Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. It’s usually software entrepreneurs. Boy, I just love entrepreneurship in general.
Joining me today is a founder of a development company who says that he wants to work with entrepreneurs, not just wants to, he does work with entrepreneurs and he especially likes helping them develop the first version of their ideas, which to me sounds like, man, most entrepreneurs don’t have enough money to work with development shops, but that’s who he’s going after. That’s been going well for him, and I invited him here to talk about how he’s done it. His name is Samuel Morhaim. He is the founder of Vantage IO. It’s a software development company that specializes in creating new products. They love working with startups, but truthfully, they’ve also worked with bigger companies on new projects too.
This interview is sponsored by two companies, one that I feel like is a little bit of a competitor of Samuel’s, it’s called Toptal for hiring developers. And the other, I wonder how Samuel feels about them. It’s a hosting company for hosting your website. It’s called HostGator. Samuel, welcome.
Samuel: Well, thank you. Thank you for having me.
Andrew: You know the first question I’m going to ask you is going to be about revenue. What is the revenue? How much are you guys doing right now?
Samuel: Okay. That’s a little private. We’re doing okay for having been in this phase of our business for almost three years now. We’ve been able to grow year over a year, but . . .
Andrew: Fair to say over a million a year?
Samuel: Yes.
Andrew: Okay. I’ve got the number here in front of me. I want to be aware of where you’re comfortable, but I’ve got the number here in front of me. So, I see it, three years old business. Give me an example . . . Actually, you know what? Forget about example. Why do you want to work with startups? They have no money, and if they have raised money, then investors want to see that they could build their own products, and so they don’t want to outsource their stuff to you. Why are you going after people with no money?
Samuel: Sure. So just the idea of being able to work with a blank canvas it’s extremely exciting, all new projects for us, it gives us an opportunity to explore and to be able to convert those ideas from just a dream into a reality. In the past, it’s been very hard, very tough to, of course, get customers. Most of our clients having been our sweet spot are entrepreneurs, just single entrepreneurs or entrepreneur teams where they’re completely bootstrapped, they’re having their $50,000, $100,000 ready to build their first MVP, ready to build that first product so that they can actually go and get investors. Now, those are the ideal customers for us.
Andrew: So they have their own money.
Samuel: They have their own money.
Andrew: And they’re bringing it to you and they’re saying, “Look, help me create this first version so I can get investors.” Got it. So it’s not that they don’t have money, they just don’t have that much money. And the other issue is, Samuel, it’s their own money so it’s precious to them which means that they’re very . . .
Samuel: Yes.
Andrew: You’re smiling because you recognize this, right?
Samuel: Absolutely.
Andrew: That means that every detail they’re sweating, every dollar they’re paying attention to and you’re okay with that.
Samuel: Yes. So we’ve been able to narrow it down into a process where we can deliver the software in three, four months. So it is profitable for us, it works for them because it gives them the opportunity to go now and raise up money, being able to attract their first customers, and being able to raise the curiosity of new investors. So, after they go through an initial phase, typically, now we’re in a position to help them with that second, the development phase, once they got it on investment round and we’re able to become part of that company internally. So we help them with launching . . .
Andrew: Got it. Getting early and then keep generating revenue with them as they grow.
Samuel: Exactly.
Andrew: Give me an example of a project that you worked on big or small, and then I want to get into your background and how you built up this company and how you’re getting clients. And maybe we can also learn a little bit about what you do to help shape an idea so that we can create our ideas better. So, give me an example of a client.
Samuel: So, one of our best clients right now is called Map Labs. It’s a local SEO company and . . .
Andrew: Map Labs.
Samuel: Yep, Map Labs.
Andrew: Okay.
Samuel: Local SEO. It’s been growing tremendously. And basically, we started about a year and a half ago and it was a single entrepreneur with an idea. They had a very crafty made WordPress where they were putting all information manually and gathering all the information from Google manually. And we came in and we developed that first MVP where now everything is interconnected with APIs, with Google, everything is single SaaS and it’s been growing. We launched into production about seven or eight months ago and it’s just been great. So it’s a . . .
Andrew: Wait. They do SEO for local businesses, and so what they would do is go into Google Analytics for those businesses, pull the data out manually themselves and then put it into a WordPress page?
Samuel: They were getting the information from the Google My Business console and they were getting all this information downloaded into spreadsheets and then pulling that information to be able to create the charts that they were giving their customers. And then they said, “Well, this is ridiculous. We need to start automating it and being able to put some intelligence and some analytics into it.” And that’s where we came in and we . . .
Andrew: So you started pulling the data in for them, you put it into spreadsheets for them.
Samuel: Correct.
Andrew: Got it. Isn’t there software off-the-shelf that can do that with no programming?
Samuel: There are some . . . I mean, there already exists some competitors, of course. This one basically tried to go a little bit further, gives you a lot of automation tools, analytic tools and so on. So, it is an improvement over some of the competitors and now it become SaaS, so it’s no longer a service company. We want to see how it’s more of an [agency 00:05:50] be able to go and do this for their clients without having to do this manually or going to each other. So, if you have 1,000 locations like some of our clients do, they manage 1,000 locations for a franchise, they don’t have to go into Google My Business to do this manual posting and manual review management. They can just centralize everything through the application and do with that.
Andrew: Got it. So an SEO company saw that they were doing the same thing over and over for their clients, they said, “Hey, you know what? We could do this as software instead of manually doing it.” They came to you, they said, “Samuel, turn this into software for us. Here’s what we sit down and do. Do as much of this as you can.” You did it. Now they have software as a service. And I see that they’ve got both a free plan and a $30 a month plan . . . Yeah, a $30 a month plan. And it’s because of you and you help them see that first version through. And then do you continue to work with them to continue to build it?
Samuel: Yeah. Yeah, absolutely. So, it’s one of those excellent examples of how we started with a simple idea, MVP, launch, and then after it’s now in revenue mode now we keep on working with them for support and improvements. And Google releases new versions and new features every month, so we help them with all those enhancements.
Andrew: I’m hearing an accent. I remember when I went to NYU in Southern Manhattan. I don’t want to call it Southern Manhattan. It’s right in Greenwich Village. No one paid attention to anyone with an American accent. If you had a foreign accent even a little bit, people would all just like flock to you and they would assume that you have so much intelligence. I’m wondering where you’re from.
Samuel: Okay. Well, so I was born in Colombia, South America. And I moved to Israel for about two years where I did part of my college. And then in . . .
Andrew: Why Israel?
Samuel: So, I’m Jewish, starting from that. And then I always wanted to go there and I’ve been there while I was in high school and I love just being there, so I . . . Also the technology environment and all the colleges and everything. There is . . .
Andrew: How does it come out? Like, how do you notice that . . . There is a lot of tech coming out of Israel. How do you see it when you’re there in school? Is it more of a passion? Is it . . . How does it get communicated? What’s going on in the school system that’s helping them do this?
Samuel: Honestly, I wouldn’t be able to tell you but I know, first of all, it’s extremely hard to get into the sciences branches of college. So when you get to college there you have to do sort of like an SAT and that decides if you go into sciences or if you go into the social sciences. So if you go into psychology and all the things for you’ll be going to math, engineering, and so on. So, it’s extremely tough to get into the engineering programs, maths and computers and all of that. So I think from the get-go that probably puts a higher level for them to be able to achieve that. But it’s just amazing the last few years the amount of startups that’s coming out of there and it’s just, not only just startups, but there’s very profitable and huge startups in all sorts of areas, so from biotech to automation, autonomous cars, even soda company. So it’s just the amount of technology and entrepreneurship that it’s coming out of Israel it’s just tremendous.
Andrew: You told our producer, “My entire life I was involved in programming and computers.” I know that type of passion. You were in the dot-com bubble. Just before it, you were working on a pay to surf startup?
Samuel: Yes.
Andrew: Was it yours or one that you were working on?
Samuel: No, no. It was mine. So right after high school, I developed this idea . . . I emulated that company from the States that was doing that at the beginning. Back in the day, you have to do dial-up, you have to pay for your internet access in that way, and so people were being paid to surf. They would see a banner in the bottom of the screen and as long as they would see the banners, they would have internet access, I think what’s called Net Zero one of the original companies. I don’t know if your audience is going to be familiar with that.
Andrew: Net Zero. Yep.
Samuel: Yep. So we took that to South America, of course, it was way too early for the country and for the internet environment in general, but then the dot bubble burst and everything went down the drain.
Andrew: And the challenge was it was already tough to make enough money from advertising to cover the cost of connecting people to the internet, but at the same time. Like, even if you think about how much money Facebook makes from each person every month, it’s still not enough to cover what I pay Comcast every month for my internet. It’s just . . . Right? There’s not that much money in advertising even for the best ad companies out there, but back then there definitely wasn’t enough money, and then when the bubble burst, the people who had the money suddenly didn’t have it anymore and they couldn’t afford to buy ads. And so that’s what happened to your business, your business went away because of that?
Samuel: So we were . . . Of course, we weren’t profitable then. We were losing a little bit of money. It was pennies per minute of navigation. We did have a handful of customers that were advertising. It was very early in the early stages of the internet, especially in South America. So when the 2,000, everybody was moving to online advertising, Columbia was still very early for them. Still, we had a handful. We had about 7,000 customers or 7,000 users using the platform and we were printing checks manually, printing checks.
Andrew: Sending it to who?
Samuel: It was like an automated system.
Andrew: Sending it to the 7,000 users.
Samuel: We were sending it to about 2,000 users, not everybody made the threshold.
Andrew: Wait. You were paying them to use the internet and letting them use it for free?
Samuel: We were paying them to use the internet. They would, of course, do with that money whatever they wanted, so they want it to pay the internet.
Andrew: Got it. They had to have their own internet connection and you were paying them whenever . . . Got it. I was missing . . .
Samuel: Net Zero did it different. Net Zero did it in a way that you would dial up to their . . . I mean, they become their own ISP, so they would do their own internet and you would . . . They would be your internet service provider.
Andrew: Yeah.
Samuel: [inaudible 00:11:56] just an add-on to your existing internet.
Andrew: You know what? To this day, I see a lot of companies outside the U.S. take ideas that work in the U.S. and then bring them where they are. And I thought this was over, that the internet because it’s spread so widely now would create new ideas in different countries. But I’ve been traveling a little bit. I just got back from Australia. Soon I’m going to go to Asia. Probably by the time that this interview is published, I’ll have done my trip to Asia to understand what’s going on there a little bit. And it still seems like there are a lot of companies in different countries that are basically copying what’s going on in the U.S. and bringing it to new markets and it’s still working.
Samuel: Yeah.
Andrew: The same thing happened to you that happened to the U.S. versions of these companies. Talk to me about the devastation of the company. I want to . . . I know we’re going to talk about a lot of your successes, but let’s get into some of the painful moments so that we care about you when you talk about the successes.
Samuel: Sure.
Andrew: What was the pain like?
Samuel: Okay. That was a very early company. I have to be honest, I was very inexperienced back then. I had to sell a big chunk of the company to a large marketing agency in Colombia and we . . .
Andrew: Before it went down or after the dot-com burst?
Samuel: Before it went down. So it wasn’t the reason why it went down, but basically, I was very inexperienced. I was right up out of high school right before I went to Israel. And so I was very young, very naive, and it was very hard. I just had a few savings that I put towards my partner that was the developer to be able to create this hosting. Back then it wasn’t like today where you turn on a server with two cents in a click. You had to buy a dedicated server for like $500 a month. So it was hard.
So when we start approaching new customers and they would say . . . new advertisers and they would say, “No, absolutely.” First of all, they didn’t understand digital advertising 20 years ago. Much less when they were hearing all this news coming out of the States where everything was going down the drain. So it was harder and harder to just keep on the lights going especially because we’re giving away money. So it was even a more difficult business. But in general terms, it was a very quick that I would say we basically gave it all to the agency at the end. My partner ended up going and getting a really good job developing applications for [SAP 00:14:19] for . . . So, I mean, it ended up really good for both of us, but it was a learning experience and nice exposure to that entrepreneurship and entrepreneurial world.
Andrew: So what you took out of it was not, “I failed. This stinks. The economy could take things away from me at any moment.” It was more like, “Hey, I had an idea, I saw it through, I created it. Yeah, it didn’t work out, but you know what? It’s not as hard as other people would imagine to create these companies.”
Samuel: Correct.
Andrew: That’s it.
Samuel: Yeah. It was a learning experience.
Andrew: You then didn’t go on and to create your own company again for a while. Why not?
Samuel: Well, so just to summarize. I went to Israel then moved to Miami. And so in the early 2000s, I moved here and I had to work to pay for rent and everything. So, I start working in a company. I started IT manager. And I already had some experience with IT management and I was able to grow from there and moved to healthcare IT where I spent 12 years. I love that industry. So, it was good. I had to get the experience, get to know a lot of other people, get to know technologies. And that took me through to where I am today.
Andrew: So you did it . . . But you didn’t have like this entrepreneurial bug because of the first company. You just said, “You know what? I think I’m good. I . . . ”
Samuel: Oh, no, on. In [parallel 00:15:46], I was doing left and right everything I could. So I did all the e-commerce, I sold pashminas online, the thing that women wear over their shoulders.
Andrew: You sold pashminas online?
Samuel: I sold pashminas online early 2000.
Andrew: You did. Where did you sell it?
Samuel: Online. I had my own website.
Andrew: Your own website.
Samuel: Yeah.
Andrew: And you got customers how?
Samuel: Basically, at that point, it was just AdWords.
Andrew: Why pashmina then?
Samuel: So, the company that I was working in it was a retailer for the tourist industry. So they had access to pashminas and all this crazy jewelry for under $10. I mean, it was like $1, but we’d sell for 10. So, I liked all of that. I saw a market and then I started putting AdWords. It was back in the day where AdWords were like Gary Vaynerchuk talks about.
Andrew: Yeah, yeah.
Samuel: It was dumb. You just put $100 and would get customers.
Andrew: Pennies a day. Yeah. You know what? I had to Google pashmina to make sure that I understood what it was. It’s these bigger scarves that . . .
Samuel: It’s for the scarf, yeah.
Andrew: If you’re in a cold office, you can use it to cover your shoulders and your upper arms and stay a little bit warmer. If you’re outside, you put them more around your neck. I see how it goes. Wow. How well did that business do for you?
Samuel: So it was good while it lasted. It was just too much work at that time. It was like packing each pashmina then you send it over to . . .
Andrew: You would pack it yourself?
Samuel: Yeah, yeah. Yeah, I would do it.
Andrew: Wow. What was the most successful company that you had and on the side, your side hustle?
Samuel: So I had an online furniture business for a while. I bought a domain, I got very good at SEO for a long time, and so you would Google contemporary furniture, contemporary Japanese furniture and I would just ranking top 10. And just with ads for revenue, I was making at that time I bought $1,000 just on ads.
Andrew: A thousand dollars over how long?
Samuel: Each month.
Andrew: Each month. Got it. And so you were doing all this. Meanwhile, you had other jobs, and the one that I’m most interested in is this company where you guys realized that cruises, cruise ships are still using pen and paper and you said, “We could digitize this for them.” Is that right?
Samuel: Yeah.
Andrew: And you were the CTO of that company? What’s the name of the company?
Samuel: So back then it was called IOS Health Systems. Now, it’s called [Triton 00:18:01] software.
Andrew: Okay. This was back in 2010 is when you started working for them.
Samuel: Yeah.
Andrew: How young was the company at the time when you started working with them?
Samuel: It was about four years, three or four years old and I was hired as a lead software engineer. And three months later, basically, there’s a very strict certification that healthcare companies we do electronic medical records needs to go through. It was chaotic. And basically, I was able to do . . . Since I had been through that before, I was able to take that company, help them pass that certification. So, three or four months later into the company, I already had some seniority and some clout and that helped me advance my career within that company. It was a very small company. It was about 15 people at a time. So, very quickly I was promoted to CIO. So, six months into the job . . . I already had about five years of experience in healthcare IT and from the previous company where I was, and so getting to this company we were basically serving land-based doctors, just regular physicians, hospitals, and so on.
Andrew: Okay.
Samuel: And they had that project linger in the back where they had some connections with Royal Caribbean and we wanted to automate and take our system on board and automate old medical operations on board the cruise ships.
Andrew: Wait. So this was first to help doctors on land do what?
Samuel: Manage medical records. So, it’s called EMR, Electronic Medical Records.
Andrew: Okay.
Samuel: And basically, it’s software to instead of having your paper charts stop some where they’re basically online, they can do only prescriptions and so on.
Andrew: And this is because for the longest time, doctors would, when you saw them, pull out a folder and start taking notes, and then next time you’d see them they’d have to go through the notes and hope that they could read what they wrote, right? And it was stuck in that one doctor’s office. And so there was this movement to digitize that and you guys were a part of that. And I see.
Samuel: We were very . . . So, prior to this company, I was in another company and we were doing exactly the same thing. When I moved to this company, it was still very early. Basically, doctors were being offered by the government about $60,000 in incentives cash.
Andrew: The U.S. government gave them $60,000 to do that?
Samuel: Yeah.
Andrew: They said $60,000, update your software or update record.
Samuel: Well, basically, move to software before, I think was 2013 or 2012. It was just push initiative and basically was to modernize medicine in the U.S. and it was like, “Get on board with the medical records and we’ll give you about $60,000 in cash incentives throughout the next three years.”
Andrew: Wow.
Samuel: If you don’t, we’re going to punish you by taking off some of your Medicare reimbursements and so on. So it was an easy sale. You would just knock on doctors’ offices that they were using a computer and offer them that and it was really easy to sell. So at that time, it was a very, very organic software. It was built by a couple of people here. And it would work. It would just do exactly what they needed. Then they need to get certified, that’s where I came in and I helped that process happen.
At the same time, it was like, “We have this idea, we have these connections with Royal Caribbean. Let’s move forward with this and how we put together that entire project.” Of course, large companies take very . . . a lot of time to move forward, but about a year and a half later we got started on that software, so we started from scratch. We just couldn’t take the software and just put it on board. We had to create a completely new software for them, and that’s what we did. It took us about a year and a half. We developed this new software to go on board and now this is being used on major cruise lines in the world.
Andrew: Wow. All right. Let me talk about my first sponsor and then we’ll get into the problem that you saw when you were there. First sponsor is a company called Toptal. What Toptal does is helps people hire developers. I asked my friend, Neil Patel, I said, “Neil, why are you using Toptal?” And he said . . . Because Neil has a big network of developers and friends. And he said, “Most people overestimate the value of network. What they underestimate is the importance of speed.” And the idea behind Toptal was, he could just call up Toptal, tell them what he needed, and then hire someone directly from Toptal.
If that’s you, if you’re looking to hire fast, if you’re looking to hire one of the best of the best developers out there, go to toptal.com/mixergy. That’s top as in top of your head, tal as in talent .com. When you use that /mixergy at the end, they’re going to give you 80 hours of top towel developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to . . . What is it? Fourteen days? Top . . . Wow. I don’t want to emphasize this like no-risk trial period. I just want to tell you, if you need good developers, go to toptal.com/mixergy.
So, the thing that you recognized that led you now to create Vantage IO was what? What was the issue that you came across?
Samuel: Well, so let me tell you a story. You have to picture it’s about 2:00 in the morning and there were developers playing in floor, there was no more caffeine that can keep us awake. And we had these deliverables, we need to deliver the software, we have investors, we have all these people pressuring us. And I think I hit bottom. I just couldn’t handle that pressure anymore, and I thought there has to be a much better way to do software. It can be all this project overruns and price overrun. So it was just madness.
And so I saw the light at the end of the tunnel. Finally, one day, a couple of weeks later a friend of mine called me, actually, one of my ex-roommates. And he said, “We have this opportunity. We want to build this software to manage social media with predictive analytics and all these things. But we need to build it . . . Of course, we need to build it fast and not too expensive. We need to do this very quickly. We only have 90 days to impress investors and be able to launch.”
And that gave me the opportunity. I was able to step away from where I was and able to create a new process to develop software. And so that’s how I . . . We were able to develop this software and 90 days later, we got an investment and we were able to launch. Six months later we got customers. We had Fortune 500 customers, we had customers all around the world, and we were already in revenue mode. And so that gave me the foundation to say, “Well, if we’re going to build software, it has to be done with this and with this set of steps and we can’t skip them or we can’t just break those rules.” And that allowed me to create software moving forward in a more efficient and more practical way.
Andrew: And this was your friend trying to hire you to create software for his company?
Samuel: No. That was him inviting me to become a partner and that was the last company where I was before I founded Vantage which was called smartBeemo.
Andrew: Yeah, from 2015 to 2017.
Samuel: Yeah.
Andrew: Why didn’t you stick with that?
Samuel: So, I exited the company at the end of 2017. Basically, the company shifted directions after we tried to launch the software back to where we take the software and we tried to take it to South America or try to take it to another country. Basically, I think we’re a little bit too late or, like, very late in terms of social media management tools. We’re talking about Hootsuite had been in business for about five years.
Andrew: Yeah.
Samuel: Even though our idea was much, much better . . . This is a lesson for entrepreneurs. Just because your idea is much better, it doesn’t mean that people are going to flock to it. But anyway, the company shifted from selling software to selling education.
Andrew: Yeah, I see. They’ve got certification here. And it’s all in Spanish. You can get certified in different social media topics. And I could see how that would help businesses. Okay. And so you said, “Hey, look, I’ve come across a set of steps that you have to go through if you’re going to create software right. I think we can use these steps to help other people create their software.” What are some of the steps that you remember from back then, not the ones that you now understand to be true, but in the beginning?
Samuel: Well, so, before this, it was like, okay, we need all this set of requirements. Are we going to follow Agile? Are we going to follow Scrum? What exactly is it we’re going to do? And we just got working instead of understanding what was a problem we’re trying to solve, then figuring out exactly how it was going to look, and then finally giving it to the developers after we understand all the different variations without overcomplicating it like back in the day with cascade and waterfall.
So, we were able to . . . When we started smartBeemo, we kind of went through those processes. There are three step process. We figure out exactly what we wanted to do, which was to do the social media management with predictive analytics. We came out with a very specific set of problems that we were solving. We came up with our user interface and user experience design, and we were able to develop this very efficiently and very effectively in record time. Then we extrapolated this in the last three years and we apply the same methodology to all four other clients that we do.
And this changed it for us. If your audience wants to see some of these steps, they can go to vantageio.com/andrew where they’re going to be able to sign up for our newsletter and also receive a downloadable with the different steps and all the checklist that they can follow in their own businesses if they want to develop software with this methodology.
Andrew: I went to it right now, but I can see that it’s not going to be available because you’re just making this up as we go and then after this session is over, you’ll just put it up there. It’s going to be on vantageio.com/andrew.
Samuel: Yes.
Andrew: Why did you want to get into this business, though? There are tons of development companies out there, there are tons of options for creating software. This is 2017, just a couple of years ago. Why did you say, “This is going to be my next business”?
Samuel: Well, so I’ve been developing software since I was probably 12 or 14 years old. I enjoy every aspect of software development. Don’t ask me about hardware too much except maybe IoT lately. But I just enjoy software. I enjoy user experience and user interface design. I enjoy new technologies. When new programming languages come up, I’m the first one to go there. I’m very, very involved in startups. I’m very passionate about it. And so mixing those two together was a perfect recipe.
What I’m going to do in the next few years, I basically had the opportunity when I left smartBeemo when I exited my position, I was able to go back to my previous jobs. I told some of my ex-employers that they were eager to help me back. And it was a tough decision for me not to go back and then be able to do this for the next 5, 10 or 20 years, which is to help startups and help entrepreneurs turn those abstract ideas into an actual product and an actual application that they can launch.
Andrew: But that’s about you. I understand your passion for this. Why did you see that there was an opening in the market to create another agency?
Samuel: Well, one of the biggest challenges that I’ve seen with people that I talked to that have developed software with other people was they go and hire a company half around the world or they hire a freelancer in one of those sites, or they go and they talk to their cousin who just graduated from college and they say, “Here’s $50,000. Make me an app.” And then two years later, they’re still trying to work out the bugs and work out all these things on the application.
And I said, well, definitely that’s the issue. They’re just hiring all these junior or inexperienced developers and actually development for me is an art. It’s not something that you can quantify with mathematics, this is good, or this is bad, but actually, you know that it’s good when you see it.
So, I wanted to . . . I saw that opening. I’m not going to say it’s a unicorn or it’s a wide-open market or a blue ocean, but definitely, something that I’m good at. It’s something that I’m passionate about and that customers would appreciate once they start working with us. And some of our clients are like that. They started off with . . . They went through another site, they hired two developers, 6 months or 12 months later, they spent half of their money and now they’re coming to us to help them and rescue them because of our experience and the work that we’ve done. So, I feel this is a biggest differentiator between us and most of the other developers that you can find.
Andrew: Sorry, I keep hitting mute. And I’ll tell you why I’m hitting mute. I don’t know what’s going on with me. This is way too, like, dorky, but I’m going to say, my nose is running and this is one of the things that I do. I hit mute so that people don’t hear me constantly wheeze on camera and mic. I do this also on team meetings. We use Zoom for team meetings. I hit that mute button whenever I’m not talking. I almost wish that there was a way to only like hit the on button when you’re talking and have the mic completely muted when we’re not talking. Zoom might add it.
Samuel: We’re working on a project, I can’t disclose the name or the details, basically, for the legal industry where they do these annotations for legal proceedings. And we’re working on artificial intelligence for voice transcription, voice detection, microphone detection, and all these things. And the biggest requirement from this customer was, like, we need a huge red indicator on the screen that you’re actually recording and not muted. And they wanted the levels to be shown on the screen and I went like, “No, you put that in the settings screen.” And they said, “No. Most of our users will mute it. Three hours after the legal proceeding is done, they realize they recorded three hours of mute.”
Andrew: Yeah.
Samuel: So the [biggest requirement 00:31:49] is a big red button on the top of the screen.
Andrew: I get it. I find that . . . I find that Zoom is good about not having a lot of background noise, but I find in meetings people will mute it even if they don’t have my like sniffling thing and my wheezing thing. I think I just can’t sit still. My body has to keep moving and making noise the whole day. But even if they have like a dog in the background because a lot of people work remotely or they have sirens in the background because they work in New York. You went out there to get your first customers, you were starting to tell me.
Samuel: Yeah. So . . .
Andrew: Go ahead. You remember the first . . . I would have thought the first thing that you do is go back to all the people who would have hired you and say, “Listen, you can hire me but not full-time. I can do this with my agency. Hire my agency.” Is that where you got your first customers?
Samuel: That’s sort of how we did, yes. We went back . . . So at the time, my ex-employer was asking me to go back. His CTO had quit and so he asked me, “Just come back, work for us.” But I definitely didn’t want it to go back and work for somebody else. I wanted to build my own. So, back again my entrepreneurial spirit was kicking in and, I mean, coming up from three years of having a startup, I was just going to go back. So, the first thing I did was, “Hey, hire me. We’ll do this for you.” So, we built for them for . . . One of my last ex-employer, we basically built a dashboard for the healthcare platform for the cruise lines. I helped them optimize that and create a data warehouse. And so we did . . . That was our very first project actually in January 2017. Or just . . . Yeah, the first year of operation.
Andrew: How much was the first contract for?
Samuel: It was about $20,000.
Andrew: Twenty thousand dollars to create this dashboard for them. And then you have a sense of how much money they made from this from what you did for them?
Samuel: Many, many times over.
Andrew: Yeah. Actually, I’ve got the number here if you’re okay with me saying it.
Samuel: No. No, I rather not.
Andrew: It’s fine. Okay.
Samuel: We didn’t create the whole dashboard. We created the data warehousing and some of the APIs to connect with the data. The team that I had built most of them was still there and they’re the ones who built that initial dashboard.
Andrew: And it wasn’t a full . . . You mean, the people who were at the company did it. It wasn’t you that was . . . Well, who coded it, is what I’m curious about?
Samuel: Well, so, I mean, the frontend of it was coded by the lead developer over there which was hired by me. He’s been there for seven years now. The backend of it was also coded by them, but they had an issue. They had some technical issues with the data warehousing, how to access all the data that we were getting from all the ships. I mean, how to present it in a holistic manner? That’s where we came in and we initially did all this data visualization and data warehousing needs for them.
Andrew: Was it you doing this?
Samuel: I did . . .
Andrew: You were doing the work yourself?
Samuel: I did most of that. I partnered up with a guy who’s deep into data analytics now. And just coming out of the startup, I had to figure out how to put it together. So, yeah, I did most of it and then some of the partners that did at the beginning.
Andrew: Contract work from them.
Samuel: Contract work at the beginning, of course. And we were lucky enough that few months later, we started get . . . I, of course, called, as you said, all my ex-employers and all the people I know. I have a big network of people. I tend to know a lot of people. My wife says that I can talk even to a wall. So I tend to know a lot of people, but, of course, it’s a very long sales cycle. People either are ready to jump or they’re going to jump in a year from now. So, it was a little challenging to get started, but we were lucky enough to start getting those type of contracts and I was able to start expanding and growing the team of developers.
Andrew: All right. I’ll talk about my second sponsor, then we’ll get into the next batch of customers that you got and the challenges involved in selling. Second sponsor is a company called HostGator. I’ve got to tell you, Samuel, that . . . I’m going to keep talking about Neil Patel. I just love that guy. Do you know Neil?
Samuel: Yes. I read his stuff. I don’t know him.
Andrew: I feel like everyone’s read his stuff because he’s a marketer who’s just built up this incredible reputation by talking about the same thing over and over, for now, a decade and a half, I imagine. I don’t know. But it’s definitely over a decade. The thing that I got from him was, he was blogging about online marketing, just blogging all the things that he was learning, blogging, blogging, blogging. I used to think that he had writers do all of his stuff. I think he does have writers, but he does do a lot of his own writing he told me because he enjoys it.
The interesting thing was that a bunch of people would contact him using his contact form saying, “Can I just hire you to do consulting services?” And for a long time, he’d say, “No, but go sign up for my course.” He finally teamed up with this guy, Mike Kamo and Mike said, “I’ll find a way to get this consulting work done. You won’t do it, Neil. I’ll just get agencies to pay us a referral fee for referring these people over.”
I said, “How well did he do?” He said, “We made hundreds of thousands of dollars our cut a month just from the referrals that were coming in.” And the interesting thing for me is, it’s because he just kept blogging, kept building a reputation for himself online, kept getting traffic to his site that when he was ready to come up with an idea he had all these people were already asking him for it, already contacting him for it.
Now, content marketing is not new, but I think that if someone out there is listening to us and they’re thinking about starting a new site, a new company, I think that . . . I keep hearing over and over again blogging still works. I’ve been thinking blogging is dead. We’ve all moved on to Instagram. We’ve all moved on to other social sites. But no, I see examples of this still to this day, writing content over and over, getting traffic from search engines and other places and then selling something.
So if you’re out there listening to me and you want to start blogging on your own, go to hostgator.com/mixergy. You’re going to get the lowest price that HostGator offers anybody, you’ll be able to start instantly. And frankly, if you don’t like the idea, you can just shut it down. I like that unlimited option that they have if you go to hostgator.com/mixergy where you can have unlimited domains.
And the reason that I like it, Samuel, two reasons actually. One is, just get to experiment with different ideas. So you try one idea, it doesn’t work, great. Kill that website, start another one. Do another one. And just as a way of doing it. Like an artist would never go to a store and say, “I want to buy one piece of paper to think through my idea.” They buy a book of paper so they could keep experimenting. Same thing would happen with WordPress websites. You just go in and install as many WordPress installs as you want, build as many websites as you want using their themes. Great.
The other thing, the other reason that I like it is, something else that I learned from Neil. He has a bunch of sites and he just uses them to experiment with stuff. Neil is always the one who’s trying different plugins, trying different headlines, trying different approaches to see how it works. And he says he does it himself and then he goes back to his agency and he says, “Here’s what I found works and here’s what I learned.”
If you’re out there and you want to experiment different plugins, different ideas, different approaches to see does it work? What is this thing like? Create a bunch of different websites. It doesn’t take that long. It’s easy when you go to hostgator.com/mixergy. Again, that middle option that they have, let me see the specific price. Look at this. Hatchling Plan $2.64 a month. The middle plan, which is called the Baby Plan, $2.98 a month. Go to the site for details and you’ll see. That middle plan comes with unlimited domains and one-click install of the WordPress, free SSL certificate . . . I could read all these different things all day. Go read the details of the pricing, go read the details of what’s offered in those plans and when you’re ready to sign up, go to hostgator.com/mixergy. Yeah, you’ll be giving me credit, but you’ll also get the lowest price available from hostgator.com/mixergy.
The second batch of customers, how did you get them? How’d . . . You know what, actually? Before we get to that, the one thing that I took away from the way that you . . . two things that I took away from the way that you sold your first customer was, you went out to people who you worked with in the past, you said, “I’ve got this agency if you want to work with me again and have expertise from other people, I’ll do it.” And that’s how you got your first clients, emails, phone calls, just reaching out to people in your network.
The second thing was when you got paid $20,000, you told our producer, Brian Benson, you said, “That’s going to be my floor. I’m not taking $2,000 projects. I’m not taking $5,000 projects. It seems 20,000 that’s our basic.” And that became your basic floor for a long time, right?
Samuel: Yes.
Andrew: Yeah. All right. How did you get your next batch of customers and how did you start increasing your prices?
Samuel: Yeah. So, through the years where I was working I developed a few websites and stuff like that. And as a freelancer without an agency or with anything like that that I was doing $3,000, $4,000, $5,000 websites and it’s just the same amount of work to do on a $5,000 website or a $5,000 project than at 20,000 or 30,000, 50,000. So I figured this is a floor. There’s nothing less than . . . It’s not even worth our time. It’s just going to take our attention away from marketing and actually delivering. So that was our floor.
And, yeah. Our next batch was just keep on hustling, networking. I did a lot of . . . I still do a lot of networking events. I’m calling all the people I know. I’m meeting with VC investors and they think that I just want to raise money and the first thing I’m like, “I’m not raising money. I don’t want any of your money. I actually want to help you make your money work better for you. Just introduce me to some of the contacts that you have,” because those are . . . People are . . .
Andrew: And they did?
Samuel: So far I had one that has delivered.
Andrew: Okay.
Samuel: I started with a bunch of other ones that haven’t actually come through, but it’s a numbers game. Sales, marketing, everything is just a numbers game.
Andrew: And this is you, Samuel. As a person who when I looked at what you told Brian Benson, our producer, as I looked at your past, I didn’t see love sales. I saw someone who was involved in programming, loved computers from an early age, right? What do you . . . How are you finding sales right now? You liking it? You’re hating it? Is it something that you just need to do and you’re enjoying it?
Samuel: Well, in the last few months I become a fanatic of Grant Cardone. So, probably you know him. And he would say like . . . What is it . . . He always says, like, “Nobody has ever been successful saying they’re an introvert, so [basically 00:42:20].” But I would say that I consider myself an introvert. I consider myself not somebody that likes . . . I don’t like picking up the phone and calling people, but necessity. I need to make my company work and I need to grow it and so I did . . . I’ve always been involved with marketing side. I did a lot of SEO and AdWords and pay-per-click and all these things. I just never been in direct sales. The last few years I had to . . . That’s how I got involved with Grant Cardone and all these things. I wear my Grant Cardone bracelet.
Andrew: I was going to ask you what that orange bracelet is. What does it say?
Samuel: This one . . . So I have a few. This is “Whatever it takes.”
Andrew: Whatever it takes.
Samuel: Yeah.
Andrew: And that’s the thing about Grant Cardone. He’s an author who’s written about sales, he’s big on 10xing things, right?
Samuel: Yeah.
Andrew: That’s one of his phrases.
Samuel: Yeah, 10x.
Andrew: And so did you read his book or how are you getting involved in his stuff?
Samuel: Okay. Yeah. People would say I’m a fanatic already. I have caps, I have shirts, I have bracelets. I’ve read all his books already. His office is about 2 miles from my house. So, I’m a fanatic. I really like him. I got involved a lot into sales. Just 10xing. Basically, if you say . . . People come to us, for example, when they have an idea and they say, “If we can only get 1% of the world to use our application we would be millionaires.” I’m like, “Do you know the amount of energy that it takes to get 1% of people?” So for you to get 1% of any industry, let’s say, you need 100,000 calls. And so Grant Cardone says, “Well, you need 10 times more because you’re going to need a million calls just to get 100 people to be able to actually get to that number.” So that’s why he talks about the 10xing and just being extra committed and going the extra mile and always have a very positive attitude.
So that’s my journey in the last few years or three years in sales have been that, just trying to get it out of my cocoon in terms of sales. I said how my wife says that I talked to everybody, but one thing is to talk to people and the other thing is just to pick up the phone and talk to random people about giving the . . . asking them for 50 or 100 grand to do their software. So, it’s a challenge, definitely.
I would say most of the people I work with they tend to say that I use the two sides of the brain. Most engineers are left-side of the brain, but that’s one of my skills. If somebody asked me if it was like what’s my superpower? And I would say, “It’s been able to use both side of my brain. So I have the technical knowledge and I also understand the business perspective, the marketing, I now understand a lot of the sales, and so that helped me tremendously.
Andrew: So what’s your sales process?
Samuel: Yeah. So we typically split it in two. That’s been the most successful way to sell our software. It’s once we have a lead, we offer them what we call the technology framework assessment where we go through a series of analysis, reports, insights into what is it that they’re doing. If they don’t have a product, what is the idea? What is the problem they’re trying to solve? And we go through all the technology assessment and what type of infrastructure, technology decisions and all these things.
And this is an introductory package. It’s about $5,000. We give them everything they need to turn around and either put it back into business plan so that they can get more investment or they can go to any site and hire a developer and guide that developer through the process of developing their software. Most of the time these customers turn out to be our own customer. So, that initial phase turns into the phase two, what we call phase two, and basically, that’s the actual development. So, everything that we laid out for them on phase one becomes a roadmap to develop the application or . . . Yeah.
Andrew: Let’s take it back a step. What’s your process for even getting in front of people? Is it you hunting down your contacts and reaching out to them or is it something else? Where are people coming to you? How are you finding them?
Samuel: They just call me. Well, so we’re networking. I’m networking a lot.
Andrew: And when you were networking in the beginning, what did you do to stay it organized? It was like you sending out an email to someone saying, “I’m available if you need somebody.” Right? And it was all your own network?
Samuel: All my own network, yes.
Andrew: Did you do anything to find people in your inbox that you might not have thought to reach? Do you have any software that you use for . . .
Samuel: All of that. Yeah. I use . . . I don’t remember the tools but I dumped all my LinkedIn contacts into a spreadsheet then I did the same with Facebook. So I was able to sort of like create my own like mini CRM in a spreadsheet and just be able to see everybody that I could call, organize them into like ones, twos and threes, so people I definitely do want to call.
Andrew: But it was you going into LinkedIn, you were exporting out of LinkedIn all your contacts. I wonder if LinkedIn still allows that. I think a few months ago they changed their policy on that.
Samuel: Yeah.
Andrew: And then what did you do to get your contacts out of Facebook? Was it scraping?
Samuel: Facebook has a setting. I don’t know if they still have it, but they had a setting where you could just like download all your contact information.
Andrew: Really? Okay. And so you did that?
Samuel: Yeah. Well, [part 00:47:40] of the names. I also paired them with my phone, so I was able to match mostly everybody with a phone number. And I also got a bunch of services like ZoomInfo to like if I needed a number of somebody and I didn’t have it, ZoomInfo it and . . .
Andrew: What is it? Sum?
Samuel: ZoomInfo.
Andrew: SumInfo.
Samuel: Yeah. The . . .
Andrew: S-U-M.
Samuel: I think it’s ZoomInfo.
Andrew: Oh, ZoomInfo.
Samuel: Yeah.
Andrew: Yeah. ZoomInfo. So you can get from ZoomInfo people. It’s business phone numbers, though, right? Not personal phone numbers.
Samuel: Yeah. I mean, but you put the names and you get to them. And so they offer I think it’s like five free because it’s quite expensive. So, if you’re a sales team, that’s fine. For me trying to do networking was like, I could get 5 or 10 contacts per month.
Andrew: Okay.
Samuel: I didn’t have the numbers. So, yeah . . .
Andrew: And then you would text them or you call them out of the blue and not send them an email?
Samuel: I would call . . . Well, I preferred email just because my reluctancy to pick up the phone. But the people that . . . So that’s why I had ones, twos and threes. So, ones is people that I have a relationship, call them and say, “Hey, we haven’t talked in a couple weeks or a couple months. I don’t know if you notice, I’m not at smartBeemo anymore. I’m doing this. Do you know anybody?” And so we got to talk. I spent like two months. My wife was very proud of me. I was out of the house almost every night. I went to dinners and coffees and everything with people that I haven’t seen in years. And it was like, “Hey, I just want to catch up with you.”
And this is actually a Grant Cardone tip is like, just call them and say, “I want to catch up. Do you have 15 minutes this week?” Just go have coffee, explain a little bit what you’re doing. Maybe they’ll know somebody, maybe they’ll want to do something. At the very least, you spend some time with . . .
Andrew: What did you do to . . . Yeah. What did you do to keep track of the people you were contacting, who aren’t available and people who are?
Samuel: I was using a CRM that I love, but I’m not using it anymore. It’s called Close.
Andrew: Close.io.
Samuel: Yeah. [inaudible 00:49:41]
Andrew: I guess it’s not even Close.io, now it’s Close.com, right?
Samuel: Yeah. And they switched. They switch to something . . .
Andrew: Steli Efti software. What do you like about Close?
Samuel: I think it’s so elegant. It’s just a perfect . . . It’s a perfect CRM. It’s so neat, nice, simple to use. Again, I’m not affiliated but I just love it. So some of the businesses that I work, I always tell them just put Close. You can integrate with anything, it has APIs. You can connect it to anything that you want and turn it like an automated sales machine. So I put them there, then I just put them back to spreadsheets just because the amount of volume that I was doing . . . If you’re calling less than 100 people or 100 people a month, you don’t need a CRM, you can just keep track with them with a spreadsheet. What I did use it’s called . . . And I forgot . . . I have a plugin on my Chrome on my Google inbox and basically, whenever I send an email, I can say, “Remind me in two days,” or, “Remind me in five days.”
Andrew: Oh, yeah, yeah. To follow back up with them.
Samuel: Yeah. FollowUp.cc.
Andrew: Yeah. I use FollowUp.cc too.
Samuel: I love that.
Andrew: I love it.
Samuel: I’m very bad at follow up, so I forget about it. I’m just doing all this stuff. So every morning, I would just wake up and I would have a few things that said, “You haven’t heard in five days?” Just [inaudible 00:50:58], email. And so I had some templates and all those things set up. So that worked a little bit. The best thing that has worked is just word of mouth. So, I would say 80% of my clients come through word of mouth, it’s just people that have worked with me or know me and they say, “I know this guy who’s done software and he can help you.” And those are my biggest clients right now.
Andrew: And now what you’re doing as a next step is just raising your profile. That’s why you’re doing this interview with me. What else are you doing?
Samuel: So, I’m trying to get out of my cocoon again and trying to be more in social media, trying to do . . . Those things that take time, they’re not instant. Again, it’s like in 2002 you would put $100 on AdWords and you would get sales. Today, you can put $1,000 on Facebook and not get a single sale because it’s not just about . . . There’s no direct effect anymore. It’s more about that building momentum and building an audience and building all these things. You talk about content marketing, I think so. Blogging for the sake of blogging probably is dead, but putting articles and content marketing helps. It helps on SEO, it helps for being an authority, and it helps for creating those magnets where people get to know you get to find your information useful, and then want to go that deeper level with you.
So the deeper level would be here at podcast, and then I’m trying to do a little bit more talk engagements, so just being able to get in front of entrepreneurs and give them this message and I sort of go through the steps of creating the software and the problem definition and the UI. And that helps a lot. So, that’s what I’m trying to do right now it’s trying to . . . Since I saturated my network. And I probably can go a few more rounds through it, but I definitely need to get more clients in that way, but yeah, that’s the goal for this year.
Andrew: Yeah. It looks like you don’t do much writing. In fact, from what I can see, there’s an article called “The Most Important Thing You Must Know Before Creating a Web . . . ” Where is this? Yes, “a Web or Mobile App.” That’s one of your big posts that’s actually sending you some traffic from Google.
Samuel: Yeah.
Andrew: But you didn’t follow through. You’re saying that you’re not seeing much traffic come in from your blog.
Samuel: So, I try for a little bit in the last few months of 2018 to create content. And I just don’t like hiring content writers or anything like that. I wrote all those articles myself. And so I was doing . . . I think it was like . . . If you see back then it was like an article a day or an article a week at the most, but yeah, I stopped. Basically, in January, we got a few big contracts and I was like, “Heck, we’re just going to focus on this for now.” But I definitely need to . . . I always know that the best way is just to be exposed like that, and that’s what I’m trying to do in the last few months and the next year.
Andrew: All right. For anyone who wants to go check it out, the website is vantageio.com. And what was that URL? At vantageio.com/andrew. What are you going to put on?
Samuel: Yeah. We’re going to set up a URL before this show airs. It’s vantageio.com/andrew. And so you will be able to go there, sign up for the newsletter and get also the checklist on how to go through those steps for creating your startup application. And so we always keep updating, creating new content like that. Right now we’re working on a guide for accelerators, so for startups to be able to seek funding through accelerators and incubators, and we’re going to be publishing that in the next couple of weeks. So, all these types of things that actually help our clients, help them move from where they are, some of them are employees, some of them are just entrepreneurs that really want you to take their idea to the next level and sometimes funding is the obstacle, sometimes process or lack of knowledge is the obstacle, and so we’re trying to help them as many ways as we can.
Andrew: All right. And I want to thank the two sponsors made this interview happen. The first will host your website right, it’s called HostGator. Check them out at hostgator.com/mixergy. The second will help you hire an individual developer. Go to toptal.com/mixergy. Finally, I’ve got to tell you, Samuel. I’m especially proud of the courses that we’ve been creating lately at Mixergy Premium. One of the ones that I’m proud of is like, we took this course, I don’t know if you know DuckDuckGo, the search engine that’s privacy first. You know them, right?
Samuel: Yeah. Yeah, of course.
Andrew: This guy. I remember Gabriel Weinberg being a Mixergy listener, someone who I talked to via email for a long time who was taking on Google, I go, “What are you doing? You must have really made it well with the last companies that you could sit at home and just try to compete with Google.” And he kept growing a little bit because he made this geeky search engine that worked well for geeks.
And then he started studying traction. How could he get traction for his product? How can you get people to actually go and pay attention? He started doing interviews, research, thinking it through. And he wrote this book called “Traction.” And I had him come on, I said, “Teach this idea because I can see you’ve got a little bit of traction with the search engine.” He did more than a little. He had a lot. We did this course on how to get traction. It was phenomenal.
And then I hired this course producer this year and he said, “Andrew, let me go back and re-master that. Really, take your editing, Andrew, because I’m not an editor and make it look a lot better.” I said, “Okay. Good. Good on you. Go do it.” He did it. He made the course look better, more polished, better visuals, better understanding. He then got me to reach out to Gabriel Weinberg again, and thankfully, Gabriel reached right back fast. And he recorded more for that course. And now we’ve got this newer re-mastered course, it’s freaking beautiful. It’s one of many courses on Mixergy Premium. So, people who have premium, you should go and get this course. If you don’t have premium, you might want to sign up just to get it. It’s available to you at mixergy.com/duck, it’ll take you directly to that course.
If you really want to learn, the best people to learn from are doers, people who didn’t have traction, had an idea, and got traction, people who built real businesses and are saying, “Here’s the one great thing that helped me grow my business.” That’s what Mixergy is about. I build relationships with guests here through these interviews and I ask them often to come back and teach courses and Gabriel is one of the people who’s come back to do a course and we’ve got over 100 other entrepreneurs. It’s available at Mixergy Premium. If you want to see that one course, go to mixergy.com/duck. There’s a little sales message for myself, Samuel. I actually liked that so much. I was spitting right into the mic. It’s a good thing I’ve got this like, high-end thing on it, this pop filter. All right, Samuel, thanks so much for doing this.
Samuel: Thank you so much. Thank you for having me.
Andrew: Rock on. Bye, everyone.