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Hey, there, freedom fighters. My name is Andrew Warner, and I’m the founder of Mixergy.com, home of the ambitious up-start. In this interview I’m going to found out how a copywriter who maxed out his credit cards ended up building and selling a multi-million dollar lead business. Ross Gordon is the CEO of Jack Craft. Excuse me. Ross, I did it again! I prepped and prepped and prepped and that’s where I screw up?
Ross: Strike three and you’re out. You have two.
Andrew: Let me say it again clearly for the audience. Craft Jack, Craft Jack, craftjack.com.
Ross: My sign is throwing you off. It’s the reverse.
Andrew: You have the sign. I think you’re wearing it on your hoodie. I’m obviously reading from my notes and for some reason my mind goes to the second word. Craftjack.com, which sells leads to contractors. You started the company in 2011 and sold it the following year. We’ll find out how he did it. Ross, welcome.
Ross: Thanks. Thanks for having me. I appreciate it.
Andrew: When you told your wife you wanted to start this business, what was her reaction?
Ross: It’s interesting. At the time I was getting ready to leave my job at Leo Burnett. I was a copywriter and I had kind of gotten into the lead generation industry as an affiliate marketer. Basically, I was selling leads to other companies that now do what I do. I’d built up some revenue on the side and I was doing this part time when I was at Leo Burnett. I had been thinking, though, I’m starting to make a bit a little bit more money doing this. It’s almost getting to the point where I’m making more now than I am at my day job. I wonder what my wife would think about me doing this full time. We had just had our first child at the time. I had a daughter. This was back in 2007. I remember sitting in my bed with my newborn daughter in one hand, my affiliate marketing in the other hand trying to do both. Then that was the time I said to my wife, “Hey, I’m thinking about doing this. I’m thinking about quitting my job to go full time at this. What do you think?” It was pretty much like, “No. That’s not happening.” I’m very risk averse and she’s not as risk averse as me, and so even though I started…
Andrew: You mean the other way. She’s risk averse and you’re not risk averse.
Ross: Sorry. Correct. Exactly. There you go. She is very risk averse and I’m not risk averse, and so it’s been a very good balance for us in our relationship. But obviously when there’s a big moment like this and I kind of went, “Yeah. Let’s just quit my job and go all in…” We had great insurance and all this stuff and here I wanted to leave all that. She was definitely nervous about all that at first.
Andrew: And we’re going to see that concerns made sense.
Ross: She had valid concerns, yes.
Andrew: Absolutely.
Ross: As always.
Andrew: Now you were doing… What kind of affiliate work were you doing and how did being a copywriter help you do it well?
Ross: I was primarily doing home improvement lead generation. I don’t know if you know a lot about affiliate marketing, but there are a lot of different niches that people focus on and some of them can actually be very shady things like dieting products and business eBooks and stuff like that. When I was trying to figure out what to promote I wanted to stay away from that whole thing, and I was trying to find a niche that I could feel comfortable promoting. I kind of stumbled into this home improvement space. Basically what we were doing is we were generating leads on a landing page and you’re selling those to other companies who then resell them to their end user. You’re just a middle-man, essentially. What I found is a lot of the lead gen space really lacks a lot of creativity and innovation. Everyone kind of just puts up very direct marketing style campaigns. You’re just trying to capture the lead. You don’t really think about a brand. You don’t really think about anything beyond getting someone to fill out that form. Being a copywriter, I’m always kind of thinking, ‘what’s the bigger picture here; how can I relate to the consumer on an emotional level?’ That really helped me start to plan out my landing pages, making it more about just capturing the lead but what’s the end value I’m providing to the user. It helped me with writing ads and Google AdWords and all the creativity really helped me kind of think through it.
Andrew: Do you have an example of an ad that you wrote differently because you were a copywriter or a point of view that you understood that the average person wouldn’t?
Ross: Oh man, it’s been such a long time. I guess it was in terms of thinking about the landing pages that we were building. How do we make that emotional connection? So a lot of people, when you’re designing a landing page, you’re going to have your form, really easy, you have people fill it out and you’re basically just going to say get a free estimate. That’s pretty much what you say.
The first one I was doing was a website called Estimate My Pool, so it was for swimming pool leads. It became more about putting people to think about what their life is going to be like after they have a pool. It’s really glamorizing it and making them feel like this is an exciting point in their life. They’re starting to think about getting a pool, getting estimates, let’s make this an awesome process for them. So it was really working in design elements and little copy elements that kind of really hammered home the big picture.
Andrew: I see. How long did it take you to start making some real money with affiliate marketing on the side?
Ross: Oh man, affiliate marketing is an interesting journey. When I first started, I was losing money. Essentially what I was doing was I’d advertise on Google pay-per-click ads, you’d see on the side, and I’d lose $25 a day and then $100 a day and I was kind of like, crap, this is no good. I’m supposed to be making money here, not losing money. Then you could start to optimize and see what’s working and what’s not working. Eventually you have this day where you break even and it’s a great success, it’s awesome. And you have some data to work off of because you see, OK, that worked. All this other stuff didn’t work. This one thing worked. Let me just stop focusing on everything else and pick this. So you start to optimize against that and eventually you start to make a little bit of money.
So in terms of the timeline, I mean, the first couple of months I was just losing money. It wasn’t a lot of money, I was pretty limited with my budget. But losing 50 bucks a day, it adds up, you know?
Andrew: Yeah.
Ross: After a couple of months, you start to break even and then by the third or fourth month in, you’re making a little bit of money. That started to build over time for me.
Andrew: Why don’t we take a side (?) just for a moment to talk about something called The Name Engine.
Ross: Yeah.
Andrew: What was that?
Ross: This is kind of what got me into affiliate marketing in the first place. I had never heard of affiliate marketing. When I first got out of school, I was working for a very small web design company in Chicago called Infotube. It was a five person web design shop working for small businesses. We had a client who was building this website called The Name Engine. The whole purpose of his site was pronouncing people’s names for you. So you could look up an athlete or a celebrity or whatever it was, click on the little microphone and it would be like a pronunciation of their name.
So I’m kind of asking the guy, this is an interesting site, but I’ve got to ask you what’s the deal here? Why are you doing this? And he said, I read this book from a guy named Joel Comm, it’s called The AdSense Code. It’s kind of like The Da Vinci Code; it’s a spoof on that. It’s kind of like here’s how you can make so much money online, you’re not going to know what to do with yourself. You build a little website and you make money. It was through Google AdSense, which is basically Google’s publisher platform. You see those ads on the side of the site. People click them and you get paid.
So he said, “I want to make this site which people are going to come to to look up names and I’ll show ads on there and I’ll make some money from it.” Being a project manager at that point, I said, well, I’ve got to read this book too because I have to understand the project and the background. I read the book and then I got hooked on this whole thing. I’m like, wow, you really an make money online. This guy’s obviously making a lot of money. If he could do it, I can do it.
I got the book and that’s when I said, you know what? I’m going to start a blog. I started a blog. At first it was just a personal blog to learn the ins and outs of Blogger. Then I wanted to start my first AdSense blog to make money. I started a blog called Free Stuff Finder. We were just posting free samples that companies were giving away. We’d post them to our blog. My wife is really into free samples and so I would just kind of go to all the sites where she was finding them and repost them.
In the early days, the way I was making money was in the free stuff section of Craigslist. I would take the posts and I’d post them in the free stuff section of Craigslist saying look at all of these free samples. I’d make $10 off the ads and then I’d get flagged for spam and taken down. I realized it wasn’t a very scalable solution and I kind of stopped doing that after a couple of weeks of spending hours a day posting and having them deleted minutes later.
Andrew: But you learn a lot as you play around with these different ideas.
Ross: Totally. I mean, I learned how to use WordPress and Blogger and what’s working and what’s not working. That was a very good learning process for me.
Andrew: What ended up happening to The Name Engine?
Ross: That company I was with, Infotube, went out of business and I was out of a job before I got my job at Leo Burnett. I don’t think anything ever happened with them.
Andrew: So you can’t make a lot of money by having a website that teaches people how to pronounce names and hopefully makes millions off of that?
Ross: Yeah. I don’t know if name (?) most lucrative niche, I’ll put it that way.
Andrew: Alright, so now, you’re doing well as an affiliate and that’s what leads you to start your own business. Why?
Ross: Well, I was doing this as an affiliate. I got into the home improvement space and I was selling it to these companies who were selling it to contractors and eventually you realize, ‘Hey, I’m just a middle man here. I could obviously be making more money because they’re making money off what I’m selling them so if I could sell to the un-user, I could probably make more money.’ I figured, you know what, this is pretty easy. I’ll just start a little network where I’ll sell these to contractors. I was pretty soon to find out that it was not as easy as I had anticipated it was going to be, but that was the initial thought is; ‘Hey, I can just sell these to myself.’
Andrew: Do you remember how much money an affiliate program would pay you as an affiliate per lead?
Ross: Yeah, it would vary. For the swimming pool leads, which was the category I started in I worked out a direct relationship with the company selling it to the contractors, so I think I was making 10 dollars for every lead. I started doing house painting leads after that, I was making 16. It’s going to vary. There’s some trades where you can make up to 40, 50 bucks, but they’re also really competitive and they’re really expensive to generate. Then there’s some where you’ll make a couple bucks. It’s really proportionate to how competitive the niche is.
Andrew: Despite your wife’s apprehension you started the business anyway, right?
Ross: Yeah, I had quit Leo Burnett when I was an affiliate, but before I had started this network, I had basically started a company called Tribe Nine Interactive, which was like a parent company for all my affiliate sites, and I was doing some client work too on the creative side. I still needed to fulfill that part of myself that needed to do branding and stuff.
I Started Tribe Nine Interactive, I had to convince her to let me do that. At that point I really had made the case like, look, ‘I’m just an affiliate. I’m spending a few hours a week doing this. I’ve already matched my income from what I’m making at Leo Burnett. Let me take a shot.’ She eventually supported me in doing that.
Interviewer: Alright, that makes sense. Jeremy who pre-interviewed you asked you, “What’s the first step you took?” and you surprised me with your answer. You said, “I want to hire a salesperson.” Why?
Ross: Yeah, I quit my job at Leo Burnett, I started Tribe Nine Interactive, affiliates going well, I wanted to start my own lead network. I said, “I need to get contractors, how am I going to get these contractors on board?” One of them is obvious, I could sell them myself. Being that I kind of wanted to get them on board fast, I wanted to be devoted to that. I figured the best approach for me would be to find a sales guy I could trust, that could kind of come on board help me start calling contractors, really wrapping that side of things up.
Andrew: You figured alright, these guys, they’ll bring them in and I’ll make enough money to cover their salary.
Ross: Exactly, if I could work out the commission structure appropriately, I could cover them. I could still focus on building up the product and the search engine marketing and all that stuff which is—SS—
Andrew: You hired a guy named Noah, which was a friend of your wife’s, what happened to Noah?
Ross: Noah’s a friend of mine. He was an architect at the time. I had met him in high school and we had been friends for a while and he did not like architecture. He’s a really good people person.
We were at a wedding together and we were talking out in the hallway. He was telling me he didn’t like his job. I was like, ‘You’re a great people person, I need a sales guy. What do you think? Do you think that there could be something here?’
Obviously, when you’re working with friends, you’re always hesitant to do something like that and get involved on that level, but for both of us it made sense. He really wanted to get out and I really needed a salesperson. We hashed out the details at the wedding, out in the hallway in the lobby over a few drinks, and we made a plan. This was in the summer, maybe mid- summer. The plan was let’s get you on board by September. ‘You’ll put in your two weeks and let’s do it. Let’s see what happens, so that’s what we did.
Right after I brought him on board and gave him the offer, he was on vacation before he finished up his other job. He actually came down with West Nile Virus. It knocked him out for about six months to recover, but the first three months, he was out. Here I am, brand new company, trying to get off the ground. I think I have a sales guy and we’re going to hit the ground running. Boom, West Nile Virus, we’re not making any sales at that point. That was a bit of a… threw me for a loop definitely.
Andrew: Ross, when you go through that as an entrepreneur, do you start to feel like your world is crumbling? Do you start to say, “Why me,” or “Everything’s not going right for me, I’m just not made to be an entrepreneur.” What’s the negative chatter that goes on in your head?
Ross: I think as an entrepreneur, that happens a lot. Every time you hit a wall you start to wonder, is this really going to work? With Noah having West Nile, It was before we had hit the ground running so it didn’t deal a huge blow to me in the sense like, “Oh, man. This isn’t going to work.” It just delayed things, but I had still income coming in. In general, that feeling happens a lot. There are times when you plan on launching something and it doesn’t go according to plan.
This might be something we talk about later, but this may be a good point for it, there was a part in our business where we wanted to expand into Windows leads, expand our trade. We had this plan of working with this big national company who we thought was going to give us national coverage. We thought we were going to make a killing, and so we launched Window Leads. What ended up happening was we just… The first month we lost $15,000. The next month lost… We ended up losing $40,000 or $50,000. The thought was we know this national company is going to come onboard and we need the data, so we have to keep getting these leads so we can… And it never worked out with them. The person who was in charge of the deal left that company and it all fell through, essentially. Here I am feeling like, wow, we just wasted a lot of money on this. I had that feeling you just talked about – everything’s kind of closing in on you.
Andrew: Do you remember what those thoughts are? You’re a guy who’s really in touch with what’s going on in your head. What went through your head at the time?
Ross: You start to doubt your strategy. You start to wonder, “What was I thinking? Why would I let this run? Why would I spend money without being able to…?” All these things that seem so obvious to you when you’re doing them, you all of a sudden start to question everything. Was that really the right call? And then you start to doubt your judgment in general. Well, if I made that mistake here, what about my other strategies? Am I making the wrong calls elsewhere? It’s a good thing to have because it makes you question yourself and really look through things. I think most good entrepreneurs find a way to persevere through that. You look at the successes that you’ve had and you reassure yourself. OK. I made a bad call there, but I’ve grown our revenues this amount and I’ve done all these other good things. You start to get back your confidence as an entrepreneur if you can isolate what you’ve done well.
Andrew: I see. So that’s the way you combat it, by saying, “Yes, all these things I’m not really happy with,” but you start to make a list of things that you are happy with, all the things that you did do well.
Ross: Yes. Exactly. Like I said, when you start to doubt your judgment you wonder are all your choices this bad. Then when you see the things you’ve done right, it’s like, “I know what I’m doing; I made a mistake there and I’ll learn from it,” but my confidence as an entrepreneur is still there.
Andrew: Sometimes when I do that I feel like I’m being a Pollyanna because I feel, “Well, I screwed up over here, I didn’t do well there, I don’t know where I’m going,” that’s what’s happening to me. What am I going to do now? Stop and compliment myself for getting up in the morning? Compliment myself for having a good smile today? Do you feel like that?
Ross: That’s interesting. I think what it comes down to is you have to find the things you know you’ve done really well. Not that you’re convincing yourselves, “Oh, yeah, we made a pretty website,” it’s backed by numbers. We had this strategy and our revenue doubled this year; or we signed up x amount of users with this ad campaign and it was awesome. We’re doing some things that are awesome and maybe we’re doing some things that flopped, but you’re never going to discover the awesome things if you don’t do the things that flop. It kind of all comes together. You can’t just choose to only do things that work and not do things that don’t work, obviously. I think you really have to realize that this is just part of being an entrepreneur. I’m going to seize as many different things as I can and I’m going to find what works and I’m going to hit those hard and if I lose I’ll learn my lesson from that.
Andrew: I see. Right. So when you go into your negative mind, you start to say – and this happens to me, too – I can’t believe I screwed that up; I must not be a good entrepreneur; there’s something wrong with me. That’s where I tend to go. You’re saying stop and question that and realize you can’t get 100% right. That failure is not an indication that you made a mistake. That failure is an indication that you’re taking enough chances that you’re not going to get everything right. Then you start to look at I quit my job, started an affiliate business and the affiliate business did well. I then started my own lead company. That did well. I hired people. That went well. I designed – and we’re talking about the design – that went well. You start to take inventory that’s a real inventory.
Ross: Yes. I’d say even if you don’t screw things up you’re not being a good entrepreneur. If you don’t screw things up, you’re not taking enough risk. As a good entrepreneur, you have to have some risk tolerance. It’s almost good to have screw ups because it’s kind of like, OK, I’m taking some risks. Now you obviously have to keep them in check, but I think it’s essential for an entrepreneur.
Andrew: The first version of the site… Remember, you just popped up on Skype a few minutes ago. The first thing I said to you was, “Boy, that looks like a great backdrop. I love the logo over your shoulder.” It just took me by surprise because I’m used to people with my kind of background. The first version of your site, how designed was it? What did it look like?
Ross: The first version of our site, it was pretty ghetto, to say the least. Before we started Craft Jack, we wanted to kind of start small and focus on one segment of the home improvement industry. We picked house painters just because we had a good lead flow through one of our affiliate sites. It didn’t directly compete with any of our partners. We started with house painting. We started a network called localpainterquotes.com, and we were pretty much just matching house painters with leads; we weren’t worrying about anything else. The first version of our system, if you could call it that, was essentially just a data base where leads would come into the system and all you would see is just a table of leads, almost like looking at an Excel spreadsheet. We actually had to manually match all the leads. On the weekends when leads would come in I’d have to sit there and look at the phone numbers, plug it into the white pages – OK. That’s a good phone number – pick a few contractors who looked like they… And we had to do this for every lead. If you’re generating 100 or 200 leads a day, it’s pretty labor intensive. It’s pointless. You had to start somewhere, but you’re wasting a lot of time. The first version was as basic as you could get.
Andrew: It’s pointless but it seems like there was some benefit to it, too. It’s pointless if that’s the way the business continues. What’s the benefit of having started that simply?
Ross: There are a few benefits. The first is that it allows you to have an MVP, minimum viable product, something that start-ups talk about a lot. You don’t want to go out there and spend $500,000 developing something if you haven’t proved that your business model or your idea works. It allowed us to just get something out there quickly and easily. Two, it made us appreciate our time a lot more once we had the real system. It kind of helped us figure out what essential features do we need now to add on top of this layer. We have this data base of leads and we manually call them. What do we need to do to improve our process? Can we automate calling the leads? Can we automate matching the leads? What can we automate? It allowed us to think through it that way.
Andrew: How did you find the affiliates, the people who would send you leads?
Ross: I was actually generating… We didn’t have any affiliates. That was once of the things we thought made us different. We were generating the leads ourselves through search, and so we thought we’d have higher quality leads because we had control over all the messaging. It was still pretty much me. Instead of sending them off to other sites, I was just keeping them for myself and selling them to our contractors.
Andrew: Got you. And you got those contractors because you had sales people who made phone calls. Got it.
Ross: That’s exactly it. And they would find us.
Andrew: The whole thing was simple like Excel, which didn’t matter because it was you looking at it anyway.
Ross: Exactly. Exactly.
Andrew: Each lead would go to three contractors so that three different people had a chance to bid on it and make proposals to your customer.
Ross: Yes. We’d have to manually match all three of those contractors and figure out this guy has budget left and he doesn’t do exterior painting, can’t match him. It was all very manual.
Andrew: This guy has budget left, meaning… Right. Right. You can’t just flood a guy with leads.
Ross: Right. Exactly.
Andrew: Just because you have a whole bunch from Chicago doesn’t mean that you have to send a whole lot to Chicago.
Ross: Right. Most guys only want to spend a certain amount a month, right? $200 or $300 or whatever it is, so once we send them that amount of leads they’re off. With the first version of the system, it didn’t manually cap them out. We just had to look and see. We sent him $300. He’s out. Pick someone else.
Andrew: You were going to build a lead management system. Did you guys ever do that?
Ross: Exactly. So what ended up happening in the early days is we started Local Painter Quotes, we built the system. Like I said earlier, we thought we’re going to sign up contractors and we’re going to be gravy. It’s going to be so easy for us to sell them, and we know we’re better because we’re generating our own leads and the quality’s going to be awesome. All the complaints there are about the other lead generation companies we won’t have to deal with. Well, what ends up happening in reality is we started getting a lot of the same complaints we saw posted negative about other companies online. In fact we got a call in the early days from one of our early contractors – I think he was in Indiana – he called us and started yelling at us about how bad our service was and all our leads were garbage. It was a big shock to us because here we are thinking our leads are so good. We’ve verified them, I’ve plugged them it. What’s the deal here? We said something can’t be right here. We called the homeowner and said, “We just wanted to follow up. This contractor wanted to give you an estimate.” The homeowner said, “That contractor never called me. I’ve been waiting for him to call me this whole time.” We started to scratch our heads and think, “Wait a minute. Maybe this isn’t the full story here. Maybe the leads are kind of good and maybe there’s an issue with the contractors.” We started to analyze the industry and realized that the real problem is contractors are not sales people or business people for the most part, some of them are but most of them aren’t. A lot of the issues and the complaints are because they don’t know what to do with the leads once they get them. They don’t know they should be calling them right away, they don’t know how many times they should follow up. Our realization became we’re going to be sending all these leads out and just have the same problems as the other companies and all the blame is going to be put back on us. No contractor is going to call us and say, “I’ve got your leads. They’re great but I don’t know how to properly follow up with them so I’m quitting your service.”
Andrew: I’d be too embarrassed to make a phone call to the customer.
Ross: Yes. These leads are garbage. I sent an email and no one ever called me back. We started to think what are these guys doing to manage their leads now? What we found, through talking to customers and talking to contractors and researching this, a lot of guys are scratching stuff on napkins and maybe using Excel if they’re super advanced, but no one’s using Sales Force or any other CRM because it’s way too complicated. Our thought became why don’t we build a super easy, basic CRM just targeting contractor that’s integrated with our lead system so you don’t have to add any data, it just populates with the leads? That’s when we started to launch Craft Jack, which was the big picture for us in rebranding. That’s where we had sat in the office, Noah and myself, and we were brainstorming. We had our entire wall covered with note paper and all the ideas and all the conversations we had with contractors. That’s when we started to think about what can we do to really change how these things are done with contractors?
Andrew: What are some of the problems that they had?
Ross: The first problem is always the biggest problem. They don’t know how fast they should call the lead. They’ll get a lead in, and some guys will wait multiple days before establishing contact with the homeowner. Meanwhile the homeowner’s wondering, they just filled something out online and they’re waiting for someone to contact them. The biggest one is they don’t know how fast they should be calling.
Andrew: Right.
Ross: The second one is they don’t know how often they should follow-up. Some guys will call, leave one voicemail and then they think they’re done with it. If you fill out something on a mortgage brokers’ site, they’re going to call you every day for the next month and a half. Maybe that’s too much, but there’s something in between that’s right. Contractors don’t know what that is. The third one is they’re not tracking the status. They don’t know… They’ve got all these leads. They don’t know where every estimate is at. Did that guy get an estimate yet? I’m not really sure. Did I submit a bid for that project? They’re having trouble keep status. Those are the key components that we’re trying to help them manage through the process.
Andrew: I see. Were they receptive to that or did they feel I don’t want another piece of software, I just wanted a lead?
Ross: This is where the branding kind of comes in, going back to the Leo Burnett. We needed to think of a way to brand ourselves as a very simple, every man tool for contractors that’s not going to overwhelm them. That’s where we kind of came up with the name of Craft Jack. It’s kind of like and every man name in the home improvement industry, it’s simple. There are definitely guys who are like that and are just never going to use any software, but a lot of the feedback we got when we were talking about the idea was, “That sounds pretty cool; I’d try that out.” The real good feedback was when we launched it, we started getting guys emailing us saying, “I’d love to use this to manage all of my other leads, not just the leads I get from you guys. We want to use your tool for everything. It’s awesome. It’s really easy to use.” That was kind of the moment for us. Yes! We’re on to something here.
Andrew: You mentioned the logo was inspired by your passed work or the idea that you need to have a design. How is that? Talk a little bit more about the influence of the job that you had at Leo Burnett that allowed you to think through the design and your message in a way that the average entrepreneur, who maybe went from selling candy in elementary school, having a high school start-up and then just continuing being only an entrepreneur, wouldn’t know.
Ross: That’s a great question. In terms of thinking about the brand and the design… First of all, when I was working at Leo Burnett, their team of designers was awesome. You’re really working with top-talent web designers there. Just being around good design all the time, you start to appreciate it more, what goes into it and the process. In design, for example, most people just think you just give something to a designer and they kind of make it look pretty, but there’s this whole level of user experience and Leo Burnett has a whole team of people who just do user experience in their wire-framing stuff. That actually is an interest of mine, too, user experience. You start to think about design less as just aesthetics and more about the complete experience in terms of how someone engages with your brand, whether it’s navigating your website or through your name or your identity. It kind of got me to think through things in that way.
We were thinking about the branding for Craft Jack. A lot of the lead companies out there and the names that we came up with… One of our ideas, for example, was Bids from Builders. We had a lot of these standard sounding names that may have been catching, but we thought can any other company call themselves the same thing and would there be a difference? A lot of the hen we were thinking of names we thought that Craft Jack was a good can for us to build our brand around. We kind of thought about it as the word resonates, it’s easy to say, it has a lot of those properties when you look for naming something, but it also has a canvas that we can kind of build our brand around. Almost like when you think of Google – it’s a word, but they built their brand around that canvas. That’s kind of how we thought about Craft Jack.
Andrew: I see. If you come up with a name that already explains what the product is, you’re locked in to that product and that understanding that people have instantly.
Ross: Exactly. If it’s too literally. For example, Bids from Builders was one of our early things that we were thinking of. We’ve gotten away from a lot of that from our branding. Now we’re more of a contractor-focused brand. That’s kind of very consumer-focused. That doesn’t have anything to do with the lead manager. What we called the Bids form Builders lead manager tool, we would have been very locked into that. It doesn’t leave us a lot of room to pivot and to adjust and still kind of put that on our brand.
Andrew: How long did it take you to build this tool now, the one that you explained to us?
Ross: Well, we hoped it would take us six months but in reality nothing ever kind of goes according to plan, especially when you’re dealing with a complex programming thing. It took us over a year to get the beta version out. That was one of those moments for me as an entrepreneur that gets frustrating, too. You plan out how long something’s going to take, especially if you’re boot strapping, budgeting for it to take that long. If you’re paying someone hourly or salary or whatever it is and you’re putting a lot of resources into a tool and it takes a lot longer than that, that can kind of weigh down on you as an entrepreneur. I’m sure a lot of people experience that.
Andrew: Then what about the contractors, did they understand it when you showed it to them?
Ross: They did. I think one of the mistakes that we made also with the contractors, is we thought it was going to take us six months.
So maybe around five months or so, we start getting excited and we think we’re going to be there, and so we start announcing to our contractors, ‘Hey, we’ve got this awesome new tool that’s coming out. You guys are going to love it.’
We showed them a few screen shots, and they got really excited. We said this will be out in a month. A month rolls around and we’re not anywhere close.
So, we kind of say OK, we won’t make any announcement. We’ll just kind of let that sit for another month and then two months go by and guys start emailing us going, “Hey, what about that thing you showed us?”
Then three months go by, and now you’re like, OK, well now we’ve got to send out another update because everyone’s expecting it. So then we say, “OK, this should be another month or so,” and then it’s not ready in another month. We made that mistake of announcing it too early and trying to predict what our launch date was going to be, and it made us look kind of silly, and it upset some of contractors who got all excited, even though we didn’t do anything wrong to them. They didn’t have the tool and they still don’t have it. But, by revealing it we put ourselves in a position that we really set ourselves up for some backlash there.
Andrew: Who built it for you?
Ross: Actually, our CTO, Ryan, he was just a freelance designer, or a freelance programmer for us at the time. I had found him through some of the affiliate marketing stuff I was doing. He was a programmer on one of the forums that I would go on.
So, he was building this tool as a freelancer for us and eventually… you know, he’s a great programmer, but he also had a pretty high hourly rate. We’re paying him 90 dollars an hour.
So, a lot of our capital is going toward that and eventually when I realized it was taking longer than I had hoped, I kind of wanted to bring those costs down. So, we brought him as a CTO and essentially said, ‘Hey, we’ll give you equity and I’ll make you partner, co-founder, and we’ll drop your rate down significantly. We dropped it down to, I don’t know, it was like 40 dollars or something. It was pretty significant.
He became a CTO and he continued to build the whole project out and he’s still our CTO now.
Andrew: Meanwhile, you’re funding this business off revenue from affiliates, but also from your credit cards as I said at the top of the interview. What happens to your finances?
Ross: Yeah, as an affiliate I was making very good money. I didn’t have any overhead, no employees. It was arbitrage, so I knew what my margins were and I would just kind of take on the profits.
Once I brought in the first sales guy, and we got an office and office equipment and all that stuff, that started to change a little bit. Especially when we were developing with Ryan and we were paying him all that money, that was starting to cost us a lot of money and add up to. So all this money that I’d saved up that I’d kind of put into the startup was kind of dwindling down. And we were launching new services, which aren’t always profitable for us. We sometimes lose money. The Windows was a great example. We lost 30 or 40 grand on that.
So, we basically had two ways of financing our boot strapping. We had an Am- Ex, which was a business Am-Ex card, and then we had a line of credit. Basically, we were financing on a credit card and the line of credit, and it got to the point where eventually had very little room … you know, the credit card was 90% maxed out, the line of credit was almost all the way maxed out, and there was very little runway left.
It kind of caught me out of nowhere essentially, because, you know, it’s a very seasonal business. In the summer, it’s very high. In the winter, it’s very slow. The winter was a lot slower than we were thinking. We thought we’d have the Windows company up on board. We thought we’d be having all these things. It didn’t work out that way and we had very little runway left at that point. We were kind of faced with a decision. You know, we need to raise money to keep this going or it’s not going to keep going.
Andrew: The American Express card might have been a business card, but essentially the way the American Express card works is, it’s your personal card. You’re paying for it, right?
Ross: It’s a charge card, yeah. It’s not a credit card. You can’t carry over a balance on it. You can’t make minimum payments; you have to pay within 30 days your whole balance or you … I don’t know …
Andrew: Yeah.
Ross: They collect, or whatever it is.
Andrew: The line of credit, how much of a line of credit did you get?
Ross: I believe our line was for $70,000, around that.
Andrew: And the way to get that, again, I think this is personally guaranteed, right?
Ross: Personally guaranteed. We went to a bank …
Andrew: Personally guaranteed. You just go to a bank and you say, “I need some credit.” They look you over, I mean they look over your finances and they say, “Alright, we’ll lend this guy $70,000 for his business…”
Ross: Yep.
Andrew: “… because he’s good for it.”
Ross: Yeah, so essentially, I was in a good position because I had the affiliate revenue. The line of credit was through Tribe Nine, which had been formed two years earlier. So, I had the strong affiliate revenue, my first year as Tribe Nine I did over $500,000 in revenue. Second year, over a million, so they saw this growth and said, “OK, no problem with line of credit.”
In retrospect, I probably could have asked for more. I only asked for 50, and they gave me 70 or something. I probably could have asked for more. But, yeah, personally guaranteed, and if that doesn’t work out, I’m on the hook for my house or whatever assets I have, you know, are on the hook.
Andrew: Alright, so, running out of money, running out of room on your credit card, which is not really, which is his charge card …
Ross: Yeah.
Andrew: …and your credit, your line of credit is almost maxed out. How open were investors to funding this situation?
Ross: Yes, Sully, it was interesting. So, what I had realized that we wanted. You know, that we needed to essentially raise money we had reached out to a number of VCs in the Chicago area. I had applied to Light Bank. I submitted a form on their website. We had talked to Hyde Park Angels. We were talking to, I think one or two other VCs. I don’t really remember who it was. And so, you know I filled out these forms. Like I filled out the one on Light Bank, and I didn’t hear back for two weeks. And I’m like, “Well, all right, they’re not interested.” And finally like one day out of the blue, I get an email from one of their analysts. And he’s like, “Hey, you know, I got your application. Looks like an interesting, you know, concept. Do you have time to talk?” And we talked with them and we kind of showed them some of the revenues and what we’re doing with it. And they said, “Hey, you want to come in? You know, we’d love for you to meet the partners and kind of tell them about your business.” And so, here I was, you know, suddenly, kind of out of nowhere, being able to meet with one of the biggest VC firms in the Mid-West. Or the biggest tech VC firm in the Mid-West for really such companies.
And all of a sudden, it’s like, you know you see this light at the end of the tunnel. Here, everything’s like doom and gloom. You know, I’m almost out of money. We don’t have a lot of runway left. And so we, I, go into pitch. You know, we’re all excited, you know, Ryan, Noah, and myself. And I go into pitch Light Bank. And they actually, at the end of the meeting, made me an offer to invest. And, you know, I was just. First of all, it caught me off guard, but I was pretty ecstatic just to get something right away. And, you know, I get back and I talk to Ryan and Noah, and we’re just like, you know, in cloud nine. Like, where did this even come from? We didn’t, you know, a couple days ago or whatever it was, last week, this wasn’t even an option. Here we are with an offer on the table at our first meeting. So, that really gave us a lot of hope. We were all really excited about that. And, at that point in time, we had started to reach out to some of the companies that we were selling leads to, that were bigger than us in our space. Just basically saying, “Like, hey, you know, we’re looking to raise money. Would you be interested in doing a strategic investment with us?”
And, we reached out to, one of the companies was Home Adviser. And we reached out to them and they were pretty much like, “No, we don’t want to do a strategic investment. But, you know, we’re curious what you guys are up to, and, you know, we’d love to kind of hear more about your business. Just a very casual thing, I didn’t think much of it. So, I had a call with their VP of business development. We talked about, you know, some of the stuff we were building. We showed him the lead manager product that we had built. We talked about some of our vision, in terms of where we see the industry going. And by the end of that call, you know, every time we talked about something, we’d go “That’s really interesting. We were talking about the same thing here. Now, you know, we’re thinking about building something very similar, you know.” We’re talking about the stuff, and by the end of the conversation, it was like, you know what? There’s a lot of symmetry here. Let me just talk to my team here and get back to you. And so, I kind of left that call and I was, like really excited. And we had this offer from Light Bank, and so, all of a sudden, things started to turn around a little bit.
Andrew: You know, that never happens where you just find a form on a website of Venture Capitalists, fill it out, and they invite you in, and offer to give you money.
Ross: It’s very rare. I’ve filled out many of them. And, you know this is one of the few times where I actually heard back. So…[SS]
Andrew: [??] invited me to the launch, his launch fest, is how he calls a conference, to interview investors for the audience of entrepreneurs about the process they go through for finding investments to make. And all they said was talk to our portfolio companies, find someone who you know, ask them for an introduction. If they believe in you and they understand your business, I’ll make an introduction, and we’ll be much more eager to talk to you and that’s the process that works. And here you went the complete opposite direction, just go to a website, cold call essentially, and get the deal. What happened with the deal, and what happened with the buy-out offer? I mean there was one buy-out offer that was really stinging, right?
Ross: Yes, so we had, I guess from the time that Home Advisor gave us their, we had already talked with Home Advisor. They had kind of expressed some interest, but they didn’t really say that they were going to give us an offer or anything. We just said, “Hey look, let us regroup with our team, and we’ll get back to you.” In the mean time, I was actually, there’s a company that sells leads, that’s based out of Israel. And I was actually in Israel. My sister got married there, so I was in Israel. And, I was meeting with this company and they really liked our lead quality that we sell them, and their CEO, you know had liked me. And he’s like, “Hey, why don’t you come in and tell us what you’re up to.” And so I had told them and we told them everything and they seemed interested and possibly making an offer to buy us out. So, I get back to America and I’m sending him all the numbers, and they come back to me with an offer, and it was like, you know, it wasn’t even half the revenue we did that year. And I was, I had left the meeting thinking they were super interested and there would be another aggressive offer on the table. And, we kind of got their offer and I wasn’t even sure if it was like a serious offer. I said to them, I said, “Hey, is this a serious offer?” And he was like “Yeah, you know this is what we can afford right now and this is what we think you’re worth. If you analyze this and we discount for this, you know. All this whole thing and, you know at that point, we realized they kind of really didn’t value all the stuff we had built in the direction that we were going and so that didn’t make sense, so that was a little bit of a blow to the process because here I am, kind of on a role, we get this software we have entrepreneur party, so that made me think that if that offers crap what are the other offers? I have the offer from Light Bank but what is the other offer if there is going to be one, is it going to be crap too, and I’m kind of stuck with Light Bank, which wasn’t a bad option, but I wanted to have some other options at the time. So we talked about the idea, and we talked about the challenges of building out the idea. What was it that people saw that was existing that made them say, yeah, I want to invest in Craft Jack, I want to buy out Craft Jack. What was there?
Yeah, so I think…this is all kind of speculation, we haven’t really asked someone, but I think there are a few things that we did really well. First of all, I think our SEM campaign structure was really good, our conversion rates and everything was a lot higher than some of our other companies that were looking at us could do and we were producing leads at a much lower cost. That’s not of a great value because you can kind of try and replicate that or you can hire people, it’s not a defensible position so to speak. So there was some value there, but that wasn’t it. I think what it was, the lead manager was a huge part of it, we had identified this need in the industry, we had great early feedback from our contractors, it was a very built beta tool and people recognized that contractors were using it and they could buy a lot of value to a company that had a much larger network of contractors to kind of bring that in was a value at, I honestly just think that a lot of these companies were impressed by our team. A lot of people knew affiliates placed our legince spacer or kind of guys in their basement, generating leads and maybe doing shady things to get those leads. I had the advertising background, I was trying to build a brand and I think that was noticed by a lot of these companies as well.
Andrew: I see. And the costs to those contractors to find out why they weren’t finding enough value in your leads that’s what turned you on to this new approach that led you to build the software that Light Bank wanted to invest in, that Home Advisor wanted to buy.
Ross: Yeah, exactly, I think that’s an important point, the founder a lot of times…even when I was hiring a sales person I still wanted to maintain contact with the contractors. A lot of times founders are kind of isolated and they’re building something and they’re not really talking with their end users as much as they should be. And that’s where all valuable feedback is going to come from is from your end users. And especially, like I a lot of bigger companies too, where there’s just so many layers between the people making the product and the end users of that product but there’s a sales team and count team, you have to rely on that information kind of trickling through and making it all the way up to the product team. Where when you’re a small startup, if you’re in tune with you customers you’re going have that feedback direct and you’re iterating fast and effectively. So yeah, a big part of that was just us reaching out to these contractors and be like, hey, why are you complaining and then calling the homeowners and just trying to put the pieces together really.
Andrew: I see. And I think a lot of people if a contractor said this lead stinks might go back and say, what if I gave you a better price on it. And you said, why it stinks. What if we did this, and you can ask them, are you too embarrassed to call. So how do you find out that they don’t know when to call, that they might have been too embarrassed to call and that’s why the emailed? What was it about your conversation you think that drew out the real frustration and the real pain that they had?
Ross: I think is would say it’s a lot about curiosity, asking questions and not assuming that you know the answer to the problem when there’s a problem. I guess if we were to make an assumption we could say okay, our leads are bad maybe, let’s go check our traffic sources, or let’s go figure out what the problem is, but we really wanted to get to the source of the problem so we always see guys say this leads bad. That’s so vague, what does that even mean that this lead’s bad? That it’s bad how? Like, it’s bad because they don’t own the home, is it bad because they don’t want to talk to you, is it bad because the person doesn’t exist, like that could be 1,000 things so we had to figure why, what do you mean by that? And once we get it figured out what you mean by that then we can figure out how we can change that. So it’s really about discovering the problem before trying to implement some kind of solution.
Andrew: Something I heard about you is that you’re not a typical entrepreneur in this sense, like unlike me, you didn’t sell candy in elementary school, you weren’t the kind of person who couldn’t wait to start a business, in fact you told Jeremy you were too shy to walk around and sell wrapping paper as a kid. First of all, why did you sell have to sell wrapping paper as a kid?
Ross: You know, a lot of schools have fund raisers, right? So I went to a smaller private school so they had this annual fund raiser where you sell wrapping paper for charity and you earn prizes for it, right? So basically most cases go door-to-door in their neighborhood and they knock on people’s and try and sell them wrapping paper and I don’t know if I was too shy, I wasn’t so shy a kid, but I just felt embarrassed about doing that, I didn’t have an interest in that. So in terms of entrepreneurs, I wasn’t one of these guys who was hustling when they were a kid, lemonade stands and selling all the time which is what you hear about all of the time from entrepreneurs is oh, I’ve been doing this since I was a kid, I started with lemonade stands. For me it’s never been about selling and hustling and that type of thing. What I always find about me that I feel makes me a good entrepreneur is my curiosity and I think this kind of goes back to the copywriting, too, and just being a writer in general.
I’m just always very curious about things, how they work, how can they be improved, how can they be done differently and that curiosity just leads me to ask a lot of questions like we were just talking about with why are these leads bad. It’s a natural curiosity and it leads me to kind of discover new problems and then the curiosity leads to how can I solve these problems. I feel like that’s different than what a lot of people are used to hearing about entrepreneurs and how they’re born and what they’re like when they’re younger and what they should be like.
Andrew: They think, hey, you have to be a born salesman. You’re saying you can also be born curious and if you’re curious, you’re going to find out what people are born to buy from you or what they (?) to buy from you now.
Ross: Yeah, that’s a great point. Yeah.
Andrew: The reason I brought that up is you’re calling up customers who aren’t happy with you, who want to rip into you for what they just bought from you and you’re not too afraid to call them up. You weren’t too afraid to find out what the frustration was. Why? Most people are too embarrassed to do it. Frankly, I even have a problem doing it. So how are you able to get over that embarrassment of calling your customers?
Ross: Yeah, and that’s a good point. I think even at the time I probably did have some of that fear and actually Noah did because he was a sales guy and he was working with them, he had built that relationship so he had done a lot of the calling too and we had kind of figured out, OK. What should we be asking this guy? He would call a guy that he had a relationship with and ask them. But for me as a CEO, trying to kind of discover what it was, a lot of times it just started with an email just to break the ice. Hey, I know you’re not happy, can we just set up a quick call to talk about this? We want your business and we want to find out what’s not going well and can we just set up a quick call? So a lot of the time it’s just make some kind of easy intro, just get a quick call going, so you’re not just kind of cold calling them saying hey, just got your email, what’s up?
And then sometimes it’s trying to explain it. If you can’t reach people or they hang up on you, it’s just kind of trying to make your point via email. If you’re thoughtful about your point, a lot of times people will just respond with their honest feedback to it. I mean, yeah, it’s kind of like doing cold calls. It’s not quite as bad because you have some relationship with that person, but there is some conflict and you just kind of have to psych yourself up and just bite the bullet.
Andrew: I have your revenues here. What do you feel comfortable saying about the revenues you guys did in 2011 and 2012?
Ross: Yeah, we can talk about revenues. So in 2011, we did just over $1 million revenue, 2012 we did a little bit over $2 million and I think this year we’ll probably be on track for over $4 million. We were acquired in June 2012, so anything after that is kind of post-acquisition and I don’t know if we even really talked about the actual acquisition yet, but we can get back to that.
Andrew: Tell me about that. Why did you decide to sell, especially if you had an opportunity to raise money?
Ross: Yeah. So going back to that story. We had the offer from Light Bank. We had the one offer that we had gotten from this first company, it just was a crappy offer. HomeAdvisor was kind of talking. They’d get back to us and say hey, you know, we’re interested in actually making an offer to acquire you guys, is that something you would consider? Obviously I wasn’t going to say no. I want to hear what the offer is. I said, yeah, I’m definitely interested. We had this offer from Light Bank and we’re kind of thinking of going in that direction. That was our number one choice at the time.
So they kind of came back to us with an offer and it was a pretty good offer. When we were talking amongst ourselves, we said OK, here’s our number, we will not sell if it’s for below this number. So it wasn’t quite at that number, but it was close to it, whereas the first offer was nowhere even in the ballpark of that. We said OK, that’s close, here’s kind of what we would need to make it work.
The real reason why we decided to sell was because when we had gone out to meet the HomeAdvisor team and when we had been talking with them, they’re just an awesome company. I mean, we went out there and we were super impressed with their company. They’re the biggest company in our industry and they have been around for a long time. A lot of times you think of those companies as very bureaucratic and very stodgy and just not pleasant companies to work with. We had actually gone out to meet all the executives and everything. It was the exact opposite. They were really receptive to our ideas. They were actually really curious about what we were doing, so they had a lot of really good questions about why did you guys do it that way and how come. You know, the types of things that we ask ourselves, they were asking.
Andrew: Why weren’t you too afraid to tell them all this? I kind of feel, when you’re telling me about this other company that made a lowball offer, that maybe they were hunting around for information. And now another company’s asking you all kinds of questions. Wouldn’t you feel like, whoa, whoa, wait? You guys (?) understand everything, you won’t need me after this conversation.
Ross: That’s a good point and that’s always a question entrepreneurs have when they’re raising money, how much do I share with the VC? Maybe they just want my idea. Or with this other company. I was comfortable because at this point in time we had already talked at a high level about some of the ideas and they were kind of already going in that direction anyway. A lot of the ideas weren’t necessarily revolutionary that we were doing. Some of them kind of were the loop manager, but it’s really about the execution of the specific things. And I think we were just so confident in the way that we executed and knowing that they are a big company and they still have a layers to get some of these things done that we didn’t think they were going to see all the stuff and be able to imitate it exactly. We thought that we had done enough job and we kind had enough of a head start where it’s out there.
The truth is, what’s going to stop them from just creating a contract into our account, log into our system and see everything anyway? So there’s certain things like if they really want to find out they’re going to find out. Here they are, they say they’re interested, we’ve had a really good conversation so far, we just have to go with the gut and trust them otherwise we only have this one other option. But it’s a great question. On a personal level, these decisions are made because you see that you like the people you’re going to working with, you see that the money that they’re paying you makes sense, but it also has to do with personal…it’s also a personal decision on a personal level why did you decide to sell?
Andrew: That’s a good question. Obviously, you know that when you start company most people think they’re going to exit $50,000,000 or $100,000,000 some huge number, that’s every entrepreneurs goal. And this was not, this was a lot less than that, so a lot people ask me why did I sell when you had this other offer from Light Bank, so I think for me at that point in my life, I had been through my first startup, we kind of had a lot of highs and lows, the highs were really high and the lows were really low, and I kind of see the spectrum of what the startup life is like and I kind of thought to myself, I have two young kids, I have a few employees now, I have a lot of responsibility, am I willing to pass up this very good offer which puts me at financial security for a very long time, which is great for the co-founders, in which also is very good for the employees because now they have guaranteed paychecks and 401k with match and all these great benefits they are getting. Am I willing to pass that up to take this offer from a VC when so many…
One thing that I think most people don’t know is what so many VC deals don’t end up going anywhere. I think it’s like there’s a 10% success rate or 20% or something very small so it’s not like my odds were extremely higher of getting the $50,000,000 if I take this offer, plus I’m going to dilute along the way so I may end up with only three of four time of what I’m getting right now which is guaranteed, am I really willing personally to risk all that another two to five times more revenue when I have this great offer which is not common. And I just wasn’t after thinking about and talking to a personal advisor and with my wife and everyone. I realized I’m a young guy, I’m 29 years old, I have a lot of other ideas, I can sprint through the fences next time, but this is something for me personally right now makes sense so that’s kind of what I did.
The interview that made me feel like this is what I’m meant to do, I love interviewing and I recognized it in my interview with my friend, Rosalind Resnick, and towards the end of the interview I remember asking her, Rosalind what is the best part of having sold, and she said, freedom. I can just now do what I feel like, like I can come up with an idea and execute and so on. On a personal level she did too. So let me ask you the same question, what’s the best part of having sold?
Ross: That’s a great question, so the freedom aspect is great, especially in our scenario, our parent company, Home Advisor, is giving us, even in Craft Shack, you still see the logo, I’m still with Craft Shack. They’re giving us all the freedom in the world to kind of pursue all the ideas that we had initially. And they’ve invested a lot of bodies in helping us do that, so we have the freedom to have all these ideas that we had with Craft Shack that we couldn’t finance are being financed within Craft Shack we have that freedom. And they’re an awesome company and a resource, but personally, it’s just that weight is lifted, like this could all go under any second and I’d be left with zero. It’s always in the back of your mind, you have to kind of shove it as far back as you can when you’re an entrepreneur, bury it somewhere deep, but it has to be there somewhere and just knowing that is not there for me right now it’s just been a good feeling.
Andrew: Do you have Money Magazine over your shoulder, one shoulder has Crafts Shack’s logos, the other one Money Magazine.
Ross: You can see that from back there?
Andrew: I poke around all the time. Why’s Money Magazine over your shoulder?
Ross: Hey actually, I did an interview with them after I sold Craft Shack. It was, how to reach a million dollars…[??]…
Andrew: I got that interview here on my screen..[??]…the title tag on that says, “Be A Millionaire.” Did you become a millionaire from the sale?
Ross: I did, yes.
Andrew: And all that you are willing to say at the time, you sold the business for a mill…for a low single figure, low seven figure some?
Ross: Yeah, yeah.
Andrew: I’m going to leave it there, I don’t want to push more than that, but I thought that was interesting. What did it feel like to be in “Money” magazine?
Ross: It was pretty awesome. It’s one of those things where the editor reaches out to you, and you’re not really sure if they’re going to run the interview. When they did, I was . . . it wasn’t like the coolest thing in the world, but it’s pretty cool. I have it on my desk there. So, obviously . . .
It’s interesting. It’s almost like the feeling you get when you get the offer to buy you out, and then you’re not really sure . . . until the actual deal closes, you’re always wondering, “Is this going to fall through?” It wasn’t as big of a feeling as the offer, but it was cool. They interview you as if it’s really going to happen. When it did, it was exciting.
Andrew: Let me do a quick plug here. Then, I want to ask you about — we talked about challenges, but there was one, maybe you call it a failure? We’ll find out how you would categorize it in a moment.
But first, I want to say, if you’re a Premium member and you want to follow up on this interview, there are a couple of topics that we talked about that you might want to go into MixergyPremium.com and grab programs about.
First, we talked about affiliate programs. There’s a guy named Mike Colella, who I knew, I think, for two years before he did a Mixergy interview. He was a fan. He said, “Andrew, I’m doing a lot of money in affiliate sales. I can’t do the interview about it. But, I trust you because I’ve been listening to you. Let me walk you through what I do.”
He did a screencast and he showed me every single thing that he did. Then, a couple of years later, he did a Mixergy interview about it. His name is Mike Colella. You’ll hear his story and you’ll see how he went from nothing to build up an affiliate program. We didn’t spend too much time on it here, because that’s not the emphasis of this interview. Mike did. So, I recommend that. Also, Mike came back and taught a course.
He said, “Hey, if anyone’s not an affiliate and wants to understand how this process works” . . . he taught it. Again, he turned on his computer screen, showed us the first product that he sold. [laughs] It was kind of a funny product, but it will give you a sense of how he did it, and let you learn from him. Also, if you like copywriting — we didn’t dive too much into it — but I thought it was important to walk about it in this program. If you want to go deeper into it, there are two entrepreneurs who came here to talk about how they did it. Let me get to that, go actually on my own site, to Mixergy.com/find.
I actually recommend that if you guys are at all interested in finding a program and you can’t see it, instead of emailing us, go to Mixergy.com/find.
There it is. The first one is taught by Dane Maxwell. One of the first courses that I did. I said, “Dane, you’re really good at copywriting. Can you walk me through what you do and, frankly, help me figure out how to create courses on Mixergy”? He did it. It’s tremendously effective.
The second one is with Neville Medhora [sp]. He actually did an interview and a course on copywriting. So, look those both up because they’re fantastic. His interview, I think, was one of the most popular interviews on the site.
I don’t want to spend too much time on this. I want you just to know where to follow up if you’d like to. If you’re a Mixergy Premium member, go to MixergyPremium.com and get it. If you’re not, I hope you sign up because, as you can see, real entrepreneurs come here to tell their stories and teach you how they did it. I’m really grateful to them for doing it. Thank you to Neville, to Mike, to Dane, and to all the Mixergy Premium members, because I’ve been working off of research, and working off of pre-interview notes here with Ross on this company.
The only reason I could do all of that is because Mixergy Premium members — when you help yourselves, you’re also helping grow Mixergy, too. I appreciate it.
All right. The final question is about this. I’m now on trognineinteractive.com [SP] and I see something called Rumpeldealskin.com.
Ross: [laughs]
Andrew: What is Rumpeldealskin?
Ross: Nice. Rumpeldealskin was an idea I had. It was kind of when Craftjack was getting started, so it must’ve been around late 2010, 2011. Being an entrepreneur and an affiliate, I always had these random ideas. Some of them I’d jot down as notes, and some of them I’d file away. But Rumpeldealskin was one that I was so passionate about.
I was like, “That’s it. I’m starting this alongside my other companies.” It was kind of when the Daily Deals craze was going on and that was all blowing up. It was essentially a Daily Deals site. The concept behind it was, basically you come to this Daily Deals site, you get to see our mystery deal at some crazy discount, 80 present off or whatever it is. You can reveal hints about the deal, and every hint you reveal, it’s going to take away 10 percent of your savings.
So, maybe you could reveal and see, “OK, it says ‘Restaurant.'” So, now it’s only 75 percent off. “It’s a Chinese restaurant,” 60 percent off. So, you’re kind of losing some of the savings. It was this concept I had that I talked with people about. Everyone I talked to about it was like, “That’s freaking awesome. That’s an awesome idea you have to do that.”
Andrew: As you explain it, I get the same smile on my face that I imagine they did, too. I like this idea. It’s a twist that I hadn’t seen before. OK.
Ross: Exactly. I was super pumped about it. I thought it was going to be an awesome idea. I was like, “I have to do this.” You can go to Rempeldealskin.com and you can see the character. He’s up there. I invested money in character design, and building out the landing pages to capture information from people. That’s where you can kind of see some of the copywriting and the branding, kind of come into play there.
I was so excited about the site. We got a provisional patent on the idea, if you can even do that, we tried to, all that stuff. Essentially what happened is, the daily deals market just crashed when Groupon started to go down. Basically the idea just became, who’s going to invest in a daily deal site right now, and nothing going to happen with it, and CraftJack started to take off the same time, and that’s one of those cases where you’re forced to let some of your babies go. I put probably five to ten thousand dollars into building up the site, I loved the idea, everyone loved the idea, I thought it could be awesome, but the market timing was crappy and something else was more important, and that’s when you kind of got to figure out, OK, I have to let this go, and I need to focus. I don’t want to some poor narged[sp], or neither of them are going to do well. And so, I had this, it’s still on Tribe Niner Active [sounds like] because we still haven’t updated that site in a while. It’s almost something to show off to people, you know, but that site is kind of in hibernation right now.
Andre: It is, why do you like to show it off to people?
Ross: Because I think it kind of show some of the branding side and some of the ideas, once you’re an affiliate marketing and I kind of left the upper nut, I didn’t have a lot of opportunity to do that stuff and so I’m kind of proud of some of the work that I’ve done and so it’s almost a portfolio piece for me at this point.
Andrew: Well thanks for being open about that, thanks for talking to us about how you built up CraftJack. This is the kind of interview that I like to do. I mean this is why I built up the site, because I want entrepreneurs who aren’t looking to sell, who aren’t looking to promote, who aren’t saying, hey, you know what, go sign up and, that’s the point of the interview. Just saying hey, I did something here that I think other entrepreneurs can learn from and I’ll talk about it, and I’m incredibly appreciative that you did this. People want to show their appreciation, what’s a good way for them to do that?
Ross: Well they can definitely, first of all sign up to the Mixergy premium, I appreciate you having me out here.
Andrew: Thank you.
Ross: I actually got premium access through Jeremy and it’s awesome, awesome content. So I think people have to be appreciative to you, but for me, if someone wants to connect to a LinkedIn and say hi, and ask me a question, or connect on twitter, I’m at TallRoss, they can definitely feel free to tweet me and I’ll hopefully be able to answer questions or point people in the right direction other than that, no requests.
Andrew: Cool, I think actually you didn’t know me as well as other entrepreneurs might have. Tell me if I’m wrong, but you said, who is this, where, you just want to check me out the way we checked you out.
Ross: [laughs] I had to make sure I was getting into something legit.
Jeremy, so I’ve heard of Mixergy, and I’m familiar with you because, just being in the Chicago community and I know you did the interview with Seth Kravitz[sp], who I know through networking and some other stuff. You’re name has come up a lot, but I had never really gone to the site and never really got into it. So when Jeremy had approached me about the interview, I wanted to see what it’s all about and see how these go, and I was super impressed, actually when I went to the site, I think what I told Jeremy was, I love the way you promote your sponsors in the beginning of the interviews. I just see there’s so much value for them, the way it’s coming from you, it’s like, hey if you’re looking for this, and I actually told a company I advise called Mystery Tackle Box, a friend of mine, Jeremy Gwin[sp], I said Jeremy, they do these demo videos of the baits they feature in the box, I said, you have to do something like Mixergy is doing, do a ten second thing about one of the sponsors, and just talk about them, it’s very engaging, it’s very genuine, and so, props to you. It’s really cool how you do that.
Andrew: I appreciate that.
Ross: Yeah.
Andrew: Thank you, and we check the guests out, and I’m glad that you checked us out and that everything worked out. Thank you for doing this interview, Thank you all for being a part of it. Bye guys.
Ross: Thank you.
