Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It is, of course, home of the ambitious upstart and the place where I interview entrepreneurs in depth about how they built their businesses.
And I do it because I’ve got an audience of entrepreneurs who are really building companies who are learning from these interviews who are using what they learned to make their companies bigger, better, stronger and often, as you’ve noticed, they’ll come back here and do an interview about how they learned from these interviews and what they built up.
So, today I’ve got an interview for you with someone who feels like a cold calling machine. I don’t know that I’ve ever interviewed someone who so embraces the idea of cold calling, who so loves it, who even when I was talking to him before the interview started to just make sure that all my facts were right, when we talked about cold calling, I saw a smile come on his face like a guy who has a superpower.
Frankly, I do feel that if you can cold call, you do have a super power because you can sell from anywhere, you can build a business from anything, you can learn from your customers what to create. Anyway, all those things he did and you’re going to find out in this interview.
Specifically what I like is that before he built the first big version of his software, he started making phone calls, many more than you, the person who’s listening to me, is probably going to have the guts to make or the time or the energy to. He did it. He learned from those customers. He built a great product. He built an incredible company and then ten years after he launched it, he sold the business. Today I invited him here to talk about how he did it and what he’s working on now.
His name Raj Bhaskar. It rhymes with Oscar. He is the founder of VisualHOMES, which was a software company focused on property management and real estate solutions for public and affordable housing. We’ll talk about what that means. It’s not the kind of thing that you read TechCrunch and say, “Okay. I’m going to do that too.” It’s a unique idea and we’ll talk about what that means in a moment.
We’ll also talk about how he moved on and created a company called Hurdlr, which offers simple financials for entrepreneurs. It tracks all of your income streams, expenses and tax deductions in real time on the go and it’s made to be really easy to use.
This interview is sponsored by two great companies. The first is a company that will host your website. It’s called HostGator. I’ll tell you more about them later. The second is a company that will finally help you find and hire the perfect developer and I’ll tell you more about them later. For now, I’ll tell you they’re called Toptal.
But first, Raj, welcome.
Raj: Thanks for having me, Andrew.
Andrew: You know, when I was talking to you about cold calling, I said you did it when you started your business. You said, “No, no, Andrew. It goes way, way before that,” to even the fifth grade, where you started making these, if not cold calls, then cold sales. What were you doing in the fifth grade?
Raj: Fifth grade I was selling candy to my classmates. There’s something in me that I always had this interest in earning my own money. I didn’t actually care about the money. I never even spent it. I also had this interest in saving up money for no particular reason. But I had this interest in earning my own money. So, I don’t recall how I got into candy, but that was the simplest thing. I think I loved candy, eating it, so I got into that and started selling it to my classmates. I think that’s like the origin of just always doing that.
Andrew: And you got pretty sophisticated about it, right?
Raj: Yeah, pretty sophisticated. Two key areas were in time I only sold during peak periods, like in the adult world, we had that afternoon coffee break. And that was the equivalent at school time. And then mid-morning as well. So, an hour before lunch and an hour after lunch, that’s when my classmates wanted it most, and then going to bulk food to buy the candy even cheaper.
Andrew: As opposed to just the local candy store, grocery store. What did you learn about sales from that? When I talked to you before the interview started and I asked you about cold calling, you said, “No, the real origins go back to fifth grade.” It seemed to me like you picked up on something by selling as a fifth grader. What did you learn that helped shape the way that you were making phone calls later in life and sold to big agencies later in life?
Raj: I think the key thing was really focusing on your value proposition. What are you really offering? Then it’s not sales.
Andrew: What do you mean? In fifth grade, you’re just selling candy. “Hey, do you want candy?” “Sure, everyone loves candy.” “Great. Give me money. I’ll give you this.” Where’s the value prop at that age?
Raj: Well, the value prop might be at 2:00 in the afternoon when there’s nothing else available, this is it. This is the only thing available. It only costs a nickel at bulk food, but why would someone pay me $0.25. Give me that whole quarter to that piece of something where they keep saying it’s only $0.05.
Andrew: I see. Okay.
Raj: The value prop is really that.
Andrew: By the way, you also said it’s not about money as a spending vehicle for you. It’s about money being just something you like to earn. That’s actually interesting to me because when we asked you what you spent the money on after you sold VisualHOMES, we asked you about a car, for example. You said–what kind of car were you driving still?
Raj: What kind? My car is over ten years old.
Andrew: Over ten years old.
Raj: And my wife’s is also ten years old. I think we’ll have to replace that soon because we just had a baby.
Andrew: Why is that? Why is it that you’re making this money and you’re not spending it on something like a nice car?
Raj: Yeah. My thing is all about building up value. I get excited by achieving the milestones, building long-lasting value. I sold my company about five and a half years ago and still to this day all employees and customers are still on board there. That’s more exciting to me than any financial milestones we hit. That’s long-lasting value that’s not a house of cards. That’s something that I live to do.
Andrew: Okay.
Raj: If I did reveal what I bought since then, it was just an engagement ring.
Andrew: That was it, the big one?
Raj: That’s something that lasts a lifetime as well.
Andrew: Did you get nervous about spending money on it?
Raj: I didn’t. It did burn a hole in my pocket, though, from the standpoint of trying to keep it. I moved my proposal date up.
Andrew: Because you didn’t want to have it in your pocket for too long. I remember buying mine and I didn’t know. Maybe I could spend twice as a much. Maybe I should spend less. I had no idea what to spend. There was no sense of it. What they tell you is spend two months’ salary. My salary is irrelevant.
Raj: Yeah. I’ve heard that too. I wasn’t sure is it before tax, is it after tax, in a good year, in an average year. So, I just went with something that I liked.
Andrew: Yeah.
Raj: And of course that I knew my wife would like.
Andrew: I remember calling my brother outside the store saying, “What do I do here?” He had nothing to say. He was just like, “Let’s talk it through. Do you really want to get married?” “Yes, I do.” “Why? Okay. Great. That I can help you with. If you want to know about what ring to get, sorry, I’m the wrong person.” All right. So, I got no help from my brother. You seem to be doing pretty well with yours.
Let’s continue on a little bit more with the backstory and then we’ll get into how you came up with this idea. You also were selling soda at golf tournaments near your house. What’s the deal with that?
Raj: I think there’s this progression from fifth grade all the way up through all years of high school, basically of selling different things and kind of upgrading along the way. So, my dad had a tech company. He came from India from a village. His first job in the US was drying cars at a car wash. Then he got upgraded. A pizza parlor owner hired him from there. He said it was the best job because he got free food and drinks there.
But he had a company that was three times on the Inc. 500. So, in time, we ended up living in a nice neighborhood. It was a golf community. It had an annual tournament. So, I sold sodas for cash on the golf course because the golf tournament itself I think was selling them for a few bucks and I sold soda cans for $1. So, I upgraded from my $0.25 candy to $1.
It got pretty interesting. My friend did it with me. But I had this manual scooter, like a pedal scooter. I ended up–so, I taped a cooler to that because what was going on is security in time was starting to come after us. So, we had to have like a mobile situation.
Andrew: To get away?
Raj: Yeah. This was back in like, I think, 1993, ’92-’93 timeframe. One time it was funny. I was getting chased and we went down a hill and the thing was so heavy and I couldn’t turn. The whole thing just fell over and I lost all my sodas.
Andrew: You’re not selling drugs. You’re just selling sodas at a golf course.
Raj: We got a lot of requests to sell beer. We just never did that, of course.
Andrew: Do you remember when you graduated college how much money you had from all these little businesses?
Raj: High school or college?
Andrew: Either one. Was there one that’s especially memorable?
Raj: Well, I’d be guessing here, but I think high school I know I had several thousand. It’s probably around $10,000. I did a couple rounds at the golf tournament, a couple years there. And that was always a few thousand apiece. Then I had a little car detail business after that once I got my license. So, these are all like cash-based businesses at the time. We didn’t have Square or anything like that.
Andrew: Yeah. I remember I had $20,000 leaving high school and then when I left college I was deep in debt. All that money, all of it went away and I had a bunch of credit card debt and a bunch of other debt from school. College is a pain.
Raj: I didn’t do anything in college. I didn’t do any side businesses then, ironically.
Andrew: No side businesses then?
Raj: Not really. I was president of the Indian Student Association. I was running a legit organization and business.
Andrew: Where again you cold called there too.
Raj: Yeah. That’s how we got all of our sponsorships.
Andrew: You would cold call who?
Raj: So, at the time there was an organization called Indian CEO that was taking off. I got a hold of one of their lists. So, I respectfully called the CEOs of these companies.
Andrew: All the Indian CEOs on the list would get a phone call from you asking for what?
Raj: It depends on what was going on at the time, but major sponsorships for thousands of dollars. So, I had to craft my pitch to really resonate with them. So, why would a tech company want to sponsor like a cultural dance show?
Andrew: So, why? Teach me something that you learned back then. What would help you convince them to sponsor a dance, for example?
Raj: Yeah. So, it’s interesting. So, of course, the obvious thing is to go the Indian route. But of course, if I get a savvy person who calls me out on that and says, “How does that help my business?” then there are a couple routes. It depends on what type of business they have. I could try to spin it that way. In that situation, I think I spun it towards the personal stuff. It’s not really to help your business per se. It’s more as a personal thing.
It depends on what their background was and if they wanted to support that type of thing that going outside of the charity bucket, it wasn’t a charity, but I talked about the things that our organization did for charity and those things. That’s what we spent the money on. We don’t spend our money on our students and we don’t do parties, which was the first thing that I–
Andrew: Even though you were doing a dance?
Raj: Dance because that was cultural dance. So, that furthered it. But when I was president and the year before I became president, I had lobbied for the organization itself not sponsoring parties. That did not further the actual cultural. That just furthered a lot of drinking. That’s fine. Parties still went on. It just wasn’t sponsored by the organization. That’s how we got a good reputation on campus and really moved the mission forward.
Andrew: Okay. So, you changed what you guys were going to raise money for and then you just kept trying to come in from a personal point of view in saying, “Here’s how you can have some kind of impact here.”
Raj: Some of them were alumni.
Andrew: We’re talking about a few thousand bucks, right? It’s a lot to ask for when you’re in college, but it’s not that much to give if you’re a successful CEO. And you worked the Indian angle, “I’m Indian. This is an Indian student association. Will you help us out, just like you’re Indian?”
Raj: Yeah. That’s just to get in really quickly, but the Indian angle never really…
Andrew: It’s not enough? You can’t just say, “I’m Indian. You’re Indian. Give me some money?”
Raj: No. That’s what everybody would pitch.
Andrew: I see.
Raj: So, it really has to be more creative than that. You’ve got to resonate with that other exec. I was kind of pitching myself, really, that how did I get them to pick up the phone.
Andrew: What do you mean?
Raj: Well, their numbers aren’t easily available. This is back in–we’re still talking…
Andrew: The 90s.
Raj: I was in college from ’95 to ’99 and mobile phones, you couldn’t just get anyone’s mobile phone number. It wasn’t ubiquitous. You’re going through a phone system at their company. So, I can go the manual route, type in their last name, get their extension. Some were still direct. Others you had to go through the gatekeepers, their assistants and stuff like that. There are so many different points that you have to give a little pitch just to get the right ear.
Andrew: I see. So, just saying, “I’m a hustler who got through here,” is enough to show that you deserve to have a conversation.
Raj: Yeah, but in a nicer way in terms of like trying to get them to identify how did they get started in their business, things like that. Maybe getting them to feel like they’re taking me under their wing, like they want to hire me in the future.
Andrew: I see.
Raj: At that point I was going for a business degree in undergrad.
Andrew: All right. Let’s get to VisualHOMES. VisualHOMES is an idea that got to you when your dad had a broker come to talk to him and you looked at the software that this broker was using and you saw what?
Raj: I saw a DOS-based product.
Andrew: DOS-based product in the late 90s. Okay. This is after Windows 95, obviously, and he’s still using a DOS-based product. What did you think when you saw that at 22 years old?
Raj: Probably what you’re thinking right now, “I can’t believe anyone is using this.”
Andrew: Right.
Raj: But they were. It was pretty common in agencies that were government or quasi-government or funded by government. But it was an interesting opportunity, first is because at the end of the day, it’s helping citizens in need. That becomes interesting. And then it’s combining technology.
Andrew: What do you mean? What was software doing?
Raj: Well, the software managed all the operations of the agencies, including eligibility for subsidized housing, payments, things like that. So, basically we needed the agencies to run smooth for the tenants to have a good life.
Andrew: What did your dad do?
Raj: He had a software development systems integration company, mostly government contracting.
Andrew: Okay.
Raj: He did pretty well for himself. He was an engineer by trade.
Andrew: Yeah, going from cleaning cars to having an Inc. 500 company is huge. I’m thinking I should be interviewing him.
Raj: I think he’d love that. He’d be an interesting guy.
Andrew: Really, would you set that up?
Raj: Sure, definitely. He did Inc. 500 three years in a row.
Andrew: That’s unreal.
Raj: Not 5000. I always tell him now they have the 5000, but this was the 500.
Andrew: The thing that’s shocking about that is to get to the Inc. 500, you have to have had a business that was growing faster than other private companies and then to grow again faster than other private companies after you’ve reached a certain point and again is really hard.
Raj: He went to the conference where he had a special pin that he was third-time. He said it was an amazing feeling because all the colleagues there, the other attendees were just amazed. He’s a humble guy.
Andrew: I’d be interested in you doing an interview with him for Mixergy. Would you be up for that?
Raj: That would be awesome.
Andrew: That would be great. You just walking us through his story. You’d know the questions to ask. All right. We’ll set that up.
Raj: Sounds good.
Andrew: So, in walks this guy, has a DOS app–I can barely call it an app–on his computer and what it does is it checks to see who’s eligible for this housing, for affordable housing and then manages the waitlist, I imagine, right? And also makes sure that they pay and that the payment is recorded properly–all those things are done and you say, “I think I can do way better than DOS.”
Now, most people would say, “All right. I’m going to create my own company and compete with these guys who were creating DOS.” You had a different take on it. You decided instead of competing with DOS, you were going to do what?
Raj: So, this was through a broker who essentially said you could buy the business without putting any money down on it.
Andrew: Why did this broker tell you you could buy this business without putting any money down?
Raj: You’re saying why?
Andrew: Yeah. How did he even know that you could buy the business without putting money down?
Raj: I don’t know how he would know that. I think he knew that I didn’t have any money and that I’m a young guy looking to do something, so that could be interesting.
Andrew: Was the business in trouble that the guy said, “Please buy us out. Get me under the thumb of this owner.”
Raj: I don’t think it was necessarily in trouble. I think it was owners probably wanting to move on.
Andrew: Okay. And he knew that the owner wanted to move on.
Raj: I think so. Yeah.
Andrew: And why would he tell you? What was his connection to you that he would suddenly tell you you should be the guy buy this, “You’re 22 years old, you should be my boss?”
Raj: No, this is the broker.
Andrew: And the broker doesn’t work for the company. He’s just using their software.
Raj: I think it was like a broker who takes a cut if he sells the business.
Andrew: Oh, he was a business broker who showed the software to your dad. I see. I got it. I thought he was someone who was using the software on a regular basis. Got it. So, he was there to sell the business to your dad, but he looked at you and said, “You might want to buy this software, no money down.” So, you say, “Okay, let me make sure this is the right business for me.” You start making your famous phone calls.
Raj: The broker would probably want to see it to anybody that’s ready. So, I did my own market research, some interview stuff. It was fine. That’s publicly available information. But I find the best is when you actually call people and chat with them, catch them off guard, find out some info. People are usually willing to be helpful with that.
Andrew: I’ll tell you what, let me do a quick sponsorship message and then come back to that.
Raj: Sure.
Andrew: My sponsor for this interview is a company that will host your website right. They are called HostGator. If you need a website built–it could be for an idea that you had in the shower this morning or it could be for an idea that you see someone else is screwing up and you could do much better or maybe it’s just you saying to yourself, “I can use my own personal domain just to have an email address on it or just to have another place to create invitations for events or just to have another place to put content online when I need it to go out there.”
Whatever reason, if you need a new website, all you have to do is go to HostGator.com/Mixergy. They’ll set you up with a website that has one-click install of popular software like WordPress so within one click you have it up and running. They’ll give you the themes for it. You can even turn it into an ecommerce site if you want. Again, really simple installation of their software. You don’t have to pay extra for it and you’re up and running with that idea that you had in the shower.
One of the things that I like to do is just create a website for things that people wouldn’t expect you to create a website for. Raj, you might not have heard of it, but in one of my past interviews I said that when my wife and I were dating, she said something that I said at an event was déclassé. I said, “Olivia, was that a little too far.” She goes, “No, that’s just a little déclassé.”
So, I bought a new domain called DictionHarry.com. I copied the Dictionary.com webpage for déclassé, put it on DictionHarry.com, my domain, with my photo next to it and I emailed it to her. It was a nice little surprise. It cost hardly anything. Another thing that I did was when I wanted to organize an event, I went and got a domain and I put the event information on my own domain so it looks a little bit better. It looks more connected to me.
Whatever your reason is, if you need a website, go to HostGator.com/Mixergy. You want to go there because they’re going to give you an incredible deal on a site. We’re talking about dollars a month, 30% off if you’re going to that URL versus just going to the main homepage. So, it’s really inexpensive. In addition, they’re really good at giving you support. We’re talking about 24 hours a day, 7 days a week, 365 days a year they have a human being there for you.
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All you have to do is tell them that you want to turn that on and they’ll turn it on for you. It’s just a little more money, a lot more car, meaning WordPress managed hosting, they’ll upgrade WordPress for you. They’ll make sure that you don’t have viruses, they’ll protect you from viruses and make sure your plugins are up to date and that you’re using the right ones.
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All right. When you’re making phone calls, Raj, trying to figure out what to do, whether to buy this business or not, who are you calling and what are you asking them to help you figure out whether you should buy this business?
Raj: So, I’m calling basically a subset of who the potential customers might be. So, let’s say there were about 5,000 housing agencies in the country. Ultimately I had a theory that in order for this business to be successful, we needed to go after the Housing 500. It’s kind of like Forbes or Fortune 500 in the housing world, basically the 500 largest housing agencies. Ultimately we’re going to invest in this and we need some good size agencies on board for that. So, I needed to validate that it was going to be–okay. We’re good. Right.
Andrew: You needed to validate that it was going to be a good idea for them. What are you asking them? Do you call them right up and say, “If I buy this company, will you buy my software?”
Raj: So, I’m going at it from an industry research angle. So, not disclosing anything that I’m up to, per se, but wanting to validate the need. So, they have a current system. What is their current system? Are they open to a new system?
Andrew: They’re going to tell a stranger who’s not even looking to buy a business. You didn’t tell them you were going to buy this business. They’re going to tell a stranger what software they’re going to use and when they’re going to upgrade? You’re nodding as I’m asking this question incredulously and you’re saying yeah, they will?
Raj: Yeah, people will want to talk. I don’t think that’s changed too much. I think the right people want to talk. I was already in my view like a young tech guy. So, I would ask them things about what their network infrastructure is like, if it was the CIO or IT director. If it was the executive director, we’d talk about more business related things or things going on in the community. So, general things going on. But people wanted to talk. Yeah. It’s amazing that if you go at it from the right angle, you’re not selling anything, you’re not pitching.
I used to have an extension in my office when I had my business. All of my customers had my mobile phone number. All of my employees had my mobile phone number. So, I never picked up the desk phone, but it was there. So, if it ever rang, it was a cold call. So, to stay in the loop and keep my sales fresh, I would periodically if I was free knowing it was a cold call.
Andrew: Just to see what it’s like to be on the other side of a cold call.
Raj: Definitely.
Andrew: So, you would just call them up and say, “What software are you using? When do you think you’re going to switch?” Any other questions that were good questions for getting information?
Raj: Definitely. So, talked about budgeting. If they did have this ultimate system, how much would they pay for it? Would it be worth its weight in cold? Things like that. That’s how I started uncovering what are the real needs out there.
Andrew: What did you learn was the big real need?
Raj: So, ironically a Windows-based system, a graphical interface. There were some players out there.
Andrew: So, they would actually say, “I would want this to be graphical.”
Raj: So, that was part of it. And then at that time, there wasn’t a great financial system in place. So, it was more–let’s say it was a lot of CRM plus financials and there wasn’t really a great integrated system that had it all.
Andrew: I see.
Raj: So, I pinpointed that as the main need, which is a big system to build. It’s no joke, but yeah. I did a little bit of that to get enough of, “Okay, let’s go for it.” But what I did come away with, which was my hunch is that we need to go after medium to large agencies, whereas this DOS product was for small agencies, right? So, the business plan would be that we have to build this thing from scratch. At this time SQL Server and Windows-based and go after medium to large agencies and then I needed a pilot or two early on and who would be down to commit capital, being like they’d pay half upfront.
Andrew: I see. They would pay half upfront for something you would then go build for them.
Raj: Build for them, but I’d be building as a product that I would–
Andrew: Sell to other people.
Raj: Yeah.
Andrew: How did you learn from those phone calls that you had to go to medium-sized business as opposed to staying with the smaller companies that were using DOS?
Raj: So, when we talked about getting to the financials and the budgets, how much did they pay for their last system? How much could they pay for this new system, it was pretty clear.
Andrew: I see.
Raj: The small agencies, they couldn’t really spend much. Medium to large, it was all over the place.
Andrew: They had the money to do it. You know what I just realized? I realized we should probably say what DOS is. DOS was the first version of the operating system that Microsoft came out with, which was all text and black screen, right? If you wanted to run an app, you would just…
Raj: Green or amber.
Andrew: You couldn’t click on it with a mouse. You would have type in something like, “Run WordPerfect,” or something and it would start it off. I actually don’t know what the actual commands were. Then it would turn up and you couldn’t use a mouse to navigate through WordPerfect. You would have to use command keys to do it. All right. So, I see now how you learned that–
Raj: To put that in context, when I was in college, I graduated in ’99, the second semester of my senior year, they went from character-based email system to a web-based email system.
Andrew: That’s for…
Raj: For email. So, it wasn’t that far of a stretch that all these systems are out there that are still character-based.
Andrew: Yeah. But that’s the internet that wasn’t fully developed. By then you were still using Microsoft Word and Excel, which were all based in Windows. I get it. I use One Medical, an incredible doctor system in San Francisco and everything is so up to date and polished, including their mobile app, where you can take a picture of a rash that you have and have a prescription waiting for you at the drugstore on your way home.
Everything is up to date. The software they use on their computers is still like a few years behind. It makes me sad for them to have to use it. They seem much more like Apple people, for example, but they’re using this old-fashioned Windows-based solution.
All right. So, you notice these opportunities. You say, “I’m going to buy this company no money down. What do I have to lose if it doesn’t work out, then I haven’t lost any money,” right? You’re not personally guaranteeing any cash?
Raj: Correct. You still lose in general because it’s like I don’t want to fail.
Andrew: So now you have to build this new software, but you also want to sell the DOS system while you’re building new software. Do you start making phone calls at that point to sell the DOS software or you give up on it?
Raj: So, we support it.
Andrew: But that’s it. You say, “I’m going to support it, but we’re not looking for new customers in DOS. We’re looking to see what we should build for Windows.” That’s when you start really pounding the calls. I asked you before the interview, “How many calls did you make? Did you make hundreds?” And you said…
Raj: Thousands.
Andrew: Thousands of phone calls.
Raj: Thousands. My thing was I wanted to interview that Housing 500. I wanted to–so, the larger the agency, it would be the CIO or the CFO, the smaller the agency in that top 500, it would be the executive director, which was the equivalent of the CEO, but I needed to interview at least one key person at each of those 500 agencies.
Andrew: And it wouldn’t be one phone call and you get right through to the CIO or the CEO. It would be lots of phone calls until you get through to the right person.
Raj: Yeah.
Andrew: Man, you were persistent. What did you do to get them on the phone? What’s one thing that you’re especially proud of that you did to get them on the phone?
Raj: Well, interestingly, so I left messages, but I left them in a way that it wasn’t for them to call me back. It was to build up my relationship with them through voicemail. So, this was back in 2000. So, it’s kind of starting to establish myself as like an industry expert.
Andrew: Okay.
Raj: And kind of laying the groundwork so they’re familiar with me when I do get them. They will pick up eventually. This wasn’t like a big caller ID time or anything like that.
Andrew: So, you’d call them up and you just say, “Hey, I’m noticing this going on in this space. Just thought you’d want to know. Good bye.”
Raj: Pretty much.
Andrew: Interesting.
Raj: I did get call backs. It was basically a whole summer that it took me to build up my database. I had mapped out where the top 500 agencies are headed. I had a whole plan of which ones will be replacing their systems when. I knew what every single one was using. I knew who their key people were. It’s the whole map in a positive way. I could see, “Okay, this is how I can shape our pipeline and what targets we can hit and who we should be focusing our energy on.”
Andrew: I see. So, it wasn’t just general understanding of the market and what you should build. It was specific understanding of individual companies and when they would be the ready to buy and who the right person was to buy and maybe even a relationship with that person beforehand.
Raj: Yeah.
Andrew: Did you learn anything when you were making those thousands of phone calls to the Housing 500 that you didn’t know from the first set of phone calls you made before you bought the company?
Raj: Yeah. So, I learned a lot more about timelines and when people are going to buy. I learned quite a bit about what the feature set should be. It was very clear that there were some common needs that weren’t being met.
Andrew: Like what?
Raj: Well, if we get into like nitty-gritty stuff, like I talked earlier about integrated financials with the housing, but there was quite a bit of–a lot of agencies did a lot of purchasing, purchase requests and purchase orders and things like that. That’s a key area where some of these systems were weak. So, I put quite a bit of effort into that.
Interestingly, in government agencies, purchasing typically falls under the procurement office or procurement officer. When government agencies buy things, they typically issue RFPs or requests for proposals and that falls under procurement. So, you’re killing two birds with one stone if you build out a feature set that’s really nice for procurement because procurement are the people that issue the RFP to begin with. Even though they’re supposed to be neutral, if you win them over, it certainly helps your case. Everywhere you go you’re going to have competitors.
Andrew: I see. When you’re asking these questions, what I’ve heard from doing interviews here on Mixergy is you can’t say, “What should I build? What would your ideal feature set be?” Then you’re going to get this monster that they can’t really use even though they’ve asked for it. How do you ask? What’s the nuance behind the questions that allows you to get these kinds of answers that are so useful?
Raj: So, it’s a little bit of chicken and egg, but I think what happens is after I’ve talked with, let’s say, ten folks that are using the same product or similar size, I start to see trends. So, I can start probing more deeply in there. It’s like, “I talked with a few folks that also use this system and they mentioned this. Would you concur or do you think that for you that’s exceeding your expectations?” things like that. So you started drilling down.
If you look at it, I spent a whole summer doing it. But my business was over ten years. I think that’s why even five years later, so it’s been over 15 years, all the customers are still on board there. That’s how deep we went early on. It’s market research that a lot of companies, they outsource that market research. You can’t. The founders have to do it.
That’s how you know what you need to build into this thing and you’re getting commitments along the way that it can’t be beat where you had another place that’s just run by sales folks that are just trying to meet quotas. This is like the real thing, like getting hands on with people who are going to become your customers.
Andrew: I see. And you also mentioned commitment. You’re telling them, “If I build this, will you buy?” or are you saying, “If I build this, will you buy and pay now?”
Raj: So, that I did to get our first customers. Certainly I did commitments. And then in time, even in our final days, I always used that as a tool to close the deal, where there were times where we agreed like we showed–we went to some clients where we were going to do a demo and I would talk with their folks ahead of time. We were getting farther along in the process. They said, “It’s just this one particular feature that you guys don’t have and we think you should have that.” I would show up at the next presentation with that feature, like working.
Andrew: And saying, “Now do you want to buy?”
Raj: Pretty much. Just say, “Look, we can do this. This is in the prototype. We’ll test it out and commit it to code. We can also do a lot of other things. I’m doing this to show you that we’re that type of company. It’s not that we keep on innovating. It’s not that we do this one thing just to get your business. This is what we do all along. We work with our clients to keep advancing the product. It’s not something that ends with getting the deal.” I always tell them it’s great to get the deal. It’s more exciting when they start using the software.
Andrew: Raj, when you got these presales, did they give you enough money to pay for a developer, to pay for the code to be built or did you also have to kick in some of your own money?
Raj: Early on, I suppose that carried on later too. The most important part was earlier on, the first few deals. I closed a deal in the first six months that covered quite a bit. We negotiated to get half up front, which is pretty rare in a government contract. It’s always nice to get a contract. It’s a whole other thing to earn the revenue on the contract in that type of business, right?
Andrew: So, you got half of the money up front. How much of your software development did that cover?
Raj: That covered quite a bit early on because early on we were outsourcing to India. It sounded nice in all the business magazines that I read. That could be a whole other interview.
Andrew: How tough it was at the time.
Raj: Yeah. It was pretty tough.
Andrew: Did it cover 80% of your development cost?
Raj: It covered 100%.
Andrew: Oh, 100%. So, basically they paid you to create this one software for them that you could then also sell to other people too.
Raj: Yeah, basically, but that’s not how I proposed it. But sure.
Andrew: I see.
Raj: We sold it as a product, basically, and the value of the product with models that were scalable, that would work.
Andrew: And half of it was enough to cover the development of the product. Wow. Let me do a sponsorship message that actually is very appropriate right now. It’s for a company called Toptal. Have you heard of Toptal before?
Raj: Definitely.
Andrew: Yeah? How do you know about Toptal, through Mixergy other places?
Raj: Through Mixergy and other places. I’ve talked with a couple of folks there. Some of them use our software.
Andrew: They do?
Raj: Yeah, Hurdlr.
Andrew: Hurdlr, the new company you’ve got.
Raj: Yeah, to manage their own finances, yeah. Great company.
Andrew: So, Toptal uses Hurdlr, your software?
Raj: Some of the folks that Toptal places.
Andrew: Got it, some of the developers, you mean.
Raj: Some of the developers and designers, they use it because they do some freelance.
Andrew: You reminded me. I talk a lot about developers that they have over Toptal. I should be talking about the fact that they also have incredible designers. We’re talking about iOS designers, logo designers, Photoshop experts, mobile app designers, web designers, all these people, UI experts–all available at Toptal.
The thing about Toptal is the way they work, for anyone who doesn’t know them, unlike Raj, is they’re a network of these top developers and designers. These people have been pre-screened. These people have been tested. These people have really been put through the ringer to make sure they’re the right top three percent. There’s a certain confidence that comes from being able to say, “We have the top three percent. That’s why Toptal does so well. They have the top three percent.
So, when you go to them and you say, “I have an issue. I want to create this new software and all of my developers are busy,” or, “I have this new project and I need a development team,” or, “I have this new idea that’s going to be a part-time project.” They can go into their network and knowing what software you use, knowing how you like to communicate with your developers, knowing your little quirks and idiosyncrasies, they can find you the right developer or designer, match you up and when you’re ready to start, you can often do it within a matter of days.
I’ve never seen a service like this before. There’s a reason why they keep advertising, because they do so well, because this is such an impressive way of hiring developers. We’re not talking about the kinds of people who you would find on a freelancing website who would take your instructions and do it on the cheap exactly as you say.
We’re talking about people who can think, who just like you and I, Raj, and everyone else in the audience gets off on figuring out how to get to the right person when you’re making a sale, how to explain your product just right. We’d like get really into this problem solving for entrepreneurs. The developers Toptal, the designers at Toptal think like that about development and designing. They want to understand how to really make things work in a clever way that you and I could never do because we’re not in that world. We’re not developers.
If you want to work with them, they have a trial period that if you’re not 100% satisfied, you will not be billed. It’s incredible. I don’t know anyone else who does that. In addition, they will, if you go to Toptal.com/Mixergy, they will give you 80 free developer hours when you pay for 80. That’s in addition to that no-risk trial period of up to two weeks.
Go sign up. The first thing they’re going to do is they’re going to talk to you. They’re going to understand your problem and make sure that they’re a right fit for you. If they are, they will find you that perfect person. I promise it will work out. They promise it will work out. Go check them out at Toptal.com/Mixergy.
How long did it take you, Raj, to build your software, the Windows version?
Raj: To put the first prototype out there, working version, I think we put the first one out there pretty early, probably too early. So, I’d say about four months.
Andrew: Why do you say too early? What was missing from it or what was so bad about it?
Raj: I think in software you can always do more testing. In that type of industry, it’s not a type of product that you release out into the public that people just download on their phones and start playing around with it and give you quick feedback. It’s more enterprise-y. So, I think I was pretty open about it at that time that we could have done a lot more testing.
Andrew: You said, “It’s not fully built. It’s just a prototype and I want to show it to you.”
Raj: No, what I was open about is we did a shitty job and we could have done a better job with more testing.
Andrew: You said that to them?
Raj: Yeah.
Andrew: Okay. Wow. And how did the client respond to that?
Raj: We have to deliver value at the end of the day. This was my first time doing a software company. So, you just learn things, like how to hire good engineers, for example. It comes in time. For those who don’t–Toptal, no question about it. It’s a perfect place to go if you can’t find your own engineers. Not everyone should be hiring their own engineers.
Andrew: It’s really tough. It’s one of the toughest challenges any software entrepreneur is going to face. So, when you tell them, “This is a pretty bad job,” what do they do? Do they say, “All right. No problem, Raj. Go ahead, work on this and come back in a few more months?”
Raj: Yeah. What’s the correction plan? But the thing is even though I’m saying that we could have done a better job, the vision is still there and they see the visual. They see the promise. It’s not that we’re doing like some dog and pony show or it’s not smoke and mirrors. It’s almost there.
A lot of times in software, it might seem like something is blowing up, but it’s often a tiny fix. It’s just gotten embarrassing because it’s a tiny fix. It could potentially could have been caught or should have been caught ahead of time. That’s part of the nature of it though. It’s very rare that in the enterprise world that something works 100% when it’s released. But in our case–we got really got at this in time–when you’re dealing with financials and financial systems, we got it to that level where it’s just solid.
Andrew: Why do you think they were willing to pay for something that didn’t exist yet? What was the big problem that you identified that made them say, “Yes, Raj, we will pay you even though you don’t have it yet?”
Raj: It didn’t exist in the marketplace.
Andrew: What didn’t exist? Why did they care? What was the problem that they were so desperate to have solved?
Raj: I think they wanted a complete, integrated system that ran the whole agency, that had a graphical front end as windows-based.
Andrew: Why? Why was that such a big thing for them? Why couldn’t they just use two different pieces of software and be done?
Raj: Because they don’t talk together, the two pieces of software wouldn’t talk nicely together. It’s a lot of extra work. Also, when you look at it from a recruitment perspective, if you’re trying to bring on new folks and they see these character-based systems, that’s a turnoff.
Andrew: I see.
Raj: So, it becomes tougher to recruit. I think it was a really a matter of finding those early adopters. Like Tesla model, you come out, if you’re one of the early folks, you have to buy like the most expensive one. They don’t do the cheaper ones up front. I think that’s coming pretty soon, the Model 2 waitlist is going to open soon. But yeah, that’s the model. It makes sense from a creation standpoint because you need investments a lot of times to create these things. But you can get that basically through your customers.
Andrew: Was this the DC Housing Authority that was your first big customer?
Raj: It was not.
Andrew: It was not. Tell me how you got the DC Housing Authority. How did you get them as a customer?
Raj: So, the DC Housing Authority, that was one of my most memorable moments in the business. We got them, I think it was like year seven. So, in DC, we have the metro system, which is like the subway. It goes out to the suburbs. Our office was just outside of the city. My condo was closer to the DC Housing Authority than it was to my office, both were close by though. The DC Housing Authority was five stops away from the office on the same line, the red line, no transfers.
So, myself and a couple of our team members, three of us went to the DC Housing Authority to give a presentation. They had invited their current vendor and another competitor. So, three companies were in there. We get to give our presentation. I was thinking just on the subway the whole way over. I was just so excited to finally get in there. It was my first time there. Thinking about, “I’m just going to tell them why we want to work with them, like just be completely open.”
So, I shared a few minutes on our company background, how we’ve grown, why we’re the best fit. But then I also talked more about our personal, like, “This is like a matter of pride. This is our thing. We’re meant to be here.”
Andrew: Meaning, “We live in this area. We take BART just like you. This is our home. We want to make sure that you guys are part of our client base because we’re all neighbors together.”
Raj: Yeah.
Andrew: That was it. Did that work?
Raj: It did. I didn’t mean it as like a sales pitch. That was the truth. You can’t fake that when you’re talking with them. Of course, we were more excited than competitors going over there. Competitors are going over there to go get some money. We were going over there to go get a client that is in our own community. So, for us it was just a big thing. I think that resonated with the 20 people that were in the room. You could see that when they’re nodding their heads vertically. You can see it in their faces. They get that.
So, that was the presentation. Of course, when we got notification that we’d been awarded it, that was just like so awesome. That was like sharing that in the office, I’m pretty sure I teared up.
Andrew: How much money did this represent when you signed them?
Raj: It was definitely a good-size deal because they’re the number five housing agency in the country.
Andrew: What are we talking about, $10 million, $5 million, $1 million?
Raj: I’m not sure I can disclose, definitely seven figures.
Andrew: A year?
Raj: So, not in the initial contract. I think in time it probably ended up getting there because we continued to do–well, I’m not there anymore, but I know we continue to do quite a bit of stuff with them.
Andrew: And you sell the software because it’s Windows-based. You sell it one time plus a recurring fee for support, right?
Raj: Yeah. It’s pretty much morphed into like a SaaS model. So, our company, VisualHOMES provides excellent customer care and support. That was something that I still do with Hurdlr. I’m just a big believer in customer service. That’s something that at the end of the day, we’re all customers somewhere. That’s something we all know. We don’t need to go to school to learn that. We’re all consumers. It’s the same thing.
I always say I’m the same person inside my house as I am when I walk out the front door. I only have one set of values, my personal values. So, do unto others as you wish for yourself. It’s very basic. A lot of it’s karma-based. We have to take care of our customers. Why are we in business if we don’t want to take care of our customers? Whatever we can do we should do. So, that’s what we did. That’s how we built up such a solid reputation. Most of our business was referral based, which is pretty rare in government.
Andrew: What’s one customer service thing you did that no one else would have done that shows you went above and beyond?
Raj: So, when Katrina hit back in New Orleans, so the New Orleans Housing Authority was one of our clients, but they weren’t live on our software yet. They were using one of our competitors at the time. We were in the middle of the implementation and implementations almost always included data conversion, which is converting their data from their system to our system, which was quite a bit of work. So, we had some of that data conversion along the way.
So, the servers that housed their existing system, those got flooded. So, they had potential data loss there. But we had partially converted data. So, we helped them in recovering that data for their vendor system.
Andrew: I see.
Raj: Not for our system. That’s just the right thing.
Andrew: And it wasn’t your responsibility, but you still went and did it and took care of it.
Raj: Definitely.
Andrew: Let’s talk about two other customers that you got. The Newark Housing Authority in New Jersey, how did you get them?
Raj: The Newark Housing Authority.
Andrew: Yeah. That’s pretty big, isn’t it?
Raj: Yeah. That was definitely a big agency. So, we took the train up, this was the Amtrak now from our office, a few of our guys. We had a meeting, very weird. It was a 4:30 p.m. meeting for 30 minutes. To that point I don’t think I’d ever done a 30-minute meeting to try to get a top 10 housing agency.
Andrew: How long is it usually?
Raj: So, it was anywhere from one day to three days. I think three days was typically overkill, happy to do it.
Andrew: But a full day of meetings is what they usually want from you at least.
Raj: Yeah.
Andrew: Okay. These guys say, “Half-hour, come on down to Newark.” So, you get in the train…
Raj: My guys were thinking, “That’s weird.” My guys were thinking, “Oh, someone else must already have it, so they’re saving their time.” That’s never the case. My view point is always, “Okay, we have 30 minutes. How are we going to utilize every second to the most value?” Cut the chit-chat, cut to the chase and focus on what’s important. That created an agenda. It worked for the 30 minutes. We nailed it to the point where they kept us there until it like 8:00 p.m. We were already negotiating. We basically did the deal there.
Andrew: Wow. What do you say in 30 minutes that gets you to stay in the office until the end of the day and beyond and also gets you to nail the deal?
Raj: So, at that time in our business, we had solid reputation, I also led with customer references. I think that was the best way. I tried to get agencies to talk with our customers before we even arrived.
Andrew: And did they?
Raj: A lot of them did.
Andrew: Did Newark do it?
Raj: They definitely did.
Andrew: So, before you even got in there for your 30 minutes, they already talked to a few of your customers and those customers talked about what you did for them and how much. I see. That goes along way. All right. Now you get in the room, what do you do to extend that meeting, to make it so good in 30 minutes that they want to spend another three hours with you?
Raj: So, I told them the story about how I was there a few years earlier and at that point–so, let’s say there were three main parts to the agency as it related to the software. It was public housing, sectioning and financials. That agency had sent out an RFP just for one of those sections. Somehow in that procurement, they had a scoring system and we actually won, but they awarded it to another company because they added the points up incorrectly.
So, I actually pointed that out when I saw that years before and then they had decided to just cancel that. Well, ultimately decided to cancel it. First they said they’re still going to award it to the other company. Something was fishy over there. What happened in that two years’ time is they got a new management team and cleared out some things. So, then they ended up going for the full agency thing.
Andrew: Okay.
Raj: I talked about that. I said that we’re very thorough, like we want to work with you guys. It’s really taking the personal route, the meaningful–like, we were mission-driven. We’re not like sales-driven. It was mission-driven. “We want to implement this system here, get you guys up and running, make you really efficient so you can provide better service to your clients, which are actually the citizens in the community.” It resonated. That message resonated. Our tagline was, “Partnering to Build Better Communities.” It was not, “Giving You Software to Make You More Efficient.”
Andrew: Okay. Let’s go to one last one. Oracle introduced you to someone in Toronto that became a customer, right?
Raj: Yeah.
Andrew: Why did Oracle, the software company introduce you to someone in Toronto and help you get a deal there?
Raj: So, when I started off in the business, I met folks at an industry conference from Oracle as well as IBM and a couple other big companies because I think they were basically trying to sell their financial packages to the largest agencies out there. With Oracle in particular, we really hit it off with one of their guys in particular and we stayed in touch. We would talk once or twice a year.
So, this was about five or six years of me knowing him and he said that basically across their company wire, there’s an opportunity at the second largest housing agency in North America. Number one was New York City and the second largest is Toronto Community Housing. He asked me, he said Oracle Canada is going to bid there financial package. Would we be interested in bidding our housing package, which would require us to modify it to meet Canadian regulations.
Andrew: Yeah.
Raj: I said, “Give me 24 hours and I’ll get back with you.” I asked him to send me what it is. It was a 300-page requirements doc. Me and a couple of my guys went through that night. The next morning I said, “Let’s do it.” A couple of days later, we were working on the proposal with Oracle. Months later, we were in there giving a presentation. I think a few months after that, we were awarded, along with Oracle. Pretty awesome because Oracle says that we got them the deal, basically. You would think it would be the other way around. Pretty neat.
Andrew: What’s amazing to me is that you just are so good with people and so good with keeping track of your relationships, getting information about people and saving it. I’m wondering what CRM do you use?
Raj: Currently?
Andrew: Yeah.
Raj: Currently Gmail.
Andrew: Gmail is your CRM? What did you use back then when you were talking to the 500 housing companies?
Raj: So, back then, starting in 2000, I used a custom developed CRM system based off of Lotus Notes. That’s what I used for most of the time and then probably in the final two years, I implemented Salesforce. But that was kind of on the side.
Andrew: Okay.
Raj: I still had my Lotus Notes. Back in 2000, I built my dream CRM where it tracks–I’m sure they’re out there today–where it tracked every call and every email. So, I had my full dashboard. So, I know everything that’s going on. There’s nothing to forget and I’m really building a relationship as opposed to just doing a sale.
Andrew: I see that. It’s really important to keep track of that stuff, especially if you’ve got more than one person talking to your clients. For us booking these interviews, we use Pipedrive, really simple CRM, and it’s helpful for me to see when somebody emails someone. It’s helpful for me to know that you were emailed to say, “Sorry, we screwed up with the booking time. Can you meet a half-hour earlier than expected?” It’s helpful for me to see that for example, that you’ve been in our system for 10 months and 23 days so that I can tell why you were a little nervous before we started about not remembering what happened in the pre-interview that happened months ago.
Raj: We had the same thing. It was initially our customer support, Lotus Notes database. That’s how it all started. Then I just took an instance of that and had it tweaked to meet the same needs for CRM.
Andrew: I’ve never used Lotus Notes before. I’m so curious about what it was like inside there. Why did you decide to sell the business? It was going great, 10-year old company. You were running it yourself, no outside funding, right? Why did you sell it?
Raj: So, the company that acquired us, Yardi, folks outside of real estate, most people haven’t heard of it. Inside of real estate, it’s a quiet giant. They have about half of all US apartment buildings using their software, multi-family buildings and billions of square feet of commercial space managed on their commercial platform. For us, it was a great partner to have because they were in this space, but they viewed our subsidized housing logic as pretty strategic. In fact, they’ve since basically converted that logic into their own platform as well. So, it was a good time.
For me personally, I had been in the business for ten years. We had achieved quite a bit, built up a solid team, solid financials, customer satisfaction was always high, so it was a good time. We had just implemented–we kind of turned it into a transaction platform, where we were the first in the industry to implement integrated background screening. So, it was going to turn our platform into a transaction engine.
Andrew: Why not continue? Did you feel like you got a little tired and needed some space?
Raj: I thought it was really a good time. It was a major inflection point when we implemented that. Technology-wise, in that space, I didn’t see for the next ten years anything dramatic coming in the next five years, let’s say. So, turning that into the transaction engine was the big thing. Beyond that, there wasn’t going to be major, major functionality. We had already led the industry and integrated document management, integrated workflow management. We did everything that was going on in commercial space and added it for our clients. So, we’ve led them through that.
There wasn’t really, in my view, in the next five years, much left. So, I kind of had this vision in my mind, in the back of my mind for Hurdlr where I felt like I did quite a bit to help citizens and I wanted to move on to help entrepreneurs.
Andrew: What size revenues did you get the business up to before you sold it?
Raj: We haven’t disclosed that.
Andrew: We’re talking over $10 million a year in revenue, can you say that?
Raj: Yeah.
Andrew: Did you sell the business for over $50 million?
Raj: I can’t disclose.
Andrew: You can’t say that. Were you the only owner?
Raj: No.
Andrew: Who else was there?
Raj: So, I have a couple of other family partners as well.
Andrew: Okay. Did you own more than 50%?
Raj: Yeah.
Andrew: You did? Do you remember the day the money hit your bank account?
Raj: Yeah.
Andrew: You do? And you didn’t celebrate?
Raj: So, I want to say no. We didn’t celebrate the way any folks would normally celebrate. It was kind of–it’s a weird feeling. I don’t know if bittersweet is the right word. The deal officially closed a couple of days before we announced it internally. So, for me it’s not anything to celebrate yet because it’s not done, per se. It’s also I have to transition my work family smoothly as well. So, I think I remember going to my parents’ house that evening. We all had dinner together and were reminiscing about all kinds of things in the last ten years. It’s possible maybe we had a drink there, but certainly not outside.
In fact, I’m not sure if it was that time or that Sunday, we had a prayer. It was like a religious ceremony for my grandmother who had passed away months before. So, we were just kind of even keel like that. I’m not out in the public.
Andrew: I can see that. You told Jeremy Weisz who pre-interviewed you that a year later, you went to Bora Bora. That was pretty much it as far as celebration and it was the first time that you ever put the vacation–
Raj: First vacation.
Andrew: First vacation and first time you used the vacation reply on your email system to say you weren’t around.
Raj: I had to get tech support to find where that thing was.
Andrew: Are you sitting on a ball, by the way?
Raj: I am. Sorry for the bouncing.
Andrew: Is that for your posture or something?
Raj: Yeah. It’s also pretty economical. It’s like $80.
Andrew: The one thing I do see that you spend some money on or at least invest money on is in startups. You’ve invested in several startups I saw on AngelList, right? Other than, you’re pretty even keeled. You’re not buying a new car. You did start this new company. The idea for the new business you told us was you wanted to help entrepreneurs now that you’d helped government agencies. Did you make phone calls also to talk to entrepreneurs? How did you understand the problem they had with expenses, tax deductions, etc.?
Raj: A lot of calls.
Andrew: A lot of phone calls. Again, you doing it. You didn’t hire an intern.
Raj: Correct. You can’t have filters on. Like I have to go direct. That’s the best way. I look at it long-term. So, I’m not a sales guy, per se. I’m going to be with this business for the long run. So, it’s valuable for me to do it myself, right? I’m the guy who’s supposed to lead it. So, that’s how I can help bring on other team members and share that information and lead them through it.
Andrew: What size companies did you call when you were trying to understand this?
Raj: Early on, I called entrepreneurs in my network that had small businesses with team members. But there was a subset that were solopreneurs as well. So, I originally was looking to help entrepreneurs that owned small businesses with multiple employees. We built our whole back end to support that. But I found throughout the first year when I was doing pilots and all the cold calling and interviewing and getting their feedback that ultimately we settled on focusing on solopreneurs. That’s how we figured out based on he needs and also how to–ultimately we had to work with the entrepreneurs anyway.
Andrew: Freelancers, you’re talking about.
Raj: Freelancers.
Andrew: Someone who’s doing design work on their own who needs–that’s why the Toptal people would be your customers. They want to make sure that all the revenue they’re booking by doing development work or design work is being tracked properly.
Raj: Yeah. Today’s modern entrepreneur or freelancer has multiple sources of income. So, to have a nice system on their phone that pulls all of that automatically.
Andrew: What else is there? I can imagine they invoice using FreshBooks or something like that, right? What else is there? Do they also sell something on their website and use Stripe?
Raj: Yeah.
Andrew: They do. Okay.
Raj: So, if you have like a speaker and an author, they might be selling books on Amazon, they might have speaking gigs and then they might have a course that they sell online.
Andrew: I see. And all those different income streams, they need a way to keep track of them.
Raj: Yeah.
Andrew: So, you probably tie into Stripe, you probably tie into their invoicing system, right?
Raj: We tie in with FreshBooks, we tie in with Stripe, with tie in with their bank account, if they like. That’s the ultimate.
Andrew: You pull it all in together and you say, “Here’s how much money you made this year.” Expenses and deductions make sense, but they probably have to put their deductions in personally, right? You don’t suck in their expenses, do you, from their credit cards?
Raj: We do.
Andrew: You do? So, they give you their username and password, you go into their accounts and pull in the data?
Raj: Yeah, more secure than that. They give it through our app, but it actually goes direct to their account. We don’t actually get those credentials. We don’t see or hold them. It’s all API, secure API-driven.
Andrew: Got it.
Raj: But they have the option to do that manually as well. We have a subset of folks who want to do manual stuff. So, we just make the manual stuff really quick. But the automated part, the automated way is pretty slick.
Andrew: So, one thing you discovered making phone calls is that freelancers or solopreneurs were the better market than companies with like five or ten people.
Raj: I think it was more about that’s where the need is. So, when we look at previously helping citizens and now helping entrepreneurs, the numbers show it’s going to go from $50 million to $100 million. Like a third of the entire workforce is going to have some type of side gig for freelance income, be it Uber drivers or–
Andrew: But you don’t learn that from making phone calls, do you? You learn that by doing online research.
Raj: That part you learn by doing online research. The phone calls, you learn about what the real pain points are and then basically I can combine that together to see these are the pain points of the solopreneurs, even if it started off with some guys, entrepreneurs that have small businesses.
Andrew: Do you remember one call that you made or one thing that you learned on a call that changed the way you built the product? Is there one that stands out?
Raj: Yeah. I think one of the guys where the distinction came was around when you have a team and an entrepreneur wants the whole team to buy in to a tool that they all might use. And then each team member might talk about a tool they’re already using to do that.
So, it’s quite a bit of work because that’s replacement. VisualHOMES was more of a replacement system. It was replacing some old DOS system versus here, what we’re finding, our target base, I wanted to replace a spreadsheet. I wanted to replace Google Docs for finances. I didn’t want to replace other financial systems that are out there. I’m not looking to replace QuickBooks or FreshBooks. I want to work with those. I want to make it incredibly fast and easy for an entrepreneur or freelancer to know what their actual profit is.
Andrew: How did the phone call help shape the way you were thinking about that? Did somebody tell you, “I’d like to use this but my team won’t because they’re committed to something else?”
Raj: That was the gist of it. That was the insight. But when you hear that after you’ve had multiple calls, this is the beauty of doing the calls, you can feel it. A lot of times they won’t say it straight up. I have to be realistic.
That’s one thing I know by making all these calls is that I can detect those kinds of things. I’m pretty good at hiring now because I hired people for ten years in the previous business, I gained an intuition. Same thing–if I’m going in objectively with my blinders on, I can try and decipher those types of things from the discussion. If I had an intern do it, there’s no way that would come through it.
Andrew: I see. I guess it’s not about the answers you’re saying. It’s about that intuition you develop by talking to people over and over again. That’s something that an intern couldn’t pass on to you. All right. Let me open this. I keep getting boxes here in the office. I put off opening them. So, I’ll open them up now. Look at how perfect this is. I picked this one because of what it says on the box. It says, “Love the problem, not your solution,” which is what you learn when you’re starting to make phone calls. It’s not about trying to pitch your product. It’s trying to understand what problem they have.
I wonder who would send this over to me and what this is. Let me see. Oh, Ash Maurya’s new book, “Scaling Lean.” He’s the author of “Running Lean.” It looks like this is an uncorrected proof. So, it’s probably a book he’s going to come out with soon. Let’s see… Love the problem, not your solution. This is a thick card, man. “Life’s too short to build something nobody wants, Ash.” Here is the t-shirt that he sent me. Thank you, Ash. “Love the problem, not your solution.” Perfect t-shirt. Thank you.
Raj: That’s a great tip on the cold calling too.
Andrew: Yeah. Why is that?
Raj: So, if I go back to all my original calls, that’s what it really was about, trying to understand what are the problems that they’re having.
Andrew: As opposed to selling your solution?
Raj: I didn’t have a solution to pitch. I wasn’t pitching anything.
Andrew: All right. Let me close out with this. How do we get you to interview your dad about one of his businesses, maybe a little bit about his childhood, then where the idea came from, then how he launched the business? Do you think you could do it via Skype if we bought you the software for it?
Raj: Definitely.
Andrew: Are you on a Mac?
Raj: I am not.
Andrew: You’re not. You’re a PC?
Raj: I can get on anything.
Andrew: If you can get on a Mac, I think the software for recording on a Mac is better, but if you need a PC, I’ll find a way to record on a PC. It’s not a problem. You’ll record it. We’ll publish it here on Mixergy as a Mixergy interview?
Raj: Awesome. That would be great.
Andrew: I’d love it. I’ve never done that before. No one has ever interviewed except for me. There’s something about this that I’m dying to try. I think you’d have more insight into what your dad did so that we could learn from him and I think there might be some questions you’ve been eager to ask.
Raj: That would be awesome. I’m only not on a Mac because everyone in my office is and we thought it was important for somebody to have a non-Mac. So, I took the bullet on that one.
Andrew: Were you a Mac person before?
Raj: No. But I wanted to be.
Andrew: You’ve got to stick with Windows.
Raj: I’ve got the Surface Pro here.
Andrew: All right. I’m going to buy you Ecamm Call Recorder. I’ll show you how to set it up. Your dad will get on Skype. Are you cool with that?
Raj: Sounds great.
Andrew: Great. We’ll have a recording and we’ll publish it here on Mixergy. I’m looking forward to it.
Raj: It’s going to be awesome.
Andrew: All right. Awesome. Cool. Thank you so much for doing this. For anyone who wants to check out your software, it’s frankly in the App Store or they can go over to your website. It’s free, right?
Raj: Yeah.
Andrew: What the hell are you doing? Why aren’t you charging?
Raj: Eventually. We still want to go with value prop. So, we’re getting there.
Andrew: Yeah. It’s already doing so freaking much. Your competition is charging. All right. It’s Hurdlr.com or Hurdlr in the App Store–Hurdlr.com. Thank you so much for doing this interview. My two sponsors, of course, I should thank at the end of this interview are the company that will help you host your website. It’s called HostGator. You can go to them at HostGator.com/Mixergy. And of course if you’re hiring a developer or a designer, go to Toptal.com/Mixergy.
Raj, thank you so much for doing this interview.
Raj: Thanks for having me, Andrew. Really appreciate it.
Andrew: You bet. Thank you all for being a part of it. Ash, thank you so much for sending over your new book and t-shirt. Bye, everyone.
