Coming up, well, I got my notes right here and one of the things that I think you’ll want to pay attention for is the conversation about how all those times that you might have been rejected while dating actually made you a better entrepreneur, a better business person. Perhaps towards the end of this interview I think is a valuable part of this interview. Also, why would today’s guest give up a business that was generating over $100,000 in sales. I mean, we’re talking about a start up with that kind of sales and gives up that business? Stick around for that portion of the interview. It just might make you think differently about your business and your focus.
Finally, actually the only other thing I want to talk about is there’s an interruption that happened in the middle of this interview and I’m curious about what your feedback is. I’m not going to say anymore about it. But in the comments or privately via email me and let me know what you think about it. So, that odd quirk about this interview and so much else coming up. Stay tuned.
Three messages before we get started. First do you need a single phone number that comes with multiple extensions so anyone who works at your company can be reached no matter where they are? Go to grasshopper.com. It’s the virtual phone system that entrepreneurs love.
Next, does anyone you know need a beautiful online store that actually increases sales but is easy to set up and manage? Send them to shopify.com. The platform that top online stores are running on right now.
Finally, do you need a lawyer who actually understands the start up world that you and I live in? Go to walkercorporatelaw.com. I’ve known Scott Edward Walker for years so, tell him you’re a friend of mine and he’ll take good care of you. Here’s the program.
Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How does a trip to Japan spark an idea for a business that lead to a mobile app with over 3 million downloads? Andres Blank is the co-founder of Pixable which let users search, browse, edit and access all the photos that are connected to them all in one location that is easy to scroll through, easy to bliss out on and easy to, just, as I experienced earlier today in preparation of this interview, easy to just spend hours on. Andres, welcome.
Andres: Thank you. It’s great to be here.
Andrew: Actually, the only reason I didn’t spend hours is because I had this interview coming up. But, as you and I were talking and setting up, I just kept hitting scroll, scroll, scroll and looking at all the photos. The layout is basically on my giant screen, it’s like five images wide, by infinite pretty much images tall right up on the screen. It’s all my photos from Facebook. I can add my Instagram feed, my Tweeter feed and so on into it.
Andres: That’s it.
Andrew: You experienced two of your heroes using your app, right?
Andres: I did.
Andrew: Which two and where did you see them use it?
The first one was actually Mark Zuckerberg and after the first week that we released, that I think we got really good [??] and we started on the right foot. I think it was right after we first started, it was said that we reached 100 thousand downloads in the first week. We got a message from one of the people that works in analytics tell me. Actually, what is very interesting is that our database is organized by Facebook IDs. We just got on top of our list the smallest Facebook ID I’ve ever seen and it’s number 4 and it’s Mark Zuckerberg. I was like Oh my God and just like it was really exciting just to see Zuck. We have tremendous respect for him and like, we were one of the first companies to introduce Facebook Connect.
We started thinking about this in 2008. Google is already a pretty descent sized company. It was really exciting to see and not everybody was so sure about it. People were like, well, Myspace went through that, but we really believe that how Facebook was building their company and how they were very smart about saying that the biggest value of Facebook in the future is going to be outside of Facebook. We have great respect for Mark and when we saw that ID pop up, it was a small celebration for us. It was just like, well, people are taking notice and that was incredibly fun.
Andrew: And the other was Mark Cuban. How does Mark Cuban use your app?
Andres: Well, that was funny because our investor is actually friends with him on Facebook. So actually when somebody joins the service people get notified and he forwarded us a screen image saying, ‘Hey, this is a legitimate guy whose not using the service.’ And we’re like oh my god. So it’s really exciting because when you’re looking at analytics it’s almost like kind of raw data and you’re like well we’re getting two users or three users per second using the service. It just doesn’t…like it kind of dehumanizes the whole thing. You’re just like wow, three users are coming in every second to use the app.
If you try to think about what that really means, like trying to get three persons come into a room every second and then you’re like wow that means a lot. So even though having those two Marks trying the site is exciting. What really gave us perspective of real people using the site and of course when it’s like people who are very well known it’s more exciting but it was kind of made us realize people are actually using it. It’s real people and it’s just exciting. It’s just exciting to see that.
Andrew: It really is; especially when it’s people who really know software. So much of life you don’t know who is reacting to your stuff online, who is reading your blog posts, who is watching me right now. But when you get it, it’s so validating. Especially when you’ve had the ups and downs that you had which we’ll go through in this interview. I want to go really in chronological order but just to give people a taste of one of the setbacks that you had on your wedding day. Right? You had a setback.
Andrew: Happiest day of your life it’s supposed to be. You’re introducing your wife to your new life together and what was the setback?
Andres: Yeah, sure, so this was a year and a half ago and we were going through our second round of financing. We’ve been actually very lucky the way that we’ve been able to raise money. It’s been like it’s always hard and tedious and you have to go through a lot of meetings but we’ve been lucky enough that we’ve been able to find a good match with investment partners very quickly. One of the early cases in which it’s a great lesson learned for me because, and this is something I recommend to all entrepreneurs is that sometimes when you think that you already have a certain yes, you really don’t. I really had organized and me and my co- founder we have organized all the fundraising process to happen a little before the wedding. Which was fine – it actually was perfect timing for us to do it because you always want to raise money when you don’t really need it but that you know that it’s certain that you’re going to need it soon.
That was kind of what happened to us. We made our rounds. We met a few investors and we started getting them really interested and it kind of seemed like it was a slam dunk a week before the wedding. We were like pretty much pretty sure that we were going to close the round. And then pretty much I fly to Miami which is where the wedding was and my whole family and her whole family. I started getting emails from the investors just asking some odd questions.
Then I started realizing after a few phone conversations…and maybe, of course, they didn’t know it was my wedding or anything, but I started realizing pretty quickly that the interest was fading. The problem about fundraising is that it really, like you have to be pessimistic about estimating how much time it’s going to take. It’s not only that it’s also a matter of…it’s almost like when you’re in school and you have a subject, when you finish it and you pass it it’s out of your mind but if you haven’t passed it it’s still there. That was kind of like a very important thought that was creeping up my head pretty much the day before of the wedding. I was like wow this is really going to fall through.
We pretty much had to kind of hustle and just figure out a game plan of how to either revive the interest of these investors or try to ping other investors that…
Andrew: Because you guys were at the time running out of money?
Andres: Yeah, pretty much. Yeah.
Andrew: And on your wedding day you knew you weren’t getting the funding, right?
Andres: Yeah, pretty much.
Andrew: All right. We’re going to come back later on and find out what happened to this funding – did you get it, did you not get it, and how did you deal with the fact that you guys were running out of money just as you are about to walk down the aisle. But let’s go back and understand how you got here and where you went and how you built up this business. In fact, why don’t we start with the company that you ran before.
Andrew: You’re from Venezuela?
Andrew: Okay. And you were running a company there first?
Andres: Yes. Yes.
Andrew: What was the business?
Andres: Yeah, so I think that’s something really interesting about Venezuela fairly different from running a company in the U. S. is that there are a lot of basic services that if you actually try to put a lot of energy and thought and try to get yourself in the shoes of other customers you can actually do a really good job out there. When I was really young I was trying to invent new stuff and trying to create new necessities that didn’t exist back in Caracas. I was trying to sell something new and it was kind of accidental what happened to me. I was in my last year of university. I was telling my dad I really want to start a company. Like I’ve already started a few companies before that nothing that been really big but it was great experiences and that’s really what I loved. He told me look I invested in a tree plantation a few years ago why don’t you go and check it out. I went to the plantation and I just kind of stumbled into this whole idea of selling lumber. It was very accidental.
I thought it was going to be like a two month project helping my dad figure out what was going on in the plantation, how to commercialize that. When we realized that there was not much value we could take out of that plantation I was already knee deep into the whole lumber business and I was actually really enjoying it a lot. It had a lot to do about just filling the whole and filling gaps. There were a lot of people who needed lumber in very different shape or forms and I was pretty much just trying to find from the source because in Latin America’s there’s just a lot of resources and just trying to get it to the right person. The more I advanced in the business the more I realized that the added value comes by actually finishing the lumber and taking it to the final stages.
So, we went from just doing raw lumber to what you call the like these raw planks that are pretty wide and we started converting them into hardware floors. Then we converted them into decks and then we finally even converted them into furniture. So, we were assembling teak furniture and old furniture and hardware floors so-
Andrew: You’re telling me that the guy behind this mobile app that I’ve got on my iPhone right here and this website that I’m looking at in the background as we’re talking started out with a lumber business?
Andres: Well, you’d be surprised of how running businesses from in different aspects is fairly similar.
Andrew: They are? What’s similar? I’ve got a couple of ideas of what’s different but what’s similar?
Andres: Yeah, so definitely like the similarities is you always, first, you always have to be the one who’s pushing. You have to be the one who is steering the boat wherever it’s going. Nobody else is going to be as responsible is going to care as much as you do. That doesn’t matter what type of business you’re running that’s always going to be the case. The second case is that it’s always about people. It doesn’t really matter if they’re highly educated or they’re not it’s all about reading into people if they actually want to work hard and if they care.
Andrew: And you had that issue in actually both companies.
Andrew: And is the company in Venezuela called, am I pronouncing it right, Lumber Tech or Lumber Teak?
Andres: Lumber Teak. It was actually because we were trying to export wood, teak, so and that’s why we called it in an English name instead of a Spanish name.
Andrew: So, you were trying to motivate these people in Venezuela and you offered them a bonus and their response was?
Andres: Yeah, I was trying to individually incentivize people but it was actually not really the way that it works anymore. (?) understand that like you really have to empathetic of what people want and people need.
Andrew: You mean it’s not just a blanket give them more money they’ll be more motivated type of process.
Andres: Yeah and I think it some cases it is I just think in this particular case it wasn’t.
Andrew: So, what was there reaction when you said hey I want to give you- You walked over to a person and you said I’d like to give you a bonus and you were thinking to yourself this is going to be a reward and motivation and what was his response?
Andres: The initial reaction was positive but when they realized it was a bonus for a hand group of people and then not for everybody then it wasn’t. That was really interesting for me because they even knew that some people were working harder and some people were more responsible. They even knew who were the leaders and who wasn’t but then these guys who were kind of self appointed leaders felt the responsibility of they had to distribute the bonus to the other ones.
Andrew: So, even if they felt I earned this. That other guy over there earned it. Andres really picked the right people to get this bonus they still would say yeah but that guy’s wife is sick and he needs it more than I do, why isn’t the company giving him a bonus, also? Is that right?
Andres: Yes, yes.
Andrew: That was it and do you think that’s because of the culture in Venezuela or is it just because well, actually, why do you think it is?
Andres: Yeah I think it’s particularly a little bit about the culture in Venezuela where communities are very close nit and you can see that in places especially when you’re not in big cities, which definitely you’re not when you’re working in (?), you’re in very remote areas that are not really urbanized and people work really strong as a community to get water flowing to get electricity going if a house needs to be built everybody’s helping. There’s a lot of big community mentality around it which is beautiful in many ways and it’s kind of unproductive in other ways but it’s just the reality of the area. It’s something that made me realize about how to incentivize people and how to get them excited and the most important thing is just to say what excites me or what makes me happy or the pat on the back that I would like the most. It’s not going to be necessarily for them the same and I should have known that because we just came from very different backgrounds and that was really important to understand.
Andrew: Why did you decide… Well, did you close a company down?
Andres: I did. Well, actually it closed down after I left. My younger brother was actually took charge of it but the reason why I left there was two things. That was the other thing that I think was really important about starting a business is that the most important thing after being knowledgeable about you have to be the one driving it and you have to find really good people is that you have to be doing something that you really, really love because that’s really what keeps you going. That’s what gives you a slightly different perspective than everybody else. It’s kind of like the way that love your girlfriend or your baby. Nobody else is going to love them less you do because you just see it in a very different way and you see what’s so special about it.
That was kind of what was happening to me in (?) I actually loved the business. I thought about there was some lack of creativity that frustrated me a little bit but the opportunity was so big that it was really exciting and it was a little bit about frustrations of external things that had to do with me. It was more about the occurring security situation in Venezuela. There was a lot of kidnappings. In particularly my brother and two cousins of mine.
Andrew: Your brother was kidnapped?
Andres: Yes, it was something that lasted a little over a day. So, it wasn’t like these long-term kidnapping.
Andrew: How does he get kidnapped? I got to get back to Pixable but what happens? How did your brother get kidnapped?
Andres: Pretty much he was in the street playing with his friends. It’s something that you probably shouldn’t be doing but…
Andrew: Playing in the streets is something you shouldn’t be doing?
Andres: Yeah, he was like skateboarding in a residential area with some friends. He’s old, I think he was like 19 at the time, so it wasn’t like…
Andrew: OK. So, someone comes and picks him up in a car?
Andres: Yeah, a few people picked…
Andrew: What did they do? They surround him, hold a gun and then they take him?
Andres: Yeah, they just put him in a car and they start just driving around and then they call for ransom and then you pay. At the end of the day…
Andrew: (?) pay to get your brother back?
Andres: Yes, but at the end of the day, it’s kind of sad, but you already you kind of know what’s the drill. Of course, you are extremely frightened when it’s happening, but you kind of know what’s the drill.
Andrew: What is the drill? How much do you pay? Can you say it or is it going to get you in trouble?
Andres: No, it won’t get me into trouble. I think it was something like it was like four kids and I think it was something like $150,000. Something like that.
Andrew: Four kids?
Andres: Yes, for four kids.
Andrew: It was like your brother and three of his friends.
Andrew: Wow, that’s a lot of money.
Andres: Yeah, it is.
Andrew: I got to tell you by the way I interviewed… One of the reasons why I don’t have a lot of entrepreneurs from Latin America on, I should because the time zone is similar because there’s a tech community down there is because of crime. Because of kidnapping and other related issues. I had this one entrepreneur from South America on he told me this great story of how he bootstrapped this company. A lot of profit told me details of it, he was a Mixergy fan, he loved doing the interview and the end I asked him this question. I said, aren’t you afraid of kidnapping, because I know when I met people when I lived in Argentina that that was an issue. That was why they wouldn’t let me do interviews with them. He said, well, I am but I want to tell my story. I want to add it on to this site to Mixergy. We hung up a few minutes later he called me up frightened. He said I talked to my wife she’s just really concerned about this. This is going to endanger me. It’s going to endanger my kids. I understood completely. At the time I was willing to remove interviews. Today I think even though I don’t remove interviews for that reason when I hear his voice and I understand the environment I’d have to. So, this is a real issue.
Andres: Yeah. It’s fairly uncomfortable. You know like I’m really to have learned what I’ve learned from my experience. It just gives you a complete different perspective and it makes you enjoy a lot what you do here, because I really feel that my success from my failure is internal. It’s not external. Nobody is really going to dictate if I do well or not, it’s myself. And it’s the people that I work with, and that’s awesome.
Andrew: Why, by doing what?
Andres: But the other thing that’s really cool is that when there are externalities that can really harm your business, you learn how to deal with that and you learn how to be in various tough spots, how to deal with stressful moments, and I think that that has given me a lot of energy and courage to start companies here.
When I was doing my MBA, I had so many really, really smart friends. I was like, “Wow, these guys, they’re going to do amazing things [??]. They’re going to do so well.” And it was really hard for me to understand how hard it is for a lot of people to have the courage and to deal with so much adversity. And definitely, starting companies in Latin America gives you a much better grasp about that. So one of the primary reasons was security. I wasn’t able to go to the sources anymore because you have to go and pay with cash. If you had a lot of cash in your pocket and going to these really remote areas, people start knowing who you are. So I kind of had a middle person there and it wasn’t the same.
Then nationalization of a lot of industries. In general, not being able to import the equipment that you wanted, not being able to export lumber. There were a lot of externalities and I was very young. I was 24 at the time and I was like, honestly, life is too short and I just want to do something in which I can be more creative, and I was very lucky enough to get accepted to a great MBA program.
Andres: Yeah. And I think that it was a great thing for me to just understand, very well, the system and just meet amazing people. I met my cofounder there. So it was a great starting point.
Andrew: Let’s move on to Pixable. As I mentioned at the top of the interview, the idea came when you went on a trip to Japan.
Andrew: There was a frustration that led to this. What was a frustrating incident that made you realize this site needs to exist?
Andres: Yeah. So we were in Japan with our MBA friends, and it was actually 120 people from our school who went to that trip. And it was incredibly fun. You can imagine the number of photos that were being taken. And there were 20 organizers; it was really well organized. And then, at the end of the trip, they were trying to create this huge photo book of all the trip.
And I was talking to my friend who was one of the organizers, and he was telling me how frustrating the experience was. He was like, look, I’ve been trying to get photos from these 60 people and they’re all like, “Oh, I posted them on Facebook. They’re in Flickr. They’re in my [??] gallery wall. Here’s a pen drive. I was sending you by email.” And it was ridiculous. The only photos I can use are my own. Using my friends’ photos is impossible. And that was really interesting.
And we started thinking more and more about that problem, and we actually helped them collect up all the photos just to alleviate that frustration. And this was happening… We were hearing this frustration at the same time that we went to this conference called, EmTech in MIT. And they were announcing Facebook on there, and they were saying that you could use the API to extract photos from your friends. And we started looking at the numbers, and the number of photos that were being uploaded on Facebook was enormous compared to anything else. And we’re talking about 2008, OK?
Andres: In 2008, I think there were 750 million photos being uploaded every month on Facebook. Nowadays, it’s 750 million photos are uploaded every two days on Facebook. So we’re talking about a 30-fold growth in four years. Even back then that number was enormous. Today, I just can’t even explain how big that number is. I remember that Mark said that… and this was in 2010… that Facebook had more photos than all of his competitors combined, multiplied by six, at that point.
So we were very interested in Facebook photos. We were like, well, this is very interesting and we thought that there was a very clear path to monetization, and that’s why we went for creating photo books based on your photos.
Andrew: Creating photo books. Printable books that, I see, you and I both go to Japan together. We upload our photos to Facebook because that’s what we do.
Andrew: Your site that you were imagining would allow us to see each other’s photos and then print them out in these books, so that we can actually flip through them and so on. That was the business.
Andrew: And the model was, you were going to earn money by charging me for this book, obviously.
Andres: Right, like Shutterflys and Kodak galleries, it’s not [?]. The only difference is that we were making it social. It was very interesting, because we thought we were opening it to a whole new market. Because I had a lot of friends that didn’t print any photo books, because they didn’t take any photos. I was, like, oh wow. Now I’m going to enable this guy who has never printed a photo book, because he never takes photos, to print it. And then I said, well, we’re enabling the whole gifting thing, right? Like, let’s say it’s your birthday, and we’re Facebook friends. I can actually create a photo book for you. We’re expanding an existing market. And not only that. The most frustrating part. We saw the abandonment rate of the Snapfish and Kodak galleries of the world was, like 60% when you were creating a photo book, because it took hours. And we realized that the most time it took was actually selecting the photos and uploading them. And people have already done that [?]. Like, if I upload 20 photos to Facebook, I’ve already gone through a filtering process, and I already uploaded them.
Andrew: I see.
Andres: We were, like, wow. We can cut the time in a very short span. And at the same time, we’re expanding the market towards people that would have never printed a photo book. And people who would have printed photo books are now going to be able to compliment them with their friend’s photos. And they’re going to be able to gift them, as friends. We were, like, wow, this is a big opportunity, and we’re really excited about that.
Andrew: All right. So the first thing you did was, you sat down and you wire framed it, right?
Andrew: You and your co-founder?
Andres: It was me and two co-founders.
Andrew: OK. You said you were going to do a photo book. Did you immediately know, hey, photo books mean people are only going to come when they need to give a gift, or when they have something special to print. So we need a reason for them to come back every day? Or did that realization happen later on?
Andres: That realization happened much later on.
Andrew: Much later on? So then, after wire framing, it was time to actually build it.
Andrew: How long did you think it would take you to build it? And how did it actually take you to build it?
Andres: We thought it was going to be, like, four months. And it ended up being more like 10.
Andrew: 10 months to build.
Andres: Yeah. Maybe a little bit more than 10. We thought we were going to release by our graduation date, which was June. And that was actually a perfect storm. Because people were graduating. So, like, taking photos of everybody graduating together. Going to all the campuses in Cambridge and Boston to get them to start printing books. We were having this campaign for free. We even printed the coupons. We were, like, the site is not ready for this at all, which was very frustrating, but you learn. It was completely our fault.
Andrew: Why did it take so much longer than you expected? When you say it was our fault, what do you mean?
Andres: It was because we did not focus where we were adding our value. We just focused on competing head on with all the big players at that point.
Andrew: Give me an example of a few things [?].
Andres: Yeah, definitely. This is something I’m going to explain in more detail, how we got to where business is now. But it was something like, we knew that our added value was in the social layer that I just mentioned.
Andrew: That already existed on Facebook that you were bringing into your site.
Andres: That was what made us different. That was why people were going to stop using the existing sites, and use us.
Andres: But what we ended up doing was that, we went through this whole photo selector. We built this photo selector, which was something incredibly [??]. But at the same time, we built an incredibly [?] album creator. We released the second best album creator in the market. There was only 1 other company that had a better album creator than we did for our first release.
Andrew: What do you mean? What makes it such a good album creator?
Andres: It was all based in Flash, which, nowadays, would be rendered as obsolete. But it was perfect. You could drag and drop photos into any position of the page. You can enlarge it. You can rotate the photos to any angle that you wanted. You can do all these filters. You can put text on top of them. Just creating that is really tough. And the whole rendering process of taking that from a Flash base to a JPEG to be able to print it, it was a mess. It was really hard. Nobody was doing Flash based back then. Only, there was one competitor who was called Mix Book. They had Best Album Creator. And we were seeking a lot of our inspiration from them. We were, like, we have to be as good as them. That was a huge mistake, because that wasn’t our value.
Andrew: In retrospect, you would have made the book look like what? What features would you have enabled, and what would…
Andres: I would have done very standard books. I wouldn’t have allowed people to move anything around. It would have been very still templates. Maybe not even add in text. It was more about saying, hey, people are enjoying selecting the photos from their friends. We were actually, [?] people were selecting [?] photos [?]. The whole album creation process, and the integration with the printing was what killed us with our timing, and we didn’t think it was wrong. It’s really easy to fall into that trap. It happens all the time.
Andrew: All the time.
Andres: Yeah. You even see Twitter, nowadays, which is probably one of the simplest products around, as incredibly successful, and they’re stilling trying to simplify, right? It’s really interesting.
Andrew: So, I can understand. You add all these different features. Maybe it even makes it more – it certainly takes you more time to launch. But it also maybe is overkill for the user because they get confused and they spend too much time with the paradox of choice thinking, “Well do I change the angle 91% or 89%, because it’s got to be right. I have this feature. I need to use it right.” All right, so that’s one big mistake. Give me another thing that you added that maybe if you would have been, not maybe, but if you would have been more focused, you would have left out of version one.
Andres: Well, it’s a good question. I think that it was mostly that, right? I think that that’s…
Andrew: It was the album? That’s what was obsessing you?
Andres: Yeah. It was a really big deal. I feel like there were a lot of little small features that we did from day one. Like, “I want to see all the photos where me and this guy, and this other girl are tagged together,” which is something that Facebook didn’t do. But I think actually, that was a great idea, and I think that that was the type of things that we should’ve been exploring further, much more than the whole album creation process.
In fact, we should’ve almost bought software that did the album creation process. Even if it was the crappiest thing, if you were giving people photos that they’ve never had, that’s huge. That’s a big (?), and that’s what we should’ve really experimented with very strongly since the beginning.
Andrew: What about this? You told Jeremy, our producer, the first version looked too good and too polished.
Andres: Yeah, definitely. It has a lot to do with what I was telling you. The album creator was the second best album creator in the market for a company that was a few months old.
Andrew: Tell me about the design of it. Where did you get that, and what made it too polished?
Andres: Well, none of us were designers to begin with. We were able to find a great designer.
Andres: But we did question a lot of our flows and we’d change it a few times to make it very intuitive. We’d change it without even actually testing it. It was more about benchmarking. We were like, “Wow. Look at this site, what they’re doing. We should definitely go that direction.” So, we’d change direction a few times, and honestly nobody could really know what was the right position…
Andrew: Because you weren’t saying, “Hey, users, try to print this out,” and then either watching what they were doing or talking to them about their feedback. You were just saying, “Hey, you know what? I just walked into school today, and I saw someone using this other website and it looks so much better than ours. We need to pivot towards that.”
Andrew: It was that? Okay.
Andres: That was it.
Andrew: All right. But you eventually launched, maybe about five, six months after you planned to.
Andrew: Then you thought, “This is perfect. People are going to naturally come. We have social, we have beauty, we have this new functionality that was addressing a problem that we certainly had,” and the world yawned. Why? Why didn’t they beat a path to your door?
Andres: Well, I think it was many things. First of all, it’s not a highly consumer product, (?). It’s not like these sensations that come overnight, at which you can just try it for free. It was something you had to pay for initially. The second thing is that nothing, at least when you’re a first- time entrepreneur and you don’t really know the market that well, it’s not really easy to get it in front of so many people at the same time. The third thing was that we actually didn’t know what was our value proposition at this point.
Andrew: All right, so you launched. People weren’t excited. You’re saying that it was hard to get people to basically come and try out a new product.
Andrew: What else went wrong?
Andres: It definitely was. I actually thought at the beginning that if you build it, they will come. They will understand all the effort that you went through, and they’re going to understand your value proposition from day one, and that was not the case at all. All right? People, in fact, are completely overwhelmed with the number of websites that look fairly similar. Because we were also being inspired by similar websites, it made it even harder for them to see what was the value proposition, right?
Andrew: Oh, because you were benchmarking such great sites?
Andres: Yeah. Of course, right?
Andrew: People who knew those sites said, “Well, I don’t see the difference. I might as well stick with the site that I know.”
Andres: Yeah. As I said, to really enjoy the product you had to pay for it, right? So, it wasn’t like we were able to test it with thousands of consumers from day one. But we had a fair amount of people trying it out, and it made us understand what was happening on the site.
Andrew: What did you learn after they tried it that you didn’t know before?
Andres: Yeah. We learned a lot. The problem was that we started with something so complex that everybody’s behavior in the site was completely different, and you don’t want that. You almost want people to say yellow or green. So you’re, like, okay. 35% of the people are saying yellow, 65% of the people are saying green. Great. Here, you could pick hundreds of backgrounds. They could move the photos so many ways. You can select photos from Flickr. So it was very hard to interpret the data. To really understand what the hell is going on.
Andrew: I see. That’s another danger of giving people too many options.
Andrew: Maybe you confuse them. You certainly take too long to build it. But now, after it’s built, it’s tough to analyze. Because you’ve given them so many options that you end up getting too many kinds of feedback.
Andrew: Too much variability.
Andres: [?] realize is that we’re trying to do something very quick and dirty for album creation process. And the people that are used to doing albums actually want to spend a lot of time making it. Because they’re, like, I’m going to spend money, it’s a little work of art. I really want to spend my time in moving things around. Saving it, coming back, saving it. When we were testing the product, I was creating 25 albums a day [??] testing the product. When you do that, you don’t really have the real behavior of the consumer. The whole saving, processing, going back to it was incredibly messy. Photos were disappearing. We were spending hours using the product. Then they came back, and they weren’t there. Most of these people that were using it at the beginning were our friends. So they were hating us. They didn’t want to help us anymore. I spent countless nights.
We were outsourcing our development to India. And they were while we were sleeping. We were taking turns spending endless nights explaining to them. Because it was really hard to actually explain what the issues were. They were so unique. And the worst part is that if you get a customer to pay, which is actually something that’s great. I definitely think it’s something great to explore. A lot of people think about the YouTubes and Facebooks and the Instagrams on the world. In which, it’s a free service, and they are highly successful, and it’s true. But most of the service, you will pay. Even in those services, you want them to pay. But you have a big obligation to [??], right? So every case, you had to pay attention in a serious way. Then in getting all that feedback, and saying what to do next was really challenging. Because there were two things that’s we’re very clear about. If you go into the whole product creation business, and we’ve talked to a lot of people who came from these companies.
You have to build a lot of products. You can’t only have photo books. Because, maybe you were going to do three photo books a year. If you’re a very, you can do a lot of them. But then, if they’re already using your site often, you should get them to create a calendar. You should get them to create a poster. You should get them to create greeting cards. We had to build tons of products, and that was our pipeline. It was pretty clear. So, how in the hell were we going to do that without much money? Without having to maintain a product that we already released? So it was really hard, and we actually did it. We actually released calendars 4 months after we released photo books. Then we released posters. It was crazy. That was definitely a great learning experience about product development. I learned so much about building products. I learned a lot about simplification.
Andrew: This was all still the Indian programmers who were developing it for you while you slept?
Andres: Yes. And in parallel, we were realizing that we started, that we needed to have an office. And we wanted to have an office in New York, of course. But we just didn’t have the resources back then. By that time, we’d only raised, like, 50 or 60,000 dollars.
Andrew: What city were you living in ?
Andres: We were living in New York. We graduated in Boston in June, and we moved to New York. It was more of a personal decision for us. [??] in New York. It think it was actually a great choice for us. New York has grown so much in the last few years. I remembered it feeling like a very small community back then. Now I feel it’s huge. I feel that every time I go to these New York tech meet-ups, or these other meet-ups, it’s, like, oh my God, this is overwhelming. It was great, I think it was great that we’ve grown with the community.
Andrew: In retrospect, should you have enabled calendars and postcards, and posters, and everything else that you did?
Andres: Probably not, but you know something? It accelerated our learnings to where we got. So we were, like, OK. We have to build calendars. We knew that our second product we wanted to build was calendars. And the biggest reason was because, all these products I’m talking to you about are extremely seasonal. Greeting cards are at Christmas. Photo books are on Valentine’s Day, maybe for an anniversary. And calendars are at the beginning of a year. So we just looked at a calendar and we said, ‘We have to build calendars. We’re in September, we have time to release this in September.’ But what’s great about our calendars and what really excited us to do that, is that we were doing smart things with the social graphics, even though we didn’t even realize. We said, ‘You know what we can do with calendars? We can actually look at all your Facebook friends, grab their birthdays, and put them in the calendar grid.’ So you can actually have an incredible birthday calendar in your wall, telling you everyday whose birthday it is.
Andrew: That’s a great idea.
Andres: Yeah, that was really cool. We wrote on everybody’s profile. So let’s say in March, I had 65 friends that had a birthday in March, so we’re putting 65 profile photos in the top of the calendar. That was really what we were doing. That was really the value that we were adding. We didn’t realize that. We wanted to sell products and it made sense. Selling products is always good.
Andrew: Do you sell products now, by the way? I’m on your site and I don’t see that I can buy anything. No?
Andres: So I’m happy to talk a little bit about how we reached where we were.
Andrew: Let me ask one other question about promotion in the early days. You had something called an ambassador program.
Andrew: What was it and how did that go?
Andres: One of the big things that we wanted to do was to have a very low customer (?) cost. We thought that one of the ways we could have it, was because our job was going to be lower. Right? And the reason, because people were spending, instead of a four hours creating a photo book, or spending 15 minutes. If we can have a drop rate instead of 60%, have 15%, that’s a much lower cost and requisition cost, right? It’s almost four times less. So what we were really trying to find was are there creative ways in which we can acquire usage. We really thought that this was going to be a product for younger people. Facebook back then was used heavily more for younger (?). Nowadays it’s not. Where back then, it was very university focused.
In fact, Facebook stopped being exclusive to universities in the end of 2006. It was still very university-oriented so it made sense to create this ambassador program in which people can create these photo books. One of the big things that we knew we were doing is that we developed a photo book that was really low end. It wasn’t one of these books that have a very strong cover, or something like that. We were doing books that were much simpler. It was like a beautiful catalog, but it didn’t have a hard cover or anything. We were like, “We can create these books that are pretty informal that cost us like $4 or $5 to produce, and we can sell them for like $10 or $12.” A product like that, people in a university can afford and they can give it to friends. One of the big things we were thinking about photo book, also, was that people usually do photo books for these very big events, like weddings and births.
Andrew: Congratulations. What made you think of the ambassador program?
Andres: Kind of like that. We thought that our books were going to have less formality than normal photo books that were being created.
Andrew: So how did the ambassador program work and what happened to it?
Andres: Yeah. Well, pretty much the whole idea was to get people from universities to have an opportunity to work in a startup. That was the big thing. We were going to get them to evangelize the product. The whole idea was that we would give students a coupon to create their first album for free. They would have to also create books from their friends just to get them to realize how cool this product was. Pretty much for every free book that they got a friend to print, they would actually get paid. We were doing the math and it made perfect sense because we were talking about a customer requisition, between almost $15 by paying ads and doing all things like that.
With the ambassador program, we were talking about a customer requisition cost of about $8. We’re giving away a book for free so it was like $5 in cost, and then we were paying the ambassadors $3 for every book that they got to create. We’re like, ‘This is an extremely creative initiative, right?’ So instead of spending money, which is costing us like $15 a person to print a book and now it’s costing us $8. That made a lot of sense. It’s something that’s really important. You don’t have to deal with it at the beginning, but you really have to at the end, create a (?). And an ambassador program, I’d scale. I’ve seen these schemes scale pretty heavily but it was something that you would almost have to become like your core competency especially at the beginning of your company. Almost our core competency had to be (?) for us to be successful in that.
Andrew: I see because when you’re starting out you can’t do everything. Even if the ambassador program’s really good even if the viral program was really good, even if all these other things are really good you don’t have time to spend time on all of them. You need to find the one thing that’s the best, focus everything on that, grow it out and then later on you can add second best third best and all the way down and this wasn’t the best thing. This wasn’t what you guys were best at.
Andres: No, it wasn’t and it wasn’t as sustainable or scalable as other things that we were doing.
Andrew: What was most effective in the early days and then I’ve got to find out how you transitioned away from printing to what I see on my computer screen right here in front of me.
Andres: Yeah, so you just asked me what is the most effective?
Andres: It was just ads like different ways.
Andrew: Buying ads.
Andres: Buying ads it was like either lead generation. So, that you have like commission junction all these things that kind of like they’re like sites like grab bloggers and they talk about your product and they promote it and they talk about all the features and for every book that is bought there’s a cost per action. So, it’s really cool because instead of buying a cost per click in Google AdWords, which we also do, you are just paying directly for a cost per action which meant somebody actually acquiring the product.
Andrew: So, you didn’t pay unless you got a customer?
Andrew: Were you making a profit on it?
Andres: We weren’t making profits in our first sale. Our whole theory, and this is something that’s pretty standard in this industry, if you go to (?) and all these things they probably give the first product away for free because they know that’s all about (?) If you actually enjoy the experience you’re going to come back and- If you’re a type of person who prints these photo books you actually do that constantly. If you’re not (?) you’re not.
Andrew: So, what were you earning and what were you paying?
Andres: We were paying like 10 dollars to get a person all the way to the end of the funnel to actually buy it. We were giving the book away for free. In fact in the end I was…
Andrew: You were giving away the book for free and giving the person who sent that book to you 10 bucks?
Andres: No, no we were paying for ads like let’s say it’s a fifty cent cost per click or you were paying commission junction let’s say seven dollars. The cost per click was fifty cents but of course you go through a whole funnel and our drop rate wasn’t as slow as we expected to be so it went from fifty cents for cost per click to like seven dollars to creating book (?) all the drop offs. On top of that it was five dollars for the product so it’s twelve and usually we didn’t- One of the most important things is that we actually didn’t give it away completely for free. We wanted them to use their credit card. So it was actually maybe it wasn’t five dollars discount it was like three so they had to just pay like one or two dollars to get a product. That was really important because getting somebody to actually use your credit card means that they’re the type of customer who are actually going to pay. Let me come back again versus somebody who you give a complete-
Andrew: Not a free loader. OK. Sorry I just keep spending so much time on every aspect.
Andres: Oh, that’s fine. It’s actually really interesting, and it was really hard for us to just get people just get our product in front of people.
Andrew: Let’s go on to the next area which is the decision to move away from printing which was the reason why you started this company towards displaying, sharing, commenting what we see today. How did you make that transition?
Andres: Yeah. Actually it’s a perfect question because were we’ve been talking the last five minutes is about how to acquire customers. One of the things that we realized very early on is that we were adding value to analyzing your social graph. So, we were doing- We wanted- We were trying to think of ways of more creative ways of how to acquire customers. Right, we didn’t want to pay for Google AdWords. We were like we’re doing such cool things with your social graph that we can actually get people to use our product for free.
So we came out with these really small apps that took us like a few days to build. The first one was called My Photo Stats[SP?]. Pretty much what it did is it told you who are the top three people that you’re tagged with the most in photos. That was it. It was like number on to number two. We got a million users using that app in less than a month, a million. It’s one of these apps that is a one up. Like you use it once, you get your stats, and you leave. You had a button there to get people to create a book. And I fell in love with these little apps that we were doing because I was like people are just all over it. There’s so many interesting data for a social graph that we’re doing. We did something else that was called Photo Book Roulette. Pretty much we just like- You click once, and we grab a person you’re tagged with in a lot of photos and we auto-created a book for you, right?
Andrew: With you and that person who you’re spending the most time with.
Andres: Yes. It’s like, me and Joe. And it was like all of the photos of me and Joe.
Andrew: And then if I want, I could print it and pay for it.
Andres: Yes. And then with Mosaic, the third party we released after Colors was Photo Mosaics, so pretty much do one click again, you’ve got your profile photo, and we created a mosaic of all the profile uploads of all your friends, but you being the main image of that mosaic, right? And it’s called like “You are your friends” or something like that. People love our products. And we were trying always get them from there to click on something to go and create a photo book. That was our big objective. Like, we’re experimenting with these new products all the time and in parallel to that, we were doing a lot of user studies about our main product, which is a photo book calendar, poster creation. And we were seeing something that was incredibly interesting, which was that people were spending much more time looking at photos and were selecting them than doing anything else. And we thought that it was actually an error that we had in our photo select.
When we kept talking to people, they were like, “Dude, like, I’m actually discovering photos that I’ve never seen before.” Uh, and when you’re doing the photo selector and spend a lot of time just looking at them because they’re really cool. And it was funny because the photos were like this size, and we weren’t thinking about creating a photo browsing experience at all.
Andrew: But even though the photos were the size of little thumbnails on the screen, people were enjoying flipping through them.
Andres: Yeah, and they were like, “Wow, that’s really interesting.” So, like, at the beginning, we were like, well, guess what, I came up with this idea saying, let’s just do a photo browser. We’ll do a photo browser, so people can then click and go on Creative Book. The whole idea was let’s do this mini app that people use, so they can come back. And one of the things that we were repeating ourselves a lot was like, we were actually getting repeat customers, this is great. But we need to get people to use our app every day. And, then [?] that’s what we were thinking. So, when we were thinking about this whole photo browsing thing, it was actually a small project that wasn’t getting much love by the rest of the people in the company, but that was where I was really good at. I was actually good at like starting something and coming up with the initial vision. And I was really excited about it.
And pretty much, the whole idea of Photo Browser is that we were going to first look at who are your best friends, like kind of what we did with the photo stats things, like by telling you who are the people you are tagged with the most, we realize that we are telling you who are your best friends. Once we know who are your best friends, we can kind of figure out who are the friends that you want to see.
So, we created this photo browser, and it was very simple at the beginning. And pretty much, we were just allowing people to discover photos. And then we realized that this was a much bigger problem than printing your photos. And the fact was that for us to be extremely competitive in this, we had to invest so much money acquiring customers because all these things that we were doing to acquire customers, like, we weren’t getting the wrong users, we were getting the right users to love using these little apps on Facebook that were the completely wrong users that wanted to create a photo book.
Andrew: I see, so all these apps are just blowing up, but very few people ended up buying.
Andrew: And so you said, “We either have to find a new marketing strategy where we can actually, we don’t spend so much money to acquire a new user and focus on this printing, or we can say, hey, all these people are loving this new way of sharing and seeing photos. Why don’t we just focus on that and then find a new way of monetizing it?”
Andres: That’s exactly right.
Andrew: And the decision was obviously we’re not going to monetize with printing, we’re going to cut that off and we’re going to focus on image browsing and image commenting.
Andres: Well, it was not that easy.
Andrew: It wasn’t, so how did you decide to do that? To cut off your baby?
Andres: So, we were maintaining five products at the same time, and it was horrible. Because it’s also sometimes really important, it’s the motivation of your employees. And people were just giving a lot of value to this photo browser, which only had two months of development on it, versus all the other products that had been out for over a year, right? But you just saw the excitement in the company, and you just saw that this idea was just bigger. And we were looking at the number of photos that was uploaded to Facebook everyday, and we’re like, “My God, this is just such a big problem. We can do photos better than Facebook.” And, why? Not because we’re smarter, because Facebook employees are amazing. It was because that was the only thing that we could do, right? And that was really exciting. And it was kind of like, you know those sweet jobs they work [?] like Mac versus Apple and all of that, it was kind of like that for a bit. It wasn’t very hostile or anything, but it was like we were fighting for resources.
Andrew: Two camps. There was one camp of people who were in the printable business and one camp of people who were in the sharing business.
Andres: Yes, and it’s kind of is also like [??] my co-founders in which I’m like I’m usually the one who kind of starts and does these broad strokes about this big idea, and then my co-founder is more about the execution. So he was very obsessed with the execution of our existing product. I was very obsessed with just growing this concept. It was kind of like two camps. We had, I had two developers he had like 10, but suddenly we just knew it we just saw, like look we just, like we’re not really making much money with what we were doing.
Andrew: How much money were you guys generating?
Andres: I think we generated in our second year, like $150,000 those kind of in our first second year. Most of it was in subsidized because we were doing heavy discounts.
Andrew: I see.
Andres: It wasn’t bad but we saw that our growth was going to be very flat, like a little up hilly.
Andrew: Did you have investors at the time?
Andres: Yes and no. So kind of what happened. That was another thing right, that kind of helped us [??]. We we’re playing with the photo browser it used to be called Awesome Browse, then we called it, Photo Feed. We were playing with that concept for a while and then what happened to us was that when we were pitching our first round of investors and we were talking about this whole photo book thing, and then we touched a little bit on the photo browsing thing we saw their eyes just open up with the whole photo browsing thing. So we realized that for [??] we were selling more [of a dream] more than what we [??].
That’s pretty common when you raise your first big round of finance, like you want to have a product that you’ve already proved you’ve built. OK. So you’re like hey look, I’m not dumb I can build a product that makes sense, but in parallel, this is the dream that we have. Like this is the proof that we can build something for very low amount of money but this is the dream that I’m selling to you right. The dream was the photo browser right, so we have that we saw this excitement of people. We were growing really fast. We could grow very fast with this product compared to Photo Books and we’re, like look what we have we were pretty confident we could get 10 million users in less than four years. We were like, we can get 10 million users and then, if we can monetize .5% of them whatever way were going to figure it out.
We’ll go back to printing so we were kind of maintaining printing and building this whole new thing until it was just so obvious we were like, look photo fee, the browser, and all of that then I got an e-mail from a paint customer saying hey look like this is a disappointment and I’m like oh my God, like what the hell are we doing it was kind of like being bipolar almost, right, and it’s hard, it’s hard to abandon your baby. I think I was comparably better than like other co-founders in that perspective. I was like, I just knew that if we put all of our efforts into this one thing, the whole company. I just knew it was going to blow up. I just knew it.
Andrew: And it did.
Andres: It couldn’t have been done with just me. We just needed all of the energy of the company to [??] that was really important.
Andrew: All right. The next big milestone was creating… By the way did you monetize it, are you monetizing it?
Andre: No, we were not, we’re not…
Andrew: You’re not yet. You’re just still [??].
Andres: [??] fantastic investors that support our mission and that is helped us I’m still not interested in monetizing yet. We have proven our monetization by doing very small campaigns that help us understand how we can understand how much we can monetize per user and understand that users are not dropping off because we’re doing advertising [??].
Andrew: Let’s get into the mobile app?
Andres: Yep, sure.
Andrew: How did you guys get to three million, it’s three million downloads of this mobile app. How did you get that so quickly?
Andres: It wasn’t quickly actually. So this is what happened. It was again kind of this of the same thing we finally got the whole company rallied up and the first thing that we released was a [??] right. And we were kind of killing everything the co-founder was really interested in doing a mobile app and we said, you know something I think it makes sense. Let’s just grab like a whole different new company. Let’s spend, I think it was like $30,000 and let’s come up with our first version. We built the photo consumption Photo Feed in a way in which the back-end could just give information to the front end, depending on whether it was a mobile app.
So, it wasn’t going to be that expensive to do and we released it and it really . . . like, for the first three or four months, I think we had like 10,000 downloads. But, we were looking at our numbers, right, or drop-off rate in the web versus a drop-off rate in the mobile. It was really interesting because we released that mobile product and we stopped working with these developers. So, we weren’t even doing anything to that and we were constantly changing our web app. That’s where all our effort was. We were growing very fast in our web app. Like, we were growing extremely fast. We were having like 5, 10,000 new users a day.
Then we started looking at like corporate analysis and retention, and all that and the mobile app, even though we hadn’t put any effort into it, it was performing like six times better, in terms of retention, six times better. That’s crazy. OK? Like we were having over 50% of our users using the app everyday, in our mobile app. It was only like 10,000 people.
Andrew: Read the percentage again. How many people were joining every day?
Andres: Fifty percent of the users . . .
Andrew: Over 50. I thought you said . . . Wow. 50% are coming in every day. That’s fantastic. So, you realize this is the next big place for us to be.
Andres: Yes. But we were very scared because we’re like, “How the hell do we grow in mobile?” We were growing. We didn’t really understand it. You know how you grow up? You grow by really focusing on it. So, it’s about creating a great app and getting Apple to help you feature it. That was one thing. Focusing a lot on SEO and understanding . . . If you grab your whole company and you put them to think about one problem, you get results.
Andrew: But you don’t focus on just one problem because you’re focusing both on the web and on . . .
Andres: That’s a great point. So, one of the big things we realized was that the web . . . We were getting a lot of downloads from the web. We were getting a lot of downloads in mobile. So, how do we get these people on the web to download the app, at least the people who have an iPhone, right? And that was where we put a lot of our effort and the web app, even nowadays, is a tool to get people to use our mobile [??] app. And, you’re going to see it. You probably used the web app for the first time, right?
Andrew: Here’s what I noticed. When I went onto the phone, to look at your site, it took me a while to realize that this is happening because I guess I wasn’t paying attention to the process. It automatically took me into the App Store and automatically was loading up your app. So, you don’t even want me to go to the web, on my phone.
Andres: No. We don’t. So, we do this in many ways and is actually a part of our secret sauce. It’s like we can get a lot of people to use our mobile app. We know how to create virality. Virality in Facebook is…
Andrew: Give me a couple of ways that you do it.
Andres: Look, it changes all the time because Facebook is changing the rules all the time and people get exhausted by looking at different virality things. So, now the big thing, the flavor of the month, right now, is Open Graph actions. So, like, when you view a category, you get published in the Facebook. Like, if you view a Top of the Day feed, it gets published into Facebook and we’re using Open Graph for that. Before that, we were actually tagging people. So, we’re actually creating a collage of all the photos that you are looking at, like, ‘Oh, these are all the photos that he discovered today. We’re creating a collage or pushing it today.’
Andrew: I see. Pushing it to Facebook and then automatically tagging the names of the people who are in my collage and so they would all see the collage and then click over to Pixable.com?
Andres: Yes. That’s another example of how [??] sucks up your data. Then, a lot of people are using their phone. When they’re looking at Facebook, they look at this collage. They click on it and they go to the App Store. So, it’s about…
Then, email. Email is extremely important to us. We are really good at email. Like, you’re going to start getting now the top best photos of the day, everyday, on your email. That’s something that people enjoy a lot because, if you just want to [smack] a little on your social network without having to go to Facebook all the time, this is a great email because it gives you the top three of the top five best photos of the day, and that’s it.
Andrew: Then it just keeps returning me back to the site to look for more?
Andres: Yes. And what’s great about it is that most of the time you’re checking email, you’re checking out your phone. So, if you click on a photo, you go to the App Store. So, we have become very, very clever about how to cross-promote this and we’ve been extremely focused on that. Sometimes, you get featured by Apple and that gives us an extra push and most of the times we don’t. We don’t count on that being a way for us to grow. And, yes, we understood a little bit . . . Like, we created optimized landing pages on mobile for like if I share a specific photo, how do you look at it? So, that’s really where we put a lot of our effort. So, nowadays, our web presence, because we know that people don’t come back as much as they do on mobile, is a tool to drive traffic to mobile.
Andrew: Got you.
Andrew: All right, I’ve got a note here to come back and talk to you about motivation. We talked about motivating employees in Venezuela. Let’s talk about having some issues here motivating employees at Pixable.
Andres: Yeah. Definitely.
Andrew: Talk about that. What was the problem that you had with that?
Andres: Well, you know, it’s very interesting because it’s completely different, the ways that you motivate people in my old company and in this one. It’s just completely different in some ways. What happened to us at the beginning was that we were putting skills on top of motivation and passion. We were looking at this amazing resumes and that was really the people that we were trying to bring in. And it makes sense, like you have to have extremely smart people. And then when we were interviewing and maybe the people who had the weakest, like had less experience were getting less credibility than the people who had more. The problem is that in some cases the people who are very proven, they’re in a position where they’ve been in many jobs and it’s really maybe hard for them to still be as passionate and motivated.
You know, like when you’re in a start up and you haven’t been successful yet you really have to push hard. If we get a new direction we’re going to change. Sometimes for people who have been in the business for a long time this can seem to be unprofessional. Because you’re like last month I stayed up late four months in a row to do this and now we’re not even going to release this? Like, you have to gather your thoughts. You have to think about what you’re doing better. But then you were seeing there were a few employees who really caught and they got into this because they really loved being here and they loved, it’s not only that they loved the project. They loved working with us as like their bosses, working with their peers and just having an enjoyable time.
What I realized is that the more you make people feel at home, the more you make them feel that this is not really a job, that this is a project that we’re really trying to make it happen. And we’re tackling the big problems and it is really important. The other thing that you know very quickly, and that is something that I’ve learned the hard way, is that you know in the first couple of weeks if somebody’s actually a good match or it isn’t. Of course you get a lot of people who are extremely motivated at the beginning and then they burn out. And then you get the other ones who are very skeptical and then they become very motivated. You have to learn how to play with that. People who are extremely motivated and you feel like they’re burning out, you have to let them kind of rest. You kind of have to let them…
Andrew: What do you do about someone who says I just spent four days working on this. I slaved away. I poured my heart, I poured my passion, I poured my intelligence into it and now you guys are not going to launch it. What do you say to someone like that?
Andres: I just say to them look, we already have an announcer of why this isn’t going to work. We can fool ourselves as we’ve done many other…
Andrew: So why didn’t you think of this before we launched? Why didn’t you guys check this out before you made me do all of this work?
Andres: Because we need the users to test it to really know. Because I can, I’m actually a person who is very passionate when I talk about a feature. It was very easy sometimes for me to convince people about how exciting a feature was going to be, right? And in fact, like most of the features are exciting but people don’t get it or it’s just a very small group of people who want it. We even tested it, we’ve become more disciplined and we tested before releasing. We get people to look at it. You know how it is. You just put it out there and if it doesn’t get the acceptance…
Andrew: You do at least launch it? You do at least test it so then you can tell the person who spent four days…
Andres: We test it. We don’t launch it. We’ll test it in dev[?] and we’ll get a few people who test it but we won’t put it on live. Because going from a dev[?] environment to a live environment is, it’s kind of like the 80/20 rule. You get 80% of the work done in 20% of the time.
Andrew: Sorry, one sec. Excuse me, this is a little unprofessional but…
Andres: It’s all good, no worries.
Andrew: Oh, can you ask him to come here? I’m still recording. I’ve got three interviews that I’m recording today.
Andrew: And my wife saw that I was probably not going to have time to get food and so she did something here. She texted me to let me know. Let’s see what happens. Let’s see who this is.
Andres: That’s awesome. That’s great. Please feel free to eat while…
Andres: Yeah, definitely man. I’ve been in that position before so don’t worry about it.
Andrew: What is this? We’ll find out. I’ll find out. All right, where do you want me to sign?
Andres: It’s right here.
Andrew: Ah, got it. OK, thank you.
Andrew: Yeah, no worries. Enjoy.
Andrew: All right, thanks a lot. Cool. People, it’s a salad. People, by the way, who see that the door is over there wonder what the hell? Who has an office where the door’s on the left side but I’ve had to set this up this way because otherwise the lighting would be off. I am a slave to the lighting.
Andrew: All right, so you’re saying you, at least, test it with some real users and then you can come back to them and say, “Hey, look. The data is saying that this doesn’t work. I’m sorry you spent all this time, but it’s much better to cut it off now.”
Andres: Yes, but sometimes also it’s just that we realize that there’s much more complexity than we thought.
Andres: We’re like, well, we really didn’t think this through. Like even though we’ve become much better at planning, one of the big important things about a startup is that you have to definitely plan, but you shouldn’t definitely over-plan it.
Andres: So, like it’s kind of a fine balance. So, we’re like “We just realized that this is really not going to fit in as we thought,” and it happens.
Andrew: All right, and if someone doesn’t accept it, you let them go?
Andres: Well, like we would never fire them just because they’re upset.
Andrew: What if even after that they still feel a little hurt?
Andres: Yeah, they feel hurt and we really try to relate to that. It’s not like I’m happy about it, either. Like, I want this to work. I didn’t want to spend two weeks going in a wrong direction. I’m the last person who wants that, right? But I know who’s counting the pennies of the company. I know how much it costs us to go through that. I don’t want that, and they can realize, like, “Do you think I want this? Of course not.”
Andres: “But I don’t want you to lose your . . . I don’t want you to waste your time. That’s why I’m stopping this right now.” So, yeah, that’s pretty interesting.
Andrew: All right, final, final thing that I’ve got to come back and follow up with you on is the funding for the wedding. You were at your wedding; you were getting ready to get funding. It didn’t happen, it fell through and here you are running a business where you’re running out of cash. What happened?
Andres: Well, it was very unnerving. We’d be, like . . .it really caught me off guard.
Andres: It made me also try to put a lot of things into perspective, because I was really happy. It was, like, a very emotional day.
Andres: Like, you’re just starting a new life but you also know that a very, like, even though starting up a company and being successful in your company is never going to be the most important thing that you do in your life. It’s not even close, like, to just having [??] and love for your family. It is something extremely important, right? Like, it’s where you spend a lot of your time and it’s something you care about, and you have to choose, right? And it was hard, like I was about to cancel my honeymoon. I was about to . . . I wasn’t going to cancel the wedding because it’s not really, like, you can be married. But it was . . . it was like one of those moments where you’re extremely emotional, right? I mean, you’re just like seeing everything in perspective. And it also, like, it makes you hustle, right? Because I was, like, well, I really have to work really hard, and we got on the phone and we pitched again and we talked about them and we explained all our reasons. And we were very, very sharp and about . . . and we were able to get the funding.
Andrew: So basically, you went back in there and you got funding from the people who turned you down?
Andrew: You did?
Andrew: How did you not, how do you not look like damaged goods? How do you not feel like damaged goods? So basically, how do you convince yourself and them that you’re worth investing in?
Andres: Well, it’s hard, it’s hard. I think that the doubts that they had weren’t the real doubts of the business model, in my opinion. There’s always doubts, but I think that we were able to address them in a correct way.
Andres: Like we always get asked about our dependency on Facebook, right, which is something that’s important. And I agree that there is a dependency. It’s less and less with time because of Mac Help, Instagram, Twitter, and now that we’re trying . . . we’re integrating photos from all different sources, it’s becoming less and less important. But you know there was a moment where we were almost about to just say, “Screw it. We’re going to start this fundraising process again.” I don’t know, I just felt that there was a way, and we just sat down and he said, “Look, like, this opportunity is huge. Facebook is big because of the photos. Facebook is a photo site.”
One of the big doubts that he had also was around the exits that photo companies have had. Remember, that was pre-Instagram and it wasn’t pre, even Flicker didn’t have a big exit. They’re like, “What big photo company had exits on, like, Facebook.” Facebook is a photo company. Facebook is a social photo company, but it’s a photo company. And it was explained to them very clearly about how serious we were.
Andrew: But all this stuff you were doing before the wedding, and they still said no. Then you did something afterwards that addressed not their logical concerns, but you said their more emotional concerns.
Andrew: What did you feel was their real hesitation behind all these logical questions, and how did you respond to it?
Andres: I think that they really love the product, and they really enjoyed meeting us, and they probably didn’t see some of the problems that we could have. Then, they just saw it. I think that they spoke with people with have been in the photo industry before. It wasn’t really specific to me what exactly attracted them, but they kind of came in with a whole new bag of issues. “What do you think about this, what do you think about this, what do you think about this?” It was a phone call that got us off guard and we weren’t really prepared to respond properly to it. They were expecting us to give up after that phone call. But we didn’t; we were really aggressive. We said, “Hey, let’s have a phone call now”.
Andrew: So the answer was, it wasn’t giving up.
Andrew: All right, so then how do you keep from giving up? What do you, on a personal level, do, to keep yourself from feeling so defeated that you actually end up defeating yourself?
Andres: You know something? You just get used to little defeats. You just get used to being told “no” a bunch of times. I don’t know if you have friends that hook up with a lot of girls, but that’s a great example. My friends who hook up with a lot of girls are my friends that also get rejected the most. The friends that hook up with girls less are the ones what try less. That’s what it really is.
Andrew: I see.
Andres: It’s not really about when you are starting a company, you’re always viewed as [??]. You’re always viewed as going against the current, and then maybe, you get funding and people think you’re a genius. Maybe you get bought afterwards, and people think you’re more of a genius. Nothing changed. You are the same person. At the beginning, I used to remember that when I hadn’t started the company, I used to see these people that had been very successful; more of those people who are not really even known. The reason that I am those type of people. The big difference, the big thing is that I’m not afraid of putting myself out there a lot, and failing, and putting a face up.
You know something? We’ve had this dependency on Facebook since we started. Facebook said that they were going to print books, and they sucked at it. Facebook is now going to enhance their photo browsing product, but guess what? It’s going to suck. Facebook has tons of fish to fry. They have to make more and more money every year. We’re a start-up, we’re nimble, we’re just going to be focused on photos, which, by the way, is the most important component of all of Facebook, and we’re just going to do it better. Then our mold product is going to be something out of this world, and I’m not going to give up because the opportunity is there. And you know it, too; you’re just afraid, which we have been many times about this, but this is what we’re going to do. The opportunity is so big.
The number of photos that are being uploaded at that time was 200 million a day. Just think about the number of photos that are being consumed in a day, if 200 million photos are being uploaded. You can probably almost multiply that number by 5 or by 10. Let’s say that two billion photos are viewed a day. That’s a huge opportunity. Truth is, Facebook can’t base their whole business model on that, but we can. And that’s where we’re really going to be hyper focused on it. We have a great team, and we have energy, and if it’s not going to be you who supports us, we’re going to find somebody else, because there’s a lot of people that are really interested. But we picked you to be part of this, and we think you should be part of that.
You know, sometimes that works and sometimes it doesn’t. If it wouldn’t have worked, it would have been a really tough week for me and probably a very tough few months, and you would have to reduce personnel, but that’s the name of the game. You can’t let one person’s opinion drive you either to an extremely positive way or an extremely negative way. That’s something not only for your professional career but for your life in general.
Andrew: That’s a great point. And good point, too, about how the more setbacks you have, the more they just roll over you and you’re able to continue. All right.
Andrew: Well, thank you for doing this interview. I’ve got this big salad here and also this site to just keep scrolling through while we’re talking. You’re right, you have all these different feeds that I could add. While we were talking a moment ago, I added my Twitter feeds, so now I’m going to scroll through the Twitter feeds.
Andres: Twitter is really interesting, because you can’t see Twitter photos in that way.
Andres: That’s really interesting, because you’re going to see Twitter in a completely visual and different way. That’s really cool.
Andrew: All right, well I’m going to click over to it and if guys you want to check out the product, it’s Pixable.com. Andres, I say it with a Latin American accent. Thank you for doing this interview.
Andres: It’s a pleasure. Thank you. Bye.