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 and usually shot out of a cannon. As soon as I start doing these interviews, I get just so worked up and I am today. But I’ve got to be honest with you, my listener and with you, Robert, today’s guest, I’m a little concerned about myself today. I was swimming last week in the ocean jumping up and down, diving into waves. My personal rule is if I’m in the ocean and I’m loving it, I want to dive into every wave or use it for like body surfing out and I was in such like a happy place. And I went to dive into one way, it was too small, I bumped my head in the bottom of the ocean, just like on a beach. It’s just immediately I felt a crack.
Immediately I called my two kids, my five-year-old, my two-year-old to me and I said, “Can you guys come over here, please? Just like hang with me. I don’t know what happened here.” I was afraid something bad happened. And I was feeling the pain for a while there. I actually went to get an X-ray, things were fine. But it’s been over a week and now again today, I’m feeling it in the back of my head. I’m really worried about it. But the big thing that I’m trying to do is not let myself get worried about it, be present in the moment, work, think about what I care about, and then go see a doctor at some point later, and then worry about it at that point. Or never worry about it, Robert. I’m not sure how you handle this stuff. But for me, it’s can I stay focused on what makes sense and not get distracted by what doesn’t? So that’s where I am right now.
And I feel like that’s a big challenge with entrepreneurship too to recognize that there are things you need to take care of that could bring down the ship, could bring down the company, but they’re also a distraction in the moment and you focus on them when it’s helpful to focus on them and you just distance yourself from those thoughts and redirect your energy when it’s not helpful to focus on those.
Robert, I bring that up a little bit because I think that you and our producer had a small conversation about stress and how you deal with it. And I wonder how what I’m saying resonates with you. But before I get into all that, let me introduce who you are. Robert Kreuzer, did I pronounce it right with the German pronunciation?
Robert: Yeah, perfect.
Andrew: Wow, look at that, or as Americans would say Kreuzer. Robert Kreuzer is the founder of Channable. He’s a guy who had a company that didn’t actually pan out the way he wanted it to, still around, you could still go to the website, it’s called Site2Mobile. The goal was to take your website and make it mobile. And it didn’t really scale. It didn’t grow. It didn’t become what he wanted it to. And we’ll talk about why not. But as he was building it up, he recognized both the business need that he had, he wanted people to be able to use a software in a way that was repeatable to create a SaaS company, but also a problem that they had. They were building these sites creating these mobile experiences and they wanted all the data that was on their sites to, you know, appear on other platforms. Things like Amazon, eBay, Google Ads, Bing Ads, I guess some people still buy Bing Ads. I’ll ask Robert about that. He’s in the space. I said, “Well, Robert, could you do this?”
Robert: Yeah, they do.
Andrew: That’s what you’re going to say? They do still buy Bing Ads. It works?
Robert: Yeah. Well, a lot less than Google Ads but some people still are on Bing. That’s right.
Andrew: All right. We’re going to find out how recognizing the problem that his customers had led them to create an even bigger, better business thanks to two phenomenal sponsors. The first, you know this, if you’re looking to hire, you should go to Toptal, and I’ll talk about why and help you make the decision to go check them out in a bit. And then the second I haven’t talked about much, but I’m loving them. Robert, I think you’re going to love this. It’s brain.fm. It’s this thing you listen to. I don’t want to call it music. You listen to it in your earphones, it helps you stay focused. I was skeptical when I heard about it. It works. It’s beautiful. But, first, Robert, let’s talk about revenue. How big is the company? Give me a sense.
Robert: In 2018, we had a total revenue of €3.6 million. So that’s about $4 million.
Andrew: Wow-wee. Bootstrapped or outside funding?
Robert: We had outside funding. We have one VC investor that invested €750,000 about 2 years ago.
Andrew: Okay. Are you guys profitable?
Robert: We are profitable now, yeah. We were not profitable for a long time. But since this year, we have been profitable every month.
Andrew: Wow. And is that something that you’re trying to avoid? I mean, to be honest, are you trying to spend more of the money so that you don’t pay taxes on it, but instead get to build up equity in your business?
Robert: Well, it was not really a conscious decision. We are always like kind of pretty close and I’ve always been very lean with our spending and really just do the necessities and trying to keep the spending low so that we can invest everything back into the company. So our main goal has been to build a great product and this means just reinvesting all of the money we make.
Andrew: You told our producer, you always wanted to be an entrepreneur. But you didn’t fully express it even as a kid. I’m kind of curious about that. And we’ll get into Site2Mobile in a moment. But tell me about that. What do you mean by that? Why do you want to be that? How did you express yourself and why wasn’t it fully expressed?
Robert: Well, it always seemed more like a dream, but not something real that you could actually do. It seemed like basically nobody you know was an entrepreneur. So it’s something it was, you know, abstract, which is you don’t have somebody explaining to you in detail how to do it and it seems like a big risk to do but it just really appealed to me to build my own product to work in a team. I’ve two cofounders, Rob and Stephen and together, you know, we wanted to build a product.
Andrew: The first product that you created was Site2Mobile. And talk about the problem that you experienced there you as a business before we talk about your customers’ needs that you uncovered by running this company. What was the problem that you had with it?
Robert: Well, with Site2Mobile, we had also built a product. So we wanted to sell this product. And the idea was that you take an existing website and you make a mobile version for it. So like other responsive website and that the trick about it was that you wouldn’t have to rebuild your whole website that we would dynamically extract all the content from your existing website and put it into a mobile template. We built a tool that people could do that themselves with . . .
Andrew: I could just put my URL in, just say mixergy.com and then out you would produce something?
Robert: A little bit more work. We had a web frontend where you could basically select, you know, the content, the title, the images, and then we would automatically extract the whole structure. So you would need to do a little bit of work, but you wouldn’t need to be a programmer. And the cool thing is it would sync in real time. So we have built this whole product, but the problem was we couldn’t sell it. It was we could sell the service. So people would say, “Oh, I don’t want to do it myself but if you guys do it for me, I’ll pay you much more for it.” And then that’s basically what we did. We ended up being a service business using our own product for other people. But we couldn’t sell the product itself.
Andrew: That’s what became Site2Mobile studio. Am I right?
Robert: Yeah, exactly that was the product. And then we use it ourselves for a few customers to build mobile websites for them. And that’s what we did for two years before we started Channable.
Andrew: Why weren’t they using it themselves? And this is the problem that you experienced. You said, “Suddenly, we’re a service company that happens to have software instead of what we wanted, which is a software company that scales to the point where you guys are right now with Channable where it just starts to produce money, even if you’re not working on profits.” Why do you think they weren’t able to use it themselves? Why do you think they wanted to service instead?
Robert: I think the fundamental problem is that they didn’t see that as their core competency, which is fair as well not. So they didn’t want to do to have the hassle. You know, if it broke, they would just want to be able to call somebody and say like, “Hey, it’s broken, can you fix it?” And they didn’t care that it would cost them much more, they just wanted to have this like certainty that that it would always work. And if it didn’t, they would know who to call. And this was worth for them much more than the savings that they could have by doing it themselves using our product.
Andrew: Yeah, that’s a big thing that I think newer entrepreneurs don’t recognize. I talked to them a lot and they say, “Why would anyone pay me to do this instead of doing it themselves?” Businesses don’t want to do it themselves. They rather spend money and have somebody do it right than try to figure it out themselves and risk doing that wrong or even just risk doing that right but get distracted from the things that matter. All right. Meanwhile, though, they were starting to ask you for something that led you to recognize the problem that you addressed with Channable. What were they asking you for?
Robert: Yeah, so some of our customers with Site2Mobile were online marketing agencies and they manage a lot of web shops, for example. They manage, well, the online marketing and they boost the sale of their customers. And one problem they were facing is that many of their customers couldn’t produce a so called data feed. And a data feed is, for example, an XML file or a CSV file, where all of the product information of a web shop is listed. So for every product, you have the title, the price, the link, the description, you know, all the item data is in there. And many of their customers just couldn’t produce such a data feed.
Andrew: Why were they trying to do that? So there are agencies that are hiring you to turn their clients’ websites into mobile experiences, into mobile sites. And they are saying, “Look, we want a quick likes file with all the information about all the products.” Why do they even want that?
Robert: They need this file so to list their products on, for example, Google Shopping. Like in Google Shopping, you can load in an XML feed, which all of the product information. And people want to be on Google Shopping so that they can sell more products. Because everybody, if you buy something online, you will go to Google Shopping or to Amazon or perhaps to eBay or one of these channels. So this is where the customers are so all the shops need to be there too.
Andrew: So they were coming to you saying, “Can we do it? You already are getting all my data anyway and you’re turning my data into mobile sites. Just give me the export of it.” And were you doing that for them manually?
Robert: Yeah, exactly. So they asked us, “Oh, you already have this technology to extract all of this data in a structured way from all these websites and now use it for mobile websites. But could you also put the data in a data feed?” And then we said, “Of course, yeah, that’s really easy for us to do. We’re all programmers.” So this was rather trivial. It just hadn’t occurred to us that this is a much more wanted feature than mobile website. And these web shops, you know, they really wanted to pay for this. They were like, “Oh, yeah, if you can produce a feed for us and get us listed on all of these different channels that we would totally pay you to do that.”
Andrew: You know what? I’ve never been on Google Shopping before. Not that I knew of, but I went to it. It’s shopping.google.com. It’s kind of cool. At the very top of the page, it says, “Let’s go shopping, Andrew.” And I know that that’s a basic thing to do online. I could do it on a WordPress site blindfolded practically. But, man, it does make the experience feel a little bit friendlier. And now I’m clicking around. Of course, I go to electronics because I’m kind of a diehard electronics geek. So you were doing this, at what point did you say you know what, “This is our new thing. We’ve got to build a product now we can actually create the software to service business and sell it”?
Robert: We didn’t do it right away. Because when you’re doing one thing you’re like very much attached to you probably, right? We’ve just been building a product for two years and trying to build a business and struggled and failed. But you don’t just like walk away from what you build. So we were careful and did a little bit of market research and we actually went and talked to like four or five agencies that are already customers. And we had mockups and showed the mockups to them. And asked them, “If we build something like this for you, would you buy it?” And four out of the five I think said, “Yes.” Four of the five were like, “Oh, yeah. If you build this for this price and with a monthly fee, we would definitely become customers.”
Andrew: Hey, you talked to our producer about how that was a big thing for you. You did not want to go and build before you had customers. And it felt almost like you’ve been burned doing it the other way before. Am I right?
Robert: Yeah, exactly.
Andrew: When?
Robert: Because the first time around with Site2Mobile, we hadn’t really done much market research. It just seemed like an obvious idea to us and this had actually come out of a university project. So my cofounder Stefan had built the first version and he had won a prize. It was a student entrepreneurship course and even won money price for it. So it seemed there was some validation about it turns out, you know, winning a prize at the university is not the same as winning customers in the real world. And so we had gone and built something without first validating the idea.
Andrew: How did the customers change your perception of what the solution should be when you talk to them? Or did they just say, “Hey, this is brilliant, you got it,” on the first try?
Robert: No, no, no, the idea changes a lot. Still now we’re very much a feedback-based company. We constantly update the product based on feedback of customers. And it was the same in the beginning. Like we just made some mockups and it was very simple. That’s another thing which we do, we always try to keep it very, very simple and because easy to start with something and then add things and this way you don’t . . .
Andrew: So how did it change? What did they tell you that you didn’t know? What did they tell you that helped you understand the problem and what they pay for?
Robert: I think it helped us understand how difficult is also for them not just to get the data out of these web shows, but also to clean up the data. Because the data is not clean in the beginning. The data is low quality. So it’s not structured the right way. You know, maybe the title is wrong. Or you wanted to capitalize it or it’s too long if you want to later make ads out of things, then there’s specific length limits.
Andrew: Oh, so it’s not just about grab the data from my site because it’s already on the site and send it out to Google. It’s, yeah, the title might be intentionally long on the website because that’s what people are looking for on the site. But once you send it to another platform, it has to be much shorter because that’s the experience that people are expecting there or that’s allowed there. Got it. So you were starting to see that type of thing?
Robert: Exactly. So that gave us the idea that actually producing higher quality data is also a really good business model that people don’t just struggle with getting the data out of their systems, but they also struggle with improving the quality of the data.
Andrew: So how could you improve it back then? How could you take something that’s long and help your clients get a shorter, snappier title?
Robert: So we started by building a system that could import all of the data. And then we added a system a data improvement or transformation system where people could write very simple rules without a web interface. So it’s a very easy to use web interface that also non-technical people can use. And it allows them a little . . . it’s a little bit like programming if you’re a programmer, but it’s based on if-then-else rules and you build it with a graphical tool. You say, “If the title is longer than 50 characters, then cut it to two 50.” Or basically like this, it gives you like building blocks and you can change these building blocks, you know, you can change anything in your data.
Or you want to say the price should be 10% more on this channel because maybe, yeah, they charge you more and then you want to increase the price. Or you may be able to lower the price on some products. And all of these like little changes they usually needed a programmer for it. So our value proposition was you can do all of these things yourself using our tool and you won’t to pay a programmer by the hour to do it.
Andrew: I’m with you, Robert. I see now how you wouldn’t have known that before because all they asked you for was an XML file with all the data in it. You didn’t know what they were doing with it afterwards, the struggle that they had to convert it into something that was usable, until you started having conversations with them. My understanding was that you also said, “You know, we’re not going to build this until we get commitments from clients who will pay us for it.” Am I right?
Robert: Yeah, exactly. Exactly. We really wanted them to like put their name down and buy into . . .
Andrew: Credit card too?
Robert: I don’t think they asked them for their credit card right away.
Andrew: You could say, “I want you to commit that you will pay for this if we build it.”
Robert: Yeah, it was more of a handshake deal thing. Yeah, exactly.
Andrew: Okay. All right. Let me take a moment to talk about my first sponsor and then we’re going to come back and talk about this, about what you finally did build for them. My first sponsor, Robert, I want to be an evangelist of this product. It’s so good. I found myself not able to focus when I sat and did long work. The big issue for me was someone on our team, Neil, would help me write long form copy because one of our goals this year is to start creating more emails. If anyone is on our email list, they’re seeing that we’re emailing more, to write more this year, to publish more this year. And so I found myself just sitting in these beautiful environments here in San Francisco or on planes or as I’m traveling the world running my marathons in beautiful environments in Asia, sitting down and I wasn’t able to focus.
And I thought, “Maybe it’s the environment, it’s too beautiful. Maybe I need to go back to my office, maybe it’s me, maybe I’m burning out or something and I’m not able to stay focused.” And then I said, “You know, I’ve heard about this brain.fm for a long time, you’re supposed to listen to it in your earphones and it’s supposed to help you get into flow. And for a long time. I don’t want to say I pooh-poohed it, but what I really want to say is I took a dump on the idea. So there’s no way it’s going to work, Robert. That’s just like some body’s clever little thing. They got to make money. I don’t know why I got cynical about it. I’m not a cynic usually but I finally said, “You know what? Let me just try it.”
I remember exactly where I was right across the street from Spark Social here in San Francisco. They’ve got outdoor tents, beautiful tables to sit outside and I wasn’t able to focus. I finally said, “You know, I’m going to connect my earphones instead of to my iPad, which is what I was working on, I’m going to go to brain.fm and I’m going to hit play.” And I hit play and I just kind of listened. I thought, “Interesting. I guess maybe whatever.” And then I started to focus. And it was kind of interesting because, Robert, it does this thing where the flow of music feels like it’s going far, then goes into one ear.
Feels like it’s going through my brain, like a really I almost visualize a wave and then come out of my other ear and then go a little bit further. And it does put me in this weird trance-like, flow-like state where I sit and I focus. Now if you go on their website, you can see all the science behind it. They did MRIs and they showed that your brain is actually more active when you’re listening to their music than when you’re listening to something else or nothing at all. It’s kind of interesting to see the science of it. But I don’t give a rat’s ass about that. I actually I’m getting more and more productive. I think if you’re trying to stay focused, go to brain.fm/mixergy. They’ll give you a big discount on their already low price.
And you can try it out right there. And if it works for you, great. You’ve got the best productivity hack ever. If it doesn’t, move on, don’t worry about it. But I went on Twitter, I said, “Anyone else still discovering this?” People said they were already on it. They were into it. And this one guy flooded me with the research about how it changed his life and how it changed other people’s lives. And I realized there is this quiet movement maybe like me, they didn’t want to talk about it publicly, because it seems a little weird of people who are actually getting more productive not by creating a better checklist, not by moving to a different environment, not by signing up to new project management software but by getting their head on right and doing that by listening to music that will keep them in that flow state.
I shouldn’t even call it music, these sounds that are music-like that will do it for you. And they’ve got others for meditation for sleep and all the work. All I care about is being more productive at work. I sleep fine. I don’t know how I would sleep with earphones, Robert, with two earphones. That would be interesting. I do sleep with one AirPod in because I do like having something to listen to before I go to sleep and my wife doesn’t. But I haven’t listened to them while I fall asleep. I have gotten more productive out of it. Robert, file it away in your brain. Brain.fm/mixergy. You will personally thank me for being . . . especially since you guys had that crazy office with all those people.
Imagine if you said, “Listen, guys, we have to be here for another two months. I’m going to buy every one of you a brain.fm account. Let’s see if it’s productive. We’ll talk about it as a team. If it’s not working, let’s laugh at Andrew and we’ll tell Andrew because Andrew wants to know. If it is working, it could be the best productivity tool for your whole team.” I got to shut up. I got to talk to you.
All right. Sachit, stop selling ads I care about this much. Who gives a rat’s ass? Or maybe I should record my ads ahead. I don’t know. All right. Let’s continue here with the story. You now said, “We got customers, we’re going to build it.” You decided you’re going to build a bare minimum. What was the bare minimum for you guys?
Robert: It was a tool that could import. I think in the beginning, we probably just did XML. So that was the file format they wanted, right, that we could import.
Andrew: Because they had XML files on their websites already?
Robert: Well, they could always import like some kind of data. It was always the wrong format. You see the problem is that Google Shopping has a very specific specification how they want to receive the data. So Google has a whole page where they line out all of the requirements of how it needs to look like. So they didn’t have that specification. So we made sure that we implemented exactly what Google wanted.
Andrew: But were you pulling the data out of their sites and then formatting it for Google?
Robert: Well, okay, so what we do now is, yeah, we can pull the data out of the site directly with a scraper, but we recommend actually that you dump the data in in some file format, like a CSV or some kind of CSV or XML. And doesn’t matter exactly how . . .
Andrew: Let’s talk about that first. With the first version, what could it do?
Robert: The first version could still load a file I believe. It could load some kind of XML file.
Andrew: So it could take it. All right. I’m actually looking at the first version of your site. If they had a Google Sheet with the data of what they had on, that was fine. But if they were using Magento to create their store or WooCommerce, you could grab that data from that software, and then make it available to Google and bestlist.nl and so on, right?
Robert: Well, support from Magento and WooCommerce was added later. So now we have plugins where we can directly integrate with that. So now it’s very easy for customers because we have plugins and that expose an API. And then actually, we can talk to the Magento or WooCommerce API and pulling all the data. But we didn’t have that in the first version.
Andrew: In the beginning, they had to have the file with the data?
Robert: Yeah, in the beginning . . .
Andrew: But Robert, the reason I’m confused is, isn’t that what they used to come to you for when you were running site to Site2Mobile? Weren’t they saying to you, “Robert, can you create this XML file, we don’t even know how to do it.” And now what you’re saying is they didn’t know how to do it. How did they . . .
Robert: Right. Let me explain. So some customers actually could produce some kind of file and others couldn’t. So for some customers, we did have to scrape their websites. And that basically is what we did the Site2Mobile, we had this technology to scrape in a structured way just the right fields and so on. So that was for some customers. But the bigger agencies, they usually could produce some kind of file. They could, you know, I don’t know, dump it out of the database or something. But it was not in the right format. It wasn’t like how Google wanted it.
Andrew: Got it. So the first version of your product wasn’t even getting the data out of their system. You just assumed they could get it out. You were addressing customers who could somehow get it out but the problem they had was cleaning it up and structuring it so that it could work on these other shopping platforms, right?
Robert: Yeah, yeah, exactly.
Andrew: Got it. And by the way, I don’t recognize bestlist.nl. I’m guessing you are saying, “I’m going to focus on Dutch companies here in the Netherlands. And whatever sites they want to put to, that’s what we’re going to focus on.” Am I right?
Robert: Yeah, exactly. We focused very much on the Dutch market in the beginning. So we were a Dutch company, and we had the Dutch customers. And we thought we need to focus on the local market first because that’s in the beginning, you need to stay small and solve very specific problems for just a few people.
Andrew: So a niche of ecommerce, deeper niche of big enough companies to have a lot of data, and then even a deeper or a tighter niche, I should say, of companies that were in the Netherlands. Got it. That’s where you were. You sold to those customers. You went out and you built it. And their feedback was? Did they pay?
Robert: Yeah. Yeah, actually, they were quite happy. I mean, it was very basic and they had lots of remarks and feature requests and so on, of course, but it was good enough that they paid. That’s enough. Yeah?
Andrew: Yeah, that’s exciting that they paid. What were you charging roughly back then?
Robert: Oh, very little. It started at €19 a month for like 500 items or 500 products, you will charge 19 euros a month and then €29 euros a month, €49 a month. So really pretty low prices.
Andrew: Okay, all right. In the beginning, it doesn’t matter. You just want them to pay something to validate that they’re willing to pay for it. And then you also wanted their feedback. And one of the things they came back to you with was they wanted an ad builder, right?
Robert: Yeah, after I think the first six months when we had together the first customers, they came back to us because they’re an online marketing agency so they also do a lot of Google advertising. So AdWords, basically. And they said to us, “Look, you guys already have all this data. And you have this tool to like structure the data in the right way and you have these data transformation rules. Couldn’t you also export the data to Google AdWords so that we could automatically make ads for all the products of a customer?”
And we were like, “Well, that sounds like a good idea because indeed we already have the data. And we just need to build a new export and integrate with the AdWords API to automatically create campaigns and ad groups and ads and all of that stuff.” Because so far, many of them had done it manually, or they had other tooling, or they were working a lot of Excel, and so on. But we could automate all of that. You know, if you have like, a million products, you cannot manually make ads for all of them. So you need to have tooling like us to create all of your campaigns.
Andrew: If you saw me just like squint for a moment going, “What?” I’ll tell you what happened, I was looking you guys up on SimilarWeb to get a sense of where your traffic was coming from and how much traffic you have on your site and to get a sense of your marketing mix. And so I logged in with my Google account, which is the way I always do and then I hit allow and then I said, “Let me back up.” I backed up. They now say on the Google permissions page, “This will allow SimilarWeb to (bullet point) view your Google Analytics data, (next bullet point), view Search Console data for your verified sites.”
And I realized this is like permission creep from them. All I want to know is like let me use your free version of your tool. And suddenly, they’re like grabbing my data, which I’m sure they’re using to enrich their data. Wow, that just bothers me sometimes. I think as an entrepreneur, you’ve got to do it. As a business owner, you’ve got to just have this permission creep because that’s what allows you to do a better thing, better business. But also as smart entrepreneur, you can’t allow other people to do it to you, which is kind of a weird world that we’re in.
Robert: You need to be transparent about this, right? It’s like I feel like you shouldn’t do these things sneakily, you need to be up front and be like, “Are we allowed to take this?” And give people the choice to opt out?
Andrew: Yeah, like, how is this . . . All right, so I’m getting I’m getting how you were building up. What’s interesting to me is you’re starting to hint at getting more clients in that first six months. How did you get more customers beyond the first four who said, “Yes, build it, we’ll pay”?
Robert: Yeah, so my, my cofounder Rob, he’s the business guy and he and our first employee, Michel, he’s our sales manager, they hit the road and talk to as many people as possible. So they just drove through the whole Netherlands and got as many meetings as they could get with all of the marketing agencies and gave the demos. And we used a small trick. We basically asked them for feedback, we were like, “Look, we’re the startup and we’re building a new product.” And we do like some feedback on what they’re building. And so in a sense, it was a sales call, but we kind of dress it up as more of a feedback thing.
Andrew: Got it. And why did you want to go and see them in person instead of using a Zoom meeting or something else?
Robert: Because nobody knew us. Like we were just these guys who had built something. But I think it’s important to put a face on a company on a product and then show that there’s like serious people behind it who know what they’re doing. And for this, it was important in the beginning to get all of these in-person meetings to really sell what we’re doing.
Andrew: I’m trying to get a sense of how big the Netherlands is or at least I’m guessing you largely stayed around Amsterdam. Am I right?
Robert: The Netherlands is a very small country. You can drive in a few hours from the north to the south. I realized in the U.S. you couldn’t do this, but in the Netherlands it’s actually very doable to drive through the whole country.
Andrew: So by focusing on Dutch companies, you’re saying you could go to anywhere in Holland and then be back home at the end of the day and not miss a beat?
Robert: Yeah, that’s right. That’s right. They would just try to get meetings in the same city, you know, they would just call the agencies they could find them like one city then drive there, have all the meetings, and then drive back in the evening.
Andrew: I’m guessing it also helped that you were a Dutch company going to see other Dutch companies that it was, “We’re here in the area, can we come and talk to you?”
Robert: Yeah, yeah, that helps. Like there’s definitely a home turf advantage. Yeah, and we now notice this when we grow outside of the Netherlands it’s sometimes more of an uphill battle. In the Netherlands, it was easier because we’re a Dutch company.
Andrew: Why did you not start calling outside of your country? Why didn’t you say, “You know what? We’re going to find a bigger market in the U.S. or bigger market in somewhere else and focus on them.
Robert: We did that. But I want to after a while actually, it just in the beginning, we just didn’t have the resources. So it just, you know, took a few took maybe two years for us to really build up the business, build a product. And then we started with a German market. So our I think after two years, we expanded on the German market, hired our first two German employees and let them focus on the German market, because it’s a much bigger market than the Dutch market.
Andrew: Do you guys talk to clients in Dutch or in English?
Robert: That’s fine. We talk in Dutch.
Andrew: You do?
Robert: Yeah, yeah. Yeah, it’s all . . .
Andrew: The reason I’m asking is I thought your website was in English. And I don’t think I saw the Dutch version of it at least when I looked in the Internet Archive. Am I missing something?
Robert: Oh, yeah, yeah everything is translated. We have a Dutch version, a English version, a German version, and a French version, and the Spanish version.
Andrew: Oh, got it. You know what I wonder if it’s because I’m going to channable.com instead of .nl. Is that what I should be doing to look at the old version?
Robert: Oh, yeah, if you go to .nl, you’ll probably get the Dutch version. But I believe we actually just look at your IP address and then give you the English version because you’re in the U.S.
Andrew: Got it. Okay. All right, I’m getting now how it worked. And I see the advantage to have going and seeing people in person. I’m guessing that you guys were able to close what? Maybe one out of four, one out of two people that you talked to?
Robert: Yeah, and the beginning of the right was very good. Like giving him the person personal touch really helped a lot. So in a quite short amount of time we signed the first 10 agencies, and for us agencies are the main sales targets because they usually managed lots of workshops. And we also have lots of workshops as customers. But for our more our marketing team is more focused, you know, on reaching them. And we’re in many app stores like the Shopify store so and so on. But for sales, the focus has always been agencies.
Andrew: Okay, and let’s talk a little bit about the challenge today going outside of the Netherlands. I know it’s something that you’re working on going international, what’s been the issue with it?
Robert: Yeah, going international has been a focus for last three years, I would say. And we’ve done one country after another. We haven’t done everything at once because it’s not really doable because we need to hire people. And our strategy has always been to hire two people to form a country team, always two salespeople for one country because it’s just better to have somebody, you know, to spar with and to work together with. So this way we’ve always started. And if it’s going well, then we start hiring more people for one of the country teams. So we did the French market as next then later expanded to Scandinavia, the UK, and the latest is now Spain.
Andrew: And so the first country, how was that going into it? What worked and what didn’t work? Germany?
Robert: Yeah, in Germany, that was also in the beginning, just like contacting lots and lots of agencies. And again, try to get some feedback. And also we need to do some market research on what channels are important in Germany. And because every country is different, and for in the U.S., you have different channels and the marketplaces than in Europe. And in Germany, you have different ones than in the Netherlands. So it was important for us to add to also add on the technical side support for all of the German channels and marketplaces.
Andrew: Are you German, by the way? I think when we talked . . .
Robert: Yeah.
Andrew: You are?
Robert: Yeah, yeah, that’s right. I’m from southern Germany but I’ve been living in the Netherlands for almost 10 years now.
Andrew: Got it. How did you make the move there?
Robert: As a student. I studied computer science here and then I stayed because we started the first company.
Andrew: Oh, got it, okay. Let’s talk about how you got more customers. It seems like part of your process is you go in and say, “We want to learn,” And you genuinely do want to learn because you were before.
Robert: You do, yeah.
Andrew: You wanted to understand what they’re looking for, how they work, and so on. And then if it makes sense, you’re able to close the sale. Well, what happened next beyond having actual salespeople go out and talk to cold potential customers, cold prospects? What’s the next thing that worked for you for getting customers?
Robert: Well, we started also doing like more online demos. So that’s something that worked very well. So we contact people. And if they’re interested, we just offer them an online demo, where, for example, Skype or screen sharing. And this way, we can show them exactly with their own data, how it would look like. So we’d ask them, “Oh, yeah, do you have some kind of file we can import?” And then we’ll walk them through the whole tool and show them, “Oh, this is how your data is imported. And now I we’ll show you like a few easy clicks how you can set up a Google Shopping export.” You know, if you just see in like 10 minutes set us up your whole feed, then people are impressed.
Andrew: I’m wondering how those people even found your site. I was trying to look through people at this point. Now we’ve got a partnership with Ahrefs because I keep hearing how good they are for understanding like where you’re getting links and what you’re ranking for in search engines. I’m looking at your backlinks using Ahrefs and there’s not that much. It’s not like you guys are doing great content outside of your site or even on your site, right?
Robert: Yeah, we’re still working on our SEO. It’s not perfect, that’s true. Most of it has been in the beginning, a lot of outbound. But in the meantime, the Netherlands is pretty much all inbound by now because at some point you reach like, you know, you get known and people recommend you to other people.
Andrew: Just through word of mouth. It’s not like people are writing about you. It’s not like people are recommending you online from what I can see. Yes, you get some recommendations. But it’s not that, right?
Robert: No, no, it has really been a word of mouth in the beginning. And so in the Netherlands, we’ve hit like this point where people would just hear from us from other agencies or from other customers. And at some point, then the ball started rolling itself. So now it’s pretty much all inbound. And in other countries, we’re not there yet. There it’s still mostly outbound. And we would get some inbound traffic also through, like I said, app stores, like from what web shop app stores, you know, like, like Shopify, there’s a lot of other channels like that. And also specifically for Germany or other countries. So we try to be in all of those app stores as well.
Andrew: Yeah, that is always a big thing once you start. So eventually you said, “We can’t have people create an XML file or count on them having a file with all their products.” We need to plug into whatever store they’re on and then you started going into some of the stores that I mentioned earlier. And most of these shopping platforms have their own app stores. I guess they’re calling it app stores now. And so the Shopify app store, you guys are deep in there, you’re offering free 14-day trial, all anyone has to do is hit the add app button and your audience in their app store. And that gets a lot of publicity, a lot of attention from people who are trying you out, right?
Robert: Yeah, exactly. Because it’s just one click. So if you use Shopify, you just click on it. And then we immediately can import all of your products. And then you can set up your feeds and marketplaces in no time. So that makes it just really low friction.
Andrew: It’s also a different audience, though. This is . . . the people who are using Shopify and hitting the add app button on their own often are do-it-yourselfers who don’t know much about the software, who don’t have much information about you. They’re just hitting an add app button, right? How do you make sure? What are the issues with those people using your software? And how do you make sure that they know what they’re doing?
Robert: All right. Yeah, exactly. So education and helping customers is a big part. And we’ve from the beginning, actually focused on having a great support team. So we’ve really invested into having an amazing support team that can help people either via email or over the phone. So unlike many of our competitors don’t, for example, offer phone support, and for us, it has always been focus that people can call us and then we will help them directly.
Robert: That’s when they’re trying to figure out how to use it or when they’re having a problem. Do you reach out to them before? Do you do anything to make sure that they understand how to use your software?
Robert: Oh, yeah, yeah.
Andrew: What do you do?
Robert: We have automated. We’ve automated emails that as soon as somebody signs up, we send them an automated email, “Welcome to Channable, here is are the 10 tips to get started,” and then be linked to like, tutorials. And we have a Help Center, where I have like in depth articles that show you click here to load in your file that explain all of the concepts. So people can just read those. We also have some YouTube videos that explain these concepts. So we’re trying to build a lot of content around making it easy to use a tool.
Andrew: All right, I’m going to take a moment to talk about my second sponsor, and then get back into this story. My second sponsor . . . and I also want to talk about some of the stress that you’ve had. Second sponsor, Robert, is a company called Toptal. If you’re hiring developers, you got to check out Toptal. I think it’s kind of interesting, Robert, a lot of companies would have been where you guys were back in the Site2Mobile days, where you knew that there was this thing that customers are asking for, but you want to build it. And for many people, they wouldn’t have the bandwidth to sit and build it, because they’re still taking care of their existing customers.
And so I feel like for a situation like that, that’s where people like the founder of grasshopper.com, who’s now investing in other businesses, that’s where they turned to Toptal. They say, “You know, I’ve got this idea for a project. It’s going to be in your case, you could have gone back, if we could go back in time.” For your case, it would be, “You know, we’ve got this situation, customers are looking for a way to take data out of their sites and put it into these other platforms. We don’t have the bandwidth to create it, but we are talking to our customers all the time, we understand what they’re looking for, we need somebody to build it.” You go to Toptal and you get somebody who’s worked with this type of project over and over and over.
You say, “I need this, I need an expert, somebody who can work with our team and build it.” And Toptal will find him for you. And then Robert, you could get on a call with the maybe two or three potential people that they put in front of you. And if you’re happy, you could often hire them and get started with them the next day or within a week. I know you guys have been hiring a lot. Imagine being able to do that. That’s what Toptal is about. People who’ve done the project before, who can work with your team like they’re on your team because they are, they get your email, they get, I mean, your email access on your domain, they get into your Slack, they get into your project management, they work the way you want them to.
And then, if you decide you want to keep working with them, you could. If you decide No, my team is going to take over, you could do that. They’ll work with you and help transfer all the knowledge so that your team gets up and running fast. And if you’re not happy, they won’t charge you. Here’s the deal. If you go to toptal.com/mixergy, they’ll give you 80 hours of developer credit when you pay for your first 80 hours, in addition to a no risk trial period. I’ve never seen anyone else do anything like this before. All you have to do is go to top is in top of your head, tal is in talent, toptal.com/mixergy.
If you’re stretched and need to find the right developers who have experienced doing what you’re trying to do, there’s no better site. I promise you’re going to love the Toptal.
Let’s talk a little bit about the stress. I’ve talked about how I have to stay focused here, like even in my conversation with you. If I tilt my head and something hurts, I have to stay focused here and know that when I’m with my doctor, I’ll focus on this pain, but not focus on, you know, not get distracted by my work needs while I’m there. Stay focused on where I am. Talk about what your stress was before we deal with how you worked? How you got through it?
Robert: Yeah, I think we’re starting a company. There’s a little different phases, right? Like in the beginning, you’re just the founders, you’re very small, you all fit into one room, and it’s very easy to communicate. You just holler or you just talk and everybody will know everything. But as you grow, this doesn’t scale. So at some point, you have more people. And at some point, we were in our second office, and we’ve got very real, like, maybe 20 people, and it got extremely loud. And because it was still like a big open office, but there was barely enough space to fit everybody, and everybody is really cramped. And so, this was a very stressful situation, because there was all this noise all the time. And we also didn’t have structure yet. So the problem was, there was not . . . at the beginning, we thought we didn’t don’t really need management structure, and it’ll just naturally evolve. But this was a terrible idea because it just turned to chaos, and people were very unhappy.
Andrew: Because you started to bring in developers, they would sit in the same office with everyone else. Developers want quiet space to work. You bring in customer service people, they would stay in the same room with you and the developers, but they have to get on calls with customers, or do video, screen share, whatever. And that would then cause all these conflicts. I’m assuming that people started putting earphones on, that didn’t help the developers?
Robert: Yeah, exactly. Like people would put on their earphones all day long just to, like, block out the noise. But even that, you know, it’s not a good situation, exactly. The developers were kind of annoyed with all the noise, they couldn’t concentrate. But, of course, customer support and sales needs to talk to customers. So that just needs to happen. So then we really need to think of a solution for that.
Andrew: So then that doesn’t seem stressful. Be open, what’s the stress that you experienced then with that?
Robert: Well, for me, it was also stressful that we have a lot of, like, I think we also didn’t have our priorities straight. Like, at that time in our life of the company, it wasn’t clear what our main focus points were, what our pain points were. And I felt like we were just like reacting all the time. We didn’t have a plan, basically. We’re just reacting because everything . . . it felt like it had grown over our head, and we needed to like reestablish some structure and have a plan.
Andrew: What do you mean by reacting? What’s an example of something that you felt you were in reactive mode on?
Robert: Oh, basically, there were on the one hand, there would be technical issues on the other end. So there would be customers that were not satisfied, and they would call and be angry about things. And we will just very quickly, have to think of a fix for them. And things like this. So we were going in firefighting mode, like nonstop firefighting. And this is what I will get very stressed from is if you feel like you’re only reacting to all kinds of things that go wrong, instead of that you have things under control, and you plan your next steps, and you build some new features, for example.
Andrew: Got it. I don’t work well that way either. I think some people like that kind of chaotic environment. Other people just don’t function well, and it feels like everything is off. Am I right?
Robert: Yeah, yeah, exactly. Like for me, it’s not a good way to work. Like I like things to be well structured, have control, have a plan and systematically work on making things better.
Andrew: So then how did you deal with that?
Robert: Well, we decided we need to have some more company structure, like we really made plans to establish teams, to have like team leads, to have like communication lines, to have tools to communicate. And also, we moved to a bigger office in the end, of course. So at some point, actually, we didn’t have a new office yet, because that’s another stressful thing. You need to find a new office while you’re juggling all of the other problems. And so, for a while, we moved, actually, development team to one of those like WeWork like places, so like a temp office which you can rent just for a couple months. And that was much better, because then the developers had like peace and quiet and could like focus on fixing problems. And the rest of the company had a bit more space. And that bought us, you know, a couple months until we had found like a big new office where everybody could live peacefully together.
Andrew: But do you deal with stress? Do you have a way of dealing with stress? Do you ever have stress that’s almost overpowering to the point where you can’t get work done?
Robert: Yeah, personally, I have to like shut other things out. I have to like . . . like I have to go and leave the office, for example. And think about things like take a walk, for example, just to, like, concentrate on what’s important. I also very much write things down. I have like a notebook at all times, and I write down what I think the next steps are. And it helps me to structure problems and to come up with like a plan how to deal with them.
Andrew: What’s an example of something that you have to get out of your head, so that you don’t obsess on the stress, and you sit and you write down?
Robert: Yeah, for example, if I feel like we need to develop some new feature or something which really would push the company forward, then it really helps me to write down in detail to, like, really take a big chunk of work and break it down into very little parts, even go as far as like assign hours to things and think about who could work on them and so on. But just as an exercise on paper.
Andrew: And you personally will do that. You will sit down with a notebook and say, we need to add what? Give me an example of something that you’d work through like that.
Robert: Well, a while ago, we added . . . or maybe the first time we had an AdWords like the AdWords feature, then I would need to go and sit down and work out what are all the requirements for this feature? What do customers really want? What is their problem that they’re trying to solve? And then I would work out a few different scenarios like this customer wants this, that customer wants that, and write down these things and come up with a solution that hopefully helps all of them.
Andrew: And you’d explicitly say, “Here’s the problem, and here’s how what this customer told us they want. Here’s what that customer told us they want.”
Robert: Yeah, yeah, we still work like this. We very much interview customers, and mostly my cofounder, Stefan, does these things now. He’s does product management. So he works very much with interviewing people, writing down what the requirements are, and then coming up with a plan of how to tackle them.
Andrew: What do you do now that you’ve got customers who are all over the place? You have some customers who have huge stores with thousands and thousands of products, and some customers who have smaller stores with dozens of stuff on Shopify. And they each are asking you for different things? How do you know what to prioritize when they’re so diverse?
Robert: We gather all of the requirements. So we have a . . . we work very much with GitHub, and we just have issues for everything that comes in. And then we keep track of how many people ask for what. So we just look at what are the most asked features. So we basically have a list of feature requests ordered by how many people asked for them. And then we work with that. We also look, of course, what fits to our product. So we cannot build everything. So we have to be selective.
Andrew: It’s just you. And so, how do you take that all in? So one of the things that we do at Mixergy is we’ve got this course, a section where we bring on entrepreneurs who I’ve interviewed before, other entrepreneurs who I haven’t yet, to talk, to teach concepts that help our audience. And what I’m finding now is that my audience isn’t as narrow as it was before, and we’re hearing issues from them. But I’m hearing it in conversation that might be one-on-one, or an email that comes in or in a text message. Andrea is hearing about in customer service. Dan is hearing about it from people who he’s talking to. There’s no unified place, how are you keeping track of where it all comes in and making sure that people are recording the needs that come in.
Robert: We asked this of everybody who works here, like, whenever they get any feature requests from customers, we have a separate repo for feature requests, and we asked them to just add a new issue, write down exactly what it is. And we don’t promise that we’ll have a look at it, but we want to have a written record of everything that comes in, especially if you hear things multiple times that we know oh, this is actually much asked for.
Andrew: And it’s just part of the discipline of the company. If customer service is hearing something, they’ve got to go into GitHub and just write something down.
Robert: Yeah, exactly. Yeah, yeah. It’s the support team is on GitHub the whole day, they write things down when they hear something, sales as well. So we just trained the whole company to do this.
Andrew: You sit and write it down. And then at some point, you guys start to recognize patterns. Start to see that many things are being asked of you.
Robert: Yeah. Exactly.
Andrew: And then what’s your process for figuring out which of those things to do beyond number of requests, because number of requests could mean that a lot of people who have small stores are asking for it? But maybe . . .
Robert: Yeah, exactly. We, of course, also take into account how big the customers are. So we see if there, if often there are patterns. So often, we have like a lot of agencies asking for the same things, because they’re all in the same market. So if we try to see these patterns. So if you see all of these agencies want this new AdWords feature like, you know, Google, just released some new features, some new ad thing you can do, then everybody wants it. And we’re like, “Okay, we need to add this because all of these big customers of ours actually need this.”
Andrew: All right, let me close it out with this. One of the things that you were doing early on in your life when you knew entrepreneurship was right for you, but you didn’t even know what entrepreneurship was. You just kind of knew that there was a family friend who was an entrepreneur, you admired him, you wanted to do it, you just didn’t know exactly. You started out reading a lot of articles and books. Is there one that you draw on mentally? Is there one that you’re especially happy or helped? Happy that you read or helped by?
Robert: Yeah, I think the book about entrepreneurship that I like the most is “Founders at Work” by Jessica Livingston.
Andrew: Yeah.
Robert: That really resonated with me because it’s just like the raw stories from the beginning, like, from the trenches. And it’s, you know, it shows you that entrepreneurship is not so glamorous, and it’s very much about like solving problems all day long. And most of the time it feels like you’re like in the slog, but sometimes in between, you’re like, get to a peak and have like a nice view, but it’s far in between.
Andrew: Yeah, that’s one of my favorites, too. There’s a story that I keep drawing on Evan Williams, I think it’s sitting in a server room right next to his servers, trying to keep those servers going at a time when BlogSpot was barely making it. It was basically him trying to keep even the hardware going. And it reminds me, yeah, he eventually sold out to Google for a really nice exit, but for a long time it was just hellacious. And it reminds me, you know what? Sometimes you have to go through the hell of it. Being in the hell of it doesn’t mean that the whole thing is failing, it just sometimes means that you got to go through it to get to the other side, and the other side could be bigger. What’s the story that resonates with you?
Robert: [inaudible 00:49:14]
Andrew: Is there one that you remember from that book from “Founders at Work?”
Robert: Oh, yeah, I have a similar story about like Paul Buchheit to build Gmail, and then all of Gmail would go down because one of their hard drives failed. And he was really obsessed with like fixing it, because I think they had never lost data. And he wanted, like, you know, to keep the track record going. So he had to, like, go in and rescue the data from that hard disk, which he managed in the end. But I thought that was like real dedication to, like, don’t lose his customer data.
Andrew: All right. The website is it’s a great book. I’m glad you reminded me of it. Jessica Livingston wrote it. She’s the cofounder of Y Combinator. The website for anyone who wants to go check out your business is Channable. You basically are aiming for ecommerce store, ecommerce businesses, right?
Robert: Yeah, that’s right.
Andrew: They have all these products, they want to put it on different platforms. And then you also do like if inventory runs out because you sold on Amazon, do you remove it from Google Shopping? Do you do that?
Robert: Yeah, yeah, exactly. We update stock as well. And then we connect orders back from ecommerce stores to their web shop system so that they know that they just had a sale on Amazon, for example.
Andrew: Yeah, it feels like it makes tons of sense for anyone who’s got a serious online store. It absolutely is a beautiful product. I’m glad to hear about how you built it up. It’s Channable, channable.com, if you want to check them out, or go see it in the app store, whatever shopping platform you’re using right now. I want to thank the two sponsors who made this interview happen. Really, when you’re done with this interview, go fire up brain.fm/mixergy. Tell me how it works for you. If it doesn’t work for you. Great. I want to know about it. If it does, I want to know about that, too. I’m not looking to get sponsors on here, because any one of them is going to make me rich.
And frankly, I don’t see like brain.fm is not going to be like this long-term sponsor. I just want to bring on products that I care about and that my audience cares about. So tell me if you do care about it, or if I’m just like on a high with them. It’s brain.fm/mixergy. And, you know, if you’re looking to hire developers, you’ve got to check out toptal.com/mixergy. We have hired from them so many times.
And finally, you know what I should do, Robert? I should tell people about one of our latest courses. I heard. I’m here in San Francisco. I freaking hate being in San Francisco. But fine, I’m here. I’m here for my wife. I’m here.
But one of the nice things about it is I was out with a couple of people who were funded by Y Combinator just playing poker this guy’s house and they told me about this guy, Julian, about this company Bell Curve that’s now like that Y Combinator is talking to that their startups are learning from about how to do marketing right. I said introduced me to them. And so I had one of the founders of Bell Curve on Mixergy for an interview, Julian. And then I said, “Hey, you guys are good at this. Why are you just teaching it to Y Combinator? Can you work with Dan our course producer and teach guitar audience?” And he said, “Yeah, let’s do yeah, let’s do it. Let’s make it happen.”
So, Asher King Abramson, one of the cofounders of Bell Curve said, we’ll teach your people come on. Well, let’s make it work. He spent a lot of time with Dan our course creator doing it. And it’s now available at mixergy.com/courses if you want to go check it out as part of Mixergy Premium. Robert, I’m really proud of the work we’re doing. I’m excited about the work you’re doing too. You’ve got to be . . . isn’t it great to be proud of what you’re putting out there?
Robert: I’m very proud of what you’ve built and the whole team. It’s amazing what we’ve achieved in the last five years.
Andrew: Yeah, like, I feel like you finally got your groove on. Am I right about that? Or am I going to talk to you in five years and you’ll say, Andrew, at the time, to be honest, I was just in personal agony. I hated life.
Robert: Oh, no, no, we have been a very structured. Like, I feel like we’ve finally got the whole company together. You know, we finally build not just a product, but a business because it’s really a difference. Like building a business means, you know, building teams hiring the right people, having good structure, good communication, all of these things. I feel like this are coming together now.
Andrew: Yeah, I see that. I feel like you’ve got your mojo on. All right. Congratulations. Thank you, guys, for listening. And if you’re building a great company, come back and tell me about it. I’d love to have you on here on Mixergy. Thanks, Robert. Bye, everyone.
Robert: Thanks.
