Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, where I interview entrepreneurs about how they built their businesses.
Sometimes people ask me who’s listening. In fact, they ask me that a lot. So, that’s why more and more, I want you to meet the people who are listening, like today’s guest. He’s one of the people who’s been listening. And he’s got such an interesting story.
The guy was selling things online and was really good at it, but he had this problem. It took a long time to make funnels. Frankly, that’s a problem that I have too. Every part of creating a sales experience is challenging. So, he said, “I’m going to build a solution for us, something that makes it easier.” He did. And it worked for him and it worked for so many other customers and now it’s become this really big business that if you’re selling anything online you’ve probably heard of.
And now we’re going to get to hear how the company was built and about some of the challenges along the way. The company is called ClickFunnels. They provide you with an easy way to market, sell or deliver products online. That name really is clear, ClickFunnels, and his name is Russell Brunson.
And this interview is sponsored by two great companies. I’ll tell you more about them later. But for now, if you’re looking to hire a developer, Toptal is my sponsor. And Acuity Scheduling will help you actually get in front of people, really make it easy for them to schedule calls and meetings with you. But as I said, I’ll tell you more about the sponsors later. First, Russell, welcome.
Russell: Thanks for having me. I’m excited.
Andrew: I’m psyched to have you on here too.
Russell: I’ve been a big fan, so it’s cool to be here.
Andrew: Yeah. You were saying that you and your team were listening to a Mixergy interview, the one with Jason Fried. What was it about the Jason Fried interview that got the whole team listening?
Russell: I’ve been a big fan of theirs ever since “Rework” came out. I read that book and then we read “Remote” right when we were launching ClickFunnels. We had this question at them time. Do we remove everybody to Boise, Idaho? Do we have people work remote? I read that book and our whole culture has been based off of that. So many of the things that they’ve done and not done, we’ve kind of modeled. I’m just a huge fan. Last week one of my partners was like, “You guys have got to listen to this interview.” I sent it to the whole team and we’ve all been listening to it, geeking out. Super fun.
Andrew: Yeah. Jason is so good. I feel like he disappeared for a while and hasn’t been talking, hasn’t been writing books. When I asked him to do an interview, I thought he wouldn’t be into it because he seemed to be in a bunker mode, but he said yeah and he was willing to do it. Great interview.
How much is ClickFunnels doing in revenues right now?
Russell: So, we are not quite two years into it, so about 20 months into it. Year one we did $12 million. This year, our MRR, we’re just about to pass $1 million a month in MRR. We should hit that, I think, by next one. But then we have like yearly sales and things on top of that. So, we do between $1.5 million and $2 million a month right now and growing really rapidly.
Andrew: How did you like Jason’s answer? I asked him and he said tens of millions and I’d say revenue–
Russell: It’s profit. We were like, “That’s so cool.”
Andrew: Right?
Russell: He is so cool.
Andrew: How much of that becomes profit at your business?
Russell: We have really good profit margins right now. We’ve been profitable since day one and we’ve never not been profitable, which has been awesome. We bootstrapped the whole thing, didn’t take any money. So, profit-wise it fluctuates month to month but we’re between 40% to 50% profit margin pretty consistently. So it’s been great.
Andrew: I wonder why–first of all, it’s really great to have such big profit margins, but I wonder why they’re so high. Is it because you guys don’t spend a lot of ads? Frankly, I don’t see you guys advertising much. But that doesn’t much. It could just mean that you’re targeting everyone except for me.
Russell: That’s a good question. We do a lot of things. We have an affiliate program where we pay out 40%, which is pretty high in the industry. We give away cars. We’ve given away 14 cars in the last 12 months to our affiliates. We do a lot of cool things from there. We have a lot of cool things built into the software, so that when people create pages, they’re powered by ClickFunnels, people come through that. If your page has a little thing that says “Powered by ClickFunnels” and someone clicks on it, you get the affiliate commission.
So, a lot of viral things internally happening. But just like the word of mouth is growing. It’s funny because we get about between 200 and 300 new signups per day. We don’t where a lot of people were coming from. There’s no affiliate. They just show up and it’s awesome. We do buy ads. We’re doing a lot of stuff as well. But there’s a lot of organic growth that’s happening.
Andrew: Where do most people come from? Is it from the links on your pages? Is it something else the affiliates are doing? Is it the ads or is it just direct traffic?
Russell: I would say probably a third of it is affiliate-based. I would count the links and the pages and stuff because that all comes through an affiliate program. It’s been fun in our community, people that love the software, people built companies based on consulting with the software and using it. It’s like this whole other culture has been built beneath the platform.
One of my friends in the fitness industry, his name is Bedros. He does these huge events with fitness trainers. He’ll bring in 400 or 500 people in the room and they just build ClickFunnels for three days. He doesn’t put it through an affiliate link, just, “Get your ClickFunnels account and show up.” Then they’re building funnels.
Andrew: Because he’s charging them to learn how to grow their business and he’s recommending ClickFunnels because that’s the software that he uses and he likes?
Russell: Yeah. So, it’s been fun. This whole subculture has been built unearth it. It’s been this cool thing that’s growing despite–we’re trying to make the best product in the world, but it’s just been this fun, organic thing that I’ve never had happen in my career before but it’s been so much fun to watch it.
Andrew: I can’t get all the features into this short description, but we’re talking about the landing page that people see, the emails that go out afterwards, that’s you guys. The sales page is you guys?
Russell: Yeah.
Andrew: Upsell page also is offered by you guys. What else does a customer get that I left out of that?
Russell: The affiliate platform–you can run a whole affiliate program through ClickFunnels. The basic shopping cart–we integrate with Stripe and things like that. But for us, our entire company is run on ClickFunnels. So, everything from the second you hit our page until the rest of the experience is happening inside the software.
Andrew: Yeah. And there are other features like SMS messages that get to go out, etc. But that’s the heart of it. I’m looking at an old page of yours, actually not that old.
Russell: Uh-oh.
Andrew: You used to sell these CDs where like on the home pages we you with two fingers pointing towards where people should give their email address, right? On the CD is you pointing two fingers towards like where the center of the CD was so that people would know where to put into the CD player. That’s the kind of stuff you were selling. I didn’t know that the first thing that you sold was a potato gun. What the hell were you doing selling a potato gun?
Russell: It actually wasn’t even a potato gun. It was a DVD teaching people how to make potato guns.
Andrew: Ah, so you were an info marketer for a long time.
Russell: 100%. When I got in this business, it was over 10 years ago. I was in college. I came online and I saw people making money and I was just so excited by the concept. So, I was learning things and trying things. Info products is where I kind of found my first home. I didn’t have any skills or expertise to make info products except for potato guns. So, that was going to be my first try in the info product business was this DVD on making potato guns. It didn’t make me a millionaire. But we sold a couple thousand dollars a month of this DVD, which for me in college was like–
Andrew: A couple thousand bucks is significant, especially for something…
Russell: Oh yeah, I was the richest kid in college. It was awesome.
Andrew: What did your funnel look like real quick? Where did people come from? What’s the first thing they saw? How did you get them to buy?
Russell: So, it was very basic. It was back in Google PPC. So, we would buy Google PPC ads on “potato gun,” “potato gun plans,” things like that. They’d come to a page. It was a long form sales page just to explain the DVD. They would pay $27 for the DVD. That was it at first. It was awesome because I put a dollar in Google ads and make $2 or $3 back. But the problem is Google started getting smarter and started increasing all of our costs. I’m sure we’ll go through that.
Soon it wasn’t profitable. I didn’t know this at the time, but my very first funnel, I met these guys in Northern Idaho that made potato guns and drop shipped them. So, I was like, “I’m selling all these potato gun DVDs. How about I sell your guys’ premade potato gun kits as an upsell and you ship it out to them?” They said yes.
So, that became my first upsell, my first funnel was like a DVD and then the upsell was like, “Hey, do you want us to ship you for $100 a potato gun kit?” That became the first funnel and suddenly we were profitable on AdWords again because the back end thing was making money. That’s how this whole thing began. Anyway, the last ten years since then, I’ve been geeking out and figuring out other ways to make it even better.
Andrew: So, a lot of times when I look at people’s older pages, I don’t see their faces on it. I don’t see their names on it. Partially that’s a product of the way the internet used to be. You weren’t going to see the proprietor of the business on a website because they wanted to sound like they were machines only, you know. I do see you on the early sites, one something like DotcomSecrets.com. That’s one of your sites, right?
Russell: Yeah.
Andrew: Was that one of the first ones where you were teaching people how to build a business?
Russell: Yeah. It was. I had done a bunch of those things. When I first got started, one of the guys I was learning from, his name was Armen Morn. What’s interesting, every one of his sites, there was a picture of him in his suit and tie. I was like, “He’s really successful and he always has a picture.”
It’s funny, like I got a suit and tie. It was so not me now. I haven’t worn a suit a tie in forever. I did that, got the picture and my first sites would have me. I had a shaved head back then. So, I had a suit and a tie and a shaved head. That’s what he did. So, I’m a big modeler, I’m going to kind of model him. That’s kind of why I did that. It’s funny looking back now. I’m kind of embarrassed you’re even looking at the page.
Andrew: You look like you had like five pounds of baby fat, just like a little bit of baby fat on you, right?
Russell: Yes.
Andrew: Is that insulting that I just said that?
Russell: Not at all. I was a college wrestler. I got in college right when I started my business. Going from wrestling every single day to like not and just being at a computer, I blew up probably 30 pounds after college. So, I’m like round and pudgy in all those.
Andrew: But I see your wrestling photo here. You look badass as a wrestler, like you could rip my head off. I think actually the photo here, are you pushing somebody’s head right off their shoulders or something?
Russell: That was the goal. Yeah.
Andrew: So, you’re building all this stuff. Were you making money with it?
Russell: Oh yeah. It was funny. In college I made the potato gun site. I had a couple of little ones like that. About that time is when people started asking me what I was doing. So, I did like little workshop where I had my friends and family come and a couple people who bought tickets, just a bunch of little projects like that. But within a year of graduating from college, I was tracking like how much I’d made.
A year out of college, I had made $1 million gross sales. So, I was making money at that time. I didn’t have any costs. It was my wife and I and a computer. I had one of my friends in Romania who was doing programming for us for a couple bucks an hour. That was the whole business. Everything we made was pretty much profit outside of the ad cost.
Andrew: That’s such exciting times, huh?
Russell: We would learn like the littlest thing. The whole thing where we added an upsell to the potato gun thing–we literally doubled how much money we made by having one little page. We were going crazy and I was so excited. There was no one around me. There was no podcast back then. There was no one to talk to. I was just like, “You guys, this is so exciting.” I wanted to share, but there was no one to talk to about it.
Andrew: What year are we talking about there?
Russell: I started 12 years ago. About 10 years ago was when this was happening. What year is this right now?
Andrew: 2016. Actually, 12 years ago, according to LinkedIn, Dotcom Secrets was 2002.
Russell: Yeah. That’s about right.
Andrew: Then you had the potato gun business before that. You’re right. There wasn’t really a community to talk to anybody about it back then. There might have been a few shady forums, but that’s not where you wanted to live.
Russell: Those shady forums were interesting. Yeah. You’re 100% right. I did my first event because I just was so excited. I’m like, “I’m going to talk about what I’m doing because I’m so excited, so if you guys want to come.” That was the first thing. There was this little community of people that actually cared what I was talking about and we all kind of geeked out together and it was so much fun.
Nowadays it’s fun because there are so many more people and the community is grown. I can listen to you interviewing the most amazing people in the world. We didn’t have that back then. It’s definitely evolved and it’s pretty cool where it’s come to.
Andrew: So then what’s this problem that you had creating your sales funnels?
Russell: So, what we were doing is we were in a whole bunch of different markets back then. We were in the dating market, the weight loss market. We had a diabetic neuropathy supplement. We did a whole bunch of things. I never wanted to be the internet guy who just taught internet marketing. I wanted to be a guy who was doing it.
Andrew: Who’s we?
Russell: What’s that? Me and my team, the people that hang out here every day with us.
Andrew: But you owned the company 100%? You didn’t have a cofounder even?
Russell: The Dotcom Secrets business I have 100%. ClickFunnels I had two cofounders.
Andrew: Okay. And these other info product businesses and the supplements businesses and all those other companies you’re talking about, did you have any cofounders there?
Russell: No. I consider guys partners, but on books I was the only owner of them.
Andrew: I’m just trying to get a sense of how alone you were in building all this and what kind of support you had. All right. So, you’re doing this. You have a good support team around you. They’re able to build out your funnels. What’s the problem?
Russell: Yeah. We had a team of about eight people. I’m not techie by any stretch of the imagination. I have a good eye for design, but I don’t know how to design. So, I had a really good team of designers and programmers. So, we’d have an idea, “Okay, we want to do a supplement.” I would kind of coordinate it all, “Okay, designer, design this. Copywriter…” I’d write the copy. Someone else would do the tech side.
But it would take us on average–we were pretty good at, even towards the end–it would take us on average about three months from like idea to be able to launch a sales funnel. That’s like–we were a good team doing it. I was trying to show other entrepreneurs how to do this and I’m like–there’s not much hope for someone else who doesn’t have a team and all these things. I’m like, “How is this even possible for people to be successful.
That was the frustration for us is it took three months to launch a funnel, which the supplement company is a good example. We bought the supplement. It was sitting in a warehouse gathering dust. I’m like, “We need to sell this thing.” We couldn’t because the tech things weren’t working and the shopping cart and the one-click upsell and like all the things that keep us entrepreneurs from being successful were always in the way and it was so frustrating for me.
All of our funnels look similar. There’s a similar process behind all of them. Like how in the world does this take three months to do? We’ve done this over and over again. But it always would.
Andrew: I see. Tell me if I’m wrong. But I feel like if you were to do it for yourself, you might be blind to all those challenges, but by showing other people how to do it and dealing with their frustrations, you couldn’t ignore it.
Russell: Yeah. It’s heartbreaking. People come to you like, “I’m going to change the world with this product.” Like, this is a great thing. I’m like, “This is what you need. You need a landing page. You need a sales page. You need a shopping cart…” Their eyes glaze over.
Andrew: You know where I had that issue?
Russell: Where’s that?
Andrew: Noah Kagan–do you know him?
Russell: I’ve never met him, but I know who he is.
Andrew: He did this thing where he rented a house in Napa and he sold tickets for people to come there and just kind of work together with him and learn from him and he invited some of his friends to come hang out there. I was one of the people who invited out. He said, “Andrew, come out for an evening. We can work together with the group of people here. We can go out and have interesting dinner. It was such a good time.
After we had a good time that night, the next day I said, “Let me help you guys. Since I’m coming here for free, my goal is to help you.” This one guy who had something to sell, I said, “All you have to do is get a domain,” this was a guy who was really starting out. “Get a domain and let’s create a landing page, now let’s create a MailChimp account.”
Dude, those three things, we’re not talking anything super clever, just basic, basic things took forever. I realized that the stuff that I do kind of automatically it’s hard to explain to someone. Like how do you go get an API from MailChimp to get the landing page software? How do you explain where that is, even? Even MailChimp, starting up with it, which is a really good intuitive software was just a lot of trouble.
What I’m saying is by working with him, I realized the problems that I was ignoring myself, that I was blind to. That’s the issue that you said we can solve this. Did you say we can solve it for ourselves first so we don’t have to go through this or did you say, “We’re going to solve it for ourselves and eventually start a business around this?”
Russell: So, it was a little bit of both. What happened, one of my cofounders’ names is Todd Dickerson. He lives in Atlanta and we’re in Boise. So, he would fly out once a quarter and we’d brainstorm like how we were going to try to take over the world, right? So, one of the trips out there, we started talking.
It was after we launched the supplement and it was running and really successful and we’re like, “That took a long time. How do we simplify this process?” And I was like, “Is there any way we can build something that takes the core concepts we do over and over again and makes it simple and replicated?” He’s like, “Yeah, we could probably build something like that.”
So, we sat down literally for a week in front of this huge whiteboard in my other office. I was the entrepreneurs like, “This is my dream. I want to do this and this.” And he’s like, “Yes, we can do that.” I’m like, “I don’t know if we can do that, but yes, we can do that.” We sat there for a week building our dream business, like what we would want. That was the initial thing. I was like, “We’re going to actually build this, not only will this solve all our problems, but if we do it correctly, this will change the whole market. It will give people the ability to do in days what used to take months.”
We got excited and Todd, he’s the most brilliant programmer I’ve ever met. He flew back home to Atlanta. He sat behind a computer and he started coding and started building the back end infrastructure.
Andrew: He built the whole thing?
Russell: He built the whole back end infrastructure. So, how everything worked–it was kind of an interesting story. So, he built the whole thing. But you know how most programmers are. They make things that work but they’re ugly as can be, right? We’re like, “The user interface isn’t intuitive or good looking or anything. People aren’t going to use it if the user interface isn’t good.”
So, I remember one night we were literally on Dribbble.com searching through profiles trying to find a UI person. We found like the most amazing designers. I worked in the past a bunch with this one designer who’s brilliant. But he kind of like–a lot of designers, a lot of them, they’re brilliant. They do something. They make a much of money and then they take a month off to do… I don’t know what designers do. But that’s how they work a lot of times. They’re very creative and they just do that.
In the past I worked with this designer named Dylan Jones, the most amazing designer I’ve ever seen. But he kind of disappeared off the face of the plant and I hadn’t heard from him. So, that night we were looking at Dribbble trying to find a UI guy. All of a sudden on Skype, Dylan pops up. I messaged him like, “Hey man, you around?” He responds back, “Yes.”
I’m like, “That means he probably needs some money,” because he never responded back to me if he did. I’m like, “Do you need a project?” He’s like, “Yeah, man, do you have anything?” I’m like, “Yes, we’re working on this thing. What would it take to fly you to Boise and build this user interface for this thing we’re building called ClickFunnels?” And we explained the concept to him.
He came back and he’s like, “I would love to, but I spent the last six years building a website builder.” He’s like, “I put my brain, my whole life and soul into this thing.” He’s like, “I would be competing too close to you guys, so I can’t.” I’m like, “I understand that, but I know you need money. You have a blank check. Whatever it takes, we know you’re going to be competing with us in the future, but we need you to help.”
Finally, he gave me a number. We flew him to Boise and he built the initial user interface for ClickFunnels. Then he flew back home. Todd finished connecting the user interface to the back end and we launched our beta launch. This is about two years ago right now. We did our first initial beta launch. People came in and started using the software. It was good. But about a week into our beta launch, people were using it.
Then Dylan sent me this video like, “Hey, I just finished my website builder. You should check it out.” He sent me this video. It was like a 60-second long video. I watched this video probably 200 times. It was this thing where you take the page and you can drag and drop things and move things. You can build–literally any website on the internet I could build it in this editor. It was so simple I could have even done it.
I remember watching this video over and over again and being so depressed like, “I don’t even like ClickFunnels because this editor is so much better than anything we’ve ever dreamt of.” I showed it to Todd and he was so depressed. I’m like, “We have to get Dylan on board to be a partner, otherwise I don’t even want to do to ClickFunnels anymore.”
So, we got on the phone with him, begged him for a couple hours. Finally, he agreed yes. He flew back out to Boise. Todd flew to Boise. Him and Dylan spent the next two weeks of our beta launch merging his front-end editor he spent six years building with our back end ClickFunnels and it became what ClickFunnels is today. So, Todd and Dylan are my two cofounders. Those two built the whole infrastructure initially and they are just the most amazing partners and developers in the world.
Andrew: I wonder how you knew what to put into that first version. I’m always fascinated by that. Let’s come back to that in a moment, though. First I’ve got to tell everyone about a sponsor that you told me before you actually had some experience with. The company is called Toptal. They’re a network of developers. Russell, what’s your experience with them?
Russell: So, when we were building ClickFunnels, Todd and Dylan built the initial thing and then we needed more developers. It was really hard to recruit developers. One company we’d reached out to was Toptal. I think they gave us two developers, one that worked for a while and one that still works for us today. So, we still use them.
Andrew: Why’d you go to Toptal? Why didn’t you just go back to your developer and say, “Do you have a friend?” Why didn’t you find a headhunter? Why didn’t you put some ads online?
Russell: We did. We actually did get a headhunter. Our program is all built in Ruby. PHP and things like that is so easy to find developers. Ruby, the supply and demand train is hard. So, it’s hard to find really top tier guys, especially guys who don’t live in California, wherever it is, that are okay working remote.
It was just at the very beginning, we were trying to find anyone that was good. We did find one recruiter her did find our now CTO. I know that he has actually recruited a couple people through Toptal and then we found one guy through Toptal as well. So, they’ve just been great partners for us.
Andrew: I see. And with Toptal, I always say you can hire someone full-time, part-time or on a project basis. You could hire a team of people. But what I don’t mention is you can keep paying them through Toptal forever, or you could do what you did. Apparently you told Toptal, “I want to hire this guy and just work with him directly. Bug off.”
Russell: Yeah. That’s part of the contract. You can buy the person–I don’t know how that works–you buy them out of the contract. You find a rock star through them and you want to bring them on your team, you can do that as well.
Andrew: I always thought that would make the most sense, but then I talked to someone at Toptal and they said, “There are some people who actually have big teams and don’t want the headache of hiring and firing. They don’t want the headache of paying someone. They just want the person to work with them without all the legal bureaucracy that goes into hiring them.”
Russell: Yeah.
Andrew: Cool. If anyone is listening to me and wants to try Toptal, they should check out Toptal.com/Mixergy. When you go to that URL, you’re going get something that unfortunately Russell didn’t get. You’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours. That’s in addition to a no-risk trial period of up to two weeks.
We’re really talking about a situation where they want you to be happy. They will spend time on the phone with you like they did with Russell making sure that they understand what you’re looking for, what you want to work with, how you work with your developers and then they go find you the right person and they give you that no-risk trial period to make sure that it is the right person and then another 80 hours of developer credit after you pay for 80 to really lock in the satisfaction.
They want the Mixergy audience to be their biggest, biggest fans. So, I hope you go sign up and then do what they’re expecting and I’m expecting, which is stop spreading the word about this great company–Toptal.com/Mixergy.
You were mentioning how you went to a whiteboard and you said, “I think it should do this, this, this, this, and this.” I’m wondering how you knew which of those features to include and which ones to back out. You got a mess of features today, but you didn’t start out that way. How did you know what to include?
Russell: Yeah. So, initially when we first mapped it out, we kind of broke it down there were three core things we wanted to do inside of ClickFunnels. We even gave them little names. The first is ClickFunnels, which is the ability to build funnels. And then we know that after the funnels were done, we wanted to be able to have a shopping cart and affiliate system.
Our next code name was backpack. That was going to be the affiliate platform. The third thing was like it would be cool to have email auto-responders and text messages and be able to have smart funnels that can change on the fly. That was our more advanced feature set, so we called that actionetics. Those were kind of the three things we wanted.
Like you said, we don’t start with everything. That was the big thing to try to tackle. So, initially, we want funnels. We just wanted something–all the sales funnels we’d built over the last ten years, there were so many similarities, right? There were probably maybe a handful of different types of funnels, but besides that, things are very similar consistently.
Obviously the design changes and things, but they’re pretty similar. So, that was our biggest focus. There are so many page builders on the market. As you know, there are tons of them. I don’t think the world wanted or needed another page builder. We wanted something that was like the next level.
Andrew: So, what are you talking about? You needed to have a one-page landing page with an email opt-in.
Russell: Yeah.
Andrew: And then after that what else did you want?
Russell: The next page is we wanted to have a sales page, so selling your product or service.
Andrew: Okay.
Russell: Typically after somebody buys something–for us, a lot of our marketing, we sell really low ticket things. I have my book that we sell. It’s free. You just cover shipping and handling. So, it’s very low ticket just to get somebody in the door. They buy the book. But then the next page, we’re like, “You bought the book. How would you like our traffic course for $200 and have the ability to one-click upsell?”
Andrew: That was all going to happen in the same flow?
Russell: Yeah.
Andrew: Sorry, what happened after that?
Russell: Then after that, the membership area has the download links to all the things they bought. So, just something that would encompass what we had and like 98% of all of our sales funnels were pretty similar. We needed something that would create those really fast and really easy.
If we could do that, I was like then for us internally, that’s two of the three months it takes us just to build that piece. If I could click a button and those pieces are done that fast, I saved myself two months. Now we’ve just got to do the polishing and the copy and the video and all the little pieces that you need kind of towards the end.
Andrew: No email, though?
Russell: At first we didn’t do any email, no. We focused on integration. As of right now, we want to be the best funnel company in the world and we’ll let other people worry about the email. So, we integrate with MailChimp and AWeber and all the major auto-responders. That’s how we launched initially. We didn’t have any kind of shopping cart ability at first. It was just pages and you’d have to link to some external shopping cart.
Andrew: Oh, really? That wasn’t your shopping cart?
Russell: At first it wasn’t. It is now. So, now we built our own internal that integrates with Stripe and Braintree, things like that. Initially it wasn’t. It was just funnels and then you get a link out to external order forms.
Andrew: I see an old image from your site. It says, “Squeeze page to sales page to order confirmation page to download page–we take care of it all.” That’s the thing that it was and then all these different integrations, like you said, for different email providers like MailChimp, AWeber and even Mad Mimi. All right. Now you’ve got your whole–actually, how did you know what features? Were you thinking mostly about yourself or were you thinking about your clients who were getting training from you about how to start a business?
Russell: So, it was a little bit of both. We’ve listened very careful to customer feedback. But at the same time, I think there’s a quote from I think it was Henry Ford that said, “If I would have listened to my customers, they would have asked for a faster horse.” We understood like people kept asking, “We want a page builder that does this.” We’re like, “That’s good. You’re missing the right thing.” We kind of had a vision of where we wanted to go based on our experience of doing it so many times.
Along the way we listened to people as well. The whole shopping cart thing was coming out of people saying, “Everything is here. I don’t want to leave for this integral piece of the funnel. I don’t want this part of it.” So, it’s kind of a blend of that. A big part of it is definitely like we have a vision of where we want to go. We’re not there yet. We’ve had a couple of offers already to buy the company.
Our response has been in our mind, there’s a vision for where we’re going. We’re probably 60% of the way there. We’re having so much fun that it’s not even something that until we feel like we’ve completed our vision, it’s not even interesting, you know what I mean? That’s so much bigger for us than any of the money or other parts that come with it.
Andrew: All right. So, let’s talk about getting the first users. One of the first things you did was email it to your audience, after it was built?
Russell: Yes. So, I have my own customer list of entrepreneurs that we’ve been working with for a long time. So, that was the initial beta launch. We opened it up–I think we had the signup process open for like four or five days. We said, “This is a new tool. It’s going to be amazing. But I’m sure it’s going to be really buggy. Come on in and let us know your thoughts.”
So, we opened it up for free. They had to put a credit card in, but we didn’t charge for–I think the first one was like 60 days or something just so they could come in. So, we opened it up and I think we had a couple hundred people that came in and then we shut down the doors just to see what happened. This is before Dylan had given us the front end editor, so there were all sorts of–it wasn’t pretty.
Andrew: You mean creating a webpage was ugly?
Russell: Yeah. You couldn’t move things around. You kind of had templates where you could tweak things, but you couldn’t do anything. People’s feedback was like, “It’s kind of cool, but…” It wasn’t like the big pow initially that you need to have something really take off. That was kind of the initial beta launch. That was about two years ago right now.
Andrew: Okay. I do see this page here on your site that says, “It’s too early,” this is an old page on your site. “Enter the contest for the chance to win free access during our private beta.” At what point did you have that?
Russell: That was probably right before the beta. I think we were trying to get some buzz and get people excited on our list. I kept mentioning it. I have a podcast and a couple things. I’m like, “We’re building this thing. It’s called ClickFunnels. It’s going to be awesome.”
So, we were just talking about it. It’s kind of hard to remember now because it’s such a whirlwind. I think we did do that ahead of time, like, “Go opt-in to the beta and have a chance to win a lifetime account.” I think we gave away six lifetime accounts, maybe four, during that initial beta launch when we got people in.
Andrew: You told our producer your initial internal goal was 10,000 members. You thought it’s going to be so easy to get 10,000 members. You actually from this beta launch got–do you remember how many people?
Russell: It was a handful.
Andrew: Yeah. Actually, 1,200, which is not bad. But not all of them were paying customers, right? They were at least trying it out. The software didn’t work. You had a lot of attrition. You went from 1,200 to–do you know how much?
Russell: A lot less.
Andrew: I’ve got here in my notes 200 users ended up sticking.
Russell: That sounds pretty accurate. Yes.
Andrew: That’s really painful.
Russell: Oh, yeah. I feel like we’ve created this thing–in the beta, we had the new editor and it was like amazing. I feel like we’ve created this thing that I would have given anything for. We were only charging people hardly anything in comparison to what we were giving them. I was like, “Why are you guys leaving? Do you not understand what we’re creating and what we’re trying to do?” It was so confusing to me. It was emotional for all of us. We did the beta launch and closed it down and then we did another launch. Very few people adopted it.
Like you said, we had this goal when we reopened this, it’s going to be 10,000 the first week. That was our number we had on the board. We were like celebrating based on this thing. It didn’t happen. It was like, “Man, I don’t see what we’re missing.” It’s funny during those times because you start doubting yourself, like, “Did we create the wrong product? Are we too early? Is this not what people want? Do they not understand?” It was just kind of this confusion.
Andrew: How did you answer all those questions that were in your head?
Russell: It took a while. It’s one of those things that like emotionally it was really tough on me. I know for Todd and Dylan I think it was the same way because we put so much of our time and effort into this thing. I don’t think we had answers. I think it was just more confusion. We’re good split testers. I’ve written a whole book on split testing. We were split testing variations and upsells and tweaks and offers. It seemed like no matter what we did it was kind of like crickets, like, “Okay, we’re still not interested.” It was tough.
Andrew: Did you talk to them?
Russell: Well, we talked to the people who signed up and they were just like, “This is amazing.” But the ones who don’t, it’s harder to talk to them because they’re giving you the information. I think there was a lot of resistance.
Andrew: It’s really hard to get people who cancelled to get open about why they canceled.
Russell: Yeah. They feel bad about it. The ones you talk to are just like, “No, it’s fine.” And they blame it on themselves. “You can tell me. It will be okay. We really want to know so we can fix this.” I think the biggest reason looking at cancellation reasons is I don’t think people understood it. In my head, I look at the world in funnels. I have for ten years. With them, people don’t look at the world through that lens.
So, it was funny. What made us change and explode was all about education, like front-end education, like explaining and showing people through webinars like what a funnel is and why it’s important. As soon as people got that piece of it, then the next thing was like, “I understand why this is the most important part,” and then it’s like, “Well, how do I do this?”
There’s only one option. There’s no one else that has software that does anything even remotely close to this. So, as soon as you’re sold on the concept of, “I need a funnel,” and this is the most important thing, then we were really the only solution. So, that education piece is what turned it around for us. I think I assumed that people knew that and then nobody really did. As soon as we started focusing on the education, that’s when it turned a corner for us.
Andrew: And you kept going with failed attempts at selling for a long time. From what I understand–this is from your conversation with our producer. The way you realized that education was going to be the answer was you went to speak at an event and what did you speak about and what happened there that led you to realize, “Hey, we need to do more education?”
Russell: Yeah. So, it was one of my friends. He was one of the first users that clicked on it. So, he loves it. So, he was putting on an event.
Andrew: Who’s this?
Russell: Mike Filsaime.
Andrew: Mike Filsaime?
Russell: Yeah. He owns a company called WebinarJam.
Andrew: Oh, yeah. I know WebinarJam. Okay.
Russell: Yeah. So, Mike was like, “I’m doing an event. You’ve got to come speak at it. I want you to sell ClickFunnels.” I was like, “Nobody’s buying ClickFunnels and we’re giving away free trials.” I didn’t know what to do. He’s like, “Well, your picture is on the website, so you’ve got to come and speak.”
So, literally it was a three-day event in San Diego. I was supposed to speak on Saturday and it was Thursday. I was watching it streaming from my home computer. I’m watching this event. I’m jumping on a plane tomorrow to speak to these people about ClickFunnels and I don’t even know what to say. I’ve written webinar presentations in the past.
I sat down and kind of followed the process I’ve used in the past and created this webinar presentation. I had no idea if it was going to be good or bad. It explained this process. In our community, we call it funnel hacking, where if I want to be successful in the market, I’ve got to find somebody that has a successful sales funnel. I buy their product. I see what their process is and then we can model it and make our own thing, so modeling their process.
So, we talked about funnel hacking. I showed, “This is how we did it.” I talked about my supplement, which at the time before I sold the company was making about $500,000 a month. That supplement didn’t succeed until I found someone else who was selling a successful supplement and we modeled their process. I showed how we did that and I should how on ClickFunnels how you can build out a whole funnel in literally 20-30 minutes and I showed how we get traffic to these funnels.
So, that was the presentation and then I made a special offer where they could get a year of ClickFunnels for $1,000. I finished the webinar that morning. I jumped on a plane. I flew to San Diego. I got off. I walked in the room. I handed them my USB drive. They plugged it in. I walked on stage and I was like, “Okay, let’s see what happens…” And I did the presentation and I taught the funnel hacking.
I talked about cloning. I talked about this process we do in our company. At the end we sold the $1,000 a year version and 38% of the room ran up and sprinted to the back. We had people jumping over each other. I had heard about people that had table rushes happen at events. I had never seen one like that. I was like, “I think we’re onto something here.”
So, that worked really well. And then what was interesting is after the event was over, this lady came up to me. In my presentation I shared examples of my supplement funnel. She came up and she was like, “That ClickFunnels sounds cool. I’m not selling a supplement, so it won’t work for me.” I was like, “Wait, you don’t have to have a supplement for ClickFunnels. You could sell anything.” I’m like, ‘What do you sell?” She’s like, “I’m a coach.” I’m like, “I coach people too.” I showed her, “Here’s my coaching funnel that I built in ClickFunnels.” She was like, “Are you serious?”
She’s like, “I thought I couldn’t use this because I’m not selling supplements. I’m like, “No, it works for you.” I listened and I was like, “Okay, my presentation, people thought they had to have a supplement.” On the flight home, I took my PowerPoint slides and I added in, “Hey, this works for info products and supplements and ecommerce products.” I showed different examples of other things that I had done.
So, I wrote that and I got home the next day or next week and one of my friends had heard that the presentation did well and he had a big email list. He said, “Would you do that presentation to my audience and sell them ClickFunnels?” And I was like, “Sure. It worked before. Let’s try it.” So, he promoted this webinar to GoToWebinar. We got online. I did the presentation. Same thing. We did over $100,000 in sales form a webinar. And then later that night I did a webinar to my own customer list doing the same presentation and we closed like $150,000 sellers from that.
So, we’d did like $250,000 in a day off two webinars. I was like, “We figured it out.” I started calling everybody I knew who had ever done a webinar or who had any entrepreneurs on the list or anything and I’m like, “We have a webinar that’s hot, that’s working.” We started lining them up. We were doing two or three webinars a day for almost a year. It was a lot of work.
Andrew: It was you doing the webinars yourself?
Russell: Yeah. I was doing all the webinars myself. One interesting piece that was like the key to this whole thing because only a percentage of people buy on the webinar, but what we did is the webinar funnel, like someone registers for the webinar and on the thank you page, we say, “Before the webinar, you should get a ClickFunnels trial to see what we’re talking about and when you show up, you’ll be prepared for the webinar.” So, a huge percentage of people go and get the free trial when they show up to the webinar. The majority don’t. So, what happens, for every single person who bought a year account on ClickFunnels, three people were signing up for the trial.
So, if you look at over the last year, we sold a lot of yearly access, but we had three times as many people trial. That’s where our initial sales came from the year, but our long-term sales have all come from this recurring revenue that’s been built up because of these webinar funnels. Using those two things together is what helped ClickFunnels explode.
Andrew: I see at some point your homepage started to feature not even the trial–not even a big button that says, “Try It,” but a big button that says, “Register for the webinar.” I remember that’s when I was evaluating the software. I was like, “I don’t want the webinar. I just want to know what it does right now. Let me try it. Let me play with it.”
Russell: There’s a story behind that that’s really funnel. I feel like now we have a long form page with all the features and benefits and stuff. But this is painful for me as someone who split tests. One of our split tests I did, Todd had this idea, I think. He’s like, “What if we split-tested our webinar registration page with our homepage?” We did that. And trials did not drop at all, but we added $70,000 a week in revenue by having the webinar registration page as our homepage.
So, we kept it there for about six months. It made us way more money, but exactly like you said, a lot of people were frustrated because they couldn’t see what it was. So, finally we changed it out and we lost some revenue in exchange for that. It was just one of those tests to work and we’re like, “Dang it. I did not want that to work, but it did.”
Andrew: Yeah. I can see how it would work. There is a free trial link. I must not have noticed it at the time. I love the headline. I could tell the headline was working for you. I could tell the whole layout worked for you largely because you’re ClickFunnels, of course you’re going to test using your own software. And because look at what the headline said, “Free Training webinar reveals,” that’s’ small letters. And here in big letters, “My weird niche funnel that’s currently making me $17,947 per day and how to ethically knock it off in less than ten minutes,” and a big button that says, “Register now. It’s free.”
Russell: That’s the title of the webinar. In that webinar, I show my supplement funnel and those are the revenues it was doing during that time. We show the funnel and we show how they can knock it off in ClickFunnels and that’s the magic.
Andrew: I forgot what your answer to this. Were you personally doing all these early webinars yourself?
Russell: Yes, I was.
Andrew: Why? Why didn’t you bring someone else on?
Russell: A couple of reasons–number one, that’s my role in the company. I’m the CEO, but more so I’m the sales person. Like Todd is a back end developer. Dylan is a front-end developer. That’s my role. I’m good at selling. I’ve been selling from stage for over a decade and that’s one of my specialties that I brought to the table. So, I did that. Plus, every time I do the webinar, just like I told you when I left the event, the ladies told me about the supplement thing, I tweaked the webinar.
At the end of every webinar, I read all the comments people give me in the chats and I tweak it and I tweak it and our conversion gets better and better and better every single time. I think year one I did it, I think it was 40–I think the last one was 47 times I did it live and it just worked like crazy. In fact, I did it today right before we jumped on live. We closed 18% of people live.
Tomorrow I have one with Entrepreneur on Fire, doing a webinar to their list. JLD’s won a car from us. I’ve got it so dialed in that I know exactly what the conversion rates will be based on who shows up. So, as soon as we know how many register, we know exactly almost to the dollar what’s going to happen. That’s the unique talent I think I bring to the table is that. I’m not a coder. I’m not a tech guy. I’m a super-fan of the product. I use it more than anyone. That’s kind of my skill set is to be the person who sells it.
Andrew: And the way the market works is all these people who are sending you people to the webinar split 50/50 all the revenue that comes from it.
Russell: 40. So 40% goes back to the affiliate, yeah.
Andrew: I see. I guess it depends on who they have the deal with. The same thing even with Mike. When you flew out to speak at his conference, when you talked about your software and then sent people to the back of the room, they ended up signing up and then you split the revenue with him, right?
Russell: Yeah.
Andrew: All right. Second sponsor and then I want to continue with how you built it up because now we finally figured out what was going to work, growing it was a challenge too. The second sponsor is software called Acuity Scheduling. And here’s the way Acuity works. Actually, you used it because it that’s the way that’s the way you and I now booked to do this interview.
Russell: Okay. Yes.
Andrew: In the early days, I used to email people and say, “Can I do an interview with you at 2:00 at Thursday?” I’d just shoot them a time. That was helpful because often they’d respond back, “No, I’m busy.” What are the odds that the day and time I give them, they’re going to be free? But the fact that they say, “I’m busy,” meant that at least that got some engagement and now we can work out a time. It’s not a big deal.
The challenge with that was that it went back and forth too much and I’d often lose people. And then I discovered this software back when it was really crappy–it was effective, but it didn’t look as beautiful as it does now–called Acuity Scheduling. I started using it. Instead of sending an emails saying, “can I interview you at 2:00 on Tuesday?” I would say, “Can I interview you? Here’s my calendar. You can pick any date that works for you.”
Suddenly, more people actually said yes to doing interviews with me. I didn’t change. It’s not like I became more popular and they were saying yes, not overnight anyway. It’s not like I changed anything else about the emails. I’m pretty formulaic. I’m very systemized. It’s just making it easier for them to book a time with me by letting them click and see my calendar increased the number of people who said yes to me.
Since then, these guys at Acuity Scheduling added so many extra features. Now I can actually pick when I want an email reminder to go to them. I could SMS remind them. When you signed up with me you got a calendar link so that it was automatically on your calendar. You’re very responsible. But there are other people who kind of fly by the seat of their pants. They don’t remember what they agreed to do.
The fact that they get a calendar invitation immediately after they pick a time means that they’re going to add it to their calendar and then Google Calendar can help remind them–I was going to say nag. But it can help remind them. The emails help remind, etc. That’s one of the beauties of Acuity Scheduling. If anyone out there is listening to me and actually wants to get meetings with people in person, on the phone, anything, what you want to do is make it easy for them.
That’s what Acuity Scheduling does. It makes it really easy for them and for you to book times with you and you get to ask people question afterwards, like I asked Russell or the software did, “What’s your Skype name?” So, then when I sat down here, I didn’t have to worry about learning a Skype name. It was right on my calendar because Acuity Scheduling put it on there.
Tons of integrations–I can add Russell to a special mailing list of just interviewees. I could connect him to my CRM. I could do all kinds of stuff. But the beauty of the simplicity of Acuity Scheduling is that it makes it easy for people to book with you. Go check them out. If you want, they’ll actually give all Mixergy listeners 45 days free to try it out. Go to AcuityScheduling.com/Mixergy.
Russell, what do you think of that name, by the way, Acuity? I’m wondering if people even know how to spell it. Can they hear the word Acuity clearly?
Russell: I know. Is it a C or a Q?
Andrew: Right. It makes it really hard for a podcast.
Russell: I hope they bought both domains so it can redirect based on however you misspell it. I always do it with ours.
Andrew: Right. Acuity is actually AcuityScheduling.com. I’m going to try it with a Q. Yeah. They got it.
Russell: You wondered that before. That’s awesome.
Andrew: You really have to actually think through all the stuff. I actually have the name Mixer and the letter G because some people think I’m saying MixerG, like G as a mixer, the letter G. You’ve got to be prepared for it.
You now had your whole formula. What did you do to tweak the product, to go from having this product that was a simple version of what you had in mind to get it to actually be what it is today, which seems to encompass everything. I feel like you’ve got email. You’ve got shopping cart. You’ve got landing pages. You’ve got SMS. You’ve got so many different tools. In fact, one of your feature pages shows, “Here are all these other companies and here’s how we do what they do for the same price,” like one price gets you all of their features.
Russell: So, at first, like I said, we had this vision of ClickFunnels, Backpack and Actionex. These were like our future things. The first thing was like we’ve got to define ourselves as the best funnel builder in the world. Year one, that’s all we focused on. Then at our year mark, we started adding in this other feature sets that they were kind of building in the background.
That’s kind of where from a feature set standpoint, there was nothing big or new coming. Like, there are improvements internally. That part of the vision has been done. But what we weren’t really thinking about initially was what happens when everything grows and starts scaling, right? I remember Todd told me, “We should be able to handle 10,000 active members without any flaws or hiccups.”
Little did we know that our initial goal was 10, 000 people the first week, which didn’t happen. Then it took us about a year and within a year, we hit 10,000 people. Almost like clockwork, these weird little things started happening. I’m not a tech guy. So, I didn’t have a chance to be behind the scenes. But I had a chance to be the front as some of these little hiccups and headaches started creeping into the software.
Luckily we had found a new person who’s now one of our partners. His name is Ryan Montgomery. He came in and become our CTO and has built an amazing dev team behind us. As we were growing, all of a sudden that started happening and we were like, “Why are these little things happening?”
Little issues that started happening. They started looking at it like, “We’re outgrowing the database servers we’re using.” We’re outgrowing all these things that started happening as this growth started happening way faster than we expected. So, that was kind of the next phase of this was like, “How do we make this so stable we can have 500,000 members without any issues. That was kind of the next challenge we ran into as a company a little over a year in.
Andrew: You did have a problem with your database. You flew out to London and you suddenly–was it when you landed that you saw the problem?
Russell: Yeah. So, I was taking my family and we were flying to London to speak to a bunch of entrepreneurs out there about ClickFunnels. So, I’m in the plane flying across the ocean with my family. I brought my wife and my kids, amazing experience. We land. You don’t have internet initially. I quick to try to make sure everything is good. I started seeing messages on Facebook and Skype and everything blowing up that we’re done, like, “What does that mean?” We’re racing to the hotel trying to get in there.
It turned out the database server company we used in the past had kind of like handcuffed us. We were trying to move over to Amazon’s Aurora, I think it’s called, their high-end database servers. This company handcuffed us like, “No, we won’t let you leave. If you do leave, you’re going to be down for a day to two to be able to migrate everything over.”
Then all of a sudden the databases and the backups all just crashed. I guess that like on the timeline, they said to restore the databases, they said it was going to be like a 24-hour thing. It ended up taking three weeks before this database server had been restructured. We would have been down for three weeks.
Luckily our CTO and Dylan, these guys are geniuses. They saw that. They went to Amazon Aurora servers and rebuilt the whole database structure, migrated everything over. We were down I think for about six and a half hour or so. So, I’m sitting there in London not doing anything. Everyone is freaking out. ClickFunnels is down. My sites are down. I’m losing money. Everyone is losing money. Everyone wants to kill us. I was just like, ‘What do you do?”
As the leader in this situation, do you try to ignore it? Do you blow it off? This is my first time as a real CEO. I don’t know the right thing to do. All I remember is how pissed I was and I thought, “I’m going to let our community know how upset I am because I don’t want to try to hide this and so I got my iPhone out and I’m sitting in the hotel room in London, I’m tired. My kids are going crazy.
I just told everybody that it was unacceptable. I was mad. Everything was unacceptable. We were pissed. This was not okay that this happened to us and to you guys and everybody. I made this video. I posted it in our Facebook group. We had at the time about 10,000 people in our Facebook group. I posted it and I said, “This is what’s happening. We’re sorry.” I didn’t know what was going to happen. I didn’t know if people were going to be mad at me or whatever.
What was interesting was from that, we ended up getting 500-600 comments of people saying, “We understand. We’re here to the long haul. I don’t care what happens. We’re here through thick and thin. We’re with you guys. We’re praying for you guys.” Even Stripe who’s our merchant provider, they sent us this huge gift basket in the mail, like, “We’re here. We want to make sure you guys…”
All this stuff, it was like this really weird rallying of our community that everybody came together and like supported us. It was the coolest thing in the world and then six hours later, we were back up and everything was functional. All these little hiccups we had been having over the last two or three months–we found out later it was because of the database server. We moved it over, it was done. All the issues were gone. Stability was perfect.
We were looking at our log like, “If we’re down six hours, people are going to leave.” I can’t tell you how stressful it was. We looked at the logs, our cancellations. Our cancellations during that time did not dip at all. It was just this thing where our community loved us and what we’re doing so much, so they said, “We’re behind you.” It was just this really cool experience where I feel like we shifted from like a company to a community. I feel like the community did that as well. Ever since then, it’s been cool. But it was definitely a very scary, very painful day.
Andrew: Considering how you have to get your business back up and running with a crisis like that, how you have to do all your webinars, how you have to figure out the vision of the company, are you still also doing the other programs? I’m looking at my notes here from someone in my community who said that you’ve got some kind of program teaching people how to use LinkedIn and Facebook to drive traffic. Do you have all these other programs that you’re still teaching?
Russell: So, we don’t have like a LinkedIn–so, I do have like a coaching program. We have a high-end, I call it my inner circle. It’s $25,000. We have 100 people in that. We do high-end coaching with these guys. Then we have lower-tier programs teaching people basically funnel building, how to direct traffic. So, we’re doing coaching, but it’s all tied back to the funnels. So, one big piece of funnels is how do you get traffic. We do teach traffic.
Andrew: Is that you personally doing it?
Russell: Some of it is. Some things aren’t my skill set. I’m not personally good at Facebook ads, but John on my team runs all of our Facebook ads. So, he trains our community teaching Facebook.
Andrew: I see.
Russell: I’m good at selling from webinars. So, I teach people how to build webinar funnels, how to sell on them. My whole mind is the more money our customers and community make with their funnels, the more money they can reinvest in us.
Andrew: You don’t have any standalone courses that you’re running outside of ClickFunnels, do you?
Russell: Yes, we do.
Andrew: You personally, I mean.
Russell: So, it’s part of the whole company.
Andrew: Oh, so now it’s all together. So, Dylan Jones, for example, has a piece of this.
Russell: Yes. This is interesting. This is something that’s kind of cool. For me to acquire a trial user from Facebook right now, it’s like $120, which is really expensive, right? But I have my book that I wrote. Right now it cost me $12 to give away a book for free plus shipping and then after someone buys the book, we have a sequence that gets them into ClickFunnels and I can acquire customers into ClickFunnels through a book funnel initially for about a tenth of what it costs me to acquire them direct.
So, a lot of our front-end products are lead generation, bring people into our community and then from there we sell ClickFunnels on the back end. And that’s been the best way that we’ve grown is having different front end training courses and books and products. So, we do have those. But they’re all tied into the funnel that brings people into it.
Andrew: I see. Even though this is your own stuff, some of it created even before ClickFunnels, you’re bringing it into ClickFunnels into the business itself.
Russell: Yeah. We recently migrated all my old products because it was weird. We had this weird thing like, “I’m doing stuff over here.”
Andrew: Like Dotcom Secrets, is it owned by you personally?
Russell: It is, but we’ve licensed all the products and everything into ClickFunnels. So, ClickFunnels, all the money that comes to that goes into ClickFunnels now.
Andrew: So, when we’re talking about $12 million, what percentage of that comes from ClickFunnels versus the info products you still have?
Russell: So $12 year one was 100% ClickFunnels. We had another $5 million that came through the coaching business. At that time, they were separate. As of this year, they migrated together into one. So, those two were separate year one.
Andrew: That’s unreal. So, why didn’t you just pay the people that you wanted to work with? Like was Dylan Jones need to have a piece of your business instead of getting paid to bring his software over?
Russell: So, I’ve had a lot of employees in the past. I’ve done a lot of that. I love employees, so don’t take me wrong. But there’s something about like with employees, I sit down and say, “This is my vision,” And then they go and they do it. It’s all about my vision and them implementing it, right? With Dylan and Todd, the coolest thing is that they are marketers, like me and you. They had their own businesses before. They were successful. And so what’s cool is when they sit down and they want to code something, they’re coding it for themselves. Todd’s like, “I wish it would do this.”
It’s his vision. Dylan, he spends so much time on the editor and UI. He’ll spend a day trying to figure out where to put the button and what shade the button should be and all these things. You can’t coach that. You can’t get that out of a normal employee. It’s got to be someone who’s so part of it that it becomes them.
That’s why I don’t spend much time on the product side at all because they are so good at. They live it and breathe it. They sleep it. They drink it.
Andrew: What share of the business do you still own?
Russell: We split it basically 30-30-30.
Andrew: Really? Even though you clearly contributed more?
Russell: I don’t know if I contributed more.
Andrew: You contributed assets that were bringing in profits.
Russell: So, I definitely contributed assets and things like that. But the things they brought to the table are as valuable as what I brought to the table. I’m 100% believer in that.
Andrew: Really?
Russell: They brought the product and the product is what’s made this great. Without them, I couldn’t have done any of it.
Andrew: And you couldn’t have hired somebody to create the product like that?
Russell: I tried. Prior to this, we spent four years here in my Boise offices, I had six full-time developers sitting in my office trying to build what ClickFunnels became for four years. Todd built out in three months what six guys couldn’t do in four years.
Andrew: What did that first build out look like?
Russell: It’s kind of ugly. It never came to fruition. Nobody ever saw that.
Andrew: Because it never worked out, even after years and years of paying these developers, you couldn’t launch it?
Russell: Insane amounts of money, yeah. The problem is it was me sitting with developers trying to say, “This is what I want.” They do it and it’s like, “Technically that’s right, but you have to understand the marketing and the art behind what we’re trying to do. There’s an art behind it. It’s not just like a science.” They could understand the science but they couldn’t understand the art.
Andrew: Could you give me an example? I feel like concrete examples help me understand concepts like this better.
Russell: A concrete example of which part?
Andrew: Of you giving them a requires, them actually following through, but because they didn’t understand the art behind it, it just didn’t make sense.
Russell: Yeah. So, I’m like we need a tool that builds in an order form. They’re like, “What needs to be on the order form?” “Name, email, etc.” Okay. So, we created this tool. “Create an order form.” The order form pops out and it’s the ugliest thing on earth. I’m going to take a jab at some of my friends, but it’s kind of like Infusionsoft. If you’ve ever seen Infusionsoft’s order form–
Andrew: Oh, the worst.
Russell: It’s the ugliest thing on earth. That’s the kind of things my guys would come out with. Technically, that’s right. It collects all the information, but it repels customers. Where Dylan will spend a week trying to figure out, “How do I make this thing so amazing that it converts?” So, he’ll build that.
Then Todd will figure out how to make it so the back end loads faster. “How do I pull in shipping? How do I make it so anybody’s ever come to our system,” like all the things that us marketers–the reason why you go to ClickFunnels’ order form, half the form is filled out for you, which has a huge increase in conversion’s because Todd wants that. I never would have thought of that in a million years no matter how much I coach somebody through it.
Andrew: I see. I completely get it. I’m just so shocked by the percentage. I wonder what I’m missing. That’s a big percentage. And then you’re also contributing a $5 million a year business into this thing. All right. I think I’ve got an understanding of it, whether you could have gotten them for less or more isn’t an issue for this conversation. Let me finish off with this. I’m trying to get a handle on all the stuff that you do. I don’t fully see it. Here’s why. I see MarketingQuickiesShow.com. That’s a program you created, right?
Russell: It’s my Periscope show.
Andrew: I see. You just created a landing page around it where most people would just be on Periscope.
Russell: Yeah.
Andrew: And then I see MarketingInYourCar.com. That’s you too?
Russell: That’s my podcast. Every morning I’m driving my car, I record a podcast as I’m going.
Andrew: And then you do that. Okay. Let me see… And then you’ve got, like you said earlier, 100 people paying you $25,000 a year for a mastermind. What happens at the mastermind?
Russell: They come out to Boise three times a year and we consult, talk about their business and then on my phone, there’s a little app called Voxer. It’s like a walkie-talkie. They all have access to me through Voxer to ask questions about their funnels and what they need help with and things like that.
Andrew: They could all just Voxer you and you’ll respond to them because they’re part of your small group.
Russell: Yeah. It’s not bad. I get probably 20 minutes a day of Voxer questions. The coolest thing is it keeps me sharp. My 100 inner circle members, they’re in every industry you can dream of–offline businesses, online, supplements, physical products, ecommerce. So, I have this really cool ability to like see behind the scenes of all these guys’ business and how the funnels work and the intricacies.
There are different things in like an offline funnel than there is with an ecommerce funnel. Most people don’t understand that, but because I have this really cool ability to work with all these amazing entrepreneurs at a high level, I get to see those, which keeps me sharp, which helps us know with the software–like right now we’re working on our Shopify integration, right? We’re working with Marcus Lamonis from “The Profit.” He’s got his stuff in Shopify and all these things. We’re trying to make that the most amazing experience ever.
So, it’s like I’m looking at all these ecommerce guys, like, “What do you guys actually want and need in a tool? Why is Shopify not giving you what you want now?” Its like, “We need one-click upsells. We need this.” We’re able to work with Shopify now to build something that our power users and their power users actually want. It kind of gives us this unique ability to see what our community wants, work with the top-tier ones. It’s tons of fun. I love it.
Andrew: All you do with them is essentially funnels. You might veer off to other conversations, but your goal with them is to help them improve their sales funnels.
Russell: Yeah, 100%. Sales funnels, marketing–I’ve been in the industry long enough that we connect a lot. If someone’s like, “I’ve got a funnel but I have no traffic.” It’s like, “Call this guy, call this guy, connect here and here. I need copy. Here are the best copywriters.” So, we’re giving them the resources they need to keep moving their funnels forward.
Andrew: Okay. Am I missing anything else? Any other big part of your business that I haven’t caught onto or didn’t think to bring up?
Russell: Those are the core things. I had a book that came out last year. I have another book we’re working on right now. These are different front-end things to bring more people into our world. The Marketing in Your Car and the Marketing Quickies show, those are just content things we’re putting out there to build better relationships with our audience. We do a big event once a year. We just had it last month. We had almost 1,200 people that came out to this huge event. We had certified partners that are certified inside of ClickFunnels. So, we’re doing a lot of things in this community–
Andrew: You’re certifying them, right?
Russell: Yes, we are.
Andrew: One thing I tried to do to figure out where you were going with the product was I went to see what jobs you were trying to fill. I ended up on Upwork seeing all these different positions for ClickFunnels. I said, “That one’s interesting. That one’s kind of strange.” Then I realized it’s not you guys posting on Upwork. It’s people who have these little projects that they need some developer or some video designer to create and so they’re posting ClickFunnels jobs on Upwork.
Russell: Yeah.
Andrew: That’s how big this community has gotten, that they’re actually looking for certified professionals to handle their ClickFunnels. They’re looking at people to create videos for their ClickFunnels pages. Wow. All right. This is huge. Let’s close off with this. What’s the best part of having built this thing up?
Russell: For me, so I love working with entrepreneurs because I feel like entrepreneurs are the people who change the world. And I feel like everyone’s got these different businesses and they’re changing people’s lives in different ways. I could share you tons of stories of different people that are doing that. I feel like ClickFunnels is this little tool, this little piece in the middle that helps them get their message out to more people.
For me, that’s been the best part, seeing that we’ve enabled entrepreneurs to share their message, to change more people’s lives, to change the world. While we’re not responsible for everything, it’s those people’s messages and their products and their services. Like we had a change to get a piece of each of those and for me and for the entire team, like that is the biggest reward in the world is to see how other people’s lives have been changed because of ClickFunnels. It’s amazing. We’re loving it.
Andrew: I can see that. The website, of course, for anyone who wants to go check it out is ClickFunnels.
Before I close it out, I’ve got to read this email that I got from Daniel Levine, who said that he just signed up for Mixergy Premium. He said, “Andrew, I’ve been meaning to email you to say that you need educate your listeners more on what Mixergy Premium is. Why not have like a 30-second clip at the end of each episode? I’ve never quite understood what Mixergy Premium is all about. So, as a long time listener, I’m pumped to try it out and I hope you get tons of signups,” and he always says, “Hey, Andrew, please tell people what it is.”
So, Daniel Levine, I’m going to tell people right now what it is. I think the best way to explain it is with an example. I had this guy Sam Parr, longtime Mixergy fan on here to talk about how he built up Hustle Con to this great conference here in Silicon Valley, how he’s now building TheHustle.com into this website that so many tech entrepreneurs are reading. I said, “How’d you grow so fast?”
He said, “Well, I have this ambassador program. I give people this title of ambassador and I give them rewards for sharing my newsletter and getting more people to sign up.” He talks about this whole process. I think, “Well, that’s great.” That’s what an interview is about. We do interviews on Mixergy, me and this whole team of people who produce it, where we get an entrepreneur to tell the story of how we built it.
Well, in Mixergy Premium, we have him teach it step by step, show your screen, tell us how you got this ambassador program, how do you pick the rewards you give people? What do you do behind the scenes to incentivize people? Teach it to us.
I actually hired a videographer, Ben Nesvig, to fly here to San Francisco to go into Sam’s office to sit down with Sam to grill him–I also was grilling him–so we could get a step by step guide on how to do it. It’s a course that will–I think by the time this video is up will be on Mixergy, where he’s teaching any out there how to get their audience to become ambassadors who then are incentivized to tell their friends and get their friends to join the site.
That’s one example of over 100 different courses we have on Mixergy, where I bring in an entrepreneur who does something especially well that he doesn’t talk about to teach it step by step by step. We have, as I said, over 100 of those. We have over 1,000 interviews in the vault of Mixergy here with entrepreneurs who tell their story.
Those are the two big elements of Mixergy. Yes, I could sell anyone of these courses individually for a few hundred bucks. But I decided I’m just going to have one monthly membership. When you sign up, you get access to it all. And if you want to do what Daniel Levine did, all you have to do is go to MixergyPremium.com to sign up. I guarantee you’ll love it.
All right. So, thanks, Daniel. Thank you, Russell for doing this interview. Thank you to my two sponsors, which are Toptal.com/Mixergy and finally AcuityScheduling.com/Mixergy. Cool. Thanks, Russell.
Russell: Thank you.
Andrew: You bet. Thank you all for listening. Bye, everyone.
