Andrew: Haystack.com. That’s where you’re going to find the right designer for your next project. If you want to build a website that people are willing to pay for, you need it designed well. You need it to be designed in a way that communicates authority, a way that communicates that you’re going to be around long enough to service what people are paying for. You’re going to need it to feel like home for you too. So how do you do that? You go to Haystack.com, this website. You scroll around. You find the designer that just makes you feel comfortable, that makes you feel like you could work with them. Now, if you want to work with them one-on-one, you don’t have to do it all by phone or all by Skype, though you can. But you can find a person, you can find a designer right in your city and that’s just by clicking over on any city tab right here. You click on the city that you happen to be in. In this case, we’ll click on Miami and you can find designers in Miami if that’s where you are or wherever you are. Go to Haystack.com. Find the next designer for your project. Build it up. Build it profitably so that I can come back and interview you for Mixergy. Haystack.com. Here’s the interview.
Andrew: Hey everyone, it’s Andrew Werner founder of Mixergy.com, home of the ambitious upstart. And Wil Schroter is a friend of mine who’s been telling me about how he brings in revenue with his websites and he’s been telling me about how the mistakes he sees other guys make is that they’re trying to monetize their websites. Not just bring in eyeballs, but bring in revenue. So I said, you know, Wil instead of doing it over coffee or over a drink, lets come on Mixergy and let me ask you questions directly. So let me introduce him. Wil Schroter, here he is. Well, you can say hi.
Interviewee: Hello everyone. Welcome, welcome, welcome to our chat, me and Andrew.
Andrew: Cool and you know what, the reason that I said why don’t you say hi is because I was gonna introduce you as the founder and CEO of a company and then I realized they’re multiple sites, multiple companies. So maybe instead of me introducing you with one title, you can just tell us a little bit about what you’ve been up to.
Interviewee: Yeah so my focus these days I’m CEO of a company called Affordit.com. What we’re doing at Affordit is we’re helping people buy real simple items. So if you want to buy a PlayStation 3 and you don’t have $300, we’ll allow you to buy it for $19 a week. Prior to that I helped found a company called Gotcast.com. It’s the largest site for aspiring talent. We cast for just about every show on television. Then I started a company called Gobignetwork.com and that’s the largest site for entrepreneurs to find financing and capital. Got about 250,000 companies on Gobig and about 20,000 investors. I founded a company called Bizplan.com, which is an online business-planning site, and prior to that I started a few other companies including Swapalease.com, which is the largest auto lease marketplace.
Andrew: And here’s what I see that all of these businesses have in common. They all have revenue baked right into them and a goal of making profits, not just traffic. But is there anything else that they have in common or is it just wherever the money is and the passion is that you go?
Interviewee: Yeah, it’s always real simple. We’re always looking for just a simple pay wall. You know, the difference between what would I pay for and what’s free that we think has value. So in the case of Swapalease.com, we’re helping people get out of their car lease. And so the pay wall was simple. If we can help you get out of your car leas that has some level of value to you and you’d be willing to pay for that. In the case of Gobignetwork, we’re helping you find investors or finance partners and that’s got a tremendous amount of value. So when we know we can create some value to somebody, we know we can charge for it. From there we’re always trying to figure out what the pricing is. But in each case it’s the same thing. Create a lot of value and then put it behind a pay wall.
Andrew: OK, so Swapalease, if I have a lease for my car that I want to get out of, I pay you guys to list my car. Someone else will find it and buy my lease from me and I get to walk away. Gobignetwork.com, if I want an investor for my business, I go to Gobignetwork.com. I have to pay you guys access to the site and once I do, I have access to I think you said 20,000 investors. Right?
Andrew: And that’s basically what we’re talking about here.
Andrew: I thought that pay walls – what you’re doing is you’re creating value and then you’re erecting a pay wall in front of it – I thought that those were gone online. I thought that with information being free, if you erect a pay wall your neighbor, another business, will create the exact same business without the pay wall. Why are you able to maintain your pay walls?
Interviewee: Well, in each of these businesses you gotta figure there’s something proprietary behind the pay wall. Once you’ve built to critical mass, and that’s really what we’re talking about is critical mass, which can be done with a free model and has been done but historically a lot of the free models they wind up not having a lot of value if you put it all for free. So for example, there must have been 10 companies that tried to replicate Swapalease with a free model but at the end of the day, the people that paid to put their car leases up and the people that paid to contact people were the most high value people. Our success rates were just dramatically higher.
Same with Go Big, it’s just not easy to replicate twenty thousand investors or two hundred and fifty thousand startups. Over at GoCast.com where we cast for every major television show, it’s difficult to have those relationships with all the major networks. You either have them or you don’t. A free model doesn’t really solve that problem. So in each case we have something a little bit more proprietary behind the paywall.
Andrew: Okay, Alright. So, the theme now for this interview is how to create great content so that you can errect the paywall, and the way that I understand is by getting real examples. So I’m going to go back to swapalease.com and see how you build that up. What was your original idea for swapalease?
Interviewee: Well, in that case, we’re actually pretty close to what the idea was. because we knew that people were stocking leases. We knew that the average person was about eight thousand dollars underwater in their lease, and there’s just no way out of a lease by just going to the bank and say “I want out of my lease”. But incidentally, every single leasing company has an outclause to allow you to transfer a lease. It is typically used like if I wanted to transfer the lease to a friend like you, and you to assume the lease, then I’d be in no problem. But we built actually a merketplace behind that, so we found tens of thousands of people, that were buyers and sellers that ****** in time for a lease, and so the contracts held up.
With that said though, when we go into the business, when we started, we looked at what do people tend to charge online for a lot of these products, and we figured about twenty dollars. And so the idea of “Hey, this is a classified listing”, twenty dollars for a classified listing makes sense. Except that it didn’t, by all means we set up the site, people came to the site, they paid twenty dollars. But what if they were willing to pay twenty five, or thirty, or a hundred.
What if we had never tested that, what would be the risk to doing that. And so, we sat around the room for a long time and we said “what should the pricing be”. And we all pretty much agreed that maybe it could be more, but we figured maybe we’d get twenty five versus twenty. So we had this idea, and I think this is a lot of what we’re going to talk about today.. We had this idea of trying every possible price points simultaneously, and it’s really just multi variant testing. And this is circa 2002, where multi variant testing wasn’t widely popular. And so when people came to the site, when they came to the pricing page, we tried all the different prices, all at the same time. So, if ten different people came to the site, they’d probably get ten different prices. This is tricky to do because not every service can all different prices to different people, so it’s really what you do in a closed test is best that you can. The way we did it was we didn’t put any pricing anywhere else on the site. It’s nineteen dollars a month right on the homepage, so every single person that has ever come to the site sees that first.
And if you settled on your pricing, by all means do that, but until you have it’s helpfull to put the pricing really at the payment page. By all means let people know that there will be a price and that it’s a pay of serivce, but the actual price itself if you’re going to test, you want to keep it controlled behind the paywall. So that’s what we did, and we tested every price point from twenty dollars to two hundred dollars. We always had different structures which I’ll talk about, about how we actually set up the pricing in different tiers. But to fast-forward to the end of that experiment, we found out that our average customers are willing to pay a hundred dollars to lease their car. I mean, Andrew, if we think trough the mechanics of what happens to a business that could have charged a hundred dollars but only charges twenty, it makes it dramatically different. If you and I opened up a restaurant and we decided to charge three dollars for steaks, I’m sure we’d make a lot of people happy with our three-dollar-steaks, but we’d essentially go out of business. So at some point you have to test the elasticity of your products, in order to know what the viability of your business is.
Andrew: Okay. You said that there are two decisions, that users have to make, the first or do they want to buy in the second is the price page. Can you talk about that, why you have two different pages and not the whole decision on one page?
Interviewee: Yeah, okay. What we wanted to do, this was for our own purposes, we always had our sign up, kind of our get engaged in the process, set up separately than the actual pricing. Because what we were trying to see was on step one, where by we don’t show any pricing whatsoever, we want to see essentially if it were free would you have still signed up. And so you put in your credentials, and then you go to the next page and you look at the price. At that point we can say, look, we know a hundred people were absolutely interested in the product but only ten paid. So therefore the difference in the product, between page one and page two, was simply price. And now we can go back to our customers and talk to them about that.
Andrew: You know and that explains a lot of the website that I see out there where I want to buy something and I’ll hit the I want it button and the first thing I see is maybe a request for my name and my email address and then the next page is where I see the price and how to pay for it.
Interviewee: Absolutely. And the checkout path is critical. You have to isolate your problems. For example, if I put all of my log in credentials as well as my payment credentials on the same page and the customer bounces, you have no idea why the customer bounced. Was it because of price? Was it because they didn’t want the service? But if you separate the two and all of a sudden you see a 100 people again sign up but only 10 people pay, you’ve isolated exactly what the problem is. What that allows you to do is only fix one problem. So if 100 people are signing up and 10 people are paying, well then I know I can start to play around with just the pricing page. The sign up page looks great and maybe I can tweak that a bit but my whole issue at that point is pricing. In every business that we’ve done we’ve always isolated it.
Andrew: OK. And there’s one other thing that you mentioned about pricing that you and I’ve talked about. You won’t show just one price to a user, right? Every user has his own price while your testing but he doesn’t have just one price. Can you give people a little more detail on that?
Interviewee: Yeah well what we realized and this was just through testing, it didn’t occur to us initially, is a one-size-fits-all pricing model isn’t necessarily great for you or the consumer. So what we did with Swapalease, this is early on, is we broke the product up into three price points. So we had kind of your high, medium and low. And generally speaking the way we weighted the offers for each of the price points was the low offer was what’s the least amount somebody’s willing to pay to just user test the service. So it was always just a get your foot in the door kind of price. The middle price was always something extraordinarily better than the basic package, which is the bulk of what your benefit is, and then the top package was we’ll just give you everything. We’ll send one of our employees to your house if that’s what it takes for you to buy this package. It’s always a much larger price but it kind of gives us the sense for there’s a customer that always wants everything that they can possibly have. There’s somebody that always wants the penthouse and so you have to have a penthouse. You have to have that available. It also gives you a sense for what the upper limit of your pricing is. So I’m remembering back but I remember at one point our pricing at Swapalease was somewhere around $50 for the base package, $99 for the middle package, and $250 for the premium package. In the premium package we literally called you and walked you through you’re pricing strategy and everything else like that. In doing that, that’s where we started to realize that the elasticity of our product was much higher than we thought. So in the three price points, aside from giving the customers some options, give you some options to really test stuff that you’d be nervous about otherwise testing.
Andrew: So now that you know that there are some people who are willing to pay over $200, how does that impact the rest of your business? How does it impact the price you give to everyone else?
Interviewee: Well you start to ask why. You get those people on the phone cause there’s typically fewer of them, although I will say across all the businesses that we’ve done in totally different industries, inevitably the price distribution comes out as 25% on the low end, 50% in the middle, and 25% on the high end. It’s almost staggering how consistent those distributions are across different businesses. And I’ve love to talk to more guys like us and find out if they saw the same. But for the most part, when you hit those high price points you start to ask yourself was there something I could have put in the middle package that would have convinced people to pay a little bit more. Right. So I think at some point at Swapalease we were up to $150 in the middle package.
Andrew: I see and the way to up it is to say which of those features that we’re offering only to premium people can we offer the middle tier people to get them to pay a little bit more.
Interviewee: Absolutely and you learn so much about your business. The great thing about that upper tier, aside from you know you get paid a little bit more, is you can throw stuff in there that you probably haven’t built out or automated yet but you’d like to offer. So, for example, the idea of being able to give you, you know, consultation on the pricing of your car. Ultimately, we could have probably built out a database so that you could kind of do it Blue Book style, but I wouldn’t want them to build it out until I knew there were enough people out there that wanted to buy that service. And so it’s really kind of your leading indicator of where customers are willing to pay for more value.
Andrew: OK. One-time fee or monthly fee? How do you … Is there a single right answer and how do you know what that answer is?
Interview: OK, so I would argue that the mistake we made at Swapalease early on is that recurring billing wasn’t quite as popular as it is now and we didn’t do it. In all of our other businesses we do do recurring billing. It’s not foolproof. You know, there’s a fair amount of attrition that comes with recurring billing. You deal with charge backs. You deal with change credit cards. I mean, it’s a tricky business, but at the same time, you start to build some annuity, and you build a reliable revenue stream for your business.
It also allows you to lower the price point. So, if you want to charge $100 for your product, in some cases it’s easier to charge $20 times five months. Again, you run the risk of not collecting the $100, but at the same time, you end up getting more customers at the same effective price point.
Andrew: Well, Swapalease, your goal is to help people get rid of their leases. If, after the end of 30 days, you haven’t gotten rid of their lease, why would they want to sign up again for another 30 days?
Interviewee: Sure. That’s essentially every classified listing out there, whether it’s job listings or Match.com, or anything else like that. The idea is if your service was so valuable, I’d only need it for a day, right? So, any other time kind of…it’s a negative offer, right? And the reality is, we only have so much control over whether or not stuff gets transacted.
The swap lease numbers were staggering as far as how strong the offer was, and how many people actually converted leases, but even still, you may convert, but it may take six months for you to find the right buyer. So the timeliness and the efficacy aren’t necessarily in-sync.
Andrew: OK. All right. So, we talked about the revenue. We talked about how you break up the decision-making process. But all of this is useless unless you give the customer an audience of potential buyers for their leases. Since we’re talking about Swapalease, let’s talk about that. How do you populate a site like that?
Interviewee: That’s a question I get asked most often. It’s the idea of, “How do you make it a great party without somebody having to show up first?” Nobody wants to show up first, but everybody wants to be at a great party. It’s kind of the same mechanics.
An so, when we set up stuff like Swapalease, what we did was, we just went and went to dealers who already had cars that could be a lease, and we started populating them on the site. Now, nobody really wanted those cars, but ultimately, you didn’t want anybody to come to the site, and see that they were going to be a database record number one.
So, you had to do whatever you can manually to be able to populate as much of the site as possible by hand until enough people are willing to do it on an automated basis. People tend to make the mistake of, “Hey, we’re going to launch the site, and because it exists, it’ll just self-populate.”
And they don’t just make this mistake with classifieds, it happens in stuff like forum sites, where people try to build discussion boards, and they say, “Hey, the forms exist, now everyone go populate it yourself.” And it doesn’t work. You have to prime the pump with your own listings.
Andrew: OK, so I can under…clever idea, you want to prime the pump on Swapalease, and so you go out to dealerships that have lots of cars sitting with lots of leases that they’re anxious to get rid of. What about…and I can understand on…well, actually, let me ask you. On GoBigNetwork.com, how did you populate that at first?
Interviewee: Well, that one was actually easier, only because I actually knew who the customers were. They were entrepreneurs and investors, so I went out, and I reached out to about 2,000 of my friends, and then I said, “I want to create a profile for you with the contact information I already have. I’m going to send you an email, and you just have to click an activate button. So, essentially, you have to opt-in, but I’m going to do the work for you.”
In every case, you have to do the work for everyone initially in order to get things moving. But at that point, when the first person showed up at Go BIG and at public launch, there was already a couple thousand people there, and so there was already some activity. So, I think putting an action plan together that allows you to prime activity is critical.
Andrew: So, that’s entrepreneurs who are on the site. The real value what you’re selling on Go BIG Network is access to investors. How did you get them to come onboard? Same thing?
Interviewee: Yes, pretty much the same thing. The investors are always looking for deals, and mind you, the investors we were going after aren’t the typical angels or VCs that you and I tend to think and talk about.
A lot of people we were looking at were people doing commercial mortgages, people who were essentially service providers, people doing commercial finance, so they were helping companies get their first $50,000 line of credit, etc. So, beyond just investors, the world of finance for startups is much, much bigger.
Andrew: OK. Cool. By the way, what offices are you in today? Are you at Mahalo’s offices?
Interviewee: Yes, we’re in Mahalo’s offices today. That was the GotCast CEO that just walked by.
Andrew: [laughs] What’s it like in there? I know that Mahalo lends – not lends – they rent office space to entrepreneurs like you. Does it feel like you’re working with a bunch of entrepreneurs who are all trying to take over the world?
Interviewee: Yes, it’s pretty cool. They’ve got great space out here, and it’s a big open space, and since there’s a fair amount of people…whenever you’re a startup company, you don’t have a lot of people, so you want to tie your boats together with other people, and so, it’s a good vibe, and they treat us pretty well.
Andrew: All right. Cool. So, we talked revenue. We talked about the content that we’re selling. What about getting people over there, the guys who are going to pay? Where do you get them?
Interviewee: You know, we haven’t been successful historically at just relying on organic web traffic. We’ve almost always got a paid model that we kind of supplement, especially initially, where we trying to force traffic through the site in order to get the site moving.
We’ve almost always got a paid model that we kind of supplement, especially initially where we’re trying to you know force traffic through the site in order to get the site moving. Organic is great. I mean obviously it’s free traffic but historically across all the different sites we’ve never seen organic for our offers to be nearly as productive or as transaction friendly as paid traffic. I mean no surprise. When people are typing in certain words into Google and clicking on paid ads, they’re more of a buy mode. We tend to sell premium products. But what we’ve always used paid search as a kind of lead in to growing the site.
Andrew: You know what and that seems like a more dependable way to grow your business. It seems like you can really have control of your life, your destiny when you’re paying for the traffic and not just hoping that there’s going to be search engine optimization that will magically bring people into the door unless Google decides to turn you off one day.
Interviewee: Right. Right, right. OK and so the other thing too that we learned again, this is circa 2002, which was a really early time for performance marketing. It’s commission junction at the time. It’s just getting its legs. Overture is real popular at the time. I mean Google was just getting into that space. But we learned a valuable lesson and I think for a lot of the Mixergy folks probably appreciate this. We learned that we could make money faster than we spent it, which is a negative flow. It’s absolutely invaluable. Simply stated here’s how we did it at Swapalease.
We started with a $1,000 ad budget and the way we looked at it was Google’s gonna charge our American Express card for that $1,000. That bill is gonna be due in roughly 45 days. So we know from the time that we initiated that click to the time that we get billed for the click and the true has to come out of your cash account kind of way, we’ve got 45 days. But the way I looked at it I said, wait a minute. That means that if I send lets call it a 1,000 clicks to my site today and of those clicks I get call it 2,000 people to, oh I’m sorry, $2,000 worth of revenue, that revenue goes into my bank account today. But I don’t have to pay for those clicks for 45 days and even then if we pay our American Express bill with our line of credit, now we’ve got another 30 days. We can create almost a 90-day float from the time that the cash … from the time we incurred the click to the time we actually paid for it. But we can get paid right away. So basically what we did in the first year is we started with I think it was a couple thousand dollars at the time of a cost-per-click revenue or cost-per-click spending rather and we just spent so much time focusing on that landing page and the conversion pages and we said the whole goal is just to make $2 for every $1 we spent and whatever extra money we make, we’ll put back into the marketing budget. And so our marketing budget grew I’d probably say over a year, maybe 18 months, from a couple thousand dollars a month to about $80,000 a month.
Andrew: Just because the market was so young, can you still find deals like that today?
Interviewee: Oh absolutely. You know, we’re doing it with other sites now, you know, with sites like Afford It and Bizplan that are new sites. It’s the same principle, though. The whole concept of if our site converts well and we can collect cash now but really pay for that traffic later, that’s a self-perpetuating model. I’m surprised at how few people talk about it because it’s so incredibly valuable.
Andrew: How do you figure out what kind of site to create? Like now we’re looking back in time and we’re looking at Gobignetwork.com and it seems like an obvious. Business people who want money to fund their business are going to be willing to pay for it. It’s a need that is so painful that they’re absolutely going to be able to take cash out of their pocket, especially a few bucks a month in order to get access to that. How do you find those kinds of markets?
Interviewee: Well I spend a lot of time listening to people to complain. Inevitably, I can tell you a story about that. Every one of these businesses that started with me just listening to somebody complain about something in typically a business I had nothing to do with. You know, an example is Gotcast where in this case the guy that just walked behind me, he and I were having a beer a few years ago and he said hey I’m getting a whole – he was a head of a talent agency – and he said I’m getting a whole bunch of calls from people who … all these casting directors looking for reality stars. We don’t rep reality stars. These are just ordinary people. I don’t know how to find these people. I said well why don’t you just post your castings online, you know. That’s where everybody is. They’re on, at the time, MySpace or YouTube and now Facebook. He said you know no one’s doing that. I said well there you go. Maybe there’s a business in that, you know. Now we cast for every major network. Same with Afford It. My brother called me a year ago and he said to me hey, I want to buy a Nintendo Wii but it’s at the time I think $300 and I don’t have $300. Do you know where I could make monthly payments on it? And I said that’s the dumbest idea I’ve ever heard. And I said why wouldn’t you just pay for it. And he says hey, it’s a cash flow issue. I’ve got the money, I just don’t have the cash flow.
And so I did like every entrepreneur. I just Googled it, said, “Why isn’t someone doing this?” And lo, and behold, no one had done a micro-finance play where you could finance simple items for consumers. And so, every one of those businesses has a story just like that.
Andrew: All right, by the way, we’re sending this out live, and it looks like for some reason, Twitter’s having some issues. If you’re watching us live and want to say, “Hi,” to us, don’t use the Ustream or whatever, other chat rooms there are out there.
Just, on Twitter, use the word, “Mixergy,” say, “Hi,” and like Maxxer [sp] ‘08, I’ll be thanking you live wherever possible.
Andrew: And even though Twitter is having trouble, I still would rather use that, because it’s the easiest to access. OK, so, GotCast — where’s the revenue coming from there?
Interviewee: We make revenue in quite a few places at GotCast, actually. We’ve got a subscription model, so customers can by all means sign up for castings and join castings for free, but if they want to be heavy users of the service, which some do — meaning they want to be in more than one casting at the same time — then they pay a subscription fee. So, that’s our paywall there.
We also do quite a bit of lead gen there, so we do things like, if people are interested in going to a modeling school, or if they’re interested in broadcast journalism, etc., we tie in with universities that will provide that information. We get paid for those referrals.
And then the networks themselves pay us to be able to use…we’ve got a pretty comprehensive and robust platform that we’ve built for managing castings. Huge shows like, “Project Runway,” are now using us to actually put the people on their shows, so if you want to be on “Project Runway,” you actually…go to GotCast, sign up, and you will actually be on the show next season.
Andrew: Wow. All right. The problem you said earlier about a party, how did you solve it here, where people want to be a part of a party, but they don’t want to be the first to show up. How’d you get the first people to register for the site?
Interviewee: Well, the tricky thing there actually wasn’t the talent, because talent’s looking for auditions all the time. The tricky thing there was actually getting the networks to agree to cast with us.
And the way we just put it to them was, “Hey, look, it’s free. We’ll do all the work. You’re looking for these people anyway. Let us post the casting. Let us host it, and we’ll send people your way. If it doesn’t work, it’ll costs you nothing. You’re not guaranteeing spots, etc.”
So, it was really easy for them to try. It was no different from them adding their call on craigslist. So, they posted with us. We got a tremendous amount of support, and they started looking at this, “This is a much better way for us to go.” Now, hundreds of thousands of people are on there.
Andrew: How did you get through to them?
Interviewee: Through to the talent?
Andrew: No, to the shows.
Interviewee: Well, in that case, my partner, Alec, had some connections. He was our agent, essentially, at the time, so he was setting us up with meetings, and then we just picked it up from there and just started to network around town.
As you can appreciate because you live in the same town, Hollywood’s a very nepotistic town, so if you and I had just come from Columbus, Ohio, and started walking around and saying, “We don’t know anybody. We’d like to meet you,” we’d get nowhere.” But if you have an inside track, and you can meet with everybody, it’s a totally different story.
Andrew: Cool. By the way, it looks like at least the video and the audio are going out live properly. Ben Fremmer’s [sp] watching us live and saying, “Hi.” Ben, if I’m missing any questions, you’re the guy who asks the best questions, I think, in the audience. Let me know what I should be asking Wil. K.H. Patell [sp], thank you. Olivia, my new wife…did you know Olivia and I got married?
Interviewee: Of course I knew you got married! I sent you a text message.
Andrew: Oh, that’s right. Thanks! [laughs]
Andrew: I guess we haven’t seen each other since the wedding, but we’ve talked since then.
Interviewee: No, it’s been a while.
Andrew: I miss Los Angeles. I miss being out there with you guys.
Interviewee: We miss you. We’re anxiously awaiting your return.
Andrew: Well, I’ll be back soon, but not too soon. I’m loving it here in Buenos Aires.
Andrew: I got everything I need. Fat Internet connection. I got burritos being delivered directly to my office here. What else do I need?
Andrew: And then at night, Olivia and I get to go out and get to have some great wine and steak for me and some vegetarian option for her.
Interviewee: [laughs] If you…
Andrew: Go ahead.
Interviewee: Oh, good. I just got a note that my car is being delivered as we speak, so I’m going to have to up [?] off in a little while.
Andrew: OK. All right. If you weren’t in this business, or in this collection of businesses, what would you be doing? If somebody…the reason I’m asking is, if someone is listening to us right now and says, “That’s great for Wil. He’s gotten me excited about this whole idea. I want to go out and do something similar. Where do I even get started?” Do you have any ideas that you’re not building right now that they can go and jump on?
Interviewee: You know, I was just [laughs]…it’s funny you should say that. I’ve got a laundry list of ideas that I keep, just kind of as I’m going, as they pop into my head. And I was wondering if it would make sense to actually start to build something like an idea exchange.
Go BIG might be a home for that, but somewhere where really everybody who’s got kind of like a, “Hey, this might be an idea,” kind of idea could post it out there and see if they could find some interested parties. Now, you obviously don’t give it too much detail. We thought about doing it on BizPlan.com., too, the same idea, so you could bring people together. But where I’m seeing that happen now is Startup Weekend, which, incidentally, is next weekend in L.A. That’s where you’ll see forty different entrepreneurs come with ideas, and then build a team real-time, and by Sunday actually have a company.
Andrew: Have you gone to any of those?
Interviewee: Yes, actually I’ve gone to a few, and I’m going to be speaking at the one next weekend in L.A., and they’re awesome. These teams really do come up with 10, 20, 30, different companies in the course of a weekend, and they’re doing exactly that, they’re putting those ideas in motion, which is very cool. If you go to StartupWeekend, I think, dot org, you can see. They’re all over the country. You can see who participates. It’s pretty cool.
Andrew: What kind of advice are you giving entrepreneurs who are coming to watch you live, or who are coming to talk to you one-on-one?
Interviewee: More often than not, everyone’s asking the same question you’re asking me today, “How do I make money?”
Andrew: “How do I bring in revenue?” is what they’re saying.
Interviewee: Yes, absolutely. The idea of scaling is exciting, but we’ve seen way too many companies scale without revenue, and so…
Andrew: So, what do you tell them?
Interviewee: I tell them, “Offer something of value.” And if they say, “Well, hey, nobody will pay for anything,” you have to ask yourself, if you have store that has nothing that people will buy, are you really in business?
Andrew: I see.
Interviewee: [laughs] No, I mean, it sounds goofy, but it’s kind of that simple.
Andrew: All right. You’re actually at Mahalo’s office. Mahalo is a human-powered search engine, and they also have an answer site. What kind of pay wall would you put on their site?
Interviewee: Well, there is value to the answers. Companies like Experts Exchange have proven that. You know, Experts Exchange is a brilliant site, showing that answers does have value.
Now, if they’re generic answers, or if they’re really esoteric answers, sometimes they have less value, but high-value questions that rank well on the search engines, consistently…you know, somebody’s willing to pay for that answer to get it quickly, if it’s got a high value solution.
Experts Exchange works great, because I posted stuff, the most esoteric questions possible, and I get an answer right away, and I’m willing to pay for that response time. And so…
Andrew: You are paying on Experts Exchange.
Interviewee: Yes, absolutely. We use it all the time. It’s a great service. Maholo’s Answers is just a bigger version of that.
Andrew: I’m actually talking to Experts Exchange about having their CEO come on here and do an interview with me. He’s not a guy who does a lot of interviews, but I really hope he says yes to this one.
Interviewee: Oh, I agree. I agree. It would be great to hear him.
Andrew: Oh, cool. Who else should I be interviewing? Who else should I be talking to here on Mixergy?
Interviewee: Oh, boy. There’s just a ton of people to talk to. I assume you’ve already talked to Jason at Mahalo?
Andrew: Yes, a couple of times, I think.
Interviewee: You know, I tell you what. When I heard him speak at Jason Lazarre’s [sp] event, a couple of weeks ago, he was just giving real honest feedback about his kind of experiences.
One of the things that resonated with me, that Jason said was, he said, “For a long time I was poor, and I thought poor. Ergo, my ideas and my execution were on a very small level.” And he said, “One day I just changed my perview, and I just said, ‘I’m just going to start thinking big and acting big.’” And he’s $20 million dollars in VC richer for it.
Listening to him talk — he and I have similar paths, but I really like the approach he’s taking, taking the big approach, which is like what we’re doing with Afforda.
Andrew: How have you done that? Was there a time in your life where you said, “I’m going to start thinking bigger. I’m going to start talking bigger.”
Interviewee: Yes, absolutely. In the summer of 1997, specifically, I remember at the beginning of 1997, this was the time I’m running a web design company called, “Blue Diesel.” It’s just really, really early on in the formative stages of building an interactive agency.
And I remember at the beginning of that year, running around talking to clients, trying to build thousand dollar websites, I mean, just these tiny ridiculous projects. And mind me, I’m about 21 at the time.
In the middle of that year, we had connected with an ad agency who bought into our company, and we started to go on big pitches. And in the summer of 1997, I remember we were doing the pitch of our lives out at a company called, “Eli Lilly.” I remember standing in front of the entire executive team of Lilly pitching with 20 people on our team.
The best pitch I and the team had ever done, and thinking to myself, I’m this same guy I was eight months ago, pitching a $1,000 business, and we’re pitching a $250,000,000 project, right? Same guy, it’s just in a different room. Sometimes, when you figure out that you’re capabilities are just aligned with what you make your opportunities to be, it changes your perspective, and at that point I realized, I was just as capable of pitching multi-million dollar accounts as I was multi-thousand dollar accounts, so I just started doing that.
Andrew: All right. What about Los Angeles? Why did you move to California?
Interviewee: I loved Santa Monica. And frankly, it’s because I got to meet guys like you, I mean, just to put it frankly. When I got there, and I got to meet the folks in Santa Monica — this is a very cool community. It feels like a startup. It feels like the community itself is coming together for the first time, and the energy’s just amazing.
I don’t want to build another San Francisco or Silicone Valley on Santa Monica – I want to build a great Santa Monica, and be known for what we’re known for. So I just felt like I can contribute here. It’s been amazing.
Andrew: All right, I think that’s everything – I know you’ve got to run to get your car. I thought you had a car in Los Angeles – you’ve been driving me around. Not driving around, or we’ve been driven, driving, together.
Interviewee: Yes, Sarah’s going to drive somewhere.
Andrew: I see, so you’ve got another car coming in from Cincinnati?
Interviewee: Oh, Columbus, yeah.
Andrew: Columbus, Ohio, right. Oh, let’s see, dude, I met you at the SCS Columbus event. His great advice was to make big money, you’ve got to build your own websites – absolutely true, right, Ben builds websites for other people, you’re telling Ben Bremmer – build his own sites.
Interviewee: Yeah, oh absolutely, do it for yourself. That was when we finished up with Blue Diesel being an Asian site and we started building companies like Swapalese and Go Big and Got Cast – this is the best decision we’ve ever made. If you have all the tools to build something, build it for yourself.
Andrew: Why would these guys who are building websites for others, are having a hard time moving towards creating their own sites? Why? What are the issues that they’re having? What do you see that they’re not doing right that you did right?
Interviewee: Well, so the first thing is, it won’t work unless you have a way to monitise it, right, so building a free site on the site sounds cool because you’re getting paid elsewhere, but ultimately it’ll never allow you to quit your job – which is really what we’re talking about. If you’re in a position where you can build something that’s even creating a small amount of revenue, it at least gives you a bridge to focus on. But if you’re building something that’s just completely free, you almost have no bridge at that point.
Andrew: I see, all right. It’s very similar to something Jason Freed, my sponsor, in one of my earlier interviews here on Mixerg said, and that’s how they transition towards products.
Andrew: Well, thanks for doing this interview. I’m still going to hit you up for more interviews, for more people who you think I should have here to interview. We’ll do it by email because I know you’ve got to run.
Interviewee: All right
Andrew: Thank you. Stick with me whilst I’ll say goodbye to everyone who’s watching – Thank you all for watching or listening, or however else you’re getting this information – in fact, I want to know how, are you listening? Are you reading these freaking transcripts that I’m paying Mechanical Turk to put together for us? Let me know that, give me any comments, any feedback that you can in the comments on Mixerg and I’ll give you tons of different ways you can connect with Will so you guys can say Hi. All right, thanks.
Interviewee: Thanks Andrew.
Interviewee: Take care, bye.