Case Study: Bringing a bootstrapped European software to the U.S. market

Accounting software is just a pain in the butt. As much as they modernize it, it still feels centuries old much more complicated than it needs to be.

Well, today’s guest said, “I’m a simplifier. I’m going to jump in and create new software that will actually make it easier for freelancers, start-ups, and people who don’t have big accounting teams looking at their books every day.”

So he created a software that makes it easy for those people to do their books. I invited him here to talk about how he did it and to see if he’s making any money considering there’s some real heavy weights in this space.

Toke Kruse is the founder of BillyApp, easy-to-use accounting software for freelancers.

Toke Kruse

Toke Kruse

BillyApp

Toke Kruse is the founder of BillyApp, easy-to-use accounting software for freelancers.

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Full Interview Transcript

Andrew: Hey, everyone, my name is Andrew Warner. I’m the founder of mixergy.com where I pride myself on taking good care of my guests, but you know what? It’s 2:00 p.m. Pacific Time and today’s guest is, I thought he was in the U.S. He’s in Copenhagen. Toke, what time is it where you are?

Toke: It’s 11:00 p.m.

Andrew: Why aren’t you angry at me for scheduling this interview with you for 2:00 p.m. my time, 11:00 your time? I could have done it earlier. You see, you’re smiling.

Toke: Yeah, that’s right, but I’m going to 12:00.

Andrew: Are you still working up until now?

Toke: Yeah, so that’s fine.

Andrew: All right. You have a good attitude about this and I really appreciate you being here. Toke Kruse is the man whose voice you just heard. He’s a guy who saw what many of us saw which is, you know what? Accounting software is just a pain in the butt. It’s centuries old it feels like and as much as they modernize it, it’s still much more complicated than it needs to be, and he said, “You know, I’m a simplifier.”

It’s the way Toke has always been, a guy who simplifies things and he said, “I’m going to jump in and I’m going to create new software that will actually make it easier for freelancers, for start-ups, for people who don’t have big accounting teams and big accountants who are going to look at their books every day. I’m going to make software that makes it easy for them to do their books.”

And so, that’s what he did. He created it. He gave it a name that was a little hard for Americans to pronounce and then he changed the name to Billy App. Billy like the name, Billy App. And so I invited him here to talk about how he did it and to see if he’s making any money considering that, you know what, there’s some really heavy weights in this space. And I want to know if he can actually compete with them or not. He’s smiling, so I’m guessing that he doesn’t have a lot of anxiety. Are you profitable now? Is that why you’re smiling?

Toke: We’re not profitable because all the money that we’re making, we’re reinvesting in the company. So we have kind of two ways to enter the market both the Danish market, where I’m, from Denmark. You can hear my strange accent and then we have the U.S. version which is a U.S. company. And it’s a little harder on the U.S. market than the Danish market.

Andrew: Yeah, you started out there, you came here, and I want to find out about the difficulty of taking something that’s working because you’re big in . . . where are you big?

Toke: In Denmark.

Andrew: Just in Denmark, not even in northern Europe?

Toke: No. So primarily in Denmark we are number three in the role of the three biggest applications.

Andrew: All right. I’m going to ask you in a moment about what your revenues are just so we have a sense of size. But first, I have to tell everyone, this interview is sponsored by two companies. The first will host your website. It’s hosting mine. It’s called HostGator. It’s hosting this new bot business that I started. They’re doing a great job there. And the second is a company called, Toptal which has helped me hire great developers, designer, and finance person. I’ll tell you more about Toptal later too.

Toke, I told you before the interview started, I was going to ask you about revenue and I told you I would not edit it out even if you beg me which so many people, they feel guilty afterwards for what they said. So, with all that in mind, what is your revenue? How are you guys doing?

Toke: Yeah, we are splitting up the revenue. So we have the Danish company and the U.S. company. And the Danish company, the revenue is $2 million annually and the U.S. company, we’re just about to start getting revenue. So it’s only $3,000 in MRR. So it’s monthly return revenue. So it’s quite small, but we just relaunched the application because we had a lot of difficulties starting up in the U.S. market.

Andrew: All right, and we’re going to get to that in this story. I’m trying to figure out whether you have any funding or not. I looked you up on AngelList. I see you have a profile, but it doesn’t seem to say whether you guys are . . . you’re not funded?

Toke: No. We have been self-funded all the way. So I think I’ve invested around $2 million in the company.

Andrew: You, personally?

Toke: Yeah.

Andrew: Wow, and so, did that money come from . . . I’m fascinated by your history. I know you’ve had multiple businesses, but the one that just keeps getting my attention is the site called SlideShop. I’m on the site right now. You have presentation slides, PowerPoint specifically here that I could buy from, I saw one for $29, a bunch for $29 for these slides. They went up to a couple of a hundred bucks. Tell me a little bit about this business. I’m fascinated by this.

Toke: I have several businesses and the other one is SlideShop. I started it in 2009 and the AdWords campaign at that time was really cheap. So, within a year, we actually got almost $100,000 in monthly return revenue. You don’t have to edit that out. But today, the AdWords contains very expensive and the competition is totally different. So now you have to spend a lot of time in the organic search and, of course, we can use Facebook a little bit.
So I started that business because I made a lot of presentations and they didn’t look very well. So we asked a couple of designers to make the templates. And today we have 15,000 templates that are editable in colors and fonts and all the texts. So we’re doing quite well. It’s a business that has funded all my other companies the last seven years.

Andrew: That’s the big one for you.

Toke: Yeah. It’s generating a lot of revenue and it’s actually . . . I’m going to sell it because I have so many other companies that I want to stay focused on. So it’s actually for sale, the company.

Andrew: What do they do, they reach out to you if they want to buy the site?

Toke: Yeah.

Andrew: What are you selling SlideShop for now?
Toke: The value we are trying to get for the company is around $2 million and it has a profit of around $300,000 to $400,000 per year. So it’s a very big company.

Andrew: And it looks like you’ve got a couple of different things going on. It’s a price per presentation, but you also have the monthly membership and I know why you have that. But when someone buys an individual slide, is the revenue split with the designer? Is that the model?

Toke: No, actually not. That’s actually where we want to change the company into like a market place for designers.

Andrew: Okay, and right now it’s you pay the designers, the designers created designs, they put it on your site and anyone could come and buy those designs, that’s the model now?

Toke: Yeah, and then we’re changing it into a SaaS company. So you just pay a flat fee something between $9 and $30 per month and then you can download as much as you want. The plan is only paying per month, but it’s a contract for 12 months.

So, if you figure it out, it’s a lot of money to put down if you’re going to buy for a year especially for freelancers and start-ups, but they’re willing to pay per month, and they’re even willing to stay on a contract for at least 12 months.

Andrew: So they’ll buy per year, but pay on a monthly basis to get it. Yeah, and part of that is because you wanted some consistent cash flow with it. The cash flow, in fact, from what I understand was an issue with SlideShop. At one point even though you guys seemed to be doing well, you felt like you were on the edge of bankruptcy. How do you do well and still end up on the edge of bankruptcy? Help me understand that.

Toke: Yeah, that’s a good question. I started out having 30% of the company and I was just the CEO that ran the company in 2009. And the investor that had the other percent, two-third of the company, he was doing all the big decisions. So I didn’t have the insight of how the bank balance was. I only spent the money so I didn’t [inaudible 00:07:42].

So, within two years, we had a really good revenue stream, but we couldn’t pay the bills and we had hired too many people because there wasn’t . . . the financial was just a mess.

Andrew: So you were spending more than you’re making. Even though you were bringing in money, you were spending a lot. What were you spending money on?

Toke: SEO consultants, AdWords campaigns, and more designers, and by the end of the day, we just spent more than we got and the cash flow didn’t follow.

Andrew: You know what? I see the challenge of that that if you have to hire designers, the designers are . . . they have to go based on what you think people will buy as opposed to a marketplace like some of your competitors. Where the designers, they have a financial incentive in understanding what their customers are going to want, right?

Toke: Yeah.

Andrew: So it feels like from the beginning even though the model works because of SEO, it was not the right model for the business.

Toke: No, it wasn’t. Or put in another way, we had to do a lot of research to give them all the information about the company, but they just made the designs, they didn’t care much about the revenue stream because they got fixed price. So that’s why we’re also moving towards a marketplace, but it takes time. We know that the current [inaudible 00:09:05] is working, but we think it could work much better in the future.

Andrew: What percentages of your sales are coming in from the monthly payments, annual subscriptions?

Toke: It’s around 30% of the company, revenue streams. And that was actually what started the idea about Billy. After you have built a company, and it’s doing very well, and you just lose it within a month or so, or you’re close to losing it, we thought, “Okay, you really need to understand the finance of the company [inaudible 00:09:41].” And then I build an accounting app, the Billy App.

Andrew: What was the software that you guys were using before your Billy App?

Toke: That is a good question. We didn’t really use any software for it

Andrew: You guys use spreadsheets?

Toke: Yeah, spreadsheets and an external accountant. So he didn’t understand the business and it was on a monthly, maybe quarterly basis where we could report the numbers. That didn’t work out. You need to stay tuned every day or at least, every week.

Andrew: Yeah, I see. Hey, guys, if you’re listening to me, you’re about to feel a pang of guilt if I’m about to address you. But stick with me, don’t tune away. If you’re a business owner right now and you’re using spreadsheets to keep track of your revenue and assuming that you have more than, let’s say, five or ten sales a month, you’re making a mistake. You’re probably feeling overwhelmed. Whether you end up using Billy App or anything, QuickBooks or whatever else is out there, I invested in I told you in another company called inDinero, I don’t care what it is. Switch to something that is much more organized than a spreadsheet.

I understand that we could use spreadsheets for CRM, right? You could keep track of all your contacts in it and you can use spreadsheets for databases, you keep track of all the things that you own in it, and it will stink in all those things, but it’s not going to break your business. If you use a spreadsheet for your finances to keep track of your sales and expenses, it will break your business. It could break your personal life too, and I’m telling you, software today for accounting is so much better than you imagined. It could organize your data much better. It could do a lot of automation. It’s frankly fun to use.

Do not use spreadsheets. It’s a public service announcement coming from your friend, Andrew and Toke. Oh, and don’t feel guilty about it because, frankly, all entrepreneurs move fast, you make mistakes, you might have your personal or your business numbers in a spreadsheet when you start and it makes sense, and now it doesn’t anymore. You might feel guilty about it because who are you as an entrepreneur if you made this mistake, then maybe it means you’re a bad entrepreneur. Don’t get in your head about it. Just switch. Just go find software right now and if you don’t like your software, you’re not using it enough, try a different software. How much does it cost on your software, Toke?

Toke: Yeah, it’s between $10 to $20 per month.

Andrew: It’s nothing, right? And what, do you even have like a special URL you’re going to give people at the end? What was it, billyapp.com/toke? What are they going to get if they go there?

Toke: Yeah, they will get three of my books and they will get, of course, a free trial for Billy. Yeah, they’re up and running.

Andrew: Yeah, there you go. Guys, really, and if you know someone who’s going through this, don’t let them do it. They might trick themselves and they might be lying to you or themselves by saying spreadsheets are just as good. I’m really good at it. Warren Buffett can use a pen and pencil to keep track of his taxes. I don’t need fancy software. You do, you need the software, get the software.

Okay, so, one of the reasons why you needed it was you were using a spreadsheet and you said this is not going to work out. You are inherently a simplifier, as I understand it. You were the kind of person who even as a kid liked to order. Tell me what you were like as a kid and how this need for order expressed itself?

Toke: Yeah, like my room, everything was in order and the way I think, I have boxes for everything just so I can optimize my daily life.

Andrew: Do you mean to this day? If I asked you to take your laptop, which is what you’re talking to me on, and walk around your house, you have stuff in boxes, everything neatly organized?

Toke: Yeah.

Andrew: Like what? What do you own that needs to go in a box? I own so little. I have like one drawer in the house that I put everything in. I don’t own that in that much. What do you have that needs to go in special boxes?

Toke: I have a box for my dollars when I’m traveling to the U.S. I have a box for my credit cards. I have a box for my keys. So I just like to put things away so it looks clean and simple.

Andrew: I get it. My approach is, I toss everything away and here’s where my mistake happens.

Toke: That’s what my girlfriend does. I’m the one who cleans up after her even though she’s [inaudible 00:13:50] at cleaning and doing stuff.

Andrew: The one thing that I wish I didn’t throw out quite so much is every time I travel, I should keep the sim. I go to Canada, I need a new sim card. I could just put it in a box somewhere just so I have the sim card because it’s a pain in a butt. You know, whenever I go to Canada, I have to go and spend like an hour or go into the mall and figuring out which sim card I should buy and then put it in my phone. It doesn’t take that long, but it’s an hour that I should be doing other stuff.

Okay, so, you’re the kind of person who kept organizing things. I heard from my producer, you would paint your wall every year so that it would look clean and organized, right?

Toke: Yeah, that’s right.

Andrew: You at 18 started the company that did what? How did it help other businesses?

Toke: Yeah, I had a company. It was a consultancy where we designed and developed webpages and we sold it. And that was a time where people didn’t have web pages. It’s 15 years ago, so it was not the standard to have a web page. So it was like, I was selling these online business cards that you could go into a web address, but that was [inaudible 00:14:52] thing to do at that time.

Andrew: But the idea was you’re going to help people who wanted to get started with an online business, to have their online presence set up fast?
Toke: Yeah and 10 years after, I actually sold that company and it was acquired by an audit company. So the money brought in that I got from that company I could reinvest that in Billy as well.

Andrew: This design company, were you developing websites for people, just plain old websites, you sold it?

Toke: Yeah.

Andrew: How much?

Toke: A few million kroner.

Andrew: What’s a kroner? Let me see.

Toke: You can divide it by six.

Andrew: One kroner to U.S. dollar, let me see. Do you guys still use kroner? You’re not even on the Euro. Oh, 12 cents U.S. I got it. Okay, you know what? That’s really impressive because I feel like one of the easiest businesses to start is a services business and as long as you don’t get sucked into it for the rest of your life, you learn a lot by doing the service business because you get deep in your customer’s business, right?

Toke: And then [inaudible 00:15:56] when you start, you can use the subscription, the SaaS model to some extent. So that’s how I actually got a few . . . I got money from the business. We had a lot of . . . For instance, at that time, it was almost a self-server in space and you just had a subscription of, I don’t know, a few hundred dollars per month. You could have a maintenance fee and all of that come together brings in return revenue.

Andrew: I see. So you weren’t just [inaudible 00:16:24] together a website for them. You were also giving them the hosting package and charging them for the hosting and as a result, you got SaaS type revenue.

Toke: Yeah and I sold them a license of how the CRM system works, we made some different modules and put them together and those were showed as a subscription. So, instead of getting a lot of money when I sold the webpage, I got both a lot of money and then the subscription model. So that brought in a lot of money so I could actually hire people. So the company had only five employees to start, again, it was enough to be an okay company at that time.

Andrew: Oh, way to go, man. All right, that’s impressive. So you’re a guy who’s in his early 20s, you already sold a company. You were starting to build up other companies and then you come up to the most dramatic, most daring business of them all which is Billy App. It’s not easy to create software. It’s not easy to handle people’s accounting. You did it. I want to find out how you did it, but let me first take a moment and talk about my first sponsor which is HostGator.

Let me ask you this. As an entrepreneur, let’s suppose Toke 2017, 2018 loses all his money and all he has in his world is the headphones that you’re wearing now because they look pretty cool, number one. And number two, a hosting package from Andrew because Andrew says, “Look, this guy with a hosting package and nothing else could build a business from scratch.” If you had nothing but a HostGator hosting package what business idea would you start 2018?

Toke: Probably AdWords Campaign, there’s a lot of people going online. It’s easy to learn how to use AdWords on a single level. Of course, there are different levels. But at the beginning, I would definitely do that and then I would be a consultant because I have so much knowledge about online businesses that I know would benefit big companies and I know I could get a pretty high salary.

Andrew: I see. So it would be one website saying, “Here are the services that I offer.” AdWords would probably be one of them, maybe the one that you offer, start selling it to businesses, and then look for probably knowing you some kind of SaaS type of revenue so that you have consistent predictable revenue.

Perfect. Guys, if you’re listening to me and frankly, I know most people are listening do have businesses and frankly, what I should be saying is, “Hey, you probably hate your hosting company because hosting company is often sucks. Switch over to HostGator if you like it.” But if you’re listening to me and you’re trying to figure out what new idea you should go after, one of the best ideas is to start a consulting business like Toke started, like he’s recommending that you guys start right now.

Toke is someone who’s done this and the reason is, it doesn’t take much. You just have a hosting package. So you have a website that looks legitimate and tells people, “Hey, I’m a real business.” Then you start calling on potential customers and a lot of the services that you take for granted because you’re so good at, to many businesses, they don’t even want to do it. Like imagine, if what you did was you set up a CRM for people, imagine if all you did was just setup email collection tools on people’s websites. That’s a whole business.

I know one guy who I interviewed, he won’t let me talk about it publicly, whose whole businesses, and he’s doing, I think its millions of dollars, doing this. He will setup businesses with all the tools that they need to collect email addresses and create their funnels, just that. That’s what his whole business is, right?

So you go to a site, you enter your email address, he starts sending you some material via email, and then at some point he says, “How about instead of you learning this stuff, just hire me to do it?” And then it became, how about instead of learning his stuff, just hire my team to do it for you and now he’s got a team of people who are raking in cash for him, who do nothing but setting up companies with all the email collection tools they know they should use, but they don’t know how to use it. They don’t know the ins and outs of how to do a good lead magnet, how to collect email addresses and so on.

So whatever it is that you’re doing, whether it’s a new idea or one that you’re already established, you need a good hosting company. Your business depends on a hosting company that you can count on and that is why I’m recommending that you go to HostGator. Check them out at the special URL where you’re going to get a couple of things. Number one, you’re going to get a discount. Number two, you’re going to get Mixergy standing behind you because, you know what, if you ever have an issue with any of my sponsors, you should let me and my team know because we go right to the sponsor and say, “Look, here’s an issue. Help us out.”

So you get that preferential treatment and you get a super good low price if you go to this one URL, and that is hostgator.com/mixergy. I get no extra money if you sign up for the higher paid plan and for the lower one, but I’m going to recommend, do not go for the lowest plan. Instead, go for the next level up. They call it, “The Baby Plan.” I think you need at least unlimited domains and that’s what comes with the Baby Plan for $4.98 a month, something like that. Go check them out, hostgator.com/mixergy.

All right, good sponsor. I’ve had them for a couple of years now.

All right, let me ask you this. I don’t see in your background a lot of deep development work. To take on a project, Toke where you say, “I am going to create software that will actually . . .” You know, the iOS 11, if you type in on the calculator, one plus two, plus three, it tells you that the numbers are 124 or something crazy like that, right?

Toke: Yeah.

Andrew: It’s not easy. Don’t do your taxes on that. What gave you the confidence to say, “I can actually create the software?”

Toke: I teamed up with a CTO that was very good and talented when developing software. He was young at that time. So he had quite some experience, but I gave him a lot of responsibilities and I had the time to make the program. So it took years to build the Billy App. And when we got revenue streams, [inaudible 00:22:07] to hire more developers. So, today, we have also a lot of developers and we also have UX designers.

Andrew: Was it your CTO, that’s who you hired, was that the person who wrote the first version by himself?

Toke: Yeah.

Andrew: Okay, what went into the first version?

Toke: Which one?

Andrew: What was in the first version? It didn’t do everything that it does right now.

Toke: No, definitely not. It was invoicing. It was expensifying things to some extent and that was pretty much it. We knew from the start we needed the entire [inaudible 00:22:46] keeping intrigue system and that just took a couple of years to build.

Andrew: The company name or the product name at first was called, “Billy’s Billing,” right?

Toke: Yeah.

Andrew: There’s a reason why there was a Billy and there was a reason why there is the Billing. Let’s start with the Billing. It seems like you weren’t thinking this was going to be a new accounting software at first. So even though you had a problem with your accounting and spreadsheets, it wasn’t that you were going to create a whole accounting package, you just wanted to deal with billing. So what was the problem that you did identify then? Why billing first?

Toke: The billing first is because most freelancers and start-ups they care about invoicing, billing. So they want money to come into their business and afterwards, they want to take care of all of their expenses. So it was a natural place to start, to start with the invoice or the billing part. And more or less by coincident, my developer, he made also the other part of the accounting software so it was not just income. It was also the expenses, and then we had the first version of a simple accounting software.

Andrew: I see. So the foot in a door for people was collecting money. If you could make it easy for them to collect money then they can be open to the rest of your business ideas. How did you know that the world needed another invoicing service? I mean, I’ll be honest with you, FreshBooks existed at the time.

Toke: Yeah, but not in Denmark where we started and I know FreshBook is easy. It’s a nice program, but I thought we could make it even easier to use.

Andrew: Wait, what do you mean by not in Denmark? FreshBooks worked all over the world as long as there was an internet connect. No?

Toke: Yeah, that’s correct, but it was not exposed in Denmark or it was not marketed in Denmark. So it was not an invoice system. None of the Danes about [inaudible 00:24:37].

Andrew: I see. So the fact that it existed meant nothing to somebody who didn’t know that it was out there. If they weren’t . . . got it, okay. And so you said, “Look, people don’t know it yet. We’re going to create this thing. We have a little bit of an advantage.” When you say with simpler, what did you do to make it so simple?

Toke: So people could design their own invoices without programming anything. And for freelancers, it’s very important to design their own invoices. So to some people it sounds a little strange to focus on how the design of an invoice is, but a lot of people do. So that was one of our focus areas when we developed the first version.

Andrew: Okay, making it looks really nice at first. How did you know the . . .

Toke: Really nice and easy.

Andrew: Did you do any customer calls to understand if people really wanted this before you started?

Toke: Actually, we created a landing page. So, when we went public with our company, not public, but when we announced the company then we had . . . before, we had a landing page where we got around 1,000 sign-ups. So, when we launched it, we got a lot of users from day one and we got a lot of feedback from those users.

So today, our roadmap is also based on only what the users are looking for and what their needs are. And we are listening a lot to those suggestions and working from what they need and what they want.

Andrew: From what I understand, before you even had the product, you personally, Toke, you went to the “Financial Times” and you said, “Here’s this new business that we’re launching.” And you’ve got an article written in there. Was it you who wrote that article?

Toke: I got an article, but it was in the Danish version of “Financial Times” and he wrote an article. We didn’t have webpage at that time so we created this landing page and we got a thousand signups for that.

Andrew: I see, and that was part of the application?

Toke: Yeah, it was, definitely. So we picked out the biggest competitor in north of Europe because they are [inaudible 00;26:46] in Denmark. I said, “You know, guys, we can do this much better and much easier for the end user and the start-ups and the freelancers” because I had this idea of the accounting software that I have seen were made from the cookie version, the accountants.

So I changed that angle and said, “Now we have some real accounting software that is targeted to the entrepreneur and the freelancers.” And the journalist said, “Okay, that sounds pretty interesting.” And that was how we got the first 1,000 signups.

Andrew: I see and that helped validate that this thing was making sense.

Toke: Definitely, yeah. I think the first month we got around $500 in revenue. Within a year we got around $10,000 to $15,000 in return revenue and then you have a company, then you can start RMP, then you can improve your supports setup.

Andrew: But you didn’t pre-sell it. Was it that you have revenue before you started to publish it?

Toke: Yeah, we didn’t have revenue before that.

Andrew: You know what? So here’s what I thought that you were in the U.S. There’s this article on the “Financial Times” called, “Silicon Valley start-up founders under pressure,” Ryan Hoover is right on the cover of it from Product Hunt at the top of it. But you’re listed as a co-founder of Billy’s Billing who moved to San Francisco with nothing but a suitcase. You have a place that’s sparsely decorated glass coffee table and a large stuffed teddy bear on the sofa. So did you try at some point to come to San Francisco?

Toke: No, after we launched the product in Denmark, six months after, I was standing on Union Square in San Francisco with that suitcase and with that teddy bear, and then we just said, “Okay, how can we build a U.S. team?” And that was actually SlideShop who supported the finance around that. So Billy didn’t make enough money to carry out two people to the Valley.

Andrew: I see. So what happened was it was first the Danish “Financial Times” that wrote a piece about you. Then you started to get people’s email addresses. Then you built the first version. Then you started to sell it. Then you started to generate some revenue and then you said, “You know, what? It’s time for us to come to the U.S. because we have a good start here with a market that people aren’t going after and we know well, but this isn’t going to make us into huge competitors.” And that’s why you expanded beyond.

And when you did, the other part of your name . . . why don’t we talk about the Billy part? What was Billy? Why do you name it Billy? Your name isn’t Billy.

Toke: Yeah, I was actually just searching for different domain names and billysbilling.com was available and I said, “Okay, that must be the name.” It was in the middle of the night around this time and I said, “Let’s buy it.” That was [inaudible 00:29:50].

Andrew: It also seems to go along with your style. When I think about Billy App or Billy’s Billing, it feels friendlier, less corporate, more approachable, less scary. If I were going to send someone who hadn’t put his numbers into QuickBooks or Excel, send them to a piece of software that was unintimidating. I would send him to the one with a guy named Billy whose color on the website look friendly and light. Who looks like the website had some hand grown images on it, but they’re still taken care of. I feel like that’s part of it. In fact, I think from my research I read that.

Toke: Yeah, that’s right. That’s the profile. Also [inaudible 00:30:30] that we get using our own Facebook channel where we invite all the users and then they actually help each other. So we have this like human touch on something very boring stuff, let’s call it that. No one wants to do their accounting, but it’s very important if you don’t want to go bankrupt.

Andrew: And you send people who have issues to the Billy App on Facebook?

Toke: Yeah. So, of course we have our own support and customer people, but the users, they are also helping each other in a friendly and easy way. So it’s like a little community for start-ups and freelancers and we also have professionals that can help them and maybe do some extra business if they don’t want to do all their accounting themselves.

Andrew: Okay, so why it is now called, “Billy App?”
Toke: Yeah, because when I went to the U.S. even my accountant when I started, the U.S. version he couldn’t pronounce it. So it was Billy’s blah, blah, blah, something. I said, “Okay, we really have to change the name.”

Andrew: Because Billy’s Billings is too hard for people to say. It sounds like a tongue twister.

Toke: Yeah, it’s a tongue twister.

Andrew: You know what? I also see, not to keep spying on you, but there’s something at 1810 Street, San Francisco, just down the street from me, what is that? I see at Yelp. Is that your old house address or what?

Toke: Yeah, probably. I think that must be the old address for the office there.

Andrew: But you don’t have a team of people in San Francisco working there, do you?

Toke: No, we have them in Oakland now. When I went back to Denmark, I got [inaudible 00:32:12], then I had a U.S. team and the new CEO, he lives in Portland. So that’s where the team is right now.

Andrew: A new CEO?

Toke: Yeah.

Andrew: I saw that. Why is there a new CEO? Why are you not the CEO anymore? Is it Zeke Camusio?

Toke: No, it’s Joshua. So we had it for a short period of time, we had Zeke, so now it’s Joshua Waldman. And he’s a writer on different articles about how to optimize your finance as a freelancer. He’s a really nice guy.

Andrew: So why aren’t you the CEO anymore?

Toke: So the reason why I’m not the CEO is because I have seven companies and if I was the CEO in all the companies, I don’t think I would have seven companies anymore for very long. So I think my core competence is to start a company, to build the product, and then hand it over to a professional CEO. So, today, I’m not even the CEO in the Danish company. I started a new company called skanned.com.

Andrew: Skanned?

Toke: Skanned, S-K-A-N-N-E-D, which is taking all the different receipts that a company can have and take all the data, validate it. So it’s 1% OCR scanned and it’s correct. And then you don’t have a bookkeeper to do it. The system is doing it and it’s based on AI. Yeah, I spent three years of my time as an entrepreneur and a lot of money on developing this [inaudible 00:33:59].

Andrew: Wait, how do you spell it? I’m on S-C-A-N-T.com?

Toke: Yeah, S-K-A-N-N-E-D, so scanned with the K. So to scan and it has been scanned, but with the K. Yeah, it’s a little weird name, but that was, again, available as a domain name.

Andrew: Okay, I get it.

Toke: Actually, I think [inaudible 00:34:21] could use it. They would be work more efficiently if they got integration. So it’s the only open risk API software within the scanning software market. It’s a little complicated product, but it’s very cool to look into it.

Andrew: You know, by the way, Zeke, I knew I recognized his name and then I talked to him. He did a course on Mixergy awhile back. He ran the outsourcingcompany.com. Yeah, I know him from there. He had a book. I remember that book and then I guess he ran your business for a little bit.
All right, so, you changed the name. You came to the U.S. You started putting together a team. I understand, by the way why you would go to Portland. I feel like Portland is a new San Francisco. When San Francisco becomes too expensive for people, they just move up a little bit to Portland, end up with a better quality of life, lower cost, and good people there. So let’s talk then about getting customers. The original email list helps you get some customers. What else did you do to get people to come in and buy in?

Toke: We got a lot of references between the people. So it was like a word of mouth that brought Billy to a very good growth in the beginning. And after that, the AdWords campaigns at the time when I started Billy were much cheaper than they are today. So we actually got a lot of customers directly from AdWords campaigns. But today, it’s way too expensive. So like QuickBooks, FreshBooks, everyone is just buying the keywords and now it’s too expensive, [inaudible 00:36:00] our lifetime value and the cost of [inaudible 00:36:03] customers.

Andrew: So is Facebook working, you said?

Toke: Yeah, it is. It’s still cheaper than AdWords campaign. It’s more segmented so you can actually hit the right audience for a much lower price than AdWords.

Andrew: How much are you guys spending a month on Facebook ads?

Toke: That’s a good question. I actually don’t know. So I would like to answer it, but yeah.

Andrew: It’s in the tens of thousands a month now?

Toke: I have no clue.

Andrew: You don’t even know that to that degree?

Toke: No.

Andrew: Wow, okay.

Toke: I think its a few thousand dollars, something like that. So they’re still building the revenue streams.

Andrew: What about this. You guys were charging less than other people were charging. I think the original price was $10 a month.

Toke: Something like that.

Andrew: Why?

Toke: It’s difficult to find the right price match in a new market. So I think it was just by testing and that’s what we are doing all the time and now we’re working on a new way of getting new customers. So we startup new customers by helping them from the sign-up until they are up and running. And that costs money as well, but some of it works pretty well.

Andrew: All right. Let me take a moment here to talk about my second sponsor and then come back in. Second sponsor is Toptal. Check this out. A couple of years ago, my kid’s nanny had trouble with her computer. I said, “What’s the problem?” She said, “I can’t watch videos.” I said, “Bring it in here. I’ll fix it so you can watch videos.”

And I looked at it and I know if she would have taken it somewhere else or just asked online, someone would have said, “Here’s a great video app. Go download VLC and you could watch videos and you don’t have to deal with the crappy quick-in or QuickTime or whatever it is that’s causing you trouble.”
But I didn’t. I asked her to look at it and instead of telling her what software to download, I’d look little carefully and I realized, oh, she’s like on all these different video sites, they install all kinds of software on her Mac which I didn’t think you could do on a Mac, but she had tons of software. She had tons of plug-ins on Chrome, all these different video sites were installed in plug-ins on her Chrome.

And so what I did was, I removed all the plug-ins, I got rid of the dumb apps and then I gave her VLC. And now she’s able to watch videos normally and just enjoy her life and not have to deal with the slow computer.

So why am I saying this in ad for Toptal? Because Toptal has developers. Why am I saying this? And the reason is this. Toke, there are a lot of websites right now where you can go and you can hire outside people to come and be your developers and if you tell them what to do, no doubt, many of them will do it right. Some places they’ll go, they’ll take your money and they’ll run away, but for the most part, they do it right.

But here’s the thing, you don’t want someone who’s going to take what you tell them to do and go do it. You want someone who’s going to understand the broader problem that’s leading you to send this request and sometimes help you think of a solution that’s better than the one that you would have thought of. If she would have said, “Andrew, how do I watch a video? What’s a good video app?” I could have given her a video app, but I wouldn’t really solve their problem. I would have just kept her going with a bad situation.

The same thing for you guys. If you’re out there and you’re looking for really good developers, ones who can understand the problem because they’ve seen it a million times and can think through a solution better than you and better than your team. If that’s what you’re looking for, the company to go to is Toptal. They do not have the cheapest developers so they’re not super expensive. They’re not. They do not have the cheapest. They do not have like the lowest cost person who you’re going to brag to your friends at how you hired someone for $2 an hour. That’s not them.

But you are going to be able to say, “This guy could have been at Google. This guy could have really been at any top Silicon Valley firm.” But because he decided he want to go to his hometown wherever that is and want to work remotely, I get to work with them from Toptal and pay him a little less than Google and get the same kind of brain power. And he’s thinking through the solutions to problems that I have in a way that I couldn’t.

So many people I have interviewed have gone to Toptal. If you’re listening to me and you need a good developer, the first thing you should do is go to Toptal. I’ve gone through this so many times of them. What you do is you say, “Here’s the problem. Here’s what I’m looking for.” Then they get on a call with you, Toke. With you, they’re going to want to talk with you if you’re the person or your CTO.

They want to understand what are you looking for, how do you work. One of my quirks is, everything has to go in Basecamp. I don’t need your email. It’s a company quirk, but you got to do it in Basecamp and you can’t @ me. So if I hire someone from them, they don’t understand. Here’s how quirky Andrew is. Whoever we hire for him has to go through Basecamp and can’t @ me. No email. It helps.

So whatever your quirks are, however you work, they fit in with your culture and also with your technical needs. Go check them out. I’m going to give you guys a URL. This is one of the first founders, one of the first Mixergy interviewees. He said he got a boatload of customers from it years ago and that’s probably why he ended up coming back and buying ads.

So here’s the URL. They’re giving us a deal that they’re not giving anyone else. Mixergy listeners who use this special URL are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours and that’s in addition to a no-risk trial period of up to two weeks and that even extends to you, Toke, and all of your businesses. So they could have 50 different customers by the time this is over because you’re 49 businesses and one person from the audience are all going to go over.

All you have to do is go to Top as in top of your head, tal as in talent. That’s toptal.com/mixergy and tell them that Andrew and Toke sent you. Tell them Andrew sent you, why should Toke get credit?

Toke: I don’t know. I want to use those guys actually.

Andrew: I’m telling you, you’ll love it.

Toke: They really sound nice. Yeah, to find good developers is the major problem by having an office in San Francisco. So that was actually a part of the reason why we also moved back.

Andrew: Because it was getting so expensive here. Do you know the big complaints the people have is like the lunch is not fancy enough? Are you out of your mind? Yeah, I hear it because the only legitimate complaint about working in San Francisco is that you don’t get time with your family. It seems really cushy, but you’re working excessive hours. Everything else is just such a dopey complaint. Here’s another dopey complaint. You get off the Google bus, it takes too long to get to your desk. Think about that.

Toke: There’s one other thing I have to mention that if there’s poop in the street, it’s not from a dog. That’s what I think about.

Andrew: If there’s what?

Toke: It’s a poop, dog shit, you think it is. It’s not dog shit. It’s something else.

Andrew: Where?

Toke: In the streets of San Francisco.

Andrew: Oh, what else is it if it’s not that?

Toke: Maybe it’s human.

Andrew: Oh, I see. Yeah, you know what? I did a street view on where your address was. Yeah, you’re in a place where it probably is human and that’s kind of weird. So, like for example, I go to Jason Calacanis, I went to interview him at his office, a really nice office, successful venture capitalist, invested in Uber and a bunch of other businesses. He’ll tell you a lot about that Uber investment. He should. He should brag about it. He did well. But underneath, there are people who can’t even afford a bathroom. It’s such a shocking disparity in income here. It’s a real shock.

Toke: Especially when you come from Denmark where the social subsidies on a very high level.

Andrew: Yeah. No, we don’t have any of that. No, this is really kill or be killed, eat or be eaten. Yeah, it seems friendly. It seems like one of these people are talking about especially this summer they were talking about the summer of love which I don’t remember when it happened, but I guess we were on some kind of anniversary because there’s summer of love here. There’s wear jeans and look like you’re casual, but dude, you better work harder than your dad. Work your ass off, really.

Toke: Exactly.

Andrew: Yeah, here’s another San Francisco complaint. Kindergarten ends at 8:00. Who has time to pick up their kid at 8 p.m.?

Toke: I really love San Francisco. It’s really a nice city. I want to go back in a short time.

Andrew: It is. It’s a good city. For what it is, if you really come in here to do some work and that’s it, you’re good. Do you have a life? Do you have family?

Toke: Yeah, I have my girlfriend and my kid that is two years old.

Andrew: A two-year-old kid and so would you come with your girlfriend and your two-year-old kid?

Toke: Yeah.

Andrew: You would come over here?

Toke: Only on vacation.

Andrew: Did you have your kid in sin? Did you have a kid without being married?

Toke: Yeah, that’s the baby’s faith.

Andrew: It is. You guys don’t want to get married, why not?

Toke: It’s a Viking thing, I think.

Andrew: I see. It would keep you from being masculine. Is that what it is, honestly?

Toke: No, I think it’s not as natural to be married in Denmark as in the U.S. where you get married earlier-ish.

Andrew: Are you allowed to date other people because you’re not married and have other girlfriends?

Toke: Yeah, if you have one girlfriend, you shouldn’t date others.

Andrew: I see, okay. All right, I’m checking . . . I see. So really what it is it’s not like you want more freedom, it’s just that there’s something about marriage that just doesn’t jive with you.

Toke: Yeah, I think for a date perspective it’s a little more traditional, a little back in the old days maybe.

Andrew: Oh, I see.

Toke: But still people get married, but it’s just an older age. So like when you have turned 35, 40 maybe. So, yeah.

Andrew: I get it. How old are you now?

Toke: I’m 35 now.

Andrew: All right, so five more years you might end up being married.

Toke: Five more years to me.

Andrew: Stop living in sin.

Toke: I really want to get married.

Andrew: Were you honestly working till 11:00, like not seeing your two-year-old, not spending time with your girlfriend, is this a typical night for you where you work like this?

Toke: Yeah, it is. My girlfriend, she’s a pilot in Greenland.

Andrew: She’s a pilot?

Toke: Yep. So she’s working three weeks in Greenland. Then she’s home for three weeks. So that’s another kind of daily life for me compared to many other families.

Andrew: I see. So there are days when you just don’t see your girlfriend, you’re on baby duty or child duty and then there are days when you get more time to work. And so I’m guessing she’s in the house now, is that what it is? Who’s with the child?

Toke: That’s the mother of the child.

Andrew: Oh, I see a different woman. Okay, is it awkward that I just brought it up like this?

Toke: Nope.

Andrew: Wow. All right, so I see. So she’s with her mom. So you might take your kid to the U.S. and separate, and that’s okay?

Toke: Yeah, but only for vacation.

Andrew: Oh, I see. Okay, all right, that makes sense. Now I’m really prying into your personal life. Sometimes I pry in to people personal lives and I get some kind of understanding. Other times I just get some texture into who they are and it’s a little awkward. I think this time it was awkward, interesting, but not necessary.

Toke: No, not at all.

Andrew: You’re okay with that?

Toke: Totally, you can ask me more personal questions, that’s fine.

Andrew: Really?

Toke: So I’m the only boy in the family.

Andrew: Let me ask you about Noah Kagan, a mutual friend of ours. I looked you up to see where you got traffic and you got traffic to the site from AppSumo, still to this day. How did you and Noah know each other?

Toke: Yeah, he created AppSumo and I texted him and he texted me back and it was just a joke. I got his phone number and then I just sent a joke and then he responded and that was the first opening. But that was actually not the reason why we got the deal for Billy App.

So that was through Facebook side for growth hackers for SaaS companies. Actually my CEO asked how can we grow the company in a more organic way or by [inaudible 00:47:50] site or whatever and they said, “Oh, just try AppSumo.” And we tried and we got rejected. And then some other guy said, “Oh, I can help you out. I’m a consultant. I know how it works” and he pitched the idea.

And then they looked at the Billy App and we got around 4,000 new customers through the AppSumo. So I really recommend people if they have a good product, if they really know how to pitch it, then they should do it. It’s a real nice channel and it works very well. And I actually did it with a SlideShow as well and it also went very well. So, if you have a good product, I totally recommend them.

Andrew: They were offering your product for $39 for how long?

Toke: For two weeks.

Andrew: Oh, just two weeks of use? No, but it was lifetime access for $39 though?

Toke: Yeah.

Andrew: But meanwhile, that’s like about a monthly fee and you still recommend it.

Toke: Yeah, definitely, because the idea about that offer was to build a big customer-base and in the long-run, you can upsell products to those people. So we will add new services that wasn’t a part of the deal. So, by adding new services, adding new features [inaudible 00:49:13] upgrade people, and 4,000 paying customers in the long run, that’s good for us.

Andrew: I see, 4,000 customers you got. Your platinum fee was . . . no, platinum actually includes some hands-on support. So that’s not the one that you were offering. You were probably doing the gold level. Gold level is $19 a month. AppSumo was $39 a month. You split it 50-50 with them. So it’s about $20 in your pocket per customer.

For the price of one month, people had a lifetime access and you’re happy because you end up with users which, frankly, when you have software, you want users to see what’s working and what’s not. You’re happy with it because at some point you plan to upsell them on something. And some of them I guess are going to go to a platinum version which is a $40 a month plan.

Here’s the other thing that I heard about AppSumo that when you’re there, a lot of people will just come to your site directly and end up buying. A lot of people miss the deal and end up buying. And so you got some residual orders, am I right?

Toke: Yeah, we did.

Andrew: And the way that you knew Noah was, you just sent him a message, he had responded. My guess is he wrote back the word hugs, H-U-G-S or something like that.

Toke: Maybe something like that. It’s a few years ago, yeah.

Andrew: Yeah, it was something like that and you’re saying even that didn’t help you get on there. It was a consultant who helped you get into AppSumo.
Okay, yeah, I think AppSumo is a great deal. I invested in a chat bot maker called “ManyChat.” I told the founder, put your stuff on AppSumo, even do it lifetime. He’s not comfortable with it. He does not want to discount anything, which I get. I respect that approach, but I can see how you got a lot of customers from that. Then you also got more customers from buying ads on Google. Then you ended up with even more customers now. These days anyway, you’re working on Facebook. I don’t see much content strategy for you guys. I’m constantly looking on the screen to research. There’s no content. It’s not like the blog that’s sending you a lot of . . . am I right?

Toke: Yeah. Currently, we haven’t spent time on the blog, but that’s the new strategy. We want to spend much more time on the content. Joshua, the new CEO, is a writer. He wrote one of the Dummy books about how to get jobs online. So it’s another topic, but he knows how to write. He’s writing on [inaudible 00:51:34] and Microsoft sites. He has some good blogs around on the internet. So that’s the new strategy actually.

Andrew: Yeah, I can see that. It looks like you guys are now starting to write . . . well, still very little posts. Ten-minute hack just boosts up your Billy invoices, is still one of the posts. So it’s still very like for your customers. But I can see that you’re starting to move through, busting through your bookkeeping excuses and things that are more general interest. You know who does this really well is my past interviewee, the guy who runs You Need a Budget. You Need a Budget has like converts to their financial software. Do you know them?

Toke: No.

Andrew: You Need a Budget, personal finance. Look at their website. All they do is like content. They do courses, teaching you how to organize your finances. They just are phenomenal at that. And more than that, I’ve talked to people since the interview. They’re cult members of the You Need a Budget cult, shocking.

Toke: Yeah.

Andrew: All right. Let me close out with this. What I’m curious about in the end is you’re hiring people to run your businesses. How do you find someone to run your business? How do you make sure that they run your business right? How do you do that? To be honest, I still struggle with having people while I’m running the business, help me manage the business because I’m not very good at delegating. How do you do that?

Toke: You really need to know people very well before you hand over a company. It’s almost a baby for you, for most entrepreneurs. So what you have to do is to interview them of course. It’s also a matter of knowing them personally before I hire them.

So the CEO of Billy Denmark, it’s a good friend of mine. I know how he works. I know his history. I know his mission about building new companies. So I’m the guy who starts a company, but I’m not the guy who runs the company. So that’s just how I want to be an entrepreneur, to start new things and to build them from the beginning and then hand them over to like a professional setup.

Andrew: But how? So I’ve been reading the Signal v. Noise blog from formally 37signals, now they’re called Basecamp. And over the years, I feel like Jason Fried and DHH, David Heinemeier Hansson, I guess Jason is a co-founder.

Toke: He stayed as well.

Andrew: I don’t know if he’s like a full and co-founder now, but he’s definitely a co-founder of Basecamp, the software. So here’s the thing though, over the years, they’ve lived out their philosophy. They’ve talked about how they develop their software. It’s not every day we pump out new code to improve it, but they even talk about I think it’s like two or three-month cycles. They have this organized way of taking in all the feature request or picking which features to go after of neatly, very quietly, getting the job done of launching those features and then they go back and they do another iteration. They taught all that.
So then they sold Highrise or brought someone in, Nathan, to help run Highrise. He’s basically doing the same thing I’ve noticed. He’s taking their philosophy and he’s adjusted it a little bit, but he’s basically running based on what they taught publicly and I’m assuming also privately. I’m wondering if you have something like that? Is there a core set of beliefs that you run your businesses based on, so when you bring a CEO, you say, “Look, here’s how we do things, help me by taking this to the next step.” Is there something like that that you’re using?

Toke: Yeah, actually the book that I’m giving away is called the “A Players.” So, you should always hire the very best people within the field that you want to hire them for. And one of the things that I write in that book is you need to hire people that are proactive. So when there’s a problem, people just solve that problem. They don’t have to be experts in the field, but they just have to have the vision of we can do everything, we can change things, and we can work proactively to find a solution.

So, yeah, I think that’s the typical side when I hire people.

Andrew: I see. So the proactive thing and I’m assuming that there are a lot of other characteristics that you keep talking about and looking for and that’s what you’re trying to get in there.

Toke: Yeah.

Andrew: All right. Actually, it doesn’t feel like it’s enough because if I say go be proactive, there are lots of different ways to be proactive, right?

Toke: Yeah.

Andrew: There’s more to it. What do you do to say, this guy can actually run my company right?

Toke: I think its intuition. Maybe it’s by testing people and look at their records and the history. And I’ve had companies for 15 years so I know people very well. And I also know when they are not doing very well. So, I think it’s a matter of experience and to be able . . .

Andrew: So watching them as they work with you. Do you do a test where you hire them, they run things for a bit and then you pass on the reins, is that what it is?

Toke: Yeah. Normally, I will have a test, but if I’m hiring a CEO, I assume that they will stay as a CEO. So a lot interviews and probably you just have to take a little risk before you take the final decision and when you’re just like getting started, then people will prove themselves or not. And again, you have to give people the time to prove themselves. You can’t just give them one day and say, “Oh, you didn’t pass.” So it’s a part of being [a startup. Sometimes it goes very well and sometimes it doesn’t.

Andrew: All right. The website, I’m flipping through the book right now, looking for like ways to go in deeper on what you’re looking for when you’re hiring someone. But I think it’s better if I just give people the URL. The URL is billyapp.com/toke. Toke spelled T-O-K-E. That’s where you’re going to get his book. You’re very prolific. You’ve written I think, what, seven books? There are three of them available free for download on that page and also a free trial to software so anyone can see it.

But frankly, don’t do it for that. Do it for this one reason. There’s a photo of Toke with a beard just fully hanging out, go do it to see his handsome mug. If you’ve listen to the podcast, you want to go and see what he looks like, go check him out at billyapp.com/toke. Thanks so much for being on here. Congrats on all the success.

Toke: Thanks, Andrew. Nice being with you.

Andrew: And I want to thank my two sponsors, the company that I’ve hired developers, designer. I hired so many people from them. It’s called Toptal. Top as in top of your head, tal as in talent. They used to say top as in top of the mountain, but I want people to feel it [inaudible 00:58:34]. I’m talking about your head, whoever is listening to me. Top as in top of your head, tal as in talent because you want the best talent. Go to toptal.com/mixergy. And if you’re looking for someone to host your website right, think about that gator, that gator is going to bite your head off if you go pick a competitor that’s not as good. It’s called “HostGator.” Look, I’m like anchoring them with visualizations, hostgator.com/mixergy.

Toke, are you going to go and have a drink right now or are you just ready to go collapse in bed?

Toke: Yeah, I will get [inaudible 00:59:03] sometime before I go to bed and then yeah.

Andrew: Yeah, you look pretty energized. I wish that we were in the same city. I’ll go out for a beer with you right now.

Toke: Oh, I’ll have a beer next time I’m in the U.S.

Andrew: All right, sweet. Thanks. Bye, everyone.


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