I tested too many different campaigns, and I set the targeting and the budget way too high. So we were eating up a lot of views. The problem that we were getting before was that the videos weren’t getting an adequate amount of views. So, I set it, I opened up the fire hose, but I opened it too far, and I let it sit there for a little bit. So, the mistake was a $50,000 mistake. And in this video, or in this lesson, we’re going to avoid making those mistakes. We’re going to translate my learnings down to you, so you don’t burn 50,000 bucks.

Andrew: Aces. All right, here are the big ideas that we pulled out before the session started, to help our audience to get some of the results that you’ve gotten. And the first one is you said to use “instream ads.” Instream ads. What are the different ads types that we have?

Eric: Yeah. So, we have instream ads. The instream ads are the ones that you’re able to skip over, these are the pre-roll ads. You can also have them in the middle or at the end. But they’re the skippable ads, you watch five seconds, you can skip. You also have the, they’re called the “action overlay,” that actually sits right under your video in the center. And then you have a companion banner, that’s a 300 by 250 square ad that you can put on the right side.

You can also run an ad similar to the instream, but its unskippable. So, it’s almost as if you’re watching a TV advertisement, where you can’t skip it as well. And then, there’s also another one I believe it’s called, “the right in-display banner.” So, you have the related videos on the right side when you’re watching a YouTube ad. It’s at the top right, and it says, “Sponsored Video.” So, those are the ad types that are available to you.

Andrew: So, you don’t want us to get the sponsored video. It makes sense. Who is going to go out of their way to click? I guess maybe some people might. I can see it working. But you’re saying that’s not what’s effective. But you also don’t want us to play, or to buy the unskippable ads. Why do you want us to favor the skippable ads over the ones that are unskippable?

Eric: Great question. So, the skippable ones, believe it or not, these actually convert the best and drive the most volume. For most people, when they think about videos, video advertising, they’re thinking, “No, this is like TV advertising. This is like, for branding purposes.” But, when you’re trying to drive conversions, the fact that you have something skippable, well, the people that skip are probably unqualified in the first place.

And you also get another side benefit as well. When you’re using instream ads, if people watch 30 seconds, less than 30 seconds, you’re not charged for the view. And also, if they finish the video before 30 seconds, that’s when you’re going to get charged. So, the key takeaway here is that you need to make sure that you’re getting someone to take an action before 30 seconds. Perhaps at the 25 second mark. And you want to create something engaging for the first 25 seconds.

Andrew: I see. So, the fact that you don’t pay when someone skips, means you’re getting a qualified person, someone who’s engaged enough, that they at least continue to watch. Here are the different options, I’ll just bring them up on the screen. But you mentioned them, I just think some people are more visual and I want them to have a look at them. These are the different options, that’s the one that you want us to take. True-view, instream ad. Not true-view in display ad. Not the non-skippable, not the overlay, in-video ads. Not the display ads. Here’s why we pick it. Ba-da-bing. Right, create new ad. And you want us to select, “let me choose,” when it comes to ad formats. And that’s what we get to pick in stream ads.

Eric: That’s correct.

Andrew: Okay. All right. So, that is the first thing that you want us to do. Let’s go back to the big board here, and take a look at the next one. Next one is that you want us to use “Apple-like” videos. What do most people do before we get into the kind of videos that you want us to use? What are you trying to keep us from doing?

Eric: Yeah. So, I want to preface this by saying that you don’t need to limit yourself to just Apple-like videos, it’s just what you’ve seen that tends to work. What I’ve seen, there’s videos like the Airbnb type of videos, where it’s like an explainer video, it’s super high quality. Whenever you start to use a human element, we’ve seen those convert better than people that use animated video. So, we’ve tested animated videos, we’ve tested using humans, and believe it or not, when you have like a simple white background, and you have someone that’s being interviewed, there’s almost like a personal touch to it. And it seems like those, what we’ve seen for the numbers is that these convert better.

Andrew: Like this.

Eric: But again, these really varies across the board. My key takeaway here is I really encourage everyone to test it.

Andrew: But this is what you found that works well. A really polished video, here’s Ryan Carson, CEO and founder of Treehouse, past Mixergy interviewee and course leader. It’s him on a white background, really crisp, very much like Apple, the simplicity of it. That’s what you’re aiming for. Why shouldn’t we, especially for just trying something new, just do a cheapo ad? Get our iPhones out, record a video of ourselves explaining what the thing is and run it?

Eric: Yeah. So, what we’ve seen in the past, we’ve tried the cheapo ads. We tried to go cheap. It’s just the engagement, what we’ve seen in terms of engagement numbers, is way lower than something that’s high quality. And, when you watch TV, I never, personally for me, I don’t remember the cheapo ads, right? You want to come across as having something that’s high quality and you want to make sure your company’s high value.

But, having said that, if you’re trying to run some type of, I don’t know, if you’re trying to run some type of affiliate deal, or it’s like a very simple weight-loss type of thing, maybe you don’t need something super high quality. So, again, it’s the, answer is cliche, but you want to make sure you test. But the numbers that we’ve seen is that quality tends to win all the time.

Andrew: Let’s take a look at that, by the way. This is something that you’re… it’s not disconnected from you. I’ll hit mute. People can watch it, I’ll link to them. This is what it looks like. You used to work for Treehouse, right?

Eric: I used to work for Treehouse. This video is a great example.

Andrew: Is this an ad? It’s a minute twenty-one. It’s…

Eric: Yep.

Andrew: That’s the length of an ad that you guys used to create.

Eric: Yep, this was before we started finding out the goodness of the 30 seconds, skippable videos. And I wish I had a better example for those. But unfortunately I don’t have it off the top of my head right now.

Andrew: So, it would look like this, it would be 30 seconds, and it would allow people to skip, and the key moment where we want them to get to is what? How far in?

Eric: Yeah. So, in this case we’re actually going a minute twenty seconds, right? But in an ideal situation in the newer videos you want them to take an action at 25 seconds, because the video, you’re going to get charged at the 30 second mark. That’s not to say don’t make 60 second to 90 second videos. Those work as well. But one thing you’ll want to test is another type of ad creative is taking action at 25 seconds and just anything before 30 seconds, if that makes sense.

Andrew: Okay. We can put, we can put that link on, and people can click it, and take that action, come to our site, buy, etcetera.

Eric: Yeah. Just, you get this offer now, click on this, and then they’ll just click on the ad, and then, boom.

Andrew: Okay. By the way, what is that over your shoulder? That black thing.

Eric: This black thing is my trusted microphone.

Andrew: Got it.

Eric: You can see it here. Yeah.

Andrew: Oh, I see it. I can kind of make it out a little bit. It’s, that is the Blue Yeti on a boom arm, and you’ve got a pop filter in front of it.

Eric: That’s correct.

Andrew: Wow, great mic. I didn’t know that it can sound that good from a distance. I thought it was one you needed to get really close to.

Eric: That’s what I thought too. But it’s gotten better and better, I think.

Andrew: Yeah. I like that you’ve got it close to you, so that we can really pick up your audio. All right, on to the big board again. The next big one is, include a call to action at 20 seconds. You just talked about it. Is this an example of the kind of call to action that you want us to have? Can we make it look like that?

Eric: Yes. So, this works, this looks quote-unquote, “low quality.” So if you do have a good design team, a good creative team, I’d encourage you to do something a little better. But the structure here is good, because if you look at the left side, you look at the 13, there’s a count-down there. It’s like, “Wow, I need to take some kind of action.” And then there is a button, and it’s crystal clear there that you need to press that button. “Get a quote in under five minutes.” You have some type of action for them there, it’s very straight forward. And you can see, you look at the red line there, the video is almost finishing before the 30 second mark. So, that’s actually perfect.

Andrew: I see. Yeah. Really clear button. For some reason, drawing a circle around the button, I’ve heard people say increases conversions, so they did that. And the countdown I hadn’t seen before. What do you think of the quality of the video. Here’s what it looks like. Let’s bring up my browser there.

Eric: Oh, good, so I did drop a link.

Andrew: Yeah. So, we can include this. Is this something that you guys have done?

Eric: No, this is actually something that a friend that has done for another company. And we worked on it together, we give ourselves some feedback. And they pumped it out.

Andrew: So, what do you think of the quality here? We’re looking at a cartoon that is less expensive, I think, to get made, than what we looked at earlier, for Treehouse.

Eric: Yeah. So, something like this would probably cost around, you know, anywhere from 5 to $20,000. And animated videos, we’ve seen it, we’ve seen them outperform the in-person ones, maybe twice. And in this scenario, this is the only video they came across. So, if it worked for them, if they tested it, it works. But I would still recommend testing like a real life sample.

Andrew: Wow, I wouldn’t have expected that a video like this, just plain animation is, you say 5 to 20,000?

Eric: Yes.

Andrew: So, here’s the thing. When it comes to Google Ads, somebody can experiment for 400 bucks and get a sense of whether it’s right or not. When it comes to Facebook, even less, I think, and get a good response. Maybe that’s one of the barriers to YouTube. That it does cost a few thousand bucks for a creative, and then, if it doesn’t work out, you don’t know, maybe the creative stinks. Do you and spend another 5,000 to get a new creative. Or maybe it’s just that the platform isn’t right for you.

Eric: Yeah. So, the thing I always like to say about YouTube is, it’s something that you want to test after you’ve exhausted perhaps, a Facebook or a Google AdWord. It’s like you mentioned. There’s a barrier to entry. And I think that’s the sexy thing about it. Because, with Facebook and Google AdWords in the past, once people started finding out about it, it became super saturated. This is one thing that has not become saturated yet. So, it’s a good time to get in on it right now.

I like the barrier to entry, because it keeps people on, the price barrier keeps people, it’s much harder of a test. We’ll just leave like that. That makes it easier for people that have, really figured out YouTube to… they have a little longer before it becomes super saturated. And, the $5000 to $20,000 number, that’s probably something that’s made in America. But, one trick that I’ll say is you can go look offshore. There are companies, in perhaps Singapore that you can look at to make great animated videos. And, they might cost like, $2,500. So, you can find discounts around, you’ve just got to shop around and look.

Andrew: Can we use a program like Screenflow or Camtasia, and create a quick test, and see if that works? And assume that… well, actually, can we get a decent response if we try a test like that? Or is it just not worth it?

Eric: Possible. Possible. Have it tested. It’s definitely worth it. I mean, you might… Let’s say you do this. I mean, you might make a screencast video, and you might say, “I want to allocate $500 to 1,000 to it”. That might be worth doing, just to see if you get traction or not. I think so. But, we haven’t tested screen full type videos before. I haven’t seen something like that. So, maybe it is worth a test.

Andrew: Okay. All right. But, in your experience, it’s the more polished videos that work. Something like this. Did you, did you guys try anything when you worked at… no, Treehouse has never tried anything that’s less than fully polished.

Eric: Oh, yeah. Totally. I mean, I used to go to them and the video team, we had an in-house video team. I’d be like, “Hey, guys, well, I’m thinking this, this and this,” and they’d just go crazy. They’d actually do like three or four videos at once. And we tried a quote-unquote “hot girl video”. And it’s all about the niche. My feedback for that one is we tried the hot girl video, making like an iPhone app or something like that. And it really didn’t resonate with the audience. The engagement was a little lower. And I hope Brian doesn’t kill me for sharing this. But, it’s because hot girl and building iPhone apps don’t exactly overlap. There’s just like a disconnect there. So, you’ve got to make sure you’re flowing with your audience.

Andrew: I have seen products, obviously, that don’t overlap with hot girls. They’ll use hot girls and get clicks. Right? So, maybe there is a more universal message there about it not working, on YouTube anyway. Back in the early days of Facebook, I saw people use that a lot. It was just a sure way of getting clicks.

Eric: Oh, yeah. You would get crazy click-through, yeah.

Andrew: Right? I remember it was, I think it was Groupon that used to use them obsessively.

Eric: Yep.

Andrew: Okay. On to the big board here, next big idea is to not let the bidding trick us. You want to customize your bid format. Help me avoid getting tricked. What are you talking about here?

Eric: Yeah. So, basically… I wish I could share my screen here. But, what you can do, when you’re bidding for YouTube videos, you want to make sure that when you’re bidding, there’s a little button that you have to click. So, you click on Targets, there’s a tab there. You click on Targets and then it’ll say, “What’s the maximum you’re willing to bid for this view, per view?” But it only gives you one box to bid on. But Google has actually hidden another box that allows you to customize bids per format. And what that means is you can break everything out, and you can bid on the ad formats that you actually care about. So, if I only care about instream ads, what–

Andrew: Oh, here. I think I’ve got a screenshot of it. Is this what you’re talking about? This right here?

Eric: That is it.

Andrew: Yeah.

Eric: Okay. So, you see that blue link right there? It says, “Return to one bid for all formats.” When you click that, it actually brings everything into one sentence. So, a lot of people tend to gloss over this. And these two options raise the in-display, and in-stream. They’re actually not available when you get to this screen. You actually have to click that link to break it out. And that’s the key. If you’re only bidding on the max cost per view across the board, you’re not going to maximize the number of views you can get per day.

But, if you care more about instream, you should bid higher for instream and bid lower on in-display. You’re going to have to tweak it a little bit. And once you look at it over like a week or so, you get something, you get like a happy medium. That’s when you can get the most views possible.

Andrew: I see. And that’s the trick that you’re talking about. They try to get you to pay one price for all their different products. You say, “No, if what you really want is instream,” and Eric, you’re telling us that we do want instream, “then pay for just instream and not for the other things”.

Eric: Correct.

Andrew: Not. Okay. What’s this screenshot?

Eric: Let’s see.

Andrew: “Max cost.” Oh, I guess it’s the same thing.

Eric: It’s more or less the same.

Andrew: This is the exact same thing actually without the box around it.

Eric: Yep.

Andrew: There we go. All right. Do you see people make that mistake a lot? Have your clients made that mistake?

Eric: They have, actually. They’d be like, “Hey, we’ve tried YouTube. It just doesn’t work for us.” And this is probably the key takeaway here. If you want to make YouTube work for you, when you’re having trouble getting more views, and you’re like, “This video doesn’t work and people don’t care about our video,” try going into this and make some adjustments and see what happens over the next few days. And, you’ll see.

Andrew: At the top of this session I said that you work with clients like Intuit and, I forget which are the other ones, they were. But they’re big names. Do you work with smaller clients too?

Eric: We do. We do work with probably tech startups that have raised like a series A. They’re more, trying to hit that growth trajectory. In some cases we work with small to medium size businesses. But the main thing for us is that we have to believe in what you’re doing. And also, it has to be a good fit. If we don’t think we can knock it out of the park with you, we’ll be very direct and that’s the thing for us. I think we’ve kind of brought over that startup culture. We operate much like a startup, like a technology startup. So, that’s how we behave. And then, yeah, we’re not here to just take on whoever we can. We’re actually very selective.

Andrew: One of the things that I regret about with Mixergy is I had an opportunity to work with you guys when you were just getting started, back when the founders were there and you hadn’t yet signed up to be CEO. And at the time, they said, “Hey, we can help you increase your sales. We can help you understand what your customers want a little more and a few other things,” and I said, “No, I don’t want to increase my sales, I’d like to understand my customers better, but if the goal is to increase sales, I’m happy where I am.” And I didn’t take that opportunity.

And then, I saw you guys work with other clients and I saw what you guys did, the beautiful sales pages, the clear explanation of what the product is, and all the marketing that then feeds into that. It was spectacular. Give me a sense now of what size companies you work with. Who out there should understand that they have an opportunity to work with you and not make the mistake that I made.

Eric: Yeah. Really the ideal, I mean, we would have been happy to work with you. I think we’ve worked with Ramit Sethi in the past. This is like before I came on, actually. I think…

Andrew: It was around the same time, dude. There, your guys were talking to both me, him, and five other people and it was, Neil Patel, who was an advisor who was really helpful in saying, “Hey, guys, my friend’s just starting this company, you should be a part of it.” I said, “I don’t want new sales.”

Eric: Yeah. I mean, ultimately, I definitely believe in what we’re doing, what Ramit’s doing. We have worked with some quote-unquote “other people,” other experts as well. But mostly who we try to work with would be companies that have more than 50 employees. And 50 to 200 is kind of the sweet spot. We do make exceptions every now and then. It’s like, “Wow, these guys are really doing something cool, and the growth trajectory is good.” We’ll make exceptions if we know we can do a damn good job.

Andrew: I see. Wow. I guess that was always the goal, 50 to 200. It was just, how do we get some people on board who have big names, who are also respected by our potential customers.

Eric: Right. Anyone that has, I think that anyone that’s watching this, that has like an agency or service-based business, I think, you want to set some type of ideal client profile. But at the same time, you’ve got to money to put food on the table. So, it’s okay to make exceptions every now and then, but, you want to go for the goal of having the clients that you want to work with.

Andrew: Okay. All right. I was getting a sense of it, because, even though you didn’t said it at the top when we started. I asked you what your goal was, and you said, “Hey, I just want to help people, I want them to get results.” I know anyone who runs an agency is also saying, “Well, there’s an audience here of entrepreneurs I want to, I want them to understand about what my business is.” And I’ve got a sense of who you’re looking for. Hopefully, there’ll be some connections with the audience. Let’s go back to the big board. And our main goal here is to make sure people can run a profitable YouTube ad campaign. And the next big idea is to define your target groups. What does that mean?

Eric: Okay. So, for example, let’s say I’m an online shoe store, and I’m selling red shoes, I have blue shoes. I might have high heel shoes. If anyone, if you guys have ever run like a Google Display campaign, the way you should set these up is to have these keyword groups broken out. So, if I’m doing a keyword based targeting, which means, I want to target videos that are focused on shoes, I want to make sure that I have a group for blue shoes. So, it might be, “blue shoes, buy blue shoes, blue shoes online.” Whatever it is, I’ll have like a group for that, and I’ll do the same thing for the other groups as well.

But you don’t want to lump everything in into one group of keywords otherwise, Google is not going to be able to figure out how place your video. And they’re actually pretty good at placing it. And then, my one bit of other advice would be, if you’re making a keyword group, you want to have anywhere from 10 to 20 keywords. No more than that. You do some keyword research and then you figure out how to break them out. If you’re teaching people how to do HTML, CSS, whatever you want to break those out to, or if–

Andrew: Let me make sure I’m understanding this. If I’m running a training program that teaches people how to code and I want to target videos that are related to HTML and videos that are related to CSS, you are saying to me, don’t put those in one group, have a different group for HTML where you’re targeting videos that include HTML, and others for CSS. Why? Isn’t it with AdWords that you do that, so that you can create a different message for someone who just searched for the phrase “HTML” and a different message for someone who searched for CSS, and a different one for others? But with video you can’t do that.

Eric: So, I think what you’re referring to is more like, if you’re searching in YouTube, you want something to pop up. What I’m referring to is you’re actually getting it placed. So, let’s go to the HTML example. So, HTML tutorial, HTML guide, and I just have this list of 20 keywords, right? And I’ve done the research, these drive volume, and Google’s like, “Okay, I understand where these videos should be placed.” So, Google’s going to go out there and look for videos that talk about HTML, that talk about web development, whatever’s related to this, and it’s going to place them there. Versus, if I’m doing an HTML video, I don’t want it to show up in like, “Learn Ruby on Rails” type of stuff, because it’s definitely more advanced, right? That’s way down there. I want it to be somewhere relevant.

So, that’s why I’m letting Google do this. And, what you do afterwards is as you continue to optimize, it’s just an optimization game. You will go in, and you will look at the placements that don’t make any sense. Google is good, but they’re not perfect. So, you’ve got to eliminate placements that don’t work. That way, you’re going to save money and drive more conversions.

Andrew: I see. It’s not so that you can create a different message, it’s just so that you can target the right person. And you then can look back at your data and see which group was more profitable and which one was just unprofitable. Is that right?

Eric: That’s correct. Yes.

Andrew: All right. And this is where we would do that? I’ll bring up my screen. Right there. You want us to look for that section that says “Targets.”

Eric: That’s correct.

Andrew: All right. Cool. Back to the big board. Wait. There we go, I’ll select it right now. Make sure to segment. Make sure to segment your campaign settings. Tell me about that.

Eric: Yeah. So, this is kind of the same concept. You want to make sure you’re segmenting things out. I would say, one other thing we’ve learned with YouTube advertising is you don’t need to target U.S. based or English speaking companies. Countries, not companies. You can also, you might have the U.S., you might have the U.K., you might have Australia. But at the same time, don’t rule out International. If you can sell internationally, don’t rule out Singapore, India, might be something that’s worth it. There’s these other countries that might be worth targeting, and I’ll tell you what, the views are actually cheaper in these other countries. And you might get good conversions. We’ve tried doing international for a few clients and it’s actually worked out.

But the key thing is you want to segment U.S. out, you want to segment International out, you want to segment if you’re doing like, red shoes, blue shoes, whatever. You want to segment everything out. So, when you’re actually going in to look at the campaigns, you can more easily break out what’s going wrong with it. If you have everything broken in together, it’s much harder to pinpoint the issues that are going on with that specific campaign.

Andrew: Here’s where you do that. Boy, this is going to be a little hard to show on the screen. I’ll just have it cover the whole screen. There it is. Right?

Eric: This is, yeah, this is when you’re first starting up, when you’re setting up the campaign in terms of countries you want to pick and things like that. This is definitely one of the things you need to do segment correctly.

Andrew: Have you made this mistake, of not doing it?

Eric: Mm-hmm.

Andrew: What happened?

Eric: It’s terrible. It’s like you spend all this money, you get very high cost per acquisitions numbers, and you’re looking like a total idiot at the same time. Yet, you have no way of figuring out what is wrong, because everything is so jumbled in together, it’s so disorganized. And I can’t stress this enough, if you’re doing any type of Google AdWords stuff, you have to have it organized. That’s the key thing. Otherwise, you won’t be able to figure anything out.

Andrew: All right. Back to the big board. Let’s see. I’ll bring it up. There it is. Next one is, you don’t want us to half-ass it. This is something I touched on earlier. You say, “Get high quality video.” You really like Sandwich’s videos. He’s really hard to work with, though. Sandwich is the name of the production company, Sandwich Video. He goes by the name Sandwich, right? The creator. He turns a–

Eric: Is he really hard to work with?

Andrew: Hard to get a hold of, because everybody works with him.

Eric: Yeah.

Andrew: Within a few months, he sold, he was doing a video for one company that does the electric credit card, what’s it called? Coin. The electric credit card that stores all your other credit cards together, so you only need to carry this thing. And then, a few months after that, he created something that said, “Well, you don’t want to have a single credit card number, you want to have a credit card that gives you tons of disposable credit cards. Here’s a new startup that does that.” Basically, he’s being used by everybody, because he’s so freaking good.

Eric: That’s true. I’ll tell you what, I mean, I think his videos, they start at $100,000.

Andrew: Yeah. Right. And he also wants to vet you to make sure that you’re the right fit. And I get it, right? Someone raises a lot of money, and their whole business is based on whether people pay for a Kickstarter campaign or not, and whether investors buy into it or not. His videos will persuade people to buy, to invest, to care, to tweet. What if you can’t? What if you can’t whole-ass it and get him? What else, what else can you do?

Eric: If you can’t whole-ass it, you’ve got to be, I hate using the word scrappy, but that’s really what it is. You’ve got to be able to look into, I mentioned earlier, looking at other countries to see if they can. Perhaps you start with an animated video first. Maybe, granted, it might not convert well, but maybe it will be a start to getting traction. Maybe you want to go to your boss and say, “Hey, let’s start with a low budget video first, let’s get traction, let’s aim for these goals.” If you can hit those goals, then you can start to get a little more aggressive. Then, you can bring in the heavy artillery later, and then start doing some live videos. Then, you start getting better and better, and then you go all in, once you have buy in from your team.

Andrew: All right, fair enough. Here’s the video that I talked about earlier from him. This is the one where he’s talking about how you want to cut up your credit cards because he’s going to give you a new credit card that has tons of numbers. This is really well done. I like his casual style and at the same time polished feel of the video. Wow, 100,000.

Eric: Yep.

Andrew: All right. Back to the big board, here’s the final point that we’re going to be talking about, which is to look for examples on YouTube. What do you look for when you’re doing that kind of research?

Eric: Yeah. So, I might, for me, I might look for companies that I really like. So, you mentioned, there’s Coin in there. I think he’s done some videos for other popular companies, like Airbnb as well. I’ll just look at what they’re doing.

Andrew: Yeah, here it is, this is listed. I don’t want to obsess on him. Here’s some of his other ones. He’s done Groupon, he’s done 1Password, he’s done eBay, Zero. Tons. Yeah, so.

Eric: What I really like to do, I mean, if let’s say I’m brainstorming for a client, I want to look for people that are in the similar niche. Maybe they’re selling baby carriers. I want to see what other people are doing. Maybe their competitors, their direct competitors aren’t doing anything, but maybe you can look into other baby products to see what people are doing, what’s resonating, right? Because, ultimately, especially if we’re working with a client, we’re not 100% sure what’s going to resonate, so we need to see what’s out there first of all. How are people engaging? Sometimes you can look for a video and you can see how many likes it has, how many dislikes it has, just get an idea of what the overall sentiment is.

Andrew: How can you tell which one is an ad?

Eric: So, sometimes you can just Google, let’s go back to the Treehouse example. You can just Google like “Treehouse ad.” Another example is Neil Patel’s company, Crazy Egg. You can just put it like, “Crazy Egg video ad.” I’m not sure–

Andrew: When you say, within Google you’re saying we should be searching–

Eric: You can search it within Google, or you can search it within YouTube.

Andrew: Let’s try it right now. So, back to the browser. How would I search here? Would I do, “Crazy Egg ad,” if I want to see what their ad is? Oh, is this their ad? Crazy Egg explainer video?

Eric: Yep.

Andrew: Okay, so this is how I get to see if I’m competing with them on heat maps, how they’re advertising their heat maps. Got it.

Eric: And you get good ideas too. And I would also say, so you can actually see who did their video there. That’s the other hack. You’re always–

Andrew: Oh, Demo Duck did for them.

Eric: Yep. Exactly.

Andrew: I see. And so we can contact Demo Duck and say, “I like what you did for Crazy Egg, can I hire you to do it for us too?”

Eric: Exactly.

Andrew: And is the only way that I know that it’s really an ad, is it because they include the word “ad” somewhere in their description?

Eric: No, I mean, it doesn’t even include it here. I mean, this is, look at this one. One has 8 million views. Look at how many likes it has. It doesn’t say ad anywhere.

Andrew: Yeah, the word ad is not included anywhere in here.

Eric: Nope.

Andrew: I see, so it’s not something they can control. They can’t stop using the word ad and keeping me from doing a search, research like this.

Eric: Yes.

Andrew: Wow, they’ve got 6.8 million views of this ad. That’s what happens when you hit it big with a YouTube ad?

Eric: That’s correct.

Andrew: Wow. And that’s the other benefit that I’ve heard. That it increases the number of views on your video, which then gets more people to watch it organically. Is that right?

Eric: Yeah, that’s correct. And you also get, I mean, you freaking get subscribes too. That’s the added benefit to your channel.

Andrew: Then more people get end up subscribing and seeing what else you come out with. Let’s see how many subscribers Treehouse has. I’m looking on this computer here. They have 52,000.

Eric: It’s not bad.

Andrew: No. Not at all. All right. So, there it is. Focus on instream ads, have a polished video. You might be able to try, but you haven’t, Eric, tried using just Screenflow or Camtasia, and tried a cheapo, cheaper video. See what other people are doing. Don’t bid stupidly. Break up the bids. I’m looking at the board here. Define your target group so that if that doesn’t work out you know why it didn’t. If it did work out, you know which segment really worked out well and emphasize that. And that’s also make sure to segment. And then, finally, look at your competitors, see what’s working for them, copy their best ideas to the best of your ability. How does that sound?

Eric: Sounds great.

Andrew: All right. Aces. The company is called Single Grain. Can I tell people also that you do a podcast, that you do interviews too?

Eric: Absolutely.

Andrew: All right, this is the agency. You guys do really good work. And where is it? This is your podcast?

Eric: That is correct.

Andrew: GrowthEverywhere.com. What kind of people do you interview there?

Eric: Well, you’re going to be on the show soon.

Andrew: I am. January.

Eric: We’ve got great people. I mean, we have Neil Patel, from Crazy Egg. Brian Carson from your show’s also on. Jason Lemkin from Adobe EchoSign. So, a lot of different people. A lot of different tech people too. And I also do a, from Tuesdays through Fridays it’s just me on the show. We’re doing like a quick Q&A, that’s like anywhere from 5 to 10 minutes. And the response from that has been pretty good too.

Andrew: And what’s the focus?

Eric: The focus is anything from business to personal growth and productivity. So, anything that’s… The one reason I started this was, I didn’t really have a goal behind it in the beginning. I just wanted kind of pay it forward, share my experiences. And eventually it started parleying or snowballing into me, and meeting other cool people, and just learning from them and whatever I learned from this I can translate it over to my personal and business life too. So, it’s been great.

Andrew: All right. Thank you so much for doing this. Thank you all for being a part of it. If you’ve got anything of value, I always say, and frankly, when we started out, Eric told me his goal wasn’t to get new customers, wasn’t to get new viewers of his podcast. It was just to give people at least one thing that they could use. One golden… What did you call it?

Eric: Golden nugget.

Andrew: Golden nugget, like the hotel. One golden nugget for people. And so, if you’re out there, if you heard us and you have anything especially useful, let them know. What’s a good way for them to connect with you and tell you?

Eric: Yeah. My Twitter is @Ericosiu, so there’s a little “O” in the middle. And you can email me via Eric@singlegrain.com

Andrew: Cool. Thank you and thank you all for being a part of it. Bye, everyone.

Eric: Thank you.

DOWNLOAD TRANSCRIPT

Master Class:
How to increase conversion
(Through research)
Taught by Peep Laja of ConversionXL

Master Class: Conversion through Research

Report Bugs

Course Leader: Peep Laja, ConversionXL

Peep Laja is the founder of Markitekt, a firm that helps companies make more money through conversion optimization. He also famously blogs about conversion optimization on his site, ConversionXL

Master Class Toolbox

Course Cheat Sheet

Survey Software

User Experience Software

Transcript

Andrew: This session is about how research can increase your conversions. The session is lead by Peep Laja. He is the founder of Markitekt, a firm that helps companies make more money through conversion optimization. He also famously blogs about conversion optimization on his site, ConversionXL. Peep, thanks for teaching us here.Peep: Thanks for having me.Andrew: I want to set up what we’re going to learn by showing an example of what can be done. That example comes from a site that you were working with, that was actually doing okay. You said to me before we started recording, “Okay is actually a bigger problem than poorly done or badly done with big mistakes.” Why is okay a problem?Peep: If you have a site that sucks [??] terrible, the design is amateur and it has all of these problems, it’s easy to find and fix those problems. You can just look at the site and say, “Hey, this sucks, that sucks, and this sucks.” and it’s not that hard. What is hard is taking a good site already making money, with no obvious no-brainers, and then improving it. That is hard work.

Andrew: What did you to do to this site that allowed you to grow their sales like this? Let’s bring up the numbers. I know this is a lot of data for people to see on their screen, but the big picture is that users went down but the conversion rate increased significantly. It’s a 45% conversion rate increase. Revenue shot up about 30% and so on. Can you give me an overview of how you were able to get it? Then in this session we’re going to go step-by-step over the process that you’ve taken, and that others who are watching us can take. What did you do to get the numbers that we looked at?

Peep: We used a multi-step process. We knew this site must have problems, we just don’t know what they are. We need to be data driven, figure out what we think is wrong with it, then see if our hunches are true. We have quantitative data to evaluate and reevaluate our hypothesis once we have a list of maybe a hundred or two hundred items wrong with this site. There were so many problems that we identified. For instance, the site was not responsive even though the mobile traffic was like 20%. Mobile experience was terrible. We decided to completely redesign the site using the data. We kept what was working and we changed what was not working. The end result was 30% more transactions with less traffic.

Andrew: Peep, you did one before we started, that most people want to just do a complete redesign. They look at their site, they learn a whole lot, and they realize, “My site is junky, I missed out on all these things that everyone else has learned over the last few months and years. I’m going to redesign it using everything I learned.” You said, “Don’t do that!” Why not?

Peep: Most radical redesign is a bad idea. The reason is that if you change everything at once, inevitably some things will get better, but some things will get worse. They cancel each other out and you don’t know what’s what. What made it better? What made it worse? You see it all of the time in news, where a major e commerce site has a million dollar redesign, but revenue per visitor is down 30%. They then roll back to the old site after spending all that money and all the time. A better alternative is to just improve your site one specific item at a time through proper scientific…

Andrew: Is that what you did on this site whose data we were looking at?

Peep: No. In their case, improving the site by one item at a time would have taken a year. That’s too slow. Since there were so many severe problems we decided to redesign everything. However, we did not redesign it based on clients personal preferences or designers creative ideas. Actually, we did not even include a designer until we had full wire frames done, based on the research data, based on talking to the users, and based on analytics data. Then we finally brought in the designer and said, “here are the fully detailed wire frames. Make it look awesome.”

Andrew: We’re going to show how that process plays out and how other people can use it. Can you say publicly whose stats that these are that we see up on my screen now?

Peep: It’s a national e commerce site called National Allergy.

Andrew: National Allergy. Let’s go over to the big board and take a look at the big steps that we’re going to be taking to give our audience this kind of result. And the first one is, well you’re saying, “Look, your opinion doesn’t matter.” But you also, Peep, are saying that you’re opinion doesn’t matter either. And in fact,

Peep: Mm-hmm.

Andrew: As much experience as you had doing this, you keep getting surprised by what works and what doesn’t. Let’s take a look at a version…

Peep: All the time.

Andrew: …of your site.

Peep: Mm-hmm.

Andrew: This is your site. I clearly, taking a look at this, can say, “This makes sense. I could see why conversions would be high.” You’ve got the box asking for an email address. You have the “share” buttons. You have clear description of what’s coming up and talk to me about why you thought this would work.

Peep: When I published the book on Amazon, and I did some research about the name, for the name of the book and I named the book “How to Build Web Sites That Sell.”

Andrew: Mm-hmm.

Peep: And I thought, “Hey since, you know, I did this study on the name of the book, I’ll use this same name here ’cause I know it works.” But of course, typically you want to have, you know, some more copies, some bullet points with benefits, some sub headline, an [??] offer, show social proof with a light button and of course…

Andrew: Ah.

Peep: …I want to have…

Andrew: So you did add that. I see bullet points right there in the center with those green check marks next to them. Yep.

Peep: Yep and then on the side, I had the tweets and the likes and all that stuff, so people would not feel that they’re the only idiots using this site.

Andrew: Yeah.

Peep: And I said, “Ah, that’s great!” But then I tested it. Because when I looked at the data of what people do on this page, the conversion rate was about five per cent for that opt in box which I wanted to be more. And when I looked at the scroll map, actually a lot of people were not really scrolling for further down and nobody was clicking on the social shares.

So, if it’s not motivation, it’s friction. That’s what I thought. So, how about I get rid of the social share? How about I get rid of most of the copy? Make the page narrower, you know, less tall. And I…

Andrew: [??] work with that?

Peep: I had a version before where I even had a “latest blog article excerpt here”, which I also removed. And then, you can see that’s the next iteration and this doubled the conversions on my home page. So, right now it’s converting at around ten per cent. So you only see a tag line, head line, and an offer. That’s it.

Andrew: All right, and you keep wanting us to think this way. It’s not that we should remove Facebook buttons. It’s, that’s not the big message here. The big message is, “You don’t know and what you think doesn’t matter, it’s only a matter of testing.” And everything.

Peep: Right. [??] I have run so many A/B tests and when I have to predict which A/B test, which variation will win, I get it right maybe 60, 70 per cent of time, which is only slightly better than flipping a coin.

Andrew: And what’s shocking to me about that is that you are the guy that other people turn to when they want to learn about optimization, and when they want to hire somebody…

Peep: Right.

Andrew: …to fix their sites conversion and if you can’t do it, there’s no nope for the rest of us. We have to test, yes.

Peep: So the point is, the conversion optimization is not a library of layouts that always work. If you think conversion optimization is tactics, “Do this, this works. Don’t do this, this never works.”

You’re wrong. Conversion optimization is a repeatable, systematic process. So, it’s about knowing how to use the process that gets you the results, not about what works. So like a site like “WhichTestWon”…

Andrew: Mm-hmm.

Peep: Their test library is useless for your purposes because what worked for that other guy will not work for you.

Andrew: All right, let’s go back to the big board here and the next big point is to, “Conduct experience based assessments of your site.”

Peep: Mm-hmm.

Andrew: And what you mean by this is, the experience, tell me if I’m wrong. The experience that a user is likely to go through, you want us to walk through it like a tourist visiting a foreign city and look around and look for what?

Peep: So, a client brings me in to start working on a new Web site.

Andrew: Mm-hmm.

Peep: And this assessment is the very first thing that I do, always. I walk through the site as their end user, while knowing what is their business objective. So let’s say it’s an e-commerce sight.

So, on the home page, I want to see, you know, “Where am I? What can I do here? Why should I do it?” You know, is it there? And also, the goal of the home page is to get people off the home page.

So, I’m assessing the content of the home page for clarity. Value, like are they communicating a value proposition. Distraction, like if you have these sliders, you know, carousels changing every two seconds. That’s distracting. I will not pay attention to anything else except for the blinking. . .

Andrew: I’m waiting to see what the next slide is going to be.

Moving backgrounds or stuff like that.

Can we take a look at a site through your eyes? Here’s one. This is one of your clients. When you’re going through this with your tourist eyes so to speak what are you looking for?

Peep: First of all I need to know what is it we want to do? What is our business objective? In this case it’s obviously to book a hotel room. We want people to use that widget to find something.

Also a secondary goal is to get people to become Marriott rewards members because rewards members convert many times higher than regular visitors. It’s six seven times more. They don’t do comparison shopping. They are a really profitable segment.

We want to have more rewards members. Knowing these two things I’m starting to go through this page. First thing clarity. Where am I, what can I do here, why should I do it. Well it’s Marriott so it’s different. Most people know Marriott. Maybe it’s OK. There’s no valuable proposition here.

However, Marriott is also not cheap. Why book through Marriott? That information is not here. No, my saying that does not mean that is the truth and they need the text here. What I do here is I write down, “they are not communicating a compelling value proposition.”

They are not giving me a reason to book my stay with Marriott. This is what I call an area of interest. Now I want to go and seek data to either validate or invalidate this claim that they need to communicate the value proposition. I can go test it right away.

Of course I don’t know what the right value proposition should be. I can generate random ideas but random ideas hardly work. That’s one. Number two, looking at the page again I see in the top right corner it says, “Not a member? Join now.” Member of what?

Andrew: Right. Our people going look at that and understand that means join the Marriott rewards program. Frankly are they even going to see that at all. You’re saying. . .

Peep: I see it and why would I click it? Why would I want to join? The same thing as the log-in bar underneath the image they also have join now.

Andrew: We’re looking at right here.

Peep: Nothing is done here to increase my motivation to take action.

Andrew: There it’s hard to see.

Peep: Is it that becoming a rewards member saves 20% off of your next stay? Well that would have value right?

Andrew: Right.

Peep: Well that huge background image there a lovely hotel I assume. That is the most visually dominant thing on this page. We want people to search for a hotel yet the picture is bigger. Is it a distraction? It’s possibly a distraction. I’m going to start to look at the orange couches. I write down, “the image is a possible distraction.”

Maybe if the search was bigger it would dominate over other things and more people would perform a search.

Andrew: Okay. It’s just going through and saying What is their goal primary and secondary? What are the potential obstacles to getting to that goal? You just look at it with fresh eyes and see not what they are but what you think they might be. You don’t walk away saying that little button is obviously a problem we should make it bigger. You walk away saying here’s an issue that we can examine later with data.

Peep: I’m identifying areas of interest. That review of the page is also very systematic. It’s not about this sucks and this sucks it’s about clarity, value, motivation, distraction and friction. If we want people to action (a) we want to increase their motivation for doing that and we want to reduce friction meaning make it easier to take action.

It’s a systematic process and it’s best with multiple people, not just you because it’s kind of a brainstorming thing. More eyes see more things.

Andrew: All right. Let’s go back to the big board here. Next thing we want to be aware of is to gather qualitative data using surveys. I’ve got one of your surveys here. Here it is. Let me open it up. Bringing back our web browser here.

Peep: The survey is a great way to get data for some of our findings. Excuse me. So for instance we want people to book hotel rooms. What is it that matters to them the most when it comes to booking hotel rooms? Is it how beautiful the room is? Is it the price? Is it something else? We don’t know. So we want to find out what are the buttons that we can push to get them to book more hotel space or what’s keeping them? A large portion of people come to the page and they leave without booking the room. Why? What’s holding them back? So again with the survey we can figure out what are some of those obstacles.

Andrew: Okay. And do you want us to just put a list of obstacles on maybe in radio boxes on a list so people can select the ones that matter the most to them?

Peep: You would think it would be so easy. The problem with that is that you don’t know what the problem is so if you create a bunch of radio boxes, buttons, or check boxes, you are not opening yourself up to new possible problems that they might be experiencing. So I always do only open-ended questions. Voice of the customer. So when I ask the question, “What made you almost not book the hotel room?” I want to see what they write. Or “What matters to you for booking a hotel room, when you’re booking a hotel room? What do you pay attention to?” I want to see their specific wording because that wording I can use as copy writing on the page itself. And if I will ask a stupid . . .

Andrew: All right. So let’s, let’s do. . . Oh, sorry. I was just going to say let’s take a look at it on one of your surveys.

Peep: Yeah. Yeah.

Andrew: I’m opening up a browser again. What system do you use to create these surveys for Marriott?

Peep: This is Typeform. So mostly I use Typeform just because they’re, it’s beautiful.

Andrew: Pretty.

Peep: Yes.

Andrew: Typeform, for anyone who’s out there who wants to use it. And so we hit enter or click the start button and I can see it says, “Tell us about yourself.” I’m zooming in a bit. Then “What made you choose Marriott.com to book your hotel room? What matters . . . ”

Peep: So this survey goes out to people who recently booked the hotel stay. So these are actual paying customers. So we know that this is our target audience because they actually spend money. So we survey them when they still freshly remember their booking experience but before they actually stay at the hotel so their hotel stay experience would not cloud the website experience.

Andrew: Ah. Okay. And I see here, “What hesitations did you have before finalizing your booking on Marriott? Did you have any room booking questions that you couldn’t find answers to on the site?” Do people actually fill out surveys like this?

Peep: A typical response, well we always incentivize, so everybody who fills out the survey gets something.

Andrew: I see.

Peep: So what it is depends on the client. It can be money. Money can be of course expensive. It’s easier to give coupons or you know, something cheap but valuable.

Andrew: I see, that doesn’t cost money. . .

Peep: And typically we get a response. . .

Andrew: . . . but does have a big value for the audience.

Peep: Exactly right. So for many companies they can give away like free eBooks or downloadables or free month of their software, something that doesn’t cost a huge amount of money but is valuable to the user. So we always incentivize people. We want to get a minimum of 100 responses. Otherwise, you know, the sample size is not big enough and one voice can become too dominant. We also do not want more than 250 because if you have more than 250 open ended responses it takes huge amount of time to go through them to and to analyze the responses. And the insight, the extra insight that you get is not really there. I mean it’s minimal. So we want 100 to 250 responses. Usually we need, if we want 100 responses we need to e-mail at least 500 people.

Andrew: That’s not bad, 20%.

Peep: Something like that, yeah.

Andrew: But I guess they’re fresh. . .

Peep: So it’s not like your regular e-mail list where it has a bunch of freeloaders on it. These are people who paid you money. So they have a relationship with you. So they’re, you know, they feel closer to your brand. So 10-20% response rate is typical.

Andrew: All right. Let’s go back to the big board because there’s so many other ways to learn from our customers and to research what they’re looking for and what they can’t find.

Peep: With qualitative data, for instance, we had a client called [??] where we wanted to find out what is the main problem why they are not buying stuff and analytics data showed us huge drop of rates, we couldn’t figure out why, and there selling pool parts, and we learned that Peep: it’s mostly old men, you know renaissance men, do it yourself, and B: the main reason for not buying a pool part was because they didn’t know what was the right part for their pool. Major insight for you know for using, for improving conversion. So you can get such high quality valuable insight out of qualitative surveys that you can’t get from analytics data.

Andrew: You know what? I can see how someone who’s a do-it-yourselfer would be blocked if he can’t figure out what the tool or what the part is the right one for his pool, and it also maybe makes him feel a little bit weak because he came into this process thinking that he can fix the pool and now he can’t even figure out if it’s the right part for the pool.

Peep: Exactly, what kind of a pool pump you know and all that stuff yeah.

Andrew: And Google Analytics wouldn’t tell you. Alright I can see why you’d survey.
On to the Big Board to the next point that I was going to say, which is to review live chat transcripts. Here’s what that looks like on one of your partner sites, one of your client sites excuse me, this is National Allergy. It’s obviously just that box that pops up, we’ve seen it a million times when we go to different sites, it asks users, “Do you have any issues? Do you have any questions?” And these boxes save the chat programs, the chat conversations.

Pep: The exact live chat software does not matter because they’re all pretty much the same. So what matters is that people are usually using live chat to ask pre-sales questions. Like they have a lot of specific questions that’s keeping them from buying something, so those questions are highly valuable. I also like to just talk to support people, but with live chat transcripts I usually get, you know depending on the volume, I want to read through the last 30 day’s worth of chats, and sometimes I also take the live chat transcript and put it in a tool like Wordle, Wordle.net I believe it is, and it just highlights the bigger, the most common words and it gives insight.

So I want to understand with the live chat transcripts what are the most common questions and doubts. So for this analogy one of the most common questions was, “Does this specific, particular product alleviate my specific allergy that I have?” Some are allergic to dust mites, some are allergic to bee pollen, maybe they have asthma you know whatever, whatever the condition is they care about their specific condition.

So once we learn that, when we understood that that’s…that helps people make a purchasing decision, once they know that, “Yes this cures my pain,” or, “Alleviates my problem,” we did two things. Peep: for each product, or most products, where applicable we added on the product, onto the product page we added, “This relieves allergy from dust mites,” for instance, and at the same time we added a thing on to the main menu. Do you have a screenshot of…?

Andrew: Yeah actually, here let’s take a look in the browser, bring up my browser right now. Here is, I was doing the search for it, this is National Allergy, I just looked at all cotton mite proof pillows and of course it says, “Dust mites,” here and you’re clear about what it’s there for, but you also said that there’s some other section, this one.

Pep: So yeah underneath the logo, yeah, there’s a drop down, and it’s automatically open once you go to the homepage, and so here people can just choose their specific condition, and this was when we redesigned it we added it, it wasn’t there before. So we were also like, “Hey are people going to actually use it? Will it make a difference?” And now what we know, because we have analytics data on it, that yes people use it, not as many as we would maybe like. I think that right now the number of all traffic on the site 15% of the traffic uses that functionality, but those who do convert four or five times better than those people who don’t use it. So it makes a huge difference.

So now we’re like, “Yes our hypothesis was correct,” because we had that insight from a live chat transcript.

Now our next task is that okay we know this functionality works not the questions, “How can I get more people to use it?” And this you know requires AB Testing, different ideas…

Andrew: Was the open drop down menu was it from the start that you added it on?

Pep: Mm-hmm.

Andrew: You did, so you said, “All right we can’t just hide it we have to both highlight by putting in a different color,” here’s what it looks like…let’s bring that up, and, “we have to highlight it by putting in a different color, and open up that menu on the homepage because it’s so important.”

Peep: You know a funny thing, we also split tested an orange version, so instead of the light blue we had orange. It really [stirred] up much more, but it actually lowered conversions. Revenue went down. We were like, “What? Is our hypothesis is incorrect?” Then we noticed that actually the amount of people using this widget did not increase. It stayed exactly the same. What it impacted negatively was people who did not use that feature because it was a distraction.

Andrew: I see.

Peep: People who stopped paying attention to the products, the categories, and the stuff, they just looked and was like, “Ah, this annoying orange thing.”

Andrew: Strange how little differences like that have so much impact. Onto the next point which is you suggesting we call customers that match our ideal customer profile. Now you don’t necessarily mean our real customers, just the ones that match our profile. As a result of doing that, here’s a before and after of how National Allergy site looked. Let me zoom in again. This is what it was before the change, and this is what is after. It’s easy to say, “Well, it’s prettier after.” But you want us to notice something else here. What are we looking at?

Peep: We called up these people. These are mostly middle-age and old-school people. That part of National Allergies marketing is that they send this paper catalog to doctor’s offices. If somebody has an allergy condition they go see the doctor and the doctor says, “Hey, you need this allergy relief product from this catalog.” They give them this specific product to buy. We called up a bunch of their customers. I think we interviewed 15, if I’m not mistaken. We had like twenty 30 minute talks about how they would like to buy, and how they buy allergy relief products in general. The biggest competitor for National Allergy is Amazon, because that’s their go-to source, to by anything really. We wanted to understand…

Andrew: Why do people even come to National Allergy when there’s an Amazon?

Peep: Exactly right. We wanted to figure it out. What we found out is that when the doctor told them to buy something, they felt some sort of anxiety that they needed to get the specific thing that the doctor told them to get. When we were asking them, “Hey, did you consider buying the same stuff from Amazon because maybe it seemed cheaper there?” They said, “Well no, the doctor told me this National Allergy is a professional medical website, not like Amazon.” That was interesting. We started to probe that with other people that we interviewed, about this doctor authority, professional, medical, and serious. That inspired the new version of the homepage, where you see the doctor.

Also, it’s where you see the copy there. Underneath the headline it says, “Thousands of doctors are recommending National Allergy to their patients.” We’re using this doctor thing as something that sets National Allergy apart from Amazon and other competitors. This is a serious medical site. If you want an allergy relief solution that actually works, you come to National Allergy.

Andrew: The only way that you were able to find it out was by talking to customers and asking them, “Why would you use a site like this? What troubles did you have with it?”

Peep: Exactly right. Why would you prefer National Allergy to other sites?

Andrew: Should we not talk to our current customers? You’re saying talk to people who are like our ideal customers?

Peep: You want to talk to both. You want to talk to people who actually bought from you, because you want to understand why they bought from you and not the other guy. What made them think that your site is the right site? You want to understand those reasons. So when we interviewed people, ten of the people were actually customers. They had actually purchased products. If you’re talking to ideal customers, nobody’s more ideal than somebody who paid you money.

Andrew: I see. So it’s not that you’re saying, “Talk to people who are like your ideal customer.” You’re saying, “Talk to your customers who match your ideal customer avatar, or talk to others who haven’t bought from you who should be, because they match your ideal customer.” And through that you’ll see why people buy and why they don’t buy. That’s how you ended up with a doctor on the homepage. And with a site that emphasizes the trustworthiness of this site that has medical connections, as opposed to emphasizing free, here this is what you used to emphasize, what they used to emphasize, free shipping on over $50 and the diversity of their collection.

Peep: Right.

Andrew: Right so that…

Peep: So when you have a site like this, which is like most ecommerce sites, they sell products that also other ecommerce sites sell. Like everyone sells Samsung TV’s right? So why should somebody buy from you? So you have two options really, either to be better or to be different and it’s very hard to be better, and it’s not that hard to be different.

Andrew: All right let’s go back to the big board, the next one is to recruit 10 to 15 people who match our target audience and you’re suggesting that we use a site, this is where user testing.com comes in for you am I right?

Peep: Exactly, so UserTesting.com is just one of the options so you don’t have to use it and you can also do user testing in your office. You get people to your office, sit them down at the computer, because the main idea is that you have your target audience use your site, or the site in question, and comment everything out loud, whatever they’re saying, they’re doing, and you want to give them scenarios, and you want to give them three types of scenarios. A, you want to give them a broad task. So a broad task would be find a pair of pants you like. I’m not telling them what they should click on, and so on, it’s very broad. So then I’m observing how they go about doing it and then commenting everything they say and do.

The second type of task you give them is very highly specific task. So let’s say, “Find dark jeans, Hugo Boss brand, Size 34, under $50,” highly specific, and I want to see how they go about. Are they successful, are they frustrated, is it easy to find something that is highly specific?

And the third type of task is just buy it. So you basically go through the checkout process. I actually take out a credit card and type in the numbers…

Andrew: I see.

Peep: …and buy something.

Andrew: And so we can either do it ourselves by having somebody walk into our office, sit down or sit down at a coffee shop, and watch them but you want us to have them do specific things and talk out loud what they’re thinking as they’re doing it so we can see what’s going on in their minds.

Peep: Exactly right.

Andrew: And if you use…

Peep: And you want to give them just tasks and you don’t want to tell them what to do, you don’t want to ask questions, “So do you think this page is secure?” If they’re not bringing up security it’s not an issue right? So we had a case with a client, Marriott.com, and after surveying Marriott customers and we wanted to understand use case, “Why are you going to stay in Marriott?” A number one use case, “I’m traveling for business, I’m attending a conference, I’m visiting an office in a city,” a different city and usually so they have a specific destination, like a specific reason.

So we created a task for our user test, a scenario, “You’re attending a conference at the United Nations Headquarters in Manhattan, New York, please find two hotels that are closest to that location.” And then we just observed how people go about that task, and so what people did was that they figured out what was the address for United Nations, something-something United Nations Way, or something, and so they typed in the exact address for Marriott.com and once they clicked search the search results come from, came from Abu Dhabi United Arab Emirates.

Andrew: Let’s do that actually. Wait, here we go, bringing up Marriott’s site. If I copy the address, I’ll zoom in here so we can kind of show it. This is what it looks like when you type it in. Then hit find. This time it didn’t do it, weird. We tested it before, but it does show here United Arab Emirates is the location as opposed to United States even though, I think I did it, I’m 90% sure I did it. Let’s do it right here, I pasted it 760 United Nations Plaza, New York, New York, hit and then New York, New York, zip code 10017, and then comma United States, hit find…This time it’s not showing anything but the problem is the same one that we noticed earlier when we tested this, which is it’s asking for, it’s looking in the United Arab Emirates and so you wouldn’t have known that unless you watched someone struggle with it?

Peep: Right, their competitor, Hilton, does not have this problem, it’s easy to find, you can just punch in the street address, and Marriott has this functionality in their advanced search settings somewhere, but this is a problem that we found through user testing. We have, of course, nobody find a client Marriott about it, but you know how it goes in huge organizations change is slow.

Andrew: How long have you been with them?

Peep: It’s about insight.

Andrew: How long have you been with Marriott? Are they a new client?

Peep: We started, we went through this whole conversion research process with them in August and September, and then we…

Andrew: Okay so just a few months ago.

Peep: A few months ago, exactly, and it’s a pretty good site. We actually struggled to find things wrong with it, but you know if you gather a bunch of data and analyze the data you’ll find stuff. So we found 75 issues, some more severe than others, and they implemented some of them, some are being tested, some are things are not implemented, not really up to me but just today I saw an email, or yesterday, in the inbox where they say, “Hey we want to do another round because we changed a bunch of stuff so let’s do more analysis here.” So they were happy with that.

Andrew: The cool thing is this, I had to struggle to find, the first time I searched on Marriott I found the exact same page that we just showed. The second time it was gone because they were AB Testing and I was seeing one of their variations, and so we do see even as you and I are talking and looking at their site that they’re constantly testing. The other thing I noticed is you said that they do how much in sales on their site, roughly?

Peep: Their online volume is $7 billion.

Andrew: So even a small percent, you were saying, a fraction of 1% could be a huge lift for them?

Peep: My god yes. You know I had a chat with their, one of their conversion managers and they said a year ago they installed a Java Script snippet onto their site that slowed the page down enough that the conversions dropped by 0.25% percent and that cost a loss of like $100 million.

Andrew: Wow.

Peep: So scale.

Andrew: Scary and exciting too, because if you could give them even a small lift that you’ve way more than made up for the cost that they’re spending on your firm.

Peep: Yeah.

Andrew: Alright, the pen ultimate point is use web analytics to find out which pages are costing you the most, and there was a company that worked with truckers that had an issue that you uncovered this way.

Peep: Right.

Andrew: What did you do?

Peep: Well with Google Analytics the main thing that you need to find is where are you leaking money. So if you have an ecommerce site you know if people get to the category page are they then, how many are proceeding to the product page? You know maybe that’s where the flow is stuck, or maybe they get to their product page but they’re not adding to the cart, or all your checkout funnel. So you need to find out where are they dropping out and then you figure out why, and again be also specific pages that are causing the problem.

So yeah I had a client, I still do, that is kind of a job service for truck drivers and they had a five step resume creation process, so if you wanted to apply for a trucking job you needed to fill out a form that was on five pages, five step form, huge, huge. So in Google Analytics we saw that in step three massive amounts of people are dropping out. They had filled out two pages worth of information already so they must have been invested, but page three they’re dropping out. We look at the form on page three can’t find a problem. We were suspecting technical problems so we ran cross browser testing, nothing, everything was working.

So at the same time we were using a heat mapping tool that also records user sessions, so we were watching user session replay videos. You can use tools like Inspectlet, or Session Cam, or Click Tail, and so we were, we took three, four hours, and just watched a bunch of videos of users that had dropped out in step three.
.
So what we noticed was that, first of all there’s a question about your criminal history, and we discovered that a lot of the people have criminal records, and you know many had more than one thing, assault and whatnot, and then they get to a question that says, “Do you have references?” And the form needs three mandatory references.

Andrew: Is what it looked like on the form.

Peep: So nothing complicated just name, relationship, phone number, right? But these people didn’t have references; maybe because they had a criminal history, maybe because they were fired from their previous job, we don’t know that, that we don’t know. But what we found out was that personal reference that they didn’t want to fill out either because they didn’t want to or they didn’t have any. So we told the client “Hey, this is what we found, this is an insight. We think this personal references are a problem.” And the client said, “We can get rid of it. Well, talking about getting rid of stuff, this five step form, you know process is ridiculous.”

And of course you know he’s saying “Well we can’t change it, because this is the requirements of trucking companies, their HR wants to see all of that information,” and so back and forth with the client, and say “Well, why don’t we just get the initial lead in, somebody interested in the job, and then we get the rest of the information later on either through phone or send them an additional form. So we through discussions we ended up with something completely different down the line where we actually instead of a five page funnel, we have a six field form.

Andrew: Here it is.

Peep: So it seems like a no-brainer; yes less form fields, higher conversions, right like everybody knows that [??] talks about it, but the hard thing about this form fields is, it is the business requirement. So if all the data is needed to apply for the job; so how do you remove form fields, because you need the data? So you need to work you know, change something on the back, and change on how you do business or so.

Andrew: And in this case it’s a short form, because it meant they also had to follow-up with phone calls, so it looks like in some ways your costs are going up. But you only understood that, because you understood their overall business.

Peep: Exactly right, yeah.

Andrew: Yeah, so it’s not as easy as just get rid of the fields; life will be good. Get rid of the fields but then you also have to spend some money to follow-up with people, but I guess as you looked at it, you realized it was worth it, but what a simpler process as I look at it.

Peep: And you know, form fields, sometimes you want to add form fields. You want to add friction to the process for instance my website, my agency website Markitekt.com we had so many leads coming in, and most were unqualified, could not afford us. So I spent sometimes 30 minutes on the phone, 45 minutes on the phone-call with somebody and we get to the budget finally, and they say “Well I have $800.00” “What? My call with you cost more than that.”

So how do we, because you don’t want to start a conversation with money, because you want to build value first. So a simple change with it, we added a drop-down box with budget options where the lowest budget was I think $5,000.00 or something. So that immediately, overnight eliminated all unqualified leads, because people self qualify.

Andrew: Yeah, here’s what it looks like now, right here. Oh wow, less than a quarter million is one and, so do you take people who spend less than a quarter million? Oh sorry, this is annual revenue. Do you take people who have less than a quarter million in revenue?

Peep: It depends, sometimes we do, and we have multiple forms here, so we have a design form where we actually ask about your budget, or if you want monthly optimization then we’ll ask you about your online revenue, because basically we want to understand if we increase your revenue five percent per month, how much is five percent worth to you? So I want to have my clients get three-four-five times return on what they pay me.

Andrew: All right, final point is, now that we’ve got all these issues, you want us to list them out, categorize them, and rank them. Why do we need to make this list?

Peep: So once you go through all this qualitative-quantitative research process, you will end up with a huge list of issues. So a typical website I have 30 pages full of issues, so now I mean where do we start from? What’s more important and you know, how should we tackle these issues? So first thing you want to do is you want to categorize all the issues.

Some of those issues are instrumentation issues, for instance instrumentation means that something that needs to be measured with analytics, it’s either not being measured. A typical problem let’s say on E-Commerce site is that they’re not measuring at the cart clicks, they’re measuring visits to cart page which is not the same thing. So the issue might be at the cart clicks are not recorded in Google Analytics, that’s an instrumentation issue. Second category is test

So we found an obvious problem with an obvious solution, but you know we know that my opinion does not matter so we need to test it not just change it, so we’ll put in a testing category. Sometimes we know there’s an obvious problem. For instance, people don’t know which part is the right part for their pool right? It’s a problem, but what is the solution to the problem? Now there is no obvious solution there could be many ways to solve the problem, so that type of problem we put into hypothesize category, obvious problem not obvious solution.

Peep: I see.

Andrew: A fourth kind of category is just effing do it. So a no brainer, so you’re font size is eight pixels light gray on gray background, you know people can’t read it. No need to test it just make your font size bigger and darker, right increase contrast. So just do it and the fifth type of issue is investigate.

So we have identified an issue, for instance, conversion rate for Internet Explorer 10 is only to 20% compared to Internet Explorer 11 and 9, why? We don’t know, so there might be some cross browser compatibility issues so a developer needs to go and investigate. So that’s investigate category.

So once we have categorized these issues we know who to send it to. All the instrumentation issues we’ll send it to an analytics guy, or developer. All the test and hypothesize things we’ll send to our optimization team. All the just do it things goes to whoever you know changing stuff on the website, and so you know how to organize the work, and now even if your categories don’t fit into five categories.

Still you might have 30 things in one category, well where do you start? So you want to prioritize each issue from, we usually use five to one ranking, so five means it’s a severe problem costing you money and a huge amount of your traffic is exposed to this problem. So for instance, in Marriott the address search, you know the search is the most prevalent thing, huge amount of visitors exposed to the problem so we’ll probably rank it around four, and also then up to one.

One is the minor usability issue that should get fixed eventually, not a high priority. So an example could be that people on your about page are not finding your, I don’t know, your address. You know maybe they don’t, not too many people have that use case but it should be fixed eventually you know?

So once you have that, and then you should have all these issues in kind of a spreadsheet, we use just Google Doc’s.

Exactly right. So we have an issue and what the issue is, the bucket which is the category, back on why is this an issue, action which is what should we do about the issue, and rating, and you can also add another column here for responsible. So Google Analytics Bounce Rate Info is wrong that’s an instrumentation issue. Well, Susie in the Analytics Department can fix that, or we are not recording free-trial downloads well we should send it to Linda; she’s taking care of all the event tracking for whatever downloads right? So we can add specific people and now we have an action plan.

So when I start, when I have a conversation with start-ups who want to do testing, but don’t know where to begin there number one question is, “What do I test, I don’t know?” Well now you have 30 pages full of stuff to do, you have no question about what to test, but once you go through this research process you, you know you can be confident in your way forward.

Peep: All right and the way to do it is to conduct those experience based assessments to gather those qualitative pieces through surveys, I’m look at the list here. In fact, I might as well just show it up on the screen, and there it is. Look at the chat transcripts, call your customers, get people who are in your target audience, look at analytics, and then once you have that list prioritize, assign, and then get to work.

This has been a real meaty conversation here, but I still want more. Because, there’s something about conversion, especially when it’s explained right by someone who’s done a lot, and I don’t know many people in the world who’ve done more than you and have researched it as well as you do. It’s just fascinating to see what you should do and how much those little tweaks can impact the business. Your business, if anyone wants to check it out, it’s Markitekt.com, but I’m going to suggest that they check out the blog first. They can register, they can read your articles, and you’ve got them going back, if I remember right, when did you start 2011?

Andrew: 2011 yeah.

Peep: 2011, and they’re really interesting articles here. It’s so great to have you on here. Is this the best place that I should be sending people to sign up right here with your site?

Andrew: That is right yeah. Conversion XL you know if I may say so myself it is the best conversion blog out there. When I started it I thought everything else is kind of mediocre out there so we work really hard to create awesome content.

Yeah and you keep it really interesting here. That’s ConversionXL.com. Peep, thank you so much for doing this session with me here today.

Peep: Thank you for having me, Andrew.

Andrew: You bet. Thank you all for being a part of it.

DOWNLOAD TRANSCRIPT

Master Class:
How to design for credibility
(So you can reverse engineer beauty)
Taught by David Kadavy of Design for Hackers

Master Class: Design for Credibility

Report Bugs

Course Leader: David Kadavy, Design for Hackers

David Kadavy is the author of Design for Hackers which teaches the principles of good design to programmers and developers.

Master Class Toolbox

Course Cheat Sheet (Coming Soon)

Transcript

Andrew: This session is about how to build credibility with design. It’s led by David Kadavy. He is the author of “Design for Hackers”. Let’s bring it up on the screen. “Design for Hackers: Reverse Engineering Beauty”. Prior to writing “Design for Hackers”…. Let me bring him up now. David founded the design departments at two silicon valley startups and freelanced for clients including Odesk, PBworks, and Uservoice. My name is Andrew Warner. I’ll be here to help facilitate the conversation. David, thanks for being here.David: Thanks so much for having me. It’s great to be here. I love Mixergy.Andrew: Thanks.David: I’m very excited.Andrew: I’m looking forward to this because, frankly, I am always overwhelmed by design even though I know I need to keep improving it. What I like about you and what people will hopefully see throughout this conversation, you give practical advice for people who aren’t living and breathing design and don’t feel like design nerds. You actually even gave me a quick video showing what we could change on Mixergy. By the time this video is up, all those changes will be up because you make it so accessible.David: That’s great to hear.Andrew: Yeah so people will see the impact by the time this video is up. Let’s talk about some of the problems with design. One of the issues is something that you’ve experienced at an event that you were hosting. You sat next to a lady who said to you, “You know, it’s really important to be in a magazine so you know you’ve made it.” Something to that effect. And you were in a magazine. What did you think as she was saying that?

David: Basically that was at an award show that I was co-organizing. We were all just having drinks. She said that and it really kind of struck me. Being in design school, we’re constantly being told that we should be in these various magazines and that we should be famous designers. That was the thing to strive for and that was something that we did strive for. First print job out of college, I got in a really prestigious design magazine.

It was sort of a strange feeling because I kind of thought this was supposed to be really gratifying, but it just wasn’t. I couldn’t figure out what the thing was. I started to question whether this is what I was really working for. When she said that, it really confirmed in my mind. Yeah, this is what designers want to accomplish when something just doesn’t feel right about that to me.

Andrew: Yeah, I get what you’re saying. Before I talk about what does feel right, the purpose of this conversation and what we’re going to impart to the listener right now. This is how wrong you felt it was. This is something that you created. What were you trying to say here?

David: This was actually the poster for the awards event that I was co-organizing, the one that I was just talking about. Now I can look back on this and realize some of the psychology that was going on in my own brain. I used, sort of a prescription drug theme for the award show. We were using the prescription drug theme for the obsession of winning awards and having prestige and being high designers, while not necessarily creating something that meet business objectives. I can see, looking at that poster, kind of where my head was at that time. I hadn’t yet necessarily come to terms with it yet.

Andrew: So here’s what it’s about. This is BJ Fog.

David: Yeah.

Andrew: What is it about BJ Fog that’s important for us to know before we continue? What’s the study he did?

David: BJ Fog runs the Stanford Persuasive Technology Lab. He did a groundbreaking study where he basically put people in front of websites and said, “Do you trust this site? Do you feel like this site is credible? Why or why not?” Obviously, BJ is a scientist. He didn’t have any preconceived notions about what people were going to say. He went through all of the comments afterwards and found that 46% of the comments, the top category of the comments of why people trusted the site that they saw, found it credible, were related to visual design. People would say things like, “It has this high quality look and feel.” or, “It just looks more credible.”

Notice that they weren’t saying things like, “I really like this particular font or this particular color.” Blue makes you feel calm. It was like an emotional visceral reaction. They were able to pinpoint to the design, but they didn’t necessarily know why.

Andrew: I get that. The way it makes me feel is: they’re not even talking about the substance of the site. They are talking about the design of the site. I know they’re connected but it does kind of feel to me like when I was in high school and I would see girls dating these dopes and I’d go, You’re just dating them because they look good.

David: Yeah.

Andrew: And vice versa, right? And what about me? I don’t look good but there’s substance inside and I kind of feel that way sometimes about some of the content that I create some of the products that I put out online. And one of the reasons why I care about design is because of the study that you’re talking about. People will think that it’s credible or not based on the design. And they’ll decide whether they engage and continue or not and buy or not based on the design. And so with a limitation, me being not a design nerd and me not having a staff of designers and the same thing is true of the person who is listening to us, we still need to acknowledge the reality of the world, which is people do care about this. And so that’s why we’re here and we’re going to talk about how to get there, right?

David: Yeah. Exactly. I mean, we’ve all experienced that ourselves, where we download an iPhone app or something the moment we see it we feel disappointed or unsure and end up deleting it maybe…

Andrew: Yeah.

David: Because it doesn’t look good.

Andrew: Yeah. Or feeling bad for the person who told us, hey, try my app out.

David: Or the opposite of just like, whoa, what’s this?

Andrew: Yes, right.

David: And being struck.

Andrew: Yeah.

David: So hopefully, we can teach people how to illicit that reaction today.

Andrew: All right. Here are some of the topics that we’re going to be talking about. The first one is to eliminate competing elements. Again, some of these are really simple but clear and important to say. Others will be different for people and important guidelines that they could use for the rest of, I was going to say for the rest of their lives, but nothing’s for the rest of your life. But they are long-standing guidelines that will absolutely help you, you’ll see. Here is a site that you looked at when you were a mentor for it was 500 start-ups, right?

David: Yup.

Andrew: Okay. The accelerator.

David: Yes.

Andrew: What did you see here that made you decide to jump in and help out?

David: Yeah this is, first of all Fontacto is basically like Google Voice for Mexico, just to get some background there. And the thing that I noticed here was my first reaction when I see it is like, oh, this is a pretty decent design. You’ve got like a nice font; you’ve got a comfortable color scheme going on. But then you realize, what am I supposed to be looking at here? What is it that they want me to see on this site? What’s the action that they want me to take? And then you realize how much things are competing against each other.

You have this blue band up at the top. You’ve got the headline right below it. And then you’ve got these different sorts of bullet points. And then they have icons next to them and then there’s the illustration to the right. And then underneath all of that finally, we have our call to action. And then there’s testimonials below that.

Andrew: And you know what, and actually, that’s just a screen shot. If we take a look at the actual web site, let me bring that up on the screen here. There’s your site, of course. Let’s go over here. I think it would even move based on where your mouse was.

David: It did, yes.

Andrew: And so you can see how the images change based on what I’m mousing over.

David: It just changed.

Andrew: Okay.

David: So it was very unclear what they were trying to tell you.

Andrew: I see and so there, here you’re saying there were a lot of competing elements. You ended up moving them towards this. And I’ll bring that up on the screen. Actually, this is what the site looks like right now.

David: Yeah, now it’s, there’s a lot more, it’s a lot clearer. There’s like one main dominant thing which is this image of this person looking at the phone. And then, you can see there’s the call to action right there next to this dominant image that pulls your eye in and then it can very easily go to that call to action.

Andrew: I see the top bar is still there but it’s not a competing element you’re saying because it’s no longer blue. If I were to bring, in fact, here, let’s actually go back to the site.

David: Yeah.

Andrew: Here’s what it looks like now. The top bar is still there.

David: Yeah.

Andrew: You go over to archive.org. We can see this is what it used to look like. And it was competing in your, you’re saying it’s competing because it’s blue. So people’s attention goes up to the top and that’s no longer true here.

David: Right. I mean notice the real dominant blue is happening on this splash area.

Andrew: Okay

David: Now the fact that it’s blue making it dominate is of course, sort of contextual but most sites for the most part are mostly white right?

Andrew: Mm-hmm.

David: And so when you put something bold and blue on it, then yeah, it stands out.

Andrew: Okay.

David: So if the opposite were true if it was all blue and there was a white band, then obviously that would be the thing that really stood out.

Andrew: All right, so the first thing for us to think about is to get rid of competing elements. What if those elements are important? You know, those bullet points are important. People want to know what the product does. People want to know how it changes their lives. What do we do about that?

David: Well then you actually, that’s when it’s good to step back and really think about who this user is, what they’re looking for, and the flow that you want them to have. What are your goals? What is the flow of everything? And you have to pick your battles there. Maybe those bullet points, if they are important information, are in some place that you direct that user to a different page, where they get a tour or something like that. You need to really simplify the way that you are moving them through the mental path that you want them to take, to be persuaded, and to do the thing you want them to do.

Andrew: Looking at their site and it looks like the bullet points have been moved down here.

David: Yeah.

Andrew: And they are grade-outs. They don’t take attention or overhear.

David: Yeah, you scroll down and then things, you know obviously you can’t see the whole page at once and things aren’t competing so much. You only see a piece at a time. Notice you always kind of see, there’s almost sort of a 1, 2, 3 going on. You got like a most important thing and then secondary importance and then tertiary importance, generally. Because our brains, you know, we can’t…that’s why numbers are…phone numbers or Social Security, credit card numbers…are all chunked in threes and fours. Because our brains, once you get over that, start to get confused.

Andrew: Cool.

David: We have difficulty ranking things.

Andrew: I do love, by the way, how Google does translation automatically and now I can get…because in English I’m just like…Cool, all right.

David: You need help on your Spanish, you know, you can do that.

Andrew: All right, back to the big board. Next big idea is “We Want To Focus On The Invisible Over The Visible.” Before I show screenshots of what you mean by that, can you explain it?

David: Yeah, it sounds like magic or something…you know keep in mind I spoke to 800 people at South by Southwest for an hour about white space.

Andrew: Okay. Did you really?

David: Yeah, I really did. So I’m pretty obsessed with this sort of invisible, these invisible aspects of design. This is a mistake that people run into a lot of times when they are trying to design something is they start to thinking about, “Well am I picking the right font?”, “Am I picking the right colors?”, “I need to have an image here, have some texture. Why isn’t this looking right?” And they start moving things around.

What they don’t realize is it’d all the invisible stuff: the way that the text is aligned says a lot about how things relate to each other, the sizes of elements says a lot, the white space between elements says a lot, the way things are organized, if they are organized on a grid. All these things can do so much to influence your design and that’s the thing that really gives things that clean sort of look that adds that credibility. But that’s the stuff that people overlook because they get distracted by all the visible things.

Andrew: You know what, I think then, let’s take a look at a couple of examples. In fact, before we show what you did with Mixergy, and these are small changes. Let’s take a look though at, how about Google. Right, you gave us a couple of screenshots here that we can see to help us understand your point. What are we looking at on the left and the right?

David: Right, Okay. So you know a couple years ago Google redesigned everything. Everything looks a lot cleaner. Notice on the left-hand size, they basically made the logo as big as they possibly could. On the right-hand side, they made the logo smaller and then they started to actually think about the units that are created by the logo. So you look at the height of the “o”, is pretty much the distance they left above the logo and below the logo to provide space for that logo to breathe. And to provide space for an “I” to be drawn there. Instead of thinking that, “Oh well, just make everything bigger!” they started to think about those invisible things.

Andrew: Okay, I see. By invisible you mean…the visible is the logo. The invisible is the space around it. By emphasizing the invisible, the space around it, we counterintuitively, we draw people’s attention to the logo, to what we want them to notice.

David: Yeah, and not only the space between things but also notice, for example, how the left edge of the “g” lines up with the left edge of the “s” in search. And also the plus which is actually hung out a little bit because the plus sign has a visual weight that’s a little bit lighter. So visually it lines up but it’s not a perfectly, mathematical line-up.

Andrew: Okay.

David: So the alignment of things, like notice also how it lines up with the search bar. All those things are important as well. The alignment in addition to the space in between elements.

Andrew: Here is another example, again from Google. Boy, that’s a little big, let’s go there.

David: Yeah, I love this example. They used to just have all these icons and all of these icons had all these different colors on them. It changes all the time. Now they just have…

Andrew: Just have a list of text. It used to be that in their search results on the left they would show you icons for each type of search you can do. You can use images. You can do a search for videos, news, etc. You would know you were doing a search for images because there was an icon of a camera. Now it’s gone. It does look cleaner, so what are we taking away from this?

David: We’re taking away the simplicity. It can be really important to getting the message across that you want to get. We have so much information on a Google search page. We don’t need to clutter it up with extra things like these icons that are essentially meaningless to our brains.

Andrew: So if I were to take a lesson away from this, is it to see what I can eliminate?

David: Yes. I would say that’s great advice, especially as an exercise if someone is trying to learn how to design. I encourage my students and people that I coach to use just one font. You can use one color of that font. Now, do a layout and see how that goes. It suddenly opens up your brain to all these other factors that aren’t present. If you start with something like that and then you start to say, “Well, I really do need to have a dash of color here.” Or, “I really do need an icon to get this point across.”

Andrew: So start with less and justify adding more, as opposed to adding what you think is important and then see what you can eliminate?

David: Yeah, then if you’re doing a redesign or something, then get rid of stuff.

Andrew: Let’s take a look at one more image here before we get to the… Oh, we actually have a couple more from Google here. This is the complete picture of both of those side by side. It’s easier to see how one looks much more cluttered than the other. The one on the left. You also give us Gmail. What should we be looking at here?

David: Oh wow! Look at the way the Gmail used to be designed. They were being very literal about… There’s a lot of information here that all needs to be separated in certain ways. They’re being kind of heavy-handed with it by putting a big blue box around the inbox. They’ve got heavy lines separating every Email. There’s the bulky check boxes on every single one. I don’t know if you happen to have an image of their newer Gmail design or not, but when you compare the two, that is when you can start to see that things are being lined up.

Andrew: I’m worried about bringing up my own Gmail in case I’ve got something personal. Let me see if I can do image search on Google for Google Gmail inbox. Every one of these is the old Gmail inbox. I don’t know why here [??] weird.

David: Some people prefer it because it’s what they’re used to and they used it for years, so they still use the old one.

Andrew: I don’t see… I’m sure it’s on there. Oh, there. This is one of the newer ones but it has a…You can kind of see it there with the…

David: That’s [??] the spam folder.

Andrew: Here’s another one there that shows… So now we’ve seen now that no longer heavy blues. The part that we’re supposed to pay attention to is just black and white.

David: Right. They’re just using pretty much a white background there to help you focus on the part that you’re supposed to be seeing, which is the Email. You’ve got a lot more simple interface elements going. The boxes are not big three dimensional check boxes, which I feel like they’re kind of left over from…

Andrew: The early days of the Internet.

David: Right. Well, people weren’t as used to the, “don’t make me think” sort of thing, which is still a great book. The people weren’t used to check boxes and things like that. They were [larger] population of people. This is what we call affordance in design. It’s visually expressing that you can click here, or you can drag here. Things like that.

Andrew: Yeah, I see what you mean. That was the old way of looking at things. It was the old way of presenting information, that if you wanted someone know that they could click something it needed to look exactly like a button, or else people who were coming from an offline world online wouldn’t know that this is a button, so it would have to look to like to the button. If you wanted it to be a checkbox you needed to make it somehow very clear that this is a checkbox, not a random square in a page. All right. Let’s look at one more. This is a sampler of what you did on Mixergy. This is what Mixergy looks like at this second right now.

David: Yeah.

Andrew: Here is what your change will make it look like.

David: Yeah.

Andrew: I wish I can show it side-by-side more easily. I think I can. Wait, I think I kind of could. Let me see if I can play with this. This would go right here and now I do another slideshow, yes, let’s do picture-picture slideshow. This will just take a minute. [laughs] Right. Now we have a blank slideshow and in this slideshow you’ll do this and we can move it over to the right and maybe even cut the, crop right, crop left, just a little bit, make it bigger. There. [laughs]

David: Yeah.

Andrew: That will kind of show it.

David: Yes. Perfect.

Andrew: I don’t know if I’d call it perfect, but that’s generous and I appreciate it. [laughs]

David: [laughs] Good.

Andrew: What we can see is in this version, here, actually before needs to always go on the left. Right there. There is a convention that we can pay attention to.

David: [laughs]

Andrew: Pop it up. And now the after can go on the right just like, where is that? No. [laughs] Wait. Come on, after. Oh, I see, I see, I see.

David: Just lower the canvas.

Andrew: There we go. After right there.

David: Well, that’s before.

Andrew: No, is it? Oh yeah, yeah, right. There we go. No.

David: No, you got them switched. I don’t know how that happened.

Andrew: I’m switched again. Wait. Slideshow. Over to the left slideshow. Image. Over to the right image.

David: All right.

Andrew: Well, before and after, now that worked.

David: Perfect. Okay. Now, good. [laughs]

Andrew: [laughs] I’m going to save this so I don’t lose it. That was a lot of work. All right.

David: Yeah.

Andrew: So what are we looking at? What’s the difference?

David: So one thing people are going to notice first of all is that the text is made bigger, but it’s not just made bigger. I’ve actually used what I call a varied scale. It’s a series of text sizes that are built up on a proportion, so 9, 12, 16, 21, 28, 37 are kind of the targets that I go for.

Andrew: Okay.

David: And so that ensures, one, it makes it way easier for me to pick the sizes I’m going to use and it ensures that they have a proportional relationship to them which makes them more attractive to our eyes.

Andrew: Wait, so what you’re saying is where I might just randomly say, maybe not randomly, but I may say, “Look, the headline looks a bit small. Let’s bump it up one. Let’s bump it up another.” You don’t do that, right?

David: Right.

Andrew: You don’t say, “Let’s take it from a 9-point font to a 10-point or maybe an 11.

David: Yeah.

Andrew: What’s the difference? How do you do it instead?

David: I always use the same size scale. So if it needs to be bigger then, if 9 isn’t big enough then I’ll make it 12. There’s no in-between for me there.

Andrew: You don’t go 10 or 11? It’s got to go to 12?

David: I don’t go 10 or 11.

Andrew: Why?

David: Because, one, it simplifies the decisions and It also ensures that things have a proportional relationship to them, so it makes it a lot easier to work with. Another thing is that size is just one of the many factors that you can use to make something look more important or less important. You could always make things bold, you can use different colors, there’s so many different things that you can worry about. This helps eliminate some of the other factors that you can think about. Just [??]

Andrew: Okay. And we’re going to get to some of this later on about learning the rules and seeing the patterns.

David: Yeah.

Andrew: Okay. So what else? So you did include the headline of each post.

David: Yeah.

Andrew: This is from the home page.

David: Yeah, I made the headline bigger. Notice that the space between the lines on the headlines is made smaller because they’re pretty short headlines and they just look awkward, they have too much space in between them in the original one. And then I also, along with making those things bigger I realized well, I need to have a little more generous margin over on the left-hand side between our picture and our headline and the edge of everything. And another thing I did was the metadata words, just posted on November 2014. I made that not only be a size that is along with my varied scale, but I made it all-caps and I spread it out a little bit, used letter spacing.

Andrew: Why did you spread that out? Why couldn’t it be, here, this part, let me, we’re talking about, I get to use all my tools, this.

David: Yes.

Andrew: Why spread it out? It’s so unimportant, the date. I would even get rid of it.

David: Sure. Well, yeah, you could get rid of it. That’s one thing you could do. First thing is I made it all-caps because it’s a different sort of information. Metadata feels different than a headline does. So it feels like it should have a different sort of character and just making it a different color or something doesn’t really have the same effect as making it all-caps.

Andrew: Okay.

David: All-caps feels very metadata. Now, don’t use all-caps for your body copy. That’s obviously not good. That’s screaming. But then when you make it all caps, you only want to do this with all-caps. You don’t want to do it with lower case. It’s one of those type rules. It’s complicated. But with all-caps you can spread it out a little bit and then that gives it sort of a lighter feeling. And yeah, if you feel like metadata isn’t important they could be a step smaller on the scale.

Andrew: Okay. Let me do this. You actually created a video for me walking me through how you did this.

David: I did. Yes.

Andrew: You said, “Look, I spent seven minutes here and I’m going to actually make the changes in real time and it’s up to you whether you want to do it or not,” and I said, “Hell yeah. I want to do it and we’re going to do it.” But with that you show how you did it, and can I just give this to whoever is listening to this right now?

David: Absolutely. Yeah.

Andrew: Okay. So we’ll give them a copy of that video and they can watch as you think it through and what decisions you make, and then they can also see how you pick the size of the text so that it doesn’t seem like an arbitrary decision.

David: Right.

Andrew: Here, I think people know, but this is what we’re talking about here. It’s the home page right there. We can make it a little bit bigger so we can see it on the screen, and that is what you’re changing, these headlines. All right. So we’ll get to see your thought process there. Let’s go back to the big board. The next one is, [laughs] I do have this, “Get over your font anxiety”.

And the reason I have font anxiety is because there are font nerds out there now who love to blog about fonts and they love to talk about what’s right and what’s wrong, and I don’t know what’s right or what’s wrong, so you know what I do? I pick Helvetica because Helvetica has a documentary that I saw and I figure, “All right. Great. No other font has a documentary. I don’t want them.”

David: Yeah, Helvetica is not a bad choice. It has a certain sort of character to it that’s appropriate for certain situations and then there’s other fonts that are better for other situations. But there’s really just like three kind of main categories of types of fonts and if you kind of pick a favorite within each of those categories and stick with it you’ve got plenty of other things to worry about.

Andrew: What are the categories?

David: So the categories are humanist, geometric, and rationalist.

Andrew: Let me write it down.

David: Or realist, realist.

Andrew: Because I think you kind of lost me here, but we can get me back.

David: Yeah.

Andrew: Humanists, okay, let’s make it bigger. Great. People see the big board, that’s secret. [laughs] Humanist.

David: Geometric.

Andrew: Geometric?

David: Yup. And realist.

Andrew: Okay. By the way, this could use more space on the left, I know that much.

David: Yeah. This is the part where it little complicated because these are, they’re not the only type of classifications of fonts that are out there and they are not mutually exclusive either, but they are kind of the three main ones that dictate how a font is going to feel.

Andrew: Okay.

David: Humanist fonts, they’re really influenced by when people used to write, they used to scribe things like [??]

Andrew: What do I need this for? Do I need one humanist, one geometric, one realist font on every page that I create? No.

David: Well, yeah, I mean it can get complicated and I’ve got stuff about it in my book. I’ve got a [??] answer, you can Google about it as well. I do have a list called “All of the Fonts You’ll Ever Need” at Designforhackers.com. People who sign up for my email list get like a list of fonts.

Andrew: Okay.

David: The point being though, that if you kind of pick a few favorites, then you have plenty of other things to worry about. And, you know, there are some great new, high quality typefaces on Google fonts, places like TypeKit. There are some really great ones. There’s also a lot of bad ones.

Andrew: Okay.

David: In fact, most of them are bad, not very good, and they’re not going to help you out. And so unless you learn what you’re doing with them, then keeping it simple, worrying about the other things will get you well on your way to just worrying about something else.

Andrew: Okay. So don’t think about it too much, but do I need a humanist geometric and realist font? Or did I just take us down a wrong alley here?

David: Hmm. Well, it depends on what you’re going … This is where it gets complicated. You might have …

Andrew: So what’s the simplest thing that we can do to leave people with? And by the way, I do have the PDF right here.

David: Yeah.

Andrew: I always have it for some reason. I click on the guest site before I get it.

There we go.

David: Yes.

Andrew: It’s the PDF. It’s available on your site.

David: And, you know, that’s not to say that literally nobody should use any other typefaces. There’s a lot of other great ones out there, but this is just to say that if you’re just stuck with these, you’d be fine.

Andrew: So just pick one of these, and I’m good to go. And I can see, oh here, this actually describes it, what the font is geometric realist. How do I link this to people so that they have access to this to…

David: I can give you access to that.

Andrew: Should I just tell them to go over to your site?

David: If they go to DesignForHackers.com and sign up, I have a free email course and the first thing that they get is this PDF.

Andrew: DesignForHackers.com. Where is that? I saw there was also available on your personal site, right here. Oh, actually I don’t even need to do that, it’s right there. I remember playing with the site, right?

David: Yeah, that’s something I probably need to fix.

Andrew: Cool. I do that and then I get it.

David: Yep.

Andrew: Great. Cool. All right. Onto the big board.

David: Yes.

Andrew: Oh wait. Let me see. You had an example of bad and good. Obviously this is very bad.

David: Yeah, I mean, that was so bad that I could hardly even take it seriously, but …

Andrew: This is good. What makes this one good?

David: Well, this is Shaun Inman who is a great designer. Lots of simplicity as far as what typefaces he is choosing, things are lined up nicely. He’s using white space in a way that is really intentional. You can see where white space is being used to separate these posts from one another as far as like how much white space there is. And there’s a sense of organization in the amount of white space between, say, the title of the blog post and the metadata beneath it.

Andrew: Okay.

David: Do you notice there’s like a rhythm to it, like if you look at the height of the bottom of the metadata to the top of the post title, that height is pretty much the amount of white space there is between the bottom of the metadata and the top of the next post title, for example.

Andrew: I see.

David: Right: There’s like a sense of order to it.

Andrew: Okay. All right. Onto the next big one. We talked about font anxiety. Now we’re going to talk about colors, and you say let’s just pick one color.

David: Yes.

Andrew: Color is complicated.

David: And color’s very complicated and there are all sorts of different color schemes and color configurations out there that you can worry about but actually if you look, if you look really closely, say like the icons on your iPhone or something, you’ll find that most brands have like one main color associated with them.

Andrew: Okay.

David: Keep things simple.

Andrew: One color …

David: Like add that one color throughout where you need it, then you’re well on your way.

Andrew: You did that on your site which I’ve been bringing up a bunch.

David: Yes.

Andrew: What happened?

David: So I mostly … Well, I’ve always had kind of an earthy feel to my sites. There’s a little bit of a texture to the background because I’ve always to emulate like natural paper, but blue, I’ve got blue in my headshot. Blue is a calming color. It enhances creativity, and I wanted that for my main color. And the rest of it there’s no black being used on any of the type either. The type is like a dark brown.

Andrew: Okay.

David: So …

Andrew: Let me understand. When you’re saying they’ll pick a color, it sounds like you’ve got, it looks like you’ve got three colors. This is one color.

David: Mm-hmm.

Andrew: The entrepreneur cycle of delusion.

David: Sure.

Andrew: This is another color, more blog posts. Here’s another one.

David: Mm-hmm.

Andrew: I just clicked. I didn’t mean to click.

David: The more blog posts … That’s actually a lighter version of the color that I’m using for my main text. I’m just using Wes there.

Andrew: I see.

David: For framework I’m just using lightened 50%.

Andrew: You’re talking about this now. Now I’ve got my telestrator back.

David: Exactly.

Andrew: And this and this, all the same color.

David: Yeah. So I think using shades of, you know, tints and shades of like whatever your black or gray, whatever you’re using for text is good, and then having an accent color, or whatever your sort of main brand color is.

Andrew: For you that’s … this is the accent color.

David: And that’s the blue for me.

Andrew: Got it. And it’s also in here.

David: And yeah, do you notice I’m harmonizing with my headshot which has blue. I’m wearing a blue shirt in the picture. I’ve got a blue background. You know, that’s not a mistake.

Andrew: Okay. So pick a color and then have another color as an accent color, is that what I’m taking away from this?

David: I think the main takeaway would be to use shades of gray and an accent color.

Andrew: Shades of gray and an accent color.

David: And one color, just pick one color. Keep it simple. You have plenty of other things to worry about. You know if you gain confidence in like the alignment and all that stuff and then you start willing to play around with color more, you want to redesign for hackers or something like that, learn more all about other stuff, then cool. But if you’re starting out, keep it simple.

Andrew: Okay. But you then are breaking that rule, aren’t you by going with brown and blue?

David: Yeah, I mean, I have a degree in graphic design.

Andrew: I see. Okay. All right. Everyone else needs to stay with …

David: So I went a little [??].

Andrew: All right. It looks like that’s what he did.

David: I can drop that knowledge here, but we’re going to be here for a while.

Andrew: No, I don’t need to be here for a while. I mean, I’m happy to be here for a while, but I don’t want to get overwhelmed. Just give me a couple of basics. All right. You used shades of gray and one accent color, and that’s it. You’re done.

David: Yes.

Andrew: Okay. I can do that. All right. Let’s go on to the next one. The next one is avoid column soup.

David: Yes.

Andrew: Here’s what column soup looks like. What’s going on here?

David: So there is something that we used to see really often. People use frameworks such as Bootstrap which are great. It really makes it easy for you to communicate a site that looks pretty professional really quickly. Now because these frameworks are made for lots of people for a lot of different situations, they have what’s called a grid, imaginary vertical lines that you can use to organize things.

Andrew: Yeah.

David: And there are 12 columns usually. By default Bootstrap is 12 columns. What people do is they start to feel anxious. They start to feel anxious so, all right, I’m using three columns here for the navigation and then I’m using nine columns for the splash, and then underneath I’m going to just divide up those nine columns into three. And then what about these other columns? I haven’t used all these other columns.

Andrew: Oh.

David: And then they start feeling like they need to actually use all those and organize them. A framework something like that has 12 columns. Let’s just pretend like you have four columns. Pretend like you have three columns and think about what you’re saying about your information each time that you chunk it up and the way things line up.

Andrew: Okay.

David: And then you don’t put this visual mess that we have in our example here.

Andrew: So go with either three columns or where is that? Right here. There it is. Just pick the number of columns that you want to use and be consistent with them.

David: Yeah, be consistent with them. Notice on the left hand side we have this navigation, and we’ve basically delineated that left hand side as, okay, that’s where navigation goes. And then we have, but we’ve completely ruined that by putting … see where it says complaints and death threats . It’s like spanning over this …

Andrew: Hang on. Let me bring out my telestrator here. Complaints and death threats. I think here’s complaints.

David: Yeah.

Andrew: It’s hard to see, and we also have death threats which is underneath here…

David: And then, yeah, draw a little vertical line to the left of where it says “Hey you” in that column that you’ve got there, because now we basically said okay, this is our main content and this is our navigation on the left, but then we totally broke that by getting anxious about using all of our columns.

Andrew: So what about this one? Here’s a site we showed from earlier. Let me bring up…

David: Sure.

Andrew: The [??] again. It looks like this is all one. How about I use red? Red work? Yeah. This is one column.

David: Yeah.

Andrew: It looks like they’ve got … here’s a second column.

David: You mean at four?

Andrew: Yeah. So is that okay?

David: Yeah, that’s fine. They basically- but, I mean they’re still using the grid in the way that the grid is supposed to be used. The grid is basically just there to prove flexibility. It’s there to provide choices for you, and that’s working out fine here because they’ve got a splash that goes all the way across, and then they’ve got…

Andrew: But what about here? Now we also have…

David: Right. And then they went into three.

Andrew: Yeah.

David: This is where we get into, you know, why design is so complicated for people, is that, you know, there’s these rules and guidelines and things that you can do that will make things a lot easier for you, but very skilled designers can go ahead and break these rules and manage to make it look fine. It’s like if you pick up a guitar and think you’re playing jazz, like…

Andrew: If we’re not at that level, we keep it like this. Where is it…? Like this. It’s okay to have this top section, and [??] it’s okay to have something like this, and columns like that, but then if we’re going back below then we want to come back to this one column, so go with one four one.

David: Well…

Andrew: Or are you telling me to even stick with one column or three but don’t change what I’m starting?

David: Yeah, I think one-four-one could be a good rule for a site like that. They can go ahead and do that. The way they get away with going down to three there is they experience such a clear delineation that this is like a new section.

Andrew: Okay.

David: That… it became okay. Where they go to three columns they’ve got a bright blue background and it’s very clear that it’s totally unrelated to the four columns that were above it.

Andrew: Okay.

David: And then they go to four again, see?

Andrew: Yeah.

David: And then they go straight across, and then the three. Some of those things might be a matter of how many items do we have that we need to organize here, which they’re using icons to express these various things. It would be different if you’ve got larger amounts of text.

Andrew: Okay. Well, they’ve got this box here. I’m going to complain to them right now. “Hi. Why so many columns on your site?” We’ll get the answer by the end. Now I’ll troll on their site.

David: I do think they did a good job, though. They don’t have column soup.

Andrew: No, they don’t have column soup. All right. You’ve explained why it is that they able to get away with it by explaining the clear delineation, but you’re saying if we’re just getting started keep it simple.

David: Yeah. Keep it simple. Most importantly, don’t feel like because there’s twelve columns you need to use every single one of those vertical delineators at some point during your design, which is what happens to a lot of people who are starting off.

Andrew: Back to the big board. Next thing is to consider readability. Fifteen words per line or less, no more.

David: I’d say eight to 15.

Andrew: Eight to 15 is where you want us to be, let me correct it right now.

David: Yeah, you don’t want to have three words a line.

Andrew: Eight to 15 words per line.

David: Yeah.

Andrew: You did that on your site, right?

David: Yes.

Andrew: This is… I’m bringing it up. What happened? What did it used to look like?

David: Well, on my site it didn’t… I’ve always been eight to 15. Actually, I made the text even larger since you’ve got that screen shot…

Andrew: Yeah, I’ve been zooming it in. It looks like that.

David: Yeah. Notice as you zoom in, you zoom out, if you change the browser size, it’s always going to be pretty much eight to 15 words per line. If you look at something like Wikipedia, for example, this is a problem with responsive design all over the web, especially with text heavy sites. There are these sites that have 50 words on a line.

I think Wikipedia has something like 50 words on a line if you bring it across a long screen. I don’t know, it’s like they figure,”Oh, if we make the window bigger we have to fill the whole space.” That makes it so hard to read because of your eyes following all the way along. It gets to the end and you’re so tired, and you have to go back and find what the next line was. If you’re in a long paragraph, sometimes that can be very hard. Optimal for reading is eight to fifteen words per line.

Andrew: I think that’s why people end up using tools like this one. Let me bring up Wikipedia here. Desktop… Chrome… Here’s Wikipedia. I end up just using this when I need to do my research. If I’m doing a lot of reading I can’t read Wikipedia style articles.

David: Yeah, when I redesigned my blog that’s something I thought about. There’s all of these readers out here. People are using instapaper, pocket, and things. Why not just make your site readable?

Andrew: When you did that did you see any change in your user interaction?

David: I’m glad you asked. I was actually just looking at this earlier today. It’s been more than a year since I redesigned. I look at that a year after I redesigned compared to the year before I redesigned. My blog before was a lot like a lot of bloggers you see, where over on the right hand side there’s this sidebar with most popular links, previous article, and next article. It’s like doing everything I possibly can to try to get people to just stay on my site and read more stuff. It has kind of the opposite effect. Instead, I wanted to make it all about the text.

I thought about what my goal was, which is I’m not looking to make ad revenue on my blog. I want people to come to my blog and read the content, to feel that content, and to be compelled to read more. I’m not necessarily looking to reduce my bounce rate across the board, I’m looking to get those people who are resonating with my content. What I found was that session durations, the length of time that people spent on the site, doubled.

Andrew: So people were spending twice as much time on the site, per visit, after you changed it?

David: Yes. This is over the course of a year, too. This isn’t just for a week. Year for year, they spent twice as much time. The number of people who spent three minutes or more went up 27%. The number of people who spent 30 minutes or more on my site went up 80%. These are people who come, read the article because it’s readable, and there’s not all this noise they’re trying to distract from.

Andrew: Here’s what we’re looking at. Let me bring it up. This is what the site looks like now, and this is what the site used to look like, right? [??] There we go. This is what it used to look like.

David: This is what it used to look like, and it’s a little bit embarrassing. I had certain goals when I started that particular design. Then so many things changed. The technology changed and then things started to be hodge-podged. The text was smaller. I was trying to get people to visit more popular posts. I ended up writing a book and stuff. Time just wiped the slate clean and make it about the content.

Andrew: I’m surprised, actually, that people stay on the site longer when you eliminate all these things that they could be doing on the site. I could imagine, someone’s done reading this post and then they might want to read this one. They don’t do that anymore. You don’t show them what else is available.

David: There’s a little bit of an effect of, if everybody made their site look like this, which has happened with things like media and stuff, it might start to have less of an affect. When people see this they’re like, “Oh wow, I’ve been having information thrown at me all day. Here’s this vast expansive of space and text that I can read, with quality writing.” Then they feel compelled to spend more time. In fact, the number of people who read five pages or more on my site would have 62%. Returning visitors will have 41%. So I could very easily have missed out on those things if I was looking for bounce rate. Bounce rate didn’t change, but because across the aggregate I didn’t necessarily move the needle on bounce rate.

The thing I was going for is what Austin Theon had a great book called Show Your Work. You want hearts not eyeballs, so I wanted to make fans. People who resonated with my work. I wanted to give them a great experience. I didn’t want to just try to get some kind of across the board aggregate great experience, but I did that. The people who really got a lot of depth out of what they saw there just went way up.

All right. Let’s go back to the big board. The next big one is, learn the rules. See the patterns to apply a framework. This is easier to understand when we talk about Shane.

Shane is a reader of mine who got designed for hackers for a Christmas present a couple of years ago and he emailed me out of the blue. I couldn’t believe how I got in touch with him. It’s like I couldn’t have made up something better. Shane is as much a software developer and he is a software architect. He’s been a software architect for 7 years. He’s colorblind. When he was a kid he was painting oceans purple and cows green and Shane was building various apps, it just really bummed him out to have things he would work on and people wouldn’t respond to it. He said it was not fun to make things that nobody wants to use because they are ugly.

So he read “Design for Hackers” which we are giving you the tactics today, but design for hackers is mostly there to give you a framework and understanding on how design works for you. How do all the different factors interact with each other to give a great design?

Shame did that and he learned about typography and white space and a lot of things we are learning about here, but a little bit more in depth. That way he had a framework that he could work with. That way when he saw designed that he liked or designs that he didn’t like he actually had something to look at. To find what he saw, to some sort of understanding, and through that process he just kept getting better and better and better.

The ultimate test, Shane started designing bootstrap frameworks and started selling them and he has made enough money on the side that I can’t show you Shane’s picture, I can’t give you his last name because he doesn’t want his employer to find out he is making this much money selling bootstrap frameworks on the side. Which is the ultimate test because people who are buying them because of what they look like.

He’s come up with little trick to get around being color blind.

The reason that we bring him up is because if he doesn’t have the ability to notice color and he doesn’t have a major chunk of what it takes to be a designer, he needed to be something else and that something else was he came up with a framework, a structure that allows him to do it. So how do we do that for ourselves? If we don’t have the design eye, if we don’t have the ability for colors, what’s a framework that we can use that allows us to do something like this.

Well the framework we are talking about is exactly why I wrote “Design for Hackers”. To give somebody some kind of vocabulary to understand everything that comes together to make a great design. Unfortunately, this particular tactic is a little bit more involved than the others in that it involves investing the time to understand everything that they’re seeing and the designs they like or don’t like.

Andrew: I see. It’s not that we’re giving people a framework within this point, but we’re saying, “Look, if you don’t have a design eye, you don’t feel you were born with it, what you can learn is some framework, some techniques that you can use to compensate for it and Shades is an example of what can happen when you do it.”

David: Yeah, exactly just to have some sort of understanding vocabulary of what is is that you’re seeing and to be a fan of design. Everybody that I talk to who’s leaning design, they all have some sort of inspiration folder where they just keep screenshots and different elements of things…

Andrew: What do you keep yours in?

David: What was that?

Andrew: What do you keep yours in? Delicious?

David: I actually don’t have one. My personal framework is the history of graphic design and classical stuff that I learned in college. I think that a lot of these people use Sketch and Evernotes to keep those things.

Andrew: I’ve been doing that. I now have a tag in Evernote. With Google Chrome and Safari you can easily save to Evernote. I have a tag there that’s called “Design”. When I do design something, I can say, “Look, I like that one and I like that one. Can you make mine look like that without copying it?”

David: Yeah.

Andrew: All right. You’re advocating that too?

David: Yeah. I think that if you have an understanding of that framework, especially, like the one I talk about in “Design for Hackers”… I don’t want to sound like I’m shoving my book down people’s throats, but I did write it because I felt that it needed to be written. People needed to know this stuff. If you have an understanding then when you tell your designer, “Make it look like this,” then you can actually then understand better why that particular design looks that way and how it meets the particular objectives that that company had. Through understanding that then you can understand, “Okay. Well, how are my objectives different and then how might that design be different?”

Andrew: David, you don’t have a design book or design tag or a design something to save it all?

David: What’s that?

Andrew: You don’t keep a design book or a design tag…

David: [??]

Andrew: Yeah. I’m surprised.

David: You might think that I would but I don’t. I just happen to have… I wrote a book that encompasses my entire understanding of design because for me it’s… I have that framework very well established in my brain.

Andrew: Do you feel like you were born with a gift? I remember in your book you saying that you didn’t even have good penmanship or even an understanding of why penmanship was important when you were going to school. Do you feel like you were born with that gene or is it something that you taught yourself the way hackers teach themselves how to code?

David: First of all, yes, my penmanship is still not very good.

Andrew: All of our penmanship stinks.

David: Right. We’re on computers all day. My mother was real good at art and drawing. When I was a kid I loved it. I just spent so much time in my room alone by myself, just skipping meals, just hours a day drawing. It was always clear that I was going to do something related to that at some point. I do think some people are maybe born with an inclination toward certain things. I still strongly believe that just because you aren’t born with that that doesn’t mean that you can’t learn.

Andrew: You can [??]

David: People like Shane, Shane thought, “I’m just not programmed for that.” People tell that story to themselves. “Oh, I just, I can’t learn this. I’m a developer. I think a certain way.” I don’t buy that.

Andrew: All right. On to the final point. I did promise you that we’d be done by now. We’re running a couple of minutes late, but we only have one left.

David: Cool.

Andrew: That is to focus on one goal. We look a moment ago at your site at a before and after. You had to kill some babies in order to, that’s how you say it.

David: Yes.

Andrew: I know it’s strange. I’m going to have a baby. It’s weird to say kill some babies. You had to kill some babies, you said, to get to…

David: I don’t have any babies so it’s easy for me to say.

Andrew: I remember actually when my wife was pregnant, I was listening to Iron Maiden to fire me up on my runs. One of them they sing about kill the unborn in the womb. It was such deft metal.

David: You’re like no.

Andrew: That means something different now that my wife is pregnant.

David: I need to change my musical tastes.

Andrew: You had to make some heavy design decisions, let’s say, some heavy editing here.

David: Yeah. We talked about that a little bit. I decided, “Okay. What were my goals here?” I had different goals back when I first designed it. That was when I was going to start maybe doing some freelancing. I kind of knew that I maybe wanted to write some kind of book someday. I wasn’t sure what it was and I just had a lot of different goals.

I ultimately decided on the latest redesign that I cared about, one: People connecting with my content. Really reading it and having, this is almost an exaggeration, but an out of body experience. They get there and they’re just entranced. They just want to read what’s there. And I wanted to give them a place to do that. And then I next I wanted to promote my book. That’s where the thing that pops up in the bottom announces my book, but it doesn’t really do that until you’ve read the whole article. You’ve got to the end.

Andrew: Oh yeah, let’s see if we can bring that up to show. That comes up.

David: I completely forgot about getting RSS subscribers. I don’t have annoying social media things up at the top. I really just cared about depth.

Andrew: I think I need to do that too, get rid of annoying RSS things at the top. But I feel like people need that sometimes. So what do you do with?

David: I feel like people who know how to use RSS know other ways to figure out how to do that. I’m not somebody who uses an RSS reader anymore.

Andrew: And I guess more RSS readers, you know what actually? RSS, you convinced me, you don’t really need it because most RSS readers now can just get the domain at the site and then they’ll find the RSS link, right?

David: Yeah. We have the technology to just copy and paste the URL. Now I do have the feed burner chicklet way down at the bottom. And then on the browsers where it’s available I have it sort of faded. It’s down there. It’s down there, you can grab it, and drag it, and stuff if you’re so inclined.

Andrew: The book doesn’t come up until right there where I hit the bottom of the post.

David: Yeah, I just tried to hide those things. And I just put the greatest hits down at the bottom. And that’s not a popular post plug-in, that’s just my hand picked, these are the posts that I feel are important.

Andrew: I have found that this is helpful in discuss.

David: Yeah, discuss does a good job with that.

Andrew: Yeah, they do pick out recommended follow-up reading that people actually do click on. I was thinking of killing that on the site and then I looked at the stats and I said, “No, people are actually using it.”

David: Yeah, yeah, one of the things I did in the redesign was go to discuss comments and that was good. They’re good.

Andrew: All right so get rid of everything. Focus on the one goal, for you that one goal was getting people to understand that there was a book there, and get them to understand and care about the book. You wanted them to actually read your posts, and that’s the goal.

David: Yeah, primarily I wanted depth of connection. And that’s why I was like, “Give them a place where they can read.”

Andrew: All right. I’m hoping you’re not too expensive after reading the book, after seeing this, and also after seeing what you did to Mixergy, very small but really significant powerful changes. I’d like to hire you to work on both Mixergy and one of the other sites. Frankly, first most important this site that I have for helping people do interviews. I think we could use so much there. And I hope you’re not incredibly expensive because I think I’m going to have to pay you, even if you’re incredibly expensive, because you’re incredibly good.

David: Well thank you. I would be really excited to learn more about those sites.

Andrew: All right cool. All right I’ll follow up with you on that. Anyone else who wants to have a follow up here is the way to do it. Check out “Design for Hackers.” I got it on the Kindle. You can get it in paperback, right?

David: You can get it on paperback, Kindle. It’s everywhere books are sold. And if you want a taste of the book I do have a free course at designforhackers.com.

Andrew: What sells more? The paper version or the digital version?

David: I wish I just had an answer for you for that.

Andrew: You don’t keep track.

David: I actually don’t even know.

Andrew: You know what? Because I read the digital version, I almost always read the digital version, and you had this interesting thing in there. You said, “Look, if any of the images are off because you’re reading a digital version I want you to complain to the publisher.” I looked I couldn’t find one. I wanted to complain. I thought that would be so cool. I said, “Let’s let the publisher know they’ve got to do right by the author.” All right here is the book again, “Design for Hackers.”

Thank you all for being a part of it. David, thank you for being here and teaching us.

David: Thank you so much, Andrew. Great to be here.

Thank you. Bye everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to launch (and price) your product

Taught by Ryan Delk of Gumroad

Master Class: Launch Your Product

Report Bugs

Course Leader: Ryan Delk, Gumroad

Ryan Delk is the head of Growth/Business Development at Gumroad which helps creators make a living by making it simple for them to sell what they make to their audience.

Master Class Toolbox

Course Cheat Sheet

Transcript

Andrew: This session is about how to launch and price your products. It’s led by Ryan Delk. He is the head of growth and business development at Gumroad. Gumroad, of course, let’s bring up their webpage, is the platform that helps creators make a living by enabling them to easily sell what they make to their audiences. You’ll see these guys have incredible, incredible users on their platform.My name is Andrew Warner. I’ll help facilitate this session. Ryan, thanks for being here.Ryan: Andrew, thanks so much for having me. I’m excited to be here.

Andrew: One of the many creators on your platform is a guy named Sasha. What did he create?

Ryan: Sasha is a designer based in Japan. A lot of things, a designer by trade. He’s worked with a lot of amazing companies. A couple years ago, he wrote a book called Step by Step UI Design. This book was on user interface design, aimed at tech companies. The book did well. He sold a bunch of copies of it. He made tens of thousands of dollars over the course of the book’s life, over the last three or four years. It was his first product that he sold, and he was writing it on the side while he was doing design consulting work.

He was happy with the results. He thought it was good. He saw this trend of what a lot of other people were doing with pricing and promotion. He decided to do his own version of that and keep things very simple. He sold the book for $5.99. He eventually added a couple different options and stuff, but kept things real simple. He made $20,000 or $30,000 over the course of the life of the book, which is great. That’s a great income from a side project. He was able to, over the course of the next couple years, learn a lot of things about product launches. A lot of things we’re going to talk about today that were able to help him make more than ten times as much on his next couple launches.

Andrew: Using the things the ideas that we’re going to talk about today, including one specific idea that we’ll discuss later on in the program, he was able to go to over $300,000 from $30,000.

Ryan: Exactly. Yeah.

Andrew: All right. That’s the power of what we’re talking about here today. Boy, you are the guy to do it. The reason we invited you on here is because I’m seeing more and more content creators use Gumroad. I figure as the person who’s introducing them to the platform, and the platform that helps them earn a living, you guys, and you specifically, know what it takes to do well. You’ve watched all these people grow.

Here’s the big board of ideas that we’re going to be talking about, all based on Ryan’s experience. The first one is basic, but it sets the foundation for everything else. You’re saying we should build an audience the smart way on our email list.

Ryan: Yeah, absolutely. When we first started with Gumroad, we had this idea of selling should be as easy as sharing. I think that’s still very, very true. That’s still something that’s a very close part of what we do and what we try to do. We learned very quickly that this idea of just sharing products on social media, for some people that works really well, particularly very large creators with massive audiences. That can work well, but for the majority of people, social doesn’t convert very well.

We learned very quickly through looking at data on campaigns and through data on where people were actually having conversions. People that would click through, view the product, and then end up purchasing. We started to see this amazing stuff where email would convert much, much better than social.

For every hundred viewers that came to a product on average, let’s say through Twitter and Facebook, a hundred users, maybe one would buy the product. Maybe two, for someone with a really, really engaged audience. Versus that same person sending it out to a hundred people via email, we would start seeing cases where eight or nine or 10 or even 12 people would buy the product when coming from an email list.

You’re talking about literally more than a 10x difference in conversion coming off of social versus email. We started to see this pop up with a lot of different people. A lot of different creators that were some of them learning it along with us, some of them we were able to share with them and say, “Hey, you should really invest super heavily in email.”

It’s hard because social is a very sexy and interesting thing. Everyone wants to build these big audiences on Twitter and Facebook, and there’s a lot of value there. It’s good for your brand. You can get a lot of engagement. Things can go viral. But when it comes to selling products, email is the way to go.

The person that I think does email probably better than anyone else I know is Brendan Dunn. He does a lot of things. He’s a former agency owner. He lives in Virginia. He has written several books, has a couple course products, has a master class, all targeted at freelancers. Almost any type of freelancer could apply his stuff, but a lot of consultants, people that are billing by the hour, teaching them how to get more leads, charging more for their rates. And then eventually build their consultancy or grow their own consultancy if that’s the why they have a lot of interest in.

Andrew: Let’s bring up his site it is, there it is.

Ryan: Yeah, and what you actually say there was and exit model, prompting you to go to his email list, which is one of the reasons why he does this well. So this is a great example were he actual set this up, this is new. And a lot of people don’t like these exit models and they think they’re a little bit obtrusive.

But what he did he actually only shows you this if you come into his site from Google. So if you Google something and his blog ranks highly for it and you have no context for him prior and you’re coming in, then he shows you this to try and get you on his email list.

But if you’re a regular blog subscriber you’ll never see this because he doesn’t want to give you that obtrusive experience. Which I think is just brilliant.

Andrew: You will see this if you go directly in there. And again he’s asking for an email there. Oh look his Mixergy interview is on his site.

Ryan: There you go.

Andrew: I see, I didn’t realize that he valued email so well. So what does he do with email beyond the [??] we just say?

Ryan: Yeah, so there’s a lot of things he does very well. The thing I think is really interesting is he launched this campaign, last year I think, where he basically started trying to convert his social following into email subscribers.

And value for him of an email subscriber is massive. He’s amazing at marketing, amazing at using a lot of techniques we’re going to talk about there. So he’s able to drive a lot of revenue for every email subscriber that he can get. Particularly if you look at it on like a lifetime value angle.

So in the double digit dollars easily. For every new email subscriber he can. And so he started retargeting people who came to his website and would then visit Facebook or LinkedIn or other social networks. Retargeting them with an optimum to get involved in one of his email courses.

So I think he tried a couple different courses, things on how to raise your rates, how to get more leads as a freelancer, how to build your own agency whatever it might be. And he had these incredible conversation rates because he has people … he was giving them something valuable, which we know assuming that a lot of us here about like email.

We use something, tease them with some, and give them something of value in exchange for getting on your email list. So it might be access to course, a book whatever it might be. And we’ll talk about that a little bit later.

Andrew: Let’s look at how he’s doing it, this is his page the moment … let me bring up my web browser again. This is how I bring up my web browser.

Let’s take a look this is Twitter account right now. And the very top thing that he has there because he pinned it and you can now pin Tweets to the top of timeline. It’s this learn how to price yourself right with my new nine day email course. That’s the link that he’s promoting.

If I click on that I see a request for an email address, right there. If want to take this free first lesson and then reason for why I should do it and again another email input box. And so this is what he’s doing to convert social viewers into email subscribers. And then from there as you said it’s much easier to sell.

Ryan: Exactly because once you have the email address you have a direct line to them versus relying on them logging into Twitter and you see it and logging into Facebook and it appearing on the top of their feed. And that’s a great example. Every person that hits his Twitter profile sees that direct URL which basically I call to action for them to subscribe to his list.

Andrew: It’s really important to hear that coming from you guys because I know that Ty Hill created Gumroad as a place where you can sell as easily as you Tweet.

Ryan: Totally.

Andrew: It was social centric at first, but obviously you’re finding that are other things that work even better.

Ryan: I mean I certainly see the value in social and definitely a huge fan of Twitter and Facebook. We just did a deal with Twitter while we’re working on helping them bring in stream commerce to Twitter.com. So definitely see a lot of value in social.

But I think for people a lot of people in our audience, a lot of people that we work with especially in the creators email just convert so much better than any social channel. And it’s a huge opportunity especially if you’re investing heavily. And so sure you want to convert these people and the email subscribers.

Andrew: All right on to the big board again, here’s the next big idea which is you want to prime your audience for your product and use drip marketing and there’s a company that you guys worked with Colt Ford.

Ryan: Yes.

Andrew: Excuse me actually its musician not a company. I’m so used to calling everyone companies.

Ryan: Yeah, so something that I think that’s interesting at Gumroad we work people don’t know that’s a lot of different types of creators. So we work with independent creators who don’t have an agent, don’t have a manager just write books or courses.

We work with well-known authors people like Chris Colbow, who Andrew and I were talking about earlier. And we work with really well-known musicians, filmmakers, people in the entertainment space as well. So we’re able to sort of gather data and look at what works across all these verticals. And the cool thing about everything we’re talking about today is that we’ve literally seen this work for every single type of creator and every single vertical. So this isn’t just something that works well if you’re an author.

It also works well if you’re a filmmaker, if you’re trying to sell software products, whatever it might be. This artist, Colt Ford, he’s a country artist. His label is Average Joes Entertainment, out of Nashville. They had an album coming out. He has a pretty decent very, very engaged following that loves all of his stuff. He’s sort of a hybrid hip hop country artist, which is sort of a weird, niche market that he just dominates.

We were talking with his label about doing this release through Gumroad, and they came to us and they said, “Hey, what could we do that would just really send us over the top? What are you guys seeing that works really, really well? What can we emulate?” Props to them. They were very open about trying new things, things they had never tried before and weren’t sure if we’re going to work.

I said, “Listen, there’s a lot of things that could work. I think what would really crush it is if you guys A) invested really heavily in getting everyone off of social onto your email list,” like we just talked about, “And then B) took that email list and started priming people to get excited about the album.”

Previously, what they had done is they would just email everyone the day the album was out and say, “Hey, go get it on iTunes. It’s here. Go.” That can work, but as something that Nathan Barry, who I think has also been on Mixergy, talks about often is that you should convince your audience to buy before they have the opportunity to buy. You want them already so excited about what you’re offering that they’ve already decided in their head, “I’m going to buy.”

We worked with them to craft these little nuggets that they would drip out. They would try to get everyone on their email list by saying, “Hey, if you join the email list, you’ll get to hear 30 seconds of the new single.” Or, “You’ll get a sneak peek of the new music video.” That would get people onto the email list. Once they were on the email list, they sent out this series of drip emails every single week. For people who don’t know drip emails, it’s just a fancy term for emailing people over time, leading up to a product launch.

They would send out little 15-second teasers of Colt doing something related to the album. They would send out interviews with him that were behind the scenes about the album. They would do all sorts of these little teaser things leading up to the album. They saw this work in a huge way. They were going to be excited if it was Top 50 in the category. He’s got a decent audience, but he’s not this international superstar.

We actually just recently got the results back from this campaign. We saw the sales, but we weren’t sure how it was going to stack up. The album was actually a massive hit. It actually went to number one in country. Obviously, he was very happy. The label was very happy. They attribute a lot of the success to this campaign. They just sent us this framed album plaque.

Andrew: Tilt it so the top is down and the bottom… Yeah, there you go.

Ryan: They sent us this framed album plaque of the album going number one, thanking us for our help and helping make that happen. That was cool. We actually literally got that yesterday.

Andrew: That’s so cool.

Ryan: A very timely example. It’s a good example. I think we hear a lot of tech people writing about these things, but these strategies work. They work across the board. They work for everyone.

Andrew: What are some of the things that we can think about dripping out? It’s hard to come up with stuff to write to tell people about a product that they can’t even buy yet.

Ryan: Are you asking… Sorry, you’re breaking up at the beginning.

Andrew: What are some of the things that we can drip out over time?

Ryan: I actually think that it works really well to give away some of the best content or best parts of the product that you’re trying to get them to buy before it’s actually available. If you’re selling a course, things like snippets of video interviews, or maybe even a full interview that’s a part of the course. Chapters of a book. An extended trailer of a film. The first single off an album. All these types of things work really well.

What I’ve heard from a lot of people is that they’re hesitant to give away anything too good. They’re afraid people won’t buy the product. I think in some cases that might be true, but in most cases if you give me something really cool, my instinct going to say, “OK. There must be a lot more cool stuff in this product. I’d better get it.” I think in general, giving away the coolest, most awesome stuff to the list, especially as a drip sequence, is the best way.

Andrew: Okay. That’s easy to come up with. If we have the actual product, then slicing off pieces of it and handing it out is so much easier than trying to come up with yet another piece of content, and another, and another, and another.

All right. Let’s go on to the next big idea, which is to have a three-tiered pricing plan. I think everyone knows it, but I think it’s still worth explaining what this is.

Ryan: Yeah. Tiered pricing is basically the idea of rather than launching a product at a single price point, rather than selling a book at $5, rather than selling a course for just $25, you should have multiple product tiers at different price points with different levels of value. You have the basic edition at one price point, a mid-tier edition at another, and then a deluxe, extreme edition up at the high end.

Andrew: We talked about how one of the people who’s especially good at is Chris Guillebeau, here is one of the way’s he does it. So there’s three different packages, he puts check box next to each one. Software programs are really good at this but content creators like me often do it. And this is what you’re talking about. So Nathan Barry is someone who’s done this really well.

Ryan: Yeah, so Nathan has done an amazing job at this. He actually did it on all his products. And I think it stemmed from a conversation he had actually with Chris. Just in passing that Chris mentioned, you know Tier Pricing’s has actually worked pretty well.

And so Nathan actually tried it for his first product, it actually worked really, really well. And there’s a couple reasons why I think Tier Pricing works well, and we’ll talk about that first then we can talk about the specifics of the actual price points.

But I think Tier Pricing works well because we all have people in our audience, regardless of the size of the audience, regardless of how long you’ve been creating content. You have people who are, you know they have an expectation of how engaged they are, how excited they are about products.

And if you only release a product that is single price point you’re really limiting yourself. And you’re limiting yourself in for a couple reasons. The most of important of which I think is because people who are really engaged and really excited, you don’t give them an opportunity to fulfill their desire to get the most insane amazing package they can possible get. Even if it cost $250.

So Nathan’s case you can look at his App Design Hymn book or the Web App Book whatever…

Andrew: Let’s go look at. There it is.

Ryan: He was several different pricing tiers, that basically…

Andrew: Here’s the package for $249, we scroll down we see the book and videos for $99 and we scroll down below we see just the book for $39.

Ryan: Exactly, and I think those pricing points sort of cover all the different people in our audience. So you could have people that are just to get on your list, just checking it out. And they’re not ready to spend $250, but they might spend $29 on getting access to a new product you came out.

Versus people who have been on your list for three years been getting a bunch of value from you, love everything that you do. And they say, you know what I want the expensive awesome thing, because I want all the video interview, I want all the extra bounce content I want everything.

And for those people you don’t want to push them into just a small price point, if you only still want price point. You want to give them the opportunity to grab that highest price package and fulfill the desire they have for that.

Andrew: So lets’ look at some of his results. Here is one of the screen shots, one of the images you sent me. Can you describe what we’re looking at?

Ryan: Yeah, so this is an image that we sort of came up with, or our design team came up with, during a case study. Where we basically looked at with Nathan, and obviously with his approval, with the percentage of sales, so this is like the actual number of transactions for each product verses the amount of revenue, the percentage of total revenue for each product.

So as you would image the book is the $29, $39 package, the book plus videos is the $100 package, the complete package is $250 package. So as you would image more people on like a quantity level purchase the book, then purchase the higher price packages.

But the interesting thing is you look at the revenue piece and you see that more than half of his revenue, I think during this case study was maybe 54-56% of the total revenue of the product release came from that top package.

And so even though more people on an actual numbers bases are buying the lower price product which is what you would expect. The higher price packages which often we think about as something that maybe a few people would buy or maybe only a few people would be interested in actually make up the majority of the revenue, in this case more than half of the revenue from the product launch.

We’re talking about 50, 60, 70 thousand dollar product launch to a large audience that makes up a large amount of money just by having that complete package.

Andrew: And this is how you’re suggesting that we think about it. Let me bring up one more in here. This is how we think about the tiers.

Ryan: Yeah, so this is a talk I gave I think at Micro Comp last year. And I was looking up sort of what are the ideal pricing tiers because that’s a question that I was getting a lot I was like I know I should use tier pricing but what should those tiers be. And its hard question because I think it’s pretty contextual based on your audience, based on the product.

But what we found to be the highest converting tiers was and these are in multiple so it works for whatever price point you want to set. But 1X, 2.5X, 5X so if you’re thinking about your bottom package being $20, you’re middle package might be somewhere between $50, $60 I mean your top tier package should be $100 or more.

And that will feel really aggressive at first especially if it’s your first product launch to think about that extreme of a tier. It’s much easier to do 9, 20, 30 or something. But that’s really, you need that big of a spread to really push people into the correct package for them. What most people find is that the middle package actually just ends up working like a price anchor. People then either say, “Okay, I’m either going to just get the small package, or if I’m interested in the middle package, I might as well pay more and get that top package.”

Andrew: I see. That makes sense. I can’t believe that it’s working that well for so many of your people.

Ryan: Yeah. It’s unbelievable how well it works, especially just looking at how much more revenue you get because of it.

Andrew: Well, actually, I was going to ask about whether musicians can do it, but I guess the answer’s about to come up. Here, let me bring up the next big point, which is you want to determine your highest converting price point per product. What do you mean by that?

Ryan: This is a really, really important thing that I think there’s starting to be more people talking about. Hopefully, we can contribute to that discussion. I think that for specific types of products, you have to be in specific price ranges in order to convert well. This won’t work for everyone, but I think in most cases you can basically classify your product into an impulse buy category. Something that people are going to stumble upon, read, check out, and then decide, “You know what? That’s for me. I want it. Let’s move forward.”

Or something that people are going to have to think about for longer. For most people, this is anything over maybe $25, maybe $30. That would include things like what Nathan’s selling all the way up to $1000 courses. A lot of things that remit safety sales. Things like that that are things you have to think about a lot longer and really make a commitment to.

I think that it’s easy just to look at what a friend’s doing and then price your products accordingly. I think you have to think about the goals for the product, and then price it accordingly, based on what you think will convert well. If your goal is to just drive exposure, get your message out, build your audience, build your email list, then maybe it makes sense to release a $2 e-book. That might make perfect sense. It’s an impulse buy. It’s quick for people to buy. It’s easy for them to share with their friends. That’s a very quick and easy thing.

If your goal is to create something for a lot of value, to drive a lot of revenue, to spend a lot of time on, then a $2 price point is probably not what you want to aim for. You want to do something that’s much more in the $30 or $40 or $50 or much higher range.

I think it’s important, because we as humans have been conditioned to make assumptions about the value of the product based on the price point. If you tell me a car is $80,000, I’m immediately making assumptions about the quality of the car. Even if I’ve never seen it, never heard of it, I’m immediately thinking, “Well, since it costs $70,000, it must be decent.” Versus if you tell me, “Hey, I found this sweet deal on a car. It’s $1500.” Likewise, I’m immediately making assumptions on the quality of that car.

I think that we do the same thing in a lot of other things in life, including products when we look at them. I think thinking about what the type of price point you want to offer, the way you want to condition your audience, is really important. Both of these can be successful. It’s not to say that you can’t sell products at a low price point, you should only sell high price products. I think it’s important to think about your goals when you’re pricing it, and then optimize accordingly.

Andrew: Let’s look at an example. Is Eminem a good example of this? Is this a good place to bring him up?

Ryan: Yes. Eminem. That would be perfect.

Andrew: I didn’t know, by the way, until I saw the notes for this session, that Eminem is on Gumroad.

Ryan: He is. He is one of the many Gumroad creators.

Andrew: All right. How is Eminem using this idea?

Ryan: Eminem is a hip hop artist. Most people are probably familiar with him. For most of his career, he did the standard music/merch artist release strategy, which was…

Andrew: Yeah, what is that?

Ryan: You release an album, $9. Maybe the deluxe addition is $16. You sell some merch, and that’s sort of the…

Andrew: Merch meaning like a T-shirt for $25 to people who would complain that they have to pay that much for a T-shirt.

Ryan: Exactly. You have a store on your site. That’s what his audience was conditioned to. About four, maybe three years ago, his team had this idea. They actually looked at what Michael Jordan was doing with his shoes, with Nike. Every single one of the drops is very exclusive. It’s fixed quantity. They’re expensive. Everyone knows Jordans are expensive. If you’re going to buy Jordans, they’re going to be expensive. You’ve got to act quickly to get them. Most people don’t complain about the price of Jordans. They’re just excited to get them.

They said, “Well, Eminem is very iconic. He has this massive fan base.” He actually has the third largest Facebook page, with a hundred million fans.

Andrew: I had no idea.

Ryan: They basically said, “Let’s do the same thing.” They spent three years essentially conditioning his audience and his fans to this new strategy. They no longer sold products for a $12 beanie and a $15 hoodie or T-shirt. Everything was exclusive, limited edition, limited quantities, never going to be made again. And so now if you check out his Facebook page on any given week. Almost every week they drop a new exclusive something, it’s a hoodie, it’s a pair of shoes, it’s a beanie, it’s a t-shirt.

And the price points are very high. You’re not buying a t-shirt for $20, the t-shirts going to cost $55 and the hoodies going to be a $130. But the audience knows there’s only going to be a thousand of these made, there’s only going to be 2500 of these made, once they’re gone they’re gone.

Maybe they’re going to be collectible there’s going to be a lot grad in terms of your friends are going to be jealous whatever. And it basically totally conditioned his audience to now understand that everything that Eminem puts out is a high quality, high price point product. Its limited edition and you better act quickly because it’s going to sell out in seconds or minutes in those cases.

Andrew: Let’s look at that on his Facebook page, see if I can bring it all up fast enough. This is his Facebook page, here is pre-order bundles now available including prints of the original written lyrics to Lose Yourself. If we click over and check out the next tab we can see there it is a thousand bucks for this print. Two disk CD and hand signed canvas print.

Ryan: Exactly and this thing is selling very, very well. And this is a great example of there’s very few artist that could put out a thousand dollar item of any type regardless of its signed or not. And not have a massive revolt on their hands or just not sell any.

But over the course of three year Eminem has completely commissioned his fans to know that he’s going to put out this type of exclusive awesome products, and the love it they eat it up. I think this is great example of the importance of sort of understanding that your audience is going to be conditioned to what you price your products at. And if you work hard and you sort of are very intention about it you can build sort of an exception around price that can be very locative in terms of driving a lot of revenue.

Andrew: By the way I thought that Gumroad was just for digit sales I didn’t realize you guys do stuff like this.

Ryan: Yeah, so we’re slowly expanding in the physical. It’s very complicated with fulfillment and all that.

Andrew: Who does the [??]?

Ryan: We just partner with a couple different filming companies. So not in house. Fulfillments not something you want to be involved in actually.

Andrew: No you don’t, it’s really tough.

Ryan: Yeah.

Andrew: All right but that’s good to know. All right and we’ll come back in the end and talk about how the first story that we started telling at the top of this interview with I guess it was … let me see what his name was…

Ryan: Sasha, right.

Andrew: Yeah, well talk about which one of these ideas Sasha used and how well it worked for him.

Ryan: Yeah, absolutely.

Andrew: The next one is to pick that tactics that work for your audience and there’s one person who I know has been doing especially well with you guys Kyle Webster. What does Kyle sell?

Ryan: Yeah, so Kyle. Kyles actually an incredibly talented artist, who does a lot of illustrations for the New Yorker and the New York Times, Time magazine. And his entire career has been doing basically contract freelance illustrations.

Andrew: Is this his work?

Ryan: Yeah, totally. And so he over the course of the last 25 years grew a little bit just unhappy with the current photoshop tool that were available. And so he actually started designing his own brushes. He would build his own photoshop brushes.

I’m not an illustrator but from what I understand like the brushed you use in photoshop are very important and it’s sort of like the type of pencil you use to draw, it’s a thing. And so he decided after maybe five or six years that maybe other people would want these bushes too.

And a year and half ago decided to just put a brush out, and see how it worked. He launched a brush, said hey this is $3 just put it on Twitter, put it on Tumbler and it blew up. He made I think almost a thousand dollars off that brush. By just releasing it and saying, hey all my illustrator friends you can have it.

So fast forward to today a year and a half later Kyle has crossed over $250,000 in total brush sales closing in on $300,000. And now makes more money selling photoshop brushes then he does from his other sort of contract work. Because he doesn’t need to do as much of that anymore. He just does it when he enjoys it.

And what I think is really interesting about Kyle is that there’s a lot of blogs, there’s a lot of articles about how you market product this is how you do it, this is what works. But I think there’s this element of like you have to know your audience, and you have to know what they’re going to want what they’re going to be excited about and what’s going to convert.

And so with Kyle he tried a few different things, he tried doing guest post, he tried building an email list. And does some stuff with email that works decently well. He tried a couple sort of leveraging his press contracts to get a few really, really big, you know, pieces and New York times people like that, and none of these thing really converted. But what he found was that most of his audience, and then most of the other illustrators, were very, very active on Tumblr. And so what he decided to do was just throughout the week he would post different things he was drawing on Tumblr and tons of people would reblog them, which is like the Tumblr equivalent of a retweet and share them and say this is amazing, this is amazing work, and then every Monday, he does what’s called mega-pack Monday, and so he basically gives away a mega pack of his brushes, which is all the brushes he has. He sells them for 30 or 40 bucks.

Andrew: Let’s look at that too. This is his Tumblr page, right?

Ryan: Yeah.

Andrew: And here is what a mega pack looks like, right? Kyle’s ultimate mega pack for Photoshop.

Ryan: Exactly.

Andrew: Let’s click on that. And that takes us over here.

Ryan: Yeah. So that’s his gum road profile. And so what he does, he says, this is mega pack Monday. Anyone who reblogs this on Tumblr will be, or retweets it on Twitter, will be entered to win a free mega pack. And what happens is, you know, if you look at some of these posts, they’ll have like 3000 reblogs of people that want to win. Their friends see it, they want to win. They just get incredible, incredible engagement because people want to win these free mega packs, but then in the posts is a link to his store, and so he’s able to generate a ton of traffic to his store from people that are basically entering to win this thing. It’s not something that I would think about as a main marketing channel for products; I don’t think much about Tumblr. I had no idea that this whole audience exists, but he’s basically built, not his entire business but a massive percentage of his business, on this Tumblr audience.

I think it’s a great example of learning where your audience is, learning how they engage with you, learning how they engage with other people, and then just playing your cards to that and not necessarily spending time on what everyone else thinks will work really well, or your sort of prescriptively says “hey, you should do this”. But just learning what works and then doubling down on that, and I think he’s a great example of how you can be incredibly, incredibly successful, you know, if you find something that works and double down on it, even if it’s not like a conventional marketing tactic.

Andrew: And know what, it’s so much easier than guest blogging on other sites.

Ryan: Exactly. Writing 30 guest blog posts.

Andrew: And hoping that they’ll work. Here, I think this is one of them. I was searching a moment ago, and you can see that people are starting to. There it is.

Ryan: Yeah. It’s just insane.

Andrew: Reblog, reblog, reblog, reblog. And this is the way that he’s promoting it today: “great new pencils for Photoshop designed by Kyle included in every single mega pack. 3PM Eastern, Kyle. Reblog and win. Reblog this post for a chance to win a mega pack of photoshop brushes, yes, the same brushes used by artists at Disney Dreamworks.” Well, great. He’s done incredible work. I mean, just looking at him in preparation for our conversation, I didn’t realize how many places his work was featured. Here’s one…

Ryan: Yeah. It’s amazing.

Andrew: that’s on the Washington Post, on the cover.

Ryan: Yeah. He’s incredibly, incredibly talented. And what’s cool about the story, he’s able to now just do what he loves, which is do illustrations, and he’s not now bound by making sure that he can make enough money from this illustration work. He just does it when he enjoys it, when he’s excited about it, takes projects that he’s excited about it and is able to have a very healthy income stream on the side through his brush sales.

Andrew: Okay. The next big idea is keep pushing to drive ongoing revenue, and I think now we’re going to talk again about Sasha, so why don’t we look at all the points up here. Which of these is the one that helped him get to 300,000 the most? Which of the ones that we’ve talked about so far before we get into keep pushing?

Ryan: Yeah. So the tiered pricing is definitely the one that was the game changer for him. And I can tell a little bit of the story around that, and then also, he did a great job of this last tactic, keep pushing to drive ongoing revenue. He was able to really leverage a lot of cool stuff to keep that revenue coming in after the product launch.

Andrew: So, for tiered pricing for him, he started out with 5.99 ebook.

Ryan: Yep.

Andrew: What did he do to add to that?

Ryan: Yeah. So, Sasha, Sasha’s awesome because he actually was very staunch on how he thought that tiered pricing was not a good idea and very public about it.

So him…

Andrew: Oh, really.

Ryan: …and a few other people sort of had a little, it was like a little thing, sort of in jest but there were some sort of notes of seriousness, and he was sort of very against this idea, and what was awesome is he sort of saw it working. He was working on this new project called Discover Meteor, which is a book on Meteor JS, and he was able to sort of see what was working with this tiered pricing stuff. I was actually jamming with him on twitter in preparation for this to get some data points, and the Discover Meteor book that he launched with tiered pricing has actually done about 10X, more than 10X actually now in total revenue than the step by step UI design book.

What he noted to me, which I thought was very fair, was that it’s sort of like comparing apples to oranges. They’re different books with different audiences. What he did, which I thought was perfect, is he went in and backed out how much revenue he would have made with the exact same number of sales if he only launched Discover Meteor at the lowest price point.

We did the math together, and basically found out that by having tiered pricing for Discover Meteor, he was able to drive 52% more total revenue over the course of a year and a half. Just by having tiered pricing. For those of you that know Sasha and how well he does this, those are no small numbers.

He’s an incredible marketer and understands these things really well. He gave me permission to share his numbers. It’s over $100,000 in revenue from this product that is directly attributable to tiered pricing that he was able to earn as a function of using tiered pricing versus just a complete, flat, one-stop pricing model.

Andrew: Let’s look at what we were just talking about. This is the book?

Ryan: Yeah.

Andrew: If I click on “Get the Book” I can either pick the $29 option, or I can see the $89 option, or the premium option for $179. He’s definitely using that. The next point is you’re saying we should keep pushing to drive ongoing revenue. What did he do after that?

Ryan: I don’t know if you have it. I included a sales graph of him. We did a case study with him, so he gave us permission to prove this. This was done about a year ago. This is his sales graph over the course of a year. May 7, 2013 to May 7, 2014. Just about six months ago. At this point, he had done $240,000 in product revenue.

For most people, what happens after you launch a product is you launch a product, you spend a ton of energy around launch. You do guest blog posts, you do a bunch of marketing, you do ads, whatever. Basically, all of your revenue comes in the next two weeks, three weeks, four weeks. After you’ve hit two or three months after the product launch, for most people, they’re making almost no revenue off their product. They’re already thinking about the next product.

What Sasha did was he very much viewed this book and this product as something that was going to function more like a subscription software platform than a book. He wasn’t interested in just launching this, making as much money as he could, and then moving on to the next product. He wanted to really invest and spend time on this. He spent a lot of time creating it and spent time promoting it and trying to build something amazing.

What you’ll notice is he has the big spike on launch day, which everyone has. That’s what everyone generates. Then you’ll notice that he’s been able to generate consistent sales of several thousand dollars a day. There’s actually a slight upward trend towards the end of the graph where he’s learning what works well, what marketing things are converting, what can we keep doing. He’s been able to drive between $5000 and $10,000 a week in sales, continuously, of this product.

There’s a few things that I think worked really, really well for him. The first being that he is just in general an incredibly hard worker. He spends a lot of time on this, has learned what works really well. He basically was able to leverage the things that were happening in the Meteor community. Meteor is a JavaScript framework, for those of you who aren’t familiar. JavaScript framework, it’s being updated constantly. There’s new things happening, news coming out.

What he did was he leveraged all these things that he could add as updates to the packages. A new version comes out, he’s able to record a new interview, whatever it might be. He adds these to the packages, and then he leverages those as marketing opportunities. He’s continuously working to add more things to the packages, to add more value.

He’s able to blast out to his list and say, “Hey, just added these four things. It doesn’t look like you’ve bought it yet. We’d love to have you pick it up today. It’s much more valuable than it was a week ago, and we’ll keep adding cool things.”

The interesting approach that I think he took to the email piece of it is a lot of us, if you launch a product, you immediately think, “Okay. I have this big list that I built up with opt-in forms, getting people primed for the product. I used drip marketing and I launched the product. I emailed everyone a couple times, but the launch is over now. Let’s just merge those two MailChimp lists. Those people will just be on my regular newsletter now, and we’ll go from there.”

Sasha didn’t view it that way. Sasha viewed everyone who was on that pre-launch list as an opportunity to make a sale and a sale he needed to earn. Anyone who makes a purchase is removed from that pre-launch list, but everyone else on the pre-launch list is still, to this date, getting emails that he’s writing, that he’s sending and saying, “Hey, here’s things we’ve added. Here’s some cool news in the Meteor community. Here’s a few snippets of the book. Here’s some new content you can check out. We’d really love to have you make the purchase, buy it”, whatever, basically still getting marketing emails, and he would use the outcome as complete binary.

So either these people are going to buy the product, or they are going to unsubscribe, and there is no in between. So he is able to drive all of this ongoing revenue because he is still using drip marketing a year and a half after launch, which is unbelievable to me, and it is awesome, and it makes so much sense. But I think it is easy to just, it is not necessarily laziness, but you just think, “Okay, the launch is over, there is no need to keep doing this.” But I think what you see is, you know, literally, he has been able to earn, you know, hundreds of thousands of dollars now, as a function of still keeping the pedal on the gas, and still, you know, being able to drive a lot of these sales through things like drip marketing, updating the product, all that kind of stuff.

Andrew: That approach really appeals to me, because I interview authors all the time who write a book, and once they are done promoting it, they are onto the next thing, and it is like they forgot about those old ideas.

Ryan: Oh, totally.

Andrew: They are gone.

Ryan: Yep.

Andrew: Well, this makes so much sense, and like you said, you learn more about how to promote, you learn more about how to sell it, you learn more about what to say to people, how to make it useful. That makes a lot of sense to me, and I am glad that he is doing well. Can I say the revenue number that he has for what he is doing per day now?

Ryan: Yeah, totally.

Andrew: Okay, I have it in my notes here, he is at about a thousand bucks a day right now.

Ryan: Yeah, he is doing amazing.

Andrew: That is fantastic. Alright, onto the big board for the final point, which is to use concentric circles of people hearing about your launch.

Ryan: Yeah, so this one, I think we talked about briefly. You know, there is not a ton to say on this. I think the main point here, I think, is to think about, you know, everyone has their core audience, which are people on their email list, people that are, you know, following them on Twitter, and really engaged there, people that read their blog on RSS. And then we have sort of a larger circle which are people that maybe occasionally read the blog, occasionally, you know, check out Twitter or Facebook, and then there is sort of a larger circle which is the people that are sort of generally interested in the things that I am writing about.

Maybe they follow other bloggers that are interested in what I am writing about, maybe there is some overlap there. But there is sort of these circles of engagement, and I think when you are thinking about a product launch, or you are thinking about even just building an audience, thinking about how you are targeting each of those circles is really, really important. And I think, you know, one of the reasons advertising works so well, even for huge, expensive products like cars, you know, wedding rings, things like this, no one is expecting, like Toyota is not expecting me to go out and buy a Corolla because I saw one television ad, and I am immediately thinking, “Okay, well, I will go spend, you know, $25,000 on a Corolla.”

They are thinking that I am going to see a television ad, I am going to see another one in two weeks, I am going to see ten more over the course of the next six months, two of my friends might get a Corolla, I might test drive it with them, I might like it, and then my car breaks down, and I need to go buy one, and I am thinking, “Oh, the Corolla is cool.” So the whole point of advertising and marketing even is getting people to have multiple touch points with your product, multiple experiences with it, and I think often with product launches, it is easy to think, well, I am just going to blast my email list, tweet a couple times, and then you know, I will be good, and the people who will to buy it will buy it.

But you know, especially for people who are not in that core concentric circle, for people that are outside that in your sort of larger audience or people that are just fringely involved in your audience, it is going to take multiple touch points, multiple times of them being exposed to the product for them to actually make the purchase. And so, when you are thinking about, you know, whether it is guest posts, whether it is getting people to tweet and Facebook about it, whether it is getting people to do, like if you are doing a joint venture deal, and having someone email their list, thinking about those circles, thinking about where people are targeted on those circles, and having different approaches for each of those, I think is really important, and understanding the idea that people need to get hit multiple times with it.

And you know, the chance of you tweeting about something and saying, “hey, you know, this is the guy I interviewed on Mixergy, he just came out with a book; it is really cool.” I might check it out, maybe I will buy it. But if you tweet about it, and then I get an email from a friend saying, “hey, this book is really good.” And then I see another tweet about it, I am much likely to then make the purchase.

Andrew: That makes sense. This has been fantastic because it is all usable, it is all practical, we do not have to do every single item on the big board that we talked about today. We can pick one or two of them, and apply those, and then go back and get more.

Ryan: Totally.

Andrew: I especially like to hear about how Sasha was against one of these ideas, ended up using it, and today he is open about how effectively it worked for him.

Ryan: Yeah, totally.

Andrew: So the company, of course, is Gumroad. Is the best place to follow you, is it your Twitter account?

Ryan: Yeah, Twitter, or my personal email is just the letter “R” at Gumroad dot com.

Andrew: R@GumRoad.com What is a good…

Ryan: Yeah.

Andrew: What is a good contact for you?

Ryan: For email?

Andrew: Yeah, I mean, what kind of email do you want? I do not just want to ask people to hit you with email and flood your inbox.

Ryan: Anything I can do to help. Seriously, I give out my email publicly, it is in my Twitter bio, whatever, if you have questions…

Andrew: I have got it right here.

Ryan: … About any of this stuff, anything we can do to help, definitely feel free to hit me up. And then we also have a resource center where we share a lot of these types of, you know, key studies.

Andrew: Where is it at?

Ryan: If you go to, let me get the URL for you. It is GumRoad.com/resource-center

Andrew: Alright, let’s see, resource dash center, and I see my typo there, I will fix it right now, real time. There it is.

Ryan: So, interview with Chris Guillebeau, a bunch of case studies. There is a case study on Sasha, a case study on Kyle Webster, who we mentioned…

Andrew: Mm-hmm.

Ryan: … A bunch of sort of guides on how to build an audience, marketing strategies, all that kind of stuff, so a lot of things that we talked about are highlighted here. Hopefully, you know, super valuable information.

Andrew: Yeah. This is really well done. One of the things I always admired about you guys at Gumroad is your design. It is just so…

Ryan: Yeah.

Andrew: It is so beautiful, easy to read, and incredibly helpful. Thank you so much for doing this.

Ryan: Absolutely, thanks for having me, Andrew.

Andrew: You bet. Thank you all for being a part of it. Bye everyone!

DOWNLOAD TRANSCRIPT

Master Class: How to increase your online business’ value(To sell it for more) Taught by Thomas Smale of FE International

Master Class: Increase Your Startup’s Value

Course Leader: Thomas Smale, FE International

Master Class Toolbox

Transcript(show)

Master Class: How to boost your productivity(By journaling) Taught by UJ Ramdas of Intelligent Change

Master Class: Journaling

Course Leader: UJ Ramdas, Intelligent Change

Master Class Toolbox

Transcript(show)

Master Class: How to find your calling Taught by Jeff Goins of GoinsWriter

Master Class: Find Your Calling

Course Leader: Jeff Goins, GoinsWriter

Master Class Toolbox

Transcript(show)

Master Class: How to create an inbound sales machine(to maximize conversions and paying customers) Taught by Steli Efti of Close.io

Master Class: Inbound Sales Machine

Course Leader: Steli Efti, Close.io

Master Class Toolbox

Transcript(show)

Master Class: How to productize your service(And break free of hourly billing) Taught by Brian Casel of Restaurant Engine

Master Class: Productize Your Service

Course Leader: Brian Casel, Restaurant Engine

Master Class Toolbox

Transcript(show)

Master Class: Connect with influencers(To accelerate your startup’s growth) Taught by Selena Soo of S2 Groupe

Master Class: Connect with Influencers

Course Leader: Selena Soo, S2 Groupe

Master Class Toolbox

Transcript(show)

Master Class: How to get featured in publications(Like TechCrunch) Taught by Conrad Egusa of Publicize

Master Class: Getting Featured

Course Leader: Conrad Egusa, Publicize

Master Class Toolbox

Transcript(show)

Master Class: Generate 200% more traffic(Through referral campaigns) Taught by Dan McGaw of Fuelzee

Master Class: Growth Hacking

Course Leader: Dan McGaw, Fuelzee

Master Class Toolbox

Transcript(show)

Master Class: How to launch a profitable YouTube campaign Taught by Eric Siu of Single Grain

Master Class: Profitable YouTube Campaign

Course Leader: Eric Siu, Single Grain

Master Class Toolbox

Transcript(show)

Master Class: How to increase conversion(Through research) Taught by Peep Laja of ConversionXL

Master Class: Conversion through Research

Course Leader: Peep Laja, ConversionXL

Master Class Toolbox

Transcript(show)

Master Class: How to design for credibility(So you can reverse engineer beauty) Taught by David Kadavy of Design for Hackers

Master Class: Design for Credibility

Course Leader: David Kadavy, Design for Hackers

Master Class Toolbox

Transcript(show)

Master Class: How to launch (and price) your product Taught by Ryan Delk of Gumroad

Master Class: Launch Your Product

Course Leader: Ryan Delk, Gumroad

Master Class Toolbox

Transcript(show)

Who should we feature on Mixergy? Let us know who you think would make a great interviewee.

Master Class:
How to increase your online business’ value
(To sell it for more)
Taught by Thomas Smale of FE International

Transcript

Master Class:
How to boost your productivity
(By journaling)
Taught by UJ Ramdas of Intelligent Change

Transcript

Master Class:
How to find your calling
Taught by Jeff Goins of GoinsWriter

Transcript

Master Class:
How to create an inbound sales machine
(to maximize conversions and paying customers)
Taught by Steli Efti of Close.io

Transcript

Master Class:
How to productize your service
(And break free of hourly billing)
Taught by Brian Casel of Restaurant Engine

Transcript

Master Class:
Connect with influencers
(To accelerate your startup’s growth)
Taught by Selena Soo of S2 Groupe

Transcript

Master Class:
How to get featured in publications
(Like TechCrunch)
Taught by Conrad Egusa of Publicize

Transcript

Master Class:
Generate 200% more traffic
(Through referral campaigns)
Taught by Dan McGaw of Fuelzee

Transcript

Master Class:
How to launch a profitable YouTube campaign

Taught by Eric Siu of Single Grain

Transcript

Master Class:
How to increase conversion
(Through research)
Taught by Peep Laja of ConversionXL

Transcript

Master Class:
How to design for credibility
(So you can reverse engineer beauty)
Taught by David Kadavy of Design for Hackers

Transcript

Master Class:
How to launch (and price) your product

Taught by Ryan Delk of Gumroad

Transcript