Andrew: Hey, everyone. My name is Andrew Warner and I’ve been waiting to do this interview since at least 2013.
Get this. recurring revenue, which is where we are right now, to $100,000 in monthly recurring revenue, which is our next milestone I’ve got an email here from Alex Turnbull from September 17th, 2013. “Hey, Andrew. I’m launching a new series on my blog this week hoping to take an honest look at the long, tough haul from idea to successful company, specifically,” this I’m reading from his email, “Specifically I’m tracking the ups and downs of going from zero users, which is where we were, to $28,000 in monthlyand beyond. Would love to share it with you if you’re interested. Do you mind if I send you a link?”
I’d love it. Of course. Of course I was happy to send the link. But before I did, I looked him up. I said, “Do I know this Alex? Who is he?” It turns out he’s a guy who had been listening to Mixergy at least since 2010. I said, “Hell, yeah. In that case, for sure.” I tweeted it out and I talked about it, and I just kept following along because of a few things. First of all, his blog was beautiful and on the bottom of each post, he had his goal of hitting $100,000 in monthly recurring revenue and he had an indicator showing where he was along the way and how could you not get lost in this journey?
So I got lost in the journey. I got to follow Alex over the years and actually, frankly, immediately after I tweeted it out, I said, “Can I interview you when you hit $50k?” And he said yes and we couldn’t make it happen. Then I asked him, “Would you do the interview when we hit $100k?” And I think he said yes and we didn’t make it happen. He is now way beyond that and I kept asking and asking and asking.
Alex does not do a lot of interviews like this. This might be the first one he’s ever done, and I’m proud to have him on here to talk about how he built up his company and how this idea of emailing people and asking them to tweet out and blogging about his journey and talking about his journey helped him grow his software.
Alex is the founder of Groove. Groove is simple helpdesk software, and we’re going to find out how he built up this company. I should tell you this interview is sponsored by two companies. The first will do your books for you right. It’s called Bench. The second one will help you hire your next great developer. It’s called Toptal. Alex, finally, welcome.
Alex: Thanks for having me, man. It’s been a journey here trying to get on this show.
Andrew: You have one of the most successful companies that I’ve followed and it’s just inspiring to watch you do it. Do you remember when you finally hit? You emailed me in September, 2013. When did you finally hit that goal of $100,000 a month?
Alex: December 14th, so about a year.
Andrew: A year later?
Alex: Yeah.
Andrew: I know there was a period there where you guys almost went out of business where this whole blog thing wasn’t working for you. There were a lot of big issues. I actually talked to someone at your company and I took notes on what went on behind the scenes and of course our producer talked to you. You now have a new goal, though. What’s the new goal?
Alex: The new goal is $5 million, well $500,000.
Andrew: $500,000 in monthly recurring revenue?
Alex: Monthly recurring revenue.
Andrew: Which would put you at $6 million a year.
Alex: Yeah.
Andrew: And where are you now financially?
Alex: $5.5 million, so very close.
Andrew: $5.5 million a year? Are you guys bootstrapped or did you get some money?
Alex: We got a little money. We’ve raised I think in total $1.5 million as a convertible note.
Andrew: Okay. Are you guys profitable?
Alex: We are. Yes.
Andrew: Unreal what you guys have built. This isn’t your first company. This is, as far as I can say, your second big company, am I right?
Alex: Second. Yeah. Third company, the last company that I was involved with was called BantamLive, which was a social CRM tool for small businesses.
Andrew: What’s a social CRM tool?
Alex: Social CRM, that’s like kind of a word that maybe TechCrunch coined in 2008, but it was one of those buzzwords that got around. Essentially it was bringing in social aspects, whether or not it be workflows, to a normal CRM that’s traditional, like a Salesforce CRM. So workflows and/or bringing in Twitter or Facebook.
Andrew: Give me a use case of how BantamLive would have been used?
Alex: So, for a small business, if you can–everyone knows kind of the Facebook stream. I haven’t done this pitch probably since I was with BantamLive. But you have that streaming feed of activity.
Andrew: Yeah.
Alex: One thing that we did that was innovative that was kind of first to market there was bringing that feed into the enterprise software of CRM. So you could see everything and anything that was going on, comments being made on different notes and contacts and the whole thing. So we bring a lot of those elements into software for businesses.
Andrew: Okay. Here’s how TechCrunch described it. You guys raised $1.7 million in funding, provided online workspace for business teams. They said, “Its social CRM feature, which included real time dashboard stream of messaging and workflow activity along with native CRM,” Man, even that I don’t understand. “Members can share information, track activity, manage contacts.”
So it seems like it’s standard CRM, which allows me to keep track of who’s in my world. You would have been in BantamLive if I was a user of it. I could see what you tweeted out and I could maybe assign to Andrea to thank you for tweeting something nice about us.
Alex: Yeah.
Andrew: Got it.
Alex: We went on a nice little run there. I think we started developing, prototyping in 2007-2008. 2009 I think we started to get a lot of the press. I think we were invited to the Web 2.0 Expo in San Francisco. We went to TechCrunch Disrupt and all those nice little conferences out there in the Valley. Did well with the press and made a little name for ourselves.
Andrew: What did you do that did so well for you with the press?
Alex: I think really it was a cascading flow of once we got invited to the Web 2.0 Expo with Tim O’Reilly, that was kind of the jump off point for us. From there, we had contacts then that opened up the TechCrunchs of the world, the ReadWriteWeb’s of the world.
Andrew: You’re saying just getting into the Web 2.0 conference just got you everything else.
Alex: Yeah, exactly.
Andrew: It wasn’t that you were the hustler that I know you to be today?
Alex: On the back end, I would say there was definitely hustle involved because without reaching out and applying to get in and to try to work your magic to actually get invited and get picked. I think there were five companies that presented. We were selected out of probably a couple thousand or more companies to come and present.
Andrew: What did you do to get yourselves picked? Do you have a tip or a memory of something you did that was especially effective?
Alex: I’m not. . . It’s been a while now.
Andrew: Okay.
Alex: Nothing comes to mind.
Andrew: That’s fine. I’m actually looking at the TechCrunch article about you guys and it says you sold for $15 million. Is that right?
Alex: That’s right.
Andrew: $15 million?
Alex: Yeah.
Andrew: How much of that did you get?
Alex: What’s that?
Andrew: How much of the company did you own? What percent?
Alex: At that point, I owned around 10%.
Andrew: Ten percent, so about $1.5 million ends up going to you, but you weren’t with the company at the time?
Alex: No. I had left.
Andrew: Were you pushed out by your cofounders?
Alex: No. I left for reasons that we don’t need to get into here. But when you have three or four cofounders working together wearing some of the same hats, I think at that point there can be friction.
Andrew: Yeah.
Alex: There wasn’t friction in a bad way. It was just my passions were in a different place, and I decided to leave. So I left [inaudible 00:08:40].
Andrew: Four cofounders sounds like a lot.
Alex: Yeah, it’s too much.
Andrew: Especially if like you said, there are overlapping skills and interests and responsibilities. Why do you think you ended up with four cofounders for that company?
Alex: Well, before BantamLive, we teamed up, one of my best friends and I started a little CRM called Upswing for financial advisors. This was 2006 probably, we ended up meeting a few colleagues in New York City who were doing a lot of things on the web and one was a little bit more experienced on the technical side and one was more experienced on the marketing side of things. So we decided to team up with them. Alongside that came investors. Alongside that came a move to New York City and from there we kind of started to work together.
Andrew: Okay.
Alex: Originally we were working on that first project, but then we saw a bigger opportunity at BantamLive and parlayed a lot of our knowledge of that CRM world into the more flat, small business CRM world because we were definitely niched out in the financial services or we decided, “Okay, let’s look at what we can do in a broad market.”
Andrew: So Constant Contact bought you guys.
Alex: What’s that?
Andrew: That gave you the money to help fund the next business. What I don’t understand is why you decided to get into helpdesk software. Zendesk had already existed. Wasn’t Desk around at the time, the company that was eventually bought by Salesforce? There were lots of competitors in the space. Why did you say, “You know what? I need to do this.” What got you to say, “Groove is the answer? Helpdesk is the problem that I’m going to address.”
Alex: Well, I think the main reason is as a cofounder, as a product manager at Bantam, I was wearing a lot of hats. One of them was customer support.
Andrew: You were answering the email?
Alex: Yeah. At that time, Zendesk, to your point, was one of the leaders that was just emerging. Desk.com was around. I think UserVoice was also around and maybe Get Satisfaction on the community side of things.
Andrew: Right.
Alex: We shopped around, picked Zendesk as the best at the time. As a product manager, you’re interacting with customers, you’re trying to figure out as many trends as possible to help guide the product roadmap. So you’re interacting with those customers.
Andrew: I see. You’re not just answering email, but you’re also trying to figure out what is this telling us about what we should be building next for our customers.
Alex: Right.
Andrew: Okay.
Alex: So, while I’m using Zendesk as a product, now I always think about ways to make it a little bit easier, a little bit simpler to use for the end user and I just started jotting down ideas on the side while I’m cranking through tickets with Zendesk and emails and such and just felt that there could be a better way.
Andrew: Like what? What was it about Zendesk that you thought you could do better as you were using it?
Alex: Well, even just replying to a ticket and changing the status. It was, I think, like four or five clicks and it really should be at a max two clicks. So those clicks add up over time.
Andrew: You’re 100% right. Helpdesk software at the time was so bad that you’d go from Gmail, which was a wonderful experience to suddenly like you said, it was horrible for the customer service rep because it sucks to just not be able to hit reply. You have to hit reply, then you have to close it. You can’t do most of it using keyboard shortcuts. You have to use a mouse.
I don’t remember specifically what Zendesk was like, but the majority of apps were that kind of frustrating. Then of course the email that the customer got looked a little weird. It was a support ticket instead of something that looked like a human being and actually looked at it. It was that kind of bad experience. Still, Zendesk was the leader.
I remember even when you told me, “I’m in this space. I want to grow it.” I thought, “He’ll make a nice little living, but he’s going to get slaughtered by Salesforce Desk.” Meanwhile, Desk.com–I’m going to say it, you don’t have to say it–Desk.com is the biggest crappiest disappointment in helpdesk software ever.
If you are using it, you’ve got to get out of it. I used to promote them. The reason I’m saying it is because I used to promote them and then it got so bad that it was agony every day to use it and I felt bad for promoting them. But frankly, this was after the sale to Salesforce, after I stopped promoting them, they sold to Salesforce and they got just ignored, I feel like.
All right. So you saw these problems. What were you doing, making a list of the problems that you experienced and starting to fantasize about how you could create a better solution?
Alex: Yeah. I would just jot down some ideas here and there and think about different workflows that I think could be improved upon. It wasn’t really until I left Bantam that I decided to pursue it full-time. Then from there, I got a little bit more serious about kind of that next level of prototyping.
Andrew: Did you do any analysis of how big this business could get, who your customers would be, about what kind of revenue you could earn, anything beyond the product?
Alex: No.
Andrew: It was just, “I know the product needs to be better.”
Alex: Yeah. I knew the product needed to be better. I knew there were people like me out there. I knew the market for small businesses on the web was huge. Coming from BantamLive, I understood that space. There was some overlap in the target market. I was very familiar with the marketplace and just every once in a while–I don’t go to a lot of meetups, but every once in a while I’d go to a meetup and we’d be talking about support software and Zendesk and the majority of people that I would talk to about Zendesk would say exactly the same thing.
Andrew: Yeah.
Alex: I saw that and I said the typical entrepreneur–and this is something that is kind of the playbook is to go out and do the research and figure out if that product is going to be viable or the whole bit, but I just said, “I’m going to scratch my own itch and go after it.”
Andrew: Okay. You know you have a problem. You’re doing informal customer development talks. You realize, “You know what? Other people do too.” You decide you’re going to jump into it. Still, you’re not a developer. You couldn’t code it up yourself. Man, what happened when you started–first of all, then there were product issues, then there were getting customer issues, then there was a whole reboot of the business. Then you got to the point where you were able to just take off and we’ll talk about how you took off.
First, I’ve got to tell people about my first sponsor. It’s a company called Bench. Have you ever used Bench to do your books? Who does your books?
Alex: Nick at LucidBooks.com.
Andrew: So, it’s a competing service. Why do you use them?
Alex: Nick’s a super good dude. I was introduced to him–
Andrew: Oh, it’s a person.
Alex: Yeah.
Andrew: Okay.
Alex: But he automates the entire process. So he uses Zero and a few other apps.
Andrew: What does he charge you to do your books?
Alex: I think it’s $500 a month.
Andrew: $500 a month, one guy does the books for you.
Alex: Yeah.
Andrew: All right. Cool. Well, I’m going to talk about a competitor. I’m totally fine with you bringing up somebody who’s not my sponsor. What’s the name of the person?
Alex: Nick at Lucid Books.
Andrew: Nick at LucidBooks.com.
Alex: Yeah.
Andrew: Here’s the issue. Actually, why did you end up going to him to do your books instead of hiring a virtual assistant or doing it yourself? What was your process for switching?
Alex: It was more or less I needed to get our books in order. I called David Hauser, a friend and advisor, he said, “I use Nick.” I said, “If you use Nick, it’s good by me. I’ll use Nick.”
Andrew: Cool. You know what? I had a situation where I used to do the books myself and I hated every moment of it. It was fun when you finally got the numbers together, when you finally got the bottom line, but the process of assembling all the data just took for freaking ever.
I had to go to all the different sites. I had to upload it into my software, never really fully moved in there properly. I had to then go hunt down all my bank account information. I had to use that stupid–what do they call it, that security thing that gives you the five-digit code so you can log in to your bank account to get their data? Every bit of it sucked.
Then I thought, “I can get a virtual assistant.” A lot of people do. But I don’t want a virtual assistant to have access to all that data and I don’t want a virtual assistant who can make mistakes to do it. Frankly, Patrick McKenzie, one of my interviewees got a virtual assistant, and he was constantly worried that she was going to make a mistake and get one thing off and then he’d screw up his taxes. I don’t want that.
I thought of getting an individual to do the books for me. I know that several of my friends have individuals doing it. I think Noah Kagan, when I was looking for someone to do my books, gave me a name of somebody who did it.
My problem with individuals is they get sick, they can’t make it, they have problems, they get pregnant, wives get pregnant. They can’t show up. It’s a problem. I want a team so if one person can’t make it, there’s always somebody else there. I want a situation where if one person is doing the books, there’s someone else keeping an eye on them.
And that’s what Bench is about. They use software to suck in all your data from everywhere–from Stripe, from PayPal, from American Express, from everywhere that you’re getting revenue and everywhere where you have expenses, your bank account, your services that you’re using, your credit card and the software puts it all together but then human beings, not just one person, but a team of human beings actually does the books for you. They go through it. They make sure everything makes sense and then they give it to you.
By having a team of human beings, you know there’s no single point of failure. By having software, you know it’s all going to get sucked in and brought in properly and you’re not going to have to mess around with all those dongles and all those key fobs and everything else that they require that you use.
And Bench.co/Mixergy will offer an even bigger discount on their already low prices. Their standard prices are $125 for basic package. It never goes up as high as, as far as I can tell, as high as you guys are paying, but who knows, if a business brings in enough money, maybe prices will go up higher.
But anyone who’s listening to me can get a really good team of people doing the books for them, really good software to maintain it. It’s all available at one single URL where they’re giving a discount to Mixergy people. That URL is Bench.co/Mixergy. Really, you should not be, as an entrepreneur, doing the books yourself. I actually think you need a team of people who are powered by software, who have software behind them–Bench.co/Mixergy.
So, Alex, who built the first version of the software for you?
Alex: First version of Groove was built by a design agency out of Providence, Rhode Island.
Andrew: They designed it or did they also code it?
Alex: They coded it and designed it.
Andrew: What did that run you?
Alex: What’s that?
Andrew: What did that run you?
Alex: I think that ran around $300,000.
Andrew: $300,000 to get the first version?
Alex: Yeah. I think it took around four or five months from start to finish.
Andrew: Wow. Okay.
Alex: It’s an agency, right? So, it’s not like you’re paying a market rate for a developer, right? You’re probably paying 4x on that.
Andrew: You know what I don’t get about that, Alex? I’ve now known you–we’ve been like email pen pals for years now. You’re a likeable guy. You must have lots of connections beyond the connections that you have today. You have the ability to hustle via email and connect with people. Why not go out and find a cofounder and say, “I’m one of the cofounders of Bantam. I’m looking to start this new thing. I really like your development chops. I’ll pay you a salary. You be a cofounder, not 50/50 because I’m going to pay you a little bit of money, but we’re going to work together on this.” Why didn’t you go that direction?
Alex: I think I could have. I definitely went back and forth.
Andrew: But there was a reason for it. There was a logic behind it that I want to understand because frankly it worked for you in the end, but at the time, it was shaky. Why didn’t you go for that cofounder direction?
Alex: Right. I don’t think I did because it would have taken a lot of time up front from starting that process to actually being able to convince a developer, hustle that developer over and get that person who I may not know, I may know through a friend, but do I really trust that person? The process right there would have taken a longer time than me taking my wireframe and literally probably a month after I left my last company starting the prototype, right?
So, knowing that I could have what I thought would be a rad, workable prototype in five months, even if it cost me 2x, 3x for what it would take a normal developer or developers, there was an opportunity cost with time and then the opportunity to just say, “Screw it, I’m off doing my thing and I don’t want to wait.”
Andrew: That makes sense.
Alex: I want to see if there’s demand here for what I think should have demand for and I just want to get it done.
Andrew: I think there’s a logic to that. At the end of the four-month process, did you get that rad prototype that you were looking for?
Alex: No.
Andrew: No? What happened?
Alex: Quite the opposite. I think from a marketing perspective, aesthetically, you could look at it and say, “Wow, I get where he’s going for this.” It did look easy to use. It did look simple. From an actual like reliability standpoint, it fell short. Simple things like email processing weren’t 100% reliable. And that’s a major flaw in an email helpdesk application that–
Andrew: Yeah. It’s got to work.
Alex: You need to be reliable, right? It’s got to work. That was scaling issues. That was technology issues. That was me trusting that an agency could actually execute and get it done. But no fault to anyone, right? I’m not going to fault them and I’m not going to put weight on myself for making that decision, but it allowed us to get to a point where we can at least validate some type of demand for the product.
Andrew: Meaning you could put up a website and say, “I have this product,” and see if anyone signs up for it?
Alex: Exactly.
Andrew: And that’s exactly what you did and what was the response?
Alex: The response was pretty good. So I think Zee, he knew me from a past venture and kind of saw what we were doing and he wanted to write about us. I was a little bit reluctant for those reasons. I didn’t think the product was ready. However, I just said screw it. I’m going to have him write it up and see what happens.
Andrew: So he wrote an article about you.
Alex: Yeah. He wrote an article.
Andrew: Zee was fantastic when he used to be at TheNextWeb. I freaking love that guy.
Alex: He’s a good dude too, super nice guy. He wrote the article and then probably over the course of seven days, over a week, there were a couple other things going on, on the side. We amassed over 1,000 or so private beta signups.
Andrew: A thousand people said they would sign up for helpdesk software?
Alex: Yeah. Well, let’s put it this way. It’s a vanity metric, right? A thousand people signed up to get an invite to a helpdesk software. Whether or not those people were actually legit buyers, there was no pricing, there was nothing, was one thing. But I at least saw some sort of demand. A lot of the emails that were coming in, the vision, the message of that simple, easy to use helpdesk that was the alternative to Zendesk for small businesses was getting closer to becoming validated.
Andrew: Okay.
Alex: There was definitely a little shining light there that I said, “Wow, okay, there’s a little something here.”
Andrew: Did you try to sell to any of these thousand people?
Alex: Yeah, of course. Over time, we were in product beta, like alpha product. But over time, I took the people that signed up for the beta and slowly brought them on to the system and–
Andrew: What was your process for getting them onto the system? Did you email 200 of them at a time and say, “You’re ready to go. Click this link and buy?”
Alex: Yeah. It wasn’t, again, buy, but it was like, “Here’s your login. Here’s your free trial account. Go have fun and give us some feedback.”
Andrew: Before we started, you and I were talking about Joel from Buffer, a mutual friend of ours. I think what he did was he actually talked to the people who signed up for his beta to figure out what they were willing to pay for it. I don’t remember any of the specifics, but did you do any of that or was it just a slow rollout and watching the feedback?
Alex: Slow rollout and we did not think about pricing probably honestly until nine or ten months after that initial period of getting press to slowly bring them people and then it wasn’t probably until nine, ten months after while we’re still getting feedback trying to refine the app, getting to a point where we can get to a reliable spot where the app is working. We’re going to keep at it. We’re making tweaks. We’re making enhancements and we’re getting closer to that product market fit, but we still weren’t there. We were inching closer and closer and closer.
Andrew: What was the feedback? How did you get it? Here’s the thing. When you talked to our producer, you said, “I spent $300,000 to create the first version of it and I didn’t do any customer development interviews.” It seemed to me like when you were talking to her, you were a little–you regretted not doing those conversations with customers before you spent the money to build the first version. Is that right?
Alex: I don’t think I regretted it. I think it was against the status quo.
Andrew: I see. You were proud of it. That’s why you told her that. I think entrepreneurs should know that there’s not a playbook that is guaranteed for every startup, right?
Alex: I see. But again, if were to go back, I would do more customer development just to make myself feel more comfortable, but the fact of the matter is Zendesk was getting huge. The market was huge. There was a better way to do it. From the knowledge that I got from my last company, that’s exactly the playbook that we had, right? BantamLive was the simpler, easier to use social version of Salesforce.com or NetSuite or another enterprise software.
Andrew: I see. So you said, “Look, I’ve done this before. I’m just going to use the same playbook again. I’m not going to spend a lot of time doing customer development interviews. I’m not going to spend a lot of time finding a cofounder. I’m going to launch. I’ll figure out how to improve.” When you did launch, you said you were watching so you could improve. What kind of feedback were you taking in and how did you process it?
Alex: I think we were using our own app. That was one of the best things we could do. We were eating our own dog food, using our own application to manage the feedback that we were getting from our customers.
Andrew: Okay.
Alex: So, yeah, for the most part, we simply looked at the trends that were coming in through Groove, through the initial early adopters, sorted those trends in an Excel sheet with the export function of exporting your tickets and being able to sort and tag and all that. But we didn’t do any like customer surveys or anything like that.
Andrew: You were just looking at the feedback and seeing what are people telling me stinks about this? What are they telling me works great? And then you put it all into a spreadsheet so you can figure out what to work on next.
Alex: Right. Exactly.
Andrew: So what did they tell you that stunk that you hadn’t known that you needed to fix?
Alex: This was a while back. Probably the biggest thing was toning the application down so it wasn’t trying to attack all these different pieces of customer support. So we added a live chat piece to the first version of this, which is absolutely crazy.
Andrew: Yeah. Why live chat? You’re going after Zendesk and you’re going after Olark at the same time?
Alex: No. But Zendesk was–live chat, bottom line is this. Live chat is customer service and support. But it’s also customer support. There are companies doing it well now that do helpdesk and live chat. However, as a small little startup that’s trying to–
Andrew: That’s just starting out, why do both?
Alex: It was crazy. So we clearly saw that we were trying to bite off way more than we could chew. We ended up actually discontinuing our live chat application, getting rid of it totally, wasted a ton of money there.
Andrew: Because of the feedback you were getting?
Alex: Because of the feedback and because of the fact that from a maintenance standpoint, from a scalability standpoint, there was no way we would be able to scale both products because live chat was such a beast and the reality is like we didn’t get into market per se to take on live chat. It was kind of one of those things that we added that we shouldn’t have.
Andrew: Here’s what Len told me. Len told me internally you guys spent half of your time building live chat, half of your time building the feedback software. Meanwhile, when you talked to customers, they hated your live chat. So, you were seeing this both in your email and also when you had formal conversations with your customers.
Alex: Yes.
Andrew: So finally it dawned on you or you finally realized, “Let’s just cut this loose.”
Alex: Yeah. That was really tough. But right now it was an amazing decision from a long gain perspective because it allowed us to really focus on the bread and butter.
Andrew: And you brought it back but with a partnership through who?
Alex: We just released a partnership with Olark, actually.
Andrew: With Olark, that’s what I thought. Now they’re doing it for your customers in conjunction with your software.
Alex: Exactly.
Andrew: I get how you were doing it and I get how you kept looking for feedback. It sucked that you had to put it out into Excel, but today you wouldn’t have to do that. Sorry?
Alex: I was just agreeing with you, yeah.
Andrew: Here’s the thing. You wrote on your blog that somewhere around then somebody offered you money for your company. What I don’t understand is why you didn’t take it. I read that blog post and it’s full of useful information, but it doesn’t answer that one question. How much were they offering you?
Alex: It was a $12 million offer.
Andrew: $12 million deal. You talk about that publicly. Why? Why not take it? You’re eight months into this thing. Cash out $12 million, spend the rest of your time creating the next big project, why not?
Alex: Yeah. It’s an amazing question and one that I grappled with over for a long period of time. It was probably a 10-month, 11-month process. The whole thing was crazy. From day one, it was like, “Wait, what is happening here? This is unbelievable. I just came off this exit and now this is a publicly traded company that is very interested and this is early one when the first email came in and after the first email comes trips out to their offices and multiple trips and meetings.
Andrew: Is this a competitor of yours?
Alex: It is not. No.
Andrew: It’s not. Okay.
Alex: But it’s a great question, right? Getting back to why, the reality is on paper, you read TechCrunch and there’s people getting bought for sale prices that on paper look like, “Oh, wow, that’s a shit load of money.” $12 million, really, with earn out, $6 million up front, half in earn out with a three-year contract to go work with that company alongside other items that were in that deal. To me, when you take taxes, short-term capital gains, at the end of the day, if I wanted to just take that offer and potentially not go after that earn out, you’re looking at clearing $2.8 million, $3 million. Now, that’s still a significant amount of money, right?
Andrew: Yes.
Alex: However, SaaS is such a big space. I think that–
Andrew: Where do you get the confidence? Dude, you were building software that wasn’t fully working. Your customers were complaining to you. You didn’t have a CTO. I see you’re kind of holding yourself now as I’m barraging you with all these questions. Why? I don’t get it. I get the confidence.
I’m wondering where that confidence came from. Why did you say, “You know what? I have what it takes to make this worth more than $3 million. $3 million is not enough for me. $12 million is not enough for me. I could go bigger.” What was it about you? What was it about your attitude? What was it about what you saw? Take me into that.
Alex: Honestly I think at that time I was doing a lot of research and looking at companies. This is going to–it might not make sense because they’re an anomaly. If you look at 37 Signals, Basecamp now, Jason is like the godfather of bootstrapping, right? I looked into that and their philosophies for a long, long time. I think that there’s this graph that can happen in SaaS that if you can get to product market fit, if you can get to a point where you’ve got real paying customers that love your product, then you have the potential to really in the long gain make a lot more, right?
Andrew: Okay.
Alex: Not only make a lot more, but learn a lot more. In my last company, we sold it right before–and I left right before I could actually learn the ins and outs of growing a real company. We had that quick exit and I didn’t get to experience growing a company. So I really wanted to see what I could do in terms of learning the ins and outs, failing, learning from wins and just trying to make it happen. I think guys like the guys at 37 Signals and other bootstrappers give you that motivation and that confidence to say wow, yeah, there’s potential.
Andrew: Okay. And then you said you spend eight months working on this getting distracted, not getting to conferences anymore where you get to promote this, not getting out there and focusing on the product and building it and so on. Huge, huge waste of time at a period of your development where you needed it. The product needed some support. And you hadn’t figured out what your marketing was going to be, this thing that I discovered you from didn’t exist.
I’m going to come back in a moment after doing a sponsorship message and talk about what the product was, how you had to reboot. You actually have your robots.txt forbid Archive.org from archiving your site, but I still found early versions of your site because I’m slick like that and I want to talk to you about the difference between where you were and what eventually happened.
First, let me talk about Toptal. Was it a little awkward earlier where I was talking about a different sponsor and then you brought up a competitor? I didn’t want to bring it up to you. Usually I would just call it out and talk about it. But I saw you felt a little guilty for it and you weren’t ready to talk about it. How’d you feel about that at the time?
Alex: Talking about Nick?
Andrew: Yeah. Did you feel a little bit awkward with Bench? Did you go, “Oh, damn, I just said it out loud. What’s Andrew going to do?”
Alex: No. I was fine with it.
Andrew: You should have felt a little awkward. I was promoting a sponsor who paid. But it’s totally fine. I’m completely happy with people looking at the competition and the person I’m sponsoring. I’m going to ask you once again. Toptal is a great place to hire developers. Did you have a competitor that you’ve worked with before? Be open. Is there someone who’s worked well for you?
Alex: No.
Andrew: No. There’s one that didn’t work so well. Good. I’m going to tell everyone out there. If you have someone who’s better, go for it. Here’s the problem that Toptal solves. A lot of the freelance websites end up giving you the bottom of the barrel people. You really have to work like hell to get somebody who you’re going to be very proud to say you’d only pay $12 an hour to or something really low. And that’s great for some tasks.
But when you really want somebody to take on a project, to take on a problem that you and your customers have and not just do what you tell them to do, but think based on everything they’ve learned about coding well and come up with a perfect or informed decision, an informed product. That’s when you need really smart people.
That’s why Google doesn’t go to all these different–I’m going to mention competitors. That’s why Google doesn’t go to Upwork when they’re trying to hire. They don’t want the bottom of the barrel. They want people who are the best of the best. And that’s what Toptal set themselves up for.
They said, “You know what we’re going to do? We’re going to find the best of the best, the people who are Google worthy, the people who will pass the test at Google, who will pass muster at,” is that really the word, “pass muster?” I hate old phrases when I say them. “Who will actually be able to work at Facebook. We’re going to take those people who can go do those jobs but who happen not to want to, who’d rather work from home, who’d rather be outside the US and those will be in our network at Toptal.”
So, when you’re ready to hire a developer, you come to Toptal, you tell them what you’re working on, you tell them what you need, you tell them how many people you need and they’ll go to their network of top developers and bring them to you. So many people in my audience have signed up for them that now Toptal is buying ads for 2017, locking them in before anyone else can because it works. If you really need a smart developer, there aren’t many places where you can get them quickly and get them reliably. That’s why Toptal is doing so well.
If you want to hire from Toptal, if you need a developer, part-time, project basis, full-time, full-time plus, a whole team of people, here’s a special URL they made available just for Mixergy people where they’re actually giving us more than they’re giving anyone else. Mixergy listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours and that’s in addition to a no risk trial period of up to two weeks. Here’s the URL. Go to Toptal.com/Mixergy. And I’m grateful to them for sponsoring.
The first version of the blog–the blog is what took off for you, right, content marketing?
Alex: Yeah. Absolutely.
Andrew: But the first version was not that. What was the first attempt at content marketing?
Alex: First version–first version was list posts. They were related to customer support. We were just trying to get in the game in terms of content marketing. The HubSpots of the world were kind of preaching it. We were reading everything that we could and just saying, “We’ve got to get into content marketing.” Our competitors were in it. Obviously from a long game, there’s definitely some advantages there. But yeah, it was total shit.
Andrew: What’s an example of one of the lists that you had?
Alex: It was, I don’t know, maybe, “Ten Things You Can Do to Be Awesome at Customer Support.” I don’t know if that’s exactly it. But it was of that caliber. It was quite weak.
Andrew: What was Ask Cody?
Alex: Ask Cody? What’s that?
Andrew: Maybe that’s one of your customers that put that up. I was trying to figure out what else was going on. There’s something called AskCody.GrooveHQ.com.
Alex: No, no, that’s a customer.
Andrew: Okay. You decided, “I’m going to delete this and start fresh?”
Alex: Yeah. That was by far and away the biggest problem we had. After that whole thing happened over the year and they ended up passing, it was at that point where I said, “All right, it’s time to build a business, right?” So, I went out, raised a little bit of money, started to build the team out. As we were building the team out, we were building the product out. We were trying to get to product market fit, we’re talking with our customers.
One of the biggest challenges we had after that initial bump that we got from the TNWs of the world that were writing about you was getting traction, getting eyeballs to your site. We attempted with that customer support blog. It failed miserably. It was super lame. We couldn’t compete. It was at that point where the company was literally disintegrating.
Andrew: You already had raised money at that point?
Alex: Yeah. We raised money. But we were spending money and we were basically putting all our money into products and not much at all into marketing. We were in a tough spot. The company was about to go down. It was probably going to last another two or three months until we came up with a new angle on content. It wasn’t until then until we started to shift a little bit and see a little bit more traction.
Andrew: When you decided to shift, how would you describe the thing you were shifting to?
Alex: It was the 100k blog.
Andrew: It was just saying, “I’m going to blog every part of my process to get to $100,000.” It wasn’t like that aha, “This is what we’re going to do.” There’s a lot of thinking involved and there was just a lot of banging your head against the wall like, “How are we going to separate ourselves away from the pack with all this customer support content out there? How are we going to get traction, right?” We could have tried to hustle that in the customer support space, but we said, “All right, well, what about this transparent thing?”
I think at the time, Buffer was kind of the only company in the SaaS space that was kind of leading that. They weren’t saying, “Follow us on a journey.” They were super transparent in a lot of their posts. So, they tell you their revenue. They tell you how much money was going out the door, employees and such. It was one of those things where we said, “We’ve got all this stuff we’re going to be working on. Why not say screw it, let’s just blog about it? Let’s be transparent and let’s show people our fails and our wins,” because a lot of the learnings, I think, especially for me and our company have come from the fails. You’re going to have fails in any startup.
Andrew: So it’s this post that you emailed me about. It’s GrooveHQ.com/blog/100k. That’s when you said, “This is it. We are going to hit $100,000 in monthly recurring revenue. We’re going to openly tell you how far we go and what happens along the way and what we learn.” You said that at the time, you had 1,901 users and $28,000 in revenue.
Alex: Yeah.
Andrew: This is the big turning point, this gutsy move to do it. So, one of the reasons why I liked it is because I wanted to follow along. You were already making some progress. The other thing that I liked about it was the freaking design. Dude, this was beautiful. It was a blog post that looked like Medium before Medium figured out what their look was, just super clear, really nicely designed.
Everything you guys do is designed in a way that makes me feel comfortable and happy, even like when you’re giving out other people’s software as part of some promotion that other people had already done and always looks like it’s a barrel of junk. You guys make it look premium. Who designs this?
Alex: We’ve got an internal designer that is our lead designer that works on most of the blog art.
Andrew: So even when you were struggling, even when admittedly things were just falling apart internally, you were spending money on someone to not just design the product but design the blog?
Alex: Yeah. We didn’t use a CMS out of the box. We said, “All right, we want something easy on the eye. We want people to be able to read this,” just like to your point, we want people to say, “Wow, this is legit.” Already from the design, I’m going to want to read this. So we couldn’t find anything out there. We just said, “All right, we’re going to spend a little time up front here to develop our own blog and design what we want.” What you see there is the original design.
Now, it was Medium before Medium, but I will give nod to the 37 Signals of the world that had a similar design. This isn’t something that I would say we coined.
Andrew: Yeah. But you know what you did that they didn’t do until later? You created an image for this. You didn’t get good stock art. You didn’t take photos of yourselves. You created an image for this. You created an image for the stats that looked nice. So you basically were saying, “This is going to be important. I may not have a lot of money right now. I’m really up against the wall. I’m not fully hitting it, but I think there’s something here and there’s enough revenue to give me confidence that we can do it. I’m going to spend a little bit of money. I’m going to spend a little bit of time to make this look good.”
Here’s the other thing that you did that, again, Len internally at your company clued me into. You said you were really good about getting influencers, that that was very much a part of your plan, that I obviously was not the only person you reached out to. What was this plan for rolling it out that got you to 23,000–2,000 shares on this thing, 120 comments? What was your influencer marketing strategy there?
Alex: Most of it was pretty simple. We put a list together of influencers in our space like yourself that we wanted to approach and we wanted to approach them in a way that wasn’t like pushing them content. We used permission-based marketing, which is a tactic that’s probably played out at this point, but Derek Halpern I think came up with a tactic or somebody did. He’s the one that kind of brought it into the mainstream.
We picked up on it and we put the list together of people like yourself and we asked them if it would be okay if we shared a piece that we were about to launch. We almost treated the blog launch as a product launch in saying would it be okay if I passed you this, it’s about this, that and the other. The conversion rates that we saw on that tactic were super high. I think we probably converted, no lie, 85% to 90%, somewhere crazy like that.
Andrew: How big would you say your list was?
Alex: It was, I think, like 250.
Andrew: 250 people?
Alex: 250 people, yeah.
Andrew: So, over 200 of them said yes and ended up sharing this thing and who are some of the big names you got to share it?
Alex: Sharing and commenting because one of the things too was not just the share, but actual engagement on the post and the engagement and the comments were the validation from folks like yourself.
Andrew: I see. So Todd Garland from BuySellAds is on there, Gary Vaynerchuk is on there in the comments, I see.
Alex: Yeah. They were legit just super interested and followed along. I think the most important thing that we tried to go after was providing value for the people that we were approaching. It wasn’t like, “Here.”
Andrew: Why? What’s the value for me in doing it?
Alex: I think the value for you is that you can then send that along to your readers or tweet that to your readers, that of which who are entrepreneurs trying to grow their businesses and if that is of value, if they can learn something from that, then that’s a win for you.
Andrew: I see. Okay.
Alex: You’ve curated that content in a way, where you’re saying, “Here it is. This could be interesting. Follow along.”
Andrew: Yeah. Sure enough, I got my email here in response. You emailed me and you said, “Can I send you this link?” I said, “I love it. Want to come on Mixergy when you hit $50,000?” You then emailed me back and you gave me the link and you gave me the link and I said, “Holy shit. This fucking thing is amazing. Are you updating the numbers? How often?” And then I said, “Email me when it’s up so I can tweet it out and I was really excited about it?”
Alex: Yeah.
Andrew: Do you think this process would still work today?
Alex: I don’t know. I think it could be tough because the tactic might be played out at this point. So the permission-based stuff, I think you see all the time now, like I literally have–I probably get an email once a week from somebody I think that read that first big post that we did about permission-based marketing and the influencer marketing about how we’re asking if they could share an article.
Andrew: Yeah. I think you’re getting more than most people. I get a lot of email, a ton of it. I don’t get that many requests like that. Mostly it’s junky, “Here’s what I have to offer and I never even saw your website.” I can tell they never saw my site. Doing mail merge now is so much easier than it ever was and hiding the fact that you’re sending mail merge from a third-party is so much easier than it ever was. So it’s just feeling really weird.
But if it’s something authentic and really sent by the person like you, I don’t get that much. Maybe it still wouldn’t work as well. Maybe it wouldn’t work at all, but I wouldn’t say people are playing it out to that degree, at least not in my world. I’m pretty sensitive to what’s going on out there.
Alex: I think it’s just got to be interesting too. You can’t just share something or ask to share something that’s not interesting. It doesn’t provide–
Andrew: Right. If somebody emailed me and said, “Hey, Andrew, can I pass a link to you that I think you might want to share with your people and I said, “Yeah, sure,” and they then emailed me “Top 50 Podcasts on Business,” I go, “Thanks for sending this,” and then I’m done.
Alex: “Thank you. . .” archive.
Andrew: Okay. Here’s the other thing you guys did. I think you started contacting people who cancelled, right?
Alex: We did. Yeah. We still do that today.
Andrew: What’s the process for doing it? It is tough to get someone who cancelled to respond.
Alex: Well, one, this is something that I actually took from Josh at Baremetrics. To cancel a group account, you have to contact us, right? So it’s not a button on the backend that you can go in and delete your account. So they contact us, and then once they contact us, we say, “Sure, we’re about to cancel your account, but we’d love to learn what we could have done better to serve you as a customer.” That is a zap through Zapier that automatically goes into a Trello card where we can segment out all the responses and figure out the trends and all that good stuff.
Andrew: I see. So, there is not button to cancel. It’s a button that just messages you.
Alex: Yeah. It says, “I’d like to cancel my account.” And then we ask them the follow question of, “Sure, we’ll cancel your account right now. But we’d love to learn about what we could have done better to serve you as a customer.”
Andrew: You want to know something? I’m feeling guilty about it, but I cancelled my account with Baremetrics. I did hit that button and I got an email from Josh saying, “Sure, but why?” It seemed like he maybe even sent it himself because it didn’t come instantly, but who knows? Maybe it had some kind of time delay on it. I think Zapier allows you to do that. I responded and said something that was pretty like flip, something like, “Don’t need it anymore.” I found that when I used that process, people would give me the same kind of response. Do you get that or do you get more meaningful responses than that?
Alex: I think it’s a mix. I don’t know what the percent is of actually like relevant good comments that we get, but yeah, of course. You get like the flip responses, but a lot of times, you get the amazing nuggets of information. I think from a trend analysis standpoint, it’s making sure you’re following those main nuggets of information and making sure that you’re focusing on the right type of feedback.
Andrew: What did you get? I found my email to Josh. Josh, if you’re listening, I’m sorry I even sent this to you. I’ve been feeling guilty about it for a while. As soon as I hit the button, I think it went and I got a response back from him saying, “Hey, Andrew, sorry to hear. Anything we could have done to help better or make Baremetrics more useful?” I responded and said, “All good, thanks for asking.” He said, “All righty then, you’re all cancelled.” And I said, “Thanks.”
I feel guilty because I know Josh is really looking for useful feedback and I’d given him useful feedback on the way in, but on the way out, I hadn’t. I know why I was cancelling and I think it would be useful for him. I didn’t. Do you actually get useful information? Is there something you can think of that actually changed the direction of your company because you did that?
Alex: Consistently we get feedback that is analyzed, whether or not it be through a cancellation or an NPS survey that we send out or just trends that we’re spotting in our tickets, consistently we’re getting that feedback and every quarter our customer success team is evaluating where those trends are. I will tell you that all of those trends are accounted for and our product development roadmap is strictly based on the trends that are actually trending. So the most votes or the most common threads are the only things right now that we’re working on.
Andrew: How do you keep track of what’s going in and organize it today? You’re not using a spreadsheet anymore. What’s the process for keeping track of this?
Alex: Right now we just tag stuff. We’ll tag it and with a tag, we’ll setup a zap through Zapier and that tag will automatically attach that ticket that’s related to a common trend to that Trello card in Trello. So, it’s pretty seamless.
Andrew: You’ve just taken an email and moved it to Trello. How are you organizing it in Trello?
Alex: It’s organized in Trello on that card. So, if you’ve got let’s say mobile, mobile has a card in Trello. Mobile is a big trend we’re working on right now with Groove. If you’ve got a ticket that comes into Groove that is requesting mobile, where’s mobile, it will tag it mobile. That ticket will then attach itself to that mobile Trello card on that board.
Andrew: I see. And then what’s the advantage of having it all collected in a Trello card on Trello as opposed to just in a tag system on Groove? Couldn’t I just pull up all the same tickets by pulling up a tag on Groove?
Alex: Yeah. What we like there is there’s a checklist that it creates. So, now once we have that feature, once that feature is released out in the public, we’ll then go to that card and we’ll have everyone’s email and we’ll then follow up with them. This feature has been now released. We just check them off one by one.
Andrew: Okay. What’s your process for figuring out which feature gets the most requests and is actually important?
Alex: It’s a natural process. I’ll give you an example. In Trello, our most popular card for our roadmap is mobile. Mobile has got I think like 2,000 tickets.
Andrew: I see. So, every time you tag, it not just appends it to the card in Trello, it also adds another number to the card in Trello and you can clearly see on the Trello board what’s being asked for and what has the highest number of requests.
Alex: Yeah, exactly.
Andrew: Got it. I see. By the way, how great of freaking Zapier that it does that, that you’re using it for your own product.
Alex: Zapier is so extendable. They’ve done an amazing job. That’s one of the ways we use Zapier in conjunction with Groove and Trello. It’s been great. It’s been a great way–our customers really appreciate it because now we not only track the trend, but also follow up with them once it’s actually released and they’re super-stoked when they’re like, “That was two years ago when I requested that feature and you just contacted me. That’s amazing.” From a customer success point, it’s a really good way to handle it.
Andrew: I love that. I had this great experience. There’s this software called Super Flexible that’s the only software I could find that made it easy to upload stuff into the cloud the way I wanted to. What I wanted was some software that would take all my files off of Rackspace and put them on Amazon S3 because Rackspace was just not going anywhere.
The problem was that no software could do it. I emailed a bunch of people including Super Flexible and said, “Will you guys ever do this or do you have it now?” They said, “Nah, but maybe in the future.” Sure enough, like you said, two years later, the guy emails me back, the founder and said, “You know how you were asking for Rackspace to be included? We now support Rackspace.” Boom. I bought it. I just love him for having done that, so much so that I interrupted your conversation to make sure I talk about Super Flexible because of how much I love that.
Apparently you guys do a sprint every few months to get on the phone with customers ten hours a week. Can you talk about that process and what you get from that?
Alex: Yeah. There was a point at which I think I had a correlate priority to talk to all of our customers. That was like, I think, two years back, but I ended up chatting with 500, I think, somewhere around that number, Skype chats, screen shares. I would just kind of ask them what they liked, what they disliked, walk me through anything they disliked so we could take all that information, extrapolate it and improve the product down the line. It was a very, very arduous process. There was a lot of work involved.
But I think it’s super important for any startup, I don’t care–if you’re kind of past that product market fit, I’m sure it’s not as important, but if you’re gearing up towards that and that’s your main priority, you have to do that. It’s a no brainer.
Andrew: You have to talk to your customers.
Alex: Yeah. You have to.
Andrew: Even as an email company, from what I hear, there are things that come up in phone calls that people don’t think to include in an email.
Alex: Yeah.
Andrew: And what do you ask them? I get how you might say, “Hey, we’re from the company, we want to improve the product for you. Can we talk to you about how you’re using the product and you get them on the phone,” right? What’s the process of making that phone call useful and not just a chat session?
Alex: I think up front you’ve got to set the expectations of exactly that. The call is based around the fact that we’re really trying to improve the product. We want to learn the ins and outs of how you use the product. We want to learn about what you like, but more importantly, we want to know what you dislike. So, the likes I’m less concerned about and it’s more the dislikes. I want to focus on those and then see if over time after chatting with 500 customers or whatever number it’s going to be, what those trends are. So, if 500 of them say it’s a pain in the ass to change the status and reply to a ticket, then I know we’re doing something wrong and we’ve got to address that.
Andrew: I see.
Alex: Where if 500 say we need mobile, then shit, we need mobile.
Andrew: I see. You’re getting those from those phone calls. I see.
Alex: Yeah.
Andrew: Man, it really does take a long time to do those phone calls though, huh?
Alex: Yeah. It’s definitely a process. But again, it pays off in spades. If you’re not–especially if you don’t have enough data coming in, if you don’t have that big quantitative data set to analyze and look at the trends and develop a product based on what your customers actually want, then early days, that’s the bread and butter, talking to those customers is stuff that’s really going to get you to a point where they love your product. They’ve got that aha experience where they’re like, “This is what we need.”
Andrew: I’m going through my notes. There’s one other thing I heard I want to make sure to bring up. That is to get new customers, one of the things that’s worked for you is integrations. How did integrations help you get new customers?
Alex: Zapier is a great example. Zapier has a wide net of small businesses, software as a service companies that use Zapier. If you integrate with Zapier, there is the opportunity to do some co-marketing with them. We’ll email our customers about the integration that we have. They’ll email their customers about the integration. We’ll do joint blog posts.
That co-marketing is gold for especially early days when you’re trying to be scrappy and trying to get your name out there. If I were to do it all over, I would have done those integrations a while back just because they do give you that nice little bump. Yeah. The co-marketing is the biggest advantage. Then you can do some other big partnerships, like that are revenue sharing, that type of thing.
Andrew: What’s another big partnership you’ve done that’s worked well?
Alex: I can’t really get into that.
Andrew: Can you say the type of partnership it was?
Alex: It’s a similar product in our space. I’m not going to get into the mechanics of the actual partnership.
Andrew: Other helpdesk software?
Alex: No.
Andrew: It’s something similar in your space that’s also talking to newer businesses.
Alex: Right. So, software as a service, ecommerce businesses, we have very similar customers.
Andrew: You refer business to each other.
Alex: Yeah.
Andrew: You get a commission, they get a commission.
Alex: Correct.
Andrew: Here’s the thing that also made me a little scared for you when I saw you were going in this direction. I could very easily switch–somewhat easily switch CRM, take all my contacts, export them, import them to the next thing. It’s very hard to switch helpdesk software because all the old conversations are trapped in the helpdesk software and you have to train your people, not just you, you have to train everybody on the team to do it. So it’s hard to win over new customers.
What I think you’ve done to deal with that is you’re not going after someone who has Zendesk and hates it. You’re going after someone who has Gmail and has outgrown Gmail because they have a team member. I’m seeing a smile on your face or some reaction to that. What do you think about that?
Alex: I think that’s definitely spot on. The Gmail users that need that shared inbox, that need a more sophisticated way to handle their customer support that they can collaborate on tickets with, assign tickets, add notes, the whole bit, right? It’s one spectrum. It’s probably split, but I think it’s even bigger is the Zendesk users, actually.
Andrew: Really? You get more people who are using competing products?
Alex: Yeah. Zendesk by far and away–I don’t know if this is a legit stat–but we’ve got probably 1,500 companies that are churning a month. When you’re ranking very high up–I think we’re like the second down from Zendesk alternative–you see a lot of traction coming in for people that are looking for Zendesk alternatives. And it may sound surprising that it’s a touch transition from one helpdesk software to the next, but there are ways in which you can automate things and suck tickets in and import tickets and the whole bit.
The reality is too they can still access their history with one login and move their entire team over to a new helpdesk application. So the transition isn’t that crazy. But yeah, believe it or not, we’ve got probably half our customer base coming in from those alternatives so the complicated Zendesk, Desk.com’s of the world are a big market for us.
Andrew: Want to know something? Zendesk bought ZendeskAlternative.com, put up a fake band page on there. It says, “Zendesk alternative is one of the original Seattle alternative rock bands. Here’s our Myspace page.” They at least had a good sense of humor about it.
Alex: They’ve got a lot of people going after those keywords. We’ve done actually pretty well. I think we were like two or three down.
Andrew: Right now for me they’re first down, but it’s hard to really say what shows up. What makes you guys better than Zendesk?
Alex: For those reasons that we started Groove, right? Number one, ease of use, by far and away that’s our biggest competitive advantage against Zendesk–simplicity, ease of use. We stand by that. We have customers that help us stand by that, that validate that. Those other reasons I think you touched on with the actual workflow between the end users, the customers of that software application or that service that are trying to interact with the agents is just impersonal.
So, you’ve got kind of the reply above this line thing and you’ve got to log in to different portals and all this stuff that you really shouldn’t be doing to just get an answer to your question. So those two things–ease of use.
Andrew: Are they still requiring people to log in to portals?
Alex: Yeah.
Andrew: That’s the worst. That’s one of the things I hated about Rackspace. Every time I had tech support issues–
Alex: Rackspace is still like that.
Andrew: Yeah. They force me to go into–what did you call those things?
Alex: A web portal.
Andrew: A web portal. The stupidest part about that is I need to remember my password for the web portal and it’s not the same password as I have for their site. So I can never keep track of the right passwords, so I used to just stop. They were known for great customer support at Rackspace. They really wanted to do great customer support and they did a good job of it when you gave them a chance, but because of things like the portal, it was causing problems.
Alex: That is right now–and the fact that it’s stripped down, the product itself to be easy to use and simple has to be stripped down, but we don’t have all the bells and whistles like Zendesk and that’s on purpose, right? We’re still trying to refine the set of features that we have. A lot of the features they have like macros and all that stuff are stuff that we’ll never do. It’s not catering to the small business. They’re catering up market, they’re enterprise.
Andrew: Their people don’t need macros, macros like where I just hit a button and then it types out a response and it forwards it to the customer and it assigns the email to someone else?
Alex: Yeah. You’d be surprised. You might think they need it, but again, going back and looking at the way we do product development by looking at the trends, that isn’t even–there are probably 100 requests for that.
Andrew: People are not asking for it?
Alex: People are not asking for it. Again, we’re going to default back to the learnings of the data set, the quantitative data that we have.
Andrew: Okay. You don’t usually do interviews. My guess is you’re probably not going to do another I interview for a while. How do you feel this went?
Alex: Pretty good. Yeah.
Andrew: I think you’ve got a great story. I think it would suck for me if you did it, but I think you should do more interviews. I think the reason you should do more interviews is to put more of a personality on the story. Every time you show more personality, people care more about Groove and it humanizes you in a way that a product like yours needs to be humanized. Basecamp doesn’t really need that much humanization, but yours can definitely use it and your competition sometimes does it, sometimes doesn’t.
Alex: Yeah. It is something that–I have no idea what that was.
Andrew: Some kind of lightning. The light even seemed to have gone out.
Alex: That was crazy. Yeah. Something that in the next year, 2017, is definitely something that’s going to be on my radar for a priority, conferences, the like.
Andrew: You should hit me up. I’ll give you some advice. Here’s one piece of advice that I’ll give you. Go do some smaller ones, do a bunch of smaller ones, actually, that you think are not going to help you with traffic, smaller interviews that won’t help you with traffic just because they’re going to be so nervous that you’re going to feel comfortable in comparison, that they’re going to give you so much room to screw up and because no one is going to see it and it won’t matter.
Then you build up your confidence and your experience. You’ve done them a favor. Some of them end up being really big anyway and then they feel like they owe you and you’ve gotten a lot out of that. Then you start to rock and roll and know how to tell your story well.
Alex: Yeah. That’s good advice, for sure.
Andrew: All right. But you don’t need my advice because frankly, dude, you’re doing killer work. You keep growing and growing. Every time I look at the website, I see that you’ve grown more. Anyone who’s interested in your story, let’s say they don’t even care about helpdesk software at all but they do care about this story and want to see how you’re doing it, they should just go to I think the best URL is GrooveHQ.com/blog. There they can see all your latest posts and you’re still doing it. On the bottom of every post, you’re showing how far you are towards your goal and a nicely designed chart.
Alex: Yeah.
Andrew: Cool. All right. Thanks so much for doing this. We’ll all keep track of your goal and then as soon as you hit $500,000 a month, which frankly you might do by the time I publish this, you guys are so freaking close, then who knows? Maybe you’ll go to $1 million a month and then who knows? Maybe you’ll get to $12 million a month and whatever you turned down for selling your company you might make every single month. I feel like at this trajectory that is all possible.
Alex: Thanks, man. Thanks for having me.
Andrew: You bet. Thank you for being on. My two sponsors, also, for anyone who’s interested, the first will do your books right. It’s called Bench, check them out at Bench.co/Mixergy. You know what, by the way, I don’t even mind giving–who’s your guy again?
Alex: Nick at Lucid Books.
Andrew: What is it?
Alex: Nick at LucidBooks.com.
Andrew: Nick at Libson Books?
Alex: Lucid Books, LucidBooks.com.
Andrew: LucidBooks.com. I don’t mind you guys and comparing Nick at LucidBooks.com to Bench or frankly anyone to Bench. I think you’re going to be very happy with the rank that they do. If they are and you’re ready to sign up, go to Bench.co/Mixergy and sign up. And my second sponsor is the company that will help you get your next great developer. It’s called Toptal.com.
I’m still trying to get LucidBooks.com. That’s what it is, right? You’re saying Nick at LucidBooks.com, so I’m typing in–no, I see, LucidBooks is his URL, outsourced accounting made easy. Compare them. Compare Nick to Bench.co/Mixergy and see which one you prefer. I’m happy to refer you to whatever is best for you guys if you’re listening to me.
Thank you for doing this and thank you all for being a part of Mixergy. Bye, everyone.
