How *Specifically* Did Balsamiq Bootstrap Its Way To $2 Mil In Sales in 18 Months?

On June 19, 2008, Peldi launched Balsamiq, a one-man software company that helps people create quick & intuitive mockups. 3 weeks later, his revenue was $4,432. In less than 5 months, he reached $100,000. And 18 months later he crossed the $2 million mark.

In this program, I asked Peldi about the details of how he did it. I wanted to know specifically how he got his first customers. And how he developed the software. And how he got his advisors. And so on. Basically, I was asking everything that someone (like you) who wants to launch hit products would need to know.

Giacomo "Peldi" Guilizzoni

Giacomo "Peldi" Guilizzoni

Balsamiq

Giacomo “Peldi” Guilizzoni founded Balsamiq Studios which creates rich, elegant, high quality plugins for Web Office applications. The company’s first product is Balsamiq Mockups, which helps software designers and developers build great software by letting them easily sketch out their ideas, then quickly collaborate and iterate over them. According the company’s web site, Balsamiq Mockups has netted over $2,000,000 in sales in first 18 months of business.

 

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Full Interview Transcript

Andrew: Let’s take a one minute quiz. What’s the company that gives you embeddable form surveys that you can add on to your website, the company’s whose forms and surveys are so beautiful that I included them in my wedding RSVP page and so useful that it’s helped me make Mixergy better thanks to your feedback? If you said Wufoo, Wufoo.com, then you’re right. I’ve used Wufoo for years. Check them out.

What’s the company that gives you a virtual phone number that entrepreneurs love? That gives you a number that will find you anywhere in the world? And extensions you can use to give the impression of size or to actually give each of your departments their own extension? If you said Grasshopper, you’re right. Checkout Grasshopper.com and see why I love them and use them.

What’s the company that will let you set up a store online in minutes and give you all the resources you need to actually make sales, not just get traffic, but bring in revenue? If you said Shopifiy then I’ve been doing my job right because I’ve been loving and promoting Shopify for a long time here on Mixergy. Check them out, Shopify.com.

Here’s the program:

Andrew: Hey, everyone, it’s Andrew Warner, founder of Mixergy.com, home of the ambitious upstart and today I’ve got with me Peldi Gullizzoni. On June 19, 2008, Peldi, who you’re seeing here on camera, launched Balsamiq. It was a one man online company. Three weeks later his revenue $4,432. I know because he blogged it three weeks later. Three weeks after that it was $10,000 in revenue, and less than five months after launch he reached $100,000 in online revenue. What is Balsamiq, this company that I keep talking about, and this product that I keep talking about?

Interviewee: Hi, first of all I want to thank you Andrew for having me here. It’s a real honor. I’ve been watching a bunch of your interviews and I’m really impressed with what you do and the way you do it. It’s always enjoyable. I never usually last for a whole hour with other interviews, but yours I’m like I’ve gotta do five more things, there’s gonna be something else that’s interesting. So anyway, thank you so much for having me here.

Balsamiq is my little startup I guess except I’m not a real startup, I’m a small business in Silicone Valley language. I’m a lifestyle business I guess. But anyway…

Andrew: Isn’t it funny by the way how they dismiss what you’re doing as a lifestyle business because you have a profit and because you’re working hard to grow that profit?

Interviewee: No, I don’t think they’re dismissing it. They’re trying to really narrow down the term. The thing is that there is a good term for startups, the Facebook and you know, but there really isn’t a good term for small businesses like we’re trying to do. There’s bootstrap, but it doesn’t have to be bootstrap, it could be a small business. So there isn’t really anything.

What I always say is that I’m trying to build a 5-star restaurant on the web…a small, family run, lasts for generations, really top quality stuff, small group, lots of happy customers.

Anyway, you get what I do. We have one product called Balsamiq Mockups and it is a wire framing tool that let’s you compose interfaces for websites or software or whatever, mobile sites. It really tries to replicate the experience of sketching on a notepad or piece of paper or whiteboard, but it’s digital so it’s faster to share, faster to iterate, and that’s it. It’s really a little program, but it has been quite successful so far.

Andrew: There’s actually a really good demo of the program on your website. Anyone who’s curious about what this can do should see how you use it to sketch out iTunes. All the little buttons come in, all the little sliders, all the little touches of iTunes you’re able to create in under three minutes using Balsamiq, and I think that shows what this program can create and how it can allow you to imagine an app and then design it on the screen, then share it and get feedback from people.

And yeah, Dano in the audience is saying even Coverflow, and I love the way you show Coverflow.

Interviewee: Yeah, well I have a problem with Coverflow though because it’s a very sexy control so people who don’t really know about frameworks, I have a lot of non-technical people using the tool, which is great because the goals was to give a tool that was easy enough for product managers or anybody with a vision to be able to participate in the user experience process. Problem is, everybody adds Coverflow and then the developer says we’re not building a Mac app or we don’t have Coverflow components.

So we’ll work on that and maybe have a set of predefined, a subset of tools that a developer can say you can only use these.

Andrew: I see. So if I’m a developer…

Andrew: So, if I’m a developer and i’m working with a CEO or a designer, I can say “These are the tools that I can give you today let’s keep this fantasy away from this project for now.” What were you doing before you launched the business?

Interviewee: Most of my professional career was at Macromedia that then became Adobe. I worked there for six and a half years. at Macromedia I started in quality assurance on Flash Communication Server which is now Flash Media Server. And then we built a product called Breeze which is now called Acrobat Connect Professional. So I did a year in QA then I switched to development and then I worked on that same team for maybe 5 years. And then we rebuilt the product in Flex and that is now called Acrobat ConnectNow which is like Adobe’s best kept secret. It’s a sweet little online meeting application, super usable, free for up to three people. I feel like I need to plug it because nobody knows about it.

Andrew: I didn’t know about it, I just think of GoTo Meeting whenever I think of doing a meeting online.

Interviewee: Well try.. try acrobat.com connect now try it next time it’s really really sweet.

Andrew: As I asked you that question I realized in my research for this interview I saw that everyone asks you that question. And everybody probably who’s a fan of yours by now knows what you did before, and that’s one of the challenges of doing an interview with you. You’ve been so open on your website that people know what your revenues were for the first three weeks and the next three weeks and everything that I’ve said up until now. So my challenge is to keep telling the story here and so that means that some of what we’re going to be talking about will be a repeat of what your fans know, but I also want to challenge myself and challenge you to bring out new ideas and new information. I’ll start this way. Before we go back into your story, we know what your revenue was five months in, what’s the revenue today?

Interviewee: What do you want to know?

Andrew: The revenue for the business today. today We’re now looking at almost two years after you launched what’s the.. what’s the revenue been?

Interviewee: So we had our record week… we had two record weeks in a row. one was number of… transactions, I don’t want to say customers because some were upgrades, some were maintenance, purchases. and so two weeks ago we had 475 sales. And that was the biggest number in a week. and Then last week we had a little less sales, but we had a record in revenue and it was I think $6,300.

Andrew: okay that’s a record can you say what the revenue’s been like over.. well, since the beginning? Can you give us a total?

Interviewee: I think we’re past two and a half million.

Andrew: Past two and a half million in revenue total. Wow. and what are your net margins like?

Interviewee: well we just hired… we just grew the team a little bit and then we just payed a bunch of taxes, so last month was pretty brutal. But I think we’re over fifty percent.

Andrew: Over ffifty percent. So fifty cents out of every dollar that comes stays in the company and helps you grow the company and push against the downturn.

Interviewee: That’s the idea, I put away as much as possible, cause ii’m always running under the assumption of a sales group of zero tomorrow. And so I want to have as much runway as possible for us to figure something else out.

Andrew: [laughs] Y’know what, it’s kind of interesting, because the product fairly easy and that’s what makes it so useful that I can see in your demo how easy it is to use that anyone who’s playing around with it can almost do too much with it, as you said they add more features than their developers have time and resources to build. My question about that is, why aren’t more people stealing your business? Especially now that they know how much business is coming in the door?

Interviewee: Oh, there’s a lot! Oh my gosh, you don’t know about all of our competitors/clones.

Andrew: I know about them because you’ve talked about them. And I know that there are some people in this space before, but why haven’t they stolen all your business? Why isn’t Balsamiq now down to zero? What do you have that they don’t? What do you have that they can’t…

Interviewee: So, we have a couple of things. One is that we choose to compete not on features. I think that competing on features is very 90’s. We compete on usability and customer service. And usability is something that I think we’re pretty good at, we’re good at making features as invisible as possible. I really resist adding any buttons to the UI. and I see some of our competitors already, they start by… the number of buttons on the UI just explode and it’s like “Alright, good job. Keep going that way and it’ll be good for us!”

Interviewee: So it’s really hard to build really good software and that’s actually why we’re building software to help people build good software because we think that usability is, you know, “Life is too short for bad software” is our motto. We really want to try to help rid the world of that software, but any ways. So and the customer service is hard to do well and -excuse me- we’re pretty customer service heavy. We have, you know, out of the five people that we have full-time, two pretty much do all the email which is mostly Valerie and San Francisco and myself. Val is on the phone all the time. So customer service is hard and we might actually hire one more person soon to do customer service in this time zone.

And then the other thing that I think is something that is sort of our secret sauce is this concept that I’ve been calling “The Golden Puzzle,” which basically means that you can’t just have a good product. You can’t just have one thing. You know, the idea of the puzzle came for…one day when my dad was saying, ‘Okay, things are going well.’ And he asked me like, ‘What is it that people could steal from you,’ you know, because I told him I’m not patenting anything. Like my stuff is pretty easy to build. So he said, you know, ‘So what is it? What’s your secret that, you know, if somebody takes it, you’re toast?’ And I had to think about it. And I said, ‘There is no such thing. There is no one thing that somebody could take.’ It is I think that the success comes because of everything that you do: the blog, every customer interaction, every email that you send, every, you know, how much value to you provide.

So this idea is the puzzle. We collect puzzle pieces now and so a golden puzzle piece is when somebody blogs something about you or your company that is not about your core competency. So we have a collection on Delicious -let me find a link. I’ll put it in the chat- of puzzle pieces. For instance, earlier you Tweeted about our Twitter background, right? That’s a puzzle piece.

Andrew: Let me explain that. That’s the background of your Twitter and in fact Balsamic Mike’s Twitter and a bunch of other people at your company is pictures of other people’s Tweets that are positive about Balsamic.

Interviewee: Yeah, right. So I got here on the wall…let me see if you can see this.

Andrew: That’s a picture of somebody Tweeting ‘nice background.’ That’s F. Williams, the founder of Twitter, Tweeting ‘nice background’ to you, to Balsamic.

Interviewee: So that’s what I’m talking about. Like if everything you do is remarkable and you do a lot of it, it helps.

Andrew: I see. So you’re saying…don’t worry about the chat room. Somebody in the chat room could you please link out to the Delicious’ collection of press clippings that he’s talking about. They’ll help us out.

Interviewee: I think I got it. I got it. I got it.

Andrew: Oh, you got it.

Interviewee: Done. I’m done.

Andrew: That’s the problem with doing interviews with techees. They actually know how the chat room works and they know how to interact with the chat room and they multitask well.

Interviewee: There it is.

Andrew: There it is.

Interviewee: So these are what we’re trying to get, puzzle pieces. There’s people who blogged about our customer service. And that is sort of borderline puzzle piece because I think customer service is one of our core competency. But there’s people that blog about our Twitter background.

Last year I published a bad build. It was broken and then I went out Christmas shopping. You know, it was terrible, one of my biggest mistakes. And so two hours later I came back and I fixed it as soon as possible and while the build was in the oven, I wrote this little blog apology because I felt terrible. Well, somebody blogged on the apology book something, that we were his apology of the week. And he dissected the apology and he said, you know, he gave us a name like. So even when we screw up, somehow it becomes more press and stuff like that.

Andrew: Let me see if I understand this. The Golden Puzzle is all the little pieces that aren’t core competency that people notice.

Interviewee: Yeah. That are remarkable enough for them to Tweet about it or blog about it or somebody put on Friend Feed that Valerie’s job title is COO Wow Division, which is, you know, kind of cute. Somebody put it on Friend Feed they were so amazed.

Andrew: I see. That’s another piece of the Golden Puzzle, them noticing the cool little aspects of Balsamic that most companies don’t even pay attention to.

Interviewee: Right. Another guy blogged about our [ULA]. He read our [ULA], which by the waywhich by the waywhich by the way

Interviewee: Another guy blog about Jula/Alur. He read our YULA, which by the way there is maybe ten people in the world that read at YULA, he read it and said: “This is worth bloging about. I have found their terms very agreeable and very well written”. The YULA? So, the goal is: whatever you are output – every single piece of output that we do – email theme plaid or whatever. We try to make it so good that people will want to talk about it. And so… If we were been working like that since the beginning and for some things it works and for some it doesn’t. But! You know, we have a lot of puzzle pieces already and I think it has it up. It is, you know, it is what it is – it’s in bound marketing, right? Their mass is talking about it. But it is also a fun thing to try and do and a fun way to be for us.

Andrew: The Jula is of course the user agreement. Most of the people don’t look at it. You can stick anything you want and there you can have your lawyers go at it and…

Interviewee: Exact, exact…

Andrew: Right, and everyone is going to accepted it. There was a company recently that slid in a line about how they own your soul when check off that agree determs of service link. What did you guys do to that to make it remarkable?

Interviewee: You know, I don’t really know. I mean we, as I think most YULA, we started up with the Frankensterin YULA – taking things from differens YULAS from companies that we looked up to. You know, we sale a MOKAPSES – a plug-in for a ATLASING confluence at recent year so, I started from their YULA because I figured my customers will be whatever idea accepted. The ATLASING YULA so I would be less friction if ours will be similar. So we started with that one but then overtime as a some large customers wanted to make a little OUTMENT. I really didn’t wanted to have special YULA for different customers so whatever they wanted that I have I would incorporate for everybody else. And so I got better overtime and, you know, it was me sort of letting go of some things a little bit – you know, it’s a negotiation. And then at some point this one customer – I can’t name it but, this lawyer said: “OK, you know, we need to add this special thing. Oh, and by the way I also went through everything else and you need to capitalise this. Here you say C point three-four but it is really three-five. She went through with the FUN TUNE COM. And she must up like twenty, thirty thousand dollars worth of lawyer work, but she must be bored with her job, right? So I called her: “Can I send you flowers? I love you”. So now YULA is so much better because of that. It is pretty amazing.

Andrew: A little know of mixed you fact. I now own of Plavy soul because he sigh my or checked off the YULA and Mixergy when you agreed to do an interview here. Howard Lindson – I own his soul and everyone of his family members – do not tell him. I cant wait to see what I am going to do with that. How do you get this into the company culture? Most people can’t get their employees to show up on time. Can’t get them to respect them and be passionate about the job. Your getting people like a balsamic mite and not just by passionate about the job, isn’t the chat-room here talking to people. And people within your company your all paying attention to the details and make it all remarkable. How did you do that?

Interviewee: First of all we don’t show up on time. There is no time. We all work from home. Velery is in San Francisco, Mike is in New York, Louis is in Paris and then Marco is the employee from Bolonia comes over whenever he wants to or he can work at home too. A little room in my house but the way is out office.

Andrew: And what city is your house in?

Interviewee: This is Bolonia. And so we work… Whenever. I don’t care where you work as long as you get your job done. I think there is a name for it – ROWE, I saw it in one of TED talks – Results Oriented Work Environment or Results Only Work Environment. Basically I don’t care, you know. Actually I have to tell my employee to not try to work at weekend. I always tell ABATUR to go to bed because she is still awake when I work up. But… So how do you do it? I don’t know. I mean. I guess when it comes down to recruiting, comes down to working with people who you know, you trust, you look up to already, or you seen your enough and.. What I try to do is always give people their dream job. And so, If they are doing their dream job, you know, and their dream… I don’t know. I get the feeling that for none of us it does really feels like a job. I’m hoping it doesn’t.

Interviewee: For none of us, this feels like a job. I’m hoping it doesn’t. Maybe Mike or Val can chime in on the chat. But.

Andrew: Do it guys, in the chat. You know what, actually. Let’s do this. Let’s go back and continue telling the story because I take away messages and remember them better in a story. And I’m going to come back and ask you about the people you hired and find out how you knew it was going to be their dream job. So, going back to where we left off in the story. You had this idea. Where did you have the idea for this business? Where did it come from?

Interviewee: As usual, it was a problem that I had. Oh, hold on a second. Sorry, my son is coming in. He wants to say goodnight.

Andrew: It’s really is in your house. Go for it.

Interviewee: Say hi to Andrew.

Interviewee: Hello!

Interviewee son: Hi.

Interviewee: Hi.

Andrew: Little known fact. You now signed the ??? too. I don’t want to scare you, but.

Interviewee: I can’t hear you. I’m wearing headphones.

Andrew: That’s better. You’re better off not hearing. I will now sell on Ebay everyone a ??? soul. It’s all in the ???, my friend. Okay, so, you were saying that you were scratching your own itch. When did you have this need?

Interviewee: Well, I was a developer at Adobe and working with product managers, user experience people, graphic designers, other developers and I was always the one to walk up in meetings and sort of try to sketch things out because I just think that way. And the problem was, then you have to write “Do not erase” and you know, my job was to go back, either take a picture or try to sort of copy it down. And then go back to the computer and then, what do I do, right? Either I open Fireworks or Photoshop and spend all day on it, you know. That’s it, or more normally what I see people do is, I’ll just code it and take a screen shot. It’s faster for me to build it in, you know, whatever, Framework and I’ll take a screen shot. The problem with that is that it still takes some time and then the more time you spend on a wire frame, the more you start liking it and the harder it is to change it. So, I saw this all the time. And on the other hand, there was this product manager that I knew who had brilliant vision. And I could see that she had the UI figured out in her head. And she was like, “Can you help me use Powerpoint to do it, wire frames?” And I’m like, oh this is so painful. And so, she would end up writing these long messages, long, you know, requirements and a picture would have been so much better. You know, you probably suspect, nobody reads the text. Everybody’s looking at the pictures. So I really felt like there was a need. I taught some product managers at Adobe how to use Flexbuilder because it has an interface designer. And they’re like, oh this is amazing. And I was like, okay, we need something. We need something that is as easy as Powerpoint so that nontechnical people can use it, as powerful and fast so that developers will use it and then, you know, pretty enough and good enough and usable enough so that user experienced people will also use it. You know, we needed something in the middle. And I looked around and I found a couple of things they weren’t very well done. So, I thought, hey, this is something that I can do. I had built a white board for a meeting application before. So I was like, you know, I think I know how to write this kind of code. It was small enough. I really wanted a small small problem because I wanted to do this by myself. I didn’t want to rope anybody else into this crazy plan. And also, I wanted, you know, didn’t want anybody sort of depending on the success for that. And also, one big reason why I’m doing Balsamic is to learn as much as I can. And I was always very interested in all the aspects of the business, not just the development. I considered going to business school at one point and thankfully I got talked out of it. And then, so, you know, the pricing, the legal, the marketing, all the stuff like that, it was always stuff that I tried to learn while I was at Adobe and Micromedia but I never had to do it myself. And so, I was like, let’s see. Let’s see what it takes. Let’s see all that it takes. That’s why I wanted to do it myself. I wanted to see, like, okay. We have to write a ???, write a license agreement now. Okay. Now what? And you know, it’s a great feeling because if it’s just you, the buck stops with you all the time. There’s nowhere else to go. And also, you know. We’re always flipping bits.

Interviewee: …and you know, all we do is type on the computer really. We don’t do anything tangible. I’m not saying that building your own project is tangible, but somehow it is a little more tangible and if it’s just you doing it, it is a tangible representation of the best that you can do…the best website you can build, the best product you can build, the best everything, the best customer support you can give.

I wanted to know how far can I go.

Andrew: How long did it take you to build that first version?

Interviewee: It took a lot of nights and weekends. A lot. It wouldn’t take very long if I did it full time right now if I had to do it again. It took a while for me to get some core classes and build my own little framework in place so that it was solid enough that it could grow, so I restarted maybe three times.

Then it took maybe eight months. I would work from 8:00 to midnight, then I had a disagreement with my wife that I could work. Sunday mornings from when I wake up until noon. So I would set the alarm for around 5:00 on Sunday then go to a coffee shop and work like a crazy guy. So I did that for about eight months.

Andrew: OK, I see that Patrick McKenzie, the founder of bingocardcreator in the audience, you know him. Yeah, he’s doing the [? 26:21] for people who are listening to the mp3 verison, he told me when I interviewed him that I think it took him two weeks to make his first sale.

How did you within three weeks of launching get $4,432 in sales?

Interviewee: No idea. My first sales was three days before I even launched. I’m like how did they find the website? I haven’t told anybody, you know, weird, weird. I don’t know, I guess I should say I do have a very popular blog post called startup-marketing-advice. It basically outlines all the emails that I sent to some bloggers and all the other steps that I did. It was all you know, if you don’t count my own time it was free.

Andrew: Can you talk a little more about that? I’m imagining the person who’s listening to us is out in the gym and wants to get fired up by your story and I want to send them to your website now.

Interviewee: Sure, hold on a second, hold on a second.

Andrew: Oh, are you going to do research on your own website?

Interviewee: Well, I was going to, but today I worked on this.

Andrew: What is that?

Interviewee: It’s everything that I know. It’s a cheat sheet that I built for a talk I’m giving next week in Florence. And it is about all the topics you could ever ask me about, company values, usability, business model, business plans, marketing, and these are talking points for me because I want to do a big part of as Q&A.

Oh, I really messed up the camera with that…I’m on pan now. Sorry, Skype.

But anyway, let me see if I can find the one about launching. Here we go. So, I sent emails to some bloggers that I thought whose readers might be interested in my product. I got some responses from that one. On launch day I was written up on webworkerdaily which was one of my favorite blogs and still is, I’m very happy about that.

Then another thing I did was and you have to be really careful about when you do, which is interject yourself in the conversation. So I would search blogs and Twitter for wire framing, the term wire framing tools, user experience, etc. That’s already stuff that I love to read about, so I knew which blogs wrote about this kind of stuff.

Then in a couple of places I’d say hey, I haven’t launched yet, but this is my tool and I think it might be relevant to the conversation. From that I got a bunch of word of mouth. I posted on The Business of Software forum, which is like a pre-after [?] news I didn’t know that existed until we first went…you know, I got this massive spike in traffic.

But so I posted these little forums or places then I got some word of mouth started that way, but you’ve got to be careful with that because you don’t want to spam. I always, always, only reply pitching your idea if these people if you think that’s exactly what they’re looking for. Even on Twitter, for instance. Go ahead.

Andrew: No, go ahead, finish that thought then I’ll come in with my…

Interviewee: For instance, for a while I had this idea of…

Lets take a one minute quiz.

Once the Company vacates you a terrible fronsister base you can airandrew website.

Interviewee: which I followed was, you know, if you’re not embarrassed by your [one-0] then you’ve waited too long.

Andrew: Read Hoffman.

Interviewee: Thank you. And the other one is -I don’t know if you’ll know this one because I think it was not as well known- it says, ‘Ship the [one-0] as soon as it’s a tiny bit better than the competition.’ Like you’re a little bit better or you have a little angle that they don’t have, something. And so I did that. Well, I thought it was that, but the bar was pretty low at the time. [inaudible] And so I did that but then since then it’s been like try to code as much as possible. Try to make it as better as possible. And at the beginning I had a lot of time to code because we didn’t have very many customers. And so, you know, I would release…I had a build machine that would ship live after every check-in. We don’t do that anymore. We’ve slowed down. Now we release every week.

Andrew: I see.

Interviewee: But at the beginning after every check-in like five minutes it was like, ‘Check!’ And that was good. So I think people started noticing that the app got better and that it grew from there.

Andrew: I see Val who works at your company. She’s in the chat room. And when somebody asked, ‘How did you get your first customers?’ I’m trying to find her quote here but basically what she said was you guys give out a lot for free. Can you talk about that?

Interviewee: Oh, yeah. Yeah, yeah, totally. We love giving our software away. The vast majority of the software we give out for free is to what we call ‘do gooders.’ Non-profits, anyone who’s really sent us an email and tell us why they’re doing good. They’re trying to make the world a better place. They deserve a license from us. Creating a license takes about three seconds. I built this little application where you put the name, click a button and it prepares all this email ready to go with the license and all these different options that we can use. So we’re very happy to donate it. We also donate to bloggers if they want to give a review and we donate to open-source projects and who else? Oh, if people want to do a demo. A lot of people start asking us and saying they wanted to do a demo and so we said, ‘Okay, here we’ll give you a license and then we’ll give a license for you to give away at the demo.’ And that was great because it was like having all these evangelists work for you, right? But they were people that were showing it to their colleagues so they already were trusted and it’s great. I highly recommend it.

Andrew: At what point did you discover this?

Interviewee: The demo thing?

Andrew: Yeah. Giving away as a form of marketing?

Interviewee: Well, I always wanted to give it away as a form of giving back because we have, you know…my belief is that non-profits who are always strapped for cash should not be paying for software. They should use their money towards whatever they’re trying to improve in the world, not software. Come on. So that we started doing from day one. And then the demo, it started happening after a bunch of people started asking me for, you know, do you have demo talking points? And so now we have them on the blog, etc. And then the bloggers, I wrote a bunch of bloggers at the beginning and then I realized, well, they’re not going to be able to test it properly so I said, ‘Here have a license,’ and then I made it a policy. And right now we’re trying to give away as much as we sell. One to one is our goal. We’re not there yet. It is so darn crucial, man. We give away 50-60 licenses a day.

Andrew: Can we do this? Can we say that if the audience here who’s listening to us live goes on Twitter and thanks Balsamiq for doing the Mixergy interview, that Patrick McKinsey will pick one of them and will give them a free license?

Interviewee: I say three. Where’s Patrick? Does Patrick agree?

Andrew: Patrick, do you agree to do it? Let’s see, if Patrick doesn’t then Balsamiq [vow] will pick something out for the audience. Let’s do it.

Interviewee: How is this making the world a better place? I mean, I know that Mixergy’s great. I have a few opinions on how you’re making the world a better place, but I’d like to hear it from you.

Andrew: You mean how is Mixergy or how is giving this away…

Interview: Mixergy because we’re giving it…because we’re on Mixergy.

Andrew: Oh, I see. I see. You don’t want to give it away unless Mixergy makes the world a better place. I’ll tell you what. I think that when you sit down here it’s not just Mixergy

[The section “minute 30 to minute 35” is still being worked on by the transcribers.]

Andrew: It’s not just Mixergy, I think it’s the whole culture around the tech industry that makes the world a better place because we’re making better products, but also we’re so freakin’ open; open with our successes the way you are when you tell people the way to build a business within three weeks and make money. That inspires other people. And at the same time, open about our failures.

When I had Ethen Shaw here of KISSMetrics he talked openly about how he lost half a million dollars, talking about a half a million dollars on a hosting company, I know he saved at least a half a million dollars for somebody else in the audience, thinking ah, I’m not going to follow in his footsteps. I don’t have to make the mistakes he did, I can learn from those mistakes then go on and build a better company.

Interviewee: I agree. I saw that and it was great.

Andrew: Not enough people saw that, the Ethen Shaw interview.

Interviewee: It was good, it was good.

Andrew: So what do we say, do we do it? Let’s give out one now then maybe we’ll do another afterwards. Guys, if you’re listening, please tell your followers on Twitter to come watch Balsamiq here on Mixergy…either patio11, which is Patrick or Val from Balsamiq will pick somebody and we’ll give it away.

Interviewee: And also, any do-gooders should write free@balsamiq.com if they think they’re worthy of…first of all if they want the app and if they think it will help them do good in the world.

Andrew: All right. So now let’s talk about the price point. $79 is what you settled on the beginning. Why didn’t you offer it for free? The internet, information, everything wants to be free.

Interviewee: Because I want to stay in business so I make more people happy. I’m not a big believer in free. Somebody’s got to pay. I’m working my butt off. What I mean is, for me a lot of people have been falling in love with this free idea, which is not free, it’s ad-based. Free usually means ad-based for startups. I did briefly get infatuated with the idea, but then I realized to make any sort of acceptable living off of ad-based revenue you have to be Google.

It’s true. You have to have insane numbers and those cost so much that either you’re Google and you have economies and scale and you can afford that, or it doesn’t make any sense. So for a small lifestyle business, ad space is just not enough.

I had a blog with ads on it and that’s when I was like whoa, I’m making $100 a month. And then I thought I can’t support a family this way. So I realized all the ad based startups are we hope Google buys us startups.

So I was like OK, ad-based is not for me. Then there’s Freemium which I’m also not a huge fan of because of infrastructure costs. My views on that from 27 signals is the demo should be good enough that you get a taste. And we have that, we have a demo on the website that you can use; we’re switching our desktop demo to be a 7-day demo, fully functional. Before it was like a nagware. And it sort of degrades where you can’t save anymore, but you can do everything else.

So for instance for a web app, we’re not going to have a free option.

Andrew: You are or your not.

Interviewee: We’re not. We’re gonna have 30-day trial on every level, but we’re not going to have a free option. I’m sure we’ll get flack for that, but we’re a small company and we can’t afford to have 100,000 people on our servers who are not going to pay us.

Andrew: Did you get flack in your early days for charging?

Interviewee: No. We do get a little bit now. We get more people saying it’s a bargain than people who say it’s too much. So we’re thinking it’s a good price.

Andrew: How did you settle on the initial price. How did you know what to charge?

Interviewee: So the story I like to tell is that I did some competitive analysis and I looked around, and I thought what was fair, but the real story is this guy wrote me and said — this was before I launched, in the beta — he asked me how much are you going to charge for it? I said I don’t know. And so he said well this other competitor is $79 and I think yours is better. I said OK, $79.

So that was the starting point. I thought it seems fair to me. Then it stuck. I was ready to change it, but it stuck, it’s a good price for our product I think.

Andrew: So you built this company and the product yourself because you wanted to learn how to do every part of the business. Let’s talk about the part of the business that’s for some people the boring part and for others exciting – increasing conversions. What did you do in the early days to increase the conversions, to get more people who land on your page to go through the funnel and to end up on the other side where they pay you? By the way I should say – you’re about to talk but I have to tell you somebody put this up on Hacker News already and apparently the audience is coming in to hear on Justin.tv.

Interviewee: Whoops.

Andrew: No that’s good, that’s good for Justin.tv and it’s good for Mixergy. So sorry, the early conversion process and the funnel, what did you do to get more people to go through it?

Interviewee: You’re going to hate me, but conversion and funnel are two words – I think this is the first time I say them. I’m a product guy. If the product is better, people will come. I never look at Google Analytics. I’ve looked at it twice. Until two or three weeks ago, we did not know how many people downloaded the app. So there is no funnel because I didn’t know many people downloaded the app.

Interviewee: Which I know is sort of like, you’re crazy! To me looking at analytics is such a time suck. It’s sort of like looking into a crystal ball and trying to gather data out of this, and it takes forever, it really sucks you in. I would much rather spend an hour doing a usability study with a customer, listening to their feature requests, doing a Skype chat with a customer. After an hour of that I have twenty things that I know I must do today. After an hour of analytic soul searching, my eyes are gone so I just don’t do it. I focus on the product rather than analytics.

Andrew: Can you talk to me more about…

Interviewee: I know this is a little controversial, but that’s what I do.

Andrew: Can you talk to me more about how you do that, about how you get feedback from your customers and improve the product? How did you do it in the early days? I want to see the evolution of that process if you don’t mind.

Interviewee: The process hasn’t really changed that much I don’t think. I signed up for Get Satisfaction right away, and this was because I really liked what they believed in. They have this company-customer pact where the company says I will be available, I will be polite, and the customer says I won’t be a jerk. I will understand if it takes you a minute to answer. So I really love how it puts the company and the customers on par. Because that’s the way it is. [xx] It’s not users, I always hate saying customers are users, because to me we’re all part of the same community of people who want to build better software. Who want to see the same problem that our product solves solved properly. We’re part of the same UX fanatics or people who are interested in the UX community. The only difference is that instead of writing a blog about or writing a book about it we’re building a product about it because this is what we have. We’re asking for money because we want to stay in business and try to make it better and make the world a better place. I guess what I’m saying is my customers or users are smarter than us. There are more than us. They use the product a lot more than I do, right? Because I’m to busy fixing bugs and building it. So they know the product better than we do so of course you have to listen to them. Immediately we started Get Satisfaction and we sent people there a lot and there’s a lot of email requests that we get as well or we get Twitter or Skype or whatever. We’ll take whatever. At the beginning I was mostly focused on feedback on the product other than anything else. When you start up that’s what you’re craving. That’s why I gave it to bloggers because they’ll give me an honest review, that’s what helps us the most. After a while we started we started doing… for a while it was just me so I was kind of lonely. I was like, I’ve got to bounce this idea off of somebody. So I would mock it up in mock-ups and put the mock-up on Get Satisfaction. This is what I’m thinking, what do you think? Everybody had great ideas, great feedback and then I built it. Then we rinse and repeat. We still do that. With any feature that we build we always put the mock-ups of it, as soon as we have them, online and the product gets so much better because of it. Everybody has their own way that they use the product.

Let’s take one minute quiz.

• What’s the company that gives you the unbeatable forms and surveys you can

add on to your website the companies whose forms and surveys are so beautiful that are included in my wedding art free prep age and so useful that it helps me make BigCity better? Thanks to your feedback.

If you said vofu , vofu.com? then your right. I have used vofu for years.

Checking out.

• What’s the company that gives you a virtual phone number that entrepreneur love that gives you a number that will find you anywhere in the world and extensions that you use to give yourself the impression of size or actually give each of your departments there own extensions?.

If you sad grasshopper, you are right. Check out grasshopper.com and see why I love them and use them.

• What’s the company that let you set up a store online in minutes and give all the resources you need to actually makes sales not just get traffic but bring in revenue?

If you said shapafive then I am doing my job right because I have been promoting and loving shapafive for a long time here on Bigcity.

Checking out. Shapafive.com

Here is the program.

Andrew : Hey its Andrew Warner founder of Bigcity.com, home of the ambitious upstart and today I have got with me Pelthy William Sony. In June 19th,2008 Pelthy whom your seeing right now in camera launched Balsonic ,which was a one man online company three weeks later his revenue was Four Thousand Four Hundred and Thirty Two Dollars, I know because he blocked it three weeks later, three weeks after that it was 10,000 revenue and less than five months after march he reached a $100000 on online revenue.

What is Balsamic? This company I keep talking about this product that I keep talking about?

Interviewee : Hi, Well first of all I want to thank you Andrew for having me here. It’s a real honour.I been watching your bunch of interviews and really impress on what you do and what you do its always enjoyable.I never usually last for whole hour with others interview but yours ..

Andrew : I have got to do five more minutes..

Interviewee :. There going to be something else interesting .So, Anyways thank you so much for having me here. Balsamic is my little start up I guess, except not a real start up for my small business. I guess in Silicon Valley language my lifestyle business I guess. But, Anyways

Andrew : Is it funny by the way how they dismiss what you doing is a lifetime business because you have a profit and because your working hard to grow that profit?

Interviewee : No, I don’t think they are dismissing it, they are trying to really near it down the turn you know, there’s something there is a good turn up for start ups you know the face book you know, but there isn’t really a good turn for small business for what we trying to do is the bootstraps but its just has to be a bootstrap there really isn’t anything. What I always say that trying to build a five star restaurant on the web. Small Favoring one, last for generation, really top quality stuff, Small group and lots of happy customers. But Anyways,here what we do,we got one product called Balsamic Markups, it’s a wild framing tool you know compose interfaces for website or software or whatever, mobile sites.Its really tries to replicate the experience of sketching on a notepad or piece of paper or on a white board but its digital so its faster to share, its easier and faster to generate. That’s it. Its really little programmed but its been success so far.

Andrew : There’s actually a really good demo of the program on your website. Anyone who is just curious about what this could do should see how you use it to sketch out items. All the little buttons come in, All the little sliders. All the little touches of items your able to create under three minutes under Balsamic. I think that shows what this program can create and how can imagine and act and design it on the screen and then share it and get feedback from people.

Interviewee : I got a perfect cover fall, because it’s a control.its for people who really don’t know about the frameworks.The goal was to give a tool that was easy for Project Manager anybody who had the vision to participate in the process.The problem is everbody has cover fall but the developer says we don’t have any cover fall,so we work on having may be set of predefined set of tools that the developer says he can only use these.

Andrew : I see, so former developer was working with a CEO or designer, I can say these are the tools that I can give for today. Let’s keep the fantasy away from the project now.

Alright,What were you doing before you launched the business?

Interviewee: So that it hides them, this is Budapest and put a toggle so that they’re hidden and this happens. I’m having a hard time coming up with one example because one of the first thing I ask some of our users when I see them in person is, What’s your feature idea that we build for you, because everybody has one.

Andrew: What do you mean? What’s the feature idea that I don’t understand…

Interviewee: What’s the feature idea that we build for you?

Andrew: Oh, oh, is there one already that I have in mind that you already built.

Interviewee: No, it’s usually like this, Did you ever ask for a feature and did we build it and the answer is yes, this was my feature.

Andrew: I see, I see.

Interviewee: Our product collection of 300, 400, 500 different people’s little ideas and big ideas on our end. I’m telling you it’s a community, it’s so weird. Even when I was by myself I tell like, i’m not working alone. There’s a whole set of people, there’s people that do our testing. THere’s this amazing woman named LuAnn who does our testing. I’m in between jobs, I love your product, I want to make it better and now she’s working eight hours a day doing black box testing.

Andrew: What does that mean?

Interviewee: Black box is the old school kind of testing where you don’t know the code, it’s not unit testing, it’s not writing test cases, it’s not TDV. It’s what I used to do back in micromedia, take the product try to break-in. Manual, and it’s very valuable still even though the profession is kind of ronky right now and I think everyone has swung the other way with the TDV you need a combination of both.

Andrew: I have a next set of questions around user experience but first I have to acknowledge what Patrick is saying, Patrick McKinsey, Peldi is not exaggerating when he talks about customer service. He talked to everybone, he added a Japanese local support to control just me. Let me read that again, he added a Japanese localization support just for him and he said in two hours you added that in there and someone who calls himself Balsamic Happy Client to the audience, which is kind of interesting that that’s the name he chose to go by, said he’s working on a localization for me right now. I love seeing that.

Interviewee: What is it? What is it? I tell you we have the most amazing community, we feel so blessed.

Andrew: I say this by the way to people that come on and do interviews with me. You don’t want to answer the questions about revenues, don’t answer it. You don’t want to answer the question about where you got your customers, don’t answer it. Don’t lie, because if you lie, the audience is going to call you out on it. The guy from Woofo, who co-founded Woofo said, we answer tech support in a half hour. Somebody from the audience went and tested him quietly and came back and said Andrew, here’s the response. He got back to me in minutes. So I can see the same things happening here. They’re coming in and saying, yeah, absolutely, my experience with Balsamig is he’s a guy who listens and it’s true, I’ve seen it. So let’s talk about user experience. I see we’ve already went over an hour since we started, can I spend another 20 minutes with you? Do you have time?

Interviewee: I have 36 hours for you.

Andrew: I would love it. Not only would I love 36 hours with you, but my audience would love it and justin.tv would send me thank you notes for having you on here for 36 hours. Okay, user experience is one of the ways you distinguish yourself and bring in new users. How do you do it? How do you design?

Interviewee: Well, there is UX user experience is a huge topic. There’s an enormous amount of literature on it and it’s a whole industry. Conferences, I mean, it is big. It is a hard, hard thing to do well. But, I think that with the experience anybody can learn. I have maybe 20 usability books that are devoured, and a couple of new ones that I can’t wait to start reading. Seriously, it’s really my passion and I’m self taught, so you know, I guess I got pretty good at it by now. But it took, at the beginning I wanted to add a button as soon as possible. I have an engineering background. Engineers love to have alot of buttons to click and turn around but.

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Interviewee: I guess software is maturing. Thankfully. And now it’s not just for geeks anymore. I always think of my mom when I build a software. She wants to get a job done and go home, she thinks of a computer as a tool and not a fun thing. And so with time I learned more and more about that. We did a bunch of usability studies back at Adobe. Those are still painful, so amazing, so amazing and powerful. Because you’re like, come on click its right there, it’s right there! So you learn a lot from witnessing usability studies, especially if you’ve built the actual software. So you can learn a lot from books. It takes a lot of practice, but if you want to know my tips that I give out for how to build the software?

Andrew: Yeah, how do you do it?

Interviewee: They’re pretty standard I think, but basically I always start from the assumption that no UI is good you UI. If you can make it completely invisible and still have it, that’s great. For instance one of my favorite features in mockups, is this one. When I started I had this, where you can type, there’s a paragraph of text control where you can type whatever you want in there. And at the beginning I had a slider under it where you would slide it and you would add X amount of lorem ipsum text, and the control. Right? And you slid it to the right and the lorem ipsum, lorem ipsum is the fake text that designers use, right? And so there was always this slider that was useful maybe one time, one time out of a million. But it was always there in your face, annoying. So then I took it out and then a couple months later I had an idea on how to make it do the same thing, but invisible. And so right now if you open up text paragraph control and type lorem, the software notices and fills in the rest. Completely invisible; same result. And you have to type lorem but guess what if you’re typing lorem ipsum you’re going to start with lorem right, so it works. And that little thing for instance is one example of a feature that you can make invisible and a little special and people have tweeted about it, or blogged about it because it’s like woah! The software knows what I’m thinking. That was another piece of the puzzle there, I guess. So, no UI is good UI. Then, there are three things you hear from customers. One is give me an option to do this. Making an option. No. Unless you really can’t live without making it an option, an option to me is a failure. There is this designer that designed a sketch and other great pieces of software that says every time I make an option it’s a failure for me, I am offloading the cognitive, he says is very eloquently. But basically I’m asking the user to understand why there’s two, why there’s two faces, two modes or two faces. So now they have to get in my mind, I’m asking them to get in my mind. It’s a failure for me because I should just know what the 80% case is and make that the default, and that’s it. You can see this and Apple software a lot better. Some things where you’re like OK I’m clearly in the 20% phase here because I can’t do this. But then the rest of the time, totally happy because it does it very smooth. So options: bad. Then there’s people that are like “Oh, wouldn’t it be cool if it did this”. That’s another alarm bell for me, cool. Let’s wait and see if we can make it in a way that’s invisible, that’s fine, otherwise talk about it. And then people say, this doesn’t work, I need this now I’m so frustrated and they’re like OK. You’ve prioritized those guys first. Clearly there something wrong, fix that and then we’ll talk about the rest. And then be of the last piece of feedback that I usually give about UI is, take the smallest that possible. Baby, baby steps. You know want to put a button anywhere because maybe six months from now there will be the perfect place for another button. But then it will be taken. So, take tiny, tiny, the smallest steps you can, then release it. See what people think. Always, there’s a saying, premature optimization is the source of all evil. Do know about this? And this is great because if you’re building a website, you know a, if there’s a signals guy, say this. Don’t start off with 1.0 with a cluster of servers. You don’t need that.

Interviewee: …..you don’t need that.. you know.. you spent all this time optimizing for this k’s that might never come. I’d say premature anything is the source of all evil, like all the time we talk about like ‘What if somebody wants to do that. No, don’t make it possible. If they want to do it they’ll ask, if enough people ask then we’ll think about it..you know… we’ll make it better. And so this view now..sort of dictates my life as well, we redid the kitchen last year in my house, we decided to do half of the kitchen and the other half we left pretty empty, nothing on the walls coz we’re like lets take a baby step lets use half of it leave the rest for later and now that we have lived in the kitchen for a year we know that we need one more piece and so we add that piece and leave some room. Because especially in architecture you know you can’t really go back and change it. So baby steps is crucial. And then the other feedback that I say is that do it with your customers because they know it, they know it better than you, most of the time. And there are some threads about some big features that if you look and get satisfaction they are enormous they took months but then when I finally was ready to build it I had all this feedback and I was able to make the feature so much better because of all this feedback.

Andrew: I had Eric Stevens on here who does user experience work for… I think he’s with HC now. And he said that what does is that he watches users as they interact with his site. Do you do any of that?

Interviewee: You should do that as much as possible.

Andrew: How do you do that?

Interviewee: We do that a little bit, we don’t do it enough. I feel bad that we don’t do it enough. I do it whenever we are at a conference I always drive people to try the software… we had a booth at this conference and so people would come by and I was like ‘Hey, do you want to use it for a little while’ and that’s where I got some brilliant ideas there. Every that time you watch somebody use your software, I swear you get all these clear problems and clear ideas of how to make it better. There was this one where my friend was trying to… and she was double clicking on the image component to try and load it, and I was like… ‘Of course, why didn’t I think of that, right’ It didn’t do that and then I coded it, an hour later it was live, everybody loves it and now it’s the favorite way…but your brain is just one brain, you can’t have all the ideas, all the good ideas by yourself.

Andrew: The other thing I promised the audience earlier that we’d come back to is hiring. You said that you want to hire people for whom working at Balsamiq is their dream job. Why don’t we start off with…why don’t you tell the story of why you hired the first person and then we’ll go on and talk about how you hire people right now?

Interviewee: Sure…Yeah…it’s been very organic. So I started by myself full time and then after maybe six months we had about a thousand customers and I realized that I needed some help especially with free giving the software..the free-mails, we call them free-mails. And so I asked my wife to take that on. So she’s not the first employee because she’s paid in furniture and clothes and she’s not in the payroll. But she’s been helping all along with that since then. And then few more months came by…so that was better I was able to deal with my email and code some too. Then few months came by and I realized that I was doing email all day and then I would only code in the weekend. Because the weekends are great, I hope people never start working on the weekend..except for me… because that way its nice and quite. But then I was like.. this is not sustainable I need to go faster than this, I need to build.. improve the product more. And so one day I woke up and I was like… I got to get someone today or I’m going to die. And luckily I was already in touch with Marco who had by the way had emailed me out of the blue saying ‘I know you… I look up to you, and if you ever need someone to do this and this and this, look me up. I was like, great. So we started going to lunch and then I gave him a little contract featured and he knocked it out of the park and so that one day when I woke up with panic I made the indecent proposal and luckily he accepted, which has been amazing. So then we were good, he codes, I do customer support. And then it was growing and growing and growing.

Interviewee: …it was growing and growing and growing and I couldn’t keep up with email. Then one of my advisors, Sara Allen, told me that Valerie was possibly available and I was like, oh, come on, she’s over qualified. So we started chatting and somehow I roped her into this crazy mess and it’s been a little over a year. So that was great.

So then Valerie was helping with the sales emails and the free emails and under coding. So we did that for a while then we started working with Louis as a contractor on the web app. all of last year, then around the end of the year things were going well. So I thought it’s time to get serious about this web app because it was something we did in our spare time, which was less and less and less. It was and still is one of our biggest requested features.

So I asked Louise to join full time and he accepted, which was fantastic. Then the last person we hired is Michael Angeles, Balsamiq Mike, also known as Konigi. Konigi.com is one of the best websites for user experience people, you should really check it out. Mike has been someone that I’ve looked up to for years. He’s one of my favorite bloggers, I’ve always…

So I got the courage to ask him what can I offer, what would it take for you one day, maybe…and then three days later all of the sudden we were giving high fives, which was sort of our contract, over Skype. So he started officially March 1. So that was it.

Andrew: …in the audience, can you put a link to the site that he was talking about? Let’s see, he’ll do it. Looks like he’s in the audience and he’s engaged with the audience there. You mentioned advisors, I saw that on your website early on. Why did you decide to get advisors?

Interviewee: Well, first of all, my advisors are either longtime friends or people I worked with at Macromedia and then Adobe, who I really, really looked up to and who I learned from the most I guess, or people I wanted to work with more closely, but somehow it never happened. So I was leaving Adobe or a lot of these people had already left, I was like what’s a good way for us to keep in touch? How about we do a Skype call once a month for an hour?

So they all agreed to do that and appear on my website as an advisor board. And I really wanted to have that page from day one because it was just me. The website said here I am, this is my face. This is me, I’m doing it all.

Imagine being a large bank seeing this and saying am I really going to buy software from this one guy? Who is this guy? So I said yes, I’m alone, it’s a risk you’re taking I know, but I’m surrounded by all these brilliant people that I can talk to. And I do talk to them, and every time I talk to them I get this brilliant idea or they solve this problem for me and it’s very informal, no contract in place or anything. They just do it out of the goodness of their heart.

Andrew: There’s no contract, they don’t have a share of the business, they don’t have a percent, nothing?

Interviewee: No.

Andrew: You don’t pay them?

Interviewee: Well, they can say they’re the advisor to Balsamiq.

Andrew: I see.

Interviewee: I’ve sort of been doing the same thing informally with…

Andrew: You’re helping other people out that way too?

Interviewee: Yes, I had a nice Skype chat with this guy who wants to quit his job, move to Europe with his wife, has a baby on the way. I was like oh yes, sounds familiar. So of course, people like to give advice.

Andrew: By the way, excuse me, looks like somebody is knocking on the door. How unprofessional. Ci? I don’t know how to say it in Spanish. Looks like he has a box for me.

Interviewee: Where are you?

Andrew: I’m in Buenos Aires, Argentina.

Interviewee: Oh, my gosh.

Andrew: Yeah, what country are you in?

Interviewee: I’m in Italy.

Andrew: What country did you say you’re in?

Interviewee: I’m in Italia.

Andrew: Italia, Italy. OK, let’s see what else here. OK, we talk about lots of millions on Mixergy and people just, it becomes too big a number to really understand. Can you talk about your first million? What was it like to see that first million dollars?

Interviewee: Oh, man, pretty amazing.

Interviewee: Pretty amazing. It took eighteen months. I mean, the whole time, Andrew, you don’t understand. This is how I feel. This is a huge rocket, okay, and I’m just holding on with my nails this whole time, right. And then once in a while I try to kick it so that it goes a little bit one way or a little bit another way. Like I’ve been chasing the business this whole time. I really have to like sometimes we don’t ship a feature because we’re afraid it’s going to bring us more business and we can’t support it properly, right. We waited on the Lincoln feature for four or five months because of like, ‘Okay, now it’s going to double, you know, the revenue and that means double the people and like.’ So it’s been an insane ride. Like I look at the numbers, I’m like I can’t believe this is our numbers, right. And it’s all numbers on the screen, I mean we still get paid, you know, I think I pay myself less now than I did than what I made at Adobe but I also live in Italy which is a lot cheaper for us. [inaudible]

Andrew: What about that first day that you looked at your bank account and saw millions.

Interviewee: What?

Andrew: What about that first day that you saw that million dollar number? What was that like?

Interviewee: We each had a toast. We had a virtual toast. We each took a picture of ourselves wherever we were giving a toast. It was in August. I was at the beach. It’s, you know, it’s unbelievable. Well, what are you going to say. I mean it’s unbelievable, right. But, you know, again I’m always say, ‘Okay, now. Are we doing good. Are we going to’…you know, like I’m trying to build a business that’s going to be around for, you know, 30-40 years. Valerie says she’s committed to 40 years or something like that, and then she’ll think about it. I told Michael that he can quit only if he decides to become Mayor of Bologna.

Andrew: That’s the only way otherwise you’re in it for life. And you’ve said the same thing for years, that you don’t want a buy-out. You could probably get somebody to buy this app and roll it up with a bunch of other apps and build an interesting company, give you a nice payday.

Interviewee: Yeah. I’ve been contacted by a bunch of VCs and those are some hard conversations to have, especially the first one because you’re like, ‘Oh my god. Oh my god.’ But now I’m getting better at it. I understand what they’re coming from. But, yeah, we don’t have a…what we say to VCs is that, ‘No, we’re not going to grow ten times in five years.’ I would see that as a failure. Our goal has always been from day one five six people, three million in revenue a year and just keep going that way and make people happy and just [inaudible] the people that you like working with and…

Andrew: Just own that little restaurant.

Interviewee: …own that little restaurant. Nothing wrong with that.

Andrew: What about doing something like what Jason Freed told me he did at 37 Signals? He said that he took a little bit of money off the table by selling a small piece of the business to Jeff [Basos]. Jeff [Basos] still can’t run the company. Any interest in that? And by the way, si?…there we go.

Interviewee: Okay. Oh, that’s better.

Andrew: Gracias. My mail from the US there, that’s what this is.

Interviewee: Ah! You got our present!

Andrew: Once a month the people…you know what? I’ve had these guys for years and I was in the south of France and they delivered me a new Trio to wherever I was in the south of France because I have to have a smartphone wherever I am. I come over here. I get married. They get me my mail and my wife’s mail. They find me here. It’s incredible.

Interviewee: So I don’t know why, I’m not ready to have a boss at this point and time. I like the pace that we’re going. I like not knowing what I’m working on tomorrow. I like not having any pressure. I like being able to not have deadlines. You know, we don’t have deadlines. As long as we’re working and we’re at a pace that we’re happy, you know, that’s it. You know, people ask us, ‘When is the web app going to ready?’ When it’s ready, you know. We’re going as fast as we can. I don’t know. I’ve been so bad at predicting when the web app is going to be ready that I’m not going to do it anymore. It’s been, ‘Hopefully, in the next two months,’ for like a year. So I’m not going to say that anymore, but right now we’re going really fast. We’re cranking. We’re heads down, which is fantastic. And it’s really coming together. Finally I’m really excited but so…

Andrew: So, we’re going to try something new here in a moment. You’re going to do a screen sharing via Skype, but first there’s a segment before we do that, that people keep asking for. Let’s test it out and see if it works. They want to know what tools, what web apps, what programs, what hardware can you not live without. And if you share that, they’ll know what they should go and experiment with, I guess. So what can’t you live without?

Interview: Okay. For this one I am going to cheat and look at the blog where we have a post called

Interviewee: …where we have a post called Tools We Use For Running Our Startup.

Andrew: Beautiful.

Interviewee: Because there’s about 100 of those. You want to skip that one?

Andrew: Why don’t you give one or two and then I’ll tell people to go checkout your blog and see it there.

Interviewee: This is the blog post, but we love Pivotal Tracker for managing our to-do lists. We love Gmail for doing customer support and email. We love our Macs because they can run all sorts of testing platforms on them. We love the classic Confluence [?], that’s my favorite wiki and we sell the plugin for that and that’s our intranet. We love Yammer as an internal Twitter. We love TweetDeck usually, most people use that. Skype, I could not without. Oh, my gosh, there’s so many. One little known one is Typinator. Typinator is this little tool, it sits on your Mac in the dock and it lets you specify a table of shortcuts and then you can make it expand. It’s like tech expander, right? But it’s great. If you do email all day we have all these different templates and we share them via drop box, that’s another tool.

Andrew: That’s what they were saying in the audience.

Interviewee: What else? I use WriteRoom for writing. It makes the whole screen black. But there’s another one now which I think is better called Ommwriter. It puts this zen music in the background. Writeroom was sort of an inspiration for us. The concept of zenware, software that gets out of the way and puts you in this sort of zen focus, that’s something I’m definitely trying to do with Mockups. I want it to be as invisible as possible.

Sketch, Screenflow, there’s a bunch. We use now AZAR, our sort of source control. We couple that with Hudson, which is our continuous integration server.

Andrew: Let’s leave it there. And guys in the audience now if you’re watching, tell me do you want to see this in future interviews and if you’re listening to the recorded version, come back and tell me on the site whether you like to see this. I get a lot of requests for it and I haven’t been sure whether I should be doing it. And of course, Balsamiq Mockups people are saying in the audience they love.

So let’s do that. Let’s try screen sharing and do our best here to show your screen. We”ll see, we’ll see if this works.

Interviewee: I’ll try.

Andrew: And good, people are saying yes, they want to hear more about the tools. Thanks IC.

Interviewee: I’ll try to do share only a portion so there’s not as much bandwidth. Share selection, there we go.

Andrew: And this again, this is part of an experiment, I don’t know how it’s gonna be. We intentionally saved it for the end of the interview so if it doesn’t work you’ll at least have gotten the full story and interview and you can move on from there. And if it does work, then maybe we’ll do this again. So far I see that it does not work because my video has disappeared, but it’s OK, we’ll see.

Interviewee: Can you see mine?

Andrew: No, I can’t. I’ll take my video off…and here’s my video back on.

Interviewee: But mine is not there?

Andrew: No, I guess not. Do you want to try sharing your whole screen? Maybe that’ll work?

Interviewee: Sure.

Andrew: There we go. That actually is working and I will wait for it to load up and see. Actually I should wait for it to load up before declaring it…

Interviewee: This is never seen before actually, this didn’t work yesterday so.

Andrew: We’re now going to see a future, upcoming version of your site. There we go, interesting, OK. Oh, it just disappeared. It came on for a moment and then it disappeared.

Interviewee: Oh, man.

Andrew: It’s OK, we’ll just take a couple of minutes. We’ll see if this works. I’d like to see it because we’re seeing an advanced version of your site.

Interviewee: Is it coming? Can people see it?

Andrew: No, so far nothing.

Interviewee: Oh, well, guess we’ll share…tell you what, I’m going to take a sketch screen shot and put it in the chat so people aren’t totally in the dark. How about that?

Andrew: OK. Why don’t we try just having you come back on for the video to say goodbye and see if it works.

Interviewee: OK.

Interviewee: Yeah, I’m here.

Andrew: And I’ll do my video back off and back on. [pause] No.

Interviewee: No? I totally broke it!

Andrew: Can you try your video one more time?

[pause]

Interviewee: Sure.

[pause]

Andrew: Okay, it’s coming; all right, so my video is gone We’ll save your video in here I’m just going to stay with you on camera. Thank you for doing this interview. Thanks for being so generous with everyone, and I hope this isn’t the last time that you’ll be on Mixergy, or the last time that you and I get to talk

Interviewee: Well I hope so too. I thank you very much, and thanks for everybody! I’m gonna go back and read all the chat and see if there are some questions that still need answering. But you know, we’re on Twitter, Facebook, whatever. You got a question let us know.


21 thoughts on “How *Specifically* Did Balsamiq Bootstrap Its Way To $2 Mil In Sales in 18 Months? – with Peldi Guilizzoni

  1. arnorhs says:

    Yet another surprisingly great show. This show and the show from yesterday, I might watch them again!

    His opinions of not looking at analytics and his disbelief in freemium models, is VERY interesting

  2. saadshamim says:

    Amazing! Andrew I love it when you interview very small business that make it without insane amounts of VC money, I know that a few years ago I had the perception that the most important thing in startups was the VC from watching all these tech blogs. You need to do more down to earth business interviews like this :)

  3. Girl Startup says:

    That's interesting I never have heard of Balsamiq. I have been using iplotz.com To be honest the branding of Balsamiq doesn't do much for me. If you hadn't done this interview and I had come across the site, I wouldn't of taken another look at it. The design of the site doesn't do much for me. The home page looks like a basic wordpress theme, so I wouldn't take the site seriously.

  4. travelideas says:

    I love this app, well done

  5. Pingback: The Startup Arena
  6. Andrew, I like yours bootstraps interviews thats have been popping up this week. ;)

  7. Ed Melton says:

    I just downloaded this program. Played with it and bought it right away! This is a true God send. I was trying to make wire-frames with Visio and PowerPoint. Now I am going to use my pulse smart-pen to transfer my drawings for use. This is an awesome tool!

  8. Maren Kate says:

    This rocked :) Got lots of good tips to! Always entrepreneurial inspiration at it's finest Andrew!

  9. Pingback: Balsamiq Blog
  10. “I think that competing on features is very 90's. We compete on usability and customer service” <~ hit the nail on the head

  11. Yeah. Great quote.

  12. Great interview and Andrew asked a lot of excellent questions again here. I especially like the part about getting the sales at the beginning of the business and about getting feedback from the community.

  13. pucek_pucek says:

    Yeah, the website looks quite unreliable… But I guess they know what they do and I think Peldi mentioned they are working on it? The interview itself very interesting again, especially liked the advice to compete on usability instead of features, do baby steps and keep options open. Cheers

  14. The only thing that leaves me a bit perplex in this nice interview is Peldi’s worry abut his “rocket” success (nice metaphor) suddenly falling. Made me think about how software adoption and abandonment goes, a blog post: http://pietro.open-lab.com/2010/05/27/lifespan-

  15. The only thing that leaves me a bit perplex in this nice interview is Peldi’s worry abut his “rocket” success (nice metaphor) suddenly falling. Made me think about how software adoption and abandonment goes, a blog post: http://pietro.open-lab.com/2010/05/27/lifespan-

  16. Pingback: Balsamiq Blog

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