Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. And once again I’ve got an entrepreneur who listened to my interviews for a long time. Before we started you said, Ryan, you listened to millions of my interviews. Where did you used to listen to my interviews?
Ryan: I paid for your interviews. I paid for–you had a whole bunch of paid interviews on AppSumo. I paid for all them. Your face probably haunted my dreams for a while but in a good way.
Andrew: I’m glad. I love that more and more of the people who listened are now coming on to do interviews with me. Gary Tan, who just started a new VC fund is going to be here in a few days. I emailed him and he said, “Dude, I’ve been listening for years. Absolutely.”
Ryan: You know what’s funny? After I listened to your interviews, it changed the way I speak on the phone. Even right now, I have to mimic how you sound because you sound so clear and it’s like–like me I’m from New York and Long Island. No one’s going to buy software from that. It’s good motivation. It’s like a digital speech coach for free.
Andrew: Good. I’m glad that you got that. Frankly, I’m from Queens, New York. I grew up right there in Jamaica Estates.
Ryan: Good. Brooklyn. Long Island. Yeah.
Andrew: Let me introduce you as–let me say it this way. A few years ago, I was on my friend Neil Patel’s website. And just I was about to leave his site, this thing just took over my screen. I forget what it was, but it was something like, “Quick Sprout presents ‘The Step by Step Guide to Monster Traffic Generation.'” And then there were two buttons. One said in big yellow clear letters, “Yes, send me the free traffic generation guide.” And the other one in this grey, sad-looking button said, “No, I have enough traffic.”
And I’ve never seen anything in my life like that before, where you mouse over to leave the site and it asks you something that first of all is kind of relevant to the site and second, makes you feel like an idiot for not taking it. It’s like Robert Cialdini meets the Airbnb guy’s growth hacking system merged into one. And I never heard of the company before, but in the overlay, in the bottom left corner was a company called Bounce Exchange and I clicked over just to get a sense of what they were. I thought Neil was just using software, but he wasn’t. He was using this company that actually did all this for him.
Because it was a company that actually was a done for you service, they weren’t listing the price, you couldn’t just download and play with it. You had to call them up. And I’ll be honest, I was a little intimidated because I wasn’t sure it was frankly even for me. And I just kind of filed it away as another cool thing that Neil Patel did. Since then I’ve been watching the company a little bit and man, have they been doing well, as you’ll see in this interview.
Well, this morning, Neil Patel says, “Hey, Andrew, do you want to meet Ryan Urban, the founder of Bounce Exchange?” I said, “Yeah, in fact, I have an opening for later today. I’ll go home late if Ryan and I can record an interview.” Ryan said yes and I will go home a little bit later and he will go home a little bit later and I’m glad to do this.
Ryan’s parent company, the parent company of Bounce Exchange, is called BounceX. They are a leader in cloud-based behavioral marketing and the fastest growing software company in America. The cloud based behavioral marketing tells me they want to go beyond these exit intent-type overlays.
They want to go to more of an understanding of who the customers are and we’ll understand what that means and the fastest growing software company in America is a reference to Inc. 500 or Inc. 5000 or Inc. something that had them on with their revenue, so we’ll talk to him about what their revenue is and how he built up his company and so much more.
This whole interview is sponsored by the company that will host your website right. It’s called HostGator. And the company that will help you hire incredible developers or designers, I’ll tell you more about Toptal later. First, Ryan, good to have you on here.
Ryan: Hey, Andrew.
Andrew: So, did the service start out as you saying, “Hey, there’s all this great software out there. I’m going to just cobble it together and charge people for the service of setting up the software of creating these interesting designs, of coming up with the clever marketing.” Was it a service or was it software and a service from the beginning?
Ryan: Yeah. I’ll take a step back because you mentioned Robert Cialdini. He’s like an idol of mine. We wound up having a conference this year and I’m like, “Oh, now I have a company and conference. I can get my childhood idols.” So, I had him come to the conference and got to talk to him.
Almost everything we do is kind of based off of some Robert Cialdini principles or Dan Ariely stuff. If you haven’t read the Robert Cialdini book–I hate when people recommend books, but it’s an oldie, it’s like 30 years old, but “Psychology of Persuasion,” it’s an amazing thing when you hear about the concepts of social proof, everyone is kind of borrowing from Robert Cialdini. But it’s nice to be able to apply those things online and kind of use some creativity and get some real results. Yeah, what you saw was kind of a version of that.
To answer your question, I was on the marketing for a long time. I ran marketing at Bonobos and a few other places. I consult for a lot of companies and was more about, “At scale, how do you spend $10 million, $20 million and acquire customers?” And part of that is spending money on traffic and the other part is how do you get them to convert.
Andrew: Wait, the $10 million is what you were spending at Bonobos?
Ryan: Yeah, more than that.
Andrew: Got it. You’re saying, “I’ve got this budget but I don’t want to waste it. I want to find a way to actually get them to convert.” So, you found different ways to do it. When you wanted to start your own company, did you say, “I’m going to use the software that’s out there,” or did you say from the beginning, “I’m going to be a software company?” What’s the vision?
Ryan: It definitely started as a software company. I hate the agency model. What really sucks, especially when I was consulting is say you’re charging someone $1,000 a month or $5,000 a month or $15,000 a month, you’re putting so much effort in the first few months and they’re getting way more value than what they’re paying you. Then in month three, it’s probably getting the appropriate value and then month six they’re getting less value.
Andrew: You’re saying if they were hiring a consultant to do it.
Ryan: Or an agency. Yeah.
Andrew: So a paid search agency, you’re paying 15% of spend. You’re getting a good deal the first month, six months you’re getting a terrible deal. So, for us, it’s like, “Hey, we need to build really good software.” Whenever someone asks about, “Where’d you come up with the idea?” The ideas don’t really matter. It’s really about the people and execution. But it had to be a software company first. There wasn’t really good software to capture emails for enterprise.
So we come up with software that captured emails. We invented the exit intent thing. That started early 2010 like, “Oh, that’s a good behavior to listen to.” I was always into Robert Cialdini’s about people’s body language and behavioral psychology and I was real into the digital body language thing, so like, “Hey, let’s detect what people are doing on a website and make the website react to that.” So exit was a good start. Now it’s less than 5% of the campaigns we do, probably even three.
Andrew: What’s another example of digital body language?
Ryan: Oh, a ton of things. Think about how you use a phone. Think about how you scroll, you swipe, you tap in the address form.
Andrew: Be more specific. What’s one thing you’ve picked up on that triggers an action immediately?
Ryan: A whole bunch of things. It could be someone watches a video. When this video finishes playing or someone pauses a video, that’s part of digital body language. So, someone pauses a video right away, maybe there wouldn’t be an action there. If someone paused it two-thirds of the way through, maybe there’s an action we want them to take. So, maybe it’s opt-in to email. If they’re already on the email list, maybe there are other things you have to offer. Maybe you have some paid products.
Andrew: Got it. That’s what you want to do.
Ryan: [Inaudible 00:07:41] video is great too.
Andrew: And before we started the conversation, you and I were talking privately and you said, “Software is great, but the truth is people don’t really use software to its full capacity. They don’t have a developer to put it on their site. They don’t have a designer to design it right. They don’t have a passion for Robert Cialdini and all that other behavioral marketing stuff that I’ve developed.”
So, you said, “I’m going to merge the two. I’m going to create the software but I’m also going to hire a team of people that are really good at using it to increase conversions for our customers.” That’s what allows you guys to charge higher. As a result, what’s your revenue for 2015?
Ryan: I’ll kind of answer both questions. So, yeah, the big hole when people have software, it just becomes a brick after a certain period of time. Even if you’re really excited about it, you’ll put a little time in the beginning to get some stuff setup, but rarely do you become a super power user or something and get the most value out of it.
What never made sense with these enterprise martech companies, these software companies charging $10,000, $15,000 a month–there are a lot of them out there–when people hear about these expensive software companies, it’s like, “Oh, they must be good.” They’re really not.
It requires like–I never understood why don’t these software companies kind of understand my business and tell me how their software applies to my business. They’re always rolling out new features. Why don’t you tell me how that applies to the business, the right way to do it? They never did. They hired really crappy account managers who had managed 100 accounts, maybe kids right out of school.
So, you’re working at an enterprise company and you’re managing a budget, you need to get results and you’re dealing with some person that has all these accounts out of school. It doesn’t make any sense. And then to get time for your designers and engineers, it sucks.
So, the big companies, there’s even more red tape and you’re a small company, we just decided we’re going to have designers. We’re going to have strategy people, engineers. We’re going to do it all for everybody. We’re not going to charge people. The only way you can’t charge people for that, number one you have to start at a fair price, me at a certain end of the market.
And it has to be building automation. We were calling ourselves behavioral automation for a while. If we’re doing one-off campaigns, it’s not going to work, but say we decided we’re going to be the best at capturing emails on people’s websites from prospects. We’re just going to be the best software for that.
Andrew: That was going to be the goal you set first, capture email addresses and then build from there.
Ryan: Yeah. We decided we’re going to be the best in the world at that. We’re going to build the best software around it for every single device and we’re going to have the best team around it too. We figure if we keep doing this for everybody, we would get smaller and keep aggregating our knowledge over and over again. Now we do 2 billion email capture impressions a month. So, what we learn on a weekly basis is insane.
We’re probably–an ecommerce company who’s doing like an overlay at entrance can sign with us and we’re 10x the amount of, an order of magnitude better of how they’re capturing emails. We’ll typically even ask less people. We’ve gotten really good about what’s right for user experience, when’s the right time to ask people and what’s the message that benefits them. It’s always about what’s in it for the user, pretty simple, if you think from their perspective, you win. If you think from your perspective like, “Sign up for our list. . .”
Andrew: By the way, I just realized this audience is getting too fast-talking New Yorkers. I would hate to be the transcription company that has to transcribe the two of us talking.
Ryan: We had to find–we do a lot of transcription here too. We had to go through five companies who can transcribe me.
Andrew: It’s hard.
Ryan: To answer your question of revenue, we went in market in 2012. We got our first paying customers, I think we collected our first check in–so, we were doing some ad revenue business, so we were using our technology and go, “Oh, that’s got to serve ads in there.” That was the first play. That was early 2012. But really as a marketing software company, we collected our first check either in November or December, 2012 on that. So, our first year, it was like you really have got to hustle to get your first few customers no matter how good your product is.
Andrew: I want to ask you about how you got that.
Ryan: I had a whole bunch of business–
Andrew: We’ll get into it within the interview. In fact, let’s skip to 2015. What was the revenue 2015?
Ryan: 2015 we ended, I think, at–in SaaS you look at what your MRR is or your ARR. Some people look at run rate. I think we ended the year at probably $16 million in actually revenue but our run rate probably $20 million, $25 million. Our goal, I think, we’ll look to end this year at a run rate of $40 million, $45 million. We want to get past the $100 million by the end of 2018.
Ryan: I think we’ll probably get there a little sooner than that.
Andrew: Okay. I like this model of we’re creating a software, but we’re also going to manage that software for you because we’re going to get a lot of experience and we’re going to get the results that you’re looking for and that’s how you judge us.
Ryan: [Inaudible 00:12:22] the results, yeah, even though we charge a flat rate.
Andrew: What’s your price point? I’ve seen some of the prices. What’s the price point?
Ryan: We have a few different buckets of customers. Most of our customers are really large enterprise companies at this point. That’s where we do the most scale. A large travel company, an airline that might be in 20-30 countries, they’re only looking for us to improve their revenue per visitor by a couple percent. That might mean $500 million to their topline a year, just from a small improvement in that.
But our largest customers pay us a few million a year. Our smallest customers now, it’s probably $6,000 to $8,000 a month. But you get our software, but we probably have 20 people on our team working on it. So, we have engineers, we have strategy people. At this point, we have the biggest conversion team in the world. I think we have 60+ people on our conversion team.
You’re essentially hiring a marketing manager at a smaller company. You’re essentially hiring a person that’s about the cost of that, but you get the software and we’ll also put a guarantee on the results we get. It’s something you don’t get–when you’re buying traffic on AdWords, you’re not getting a return on ad spend guarantee and we’ll put our money where our mouth is.
Andrew: Wow. You told Inc. Magazine that you got the idea when you were sitting hearing some speaker and something bothered you. Can you tell us–this is Mixergy–can you tell us who the speaker was and what bothered you?
Ryan: Yeah. It was 2010, I think March. I was in an Omniture training class. I was running marketing at a company called BrickHouse, which was a pretty big company at the time. Since the company was growing so fast, the CEO was like, “Hey, let’s just use all this–let’s try all this expensive enterprise software. Let’s sign up for all the A/B testing softwares, let’s sign up for Omniture.” And then signed up for all these things and what happened? It sat there like a brick. And it’s like, “Oh. . .”
They paid for a consultant to teach them, but you had to go and set it up and do it the right way and no one was going to do it. The analytics couldn’t figure it out. There was barely an analytics team. So, the CEO was like, “Ryan, can you get this thing done?” I’m like, “Okay.” Me and one of my marketing guys, we’re like, “We’ll do this two-day class.” This was an intensive class.
This Omniture professor, he was funny but he was kind of a jerk, messing with everyone in the room. He started like ranting about bounce rates. He was saying, “You’ve got to write this stuff down. This is the most important stat, bounce rate. If you improve your bounce rate, that’s going to change your business.” I’m like, “This guy is so full of shit because this guy doesn’t understand a conversion funnel.”
People come to your website and as Avinash would say, “Puke and leave.” And there are these very hard bouncers who leave within 10 seconds. There are people who stay on the page for a little while. There are people that go two pages, three pages, maybe go to a product page. Maybe some people go through the checkout process, enter their billing and shipping information.
What happens is the bounce traffic, the people who are puking and leaving, you can’t just get them … if you can get them to do something, you can maybe get them to stay a little longer and get them onto the page. You can’t teleport them down the bottom of the funnel.
If you improve your bounce rate, it actually doesn’t improve your business. I actually found inverse correlations on landing pages. If you got rid of all the leaks, if you got rid of navigation, your bounce rate increased and your conversion rate went up. A lot of times by making your bounce rate worse, your business got better.
So I’m like, “This guy’s an idiot. He’s giving everyone the wrong advice.” I started thinking if someone was bouncing, what would I do with them? I’m not going to try to get them to buy. I’m like, “Maybe get their email, maybe show them an ad, show them a video.” How do I change the dynamics of the website? I just started thinking about how are the ways I can detect people bouncing, algorithmically which page have a propensity to bounce, building out some model there.
I’m sitting in the back of the class because I’m the youngest person there and just kind of observing people, like most people are using Internet Explorer or Firefox then and everyone just has the same pattern of when they leave the website. The interesting thing was the efficient way is go to the address bar, type in a new address and everyone is kind of moving up, closing the tab, opening a new tab and typing a new address. I’m like, “Why not just go to the address bar?”
Everyone had the same pattern where they go towards the x-button. At that point, pretty much everyone used tabbed browsing, so no one’s closing out the whole window. So, people are just closing out the individual tabs and smart people go on the address bar. But they always had this same pattern. I’m like, “Let me see if anyone’s doing this.” No one’s doing this. “Let’s see if I can build this thing out and detect this.”
I had a few other software ideas at the time. I’m like, “I kind of got the closest people to me like, “I think this is it. I really want to see if I can get this to work and I can have impact.” It would be great if like capturing emails, like the worst thing you can do is ask someone when they get to your website and you don’t have a relationship with them yet, wait until they engage, go to a few pages, read a few articles, go to a few products. Ask them after they engage. They’re going to be higher intent. So, I built it out and then experimented and low and behold, it worked pretty well.
Andrew: But for a while there, you were doing this while you had a full-time job.
Andrew: In fact, you left that company and then you went on to work for Bonobos after you’d already started Bounce Exchange. Why did it take you until two years after you started Bounce Exchange to finally do this full-time?
Ryan: Because in my 20s, I think the biggest mistake people make, especially people who have that entrepreneurial spirit and a lot of entrepreneurs are probably listening right now, you execute and you have a lot of drive. That’s the probably. You have an idea or someone else has an idea and you’re like, “Great, let’s go do it. Let’s do this thing.”
I wound up spending 12 years of my life doing that and taking these mediocre ideas or bad ideas and then making them work too long. So, you can get stuck in a business for like two, three, five years just because you can execute because you’re an entrepreneur and it’s in your DNA and you need to take a step back and say, “What’s really the right way to do this? How do you get the right people?” What I didn’t realize is you have to have people that are going to go into battle with you. You have to good business people with you who can execute and help you hustle, especially in the beginning. You need at least one of those people or two.
I remember at the time everyone was saying, “You’ve got to have technical founders. You’ve got to code your own site.” I’m like that is such nonsense. You need business people. You need people who really can hustle. So, this time around, why did it take so long? It’s because I took a little more time with it.
I’m like I don’t want to just run with the business model I think is going to make sense, like let me think of four business models, test all these things out, see what’s going to work. It’s not like crapping on the lean launch movement, it’s actually the best part of it, like let’s figure out like before you start running and iterating, take a step back and figure out which model is going to be the one to make sense.
Andrew: I see. You said, “I’m not going to quit my job and focus on this until there’s something really there and I’m not going to give up on it until there’s something there and you wanted to spend a little time to get this right.
Ryan: Also I’m in my 30s at that point, so I’m like I have a lot of expenses and I’m pouring money into this, so let me figure out a place where I can figure out a way to have enough consulting money coming in where I can pay my own bills, I can go from making a high salary to making nothing and making nothing to paying out Rackspace bills and paying out engineers. I need to figure out how can I make $15k or $20k a month clear and still be able to work full-time. So, it took me some time to figure out how to do that as well and I did.
Andrew: I see. And for a while there you were going without any money. You were just basically continuing to build out the business until you can make enough money to take a salary. Why don’t we take a break here and then I’m going to come back and ask you about what that first product looked like, how you found your first customer and then building up. And Neil Patel was part of your strategy. We’ll talk about all that in a moment.
But first, my first sponsor is a company called HostGator. Do you know HostGator?
Ryan: Yeah. They’re awesome. Our office is right outside of Times Square. They have the biggest sign ever there.
Andrew: Yeah. They’ve been advertising now like crazy. I see them on websites that I visit. They’re advertising on my podcast and because it worked here they’re advertising on other places. It’s because they make it really easy to host a website and they’re charging way less than other people can maintain and still HostGator is giving incredible service.
Let me ask you this. You’ve seen a lot of content-based sites. Let’s just talk content here for a moment. Based on that, if I gave someone a HostGator account and told them start a content-based business, what would you recommend that they start? What would do well? We’re still in the ad. What would do well?
Ryan: So, the content just has to be really good. I would do something that’s niche, long-form content, something that the quick articles, like getting a lot of content out there, I don’t think that makes sense anymore. I would only do long-form articles, research journalism. That’s how you can build a following.
So, whatever you know really well or places no one’s going, that’s what you’ve got to do. It’s not about how many 200-word to 300-word, 500-word articles you’ve pumped out, it’s how much long-form journalism, really in depth things about things people care about and you’ll start to build up a following that way, where people actually share your content or talk about you and want to come back.
Andrew: Is there a topic you’ve seen someone do especially well?
Ryan: Going back to Neil, he does online marketing really well. I love this guy Baekdil. He’s out of, I think, Sweden. He talks about the publishing industry. He’s amazing at it.
Andrew: About the what, the publishing industry?
Ryan: Yeah. Nick Kolenda, he just did a 70-page paper on pricing psychology and he gives it away for free. He does amazing stuff I love Dan Ariely. But regular writers, Baekdil, I don’t even know the way it’s pronounced. I love what he does.
Andrew: And Neil Patel also has in addition to Quick Sprout where he writes about marketing, he also has one about weight loss and fitness and that’s doing well for him. So, even topics that have actually been exploited heavily by other people are still available right now. Whatever it is that you want to get started with, go to HostGator.com/Mixergy and think about the marketing. You can frankly copy some of the ideas that have worked for–
Ryan: Just do it better.
Andrew: Sorry? They can copy a lot of your ideas. Even if they don’t do it as well as you, they’re at least getting going with it. And if you already have a hosting company, you don’t like it, you don’t love them, you’re having problems with them, they can’t keep your site up, switch to HostGator. They make it really easy. In fact, they gave us 50% off if you’re a Mixergy fan.
All you have to do is go to HostGator.com–think of the gator–HostGator.com/Mixergy. When you add that /Mixergy at the end, they’re going to give you 50% off. You do not have to commit for a long period of time. You can even sign up for month to month. HostGator.com/Mixergy, 24/7 support, lots of free ad money offers that they give you, so basically they’re going to help you grow your site with ads, with good support, with good hosting–HostGator.com/Mixergy.
The first version of the product–who coded it for you?
Ryan: So, it was a combination–I knew a whole bunch of engineers at the time, which is helpful. Some people I know outsource their engineering overseas. I don’t really recommend that. I recommend getting someone you know to help you out. I had someone who interned with me at BrickHouse. I had this other guy who had built their personalization software.
I figured it’s going to be these two people. His name is Namik. He’s really into food. I’m into food. We’re in New York. We went out, got some good food. I showed him Bounce. He’s like, “This is really good.” I told him I’m going to have this other guy do this part. And really the segmentation, personalization part, how to treat people differently, I want you to figure out how do we detect if someone’s leaving a website. There’s a whole bunch of things I want to do.
He’s like, “I want to do both. I want to prototype.” We had like a really good steak dinner. We had a nice little mandate. And within a week he had a very, very primitive prototype and it was really, really good.
Andrew: That did what? What are the things that this prototype did?
Ryan: It actually did some pretty cool stuff. It was able to detect what keyword someone’s coming in from at Google, detecting true exit intent, which was not just breaking a browser plane. Internet Explorer was a dominant browser then. So, say a lot of people like you have a small window right now, if I’m minimizing, going off the side, actually figuring out if someone’s leaving the website, detecting who they are by their channel, how they came in, being able to spit back their keyword, detect the exit intent and being able to put a creative in there, just that basic thing.
Andrew: I see. An exit intent, I think of mouse going over to the address bar, but you were also thinking if they minimize, you want to bring something up so if they bring up their screen again, we have an offer for them.
Ryan: Yeah. Wherever someone left off, look where they left off, what’s relevant to them then and what does it mean if you’re just going to the back button and you’re not leaving. We were always really thoughtful.
Andrew: What do you mean going to the back button but not leaving?
Ryan: A lot of people use the back button to navigate on websites. If it’s on your landing page and you hit the back button, that means you’re leaving. If you’re on page two or three and you’re on the back button, you’re trying to go to the previous page. If you’re on a category page and you go to a product, you’re going back to the category page, you’re not leaving the website.
Andrew: I see. And you don’t want at that point to distract them with an offer because they’re just going back a level. Is that right?
Ryan: That’s right.
Andrew: It’s only when they leave that you want to do what?
Ryan: It’s kind of narrow someone’s focus to the one thing that they have the ability to do. So, how do you just make it about one decision and what’s going to benefit that person at the time. If they looked at a whole bunch of items and someone has an introductory offer, great, “Would you like $25 off your next purchase?” You say yes. Cool. Where should we email you this code and here’s how you get access to that.
Andrew: What’s the first advertiser that you got or the firs customer you got?
Ryan: I just found a whole bunch of people I knew from the ecommerce world and literally I combed through every business card I had an I contacted everybody and I started taking people out to lunch at the rooftop of Eataly.
Andrew: Why out to lunch? Why didn’t you just email them and say, “I’ve got this idea. I can actually detect when people are about to leave your business. I’m charging $1,000 to put this on sites.”
Ryan: Well, I don’t want to charge $1,000.
Andrew: What did you want to charge?
Ryan: I wanted it to have as much value as possible for enterprise companies. I wanted to be able to charge $10,000 a month or $15,000 a month.
Andrew: How’d you come up with that price point? How’d you come up with that?
Ryan: I was enamored by companies like Bazaarvoice where they charge $30,000 a month for a product recommendation widget or a product review widget, not recommendation widget. I was amazed by that stuff. What I realized is at the enterprise level, they needed support. They needed someone to moderate the reviews. They needed someone to partner the brands. They needed all these enterprise features of it even though the technology wasn’t that stout. And for us, it was like I really wanted–from day one, I think two out of our first six hires were designers.
So, day one I knew I wanted to build the support structure. I thought charging people for it was bad. Big email companies like ExactTarget responses, you had to pay for all the support, pay them to help you out. That’s just how it goes. You pay for support. I’m like, “No, we’re just going to do it for people.”
We had to charge a fair price point. But if you charge more money, then I can also hire more engineers and make the product better. I can hire more people on the service side. I wanted the product to get better and better and better and some that’s people and some that’s engineers.
Andrew: I see. At that price point and with that level of service, you want to take them out for a nice steak dinner to let them know what they’re looking for, to have them feel comfortable with you taking on so much of their site. They have a site that’s more valuable than the guy who’s just getting started and can only pay $30 a month. I see. So, let me ask you this. How did you know all these people? How did you have all these business cards?
Ryan: I went to a lot of industry events. When I go there, I talk to people and I got their cards. No one does cards these days. I haven’t used a business card in three years. When I go to events and someone asks me for my card or if I just like someone, I’m like, “Hey, what’s your email?” I’ll send them an email right then so it’s in their box.
Andrew: Me too.
Ryan: If someone asks me for that, I say, “Hey, send me an email. I’m Ryan@BounceX. Send me an email. Put a funny subject line. I’ll reply right away. I’ll push it off to the right people on my team.” I got it done right then. Recency is king. A day after we had that conversation, that person, I’m dead to that person and that person is dead to me. I’ve already had 100 other conversations, so getting there right away. Forget the business card thing. Back then it was business cards and following up.
Andrew: What was your system for keeping track of it? I get a lot of business cards even though I try not to.
Ryan: I don’t take any, actually.
Andrew: I try not to but I hurt people’s feelings. They’re so proud of their business cards. So, what I do is kind of dump it in a pocket but I ask them for their email address and give them mine and I do exactly what you’re saying. Then it’s digital. It’s always there. But if I wanted to go back and find everyone who I met at a conference, it’s going to be a pain. What was your process? Were you more organized or am I just imagining it?
Ryan: I was born so disorganized but I trained myself to be organized. I looked at the relevant cards and I’m like, “Who do I have good relationships with?” I look at LinkedIn and who do I actually know and then I reach out to everybody, a very personal email. There’s no blast emails, something very personal like, “Why don’t you come out to lunch. Let’s talk about your customer acquisition strategies. I have a whole bunch of new things. Let’s talk about that.”
I’m like, “Hey, I’ve been working on Bounce for a while. I think it will really help on capturing emails or reducing card abandonment. I know email is a huge channel for you. I’d be happy to do a free pilot for you guys and put all the work in and do that and get some results.
Andrew: The first person you worked with, was that a free a pilot?
Ryan: Everyone was free. It was a nurturing process. It’s not like, “Hey, put my tag on your site and I’m going to charge you money.” It was a real life nurturing process.
Andrew: Do you remember the first person who said, “No,” or, “This is a bad idea?”
Ryan: No one really said it was a bad idea. It’s difficult to get yes’s. It’s just hustle.
Andrew: Do you remember the first person who finally said yes?
Ryan: The first ecommerce sites I put it on, I had a whole bunch of publishers who used it, different content sites. But Busted Tees, I met the guy, Adam Schwartz, at like a dinner put on by a different company. BabyAge, I was consulting for them. Spartan Race, one of the original ones I tried it on. And we were projecting like getting a one percent opt-in rate and some of the initial tests were like five or six percent. This was without any optimization. It was like, “We’re really on to something here.”
Andrew: I see.
Ryan: It was just free, giving it away for free to as many people as possible.
Andrew: And by the way, giving it away for free for you doesn’t mean just giving them software, it means doing the work for them–analysis, design, the works. Busted Tees, did they give you a percentage of their site, I imagine and say, “Play with this and see if it works?”
Ryan: No. It’s like, “Here.” We had good segmentation about who was a customer and who wasn’t. So, we were always pretty smart about that, like go way beyond cookies, “Let’s really be thoughtful about this.”
Andrew: How’d you know Adam? Adam is not an easy guy to get to know.
Ryan: I was literally at a dinner put on by Monetate because I was a Monetate customer in a different life. I just sat at his table and then we were talking about different things.
Andrew: Were any of the first customers or free users not getting the results you wanted? Was there anyone who didn’t?
Ryan: We always had our results. So, we were always going to capture a lot of emails or do different things. We had to work on user experience at the beginning. It was like how do we make this a much better user experience. So, that was the challenging part. Compared to what someone was doing before, a baseline of collecting emails from prospects, we were going to just have some unbelievable numbers.
I remember on one site, it was WomanWithin.com, we captured 12,000 emails the first hour. We thought something was wrong and they were all real names, like holy crap. So, yeah, that stuff didn’t really exist, like overlays weren’t ubiquitous then. We were on to something and we built on it really quickly. We quickly evolved into being a full platform right away.
Andrew: At what point did you know this was it, it’s working financially?
Ryan: It’s when you get your first check, when you get your first $5,000 check.
Andrew: Okay. Who did you charge the first $5,000 check?
Ryan: Our first paying client was Busted Tees. We couldn’t charge it $5,000 and we were putting so much work in it didn’t matter. We were basically working on that as a loss and I think it was like $2,000. We were doing so much stuff there. Spartan Race was $5k. One of our first original clients, we wound up getting to pay us over $40k a month. That helped us raise money.
Andrew: Is it hard to go from giving someone free service to charging?
Andrew: How did you do that?
Ryan: I don’t recommend that to anybody. So, at the beginning, before you actually have a great product and great service, you have to do things that don’t make sense and aren’t scalable. Even doing a pilot for half-price, in enterprise, you can’t set the tone, you can’t anchor people the wrong way.
So, now we do two and three-year deals generally. We charge very large implementation fees because now we’ve earned that right and we’ve put in a lot of work for it. But I don’t recommend anyone starting with one price and going up. Enterprise is not about free trials. You have to de-risk it for your people. So, you have to figure out ways of doing that.
Andrew: How else do you de-risk?
Ryan: For us, we do a lot of behavioral email. So, we’re really good identifying people on a website down to an email address, so say it’s an ecommerce client. We might know 50% to 75% of the users down to an email address. Then you can make the email much smarter. Then the email is about the products you looked at instead of being the next new product launch, the next email that comes in.
So, we’ll say, “Okay, we want to run control groups and we want to create some lift. We want to guarantee you’ll get a certain amount of lift there, or we’ll do a return in ad spend guarantee. If you’re paying us $50,000 a month, we might guarantee that we’re going to drive $300,000 a month in traffic back to your site. We’ll identify people, people you were targeting, now they’re getting emails and they’re coming back to the website and they’re clicking and they’re buying it and in your analytics we’re seeing guarantee you’re going to get at least $300,000 back from there. So, that’s–
Andrew: What happens if you don’t do that? Do you give them money?
Ryan: Then they wouldn’t pay you.
Andrew: That’s it?
Ryan: So, we already know–
Andrew: So, a guarantee is not that expensive for you to give because worst case, you’ve given up the work but you’re not having to pay the extra money.
Ryan: We put in a lot of labor. Now probably at this point, we don’t get to break even until after our first year.
Andrew: Because you put so many people on it.
Ryan: Yeah. And engineers are really expensive. The account managers we hire, a lot of them are making well over $100,000 a year. Hiring is a huge thing. We have 60-something open roles and we start a pretty high rate, but people in our company make a lot of money and they move up really quickly.
Andrew: I would imagine someone would want to work with you guys or work for you guys just to learn the psychology of customers, of closing with customers.
Andrew: Do you have any positions open now for that?
Ryan: Yeah. We have a conversion sciences team. We have a whole bunch of roles open there. We have all these conversion director roles that work with individual clients, but they manage a group of like five to eight clients and you’re really like applying–it’s like how do you apply behavioral marketing? It’s this chess game and it’s really fun. It’s this puzzle.
How do you unlock this? How do you unlock this and how do you compel more visitors to buy or do these things? How do you make it a better experience for them where they want to buy at a higher rate and it’s fun? And we have a play book but there are a lot of unique things about every website. It’s you working with our conversion sciences team and coming up with this plan and then you get to see if it works and you have to get it to work.
Andrew: I can tell that you’re hiring because when I go to BounceX.com, that’s the URL, one of the top links is right next to Get My Free Demo, which is how you onboard new customers, it’s Better Jobs with a list of tons of jobs. If someone goes to that and then ends up because of this interview getting hired by you guys, will you sit down to lunch with them and just talk to them about their future or whatever it is that they want to do?
Ryan: I sit down for lunch with pretty much everybody that works at the company, even though we’re 200 people now. Yeah. I’m in the office every day. I’m in the office. No one actually has an office. Everyone is open floor plan.
Andrew: Yeah. It looks like it. I see people over your shoulder. It’s almost 8:00 Eastern time where you are. Do you have any relationships? Are you dating anyone right now? You can’t be.
Ryan: I live a counterbalance life. It’s really tough. I’ve chosen like kind of progress for a little bit, but yeah, it’s really hard to do a lot of things and still kind of stay close to your family, your friends, your personal health.
Andrew: So, you’re choosing to just put that off for now while you build this up?
Andrew: I think that makes sense. Dude, you don’t get on many rockets in your life. When you’re on a rocket, you don’t look for a girlfriend, you ride that freaking rocket and then once you get to the moon, the world is open to you.
Andrew: Let me move on to something else instead of your love life, which I can talk about forever as people have heard in past interviews. Here’s what I want to ask you. So far I’m hearing about you. But when I went to AngelList to look up Bounce Exchange, I see these two other guys, Andreas and Cole, both listed as founders. What’s the deal? How did you bring them on and what were their roles?
Ryan: I worked with Cole at Bonobos. I worked with Andreas at BrickHouse. They were just–these are people that are going to be business people, get it done, go into battle. Let’s do whatever it takes to get business and get it to perform and do it.
Andrew: What did you want for–there’s also this guy, Namik, is he also a founder?
Ryan: Yeah. He’s here too.
Andrew: What were the roles that you needed that you brought these guys on to do?
Ryan: What was that? Oh, the roles. Well, one, you have to have a lead engineer.
Andrew: That was Namik?
Ryan: Yeah. That’s Namik. We’re really good friends. We do this kind of intensive–I hate working out. The gym is a terrible place for me. I don’t mind being in the water, so we do these swim sprints. We still do this together a couple days a week. Andreas was going to manage all the accounts. He’s going to be in charge of making sure the client relationship is getting performance.
Cole is going to kind of do all the business functions, which is raising money, closing deals, pretty much all those things, everything required. He’s our Chief Business Officer, still is. So, all the finance, accounting, getting people to pay, all the tough stuff, like we’ll have someone to do that. And me, I’ll run strategy and product and marketing.
Andrew: And podcast interviews. I’ve got to tell everyone about this company Toptal. They’re so good for hiring developers. Ryan, you just told me about how when you started, you needed a developer.
Ryan: So hard to hire developers.
Andrew: So hard. And here’s the thing–yeah, you can go to some of these freelance websites and get a guy who’s going to code exactly what you need, but the guy who coded your first product didn’t just say, “Ryan, tell me what to do and I’ll go do it.” He understood what you were getting at and what I noticed from you, he loved the challenge. You said, “Do this or that.” He said, “I want to do both. Let me show you what I can do,” and blew you away.
Andrew: So, the guys behind Toptal said, “Those are the only engineers we want to work with. What if we just put together a network of those engineers?” These guys used to work at top companies like Google but they don’t want to sit in an office anymore. They don’t want to go to Google’s offices, as nice as they are. They want to travel the world and still do great code.
What if we get these guys together in a database and when someone wants to hire an engineer, we will refer them to one of our guys that can hire them through us so they don’t have to deal with all the payroll or anything else and they don’t have to wait for days and weeks or months to get them onboard, they can get started right away. That was the idea behind Toptal. They tested it out. The thing just started to take off.
I’ve had people in my audience sign up for them, including the founder of Tatango who I’ve interviewed. I did a course with him on Mixergy. He heard me talk about Toptal. He signed up. He said, “Let’s see it. I know Andrew now really well because I’ve listened and been on Mixergy. I know he’s not going to set me in the wrong direction. They’ve called up Toptal. After looking for 20 to 30 people, they started interviewing and then they said, “Let’s just talk to Toptal.”
Toptal got them two people because Toptal talked to them for a bit, understood their needs. Two people–first guy wasn’t a great fit. The second one was such a good fit that they hired him. They now work with him full time plus, meaning this guy is working incredible hours. And the CTO of the company, Tatango, said, “You know what? He is just as good as me. Just as good as the CTO.”
When you talk about great developers, that’s what Toptal strives for. Not someone who’s just going to code exactly what you want, someone who can help you think through the problem, get excited about solving it and blow you away. If you don’t have that, then you tell Toptal, “This guy’s not really working out for me.”
But that’s what they’re about. If you are listening to me and you want to try Toptal, it was founded by a former Mixergy interviewee who went on to raise money from Andreessen Horowitz for this. And so many Mixergy people have signed up for them that these guys are trying to lock up every ad spot that we have.
If you want to join, go to Toptal.com/Mixergy. They’re going to give you 80 free Toptal developer–wait, you’ll get 80 hours of Toptal developer credit when you pay for your first 80 hours. In addition to a no-risk trial period of up to two weeks, they’re offering that to Mixergy only.
And one of the things that I like about them is once you start, you start with a phone call. You talk to a real human being, probably since it’s a Mixergy deal, probably through my man, Graham, but it could be maybe through someone else there. They’ll understand your needs. If it’s not a good fit, say, “Sorry, it’s not a good fit.” People have complained to me, “Andrew, they turned me away.” Well, if it’s not a good fit, let’s not waste anyone’s time or money. But if it is a good fit, they’ll match you up with a great developer.
Go to Toptal.com/Mixergy or frankly email me and I’ll introduce you to Graham since I brought him up, Andrew@Mixergy.com. I’ll make a personal introduction. But they’ll take good care of you either way, Toptal.com/Mixergy.
I noticed you were paying attention to it. You must be hiring. You are Mr. Energy. This is the only time that I saw you kind of pause.
Andrew: It’s partially because you raised a lot of money. Why did you raise money since you’re doing so well?
Ryan: For a martech company that did enterprise that’s 200 people, it will probably be 400 by the end of next year, we’ve probably raised the smallest amount of money of any martech company of that size and our revenue.
Andrew: What are we looking at? According to AngelList, series A–actually, they’re showing two series As. Series A, the first one is $1,500.
Ryan: No, $1.5 million.
Andrew: The second series A was $6.35 million.
Ryan: Yeah. The first one was $1.5 million. At that point, we were getting offers at higher prices, like $10+ million valuations because we already had a whole bunch of traction and a lot of paying clients. I recommend that too. Before you raise money, go get some traction. If you’re a SaaS company, try not to raise before you’re at $50k MRR. It’s nicer when you’re at $100k. You’ll get a better deal. You don’t have to give up a lot of your board seats. They give up 30% of your company right away.
We have full control of our board right now. We banked on our growth. Everyone gave us advice like take the money, take as much money as possible. We never did that. When we took $1.5 million, we could have taken $3 million, $4 million, $5 million. We didn’t raise money for another few years. We basically survived three years on a little over $1 million, which is insane. Our rent is $185,000 a month now. So, our security deposit was over $3 million for this place. It was difficult.
So, then we took out a little bit more money, mostly from entrepreneurs, though. It was a lot of different software founders.
Andrew: Who were some of the people?
Ryan: Brett Hurt from Bazaarvoice and Coremetrics, Jason Finger, founder of Seamless. If anyone orders stuff online, a lot of HubSpot guys, the founder of MediaMath, Justin Yoshimura, founder of 500friends, A-Rod.
Andrew: Alex Rodriguez? How did you get A-Rod in?
Ryan: Yeah. One of our cofounders’ friend of the family helps represent him in some ways. He’s actually a really good guy. He was down and wanted to get into some investing and we–
Andrew: Why did you take on so many founders like the founder of Seamless? What was the intention behind that?
Ryan: People who are operators, that’s who you want to get advice from. So, venture capitalists, they want to give you advice, but you want to get advice from operators who have failed and built big scale before. Yeah. Take their advice.
Andrew: I see. You wanted their money so you could get their advice.
Ryan: It’s basically they’re paying you to be an advisor, essentially. So, when you have an advisory board, we didn’t really have much of an advisory board, it’s like let’s just get the people we want and invite them to invest in our company and then they’re invested in. So, they’re actually paying our company to give us advice. It’s great. Then a lot of them had reinvested a lot more money and they’ve been really, really helpful.
Andrew: Is Neil Patel and investor?
Ryan: No. Neil wasn’t in the beginning. He should have been. He would have probably been up 100x right now.
Andrew: Because you offered him an opportunity in the first round?
Ryan: We were talking to him but we raised so little money we wound up being really over-subscribed. We still haven’t raised a big round. We’ll probably do that $75 million round next year, something like that and really attack the market. For us you wait until you really figure out your place in the world and have true product market fit. We’re 200 people. We’ll pass $50 million soon. I don’t think until this year did we really feel like we had that. So, it’s really important now to not have your head up your ass. That’s another mistake entrepreneurs make and I made that mistake myself.
Andrew: Give me an example of head up your ass with you?
Ryan: You speak in a certain way and you speak like an asshole, you speak down to people but you think you’ve made it. You think you’ve figured things out. Once you think you’ve figured something out, it’s over. So, it’s like you think something is going really well at your company. I don’t think anything is going well. I’m not impressed by anything that we do.
Everything we did a year ago I’m embarrassed by. It has to be much, much better. We’ve got to keep innovating and reinventing ourselves. Everything we do now, even at enterprise scale is going to be a commodity in three years. You know how many people copy us? There are probably 200 companies that just try to copy everything we do. Amazon copies us all the time. Yahoo copies us.
Andrew: For what?
Ryan: They copy some of our tactics because people at Amazon and they’re testing team, they’re going to different ecommerce sites and seeing what’s happening. What’s happening on ecommerce is stuff we’re doing. We have the conversion labs here, so then Amazon copies our clients.
Andrew: What’s one thing that they copied about you?
Ryan: We ran data on cart abandonment. Most people when they think about abandoned carts, they’re like I have a shopping cart and checkout, so that’s my funnel. So, how many people abandoned the cart phase and abandoned the checkout phase? And if you ask people why they abandoned cart, they’ll say the shipping or something like that. Surveys are so meaningless. So, we actually look at people’s digital body language. We say, “Let’s see what people are doing and let’s see what’s the real reason people are abandon cart and where they’re abandoning.
So, what we found is about 70% of people who abandon cart actually are not in the cart. They’re not in the cart and checkout process at all. They’re on the website. So, they went to the cart, hit the back button. Or sometimes websites, you add to cart and they keep you on the site.
So, all the cart abandonment was happening on the website and we noticed that people were in their checkout process, they do a lot of A/B testing and the checkout process is really clean. There are no links. It’s really, really simple. But most people when they have stuff in cart were just on the website. People just got distracted.
So, what we did is like okay, let’s take some of the things in the checkout process and we created this floating bar. We called it a nano-bar. We say okay, if someone added to cart and they went back to the website, we created this floating bar at the top of the website that would say you have this many items in cart, you may be qualified free shipping, whatever it is, and have a big button that said checkout now.
So, we recreate the cart on the website and we have a float with people. It was really simple and it worked great. It would have like 10% to 15% lift in conversion. Now we’ve iterated on that so many times. We crush it with that. So Amazon copied that. So, if you go on Amazon’s website, you add something to cart and go back to the site, you’ll see–
Andrew: I saw that.
Ryan: It’s almost an exact replica. They stole that from us.
Andrew: I saw it. I thought this is so brilliant because I forget.
Ryan: They stole it from us. It’s up to keep coming up with new things. We’re probably three years ahead of what Amazon is doing, which is cool. We get to get our clients to a level like, “We know how to beat Amazon at different things. We’ve figured out some really cool stuff.” We’re sitting on a pile of data and we do it full service for our clients so we just learn. It’s awesome.
Andrew: I see it now. I just went to test it to see if it’s still on there. It is. I remember seeing it for the first time.
Ryan: We ran that on Busted Tees in 2012. Yeah.
Andrew: That is incredible. And you know what? One of the things I noticed about you as I was researching you is over the years, there have been lots of blog posts about how to copy you using competitive software. Even on the lower end, it was like if you can’t afford Bounce Exchange, here are seven options for recreating Bounce Exchange for free.
Ryan: It was basically like how to copy one campaign that was visible in the world. Someone would say, “Oh, I saw this thing on Neil Patel’s website. That must be what Bounce Exchange does.” We don’t really talk about what we do. Our website is super-vague intentionally. A lot of the products we have are not even public because one, we’re innovating and we don’t have time to do it, but we want people to contact us.
Just like Toptal, we don’t really have sales people. We don’t hire anyone who has a sales background because they kind of suck. No one wants to talk to sales people. We hire a lot of ex-management consultants. We hire people who like understand your business and then they’re like, “We don’t have this platform, this is how the stuff we do applies to your business. Here are the things we’ve never done before but we do for your site because this is what kind of makes sense.” It’s very, very specific.
Andrew: So, let’s talk about Neil Patel.
Andrew: Because you were a nobody when you got Neil Patel. He hadn’t heard of your software and as a result, I’m imagining–did you get customers because you were on his site?
Ryan: Yeah. We were speaking before. It was pure hustle.
Andrew: Yeah. Talk about the hustle of getting Neil Patel because this is part of your early strategy.
Ryan: Cold outreach. Part of our marketing strategy, we came up with the concept of doing a lot of these overlays. Let’s put like a little powered by signature there. That’s a Hotmail tactic. So, Hotmail did such a good job at getting other people to use Hotmail by putting the signature in there. When I was at Bonobos, in my email signature, I would have my referral links and it worked really well.
So, I’m like, “We’ll just put a text link that says powered by Bounce Exchange.” So, I put the logo on there, make it look really simple. Text links actually work much better than colored links a lot of times. So, I think we can get away with doing that, especially with doing free pilots, but people let us get away with that. It was kind of great. So, this was driving a lot of traffic to our website.
But I’m like, “Who are the relevant people? What are the most relevant sites? Where are my customers? What are they reading?” They’re reading Quick Sprout. So, the marketing managers who I’m targeting, what are they reading? They’re reading Quick Sprout and they’re reading a few other things. I’m like, “Let me reach out to all these things people are reading–ConversionXL, Copy Hackers–let me find them all and reach out to them.”
But cold emails are crap. Everyone gets a million emails. I know Neil reads his blog comments and responds to them all or used to. I’m like I’ll comment on his blog, build up a reputation. After commenting a few times, going back and forth and coming up with some ideas, then I sent him an email through a blog comment like, “Hey, I’ve got this company Bounce. Our team came up with a whole bunch of cool stuff for your website. We have a way that we’re going to double your email volume. Let’s get on a call and I’m going to show you what my team created for you.”
He got on a call and was like, “Hey, what’s up?” I’m like, “Here’s my tech. Here’s what my team created for you. We’re going to do these things and double your opt-in rate.” The day we went live, we doubled his opt-in rate.
Andrew: I love that kind of hustle for one person. By the way, Neil does not respond to his blog comments. He hires someone to do it. I know because he said it deep in a Mixergy interview. He’s smart to do that. Every single comment gets a response so you feel connected to him and you keep feeling engaged. I know that the ones that stand out he reads and he actually pays attention to. But it’s really interesting the way that he hustled and the way that you hustled.
Andrew: Do you keep track of how many customers you got from him?
Ryan: We had a ton of people clicking through our link. Yeah. Sometimes he’d write a post and mention us and it was really good. The whole thing was like you have to–I think product is everything. Having a great product, offline word of mouth–literally off line word of mouth is the driver of every major successful business.
Google, Amazon–you don’t buy from Amazon because they have great ads or they have great social media. They’re actually terrible at marketing. You buy there because someone told you to go there and then you had a great experience. And then you tell other people to do it. If you use AdWords, it’s not because a Google rep reached out to you via email and said, “Hey, try AdWords.” It’s like, “Hey, it works. Other people said it works. Try this thing.” And it works.
My belief is in B2B enterprise, which nobody does, is built up by word of mouth but you have to seed it. It’s like what are all the ways of seeding it? I don’t use the word growth hacking, but it’s just hustle. It’s like come up with evert and do it all and then once you seed it, then make it about the product and the service. You have to have the best service and the best product out there. An order of magnitude is a lot, but you need to be 3x better than any competitor realistically, especially if you want to charge more money.
Andrew: That makes sense. It’s not like someone’s clicking from Neil’s site over to you and then as a result signing up. It takes time. It takes a lot of awareness before they become customers.
Ryan: We also happen to use our own software on ourselves. So, we probably have one of the best B2B enterprise opt-in funnels there is. It’s funny. We acquired this company called GoChime and we did some experiments there. You can probably go to GoChime.com.
Andrew: To what, GrowthChime?
Ryan: We acquired this company earlier this year. We took that site from a 0.2% opt-in rate to 20%. So there’s a whole kind of web of things that happened there. Anyone here can check it out. On any device, it’s all going to be a brilliant responsive experience. We like to ask people questions. If they answer yes, we’ll do different things. We’ll create all these ways of getting you in.
Andrew: Here’s what it says on the site, “Add data-driven social media to your marketing toolkit to grow your business.” How does it work? What does it do?
Ryan: We started off doing stuff onsite. We’re really good at identifying people. Then we started doing stuff around behavioral email. Then we wanted to do stuff–we noticed like high intent behavior is really important.
If you can come up with that high intent moment, someone finishing watching this video, finishing reading an article, someone finished with the product page, a really high intent moment, that’s the best time to ask someone something. Someone completed an order, you can ask them to do things.
So, it’s like how do we–email, you have all these high intent moments, which is people opening your email, but you know what happens? Of people opening your email, 85% of people on average don’t click through your email. So, no one creates automation of people opening an email.
So, of people opening email, I wanted to reach out to them. So Facebook launched people-based marketing a long time ago if you’re familiar with custom audience. People-based marketing is going to be huge, huge. It already is. It works amazingly well. Custom audience–are you familiar with it, Andrew?
Ryan: It’s great. You can upload a file of email addresses to Facebook–
Andrew: Which we’ve done.
Ryan: They’ll match 70% of them, and then you target individual people with ads on different devices and on Instagram. But the probably is you’re paying for advertising, so you want the targeting to be pretty surgical. And the best thing is if someone is high intent, to target them. What we found is a great high intent moment is someone opens an email and doesn’t click through an email.
At that moment, now you want to automate advertising and GoChime allowed that to happen, where they hooked in with HubSpot, Marketo, all these places and said, “Based on your open and click behavior in email, we can start targeting you on Facebook, Instagram, Twitter, Gmail, YouTube.” So, they’re the only company really thinking about solving this probably in a way of how do we take these high intent people and get them to come to the site?
Andrew: I see. That makes sense. What we do with Facebook is we just upload our whole mailing list and we say, “Let’s target everyone.” But you’re right. Not everyone is the same. Some people deserve more money to be spent to get them because they’re more interested.
Ryan: At that moment when someone opens an email, that moment someone opens an email, maybe you have a free guide and webinar, they show an intent on it, they just didn’t click it. Then their whole world should be like, “We have this webcast coming up.” That is the world.
You know what will happen? They go to the thing on desktop. They open the email. They don’t do it. They go to the bathroom. They’re in the bathroom for a long time. They’re on Instagram and now they see the ad. “Okay, fine I’ll do it there because now I’m stuck in the bathroom for ten minutes.” But it really works really, really well. It’s incredible.
Andrew: I had no idea this even existed. So, here’s the thing I’ve been wondering as you’ve been talking right from the beginning when you told me about your love of Robert Cialdini. I get how you would come up with this creative stuff because you live it, you breathe it, it’s your company. This is your obsession. How do you first hire people who can think this way and how do you train the people you’ve hired to keep innovating and out-innovating Amazon?
Ryan: It’s very tough to find people who are really into conversion optimization and have done it for many years at a high scale. By the way, if you’re listening here and you love conversion optimization and you’re really into behavioral psychology, go to Bounce.nyc, that’s our careers area and go apply. Actually, just put your email in. We’ll probably get your email anyway because we’re really good at that. We’ll probably get 25% of your emails.
Andrew: Wait. If I go to Bounce.nyc.com and I don’t put in my email address, you’ll still identify me somehow?
Ryan: Yeah. We will.
Andrew: I’ve interviewed people about services like that.
Ryan: You’ll see Bounce Exchange for a long time.
Andrew: Got it. Okay.
Ryan: If you put your email, we’re going to target you on every device. Your whole world is going to be us for a while. It’s nice.
Andrew: You were starting to say about how you find people who can think this way.
Ryan: Yeah. Then we started looking at candidate profiles and it’s really about training and onboarding. It’s mostly about we–
Andrew: What is your training and onboarding to get people like that?
Ryan: We’ve actually been able to find a lot of people out of school surprisingly. So, sometimes it’s business majors, sometimes psychology majors. It’s typically people who had some ecommerce internships when they’re in school. We pull a lot of people from UPenn, Wharton, a whole bunch of places. A lot of people we pull, they were working at an ecommerce company for a few years or working for an agency for a few years and they’re really frustrated, like they want to have more ownership. They want to do more things. They’re frustrated by the slow pace.
So, people like me who are neurotic who want to get shit done, those people flourish here because we don’t like do the micro-managing thing. It’s you have ownership to create your own path here, which is really good. We hire for people like that. We have 14 full-time people on our talent team now, literally 14 people. All they do is recruit and hire people.
Andrew: Fourteen people who are recruiting right now?
Ryan: Full-time on our team.
Andrew: Good lord. So, onboarding–what do you do–is it just onboarding or do you do training throughout?
Ryan: We do training all the time.
Andrew: Tell me about your training. What’s the internal training like?
Ryan: We’re going to train people on kind of customer acquisition, analytics, vendor ecosystem, how to understand a business, how to do conversion optimization. There’s so much training. It’s ongoing because it’s fun. That’s what makes people better. We’re really good at that.
Andrew: I’m on my site right now. I do not like this. There’s an image on there that I know someone’s testing. It’s not a good looking image of me. I don’t think it’s a good looking ad anyway. This is the first time I see it. I have a sense of who put it up. Does that ever happen for you, where you’ve given people so much power that some of this stuff is crazy good and some is just crazy. How do you stop the crazy?
Ryan: We don’t give people power. We do it for our clients. So, the clients give us the power. We come up really a strategy. We make brilliant creatives and then they approve it. So, we’re really good at getting things approved by even like really discerning brands, even like Apple and stuff. We work with a lot of companies.
If the client was driving it, yeah they’re going to make a lot of crappy things and they’re going to go really slow. We just drive it all, so we make stuff that looks stunning and performs well. That’s just how it is. There will never be a case where there will be an ugly image of someone on a website. One, they wouldn’t approve it. Two, we would never do it. It wouldn’t convert.
Andrew: I’ve got to find out–
Ryan: Offline after, I’ll have some of my team reach out to some of your team and we’ll do some stuff for you.
Andrew: I’d love to see that. Thank you. Wow. It’s just a kick in the gut when I see it. I also have to understand it’s not all me. They should be able to experiment and I should be good with that.
Andrew: I should be okay with it. I am okay with it. At the same time it’s like what is this. Cool. I am so glad that Neil connected us this morning. Neil, by the way, has taught a course on Mixergy. I never talk about Mixergy Premium here, but I should frankly. Mixergy Premium is a place where I bring in these entrepreneurs who are so good at one special–who are good at one thing especially, like Neil is really good at traffic.
I said, “Neil, you’re a friend. You know how good the Mixergy audience is. Would you come here and teach something?” He said, “Yeah, I can teach people how to get traffic from content.” He did a course on that. That’s part of Mixergy Premium. He’s one of over 150 entrepreneurs who have taught courses on Mixergy. When you sign up for Premium, you get access to all of them. If you’re listening to me and you want to check it out, go to MixergyPremium.com.
Ryan: You know what we’re going to do, Andrew? I’m going to have one of our product people get in touch with you. When you’re targeting someone for Mixergy Premium, which is not going to be everybody, it’s going to be a finite audience, anyone who opens that email or shows intent but doesn’t complete, they’re going to see the follow ups for that.
But the people who open and click through and then engage, then they’ll see more about value propositions about why is Mixergy Premium really good. So, we’ll do different messaging based on their intent level. We’ll automate it. We’ll automate all the creatives because there are 40 different ad units on Gmail, YouTube, Facebook. We have ways of automating all those things and doing it automatically. So, we’ll set that up for you and we’ll do it no problems.
Andrew: I love it. Man, thank you so much. I’m curious to see how that will go and I’d love to share with the audience what we’re doing. You cool with that?
Ryan: Yeah, sure.
Andrew: There are things you’d want to hide.
Ryan: We have a lot of trade secrets, but yeah, just that one I talked about that Amazon copied, no other people know that we do that and we just happen to do it.
Andrew: Yeah. You know what? I would love to just spend–I would like to go back in time and be an intern at your company back when I was in college, instead of working on Wall Street to be an intern at your company to learn as much as possible. I know a lot of it would be outdated by the time I’m done, but the thought process will never go out of date.
Andrew: Right? Robert Cialdini, he used to watch people give out flowers at airports back when you could do that, the Hare Krishnas. The techniques that he learned from that are still applicable today, which is reciprocation. You give someone flowers, they’re more likely to give you money.
Ryan: I learned a lot of stuff from Scientology people, how they walk through the process. It’s not like they walk up to you and all of a sudden you’re ingrained at Scientology. They’re really good at like, “Hey, you look stressed.”
Andrew: A stress test.
Ryan: Yeah. “Hey, are you stressed? We have a stress test meter. You want to check this thing out?” It’s great. Or they’ll give you some gum and then they do a good job of nurturing you. So, we do the same thing.
Andrew: Where do you study that? For the courses that we teach, I really studied cults to understand how they get people to believe and live their ideas so that we can use those same techniques with the courses and we still use those techniques. But I’d love to learn more.
Ryan: You can learn a lot from religion in general. Things have to be didactic.
Andrew: What are books? Are there books where you pick this stuff up?
Ryan: I read a lot of stuff. I follow like the Freakonomics podcast is great. Dan Ariely, all his books are amazing. His AMAs are really good. You have like Dan Thaler on Nudge, “Contagious” is a great book, Robert Cialdini’s stuff. He has new stuff called “Persuasion.” It’s awesome. I love watching infomercials.
Andrew: Me too.
Ryan: Infomercials are amazing. Go watch infomercials. Those things have to really perform. Go watch QVC.
Ryan: By the end of QVC, you’re a guy, you want to buy this piece of jewelry that has nothing to do with you, you don’t have a girlfriend. You want to buy this thing. You want to buy these stamps. It doesn’t mater. They’re amazing at it. Go watch some infomercials. Study. Study the science behind it. Those kinds of things.
Andrew: If there’s one book that I’ll recommend, it won’t increase conversions, it just helps you see how cults think. It’s called “The Culting of Brands.” I interviewed the author years ago. So good. He just basically dissects cults to understand what they do. I have an interview with him, but you can also get the book on Amazon.
Ryan: That’s awesome. [Inaudible 01:07:44] over and over again. It’s like some people think it’s redundant to ask people twice. No it’s not. For a radio ad to be effective, you’ve got to hear it a whole bunch of times, you’ve got to reinforce it. This is what the really good advertisers from the CPG brands know. It’s over and over and over again. The best marketing organizations of all time are cults and religions and look, they’ve got people to believe in a lot of really insane things, which is awesome. And there are 10,000 religions and they all think they’re right, which is amazing.
Andrew: And you want to understand their techniques and bring it back into your business.
Ryan: It’s making it didactic. It’s reinforcing different ways, like how things are going to benefit them. The afterlife is a pretty good tactic. It’s amazing. You can’t compete with that. It’s how are things going to benefit you and reinforce it over and over again.
Andrew: I just got that afterlife thing. Man, I love this. I hope you write books about this. I’d love to read them. I’m glad that you and I got to connect today. I hope we’ll get together in person some time and talk about this more. Sorry?
Ryan: Come to New York. We’ll hang out. I’ll show you a good time.
Andrew: I’d love it. Yes. I’m in. I want it. Anyone who’s listening, it sounds like you guys already know you can go to BounceX. It sounds like they’re hiring like crazy, so if you’re looking to work with them, go to Bounce.nyc, right?
Ryan: Yeah. You can go to BounceX.com. Just go to Bounce.nyc. That will take you right to our career section. Pop your email in or just look at some of the roles. If you know someone else who’s a frustrated marketer or someone who really wants to take it to the next level, tell them to apply or apply here. We get back to every single person. We got 25,000 applications last year. We only hired 80 people.
So we hire the top one percent of the one percent. But if you’re the one percent of the one percent, just come apply and you’ll be working with the smartest people you ever met. Your brain is going to hurt. You’re going to love to come to work every day. It will be amazing.
Andrew: I love for my brain to hurt. All right. Thank you so much for doing this. For everyone who’s listening, I will repeat that the two sponsors are HostGator and Toptal. Remember if you need a hosting company, go to HostGator.com/Mixergy and if you want to hire a great developer, go to Toptal.com/Mixergy. Man, thanks so much for doing this.
Ryan: Thanks so much.
Andrew: Bye everyone.