Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. And this interview is about how to go from being a consultant who trades hours for money into creating a product which continues to grow revenues even when you’re not working.
Carl Hancock did that. He is the co-founder of RocketGenius which is the development company behind GravityForms, a plug-in that lets anyone with the WordPress site add powerful forms to their sites.
And this whole interview, this whole shebang, is sponsored by well, something that I helped create. It is AndrewsWelcomeGate.com. Why did I need to create it? I wanted to establish real relationships with people who hit my site. I just didn’t want a hit on my site that bounces off and goes as someone who never comes back. I wanted to get someone’s email address so that I can start a conversation, build a relationship, and build my business.
And so I spent a couple of years building the perfect page that gets the best conversions I possibly could. And now that I have it I want to make it available to you if you want to use it on your site. Frankly, if you don’t have a site, you can use it. All you have to do is go to AndrewsWelcomeGate.com. Write that down because it’s going to go away. If you don’t grab it now, you will not have it, AndrewsWelcomeGate.com.
You can use it instantly for a buck, and it’s powered by LeadPages which means that they will make sure that it runs well, that it will integrate with whatever program you have, I mean, if you use AWeber or InfusionSoft. If will integrate with all of those, so you can use those email addresses properly. And if you don’t like my page, because when you signed up with my page, you also get a membership in LeadPages. You can get tons of other pages that will increase your conversions.
All right. Now that we did that, and I sent a bunch of people to go check out a great site, let’s start talking to Carl. Carl, welcome. I’ve been looking forward to doing this interview.
Carl: Yeah, I’m finally glad to do it. I’ve tried getting together to do the interview a few times, but time got away.
Andrew: Months and months and months, and the reason why I hunted you down is I use your plug-in. I love your plug-in. And the reason you asked me to wait is because you were moving to a new office.
Andrew: Would you mind turning your camera around and showing us this new, beautiful place? The place that GravityForms built.
Carl: Well, it’s just a little snippet because you can’t see the downstairs. I’m in an office.
Carl: And you see those doors . . .
Andrew: Look at the glass ceiling. You see the kitchen area. Mm-hmm.
Carl: And then there’s an open area up here, and then there’s a downstairs and kitchen area and tons and tons of natural light. We have skylights and on the back there it’s just a wall of glass and wood floors. And it’s pretty awesome to have a nice creative space to do what we do.
Andrew: Yeah, look at how stunning that place is. Congratulations on the new office. It’s all built using Gravity Forms. Would you mind telling us where your revenues are today? I’m so curious.
Carl: Where our revenues are today, as if . . . Our revenues are way higher than they’ve ever been.
Carl: We launched at the very end of August in 2009 and instantly did well right away as soon as we launched, and right now our revenues are, without given specific exact numbers, they’re multiple hundreds of thousands of dollars a month.
Andrew: A month?
Andrew: Millions a year?
Andrew: Congratulations! All from this plug-in which is just so simple, so elegant. You turned a profit after how many years?
Carl: Simple but powerful.
Andrew: Very powerful. I mean, we use it to collect information on users that we can then present to them even months, years later. We use it to sell because you can turn a Gravity Form into a sales page, excuse me, into a credit card processing page using Stripe or PayPal. We use it in so many things.
How many years did it take you to turn a profit on the plug-in?
Carl: A month.
Andrew: A month? All right. Let’s get into how you did this. I want to actually go all the way back to the beginning to get to know the man behind the company so that I could see how this idea can come out.
Andrew: And the man behind the company used to be a Navy brat which meant you were traveling around the world, right?
Carl: Yep. My dad was in the Navy and unfortunately I was born here where I live. My sisters got lucky and got to be born overseas, but I pretty much grew up here in Virginia Beach, Virginia, which is on the East Coast.
Carl: I lived a few different other places, but, yeah, I pretty much grew up a Navy brat.
Andrew: And I understand that you were really into computers even as a kid. You were on BBSes.
Andrew: What were BBSes? What did you do on there?
Carl: Stuff that I probably shouldn’t have been doing. [laughs]
Andrew: What are some of the things that people used to do there?
Carl: At the time you’re talking early stages of computer art scene for one.
Carl: Back in the day with BBSes there was art called ANSI art which was basically like the Legos of artwork. I got into that a lot. That community was kind of real tied into some other more nefarious elements of the online world.
Andrew: What kind of things? When you say nefarious it makes me feel like, well, I don’t know. What kind of things? I won’t even guess.
Carl: Just silly stuff like finding ways to get phone calls for free…
Andrew: Oh, yes.
Carl: …and having conference calls with people from all over the world. I mean just silly stuff like that that now, looking back, is silly, but at the time when you’re a teenager and communicating with people all over the world was not something that was normal like it is today. One of our key programmers is in Europe, and we’re here. I mean it’s so normal now, whereas back then being able to talk to people all over the world was just incredible.
That’s kind of how I got hooked on BBSes and that whole scene, just that aspect of it. Then, the Internet basically came at the tail end of that and changed everything. I just kept going with it and got into the Internet.
Andrew: You didn’t just get into it. You helped other people get into it. When you were in high school you made a little business out of it, a consulting company started back then. What did you do back then?
Carl: Websites designed and optimized for Internet Explorer 1.
Carl: Yeah. I did some work on my own freelance as well as worked for a local company when I was in high school. Then, I took a job in St. Louis when I graduated from high school to work for a software startup in St. Louis.
Andrew: You also went to college. How did that go for you?
Carl: I did not go to college.
Andrew: I heard you went for a single day.
Carl: I registered for college. I had everything set to go to college. I got in my car to drive to my first day of class, and I said I’m going to go to the beach instead.
Andrew: You didn’t even make it to a single day of college.
Carl: I didn’t go to a single day of college.
Andrew: You said I want to go to the beach. Why?
Carl: I went to the beach because I had a job offer in St. Louis. The computer stuff that they were offering at the time was way below what they’re doing now. Now they’re, at least, more up to date. I mean at the time I would be going I would probably be learning things like Pascal, and it was just totally useless for what I wanted to do online. I took the opportunity with the software startup in St. Louis, withdrew from all my classes, returned all my books, and moved to St. Louis as an 18-year-old right off the bat.
Carl: My parents supported my decision. It just kept going ever since. It was definitely the right decision at the time for sure. Who knows what would’ve happened…
Andrew: No regrets about not going to college.
Carl: Not that college isn’t good, it wasn’t for me.
Andrew: How did it go with that job? Is that where you met your co- founders, I should say?
Carl: No. That job I actually worked there for only two years. While I was there I started a website that was actually focused on, this is silly now because I’m not into it at all, professional wrestling. It was at a time when ad rates, especially based on CPM, based on impressions not on clicks, were just insane. I had a website that was getting ridiculous amounts of traffic, millions of page views every month at a time when CPM rates were ridiculous.
I was able to build a business out of that that I eventually sold to another company out of New York who in turn sold to what was then Snowball. It’s IGN, ign.com, the gaming content company. Briefly they were called Snowball, then they went back to being called IGN.
I started that business and sold it and left the startup I was working on. Subsequently, they got bought by a software company called Quest Software which is a big enterprise software company. I didn’t actually meet my co- founders until I ended up back in Virginia Beach after a brief stint in Pennsylvania where I was only there for ten months working for a magazine. When I came back to Virginia Beach I got a job with a company that did enterprise solutions for the marine industry, power supports industry…
Carl: …earth cycles, doing content management systems and lead management systems for manufacturers and their dealers. That’s where I met my co- founders, and we worked together for many years before starting RocketGenius.
Andrew: One of the things that you were doing together was looking for ideas, something that would allow you to create a business. You had a bunch of false starts. It’s not like you just hit it with GravityForms from day one. One of the big ideas that you had was similar to Airbnb. What was it like, and what happened to that business?
Carl: Yeah. I’m really into travelling. Anyone that follows me on Twitter or Facebook or knows me personally knows that I’m real big into travelling. I travel a lot. It’s one of the reasons why this interview we’ve had to reschedule it, not always because travelling but I had trips that I had to schedule around.
I didn’t like the sites that were out there. I and two of my co-founders of RocketGenius as well as another person at the other company started working kind of on the side on building a platform that would allow people to list rental properties, vacation rentals, and be able to facilitate booking them and managing all that, basically what Airbnb eventually ended up doing. There were a few companies already doing it that are still doing it. HomeAway, for instance, has been around way longer than Airbnb, but they were still kind of stuck, like, ten years before as far as their designs, their features, their UI, all of that stuff.
It just didn’t pan out because it’s difficult to make a real product working on it just here and there on the weekends.
Andrew: Give me an example of a problem you had building what was the equivalent of Airbnb back when you were working a full time job and could only do it nights and weekends and whenever you could find a moment.
Carl: Just not having enough time to work on it, and not getting certain things that were supposed to be done by certain people, getting them done timely so that we could move forward with it. I would say we worked on that for probably about nine months. Now, not all of that was spent working on that product. We were kind of also trying to decide what we wanted to do.
Then, I would say probably around nine months into it one of my current co- founders was basically like look, if we’re going to really do something this working on it on the weekends and nights isn’t going to work. We need to go all in.
Andrew: I see.
Carl: That’s what we ended up doing. Three of us ended up doing that, and the fourth did not. He stayed at the company and we left the company and built it into what it’s become.
Andrew: And you launched RocketGenius which was a consulting company catering to whom?
Carl: Anybody that would pay us.
Carl: We were basically doing consulting and client work to allow us to build a product that we could then bring to market.
Andrew: How would you find customers back then?
Carl: When we quit our jobs we didn’t just quit our jobs. We presented a plan to outsource our jobs to ourselves.
Carl: Our main customer was the company we worked for prior to leaving, and they…
Andrew: Look at the nerve! Wait, hang on a second. I don’t want to brush over this. This is amazing. This is the kind of nervy thing that real entrepreneurs do that I want to put an underline on. I want to make sure we all pay attention to it.
You went to your bosses and said we’re going to start a consulting company, but that doesn’t mean that you don’t get our services. If you would like to hire us, we will be the company that will take care of this for you.
Andrew: What kind of pricing structure did you give them?
Carl: We gave them a pricing structure that was slightly less than what we were making individually salary-wise, but enough to where we could still live comfortably just on that alone.
Carl: That made it enticing for them, because they got the same work for a little bit cheaper than what they were paying. It allowed us to basically focus way more time on our own products, and we did some client work here and there outside of that. But, during that time we developed gravity forms and as soon as we launched it the consulting client work was pretty much done.
Andrew: One of the reasons why you knew that this would be a good product is you were working on other people’s sites and you saw the same need come up over and over again. And that need was?
Carl: Forms. Everybody needs forms for tons of different reasons.
Andrew: I’m surprised that so many people need forms. Why do people need forms so much?
Carl: I mean to practically do anything online interactive is done through a form. Whether your placing an order for tickets or you’re submitting a support ticket because you have an issue or you just want to contact someone online. Gravity forms can do… Between its core functionality and its add-ons, there are so many things you can do with it. People just think forms. They think a contact us form. I’ll tell people when they say that, why do I need gravity forms? I can just get an easy contact us form.
Andrew: Cell phone’s going off.
Carl: It’s Yosemite continuity getting in the way. It’s coming over my computer.
Andrew: What’s Yosemite continuity? Oh, I see. You’ve got the new OSX.
Carl: Yeah I’ve got the new Beta OSX.
Carl: Let me just turn this off actually.
Andrew: Well, hang on a second. So back then when you were putting in forms for people, I understand you were putting in contact forms. But, everyone needed a contact form. Great. What tools did you use to give them that form and to do a handful of other forms that you were hired to put together?
Carl: Before? When we worked for the enterprise company before?
Andrew: Yeah. And when you were doing any consulting work on the side?
Carl: We had actually build Form Solutions before at our previous company. Because, one of the things that we built were re-management systems for manufacturers that trickled down to their dealers so that we would run and manage the manufacturers websites as well as the dealer websites. So when a lead was submitted on a yacht on a manufacturer’s website, it would be routed to the appropriate dealer. So we did..
Andrew: Based on what city or state the lead was coming from?
Carl: Yeah, whatever region, whatever market that the dealership had exclusive rights to.
Andrew: See this is a great example of how forms are used online that we don’t think about. Someone has a form that they have on their site. As soon as one of their users fills in the form, the data should go to go to the right place. Not all in the same [??] bucket where a human being will route it around, but immediately if I’m in California, I should go to a local dealer here in California. And if you’re in Virginia Beach, you should get a local Virginia Beach dealer. So that’s what you were doing. What software did you use at the time?
Carl: We built it all. We were using anything off the shelf.
Andrew: From scratch?
Carl: The CRM. As well as, the form solutions and the CMS that we used there was all stuff that we build in house.
Andrew: I see.
Carl: From working at that company, we had built Form Solutions. We build CRMs. So, we’ve done all that. When we go to building websites for clients and we got into doing Word Press, the solutions that were out there were nowhere near what we were doing before. And we saw a hole in the marketplace that needed to be filled.
Andrew: When you were doing this for clients who had Word Press, what software plug-in did you use back then?
Carl: What did we use?
Andrew: What was the big one?
Carl: I think we just used contact form seven which is as basic as it gets.
Andrew: I have never heard of contact form seven. Okay. I have heard of…Is it C-form that was big?
Carl: C-forms were big at the time. It was the biggest, drag and drop-type, build your own form. It was probably the biggest one at the time when we launched. The other one’s much more basic. The contact form seven is a lot more basic. It’s not a visual type editor. It was just real simple and it was fine for contact us type stuff. But beyond that, you wouldn’t be able to do much with it.
Andrew: What are Wufoo? Wufoo was a service that you can use and easily embed a form on any site. What’s wrong with that?
Carl: Nothing is wrong with that. There’s a bunch of them. As far as the SaaS solutions that are out there. The [??] solutions. I mean there’s Wufoo and form stack and jack forms and… One thing that we used to differentiate ourselves when we launched gravity forms is we didn’t look at the other WordPress plug-ins as our competition. We always looked at the other commercial services, such as Wufoo and Formstack as our competition. And, a differentiator was you owned, your data is on your site and you owned your data.
You’re not having to pay on how many [??], based on how many forms you create, or how many leads or entries you get from those forms.
Andrew: I see.
Carl: So the pricing structure was different and you had more control over the application itself.
Andrew: Excuse me, I had to sneeze there. I see, that makes a world of difference. So you saw the opportunity, when it was time to create the first version, how long did it take you to do it?
Carl: We started on the first version of Gravity Forms in February of 2008. We gave a first preview of it at Word Camp Chicago in, I believe that was May of 2008.
At that event was a lot of people that went on to build successful companies in WordPress, as well as Matt Mullenweg was at that event. He was actually one of the people I gave the demo to, a private demo to.
Andrew: Mullenweg, the founder of Automattic which is WordPress.
Carl: The founder of Automattic and WordPress, yes.
Andrew: Development [??]
Carl: Great, great guy and super, super smart.
Andrew: Incredibly bright but you’re telling me in February is when started developing it, and May is when you started showing it off at Word Camp?
Carl: Yes. And then we, from that…
Carl: We used it to build some buzz, using Twitter primarily, based on the buzz from people seeing it at Word Camp Chicago, as well as giving private previews to other people within the Word Press community on the [??]
Andrew: Let me hold that for a moment, Carl. I’m sorry to interrupt, but I want to understand…
Carl: No problem.
Andrew: I know how powerful the plug-in is today, and that’s why I’m excited about it but when you’re talking about building it in a matter weeks, what could it do at that point? What was it that it did back then?
Carl: The core is basically… I can’t say it’s the same, the core has changed a lot. We added… At the time it didn’t do, like, online ordering/purchasing type stuff. It was basically the standard fields, which are like input, dropdowns, radio buttons.
And some of the advanced fields, like name and address, but a lot of the features that are there now, obviously weren’t there. So, it’s still…
Andrew: So it’s just a very basic form, what did it have that gave it an advantage over other plug-ins?
Carl: Ease of use, and it looked like it was part of Word Press. It didn’t look like it was some other platform that was just shoved into Word Press. That was a key goal of ours, was to make a product that looked like it was part of Word Press rather than just something bolted on.
And it’s something that we’ve continued to this day to try to make sure… We can’t always do it, sometimes we have to create new UIs because Word Press doesn’t have UI for everything but we still try to make it look as much like Word Press as we can so that users are comfortable using it.
Andrew: Yep. Okay. So, you put this together, it looked like it was part of Word Press but it was simple too. It didn’t have all the features that it has today. You go to Word Camp, I don’t want to brush over what you did at Word Camp. You didn’t not sponsor Word Camp 2009 [sic], right?
Andrew: Word Camp Chicago. What did you do…
Carl: No, we didn’t sponsor. We kind of…
Andrew: … though?
Carl: We kind of used guerilla marketing and kind of …
Carl: Took over a lot of the spotlight, not necessarily from the speakers but as far as, like the buzz at the event. It’s funny because I’m friends with Lisa Sabin-Wilson who is, was one of the organizers of that event.
When she talks about it now, it’s funny. We would put out these cards with beta sign-up information for people to sign-up for betas and we’d put it on the swag table at the event even though we weren’t sponsors.
They would take them off and then we’d put them on there again, and they’d take them off. We basically just used guerilla marketing from the very start to get the word out about it and…
Andrew: The t-shirts you wore, what did they say?
Carl: Yes, the t-shirts that we wore said… It is me and one of my co- founders, Alex [SP], and the t-shirts just said, “Ask me about Gravity Forms” that’s all they said on the front of the t-shirt.
And it worked. People saw, you know our shirts said, “Ask me about Gravity Forms” and they asked us about Gravity Forms, and we told them and showed them. And, you know, they loved it.
Andrew: Yes, one of the things I like about going to Word Camp is I like seeing other tools that are out there for WordPress, especially the brand new ones. And what’s cool about your name is, it’s called Gravity Form.
Immediately, I know you’ve got forms, and if I’m curious at all about forms and I’m looking for a conversation about a new tool, I could see starting a conversation with you. Matt Mullenweg was there. You gave him a demo. Do you remember what he liked about it?
Carl: He liked that it looked like WordPress.
Carl: And he liked how easy it was to use.
Andrew: One more thing before I go off into what you said about Twitter. By the way, I intentionally slowed this stuff down because I don’t want to brush over the fact that the tee shirts that you wore worked. They were simple, but they worked. The way that you put postcards out there was important for the audience to hear, so I want to keep slowing things down to make sure that we really drive home the message of how you got this out there.
Did you have a revenue model around GravityForms in the early days, in that period?
Carl: No. We were pretty much just winging it. I mean when we started the company it was the height of the economic downturn and we quit our jobs. I had a four month old at the time, and one of my co-founders had one kid and another kid on the way. We just basically winged it. We knew what we were capable of and we would make something happen, but we didn’t know what that was going to necessarily be when we made the jump.
Andrew: You knew that there would be some revenue model. Did you have a sense that it would probably be what worked for other theme developers and other plugin developers which is give the plugin away for free, charge for the support, businesses…
Andrew: You just said let’s see where it goes.
Carl: Yeah. We weren’t really interested in starting out with the freemium model, because a lot of plugins at the time were basically supported by donations. Any plugin developer during that time that had a plugin that had a donation button will tell you they pretty much got no donations.
Carl: We could’ve made it freemium, but we would not have turned into the company that we’ve become if that was the case. Because a lot of people just aren’t going to pay for just support only. They’re just going to try to get away with the bare minimum, and if they run into an issue they’re just going to quit using it and not even bother paying for support. They’re going to use something else.
Andrew: What do you charge for today?
Carl: There’s a negative aspect of it.
Andrew: I thought you charged for support.
Carl: What was that?
Andrew: I thought you charged for support today. I guess not.
Carl: We do charge for support, yes, but we don’t allow you to… You can’t download and install GravityForms from the WordPress repository. You have to purchase it from us before you download.
Andrew: Oh, I see, okay. What do you think Matt Mullenweg would say about that today?
Carl: And then support is included. Huh?
Andrew: What do you think Matt Mullenweg would say about that today?
Carl: He’s more of a fan of the SaaS model which is what Automattic uses for a lot of their plug-ins like Polldaddy and Akismet. He wasn’t a fan of it in the beginning, but it’s kind of been as WordPress has evolved it’s something that he’s accepted. He would prefer people…
Andrew: He doesn’t want people charging for plugins.
Carl: Yeah, and I understand his point. He’s worried about things being taken and incorporated into core, then that renders your business null and void, because if it’s in core it’s probably going to be good enough for most people. But, that’s not going to be the case for something that’s more complex. I can definitely see it. That’s why you’ve got to be careful when you go to product. You want to build a product and not a feature. If you build a feature it’s not going to end well for you.
Andrew: Back then you weren’t charging for it. It was free. You didn’t know that you would charge for it, but you knew for sure you weren’t going…
Carl: No. The beta was free. We knew we were going to charge for it out of the door.
Andrew: Oh, okay.
Carl: It was not going to be free out of the door. When it was released, the final version 1.0, it was pay right out of the gate, no free, no trial, no nothing. It was you have to buy it.
Andrew: Okay. Thanks for clearing that up.
Carl: But we did do a beta cycle, and we had beta signups and had a lot of people using it. When they used it they would rave about it on Twitter and to their friends and a lot of theme developers. At the time theme shops were starting to get big, because they got a lot bigger before plugins did, even though now I think plugins make more revenue on a business level than themes do. But, at the time themes were what was really driving a lot of sales and money in WordPress.
Carl: We became friends with a lot of the top theme guys, and they loved our product, so they told their users about our product and that helped as well with getting the word out about it.
Carl: But it was tough because you had to purchase it right out of the gate. I mean a lot of plugins you can go to the repository in WordPress and just install it and it’s free.
Andrew: And never pay.
Carl: And never pay. But if you run into an issue, like I said, it makes it difficult if the user has an issue they’re going to give it a bad review and quit using it. Well, they could have paid support and found out it was something extremely simple and it was a server issue on their end and not an issue with the product. And that’s one of the reasons why we shied away from the freemium model because we want to provide our users with support and make it work the way it’s supposed to work so that the user’s happy.
Andrew: Okay. So you get to Word Camp. You’re starting to make a splash using gorilla marketing. And you use that to or use Twitter, excuse me, to magnify that. What did you do on Twitter to take advantage of all of the work that you did at the event itself?
Carl: We reached out and got to know a lot of people in the WordPress community. Everyone from core developers of the WordPress project itself to the theme developers. That was probably the key was the friendships we made with the theme developers. Who helped get the word out about us. Because at the time when we showed up to that Word Camp in May of 2009, we were completely unknown in the WordPress community.
Nobody knew who we were at all. And then after that we got buzz and stuff from Twitter. We got buzz from other people within the WordPress community that saw what we were building. And we used that to drive initial sales. And then from there we used word of mouth.
Carl: And that’s the best form of advertising there is is word of mouth advertising. That’s been the biggest key for our business in driving sales is word of mouth advertising.
Andrew: When theme developers were promoting you, what was their incentive? To send people to a paid product.
Carl: Early on in the beta there wasn’t much of an incentive. Other than the fact that it was a good product. And the WordPress community is a bit different than a lot of other communities especially in the tech industry. A lot of people within the WordPress community that may compete with each other are still good friends with each other. Which isn’t always the case in different industries.
So when there’s something cool on WordPress that’s released a lot of people will promote it and put the word out about it just because it helps the community that there’s a good product. We did launch with an affiliate program also that we used to give them an incentive to promote it to their users as well.
Andrew: Oh, okay. What was the affiliate deal that you offered at the time?
Carl: The same thing it is now which is 20% of any sales that come through from their affiliate.
Andrew: All right. You had beta. Beta’s going well. It’s time to actually get real customers. Do you remember where you got your first customer?
Carl: I don’t know where she came from.
Andrew: But you know that it’s a woman. You know who she is.
Carl: It was a woman. We launched the site. And order came through before we announce to anybody that we had launched the site. We had turned the site on and it was like 30 something seconds an order came through. And we were all like, “Did you just place a test order?” “No. Did you?” “No.” “What’s going on? Is there something wrong?” It was a legitimate order. I don’t know how she found the site. Didn’t know who she was. But it was a pretty cool moment because we hadn’t even said anything on Twitter or anywhere else that, “Hey, you can buy it now.” And this order comes through. It just kind of blew our minds that that happened so quick.
Andrew: It seems like it was because of the advance work that you did before. You went and met people at the events. You made friends with theme developers. You tweeted out what you were doing and you asked them to tweet out what you were doing so that you could create some kind of buzz. Right?
Carl: Yeah. Lots of networking. Which was big.
Andrew: A lot of it. August 29th, 2008, I think at 5:00 p.m. is when you officially opened?
Carl: 2009. Is it 2008? I thought it was 2009. I lose track of it myself just because I can’t believe it’s been so long. I think it was 2009.
Andrew: 2009. Okay.
Carl: We started RocketGenius in the fall of 2008. We launched GravityForms basically a year later. The end of August of 2009.
Andrew: Okay. Here’s something that you said in your pre-interview for Mixergy. You said, “We looked at theme pricing and other form pricing, and it’s not changed much since launch. What do you mean by theme pricing?
Carl: Theme pricing has changed.
Andrew: What is theme pricing?
Carl: Theme pricing, what the theme developers are pricing their themes at.
Andrew: How do they price their themes? Where they sell it once, or . . .
Carl: It varies.
Carl: Yeah. A lot. I don’t think there’s enough theme developers and companies that are putting enough thought into it, and actually doing it right. There are some. Problem is there’s been a race to the bottom in the theme industry. With some of the marketplaces that are out there that allow, basically, anyone to sell theme. There’s been this not only a race to the bottom on price, but features also. So, you have tons and tons of features at a really low price, and that doesn’t really scale cuz tons and tons of features means you’re going to have issues. There is no such thing as bug free code.
Andrew: Oh, I see what you mean. Right. Every theme developer is offering tons of themes to their packages, or even if they’re selling it individually there are tons of them. They offer free support when you buy. I see, and then all these themes have tons of features, the slider, the color changer, et cetera. You also made a similar mistake where initially you were offering lifetime support to anyone who paid, what was it? Like, 200 bucks to get developer license. They get license support?
Carl: [??] Yeah. That was something that some theme developers still do today. We did it purposely in the beginning, and used it as a way to drive sales in the beginning with an eye to changing it in the future.
Andrew: I see.
Carl: If we knew it was not sustainable going forward for forever because unlimited lifetime support and updates just is not sustainable. When would you work for a client and offer to support it forever for that one-time payment? It just doesn’t make any sense. You buy a car you get a warranty. That warranty isn’t perpetual.
Carl: We changed to a one year model, and that was definitely huge for us also, as far as, growing our revenue. That was all part of the original plan was to, basically, use unlimited as a hook to get out there in the marketplace, and help get buzz, and then . . .
Andrew: Get the first scoop of users.
Carl: . . . and then change it, but we grandfathered those users in. So, all those users that purchased during that time they still have that lifetime license. So, we didn’t just change their terms. We grandfathered them in, and then we used it as a sales event. So, we said, the policies changing this day. Buy before this day you’ll get a lifetime license. That ended up being one of our highest sales days were the days leading up to that deadline.
Andrew: I see a post on Copy Blogger from 2010 where they’re doing a review. Actually, not them. Brian Clark, the founder of Copy Blogger, is doing a review, talking about the different elements of Gravity Forms. I think he’s even talking about how . . . yeah, there it is. User generated content Gravity Forms will also allow you to let your users create blog posts on your site.
You just create a form that automatically populates a blog post. Then, the link is to copyblogger.com/gravityform, which I assume becomes a redirect over to your site, which also has an affiliate.
Carl: Yeah. [??] affiliate, I think.
Andrew: So, he was an affiliate of yours. He’s incredibly persuasive with his writing. He’s got a lot of [??]
Carl: He’s got a huge, huge reach. During that time that article was definitely the highest sales day during that time period with [??] was published.
Andrew: How did you get him to do that article for you?
Carl: They liked the product.
Andrew: That’s it. You didn’t reach out to them? There wasn’t any proactive request? It was just them liking the product, seeing that you have an affiliate?
Carl: I don’t remember asking him specifically to write about it. I know I talked to him about it in, like, to say, hey, we got this product. I showed him it. I don’t remember specifically saying hey, can you write about it, but we had discussed this is what we’re building. This is what it does. They like it, and used it so, he wrote about [??]
Andrew: [??] How many sales, roughly, what size sales are we talking about? 100,000 dollars, 10,000 dollars?
Carl: From that?
Carl: Post. No, it wasn’t that high. I’m trying to remember what it was, because his half would’ve been…
Andrew: Even if it was ballpark.
Carl: You said May of 2010.
Carl: It’s amazing how much you forget over time when time flies. I think we did in double digits thousands that day which was the first day that we had done over ten.
Andrew: So, Brian would’ve gotten a minimum of $2000 from that deal.
Carl: No. We gave him an extra 10%.
Andrew: Because he negotiated it, or because you liked him and knew…
Carl: Because of his…
Carl: Because of his reach we negotiated with him on his affiliate cut.
Andrew: I do notice that a lot of sites will do what he did which is they like a product, and they go over to the site itself. They look on the bottom, and just like on your site if I go to gravityforms.com and I know to look for it I’ll see an affiliate link. They click the affiliate link. They sign up, and then they do one other thing which is an email to the creator saying hey, I have a lot of pull and a persuasive audience or an audience of influencers…
Andrew: …or whatever their reason is, will you give me an increased commission. Almost everyone seems to say yes.
Carl: Yeah. I mean if it’s someone… Amazingly, he’s the only one that’s asked, which is amazing to me. I’m surprised other people haven’t.
Andrew: He is the only one that asked?
Carl: Yeah. If they’re an influencer like he is, I mean you know the kind of reach Copyblogger has.
Carl: It’s way bigger than it was even in 2010. I mean yeah, we’re open to negotiating, because it’s a good deal for us if they’re an influencer and have a big market. It’s a win-win.
Carl: His article wasn’t just like a single day. It had residual effects over the next few days as well.
Andrew: I bet. All right, so then you grow even further. You start to build up traction. There were a lot of these plugins back in the day. They came and went. A lot of theme makers who made maybe even a million dollars and then disappeared, because their theme just wasn’t as cool, because there was a lot of competition. Did you have any concerns that that would happen to you?
Carl: We look at plugins and themes very differently. We almost got into themes ourselves. We were pretty much 90% or so finished with an entirely new brand…
Carl: …around themes that we were going to launch before we pulled the plug on it to focus solely on plugins. Because to us plugins are like software and applications and themes, it’s a completely different market. A site only runs one theme. A site can use tons of plugins. Every site can use GravityForms, but not every site can use theme X. I mean there’s a big difference between the two.
That’s one of the reasons why we liked the plugin market even though it was in its infancy then as far as the commercial space goes. There was maybe one or two other commercial products. Ours was the one that got more press and buzz initially when it launched.
Since then there have been a bunch more. We pretty much didn’t like the way themes were priced and marketed and sold, and the market was limited. We weren’t real concerned about competition and stuff like that rendering it useless. We know that everything it does, I mean there’s the whole fear oh it could be added to core. Well, I know what GravityForms, and if it gets added to core, core WordPress is going to get extremely bloated. That’s not good for anybody, and it’s not the goal of the project itself.
We have lots of competition that’s free, and we’ve had competition since day one that was free, and we were selling a plugin at a time when people weren’t used to paying for plugins. We’re not worried about the competition. We’re focused on building the best product and we’re confident that we’ll continue to do well.
Andrew: Here’s what you told Jeremy Weisz in the pre-interview, ‘Early on I was not coming to terms with the success, and I was worried the orders were going to stop coming in. I was paranoid and had a big fear that once it was getting rolling it seemed too good to be true. This made me work harder because fear was driving me for a while there.’
Andrew: So there was a period where you were feeling a little paranoid about all this coming to an end.
Carl: Yeah. Early on when we really started getting successful there was that. And I’ve talked a lot to people in WordPress and other people had the same fears. Like I’m friends with other owners, startup founders, and people that run theme and plugin companies and they’ve all at one point or another had the similar kind of fear. Because when we got into it we didn’t know how big, we knew the WordPress community was big, but we didn’t know how big. And we didn’t know how much it was going to grow. And as you know, WordPress is just grown well beyond, I think, anybody expected.
Carl: And there’s new people that start a WordPress site every single day. But early on when the sales were doing well and they just kept going up and up and up, I’m like, “Okay at what point is there going to be saturation?” And it just hasn’t happened. And it’s still kind of mind blowing. I’m not afraid of it now because I know that we can do things to drive more revenue. And we plan on doing things to drive more revenue. But it’s just so impressive what WordPress has become.
Andrew: What would you do to drive more revenue?
Carl: What are we planning on doing to drive more revenue?
Carl: Introducing complimentary products to Gravity Forms.
Andrew: For example?
Carl: Mostly this isn’t public. We do plan on introducing some SaaS functionality to GravityForms core itself. One of our biggest support issues is emails. Because forms they send notifications via email. And because it’s self-hosted, it’s relying on the user’s web server being able to reliably send email which depending on the web host, doesn’t work out well. And we’re going to introduce a SaaS API that basically offloads that so that we can manage sending the email notifications. But we’re planning on using GravityForms. Kind of like how Gravity Forms is built on top of WordPress, we’re going to use GravityForms as like an app engine. And we’re going to build other products on top of GravityForms. Products that…
Andrew: For example?
Carl: Think of a variety of things that the user interacts with via forms. So you can take that anywhere. I know I’m kind of being a little big vague. I’ll use some examples that we may or may not be working at getting into. Take event management. How does a user order tickets for a Word Camp?
Andrew: Got you.
Carl: Take reservations and making appointments and bookings and reserving a slot to do Mixergy.
Andrew: Right. Like if you’re booking a time to do this interview with me, I give you my calendar now. What you’re saying, “Why couldn’t that work with forms on Andrew’s site directly?”
Carl: Yes. If Gravity Forms handles some of the heavy lifting and then the other product brings the functionality specific piece on top of it.
Andrew: I would like to see that. Frankly if you just created an inventory system that would do it.
Carl: Yeah, we have a laundry list of…
Andrew: I see.
Carl: …places we could go with it. Really there’s so many different places we could go with it. And we have some products that are going to be complimentary to those as well. CRM is a space that we’re eyeing.
Andrew: You mean you’re going to create a CRM yourself?
Carl: Correct. That’s something that we’re eyeing.
Andrew: Let me look backwards for a moment.
Carl: Not on the level of sales force or some of those giant CRM’s but more on the level of what 37signals did with like Highrise which was fine or smaller businesses and medium size businesses. But of course they discontinued Highrise. So that’s a space that we’re looking at getting into. And it’s extremely complimentary to what Gravity Forms is and does.
Andrew: Let me look backwards for a moment here and see why this worked out. I want to dissect it so we understand why products work out and can then use it for our own products. One reason is you said that you built on a growing platform. It’s the difference between creating a form product for Jumilla which didn’t go nearly as far as WordPress. And WordPress is now I think ten percent of the internet is run on WordPress. Something like that.
Carl: [??] say it’s like 18 or 20.
Andrew: It’s huge. So you built on a growing platform. You also charge which means that you had enough revenue to build your business and improve the product and to give customer support which made the product even better. You had an affiliate program that allowed other people to, it gave them an incentive to promote. You also made it into a platform. So that it wasn’t just forms on its own, but there’s a woman somewhere out there who created the stripe integration that I use. Right? She puts her plug- in into the WordPress repository. And I think she charges 50 bucks a year for support for it.
Andrew: And the reason she can do it is because you said, “Gravity Forms is not just a forms plugin. It’s a platform for others to build on top of it.”
Carl: Yeah. There are lots of third party add-ons for it. We can’t make an add-on for every service. Did you ask a question? I think we…
Andrew: Obviously I’m doing the interview for you because I’m so excited about the product. But I want to make sure that my assumptions are right.
Carl: So far yes. Spot on.
Andrew: So when they do that, you only get paid an annual fee from me, from the user. Zapier doesn’t pay you anything.
Andrew: Nope. And I don’t pay you anything for plugging into Zapier except the 200 bucks a year that you charge me as a user.
Carl: Yes. Correct.
Andrew: Got it. And that’s the other thing I should actually say. It wasn’t a one-time fee. It’s an ongoing recurring revenue stream which means that you have predictability. You can say we can pay the rent next year because we know how many members are in there. We have a sense of the churn, etc.
Carl: Yes. And we went with yearly rather than monthly just because I think people see a monthly fee and it can kind of be a turn off even though it may not be expensive. But whereas just like with hosting when you sign up with a lot of hosts, they charge for a year up front. Especially like with shared hosts like Bluehost, Hostgator.
Carl: They’re still kind of breaking it down so it’s like a monthly but they’re doing it over the course of a year and then they’re doing a yearly renewal. And we thought that was the best way to do it. Because if you’re doing it every single month, then there’s also more opportunities for users to cancel their subscriptions.
Andrew: I have noticed that a lot of SaaS products that are aimed at businesses charge on an annual basis. They show the price on a monthly basis sometimes but they push the annual. And that increases their attention. All right. Anyone out there who wants to follow up on this interview I have a couple of places for you to go.
The first is, actually since we talked so much about WordPress I think the origin of WordPress as told by Matt Mullenweg, the father of WordPress is one of the best stories on Mixergy. You can hear him talk about how he did it. You can hear him talk about why he decided to take a gamble on starting WordPress and starting his own business. And what he did to make it work. The way that he promoted in the early days I think is pretty freaking clever. He actually used the work Spam. And I urge you to take a look and listen to that interview.
While you’re at it, since we are talking about WordPress and businesses built on top of WordPress, we have a handful of interviews with entrepreneurs who built theme based business. You know, it’s not nearly as big as Carl’s business. But we’re talking about million plus dollar business where you create a theme and sell it to the WordPress community. We have a handful of those interviews here on Mixergy. The one I think you should check out is the one with the found of Woothemes. Woothemes, excuse me. Woothemes.
If you are a Mixergy Premium member, you have a lot of other programs that you can listen to. Go to Mixergypremium.com and check them all out. If you’re not, I urge you to sign up at Mixergypremium.com. Where you can learn from the successes and failures and how-to’s of some of the most successful people in the tech space. Carl, I want to end the interview with this. I’m looking at you. You’re a pretty outgoing person and you look pretty reserved in this interview. Do you feel a little bit nervous about…
Carl: I’m a reserved person offline and in my non-business life. I’m not reserved when I go to Word Camps or events or online, but when I’m not in work mode, I’m definitely a more reserved person. I’m not sure why I’m more reserved in the interview, but I guess just because I’m comfortable.
Andrew: I thought maybe you were worried that I would push you to answer something that you didn’t want. I know in my notes that there’s something you felt comfortable revealing. Something about your revenue, but not the whole thing. I thought. None of that.
Carl: Yeah. I mean I’m pretty, I’m not going to get into specific numbers, but I’m pretty comfortable discussing practically anything. And people in the WordPress community can attest to that. I’m not afraid to, you know, not necessarily stir the pot, but speak about something that may be controversial that other people may be afraid to talk about. I’m not afraid to talk about stuff like that.
Andrew: …WordPress plug-ins.
Carl: What was that? I didn’t…
Andrew: For example, charging for WordPress plug-ins?
Carl: Yeah. For example, that. Yeah. I mean obviously I was a big proponent of that from the very beginning for obvious reasons.
Andrew: Wait. Is your plug-in obfuscated, or can we look at the source code?
Carl: No, you can look at the source code.
Andrew: We can make sure. We can audit it and make sure it works.
Carl: Yeah. It’s all GPL compliant which means you can look at the source code and you could fork it if you want.
Andrew: I can say hey, you know what? I’m going to give this to a friend of mine, can’t I?
Carl: Yeah, you could do that also.
Andrew: But wouldn’t they need my product key?
Carl: The license key you couldn’t give to your friend, but the actual code you could. There are caveats that are starting to pop up in WordPress. People see GPL and think they can do whatever they want with it because it’s GPL, but GravityForms is trademarked. The code is GPL, but our brand is not GPL. It’s trademarked, and you can’t do whatever you want with our brand.
There are definitely some caveats there. I mean we don’t crack down on people for sharing it with their friend, but we’ll get in touch with people that are using our trademarks in ways that we don’t appreciate.
Andrew: If I say anyone who signs with Mixergy Premium also gets a copy of GravityForms. I already paid for it, it’s GPL. You’re going to jump in there. When I did an interview with Matt Mullenweg and Chris Pearson and…
Andrew: …people in a live chat… You heard it?
Carl: Was that during the big thesis war?
Andrew: Yeah, big thesis war, absolutely. There were people in the audience who said this is essentially what they thought that Chris should do, that he can still be GPL, he can charge for tech support, he can trademark his name and things like that.
Andrew: I know that he…
Carl: The problem is people don’t understand trademarks and they don’t understand the GPL. They think that GPL means… I have people that email me and say I have to provide them with GravityForms, even though they didn’t purchase it, because it’s GPL. No, it doesn’t mean that. It means once you have the code you can do whatever you want with it, but it doesn’t mean I have to give you the code just because you asked for it.
Then, when you get trademarks in the equation it changes things also. WordPress is trademarked. If you go out there and you create a site that uses WordPress in your domain name the WordPress Foundation’s going to contact you and say you can’t use that in the domain name.
Andrew: And I think Automatic owned that WordPress trademark for a while, and then it was donated to wordpress.org, the foundation.
Carl: To the foundation.
Andrew: I know that Chris, by the way, did not want to do any of those things even though he knew he could. He wanted to just stand on principle and say…
Andrew: …no, I should be allowed to charge for this. I put my hard work into it and you can’t tell me how I should charge for it, and you can’t tell me that it’s okay as long as I trademark. No, it’s my thing. I understood Matt Mullenweg’s point of view on that, too.
Carl: I understood both points of view on that.
Andrew: Which way did you come down?
Carl: I think it got out of control, though.
Andrew: You did? The argument got out of control?
Carl: Just online, just that you had, like, Team Matt and Team Chris on Twitter, and they were attacking each other. It just got kind of ridiculous on that kind of thing. It was kind of like high school.
Andrew: I thought that argument needed to happen. I think it…
Carl: It was going to happen sooner or later.
Andrew: Somebody needed to stand up and have this conversation. Chris was willing to do it. Somebody on the WordPress team needed to stand up and say this is our vision and you can’t mess with it, it’s not just written on a computer screen, this is our vision. They both, actually, were big, strong advocates for their points of view.
Andrew: Things changed because of that.
Carl: I’ve been a strong advocate for a similar point of view as Chris’ only I don’t have a problem with the GPL, because you can work within the GPL and still accomplish what you want to do. I’ve been a big proponent of what we do from the very beginning even with Matt. Matt and I have had discussions, and we don’t always agree on things, but I completely respect him. I’m not going to go attacking him and picking fights. I can discuss stuff with him and still respect his opinion and understand his opinion.
I mean he’s an incredibly bright guy, and he’s definitely matured a lot since we started. Between 2009 and now he’s matured a lot and learned a lot business wise. That’s actually been pretty awesome to watch. People forget how young Matt was when he started WordPress and how young he still is. He’s an incredibly bright person.
Andrew: Yeah, he really is, and he did start out really young and he’s built up a phenomenal business. It’s too bad you won’t argue with him and he won’t argue with you, because that’d be great for my ratings…
Carl: Well, I don’t know what…
Andrew: …or my [??] counts.
Carl: Maybe a few years ago. I don’t know what there is to argue about now.
Andrew: No, there isn’t. That argument actually helped settle things, I think.
Carl: Yeah. Like you said, it had to happen eventually.
Carl: I don’t necessarily like how some of it went down, not on the interview that you did but leading up to that on Twitter, some of the nasty stuff that was going on there, but eventually it…
Andrew: You want to know something? It happened on Twitter before. What I did was I saw that it was going on on Twitter and I…
Carl: And you were like hey, let’s get…
Andrew: …had them both on Skype chat. I still do.
Carl: …these guys together and that’ll make a good interview, and it did, and it…
Andrew: And it did. I think I did it. I’m proud of the work that I did on that. I didn’t…
Carl: You jumped in quick, too, and I was glad that somebody that had more market share or more mind share in, you know, this type of podcasting, rather than just a small WordPress podcast doing it.
Carl: Because it put it out there to a wider audience. It had to be discussed in the open eventually. Matt may not agree with everybody’s business models, but nobody has to agree with everybody’s business models. I mean there are different ways of doing business.
Andrew: Yeah. I think we ended up with… I think he still will… He told me even afterwards about some people’s models that he wasn’t happy with, but he made his point before. Everyone now knew where he stood and they knew how to work around it if they wanted to the way that you did.
You built a phenomenal business. I’m very happy to be using GravityForms. I just recently re-upped it. I think you automatically charge, or I had to go in there and charge because I had a new card, but I was very proud to do it.
Carl: Yeah. We don’t do automatic recurring right now. You actually have to manually make your renewal payment.
Andrew: I wish that you’d do automatic, because I…
Carl: We will. We will be doing. Basically, we will be offering that with an incentive. We always try to think of ways when we implement change that either turns into a sales event or gives you an incentive to want to do it the new way. We’ve always offered a discount on renewals. When you purchase the developer license the renewal is in the full price of the developer license.
Andrew: You’re right, yes.
Carl: It’s discounted.
Andrew: Can I say what I paid?
Carl: When we introduce recurring payments you’re going to have a choice. You can opt for recurring payments and your renewal is discounted, or you can opt for not recurring and when it’s time to renew it won’t be discounted. We’re going to introduce it in a way that it’s not required, but you’re going to have a big incentive to want to do it.
Andrew: Makes sense. All right. Well, I’m happy to continue to pay and I love the product. It’s great to hear the story behind the product. Thank you so much for being here and giving me this interview, sharing your story with the audience.
Carl: Thanks for having me.
Andrew: Thank you all out there. It’s great to have you here.
Carl: That was fun.
Andrew: If you guys are out there and you see Carl at a Word Camp or any event where he’s extremely outgoing, I want you to walk over to him and say hey, I heard you on Mixergy…
Carl: I’ll usually be wearing a red hat, usually Cardinals hat.
Andrew: You will be wearing a red hat?
Carl: This is a RocketGenius hat, but people know me for my Cardinals hat.
Andrew: Come walk over and say hi to him.
Andrew: Tell him you saw him on Mixergy and thank him if you got anything of value. I’m going to do it right now.
Carl: I’ll be at Word Camp New York City next weekend.
Andrew: Actually, I’m not going to publish this before then, so they’re going to have to catch you another time.
Carl: Well, I would’ve been at Word Camp New York City before you watch this, so maybe you saw me there.
Andrew: They’ll catch you in person. Thank you so much for doing this. Thank you all for being a part of it. Bye guys.