Andrew: Hey there, freedom fighters. My name is Andrew one on the founder of Mixergy where I interview entrepreneurs about how they built their businesses. If you’ve been listening to me for a while, you know that I’m kind of fascinated by chatbots. This realization that I had was that I’m not using email as often as I did in the past, and chat apps are taking up more of my time. So instead of communicating with my wife via email, I’m using iMessage to connect with her. People on my team, I used to use email to communicate with them. Now I’ve switched to Ping, which I find is better than some of the dedicated chat apps. Ping as part of Basecamp. With my customers, I’m finding that I’m using different chat apps with them too once they buy and they get to know me.
But I realized a lot of our marketing is still done via email with potential customers. And a lot of our communication with customers is still done via email. And I thought there’s got to be a better way and how could I use the chat app that I love, that I use with the people who love me, with people who I’m trying to get to know, with people I want to do business with instead of relegating them to it? It’s feeling more and more like the email ghetto, you know, where you put your second tier or third tier relationships. How do you use chat to communicate with the people you work with? And what I discovered was chatbots. All they do is let you send messages, interactive messages via chat apps like Facebook Messenger, and I became kind of addicted.
Anyway, when you’re creating chatbots, you kind of want to see what they look like, what’s the flow of messages look like? And it’s hard unless you go into the app itself and start to actually create a chatbot. It’s hard to see what that’s going to look like.
Well, today’s guest, Obaid Ahmed, created a company called Botmock. What it does is it allows you to create a mockup of what your chatbot or your chat experience is going to look like before you actually build it and have real users go in and interact with it. Kind of like before you built a website, you might use a tool like Balsamiq or some other mockup software to create a wireframe of what the site would look like. And that’s what Botmock allows you to do for chatbots. And I’ve gotten to know them over the last couple of years. He’s been here to our office to have scotch with me. Even though I don’t think you drink, do you?
Obaid: No, I don’t.
Andrew: No. But you had water.
Obaid: I had a lot of water.
Andrew: Did I make you feel uncomfortable for drinking water?
Obaid: No. I’m used to it.
Andrew: Yeah. I feel like a lot of people who don’t drink scotch will maybe stay away from my scotch nights and what they should know is that there’s no issue here if you just want to drink water or just hang back and not drink anything at all. It’s about getting to know people, and I’ve gotten to know Obaid and I’m looking forward to having you guys get to know him and how he built up Botmock.
This interview is sponsored by two companies that you probably know really well by now because they keep sponsoring us because they keep doing well with you. The first will host your website right, it’s called HostGator and the second if you’re hiring developers you’re going to thank me for introducing me to them, it’s called Toptal.
But, Obaid, I’ll tell you and everyone else about them later. First, good to have you here.
Obaid: Good to be here.
Andrew: Are you a little nervous about being here?
Obaid: A little bit.
Andrew: A little bit.
Obaid: I’ve seen your interviews before.
Andrew: You know the first question I’m going to ask you is one that you didn’t even tell our producer. What’s the revenue, dude? How much?
Obaid: So we are roughly around 11,000 MRR right now.
Andrew: Okay, impressive. And you’ve been around for how long now?
Obaid: We just did our second year anniversary in January.
Andrew: Congratulations. And I know that you’ve had some changes and ups and downs over that time that we’re going to talk about in this interview. Before that, you had something called OAK Computing, right?
Andrew: OAK Computing was a consulting company?
Obaid: It was a consulting company. So we did traditional web and mobile application development, essentially agency work. I worked with a lot of government agencies in Ottawa and then with a few startups as well and helping them build things.
Andrew: And what happened to that business?
Obaid: I was doing good. I just got bored of services business, so I wanted to move into products. Saw an opportunity and made my move.
Andrew: And is that business still running but now without you?
Obaid: It is running without me. Yeah.
Obaid: We sold most of the clientele books to other agencies.
Andrew: And that gave you time to figure out what do I want to do next with my life, right?
Obaid: Absolutely, absolutely. [inaudible 00:04:17].
Andrew: What are some of the things you considered?
Obaid: I was actually going to take sort of a relaxed year in 2017. So we did that around late 2016 is when I decided that I’m going to move away from that. And we were expecting our first kid in 2017. So I thought, “Okay, let’s take the first year easy.” And then towards the end of 2016, I got a group of chatbots. I was like, “Okay, let’s start building something on that,” and came up with the idea on Botmock.
Andrew: How? Before we get into that, how did you hear about chatbots? For me, it was like I said to you, it was, well, I invested in a company that ended up doing chatbots. It’s called Assist, the first major VC-backed chatbot company and they showed me what it was. And then I also realized as I said in the intro, I am having this realization that I’m reaching my audience just through email but connecting with friends via chat. That’s what turned me on to chatbot and started me on this journey What about you? How did you discover them?
Obaid: So mine was a little different. We had a restaurant client. We built a website for them, having managed their online presence. And the owner came to me one day and he’s like, “We want to do a loyalty program on SMS based.” And I was like, “Okay, it’s interesting.” He had few other ideas around that. So we started building something like that. And around the same time, I was exploring all these conversational things. Now that we are checking people in with their phone numbers, what can we do? So it became, “Okay, we can send your marketing message,” but then people were starting to ask questions to that number. And we didn’t really have any way of communicating that information, right?
And around the same time there was a whole sort of buzz around Facebook Messenger launching their APIs and everything. So our team looked into that. I started looking into that and I’m like, “Oh, this is interesting chatbots. Why can’t we do this loyalty program thing or anything else like that or any of these networks and channels?”
Andrew: Right. Why does have to be via text instead of maybe through Facebook Messenger or some of the other channels like WhatsApp, which will eventually, I believe, offer this type of chatbot communication option?
Andrew: So you were still working at the consulting agency at the time that you discovered this, but you didn’t do anything with it. You were just opening up your eyes to it, is that right?
Obaid: Yeah. So we didn’t really pursue that much around it. I actually started thinking about it on the side. And when I decided that I’m going to turn away from the agency and move toward this, it kept in the back of my mind. And I actually thought about, you know, I started looking into Facebook Messenger’s API and what we can do with it. And I have a software background so it’s extremely interesting for me to sort of see what can be done with it and it’s very easy for me to tinker with it.
And I had a few ideas because, you know, as I said, we were expecting our first kid and my wife kept looking up on these things on what can I eat and what cannot eat and stuff like that. And I was like, “This is a perfect example of there should be a bot in Messenger that you can just message and say, ‘Hey, I’m about to eat this. I’m this much pregnant, you know, this is many months and what can I do?”
So I thought about that idea and I started telling her and she did never heard about bots before. So she looked at me and says like, “Is that an app? Like how does it work?” I was like, “Okay, maybe I should just show her example of it.” And I started sketching on a piece of paper. And then I realized that the conversational apps are quite different than web and mobile apps. I could have sketched a website to her or sort of like a mobile app and a few screens would have given her idea of what I’m talking about. But the conversation, there’s so many ways that it can be interesting and how she would use it as a user. And so I started looking at solutions around that and found there was nothing. So I was like, “Oh, seems like a good idea.”
Andrew: Why didn’t you say, “I’m going to create the software that will enable anyone to create this type of chatbot for my wife or for any other use?”
Obaid: So I actually looked at that. They were quite a few of them at that time too at that point, but didn’t really solve my problem. The main issue was that all of them required me to actually have a Facebook page to connect with. And that’s the only way I could test it. And I thought, I’m like, “Why would I create a fake Facebook page just to test things out? I want to show an idea. I want to get the audition on the idea first before I invest that much effort.” And as a developer, I could do all the things but I was like if you’re not a developer, that’s such a big hassle. You have to then figure out a way to build something and deploy it kind of in the fake environment and then give control to somebody else and say, “Hey, here you go.” Otherwise, you didn’t write them in as a developer account, which, again, becomes a big problem.
Andrew: Right. Which I would never do with a web page. If I wanted to show someone a web page idea, I would never go and create the full page, have it working on a dummy domain and then say, “Do you like it?” I would create a wireframe first and have them go click on that. And there’s tons of tools for that. And you said, “Okay, this could be the thing?”
Andrew: What about this, though? There are tons of mockup software out there? Weren’t you saying to yourself, “One of them is just going to add another set of assets to enable people to create a wireframe or a mockup for chatbots?”
Obaid: Yeah. So I actually built the first prototype of the idea that I had for my wife’s sort of chatbot that we were talking about in InVision. So I created a few screens in Sketch and I put them together in InVision and that’s how I showed her what it would look like. And at that point I realized the method behind creating these conversations and prototypes is so different than creating static screen products. Right, each element, each message is essentially a screen. It conveys a message. It has a weight to it. And the way it comes up, it has emotions to it. So you want to time them. You want to perfect that. And that by itself was very hard for visionary people to do right away.
Andrew: I think that makes sense. All right. But I only think that makes sense because I’ve lived in this. At the time there weren’t a lot of people who are living in chat. Did you call people to say, “Would you be interested in this?” Or did you say, “I think Botmock needs to exist. Someone needs to create this. I’m going to go do it.”
Obaid: So yeah. So around October 2016, I basically popped up with my sketch and built a little screenshot of what I thought the app would be in terms of prototyping these things. And I set up a page. I found botmock.com as the domain. That all happen like in one day kind of thing and I’ve slept on it and I put a WordPress theme and said, “Okay, sign up for our early preview if you’re interested.” And that’s what we do. No video, nothing. And I kind of I just thought, “Okay, if this goes anywhere, how big of a need this is?” I initially thought maybe you need to create some sort of fake videos to showcase what it is because the idea is a little bit sort of complex than I thought people will get. We had 700 people signed up in line by December of 2016.
Andrew: So I read that in my notes and I was wondering how? How did you get that many people to come in and even discover that you existed?
Obaid: Yeah. So I went to a lot of Facebook groups. People were talking about Facebook Messengers and bots and how can we use them. And I basically said, “Hey, if you’re interested in something like, you know, trying something out, here’s a tool that we’re coming up with.” And I would just send them a link and they would sign up for, “We’re waiting for the next preview release.” And then I started sort of thinking about if this is what I’m going to build, how many go about building this, right? And I had some sort of ideas around it. So I started tinkering with it. And in January 2017 is when we decided, “Okay, let’s launch our version 0.1 out there and see how bad it is.” And to my surprise, it wasn’t that bad.
Andrew: Who’s “we”? Who else was there with you?
Obaid: So “we” was just me and my free consultant friends, basically, friends who I will use my sort of soundboard and part of them were just looking at me and say, “Okay, yeah, you should launch this.” And I’m like, “Okay.” So I always consider them part of my team. They don’t get paid at all and they’re awesome for not doing that. I just buy them a coffee and just get them to give me advice.
Andrew: And so to this day are you a sole owner? It’s just you?
Obaid: So, yeah, I’m a solo founder but now we have two more engineers to join us.
Andrew: Okay. And the first version you code it up yourself?
Obaid: Absolutely. Yeah.
Andrew: Well. Okay.
Obaid: First 10 months of it was just me.
Andrew: So you had a few 100 people on your email list. And then January 2017, about a year ago, you launched . . . no, two years now, you launched, two years. How many of those people ended up buying?
Obaid: So we had a free plan and then we had a paid plan from day one. And I remember . . .
Andrew: Even from before day one . . . sorry, day zero even, I went back to the Internet Archive. I saw from the beginning when you’re collecting email addresses, you said, “Here’s what I envision being in a free. Here’s what I envision being in the paid. Click this button and I’ll tell you when it exists.” Okay, so when you launch with both those tiers, what happened?
Obaid: So yeah, we had a lot of people. We had about 350 people in just one month, sign up on the free plan. We had the first person to sign up for paid in first week of February. Yep. And that was exciting because that was like the best validation I could get for the idea. Because at that point, we only supported Facebook Messenger and even then we did very limited things for them. And the minute that they by themselves, no intercom marketing, nothing, no email marketing whatsoever, they basically found value in it, and they were like, “Okay, we’ll just buy a subscription.” And have a go.
Andrew: But you’re saying as soon as you got the first customer, that was exciting? But it was only one out of hundreds of people who subscribed.
Obaid: Yeah, but that was sort of like the validation that, “Hey, somebody finds value.” And then my next step was really want to send them an email and say, “Hey, let’s get on a call because I want to know who you are and why are you willing to pay for this? What value are we really generating for you?” And that really turned the corner for us because I could take that sort of feedback from him and incorporate it back into my marketing.
Andrew: What did you hear from the first person that you found useful?
Obaid: So yeah. So essentially, he looked at me and said, “Well, I was doing this thing in Visio and Lucidcharts and it was painful experience because I’m not a developer and I have to do all the design work upfront and then give it to my developers just to test something out.” And he’s like, “I have client demos where I cannot go and show them a Lucidchart because it does not mean anything to them.”
Andrew: A Lucidchart is a flow chart?
Obaid: It’s a flow chart. Yeah.
Andrew: Yeah. You know what? So I’ve got Bot Academy where we train people to create chatbots. And then if you want to hire a chatbot developer, you can hire one of our graduates. They went and used that software too. And at first I was excited. It looked good. It was fast. I never heard of it before. But it really is hard to communicate to a stranger this is what your chatbot’s going to look like when you’re showing them a bunch of diamonds, right?
Andrew: They really want to see something that makes more sense. And so you were seeing that he wanted to not explain it to a customer but explain it to his developer team.
Obaid: Absolutely, yeah. And even sometimes for himself because he’s like, “Now that I’ve mapped this out, I want to basically try it out myself and see is this the best experience that we can have.” Now his iteration process was that before Botmock was, build Lucidchart, flow charts, give it to your developer, get them to build something quickly, send him a back link. He can test it out and say, “Oh, that’s not what I wanted to build.” Go back in Lucidchart, change and go back to developers. And then during the meeting if somebody comes up and says, “This looks interesting, but what if we change this?” And that required him to go back in the entire process again. And just that little bit of ease that’s for him so that he can design something could preview, run it, show it to the customers without having to bug as developers was gold for him.
Andrew: Yeah, it does seem like there’s a big market for software that keeps people from bugging their developers. Like I think about David Cancel who created landing pages because he found that marketers hated to go to developers and say, “I need this one web page that could or could succeed or could fail when we run ads towards it.” And you did the same thing here. Still, a lot of people did not buy from you. We’re going to find out a moment what you did with them.
But first, let me tell people about a sponsor called Toptal. If you’re looking to hire a developer, you really owe it to yourself to go check out Toptal. Before I get into Toptal, within the Toptal ad tell me, what did you do to find your developers? What was your process? And then I’ll tell you what it would be like if you went to Toptal.
Obaid: Yeah. So I went through Craigslist first. That was horrible. Then I posted . . .
Andrew: What was so horrible about Craigslist?
Obaid: Basically all we got was agencies from all over the world and that’s been great. And even though, you know, we explicitly say don’t contact me, but who reads that? Then we did the angel.co. We got so many applications but they were . . .
Andrew: From AngelList Pro you got a lot of applications?
Obaid: Yeah. AngelList there’s a lot of applications.
Andrew: But what was the problem with that?
Obaid: There was no easy way for us to filter. So it was like a lot of work for me to handle. Then I basically did was a lot of my friends told me is like just go through your network first because I wanted to make sure the person I’m talking to is, you know, prequalified for a lot of things. So I started emailing everybody that I knew in my friend circle and telling them that, “Hey, if you know somebody or if you’re interested in working on this, this is what we’re looking for. Send them my way.” And that’s how I started getting a lot of these very good resumes. And essentially, you know, you could interview all of them in real in some sort of sense. And not sort of kill your days and weeks, like everything else required me to take like three or four days in a row just to look at resumes and filter them out and then we did interview calls and it’s just a mess.
Andrew: So here’s how it would work if you were to use Toptal and I think work with your network is really effective. But if you were to go and say, “I need somebody that I can’t get through my network,” or, “I don’t have the time, I need them faster.” Here’s what you do. You just go to toptal.com. You hit this one button. And as soon as you go through their form, they’re going to schedule a call for you with one of their matches. You can probably get on the phone with a matcher within minutes, frankly. Once you get on a call with me say, “Look, here’s what I’m trying to build. Here’s the software we’re using. Here’s how I operate. Here are the hours that I’m awake and I need somebody to be there for us.” They then say, “Okay, give us a little bit of time.”
I always imagined that they’re going to give me the name right away. But they say, “No, give me a little bit of time.” They go look through their network. They have some conversations, make some calls, and then they come back to you and they say, “Look, here are the two people that we like for you based on what you said. Or if you need a team, here are the team that we think would be appropriate.” You get on a call with them and you schedule it using the Toptal software to make sure that everything is easy and organized. You get on a call with them. Often you’ll love the first person. You’ll be forced to go and talk to the second person and you’ll push yourself and then you say, “I love the second person,” then you decide which of them you want to get started with. And if you like them, you could get started often right away. You don’t have to sign up with Toptal once you go through this process.
So you might as well just go to toptal.com/mixergy next time you’re hiring. Just try it out. And if you don’t like the people you’re introduced to, you don’t have follow through. And if you like them and then they don’t do a good job, you will not be forced to pay. And I think frankly, they’ll even pay that developer. So if they introduce you to someone and you say, “I’m not happy with them,” they’ll still pay even if you say, “I want to take advantage of this risk-free offer that Andrew is telling me about.” So you won’t have to pay if you’re not happy. They will still get paid because Toptal wants to do right by their developer network.
So if you want to work with Toptal, that URL is toptal.com/mixergy. Toptal.com/mixergy will also give you 80 hours of Toptal developer credit when you pay for your first 80 hours. In addition to that, no-risk trial period. Go to toptal.com/mixergy. Mixergy is M-I-X-E-R-G-Y. Really worth using that URL. You then read an article on GrooveHQ. I love that company. What was it? What happened?
Obaid: Yeah. So read an article on . . . actually I started researching on how to run a SaaS business essentially, like how do I build this thing up and what sort of revenue should I be aiming for and how long would it take, what the journey would look like. And I read a lot of articles, but there was a blog that that GrooveHQ had about going from 0 to 100K, the aha moment. And it was like a journey map that they were doing. I found it really interesting because every single blog post and I think I read all of them like two or three times because you would find so much hidden knowledge in that. It’s like, “Hey, we tried this, we tried this, we tried this.” We failed at this . . . or we assume this. We tried this. We thought this will basically blow for us and it just completely failed.
And when I was reading that I actually started thinking about how should I bookmark, earmark my journey around this? And one of them was the advice that he gives us pretty much in every book was is talk to your customers. Before you go build it, talk to your customers. And I was like, “Is that sales?”
Andrew: You’re saying GrooveHQ blog posts that kept saying over and over, “Go talk to your customers. Go talk to your customers.” And you said, “You know what? They’re saying this so many times. I’ve got to go do that.” Is that right?
Obaid: Absolutely. Yeah, absolutely.
Andrew: And so at the time you hardly had any customers. I’m looking at my notes here. At the time you had 800 people who signed up but very few customers. What did you do?
Obaid: So I treated 800 users as my customers. So I looked at it and said, “Okay, these are all people who have signed up to use my product. They might not be using it to pay me right now. They’re not convinced enough.” But they saw some value out of it. Took their time to sign up and create the form and try things out. So I started sending an email out to . . . I decided to send an email to all of them and said, “Here’s my Calendly link. Let’s get on a 15 minute call. I want to know why did you sign up? What are you working on? How can we [help 00:22:00] sort of the value to you?” And initially I was, “Okay, I’m going to use MailChimp and it’s not going to look personal. It’s going to have all the marketing center. They’re going to [get on 00:22:09] it.” So I found a Streak CRM to use it in Gmail and then they had a nice feature of doing sort of mail merge for you and then send an email out.
And so I did that. I think it took me like three or four days to send all the emails out because they have limitations on how many you can do. And then I crossed my fingers. I said, “Okay, let’s see what happens.” And I made a mistake of setting up my Calendly incorrectly. As in, I set it up so that you could just book time anytime of the day. And I saw there was bookings in the middle of the night from Australia or like every possible place. And I was like, “This is interesting.” My users are all over the place and they all want to talk to me.” I think I had like 150 or so calls scheduled. So I literally spend a good month and a half and just talking to people. Like I . . .
Andrew: In the middle of the night. You now have a new baby. You’re waking up in the middle of the night and you go make a phone call and you’re whispering to them?
Obaid: Well, I had a basement where I could just go on myself and [inaudible 00:23:15].
Andrew: So in the basement and you’re talking to them middle of the night.
Obaid: Middle of the night.
Andrew: You’re awake enough to talk to a customer?
Obaid: Absolutely. Yeah.
Andrew: What did you learn from that from the set of calls? Like what?
Andrew: Like what? What did you learn from having those calls?
Obaid: The main things were, you know, where was the core problem they’re trying to solve, right? So they perceive . . . they use your software and they’re like, “Okay, I . . . ” they have a problem in their mind, and they’re using your software to solve the problem. And sometimes you might have done everything right from your perspective, but you just don’t understand what their problems were. So once we started talking, they were telling me about their problems and how they couldn’t solve it. And I was like, “No, you can. We have a feature that does this way.”
And the other thing I did is I actually learned a lot of terminology from them. Things about, you know, how are they mapping it? What are they calling each block? How are they using it to sell to their customers? What are they using it for? If you’re calling developers, what’s the biggest pain point? What are they . . .
Andrew: What are the problems that they had that you actually had solutions for, but they couldn’t discover in the software? Like what’s an example of something that you remember in the early days was a problem?
Obaid: So being able to share a preview without having to download it as a video.
Obaid: And when we, when I built it, I was like, “Like why should I download the video and send it to somebody when I can just send them a link and they can open it up in their browser and give feedback?” And most users will like, “Because that’s how we do it. We basically build it up before and we’ll screen capture our chat interactions and then send it our customer feedback. So when they saw the button to download a video, that resonated with them. I really love the process.
Andrew: You thought they would want to link to avoid the download because the downloads a pain in the butt. You thought just here’s the link. It turns out what they wanted was to get the video. They wanted to download the video and give it to their people using whatever means they wanted.
Obaid: Exactly. Because they might be putting that in a Slack conversation or they might be putting in an email because that’s where the customer is comfortable.
Andrew: Got it. Right.
Obaid: And they wanted that option and they were using it quite well.
Andrew: And you had that option, the download option.
Obaid: We had that option.
Andrew: They just didn’t even know it because you were deemphasizing it in favor of what you thought they wanted, which was a link.
Andrew: What about the terminology? What’s one example of that?
Obaid: So terminology with things like, you know, when they . . . we were calling each message node as a component, and then it will be tech term. And they looked at it and said, “It’s just a block, right?” I’m like, “Yeah.” “Okay. That’s what a component is.” And I think I heard like from 10 people before I started realizing that why am I calling it component. It makes sense for me as a technologist to call them components that make things up. But to them it’s just a block.
Andrew: And I think it’s kind of weird that people call it a block. What we’re basically saying is if you sign up to my chatbot and my chatbot says, “Thanks for signing up,” and then there’s a picture of me on top of that, each one of those is considered a block.
Obaid: Exactly. Yeah.
Andrew: Right. And I think that’s kind of weird that people do that. But they do call it a block. And I feel like that’s Chatfuel that started out by calling it a block because they thought each one of these little messages whether it’s an image or video, or text, or anything else, doesn’t matter. Each one of them is a building block towards this bigger conversation that they’re helping facilitate. And they, I think, are the ones who got that language out there. But you’re saying I called it component. Component makes in my mind just as much sense. But if they’re all calling a block, you got to change your language to block and so got it. From the small pieces to the big pieces.
What about this? When you talk to somebody, they feel better about working with you. They feel warmer towards your company. They’re more likely to buy. Did you find that just having conversations with people lead to you going into your Stripe account and seeing that there were sales?
Obaid: Yeah. So we actually signed up a lot of customers like that because we sort of took converted them into showing them the value of it. The conversation will turn into, “Can you do a screen share and show me how I would do this in Botmock?” Even though I initially was like, “Okay, this is going to be just you talking, me listening, which was good because we would do like presales demos essentially but without having them being under the guard.
And the other thing that happened is that I had a roadmap kind of in my head and I would write it down. And while we’re talking to them, you can start seeing that they want things out of your roadmap. And when you tell them that, “Yeah, that’s coming in like three months or four months,” and you publicly share your roadmap with them, it became like this instant thing of, “Oh, you’re already thinking what I’m thinking so you’re on the right path so I can join you in this journey early.”
And that’s something that I learned from one of my calls with them because one of the users basically looked at me and said, “Hey, if you share what your roadmap is, maybe . . . ” Because he looked at me and said, “Would you be building this?” And I’m like, “Yes, we will be building it soon.” He’s like, “I’ll pay you when you build it.” I was like, “Well, yeah, but there’s a lot of other things, right?” And he’s like, “Well, if you share the entire journey, if you give me the confidence that one year or two years from now, you guys are thinking about how you can make my life easier without having for me to think about and tell you and then, you know, that makes sense. I can get behind that journey.” And so we got that. We got a lot of validation of our roadmap. That gave me the confidence to keep building the product in a certain direction.
And the other thing was that a lot of people then would get on a call and say, “You’re doing this Facebook Messenger, which is awesome. But we are building for Alexa, for Google Assistant, for Telegram, for WhatsApp, whatever that might be. And are you thinking about adding that?” And I was like, “Okay. Like how would that process work?” And they would actually share their set of problems that I had not even thought about because I was not in the [YCUI 00:28:52] design right now. So it was like, “Oh, you can do this on Alexa.” So I actually went out and bought an Alexa and the Dot and the Google Home device just to try it out at home.
Andrew: Yeah, it’s funny how there is an overlap that the people who are interested in chat marketing via text-based apps like Facebook Messenger are often within companies, the same ones who are tasked with figuring out what the company’s Alexa strategy is. Even though in my mind, it’s two different experiences, for them, they’re the ones who handle both of them. And as someone who’s . . . you’re in Canada right now, aren’t you?
Obaid: I am.
Andrew: As someone in Canada, what was it like to get an Alexa device? I don’t think Amazon made that available for a long time, right?
Obaid: No. So I actually got one of my friends to buy it in U.S. and ship it to me and send them a Google Home device and none of them were available. And I had to switch my phone to U.S. completely.
Andrew: Just to turn it on.
Obaid: Yeah, because you can configure it because it would say it’s not supporting in your country. So almost all of these devices are set up with your phone. So I had to switch my profile on my iPhone to be in U.S. and that worked. But it was interesting because I had never really interacted with these devices that much outside of just stores. And it became interesting to see . . . you know, okay, you think about why would somebody build a bot for this? What use case can I have on this? And then I started seeing my family start using Alexa and Google Home in their routine and I was like, “Okay this is interesting. This is very different medium.”
And we initially thought about, you know, the software should remain the same, the design methods will be the same and all of that stuff. If you’re designing for Facebook Messenger, you should be able to take the design and put it on [voice 00:30:35]. That’s another thing that a couple of our customers told me because I would categorize them and I would send back an email and say, “Hey, we are thinking about doing it by Alexa. You know, can we take your Facebook Messenger project and convert it?” And most of them came back and said, “Look, don’t do that. We will not pay you for that feature. Like that feature is useless for us because we are rethinking for Alexa is a completely different strategy than for Facebook Messenger. So that is not useful for us.”
Andrew: I think that makes sense. And I kind of feel like for the voice-based devices, having a mock up is more important even than the text and visual devices because it’s a pain in the butt. But yes, you could create a fake bot and show somebody what it looks like, especially if you take screenshots and say, “Look,” to the client or the developers, “this is what I want, what do you think?” But with voice, people have to go and talk to every single variation before they get to experience it. And so they want more of a visual representation of what that experience would look like.
Obaid: Absolutely. And during my conversation with customers, I actually stumbled upon a PR gentleman from San Francisco. He works at a Fortune 100 company and he basically got on a call with me and he’s like, “Look, this is my process right now. We’re building for Alexa.” And he’s like, “My process right now is that I have to write the scripts out on a piece of paper or Word or Excel wherever that might be. Then I grab a colleague with me and we’d go into a meeting room and we read it out loud. And then we have other team members listing into it and thinking this is good or bad, but kind of make a decision on that. And then we get a developer to make a fake scale, essentially hardcore everything about it. There’s nothing smart about it. It’s just turn by turn conversation. And then we deploy it on our Alexa device. I basically take my device to the meeting room, plug it and hope [it in turn 00:32:25] works. And then I say, ‘Hey, Alexa,” just walk through the to the entire conversation just to give them.”
Andrew: And that’s their process. And that’s the pain that they want you to solve by creating a visual mockup of it. Okay, so I see how the calls helped. Let’s talk about a problem that only a friend of yours was able to help you with, a guy who was here in the Bay Area. He told you that you were thinking about pricing completely wrong. What was it that he said was wrong about your way of thinking about pricing?
Obaid: Yeah. So we were actually for the longest time we’re doing freemium model. So we are free plan tier and then we thought, “Okay, we will convert users from there to paid customers and all that.” And he looked at me and said, “Well, two things,” he said, “kill your free plan because that’s not helping you. You’re getting so much noise in this market right now. It’s early on. Your tool is young and you can’t please everybody so get people to prequalify themselves. So give them an indication you will charge and ask them for [credit card print 00:33:19].
And second thing was charge for everybody, like charge more. Whatever you think about, charge more than what you think because you’re providing more value and sometimes because you’re not the end user yourself selling this thing and building it up and in your own day-to-day environment, so you usually undercharge your customers.” So those two things were a little bit hard for me. One was we were getting a healthy amount of users signing up every day because it was free and that was a big thing.
But I realized once we switched the number drop for me. And I think I had like a shock for a day or so. I was like, “Is it the best move? Should I keep it? Like where are these users going if they are signing up for mine?” And I actually called them. I said, “Dude, I think we need to bring back the free plan. Like this is ridiculous.” He said, “Look, now, whatever number you’re getting are the customers who are interested in your 15-day trial. You have 15 days to convince somebody. At least have a communication where you know that that person saw whatever they saw and found that this is worth putting in credit card out. That’s a way better conversation then people who were not your customers who were just trying things out because it’s so easy to sign up online these days. They just put an email address and name there and you think that they’re interested . . . ”
Andrew: And we’re all putting in our second email address, our fake email address that’s just for signups, you know, the whole thing. I do see it on your site. It went from really being very clear that there’s . . . where’s the big button? The big call to action button was for a long time get started. Not just get started, it’s free. It’s free! Like really drumming that in. We are free to get started right now to suddenly the button call to action switch to saying start 15-day trial. But you did say no credit card needed. So at least you had a . . .
Obaid: Yeah, so we switched that part later on.
Andrew: So now it’s even credit card required?
Obaid: Yeah, so don’t we do a 15-day no credit card required. And that happened purely because of the enterprise customers. And in 2018, we started getting a lot of them knocking on our doors. And we found, again, talking to them, they were like, “Well, we want to put up a credit card but I do have a company policy does not pick it up. I need to get approvals before I can put it. I don’t have credit card for my company. So I don’t want to put my personal one.”
Andrew: I do find that that’s a bit of a problem. I kind of wish that Basecamp made it easier for other people on the team to sign up without going and getting a credit card and special permission, for example, because our team didn’t even try Basecamp. We just went to treat Asana because Asana, they didn’t ask me for a credit card. Meanwhile, it wasn’t the right fit for us.
Let me talk about my second sponsor and then get right back into the next big issue that happened for you. Second sponsor is a company called HostGator. If you want your website hosted right, I’ve said forever what you want to do is just go to HostGator. I got to tell you something, I keep getting emails from people or chat messages from people telling me that this hosting company is better than one. It’s always some no name company I never heard of, even though I’ve been in the space basically my whole life.
And what I’ve realized is that it’s one of those things like where everybody has this need to have the perfect hosting company that you spend forever researching and what’s the freaking point, just get your website hosted and move on with whatever it is that you need to do, which is talking to customers, improving the user experience, actually building up the freaking business. I don’t need to understand that you could save a penny by going to another hosting company or then another hosting company has one extra feature. I don’t even think they do but there’s always like some extra feature that people think they need that they really don’t. Just get your website hosted right and then move on with your freaking business and talk about how to get customers, how to make your customers happy.
So, look, I’m not going to say HostGator is the best hosting company on earth, even though I’m happy with them. I’ve signed up with them. I think that they’re really good. I’m just going to tell you, dude, stop thinking about it too much. Hostgator.com/mixergy.
You’ll get hosting that’s done right. If you hate your hosting company, just switch over to them. They’ll take really good care of you. If you’re starting something new, start with HostGator like so many of my interviewees have. And then stop thinking about it because your website will be hosted right. It’ll just work and you could move on to doing things like calling customers.
If you go to hostgator.com/mixergy, first of all, you’ll be helping me because it’ll show them that my ads work and second you’ll be getting what I imagine is the lowest price they possibly could offer and what they told me was the lowest price online, up to 62% off. Hostgator.com/mixergy.
All right. The next big issue was last summer, I knew you. I didn’t realize you’re going through this, every few months you told our producer, “I felt like I was having a bad month.” And then you started going into churn. What was going on with churn?
Obaid: Yeah. Like start of 2018, we started seeing a lot of customers canceling their subscriptions and stop using the solution and we started reaching out to them. It was like, “Okay, why are they stopping? What are we doing wrong?” And we were expanding support for the platforms at the same time. And I sort of wanted to stop doing that. And it’s like, “Okay, why are they canceling?” And they started to go back to the same thing, talking to customers. And it becomes a little bit interesting when you have a bigger cohort of customers using it and users using it. And because we have multiple platforms, different people coming with different assumptions and it started sort of doing the same problem. We’re like, “Okay, why are you cancelling? What value are we not providing you?”
Andrew: You know, before we get into that, I want to emphasize that you actually, once you started to see the churn was high, meaning people were leaving fast, that you were having negative growth, meaning every month, you had fewer customers than the month before. You started to wonder whether you should even be in this business. And the truth is that whenever you talk to someone who’s in the software as a service business, they talk to you about how once you get those subscriptions coming in, your business just keeps growing and maybe takes a little while to get started. But it grows on almost till forever. What they don’t talk about is the experience that you had, which is sometimes you do have negative growth where people are leaving faster than you could get new people.
And frankly having them leave you at all, there’s a real problem. Having leaving faster than you could get new people means your business is going to die at some point. And when no one else talks about it and everyone is talking about how you just get in there and your growth and the growth charts and you suddenly have negative growth, it’s very easy to think, “Maybe I am not in the right business and I should leave.” Instead of doing what you did which is just start talking to people and they gave you advice. You actually said to our producer, “Look, I got into analysis paralysis. I didn’t even know what to do.” And then you finally went to a friend who had a SaaS company and he said, “Welcome to the SaaS business. This is the way it is.” I see the smile on your face like, “Hallelujah!” right? That you actually got the truth.
And then you got the next piece of advice. I’m actually going to screw it. I should be letting you have a chance to talk but I freaking love this quote so much that I highlighted it and bolded it in my own notes. He said to you, “Go back to the people who cancelled and harass them for feedback.” That word “harassment” I thought was important. Obviously we’re not really talking about harassing. We’re talking about being super persistent.
What happened to me when I call people to cancel was nobody wants to talk to you. It’s like having someone finally break up with you, a girlfriend breakup with you, and then going back and saying, “What did I do wrong?” “I broke up with you. I finally worked up the courage to leave. I don’t want to get back in a conversation that’s painful for me.” And they don’t want to do it. And so I would ask them. I wouldn’t get any feedback. I should have done and I’ve learned to do things that are much more persistent and get feedback. So what did you do to express that persistence to actually get feedback? What did you do?
Obaid: So, yeah. So I made it very easy for them to give feedback, right? So my first take on that was an email that goes out to them when they cancel and say, “Hey, you cancelled and we’re sorry to see you go. We’re sad about that but we want your feedback to improve the product, let’s get on a call.” You know, that method worked early on for us but it wasn’t for churn users. Those were users who were just signed up but didn’t have it [prepared 00:41:30].” But these guys were like . . . one of them actually emailed me back and said, “Look, I’m not interested in a sales call and I’m not going to sign up for it. The project has died on our end. There is no need for it. That’s okay.”
I was like, “Why are they thinking that?” And so I talked to my friend and he’s like, “Well, you got to harass them.” But what he meant was make it easy for them but persist with that feedback loop. You know, don’t just give up to the first one that they don’t reply to. It could be because they’re busy, it could be because they didn’t get it. Ask them, but continuously ask them feedback.”
And so the we made it extremely easy for them so I would send an email that had five options and I’d say, “Hey, you can just hit reply and just enter the number. You’ll not hear back from me. But if you want to tell me more, go right ahead. And this is coming from my personal email. There’s no help at Botmock or anything like that going on. This will come to me and let’s get on a call and just talk about this.”
So that started a conversation loop where people would just literally hit reply and they will say, “Two,” and that’s it. Like they will just select the second option and they won’t even bother repeating like copy and pasting it. They just hit reply and tap Two and they’ll send it to me. But two things, one, it started the conversation with them. So now I could go back and say, “Hey, you have this particular reason. I have a better rebuttal for you. I have a follow-up question for you that is more targeted towards you.” And they started to talk to me a little bit more.
Andrew: So wait, you would give them like a list of a multiple choice, they would hit the number that corresponded to their answer and that was it.
Obaid: That was it.
Andrew: But when you followed up at that point, now they were much more willing to give you more details.
Obaid: Yeah. So for example, somebody will say . . . so we had options I think . . . I don’t remember on top of my head but one of them was like, “My project got cancelled,” or, “The tool is too expensive.” So when they select one of those, I would follow up with them and say, “Okay, what’s the pricing that would work for you? Clearly, we have some value for you. It’s not X dollars, what is that number?” I would tell them like, “Whatever the number is, I will give you that for six months.” So right now they’re forced to reply back with an answer. Now what would happen is what I expect that people would come back and say like $10 a month or something very lowball. Surprising, a lot of people came back because I think it was like just hard for them to come and the lowball number. They were like, “Okay, I got to come with a realistic number with this guy.”
So they’ll come back and they were like, you know, “I need 20 bucks a month or 30 bucks a month.” And I was like, “Okay, but what else do you need? Like do you need features? Like do you find valuable? Because we have like that plan in $20 a month, but you will not have multiple users. You will not have this, this, this.” “But I really need that feature.” So I understood that they had price constraints because of whatever the industry they belong to or they were single founders, single person team, marketing team, and they just were strained with it.
The other part of it was a lot of them came back and said, “Hey, we were really looking forward to this feature, and you haven’t launched it yet. You said I will be launched in three months, it’s not there. We’re done with this relationship.” And that was eye-opening because we thought we were prioritizing it properly. I really thought we were moving as fast as we could. And that’s when I actually started looking at and say, “Okay, we need to go raise money because we do go faster for our customers.”
Andrew: And how did you raise money?
Obaid: We raised money from Jason Calacanis. We joined one of these incubators. [Basically second 00:44:58] in a Launch incubator. So I send them an email about something on raising money essentially. And he’s like, “Hey, do you want to join my incubator?” I’m like, “Okay, that sounds like a good idea.”
Andrew: How much did you raise from them?
Obaid: So we raised 100K from them.
Andrew: A $100,000. And then what did they take? Seven percent of the company?
Obaid: Something like that, yeah.
Andrew: And was it helpful beyond the . . . Is that why you were here when we had scotch?
Obaid: So, yeah. So I lived about eight six to eight months in San Francisco and then I chose the first time to come back to Ottawa though. But now I’m here. So between these two cities. And I was there for networking with him and working with him on the other side of the equation. The reason I actually joined his incubator and the reason I love working with him, essentially having him on our team, or the other way around, is he gives feedback really good. Secondly, I didn’t have any network in San Francisco. So I was like, “If I want to raise money or if I want to build a network in the city that I want to sort of be successful on, I need the rock star to help me guide through it.” And Jason was like that person.
Andrew: Okay. And so beyond that, has he helped shape the product in anyway?
Obaid: He has. I mean, he has given us feedback on how we’re explaining it. I had a hard time telling people who are not in chatbot industry, who were not familiar with chatbots itself and exactly what we do. And he basically pulled me aside one day and he’s like, “You’re explaining it all wrong. Like rephrase it, rethink it. I don’t . . . ” Like he didn’t have a magic solution for me. But he was like you, “You want to be able to get somebody excited about your product faster than what you do. You have this long drawn out story that is boring. So make it exciting and do it properly.”
And he was always available to sort of give feedback on these pitches. So I will give him a pitch and he’ll come back and set up. And would just basically stop you in the middle and said, “You lost me at that point. Like where you’re going with this. You know, this is taking too long.” And that helped in a lot of things. In sales calls, it helped me a lot because now I exactly knew how to explain Botmock, how to get . . .
Andrew: How do you explain Botmock? I noticed something as I went back and looked at different versions of your site. But before I say what I noticed changed, let me hear how you explain it now.
Obaid: So we now basically look at people and say, “We are the conversation design and prototyping tool. If you’re building an app, conversational app on Alexa, Google Assistant, Facebook Messenger, or any of these platforms, we have a tool that can help you build good experiences.”
Andrew: Okay. All right. And I could see that resonating with them. One thing that I saw that changed was you went from explaining what the tool did on your site to explaining the problem and how you solve it. And I think even the current version of the site says, “Look, you’re using Word doc to do this, you’re using this to create an image, you’re doing this to pass it to Sally and then Sally does this to pass it to Bob and like all this stuff.” Or instead of this convoluted process here we are at Botmock in the center and all the things that you’re doing just work straight through there.
Obaid: Absolutely. And then sort of came, again, from talking to a lot of customers, but also the way our product is evolved. We now look at ourselves as this solution, this part of that we use every single day in our customer’s life. Like we track that information extremely well now, and we are surprised at how many, how long these sessions are. When somebody comes to the work every day they open a Botmock, and that’s where they’re spending majority of the time in building, designing, putting the content, trying things out. And it went from having an average session of 30 minutes to now doing 5 to 8 hours a day.
Andrew: In the app.
Obaid: In the app, yeah. So we are now not just a part of our process, we are where they start from. They think of an idea, they think about something and they’re like, “Oh, I want to map this out.” And they were like . . . .everything just get started, and then more.
Andrew: So how did it affect your business when you started making these calls to people and you started getting feedback from them on pricing and strategy? Did things start to turn around? Were you able to do anything to fix your churn based on what you got from them?
Obaid: Yeah. So we did a lot of things. So one is our copy changed a lot, our sales pitch and marketing website. Our product roadmap evolved a bit too in terms of what exactly are we solving problem for? And, you know, who is our not our customer? Which was the biggest thing that we learned is to identify people who are not going to be part of our journey in the long run, right? They’re not the ideal customer who will find the value and keep on adding more money to our pockets as well and be with us in the journey. And we found a lot of enterprise customers who were interested in our journey and our product but they were on the bottom line because we were not explaining them to them the value of our product. So a bunch of those things helped us. We are now at kind of 20-plus enterprise customers.
Andrew: I noticed that. That’s one of the things you talked about at scotch that adding enterprises helped dramatically. That big companies, I don’t know if you can mention them here, if you can, go for it, but you told me in private and they’re pretty impressive companies that are signed up to work with you.
Obaid: Yeah. And we found that those companies actually have a bigger need than the smaller agencies right now. See, the agency work might be . . . it’s depending on how many customers they can get and how quickly they can turn on the project, whereas the these enterprise customers looked at and said, “Look, design and product is one part of it, being able to test is another part of it that we are in need of. Being able to keep a working version of a document as a design document across all of our versions of this bot is another problem that we are doing, solving.” And be part of a workflow, right? I mean, they had nothing. And they are the ones who actually gave us the idea for the diagram because they were like, “We have content in Excel. We have writers doing this.”
And the reason Excel, by the way, just wins across because whenever we talk to them, they were like . . . essentially, we went to our developers and said, “What format works for you?” And they were like, “Give me a CSV file and I can do magic with it.” So if you’re writing content, most developers would be like, “Give me a CSV file because that is just easier for me to parse and incorporate in whatever I’m doing in my tools.” So you can upload it in many, many tools, in dev tools. So essentially, all the designers were like, “Excel, I can save it as a CSV file. So Excel it is.” So Excel became this one document that crazy amount of documents. We’ve seen things that have been done in Excel that I was like, “Wow, you spent so much time doing this in Excel.”
Andrew: For chat messages, for bot mockups.
Obaid: Yeah, the entire copy of bots exist in Excel file somewhere. And that is a hard thing to share, collaborate, get feedback on.
Andrew: Right. And it’s hard for people who are visual to understand what’s going on with all these different cells of text.
Andrew: All right. Congratulations on getting this far. You guys aren’t profitable, right? You’re not supposed to be profitable. You’re supposed to just keep using the money that Jason gave you, aren’t you?
Obaid: Yeah, so we are not profitable. We were profitable. Now we are expanding so we are not profitable, which is that.
Andrew: How are you getting customers now, by the way?
Obaid: So we are getting . . . a lot of them through our content marketing. We give talks at a lot of conferences that gets us in front of our enterprise customers a lot. We’re sharing our knowledge essentially. That’s what our strategy is.
Andrew: Where? I’m on your site. I don’t see a link to your content.
Obaid: So we do guest blogs in different places. That gives us much better coverage than if you were to maintain our own blog.
Andrew: So guest blogging on other sites that then leads back to you.
Obaid: Yeah. So a lot of people are different publications. They might be . . .
Andrew: What’s the one that’s worked best?
Obaid: So online Chatbot Magazine has worked really well for us.
Andrew: Chatbot Magazine, that’s a medium magazine, right? That’s done really well. I could see that.
Obaid: Yeah. Because, a), a lot of those guys are also a lot of customers who are contributing to that thing. So they look at it and say, “Oh, yeah, your solution works very well.” And then just sharing our knowledge. We do a webinar every Wednesday that we push out to our customers through different channels. And a lot of people sign up for that where they come in and ask questions about how do I design conversational chatbots? How do I design to Facebook Messenger or whatever? And we have a slide deck we go through where we share our knowledge based on our customer conversations and then we answer their questions. And they don’t have to sign up for our product but we just share knowledge and they look at it and say, “We want try it out.”
Andrew: All right. The website for anyone who wants to go check it out is Botmock, as in mockup for chatbots, right? Chatbot mockup. Botmock.com. And I use it. I love it. I feel like one of the things that I love about this and we’ve encouraged other people to use it so I get to experience what they’re doing with their Botmock accounts, I just love how much you keep improving it. It went from being something that was useful because it was a quick design tool to one that really helps you think through more than design but the full experience. So go check them out at botmock.com. And guys, you really should be just considering chatbots at least.
In fact, I actually think at this point, we’re in 2019, you should have a chatbot at this point. If you want to learn how to create a chatbot, you can check out botacademy.com where you can even hire one of our graduates to build a chatbot for you if you decide you don’t want to learn it for yourself. I’m really high on chatbots and I loved watching how Botmock has built up. I also want to thank my two sponsors who make this interview happen. The first will host your website right, it’s called hostgator.com/mixergy. And the second will help you hire your next phenomenal developer, it’s called toptal.com/mixergy. Well, thanks so much for doing this interview.
Obaid: Well, thank you.
Andrew: Cool. And I know you’re doing this from home because weather’s been terrible, so thanks for making this work today.
Obaid: Yeah. No worries. We got like, 40 centimeters of snow on the ground in two days.
Andrew: That’s what I love living in San Francisco. I’m so done with snow. It’s an interruption. I want no interruptions my life.
Obaid: I’m actually flying back to San Francisco on Monday. Just for this reason, I’m like, “That’s it. I can’t handle winter anymore.”
Andrew: All right. Maybe I’ll see you here.
Andrew: Bye everyone. See you.