Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the, or a mix. You know what I should explain why I say freedom fighters. It came to me when I was living in Argentina. And I noticed that the people who are in Argentina waiting for entrepreneurs to give them the freedom that their government wasn’t giving them access to the world, access to jobs.
And I saw the frustrations that they were dealing with, but I also saw the hope that they had, that the people I was interviewing were going to bring them into the modern world that. They felt their government wasn’t, , bringing them in. We in the U S were thinking about Che Guevara. They in, uh, South America, we’re thinking about, the founders of, all the companies that I was interviewing.
Anyway, today’s guest has a, a similar take on this. He feels that entrepreneurship is also about giving yourself the freedom, the freedom to live, the life that you want to make the decisions you want to be, where you want to be. And I’m fascinated by him because Leela fever. Co-created common craft as a site to make technology easy for people to understand that he created this explainer video with little cutouts on paper that he positioned on the screen to explain things like what RSS is.
Google hired him to create a video like that little people cut out and, and so on. And his voiceover to explain what Google drive was. Dropbox famously had his video on page to explain to people what this new idea of Dropbox was. Anyway, the thing it fascinates me about Lee is the way that he’s evolved without changing.
I thought, for example, that the latest thing that would have destroyed Roy Lee is all these fricking video apps that I see that allow anyone to create their own version of common craft, where, you know, you’ve seen this, everyone’s seen this, these explainer videos where you can quickly create a video. Um, with these cutouts of people, the call outs, for their words, you know, the word, bubbles, the thought bubbles, et cetera, and just create what Lee crafted by himself and invented.
But no, even that didn’t crush his business. He just keeps slowly evolving. And at the same time saying, you know what? I don’t have to be big. I don’t have to be the next unicorn. I can just build a company that my wife and I love that gives us the lifestyle we want, that allows us to grow. Quietly sensibly and continuously boy, he wrote a book called big enough called build it’s called big enough building a business that scales with your lifestyle.
And as I read the book cover to cover, I was just shocked by all the little things that he added to his business that I wasn’t even as a fan, I wasn’t aware of invited him here to talk about how he built his business, how he adjusted every time I feel people copied his model and why he doesn’t think he needs to be much bigger.
And we can do it. Thanks to two phenomenal companies. The first one, do you have a tech idea? If you need some help to launch your product, we’re talking about that first version. Can’t get an agency to build it for you. I’m going to convince you that launch pier will help you do it, and I’ll give you something for free to enable you to do it.
If you want to check it out, go to launch pier.com/mixergy. And the second, if you need to hire a developer to build up your team, you got to go to top towle.com/mixergy, but I’ve been at enough here. Lee wants to get a chance to I’ll tell you about those advertisers later. Firstly, good to have you here.
Lee: Nice to be here.
Andrew: Where is here. Where are you right now?
Lee: I am in, uh, on an Island called orcas Island, which is off the North Northwest coast of Washington state between Seattle and Vancouver.
Andrew: Can you describe your place in the environment that you’re living in? This is your ideal life, right?
Lee: it is, we lived in Seattle for 20 years, my wife and I, and, Last year, we became permanent residents of orcas Island, which is an hour ferry ride away from the mainland. it’s kind of a rural, like wooded mountain, this place that’s really popular with tourists. There’s lots to do in the water.
And, um, it’s just a very serene, like I said, it’s very different than living in Seattle. And it’s, I think that we just reached a point in our lives where this is, this is what we wanted. You know, this is the environment that we feel like is the healthiest for us right now.
Andrew: And what do you do get to do there? Are you fishing? Are you boating?
Andrew: Crabbing? That’s the thing, isn’t it.
Lee: yeah. Into the crab crabbing. Yeah. There’s a Dungeness crab, which has big, delicious crab here. Um, we have a little 15 foot Boston Whaler boat that we take out drop four crab traps multiple days a week. And, uh, it’s become a major protein source during crab season.
It’s really a hobby. We love it. We love being on the water. That’s really what we’re all about.
Andrew: You, although it feels to me like this is the opposite of why you came to the West coast, you came because you saw what.
Lee: , innovation, attitude. I was brought up in the grunge era, like probably a lot of listeners and always thought Seattle had its cool aura to it. I felt like it was an innovative place, uh, an outdoors focused place. And there were an interesting companies being founded and run in there. Um, you know, I graduated from, um, from graduate school and didn’t have a job and didn’t know where I was going and just took a chance and moved to Seattle and stayed there ever since.
Andrew: You wrote in the book about how you read fast company you read, I think was an entrepreneur magazine. You started to read about all these businesses that were psyching you up and making you feel like there’s future here. I remember reading about those companies. For me, it was this company, web TV. It made so much sense.
Just attach a little T little computer to someone’s TV, give them access to the web right in their living room. The thing just took off. Microsoft bought them for a bunch of money at. I forget the exact number, but it was somewhere around half a billion dollars, which was huge at the time. And that’s what brought me, um, into tech entrepreneurship.
Once you’ve discovered this what’s the first one, then you did what’s that job that you took once you got to Seattle.
Lee: Well, I started as a Lily data analyst, um, and quickly got into the idea of online communities. Um, the book, the manifesto was really important to me and around like 1999 or 2000. And, um, I started thinking about ways that I could start doing online community management and at the company where I was, and I started lobbying for it.
And within a few months I created the online community program at a company called solution, which is now part of a bigger health system, like truant health, I think. But, um, I was using a Yahoo groups at the time. I think it might’ve been started with IE groups, which was then transitioned to Yahoo groups.
And, um, I just fell in love with the idea of what is now social media, but the idea of the web being a communication medium at heart and companies, uh, I thought at the time should be figuring out how to help their customers work with each other, um, through the web and via discussion groups and blogs and things like that.
And I, I did that job from 1999 to about 2003.
Andrew: And one of your frustrations with it was you weren’t getting to do enough community management, which most people would just think this is a big pain in the butt, you know, dealing with a community of people, but you loved it. The thing that’s interesting to me is at one point, you go to a conference, you watch a guy explain something and you get uncomfortable with it.
What was he explaining? And why were you uncomfortable?
Lee: Sure. Um, in, you know, this was probably around 2003 or four and, um, RSS, you know, really simple syndication, something that everybody that’s watching this is using, but doesn’t probably know it in one way or another.
Andrew: because that’s the way podcasts get, get pushed out to the world. Right? All the
Lee: cynic. It’s syndicates. Yeah. It’s like the syndicate syndication. Um, but it was new at the time.
And it was when blogs were really getting popular and, um, a CEO was presenting about trends and things to look out for. And he mentioned RSS and he described someone raised their hand and said, what’s RSS. And he said, it’s a XML based content syndication format. And I just thought to myself that didn’t help anybody.
You could see just the air go out of the room. And I thought I can do this better. I can help that guy. Um, and that, that really was this sort of, uh, epiphany for me of like, I want to explain technology.
Andrew: And so you just got an old camera or whatever family camera you had. You stood in front of a white wall, which is kind of what I’m doing right here. And you started explaining it into the camera.
Lee: Well, I didn’t know what to do to start, but I knew that I wanted to do video because YouTube was taking off. This was, um, 2000 late, 2006, early 2007. Um, and YouTube, I think started in 2005 technically, but, uh, it’s just starting to really take off. And I was like, let’s make videos that explain technology.
And I tried doing it. You know, lecturer in front of the whiteboard and it was, it was a mess. Like I’d never lectured it from a camera. I didn’t know how to really run the camera or work a mic. Uh, and it was, it was very discouraged, discouraging at the time.
Andrew: Let, let me pause here for a second. Why were you trying to become YouTube famous? This word, what were you trying to do? put yourself through the
Lee: you know, yeah. My wife Saatchi had joined the company then, and, uh, we were kind of open to new possibilities. So I’ve been consulting for three or four years. We’d actually taken the year previous and traveled. And it kinda reset our business. Um, and, and I should say too, um, I’m here talking, but, but Saatchi, my partner and wife is as much a part of common craft as I am everything we do involves her and, and she’s as much of a leader as me, if not Lamar.
Um, so yeah, we were, uh, I think we just thought it was the way to promote common craft, a way to get common craft attention at the time. Um, I didn’t, there were no YouTube stars at the time.
Andrew: No, there weren’t, this will, it took years until YouTube became a place for something other than short viral videos that are just, I don’t know, Johnny bit my finger, but you are trying what was common craft at the time?
Lee: Um, it was consulting. I was working with companies to understand how they could use online communities for customer support and things like that.
Andrew: Okay. And so your wife Saatchi says, you know what, why don’t you? And this is why don’t you explain what she said, because this was the changing point.
Lee: definitely. This was a total transition. So, um, I’m frustrated, I’m frustrated with trying to do the videos and not really seeing what I can do. And Saatchi is an amazing problem solver. And she said, well, why don’t you just put the whiteboard on the floor, point the camera down under the whiteboard and just record your hands doing like writing markers and using pieces of paper.
And I was like, wow, that’s brilliant. Let’s try it. And, uh, we started experimenting and then within a few weeks we had figured out a way to make it work. Oh, it was well in relative to our expectations. It was astronomical because we had no idea what we were, what we were doing. Neither of us had, uh, any background in video, aside from just travel videos, um, or education. And we put the video out there hoping to help people adopt RSS. And within a day or two, it was an early viral that on, on YouTube.
And it, it changed our lives in that moment where you hit, you know, posted it on YouTube. Um, our lives changed and we’ve never looked back.
Andrew: And you made a point in your book about how there were lots of bloggers who had an incentive to embed your video. They wanted people to subscribe to their blogs, subscribing meant using RSS. And so they needed a way to explain this. Mechanism to their readers, they embedded your video. And the thing went viral, who was the first big company to hire you guys?
Lee: Uh, Google was the second. Um, the first was, um, Vogue it’s focus, which was formerly PR web. And that was our very first custom video, but the big one was, uh, what was Google box was Google.
Andrew: do you remember when they contacted you?
Lee: Oh, yeah. Yeah, definitely. Um, at the time we have been making videos for a few years or for a few months, and we got custom questions from time to time, but none of them seemed all that interesting.
But one just. Set off both of our alarms like this, this seems something that was like sort of ambiguous and vague in a way that made it obvious. They were trying to conceal who it really was. Then Saatchi did some reconnaissance and figured out that the person sending at work at Google and we thought, Oh my gosh, we could actually make a video for Google.
This is going to be so cool. How, how, how do we handle this? What are they going to expect from us? We don’t know what we’re doing. How’s this going to work? Uh, so it was both exciting. Um, I think it was. Yeah. That’s all right. Um, I think it was between 10 and 15,000.
Andrew: And then how many hours of work goes into creating a video? Explaining what Google drive is.
Lee: I thought at the time it was Google. Well, now it’s Google docs. It’s the time at a time. It is it’s Google docs, but, um, gosh, everybody has different that actually the video actually went quite smoothly, but I would say it in the neighborhood of maybe 20 or 30 hours, at least, um, thankfully they were, um, quite accepting of our approach.
Um, and that that’s when videos, custom videos take a long time is when there’s. Things happening in the company where they’re not sure about this approach, our specific approach to explanation.
Andrew: I thought the story of how Twitter started using your video is interesting. What happened there?
Lee: Uh, you know, w I became very fascinated with Twitter as soon as it came out. And I felt that it was going to be a big deal and that it like RSS and wikis and things we’d explained, had an explanation problem, that it was a very, it could be a transformational thing if people just understood it. So we started making a video that was our property, not something that we had worked with with Twitter or anybody to make.
And we were actually going to call it microblogging in plain English, because that was at the time was what people were referring to. Things like Twitter as. And before we publish it, I, uh, sort of on a whim contacted biz stone and sent him the video and he loved it. And within, um, uh, you know, with a handshake deal, they agreed, we agreed to, uh, have him use the video on twitter.com and, uh, within a few weeks, a button appeared that said, watch a video.
And when you click the button, Uh, Twitter and planning that showed up on Twitter with a link that said thanks to our friends at common craft. And, um, that really took us into a whole new, uh, stratosphere when it came to attention for our little company.
Andrew: And the handshake deal was not for money. It was just for promotion
Lee: Yeah. Yeah. We said that as long as you go ahead. And as long as you link to our website, um, you can use it all you want. I think we did send them a little contract just saying that this is our property essentially. And they were fine with that, but there was no money, no money exchanged hands. I like to think it was a really good win-win because they got to explain their product and we got a lot of attention from it.
Andrew: I love that you just created it, sent it over and because it was so useful for them, they promoted it. By the way. Speaking of contracts and ownership, you freaking blew my mind. You said in your book that if a wedding photographer or videographer shoots your wedding, who owns the copyright on that?
Lee: Yeah, they do. Yeah. I could write a P I could write my name on a piece of paper and just because I did, it means I own it and I have a right to make copies. I mean, that’s something, a lot of people don’t really understand is everything they create virtually is, is their copyright by default.
Andrew: Even if you pay the videographer, the photographer to come and shoot your wedding, they own it. And they can do whatever they want with it. Unless you say what you’re
Lee: Yeah. Let’s you say? What, what kind of, what kind of relationship is this? Um, you know, photographers, any, any kind of media creator is, is used to having a, what’s often known as like a copyright release, which means that it’s explicit, who owns what. And if there is no explicit statement, if there is no contract, it defaults to the creator.
Um, and it’s a really important part. I think, of, uh, of working with customers. It’s, uh, you know, there’s a part in the book where I talk about what’s called work for hire. It’s really three really powerful words that we’ve learned over time to use in our contract because when we were hired to make custom videos, We say it’s a work for hire contract and to all lawyers or at least the ones dealing with intellectual property.
They know that means that we are not, that we are handing over the copyright to the people who paid us.
Andrew: And so if I hire somebody to create video for me, I’ve got to make sure to say, this is work for hire. That means. Get to own it. That’s the magic word. By the
Lee: That’s right.
Andrew: Speaking of hire to June, 2007, you and Saatchi put a hire us link on your website and start getting emails from companies who were interested in doing videos and having you do videos for them.
How big did this get? How, what are we talking about here? Are we talking about a hundred thousand dollars a year business? Give me just a ballpark to get a sense of how big you got creating videos yourself.
Lee: Yeah. Yeah. Uh, we know early on we were making custom videos as fast as we possibly could. Um, with only two people, it was, it was a lot and we kept, you know, pushing up the pricing. Um, I think the pricing grew every time we were trying to find a ceiling because we had so much demand. We had, you know, multiple emails a day from people that would like videos.
So in the first few years it was, it was well into the six figures per year.
Andrew: So we’re talking like half a million roughly. Can I say roughly there, even if we’re off by a few hundred thousand, it’s fine. I just want to get a sense of it, because then I remember interviewing you soon after that. You took it to the next level, instead of saying, I’m going to compete with all these other people who are creating explainer videos, you created a marketplace, how’d you figure out that.
And what was that marketplace?
Lee: Yeah. Yeah, sure. So, um, we had sort of a first mover advantage with explainer videos. We were, we were known as. The people who originated the sort of genre or movement. So a lot of attention came to us for that. And we thought it was kind of a, a shame to have so much demand and not have some, some way to have supply for it.
And along that time, I was reading a book called blue ocean strategy. That’s kind of all about like, not, not competing head to head, but finding new markets. And, um, we, we thought like, well, maybe these other. Other video producers who are making custom videos and calling them explainer videos, Mike, uh, you know, pay us to serve as that, that demands.
So I went out to a number of them and said, Hey, I like your videos. We get a lot of demand for them. Um, you know, we’ll, we’ll put a listing on our website for a monthly fee. And, uh, whenever demand comes our way, we’ll point them to the listing. And then there you’re from there and you’ll be competing against other producers, but you’ll be a part of our explainer network is what we call it.
Andrew: And you ended up with what nine different companies, I think on the list because you couldn’t support, you couldn’t get enough business for 10 or a hundred. It just, you kept it small.
Lee: Yeah, we kept it pretty small. It was always for us secondary to our videos. Uh, we designed it to be as lightweight as possible. Uh, for instance, people, the. The members paid a flat fee every month, there was no connection to how much revenue they were making, because that creates a whole other thing to manage.
Um, so, um, w we wanted it to be something that could work, could sort of run in the background on its own, and we didn’t want to do that too much for it, because it would take away from what we felt was our real business, which was videos.
Andrew: Yeah, so much of what you do is we’re going to keep it lightweight. We’re going to keep it simple. I was even going through their site. I can, as somebody who’s used Wistia before who’s used membership sites before. Common craft looks good, works well. Everything is where it needs to be. And still I could see how you built it.
I could see the simplicity of you saying we’re not going to create a new video platform. We’ll use Wistia. Wistia is good. Let me come back. Um, I have a question for you that I want to come back and spend a little more time on. Throughout your book, big enough. You keep referring to books, like you just said, now, blue ocean strategy that you read, it changed the way you were thinking about your business and you open up the whole new part of your business because of it.
I’m curious. How, how are you taking books in and making them useful? As someone, myself, I read books. I sometimes feel like I just highlight, I plan to use them and I never do. You seem to have real dramatic change because of its own. I’m wondering what you do with your note taking and all that. But first let me talk about
Lee: good question.
Andrew: Oh, good. I’m glad it didn’t seem to. Um, I don’t know. Sometimes people think that my questions are just too simplistic. Of course you read a book, you use it, come on and you don’t over think it, but I do overthink it. That’s my world. Alright. Here’s what I didn’t overthink first version of Mixergy. It was an online invitation site.
I don’t even know. Did you know that Lee I said, you know, I need a way for people to invite to each other and their friends to events. And then for people who are coming to events to get to know who’s coming to the event before then, so they could look them up. There’s anyway, right before you go to an event, if you have someone’s email, you Google them, you get a sense of who they are.
Anyway, that was my idea for, I created this invitation. I spent a few hundred thousand dollars on it, and even my wife didn’t use it. I mean, literally for my birthday, she used a different invitation site. I remember, um, I was waiting for her to drive up to this meditation retreat, no technology, no nothing.
I was reading a book and then somehow I looked at my phone and I saw that she invited my friends and me to my birthday party. And she used somebody else’s. It just drove me so nuts. I couldn’t stay that meditation retreat said, Olivia, as soon as you get here, we’re getting outta here. I can’t. Anyway, the big mistake, one of the big mistakes that I made was that I spent a lot of money without figuring out.
Is there a product market fit? Does it actually make sense? Is this something that I should be creating? And so I’ve been thinking a lot about how do you know if your idea is worth building? How do you know if you should adjust and validate your idea? How do you build a model, a business model after you figure it out?
This brings me to my sponsor. It’s a guy named Jake Hare. He is the founder of Launchpeer. A few years ago. He did a Mixergy interview with me, where he talked about how he helps entrepreneurs, build their companies, build their software. And I guess he got a lot of customers from just being on my podcast because he reached out to me recently and said, Andrew, how about if I sponsor you?
And so we talked about what he could be offering. And one thing that he realized was, you know, People need to know if they have product market fit or how to get product market fit, or if their idea makes sense. How do you validate your idea? How do you find your business model? And he created a course, a free course on how to do this.
He doesn’t charge for it because that’s not his business model for his business model is to help a nontechnical founders incubate their businesses without taking any of their equity. And so he said, I got this course, I’ve spent over half a decade, helping nontechnical founders create their software. He says, I have over 4.8 rating on Trustpilot 4.8 out of five rating.
Anyway, he says, if your audience is interested, I’ll just give away this course. If at some point it makes sense. Once they have their business, once they have their software, once they have their business, excuse me, once I have their business idea and they need their software built, if it makes sense for them to work with us.
Great. If it doesn’t let them have this course for free and come and enjoy it and build up their business. So he’s. Playing the long game here by offering people who are listening a free course to help them validate their idea. If you want the cake to take that course, it’s at launch pier.com/mixergy.
That’s L you know, L a U N C H P E r.com/m I N E R G Y that’s launch peer. They want to be your peer launch, peer.com/mixergy. Go sign up for that free course. Validate your idea. Find a business model and ensure product market fit. What do you leave? Be open with me. I’m very critical. My guests. I want you to be critical of me.
What did you think this was my first ad read or my first ad for a new sponsor. Give me feedback as a guy. Who’s good at explaining things.
Lee: Um, you know, I was wondering at what point you switched into add mode, which I think that good pod tech put good pod-casters can kind of like transition where you’re not sure what’s happening, but then it’s obvious when you say this is, this is a sponsorship. Um, you know, if I saw it on a piece of paper, I would probably edit it down a little bit.
But sometimes that can start to sound more like a commercial. And I think you sounded more natural and I think we need more, more of that kind of thing. I think people are tired of, of normal marketing speak. Um, You know, I’m glad you said he want peer. Like he wants to be your peer. I think that really like made it seem, cause my first thought was pier P I E R like your law.
It’s a peer for launching your, your, your startup. And uh, now when you said he wants to be your peer, then that made sense to me.
Andrew: I’m trying to create visuals in people’s minds with the sponsored messages, because I know for example, with HostGator, I wouldn’t know, is it host Gator, host, alligator host, bear hose. You know, I, I wanted, I’m trying to, or for top towel, top of your head, it’s hard to find ways to explain things to people.
Meanwhile, you’re doing it the way that I am, right. You’re not doing it to an audience where you could read their face and see if they understand or not. In my case, I saw at times that I was losing you. And so I. I explained things a little bit better, or I backed away from my long texts. You don’t have that.
How do you, how do you no, that what you’re explaining actually will make sense to people.
Lee: Oh, man. I wish I knew. Um, I think, um, you know, we’ve been doing it for a long time. We’ve been doing it since 2007, but, um, you know, I think it comes down a little bit to the way my brain works to be really honest. Um, I think that I sometimes have to work a little bit harder to understand things. So I have to ask questions or I have to, uh, take a little more time.
And I think it makes me really sensitive to things that aren’t as understandable, maybe more so than more people than other people. And, um, having built that sensitivity and especially now with it being part of my job, I feel like that I can sort of be an advocate for the people out there who misunderstand it and, and know how it feels.
And, um, I’d like to think that that. My sort of what you could call a deficit is kind of a strength in my job because I’m able to empathize with people and in presenting things to people in a way that, that makes them feel smart, it makes them feel informed and not feel confused. Um, that’s always the goal anyway, is to make people feel smart.
Um, and, uh, I think it is really a part of me. Um, you know, that’s something we’ve talked about a lot Saatchi and I.
Andrew: And do you have a format? I know my format is. Bill. How do I explain this? I will look for a story that explains a problem that people could identify with or scared of. I tell that story, then I talk about the win. Then I talk about the, the alternate approach. And I try to find a, when that happens after that, do you have a structure?
And obviously it’s a loose structure. I’m not trying to always follow it, but do you have something like that that helps you explain things and create.
Lee: You know, one of the most basic ways I describe that is this simple structure that goes, like meet Bob, Bob. He has a problem and he feels bad. Bob found a solution. He feels great. Don’t you want to be like Bob? You know, it’s kind of like that. I mean, I think if you look at almost any commercial, like I think commercials are great explainers I’m in a lot of cases, some of them that are purely entertaining, but, but some commercials are great explainers, um, because they really do just.
Present the problem, present the solution and show how people can, can achieve that solution. Uh, we take that in a lot of different directions that the video we just published this morning explains a disinformation, which I think is a very timely topic. And we do it through an analogy of two towns that have a river that flows between them.
And they’re having a debate about whether to put a bridge over that river or not. And one town uses disinformation to sway the other town against the bridge, even though they want it. And so that’s an example of using this story analogy to understand two different perspectives and, and why. Um, one town could have power over another one.
Andrew: No. I just finished a book called working by Robert Caro. He’s the guy, a guy who created a series of books on Lyndon Johnson. He created that giant tome on,
Lee: Yeah. Yeah.
Andrew: Robert Moses. The man basically created the infrastructure in New York. He talked about his interview style and how he takes notes and then how he writes a story about someone.
And he says, people keep looking for the facts. What they don’t get is. What was the color of the room where the facts happened? What did it smell? Like? What did the person sound like? It says most writers don’t appreciate that because they think that it’s just background to the facts. But people are more aware of it.
I try to get my interviewees to give me more of that color to tell me about the time that, uh, the one that stands out in my head as a painful one guy was being hurt by his mom. And he talks about how she pulled over the car, what it was like in the car, how he felt as she was hurting him. And then what it looked like when he looked out the window and saw the family that stared at them and.
How they drove off in any talked about the restaurant he went to. That was a poignant moment, not just because he said he was hurt by his mom, but because he set the scene so well, and we work with our guests to do that. I don’t do it as well. When I do my sponsorship reads, I don’t do it as well. I don’t think when I do inner intros to you do that, do you?
I don’t know that in my ad reads, I have enough space and time to do that. What do you think about for you and your short explainer videos?
Lee: Do are you asking,
Andrew: wondering, do you have
Lee: having that color and texture?
Andrew: the fact that keep me Bob, but to instead give us some hook that connects us to Bob and makes us care about him.
Lee: Yeah. I mean, I think there isn’t a certain amount of color in there. I don’t think it’s the Robert kero style. I mean, literature is a very different thing and our videos are about 450 words. And within those 450 words, we have to introduce an idea. We have to explain it. We have to tell people where to can learn more and we have to take out a lot of that.
Sometimes there’s not even room for much of a storyline. So we really try to think about what the big two things are that everybody should get from the video. Um, and it’s not necessarily, you know, what website to click on. It’s like, Oh, I’ve got to remember that I can use symbols in my password. You know, things, things that are like really big and pivotal, we just don’t have time for it color.
But I think we do try to sneak in some Easter eggs and the visuals where, you know, we. Use visuals that maybe he’ll people don’t expect. And I’m trying to think of an example, but you know, if we were explaining, um, uh, you know, viruses for computers, we might, you know, talk about Trojans. And then when we, when we talk about Trojans, we actually use, you know, a Trojan horse and at one point the Trojan horse, like poops or something like that.
There’s so there’s something funny that people can grab
Andrew: yeah, it doesn’t exactly add to the facts of the story, but it makes it a little bit more visually interesting and memorable. That’s what I was getting at. Oh, speaking
Lee: sort of thing.
Andrew: I read a lot of books. Um, I take notes. I highlight. I’m not, I’m not sure that my life is as influenced by books as yours is throughout your book.
You keep saying, you keep referring to books that moved you. What’s your process for taking it in and actually using it. Using what you read.
Lee: That’s a, that’s a good question. I’m really come and go. Um, lately for instance, I’ve not been great about reading for whatever. It will have a lot of things going on right now. But, um, I, um, I, I read books, but I really look at the bigger, try to look at the bigger picture of the book. And I don’t get messy.
I don’t get caught up in the details. So, you know, we talked about blue ocean strategy. Like there’s a lot of active academic information in that book. Like the, the author is truly went into the details and I don’t really care about that. Like just the idea via it. The theme of it, the sort of thrust of the book is really what, what gets my head going.
And I don’t, I don’t care about any equations or anything like that. And there’s. Other books. I was reading at the time, like the four hour work week, Tim Ferriss has got a million tips that I didn’t really care about so much as the idea of the deferred life like that. I was not going to live a deferred life.
And, and that’s what I took from that book. I didn’t necessarily take notes.
Andrew: And do you go in saying, what’s the one thing I can get from this? Or are you just opening yourself up to anything?
Lee: I think I opened myself up a little bit. I mean, I would, I’ll go in expecting it to be about something, but I’m always looking for the nuggets that I can sort of latch onto and sort of store away in my mind somewhere. I don’t feel like I’m a particularly good reader like reading comprehension wise.
Maybe this is why it’s like, I’m really need the bigger themes and not the details. That’s kind of fits with my learning style. Um, I, I do highlight, I read a Kindle. I use highlights very rarely go back to them, but at the time it seems like the right thing to do when I see something, the thing I like. Um, but a lot of times I’m also just these days I read as entertainment is not necessarily something to learn.
Andrew: And so then when you went back to write your book, how did you know where to look for what to include? Was it just that there are certain books that moved you.
Lee: Um, you know, I read a couple of biographies, uh, memoir kind of stopped biographies before, because I really wanted to write a book that was entertaining to read, but it was not a typical business book. I wanted it to read like a story. Um, so I read, um, you know, uh, Bruce Springsteen’s. Biography. I read, um, you know, well, this is not a biography necessarily, but Stephen King’s on writing.
Um, I read, uh, scar tissue about Anthony just to get a feel for like how these people personally trade their lives to talk about themselves because big enough is a kind of business memoir. And I wanted to feel like I was understanding how to talk about yourself, you know, in a story, in the style of a story.
Andrew: I did love that it was just written like a story. It wasn’t, here’s 20 reasons why you should consider your business big enough at a certain point. It’s just, here’s my life along the way. I’ll help you see why I think that I don’t have to keep growing, but throughout you just get my story and you could get lost in it, which I did.
All right, let’s continue then with the business. So then you had this marketplace, you were also doing, um, you were also doing work for clients. One point, I think the next part of your was creating the membership site. No, it was selling individual videos. What were the videos that you were selling on a one off basis?
Lee: The first one we ever sold was wikis in plain English. Uh, emails from, from fans who were saying, Hey, I know you’ve got these videos on YouTube, but I needed, I need to download it. I’d like, can I get it without branding? Can I use it in my presentation or my classroom? And we thought, wow, that’s, that’s an interesting idea.
I wonder if we, if they would pay for it. Pay to download it. And that set us on this path of, of, uh, licensing our videos. So within a few weeks we had put a button on our website next to the video that said, download this video, I think for $20 or 50 $14 at the time. And we sold our first video within a few hours.
And it, it was really this, um, sort of epiphany at the time that, Oh my gosh, this is a business. This is a way for us to think about videos, not as a service. But as a product, as something we can make once and sell mold small, multiple times, something that we own and something that we can make more of in the future.
So that was the very first moment where we thought that we could be in a different business than we ever imagined. When we started making videos,
Andrew: You used Ejunkie I interviewed the founder of Ejunkie. Like, he didn’t recognize what he had there. He had the first easy to create shopping cart. We’re talking about like Gumroad long before Gumroad we’re talking about there’s so many other competitors who are now this just straight up sales. I think he under appreciated it because maybe came to him a little too easy.
And now he’s back at the business working on it, but it’s
Lee: I was, I always felt the same way. I mean, it was so easy then it was like, there were some issues, things that I wanted to fix, but the opportunity was what Shopify is now. Like, To me that like Shopify became well at that opportunity was at the time. And it seemed like it was running on a shoe string. And I was like, there’s no way this is running on a shoestring.
If there’s a lot of people like me paying as much as I am to do this.
Andrew: Right. No, I think it was running on a shoe string. I don’t know if it could become Shopify. I don’t think he had the vision, the heart, the care to build a community of app makers to
Lee: You know what I mean? Yeah.
Andrew: but Gumroad, there are tons of tools now and he missed out on that opportunity. Which kind of brings me to your worldview.
You have this great. Yeah. I don’t know that I should be reading it out of your book, but I’m going to read a little bit of it. You talk about how the designer of central park, New York often ignore the need for short term success and took a long view in a letter to his son, Frederick jr. He wrote quote. I have all my life been considering distant effects and always sacrificing immediate success and applause to that, of the future in laying out central park, we determined to think of no result that would be realized in less than 40 years thinking it doesn’t matter what happens tomorrow.
It doesn’t matter what happens in a decade. We’re thinking 40 years ahead. I think that their founders like the creator of Ejunkie, I don’t think he saw the possibility 40 years. How do you think about that in your business?
Lee: Um, yeah, that’s a good question. You know, we, one of the phrases we use is you, you plant the garden, you’re prepared to tend, and that’s sort of a reference back to, to Olmsted maybe, uh, you know, being a landscape architect. But you know, if you’re going to plant a garden, And you really love gardening and you want to be in the garden hours a day, then the choices you make of what you plant, I can’t influence you.
The amount of work you put in. And we always set out to plant a lightweight garden that didn’t need all that much tending that might not produce, um, a huge bounty that we can sell, you know, at the market place, but it’s enough to support us on a day to day basis. And, and I think that that’s really. What drove us from the beginning was, was not shooting for the biggest possible potential, the biggest possible payday, but slowly but surely, you know, using low overhead and, and doing a lot of experiments and taking some risks to try to plant the garden that that might go for the rest of our lives.
Andrew: What’s an example of a decision you made because you knew 10 years from now. I don’t want to have a high overhead business. What’s a decision that you made a few years ago that allowed you to be where you are today.
Lee: Well, the biggest one is not having employees. Early on. We decided it really in 2008. So the year after we started making videos, that was when we applied a set of constraints to the business that we have stuck to this day. And the, the big, the first and biggest one was that we were going to be a two person company come, what may.
And that ended up, ended up being a constraint that was our guide to the business. Like we would look at opportunities and say, can we do that as a two person company? And if, if not, then let’s keep looking. Um, and that, that was one of those things that, that really, uh, was the hardest thing to do in the short term.
But in the longterm, I think was the right thing for us.
Andrew: I’m surprised you wouldn’t say let’s teach this explainer video concept to an employee. We’ll sell Vel, do it. We could even hire a few others. They’ll do it. We can run the business. Why didn’t you want to work on the business instead of in the business, as everyone says,
Lee: Well, I think there were a couple of things happening. You know, I, as I was saying in the book, once you, once you, once you cross the line employee Rubicon going back like you, uh, once you get that system, that business set up with all the tax things and all the payroll things and all those things, then you are that kind of business.
It doesn’t matter if you have one or a hundred employees, you’re still that kind of business. And we didn’t, that’s not what we do wanted. We thought that we could do it all. Um, and we thought that, you know, the business didn’t have to be the type that could scale that way. Um, and. Well, we found was that custom videos, videos we were hired to make, um, to grow that business, to make it bigger, um, would require us to hire, you know, we would have to have producers.
We would have to have people working on it, but we’d still be playing the, the services game. We’d still be limited by the number of hours the human can work in a day. And when, when licensing started, when we started to CA see the ability to make something and sell it multiple times and see the product perspective, we saw that.
Our videos could be, could scale without us having to hire more people and that we could slowly, but surely build up a library of our own intellectual property that we controlled, um, that, that paid us more passively over time and allow the company to scale. Maybe it could scale a 10 times, um, without, without having too much more support because our, our membership system became sort of touchless where they don’t have to talk to us to buy our videos.
Andrew: And the membership was the next step. I love how in the book you say, I became addicted to the emails that I got that said you have a sale, you have a sale, you have a sale. You then at some point started hearing from teachers, which I can’t believe they weren’t just all bootlegging. The thing, I feel like teachers, uh, are still, um, but at some point they contacted you and they said, this model of paying one off doesn’t work for us because.
Lee: Because they’re they’re subject to, to budgets, to annual budgets, uh, was one of the big things, um, that they said that it would be easier for. Yeah. Um, so they, they loved, they loved using the videos, but buying a doll, a video for $20. That they get one video or paying a few times that for an entire life or videos was something they liked.
So they can have a choice of what they taught, but also when they would go to their superiors, they would say, I’m not, I can’t give you a, you know, $20, but if you can get an annual. An annual version of that. I can try to get it on the annual budget. And, uh, that, that was one of the big reasons. And that’s actually been really good for us because, um, those annual budgets are renewing and they’re, they kind of take on, they can last longer than a year in that case.
Andrew: So now you had a subscription business, it was painful for a while for you because you weren’t getting enough subscriptions. Is that the thing.
Lee: Well, yeah, I mean, you know, when we applied those constraints in 2008, one of the big. Big ideas for the future was that we were going to slowly move away from custom videos because it was a model that didn’t scale. And we wanted it to be involved in education, focus on licensing, but licensing business wasn’t it was a fraction of what we could make on the custom side.
So there was this competing priority of like doing custom videos. Enough to pay for what they’ll pay for supporting us, but then always trying to build this intellectual property library too, too, for the future. And, um, those things were always competing with one another and, um, Eventually, thankfully the licensing ramped up enough where, um, we basically took a big pay cut and switched over to only licensing.
And that was sort of this income Valley that I talk about where, um, it was, it was not, um, a fun thing business wise to know you’re leaving money on the table, leaving opportunity on the table every day, because you’re not doing custom videos based on this dream that someday your licensing is going to support you.
Um, And it was hard for us both to really feel that, that we felt like we were kind of crazy. Like, what are we doing? Why aren’t we doing this? Um, but it’s, uh, over time, over many years, you
Andrew: what was the Valley? How, how, how much of a revenue dip are we talking about and for how long.
Lee: Yeah, well, we were doing custom videos at the time for tens of thousands of dollars, a piece that we could do a couple of videos and do quite well. Um, whereas licensing might be, you know, a few thousand dollars a month, um, at the time. And that might that’s, you know, over time
Andrew: talking under 10,000 a month.
Lee: uh, in licensing.
Andrew: For how
Lee: Yeah. It’s pretty it’s it’s um, well for years, um, I think that. Yeah. I mean, that’s, that’s been kind of around the general neighborhood of where licensing has been for a while. For us, it comes and goes, uh, but it’s licensing for the last, maybe five years has supported us fully as a household.
Andrew: One of the things that I imagine helped you get through it was, can I say how cheap the two of you are? I was telling Olivia all these things that you guys do, clothes wear out your wife, Satya. We’ll just sew it up.
Andrew: Bread, you guys buy
Lee: she doesn’t clean. Nah, we’ve been bought by the one time. Yeah, we were well, because we’d like to make it it’s better. It’s better if you make it that’s one reason. Um, but you know, there is a chapter in the book called the mandatory Liam and, um, part of the premise of that chapter is slouching. I come from very different backgrounds and, um, she is very, very budget conscious and cost conscious and.
Um, you know, we’ve been together for 20 years now and early on, she could see that I S I spent money frivolously and was kind of not very smart about it. So when you started thinking, okay, like we need to pay for it or a house renovation or a trip. And so we learned to go into a lifestyle mode where we could basically flip a switch and go into a movie called the monetarism, which is a moratorium on spending money.
And it would be a way for us to save a lot of money quickly, but also compete to see month to month. If we could beat our record of like how few things we bought or what we could fix instead of, instead of buying new or how low we can get the grocery bill or how little we could eat out. And there’s, there’s lots of joy in there too.
We would love the game of it, but also we just found other things like having dinner parties at our house versus going out. For expensive dinners, uh, you know, staycations and camping versus big trips, you know, things like that. And I think that it’s, it’s taught me that that is a version of the good life is being responsible about that stuff because that stuff for entrepreneurs matters a lot.
Uh, what’s your PR how your personal spending impacts your business and the success your business has to have to pay for your lifestyle.
Andrew: I hear Gary Vaynerchuk. One of my first guests talk about this all the time. He says that you, if you cut back on your expense, Because you have so much more freedom to do things, to build, to invest in yourself and to not be at the mercy of, of a job or a client or a life that you don’t love. Um, I even love how, when the bread gets little stale, you cut it up into crew Titans and you don’t even let that go to waste.
You found, uh, you learned how to extend the life of different rechargeable batteries. What does that mean? This is too in the weeds. I just am so
Lee: Well, I mean, no, it, batteries is just an example, but you know, a lot of products have owner’s manuals that people throw away or you can find things online, but a lot of things like batteries, there is a optimal way to make them last longer. And if you just do a little bit of research, you’ll understand that, you know, I think, um, I don’t have it right in front of me now, but there’s basically three ideas, um, in the monitoring where it’s like, you know, uh, you know, Oh, shoot.
I’m not going to like remember them right now. Yeah, I should totally be able to, maybe you can remember, but it is like repair it, fix a repairing things, making things last longer and, and, um, saving, you know, saving money, um, budgeting, um, So, yeah, there’s lots of examples of that, but I, you know, I thought about writing a lot more about all the funny little things we do to try to reduce waste.
Um, but it’s really, again, kind of that big idea. You know, I talked about that with the blue ocean strategy. It’s the big idea that I think, you know, privileged people and I call myself a privileged person. Um, Lose sight of what it means to have to do that. And I think a lot of people are experiencing that now.
And I, I do want to say that anybody there’s a lot of people because of coronavirus with session being out of work, don’t have a choice in how they, uh, save money or how they change their lifestyle to meet their needs. And the unfortunate that I’m doing it by choice. So, um, but I think that everybody should be more responsible in that way.
I think it’s a healthy way to live.
Andrew: Coronavirus got me to do it too. As soon as I saw what was happening, I got worried that things were going to get way worse. Um, thankfully for people in tech, it hasn’t hit us as much. Um, but I started cutting expenses and there’s so many things I didn’t even think about that. I was spending money on like the, the big example is if I go out for a drive for an hour, I might drive for 15 minutes and then go and get a cup of coffee from Starbucks waste time on the road, especially when you’ve got kids in the backseat.
Now it’s an extra 15 minutes for them and it’s just a useless waste of money. And you’re signaling to yourself that this could be spent and that you’re not paying attention. Um, here’s the three that you have doing without maintaining what you have and reducing waste. Um, and then you talk about how anyone who grew up in the great depression has, or has lived through a war or even the recession of 2008.
A 2009. It knows some of these elements, right? By the way, second sponsor, they sound to be very clear. There’s this sponsorship sponsored message. There’s a company called one of the things that I did when I started interviewing right after Corona hit was, I said, I don’t know where the world’s going to go.
I’m going to talk to you who are doing well, who are taking drastic action. Um, after that, And no Kagan was one of those people. And I said, no, I’m going to read an ad about top talent. I knew in the back of my, the top tab does charge high prices for their developers. We’re talking about Google level developers, people who can solve problems.
I know you wanted to create an app. These guys would have gotten the app read ready for you, right? If you had them on your team, um, And I said, Oh, I, no, it was going to rag on them. I said, no, I got excited. He said, no, this is the way to hire right now. He said, you don’t have all the expenses, all the ramp up of hiring a full time person of putting them on the books of making sure that their taxes and that their insurance and everything’s squared away.
Let top towel deal with that. He says he calls up top towel. He gets who he needs. And then when it’s time to scale back, because a project is over because he has someone on his team who could do it because they decide they just don’t want to do it at all. He calls up top tile. He says, This position is over.
Can you please make the transition for us and top Cal does. So it’s a way of getting top developers. That’s why it’s called top talent, top talent, top developers at a reasonable price. When I’m talking super cheap and then scale up when you need it scale down when you’re ready to scale down and you can do it way faster than you could.
If you were to put ads out and try to do your own recruiting process. And way cheaper than if you paid a recruiter. So if anyone out there wants to do this, I’ve got a deal that will let you have even more for less. And that is if you go to top town.com/mixergy, they’ll give you 80 hours of developer credit when you pay for your first 80 hours.
In addition to get this a no risk trial period. Really, if you’re hiring developers, just go check this URL out. It’s top towel.com/mixergy top isn’t top of your head towels and talent. I’m going to spell it out Lee, because I think it’s important. T O P T a l.com/m I X, E R G Y. Alright, we should continue.
Oh, what is that project? Didn’t you say in the book that you had some failures and one of them was you hired a developer to create, what do you remember?
Lee: Yeah, there was this layer on top of Twitter called task love, and it was this way to use Twitter as a way to peer pressure, one another into finishing projects by reporting the tasks that have been completed on, uh, on Twitter.
Andrew: And so did you launch it?
Lee: Um, it officially worked for a little while. Um, there was a really wasting time because we were, we were doing pretty well, but I was filled with confidence, I think because common craft had done well, and I wasn’t even thinking of business models or the ongoing needs of operating, something like that.
Um, I just wasn’t. It was kind of playing and, um, it never really took off. Never really got attention, never really did anything. And it was a really big waste of time. And I now look back at it as a failure. I had fun doing it and I learned some things, but, um, I like to think I’ve become a little more responsible business person.
Andrew: What did work for you though was saying, you know what other people are getting into explainer videos. I’m going to teach them how to do it. Instead of feeling threatened, instead of feeling like this whole thing was going to go away, you are going to teach, you wrote a book on it, right.
Andrew: And it became a grew your business. How.
Lee: Well, I think that we. Prepared in that we looked at common craft and said, you know, if people read this book, what can we do to them? If people look it up common craft, or go to common craft, what can we do to connect with them somehow? How can we help them solve a problem or do something? So, um, before the book came out, we started, we created a new library of what we call our cutouts, which is the artwork.
That it appears in common craft videos, they all match. And they’re all very much common craft style. And we kind of let go of the idea that we could be creating our own competition. And instead encouraged people to actually make videos like our own so that they can hopefully explain things and become explainers themselves, which is kind of the message of the book.
Uh, that was one of the things we did was, was created that new library, which is kind of a new product for us.
Andrew: I’m surprised. I’m surprised they didn’t feel threatened because a lot of people doing this poorly wears out the, the novelty of it. When I first saw a common craft video with the cutouts, with the person, which was you explaining it in a voiceover with the story style, it felt unique. It felt special. It felt.
Different. And, and it felt like you had your own style. If everybody’s doing it, it feels less special. It feels like, uh, another YouTuber who’s putting half effort into telling a story. Who’s using some cheapo software to do it. Right. Why weren’t you feeling like this is going to wear away our thing? Or did you say, you know what, it’s going to happen?
Anyway, we might as well profit from it instead of getting trampled by it and feeling bitter.
Lee: Yeah, I think that, I think, I think it’s the latter. I think that as a company, We look at what’s happening in the environment. And instead of trying to consistently maintain, we try to see how we can go with the flow and see how we can work with it. And that was an example where we think we thought that was going to happen anyway.
Like it’s gonna, like, people are gonna be doing this. We can’t stop them. There’s no legal way for us to do it. And it would be hugely expensive to do it. So we might as well make it easy for them. And give them resources that they can, they can pay for it, to do it with our permission and with our help.
And maybe that’s the new version of our business. And it was something that, um, if it worked, you know, it, it would scale. It would, it would be something that we could manage. And that that’s really the central question throughout our work. And in the book is looking at these opportunities and asking the question, like, what if it works, if this works, can we still be a two person home-based.
Business. And once you apply that constraint, it’s surprising how many things start to look like opportunities that you might not have thought of before.
Andrew: I think we should just underline this message from your story. When the world starts to compete with you, when people start to copy you, you don’t get bitter. You li you Saatchi you common craft. You instead say, all right, this is where it’s going. I can’t fight this wave of people copying us. What can we do to live in this world and still be true to ourselves and our vision and our vision is still a two person operation.
It seems like part of your vision has become subscription, right? So you’re selling cut cutouts. But from what I saw on your site, it’s on a subscription basis, right? Okay. And that is what you keep doing by the way, those cutouts.
Lee: Originally they were, that’s why they were called cutouts is the early videos. We actually spent untold hours cutting pieces of paper to make the videos. Now we do. Now we do digital and it only took us a couple of years until we started digitizing those early cutouts. And just over time, we have a library of getting close to 3,500 images that are all in the same style and it can be used to tell all kinds of stories and used in presentations and
Andrew: they still, are. They still cut outs now that are digitized, that you then use software to manipulate?
Lee: Yeah. Yeah. So there we get them vectorized. So they, um, they’re really nice and clean and have transparent backgrounds so they can be laid on top of one another. They’re um, very, it’s easy to use software to change the colors and things like that. We, we, we try to make them as flexible as we can.
Andrew: And did I understand your book, right? That you’re now doing this in keynote or PowerPoint using the animation
Lee: Yeah. Yeah. Everything. Yeah. Yeah. That’s I mean, that was an experiment we did was like we’re, you know, making the traditional common craft style with. Live action video using actual paper cutouts was our thing. There’s a lot of special things about that, but it’s, it’s a hard thing to pull off and it’s a hard thing to go back and fix one scene because lighting changes and there’s just, it’s a harder thing.
So we, we always felt like that our, and this is true for us. Our whole business is that we’re not competing on the cutouts. We’re not competing on the look and feel we’re competing on writing. Like we’re competing on scripts. Like that is our special sauce. Is the script. Sure. Maybe there’s some confusion about what, you know, if our thoughts are being used by other people, but our real talent is that there’s the writing.
And we thought like, we’ll always have that. That’s something that will always be a competitive advantage because it’s something that’s creative. Eight of that. Um, other people can do their own style and still be, and still work, but we have sort of our style.
Andrew: Okay. So it’s in keynote. You’re creating these videos. You then start to see, Hey, you know what other people are creating software that makes this easy. And I’ve got to tell you Lee, some of it I imagine is good. I just see the ads on YouTube for the junky versions of this. They’re kind of copying your stuff.
Wow. But it’s not good. And you know what I have to say sometimes it’s just good enough. It just, I wouldn’t feel excited to see it when it comes to my YouTube feed. But I can understand if I were trying to explain a new product to an audience, a new software, maybe the first version doesn’t have to be great.
So the cheap rip off of you might be enough. You don’t feel threatened by that either you instead decide it’s now time for me to become a dealmaker, which is different from what you’ve done before. Talk about some of the deals that you’ve made and how you dealt with that.
Lee: Sure. Sure, sure. Um, you know, go animate was one of the early platforms that you’re talking about. It’s browser-based video making animated video. Um, and I went to, and the founder of go in and mate had reached out before. So I knew that he knew about us and I said, Hey. I know you’re doing this tool. Uh, people want to make common craft style videos, and we want them to, in fact, we have this whole library.
What if our cutouts lived inside your tool and you paid us a licensing fee, uh, for, for that, and, uh, through a lot of negotiation and technical things, um, that became a reality and we’ve been partners with. What is now beyond, um, ever since, and we’re all happy. We still work together on, on, um, the new packs of cutouts available for their users.
Um, we also went to companies like TechSmith, who makes Camtasia for, you know, a video maker, screencast, or kind of thing, and said, Hey, here’s a zip file with a few thousand, a couple thousand cutouts. Um, you know, are you interested in selling this to your audience? And they added it to their store and offered it to people as they were checking out.
And for a few years, that was, um, a good business for us. And there’s more examples like that.
Andrew: You don’t feel jealous that I guess now it’s called void, as you said, V Y void vined, how’s it pronounced
Lee: It’s like beyond, but whether V yeah.
Andrew: liked the go animate better. It’s easier for me to pronounce, but V Y O N D you don’t feel jealous. Like, Hey, you know what, they’re basically creating a whole business software based on our, our idea.
Why aren’t we doing that? Why aren’t you doing that? Why didn’t you do that?
Lee: I don’t, I don’t want to run that business.
Andrew: That’s what it keeps coming back to. You could have run it.
Lee: Yeah. I mean, that’s like, that’s an incredibly competitive market. And at first I want to say to you that I admire entrepreneurs that want to build and run big businesses. I think we need more of them. My message is not that that is bad or wrong. It’s just that I want people to see that there is a choice.
Like you do not have to do that. Like I want, I don’t want, I’m not in a position to give anybody permission to do anything, but I hope the message of the book is that it is okay to aim for a smaller kind of business. That supports the life that you want to live. I feel like that’s, what is changing? Is that, what does it mean to live the good life?
What does it mean to be white? The enrich, and I think that you can be wealthy and rich and live the good life without the money. Like the money doesn’t have to be. You don’t have to have millions of dollars. You can be raised with time. You can be rich with family, with location, a choice of location. It can be raised with independence.
And I feel like that’s the big trend. And that’s the thing that I want. Entrepreneurs to see is that that can be the goal. It’s okay. It’s okay to aim for that.
Andrew: No, you talked about in the book and I could see by the way I get that, it makes sense. But then you also talk about in the book about how people don’t get happier when they have more money. I’m looking for where the actual numbers are. I highlighted it because I wanted to disagree with you on it. It was something like after $200,000, uh, in salary, people don’t get any happier when I read it.
It sounded familiar and I disagreed with it. And here’s what, why maybe not in the moment, maybe it’s difficult in the moment because you’re balancing so many expenses, so many obligations, so long, so many long nights. But at some point it comes to an end and assuming you’ve been able to save enough, life gets happier at that point.
And so yes, you are deferring some happiness. You are suffering in the short term for the late term, but isn’t that what you’re doing with the money Torian, where you’re saying we’re going to suffer. We’re not going to get to go eat out. We’re going to cut back. And then later on, we’ll be able to go on vacation or buy a house.
Isn’t it the same thing. If you say we’re going to suffer, earn more money. Now, if suffering is not the right word to describe it fine, but whatever it is, you are going to take a hit now for a benefit later. Isn’t that the way to look at it?
Lee: You know? I think so. I mean, like everybody’s different. I think you’re applying a micro situation to a macro concept. Like the, the study of my book was by David cleaning Smith at case university it’s based on this, like the longest largest longitudinal study of household survey in the world. It’s called the panel study of income dynamics.
They’ve been studying the same individuals over generations. Um, and the idea is that money definitely matters. And the closer you get, like once your basic needs are met, then you, uh, experienced fewer negative feelings, which is how they put it in the study. But basically they say it’s a you’re happier and, and that more money, like more marginal money matters.
Um, and they in the study again, very macro, huge longitudinal study that up to about $200,000. And that your happiness increases then, but then you kind of reached a tipping point where there starts to be other client in the amount of marginal happiness you get as the money goes up. And, um, I took from that from a really big picture that yes, money matters, but there is a diminishing return effect in terms of the happiness that comes from that money.
And that if you’re only focused as money and again, Individuals different entrepreneurs have different values. And I think that’s great. Like I’m not applying this to everyone, but I think, I think people, I think it’s great for people to know that they’re, it’s okay to see that you’ve reached a certain level and maybe it’s time to, to tweak your life, to see that maybe your happiness is going to come from something else.
Other than that next $100,000 or $500,000.
Andrew: And by tweak your life. You mean maybe first of all, accept that that’s fine. That you’re not going to be less than, or you’re not, it doesn’t matter. Who’s thinking that you’re not achieving what you should achieve by just being okay. Where you are. And the second is. Cut your expenses so that you allow yourself to be there comfortably.
Right. And then what else, what else is part of, and then is it, yeah. What else is part of your philosophy? I want to absorb it.
Lee: Yeah. Well, I mean, I think that part of it is understanding where happiness comes from. There’s a bit in the book about the science of happiness, right. And, um, satisfaction and happiness are often confused. Happiness is a feeling where satisfaction is something about how you feel about your life. And I think satisfaction is really what we’re all looking for.
And when, what you can do to increase satisfaction and understanding that a lot of the academic work or sees that to some degree, yeah. Happiness is built into us. We cannot change, but only so many things about how, how happy we are. But, um, there’s so some, some people think that you can. Take on activities in your life that can, can increase your happiness.
And that means, uh, surrounding yourself with people you love being a part of a community and also using your talents to help others is something that, that can increase your happiness. So I think that in the absence of a focus on money, thinking a lot about how life can be lived in a way that supports your happiness, I think, um, is I hope a recipe for living a happier life and having more satisfaction.
Andrew: And so for you, that is living on this Island, getting to go for a walks with how many dogs you have,
Lee: Two dogs.
Andrew: dogs. Okay.
Andrew: Getting to go crabbing. What else?
Lee: Yeah. Um, I think location is a huge thing for us. That’s one of those things that, um, a lot of people that are listening to this might be thinking right now because suddenly their, their workplaces are more flexible when it comes to location. And I think that, um, there’s a lot of people, even on this Island, the real estate market is crazy because people are looking for that.
That, that kind of thing. Um, I think that we saw she and I, um, you know, drive happiness from a lot of things that don’t, don’t really cost very much money. Um, even if it’s just making dinner, you know, I think I’ve changed. I’ve rewired my brain around. What, what satisfies me? There’s a story in the book about.
Being coming out of the Montessorian and going to get a pub burger. And it was like the best meal I could imagine at the time that, you know, it satisfied me so much because I was so used to, to, um, home cooked food, not to say that the home cooked food wasn’t good, but just the act of going out was so much more important to me because we hadn’t done it in so long.
And again, I’m sure a lot of people feel that right now, too.
Andrew: I do. I remember the first pizza that I went to. I used to get pizza every week. Every day on average, I would eat out once a day and then when things closed up, I stopped and then I started appreciating not going out again, not having that time. Stuck. But I was driving with Olivia the other day from her mom’s house to our house.
And I saw the pizza place, had some tables outside now, more places in San Francisco doing it. I went and I had. What was maybe the best pizza I’ve ever had? I just kept raving to the guy. I sat down on the street with a beer, which you’re not usually allowed to do in San Francisco. It was such a good day.
And I’m with you. I think that by overdoing it, I stopped paying attention to it. And now by cutting back, I’m appreciating it so much more. Alright. Overall, are you guys over a million dollars in revenue? Can we say that?
Lee: Um, overall or per year?
Andrew: Well, per year?
Lee: No, we’re not.
Lee: Nope. I mean, we have in the past, there’s been times where we, we, we got close, but, uh, but now we’re not. Um, and part of it is, we’re not, we’re not doing custom work. Our, our, our focus is solely our, uh, our membership service.
Andrew: And then how many hours a week would you say you work now? And I know we’re running over time.
Lee: Oh yeah. Um, well, on, on common craft videos and common craft support and things like that, you know, Five to 10, but I’m also doing a lot of stuff. Like I’ve written this book. Um, thankfully common craft, uh, you know, is fairly self-supporting people. Don’t don’t need a lot of support with common craft, but, uh, I’ll go into phases where I’ll be, we’ll be making new common craft videos and that’ll be, you know, 40 hours a week or, you know, maybe 30 hours a week just writing scripts and making videos.
But that, that goes in phases.
Andrew: Uh, now that I’m, uh, doing some more homeschooling, I’m recognizing all these different businesses that I never paid attention to before that are kind of similar to yours that are never going to be gigantic. But there’s one that I imagine I’ve got to find the founder of this company it’s called. They do three, two wonder the science videos in a green screen room, 10 minute videos, or less explaining one science concept in a fun way.
My kids asked to watch out that way. They might ask to watch Pokemon video, right? It’s just like a hundred bucks or so a year, you get it for your kids. You can pay for, for your school. It’s just phenomenal. There’s sight words, sites, people who are just teaching kids, how to read or helping parents buy the tools.
They need to teach our kids how to read regional math. It’s a set of businesses that I know I’ve never interviewed on Mixergy, but I can see. Beyond the fact that there are businesses that are doing well for the families behind them. I could see the, the craft behind them. I could see it in your work, Lee over the years.
So much everything that you touch just has this sense of simplistic style. Everything you create has the same voice. And that’s why I told you. I finished your book last night, I was exhausted. I was with the family with work, doing everything, and then I couldn’t put the freaking book down. I knew I could just, I had enough information.
I couldn’t put it down and it’s because I hear your voice. I see the care. I see the storytelling style and I just really enjoyed it. And I’ve enjoyed following your company over the years.
Lee: That means a lot to me. Thank you.
Andrew: thanks for being back on here. And I should say you’re one of the few people now who’s pitched me on being on here by himself.
Didn’t even hire like an outside company to do the do podcast pitches.
Lee: We do it all, man. I tell you.
Andrew: use like a secondary email address. All right. The book for anyone who wants to read it, it’s called big enough. I wish I told the Lawrence of Arabia story given you time to tell it. I don’t want to have acid. So what I’m going to say is even if you don’t buy the book, you, first of all, should buy the books.
A good book. But even if you don’t just scroll to that story, it’ll give you a sense of it. Storytelling style and the message that comes from the message that he has behind saving money. You know what I’m talking about? Don’t tell it. Let’s let it, let’s let
Lee: Really you want me to tell this quick story? So I’m a, in Lawrence of Arabia, Lawrence is sitting around with, um, fellow soldiers and one of them in Lawrence Arabia pulls out a match and puts it out with his fingertips. And one of his soldier, friends goes, how did you do that? And he, and then he tries it.
He goes, Oh, that hurts. How did you do it? What’s the trick. And Lawrence of Arabia says the trick is not minding the pain. And that that little scene just meant so much to me, that like so much of what we do is mental. And we convince ourselves that we’re, we’re doing so many things that we hate or that we, you know, wish we weren’t having to do.
And I think th the trick, sometimes it’s just not minding the pain.
Andrew: Yeah. In the context of the chapter on cutting back saving money, it just, just stuck. Just hit. Home for me. All right. The book is big enough. You can find it everywhere. Um, I want to thank you for being on here. Of course, the website is common craft.com, right?
Lee: Yeah, the book email@example.com and there’s a free chapter available there.
Andrew: Is that where I saw that video of you and your dogs?
Lee: Uh, gosh, who knows? Yeah, probably.
Andrew: what, I, then I went down a fricking rabbit hole of looking. I found your YouTube video, your personal YouTube channel, where I saw videos that are watched by like 20 people of what was it at house being assembled, a roof being put on what was that
Lee: yeah, we, uh, we’re in the middle of building a house on orcas Island right now. So I’m doing a lot of videos that nobody sees about the house product, house,
Andrew: from scratch.
Lee: Well, we’re not building it ourselves, but yeah, it’s a, it’s a new house.
Andrew: New house getting built from scratch. It was just fascinating to watch parts of it get built. Right. And then I started feeling guilty for why am I watching this guy’s life? But I like the simplicity of it. I liked, I liked it when I looked out. I didn’t see another building. Stick your building right next to where you were sitting with the dogs.
Alright. Thank you so much for being here. And I want to thank the two sponsors. the new sponsor that I introduced today, their company is called launch peer. Remember they want to be your peer. If you go to launch pier.com/mixergy, they will teach you how to validate your idea, find your business model, and then get it built.
and I also want to thank top tau for years of support. If you’re hiring developers, go to top talent.com/mixergy Lee. Thanks so much. Yeah.