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Here’s the program.
Andrew: Hey, everyone. My name’s Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How do you build a lifestyle business in art? Joining me is Stuart Sandler, an entrepreneur who sells fonts. He runs Font Diner, a one-man business that he launched and runs from his home. He pulls in the resources that he needs to run his business from around the world. I want to find out how he launched a business. I want to find out how he grows it, and I want to find out how he does it so leanly. Stuart, welcome to Mixergy and thanks for doing the interview.
Stuart: You bet. Thanks, Andrew, it’s great to be here.
Andrew: So who’s used your fonts before? Where have your fonts been used?
Stuart: They’ve been used quite a bit of places honestly. Probably the first popularized use of the fonts was if you remember the TV show called “The Osbournes” by a small network called MTV, that was the first time one of my typefaces sort of hit popular culture. Other broadcast uses have been on “Sesame Street.” I was pleased to see them there, a lot of greeting card companies, General Mills uses them quite often on their cereal box packaging. At this point, I’m surprised to see how they’ve started to permeate popular culture and how prevalent they’ve become. So it’s always a pleasure for me to see them in use.
Andrew: I remember watching the movie, I think it was called “The Wonders,” where this little band goes from nothing, from complete obscurity to the top of the pop charts. And the first time they heard themselves on the radio, they were just jumping up and down, they couldn’t believe it. Do you remember the first time that happened to you, the first time you saw yourself on TV or saw your fonts on someplace that you were especially impressed by and proud of?
Stuart: I think actually probably one of the first articles that reviewed my font company, and this would’ve been in 1998, and it was the first time I saw my company’s name in print along with some samples of the fonts that I was selling. I was like wow, this is sort of, I’m now a business in a marketplace that I was previously the customer of. That was kind of a big deal for me.
Andrew: That’s cool.
Stuart: Yeah.
Andrew: I got to tell you, I’m looking over your shoulder just to get a sense of where you are. The place you’re in is beautiful. Usually when people hear working from home, and I know the people who are listening to us on MP3 or just reading the transcript must have an image of what it looks like, and they must be thinking small kitchen table, look over a shoulder and there’s a microwave or a refrigerator over the other shoulder. No, it’s a beautiful workplace, I see lots of beautiful books back there. I love the wooden doors. I’m paying attention and snooping around over Skype with you here today. Looks great.
Stuart: Oh, thanks. Thank you. And actually, if you don’t mind I’ll give you a small audio tour for the folks listening at home. I literally . . .
Andrew: Can you move the camera around for the people who happen to be watching?
Stuart: Sure. Sure.
Andrew: Okay. We’ll come back and go back to the story of how you got here later, but I’m kind of curious. So what do we have around here?
Stuart: Well, the first thing I want to show you is my workspace. Everyone always seems interested in, and so here’s the Mac, the Biomorph desk because comfort is key. And just something else to point out that I think is important to show the audience at home, I don’t have anything else on my walls, and there’s a reason for that I’ll explain to you a little later. As we sort of pan around, this is one of my pride and joys is the Filmotype machine, which I’ll get into that a little bit more, my ’50s wall sconces, a pretty impressive library of type specimens and book collections that I’ve continued to collect and reference pretty frequently. You might have to do some editing since I’m doing sort of the polo match with the camera here. Even though I’m in my basement, I have a nice view outside facing the woods and I always get to enjoy the wild turkeys as they come through and some deer, especially when the baby fawns are born and we see them walk by. So I love the Wisconsin lifestyle. A little bit of music for when I want to take a break and a little bit a showroom and then into the other part of the basement. But that’s basically Font Diner central.
Andrew: And some people might have been looking at your computer screen, you intentionally made the background black so that it wouldn’t glare so much on your glasses. I love the attention to detail. I never would’ve thought of that.
Stuart: I was testing my new camera here late last evening, and I looked like someone from a Dilbert cartoon where all you see is the white part of the glasses. So I wanted to make sure that folks could see me at home.
Andrew: Yeah, looks great. Why no art on the walls? Why is that so important?
Stuart: I had received one very important piece of advice from a creative director when I worked in the advertising world. He asked me to describe what my office looked like. And I said, “Oh, it’s great. I’ve got chotchkies all over the place. I’ve got Star Wars toys. I’ve got super cool posters.” And he said something and I actually kind of felt bad about it afterward, but at the time I was just sort of puzzled by it. He said, “Well, why would you surround yourself with someone else’s ideas?” And at first I was kind of defensive about it. You know, here I was I had George Lucas influencing so much of my active workday. I had all the different brands, the different things staring at me, and then it occurred to me that he actually had a really good point. But to take that even further, even if I was to put up my own creative work or successful ads, things that inspire me, that may kind of lock me into one space visually or creatively, and I like getting up and moving around and picking up books or getting on the iPad. If I’m not continually refreshing the content that I’m putting in my head, I’m stagnating myself. Even with something as simple as wall decorum, I think can be part of what creates stagnation creatively.
Andrew: You mentioned the books behind you have specimens of fonts, and I heard and read that you’ll sometimes go traveling with a camera just to take pictures of fonts that will inspire you. Where do you get your inspiration and ideas, and then how do you use them to create new fonts?
Stuart: Well, primarily most of those books, obviously if publishers only produced type specimen books, there wouldn’t be a huge market for them. So most of that is popular culture books. So it’s the history of the cheeseburger, diners, mid-century architecture, I mean all of these things I sort of, my passion has sort of become my hobby in many ways. It has worked on so many levels. But primarily, a lot of the books in the bookshelf, I think the range is very specific. It’s somewhere right around the early 1930s to about the mid-1960,s and anything with popular culture within that period I sort of tried to capture that, bunch of dusty old magazines that I enjoy, that I flip through periodically.
In terms of the type specimen trips, yeah, absolutely, I can’t do everything from here and antique shops, that’s pretty funny they’re as much museums as they are anything else. It’s sort of like a free museum of American popular culture. So I would say even starting from like the earliest points and once this started to go from being an interest to sort of a passion, I think it was always looking for more actual . . . you know, it’s one thing to see a photograph of what a new Howard Johnson’s looked like in the early ’60s. It’s another thing to drive to that location in Missouri and look at that Howard Johnson’s now and see that it’s either been completely glossed over, the facade has been ripped away, or it’s been repainted versus finding one that’s maybe still in the same condition but older. It’s been still kept pure. So it’s nice for me to see sort of the contrast of what does it look like in real life versus what is the photograph telling us. It’s the difference between sending an e-mail to you and having a Skype discussion and then shaking your hand in person and you getting a different sense of what is this really. So I think that for as much as you can have sort of empathy for the aesthetic and all the things that went into creating it, you have to think about the people that did the work to create it. The lettering artists, what was their lifestyle like back then? What were the things that were influencing their decision making creatively or even coming home, what was the meal that was on the table? What was the situation? So I think it can be indulgence if I get too interested and try to figure out what it was.
Andrew: Now once you take it all in, how does it influence your work?
Stuart: That’s a great question. Generally, I like to, when it comes to design stuff for me, it’s more important to understand what was the mechanical process that produced it. So obviously, we’re at a point where advertising, lettering, a lot of stuff is done directly on the computer. Back in the day, there were analog drawing tools and there were older processes. People spent more time doing sketches and things of that nature. So a lot of times, even like with my old magazine collection, I’ll flip through and see an ad that’s very interesting to me, and then I’ll try to recreate it on the computer to try to figure out what were some of the, okay why is there a solid black bar here? Well, the designer didn’t have anything else to put there, or they actually had a mechanical constraint and so they ran out of space and they actually just wanted to balance the aesthetic of the entire printed page. So it’s funny to try to, when I see that work, when I see how the decision process was influenced by the limits created by either the printing technology or the space they had to work with, I think those are more important building blocks for me to kind of . . . it’s funny, these are lessons that are out there, they’re in plain sight, but most people wouldn’t pay attention to them. It’d be like if an engineer was to study Hoover Dam, a modern day engineer could look at that and see the shape of the structure and how it works and what makes it stable, what makes it successful but could also be able to extrapolate a lesson that they’ve seen in the way things are placed or how it’s used.
So I think there’s lots of these sort of obvious things out there that if you have a specific focus you can derive education just from studying things that have already been created.
Andrew: And you won’t just look at them and study them. You will try to recreate them. And I’ve actually seen when I’ve gone to the Met, I’ve seen people sit there and paint what’s up on the wall, and I guess that’s their way of taking it in and really doing what? Why would they do that instead of just doing what I do, which is standing, looking, maybe look a little more carefully than I would? Why does recreating help you understand the material better?
Stuart: The process of deconstruction I think is vital. I mean it’s vital for business, it’s vital creatively. I’ll throw another weird, related example. I’m a huge fan of coffee and I’ve got my trusty coffee mug with me. I can’t produce the coffee that I can go and drink, and yet it’s important to me to understand how can it get to that point. So as much as I have in terms of a library for American design, aesthetic design, it’s also important for me to fully understand how I can create that same result. And if I can deconstruct all the pieces that went into making that, I may find the end result isn’t what’s important to me. What might be more important to me is finding that I’ve uncovered entire, I guess I’d call it a branch, to head off in a completely different direction that may have been one of the granules of the process. And I think it’s absolutely essential. I think there’s, O’Reilly’s Publishing’s make Craft magazine, they give you the raw materials, they give you the recipes. Buy these materials, put this together, and there’s some learning that happens in the way that it’s explained to you. But you’re not really understanding it until you have the materials and you’re physically working with them. So I think there’s as much of a tactile experience that’s related to deconstructing and reconstruction as there is even the mental experience of deconstructing an idea and then reconstructing it or finding aspects of it that you can sort of tangentially explore.
Andrew: I’m curious about how you got here. In fact, what did you do before you started this business?
Stuart: I was actually an advertising art director.
Andrew: What does that mean?
Stuart: I’m sorry?
Andrew: What does that mean to be an advertising art director? What do you do?
Stuart: I went to art school out of high school. My first job I was working for a homebuilder in Orlando, Florida, and I designed all of the printed literature that they produced and gave to their customers. I produced magazine ads, newspaper advertising for them. That wasn’t my passion, but it was my first out of school job. I was happy to have the experience. I eventually went to Milwaukee where I became an advertising designer, which is really what I wanted to do is work at an ad agency; focus on a variety of clients. I did work for a lot of different Milwaukee centric companies — Miller Brewing, Wisconsin Dells, very popular tourist area near Madison; a lot of banks. And it was great. I mean, direct mail pieces, magazine advertising, billboards, I mean talk about getting a kick, imagine designing a billboard and then driving home one evening and seeing your design on the billboard. It’s absolutely, I mean you just stop the car. You can’t imagine seeing a piece of work that large in your space. And it was great, it was exactly what I wanted it to be, and at a certain point decided the Web was calling me.
Andrew: What was it about the Web that drew you in?
Stuart: Well, there was a couple things. First of all, there was some dissatisfaction with the print world because of the fact that print was print that was it. I mean there was not a whole lot of new anything to bring into that media, and so I was starting to feel like there were too many people who had been there, done it. And there wasn’t a lot of new anything happening in that world. As a designer and even when I went to art school, computers were just taught towards really the last six months of my design program. Not to date myself, but to say that in the early ’90s there was a big transition from the analog processes to the computerized processes of creating advertising. And then from that point, even though the computer processes went forward, you were still dealing with the same, ultimately it was the same result, which is a printed ad. So moving this forward a little bit, I had always been a computer person. I used to program Basic as a kid, and I loved computers. My first dream job, what did you want to be when you grow up? I wanted to be like David Crane from Activision. I wanted to be a video game designer for Atari. I thought that would’ve been the coolest job in the world.
So my passion for computers was always present, and being able to do design work and computers I thought was just a dream. Taking that forward, I had my own sort of a metamorphosis in the way that the Internet experience happened, and this was 14/4 dial-up modems. And for me, the experience was very personal, because just like I’m talking with you now I’m actually screening up my monitor, staring at a video cam. I’m the only one in the room except for maybe a kitty cat that might be running around here.
But the point is that my experience is with myself. It’s not with anybody else. So when I’m browsing the Web or when I’m even having a Skype discussion, I’m really having this experience by myself. So what primarily drew me to the Internet was the fact that here’s this entirely new way to interact with people, and my statement was I really wanted a hand to come through the screen to shake your hand. I mean I really wanted to have that type of experience with someone. And part of the reason I explored that I think I was just reading the Internet and back in the early ’90s, and I read a joke and I was absolutely cracking up and realized that I was the only person there. I was in the office, it was after hours, and it just occurred to me I can be motivated, maybe manipulated because I was in the advertising business by myself, by my own solitary experience with the machine. So that was probably the primary driver for me to explore that. It wasn’t . . .
Andrew: Most people who I ask that question of, at least here on Mixergy, will say it was the mid ’90s, it was the late ’90s, everyone seemed to be getting rich online, and I thought I got to jump in there, I got to get my share of the action. And for you it was different. For you, it sounds like you’re saying it was an anti-social way of experiencing the world. Is that what you’re saying?
Stuart: I would say when you’re designing a print ad, at least back in those . . . oh, just a real quick detour, I don’t know if you can see it, there’s a wild turkey in the yard.
Andrew: Oh, wow. I didn’t know wild turkeys could just walk around people’s yards. There’s a second one.
Stuart: I’m sure you’ll see the crowd of them. Anyway, sorry for the . . . to answer your question though, when you’re designing print advertising, at least when I was in the ’90s, you have these demographics. Our female sees this age range, right? It’s relevant but it’s also sort of like who am I? Well, at the time, I was a 20-year-old out of college kid. I don’t know anything about the interest of a 27-year-old woman who may or may not have children. So there’s some relevance, but also if you don’t know how to speak to them, you can’t really know that. So for me, when I tried to assign demographics, which was sort of part of the core way you developed ads back in that time, I tried to assign a demographic to what the Internet is. How do I reach these people? Well, you can’t look at age and you can’t look at gender when all of a sudden you’re seeing that it goes so far beyond that. It goes to my name is Andrew and I have this interest, I’m really into lunchbox collections. All of a sudden there can be a billion people in that range. I’m trying to find out what makes those folks interested in very specific things.
So it wasn’t so much my reaction to trying to figure out how to make a buck. It was more or less my perspective of how do I find the people I want to talk to. And this is so far before even any ideas of social networking, and it was hard to connect. It was hard to find those groups. So that was more where I started from. I eventually found something that, yes, this is the business I need to start online. And that’s sort of where it moves forward into how can I turn my ideas about the Internet into a way for me to turn this into my profession.
Andrew: I can see how somebody who has to deal with demographics, who has to deal with client requests and co-worker insistences, I don’t even know if that’s a word, insistence from co-workers that once you get to just design on your own and be there without all those voices shouting at you that that would be pleasure. That would be your way of just discovering the world without all those people showing you how they want you to see the world.
Stuart: Absolutely.
Andrew: So you were still working there when you decided to start your own business. What was the idea for the business? Before you launched, what was the vision that you had?
Stuart: Well, it’s sort of, and this may be more typical of the stories you’ve heard, I was surfing around, I was an art director, and I knew that the better quality fonts I had available to me the better my designs would look, my print designs I was doing. So at the time, most of the way that an art director could get exposure to typefaces was catalogs. Everything came via direct mail, catalogs from suppliers that had fonts to sell you and graphic design magazines. So once www addresses started popping up next to all of the manufacturer names, well then I could explore a little bit. And at the time, believe it or not, Yahoo had the most complete directory of font companies available. I just remember really early in the days it was hand index, so you had to submit. But what was interesting is that all of the literature I was receiving had these bigger name organizations, and it wasn’t until all these smaller organizations that started popping up lower in the search and sort of okay, let’s see what this person is doing. Who’s this? Who’s this? Who’s this? I just wanted to see their fonts.
And there was one that I found called fonthead.com, a guy by the name of Ethan Dunham started and I studied it. It was the first time I saw, one, it was an individual. It wasn’t a large group of people. And two, he had a very unique position in the marketplace where he was selling fonts in a bundle. So you could buy maybe 10 to 15 fonts for $25, and there was some decent fonts in there, there was some filler fonts in there, but you could see the strategies he was using were starting to build up his popularity. That was actually for me the first time this is the business I need to start. From there, my focus was really I need to find a niche market that I want to serve. I want to make fonts. I need to learn how to build a website. I need to learn to program.
So that’s when I started to get into the point where I become a self-taught web designer. I learned programming by sort of reverse engineering PageMill code. As a font designer, I knew I had taste for fonts. I knew the types of things that were interesting to me. But it wasn’t until one day a catalog came in, a nice thick book from a company called CSA Archive that I found these old clip art references from the 1940s and ’50s of old matchbook cover art and it was great. It was this beautiful stuff. If you want I can run back to the bookshelf and hold it up if you want for your audience.
Andrew: Maybe at the end of the interview. I’m curious about the story.
Stuart: Sure. So I’m studying this book, and I know I wasn’t interested in designing text typefaces, which I think Helvetica, Times New Roman, and I can identify text typefaces. There’s thousands of them. But I didn’t really ever have a passion to design a text typeface. I always liked the fun, expressive, playful display typefaces. And so I thought, well, geez, if you could compliment this great 1950s imagery with really period appropriate type, you’d really be on to something. And at the time there wasn’t really anybody who was doing that type of stuff.
Andrew: Did you want to assemble other people’s fonts and sell those first, or were you planning to sell your own?
Stuart: I was always planning to sell my own.
Andrew: But how did you start?
Stuart: Well, I was learning many things at multiple times. I guess I’d call it my first big break was I met a client who was an executive producer of the public television station. His name was Charlie White. And he’s actually, he was an editor at Gizmodo. He’s a very prolific blogger. He turned me onto the Internet as hey, there’s this new career, website design. He had done software reviews for digital publications. He reviewed a software product called Fontographer. He sort of turned me on to all these different things. He taught me some foundations of Basic programming. So he was the first guy to really get me, really the beginning of my learning how to do this work. Simultaneously while I was starting to build and design my original first Font Diner website, I didn’t have any fonts of my own to sell or to promote, but I knew I wanted to start the branding exercise and the building exercise of the site.
On a related client project, I had found one of these independent font designers, the Brain Eaters Font Company. There was a fellow I had been e-mailing with from Utah named Brad Nelson and he was just a nice guy. He was like, “Hey, don’t worry. I’ll just send you the font. Your agency can send me the check, whatever.” So he and I had a rapport, and he was someone I could pick his brain about how do you make fonts and how are you operating? At the time, his site was very, very basic. It might’ve even been a Geocities website. I said, “Hey, I’m starting a new website. I’m learning to design fonts. In the meantime, can I feature your fonts until I can start to create some of my own?” He said, “Yeah, that’s cool.” And to sort of put some relationship to it, his fonts were B movie horror fonts from the ’50s. He hits the genre very well, and they’re very enjoyable to look at. And it jives with the ’50s aesthetic that I wanted with the Font Diner.
Andrew: When you were selling his fonts, actually you were featuring his fonts, you weren’t selling them. You were just linking to his fonts, showing them on your site, and you weren’t getting any commission for them, were you?
Stuart: No, none at all.
Andrew: No commission. At what point did you start earning some money from the site?
Stuart: This is also kind of an interesting story. So I started to release some of my own fonts freely because I wanted to build traffic. And so I wanted to give away a couple of fonts for free and just build interest that I’m doing this sort of ’50s font website. Now, once I started to complete some of my earliest commercial fonts, I was so excited to have completed a font. I think the first one took like six months. It was laborious to me. I put it up for sale and I put it at some pretty exorbitant price, because I was like I did all this work I should get it up there and get it for sale. I released maybe two or three fonts like this and they didn’t sell at all. So I sat on these unselling fonts for a while, while still building up my library. I eventually got to the point where I had enough fonts to do a collection. I said, “All right. I know this guys model works. I can’t wait for my first dime here on this.” So I had to get that whole back end process of getting a payment processor, which was very difficult back in the early ’90s. I actually worked with a company called Cogee [SP].
Andrew: It was the late ’90s though, wasn’t it?
Stuart: At this point it was the mid ’90s, 1996.
Andrew: ’96 is when you launched, OK.
Stuart: Yeah. So the site launched in ’96. My first sale was probably towards the end of 1996, in the fall.
Andrew: So by the end of that first year that you were in business, you already had a font for sale and already gave away a few fonts to get people in the door?
Stuart: Yep.
Andrew: Wow. All right, that’s a lot so quickly.
Stuart: Yeah. I mean and it was a running start, it really was, because I was trying to do everything at once. So by the time I had amassed enough of the fonts, now keep in mind, backing up ’95 I was still toying with it, I didn’t even have my own domain. So I was really doing a lot of the site work in ’95, and it wasn’t until ’96 I got the domain, I had enough fonts to have an entire collection. And then as soon as I put that collection up, my first sale happened probably within four days.
Andrew: And the reason it happened so quickly is because people already had come to your site to see other people’s fonts and then to see the free fonts that you were giving away. And now you had traffic away from giving away and you were able to convert. I see. Okay. At what point did you decide to do this full time?
Stuart: The business continued to grow and it was always my hobby, it was my second wife for many years. I wasn’t married, but whenever I had time, I’d build another font set. I’d put it up. As I got better with programming and web design, I’d make design out base to the website. I’d fix the coding that was not open tags and the whole nine yards. In about 2001, I had at the time four font collections up and for sale. At that point, it was starting to become serious hobby money. And I was having a phone conversation with a brother of mine, I have two brothers, and he was very excited about his new job and his new promotion and his new raise. And at the time, we weren’t too coy to talk about how much money that was. When he sort of told me, hey, I got a raise and this is what I’m making now. I said great, good work. All of a sudden it occurred to me that what his new salary was, was about $10,000 less than what my hobby/business was earning. I said, “This is ridiculous. I’m doing the wrong thing.” It was a very sudden . . . it still gives me chills because I couldn’t believe. Also by this time, I had transitioned from doing print design to being a professional web designer. Being a professional web designer in the mid ’90s was a very profitable profession. There weren’t many people that knew how to do it. There wasn’t the expertise. Schools weren’t teaching it yet.
So I had a great job, I was making a great salary designing websites. But at the moment I realized this could sustain me full time, I realized very quickly it was time to pursue this full time. And my first inclination was literally I’m going to quit and just do this. And I actually went in to quit, and I actually had a really pretty awesome boss. And he said listen, “We still need you, because as someone that works for an ad agency, you’re helping that company make money.” We needed each other a little bit. He needed me more than I needed him at that point, but I wanted to try to do right by my employer, who had been very generous to me. So he said listen, “You go to half time and we’ll pay you half and that’ll give you the freedom to do what you need to do. And when you want to come back, the door’s open. We want you to be back full time, but it is what it is.” And so we engaged in that arrangement. I poured myself into developing the Font Diner, more font sets. And at a certain point I was creeping up so close to what my salary had been, and I sort of said, you know, there’s not really an option for me at this point. I have to fully exit. And that was within probably a year of going down to half time.
So I never felt that I had taken a financial risk to do this, because I had very regular income at this point. This is one important point that I do want to share with your audience. When it comes to any retail sales, software, physical goods, customers in your restaurant, you don’t want binge/purge situations. You don’t want to have a rush and then no one. What you want is you want two or three customers a day, but you want them every single day. And that was what I had built up to at that point, and that sort of gave me the confidence that, wow, I have a recurring base of customers. I don’t have the spikes that I used to have and the same pitfalls. I mean, there’s nothing worse than those goose egg days. But once you get maybe two or three years into any business, if you’re at a point where you’re never seeing a goose egg that’s actually a really good thing to have, and it can give you the confidence there is absolutely a future here. And so really everything started to grow from that point. I had a very stable base underneath me. It gave me the freedom to do more sets and pursue other business opportunities that have other legs related to what I was doing with the Font Diner.
Andrew: What about any set backs in the business?
Stuart: At that point, I was flying high. I mean right up until about 2002, when I was doing it full time and I had been working on it, I had at that point been making fonts for a while. I had wanted to make more money. I had been concerned that this was my only income stream and that I needed to diversify what I was doing just to, number one, keep my interest and number two, so that if one day the fonts weren’t selling so well that I wasn’t cry me a river, I couldn’t afford to pay my bills. So I distracted myself with a lot of different things at that point. Some of those things turned into financial endeavors that made money, some of those ended up being giant wastes of time.
Andrew: Like what? What was a big, giant waste of time?
Stuart: This would be a fun one for your audience. There was a product in the . . . it wasn’t a product at all, it was a hobby. In the early ’90s, there was this group of college students who made a drink machine called the Bar Monkey, and this thing was very cool to me. It had eight windshield washer fluid pumps that they had programmed with a serial cable to be driven by some code and a windows machine to make this drink machine that could dispense cocktails. And it was a really cool sort of novelty thing, and I love gizmo, gadgetry and novelty items. And I very quickly got turned onto to, because I was [inaudible 42:55] super cool thing. Someone said, “Yeah, that’s very similar to something my friend from Iowa State made called the Lazy Drinker.” And so I got involved in the project where I wanted to work with this guy and I wanted to turn this Lazy Drinker thing into a big money maker. I mean I had dollar signs in my eyes. I thought it was cool. And it was still a really neat idea and he still does the business. But at a certain point I had been investing a lot of time and a lot of my own money to try to, I guess, reinvent the new mousetrap, a better mousetrap for how to make a cocktail dispenser. And ultimately, the price point of entry was $1,000 to get into a 16 ingredient cocktail dispenser. And it had this high novelty factor, but unless you’re a bar owner or an alcoholic, nobody needs a machine like that and not for very long.
Andrew: Is part of the reason that you get into a business like that, that there’s money coming in from your main business and there’s not that much room to grow it and also you’re looking for outside interests, you’re looking to explore . . . actually why is it? You’re not the first person who’s told me about that. I was actually just looking at a transcript from a previous interview where the founder was making a lot of money and he just kept pouring it into lots of different ideas and I didn’t ask him why. Now that you’ve said it and it’s on my mind, why do entrepreneurs, why do we all do that?
Stuart: It’s fear.
Andrew: It’s what?
Stuart: Ice cold fear.
Andrew: Fear. Fear of what?
Stuart: Fear. Fear that the business that is your rock, is your foundation of your personal income, your ability to live could go sour. The fear that that business, I mean for me, when a business is doing really well, that’s when I’m most fearful of the business, because to me it feels like I’ve done all this hard work, it’s doing really well now, but what happens once I get complacent because it’s doing well? When it’s doing well, I’m not doing much to support it. It’s on autopilot. So I don’t set it up to be a failure, but I have this expectation that because it’s doing well it’s because I’ve already done the work and I’ve gotten it to a certain point. And if I don’t maintain that hard work in the business, it could just like a light switch, it could turn off. And so there’s this fear that if your entire income base is reliant on a single column of income, it’s very easy to get knocked off one pedestal. So there’s this desire to create multiple pedestals that you can have more footing on. Eventually, if you have enough pedestals, guess what? You have this gigantic floor of pedestals underneath you. So even if some of those columns fall apart, you still have a very comfortable base of pedestals. And I always like to tell anybody that I talk to about this, don’t ever become reliant on a single income stream. Give yourself multiple income streams and then seat yourself firmly on all of them. That’s really where that comes from. It isn’t until you get that underneath you, I mean you’re still going to have those fears but at least now you can control the cycle of fear that okay, this business is going to tank but this business is sort of coming up to meet it. And then you’ve . . .
Andrew: In your experience that’s good advice but maybe focus on the one area that you have a lot of strength in. So maybe for you it would be fonts. For someone else, it might be search engine optimization products and so on. Whatever it is that you’re really good at, just focus on creating multiple businesses or multiple sources of revenue within that business.
Stuart: Correct.
Andrew: Now you told me in our pre-interview about an aspect of the font business that I never heard of before that I want to make sure to include in this interview. How do I bring this up? Slot machine makers for example, when slot machine makers use your fonts they don’t just pay you once for the right to use the font. They don’t give you $20, go create designs on their slot machines using your fonts, and then that’s it. What do they do? How does that kind of deal work?
Stuart: Well, actually, do you mind if I back up and readdress one other point?
Andrew: Yeah, absolutely. You want to talk about something that I said before, absolutely. I don’t want to just put assumptions out there without being challenged or have your input on them.
Stuart: You had asked other challenges to my business, and we can revisit this but I wanted to make sure that I got this out there. At a certain point my business, I became very complacent technologically and lost the interest to do the programming and the web design and stuff like that or to keep the site updated. And the sales followed that very closely, and I didn’t realize until within the last year or two what that actually turns into. I mean in terms of all the changes that have happened since even the early 2000s till now in terms of the social networking integration, the way programming is optimized for SEO. It’s sort of like if you put your head in the sand, you’re eventually going to become a dinosaur. And we can certainly revisit this a little more if that’s interesting to you, but I just wanted to put that out there, that was a huge, huge, probably the biggest stress on the business in the last ten years.
Andrew: That things got stale for you or what was the biggest stress? How would you explain it?
Stuart: I made the intentional decision that I was sick of paying attention to Web.
Andrew: Okay. So it didn’t just happen, you didn’t just happen to lose interest a little at a time. You said, “No, that’s it. I’m going to take a little step back. I’m exhausted from this.”
Stuart: Right. I want to look at other things. I want to just make products. When you’re a one-man show, you have to make products and you have to continue to sell those products and promote them and do all the things to, if you’re working with any distributors, to get those products added to their library that they can distribute. So you can never say no to one thing and solely focus on one thing. And I guess I had a very big wake up call about two years ago when I realized how out of touch I was with the social networking technology that it’s just part of . . .
Andrew: What was the wake up call?
Stuart: I’m sorry?
Andrew: What’s the wake up call?
Stuart: Somebody made a point to me. My biggest marketing tool on my website was sign up to be e-mail alerted when we had news to share with you. And so you’d put your e-mail in and you’d hit enter, thank you, we’ll subscribe. So I’d send a mass e-mail and it was a great, it was this constant hit. Well, all of a sudden it, didn’t matter how many e-mails I was sending, I wasn’t getting any responses. Those weren’t turning into the sort of sales avalanche that they used to be, and part of that had to do with anti-spam technology that everyone was employing. Part of that had to do with the fact that just people change how they check e-mail. People don’t like using e-mail if they can use Twitter or if they can keep in touch via Facebook. So e-mail has sort of become the stepchild of communications now. So you now can’t rely on that. So it didn’t matter how many e-mails I was sending, I couldn’t get in touch with anybody that could affect my sales.
So once I sort of realized that and someone put a fine point on it that, you know what, you probably can’t, because I still kept in touch with advertising friends and people who were into social networking and they said you know, you’re not getting sales because you’re actually not reaching anybody. And the way that you’re trying to reach out to them is like sending an e-mail newsletter in a tweet. It’s just not going to work. You have to understand why a tweet is different than an e-mail and how to speak to people via Twitter differently than how you’d speak with them in an e-mail. So I just had to sort of relearn everything, because it had moved so many times since I sort of decided I wasn’t interested in paying attention to it anymore. I just had to relearn what’s the latest and greatest, why is that, how did that shift happen in technology? Why are people gravitating towards these different things? It was a giant wake up call for me.
Andrew: I see. Okay. Let’s go back to the licensing, I’m curious about where the money comes from. And by the way for the audience, Stuart and I agreed we’re not going to bring up revenues, profits, sales numbers, not that I’m wussing out of asking the question that some of you love to hear and many of you hate for me to ask. It’s just I don’t always ask it, and I don’t push people who don’t feel comfortable doing it. This is a one-man business and it’s a private business and I completely understand that we’re going to stay away from that. But I am curious about some of the mechanics of the business and the revenue. So how does licensing work?
Stuart: Licensing is the business. A lot of people think that when they’re buying a software product they’re getting a software product. Well, ownership never changes hands . . .
Andrew: Yeah, if I buy software even from the store and it’s shrink-wrapped, it’s not mine. What I’m buying is the license to use that software.
Stuart: That’s correct.
Andrew: Okay. I have started to learn that about software a few years ago. I didn’t know that about fonts. I thought if I buy a font I could do whatever I want with the font, unlike stock photography, unlike other tools, a font I thought I bought. You’re making me more aware of the font business as a whole, and you’re saying no, that’s not the way it works. In some cases I’m just licensing the font.
Stuart: Well, in every case you’re licensing the font.
Andrew: I didn’t know that. Okay.
Stuart: I mean just to put a fine point on it. When you create a Word document, you don’t even own that. In the nicest way, you can own the content of that document, but you don’t even really actually own the software if you read the license agreement that you agreed to when you installed Office. You don’t own the .doc file at all. You can only own the contents.
Andrew: I didn’t know that.
Stuart: So suffice it to say when it comes to software, what you own is the content you create. If you take a photograph, you own that photograph. If you write words, you own those words. The vehicle that contains those, you can never own. Those rights are never transferred at any time. So extrapolating that back into the font world, when you buy a font, you always are buying a license to use that font. Even if you’re downloading a font that’s from a free website like dafont.com is a giant website, we have a great relationship with him, whenever those fonts are being distributed, there’s always going to be a read me file. And even if it’s very casual, it’s going to say on there you can use this font for whatever you want except for these things. But you can’t redistribute it without this read me, you can’t resell it. I mean there’s some very basic things that you can’t do because the font author wouldn’t want you to do them. Or they might say, “Hey, I’m just giving it to you under an open font license.” But even something that’s an open font license or creative comments license basically says, “I’m not transferring the ownership. I’m still the creator. I own the font software, but you can use it for really anything. You can make as much money as you want to with it.”
I had the fortune of, and I might be one of the very few people in the world who can say this with a straight face, I really, really like my lawyer. I love lawyers. I think they serve a very important purpose, and some people would say yeah, but you’re stymieing creativity or if you put restrictions on it. Everything should be free. And that’s sort of, when it comes down to it, you’re running a business to, you have a goal you either want to make money or you want to promote the business. You have some goal for it. In many cases, I give away a lot of fonts for free, but I give them away free with the caveats that come with that.
Andrew: What are those? And by the way you don’t have to apologize for that here on Mixergy. We want to understand your business the way it is. We understand that you have a right to earn a living. So, what are they? What did your lawyer teach you about fonts that helps you generate revenue from products that use your fonts?
Stuart: Well, that they have value. Whether they’re given away freely or they’re purchased, they have an inherent value, which is why even when a buddy wants to hit me up for a free copy of a font or a piece of software, you got to pry it out of my hands because I know that there’s a value associated with it, even though it’s a digital asset, it has no physical presence. So really one of the first things that I learned was that every font has value to it. The question is how do you create value within a marketplace for a piece of software like a font? And the answer is you’ve got a price point. At a bare minimum, I’m either going to give this to you for free or I’m going to charge you for it because I think it’s a nice font and I think the amount of work I put into it has some value, monetarily. But no matter how it’s coming into your possession, if you are using it in a way to generate income for yourself, that makes it’s value worth more than what I sold it to you for. At that point, I’m adding value to your business. My font becomes one of your assets, one of your tools, one of your employees if you will, and I want to make sure my employees are getting, I’m their union rep and I want to make sure they’re all getting their fair share.
And so when my fonts are being used by, getting back to the example, a slot machine manufacturer, well if you go to Las Vegas and you walk up and down the casinos, most slot machines are almost purely digital at this point, even the marquee. So they can change out what the slot machine is at a moment’s notice. Whenever a slot machine manufacturer is using my fonts and they’re embedding them in their machine to create a track loop to get people to drop a quarter in or on their reels, the whole purpose of a slot machine is to make money. And so the fact that they’re using my fonts to create that sale, I mean I certainly have a moral and ethical position about it, but truth is I don’t restrict the fonts use in gaming machines from a moral perspective. But if they’re being used in an electronic device like a slot machine or a greeting card creator kiosk, it’s no different to me. It’s important that because if I’m adding value to their product that I’m being compensated for that value.
Andrew: And how are you compensated for that? Based on share of revenue from the slot machine or based on use?
Stuart: That would be nice, but it primarily, some of those deals you can get an annual license. But many times manufacturers don’t want to deal with the accounting situation related to that, and they’re saying no, this is what’s fair and we come to some terms as to this is a fair price. I’ll usually limit it to a series or a title of a machine. Then for example, once we find common ground on a price and the terms of that and this is where the lawyer has sort of helped me understand how they may be over reaching, even after a price has been defined, and they may try to expand it into more than what we’ve actually verbally agreed to. That’s sort of where the devil’s in the details, that sort of thing. Then I usually will negotiate an agreement that’s usually an amendment that sits on top of the license agreement that I’ll work with my attorney to draft. We get payment and they have this peace of mind that all right I’ve got this license from this font guy, he’s not going to sue me now. We’re working together and we agree that . . .
Andrew: I could see why you love your lawyer. I could see why you’d love somebody that opened you up to that. I’m wondering how does this slot machine owner know that they need to work out an agreement with you? Or how do you know that some slot machine owner or greeting card company manufacturer is using your font?
Stuart: This is going to sound like the worse answer in the world, but because I can identify so many typefaces so quickly and I’ve got an audience that always sends me, “Hey look, I saw your font on this TV show. I saw it on this billboard. Check out this cool flash game that uses your font.” I have so many feelers out there, I’m such a participant in popular culture and I can so easily identify my work, it’s just I know if I’ve given a license to those folks or not. And many times, probably the most infringing uses become the most popular ones. So it’s not very difficult. They’re eventually going to find their way back to me, and it’s not like a big brother thing where I’m out there looking for ways to sort of blackmail folks into licensing. But when anybody purchases a font, you agree to an end user license agreement. That long thing that nobody reads and everybody clicks okay just so they can get the font downloaded, but that actually is very important, that agreement is an agreement. And when you click it, you accept it. When you download the file, you accept the agreement. When you install, you accept it. So you accepted it three times by the time you’re actually using the font.
Andrew: You understand that when you agreed to do this interview that at some point you accepted the agreement that I own all your fonts forever, you checked off the box. I don’t know if you noticed it or not, but you checked it off one, not three times, but I now own every, you’re a little nervous I see it. All right. Let me ask you this. Final question, any advice for other people who want to build a business like yours? A business where they could run it on their own, they don’t have the agita of lots of people coming in, investors who demand board meetings, and they want to do something that they love the way that you do, what advice do you have for them?
Stuart: The first piece of advice is talk to as many people as you can, not about your business idea, don’t bore people to tears with I’ve got a new coffee mug design. I mean those are speculative discussions and to some degree they’re private, you shouldn’t be sharing that with anybody. You can manage your own business idea on your own. But what you can do is interview people, same way you’re doing with me. People who love what they do will talk about it and they’ll talk about it and they’ll talk about it. And you can indulge them in any question and they will happily answer it. And what’s funny is, is the really, really talented people, the people that you think are absolutely going to be unreachable, those are always the nicest people that have the best information to share with you. And the people that are really jerks, feeling like they have something to protect, those aren’t people that stay in business as long as the really good people who are more open with their knowledge. So I think really you have to really spend time and ask a lot of questions and really get into it and you’ll find people who can engage those questions with you forever. But that’s my number one thing is . . .
Andrew: That’s great advice. So if anyone out there wants to start a font business or any similar business, contact Stuart. Send him an e-mail, do a series of interviews like I’m doing with the people who are in the business you want to get into. I’m telling you, you’re going to learn so much, and not just from the interviews themselves. Most people who are listening to me know that I do pre-interviews the way you and I did. Sometimes those conversations can be twice as illuminating as the conversation that we have here, because people reveal things in private that they of course won’t say publicly. I think we went through everything here. In fact, I could see that we missed some, but maybe we’ll save them for a next interview. How about final word website, where can people follow up and see your fonts?
Stuart: Awesome. People can see my fonts at www.fontdiner.com. They can also see my font distributorship called Font Bros at www.fontbros.com. They can see the clip art, photo shop filter compliment to the Font Diner called Mr. Retro at MrRetro.com, it can either be M-R or mister spelled out. Or you can even see my wife’s stationary business at guestbookstore.com.
Andrew: Guestbookstore.com?
Stuart: Guestbookstore.com.
Andrew: Guestbookstore.com. And of course, when you go into any one of those websites, watch what you’re checking off. If you’re checking off a box, read what’s behind that box. All right.
Stuart: Actually, you know the nicest way, please read the license agreement. I absolutely want people to know what they’re getting. As a software creator, I never want to be deceptive to my audience and ask questions. I mean, you know it’s a funny thing is that there’s still even nowadays this perception that people think computers create software not people, and they won’t ask questions of the creator. Say hey, can I use it like this? Yeah, you can use it like that. Can I use this like that? Well, yeah, but it’ll cost a little bit. So I’m never trying to be deceptive to any of my customers. I want everybody to understand what they’re buying, and I try to be as fair as I can with the uses that I want to grant people when they’re buying it. I don’t want to create a customer base of people who I have to look over their shoulder to figure out if I’ve accidentally accepted Andrew’s agreement [inaudible 1:07:08] entire font library.
Andrew: All right. Well, I’m going to end it here so you can go back and read the agreement that you signed when you . . . no I’m kidding. I see you get a little nervous when I say that. I’m completely kidding. I’m glad to have you here, I’m grateful to all of you for watching. Thank you. Bye everyone.
Stuart: Thanks guys. Take care.
Andrew: Cool.
