Andrew: ok, before we get started, does your email provider offer this? Check out the top of dnamail.com, there’s a phone number with 24 hours a day, 7 days a week support. What happens right now if your email goes down, what does it mean to your business, what happens as you wait for somebody to fix the problem? Try dnamail.com, they are the experts when it comes to handling email, they’ll give you a hosted exchange solution AND they’ll have somebody in Los Angeles, ready, standing by the phone in case you have any issues or questions. And, if you need Google apps, they’ll do that for you too. Dnamail.com. Allright, check out also 99 designs, I showed you all the designs that I got when I was a customer of 99 designs. Check out what Troy Simpson sent me, he was listening to me talk about 99 designs, he said “Hey, I used it, and look at all the designs that I got.” Now, if you use 99 designs here’s all you do you go onto the website and you describe the design you need, do you need a logo, do you need a webpage, do you need a template, do you need some other design? You describe it, and then you’ll get showered with designs. You’ll give the designers feedback, you’ll get showered with even more designs. Give them even more feedback, and they’ll really just hone in on what you need. Once you pick that right design, you only pay for the design that you want and you only pay what you agree to pay. There’s no standard fee there. 99 designs will even guarantee that if you don’t like any of the designs, they’ll give you your money back. 99 designs.com, I use them, Troy uses them, many people in my audience and many of the guests on the show have tried them and used them, and loved them, and I hope you do too. 99 designs.com Funny grasshopper, I hope you understand by now that grasshopper is not just a standard phone number, its a virtual phone system which means, if you need a new extension you can set that up for yourself quickly. If you have a new hire, if you have a new department, if you want to just create a fictitious department to give your company the air of size, to make it look big- you just go to grasshopper.com and you can add all of that, its the virtual phone system that entreprenuers love for a reason. Check it out and you’ll see for yourself. Grasshopper.com
Hey, everyone, its Andrew Warner, home of the MIxergy.com, the ambitious upstart, and also home of the bad lighting as AAron and I were talking about. Today I’ve got Aaron Dragushan with me, he is the founder and CEO of Wondermill, and Aaron and I met when I said, I forget what message board probably hacker news, I’m looking for people who’ve had really bad setbacks and want to come to mixergy and talk about those setbacks. He emailed me and said “Andrew, we invested in my company, $150,000 into this web property, it worked ok, it didn’t collapse, but it didn’t really work well enough to justify all that we’ve invested in it, and he said “I’m willing to come on Mixergy and talk about it” Now, bofore i fully introduce you Aaron, i’ll tell you this. I went to your website, and I looked at your story, the Wondermill story is really well told on the website, its interesting and i kept reading it. And then i saw something- a reference to how you guys learned from a company called Mailbidz, how you telephoned for them. I don’t know if you know this, but I knew i recognized your name. I was the guy who founded Mailbidz, me and my kid brother! So
Interviewee:oh, my god, seriously, i read that in your story
Andrew: yeah, so my kid brother and i founded this company, and one of the things we did was a telephone form, and Aaron Dragushan saw the some kid hold up a $5000 cheque that we apid them through an affiliate program, and he said, well we should go through the story and tell it. I mean, you’re not the first person who’s copied what we did, and who i’ve met and i’ve gotten to become good friends with. I’m looking forward to talking about how you stole some of our customers, some of our users away
Interviewee: we did our best
Andrew: and what you did wrong, and what you guys thought we did well and wanted to emulate. So first of all Aaron Dragushan, welcome to mixergy and welcome
interviewee: thank you, i’m really excited to be here
andrew:all right, we’ll go through all of that. Why don’t we first start off by…where do we start? Lets start off by telling your story, and then throughout we’ll talk about how mailbidz fits in and also ask 500 people
interviewee: sure
Andrew: so when did you start your company?
interviewee: we started, i had a company previous, that i started with my best friend, which is…you know, leads to lessons learned, and, you know, we were going to be web designers, and and we we were both generalists, and so we both thought we knew everything. Nobody specialised, and we couldn’t design our way out of a paper bag, and it was terrible, and in the end that company folded, and then i started Wondermill, and I guess…I started some of the properties that eventually became wondermill in 95, and wondermill was officially started in 1998, and we started off….do you remember, you must remember actually like hamsterdance?
Andrew: yes i think we might have done business with them this was a webpage where the hamster just danced, and i remember the song it was like dededede dedede that thing was going through our office all day long
Interviewee: Right. It was, it was, it was huge, huge, huge. Everybody was looking at this thing. Which is you know, in retrospect, now that you think about it, really, you know, crazy, like sad, but. So anyway, hamster dance, it was this, it was this big thing. We started making all these different sites, all these sort of, dance sites. And we had… you know sort of central site. Do you remember rings, like web rings?
Andrew: Yes.
Interviewee: And they would, so you would link to the left and link to the right.
Andrew: Yeah, they were just websites that were all around the same topic would…
Interviewee: Right.
Andrew: …link to each other in a web ring…
Interviewee: Right.
Andrew: …and I guess that’s the way that they were gonna pass traffic back and forth.
Interviewee: Exactly. So, so web rings and we made this site. And we hired an artist, and we were just making, you know, making sites that would… that you would tell to a friend. And…actually, so I’m jumping ahead. That’s actually after we had Super TAF I think. So, but… not it’s not, no I think it was before we had Super TAF. And then, and then, this is kind of where Mail Biz comes in we saw the check, and we, we realized if, if you guys were paying somebody $5,000, then, you know, what must your margins be. They must be, you must be making some good money on this. And… I think you guys paid, .25 a send, is that right?
Andrew: Yeah, every time somebody used…
Interviewee: Right.
Andrew: …our tell-a-friend form, the person who sent that person to the form, got .25.
Interviewee: Right, which, is a tremendous amount of money. Like that was, crazy, and I think that was fueled by a lot of the internet advertising like all the amount of money in the system back then. So that was an amazingly high payout, and… we thought, “Man, we could, you know we’re, we’re pretty technically savvy, we could program something like this.” So we, we coded up something like that and…and launched Super TAF, Super T-A-F, or Tell-A-Friend. And so, we launched that and our, our positioning was kind of like, I mean for your system, you guys, like I would [inaudible] by atleast an order of magnitude. And…our positioning was, you know, for people that wanted a bit of … like a shorter process. Like with yours they went through a few stages. And I wanted a sort of shorter process so that way just like, people, the market would just have a choice, between the two different alternatives. And that was like, that was the start of, you know, of our business and our positioning.
Andrew: Yeah our process I think was, you’d create a hamster dance type webpage, we’d give you a button to put on that page. Your user would say “This is the greatest freakin thing ever. I gotta show this to my mom, my daughter, my friend.” They hit the button, they come over to our website, where they type in their name and email address, their friends name and email addresses, actually just emails addresses, a short note, and then there’d be these check boxes, where they could sign up to our mailing, they could sign up to our sponsors mailing and so on, they’d hit submit. And in the old days, we would just say thank you and send them back to, to the website that sent them over. And, later on we had another landing page afterwards where we’d say, “Hey wait a minute, hey wait…
Interviewee: Right.
Andrew: … a minute user. Do you also want to get a free CD from BMG, or, or, do you want to get six free issues from Time Magazine?” And then we’d get paid from that. And so got paid from those check boxes and because we got paid from those landing pages, we were able to pay .25 per use.
Interviewee: Which is killer. That’s amazing.
Andrew: And so.
Interviewee: Nobody, nobody ever reached…
Andrew: How did you shorten that process?
Interviewee: Well we just, we let the user choose how many pages they wanted. And so people could, they could just go, we had the same, I don’t think we ever got the same level of relationships with advertisers that you did. But, we would have, people could go, through… they could also choose how many, check boxes, would be on the actual form.
Andrew: Yeah.
Interviewee: So it was, totally customizable. We were the ultra customizable, kind of thing. So, you could just have, I think, I don’t think you could have none, cuz we had to make some money. So but you could have as few as you wanted. And then we had an algorithm, that was actually very similar to how Google Ad Words started, in terms, in terms of their initial… I don’t know if it’s still the same. Where basically the, the, the sign up rate, times what you paid us, equaled how often we showed your, you know, your ad, your signup. And therefore, if you wanted to get more signups, you could pay us more, and you would rise up. And so that person that just wanted one signup option on your form, you’d be the one. So you know, your volume went up. So it was kind of, just [inaudible]. Trying to think I mean it’s been a long time. I’m trying to think of anything else…. customizable…
Andrew: And I think you also didn’t have a standard payout, where we paid .25 no matter what.
Interviewee: Oh yeah.
Andrew: You had a variable payout.
Interviewee: No, no, we had, oh my goodness, we had a… [laughing], this is a blast from the past isn’t it?
Andrew: Yeah.
Interviewee: So we, we, we had a standard payout for a long time. It was, you know, .3, I think we managed to get it up to .5. And then the… the industry tanked. And…and…we, we were really going head to head with a company called FocaleX, which I’m sure you know. Seth Lieberman, we’re buddies now. He’s in Boston. So…so we, we were going head to head with them, and, and I think that they declared, in their terms of service.
End of transcription.
Transcription of Mixergy-Wondermill-Aaron-Dragushan- minutes 10 to 15
Interviewee: …they declared in their terms of service that you weren’t allowed to use us and them. The said you can’t use Supertap and us because we… and this is a bit sneaky but they had a monthly cap on how often they would pay so you would pay the 25 cents or whatever they paid I don’t remember right now on the first submission from I guess an IP address or email address I don’t remember how you guys did it. And then after that if they submitted thirty more times that month, you didn’t pay. And we made some code that a webmaster could put on their website so the first time anybody came from that IP address our code would give them the Focalex, sign up, here you go, we’ll put Focalex in there. And then as soon as they did that, now that the webmasters being from Focalex they are not going to get paid from Focalex anymore. And now we have ours in there and we’ll pay you for every single time. So the webmasters optimizing their income because they’re getting all they would be getting plus ours And we’re happy because it let us…. we never could never pay as much as either you or Focalex, we never got there, I think we were more of a technical development company and less of a get on the phone and do sales and call people and stuff. So that enabled us to compete and then eventually they said “Alright that’s it, you can’t run both.” And a bunch of the affiliates said ‘ OK, we’re leaving Supertap’ and a bunch of the affiliates were so pissed off that they did this, they said “Ok, that’s it, fine, we’re leaving you” and they came to us. So I don’t know how I got on that.
Andrew: It’s interesting that there was this whole world around these tell-a-friend pages that the mainstream Internet companies had no clue about. Even the people who were paying us money just didn’t really understand the business they said “ Ok we’re going to pay you per result, we don’t understand the process you’re taking to get us this result, we don’t understand this crazy business but if the results are good we’ll pay for it. So that’s I think is what’s most interesting to me here and I’m wondering how many businesses like that are going on right now where the entrepreneurs are making money, where they might be battling internally but beyond that there’s no noise and we’re all missing those stories.
Interviewee: Yeah, absolutely. I think there are probably a lot of little niches like that out there and you hear about them. You’ve hit on exactly that and people don’t necessarily talk about them because they are happily making little bit money in these niches. So I think there’s probably millions of them.
Andrew: I know, we were bringing in over thirty million dollars a year in revenue. There were guys who were crowing about having the evaluation of six million dollars or raising a million bucks or something and they were thinking they were on the top of the world. They didn’t even know how big the world was!
Interviewee: Right.
Andrew: And Jonathan Liberman who you mentioned from Focalax who also created one of these tell-a-friend businesses, he used to send out these get-out-of jail-free cards to my affiliates. He would go and do a Whois lookup to find out their addresses.
Interviewee: Those guys were aggressive!
Andrew: Very aggressive. But I sat down with him in a party once recently and I told him “ Do you know how much money we are making?” and he threw some numbers and I said would you believe…this is before I said it publicly…on Mixergy would you believe we were doing thirty million dollars from this business and his jaw dropped. He even… the guy who was the most aggressive and in this space didn’t recognize how much money there was in this space. And unfortunately it didn’t last forever, it was quick, it was there but eventually there were two things that happened. Like you said some of the sponsors went away because their businesses…..
Interviewee: I think that was a big part of it, the vacuum just (sucking sound) it felt like the air was just sucked out of the whole system. Yeah absolutely.
Andrew: And to some degree they were replaced by the mainstream advertisers who were looking for a new place to promote their stuff, like BMG. They wouldn’t have touched us in the earlier days of the Internet but then all their magazines that they were advertising in were staring to do poorly for them, they were looking for more aggressive results, they said “ Alright, let’s try the Internet, let’s try a pay-per-lead program. And the other thing is people are now laughing at the whole ‘hamster dance’ and that’s what really hurt us. The ‘hamster dance’ sent all those other related businesses; all those other little sites just, lost peoples interest.
Interviewee: I think the Internet matured and better stuff came out, better content more valuable. Now I’m on all these sites that have actual content, we actually have conversations. It’s less of the “Whoa! Did you see this” I mean you have your viral hits but you go check it out and you go away. The amazing thing is something like ‘hamster dance’, which you look at and get it in about seven seconds, you’re like “ok that’s a bunch of hamsters and they’re dancing and there’s music and it’s catchy. How did that maintain…. How many people in the world must have still never seen it and then they saw it and then they sent it to their friends. Why does that keep going?
Andrew: And you know what, I actually think it’s still going on today.
Andrew: When I talked to Ben [?], it seems like a lot of his business, Ican has Cheeseburger, and Lolcats. That seems very similar to this.
Interviewee: Yes, except that there’s new content. There’s new ones. This is one page. Imagine one Lolcat driving your industry.
Andrew: Right, right. So you took this business. You built it up, you actually sold it. How much revenue did you guys pull out of Super Taf?
Interviewee: In total, ever? Probably, ever, on the order of $2 million. So nothing near you guys.
Andrew: By the way, when you say $.25 was a lot, $.25 was a lot, but I’ll tell you this. Those check boxes, we were selling them for $1.00, $1.50, we had a couple of check boxes…it was very…I’d say at some point we were very easily bringing in $3 per Tell-a-Friend form filled, and paying just a quarter.
Interviewee: That’s amazing, amazing!
Andrew: And we were definitely not into design…
Interviewee: But that payout, that’s the thing. This kid you know, $5,000 on his check.
Andrew: And he was small potatoes. There was a guy who was bringing in $100,000. And I didn’t realize until I read your story that that’s how you discovered us. Because we knew the traffic numbers were killers. We couldn’t let people see how much traffic we made. We couldn’t let them come to our webpage and fully understand the business or else they’d copy us.
So we created several websites to direct traffic. We created a landing page that didn’t exactly explain what the business was. But I didn’t realize there were kids out there who were showing off their checks.
Interviewee: Do you know why? I think they were probably showing off their check…I mean, I think people tend to wanna share stuff like that if they feel good about it. But I think it was a referral program. Did you guys have a program?
Andrew: Yes, yes, yes.
Interviewee: The guy shows a $5,000 check for a program. You know, $5,000 check, why don’t you sign up under me? So that’s what probably drove that.
Andrew: Yeah, that’s true. I think they would get like a quarter. Sorry, if we gave them a quarter, the person who referred them would get $.05 or something, and that would add up. Something like that.
Interviewee: Yeah, absolutely.
Andrew: Yeah, all right, those are good days, those are good days. So when you sold to a company, is it called Notes, LLC, I saw?
Interviewee: That’s right.
Andrew: Who are they?
Interviewee: It was a fellow that I met, and had an ongoing relationship with him. I don’t even know how I met him. And they had a business which was called Response-O-Matic, which is now one of our businesses. He wanted to get into that business, a sort of Tell-a-Friend type business, and I was in something that was… So Response-O-Matic’s original model was similar, still ad driven, but I just liked the process of it a little bit better.
I liked the structure of the business. And I felt like there’d be a way to change from ad driven model to I was gonna say a revenue driven model. But you know, the model we have now, we charge them monthly with their credit card. It’s a whole different ball game in terms of the predictability of your revenue. Internet advertising goes up and down, it’s very stressful. Whereas this, you provide value and it’s very simple.
Andrew: And Response-O-Matic is forms and surveys that people can ad to their website. You need a feedback form, you go to Response-O-Matic. In fact, you guys call it Freedback, right?
Interviewee: Yeah, there’s a similar, there’s two sites and actually the internal code base is the same, they just have two external faces on them because we didn’t see a point. Both of those sites I believe were founded in ’98, so that’s 12 years of Google. I don’t know what the value of that is in terms of SEO, but Google loves it when you’ve been around a long time. There’s no reason I want to close down one of those sites and mess with it. So we just maintain two brands.
Andrew: Okay, before we move on to this… $2 million, you’re not one of these guys and neither am I, who’s in the club where they talk and they hand out millions to each other, and invest millions in each other’s businesses. You had to earn every one of those dollars, 10 cents, 5 cents at a time. So when you finally get to $2 million, do you remember that day? Do you remember what it was like?
Interviewee: Well, I’m talking total revenue over the lifetime of that business I think. I’m not talking $2 million in yearly revenue.
Andrew: Okay.
Interviewee: And I think, just to be clear, I definitely remember moments. One of the interesting things about that business model, and I don’t know if it was the same for you guys, is the cash flow was fantastic…
unknown site.
Interviewee: …and I don’t know if it was the same for you guys, is the cash flow was fantastic because we just simply put in our terms of service that we pay net 45 and we demanded that, we gave preferential treatment to advertisers that paid us in advance. And I remember a big moment for me is looking in the bank and seeing I had 1/3 of a million dollars sitting in the bank.
Andrew: Just cash?
Interviewee: and in retrospect you A. a classics entrepreneur mistake is you think that’s your money, you’re like wow look at that, that is a 1/3 of a million dollars sitting there and then you know you release actually that’s just a float and a lot of that money’s never going to be yours. You’re going to have to pay it out; you know, I remember that moment
Andrew: What did that feel like, how did your life change.
Interviewee: I think that the business has been around long enough, that I think of profits and money in the bank as cushion that allows you to be innovative and so if you have money in the bank you can safely try things and fail, try things and fail, and just try fail fast and you get more shots at it and if you run out of money you have to get a job or go get investors or something. Looking at that money in the bank kind of makes me feel aah we’re solid I can try things I guess.
Andrew: That’s interesting, everybody whenever they hit that cash whatever that is they have a different understanding of what it means for them. For some people its freedom for some people it means creativity for some people it means a good start that they’re on the right track you know. It’s interesting, very telling. Did you trade that business in for response-o-matic?
Interviewee: Yes we essentially had enough trust between us that we just, literally just traded businesses.
Andrew: Wow!
Interview: we just traded businesses, traded logins we helped each other get accustomed, I introduced them to all my customers , we then rebuilt, the service what we acquired really we were acquiring volume if you really look at it. I think it got nearly 10-15 thousand submissions a day which is just , its volume you can work with, one of first things is we didn’t know that industry at all and one of the first things we found is that phishing became rampant and people would sign up with an account because you could create an account, sorry, you didn’t need an account when we first acquired the service literally, literally what we were acquiring was a domain name and a form, a script, the script would process a submission you could just make a form of any kind and if you just aimed it at this script it would just send you an e-mail and you would pass your e-mail into the script and the way it made money it did a lookup and if you sent in $50 it would add your name to a list of whitelisted of email addresses. Unfortunately a lot of the volume, the original volume was phishing like scams and serious scams, ugly stuff.
Andrew: When people would create a form in order to phish for information from and audience of gullible people online.
Interviewee: Right, yeah, phishing just to explain it, is where you know it happens a lot you get an e-mail saying click here look at this funny video about and you click and it looks like a yahoo login and you fill in your yahoo information and the truth is that form would submit it to our servers and then send the information to the bad guy and then you wonder why you can’t log into yahoo anymore. Or in a much worse scenario someone would try to get your bank details or credit card out of you or your bank login. so the first thing we did was rewrite the entire code base so that you would create an account we had tens of 100s or 1000s of forms just pointing at us already and so the interesting thing is we had no way to contact theses people. We didn’t know we had no relationship with them we just had a server there forms were pointing at us. and so what did our script would auto create an account for you and then now then we have an account for you based on your e-mail address we can start tracking things and logging things and start looking for patterns and trying to figure out are you a scammer and then we had, I don’t know what you call it not a heuristic…
Interviewee: … but essentially, you could use this for spam or something your getting points, so if this happens, if this many, you know, things are on the form, or dimensions are this, or if this happens, or if we have to go back and scrape the chat room. We are just looking for all of these different variables and assigning them all point values. And then based on how high up they- how may points a submission got or a user got, we would take various actions, like flag it as possibly abusive, flag it as definitely abusive. And don’t send it to the person. Or, flag it as abusive, you know, and block their log in and shut down the account. And so, the neat thing was, as we improved the system and impoved the system someone would create an account, we can’t stop that. They would do a submission and the account would be shut down. You know, it felt so great, when we got the system he had been wrestling with the problem in a manual way. And he had a person, who did a great job, she did the best that she could-trying to look for patterns and things but you can’t make it across 15,000 submissions a day or whatever, you can’t do that, but it didn’t work. It doesn’t scale. It doesn’t scale. Anyways, that’s what happened. The next thing we did with that site is shift the model away from revenue, I’m sorry, away from ads. Because after Forbes edition, just classic, same kind of business, after a submission something happens just like mailbits. So, with this, it would show an ad, which we can still do but you now can make that go away we give other features and stuff if you want to pay a monthly.
Andrew: So when you bought it where was the revenue coming in? From what?
Interviewee: From Ads. Ads similar to super tabermillbits
Andrew: Check boxes within the form? No?
Interviewee: No, Legent.
Andrew: So, after somebody submits a form you guys do your processing and get that data to the person who created the form. And then you show the user a landing page with an ad.
Interviewee: Exactly.
Andrew: Ok. And so you guys still have that but now you say if you don’t want us to have advertising all you do is you pay a little bit of money and we’ll get rid of it. And that is what gives you a consistent source of revenue today.
Interviewee: Exactly, that’s right.
Andrew: I see. Someone in the audience said, “Hey Andrew this sounds like your sponsor WooFoo.” Why would someone use you instead of WooFoo.
Interviewee: That’s right. They are definitely competitors. I have nothing bad to say about them. I met them at South by Southwest a few years ago and their great guys. I think we position ourselves differently. They are much more powerful and much more customizable, they are probably more scalable. And what we’ve tried to do is be really, really easy to use for someone who is not technical. That’s been our focus. There’s all kinds of things we want to improve upon it, and stuff like that, but that’s been our focus. Reallizing that some of the market is just the admin. assistant in a doctor’s office and the doctor asked her, or him, to set up a form on a website and their not a technical person. They are stumbling though this thing. So how can we make it so they can just go from here, to here, to here and they are not worried about CSS and they are not worried about colors and they are not worried about all of this stuff. And that so far out the differene with WooFoo.
Andrew: And I should say too WooFoo is not a sponsor right now. I am still friends with the guys who created the company…
Interviewee: So there’s an opening!
Andrew: …and I am happy to mention them but I also want to say this is not a sponsor-this isn’t a message because they didn’t pay me for it. It’s just me having conversation here, trying to understand…
Interview: And I think they’re great. We send them customers who, for various reasons, if we can’t handle or we don’t have the technical features they want, we’ll send them to WooFoo.
Andrew: Alright, and what do you charge to get rid of ads?
Interviewee: The lowest is 9 bucks, $9.95 I think a month. Then 20 bucks, then 40 bucks. And then if you go enterprise it’s 99. And our prices are just so inexpensive. It’s pretty funny, when an enterprise customer, who is really enterprise…I mean I don’t like, particularly, doing enterprise level sales. I don’t want to get on the phone. I want to build something beautiful and hope the world notices. That’s what I like to do. As opposed to, and I know who I am and I have come to terms with it…I wish that I was more enthused about getting on the phone sometimes, it’s a fantastic way to do business and, but it is what it is. And at one point Verizon was on the phone, and we’re on the phone, and there are five Verizon people all, you know, in there trying to make decisions and about this and we are on the phone call. We are talking about a $20 a month account! I am only bothering because it’s Verizon and then I can say we have Verizon as a customer. It’s pretty ridiculous when you get to that…And of course they are like “what about the security of the data.” And we’re like we are all locked down and it’s very secure. And they say, “well, are you…
25:00 Minutes
Interviewee: …somebody in the chat room will know. But essentially, you could use us for spam or something. Where you’re giving points. So if this happens, if this many things are in the forum, or if it mentions this, or if this happens, and we would go back and scrape the website.
We’re just looking for all this different variables, assigning them all points values, and then based on how high–how many points a submission got or a user got we would take various actions. Like flag it as possibly abusive or flag it as definitely abusive, and don’t send it to the person. Or flag it as abusive, and block their login and shut down the account.
And so the neat thing was as we improved the system and improved the system– Somebody would create an account. We can’t stop that. They would do a submission and the account would be shut down. It felt so great. We were like,
“When we got the system…he’d been wrestling with this problem in a manual way….” And he had a person who did a great job. She did the best that she could trying to look for patterns in things.
But you can’t–across 15,000 submissions a day or whatever…you can’t do that. It doesn’t work. It doesn’t scale. Anyway…so I’m–so that’s what happened. And then the next thing we did with that site is shift the model away from revenue. Or, sorry…away from [Laughs] ads.
Because after a form submission, just classic. Same kind of business. After a submission something happens. Just like MailBits. So with this, it would show an ad. Which we can still do. But now you can make that go away, or we give all these other features and stuff if you want to pay monthly.
Andrew: So when you bought it where was the revenue coming in? From what?
Interviewee: From ads.
Andrew: From ads where?
Interviewee: [Overlapping Conversation] Just…very similar to [Phonetic] SuperCapper MailBits.
Andrew: [Overlapping Conversation] Oh. Checkboxes within the form? No….
Interviewee: No. Lead Gen.
Andrew: So after somebody submits a form? You guys do your processing and get the data to the person who created the form? And then you show the user a landing page with an ad?
Interviewee: Exactly.
Andrew: Okay. And so you guys still have that, but now you say, “If you don’t want us to have advertising all you do is you pay a little bit of money and we’ll get rid of it.”
Interviewee: [Overlapping Conversation] Right. That’s right.
Andrew: [Overlapping Conversation] And that’s what gives you a consistent source of revenue today.
Interviewee: Exactly. That’s right.
Andrew: I see. And why would people– Somebody in the audience said, “Hey Andrew, this sounds a lot like your sponsor [Sounds Like] Wufu.”
Interviewee: [Overlapping Conversation] Absolutely. Yeah.
Andrew: [Overlapping Conversation] Why would people use you instead of [Sounds Like] Wufu?
Interviewee: That’s right. They’re definitely competitors. Nothing bad to say about them. I met them at South by Southwest a few years ago, and they’re great guys. I think we position ourselves differently. They are–I would say they’re much more powerful. Much more customizable, they’re probably more scalable.
And what we’ve tried to do is be really, really easy to use for somebody who’s not technical. That’s been our focus. And even–there’s all kind of things that we want to improve about it, and stuff like that.
But that’s been our focus is realizing that some of the market is just…the Admin Assistant in a doctor’s office, and the doctor asked her or him to set up a form on a website, and they’re not a technical person, they’re sort of stumbling through this thing. So how can we make it so that they can just go from here, to here, to here and they’re not worried about CSS? They’re not worried about colors, they’re not worried about all this stuff. And so that’s, I guess, the difference between us and [Sounds Like] Wufu.
Andrew: Okay. And I should say too that [Sounds Like] Wufu isn’t a sponsor right now. I’m still friends with the guys [Overlapping Conversation] who created the company, and I’m happy to mention them.
Interviewee: [Overlapping Conversation] Right, right. So there’s an opening!
Andrew: [Overlapping Conversation] But I also want to say this isn’t a sponsored…this isn’t a message…they didn’t pay me for it. It’s just me having a conversation here and trying to understand–
Interviewee: [Overlapping Conversation] Right. Well, I think they’re great. And we’ve sent them customers that for various reasons we can’t handle, or we can’t–we don’t have the technical features that they want. We’ll send them to [Sounds Like] Wufu.
Andrew: All right. And what do you guys charge to get rid of ads?
Interviewee: The lowest is nine bucks. $9.95, I think, a month. Then 20 bucks, then 40 bucks. And then if you go Enterprise it’s $99.00. And our prices are just so inexpensive, and it’s pretty funny. When an Enterprise customer who’s really Enterprise–I mean, I don’t like particularly doing Enterprise level sales. I don’t want to get on the phone. I want to build something beautiful and hope the world notices. That’s what I like to do. As opposed to…and I recognize–
And I view it as: I know who I am. I’ve come to terms with it. I wish that I was more enthused about getting on the phone sometimes. Because I think it’s also a fantastic way to do business. So it is what it is. And at one point Verizon was on the phone. And we’re on the phone, and there are five Verizon people all in their side, trying to make decisions about this.
And we’re on a phone call, and we’re talking about a $20 a month [Laughter] account! And I’m only bothering because it’s Verizon, and then I can say we have Verizon as a customer! But it’s pretty ridiculous when you get to that. And then of course they’re like, “Well, what about the security of the data?” And we’re like, “Well, we’re all locked down, it’s very secure.”
And they said….
30:00 Minutes
interviewee : Your hobby on our system, I dont think you understand what were and even talking about, that point you kind of realise whether not this conversation dies now or it dies in two month, when you finally put me in touch with your IT guys, this is a dead conversation so we need to just, you know move on.
Andrew : Yes, funny how they just dont get it, and how they will have multiple people in a meeting, I love sales but when you get into these multiple people sale processes where are people asking dobe question it really starts to grind on you.
Interviewer : Right!
Interesting, its interesting too that they just wouldnt know well we’ve got an IT department, we just have them create a forum for us.
Andrew: Well Right! I mean its just a web for Right?
Our perfect market is somebody who really does they dont wanna do programming and they dont wanna heir a programmer ,and they dont want to have to come to a programmer and ask them for feature changes, thats your perfect customer.
Andrew: “Finally grasshopper, I hope that by now you understand that grasshopper is not just a standard phone number..”
Interviewee: Sorry, on the page after a submission. So instead of an ad or…
Andrew: Oh, on the main back page, on the response-o-matic page. That landing page you had advertising space, you decided to use it for yourself for your own idea. You asked a question on that page, and one third of the people who saw that question, after filling in a whole other form, one third of them were willing to fill out that question.
Interviewee: Right. And that just blew me away. That was, that made me feel like.. oh my goodness we are really onto something. This is..
Andrew: Yeah, usually you’re fine if you get 5%, 10% is gigantic. A third is huge.
Interviewee: Oh yeah. This is a third, so we thought, “Oh, that’s really interesting.”And the next thing to realize was, I think that worked out to be about 3 answers a minute. Something like that. And that made me think, my goodness, that’s almost real time. That’s, and then I thought, and then the next step for the idea was, what if we could make this visual? And actually make this real time? So the idea was you know, could you watch a survey happen in real time? And I thought that would just be amazing. So we started to, we built up a very simple prototype. And showed people, and people were just, they were blown away. They were amazed and this is where it starts to become a lesson learned. This is where..
Andrew: Okay, let me just make sure that I’m understanding what’s so exciting about this. Because, as I hear this, I understand that it makes sense. What you are going to offer users is the ability to ask a question and not come back tomorrow to get the answer, not wait a week to get the answer, but in real time they get to see others answer that question, they get to see the answers come in, and then they get to see overall what the reaction is?
Which is huge.
Interviewee: Exactly. Exactly, so it’s engaging. It’s just really, really engaging. And an aside is we were a finalist for the, I think it was the first year of the Tech Crunch 50. And it was such a bummer,
Andrew: With this idea.
Interviewee: What’s that?
Andrew: With this idea.
Interviewee: With this idea. And I was on vacation with my family, and I came back to do this thing, Heather Hardey was the CEO, I don’t know if she still is
Andrew: She is.
Interviewee: Right. So I was talking to her, and demo’d her, she loved the idea, and then Mike was sick…
Andrew:”…and then Mike was sick, that first year, he was sick and we just, we missed in the night and it was, we never had the call, and then they had the meeting I think must have happened was is, it was Jason Calacanis, and what I think must have happened is she presented, she was so enthusiastic, she wanted power surveys at the conference, we were talking about all this kind of stuff, and I think what happened is it fell down because it was an idea that had to be singing so i was supposed to show mike,and that would have been two people at the meeting that actually saw it, but you just had one person and I think thats why we didn’t make it. I just want to say for the record, I think we would have made it to Techcrunch 50, and that was such a bummer for us, that was such a bummer. Anyways, I’ve never said that, so that felt good
Interviewee:I think the person, by the way, if you want to get into Techcrunch 50, here’s a secret for the audience; the person to really go after is Tyler Crowley. If Tyler Crowley understands your idea, he has the patience to explain it, he has the patience, if he gets a little bit of push back, to continue explaining it a different way. Everyone else will just, I don’t know, I don’t think they will champion you they same way.
Andrew: Right
Interviewee: Anyway, but you had the CEO of Techcrunch, I can image that you would think at that point, it’s nailed.
Andrew: Well you know I knew they’ve were saying it was a decision of three and so the thing is its engaging, its visual, and so there was a group full of watch, i was in a group full of [watch porters??], and I showed them, we projected up on the wall, and the reaction was amazing, people were jumping up out of their chairs, they were just so excited, they thought this was going to be the biggest hit, and it just pumped me up, it made me so excited, which became very dangerous, and we can go through the story, but, the lesson at end of the story is that people’s excitement may never transfer into dollars, and the mistake that I made over a 150,000 dollars and probably a year and a half of development was just never asking for the sale, and I think this is, for some subsets of [watch porters??], this is a real challenge its got to be beautiful and its got to be perfect, and its never good enough, and so we; even to the point where, boy this is great, and we can put in something for business users, but you know what we know they are going to want demographics, we know they are going to want demographics; lets go get demographics. So you know you spend another six months building demographics and in the end, the sales, we do make some sales on the site, but its really, you know, its not what we hoped. and a lot of the other things are that in the end we realize the target market, we thought it would be for [Watch Porters??], who wanted a quick answer to a question, and that is what we get to some degree, but the problem is when you show somebody the web sight they often go oh my goodness this is amazing, this is so cool,” and then when they go to make a logo, which is kind of our ideal case scenario, they go to make a logo eight months later they don’t remember the sight, they don’t associate the site and we didn’t have sort of an excuse to maintain an 8 months relationship with them so they would have us in their mind.
Interviewee:What do you mean make a logo?
Andrew:Well if you were making a logo for your website our ideal offering that I think is very valuable to people is you can upload 4 different version of the logo like of using 99 designs, or something like that, you can upload 4 different versions, and we will run, you have to pay because you get to the front of the line, and you get more responses and all kinds of stuff but you know we’ll give you results on those four different versions by gender, age, you know, location, education, income, and one more I think, team which is just sort of a fun one. So, that valuable information if you have a site thats selling cigars or selling something thats for a specific demographic it would be great to know, oh, men love this, women under thirty love this, or whatever. I feel like its huge value but entrepreneur don’t remember it, and I understand that, thats fine. What we’ve discovered is that really, rather than us hoping that people will remember us, we’ve discovered that agencies are who we really should be talking to; because when a client goes to an agency, the agency is in a position of authority, the agency is in a position of “We know what you need,” so the client says “blah” and the agency can “Say you need this,” and so thats kind of what we’re working on now.
Interviewee: Okay lets go through this piece by piece; the expenses. Where were they, What did you spend 150,000 on?
Andrew:Mostly people.
Interviewee:Okay, current people that you had, or that you scaled up?
Andrew: No, people that we had. The company would often work on one thing, and then maintain that thing, while going and working on a new thing. We switch our focus to [name of product??, something people?]
I am not sure about two foreign words he was saying.. I am guessing some sort of technical talk or something. Hope it’s not too big of a deal :)
-Tony Gawarecki
<40:00>
Interviewee: … and we just, we just worked full time on it, you know a team of us worked on it full time, so… just it costs money.
Andrew: Jason, yah, 37 Signals said they worked the same way, they’ll leave their product pretty much to stand alone for a while while they go develop something else, or focus on an older product that needs improving, and that’s what you’re doing. So, it’s not $150,000 that you pulled out of your pocket for this new project, it’s just $150,000 in kind of opportunity costs, but it’s still money in a business.
Interviewee: And time, and the opportunity cost of the time, that was the brutal thing, and if I just asked for the sale, you know we could have A two things: if we had just asked for the sale, we would have heard “no” a lot sooner, or we would have started to get it, or we could of course have changed direction, and we could have been aiming at agencies, you know, a year earlier or something.
Andrew: When you say, “ask for the sale,” what do you mean by that? Ask who for the sale?
Interviewee: I mean, have a way that people can give us money with a credit card.
Andrew: Oh, so you just kept improving, improving, and improving…
Interviewee: yah…
Andrew: … The product…
Interviewee: … It was ridiculous…
Andrew: … Without creating a place for people to go and buy the product.
Interviewee: It was … you couldn’t buy anything, we don’t want your money. We just want to build some beautiful thing. It’s ridiculous.
Andrew: I see, and the reason you didn’t do that was because this was going to be your breakthrough mainstream product and so you wanted it to be right.
Interviewee: That’s right, i mean we thought that this would be just sort of, I mean, honestly, the Iraq war was happening around this time as well, and there’s always stuff going on in the Middle East, and there’s always… we, we had this idea that I still think would just be so neat to do, and that was kind of like, when we first launched the site, I think “Mashable” broke it, and then a lot of other blogs picked it up, and we got an amazing response from outside the US, you know, the US was great, but also Japan. We’re on a TV show in Japan, and Japan spikes, and because you can look at the site and you can get it, you can get it, there’s some question there and you vote, and the thing moves! To where you are! And it’s going, “Oh! Look at that, that’s me! That’s my vote!” So it’s engaging and it’s fun and it’s personal, and so whenever a country would kind of get picked up, you know, it would spike, so Japan would kind of discover it, and we’d would have this huge spike, and get a bunch of questions. People’s… I mean, Japan would be different, but Romania was one, where a lot of questions were about whether or not the world knows or cares about Romania: “Do you know where we are?” “Do you know who we are?” “Do you care?” It was really, it was interesting to see people’s revealing like their, their kind of national psyche, of, you know, “Do you know where we are?” And one of the things we thought about, on the site we eventually added flags, so your country, based on your IP address, shows up next to you, and so you, in a sense, are kind of representing your country with your opinions. And so you would have a thread, that says, you know, “Let’s talk about the Middle East.” And it would just be this thread of people, and you’d have Israelis, and Palestinians, and people are all talking with their flags next to their names, and it was just a really neat thing. And we realized, and one of the things, and this was something that I, we didn’t do intentionally, because I realized that if we can’t find money in the regular idea, we’re never going to find it in this. You know, it could get big, but that didn’t matter if we don’t have a way to make money. So, but one of the things that I thought, I thought this idea could scale up to… you know, not be anything near as big as Wikipedia, but in the same kind of like, global, bringing people together kind of way. Like I mean, imagine, what the idea was, is imagine if you could ask a country a question. So you could ask France a question. Like, “Hey, what do you guys thing about this?” You know, “Are you pissed off with your politicians XYZ?” Or, “Are you guys really mad; is it true that you guys are mad when people don’t speak French?” Whatever your question is, about that country, and then, we could lock it down based on IP addresses, so only that country could vote. And then maybe in the comments, you’re having a discussion. And the idea was that you could really be.. that you could have conversations between nations. And the interesting thing is that… you know, the press right now, you can’t talk to the people of another country, without a mediator, right now. You can’t talk to the people of Iraq. Reporters, journalists will go to Iraq, and they will bring out a story, but you can’t ask Iraqis a question.
Andrew: You want to be able to say to Iraqis, “Do you want the U.S. out of your country?”…
Interviewee: … Right, right…
Andrew: … “Do you want the US military out?” And then it only goes to Iraqis who have Internet access, and you get to see their reaction: do they all want us to stay, do they want us to leave? You say to a European country, maybe to all European countries, “Do you believe that… Greece should be bailed out?” And you get to see, ah, people are really pissed, they don’t want this, or, people are excited, and it’s the media that’s making it seem like nobody wants to bail out Greece. I see what you’re saying. I can see…
Interviewee: The people of one nation can talk to the people of another nation, and ask them a question. And, I thought that would just be the neatest thing, but unfortunately, in terms of development, we never got there. You know, because there was no, there was no model. Hang on a sec, my screen locked again, ok, we’re back.
<45:00>
and we just work full-time on it, you know, a team of us working on it full time, so it costs money.
Yeah, Jason Free (?) at 37 signals said they work the same way. They’ll leave their product pretty much to stand alone for awhile while they go and develop something else, or go focus on an older product that needs improving, and that’s you were doing, so it’s not $150,000 that you pulled out of your pocket for this new project, it’s just $150,000 in opportunity cost, but it’s still money in a business ..
and time, opportunity cost for the time, that was the brutal thing. If I just ask for the sale .. two things. If I just ask for the sale, we would’ve heard “no” a lot sooner, or we would’ve started to get it, and we could’ve of course changed direction. We could’ve been aiming at agencies, you know, a year earlier.
And when you say ask for the sale, what do you mean by that? Ask who for the sale?
I mean have a way that people can give us money with a credit card.
Oh so you just kept improving and improving (Yes! It was ridiculous) without a place where people could buy the product.
Yes, you couldn’t buy anything. We don’t want your money, we just want to build some beautiful thing. It’s ridiculous!
I see. And the reason you didn’t do that is because this was going to be your breakthrough mainstream product.
Right. We thought that this would be just .. I mean, honestly, the Iraq war was happening around this time as well, and there’s always stuff going on in the Middle East .. We had this idea that I still think would be so neat to do .. when we first launched the site, I think Mashable broke it and then a bunch of other blogs picked it up, and we got an amazing response from outside the U.S. The U.S. was great, but also Japan, we’re on a tv show in Japan, and our Japan spikes. You can look at the site and you can get it, you can get it! There’s some question there, and you vote, and the thing MOVES TO WHERE YOU ARE! Look at that, that’s me, that’s my vote! So it’s engaging, and it’s fun, and it’s personal, so whenever a country would get picked up, it would spike. So, Japan would discover it, and we’d have this huge spike, and we’d have a bunch of questions. You know, Japan would be different, but Romania was one where a lot of questions were about whether or not the world knows or cares about Romania. Do you know where we are? Do you know who we are? Do you care? It was really interesting to see people revealing their national psyche. One of the things we eventually added on the site: flags. So your country based on your IP address shows up next to you, and so you in a sense are representing your country with your opinions.
So you have a thread that says “let’s talk about the Middle East” and it’s this thread, we’d have Israelis and Palestinians, people are all talking with their flags next to their names. It was a really neat thing, and we realized that .. this was something we didn’t do intentionally, because I realized that if we can’t find money in the regular idea, we weren’t going to find money in this. You know, it could get big, but it didn’t matter, because we didn’t have a way to make money.
I thought this wouldn’t be near as big as Wikipedia, but in the same global together kind of way. Imagine if you could ask a country a question. You could ask France a question, like “Hey, what do you guys think about this?” “Are you pissed off at your politicians XYZ?” or “Is it true you guys are really mad when people don’t speak French?” Whatever your question is about that country, you could lock it down by IP address so only that country could vote, and in the comments you’re having a discussion. The idea was you could have a conversation between nations.
The interesting thing is the press right now .. you can’t talk to the people of another country without a mediator right now. You can’t talk to the people of Iraq. Reporters, journalists, will go to Iraq, and they will bring out a story, but you can’t ask Iraqis a question.
You want to be able to say to the Iraqis: “Do you want the U.S. out of your country? Do you want the military out?”
Right.
And then it only goes to Iraqis who have Internet access, and you see their reactions. Do they all want you to stay, do they want you to leave? You say to a European country, maybe to all European countries, do you believe that Greece should be bailed out, and you get to see people are pissed, they don’t want this, or people are excited, and it’s the media that’s making it seem like nobody wants to bail out Greece. I see what you’re saying.
Exactly. The people of one nation can talk to the people of another nation, and I thought that was the neatest thing, but unfortunately, in terms of development, we never got there. There was no model.
Hang on a sec, my screen locked again.
Interviewee: …locked again. Okay, I’m back.
Andrew: All right. So how about this as a way of learning from the process. If you could do it again and if there’s somebody in the audience right now who has got a company, who wants to start off a little branch of the business based on the new idea, how would you do it differently? How would you advise them to do it differently?
Interviewee: Well, the biggest thing is the one I mentioned, to ask for money much, much sooner. Even if it’s not perfect, even if you’re asking is not perfect, even if you’re throwing a Paypal form up there. Forget that you really want to process credit cards, forget about that. Just find out if there is money, if there is interest, because you can always fix and you can always improve.
And that really was the biggest lesson, was just to find out is there a real business and ask the hard question because honestly, it’s really easy to imagine a business, but not ask that question. You can fool yourself and you want it to be a business, and you know as long as you wait you don’t have to face the fact that it may not work. We all want it to work.
Andrew: I see. So you want to ask for the money so you know if there’s a real business and a real need.
Interviewee: Whether it’s a waste of time or not, yeah.
Andrew: Even if you’re interested and excited, it doesn’t mean there’s a real business and if you’re seeing they’re willing to at least click that Paypal button or take out their credit cards and fill out a form. That’s good.
Someone in the audience is saying who would you ask in this case? Would you create a freemium product where there’d just be a free offering, but if you want something extra you’d have to pay for it?
Interviewee: Well, we have a paid model now. Our original thinking, we tried a few different models, which in retrospect I think are silly, but we had you know, are we gonna have a bunch of users and those users will pay $5 a month, which I think is a dangerous model because free users generally just don’t want to pay. I think you want to aim for businesses that want to pay, so what can you offer businesses.
Freemium can absolutely work in a lot of cases, but we kind of were thinking about free users for scale and visibility, and business users for paying. I think that’s a good model in general…business users pay.
Andrew: Okay, so you should’ve created that pay process at what point?
Interviewee: I believe, while I struggle with it in my soul, I do believe that the concept of shipping or asking for money, or whatever, when you’re still embarrassed or you’re just barely you know, embarrassed is a good one. It’s the perfect thing because you can relate, you’re like oh, this is not good enough. But the problem is just fooling yourself for so long. There’s nothing wrong with getting no money if you ask. You might still try to prove it, but you get a hint. You get a hint much earlier that maybe this might not work.
The problem is it’s like feedback. Money is feedback. Money is feedback from the world.
Andrew: Okay, and when you guys acquired Response-O-Matic, was there a payment process in there at the time? There wasn’t.
Interviewee: Well, you could mail him a check.
Andrew: And then he would take the ads off.
Interviewee: …for $50 a year and he would manually add you to a white list. It was not, I mean, one of the things that I think about is sort of flywheel businesses. A flywheel is a very heavy thing that you turn, and the flywheel goes faster and faster and faster, then if you stop pushing on it, it keeps going. It’s just a momentum concept.
And I like flywheel businesses because you just continue to crank them up and up and up, and if you look at feedback for Response-O-Matic, they are a flywheel business. We maintain them, we tweak things and stuff like that. I mean we took our eye off of that business for a year and a half to build [? 48:54] on our people, and revenue went up $20,000 a year.
I mean think about that. That’s a flywheel business. You’re building something that helps people. They’re paying you by credit cards, and you know…
Andrew: Well, in that case, how soon did you add a credit card process?
Interviewee: We started working on that right away.
Andrew: Right away, I see…before you improved design and the product?
Interviewee: Well, I think it was while. While we were doing the full redesign because there was no real, you couldn’t log in, there was nothing to see. So while we did that whole thing I think we put that in. I mean if you looked at the form submissions you’ll see the value that you provide.
One of the things to think about in business is is there a way to quantify the dollar amount of the value you’re providing to people. So if we look at our submissions, we have realtors who are using us as their contact form for contact me because I’ll help you sell your house. If they sell your house, that’s a $5,000 or $10,000 to them, whatever it’s gonna be, but that order of magnitude.
Andrew:I used it and look at all the designs that I got. Now if you use 99 designs. Heres all you do.
Transcription of Mixergy-Wondermill-Aaron-Dragushan- minutes 50 to 55
Interviewee: …five or ten thousand dollars to them, whatever it’s going to be but that order of magnitude. So that submission is really important and really valuable and it’s really easy to say to somebody “Look you pay me $40 a month, I’ll make sure you get your five or ten submissions a that may turn into $50,000 a month or whatever… $20,000, whatever it is.”
Andrew: Tell me why didn’t you create it from scratch, you had an audience of webmasters who understood what it was to hook up with you and to include one of your forms in their site, Why didn’t you just recreate this business, Responsomatic business, instead of acquiring it?
Interviewee: Oh! The traffic. The thing is anybody can start a business like that like now and there are hundreds of them and really what we have is just so many inbound lengths and just so much Google Juice… we are acquiring that. Like I say there was nothing there, we’re acquiring the fact that a lot of websites pointed at that URL, at that script, that’s really we’re acquiring and from there we added value. I think the original impetus for recoding the whole thing was actually the fishing. Shutting down the fishing was the number one thing and then of course while you are building an account system you might as well add some features and a form creator and stuff, so that’s kind of from where that came from.
Andrew: What are the revenues now on Responsomatic, on that part of the business?
Interviewee: I’m afraid I can’t say.
Andrew: Can you give us a sense of them?
Interviewee: They are in the six figures and not seven figures.
Andrew: And how many people in the company?
Interviewee: There’s me and a full-time designer and lots of part-time folks.
Andrew: I see. A full-time designer?
Interviewee: Yeah.
Andrew: For what?
Interviewee: We also do code and stuff.
Andrew: And you still do code yourself?
Interviewee: No…No..(laughs)
Andrew: How do you spend your day now?
Interviewee: I’ve discovered that optimizing…I’m playing around what to optimize for and I’ve discovered that optimizing for things that are indirect has a big reflection on my business I guess. So in a sense optimizing for how I’m feeling about myself, if I’m feeling confident or if I’m feeling fit. These kind of things has this totally indirect effect on my business. I feel like in a given business day you have maybe three or four hours tops of really focused, serious partivity, on the things that really matter, things that drive revenue or your really creating a real thing, when your writing. For you it would be this podcast itself, if you did this podcast at this level of interaction and focus for ten hours a day, you would be…you couldn’t do it. So really if you think about that window of a few hours I feel that a lot of the rest of the day can actually be optimized your life for those few hours. If you are a creative person, if you are a knowledge worker that’s the scenario I am talking about.
Andrew: Ok.
Interviewee: So I’ve been working out this morning routine, I’ve got a couple of little ones and so I may get woken up at five in the morning. So I’ve kind of got my initial morning with them and then once I am free to work I restart my morning so I may not even have had a chance to have a shower by then. So then it’s as if I woke up and that’s 8am. I may not even start my day until ten because you know I am doing stretching and thinking and meditating and reading; all these kinds of things to have a fantastic day and then you’re really focused and then you get a whole bunch of work done. Often in the afternoon I will do the menial stuff, the stuff that’s just got to get done. That’s not moving my business forward that’s just like you have to answer certain emails.
Andrew: You know what, I should probably do that too. I keep hearing people say that you should only answer email later in the day, don’t start off with your email but I always jump right off in my inbox.
Interviewee: I got a few tricks for that. First of all I’m not saying that I don’t answer email throughout the day, I do answer email. But I meant like cleaning the office or doing this or that or phone calls or whatever I try to stack them for when my brain is done. By 2pm I sort of slow down and my brain is done. One of the things that I’ve been thinking about a lot is time-shifting… I call it ‘time-shifting your balance’?? which basically for lack of better term you have your higher self and lower self. And your higher self wants to be productive, wants to give to the world, wants to eat healthy things, be in great shape, be a great friend, your higher self. Your lower self wants to eat the candy bar, doesn’t want to get off the couch or wants to watch TV and doesn’t want to work. So its two selves and really when your in touch…..
Interviewee: When you’re in touch with what you really want, when you are in touch with your higher self – I’m sorry I’m gettting a little woo-woo, out there on you here – but when you’re in touch with that part of yourself…
Andrew: Mm hmm.
Interviewee: that’s when you can take actions that will protect you when you are sort of in your lower self mode. So for example, in terms of checking email, in the morning – right – one of the things that I’ll do, I’ll flip this little piece of paper down over my monitor, over the WiFi, you know, to get on the WiFi, right…
Andrew: Mm hmm.
Interviewee: And so I can’t get on it without flipping that piece of paper. I’m adding actions between me and getting online, and I’ve also got the router here on a timer, it’s on a physical timer, you know, like that you would use to turn your Christmas lights on and off or something. So it’s on a timer so at night one of the things that I find, like, my lower self wants to just watch Hulu, you know, all night or something like this, like or just surf websites and then it’s like it’s 12 o’clock and I know I’m going to be up at 5 and I’m hating myself and I’m pissed off, right. I’ve lost track, right, because I’m sort of in that lower self mode. I’m not really thinking about what I really want. I really want to get up early and feel fresh. So what I’ll do is, you know, this timer will turn off my router at, you know, 9PM or 9:30 or whatever, and that’s it, the internet kind of just goes poof, gone. And, you know, I’ll kind of go “Oh, right. Okay”, and I’ll wander off and do other things and I’ll go to bed much earlier than I would’ve. And I put that in place when I’m kind of in touch with things, but then it’s catching me, you know. So one of the things that, you know, I’ll do is in the morning, you know, that, you know… you put blockers between yourself and the things that you might find distracting. Like you could make a note that says, you know, “Do X,Y,Z before you check your email” and tie that note to your ethernet cord, and then at night you unplug your ethernet cord from your computer and you go throw it in the closet or on the far side of the room or something. So you know, you’re putting a block there between yourself and… ‘Cause, you know, you stumble, it’s your email in the morning. That’s the problem is you’ll wake up and kind of go, “Oh, let’s check in.”
Andrew: You know what, it’s interesting that you can try to have willpower and you can try to remind yourself and all that, but sometimes just physically changing the world is a lot easier. I like what you’re doing where the router just won’t work. So you could be in bed at night with your iPhone or with your computer and you could be saying “Don’t go look at Hulu. Just focus on, you know, reading a book.” But, you know, be a wrestling match if you just can’t do it because the router isn’t on right now, then it’s so much easier and it’s so much more consistent.
Interviewee: Right. Exactly, absolutely.
Andrew: Cool. So are you teaching this stuff somewhere?
Interviewee: Yes, I’m sorting out these theories and teaching this on upgrademe.org
Andrew: Upgrademe.org. Does that mean that there’s no money in this business or did you add a sales process or…
Interviewee: No, I intend there to be money in this business…
Andrew: There is?
Interviewee: I intend there to be money in this business. There’s no money in it right now, but I want to, I’m sending out a survey to people that are subscribed to the newsletter there and to see what people want and how I can help them. And I just got a camera and some… See it? You see that there?
Andrew: I do. I was looking behind you. I said that’s the kind of setup I need. You’ve got the…
Interviewee: Yeah.
Andrew: the umbrellas to reflect the light, you’ve got what looks like a tripod for the camera.
Interviewee: Yeah, it’s… So I mean I want to shoot videos and create like, you know, maybe an (unintelligible) DVD series on this kind of stuff, how to start your morning, how to, you know, how to have a fantastic day so at the end of the day you’re done, you feel great about what you did and you can just go enjoy your family…
Andrew: What about one more, one more of those tips?
Interviewee: One more tip, lets see. Okay, another one is especially for entrepreneurs I find one of the most dangerous things to me, one of the most dangerous things is these moments where you kind of go offtrack. It’s just this little moment; like for example, you know, your instant messenger pops up or your email pops up or something happens or you have a thought, and that thought leads you off track and you lose an hour or two or whatever…
Andrew: Mm hmm.
Interviewee: And that’s, so what I’m trying to find ways for is to win in those little moments so that you don’t lose the big battle, you know, like it’s this little moments where things happen. So one is, I call this the “butterfly pad idea”, is you know, you get these little butterflies in your head, like an idea like “Oh hey, I should blah-blah-blah”. And you go on, you know, you go on Google and you’re looking for how many people are advertising about AdWords to see if there’s really a market there and you’re going and seeing how many keywords are, like how many websites, and now you get onto somebody’s website and you’re reading their blog and you’re reading their About page and you go to their filter page and you’re off, you know, you’ve lost it. And so the idea is to have a pad of paper next to your computer, and when you’re away from your computer or you’re at your desk or you’re writing or you’re thinking or whatever, you have a way to postpone the engaging in the idea. So when you have an idea for something and you write down, “Gosh, I wonder if there’s a market for, you know, puppies that are blue”, and you just, “You know what, I’m not going to research that right now. As a butterfly, I’m going to write it down on my butterfly pad” and you stay focused. You know, you avoid that little moment where you can, you know, head
when you’re when you’re in touch with what you really want when you are in touch with your higher self I am sorry i am getting a little wuh wuh out there on you here when you are in touch with that part of yourself thats when you can take action that will protect you when you are sort of in your lower self mode so for example in terms of checking emails in the morning right you one of the things I will do is i will put I’ll put this sort of piece of paper down over my monitor over the wifi you know to get on the wifi right and so I can’t get on it without clicking at the que I mean access between me getting online and i also have the route here on timer its on a physical timer it like a **** bell off or something so its on a timer so at a night one of the things that that i find my lower self wants to just watch hulu you know that all night or something like that or just surf websites and then its like its 12 oclock and i know i am going to be up at 5 and i am hating myself i am pissed off right i have lost track right because I am sort of in that lower self mode I am not really thinking about what I really want I really want to get up early and feel fresh so what I will do is this this timer will turn off my router at 9pm or 9:30 or whatever and that it the internet just goes poof gone and you know I kind of go ooh right ok and I will I will wander off and do other things and then I will go to bed much earlier then I would have and I put that in place when i am kind of in touch with things but then its catching me you know so one of the things that that I will do in the morning you know that that you put blockers between yourself and the things you might find attractive you could you could make a note that says do xyz to your ethernet cord and then at night
you unplug your ethernet cord from your computer and you go throw it in the closet or the far side of the room of something you know you are putting a blocker between yourself and you stumble to get your email in the morning that the problem you know you wake up and go ahh lets check in
interviewer: you know what its interesting that you can try to have will power and you can try to remind yourself and all that but sometimes it physically chainging the world is alot easier like what you are doing here
That happens to me all the time. like I might be writing a blog post for this, and think well Aaron said that he’s been on line for twelve years and he’s got all kinds of googlaleges lets go see what his page rank is. so I go to check his page rank. go interesting but I wonder if he’s got a lot of traffic lets go check compete.com to see well I’m on compete who do i compare him to? well why dont i compare him to woofoo. lets go over to see what woofoo has to well woofoo is Y combinator, I should go check out hackernews they might be talking about me or somebody there and then boom the day is over.
right hacker news and your done
yeah, you know what it was so interesting to see the guy who created hacker news, paul gram, had a post up about how he had to have two different computers, one with internet access and one without just to keep him from having to deal with these butterfly moments. Butterfly moments thats what it is. your solution for it is just to recognize thats what it is, write it down on a piece of paper and promise yourself you’ll go back to it, and i’ve done this and when you write it down you think “Oh great i cant wait to get back to it” but a half an hour later you’ll go back to it and say “who the hell cares what his page rank is its not affecting me”.
or the idea on a larger scale you get these ideas though businesses, and your thinking “boy this is an amazing business” and if you just write it, one of the things that, because you want to start the busines but your like “I’m in a business and i know that i need to be focused i know that i need to focus i’m in something i’ve decided to do something. i’m going to keep doing what i already decided to do.” you know but the problem is, you know so if you write out the idea what i’ll do is i’ll take as long as it takes to write out the idea, and two weeks later i’ll be like that was dumb that was a stupid idea. i dont even know what i was thinking. but i didnt loose all the time like because you start reasearching like whats the market and what i can do.
alright I like this alot, upgrademe.org if you guys want to find out more about it, or if you want to sign up, or if you guys want to anwser some surveys about what your looking for. i like the way that you express that, seth coden would love this too. i like how you name things, if you didnt name it if you didnt say it was a butterfly moment i’d say yeah its one of those moments one of those distractions but the fact that you named it makes me feel like you own it and now i own at least the problem if not yet the soulution.
apprabbit is saying is Aaron on hackernews. Yeah thats where i think we started this conversation. whats your name on Hackernews?
Its Ekanes E K A N E S.
How does everybody have a name thats not theres on hackernews, and then its not like their hiding because you click the name and it’ll take you to their email address but its kind of a hash version of the email address whats ekanes mean?
its kinda silly its hebrew
oh to come in?
what that?
to come in?
yes
why that?
its like a throw back to what i used to call myself when i was more interested in probing systems or wanting to be places i shouldnt be or something
i see, ok intersting
so its just a silly name
Cool, well its hacker news its what its about. thankyou thankyou for doing this interview guys check out wondermill.com do i have that right yeah wondermill.com thanks for doing the interview and thanks for watching
