Andrew: Three messages before we get started. If you’re a tech
entrepreneur, don’t you have unique legal needs that the average lawyer
can’t help you with? That’s why you need, Scott Edward Walker, of Walker
Corporate Law. If you read his articles on Venture Beat, you know that he
can help you with issues like raising money or issuing stock options or
even whether to start a corporation. Scott Edward Walker is the
entrepreneur’s lawyer. See him at walkercorporatelaw.com.
And do you remember when I interviewed, Sarah Sutton Fell, about how
thousands of people paid for her job website? Look at the biggest point she
made. She says that she has a phone number on every page of her site
because, and here’s the stat, 95% of the people that call, end up buying.
Most people don’t call her, but seeing a real number increases their
confidence in her and they buy. So try this, go to thegrasshopper.com and
get a phone number that will make your company sound professional. Add it
to your site and see what happens. grasshopper.com.
And remember, Patrick Buckley, who I interviewed? He came up with an idea
for an iPad case. He built a store to sell it and in a few months, he
generated about a million dollars in sales. Well the platform he used is,
Shopify. If you have an idea to sell anything, set up your store on
Shopify.com because Shopify stores are designed to increase sales.
Plus Shopify makes it easy to set up a beautiful store and manage it.
Shopify.com. Here’s the program.
Hey there freedom fighters my name is, Andrew Warner, I am the founder of,
Mixergy, home of the ambitious upstart and speaking of home by the way, I
am in a brand new home here, brand new office I should say, here in San
Francisco. A very well lit office this time. We’re still experimenting with
lights and backdrops and everything but starting off fresh here in San
Francisco. And the first interview I’m going to be doing from this office
here, in SF, is with a guy named, Trent, whose interview I think you got it
here. And to hear it, I want you to put yourself in his place. What would
you do if your employees turned on you? We’ll, today’s guest says it
happened to him and you’re not going to believe what he did next. Trent
Dyramid founded, Doran Systems, which offered, and still does actually, you
can go check out their website to this day. It offers IT services over the
Internet, via subscription. So for example, if your company hired Trent’s
company, and your employees had some tech support issues, his people would
fix them remotely. I invited him here to talk about the idea, how he built
it up and that thing that happened to him, that I especially want you to
pay attention to. Trent. Welcome.
Trent: Hey, Andrew, thanks so much for having me on the show, it’s a real
privilege to be here I’ve been a big fan for a while and listened to many
of your interviews. So it’s kind of a treat to be the guest.
Andrew: Thank you. And you and I have actually gone back and forth through
my support email system for a while now. You said, Andrew, hold off, I
can’t tell this story; I can’t tell this story . . .
Trent: [laughter]
Andrew: . . . but now you finally can, because the last check came to you.
Let me ask you this. Your company sales, at its height when you were still
running it, what were they?
Trent: One point eight million.
Andrew: 1.8 million dollars in sales. And how did I do at describing what
the business did?
Trent: There’s a term for the industry now, it’s called, managed service
provider. Essentially we were a virtue IT department for small business. So
if you have 50 work stations, you got a couple of servers, backup system,
firewall, all that stuff. You could either hire an IT guy and that would
probably run you like $100, $100 in change, buy the time you fully burdened
those costs. Or for about half of that you could pay us, and we’d remotely
monitor the server, the backup and the firewall, all 24/7 and we’d have a
remote help desk and we could control your work stations. It’s pretty much
how enterprise companies work, they’ve got IT at the head office and they
go to all the branch offices and they dispatch IT support from the head
office, that’s the same model.
Andrew: OK. Where did the idea come from?
Trent: Competition actually. At the 6th month, because I knew nothing about
that business when I got into it.
Andrew: I mean the original idea for the business? I know that you changed
the model about six months later.
Trent: Yeah.
Andrew: But the original idea that lead you into this business. What was
it?
Trent: It’s funny. When I got out of my previous career and I tried to do a
dot com and it really didn’t work, I was like, well now what am I going to
do. And this guy that used to come and fix the computer network, of the
last corporate job that I had. I did a lot of entertainment back then.
Corporate entertainment was for clients and so hockey boxes and basketball
boxes and I always had extra seats so I invited this guy named Ed. So we
sort of got to know each other and during the year that I was in school and
also trying to get my dot com off the ground, he and I hadn’t had that
conversation of, you know, hey we should do something together one day and
we had it about four or five times.
And then one day came and I phoned him up and I said hey, you know, I
need to start a business and I was a really good sales guy, but I didn’t
know anything about business back then. I didn’t know about business
models, or leverage, or nothing. And I just said why don’t we set up a
kind, and he was in Calgary and I was in Vancouver and I just said why
don’t we just setup a company that does pretty much what you’re doing
already because I know I can sell just about anything. And so you can just
move back here and we’ll just like go and fix people’s computers for hourly
charges.
Andrew: When you meant fix people’s computers, you meant actually come to
their office, sit at their desks, and for a few bucks an hour get . . .
Trent: Yeah.
Andrew: . . . rid of their spy ware, or virus, or whatever was going on?
Trent: Yeah and it wasn’t the home people. It was always going to be
businesses. But I’m laughing because never in a million years would I ever
do that business again. There are so many problems with that business model
that I won’t go down that rabbit hole. It’s not a great business to be in.
Andrew: All right. So it was an interesting idea. I could imagine you
thinking hey you know what, we’ll charge people what $75 an hour. We’ll
charge our employees who go out to offices maybe $25, $50, we’ll pocket the
change. A nice business that could continue to grow, right?
Trent: That is the naive belief system that every single one of us who
goes into that business operates with, yes.
Andrew: All right.
Trent: It plays out . . . [SS] . . .
Andrew: Let’s understand how reality changed from that belief. But first
this is a good idea that anyone in the audience would maybe come up with
and think it would sense as you did. And if they launched it, well in fact
your launch what was it like?
Trent: We didn’t really have a launch per se. And, you know, I want to
give credit to the idea. It’s better than doing nothing. If you’re sitting
there thinking, you know, hey I need to be in business. You can get into
business this way and if you’re smart, you can build a good computer but
you need to shift the model and I guess we’ll get into that. Our launch
really was, so he arrived from Calgary. I rented an apartment so I was
paying all the bills and I got this apartment and I put two desks in it.
And because I was a stockbroker before, I knew how to cold call. So we just
got these lists from like Dunn & Brad
or InfoUSA or wherever and we literally just sat and cold called all day
every day. When we started, I don’t think we even had a website and if we
did I’m quite sure that it sucked.
Andrew: So actually that seems like really a take control of your own
business way to run a company. You’re not sitting down creating a website
and hoping people come, you’re going out to them. And you’re a guy who
knows how to sell and I always feel like anyone who can cold call has to
have some kind of a background that would make him feel like I have to
succeed. Because cold calling is not easy and you did. You grew up in what
kind of apartments?
Trent: Welfare apartments. After my parents divorced, my dad went bankrupt
and we lived in a really, really, really crappy apartment with really
crappy furniture and crappy food.
Andrew: What was it like to go back to that lifestyle?
Trent: Well, what do you mean to go back to . . .
Andrew: To go to that life. I mean when you come down a step as a kid, what
is that like? Do you start to feel ashamed, do you start to feel upset at
your parents for doing this to you?
Trent: I don’t know whether I’ve blanked it all out or whether it just
wasn’t that bad because I was in grade five, so I was like 11 years old at
the time. And I think because my parents had divorced and after the divorce
I was living with my mom, she quickly got remarried and had a new kid. And
I was never accepted by the guy she married and he made it very obvious he wanted me
gone. And so coming from that environment, there was a whole another story
which I don’t necessarily need to bore your audience with, but it was not a
good relationship. It was not a good situation. And so when I finally
decided to leave that not good environment, whatever environment my dad
offered had love. And so the other stuff, I don’t really think it actually
mattered to me that much because . . .
Andrew: Oh, I see. So you went from living with your mom who was married to
someone who didn’t fully accept you to going back to living with your dad
who was living in this welfare apartment. And you said hey you know what,
anything is better than living with someone who doesn’t want me there. I’ll
live in this situation because my dad is, at least, happy for me to be
here.
Trent: And I was back with my brother again as well and we weren’t close
back then. We used to like to beat the crap out of each other, but, you
know, there’s that brotherly hate/love thing. That was better than feeling
like why are you here. Why do you keep showing up at this house. Get away.
Andrew: Did you do anything like I did where I didn’t have nearly as bad a
life as you did. But I wanted out of my life and so I would read
biographies of successful people and be transported into their experiences
and their lives and say that is where I want to be not here. Did you feel
of any of that drive back then or did it come later?
Trent: I wanted to be Luke Skywalker when I was a kid.
Andrew: I see.
Trent: I wanted to go off and like and I did. I ended up joining the
military to be a fighter pilot and all of this stuff because I wanted to be
Luke Skywalker when I was a kid. Because I wanted to just go on this big
adventure. Yeah, so I guess there was an element of escapism . . .
Andrew: Okay.
Trent: . . . because my reality. And I don’t want to make it sound worse
than it is. You know, there’s people who are far worse off than I was, but
it wasn’t great.
Andrew: Okay. All right. So then you get a job on Wall Street. Actually
what’s the Canadian version of Wall Street? Do you guys still call it Wall
Street?
Trent: Well, it’s Bay Street, but that’s in Toronto in Eastern Canada. So
I got a job in the financial services industry and I was stockbroker, but I
wasn’t on Bay Street because you don’t need to be on Bay . . .
Andrew: Right.
Trent: . . . Street, and I didn’t want to live in the East. I did it in
Vancouver.
Andrew: Can you tell the audience about what you did to ensure that you
made 110 calls?
Trent: Yeah.
Andrew: One hundred ten cold calls.
Trent: Yeah, dials of the phone. So basically when I started in that
business, they don’t give you a whole lot of training really and I was
really young. I was 21 years old at the time. And so I had two baby food
jars and I’d put 120 paper clips in one of the jars and then I would sit
the other one beside it and every time I dialed the phone, I could move a
paper clip from one jar to the other. And so my entire first like year in
[??], I never read the newspaper, I never read research reports, I never
did anything except show up and by 8:00. Because I was calling on small
business owners so I knew they were at their desks at 8:00. I would start
dialing at 8:00 and I would not do anything until all those paper clips
were moved . . . [SS] . . .
Andrew: Over 100 calls a day?
Trent: Every day. I made 25,000 dials in my first year.
Andrew: And what was you like count out of I guess 120? One hundred twenty
dials, how many of them ended up talking to you? How many of them ended up
buying? Do you know any of those stats still?
Trent: Oh, yes.
Andrew: Still remember?
Trent: I can tell you all the stats, yeah. I can even tell you the
scripts. I could literally rattle off the scripts.
Andrew: Oh, do it a little bit of it for me if you don’t mind.
Trent: Sure. Hey Andrew, my name is Trent. I’m calling from the investment
arm of the bank in Nova Scotia. We’ve just come out with a report called
ten ways to save tax through your investments and I wanted to find out if
you would find any value in receiving a copy. That was it.
Andrew: I see. And why does that work? Break that down for me.
Trent: So the investment arm of the bank in Nova Scotia, we have five big
banks in Canada and I’m not in Canada anymore. I’m in San Diego now, but
back then. And our banking system is very different than the US. So five
big banks, so instant credibility by association by name dropping in case
they hadn’t heard of this major firm that I was with, they had definitely
heard of the bank that owned it. Ten ways to save tax through your
investments. Well, all business owners want to save tax and presumably they
have some investments. And I want to see if you might find any value in
receiving a copy not do you want a copy.
Well, it was a very loaded question. So out of 120 dials, I would get
through to 30 people. Ten of them would say yeah, sure send that to me.
Three of them would take an appointment and one of them would become a
client. So I was getting a client almost every day.
Andrew: Wow, unreal. All right. So now with that in your background having
made so many phone calls, you feel a sense of super power I imagine where
you feel like I can take this to any other business and do the same thing
but only . . .
Trent: Yeah.
Andrew: . . . right?
Trent: Yeah. I would say that that was fairly accurate. I was never
doubtful that I could get customers. I just knew that I could just pick up
the phone and call them and I guess in hindsight because I haven’t made
cold calls now in years and I don’t want to. That’s why I use the Internet.
But back then I was talking to a buddy of mine a while ago and I was really
cocky when I was young because I had gotten so good at getting these people
on the phone and I was making a lot of money doing it. I remember he told
me back then he says, I remember you were in the board room and you were
blabbing off that you’d call anybody, you didn’t care and it was true. At
the time I was a 21-year-old punk. Yeah, I would call body. I didn’t care
who it was and I never got nervous. I’m probably more nervous now on this
interview [??] . . . [SS] . . .
Andrew: I noticed that.
Trent: . . . making cold calls back then.
Andrew: All right. So you get in business now you and your buddy Ed, you
guys. You guys have a product which is computer services for businesses.
You start making cold calls essentially the same people who you might have
called before. I mean the same type of person.
Trent: It was.
Andrew: So how do you know that this is not working for you within six
months?
Trent: Because of the size of the lost that we have every month.
Andrew: How much?
Trent: So okay. At the time I had started it, I had to pay Ed’s salary. I
think I was paying him like, this is quite a few years ago now, $4,000 a
month or $5,000 a month something like that and I pay for the computers and
the phone and all that stuff. And so I think in the first few months I was
cutting, and I wasn’t taking a salary, but I was cutting a check for like
$2,000 to $4,000 of losses because we’re generating revenue. We did like
$10,000 in our first month and, you know, like $10,000 or $12,000 each
month. It wasn’t all profit of course, that was revenue. It wasn’t until
the three-month mark when I decided because this wasn’t work fast enough
that I should hire some salespeople and get an office because, you know, we
can’t put three sales people in our apartment. So got an office so then I
was writing checks for like $12,000 to $14,000 a month in losses every
month.
Andrew: Oh, wow.
Trent: Yeah. And so that happened for well until the 6th month mark when
we had our big epiphany, but . . .
Andrew: Why doesn’t this model work though? You hired salespeople, you’re
an experienced salesperson yourself who can teach them how to sell
properly, you had a product that had a clear margin. Why didn’t that work?
Trent: That’s a very good question. Most people who start in this business
are technical people and they go and so we call them the trunk slammer.
They’re this guy and he runs around and he gets a bunch of work and he does
a good job. So he’s not doing any cold calling or no marketing or nothing.
So as a one man band he’s making money because his, you know, he’s billing
himself out at $75 an hour. His cost is way less. And then he gets
referrals, so maybe eventually he sort of hires another guy. But he’s
already got enough utilization to pay for the other guy, so in that world
it can work. For me, I couldn’t do any of the work because I don’t know
how. My co-founder could, but he didn’t want to so we were both sales guys
and then we were hiring other people right away. And you have this thing in
the services business it’s called utilization rate so as soon as you start
incurring, because if you get anybody good you kind of have to pay them to
hang around or they’re going to leave because they can get work elsewhere.
So if the sales guys aren’t bringing in enough business, your utilization
rate, let’s say that they are capable of billed in/billed out for say 40
hours a week in a perfect world well what if you’re only billing them out
for 20? So when we started we had one guy who was generating revenue and
two guys, us, me and Ed, and all these expenses and that one guy wasn’t
bringing enough revenue in to pay . . .
Andrew: I see.
Trent: And so it just perpetuates itself.
Andrew: But you did get a customer in your first month BNI. I remember BNI.
Those are groups that you go to as entrepreneurs. You promise to each swap
referrals. So if you’re doing computer work and someone comes to you and
says hey by the way, do you happen to know an accountant? You go yes, from
my BNI group. You give the referral. If an accountant talks to one of his
clients and finds out that he has computer trouble, he goes I know a guy
named Trent who can solve it. So you guys are exchanging leads. That worked
didn’t it?
Trent: We got to the best of my recollection one referral from BNI and
that was that customer that allowed us, who is called Nedco Cellular and
God bless them because they were a customer for years. They may still be a
customer for all I know. [Tameer] [SP] and somebody. I can’t remember his
name now. And so that was this referral that we got and they just happened
to need like about $10,000 worth of work and so they picked us to do it.
And then I think they actually started referring us to other customers.
They were a big help in the early days.
Andrew: Okay. But still not enough to keep that part of the business going
then . . .
Trent: Huge.
Andrew: . . . six months later, you had an aha moment. What was that?
Trent: So six months later, so I had done a fair amount of networking in
the business community quite a bit and I had met this woman who was the CEO
of a company called Retirement Concepts. And they’re like one of these
managed care companies where you could go to and pay to like live when
you’re old and at the time they were very small. I think they had like
maybe one facility. And so I was having lunch with her one day just for
networking for other reason and she’s like so what is it that this company
of yours does anyway. And so I tell her and she’s like oh, well we’re
actually looking for a new IT consultant right now. I’ll put you in touch
with, and his name was Rene Burschwa [SP]. This guy that I’ve hired, Rene
Burschwa, he’s like checking out all the vendors. He says, ‘You can’t talk
to me, but I’ll make the introduction to him, and you’ll at least be in the
competition to be our supplier.’ I said, ‘That’d be good.’ We went through
the whole song and dance, and we wrote this proposal and our proposal was
to show up a half day per week, do prevent-, [??] maintenance and then be
on call to show up. I think we wanted $1500 a month for that. It came down
to us. The other company, they were VC backed, and I didn’t even know who
they were originally. Rene calls me up, it’s been a month long competition.
He calls me up and he says, “Trent, you’re going to lose. Sorry.” I’m like,
“That sucks. How come?” Thankfully, I’d done a good job of building rapport
with the guy. He was able to share with me. He says, “The other company
[??] 1500 a month, blah, blah. The other company’s going to remotely
connect to our servers and our desktops, and they’re going to do all this
monitoring, and it’s only going to be $800 a month.” I’m like, ‘I don’t
really blame you for picking the other guys.” I didn’t even know that was
possible at the time. I said, “Is there any chance that you would wait two
days before you award the contract to the other company? I want to see if
we can figure out how to do this.” He says, “You are the hungriest,
scrappiest SOB. I will wait two days.”
Andrew: I admire that.
Trent: I went back to the office. I said to my co-founder, Ed, now I knew
the name of the competitor, and I knew their price point and I said, “We
need to figure out how to do this.” We got on their website. Thankfully it
was on their website, the technology they were using. It was from Intel.
It’s defunct now. We called up Intel and gave this sob story that we were
poor and starving and had no money and would they give us a discount or
sell it to us on a per-seat [SP], basis. We had no cash. They said, “Yes”.
Come Monday morning I phoned Rene back and I said, “You know all that fancy
stuff that they can do? We can do all that exact same stuff using the exact
same technology and my prices is 25 percent cheaper. Can I have the deal?”
I started doing a vote [SP], like this after I asked him the closing
question, and he started laughing. He said, “I have to give you this.”
Andrew: That’s when you discovered the new model, which is work remotely.
You don’t have to send your guy out. People like it better. You get to
offer a lower price.
Trent: It was a big light bulb that went on because in my previous career
as a stockbroker, we used to manage big piles of money, assets. We would
charge a retainer as a percentage of the assets that we managed. We had
this annuity stream, and I went, “This is an asset management business. I
know how to do this.” Because I just saw all the computers like stocks and
bonds. They were just all these assets that needed to be managed, and I
could charge a retainer and suddenly I was like, “I want to manage
thousands of these computers and get this big recurring revenue stream.
Then I want to sell my company for a big pile of money and ride off into
the sunset and play with cars.”
Andrew: Now you’ve got the product that you ended up building, but there
are challenges with that. You told Jeremy, our producer, that people don’t
anticipate needing this and the people who do don’t want you to do it. Why?
Trent: [??] this was the hardest thing I ever tried to sell because, you
call up the CEO because if you call a company big enough that they have an
IT person, what do you think that IT person’s going to think? ‘These guys
want to take my job,’ so they’re not cooperative. That makes the CEO of
that [??] trying to get to the CEO to have a conversation about IT is
nearly impossible because he says, “I already have an IT guy. Talk to him.”
The IT guy has zero interest in having a conversation with us. So that was
this ceiling on the size of account that we could get into in the first few
years. We had to talk to companies that didn’t have an IT guy, which meant
they were probably 40 workstations or less, so the size of the contract
wasn’t going to be that great, and these people were accustomed to just
calling in the trunk slammer guy when stuff would break. Then they would
go, “We have down time. Lost productivity. We’ll call Dave and Dave will
zoom over in his car and he’ll fix this and he’ll charge us hourly.” Dave
was cheaper than us, but if you took into account lost productivity and
risk, not such a good solution.
Andrew: They don’t think that far ahead? Just like most people don’t think
so far ahead with backup. Did I just deal with what you’re about to say?
Trent: You got the point exactly. These business owners of businesses that
are that size, they’re starving. They don’t have a whole lot of money, so
paying for preventative maintenance is like buying an extended warranty.
It’s not the most. They’re not jumping out of their shorts to do it, I
guess is what I am trying to tell you. So, our close ratio was really,
really low. Out of like out of 20 proposals, we’d usually get like maybe
one deal. And, typically, and again we were cold calling, because I knew
nothing about marketing per se. We’re cold calling so if we have happen to
luck out and find somebody who’s IT guy had just left or they had some
problems just recently. Then, our chances of getting in were much better.
But, if everything was, kind of, like, running tickety boo when we cold
called them, it was tough. It was really tough.
Andrew: All right. And, so, then why were you able to build up to such high
sales then considering those two big challenges which are huge?
Trent: Yeah. I wish I could say because I was some genius salesman, but I
think that well, we made a lot of cold calls and we talked to a lot of
people. So, quantity. Just the sheer volume of people we talked to had a
lot to do with it. I think we got good at. See, we didn’t try to go in and
try to sell that service right away. We would go in and we would talk to.
Especially because 9/11 happened just shortly after we kicked the doors
open. So, this whole disaster thing was. We got about a year’s worth of
mileage out of that. And, so, we would call people up and talk to them
about disaster recovery plans and network vulnerability tests and all this
stuff and so we could get in the door with that conversation and so then we
would say, “You know for like.” I think it was $3,000 or $1,500, somewhere
between $1,500 and $3,000. We would go in and inspect everything like an
audit, basically, but we couldn’t use the word audit. We had to use the
word assessment. And, then, we would write this big report and we would
say, “You have problems, here, here, here and here.” And, we’d always find
truckloads of problems and so that sort of whoever the incumbent was, not
look very good, which was helpful for us. And, so then, people, you now,
they are experiencing the emotional fear of loss, vulnerability and they
want to make that go away. So, we would say, “Well, we can fix it all for
you for like $8,000. We’ll fix everything. Or, if you sign up on this
program where we’re going to be your long-term strategic partner, we’ll fix
everything for like $5,000.” So, we’d give them this big discount if they
would sign on with Continuity on for the monthly fee. So, that worked
reasonably well and then customer referrals accounted for probably, maybe
half or so of our new business, maybe it was even more than that. Because
once we got someone on, they were really happy. They stayed. Our stick rate
was really, really high, and so, they would tell their friends when we
asked them to.
Andrew: I’m going to come back and ask you about the way that you got
referrals and the way, more importantly, that you advise people in the
audience who are listening to us to get referrals. But, let me make sure
that I understand this audit. They would ask you. You would get them to say
yes to the audit and then you would go in and audit and look for problems.
Then, you would say, “Here’s the problem that we found. Do you want us to
fix it?” I see and so, they say, yes. They want you to fix it. You make
them aware of the problem that they have and that’s how you get them to
sign up to a contract. By [inaudible].
Trent: Yeah. That’s how you sell anything. You got to find pain. And, so,
we would find pain and then we would start talking about the risk of
relying on a single trunk slammer or if you just had one IT guy who was
part-time, single point of failure. And, we would just try and just dig in
as much as we could into the pain.
Andrew: You want the immediate pain too.
Trent: Yeah.
Andrew: You want to discover the pain that you feel today. Not the pain
that “if three months from now you’re system has a problem and it goes
down, you’re going to suffer very badly” because people don’t relate to
that. It’s too far in the future for them to see.
Trent: No. They don’t care.
Andrew: OK. So, now things are going well. And, at the top of this
interview, I said that something happened with your employees.
Trent: Yeah.
Andrew: Your company turned on you. Tell me like in a nutshell what
happened and then let’s dig deeper into it.
Trent: Sure. So, we just went from the six month mark to about the seven
year mark, by the way, in the timeline.
Andrew: You jumped throughout this. Right. All of this didn’t happen like
that.
Trent: In the middle years, all I did was execute, execute, execute,
execute. The same strategy over and over and we innovated and so forth. So,
that’s probably not too terribly interesting. So, in the beginning of 2008,
so I started the company in 2001. Just so people have a timeframe for this.
Beginning of 2008, now we’ve won lots of awards for being a fast growing
company and we had become profitable, and you know, things we’re better. I
was in this mastermind group in the United States. Everyone else in the
group was U.S. company. So I would four times a year I’d fly down and
spend, you know, like three days with these guys. And we would compare our
profit and loss like everything, what we’re doing for marketing, and all
this stuff. A lot of benchmarking. And I was still really struggling with
lead generation. By this point sales were kind of like plateauing. We
double, double, doubled, doubled and then it just kind of [??] and that was
driving me bananas which is why I joined the mastermind group.
And then I got it in my head that I really wanted to have an office in
Seattle because everything that these guys were doing that I was learning
from them was not working for me in Canada. And I thought, I don’t know
what’s with these Canadians but I wanted to be in the big leagues and I
wanted to go do business in the United States because their mindset must be
different. Go big, you know, go America. I just wanted to go find out
because I was felt like I was getting my butt kicked.
So in the beginning of ’08, I hired a COO because I knew that my co-
founder, he was a really good account manager. He was really good with the
customers and he was good with the staff, but when it came to like strategy
and so forth he didn’t have the skill set or the education to help with
that. So I thought I want some more, you know, higher level talent.
So I brought this guy in, Nick Drare [SP], you know, and I had known him
for six or seven years. He was a senior partner in this $150 million firm
and then the firm got bought and he got packaged out and so I though oh he
would be like a great fit. So the first six months I’m paying him like
$10,000 a month and his wife is doing the books. So I mean I’m spending the
Drare family a ton of money. But he had, you know, I thought that he was
going to bring in because he had a rolodex of government contracts and I
figured like this guy was going to lit it up man. I mean we were just going
to start crushing it. And six months in not one dime in revenue from Nick
and I was pretty frustrated because I’m thinking why am I paying him all
this money. So [??] to hell with it. Still a good guy, I still like him.
I sat them down and said guys I’m going to go open an office in Seattle
which was basically an apartment with me in it and I hired two salespeople
down there. And so I spent Tuesday through Friday in Seattle every week
trying to drum up business in Seattle. So there was a lot of absenteeism
from my part obviously. Nick and Ed started to become pretty good buddies
during my absence and they were both technical guys.
And either I wasn’t paying attention, probably that one, or they didn’t
speak up loud enough, probably the former, me not paying attention. They
weren’t particularly on board with my U. S. expansion, but I was the
majority shareholder. I had won an angel [??] investor who I call him my
rich dad, he still does business with me today and he thought it was a good
idea and I thought it was a good idea. So honestly I didn’t really care
whether they thought it was a good idea or not. I didn’t build consensus, I
just said this is what I’m going to do and like you pick up an oar and
start paddling. Not the best way to run a company.
And so that was in June and so I started doing the thing down there and by
September the place that I was living in Vancouver because I had sold my
house to get the money to start this business, so I was in a rental condo.
The owner said they were going to sell it and I had to move out and I was
like well that’s a sign I need to move to Seattle. So I said Nick go get me
a Visa and I said, you know, I want it fast. Chop, chop, chop, go because
I’m [??] especially really intense personality. I have mellowed out a lot,
but like I was not interested in excuses or delays or nothing. Like here’s
your marching orders start marching.
Andrew: OK.
Trent: And again that’s not a style that’s works very well with certain
personalities, but I didn’t care. So I got my Visa and I went down to
Seattle and I’d been there a month and I got a phone call from my co-
founder Ed. And he and I, I should actually back a little bit because
there’s one other really important piece of information. At year five when
we achieved profitability, it took that long, I gave myself a reasonably
sizeable raise because I was the guy who’d signed for all the bank debt, I
owned the majority of the firm. Ed had never taken on any debt, no co-sign,
no nothing.
Andrew: . . . [SS] . . . bankrupt at one point because of this business?
Trent: Yeah.
Andrew: Yeah.
Trent: Yeah, I was. I was . . . [SS] . . .
Andrew: So how much of a salary did you take for yourself?
Trent: I think I’d upped myself to like $10,000 a month which was not
really a lot of money and Ed was getting like I think $6,000 at the time.
He became the bitter housewife from that forward. He and I’s relationship
went in the can because he could not understand. He was like I work. He
probably worked more hours than me to be honest with you. But he couldn’t
wrap his mind around the thought that we weren’t getting paid per hour. We
were getting paid per brain cell and I felt as though I had taken more risk
and I was contributing. Because I was the guy who brought in all of the
customers. He just kept customers. So, we didn’t agree on that. Soured our
relationship. So, by the time Nick comes along, comes into the foray, Ed,
Nick, they’re just like little bed buddies, getting a relationship
happening. And, I guess they hatched a plan that Trent needs to go. And, so
I got a phone call. I’d been in Seattle the full-time. I’d moved there for
a month. And, Ed calls me up, “I’m not happy. I want to buy you out. Here’s
my price and you have 24 hours.” Click. That was more or less.
Andrew: Just like that?
Trent: Mm-hmm.
Andrew: And now he owns what? 25% of the business?
Trent: 22.5%
Andrew: 22.5%. How do you get to 22.5% by the way?
Trent: It was 25% but when this investor bought in we both got diluted a
little bit and it made the numbers funny. And, Nick was supposed to have
bought in. But, he dragged his feet, and dragged his feet, and dragged his
feet. So, he was still not a shareholder.
Andrew: So, he wasn’t a shareholder. They, so the guy who has 22.5% of the
business, how can he buy out the guy who has a majority and the investor
who came into back them?
Trent: Well, he couldn’t. I mean, I guess he could.
Andrew: But what was his plan? Did he say, “I’m going to go get some cash
and give it to you or give you money over time or just walk away and leave
us to run this thing?”
Trent: He was going to give me $200,000 in cash plus paying me out over
four years. So, I was going to have to carry a note. Which is ultimately
what I did and it was worthwhile but not on those terms. And, so, I smelled
a rat because Ed never had a pot to piss in. Like he didn’t have $2,000.
Let alone $200,000. Magically, Nick was going to buy in for $200,000. So, I
said to Ed, I go, “Where did you get the money?” “Investors.” Ed did not do
any business networking ever. And, I said, “Really? Does Nick have anything
to do with this?” “No. No. No. No. No. All me.” I’m like, “OK. Well, we’re
going to be having a meeting at 10:00 tomorrow morning back in Vancouver.”
So, then I got Nick on the phone. I said, “You know what’s going on?” “Mm-
hmm.” “You have anything to do with this?” “Mm-mmm.” “OK. 10:00. See you in
the morning.” “All right.” So, three months before all this happened, I had
had a separate company make me an all cash offer for the business which I
turned down. Just over $1,000,000 and so I thought, well, I’m just going to
go and sell it to those guys. I’d had a good quarter. All of the numbers
had improved and so I phoned the CEO. So, I thought, in my mind what I
thought would happen. Sorry. I’m actually jumbling my story. Leave the
investors out for a minute. I thought, “Great. If Nick doesn’t have
anything to do with this.” This is how naive I was. Nick can buy Ed out. Ed
can go pound sand. Nick can stay in Vancouver and run the shop and I’ll
stay in Seattle because I did not want to move back to Canada. It took me
all of those years to leave. I did not want to go back. So, I drive up. We
do the meeting. And, this is how the meeting starts. We sit down and Nick
says, “By the way, before we get going. I want to let you know that if Ed
quits, I quit too.”
Andrew: So, now, you have a gun to your head.
Trent: Because who is going to manage the staff?
Andrew: Right.
Trent: If two guys leave, it was not good.
Andrew: This is a fear that a lot of entrepreneurs have when they need to
give power to people. Think, “What if those people want to push me out?” I
want to come back and ask you what to do to prevent that. But, for now,
this is what’s happening. What do you say now that you’re hearing the
surprise from Nick?
Trent: Well, at that point, that’s when I pulled the investor. The other
acquisitor card. I don’t know if I said that right, but the other company
that wanted to buy us. They didn’t have. Nick knew nothing about it. Ed had
limited details from three months earlier because I didn’t share it all
because it was only a discussion. And, I said, “You know what?” I said,
“You can both quit now.” And, I said, “And, Ed, I will dilute you into
nothing.” Because I was pissed, as you can imagine. So, I basically told
them they could both go F themselves. I said, “I started it. I’ll fix it. I
don’t need you two jackasses.” And, so, I said, “Or we can agree to play
nice with each other.” Because by this point, Ed has stormed out of the
room. I said, “Nick, clearly, nobody wins in that situation. I don’t want
to come back to Canada. I don’t want this company but this working
relationship, it’s done.” So, I said, “This is the smart plan. We all play
nice long enough to sell it, but to XYZ company because they’d made me an
all cash offer before, presumably they’ll do it again. You guys can go work
for them and I’ll take my little bag of money and I’ll go do something else
because I ain’t ever working with you. And I ain’t ever working with him
again.” And, Nick, because he had no vested interests, was able to remain
calm and he said, “I’ll have a conversation with Ed about that,” so I left
the office. A couple hours later, Ed was all happy and friendly and called
me up and he said, “Yeah, we’ll help you do that.” So OK. So then I called
up the CEO again and got the conversation started and he said, “Well, do
you just want me to resubmit my letter of intent?” I said, “Well, yeah, but
I’d like you to sharpen your pencil a bit because I’ve had a good quarter.
Things are going the right direction.” He said, “Well, send me your
numbers,” so I did.
A couple of days later he called me back. He wasn’t the fastest. I guess
they were doing a roll up. They were probably buying lots of firms. He
called me back and he said, “How long is Ed willing to stay?” Now, when he
asked me that question three months ago, the answer was three years. This
is where I made another mistake. I should have said “three years” and
figured out how to deal with the fallout later but I said “one year” and he
instantly, because he was a smart guy, he instantly knew that there was
trouble in the henhouse so the offer that I got from him the next day was
50% of his previous offer.
Andrew: Wow.
Trent: So now I had no plan B. Because if I had taken that offer, by the
time I paid everybody off, I’d of had like $150,000 for eight years of my
life, which that wasn’t going to happen. So I kind of freaked out at that
point. I called up my rich dad and I briefed him on everything that
happened and he said, “Well, let’s go have dinner tonight.” So that night I
am at dinner in this steakhouse, I’m 38 years old, and I am bawling my eyes
out at the dinner table because I’m looking at my net worth go “poof”,
eight years of my life, and I just didn’t know what to do. He just sat
there and then he said, “OK. Here’s what you’re going to do.” He said, “Do
they know you don’t have a backup plan anymore?” I said, “No.” He said,
“Exactly. So all you’re going to do is stall. That’s it.”
This guy was really wealthy, a lot of real estate deals, so super smart
negotiator. So I said, “OK.” So every day I would talk to him and he was
just, “Stall”. Ed would phone me every day, “Do you have their offer yet?”
“No, nope, haven’t heard from them yet.” Exactly like John, my rich dad,
had said, within three days, Ed cracked. Just couldn’t handle the pressure
and he said, “I can’t wait anymore. I have to resign.” I go, “Why don’t you
just make another offer?” I go, “It’s not that I don’t want to sell you the
company. I just don’t want to sell it to you at that price.” I said, “I
don’t care who I sell it to. I just want to get an ROI.” He goes, “Oh.”
So him and Nick went back and sharpened their pencils and they didn’t know
what the offer was that they were competing against and they came back with
an offer just shy of $1.2 million, which they were competing against a
$500,000 offer. Ed and Nick, I hope you’re listening, you rotten bastards.
Andrew: They still don’t know until they listen to this?
Trent: No.
Andrew: By the way, I’ve had alerts on my computer to get back to you in
November 2012 go off like every week, I feel like, just, “Make sure you
remember. Don’t forget. Don’t forget. Don’t forget.” You just got the last
deal, the last check, and that’s why you can be so open.
Trent: I could have before. I had their stock in escrow and there was
nothing, but I just didn’t see the need to stir up the pot and I’m sure
that neither one of them listens to Mixergy but I also want to email them a
link. But, yeah, they bid against $500,000 and paid $1.2 million. Ha ha ha.
Andrew: The reason that your rich dad wanted you to stall was so that it
would seem to Ed and Nick that you had another deal that you were still
working through, so that they wouldn’t know that it died. If you came back
to them quickly, why wouldn’t they understand that, “Hey, this deal is
still on”?
Trent: It was poker is all is was. I had to get them to more or less say,
“Hey, we want to keep bidding.” Because as soon as you go back, you might
as well just turn all your cards around and say, “Hey, I have nothing.”
Thankfully, John was so much more experienced than I was and had been
through this probably 50 times in his life. He knew exactly what to do.
Those couple of days for me, my dad was like, “You’re crazy. You ought to
take it and blah, blah, blah, and take their offer.” I think they had a
million on the table. So, I was fishing for $200,000 more. And, for waiting
three days, I got $200,000 more. Negotiation is the highest paid work ever.
Three days. I earned $200,000 more because I was willing to take a risk and
thankfully had the guidance of John to get me through that. And, honestly,
all I did, because I was so nerve wracked during those three days, is watch
TV all day long to distract myself. I’d have a fifteen minute phone call
for that day if I had to do anything at all and then I’d watch TV all day
long because I was [nervous sound]. Yeah.
Andrew Warner: John came into your life, as I said earlier, at a time when
you were near bottom. Can you describe to the audience where were you at
the time, not when he came into your life, when he came into your business?
Trent: Because he’d been in my life for a while.
Andrew: How’d you meet him?
Trent: So, I was a stock broker in a very successful practice. We took
clients and prospects only by appointment and so one day I was eating lunch
at my desk and we had a walk-in and Marie came back and said, “There’s a
gentleman up front. Wants to know if anyone’s available to see him.” I was
the only guy there and I said, “Well, if he doesn’t mind watching me eat my
lunch. Sure. I’ll talk with him.” But, and normally, I don’t why I did it
because we were making a lot of money and I was making a couple hundred
thousand dollars a year in my twenties and this was twenty years ago. And,
normally, I probably would have just wanted to eat my lunch in peace. And,
besides, you don’t know when someone’s walking in, he might have like $0.10
and you’re thinking, “I’ve got to give my whole lunch break to talk this
guy?” So, anyway, he walks in. He sits down, and so, I made. He’s like, “I
got $50,000. What do you want to do with it? What do you think? What do you
like?” He’s a very dry sense of humor kind of guy. And, I just, I’d been
studying royalty trusts at the time, oil and gas royalty trusts and I said,
“Hey, I like this one.” And, he gave me the whole $50,000 which I later
learned was like nothing for him. And, it’s stock went up 40% in a week.
So, I was the golden boy from the get-go with John. I never, on any of the
other trades, made him any money and I never lost him any money. We just
[sound effect], but first impressions being what they are. Right? So, he’d
invested in my dot.com that didn’t work and then I went to him with Durand,
and at one point, so I was.
Andrew: Sorry. This is after you left the finance industry. You had this
idea for a dot.com. It took about $100,000 to start the business. He
invested in it. It wasn’t working well and you did the honorable thing. You
said, “Hey, this isn’t going right. I’m giving back whatever’s left of the
money.”
Trent: Yeah. And, we shouldn’t skip past that point because that was, in
hindsight, a super important decision. I didn’t have much money then and I
had another $50,000 of his money and I could have just, kind of like,
milked it but I thought, “That’s stupid.” So, I phoned him and I said, “I’m
not going to be able to make this work. I want you take your money back.”
And, I called that a deposit in the emotional bank account. I put $50,000
back in for goodwill which presumably, in hindsight, I think it worked. And
then I went off and I did my own thing and I founded Durand on my own money
and it wasn’t until one day, I think in like, oh man, I don’t. I needed
some money. He lent me $25,000 three months later and I personally
guaranteed that was gone and then he lent me another $25,000 and then three
months later that was gone. I’d sold $50,000 worth of my own stock. I’d
maxed my line of credit of $40,000. So, I was kind of like out of money in
this. This answers your question.
One day, I could not make payroll. Monday was payroll. I didn’t have the
money. We’d been in business maybe like two years. Might even have been
three at this point and time. So, I called John. I mean this guy had just
saved my ass on so many occasions. I called him up and said, “I want to
have breakfast with you in the morning.” So, we went and had breakfast. I’m
tell him. I’m all full of piss and vinegar, revenues on the climb. Blah.
Blah. Blah. But, I’m running out of cash and, but, I said, “I’m at my
personal threshold for debt. I can’t take any. I can’t sign for any more
debt.” I’m like $100,000 in the hole. Personally guaranteed and if this all
bailed, I’ve got nothing to sell to pay off $100,000 and that point in my
life that was a large amount of money. And, so I said, “I need another.” He
said, “Well, how much more do you need?” And, I said, “$50,000.” “Isn’t it
time to quit? You know, isn’t it time to shut it down?” And, had I not been
so far in debt, Andrew, I would have shut it down. I would have. But, the
only way out was bankruptcy or keep going. So, I chose keep going.
Andrew: Talk about burn your boats after you’ve land on shore. There’s no
way to escape this fight. You’ve got to fight to win or you’re going to
die.
Trent: Yeah.
Andrew: You’ve got to fight to win or you’re going to die.
Trent: Yeah and . . .
Andrew: So you fight like mad.
Trent: When I give speeches later, I jokingly call this embrace economic
pressure which is a fancy way of saying bury your ass in debt so you have
no options but to keep going. And so he said well here’s the deal. I said
to him I want you to convert the 50 you’ve given me to equity and give me
another 50 and I’ll give you and I think I probably offered him like 15% of
the company. And he goes how much do you own? He goes, I want half of it.
Okay. That was a short negotiation, okay. So now he owns 40, I own 40, and
Ed owns 20. Actually Ed never owned 25. He owned 20 and then we got a
little bit more stock. That’s how he got up to 22%. So now John was my
equal partner. And, you know, people listening might be thinking oh well
that guy’s a tough rotten bastard. No, he didn’t have to. How many people
want to invest in private companies? It’s a short list. And the fact that
he only took 40 and given how much help he gave me after that, it was a
good thing.
Andrew: It’s such a distressed time. I mean people will invest in private
companies when they’re startups and they have promise. Not when they’ve
just fallen flat on their face and they’re, you know, a few bucks away from
disaster.
Trent: Yeah.
Andrew: All right. I want to go through a list of advice from you. Let me
sure that I didn’t miss anything here. You and Jeremy had a long, how much
time did you Jeremy spend? The guy is thorough.
Trent: He is thorough.
Andrew: . . . seems even more thorough. What did you, sorry?
Trent: Yeah, he’s very thorough. We must have talked for an hour and a
half or two hours I think because there’s just so many facets and hallways
in this story to go down. Like we haven’t even talked about referrals and I
want to talk a little bit about that, but you go head and . . .
Andrew: Yeah, I’ve got, yeah you know what I’m about to do. I’m about to
promote and then I want to come back and ask. I’ve got a note here to come
back and ask you about general advice about how to prevent treason. I also
want to talk about something brightideas.co/mixergy which you’ve created.
Trent: Yeah.
Andrew: And so a list of advice that you’ve got. All right, but first let
me say this. If anyone’s listening to this and says hey you know what this
whole super power thing of making phone calls, I’d like to have that. I’m
tired of waiting for my audience to come to my website. I’d like to just
find a way to just take matters into my own hands and bring in customers
myself. Well I’ll tell you guys, we’ve got this course at
mixergypremium.com taught by a guy names James Kennedy of piehold.tv. I
have done such a poor job of promoting this thing even though I’ve tried
that I’ve got to take a moment here and just tell you what this is. Here’s
a guy who emails me and said Andrew, you’re missing out. You’re not missing
out, you are not helping people like me and I go what do you mean.
He goes look we can’t wait for traffic to come to our side and sites and
build up to a point where we can start making some money off of it and then
build it and grow from there. We have to bring in revenue right now. I go
okay so what should I do. He goes, I figured out what to do. He goes,
here’s what I do. He says, you know how everyone tells us to offer
something for free and then collect an email address from people who want
it and then of course send it to them via email. I go yeah, of course I’ve
heard this a million times and it works.
He goes, well I did one little thing. I added a request for a phone
number. I go, okay what do you do with that. He goes, well I didn’t get
that many people asking me for my free guide, but the few people who did
left their phone number and so I would follow up with them and say hey so
did you get, you’d call them up right away and say so did you get the
guide, did everything come through okay and they say yeah. He goes, all
right. He’d talk to them for a bit and then he’d say do you mind if I
follow up with you in a week to, I forget what the excuse was, to make sure
that it worked out, to make sure that you understand, that you could use
what you learned and so on. They said, sure of course.
He followed up right on time and then they made a follow-up phone call
and I think another one and then he closed sales that way. The few people
who came to his site and asked him for his book ended up getting a phone
call from him and then many of them ended up buying from him. And the
people who didn’t end up buying still thought boy this is impressive. I’m
getting a phone call from the company that I was just on. These aren’t just
a bunch of fly- by-nighters. Anyway this is what he did.
He finally got his business up and got himself on his feet and he came back
to Mixergy to teach how he did it and it’s an incredible story and he walks
you through step by step what he does, he gives you the scripts that he
used and so on.
I don’t usually take this much time to promote a course on Mixergy Premium,
but I have to try to do justice to what this guy did. And so it’s that
important to me and if you’re a Mixergy premium member, I urge you to go
and listen to this. Just download it, put it in your mp3 player and listen
or watch it on the computer screen, but find a way to pay attention to it.
And if you’re not part of Mixergy premium go and sign up and start with
that session and you’ll understand why I’m spending so much time here. Why
I think it’s going to be so powerful. And if you don’t agree with me, I’m
right here. I’ll give you a refund. One hundred percent of your money back
guaranteed. But thousands of people love Mixergy premium and I’m confident
that you will too. So go to Mixergy premium.com.
Trent: Yeah.
Andrew: And for generally our producer who keeps telling me I don’t do a
good enough job, how did I do there Jeremy? Let me know.
Trent: And I’m a Mixergy Premium member by the way and so I’ll give you a
plug as well. There’s a ton of good stuff in there.
Andrew: Thank you, Trent. And you know what? And beyond the good stuff that
you’re getting for yourself, I’ve got to thank you and all of the premium
members. You’re the reason that we can do research like I did with you
while we have Jeremy there who does pre-interview, why when we post your
interview there’ll be somebody there to respond if there’s an issue, why we
can spend $1,000 a month now to serve up all these media files. So anyway
thanks for keeping this thing going. It’s a mission and a passion of mine,
but it’s because of you and other premium members that it even has a chance
to continue. Thank you.
Trent: I don’t know if you’re thanking me or thanking . . . [SS] . . .
Andrew: I’m thanking you specifically . . . [SS] . . .
Trent: [??].
Andrew: And you are representing all the other premium members, but I’ve
got to thank you personally. Thank you for doing this.
Trent: You’re very welcome.
Andrew: And in addition to keeping this thing going to being my venture
capitalist and my John, I’m going to ask you for a little bit more advice.
So there’s some advice that you and Jeremy went over starting with
referrals. You said you want to talk a little bit about referrals that
helped you early. What advice do you have for us on getting referrals?
Trent: Well, it’s actually if I can, I want to talk about somebody that I
interviewed because I wasn’t really awesome at getting referrals. Because
here’s what most people do and this is OK . . .
Andrew: Yeah.
Trent: . . . to keep going [??] yeah, okay. So most people were trained
like, you know, you go ask your customers first. So let’s say you’re my
customer and you’re like and we’re trained to say hey, you know, Andrew,
are you happy with my service. Yes, you are. And do you know, could you
name, you know, like two people who you think would be good and then make
an introduction and how does that make most people feel? Kind of like
awkward and uncomfortable and put on the spot unless they’re a raving fan
in which case they’re already referring to you and you don’t have to ask.
So we used to do that that I just described. We’d go and have lunch with
them and we’d basically like pull three names out of them and it worked.
But there’s a cost I think to that because people they don’t necessarily
like that so much.
Andrew: That’s a method by the way that I’ve learned and people are seeing
me use it in interviews. It works not perfectly, but it works in you saying
that yeah there’s a bit of a price because you’re asking somebody to give
you something to reach in the Rolodex and . . .
Trent: Yeah. Andrew in addition to giving me your money every month, I
want more. Now I want your friend’s money and it’s not ideal.
Andrew: OK. So what’s the alternative then?
Trent: The alternative, so I interviewed a guy by the name of Mike
Michalowicz. He wrote a book called The Pumpkin Plan and why I was
attracted to him like is he ran a firm just like mine. We had a really
interesting conversation and I’ll put a link to the Mike Michalowicz
interview on the page at brightideas.co/mixergy so people can get to this
interview.
Andrew: And this is you, you’ve heard me say it for years now. Go and
interview people. Don’t just be a blogger who has to fill up a blank page
by yourself. Get the people who you admire or who you want to learn from,
do interviews, learn from them, and let other people learn too. You took
that to heart. I saw you’re even using the video player I think that I
recommend. And so you’re saying you’re going to put it up on where
brightideas.co.mixergy?
Trent: Mixergy. You know, if they opt in on that page, I’ll make sure they
get an email that takes them right to that interview.
Andrew: OK.
Trent: But basically, so what Mike did and I just want to give the
results. Once he figured out this particular referral strategy and it does
not involve going and talking to your customer and asking referrals. He
instead figures out who are the other vendors to your customer and then he
has a framework which he describes in the interview and in his book for the
conversation that you have with those other vendors. Seventy-five A grade
referrals in it was either the first year or two years after he figured out
this referral strategy.
Andrew: That’s what he got.
Trent: It was fricking brilliant and if I would have known about his
particular strategy and as a matter of his whole Pumpkin Plan, I think I
could have achieved quite considerably more than I did with my company
during the time that I ran it. But like I said basically you’re looking for
vendors who are already selling to your customers. But of course they have
other customers and that you’re in a position yourself in such a way with
those vendors that they’re going to want to refer you to their other
customers and there’s a couple of things like I say, you know, I can’t [??]
do with the interview. I mean it’s a long interview. I can’t do the
strategy justice by squeezing it into a two- minute conversation.
Andrew: OK. But I get a sense of what you’re talking about. Don’t ask the
client to come up with other people like him because you’re probably going
to get two maybe three people and you’re also going to be pulling out of
them something that they may not be happy to do. Go to the person who
supplies them who has other customers like them and make a deal with them
to extend you more customers because they have a ton more customers
available to you than . . .
Trent: Yeah.
Andrew: . . . one of your customers could ever refer to you.
Trent: That’s the high level. The killer detail in that conversation is
you’re going to position yourself with these other vendors in such a way
that it helps them to refer you to their other customers and then you get
truckloads of referrals.
Andrew: My mentor Bob Hyler [SP] who works with all of our vendors, he’s
been recommending this approach to them for a few months now starting with
the wpvalet.com which manages our website. He said go do that, the Pumpkin
Plan. All right. So that’s what we do to get referrals. How about what do
we to prevent a situation where like you had where two of our top people
get together and squeeze us out of the business without . . .
Trent: Yeah, that’s a harder question to answer because, you know, you can
have buy sell agreement shot gun clauses and you should in your
shareholders agreement and I’m not give advice on any of that because I’m
not an attorney. Go see your attorney. The advice that I would give is that
you need to have better management style than what I used so that you don’t
alienate them in the first place. I naively thought well I own all the
stocks so it’s my company so I can do whatever I want in theory. But the
reality is no because if people aren’t bought into your vision, they’re not
going to paddle along with you. And no amount of paperwork that the lawyer
will do for you is going to fix that particular problem. So you really need
to make sure that first and foremost you manage the relationship so well
that you don’t need to be, you still got to have the paperwork, but you
don’t need the paperwork. And I wasn’t smart enough to figure that out back
then.
Andrew: That’s great advice. What about joining a mastermind? You’re a part
of one that helped you expand to the US. I know you’re a big advocate of
them. Why should we join a mastermind group?
Trent: Because you can take years off your learning curve. I mean Bright
Ideas is essentially a mastermind group. I’m in a mastermind group. The
whole reason I started Bright Ideas is I just love this. Like you well know
every time that I interview somebody, you know, I get like a free hour’s
consulting. So the whole thing with a mastermind group is like I’m in this
group right now with a bunch of guys who are high six and seven-figure
earners with their various online businesses. So tangible benefit number
one, if I have something to promote they’ll mail for them. Well that’s
huge, huge, huge. Or if I need a supplier to be able to code something or
do something or, you know, like Bright Ideas I launched it first on a
regular theme and it kind of looked crappy.
And so I went to somebody that I knew and I said I need some help because
I’d been on a couple of the job sourcing sites and I tried to hire
developers and designers and just never really went very well. So you go to
a mastermind group and you say hey who are you using and you don’t have to
be in a mastermind group for that particular conversation, but it’s sure
helpful because you’re able to see firsthand. So my big thing is it takes
the learning curve and just goes and compresses it.
Andrew: What is birhgtideas.co? I don’t even know. I checked out the
website, but it’s just now launched I think within the last 24 hours of us
recording the interview.
Trent: Yeah. When I first came up with the idea, it was going to be really
similar to Mixergy. The big difference was going to be you versus me. But
like anything once you start down a path, you start figuring because you
need to have a niche, right? You need to have your particular angle, your
particular hooks. So what Bright Ideas now is is for marketing agencies,
marketing agency owners in particular. I want to make it the best place
that they can go to hear what other agencies are doing to be successful. So
that’s the mastermind angle.
And my second audience because I have two audiences, my second audience is
what I call the professor marketer and this is all on my about page if you
go to it. Because in addition to having the agency come on and share what’s
working for them, I also want to give them the opportunity to promote
themselves to potential customers so that’s why I have that second audience
so there’s kind of like two reasons why someone would come on. So it’s very
much similar to Mixergy in that and we’re trying to extract great ideas or
bright ideas as I call it. The difference is I don’t have at this point in
time, I was going to do the premium thing and all that but Mike Stelzer
[SP] talked me out of it. He told me that I need to give everything away
for free because my list will grow so much faster as a result and I didn’t
exactly know how I was going to monetize my list to begin. I thought I
would do live events but I’ve subsequently figured out that there is a need
– and this is what I love about bright ideas – one of my guests, a guy by
the name of Travis Ketchum, has recently launched something. He launched it
as a plugin called “Contest Domination”. You know Travis.
Andrew: I know him.
Trent: That’s how I learned about him was from your interview and I knew
someone that knew him so we got hooked up. Anyway, so I did a master class
that’s never been published on software with Travis, and at the end of it,
because as you probably know, he’s got Contest Domination in the cloud now
as a SAS app. I kind of jokingly said, I go, “Do you have any SAS ideas
that you’re not really using because I’d really love to be in that space?”
Andrew: You want to make sure to earn revenue on a monthly basis with
software that people need and if they stop paying you, they stop having
access to this software that they’ve grown dependent on. It’s a great
model.
Trent: Correct. It is and Dane Maxwell talks a lot about it. I was
listening to Dane’s stuff and Travis and having these conversations so he
said, “Well, I do kind of have an idea,” and was vague, he said, “I’ve been
studying the marketing agency space,” because that’s part of his target
market for the Contest Domination, “for about a year and he says if you go
and ask certain questions,” and he didn’t really tell me what the questions
were and he didn’t really tell me exactly the problem, but he said, “you’re
going to find some opportunities there.” So I was like, “OK.” He at least
pointed me in a direction.
So then I was doing another master class with a guy who is now my partner,
a guy by the name of Paul Clifford, who has done very, very well creating
micro apps and selling them as WSO’s. We kind of came up and he had had
this – I’m going to be a little cagey now because I don’t want to disclose
too much of what we’re doing – but he had had this one particular app, it
sold really, really well. It solved a particular problem. So I said, “What
do you think of this idea?” and he goes, “Well, I think if we did X for
marketing agencies, we’d probably get some good traction.” Then the light
bulb went “bink” because I remembered back when I was running my tech
services firm there was a certain pain. When we were managing, say, five
computers, the pain didn’t exist but when we were managing 700 computers,
this particular pain was a big problem and we used to use a SAS application
and it saved us a ton of time. It improved our profitability a whole bunch
and I went, “Oh, wait a minute, marketing agencies, tech services
companies, this is very, very similar, similar pain,” and I’m going to stop
there because I don’t want to . . . There’s probably some smart people.
Andrew: All right. BrightIdeas.co is where people can see it and if they go
to BrightIdeas.co/Mixergy, they can be directed straight to the interview
that you told us about here. I’m going to get Mike back on to talk about
this book because I keep hearing so much about it.
All right. Final thing I’m going to say is this, this is your side of the
story to the best of your recollection. We’ve said some things about Ed and
we’ve said some things about Nick and they didn’t get a chance to say their
side of the story and if they did, maybe their recollection might not be
perfect. Our goal here isn’t to be legally perfect, it’s to tell the story
as best as possible and, frankly, if Ed and Nick disagree with the way that
it’s told, I invite them here to tell their version of the story. I’d love
to hear how they built it, how they launched it, what they did after you
left and everything and I always appreciate having discussions where I hear
from entrepreneurs what they remember about how they built their stories.
You’re smiling as I say that. What do you think?
Trent: I mean, they played some dirty pool. I don’t think fundamentally
either one of them is a bad guy. I just don’t agree with some of the
decisions and tactics that they undertook at that point in time. But it’s
so far under the bridge now that I just get a chuckle out of it because it
worked out for me. They got what they wanted. I got what I wanted. They
still have a business. I got a big bag of money to walk away with that gave
me a runway to do something else so everybody won.
Andrew: Congratulations on the sale, on the freedom that you had and on the
new business. Thank you for doing this interview and thank you all for
being a part of it. Bye guys.
