Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. One thing that I’ve noticed in doing these interviews is that when the world shifts like when there’s new technology or a new shift in the way things are done, there are some players who come in and really start to grow fast and build businesses during that shift. And one shift that we’ve seen in online sales is crowdfunding.
People don’t create the product, put it in a store, and hope that it sells. They actually get customers first and then they create the product. And in that shift, one entrepreneur went from creating a standard digital agency to saying, “I’m going to focus on this.” And he focused on a small part of it and it grew and grew and grew. And today Roy Morejon, or if you’re not Cuban you’d pronounce his name Roy Morejon. Also, if you’re Googling him you’d want to pronounce it Roy Morejon to make it easier to find. But Roy created such a company. It’s called Enventy Partners. I forgot to check the pronunciation of the company. How do you pronounce it?
Roy: You butchered it man. Enventys. So Enventys Partners stands for entrepreneurial ventures.
Andrew: Enventys. Enventys Partners. We missed the S in my notes. I always check on everything. I even checked on the pronunciation of your first name in case there was an issue and I forgot to check that.
Roy: You did?
Andrew: But I’m leaving it in mistakes and all of these interviews. Well, what Roy’s company does, Enventys, will take your idea even if it’s like this, on the back of a napkin. They will take that idea, help you create the prototype, actually manufacture the product for you, help set up the crowdfunding campaigns if you want to do Kickstarter, Indiegogo whatever, he’ll help you actually get the whole thing up and running from scratch and he’s built a solid business on this by focusing on crowdfunding campaigns.
How am I doing describing your business? I’m kind of getting a sense from you that maybe I kind of lost you by screwing up your company name.
Roy: No, you’re doing well, Andrew.
Andrew: All right. You’ve got good scary eyes, like if I screw up, I could tell. This is why I like video. I could tell when something’s off.
Roy: That is true. That is true. I have to use it on my daughters now. They’re getting the evil eye sometimes because they’re growing up with bad habits.
Andrew: How old are your kids?
Roy: Two and four.
Andrew: Two and four.
Roy: They’ll turn two and four this month, this week actually.
Andrew: I read this book on negotiation that talked about working on your eye contact that if you could give the right kind of message with your eyes you don’t have to raise your voice, you don’t even have to raise your price. You could set people back a little bit.
All right, but let me talk about the two sponsors who are making this happen. The first is software that both Roy and I use to close more sales, it is called Pipedrive. And the second is forum software which you might think is really boring, but it’s helped me close sales and understand my audience better. It’s called Formstack. I’m going to tell you about both of those later. But first, Roy good to have you on here.
Roy: Pleasure to be here, man. Looking forward to it.
Andrew: Is your family actually Cuban?
Roy: On my father’s side, yeah. His father came over to actually try his hand in playing professional baseball in New York for a little while, but yeah.
Andrew: Really? And then he became a federal agent. What kind of agent?
Roy: The National Marine Fisheries Service.
Roy: So making sure all the illegal fish and lobsters that were coming in from foreign countries or that were here State side whether from Canada or elsewhere, making sure that we were protecting our nation’s borders with the fisheries industry and making sure that there were fish for our future.
Andrew: Meanwhile, his son at 12 years old, you, get an AOL account and back in the early ’90s you started screwing around. I heard you’re one of the first 10,000 users of AOL. And you noticed something, a little vulnerability in AOL. Can we start with that? Tell me what happened there.
Roy: Yeah, I usually have to start with that with most of my full-service clients or any of my bigger clients that we do work for. So yeah, just basically forced my parents to not only get a computer, but also connect it to the Internet and get a new phone line basically for it. So, I was told that I was one of the early AOL users on there. But basically it was the Wild, Wild West, right?
The Internet was just opening, and everybody wanted email. And then Instant Messenger came along as well and basically, I taught myself how to program in Visual Basic in C++, created a few different programs with a few other [inaudible 00:04:14] so to speak, and basically, we could do anything on the Internet. And one of the big things that we did back then was change our user name to AOL terms of service or AOL cat watch, the Community Action Team, and we could go and IM people and say, “Oh, there was a glitch in our servers. We’re so glad that you’re online. Send us all your credit card information so you can keep getting AOL service.”
And we were doing this to the tune of tens of thousands of credit cards a week, and then we would trade those credit card and that information for pirated software back in the day that would live on AOL servers. So that was the heyday of AOL for me as a young kid just coming into my teenage years basically.
Andrew: And you were caught?
Roy: I was caught, yes. I was caught. Fortunately, my father was a special agent, so at the time they kind of slapped me on the wrist and said, “All right, here is everything that you’ve done. Obviously, we don’t like what you’re doing but there are gaps in what we’re seeing with AOL and what they’re doing.” So I did a short consulting gig for them to show them everything that we’re doing, show them all the script and languages and the programs that we had created. So they could fix all those vulnerabilities.
And then they started adding, on the [inaudible 00:05:22] box that AOL will never ask you for your username or password, and that was basically because of what we were doing online.
Andrew: The funny thing for me about all that is . . . and I get it. In retrospect this is bad stuff, we’re not promoting it. But the funny thing for me is all you bought was software. What kind of geek were you? You could have had sneakers delivered to your house, you could have had all kinds of stuff. Software? That’s what you winded up with? Why?
Roy: Well, one, we couldn’t get in as much trouble for it because there was all the issuing and licensing fees with it. And the fact that the software was actually just sitting on AOL server, we thought that we wouldn’t get in as much trouble for it because basically you would go into a chat room and you would call up a list serve, you get the e-mail, you would see what we would have in inventory, Windows95 and Adobe Photoshop 1.0, and then lot of games, like everybody wanted the new games that were coming out. And you would just call that, you’d get a RAR file download that and unrar 40 different files, and then boom, you had your software.
Andrew: Wait. So what you were doing was selling that software?
Roy: Trading it.
Andrew: Trading it. All right. And what did you do with all the credit cards that you got? With the credit card numbers what did you buy?
Roy: We traded those for software. Nothing. We didn’t buy anything with the credit cards.
Andrew: That’s it. That’s what I thought. You get these credit cards from people, you use it to buy software, then you take that software and you trade it for other software. That is shocking.
Roy: Yeah, I didn’t know what I had back then, but I’d probably be in a jail cell still to this day if I had done those sorts of things.
Andrew: If you had actually gone out and bought more stuff and really sold their credit cards and so on. Yeah, I could see that. All right. So fast forward a bunch of years, you decide that you’re going to start your own company. It becomes a social media marketing agency. We’re talking about 2010. Give me an idea, like typical work that you would do for a client.
Roy: Yes, so that agency B2WE I started actually in 2007. So the focus there was, it was the new shiny tool in everybody’s arsenal, right? What was Facebook, what was Twitter, LinkedIn. Those were the main platforms that people were playing with at the time, but they didn’t know how to use them, whether it was for lead generation or retention and recruitment.
So a lot of the Fortune 5,000 companies here in Charlotte really needed training and support on what that meant, and then tying in my technical background in terms of the SEO side of things and making websites rank. There was a cohesion between social media and SEO and bridging those two gaps together for a lot of the larger corporations here in the south.
Andrew: Social media and SEO, meaning you were helping them get traffic from SEO and also from Twitter and all the other social networks that you worked with. Is that right?
Roy: Right, because those were strong signals that were coming from social media sites, the authority passed through in terms of what it looked like from getting Google Plus’s on stuff to getting tweets and retweets and all that. Those were strong signals back in the day, stronger than they were probably now because of the bots and everything else that’s out here now.
But those were strong signals that tied together companies in terms of making sure that they rank for the keywords when you’re Googling it, but also making sure that when someone is searching on Twitter for a service or a product that you’re also found there.
Andrew: So it sounds like what you did was you sold the one company that you owned by yourself to the company that you owned with a friend. Did you make money from that sale?
Roy: Yeah, a small bit.
Andrew: Okay. All right. And then why did you want to start a new business with a friend? Why not continue and evolve B2WE from a social media agency to something else? Why did you need this other thing?
Roy: Yes. So, again, talking about that convergence of SEO and social, the missing trifecta, if you will, was PR. And so the gentleman that I brought in or wanted to partner with was a PR expert here in Charlotte and he was working at the biggest agency here at the time but wanted a challenge. So it took me probably eight months to a year to finally convince him to quit the day job, because I had enough clients that could support us both basically. It was a little bit safer for him.
But he always had an entrepreneurial spirit but really focused on the PR side. And for us for our clients that I was working with at the time, PR was that additional layer that they all needed that they would go to someone else to get, and I always wanted to be that turnkey provider where I could do everything for the client.
Andrew: When we talk about PR, we’re talking about online PR as a way of getting paid rank, public relations PR for paid rank PR, right?
Roy: Yeah, correct. Yeah, public relations, people relations.
Andrew: Yeah. But it wasn’t for branding. It was about getting more traffic by getting on to more blogs and that kind of thing.
Roy: Exactly. Yeah, I mean, all those PR links for some of these high authority websites lead back to yours. And back then they weren’t really worrying about no follow, do follow links. So back then pretty much everything was a do follow link, so the attribution that pass through was pretty significant when you get a nice placement.
Andrew: Okay. Before we get into how you transition from there to crowdfunding, I’m curious about how you got your customers. How did you have so many customers that you could take on this new partner and he didn’t have to work his day job? What was your process?
Roy: So I’m a tinkerer, I know code, and so reverse engineering Google’s algorithm in terms of how they rank websites was one of my specialties. So I had a team of freelancers around me and basically, I was able to get my company website to rank on the first page for social media agency, which was like the massive keyword back then in 2007, 2008. So being on the first page, I was getting inundated with dozens of leads a day and that’s kind of how I built up my profile.
Andrew: Okay. It was just that, just being good at SEO got you more clients.
Andrew: Wow. And even big-name clients would find you that way?
Roy: Absolutely. Working from some of the big banks here to some of the big insurance companies, yeah, they were all looking for it because they needed it and that was the main term that people were Googling back then in terms of, “Oh, I need social media. I need social media marketing, social media agency marketing, consulting.” All those iterations on the keyword phrases, I was on the first page for, if not, in the first spot.
Andrew: I see. What was working for you for SEO at the time? I could see the pride as soon as you finished saying that. I could see even looking back you feel really proud of it. So I’m curious what you did to get there.
Roy: Yeah, it was great because I was competing with all of these other like new people at the time that were in social media at the time. And they’re like, “Oh yeah, I’m the expert.” Nobody was an expert back then. We were all just trying stuff and seeing what was actually working and what wasn’t. Everything back then was the test which was the fun part, same with the SEO rankings and getting ranking for that. There were constituents and other consultants that I was working with or working against basically to get contracts from, and we were all playing the same game.
So there was a bunch of high authority websites that were out there who used to use a tool that’s still around run by Barry Wise called KnowEm. And basically there you could register keywords as your user name, and basically then those profiles, so I used to own like @socialmedia and @socialmediamarketing as a handle for all these social sites. And then all of those links would come back to my website showing high authority with the keywords I’m trying to rank for. So that was like the big trick, over a decade ago of registering social media user accounts as the keyword you were trying to rank for.
Andrew: I see. So “know” as in know some things because you’re smart and E-M. And that’s still around to this day but it doesn’t work as well. What was your process for finding out about stuff like this? Were you the kind of person who just kept reading blogs, was it about message boards? Where would you know to come up with techniques like this?
Roy: Yeah, I used to do so much reading of blogs. Like my RSS feed would be thousands of articles a day and then getting better filtration in terms of people that actually know what they’re talking about and then everybody else. So really, building out that filter system of what my RSS feed would look like, that was the main thing.
But yeah, a ton of research and then just a ton of speaking whether it be at engagements, at conferences or people that are actually writing and developing these programs. There were a lot of sites out there that were just aggregators, you know, kind of like a product hunt today where new startups were listing, and basically, I’d go to it, signup, test something. If didn’t work, move on to the next one. If it did, put it in my arsenal of tricks for my clients that . . .
Andrew: And it was you doing all these tests?
Roy: Yeah, for the most part. I mean, again, I had some freelancers that were working with me, some that specialized in paid media in terms of AdWords, some that were better at copy. But yeah, for the most part I was lead strategist, if you will, on everything.
Andrew: That’s killer stuff. I could see why you, even looking back would be really proud of it. How much revenue did you get to it before you partnered up with your buddy?
Roy: That was a six-figure business. I didn’t really get more than that, running that out of my basement with a bunch of consultants. But it basically got to the point where these companies wanted on premise meetings. I’m like, “Well, I don’t have a spot.” And WeWork didn’t exist back then, “Let me just come to your office.” And it just got to a point where you had to have an office in a physical space, so that’s kind of where we dove in and then started hiring people at that point.
Andrew: Okay. You know what I’m wondering is, when you said you went to speaking engagements and that was one way you learned, how did speaking at events help you learn more?
Roy: Because these are the experts, so to speak. You’re on stage and hopefully you’re talking about like a case study or real things. And it’s always difficult. You trying to find that one nugget out of a conversation or presentation that you can take back and immediately implement, because there are so many things that happen at these conferences and usually it’s just overload for people. You’re just trying to lead them. When I speak now, with just one nugget, one tactical thing that they can go back . . .
Andrew: But that’s how you teach. When you’re speaking you’re saying you also . . . my hunch is it’s because you’re telling someone something on stage and what I found when I speak is a few people will understand it and want to one up you in private or show off something that’s impressive to say, “Hey look, I’ve got chops, you’ve got chops, let’s be friends.” Right? And that’s what it is, the same thing with speakers at speaker dinners. Right?
Roy: Absolutely, yeah. I mean, it’s just mutual respect for everybody’s industry and what they’re actually working on. But that’s when you have the real conversation.
Andrew: Did you do anything more formal than that?
Roy: What’s that?
Andrew: Sorry. I keep interrupting because I’m dying to like suck as much knowledge out of you as possible. Is there anything more formal than that? I’ll tell you why. I’ve been doing more speaking, I usually say no, but I’m starting to take on some. And if I’m flying out somewhere, I want to maximize every minute of my time there.
The only thing that I want to do that’s not work related is go for long runs in whatever city I’m in. Otherwise, I want to learn from people, I want to get to know people. And so what I do is, when I’m on stage I try to find a way for people to connect with me by giving them a link to my chat bot and the chat bot would say if I have five minutes, I’ll say, “Hey, here’s a picture of where I am. I have five minutes, if anyone has any questions come by and say hello.”
I do dinners with speakers, I do scotch night for attendees. What else can I do? What else do you do that helps you maximize the time that you’re at conferences and learn from the people who are there?
Roy: Yes, so usually like I just spoke at the Growth Marketing Conference out in San Fran this past week which is absolutely amazing. That was my first time there and the CEO runs an amazing conference, so for everybody go to that one.
Andrew: I must have missed you. We had breakfast with a couple of people from that conference just on Friday.
Roy: Were you there?
Andrew: No, no. I was at my office.
Roy: Well, you were missing out on the good stuff.
Andrew: So yeah, tell me what do you do? I’m interrupting constantly.
Roy: Yes. So what I did there is basically they sent all the speakers the list of the people that were attending your workshop and then the people that are attending the conference as a whole. So what I do is actually go through that list and see who’s a good fit for me to talk to or are they launching something, do they have hardware, are they a company that I can audit their website really quickly and see all the things that are wrong with it and then try and have a conversation with them.
A lot of these conferences now have apps, like they were using Brella, and then there’s a bunch of other ones that were out there. Like I was at Web Summit a couple months ago at Portugal, and they had their own app where you could communicate through there. And that’s an easy way to start scheduling meetings is just do it through the app that a lot of these conferences are having.
But, again like when we launch crowdfunding campaigns, pre-launch is critical. And it’s the same thing, the approach that I take when I go to conferences and I speak at them. My pre-conference speech is critical so that I’m speaking to the audience with what they want to hear, and I try and customize everything that I talk to a point in terms of reaching the majority of the audience in terms of the content that I’m giving to them that resonates with them as closely as possible.
Andrew: Okay. All right. That makes sense. Okay. Let me talk about my sponsor and then get in and talk about how you transitioned then from what you had that was working but wasn’t growing enough to what you have today which is what I’m interviewing you about.
The first sponsor is a company called Pipedrive. In the past when a guest says that they use different software, talk about the positives of the other software and say, “You know, maybe sometimes Pipedrive is not perfect for you.” Today, I’ve got a guest who actually does use Pipedrive like me. We are fully onboard with Pipedrive for closing sales, for getting interviewees. I’m curious about how you use it. How do you use Pipedrive?
Roy: Yeah, we just got to a point where we were getting hundreds and hundreds of leads a week and, you know, the manual process of that was just too daunting in terms of building up the business and the biz dev team. So Pipedrive was like that needed product. After evaluating dozens and dozens of them, that was the easiest one for my entire team to jump in and review products as they came in and vote on whether or not they’re good fits and kind of built up that entire system with the scoring matrix in terms of the product that came to us, whether it’s a good fit for crowdfunding, whether it’s a good fit for our agency and so forth.
So we’ve been using it now for almost a year, super stoked on it. It’s a great piece of software. So I’m glad they’re a sponsor of your show.
Andrew: You know what? For me, you’re right, I don’t bring this up enough. We have a form on our site that people could fill out if they want to hire . . . we have a sister business called Bot Academy. If you want to hire someone to build a chat bot for you, you fill out a form and you ask for a demo. Well, as soon as someone fills out that form the contact information goes immediately to the first column in Pipedrive. So someone on the team gets alerted and can look and say, “Is this person a really good fit for us or not?”
If they’re not a good faith, meaning they don’t really have a budget, they’re too early, we don’t want to take their money if it doesn’t make sense for them, we just quickly fire off an email saying, “It’s actually not a good fit for you, but here’s where you can learn some things for free, so you can do it on your own.” If they are a good fit, the next step in the process is to send them a link to a live demo call with someone on the team. And so as soon as we send that link, we move their card over one column in Pipedrive, and then we can keep collaborating to get to the end.
If they don’t buy, Kelly, who’s now been managing this, takes the card. She doesn’t just move them into lost any more. She moves their card all the way to the far right to a column called Andrew Ask Them Why They Didn’t Buy. I then get an alert and my message comes in and says, “Hey, I notice you didn’t buy. Totally fine. Was it Kelly or something else?” And I asked them provocative like that, so they could come back and say, “Yes, it was Kelly,” and tell me what the problem was. Or they could say, “No, no. Of course it wasn’t Kelly. Here’s why I didn’t buy it.” And then I could learn and improve our sales process.
That’s how we use Pipedrive. What I’m finding is more and more companies use Pipedrive, not as a standard CRM, but as a sales management tool. It manages your entire sales process, gives you discipline if you’re a one-person operation you could use it and really organize yourself and get good, and as you add more people and if you have more people you can all coordinate to get someone from the “I’m just curious” or we think that they’d be a good customer, all the way to the end which is where you sold them. You as a team sold them in an organized way and they feel good about the whole process.
If anyone out there is listening, and they want to sign up for Pipedrive and be like Roy and me, I’ve been a long-time customer of Pipedrive. We have a special offer for you at pipedrive.com/mixergy. They’re offering you a discount, they’re offering you some free time. I don’t really give a rat’s ass about that. Yes, of course you’re going to get all that.
If you’re so petty that you care about a little bit of discount and that’s what’s going to sway you, you’re missing an opportunity here. Don’t think of it as the cost because the cost is practically nothing. Think of it as what is it going to do for your sales. If it will measurably increase your sales, go for it. You don’t even need my discount if it measurably improves your sales. If it doesn’t, then cancel it and go on to something else. But if you go to pipedrive.com/mixergy, they’ll give you plenty of time so you can try it out and see what kind of impact it has on your sales. I love Pipedrive and I urge you to go check them out at pipedrive.com/mixergy.
The transition. What happened Roy? How did you go from that to this?
Roy: So running the digital agency was fine and dandy, but obviously competition is high. Given my SEO prowess making sure that we ranked on the first page for a startup marketing was key because those are the types of clients that we really pivoted towards instead of working with a lot of the larger Fortune 5,000 companies. Pivoting to the companies that were more agile because speed for us is everything, especially in marketing, we want to make sure that we can be as agile as the startups that we work with.
So making sure that we ranked on the first page of startup marketing, startup PR, etc. So we got contacted actually. Someone reached out to us that was running a crowdfunding campaign in early 2012, the [inaudible 00:21:42] device. You might be able to see it right there in the background. So this guy basically, it was like the early tile, but look how thick it is, right? So this device . . . I think you’re on mute.
Andrew: I see it. Thank you. Basically if I attach it to something and I lose it I could find it using my phone, and you’re right, it is a little thick.
Roy: Yeah, there’s a little clip like through the side. So there’s like a little gap there. But yeah, basically this was the early tile. So five plus years ago these guys even further than that had developed this and they’re like, “Listen, we have this awesome product that everybody’s going to want, but we have no idea how to reach this customer. We don’t know where they are. Like, we’ve done everything we possibly can. Can your PR team help us get more backers, get more supporters, get more customers?”
So we did some PR for them, we landed them in some really top placements. I think Mashable and Gadget, maybe TechCrunch or something like that. We doubled their funding with only two weeks left of their campaign. So these guys were super stoked as were we, we’re like, “Man, we truly moved the needle for this company,” got them the funding that they needed to bring this little guy to life, and we’re like, “All right. Let’s dip our foot in now.”
So then we started actually doing some outreach to campaigns that were active on Kickstarter because you could message through their backend system. We’re like, “Really cool tech product. We’d love to help out. We helped out [inaudible 00:23:10] device. Is this something that we can do some PR for you?” And then one after one we started building up more and more clients, and fast forward today almost six years later we’ve done over 500. I think we’re close to 600 projects now in terms of completion from start to finish.
Andrew: What was it about it that attracted you? Was it what I said earlier that you see there’s a new market forming, there isn’t an established player owning this market. We could be that player.
Roy: Well it was the fact that just helping startups and bringing their ideas and their passion to life, right? Like we had the opportunity to do that because they’re makers, they’re entrepreneurs, they’re not marketers. They don’t know how to do Facebook ads or set up a Twitter bot or do PR for themselves or even set up a website, or an e-commerce store, or run a content campaign, or whatever it may be. They didn’t have that expertise.
But they had great ideas and they had great passion for their product, whatever it may be. And we really wanted to see these products come to life because that’s their baby, right? Sometimes their baby’s ugly and we have to tell them and nobody wants to back it, but a lot of times we can make that baby as beautiful as possible and raise the millions of dollars like we’ve done for 24 other campaigns. For us it’s all about bringing that idea to life and then seeing hopefully the fruition of a product line evolve after that.
Andrew: So, once you had the first one, how did you get the others? What was your process for getting more crowdfunding companies?
Roy: So we started creating content on our website or on crowdfunding marketing, PR for crowdfunding, startup crowdfunding marketing, Kickstarter marketing. So eventually we got the first listing for Kickstarter marketing, and then we got the news article for Kickstarter marketing in terms of the snippet. And then there were all these other things that we were doing at the time in terms of the SEO side of things of getting ranking for it and then doing outreach.
So we would start messaging people, we would put our banners on the campaign pages saying that they work with command partners at the time, and that would lead a strong word of mouth cycle of all the successes that we had had.
Andrew: I see. You know what? I don’t think I’ve seen your banner on any of the Kickstarter pages, but it could be because I just don’t notice this stuff. What’s an example of a Kickstarter campaign where I might find you guys?
Roy: So we just finished a campaign for Antonia Saint New York, which is a custom molded high heel shoe. We raised $1.8 million for them on Kickstarter. We just migrated them over to Indiegogo. We’ve done about $2.2 million for them so far. So usually we only put our banner at the end of the campaign all the way at the bottom of the page, because the campaign is not about us, it’s about our clients. And we just simply put our banner at the bottom to say that, “Yeah, we were the marketing partner for this,” and most of our clients are like, “Absolutely, put that there. You guys did the campaign for us. You made us a massive success.”
Andrew: I see it now. You know what? It is the kind of thing that I don’t notice because I know what I look for in the Kickstarter campaigns. I like the GIFS, I like the images, I barely read. I will then move on to the video afterwards and I’m never looking at any of the links like that. But if I had a Kickstarter campaign.
Roy: Well, it’s not [inaudible 00:26:04] right?
Roy: You’re the consumer, right?
Andrew: Right, exactly. And that’s good. You don’t want me to see it. But if I have a Kickstarter campaign and I like what these guys did, I would go through and I would notice a marketing partner, “This is the company I probably should contact,” and if I click a link on that you guys see the referral that tells you which campaign I clicked over from and that gives you an indication of what’s sending you the most customers.
So it kind of is, I don’t know if I’d use the word flywheel, but it is a really virtuous cycle. You do a campaign for someone, they help send more potential customers to do a campaign for those customers, every one of them potentially sends more customers to you.
Roy: Right. Yeah, and for us, so that link typically then would go to their case study on our website to talk exactly about how we did that. And in Antonia’s case, that’s actually now the first ever crowdfunding case study on facebook.com.
Andrew: What do you mean? Facebook put that on there? Why?
Roy: Yeah. Because of the ROI that we got from our Facebook advertising team. So, in terms of track links and everything that we did in terms of the success of the campaign, Facebook actually just published that last week on their facebook.com/business/success/antoniasaintnewyork or something like that. I’ll shoot you the link so you can include it. But yeah, so we’re actually the first case study ever on facebook.com for a crowdfunding campaign.
Andrew: Okay. And is it mostly Facebook that you were doing at first or is it also . . . can you do any SEO when you’re talking about a Kickstarter campaign that has to move so fast?
Roy: So the long-term value of the SEO is the project title. So how you word the project title, because that’s the meta title or the title tag of the campaign itself. That’s what’s going to live for a long time because Kickstarter’s authority is super high. So, and then people sometimes will do campaigns that are like the exact match keyword that people are going to Google when this company actually starts shipping product.
So sometimes we’ll keyword optimize the campaign title so that it ranks long term for it, but it’s extremely difficult to get good SEO for a campaign because most people that are Googling for a product they’re going to amazon.com to search for the product, right? They’re ready to buy it now. If they’re going to Google there might be a research phase and they’ve never heard of crowdfunding, they never backed a campaign, and they don’t want to wait six months or eight months for a product to ship. So the SEO really doesn’t truly work except for the long-term value of the campaign actually being up there and then it continues to rank for it.
Andrew: Some of the majority of the work that you did for these clients was about Facebook ads, right?
Roy: So once it goes live, yeah. And as I mentioned earlier, the pre-launch is the most critical factor of any campaign that we do in terms of building up that buzz, that hype, that groundswell before a project ever launches. Getting people on your email list, letting them know about the early bird rewards, and telling your friends about this, and . . .
Andrew: Let’s take it from the beginning. What are some of the things that you do? I come to you . . . this is before you decided that you’re going to get into the product prototyping and creation. Back before you did all that when you were just doing marketing, if I came to you and I said, “I have an idea for a better pen. It’s a digital pen that anything that I write down will also go into my phone. I have it. It’s made. I need money so that I can go and produce more of it and I need customers.” What would you have done for me back then with that kind of idea?
Roy: So given that we’ve done a few pen campaigns, we certainly know where to target and where to advertise to. And we have communities all around that in terms of the people that are the workers, some of the thought planning books, some of those books around that. So we have some communities that surround that product, but given that, right? So it all begins with the story like storytelling, that’s critical for us of, “Why should someone buy your pen? What are the key features of it? But also, what’s the benefit to someone?”
And that’s really the things that we try and focus on in terms of our consumers that we’re reaching out to. How is this going to make their life better? Just like Pipedrive is going to make my life better because it saves me so much time in terms of sales and funneling and focus. This pen may save me time because of X, Y and Z.
So figuring out what those features, what those benefits are and creating that story around it, then it’s crafting the landing page, right? Where are we going to send customers to where they can learn more about it, maybe watch a pre-campaign video, maybe that’s where we split test some of the copy that we’re doing, maybe we test, let’s launch the pink one or the blue one first so we can test all of those things before . . .
Andrew: So before you even put it up on Kickstarter, you get a landing page for them and you’re experimenting with the storytelling, with the design, which color pen do you sell, etc. And you’re already starting to buy ads for it.
Roy: Even price points. We’re testing all of these things pre-campaign to understand what the consumers want that we believe are going to be the ones that are going to purchase it. There’s sometimes that we’ll set up a landing page with actually a credit card form at the bottom that’s fake, but basically it allows us to see if someone’s willing to buy it right there on the spot with the content that we gave them, we know that’s a true conversion, right?
And then we can take that data and say, “Okay. X amount of people are going to convert on this type of landing page or this type of landing page or this price point, etc.” So then we actually get true data during our pre-campaign whether or not those products are a good fit and/or all of the marketing and messaging and branding and content we’re creating is actually a good fit for the customer that we think is going to purchase it.
Andrew: So the high-heeled shoe that you were telling me about, I’m looking at their Kickstarter campaign, and all the women in the top hero image are wearing jeans and the high heels. You might have tested skirts and high heels, dresses and the high heels, and decided, “No, our audience really cares about jeans and high heels, they feel comfortable, and that’s what our hero image will be when we eventually get the Kickstarter.” You tested that on your own landing page with a few bucks of advertising, right?
Roy: That as well as testing that in the ad copy and the ad imagery, the display imagery.
Andrew: I see.
Roy: All of those places get tested as well specific to your images. Correct.
Andrew: How much money are you spending in those kind of tests before you even get any customers from it?
Roy: Usually, we try and test between 20% to 25% of the overall advertising budget that’s set aside for the project.
Andrew: Wow. Well, give me a sense of how much ad budget would go into a campaign like this.
Roy: So for that campaign, overall ad budget was low side of the six figures. During our pre-campaign, probably 5K to 10K. I don’t know the exact numbers but it was somewhere around there. I think we were able to build up around 40,000 e-mail addresses during the pre-campaign launch.
Andrew: Oh that’s fantastic. I thought it would be so much more expensive to buy ads for a product like this and promote a campaign.
Roy: When you have our expertise, we’re able to quantify and qualify the leads that are coming in to give it the best exposure at the lowest cost per lead as possible. And we’re not getting leads . . .
Andrew: We’re looking at 1.8 raise to give people a sense, 1.8 raise. And roughly how much would you spend on advertising for it?
Roy: Just probably around 100K.
Andrew: That’s fantastic. All right. And so in the beginning what you’re doing is not just testing but you’re also collecting e-mail addresses. Are you doing anything other than advertising? Are you also going out to Facebook groups or other types of groups and telling them this thing is coming and asking them to link over? Are you doing any campaigns with bloggers? Anything else?
Roy: Yes. So the pre-campaign we’re using different types of internal software and things that we do to build that groundswell. When a customer comes in, they’re immediately in line in a queue, right? And then they get points for signing up and commenting. Then they get points for Facebook sharing it, or tweeting it out, or emailing it to their friends, and they move up the queue. The further they move up the queue the closer they get to winning free product, instead of backing the campaign they win free product.
So then we can see this viral coefficient that gives a statistical relevance of the virality from that customer that shared it out. So we’re able to say, “Okay. Customer X, Y and Z just shared it, we just got a bump of 100 new people that came in and signed up as well. This person is an influencer. Let’s reach out to them individually and potentially give them a referral agreement so that when they share it, they get cash back for sharing it out to their network.” So there are a lot of different things that we can do with bloggers, with influencers that we do during that pre-campaign all to build that groundswell before it launches out.
Andrew: What software do you use to give out points and get people to spread the word about it?
Roy: So the main software that we use is called Queue Technologies. Joe Sanchez runs that out in San Francisco.
Andrew: What is it called? Queue Technologies?
Roy: Queue, yeah. Q-U-E-U-E Technologies.
Andrew: Q-U-E-U-E Technologies. And this allows you to create that whole viral growth thing. Oh yeah, there it is. I see it. QueueAT.com amplify brand advocates. And this lets you create the landing page, the whole thing?
Roy: No. So we custom code all landing pages whether it be WordPress or some other template system that we use internally. But that basically builds that viral engine. So we put that usually at the bottom below all the sales copy, below the imagery saying, “Signup now, get in queue, get in line,” and then we try and get them back and back and back every single day to keep sharing it and moving up in points. And then finally, the reveal of the launch day. They’re the first ones to get notified about it so they can get the early bird rewards so the product at the best price possible.
Andrew: Wow. I wonder if we should be using this software for like even webinars. If someone’s coming to a webinar and they’re signing up, maybe we should be giving them an incentive to promote it to their friends as a way of getting more people to show up to the webinar. What do you think of that? Would it work?
Roy: Well, I think you should actually use it for all of your guests. Make them use it so they set up their landing page like, “Listen, I want to be on Andrew’s show but I can’t do it unless I hit a certain viral co-efficient or get enough people to share it out there.” Then you can contest all of your guests, basically, to make sure that they’re sharing the show out there and basically the person with the most reach, they’re the ones that get on the show.
Andrew: And is this before . . . so this before they get on I create a show a page for them, so I have to . . . if I’m interested in having Roy on, I’m the one who says, “Roy maybe should be on maybe not. I’m going to create a page for him basically saying ‘Do you want Roy on Mixergy.'” Roy then gets that page and he gets to share it out with people.
Roy: Yeah. And if I don’t hit a certain metric of people sharing it or enough people interested in the show, then sorry, you didn’t make the cut.
Andrew: Oh, wow. How much of that can I do just using cues software as is, and how much do we code? We have a developer, we can code this up, but I want to do more of this stuff next year.
Roy: Yeah, Queue handles is almost all the backend for you. So there’s very little coding and upfront that you have to do. They’ve built the system that we use for almost all of our pre-launch campaigns, the big ones. We use their software, so happy to make an intro to Joe.
Andrew: Okay. You know what I need? I want one person who’s going to manage a lot of this stuff. Like frankly, at the end of this interview, I notice that some people are really proud to be on Mixergy because they’ve been listening for years, and they want the logo on their PR page or on their home page. And some of them will actually take the time and put it on their site because they’re going through a redesign. Others just won’t do it.
But if we say to them afterwards, “Hey, here’s a logo. Do you want to put it on your site? We welcome you to do it.” I think we’ll get some people to do it. Some people have PR pages. If they think about it they put it on their PR page. If not, they don’t. Someone should be putting that on. Some of them will tweet it out, some won’t. And we don’t do a great job of following up and getting them to tweet it out. We don’t do a great job of thinking of all these things.
I want one person in charge of all of that. Where would you go to hire that person, that person whose whole job is to do growth for Mixergy and come up with, like if I hear an idea like this to go and implement it? You’re good at this stuff. Where would you go to find that person?
Roy: Yeah, it’s a good question. We do a lot of networking in terms of trying to find talent, but actually, we’ve started reaching out to places in other states, like we’re getting people that are coming from Denver, we just got a new hire from Austin, from Virginia, from New York. So we’ve got a lot of people that are actually just coming in because they’re excited about our story and about the products and everything that we’re working on. It’s something new every day, it’s a new start up every day, it’s a new story to tell. So for something like that.
Andrew: I get it. But where are you going to get the . . . growth hacking now has become such an overused word that it’s kind of a joke if someone calls themselves a growth hacker. But there’s something to that role that is important. That’s basically what you have. Your whole company is based on growth hacking people’s success and crowdfunding campaigns. Where do you go? Is there a network online that’s good at this? Is there a place where you go? And is there a conference that you go to, to find these people?
Roy: Yeah, that’s a good question. I don’t think there’s conferences for it because likely those folks already have gigs. I mean, really, I’ve used LinkedIn, honestly to do outreach to people. And I don’t like poaching but I like working with people that I’m friends with that I have connections with and then I’ve known and see them grow in terms of doing their own thing. And those are the people that I’m really excited about hiring myself because I’ve been completely removed from the hiring process. Just because we’ve gotten to a stage now where I can’t be in all of those interviews and we’re bringing in someone new every week, it seems like.
So LinkedIn still to this day I think is the best place to find talent that’s potentially not looking for a new job, because those are usually the best hires. But we like to hire college students fresh out, maybe their first or second gig and they don’t have any bad habits. So they can learn from us because we’re creating a whole new industry as you said. I mean, crowdfunding is so new. I mean, Kickstarter just crossed the 14 million backer mark. So that’s all we’re dealing with in terms of a community, 14 million people. That’s it.
Like, Indiegogo, yeah, they probably got 10 million, out of that probably 60% of those people are actually on both platforms. But still, let’s say that the total universe of 20 million people have actually backed a campaign. So the growth is phenomenal, but we’re creating new jobs with titles that haven’t existed before, like cross-promotion specialist. Like, what is that?
So we’re trying to hire for that now and we just published it again because we need another one and we’ve already got 15 applicants. But they have no idea what they’re signing up for, like they’ve never done anything even remotely close to that. But these are things that we can train them on so they become experts in it and then hopefully move up in their career with our agency.
Andrew: I guess what I should be doing is also looking to see what titles people have at your company and also which ones you’re hiring for, so I get a list of like the job descriptions and I understand what you’re doing. Okay. Let me take a moment to talk about my sponsor and then I want to come back in. I want to find out a couple more things about what you did when it was just marketing, and how did you end up getting into actually creating the product? And frankly at some point, you basically run the whole thing, why do you even need the inventor anymore? We’ll talk about all that in a moment.
But first I’ve got to tell everyone about a company called Formstack. A moment ago I mentioned that when someone fills out a form on my site, I take all that contact information, I put it into Pipedrive. The reason I could do all that is because I have form software that allows me to connect with all the tools that I want. And that’s the beauty of Formstack. If you’re out there and you’re listening to me, you have to understand that, yeah, there are a lot of third party software that you can go use on someone else’s website. But I urge you to get software for forms that you can put on your site, and think of forms as more than just surveys.
Think of it as the onboarding top of funnel for your business. Think of it as a place for you to screen out who’s a potential good customer and who’s not, to understand what you should be creating what you shouldn’t. One of things that I did when I wanted to figure out what to sell to my audience was I looked at my e-mail and I saw a lot of people are asking me, “How do I do interviews?” Like with Roy, he’s got his own podcast, right? But you don’t do interviews. The Art of the Kickstart is just you?
Roy: Yeah, it’s just me.
Andrew: Just you.
Roy: I do interviews, yeah. I mean, I interview startups, founders, most people that are crowdfunding products most of them are our clients.
Andrew: I see. I thought so. And then how do you record it then if you’re not doing via Skype.
Roy: Well, I do it via Skype but I don’t do the video part of it. That’s like the missing piece.
Andrew: So then what are you recording Skype with? I asked you before we started, you said, “I don’t use e-cam.” What are you using to record?
Andrew: Audacity. Oh, really. And you’re on Mac?
Roy: No, PC.
Andrew: Oh, okay. That’s the headache there. I get it. Unfortunately, there’s no e-cam for the PC. The guy behind e-cam loves the Mac. He’s all about creating software for the Mac.
Roy: That’s funny.
Andrew: Well, one of things that I found, was as I was doing interviews I kept getting hit with questions from people that, “What mic do you use? How do I set up software? What do you use to record off a Mac? What do you use to record off a PC?” And I thought, “You know what? Maybe I should be selling this is as course. Instead of doing one-off answers, maybe people want a full-on solution.”
So I sent out an e-mail to my audience saying, “If I sold this, would you be interested?” Anyone who clicked Yes went to a form that I said, “Well, why do you want to know this? What’s the solution that you want?” And then they hit Submit. As soon as they hit Submit, the next form that I came to them with was, “Would you pay for it?” If somebody says, “Yes, I would pay for it.” I said, “Okay. Put your credit card information right now. Put a $25 deposit so I know that you’re serious about it.” And people actually put down a $25 deposit. If they said No, the form asked them, “Why not?” So then I understood the reason they said, “Why not?” is “I don’t have enough time.”
So I went back and I changed my copy like in the first form that said, “Would you be interested in learning how to do your own podcast, your own interview podcast like me if it doesn’t take you too much time in the week?” Suddenly, I got a lot of yeses and a lot of people who then put money down and a lot of No’s still came in. And I took all the reasons why they said no and I changed the copy on the first page and I improved it and by the end I had a real understanding what people would pay for, and I had paying customers who were willing to put a down payment to hear more about this and to get early access.
All this could be done with forms. If you’re sending your traffic for forms to other sites, you’re making a mistake, you need to own it on your site. If you’re using forms that aren’t this smart, they can’t do like if-then analysis, they can’t collect payment, they can’t send that data to something meaningful, maybe not like me, maybe you don’t use Pipedrive or CRM, you use Excel spreadsheet or some other spreadsheet like Google, you want to send that data to them. And that’s the beauty of Form Stack.
I urge you to go check them out. I love them but so do so many other people. I’ve got this quote here from Bloomberg. This is the Chief Engagement Officer of Bloomberg, Steven Shattuck. He says, “I love Form Stack.” He says, “We switched from . . .” and he talks about who he switched from, a major company. “We never looked. The user interface is extremely intuitive. Multiple team members including myself are able to jump right away in with minimal orientation and training.”
And that’s important too, because if you’re using this you want to know everything about how to use it fast, and then train your people to do it without having to always be the person who’s on top of forms. “We’ve had no issue with the service or support whatsoever,” Steven says.
By the way speaking of support, they tell me that they love the support, that they’re on support. If I ask them, “What’s the one thing that separates you from everyone else?” It’s the level of engagement that they have. I think it’s the connection and the flexibility and the ability to basically create these if-then statements if someone answers this, ask them that question. But to them what they’re proudest of is their support.
So if you want to sign up, if you want to check them out, I urge you to go check out . . . let me go and make sure that the page is up right now, formstack.com/mixergy. They are huge with other people who I’ve interviewed. In fact, when I was looking for the domain that we were using for them, I kept finding like VCs who sent me forms using Formstack, I found entrepreneurs who I interviewed who sent me form via Formstack.
They’re really big with them because they’re such good software and they want to make sure that you get to try it. So they’re going to give you a 14-day free trial if you just go to this URL, formstack.com/mixergy.
All right. That one went a little bit long Roy, right?
Roy: I like that. It’s good. It’s good content.
Andrew: I think I could have been a little more polished on it. I think I got the message out there. I just needed to like go boom, boom. And this is where, Roy, people say I should be recording the ads ahead of time. I don’t like that. I don’t like anything that’s recorded. I hate listening to someone else’s podcast and I hear that it’s so polished that it feels like an ad on television. I want to personalize it.
Roy: Oh, I think that they give better engagement when you actually blend it in with the conversation, and it comes out naturally. So I’m all for it. My podcasts are pre-recorded just because we have a couple of them and we like it small and they don’t change and everything is good there, and they’re vendors that we use. So I prerecord it and it saves time.
Andrew: Here’s what I don’t like. The new thing is Gimlet Media started out playing a little bit of music under their ads. So then other people are playing more and more music, the Gabfest podcast by Slate has music that’s so loud, this generic jazz music that I can’t even hear what David Plotz is saying when he’s talking about his sponsor. I can’t hear it. And I know why they do it.
They think of themselves as news people. They want to distance themselves from the product that they’re promoting. They want music so loud that says, “We are not at all related to this. This is a paid ad.” Right? Because they don’t care about it. They just know if they’re going to do media in 2017 and 2018 they need to do ads, so they do it, they hate themselves for it and they play a lot of music.
I’m doing only ads for things that I believe in. I know you’re doing the same thing. I thought about it at 2:00, in the morning. This morning really, I woke up and go, “Am I doing the right thing here? Is this the right company?” I go through my whole thing at 2 a.m. and one of things I said was, the ad is the most personal thing that I do. If somebody signs up for Formstack because of me, if they sign up for Pipedrive because of me, this is embedded in their company, this is the most personal representation of me in their lives. They can’t separate it from me. It better be good stuff. It better be.
Andrew: I went on a little rant. Do you still get to that point where you’re like in the middle of the night, you’re questioning yourself? Am I doing the right thing? Am I on the right track? How do I make sure that I live up to whatever ideals I had as a kid?
Roy: That’s it. That’s the entrepreneurs challenge or conundrum or what have you.
Andrew: Right. What is it like for you when you feel that way?
Roy: I don’t know. Usually I’m up at night because my kids are sick or something along those lines and then I just don’t go back to bed because I can’t stop my head from thinking, or coming up with new ideas, or how to market something.
Andrew: Is it just new ideas. When it’s not new ideas, what else is there when you can’t stop your mind from thinking?
Roy: How can I make my clients more successful and how can I continue to scale my company, the overall direction, right? Like biggest challenge is taking it from that company that was in a search phase, trying to find that repeatable scalable business model which we found with crowdfunding marketing, and then building it, like scaling it to grow the customers and users and everybody that’s paying for the stuff. And then, as we get into that, like, the growing side of things in terms of achieving liquidity and optimizing all of our business processes. That’s where we’re at now, is that growth phase and that’s what keeps me up at night.
Andrew: I get that too. And partially it’s because now that I have kids, what if I get hit by a bus and I’m cripple and they have this loser dad in the house that they can’t roll around on the floor with because he’s now broken and he’s broke because he didn’t set up a business that runs without him? And in my head this loser dad is not what I want to be, and so I go, “Did I set this up? Why am I still on top of everything? Why am I the person who does this? This is a mistake.” When you do your systems what do you use to manage your systems and make sure the company can run without you and scales without you?
Roy: Yeah, fortunately, my Chief Operations Officer, Joe, is my scalable future. I mean, he’s been able to set up . . . basically, my issue was getting everything out of my head and onto paper because I know everything that needs to happen for the most part because I’ve done it before. I’ve grown it and know what all these companies need to do in terms of grow.
But in terms of my own as we scale from 2 people to 5 to now we’re over 60, it’s difficult and unless you have all those processes and systems down, so a variety of like Trello cards and ActiveCollab and Google Drive basically everything lives within those three systems. So when I go and travel and speak at conferences, the company can run without me which is great because I don’t need to get in the way. And that’s kind of why I even got removed out of the hiring process because I just get in the way of it right now.
Andrew: ActiveCollab is project management software like Basecamp except it seems to work, I’m looking at it right now, like Trello cards, very similar to Trello.
Roy: Yep. Yeah, nice integration points. There was a few additional things because we were a Basecamp customer one of their first ones. So we migrated with them up to a point where we got too many clients that we were working with and ActiveCollab just had a little bit more robust features that we needed for all of our clients.
And then now with the merger adding on product development they were using a similar system, so we were able to migrate all of that. When a customer came to us with that idea on the napkin, once we finished the crowdfunding campaign it’s a smooth migration the product development to now go and make, manufacture and distribute that product.
Andrew: And it’s the whole thing . . . let’s look at, set up a landing page, set up the viral component of the landing page, do a test for the Facebook ads. Is that all thing a set of checklist items in your project management software or is it a set of Trello cards? What is it that allows you to know, “We have our steps for taking a customer and making them successful”? What software, documentation, what do you use to get all that down?
Roy: Yeah, everything is a templated list for the most part, all depending on where that startup is, right? Everyone’s in a different place in terms of their foundation and what we’re working with in terms of assets, content, websites, social media. And many of the companies and entrepreneurs that come to us have absolutely nothing.
One of our case studies, a company called Bunch O Balloons. Josh Malone came to us with this great idea, this great invention of filling up water balloons without having to untie them, but he didn’t even have . . . he had his child create the logo. He didn’t have a website, he had no social media presence. We ran his campaign, we did the PR for him, we got him on The Today Show. It was a million-dollar campaign basically. Once the campaign was over, he then licensed the toy off to the largest manufacturer in China and now they’ve produced hundreds of millions of these products with the exposure and help that we did for the marketing and content creation for his campaign.
Andrew: You know, I’ve seen this thing, a Bunch O Balloons, really cool.
Roy: It’s genius.
Andrew: Yeah, it’s so simple too.
Roy: I’m glad that as a parent now I have like thousands of them in my garage. So like I’m the place that all the kids want to come, in the summer parties and everything in the backyard.
Andrew: Right, throwing them at each other.
Roy: Because I just have tens of thousands of water balloons ready to go.
Andrew: So if a new balloon company or a new child toy company came to you today and said, “I don’t need the manufacturing. I got it handled. I need you to do promotion.” Is it, you have a checklist that you would copy and paste into a new project and say, “Okay, team, we all know these are the steps that we take to make these guys successful. We’re all going to go and take on our checklist items.” Is that what it is roughly?
Roy: For the most part, yeah. I mean, it’s very systematized in terms of the departments that are taking it over whether it be the PR department, the social media, the content team, the advertising team, the project manager, etc. They all have their lists of tasks all dependent on when assets usually get delivered from the client. That’s usually always the hold up of getting stuff from our clients whether it be photography if we’re doing the videography or if they’re handling, what content, what story do they want to tell.
So now we’re creating more brand guidelines for a lot of these companies and we can say, “Okay, this is what you agreed on initially in terms of what you want your story to be and what you want us to portray your product as to the consumer market.” And then we follow that along all the way through campaign launch, pre-campaign, etc.
Andrew: I see. So now you’ve had this thing work. Why did you decide to take on building the product, prototyping it? That’s a pretty big project.
Roy: It is, and just think of it from the entrepreneur’s point of view, right? So they’re like, “Hey, I’ve got this nice cushy desk job. I don’t know if I want to leave it yet, but I’ve got this cool idea that I really want to see if it can work and come to fruition.”
So we were getting, again, hundreds of leads a week with people with ideas. Nothing fleshed out yet. “I think this would be cool. Can you help me out?” And we’re like, “Yeah.” But nowadays the platforms and the backers want to see a functioning prototype, they want to see if this thing is real, if it can exist. So we were basically just giving all that business away and then waiting a year or two for them to come back and say, “Okay, our prototype is ready.” And we’re like, “All right, let’s run the campaign.”
So we were fortunate a mile down the road was Enventys, a product development firm that have been doing this for 16 years now, and they’ve produced hundreds of products, if not thousands of products over a billion dollars in sales in terms of all the products that they had created before. So they had built the system, they have factories overseas in Taiwan and we can make and scale these companies up, and so that there is no finger pointing at the end of the day.
So an entrepreneur comes to us, they give us the idea, we run it completely turnkey start to finish for them, and there’s no gaps in terms of handing it off to a product developer or an industrial designer or the IOT department of somewhere else and then coming back and blaming the design team that they didn’t do this right or that right. Everything’s under one roof for them. So it’s very seamless for them in terms of the transition from, “Here’s my idea, go raise money on crowdfunding, go produce the product,” now we can help them with sourcing and shipping and everything else thereafter.
Andrew: So then, what is the entrepreneur doing? Just having an idea? You’re basically marketing the idea for them.
Roy: Yeah, we have a ton of entrepreneurs that come to us and say, “Here’s my idea, Roy. I don’t want to run a company. I don’t want to leave my day job.” And we take those ideas, the ones that we feel we can get enough traction for and we do everything for them and pay them a royalty of all the sales if it’s successful.
Andrew: So at some point, it’s just them giving you ideas and you basically own the ideas, kind of like . . . this is this is what happened in the old infomercial days. Some agency would be out there to represent people and help them promote their stuff with infomercials, and then they realized, “Well, we actually don’t need that. What we want is the ideas and we’ll take them over.”
Roy: Yeah. Unfortunately, that’s what happened actually with Bunch O Balloons. One of those infomercial companies actually took the idea, tried to create it on their own, got it into a bunch of stores, Bunch O Balloons had to file lawsuits against them and they actually just . . . the case just finished two weeks ago where Bunch O Balloons was found in the right and got a nice $13 million or $15 million settlement out of it from one of those infomercial companies.
Andrew: Right. And at one point in the past they were more about the inventor and then they became less and less from what I understand.
Roy: Yeah, I mean, again Crowdfunding is just, you immediately see some of these viral type campaigns that are out there that consumers just want to back and what we’re trying to always increase is the amount of first time backers, right? Let’s educate them on the platform, let’s write a bunch of content around why it’s safe or, why bet on the entrepreneur to get this product before everybody else gets it. And that’s what we’re always trying to increase, is the amount of first time backers as well as repeat backers, obviously.
We don’t want someone to get burned in terms of a campaign that raised a bunch of money, but they spent too much money on marketing or product development that they actually couldn’t bring it to life and then they just pocketed all the money and the backer’s like, “Screw this. I’m not going to crowdfund or back anything. I’m going to wait till it comes out in Best Buy or in a store or whatever it maybe.” So we’re always trying to keep the customer around and keep them coming back for a new campaign every time we launch something new.
Andrew: So Roy, if you’re basically taking on a new product and doing everything and just paying a royalty out to the inventor, at that point you even own the e-mail list, which means that if you have one toy that you own the email list for, you can then promote another toy with your email list and grow it further and further and further. So you’re basically a product company, right?
Roy: Correct. Yeah, I mean, so, again, given that we’ve been doing this longer than pretty much any other agency out there, we’ve built a significant group of backers in the millions that we’re constantly reaching out to in terms of, here’s a new product innovations that are launching on Kickstarter, and trying to reengage that community to come back and back more projects. And then any of our active campaigns that we’re working with we’re always try to cross-promote, again, other campaigns that we’re working with to try and continue to upsell customers as they go.
But yeah, we own millions of millions of different databases of customers. So again, we’re very picky in terms of the projects that we take on because we’re getting hundreds of leads per day. We maybe will take on two or three of those that are good fits for the agency, good fits for advertising, marketing, whatever it may be.
Andrew: How big is your e-mail list now?
Andrew: Millions. You won’t say the number. I have revenue numbers for 2017. Can you say them publicly? I promised that I wouldn’t tell him but if you say them, I think it’s okay. Give me a sense of the revenue.
Roy: Revenue numbers for 2017, given that we’re what? Twenty days away.
Andrew: Yeah, and we’re going to publish this right after the New Year, I believe.
Roy: Nice. Yes, so we’ll do over 10 million this year.
Andrew: Ten million in 2017, and that doesn’t include the money that you guys get from your clients to run their ads, their Facebook ads.
Roy: Right, because we’re usually fronting all that.
Andrew: Yourself. And then what’s the net? Is it more than two?
Andrew: Wow. So you’ve really come a long way, bootstrap company. It is, right?
Roy: Yeah. I mean, so we’ve built a lot of other companies underneath it. So we have the manufacturing side that we’re doing, larger companies like DonJoy for some of the medical innovations that we’re working with. The Bacon Bowl, a big seller, Eggies is a big seller, the Gyro Bowl that you’ve probably seen as well. And then we have . . .
Andrew: The Gyro Bowl is the one that will not spill?
Roy: Well, you can’t say it will not spill, but it prevents spilling, right? And then we have an innovation line, right? So we’re doing our own internal products now. Now that we have all of this fun stuff inside the building we’re going to start creating our own products.
And we have Edison Nation which basically is a product search inventor network of over 300,000 inventors in the world that we can submit new product ideas for and try to get the inventor community around it. We also run, like I said, Edison Nation Medical which is medical devices. We have the largest magazine dedicated to the inventor community, Inventor’s Digest. We have an enterprise crowdfunding site called Fulkra.
And then we actually just launched a company called Start100 which is basically a part angel fund, part accelerator, part startup coach for potential high growth product entrepreneurs that we think are great fits for crowdfunding. So basically, we’re going to invest in the engineering, the entrepreneur itself, execute a reward crowdfunding campaign and hopefully build them a foundation for long term success. And then of course I’ve got the podcast as well.
Andrew: This is a lot. What the hell, dude? Do you get to see your kids at all?
Roy: In the mornings and at night, yeah.
Andrew: Fulkra.com is the company. Is that right?
Roy: So that’s our enterprise crowdfunding site, correct.
Andrew: I see. And it’s Chris Travers who runs that for you, it’s not you doing day to day on that.
Roy: Correct, yes. So they were here today actually we had General Electric here, so we’re actually going to be working with GE now to do some enterprise crowdfunding for some of the businesses that they’re working with. So exciting stuff.
Andrew: Meaning, new businesses will pay before the product is created to have it when it is created.
Roy: Exactly. They want to just . . .
Andrew: What’s an example of a product that an enterprise would be willing to pay upfront for and wait for it to be created?
Roy: Well, so it’s not necessarily that. They want to do product validation. They want to see that if the innovations that they think they’re going to be launching are actually good fits for the consumer market specifically [inaudible 01:00:11] crowdfunding . . .
Andrew: Oh I see. So it’s B2C for enterprise. Why can’t they just use a standard crowdfunding site?
Roy: They can, but they don’t have the expertise necessarily to reach out to the customers. Again, they’re really good at making stuff, we’re really good at marketing stuff. So we bridge those two together in terms of, let’s find the customers, let’s get their feedback, let’s engage them, let’s see if they’re willing to pay for it and at what price, and all the other things that go into running these campaigns.
Andrew: I see. So it’s not you selling it on fulkra.com, it’s you getting those customers from Fulkra and then taking them to Indiegogo or taking . . . how do you decide which platform to take it to, Indiegogo or Kickstarter?
Roy: So given that we’re an expert on both platforms and we’ve received that monocle from both of them, both platforms usually fight over our clients. So we basically pitch it to both of them and we say, “Here’s a cool tech, here’s a cool idea. What are you guys willing to do for it? Or what additional promotion, or e-mail news blast, or all these other things, are we willing to get?” Again, because we do such volume with these platforms and bring them such revenue, they work directly with us. So we have daily, if not, multiple time calls with these platforms with active campaigns and campaigns that we’re bringing into them.
Andrew: All right. Let me close it out with two challenging issues for you and how you dealt with them. The first one was you had this partner that we talked about, you intentionally merge your company with his and he became a co-owner. What happened to that co-founder?
Roy: So, with Command Partners I’m assuming you’re talking about?
Roy: So yeah. I have an original founder on the PR side. We did a campaign for another company that basically we blew it up for him, did millions of sales for him and he was like, “I want in.” So we ended up bringing in a third partner, so we were all equal third share owners. And basically within the first eight months it really just wasn’t clicking for the two of them. They were just at ends and I was kind of the middle child hearing it from both ends and having to interpret it. And basically it got pretty sour where he was threatening to bankrupt the company basically.
Andrew: This is the new partner, the third person you brought it and said, “I’m going to bankrupt the company unless you help me resolve it with the guy I don’t like.”
Roy: Let’s fire him. Yeah, unless you get rid of him.
Roy: It was just ugly at the time and I was broke and I didn’t get a paycheck at the time. And I couldn’t force and I didn’t want to see my baby die, so I basically had to agree with the new founder that we had brought in to get him out. And then basically, he and I kind of got at ends a few months later and I ended up buying him out just basically to retain ownership 100%. And then since I took over the ownership we were one of Charlotte’s fastest growing companies for two years in a row.
Andrew: Wow. And meanwhile the other person, the guy who you had to buy out of the business is family.
Roy: Yeah, so he’s a step brother-in-law. So he introduced me to my now wife. It’s almost water under the bridge entirely.
Andrew: Do you still see him?
Roy: So we just had a holiday hang out recently. So it’s water under the bridge but it was a really difficult time then and the business could have gone down. But I knew I could see it through and fortunately he was willing to work with us in terms of what his end agreement was.
Andrew: What about the first founder? Was this Amish?
Roy: No. So that was the second founder. So Brandon was the original founder with me. So basically, he had a bad taste in his mouth for years and years and I don’t know if that reputation between he and I, or that relationship between he and I were ever be patched because we kind of built it up together.
Andrew: Yeah, that’s painful.
Roy: So it’s unfortunate.
Andrew: All right. And I interviewed another person. I’m not going to mention their name or company because I think then I get you to be more open about it and we leave enough ambiguity that we don’t say anything that would cause you any trouble, so you could be more open.
But the other company also does crowdfunding campaigns. They focus on them. You had, from what I understand some interaction with the founder who I interviewed, with the founder of this other company. What was it? What was the interaction?
Roy: So yeah. So given that we were doing crowdfunding for years and years, we had built up the reputation as the top crowdfunding marketing agency in the world. And our reputation and our campaigns showed that. So another consultant reached out to us and said, “Oh, we just ran our first campaign. It was really fun. We’re thinking of getting into this. Can you kind of show us behind the scenes of how you guys work your magic?”
So we ended up doing that, showed basically everything we were doing, let them talk to our Facebook ad managers and everything else that we were doing. And they eventually launched their own company which is solely focused on just Facebook advertising where we’ve taken the holistic approach of actually caring for our clients start to finish and then nurturing them throughout, obviously, now with the product development arm, but helping them continue to sell product there after the campaign where we’re not just ending our engagement once the crowdfunding campaign concludes.
Andrew: So they just focus on this one part of the business which is getting customers, but as soon as the crowdfunding campaign is done they’ve gotten their customers, they move on to the next crowdfunding campaign and they help promote that and they just keep cycling through customers.
Andrew: Why would you let someone in and show them everything, let them talk to your ad people, to the rest?
Roy: Maybe I’m just too nice. No, I mean, crowdfunding . . .
Andrew: There’s a benefit to it. I know other entrepreneurs who I’ve interviewed have done that and I can tell you why they do it. I’m curious why you do it.
Roy: Yeah, I want the crowdfunding community, the world at large to be larger, right? So for another agency I felt was white hat at the time was doing good deeds and bringing startups to life and bringing products to life. I was like the more the merrier, bring them on. So that’s why I was willing to show them behind the rope.
Andrew: Why? You’ve got a business. If the whole thing goes away, we talked about it, you could end up being that loser dad that I worried about at 2 a.m. Why do you want other people to be in this space? Kickstarter’s doing great, Indiegogo is doing great. If you’re the only person who’s shepherding entrepreneurs through that process of getting on there, creating their products and selling it, who cares?
Roy: Well, because there are so many entrepreneurs that need help and we can’t help them all unfortunately. I wish I could. I mean, there are just new projects launching every single day. I mean, Kickstarter now crossed like $3.5 billion with hundreds of thousands of projects that have been successful. But if you look at the success rate of these projects because we only focus on three categories, design, technology and fashion. Those campaigns, on average only a third of them are actually successful.
So all of these new tech ideas or new innovation ideas need help. They need our marketing help. So at the time I was like, “Yeah, here, you can get some of our scraps,” some of the campaigns that we weren’t taking on because we didn’t feel they were good fits for us. And, it’s fine. We’ve got plenty of case studies to prove that we’ve done better advertising. Again, we’re the first crowdfunding marketing agency to actually have a case study on Facebook. So that says it all.
The fact that we work so closely with the platforms, we’re the only expert on both platforms as well in terms of agency. So those things are the pillars that we hold up that we’re trying to do the right thing for all the companies that we’re working with, whereas, they’re more of a churn and burn.
Andrew: Here’s why Tony Hsieh did it. He was one of my first interviewees. He would have people come into his office famously and show them everything, and I thought it was so that they could teach other people their process and reinforce it in their team, right? If someone on the team who does customer support tells another business owner, “Here’s how we do customer support,” well, they’re reinforcing it in their own mind.
What I heard through interviewing him and other people, the company is they also would get information from them. When you’re teaching, you also get to hear someone give you feedback on your process and you go, “It actually can be made better. It can be made differently.” They open your eyes as much as you open theirs.
All right. This has been fascinating which is why I ended up going way longer than we expected. I appreciate you giving me the extra time. If anyone wants to go check you out, you do the podcast. Is that the best starting point? Should I send them to artofthekickstart.com?
Roy: So that’s the podcast, Enventys Partners, enventyspartners.com. That will be the best resource. We’re actually re-launching the website probably on the same day this podcast may come out. So, that’s probably the best resource to be able to go to and request a quote and get started and submit your ideas.
Andrew: Cool. Guys, let me know if you end up working with him. I want to know what it’s like on the inside. Keep feeding me that info about him, his business, and frankly even my sponsors. I only want to work with sponsors that you are excited to use. If for some reason you had a positive experience, I want to know about it. But more importantly for me, frankly, because I’m that kind of person, I like to keep hearing about the downside. If it stinks, let me know.
All right, so here are the two sponsors. The first is the software that Roy and I both use to close more sales, it’s called Pipedrive. Check them out at pipedrive.com/mixergy. And the second is form software that is so flexible that you could create things that are basically like automated software and take that data and send it anywhere that you want. It’s called Formstack, check them out at formstack.com/mixergy. And I’m grateful to them for sponsoring. Thank you, Roy.
Roy: My pleasure.
Andrew: Thanks, everyone.