Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. Often what will happen is people will listen to my interviews while they’re building their ideas, while they’re building up their businesses. What they hear in these interviews is designed to impregnate itself in their minds. We are specifically telling stories with clear points, the stories are what you’re going to be interested in, the stories of what is going to stick and the points will come along with it. And so, people have been listening to these interviews for years, the ideas get impregnated in their minds and as they’re building their companies without even the effort of going into their notebooks to look for a note on what they heard, it’ll just come out because the stories are part of who they are.
That’s how this interview is prepared. That’s how this whole program is set up. Joining me today from the streets of I don’t know where is an entrepreneur who years ago in school had Steve Jobs come into his class and rocked his world. He ended up doing business with someone who worked with Steve Jobs, as you’ll hear in this interview, and went on to create several companies, including his latest company, which is called Chili Piper. His name is Nicolas Vandenberghe and Chili . . . I keep wanting to say Chili Pepper, Nicolas.
Nicolas: Chili Piper.
Andrew: Yeah, like, like, well, I’ll ask you why you ended up with Piper as the name. Chili Piper is a sales enablement tool. One of the things that they offer is, you know, when you sometimes go to a website and you say, “I want the demo. I want to, like, get more information,” and you fill out a form. And at the end of the form, it says, “Okay, great, someone will contact you.” And you go, “Who and when?” If you’re the right fit for them, you’re a lost opportunity, you might forget about them by tomorrow. And even if you don’t, and you remember that they put you off, it’s not a good experience.
So what Chili Piper does, at the end of those forms, if you’re the right fit, they schedule, automatically, immediately, an appointment for you with the right person at the company that’s using their software. We’ll find out about how he’s doing that and other things at his business, thanks to two phenomenal sponsors. The first will host your website, right. It’s called HostGator. It’s phenomenal if you’re doing anything, including membership sites. And the second is for anyone who wants to hire a developer, the best of the best developers are on Toptal, but I’ll talk about those later. Nicolas, when Steve Jobs came to your school, what city was this in?
Nicolas: It was at Stanford. So Stanford Business School.
Andrew: Oh, of course, right? Right across the water. Yeah, across the Bay.
Nicolas: Yeah, that’s right. So I came to Stanford thinking I just wanted to see a different country. I was coming from France. I’d worked in consulting, I thought that I want to travel the world. And then a classmate of mine that is now reasonably famous called Steve Jurvetson, a venture capitalist, invited Steve Jobs, and we all sat on the floor. Steve sat in the lotus position. And he started telling us about the world and I looked at him and I think, “I want to be him. This is what I want to do.”
Nicolas: “I want to be a tech entrepreneur. I want to do things that change, change how people work, change how people live.” It was just such an eye-opening. I had very little exposure to entrepreneurship back in Europe. In Europe, there we see one entrepreneur. The entrepreneurial world is a lot less developed and even more so at the time. So for me, it was something completely new. And on the spot, I said I’m staying in California. I’m staying in the Bay Area and see what my life is going to be.
Andrew: You were entrepreneurial, though, growing up. I read that you were selling newspapers. How old were you? And how did you do it?
Nicolas: Yeah. I was 17 years when I was selling newspaper. But I didn’t think of it as entrepreneurial. I just thought I wanted to make money in that case and what can I do and, you know, and I thought, you know, if I sell newspaper, I bet I’ll sell more than the others. And I sold about 12 times more than the next one.
Andrew: Why? What did you do that allowed you to sell at 12 times more than the others?
Nicolas: You know, it’s a good question. Newspapers sales is different from enterprise sales. So I don’t know that the techniques I used were applicable. But there’s one thing that is true of everywhere: you have to be in people’s face. So I took my newspapers and I went out in the streets and I went. Well, there was a lot of traffic. And I sat in the middle of the traffic, where a lot of people would just sit in the corner and hope that people will come by. I actually looked for people and found them so I was in their face. And that’s true in the enterprise world, the same way you have to reach out . . .
Andrew: How? How can you get in their face in enterprise? How do you do that?
Nicolas: Well, you have to find ways to get people to be aware of you. And it varies from one space to the other, right? You’re going to . . . One good reason right now, I’d love to be talking to get a lot of entrepreneurs to use the Chili Piper tools and I’m talking to you because you have such a beautiful audience was entrepreneurs. You know, like when I worked for this big telecom company, there was probably about 100 companies that was a potential target. So you just get them all listed and you will reach out to each of them.
Every product is going to have a different approach. But in the end of the day, you have to make sure that you are in people’s face. That was number one. Rule number two is that I always found an angle. So when I was selling my newspaper, I’d look at people. Let’s say that guy is going to like it if I do a joke, right? Then I’d crack a joke and he’d buy my newspaper. And then this other person was serious, I’d say that one is going to be interested in, I don’t know, the last stages of the thing. So that, I would always try to find an angle that works for the person I was looking for.
And it’s the same thing now in business, you know, you’re trying to have a . . . we call it a trip, I’ll probably call it a micro theory where you say, “I have a micro theory why this account is going to buy our thing is because, I don’t know, they have a high volume of meeting always because their conversion rates were below is because that guy used to work for a similar company.”
Andrew: I see. You’re saying before you . . . I’m sorry to interrupt. But you’re saying before you sell to someone, you have to have a micro theory about why they would buy. Why? Why do you want to have that theory before you talk to them?
Nicolas: The main reason is that that helps you qualify accounts, right? So if you don’t have a theory, don’t go after them because if you don’t know why they should buy, it’s unlikely that they would know why they should buy. The second reason is that you’re going to come across as much more relevant. So if I call on you and say, “Andrew, buy my software from the website,” and you answer, “I don’t even have a form in the website,” right? You’re going to think I’m a freaking idiot, right?
“I think this guy wasted my time.” But if I come to you and say, “Hey, I know you don’t have a form on your website, but during your broadcast, maybe you want to book meetings with the next entrepreneur and maybe in that page over there, that would be helpful.” Then you’ll say one thing, interesting idea. So I have a theory of why it would be helpful to you. And the minimum, you will find that I’ve done my homework to come to you. And nowadays, it’s so easy to send, you know, millions of emails to everybody that if you don’t have this kind of approach, then you’re going to be marked as spam by Google and every other mail system. So it’s becoming more and more important to build a micro theory on why [this account 00:07:41] going to buy from you.
Andrew: John Sculley was someone who was famously recruited by Steve Jobs to work for him and then took over when Steve Jobs was booted from Apple. You got to partner with John Sculley on a company that I think I remember and I’ll ask you about it in a moment, but how did you connect with John Sculley?
Nicolas: It’s a funny story because, as I was saying, Steve Jobs inspired me and then my first startup was his . . .
Nicolas: Nemesis, I guess, is the way to say it. Yeah. I was helping an inventor, a French inventor who built what was at the time called a Photoshop killer. So he had built a technology that he thought was going to kill Photoshop. Obviously, you can tell you looking back now as [inaudible 00:08:35]
Andrew: Photoshop is not dead yet.
Nicolas: That’s right, exactly. But, you know what [inaudible 00:08:39]. But the technology was amazing. You could open the files a hundred times faster than Photoshop. So when John Sculley was running Apple, it was a natural partner to go with, right? So I have . . . his name was Bruno. I have a meeting with John Sculley where he demo the technology. John was so impressed that you wrote, “You’ve built a jewel for the world and congratulations.” Then shortly enough, he was at Google, that is John, not Bruno.
And so I reached out to him again and said, “John, you love that technology?” And he said, “Yes, I’d love to get involved.” And that’s how we got together. As we got together, it was becoming clearer and clearer to me that the Photoshop-killing plan was not on track. You know, people were so used. There was such a huge ecosystem around Photoshop. There was no way we were going to kill Photoshop. But I thought, “Why don’t we go after the consumer market? You know, it’s the beginning of digital imaging. This technology is amazing. We can repurpose it for the consumer market and it’s a greenfield market,” right? There’s no established competitor.
So we did that. We started with John and we built that company and that was super successful. We did 6 million in revenues in the first year of shipment. We did 12 million the second year or 11 million the second year. And at that, I got an offer to buy the company for 60 million.
Andrew: Sixty? Six-zero million?
Nicolas: Yeah. Well, it was a real company. We had an offer from a consumer software company called Sierra On-Line back in Seattle. And John decided to turn it down by de facto that thing is worth 80 or 90 million, to which I thought, you know, “I think this is a very fair offer. And how about we do a deal where you buy my shares and I exit at that level?” So I did that.
Andrew: And he did. He bought your shares at that height.
Nicolas: Well, he got Lehman Brothers to negotiate for him and they didn’t quite give me the price. But once you set on selling, you do it. To be precise, since I know, Andrew, you like no bullshit and I think it was under 25 million valuation instead of 60. So I wasn’t super happy with the work of Lehman Brothers. I did question, “Why would it be 20 and not 60?” But, you know, I got my money and I doubled down on an internet company. And it was 1998, it was . . . internet was booming. I was in San Francisco and I thought, “I can’t be doing consumer software when this, you know, life-changing trend is happening, the internet. I have to go and do that.” So that worked for me.
Andrew: Wow. And you’re saying once you go down the path of selling, it’s hard to stop it. You’ve already expressed that you’re interested in selling and so, they basically had an opportunity to chisel down the price on you. And they did.
Nicolas: Yes, exactly.
Andrew: But the price didn’t go up for that company. We’re talking about the LivePix Company, right, LivePix Co?
Nicolas: Yes, that’s right.
Andrew: Yeah. So actually, that’s not the one that I remember. I remember John Sculley was on the back of a box of some kind of software that made banner ads. You could buy it at Staples and John Sculley’s name was on it. I thought, “Wow. That’s kind of weird but interesting.”
Nicolas: It is the one.
Andrew: It is the one?
Andrew: Wow. So you guys were at Staples full-on box software with John Sculley’s name and everything? Got it. So I do remember seeing it in there.
Nicolas: That’s right. That’s right.
Andrew: Pretty cool.
Nicolas: At the time, software was not downloadable, right?
Nicolas: It was a dial-up modem. So you had to go and buy it at the Best Buy or Walmart. We had a massive deal with Walmart. But the bulk of the software was OEM deal. So we a million-dollar deal with Epson, HP, and so on. But you’re right, John Sculley was on the box. You remember correctly.
Andrew: So I saw you’re an entrepreneur, you started that company, you started other companies, you want to be in the path of Steve Jobs. Why did you then go on to take a job as this Chief Information Officer at LightSquared? It’s a multi-billion dollar telco startup. Why did you decide to do that?
Nicolas: Well, exactly that reason, the last word you said, a multibillion-dollar telco. I had a friend of mine working for Vodafone. He was Head of Strategy in Vodafone. He called me and he said, so Vodafone back in the UK, he said, “I’m coming to New York, I’m doing a startup at Dallas.” “Nice.” He said, “We have $2 billion in funding.” I said, “You have what?” He said $2 billion. And I said, “You know what, I want to be part of that. I want to see what it’s like to do a startup at a scale that’s actually 1000 times bigger than what I’ve done in my life,” right? “I’ve always counted in millions, not billions.”
So he said, “All right, do you know anything about telecom?” I said, “No, but I know, sales.” So I interviewed and I got the job of VP of sales. So that’s how I got started at LightSquared as a VP of sales. And that job was the easiest job in the world because it was this really smart business plan to do a white label telecom operations to other companies. So actually, my job was to sell to Google, Microsoft, Amazon. And this was the easiest job in my life, right? Everybody wants it in Google now as this thing, what’s the name of their phone where they have a connection built in? So they had this idea 10 years ago, they wanted to do it a long time ago. So when we showed up and said, “Hey, we’re going to build the network for you and you’ll brand it Google,” they said, “This is what we’ve been wanting for years.” So the deal with Google was a $500-million prepayment. So that was . . .
Andrew: They paid you $500 because if I understand it right . . .
Nicolas: Five hundred million.
Andrew: Five hundred million, prepaid you, they said, “Here’s the money.” Now, what you gave them was the ability to create their own phone network, Google Fi?
Nicolas: Well, the ability to label our phone network Google, yes, a white label.
Andrew: This was this became Google Fi, am I right?
Nicolas: Well, it should have except that the company LightSquared had purchased a spectrum [inaudible 00:15:03] GPS spectrum and then the U.S. Army found that we were interfering with their airplanes and missiles. And as a result, they passed a law that we were no longer allowed to use that spectrum and the whole thing went up in smoke.
Andrew: And then the money from Google had to go back.
Nicolas: Yeah, that’s right. They had to go back to the drawing board and find another way to do it. It was the same project, but we ended up not being the supplier was this unfortunate spectrum issue.
Andrew: It was a GPS, like, interference with GPS, apparently, that was an issue.
Nicolas: That that is correct.
Nicolas: Yeah. Amazing. And you asked the question I was Chief Information Officer. So the way it happened is that I started in sales. And then I looked at what the company was doing in the IT stuff because I was my world, right? And they had a core to develop systems over five years for 200 million. And that’s crazy, 200 million, but in the world of telco, that’s [inaudible 00:16:02]. Anyway, I said, “Let’s redo the tender because that seems way too much money to spend on IT.” And nobody was ready to do it. So the CEO volunteered me. He said, “Look, you keep talking about how it’s too expensive. Why don’t you go and do it and see what you can do?” I said, “Sure.” But then he said a little note, “If you are bullshitting, you’re fired?” I said, “You know what? That’s fine. I’ll do it.”
So I rewrote the request for proposal and made sure that people understood that it was a different system we’re looking for. And the best price came back at 60 million instead of 200. So when that came back and I was saving the company 140 million, they said, “How about you take over IT? It seems that you know what you’re doing.” And it’s a true story. That’s exactly what happened. I took over IT. I became Chief Information Officer. And I started deploying systems. And that’s until the GPS issue showed up and we got interrupted and it was unfortunate. It was a super fun project.
Andrew: That’s fast.
Andrew: Within two years.
Nicolas: Yeah, that’s right. That’s right.
Andrew: I should say I’ll go into my sponsor and then I want to understand how that led you to understand the problem with sales that then led you to Chili Piper. But quickly, for anyone who doesn’t know, my sponsor is HostGator. If you have an idea for a website and you need it hosted, go to hostgator.com/mixergy. They’ve been around even longer than me. I’ve been around for 10 years with Mixergy; they’ve been around longer. And they figured out hosting, how to make it so easy. They’re just going to set it and forget it and then focus on your business. The only time you’ll want to go back to their website probably is when you want to get another domain, another domain, another domain so you can keep coming up with new projects.
If you need to get started, go to hostgator.com/mixergy, pick that middle option. And that will give you all the domains that you need, literally, unlimited domains. hostgator.com/mixergy will also give you the lowest price possible. Let me give you that name again, hostgator.com/M-I-X-E-R-G-Y. I guarantee you will absolutely love it. So what was it that helped you understand this problem that you’re solving now with Chili Piper?
Nicolas: It was two things from two different angles. The first one when I was running sales, whenever running sales, the sales team was very reluctant to use Salesforce.com. And I thought, you know, this is . . . I can see this is, at the time, 2011/2012. “This is a wave of consumer applications. And we forcing them to use things that were designed in the 1990s. Something’s going to happen there.” That was the first thing. And then as CIO, I was sitting on the other side where I was buying software applications and my predecessor had done a big deal with Oracle.
And Oracle came. I tried to negotiate lower fees on the maintenance and they said, “Oh, well, if you want to . . . ” I said, “Look, we’re only using 8 of the 17 apps and we want to return these other 9 apps. And you guys give me a better deal.” They said, “Oh, if you return the nine apps, you unbundle and your price goes up.” And I thought, “This this is just not how software should be bought and sold. You know, we’re getting screwed.” I wrote a blog and getting screwed inspired me.
Andrew: I read that blog. You basically said, “Look, if I take fewer options, it’s no longer a bundle, you’re going to increase my price?” They said yeah. So you were stuck for years and years paying the higher price and use . . . well, not using, getting access to software you never even used.
Nicolas: That’s exactly right. Sitting on the shelf and I’m paying for it.
Andrew: Nicolas, forgive me. I’m sorry to interrupt. But I understand how that made you understand that software as a service, web-based software is better than software that you have to buy at enterprise prices, enterprise bundles that sometimes has to be on your servers. But what I don’t understand is, where did you get the idea for Chili Piper? Why’d you decide, “I’m going to tackle this forms-to-calls issue?” Which I didn’t even realize was an issue until you brought it up. How did you recognize it as an issue?
Nicolas: Okay, so that’s not direct. It didn’t happen quite that way. What happened first is I did Floating Apps, like we mentioned earlier. And Floating Apps was this idea of an apps-intelligent that floats between your mail. So it was the idea of solving the adoption problem for CRM. My idea was that it’s a bit silly to ask salespeople to input the email contact in the CRM when a smart computer could do it. So I built a solution to retrieve emails, contacts, phone, and everything into their Gmail and phone and put it into CRM. That was what got . . .
Andrew: They’re in email anyway. Why make them go and load up Salesforce and add it and manually do it? Just have a floating app, it floats within the browser, they could really easily add the contact information and details about contacts. Got it. Okay.
Nicolas: Exactly. Even better, you put in the cloud and it does it automatically. So I did that. And that was a very good idea except that two other companies had the same idea: one called Implicit in Israel and the other one called RelateIQ in San Francisco. RelateIQ thought, “This is such a good idea that we’re going to make it our weapon to kill the CRM. We’re going to build on CRM and now the differentiation will be that our capture is automated.
“We’re going to call it “relationship intelligence.” It’s smart. It goes into the intelligence.” There is $40 million from [Excel 00:21:42]. I’m picking what seems like a strange strategy to me to go after Salesforce. The next thing, some VP at Salesforce decided to buy my Israeli competitor, [Implicit 00:23:51]. Already, that didn’t feel too good. And then Marc Benioff decided to buy RelateIQ for 390 million. So by then, I’m thinking, “Okay, so let me get that right? The hundred pound gorilla in the space just bought my two competitors. Maybe it’s not a good idea.”
And that’s when, so now to your question, “How did you come up with this idea of fixing forms?” By then, I was in the space. I was talking to a lot of companies. I was thinking that my intelligent relationship intelligence tool was not going to be the foundation of a new business because Salesforce was going to bundle that with their product. So I needed to . . . I wanted to stay in that space because I was still convinced that there was a lot of opportunities. But I needed to start something narrow. So I that’s why we focused on scheduling because we talked to a lot of people and they said, “Well, scheduling is still a hassle in the world of sales. And there are problems to solve.” So we thought we can solve that problem. That’s how we got to it.
Andrew: How do you find the salespeople that you’re talking to?
Nicolas: Do you mean the targeting [inaudible 00:23:02]?
Andrew: Yes. Was this your friends that you were talking to? Who did you talk to that to see if this was an issue?
Nicolas: That’s interesting. Floating Apps and Chili Piper, the go-to-market strategies were very different. At Floating Apps, our appeal was very universal. And there was a natural channel for us, which was Salesforce. So we listed on the app exchange, and six months later, about 400 companies signed up. It was just there. You know, like we said earlier, you have to be in their face. There was a place to be in their face. That’s the reason why when Salesforce acquired our competitor, we thought we’re going to have a hard time surviving because Salesforce is our channel.
When we restarted Chili Piper, we no longer wanted to rely on this channel. So it was more of a hunting thing. So I didn’t go with my friends. I went with my neighbors. So I went to a lot of meetups in New York, I phoned companies in tech. I said, “Hey, so this company in San Francisco asked us to fix a scheduling problem. Do you have the same scheduling problem?” And half of them would say yes. And I said, “Well, how about you look at our software?” So our second paying customer is Greenhouse in New York. And then we continued with a lot of success in New York companies.
And then I flew to San Francisco, I went to a bunch of the conferences, and I continued with my same way. One of our customer company called [Avalara 00:23:43] already reminds me that we started business when I was sitting next to the person having lunch at the Tokyo conference. And I pulled my computer and I said, “Let me show you. Let me demo our app.” That was how I recruited the first customers. And that worked well.
Andrew: Well, did you get any insights? And I think I’m kind of using one of the questions from Sohan who’s in the live audience right now. And guys, if anyone else has questions, just chat it over to me. Did you get any insights from talking to them that you hadn’t thought of that helped shape the product?
Nicolas: Yes, absolutely. Absolutely.
Andrew: Like what?
Nicolas: Well, every little detail, the products came from insights from there. So for example, when we started the scheduling with other people scheduling in Salesforce, right, so we put a Chrome extension that that appeared in Salesforce where you could book from there. And then people said, “No, I’m most likely getting an email from [Borr 00:25:37]. So I want it in Gmail or in Outlook.” So then we extend, we did an Outlook plugin to make sure we were there where they needed us to book. Then they said, “Well, sometimes the prospect,” that was before the form thing, “the prospect was to adopt a bunch of options.” So we suggested times by email. And then we realized there was a bigger problem, that the form, the current product you described earlier about inbound, the form was the bigger problem. And that’s what we went after.
Andrew: I heard that, well, let me see, that you pre-sold the product before you launched? Is this Floating Apps that you did, that sale?
Nicolas: No, that’s Chili Piper.
Andrew: Chili Piper? So before you built the . . . You tell me. Yeah.
Nicolas: Well, so back, we find Salesforce is going to do the same problem as Floating Apps, we need to find something else. So we went to talk to our customers and say, “What problem do you have?” And one customer, a company called Five Star, says, “We have this problem with scheduling between our prospecting team and our [account executives 00:26:44].” I say, “How much would you pay for it?” And, you know, I said, “How about $20,000?” They said, “That seems fair. All right.” So I said, “Okay, let’s do a contract, $20,000. And I’ll build that thing for you.” You know, when you think about it, it was a good price for them too. It was not a lot of money to pay for solving this problem. And then we went to other people and they had the same problem and the same willingness to spend money on solving it.
Andrew: Well, you know what, let me take a moment and talk about my first sponsor. And then I want to know, were you doing this a lot? Were you doing a lot of this type of consulting, essentially, where you’re building for individual clients because I know that you want to be profitable from the beginning? But let me take a moment to talk about my second sponsor. Nicolas, you’re probably going to love this company. It’s a company called Toptal. They raise money from Andreessen Horowitz. But they’ve been doing so well, I don’t think they needed to go back and do another round. Here’s what they do. They said, you know, people like Nicolas, people like Andrew, they need developers. Everybody is saying, “I’m going to make it easy for you to post ads all over online.” No one’s saying there’s got to be a better way.
And so what Toptal said is, “We will have the better way.” The better way is they create a network of the best developers out there. When you need to hire a developer, you just go to them and say, “I need to hire need a developer.” They will go to their network, they’ll introduce you to two people, you could do a video chat with them, talk to them, interview them, and then get started often right away. I remember asking Neil Patel, I said, “Neil, you’ve got the biggest network out there. Why are you using Toptal? You can just go to your network and hire.” He said, “Yeah. But with Toptal, I get to hire fast, faster than even with my own friends.”
So if you want to hire fast and get the best of the best, we’re talking Google-quality, Facebook-quality developers, all you have to do, and, Nicolas, I don’t know if you like a deal but here it is. If you go to toptal.com/mixergy, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours, in addition to a no-risk trial period. Do you still like deals? Or are you someone who just, like, who cares? “I’ve got money.”
Nicolas: Sounds good to me.
Andrew: You like deals? All right.
Nicolas: I do.
Andrew: So for you and everyone else, it’s “top,” as in “top of your head,” “tal,” as in “talent.” T-O-P-T-A-L.com/mixergy. Many of my past interviewees have used them, a lot of them. So were you doing a lot of this type of consulting service where somebody would say, “I need this feature” and you built it?
Nicolas: No, it was not consulting. It was pre-purchase. So consulting you build something exactly as spec’ed out by the customer, whereas pre-purchase, you spec out what you’re going to build and the customer tells you, “Yes, that’s the product I’m looking for.” So that’s a great way to get started. Look, it was just a way for us to, like you said, get profitable very quickly. So we identified the need. And we were fortunate that the company felt strongly enough that they were willing to prepay for the product. But we never do things custom. It’s not a good idea in the tech world to do things custom.
Andrew: So I’m looking at my notes from the producer’s conversation. And it says, “He would go into businesses and do more face-to-face in a consulting type of sales. And that got them to a million dollars.” So I’m guessing what you meant by that was you would go into businesses and just sell the way that consultants would sell not the way that a SaaS company . . . Is that what it is? Described that.
Nicolas: Yeah, that’s correct. By that, I mean the sales processes as a consulting process, not the product-building.
Andrew: So how did it work?
Nicolas: Well, you know, when you do something that’s a bit, you know, innovative, you have an impact on processes, right? So you change the process. For example, the form process, currently, people, SDRs, whose job it is to be alerted that somebody has requested a meeting, and you call them the next day or so. And so you have to go and tell people, you know, there is a better way to do that.
Andrew: Let’s give the . . . There was something going on in the background. By the way, this is a good time to address it. Where are you? What city are you in and where? What part of the city are you in? You’re outside?
Nicolas: I’m in France on an island in Brittany. It’s called Ile Vierge. It’s completely beautiful except for the network going down.
Andrew: Are you on vacation now and still doing this?
Nicolas: Yeah. Yeah, I’m on vacation now. Yeah, that’s right. My pleasure. And I do apologize for the technical difficulties. It looks like, you know, [inaudible 00:31:10]
Andrew: I need to ask you, are you running this company with your wife, your sister, someone with your daughter? I saw it. I was, like, looking at SEC filings about you. I saw that someone had the same last name as you.
Nicolas: Yeah. If you look at the picture, you’ll see she’s no candidate to be my sister. She’s my wife. She’s my beautiful wife. She is very talented. I mean, she has an amazing track record in product design, very complementary of my operational and sales skills. So that’s great. We studied together and we also started this other company, GipsyBot, together. We really have very complementary skills. So it’s working really well.
Andrew: Yeah. I see she was most recently at Sharecare. She was the Senior Vice President of Product.
Nicolas: That’s correct.
Andrew: All right. So, well, can you describe a little bit more about how your sales process worked? How would you find leads? How would you go and turn them into customers? What was your process for that?
Nicolas: In the early days, and that’s up to $1 million in revenue, is that I was doing sales myself. And my process was person to person. I’d go and meet people in person at a meetup or conferences and address their concerns directly. And what happened is that I used what’s called, in consumer marketing, it’s called the bullseye strategy. That is you identify the people who are the most influential, right? So that’s the reason why the brands are fighting to sign up athletes or signing stars is because these people are influential. So in the world of SaaS, obviously, you don’t have a Michael Jordan to sign up, but you do have a company like Square or Greenhouse, right? Companies that are more influential.
And if you sign these names, you’re going to get some benefits. So we did. We went for the more influential. That’s why I went person to person. I targeted these companies that are more influential. We went after companies like . . . We went up to Salesloft, very early on, we went after DiscoverOrg, you know, these companies that influential in the space. And that’s snowballed. That did bring a lot of inbound reputation and got us to where we wanted to be. So that was the beginning. And once we got to a million, and we had enough of these references, then it was time to scale. And then we went to the more traditional B2B sales process. We hired sales [inaudible 00:34:02] and reps to start contacting a broader range of companies and bringing the pipeline.
Andrew: And that got you to . . . In fact, that was beyond a million. A million was you mostly doing it yourself, is that right?
Nicolas: That’s correct. A million was me, just me on my own.
Andrew: What do you guys charge? Let me see, actually. I’m looking at an earlier version of the site to see what the earlier pricing was. I feel like your messaging has gotten better too as I look at past versions of the site. Oh, there it is. Calendar Round Robin, $25 a month. That was very cheap.
Nicolas: That is too cheap, we never changed our pricing. I apologize. We never changed our pricing. We charge $25 a month a user. And then the way we did it, as we added more features, we added more price, right? So now with the form thing, you still pay $25 a month a user, but you also would have to pay $200 to connect your form. And if you want to connect with a phone, then you add another 350 for the [thing 00:35:01]. So we never increased our price apple to apple. We were always adding more feature that can justify additional price. And we also have something very unique, Andrew, we have a no-discount policy.
So we charge the same thing to everybody. We have a company with thousands of licenses. They pay the same price per license as a company with three licenses. We found that we deal with a large company, we do a lot more work on supporting them and onboarding them. And the value is also higher. And as a result, we think it’s fair that nobody wonders if they’re getting a better deal than the other. Everybody’s getting the same deal.
Andrew: So I’m just shocked that you could get to a million dollars charging $25 a month.
Nicolas: So that’s 300 a year. You get a deal, the 50 reps, that’s 15K, right?
Andrew: Oh, because you have that many reps, it’s 15 at a time. Got it. Wow.
Nicolas: Fifteen. Right.
Andrew: And then you’re additive . . . Sorry, go ahead.
Nicolas: Yeah. That’s right. You know, you took an average deal at 10K. To get a million, you only need 100 customers.
Andrew: I do know that you got to . . . There was a period there, 2017, where you ran into financial problems. What happened there? Was this over Christmas?
Nicolas: Yeah. It was. So it’s a risk when you bootstrap. Any cash you have, you want to invest it in growth. So 2017 was, you know, we started early ’16. We got to a million, then it was time for me to hire people and hiring people when there was an onboarding time. And so, by the time I was paying more people and the revenues didn’t come, then you get short. You know it’s going to come. You know the renewals are coming, you know these new sales reps are going to be productive. It’s just that the money just doesn’t meet, right? So that was 2017. We had to, you know, make it right. But there was no question for me that I needed just going to finance that deal because the business was very healthy. It’s just the technicality of the cash.
Andrew: So you took more money out of your pocket to make it work?
Andrew: You did?
Nicolas: Yeah. But I could pay back myself pretty quickly and I knew I would. But yes, I did. Yeah.
Andrew: I did see the . . . So I was looking around and I saw SEC filing about you guys raising money. When did you raise money? How much?
Nicolas: We did two things. We, first . . .
Andrew: I’ll tell you what, while we’re waiting for him to reconnect, guys, if you’re listening in the live audience, let me know what your feedback is on this. What are you thinking? And, Alina, I’m glad that you’re there answering questions, including the one from Andre. We’re going to wait for Nicolas to reconnect. While he does, I’ve got to say that one of the things that took me by surprise was how much companies, even smaller companies, are using phones to close sales. There’s this guy was listening to me, Jamie Kennedy, who said, “Andrew, listen to all the guests who you’re interviewing while talking about closing sales by phone and all you focus on is the right form to close the sale.”
I said, “Yeah. What do you have in mind?” He said, “Phones. You should teach people phones.” I said, “Most people don’t have enough of a team to do the phones.” He goes, “Yeah, but the founder could do it himself. I said, “How?” He said what you do is, and he said here’s what his company does, Pie Hole. What they did was they created a form, same as everyone else, collected email address, same as everyone else. But he added one more field, a phone number field. And when somebody filled it out, he contacted them. He personally got alert on his phone and contact them directly and then he closed the sale.
And he talked about exactly what he needed to do. And he said if you do talk to them on the phone, it humanizes your company and your product and people are more likely to buy. I said, “Okay.” He said, “Andrew, I could teach it.” He did if you’re interested. He’s one of the past guests here. And he did a course with us for our Mixergy premium where he teaches the exact step-by-step process for getting somebody’s phone number and closing a sale.
If you’re interested, go to mixergy.com/courses. You’ll see his course, James Kennedy and so many others there taught by real entrepreneurs. And it’s all available for you. I was shocked by that too. John in the audience is saying, “Great idea to close on the phones.” I also liked that he would do it instantly as soon as somebody was on the site. Alina, by the way, do you know if Nicolas is able to reconnect? I seem to have lost him.
Alina: Can you . . . ?
Andrew: Oh, yeah, I can hear you.
Alina: I hope he can join because I’m the shyer part of our team.
Andrew: Well, do you feel like we missed anything in the story? I kind of feel like I did, cues what I’m missing. But what do you think?
Alina: First of all, let me try if I can start my camera.
Andrew: Oh, yeah, I’d love it.
Alina: I click on start video and this says the host . . .
Andrew: Oh, yeah. Yeah. Let me make you a co-host. Thank you for coming in.
Alina: Can you see me?
Andrew: Almost. Try it one more time. You should have the ability. I don’t know why it can’t just tell somebody to get on video. It’s okay. I can hear you.
Alina: All right, you can imagine there. There you go.
Andrew: Oh, there I can see. Yes, there you are. So you’re on vacation now, the two of you?
Alina: No, just Nicolas. Because we work together from the time we wake up until the time we fall asleep, we take vacation separately sometimes. So he’s on vacation on his own.
Andrew: My wife and I don’t do it. But we do take vacations separately. I used to think that was such a weirdo thing that will make couples separate. Nope. It makes me want to see her more, especially now that we have kids.
Alina: Exactly, exactly right. We get to take a break sometimes.
Andrew: I get it. And so, where are you?
Alina: I’m in Brooklyn. I’m in the office. And everybody’s gone. I don’t know where. I guess on vacation.
Andrew: Got it. Yeah, it’s only 6:30. Get back to work. What do you think of what we’ve been saying so far before I get into my questions?
Alina: I think it’s captivating. These are captivating questions. When you’re in the midst of doing things, you don’t stop and ponder on all these aspects. The critical point is as you’re pointing them, you don’t ponder on them, you just move forward and then you just fight to the day you have those. So it’s interesting to even hear our own story from your lenses.
Andrew: You know, the part that I’m fascinated by, first of all, I admire that he started back from bootstrapping. The two of you could have raised tons of money. What I’m fascinated by or what I’m wondering is, what about the competition? I saw that there are companies like Drift suddenly coming in and doing essentially the same thing. What do you guys do about that?
Alina: So we don’t view Drift as a competitor at all because they handle chat. And more than 80% of people’s traffic, at least on B2B sites, come through forms, not through chats. Chat mostly picks up other conversations. So we don’t view Drift as a competitor. But I admire what they’re doing in terms of marketing and in terms of being out there. Everybody knows their name. Everybody’s aware of them. So it’s a company that I personally admire a lot in what they’ve done. And when you’re bootstrapping, you’re obviously giving up on some of the things that could make you more visible like Drift is. And you have to be more thrifty on how you’re spending marketing dollars and how you’re spending your attention as well. That’s on the one side, but on the positive side, it teaches you all sorts of habits that become helpful further down the line, for sure.
Andrew: Like what? What’s a habit that you’ve developed because you’re more thrifty?
Alina: Well, every expense that we make, we create a decision memo on it and . . .
Alina: Yeah. We have a decision memo process where we explain why we have to make a purchase, and what are all the options and what is the option of doing nothing? That’s one of the healthy habits, I guess, we have. I don’t know if it’s healthy or not, but it’s a habit that we’ve been adopting.
Andrew: It’s interesting in comparison to so many people who just have tons of money to throw around. Did you have any hesitation about working together as a couple?
Alina: Not at all? No. I can see that. For people that have a husband and wife have a good dynamic together in terms of passions and interests, they are always concerned about working together because you often have, as founders come, you often have disagreements. And these disagreements sometimes can be major on shifting direction on hiring resources or on doing a product in a certain way. And if you do not have a good habit in solving those disagreements, then obviously, you can’t have a healthy working relationship.
But we’ve had that from the beginning, in everything that we’ve done. When we moved somewhere, where we’ll go on vacation, we had a good way of solving conflictual opinions. And we always came up with a better solution than we would have on our own. So we thought, “Well, we make a better team together than we would separately.”
Andrew: What is that? My wife and I have a hard time making decisions because I am very much about “Let’s just pick the easy answer.” And she’s into “Let’s get the right answer. And let’s spend forever on it if we need to.”
Alina: Well, I’m sure that you reach agreements, right? In the end, everybody has their own way.
Andrew: No. Our solution is one of us has to throw their hand. This is why we can’t work together. I’ve seen, I’ve interviewed so many people who work really well with their spouses. And I know that I can’t do it. I just would . . . We’d drive each other freaking nuts. What we end up doing is one of us throws their hands up and says, “Okay, you know what, you just make this decision your way. And I’ll take the next one.”
What about just the fact that you guys, in addition to this, I was looking at your LinkedIn and his LinkedIn, and you both have GipsyBot at 2018, on your LinkedIn. How does a company that’s helping businesses with sales suddenly get into task management software?
Alina: We have problems ourselves. We kept getting inundated by things that we had to do. As it happens to the SaaS founder, your team, you have a lot of people reporting into you because you don’t have a managerial structure. So a lot of people asked me to review, like I said, a decision memos that we do on purchasing software or specs or anything of that nature. So your list of to-do keeps growing, keeps growing, keeps growing. And then how do you prioritize? Do you take the tasks that are coming from others? Do you take the things that you have to do to grow your business and then you have personal things that are coming through? And we couldn’t find any solution that would keep us in check with our goals and our strategy. And so, we decided to build something that could suit our needs.
Andrew: But it’s a product that you’re selling too, right?
Alina: It’s a free even though it’s not a paid product, at least not yet.
Andrew: You’re not going to sell it at all? Okay. I see there’s request early access. The part that resonated with me about it is that a lot of times when people send me messages, and I forget that I have to add it to a to-do list. And that’s a pain in the butt to turn it into a to-do list. That’s what you guys do well, right?
Alina: Yeah, that’s right. It’s a transformation of a request from somebody into a quick task, but you can see it in one single place so that you can prioritize your timeline. You only have one timeline, right, and so many requests for it. Every email is a request from somebody to do something.
Andrew: And then what I end up doing is I use Siri and I say, “Hey, Siri, remind me to whatever.” Or if you’re seeing it on your screen, you could say, “Hey, Siri, remind me of this.” But it’s not really a way to do it because you can’t easily get into Siri, every request that comes to you.
Alina: And then you have to prioritize and then you have your events. Like for instance, you’re recording this podcast, and then you have meetings, and then you have things that you have to do maybe with your kids or with your spouse.
Andrew: Right. Okay. Why don’t we close it out with the name Chili Piper? How’d you end up with that?
Alina: Well, that’s Nicolas’ story to tell because he’s the one who comes up with the names. He likes to think to pick things that resonate well in his mind. And when you have a French accent thing and then like a French verb to things, there’s something about French culture and French pronunciation that it’s appealing to me, but I can’t fully understand it. So for him, it came from this French champagne. It’s called . . . No, I’m blanking on it. Something Piper. It’s called something Piper. He saw an ad for it and he really liked it and it was so fancy and the experience where it was so fancy that he felt that he has to find that name but with a twist on it.
Andrew: Was it? Oh, I see Piper-Heidsieck?
Alina: Yes. That’s the one.
Alina: Yeah. Yeah. And the advertising was very cool. They were like a very cool looking couple in a club and they were ordering champagne and they had the living the maximum amount of I don’t know, blitz and, and fancy nice. So he really liked that.
Andrew: All right, for anyone who wants to check it out, the website is chilipiper.com. And for 25 bucks a month, you can get started with them. That’s a really low price but I get it. I guess as you guys go into enterprise and you sell lots of seats, it adds up. I want to thank my two sponsors who made this interview happen. The first will host your website right. It’s called HostGator get them at hostgator.com/mixergy and the second if you’re hiring developers, you owe it to yourself and your business. Check out Toptal, check them out at toptal.com/mixergy. All right. Thanks for jumping in and . . .
Alina: Thank you, Andrew.
Andrew: You saved it.
Alina: Thank you.
Andrew: Thank you.
Andrew: Thanks, bye.