Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It is, of course, home of the ambitious upstart.
And I kind of do these interviews for people to use today, but I also understand that in the future decades from now, people will be going back and listening to some of my interviews and studying home this crop of entrepreneurs who changed the world did it.
And one of the interviews that I’m going to be so proud for people to go back and look at is my interview with Mitchell Harper, this guy who started out bootstrapping his company, who started out hustling, who built it up. We did this incredible interview. How many years ago was it now, Mitch? Let me have a look here. This was back in 2010, to give you a sense of how far back it was. It still holds up. It’s such a phenomenal interview.
Part of the reason why it was a phenomenal interview is that I became a good interviewer by then, but a much bigger reason is that Mitchell Harper built this incredible company and came on here to talk about how he did it.
He is the founder of BigCommerce. It’s an ecommerce platform whose revenue is approaching now $100 million. And then it’s actually one of several companies that he started. A few months ago I scheduled an interview with him to talk to him about this new company that he had called PeopleSpark and we had it on the books and he didn’t show up and I want to find out why he didn’t show up. So, I’m going to ask him about that.
I’m also going to ask him about why he left BigCommerce, what happened since our last interview with BigCommerce and about his new product. It’s called Startup Growth Blueprint. It’s a course that teaches basically everything that Mitch has learned over the years from building all these different companies, including where to get an idea, how to validate it, how to create a product, launch it, hire people, raise money. The guy’s gone through the whole thing and he’s going to teach it.
And this whole interview is sponsored by two great companies. The first will help you hire your next great developed or designer. It’s called Toptal. You’ve got to check them out–Toptal. The second will help you get your books done right. Frankly, they’ll do it for you. It’s called Bench. You can check them out at Bench.co. I’ll tell you more about both of them later. Mitch, welcome.
Mitchell: Hey, Andrew. Good to be here.
Andrew: You know what? I kind of brushed over that awkward part of our relationship, but I think it’s important to start off. You and I had an interview scheduled about PeopleSpark and you didn’t come. What happened? What were you going through?
Mitchell: Well, first, apologies for not cancelling. I actually I did cancel that with your producer. But my bad on that. Good question. So, I’ve spoken publically about this a little bit, not in too much detail. You’ll be the first person that I talk to. Long story short, the company failed.
So, it was a platform to help fast-growing companies essentially keep a pulse on their culture because one of the things I learned building my companies is if you hire great people, build a great culture, promote them and give them paths to autonomy, mastery and purpose, which Dan Pink talks about, you build a great culture that becomes self-sustaining.
One of the things I learned building BigCommerce was just how critical that is. The company today is almost 500 employees and we’ve got a great culture there based on my DNA and also Eddie, my cofounder. I essentially thought that you could productize a lot of the internal systems and tools and processes that we built over the years to build a great culture. I think you can. But my passion is small business and building tools for them and the product stuck really well for larger companies, so enterprise companies, but that wasn’t the space that I wanted to play in.
Andrew: And the idea behind PeopleSpark is that everyone on the team would get a list of questions they would answer it. They would answer it, send it over to the boss and I guess other people on the team too and they would be aware of what was going on, things like … what are some of the questions that would be asked?
Mitchell: Yeah. What was your biggest highlight this week or what was your biggest win? Where do you need my help as your manager? Do you want to shout out to anyone in the company and give a thank you? Those kinds of things.
Andrew: So, sorry to interrupt, but some of what you did right you talked about on Medium. You actually did a lot of things great that I don’t want to brush over just because the company didn’t work out. You really validated the product. First you said, “This is what we need internally.” Did you use it at BigCommerce when you worked at BigCommerce?
Mitchell: It was based on about 70% of the things we did at BigCommerce. So, BigCommerce was a pilot when we launched and obviously I shut the company down. So, yes and no.
Andrew: Okay. So, then you knew what you guys needed because you experienced it and then you did some validation to find out how it could be used by other people, right? What kind of validation did you use and what did you hear back?
Mitchell: Yeah. So, we did a lot of validation. So, we did a closed beta that went for about six months and during that closed beta, we iterated on the product based on feedback coming in. We had I think it was about 50 companies in the closed beta, some smaller ones, some medium-sized ones and one or two larger companies.
Iterating on the product really showed me that the path to scale it and to build a big company is to focus on the enterprise. So, that’s probably the biggest lesson that I learned coming out of the beta, that for an enterprise, culture is a pain point or a big pain. For an SMB, it’s more a vitamin. You’ve probably heard you want to build a painkiller, not a vitamin.
Andrew: Why do you want to build a painkiller not a vitamin?
Mitchell: Because that’s what I call a tier one problem. For a business, they’ve only got a finite amount of resources, a finite amount of capital and a finite amount of time they can use to fix problems. So, for problems at tier one or one of their top three problems, it’s probably going to get brushed under the rug and they’ll deal with it later.
So, for an enterprise, this was a tier one problem, for SMBs, it was probably a tier two or tier three problem because they hadn’t hit that point where culture mattered yet because they weren’t having attrition internally, they won’t losing good people because of that culture because they weren’t at that tipping point in terms of rapid hiring yet.
Andrew: How did you know that this was an issue for enterprise customers?
Mitchell: Because BigCommerce is pretty much an enterprise company.
Andrew: I see. So, you experienced it yourself, but when you were testing it out with other people, how did you know that it was clicking with enterprise customers, but it wasn’t clicking with SMB, which is a small medium sized businesses?
Mitchell: So, during the closed beta, I ended up building two personas, so essentially a small business and an enterprise. When I looked at the NPS or the Net Promoter Score surveys that were coming in, in the feedback and segmented them, enterprise customers or beta users loved the product. Small businesses liked the product. I think that was a big difference. That’s how I knew we were solving a pain point for the enterprise and it was more a vitamin for the SMB.
Andrew: Did you also make phone calls and talk to customers?
Mitchell: Yeah. I was on 100 phone calls.
Andrew: Okay. Is this uncomfortable in any way?
Mitchell: No. It’s fine.
Andrew: I know you work very closely with David Cancel, another great interviewee on Mixergy. They’re both great, but the last interview with him was so fantastic about how he’s embedding himself in his customers’ lives to understand their pain so that he can turn Drift into a product that’s not just a vitamin or a painkiller, but almost like a cancer cure, like he wants to understand the deep pain that these guys have.
So, you guys come from the same mindset and I want to understand the process as you did it. So, you talked to dozens and dozens and dozens of customers or users. How did you find those customers to talk to?
Mitchell: I ran promoted tweets and Facebook ads and targeted based on interest and job title, so primarily targeting startup founders through Facebook and then targeting people on Twitter via promoted Twitter who follow I guess what I consider innovative kinds of companies like First Round, First Round Review. They put out a lot of great content, as I’m sure you’ve seen. Entrepreneurs organizations, they have founders that are hungry that want to learn and grow their company.
So I wanted to attract like-minded founders who would give me the time of day to play around with the product and use it without paying them, without actually knowing the product wasn’t launched yet. So, they were the two primary channels, very cost-effective.
Andrew: So, you were using those channels, buying ads on them, sending people to a landing page, you get someone to fill out a form to say that they wanted to use the software. They didn’t have to pay at the time, right?
Andrew: And then at that point, they were using the software. At what point do you make a phone call to them and actually get on a call with them?
Mitchell: Before they use the software.
Andrew: Before they use it. So, they have to ask for permission to use it.
Mitchell: Right. So one of the things that works really well is to create an environment of constrained supplier when you’re bringing in people to try a product. So basically the ad said, “We’re looking for 10 business owners who care about their culture and want to think about how to scale that in a way that makes sense for them. We’re building new software. Click here to tell us more about you. If you qualify, then we’ll reach out and show you a product.”
So you click the ad. You end up on a SurveyMonkey 30-question survey. This was not just something that said name and email. This was a very detailed survey. There was nothing about the product, no screenshot, nothing about me. It just said, “We love culture. We’re building a product to help you scale it. If you want to learn more, fill in this survey. If you qualify, our founder will reach out.” That’s it.
Andrew: I see.
Mitchell: That worked really well because then I could cherry pick the best companies from the–I think was had like 100 or something like that companies complete that. I could say, “I like that person. That person looks good.” I’d reach out and say, “Hey, let’s get on the phone.” And then I’d tell them who I am and what we’re doing.
And then on the phone, if they sounded like a good fit, if they weren’t a jerk–I like to work with nice people–if they sounded good and humble and they were a great founder and I’d say, “Let me set you up with a demo of the product. Let’s import all of your employees and let’s run the closed beta for three months.” That’s how I did it.
Andrew: Why not just let anybody use the software and then watch what they do and make phone calls to a handful of people who you think are good customers to talk to? Why did you have to talk to them before?
Mitchell: I believe you only get one chance to make a good first impression. I valued my brand as a founder and it reflected the standard that I hold myself to. That’s why like to do a closed beta. Refine the product–it was six months that we did it and then put it out knowing that we’re much closer to having a great version one as opposed to an MVP. I like to have an MSP, minimum sellable product like Mark Suster talks about, not a minimum viable product. There’s so much competition in every space these days that you need to stand out.
Andrew: So you were thinking, “If I give them the product first, the product is not that good. It’s not going to make a good impression. I don’t want to start off with a bad impression or anything less and a good impression. I’m going to start talking to them, I can make a good impression and then the product, if it doesn’t live up to expectations, they at least have seen where I’m going with this. Did you have a product when you first talked to people?
Mitchell: Yeah. I had a very rough product that an agency had built for me. So it was a prototype. You’re exactly right. You don’t sell them on the product initially. You sell them on the vision and your mission and what you believe you can accomplish over the next two or three years to get them to buy in. The first version of the product was ugly. It was hard to use. It was buggy. But they overcame those obstacles because they believed in my vision and I could convey that confidently on the phone as well.
Andrew: I want to keep digging into this, but I’ve got to ask you a question that just pops to mind. Any time people here that someone’s offering a course, look at how smart you are at thinking through your product. Look at how successful you are having built other companies before, including the software company, BigCommerce, which is gigantic. Why go to teach? Why become an info marketer instead of saying this whole process that you’re teaching me could be applied to the next thing and the next thing after that? Why teach, dude?
Mitchell: Good question. So I think before you hit record on this, we were talking about that. You said in our last interview in 2010 I was doing a lot of content. I haven’t stopped over the last six years. I really get frustrated when founders, entrepreneurs, CEOs make it look like there’s some secret or some magic to building companies or being successful because I don’t think there is.
Andrew: In the past when you before BigCommerce started teaching, you were teaching because you were selling software, right? You were essentially … well, I guess no, you did for a period just sell content itself, right?
Mitchell: No. It was all to generate inbound leads for BigCommerce. We were bootstrapped.
Andrew: So then is this course a way for you to eventually create a new software or are you at a point in your life where you say, “I want to just sell content. I want to sell information.”
Mitchell: No. Good question. So I’ve built a lot of companies. I’ve been fortunate enough to do well from those financially and all that kind of stuff. So, my mission, my personal mission now is to teach as many wannabe founders or first time founders how to avoid the mistakes that I made. So my ultimate goal over the next three years is to actually build a university.
Andrew: What kind of university?
Mitchell: It will be online. It will be accredited.
Andrew: Fully accredited?
Mitchell: Fully accredited. Yeah.
Andrew: So I went to NYU. When I took a speech class or I took a Spanish class, I got credit for it. I see. That’s what you want to do. So, this is your minimum sellable product, the one course that you can teach yourself.
Mitchell: Right. I’m actually working on more courses at the moment. So it’s twofold. I want to help as many entrepreneurs as I can because there are so many great tools out there to do everything at the moment in terms of SaaS, but the education is still fragmented. There are lots of great sites. There’s Udemy. There’s Khan Academy. There’s YouTube. You can learn everything. But how do you bring it all together, or most importantly how do you learn from someone who’s done it as opposed to someone who says, “I’m going to launch a career teaching people how to do something that I haven’t done”?
Andrew: Right. If you know how to do it, then do it yourself first and then go and teach it, right? I wouldn’t want to take bicycle riding or snowboarding lessons from somebody who’s never ridden a bike or snowboarded before. But in business, it doesn’t seem to be an obstacle. They’ll go teach something and then hope that … actually, they don’t even hope that they’re going to do it.
Here’s the other thing that I’m thinking. This is the stuff that gives people douche chills, but that’s what makes me a good interviewer because it’s the questions on people’s minds. I’m looking at your YouTube channel. You’re a content madman. You’re driving somewhere and shooting video for YouTube. I thought, “This guy is great. He’s the creator of BigCommerce.”
I hope I’m not like … I’m not a super fanboy of BigCommerce, but frankly, to see an entrepreneur build a company from nothing to that level is tremendous. And then I go to your YouTube numbers and they’re like hundreds of views. Right now, there’s a kid crying on camera in a cute way that’s got thousands of views, hundreds of thousands of views. Does it make you feel like, “What am I doing here? I’m taking a step back so much.”
Mitchell: No. The YouTube channel I only launched about a month ago and it’s not my primary focus. I’m just building it up. Second, people like edutainment. So, I think with YouTube, the cat videos and the people crying, that’s a very broad audience that I don’t want to appeal to.
I want to appeal to the tiniest slice of an audience that is like you, is like me, a founder that wants to build a successful company. That is a fraction of a fraction of a percent of everybody in the world. So, I don’t need a million views on one video to build that audience. I need 100, 200, 10,000 one of my videos got last week, and then that’s enough for me, right?
Andrew: I’m amazed that you don’t feel disappointed by that. I’m so amazed. I just watched before this interview started your video with “The Secret to Making Huge Progress.” It’s a good video. It got 75 views. I would feel so down on myself after that, but you don’t feel that.
Mitchell: Well, I think there are two things around that. So, I’ve changed the way I do the videos. I normally do 20-minute whiteboard videos. I’ve got a whiteboard here behind me. I actually have over 100,000 people on my email list that I haven’t sent the videos to yet. That email will go out tomorrow and the views will skyrocket.
Andrew: They’ll get even more.
Andrew: Here’s the part that I admire about this. This reminds me so much of those videos that I watched before BigCommerce was BigCommerce. It’s just you teaching and I think that it’s really hard in a world where everyone seems to have a ton of followers, where everyone seems to have a ton of views to put something out there and not have a ton of views. I’m amazed that you’re you at a place where your ego is so big where you say, “I can’t do this. I can’t let people see this. I can’t start from scratch like this.” You really are starting from scratch here.
Mitchell: Yeah. I like starting from scratch.
Andrew: You do?
Mitchell: All of my companies, yeah.
Andrew: I hate that. That’s the part where nobody knows you, where you feel like a failure. Don’t you feel any of that?
Andrew: You feel like a nobody. You feel like everything is hopeless. You put out a video. You get nobody watching it. That doesn’t disappoint you?
Mitchell: No. It’s just one touchpoint. YouTube is one way that I can reach out to people. I have a Medium like you do, on Twitter like you do, on Facebook. My secret to customers is paid acquisition. So, what you see on those free channels is one-millionth of the reach that I have at the moment.
I don’t worry. I like teaching and it’s my passion and I would do it if no one watched my videos because that’s how I’m wired as an entrepreneur. I like to execute and build companies and I am building more companies at the moment, but I just feel a drive to teach and stand in front of a camera. I can’t explain it.
Andrew: How much time do you spend a day creating content, whether it’s for Medium or for YouTube while you drive or something bigger?
Mitchell: Recently it’s been about 14 hours a day.
Andrew: 14 hours a day making content?
Mitchell: Yeah, 12 to 14 hours. We’ve just had our second baby girl and she’s two weeks old. So, that’s taking up some of my time. I create a lot of content that never goes public because it goes into some of my automation funnels that I use to build leads. So, what you see public is maybe 30 minutes a day and then a lot of it is building out campaigns and videos and all of that stuff that I use to drive leads.
Andrew: I’d love to see your campaigns. What software do you use to send out your email?
Andrew: I see because you get all the automation that you crave.
Mitchell: It’s incredible. Yeah.
Andrew: Okay. So coming back to PeopleSpark for a moment, I’m bouncing all over the place because there’s so much I want to ask you about and I think it actually keeps things interesting because it keeps moving. Actually, you know what? I’ve got to take a break since we’re not making a transition back. Let me use this opportunity to take a break and talk about my sponsor.
The company is Bench. Bench does bookkeeping. Everyone thinks of it as just software for bookkeeping, but we’re talking about software and people who do your books. Have you ever, Mitch, gotten into a situation where your books were out of whack, where do you didn’t know what your revenues where? You did?
Mitchell: Oh yeah.
Andrew: When was this?
Mitchell: Probably five years ago.
Andrew: Five years ago? So even after our interview. What do you mean by your books were out of whack? What happened?
Mitchell: I had a rough idea of the revenue we were doing, but I didn’t know down to the precise numbers monthly what we were doing, quarterly what we were doing. We were raising a round, so that was a second priority to get the books in order.
Andrew: So, why do you think the books were so out of whack at the time?
Mitchell: Our CFO had another focus on raising the round with us.
Andrew: Ah, okay. I see. What’s the damage of not having your books kept up?
Mitchell: It makes board reporting really hard, when you don’t have the right numbers and you get an investor on the phone saying, “Send me the deck,” and you say, “We need two weeks to get the books in order.” It damages your reputation.
Andrew: Here’s another problem. When you start falling behind with your books, it stars to become a bigger and bigger issue where it becomes so daunting that you just don’t touch it until tax time and then you have this big giant hairy ball that you have to unwind, tremendously bad. It also becomes an issue where you just don’t know where your money is going. You don’t know what’s bringing in revenue. You don’t have deep insight into what’s working and what’s not.
We entrepreneurs tend to go from one side to the other. We’re either so upset that we think everything has gone to pot. It just is not working or we’re so overly optimistic that we think we’re doing great everywhere. Unless we have the real numbers, we could be deluding ourselves either positively or negatively, but either way, we’re really ruining our ability to run our companies.
So, what many entrepreneurs will do is they’ll sit down using one of the worst pieces of software ever created, QuickBooks. I probably shouldn’t be mentioning a competitor’s name in an ad, but they’re so bad. Even if you find another piece of software and you try to do it yourself, you’re wasting your time.
You as an entrepreneur should not be doing this. One, because your time should be spent on higher level things and number two because you need a second pair of eyes, someone to really look through it and make sure that it’s being done right and then you come in and verify so there are two groups of people who are looking at it.
So what do you do? Many people go out and they start looking for that one bookkeeper who’s going to do their work. Well, I read Mark Cuban’s book, the one about how to win or something. I forget what it’s called. It’s like a compilation of his blog posts. It’s actually really good. But he talks about how the woman who is doing is book deleted some name on some checks and ended up stealing money from them. You can have that one person do books for you. You need a professional organization to do your books.
So where do you find a professional organization? Well, if you go to Yelp like one Mixergy member did, you’re going to make a mistake because those people do not know our world. They don’t know how Stripe works. They don’t know how PayPal works. They don’t how to deal with lots of orders coming in from all those places. What you want is someone who knows tech, who knows books, who’s got a big operation so there are people looking over each other’s shoulder and one person can’t run away.
We lost the connection. What I was saying was you want someone who knows your technology, who knows how to do books. Who’s got an organization so if one person screws up, there’s someone else to have their back. You want a professional to run your books for you. That’s why I recommend that you go check out Bench.co/Mixergy. Bench is the company that will do your books for you and give you the software so that you can see everything.
They’re phenomenal. Go to Bench.co/Mixergy and they’re going to give you 20% off your first six months. Frankly, their prices are already much lower than I think you can get at a decent bookkeeping operation to do your books for you. They will do it for you. Go to Bench.co/Mixergy. Then email me to rave about how well they’re doing your books like Patrick McKinsey did. He wrote a whole blog post about how great they did his books.
Okay. Mitch, going back to Spark, you now knew your customers. You were talking to them. You were improving your product. You then discovered that enterprise is where it was at. Why not stick with enterprise? I feel like enterprise is a lot of money. It’s never their money. If I spend money at Mixergy, it’s my own money. I’m going to be watching it like a hawk. Why not stick with enterprise who don’t do that?
Mitchell: Yeah, three reasons. Enterprise is not in my DNA as a founder. I think it’s really important for founders to align with the market they want to serve. I have a passion and a background for serving SMBs. That’s what I know. That’s what I’ve done for 15 years now. That’s the first reason.
The second reason is the long sales cycles. They do require sales teams. I don’t like building sales teams. I believe they’re cost inefficient in the first few years of the company. And the third is having to raise capital to the build the business, which would, for a company like that, mean that I’m moving to the US and I’ve spent the better part of the last six years on planes between Sydney where I am now and San Francisco and Austin.
I just mentioned before that I’ve had my second baby girl. So I’m a dad of two little girls. I could get away with that before my girls were born. My wife would let me. But now she would cut off my leg if I said we’re moving to the U.S. So a mix of business and personal reasons. Having been through all of that before knowing the commitment it needs, I couldn’t make that decision to serve the enterprise customers because it wasn’t in my DNA. That was the main reason.
Andrew: A competitor of yours did a Medium post that pointed out how much of your site looked like his site. He even showed screenshots of his and yours using the same language. What was going on there?
Mitchell: Do you copy someone if you have a few words in the headline that they have? I don’t think so. That’s basically what it was. He emailed me and basically said that he overreacted and wished me well and I wished him well and said let’s have a fair kind of fight. One of us will win the market. Good luck. And that’s it. I think David is a nice guy, the founder of 15Five. He’s got a very smart PR woman working for him that no doubt encouraged him to write that post and fan the flames. People like controversy. It did what it did.
Andrew: I see. So it wasn’t a copy. It was just two similar sites.
Mitchell: If you’re targeting the same audience and you have similar messaging, then if you put any two sites, if you put BigCommerce next to Shopify, you can say we copied them, they copied us. When you’re serving a market and you understand your customer and the language they use and how they expect to be presold on the website, you end up with a lot of similarities.
Andrew: Do you think there’s a big market in this?
Andrew: In what 15Five is now doing, what PeopleSpark was doing? How do you know whether there’s going to be enough money to be worth your while to build this company and pour the next few years of your life into it?
Mitchell: I think there is on the enterprise side, I think Glint is doing a great job. They’re a new player in the enterprise space. In the SMB space I predict that all those players will fail if they don’t move into the enterprise just because it’s not a tier one problem for an SMB.
Andrew: And in many ways it actually bothers SMBs to tell all your people when it’s 10 or 20 people that they need to fill out this form feels a little bit much. What do you think?
Mitchell: Yeah. It’s a balance between getting the information you need as a founder and pissing them off by asking them every week to answer questions. So that’s kind of where you need the flexibility in the product to say, “Here are the questions we recommend. Don’t ask any more than these and if you do, you may get survey fatigue.” And that’s what we started finding.
Andrew: You wanted to put $1 million into it. How much did you put?
Mitchell: A few hundred thousand.
Andrew: A few hundred thousand.
Andrew: Into design and development work mostly.
Mitchell: Design, development, branding, a little bit of PR, just the basic stuff. We had three engineers, four engineers and a designer and that was it. So, a pretty small team.
Andrew: What about this, Mitch–when it was time to close, you’d already said how you’re building this company. You wrote all these blog posts teaching other people to do this process and then the company fails. Did you at all feel like a failure? Did you at all feel embarrassed after that?
Mitchell: Because the company failed?
Andrew: Because not just the company failed, but that you talked about it beforehand. The founder of Buffer when I had him on sad that before he founded Buffer, he founded this other company and he was talking about how to build these successful companies and then that other company failed and he said he felt like a failure. Did you feel any of that?
Mitchell: I’ve had heaps of companies fail. It doesn’t bother me at all. I’ve learned to separate my emotions and my ego and my pride from the businesses that I’ve built or invested in. So a business failing is not, in my view, not a reflection on me. It’s just an event. If you internalize it as a reflection on yourself and say, “I could have done this. I lost all this money,” and blah, blah, blah, then you beat yourself and you never take the next step forward and learn from those lessons. So no, it didn’t affect me at all.
Like I mentioned, I’ve had companies do well that I’ve sold. I’ve had companies fail like PeopleSpark. I’ve had companies fail before I even got them out of the gate. Some of them I talk about, some I don’t. It is what it is. That’s why I’m an entrepreneur. That why you’re an entrepreneur.
Andrew: I think one of the reasons why it’s hard as entrepreneur to talk up your company in the beginning when there’s nothing there is because if it fails, then not only is it a failure, but you look like a chump. If you’ve already written all this stuff, if you’ve already talked about it, that’s a painful place to be. You’re saying you don’t experience that because you disconnect your ego from this business and that’s not where you get your sense of pride. Then where do you get your sense of self-worth so this doesn’t affect it?
Mitchell: I think I’m in a different situation to most founders because I’ve been doing this for such a long time. I’ve build five companies, been doing it for a long time. Early on, ifs something failed or a good person left or we couldn’t raise a round, I’d beat myself up. I was actually depressed for probably about 18 months back around 2011. That kind of hit me really hard. Then after that, I just said, “I’m not going to put myself in this situation where I let anything that happens in my businesses affect me,” as much as I can, right? It will affect you a little bit.
Andrew: But how do you do that? If you’ve ever had insomnia, you wake up in the middle of the night saying go to sleep. Whatever these thoughts are, they shouldn’t exist right now, just stop. They don’t stop, even if you reason them away. How did you say, “I’m not going to let this stuff affect me?” and have it stick.
Mitchell: The most powerful quote–I like quotes. They motivate me. Tony Robbins has my favorite quote of all time, which is, “Progress equals happiness.” So, my view, if something doesn’t work, as long as you’re making progress on something meaningful that will impact me and my family and the customers I want to serve, you put everything else that happened in the past and it gets behind you very quickly.
So if I sat and dwelled on that–I could have written a long piece on Medium about why it failed and how I’m so upset. My view there was to say, “What have I learned? How I take that and how do I apply that to something moving forward?” And I think you mentioned that I wrote a lot about launching the company, etc. and I did. But there’s still good lessons in what I wrote regardless of whether the company did well or not.
So that’s why I don’t think too much–I talked about the mission and the vision, which I did. But some companies work and some don’t.
Andrew: And you just keep saying, “I learned a lot from this that I’m going to use for the next business.” See, if I were to say that to an entrepreneur who is either afraid of failure and wasn’t fully expressing himself or failed and then felt humiliated by it, if I were to say, “Look, you learned a lot from this. Now you’re going to take it to the next level, they would think I was being Pollyanna on them. But that’s the way–I see you’re laughing it off. That’s the way you genuinely think.
Mitchell: Yeah. I equate it to like meeting women in a bar. If you go up to one woman and she rejects you, for the rest of your life do you not say, “I’m going to find a wife or a girlfriend or a partner?” You’re down for a day or two and then you say, “Let me get back on the horse.” If you’re afraid of failure, you shouldn’t be an entrepreneur or you should build a lifestyle business where there’s a lot of security.
I think my view is you want to build and ideally have one company that does really well so that you’re financially secure and you can take the bigger risk on the things that you’re passionate about and that you think will impact the world.
Andrew: So you had that one big thing that let you do that.
Mitchell: I had a few. Yeah.
Andrew: By the way, I’m here to learn from you, not to impose my ideas and in some ways, the drives the audience crazy because they want to hear what I think, but I don’t want to impose what I think, usually. In this case I do. I do think, actually, if you went back and did a PeopleSpark post on what you learned, a postmortem on it, especially if you found a really good headline for it, I think it would get you a big viewership.
I think it would also be useful and I think it would humanize you because so much of what you’ve done seems a little bit superhuman like one of these guys who’s constantly hitting the ball out of the park. I think to say, “Hey, look. Here’s where it didn’t work out for me. Here’s my thinking about it. Here’s why I closed up,” I think that would be really helpful. What do you think of that?
Mitchell: That’s part of Startup Growth Blueprint. So I do a full postmortem and go through everything and talk about our lessons in that. So I have done that. It’s part of the course.
Andrew: I’d suggest putting a little bit of it on Medium as giving us closure on this story that we’ve been following along.
Mitchell: I think my view on that, you’ve got to be careful about thinking that people actually care about me, not you, but I have to be–I’m very self-aware. Most entrepreneurs are. People don’t care about me or that the company failed. They care about their business and what they can apply to their business. That’s the primary reason I haven’t done it.
Andrew: I disagree with you. I think in general you’re right. I think in your case and a handful of other people’s cases and more and more as we continue, people do care about the entrepreneur. The entrepreneur matters a lot more than it should. The story, your story, I think, matters a lot more.
People root for entrepreneurs the way that they used to root for baseball players. That means a little bit more personal story. That means a little bit more that they’re following along and we need to give them closure. Frankly, I’m guilty of that too, of not doing enough of that. I know that it’s hard for me to do it because I’ve positioned myself as an interviewer.
But I know that when I put something out there, the audience wants to know, “Where is it going?” which just reminds me–in one of the past interviews, I said I was going to open up a package from a guest and I didn’t do it because the video went out. I’ve got to do it today. I’ve got it right here. Now, this is one of those things that I probably shouldn’t be doing. Nobody cares about the package I got. They don’t care about me to that degree. But I do think they do care. I think the more we get to know you, the more we care about your product.
Let’s talk about depression. I love that you were willing to bring that up.
Mitchell: I think you’ve got valid points. So I’ll definitely take that on board.
Andrew: Okay. I appreciate that. Depression, I love that you’re feeling open about talking about depression. What do you think started it?
Mitchell: The variability in predictability and my emotional range when we were shifting from Interspire, which was a company I started in 2003 and we pivoted one of the products out of that in 2008 to become BigCommerce. So the risk, taking a very solid, very profitable revenue stream and cutting it all off and saying, “We’re going to go all in on this and we’re going to grow this thing like crazy and raise a bunch of money and it’s going to work and if it doesn’t, we’ve cut off all this revenue from this old company, but who cares, let’s go all in.
Andrew: And the risk bummed you out.
Mitchell: It was the risk. It was that one day things are going really well–like every startup, one day things are going really well and then the next day one of your managers resigns. And then the next week things are going really well and then an investor pulls a term sheet from you, just that constant up and down kind of emotional run was the catalyst for a lot of it. Yeah.
Andrew: On a personal side, did you bank enough money before you made that change from Interspire to BigCommerce?
Andrew: You did? To the point where it didn’t affect your lifestyle that much, like you’d still be living a one percent lifestyle?
Mitchell: Yeah. I think my view of what drives me has nothing to do with money.
Andrew: It doesn’t.
Mitchell: It’s making an impact. Any time I feel in any of my businesses, being able to make a big impact is a risk. That’s when I used to internalize it and that would kind of affect me emotionally. Yeah.
Andrew: I see. What was the big one for you? Was it DevArticles, that business that did really well?
Mitchell: No, it was Interspire.
Andrew: Interspire, that’s the one? Then you took enough money off the table with Interspire before it because BigCommerce, is that right?
Mitchell: Right. Well, actually, I sold DevArticles. So that kind of did okay. I sold that when I was 21, I think.
Andrew: What did you sell that for?
Andrew: What did you sell that for? How much?
Mitchell: Mid-six figures.
Andrew: Mid-six figures, okay. That gives you a little bit.
Mitchell: A little bit. Yeah. Then Interspire was doing so well because it was kind of pre-SaaS and we were doing email marketing and shopping carts and those kinds of web designing things.
Andrew: You guys did a knowledge manager. I’m looking at the site right now. It’s still up for historic purposes. Anyone can go check out Interspire.com. It kind of redirects over to BigCommerce. But you can see it. Yeah. I see it. A lot of the software was one-time payment, if I’m correct, right?
Mitchell: On time payment and you’d install it on your own web host, yeah.
Andrew: Okay. And then BigCommerce became the thing that anyone could pay you guys a monthly fee for and then you install it, you set it up. You make sure it all just works for them. Sorry?
Mitchell: It’s all SaaS.
Andrew: So you took enough money off the table with Interspire and that’s what gave you the cushion that you said allowed you to feel safe with BigCommerce. Am I right?
Mitchell: Right. I think the important thing there–so, two things, Interspire was bootstrapped. We grew that to it was about $7 million in annual revenue, very profitable with about 12 people running that. But also I had a very low cost of living. I don’t need fancy stuff. So, my cost of living back then at least was very, very low. So, we only needed a little bit of money to feel secure, to swing for the fences and say, “Let’s shut that revenue down and go all in and build a huge company with BigCommerce.”
Andrew: Okay. Why did you leave BigCommerce?
Mitchell: Good question. I am very good at starting and scaling companies. When it comes to having a very established company where it’s primarily about managing and hitting targets, that bores the hell out of me. Tony Robbins always says there are three types of people–artist, entrepreneur and manager. I’m a combination of artist and entrepreneur. I’m not a manager. I’m great at managing people. I love hiring and building cultures, but running companies at that scale, it’s time for me to step back. It’s time to bring in a “professional” CEO, which we did and he’s doing a killer job.
Andrew: Was that a tough transition for you to do?
Mitchell: No. It was very easy because I had planned it for 18 months.
Andrew: How do you plan it for 18 months?
Mitchell: I said within 18 months I want to build a new company. So, what do I have to do within that 18 months to make that a reality? The last thing was to bring in a CEO. I just worked backwards from there to figure out my direct reports have to report to someone else. Who do they report to? How do we do that? I have to talk to the investors and get them comfortable that I’m leaving the company. How do I do that? etc., etc. So it was a long process, but it’s something I very carefully and considerately for everyone planned.
Andrew: I see. When you go through these transitions, they see, really easy from the outside, but the reason that it’s easy is because you thought through this whole process. It seems like you’ve had somebody help you think it through.
Mitchell: Yeah. One of my best friends and one of my advisors–I advise him, he advises me–is Eddie, Eddie Machaalani.
Mitchell: Eddie, my cofounder at BigCommerce. We built Interspire together. We’ve been working together since 2003. So it’s at 13 years. We still text. I’ve got my phone here. There are ten messages on here from him and my phone is on mute. We’re no longer working in the same company, but he’s doing something. I’m doing some things. We’re each other’s sounding board. So, he was a huge part of it.
Andrew: Is there anyone else? I think I read one of your posts where you said that you want to have people who are a few steps ahead of you, not a thousand steps ahead, but a few steps ahead. So when you think about that, who’s a few steps ahead of you that you can turn to?
Mitchell: I think it depends on which area of life or business you’re talking about. David Cancel is just… That guy is on another level. So I talk to David a lot. My wife, actually, helps me a lot. And I’ve had coaches for ten years.
Andrew: How did you find a good coach? It feels like a lot of coaches are not practitioners. So they don’t get what you’re going through.
Mitchell: Yeah. My initial view was that I only want a coach that’s been a player. So, if you use the analogy of NBA. Phil Jackson was a great coach because he played for the Knicks. He understood the game. I was pig-headed in that view for a long time. But as soon as I said, “It’s okay to get a coach whose job is a coach and they haven’t built companies and anything before.” That’s when I really found a good coach.
I’ve mentioned Tony Robbins 600 times already. I feel I should get an affiliate fee if anyone clicks on his website. But he has what he calls Master Coaching. This is a group of people, I think there are like ten of them and they all report directly to Tony. You can apply to get them to coach you. That’s what I did back in 2010 or 2011. So I had three different coaches from Tony Robbins and they were very impactful to get me through the rapid growth of BigCommerce, primarily.
Andrew: I tried them and I didn’t get much out of working with them because they weren’t entrepreneurs. They weren’t business people. They didn’t give me the advice that I was looking for. I think maybe I should have been willing to take the advice that they were giving instead of looking for the advice I wanted. I wanted more business direction. What they do is they teach you that mindset stuff that Tony Robbins is known for, right?
Mitchell: They do. They were not business advisors at all. A lot of the business advisors I had came through my investors. So General Catalyst, who I’m sure you’ve heard of. Larry Bohn, he’s on the BigCommerce board, he’s incredible. He gave me access to all of the entrepreneurs. So you know Dharmesh Shah. He’s incredible, Brian Halligan from HubSpot, Mike Volpe from HubSpot and just being able to tap into them and send emails and call them–
Andrew: Wasn’t Steve Case a board member?
Mitchell: Steve Case is on the BigCommerce board. Yes.
Andrew: Were you able to text Steve Case, the guy who ran AOL?
Andrew: You were? And just say, “Hey, we’re having this trouble. We’re going through this issue.”
Mitchell: Yeah. Steve is and was very present in all of the board meetings. What BigCommerce is doing aligns with his view based on his new book. It’s called “The Third Wave,” where everything is being democratized and made available to everybody. So he’s very passionate and very smart, obviously, as well.
Andrew: And Dharmesh Shah, the founder of HubSpot–what kind of advice would he give you?
Mitchell: I didn’t speak to Dharmesh too much, probably three or four times over the last few years. But anything he says, you listen. So I can’t remember specific advice, but it was business advice about raising capital and hiring and things like that. It was a while ago.
Andrew: Okay. Second sponsor, I’ve got to jump into that. Man, I’m so behind on my sponsors. Second sponsor is a company called Toptal. Have you heard of Toptal?
Mitchell: I have heard of them.
Andrew: You have? So what do you remember about them actually before I go into my spiel here?
Mitchell: I know that they help with finding great talent and that’s pretty much all I know. I haven’t used them.
Andrew: Perfect. What’s great about Toptal is they have this network of developers–lots of different languages, lots of different people all pre-tested, pre-vetted, etc. so that when you need somebody for Ruby on Rails or an Android developer, etc., you just contact them, you tell them how you’re working.
You tell them what you need done. Whether you need person, whether it’s a project, whether it’s a part-time thing. Maybe you need a team of people. Then they go out. They have matches, people whose whole job is to match you with the right developers. They find the right person for you or people for you. You can talk to them. You can make sure that it is the right fit and if you’re ready, you can often get started with them within days. I got started with my guy within 24 hours. It’s a fantastic turnaround time with an incredible group of people.
This is such a good company that Andreessen Horowitz invested in them I think within minutes. I don’t know for sure, but the rumor is within minutes of finding out about them because of the team behind them, because of the people who believed in them and because of how fast they were growing. But the reason I want everyone out there to check them out is because they really do have a tremendously good group of people who are there ready to do work for you.
So, if you’re looking for a developer or a team of them, go check out–actually Toptal is where everyone else goes. What I want you guys to do is go to a site that they setup for us to give us something that they’re not giving other people. If you want what they’re giving Mixergy listeners, which is 80 hours of Toptal developer credit when you pay for your first 80 hours, they’re going to give you 80 hours of developer credit after you pay for your first 80.
If you want that in addition to a no-risk trial period of up to two weeks, go to Toptal.com/Mixergy. Top as in top of the mountain, tal as in talent. That’s where they want to be–top of the mountain with the best talent in the world, Toptal.com/Mixergy.
All right. You left the … actually, I have a couple of other questions that I want to ask you, but if you were listening, what’s one thing that you would want to hear from an entrepreneur who built up all these companies, from the guy who built up BigCommerce?
Mitchell: That’s a good question. I think that the main thing that I’ve learned is how critical finding the right people is and hiring them at the right time and making sure that you don’t think more than about 18 months out. Ben Horowitz in his book, “The Hard Thing About Hard Things” talks about that a lot.
He says, “When you’re planning, when you’re thinking about hiring, when you’re thinking about revenue, your product, don’t plan more than 18 months out because in 18 months your startup will be drastically different from where you think it will be and where it is now.” So, I don’t know if that answers your question.
Andrew: It does, actually. I feel like I’m not asking the right questions or enough questions about hiring because when I look at the pre-interview notes from my guests, what I often see them say is we always ask them what was the hardest thing and they often say, “Hiring was the hardest thing.” And I don’t know how to ask the right questions to get at the difficulty of hiring and the process that worked for them.
Andrew: So, what was difficult for you about hiring and what process helped you hire the right people?
Mitchell: Hiring without a doubt has been for me the hardest thing to get right. It doesn’t matter if you’re hiring a CEO, which actually turned out really well, if you’re hiring a C-level, a VP, an engineer, it doesn’t matter what it is. I did an estimate and I think I’ve interviewed almost 1,000 people over the last seven or eight years. Sometimes you get it right and sometimes you don’t.
I think the hard thing about hiring is people can have great resumes, great references, a great track record at great companies. They can talk the talk in the interview and then three months after they started, they’re like, “Why the hell did I hire this person? How did I miss the obvious sign of X?”
So I think the big thing I learned is not to be impressed with pedigree, which is the brands they’ve been at or the titles they’ve had or even what they tell you they’ve done in the interview. I think the biggest way to mitigate that is to do back channel references, which means if you’re close to making an offer, you want to talk to people who were their peers and also that they reported to or that reported to them and get some honest kind of intel from them.
That’s not always possible to do. It’s a balance between privacy of the candidate and kind of reaching out. But every time we’ve done that and spent a lot of time back-channeling references, the new person has worked out. That doesn’t matter whether they were a head of this or an engineer or a designer. So I think that’s the biggest lesson I’ve learned.
When someone comes into an interview, for the last few years I haven’t looked at their resume, their LinkedIn profile, the big logos they’ve been at. I just try and get to them on a personal level and I’ve found skills can be taught. Personalities can’t be changed. I think that’s how I’d sum it up.
So in the interview, if they’re hardworking, if they’re honest, if they have integrity, if they have a good track record where they’ve taken ownership of problems and can clearly communicate how they solve those problems in a way that’s articulate, that speaks a lot to me now as opposed to, “You were the VP of this or that company. Wow. I’m so impressed.” I fell for that as a first, second, third, fourth time founder. But there’s a reason people like that don’t last for long in well-known companies. It’s because they create politics. It’s because they put themselves before their team.
Andrew: Can you tell someone’s personality from an environment where you’re judging their personality so carefully, where you’re scrutinizing it?
Mitchell: I like to do a face to face and use my gut first, but then I like to do a DiSC profile and a Myers-Briggs personality test as well to verify it.
Mitchell: People can have strange things going on upstairs that don’t come through in an interview and they’re very good at masking them or hiding them. Those personality tests will tell you, “Is this guy or girl legit or do they have some issues that they just haven’t brought up?” So, I like to do it in person and verify with the data.
Andrew: You told our producer that you once managed a Burger King just to learn how to manage people.
Mitchell: I did when I was 15.
Andrew: Did that work.
Mitchell: I think I did a pretty good job.
Andrew: What did you learn about managing people at Burger King?
Mitchell: That teenagers don’t care about the job. That was the main thing. But how to communicate, how to have empathy, how to be authoritative without being, pardon my language, an asshole. I think there’s a fine line between convincing someone to do something and telling them to do something and doing that with teenagers when I was 16 and everybody working around me was 14, 15, 16 as well. That was interesting. I definitely didn’t get it right all the time, but I think I learned a lot from that because I was a very big introvert in my teens and I wanted to break out of that.
Andrew: When did you do it right? Do you have an example of a time you look back on and go, “That is so bad?”
Mitchell: Thousands of examples. There are four styles of leadership that you need to employ. There’s sell, tell, direct and delegate. Depending on the seniority level and the experience of the person, you need to do it in a different way, right? So, let’s say you’ve hired someone who’s doing a very menial task. You’re going to tell them exactly how to do it. Maybe they’re a junior or an intern and they’re very new to an industry.
You’re going to say, “I want you to do this and this and this and then this and this and when you’ve done it, come to me. But if you take that approach and apply it to a vice president or to a manager, they’re going to say, “Dude, I don’t need you to tell me what to do. Give me guidance. Be my guiderails and don’t give me the step by step.” So, I’ve been guilty of doing that a lot.
Micromanaging would be… Steamrolling over people because I have strong ideas and a strong personality and steamrolling their ideas and their input and saying, “No, we’re doing it this way. Go and get it done or I’ll find someone else who will.” Sometimes that works. Sometimes you need to do that. Sometimes it doesn’t.
Andrew: BigCommerce versus Shopify–I’m trying to find market share. Isn’t there a site that I should be able to go to that will tell me what percentage of sites are using BigCommerce versus Shopify?
Mitchell: I can tell you roughly. BigCommerce is like 120,000 to 150,000 stores. Shopify is about 250,000 at the moment.
Andrew: So, why are they a little over double?
Mitchell: Because they’re targeting the SMB space and we’ve moved up to what I would call fast-growth brands. So, more than medium-sized companies, there are fewer of them. Therefore you have fewer clients and you make the same or more revenue from them. Instead of a $50 a month plan, you’re charging $3,000, $4,000, $5,000, $10,000 a month. So, you need fewer of them to net the same revenue.
Andrew: I see. And revenue-wise, do you think you guys are doing as much as they are? Their stuff is public, right?
Mitchell: No. They’re a bigger company. They’re probably three times bigger than BigCommerce.
Andrew: Why? Why do you think? What was the difference? Two similar platforms…
Mitchell: Two similar platforms initially, but I think in any market over time, there’s a very predictable pattern that happens. I like to think of the email marketing space. We were in that space in 2007 with Interspire, the company before BigCommerce. You think about today who are the players in that space. Well, there’s ExactTarget at the top. They’re part of Salesforce. In the middle, there’s kind of Infusionsoft and a few others and then down at the bottom there’s kind of MailChimp and Constant Contact. So, over time market segment and products do really well in a segment of those markets. There’s really no one that owns enterprise email marketing and mid-market and SMB.
Andrew: I see.
Mitchell: That’s exactly the same thing that happened here. Shopify, great company. I have a huge respect for Toby and the team there. They own the SMB space.
Andrew: And you’re saying that’s a more profitable space to own?
Mitchell: No, the mid-market is a more profitable space, which BigCommerce owns. Yeah.
Andrew: So why are you guys not doing as much in revenue as they are?
Mitchell: They started four years before us.
Andrew: That’s what it is? It’s just that they had that head start?
Mitchell: Yeah. I think that’s a lot of it. We also repositioned about two or three years ago. We were going head to head. Shopify was one of many in that space. They’re the leader now definitely. There was a lot of sameness in that space. SMBs really couldn’t tell the difference between the platforms because we would add something and then everyone else would add it. Everyone else would add something and we would add it. It became kind of feature wars and everyone kind of built the same thing–different logos and one platform was easier and one was more powerful.
So we really said, “How do we win a market and how do we create competitive differentiation?” We saw that the mid-market was wide open because Magento had just been sold to eBay. The two founders had left eBay. They’re a good partner of BigCommerce now, so I won’t say anything about them, but they didn’t do a great job with the transition and now Magento is kind of on its back legs.
So we saw that opportunity to own the space, to bring it across all of the Magento partners because they were frustrated that the product was abandoned, and two years of hard work and strategy and great people and that’s what BigCommerce has done. It’s owned that mid-market.
Andrew: By bringing in the partners that were working with Magento and saying, “We can give you a new home?”
Andrew: You could give them a new home because you went up beyond the SMB audience.
Mitchell: Exactly. A new home, we feed them leads and customers, they get a good share of revenue. They win, we win, the customers win. I believe in a win, win, win model when it comes to partners and that’s what we put in front of them and that’s what they wanted.
Andrew: When I interviewed you last I asked you where you got your customers. It was so interesting to see the buildup of where you started getting the early customers, the next and the next and the next and the next. I’m wondering when you get to the tens of millions of dollars, where do customers come at that point? What’s the next level after our last interview? Where did you go to get more customers?
Mitchell: The main thing was building a brand because 50% of searches now are branded, which means BigCommerce or “BigCommerce blah” in terms of keywords, right?
Andrew: I see.
Mitchell: So building a brand, learning this the hard way is not something you can do overnight in one year or two year. It takes five or ten years. So investing a lot in building a brand, not by running TV ads and billboards and doing that kind of branded promotion that maybe Ford would do for their cars, but building relationships and building word of mouth and making sure that our core values were reflected in how we did business and how we brought on customers.
I taught the sales team that if our product isn’t a good fit for someone, don’t sell them on it, send them to Shopify, send them to Magento, send them to WooCommerce, PrestaShop. There are a million places.
Andrew: So how do you get enough people to even talk about BigCommerce and type it in?
Mitchell: Well, you knock the socks off your existing customers.
Andrew: That’s it? That was your big thing at that point?
Mitchell: The average BigCommerce customer or merchant knows six to ten other business owners. So, if you wow them, then their network, they’re going to bring in one or two. So, you’re paying to acquire one customer, but you’re netting two from them.
Andrew: That seems like a really hard transition from the person who you seemed to be when you started, which was much more like direct marketer data-driven, right? There was a period you jumped on Google AdWords back when they were pennies. So, talk about that, if you could.
Mitchell: So the company still does AdWords and paid acquisition. But I think there’s a big difference when you’ve raised $155 million about how you scale marketing–getting very good at product marketing, segmenting the customer base and really as I mentioned before, trying to position and own that mid-market and speaking to those fast-growth brands and a way that resonates with them.
There was a lot of luck in it. Magento kind of falling over was a lot of luck for us. I always believed there was a huge amount of luck in any successful company. We were able to capitalize on that, their failure very quickly to help their partners and customers come across. That did a huge amount of gain in terms of customer count. But we still use paid acquisition. We still do email marketing, but a lot of it is about segmentation of the market and also building a sales team. BigCommerce has a large sales team.
Andrew: Outbound sales team?
Andrew: Both, and internal?
Mitchell: Internal. The outbound one is calling on companies who are with competing platforms where we know they’re not satisfied but their revenue is growing.
Andrew: How can you tell if they’re not satisfied?
Mitchell: You just look online.
Andrew: To see if they’re complaining?
Andrew: To see if they’re complaining, you mean?
Mitchell: Right. You look on their forums. You look on Facebook pages. We have a whole team that does that intel and brings it in to the SCRs and the outbound. So it’s a very laborious, expensive process, but when you understand the lifetime value of one of those customers, you can spend $10,000 to acquire them and you’ll make that back in two months.
Andrew: $10,000 to acquire a customer?
Mitchell: That was just a rough example.
Andrew: But we’re talking thousands of dollars is what a customer is worth to you guys.
Mitchell: Hundreds of thousands of dollars in lifetime value. Yeah.
Andrew: I’m looking to see now that you’re teaching this, I’m trying to spy on you to see where you’re getting traffic. My spy tool is SimilarWeb. I freaking love them.
Mitchell: I’ll tell you where my traffic comes from.
Andrew: It seems like it’s Medium.
Mitchell: My email list and Facebook ads.
Andrew: Oh, it’s Facebook ads also. It looks like the natural stuff is your posts on Medium, but you’re saying it’s your email list and also Facebook posts. What’s working for you with Facebook ads?
Mitchell: Any of your listeners, if you’re not using Facebook ads, they are the Google AdWords of today. When we last spoke, you could buy AdWords for $0.50 a click or something like that. Facebook today with their targeting, retargeting lookalike audiences, custom audiences, Facebook today produces a huge ROI, not just for me, but for any business. So, I invest 95% of my paid acquisition budget on Facebook. I work with an agency and they’re dialing it up now. Facebook is incredible.
Andrew: You’re getting people to come in. They sign up and take… Where was that? It’s video lessons on entrepreneurship, right? And then at some point in your sequence you sell them.
Andrew: I see. I was going to ask what you sell for, but you probably want to keep that private because some people are going through that process.
Mitchell: No, it’s $1,997. That’s the price.
Andrew: What does somebody get for that?
Mitchell: They get–it’s a very detailed course. I think it’s 43 hours of me in front of a whiteboard, screen recording, etc., and basically stepping them through, “How do you get an idea? Once you have an idea, how do you validate the demand for the idea? Once it’s validated, how do you build it? When it’s built, how do you market it at scale to drive customers?”
Andrew: Is there any connection to you as they’re learning this stuff or to each other?
Mitchell: Yeah. So, as part of the enrollment, they get direct access to me as almost like a one on one coach for 12 months.
Andrew: What kind of contact with you? What do they do, text you?
Mitchell: Yeah, questions.
Andrew: They can text you?
Andrew: Where are you finding the time? In addition to 14 hours of content creation, in addition to having a baby who’s two weeks old, where do you find the time to text them back?
Mitchell: Well, first I have a super wife. She’s great with the kids. Second, I love it. It’s a passion. I’m a coach. I coach founders as well and this is just an extension of that in a way where most of the questions are very, very simple to answer. It comes in, you just reply and it goes back to them. There’s only 20 or 30 questions a day, so it’s not a lot of time, but I love doing it. I make the time. When you’re passionate about something, you find the time, as you would know.
Andrew: I can’t imagine it. I see on your website here you’re also offering coaching. That I don’t see the price for. That people have to actually apply and fill out a SurveyMonkey form.
Mitchell: That’s true. With coaching, I’m I don’t want to say picky, but I work best with certain founders where their companies are at a certain size and we have great relationships and I help them scale their company and work with them on mindset and psychology and a lot of the business stuff, but also a lot of the stuff they have as a founder and how that can prevent them from building a business. Self-sabotage is massive for a lot of first-time founders.
Andrew: When I was going to interview you about PeopleSpark, our team, the producer asked you what questions did we forget to ask you. You said it’s what mistakes do founders make and you said the thing I’d like to talk about is the sense of feeling unworthy if you aren’t doing what other companies in the Valley are doing. Now you’re totally not doing what other founders in the Valley are doing. Do you feel any sense of unworthiness?
Mitchell: No way.
Andrew: David Cancel is building Drift. You’re not thinking, “I should building software like him too?
Mitchell: I have equity in Drift and I’m an advisor. So, if he does well, I do well. So, not really. I don’t want to say I’ve had my run, but I’ve been doing this for 15 years. The next few years of my life is about my girls, my two daughters and my wife. Teaching this course and teaching sincerely as many entrepreneurs as I can how to build their companies–in a few more years I’ll go from advising and investing to actually being active and I’ll start another company. I have too many ideas not to. But for the next two or three years, I’m on the sidelines and I’m completely okay with that. My friends have companies. I’m advising there. I help them. They help me. It’s great.
Andrew: I do feel it’s great. I feel like what you’ve built is just phenomenal. Every time I see BigCommerce–I found out about BigCommerce I don’t even know how. But it was before everyone was talking about it. Then I remember that one time after I moved to San Francisco. I was just going to BART.
I don’t know if you remember me texting you about this, but I’m walking down the street and I see these people handing out these fantastic egg sandwiches, which I usually don’t take because I don’t need free food, but this just looked delicious. They did it right outside of the stop where–do you know the stop?
Andrew: You do? I figured you didn’t have a direct connection to this.
Mitchell: I masterminded that whole stunt.
Andrew: You did? This is right out where the Apple bus comes, the Yahoo bus, the Google bus, the whole thing. I know because I sometimes drop my wife off at the Yahoo bus.
Mitchell: It’s not an accident that they were positioned where they were.
Andrew: They were right there in front of all these people. The coffee shop right next to them is the homeless shelter, essentially. It’s so bad. But they do make good coffee. These guys were handing out free sandwiches and slips saying, “BigCommerce is coming to San Francisco and you should be applying for a job here.” Did that work?
Mitchell: Within the first year we had 150 engineers in the San Francisco office.
Andrew: How much of it came form that? Where did you get the most engineers? What worked best?
Mitchell: That worked the best by far.
Andrew: That did?
Mitchell: Both in terms of direct hiring, we got nine engineers from that. But also in terms of building brand presence and creating that word of mouth between engineers. Like you, you probably cut the cup and it said BCinSF.com. You take that on the bus. They say, “Hey, dude, what’s that?” “I got this coffee from these guys.” “What do they do?” So we built virality and a conversation into the way we did that. So, over the next 12 months, that really helped us when we would reach out because instead of saying, “I’ve never heard of these guys,” they’re like, “You guys are the ones that did that coffee. Cool, man. Let me come in.”
Andrew: That’s it?
Mitchell: It worked incredibly well. Yeah.
Andrew: It does feel like it’s more tangible, the company. The company that is very intangible because unlike other software companies–software is pretty intangible anyway–you can see it. If you’re engaged with software–I’m engaged with Skype right now to talk to you. I’m staring at Skype, but with BigCommerce, most people don’t even know they’re on a BigCommerce site. Now to hear it and to see it live, in person just brings it to life so much more.
Mitchell: Thank you. I can’t take any of the recent credit because I’m no longer active in the company, but I appreciate the kind words.
Andrew: You took money off the table with some of these raises, right?
Mitchell: I did.
Andrew: This was a fantastic interview too. I urge everyone who listened to this to go back and listen to the first interview. Before I say goodbye and ask people how they can follow up with you, I’ve been–I love that people send me stuff, but I feel so guilty getting free stuff.
Mitchell: Whatever is in that bag, you can give me half of if it’s anything good.
Andrew: I would, but you’re so far away and I hate to ship things over. I hate to ship things anywhere. I wish you were here, I’d give it to you. Look at this nice bag that didn’t actually rip anywhere. It came direct from Japan from a guy named John Hawes. I hope this isn’t some kind of spam.
What is this? I won’t hold it up because it’s a handwritten address, which makes me feel like it’s a home or work address. It’s a nice box inside the bag. It says, “Thanks so much for your help recently. I’ve been a Mixergy listener since your time in Argentina.” That’s back when I interviewed you, Mitch. “And still look forward to every interview. Best from TS Export.” That’s where John’s from.
Let’s see what he’s sent over. The Japanese know how to wrap stuff. Let’s hold it up here. I’m one of these people, I don’t know if you are, I’m much better buying stuff for people than I am accepting stuff being given to me.
Mitchell: Me too.
Andrew: There’s an indicator on here and I still can’t figure it out. While I’m doing this… John, thanks for sending this over. Oh, it’s all kinds of treats from Japan. So we’ve got chocolate. We’ve got these breadsticks, all kinds of other stuff. Wow. Thanks, John. Let me do this so I can take a photo of it and send him a picture saying thank you. I wish that we could share this somehow.
Mitchell: I’ll be there in San Francisco soon, maybe I’ll come to your house.
Andrew: Do it. Come. Come over for scotch. I was going to say I’ll introduce you to a bunch of entrepreneurs here, but you know more than I do. Where can people follow up with you if they want to hear more?
Mitchell: Yes. I think there are a few ways. Obviously we mentioned the course. That’s open now, which is just StartupGrowthBlueprint.com. That will take you to a page where you can enter your email and get a few videos to kind of figure out what it’s about and decide if it’s for you or not. I’m on Twitter, just @MitchellHarper is my username. MitchellHarper.me is my website and then just Mitch@MitchellHarper.me for email. I’m on email all the time as well.
Andrew: And you’re going to respond to these people’s emails?
Mitchell: Oh yeah. I respond to everything all the time.
Andrew: That’s a lot of work, dude. Good. If anyone goes through this program or when someone does, please email me, let me know what you think of it, tell me what it’s like when you’re getting to text Mitch in the middle of the night because your hours are backwards from us, right?
Mitchell: Yeah. So, it’s 10:00 a.m. here.
Andrew: Yeah. Right now it’s just a little past 5:00 p.m. All right. It’s good to have you on here. Hope it won’t be another six years before we do another interview. I really admire what you’ve built up if it hasn’t come across in the interview, then it’s definitely come across in the interview. I admire that you even are that close to David Cancel. Anyone listening to me should go back and listen to the previous interview with you, with Mitch and the David Cancel interview that I did most recently in 2015-2016. You’ll love it. Thank you so much.
Mitchell: Thank you.
Andrew: Cool. Bye, everyone.