Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses.
Back in–actually, let me find that actual email here–2013, December 4th, 2013, I got an email from Jason Nazar announcing that his company, Docstoc was acquired by Intuit, which was exciting. And then he linked to a few articles about it, which of course I read and I used for preparation for this interview.
But what was interesting to me is how the guy started the company back in 2006 as a site that was going to help you embed your documents on other sites like Myspace. The world kept changing. Myspace obviously lost its dominance. And Docstoc changed with it. Then the world changed again and then Docstoc changed with it. It went from being a site where you could embed your documents on Myspace and your blog to being a resource that helped entrepreneurs grow their small businesses, a large content site.
I was always curious about how he did it, what happened internally, what was his thinking about how to transition the business. I never got a chance to talk to him about it, so today we’re going to sit down here with you listening. I want to find out the story behind the company. I also want to hear why he decided to start a new business that competes with some large companies out there.
The company is called Comparably. It’s a tool to monitor the job market for employees. Actually, that’s what he told me to say for the intro, but frankly I think the coolest part about it is if someone has a job and they want to know what other people like them are making, they can go to the site and get those comparable salaries and all kinds of information like that.
So this interview is sponsored by two companies that I’ll tell you more about later. The first is Acuity Scheduling and I’m intentionally picking them because something frustrating that happened yesterday. The second is a company called HostGator that will help you host your website right. I’ll tell you more about both those later. First I’ve got to welcome Jason. Good to have you here, man.
Jason: Hey, Andrew.
Andrew: Hey. One of the articles that you sent over that I read was from Kara Swisher, back when she was at AllThingsD, and she said that she thought the company sold to Intuit, your company, for $50 million. Was she right or wrong?
Jason: It’s pretty well known that that’s the general number.
Andrew: That was it? I think actually you might have even sent an email saying that was the general number, but I couldn’t find it.
Jason: It was an all-cash deal, yes.
Andrew: So basically, you ended up with over $10 million yourself?
Jason: In that ballpark.
Andrew: Wow. How did your life change?
Jason: It’s an interesting question because I still had a lot of student debt. I’d been working at Docstoc for a lot of years. So all the wealth that I potentially had was in that one company. I think the most interesting learning is your life doesn’t change that much. You’re still just as good looking. You’re still as out of shape. The people that love you do and don’t love you. For me, it was a really interesting lesson because now I had the freedom to do a lot of things I wanted. That was the biggest thing that changed, I had a lot more freedom. I could do the things that I wanted to do.
Andrew: Like what? What did you get to do with this newfound freedom? We’ll get to the new business, but beyond that, what did you get to do?
Jason: I got to more thoughtfully plan what I wanted to do the rest of my life, career wise so I didn’t have to work anymore so I could decide what I wanted to do driven by passion, not out of financial necessity. I think that I got more of my time back. The fact is money buys you a lot of time to do the things you don’t want to do. I had more resources to travel.
Andrew: Do you have an example of how money helped you get more time?
Jason: Well, for example, I would hire–I have a philosophy that if you have the ability, try to growth hack your life to where you get to do the things you love most. So I spend my money to take care of things I don’t want to have to do.
Andrew: Like what?
Jason: So, for example, in our new business, I don’t really run errands. I have Postmates do it for me or I have a personal assistant help out. When it comes to things that other people can get done that aren’t absolutely necessity. And of course, the things I have to do I try to spend my time with the people I love most doing the things that I love and pursuits that are really interesting to me.
Andrew: I remember there were times when other people sold their companies who weren’t as smart as you. You always gave incredible feedback to people. You always had like Mark Suster level of understanding of a business and where it should go and what it should do and what it was capable of. Meanwhile, these people who didn’t have that I watched sell their companies, get out, get some freedom, take a chance to get a breath of fresh air while you had to rejigger your business all the time. Did you feel at all the pressure of that?
Jason: I absolutely felt the pressure because you have a bunch of other people’s money. You have a bunch of folks depending upon you and the second you raise any amount of money, you’re in the bus of having a liquidity event. It’s not like you need to build a business on your own.
I think what I always try to remind myself of is no matter what it is I’m going through and people in our situation are, we kind of all won the lottery of life. Yeah, it feels frustrating while you’re still trying to build your business, but to get to live where we do in the time that we do and to be healthy and to have our mental faculties about us, 95% of the world would trade places with us.
Andrew: But that’s a very composed view. There was a period when you weren’t feeling that way. I remember you wrote a post about how you’d gained weight because of the pressures of entrepreneurship. Was that the toughest period for you?
Jason: Actually, I wrote that post a year and a half into the company. I don’t think it’s the toughest, because at the beginning you just go through it and you don’t know.
Andrew: What was the toughest? I’ll tell you one of the reasons why I’m asking is I want the audience to root for you, to identify with you and not see you just had the easiest ride to exit and now the next one is going to be a natural. You did have that tough period. What was that tough period? Can you describe it?
Jason: I really appreciate that. That’s very thoughtful. I think in our case we, after the first two or three years, started having a lot of success. Our traffic grew quite a bit. We grew to one of the largest traffic sites on the internet. Then three years in a row Google’s algorithm completely changed. So, literally, one month we’d be doing 28 million unique visitors a month to the site and two months later we could be doing 16 million, which changed our revenue and a whole bunch of things and by the third year in the row of that happening it was getting tiring. That was part of the strategic decision.
Between you and me and your audience, I think our business was worth a lot more than what we sold it for, and I think we could have taken it to something much bigger. But when those options started coming in, I was looking at my life and seeing all the things that were struggles and challenges. I made the decision, we made the decision as a board that this would be a good time to take the exit even though I think we could have built a much bigger business.
Andrew: I see.
Jason: So year five, six, when things started going wrong after they’d been going right for a long time, that was tough. And you’ve just got to power through it.
Andrew: I’m looking at an early maybe even first version of your site. It says, “Docstoc is coming soon.” And then you have a list of bullet points with what Docstoc will be. It will be the place where you can find and share any document, do keyword search by meta tags or go through three levels of categories. You can make friends on Docstoc based on common interests.
Jason: That was a dumb idea.
Andrew: That was what?
Jason: That was a horrible idea. I can honestly say no one became friends with each other.
Andrew: Because of a document they shared. There’s a whole list of stuff. Was it that many things that you really wanted to do, or was there a core idea and you were trying to sell it through a bunch of bullet points?
Jason: Until the very end, the main value property of Docstoc was that any document that you needed for your business you could get. So that stayed the core of the product from 2006 until 2015, when Intuit turned it off. When we very first started the company, the idea was that we would be YouTube for documents, that you could have user generated site where everybody uploaded their documents. My bent, because I was finishing my JD MBA, I wanted it to be a place for professional content, so business content, legal content, but, you know, we were taking everything at the time.
What we really consciously evolved into becoming was the premiere content site for small businesses to starve and grow. So we became publishers of content, we wrote articles. We created video. I think we had to evolve what we were to start to build more enterprise value. But that first bullet point that you read, I think that’s what most people know us for to this day.
Andrew: Which was find and share any document.
Jason: Yeah and really business documents is what it became.
Andrew: When I first got to know you, Digg was a very big site. It could send massive amounts of traffic. You knew how to work the Digg situation. You understood who were the top people on Digg. You understood what content worked on there. Can you talk a little bit about your strategy there because it seemed to have worked.
Jason: Yeah. I’m going to take it up a level. What’s actually funny is you and I did a talk at Magicopolis in Santa Monica, and if you searched for Andrew Warner, Jason Nazar on YouTube, I think you still find that talk.
Jason: Yeah. It’s still there online.
Andrew: I was doing live events and Magicopolis was this really nice event space you could take on and you spoke there.
Jason: Yeah. Let me say this instead–this is a very core principle of mine when it comes to business and startups. Anyone can eventually solve for supply. The hard thing is to solve for demand. You’re a great interviewer. I would legitimately say you’re one of the best interviewers I’ve ever met.
But that’s probably not why you’re as successful as you are. It’s because you’re also a great promoter and you can get the word out to lots of people seeing you. If you weren’t great at what you did, over time the audience wouldn’t stay. But you don’t get them there because of the supply. You get them there because you can solve for demand.
Andrew: I see.
Jason: What most people overlook in the startup phase is they just take the demand for granted. They think, “Oh, I’m going to build a better product, or I’m going to have this feature. I’m going to build this hardware and then people will just use it. But the demand is always the hardest thing and people don’t obsess about it enough, stay focused on it enough. What I’ve taken on myself is if especially early on I can’t hire other people to do the demand generation or the product’s not creating itself, I’ll step in and I’ll do those things.
So, early on in Docstoc, we drove millions of visitors in that first year through social media, and it’s because I knew how to get articles on the front page of Digg, which drove 30,000 to 40,000 posts. Similarly, there are growth hacks that we do in Comparably today to get the word out to lots of folks over press and everything else. So the mechanics of how it works is it’s really as simple as having a large social network. Early on it was how fast you could get those votes and if it was on a good quality content site. Then the content needed to be good enough that it could bubble up, and once it went to the large audience, they liked and voted it up. That was kind of the secret of how you did it.
Andrew: I think there’s a lot to your essence in that answer. First of all, you related it back to me. I’ve seen you do this in private with people. Even when you describe Docstoc, I remember when we were at a dinner and you talked to a lawyer who said, “What’s Docstoc?” And you said, “Docstoc is a place where you can find any document. So, for example, you might have found there’s a contract that you know someone else had written and you don’t want to start from scratch, well you can find it on Docstoc and it will help get you started.”
And then you went to someone else and you used an example that applied to their life. I thought this is so interesting the way he does this all the time. I finally figured out an element of it. So, you did that with me in that answer, which I think is worth noting.
The other thing you did was you summed up a business approach in one statement. It was something like you had to solve for the demand side, not for the supply side. What I wonder is when you get that understanding of business that you can sum up so clearly, how do you do that? What about you allows you to do that?
Jason: I really appreciate it. So, let’s break down some interesting things, first off. Here’s what I learned a long time ago and what I know to be true is that people are most interested in themselves. The mistake that we make as purveyors of information is that we can talk about the things that we think that we care about, but if you’re not talking about what other people are thinking and feeling and what they care about, they’re not interested in us.
So, ultimately, I’m in the business of helping other people, and so I’ve got to talk to them about them, not about me. I think those are the leaders that I’ve always respected the most. If anyone’s had a chance to meet Bill Clinton or George W. Bush, everyone uniformly says that they just make it about you. They turn it back on you right away.
Andrew: Which is something that we know but we don’t do very well. I struggle with that too. You do it in a very subtle way, so it doesn’t feel like it’s heavy handed and manufactured but consistently. I get that and I just wanted to notice it because I’ve noticed it about you for a long time and I think it’s worth paying attention to and I’d like to do more of that. But you were going to say something else.
Jason: Thank you. I think you do it pretty well, and you’re pretty perceptive about that. As far as the second principle being able to sum something up, let’s put this in the context of what your audience probably cares about, which is fundraising.
One of the biggest mistakes in fundraising is if you and I were behind the glass window, one of those two-way mirrors and we’re watching, I can point out to you how within 45 seconds, 80% of people pitching investors lose them. You see it. The investors are gone. They lost them. And it’s because they’re not saying a phrase that captures their interest. It’s because they’re not saying a phrase that captures their interest or talking about something they care about, and they’ve in essence lost the opportunity to really persuade those folks about their product or service.
What you have to be able to do is boil down what you’re saying and talking about and doing to its core principle. If there’s any one thing I think I do in business better than other things–that doesn’t mean I’m great at it, it just means I do it better than everything else I do–it’s that I can get to the heart of the matter really quickly.
Andrew: How do you do that? You were mentioning investors, entrepreneurs losing investors. I have an example of Fred Wilson, an investor, who said that when he was raising money for his fund, he couldn’t do it until he sat down and said, “We are overcomplicating what we’re trying to do here. We have to simplify it.” And once he did, he was able to raise money. I see that his process was iterating in front of investors. What’s your process for iterating down, to boiling down, as you say, the tough issues to short sentences? Do you have a process?
Jason: Most intuitively it’s what does the person really care about and what’s the core value prop. You actually did it. You asked me before the interview, “Describe Comparably.” I said, “Our overall vision is to be the brand that monitors the job market for employees.”
But what you did is you said, “I’m going to pick out the most interesting thing in what the product does, which is we’re going to show you how much money people like you make.” Okay? There are probably 50 different ways I’ve described Comparably, but when I have to buy ads online for it, there’s a single phrase that people care about more than anything else, which is, “See how much money people like you make.”
Andrew: I see.
Jason: Very powerful. It gets to what they care about. So, when you learn to talk to people about them and the things they care about, you become very powerful in your communication and when you’re pitching VCs, you’ve got to get to the heart of the matter. A, they pattern match. So you have to show them how what you’re doing pattern matches with other things they see as successful. “Here’s a big market. We’re going to be like. . .” That’s why it is so powerful even though it seems like copycat to say, “We’re going to be Uber for X,” because they can make the association quickly.
But more importantly, let’s go into fundraising for a second, okay? I’ve done a bunch of angel investing. I’ve pitched VCs. I’ve raised a bunch of money. I’ve seen people raise over billions of dollars. There’s a Maslow Hierarchy of Needs. It starts with the team. If people don’t believe in the team and you, who you are, they’re done. They’re out. Then it goes to a market. Is this something that can be a massive opportunity?
Then it goes to the product. Is it differentiated? Is it special? Is there something unique about the product that makes it different and better? Then it goes to metrics, like what are the growth metrics. Then it goes to revenue and you have to map how that revenue grows to a certain scale. If you don’t talk to VCs in that order and convince them sequentially in each of those steps, then you’ve kind of lost them.
What most people do when they’re pitching is they spend a ton of time talking about features or benefits or what they’re doing or nuances. They go on about the market way too long after a VC is convinced and they just lose them. So you’ve got to understand what somebody cares about. It’s the same thing in building an online product.
The hardest thing in building an online product is you’re going to do so many things. You’re going to write so much code. But the vast majority of what you’re going to do your users aren’t going to care about. So you have to get to the heart of that matter, that one specific thing that makes the biggest difference. Then this is just my final business philosophy, which is that the vast majority of what we do in startups and as business leaders really don’t move the needle at all.
Like I genuinely believe that everyone here in my company, 80% of what we spend time on won’t actually make any difference whatsoever into growing. I can look back over eight years at Docstoc and I can tell you probably about 80% of what we did just didn’t make a difference. Like if we hadn’t done it, but we’d done the core 20%, we pretty much would have grown the same.
So the challenge is how can you identify that very small set of things that move the needle and kill it on those? And that and that just gets reflected in how you talk. If you think that way and you see the world through that lens, then you start thinking, “How does everything I say boil down to the most single essence of what somebody else cares about and drives an action?
Andrew: I see that. Speaking of the 20%, those early promotional pushes that you did, often it was like some jokey image that you might have or someone on your team might have found online, then put in a document, then uploaded to Docstoc, then shared as a document from Docstoc. It wasn’t business-related. It was often just a funny thing, the kind of thing you might find on Reddit today or Imgur. What about the idea that you were going really broad? Was that a mistake in the beginning in your marketing or was it just you had to do it because that’s where your audience was?
Jason: It was the experimentation we went through to figure out how to drive audience. The reason you saw those things is because that was the kind of content that virally did better. Early on it helped us drive audience and awareness, but over time, it became in conflict with our brand and our mission, which was to help small businesses. We had to give it up. I think that was part of the experimentation process of understanding how do you drive an audience at all? That was one of the growth hacks we did.
Andrew: All right. Let’s pick up growth in a moment. And you guys hit profitability. I want to understand how you did that. But first, I’ve got to talk about my first sponsor. My first sponsor is a company called Acuity Scheduling. Here’s the reason why I had to talk about them, Jason.
I love my office here. I’m right in the heart of San Francisco. Anyone can come visit me, 201 Mission Street, please give me a little head’s up before you guys come out. But I noticed that I’m getting a little stale here because I’ve been in the same office for three years. I started looking for a new office and I made an appointment with a real estate broker to do it. Yesterday morning, I took care of my kid, my oldest son, got him ready for school, took care of the baby, changed a diaper really fast, got in an Uber, rushed out to see this new office and I get there and the guy’s not there.
I send a picture of myself with the address saying, “Here’s where I’m standing so that in case he’s looking somewhere else, he’ll know I’m standing in front of this store.” His response back to me was, “Sorry, Andrew, I totally spaced on this meeting. I can’t make it today. Can we reschedule later?” I said, “All right. I’m sorry to hear that. No need to reschedule. I’m not rescheduling with that guy.”
What I wondered was why is it that I sometimes have these meetings with people where they just don’t show up, but for an interview, almost always supplement will show up, even if they reluctantly say yes. The reason, Jason, is because with him I just added him to my calendar manually. With an interviewee, I use Acuity to let them book the time so they make the effort to find the right time on my calendar and book it.
With Acuity, they enter their email address so Acuity sends them a reminder of the meeting a day before, an hour before so that they’re always aware. I had no doubt, Jason, that with your busy schedule, you would show up here. I had no doubt that even though we booked this weeks, probably even months before, that you would be here.
Yeah, there’s an important event here that you’re going to do an interview, but you’ve got a lot of important events in your life. It’s that Acuity helps make sure that my meetings happen, right down to as soon as you book it, it automatically sends you an email saying, “Here’s how you can add it to your calendar,” and it’s more than just adding it to your calendar. Now it’s in your inbox, so if you ever have any doubt, you know you can go and search for it.”
That’s the idea behind Acuity Scheduling. If you want to schedule meetings with people, if you’re out there listening to me and your sales people need to schedule meetings with people, if you’re trying to schedule meetings with investors, if anyone needs to get on the phone with you or see you in person, you owe it to yourself to sign up for Acuity Scheduling. I’m going to give you a bunch of free time here, so you’re not even going to have to pay any money.
You’re going to give people your calendar with just your availability. They pick the dates and times that work for them. They tell you what their phone number is so there’s no doubt about that. Maybe you ask for what their Skype name is or whatever else you want. It automatically goes on your calendar and their calendar. The meetings will happen. Because you make it easy for them to say yes, they’re more likely to say yes.
Here’s a link. This thing was created by a Mixergy fan, so I can give you a lot of free time. This guy’s been listening to Mixergy while he coded up his site. He was so excited as the thing built itself up and I followed along with the success and he wants to say thank you to Mixergy and to the audience. Here’s how much free time he’s giving you guys–45 days, a month and a half free, when you sign up using this special link. Go to AcuityScheduling.com/Mixergy to get it and to actually have those meetings happen. I’m grateful to them for sponsoring.
That was a pretty good ad read, wasn’t it?
Jason: What’s interesting to me is you’ve done two things that you say that I do. So I’m going to give this back to you.
Jason: First, you asked me how do I get more of my time back and you’re getting more of your time back by using Acuity.
Jason: That’s a product we like and I’ve used. You asked me how do you get to the heart of the matter and you put me on the spot in the first and second questions, you said, “How much did your company sell for and how much did you personally make?” which is a little taboo even though my current company is all about what people make. But you asked the question that probably everybody wants to know that other people don’t. So don’t play modest hero and you do the things that you’re saying that I do.
Andrew: You know what? I have become a much better conversationalist. But I have to admit, when you and I have had conversations in the past, I kind of felt like there was a little bit of like a barrier. I couldn’t break to get to that personal zone. I don’t know what it is. I don’t know if maybe I came into a conversation with this chip on my shoulder, or maybe I came into the conversation trying to go very social where you at a period in your life really businessy. Do you know what I’m talking about?
Jason: There just probably wasn’t enough drugs involved. If there were just more mood altering substances–
Andrew: It’s very possible I was also in my head about it.
Jason: Yeah. It’s also where you meet people. I’ll tell you a great trick. There was a VC I recently met. I’ll leave out the firm. Whether or not I do business with them, after I pitched them I wanted to go to a basketball game. I’m like, “Hey, just come with me.” Because we were in that environment together, we’re going to have a different relationship for the rest of our lives. I got to see a different side of his personality.
Andrew: Because you took him to a basketball game?
Jason: Yeah, just because you get out of this boring, formal context of how you normally deal with people. When you deal with somebody in a job interview or pitch them in VC or do an interview, you’re going to put on a certain façade of a personality. I think the trick is how do you be the person that you are when you’re offstage with people in these formal environments? I think you do that really well. I’ve seen you get a lot better over the years. But that’s part of what makes people charismatic and challenging.
Andrew: What are some good opportunities to do that? I’ve been thinking that recently too, that I should have–I think it was someone who I read went out shooting with friend and I said, “I should do stuff like that.” I don’t really like to shoot guns, it’s not me, but I get how moving and doing something different is actually more of a bonding experience. Do you have examples of things like that that you’ve done? What do you do?
Jason: Sure, a couple simple ones. When I interview any candidate, instead of staying in the office, we go for a walk. You’d be so surprised how just being outside and walking completely changes the dynamic of how people interact with each other. So that’s one simple one.
The second is if you’re trying to meet with people, there’s a reason why business got done for hundreds of years over drinks. It’s because you build a certain rapport and relationship with people, and the fact of the matter is technology and everything we have makes us so much more efficient, but we hide behind our computers and we hide behind our devices and they don’t build the same connections.
So, if you’re trying to form relationships in the web space, go to people. Go in an environment that’s not the same boring environment that everybody else is and do something you would do that’s part of your normal interests and you’ll completely change the way in which you form that relationship.
Andrew: I see. So it could just be as easy as going out for a drink.
Andrew: And maybe we should have gone out for a drink apart from like the tech community in L.A.
Andrew: That would have made sense. One of the things I noticed you guys did at Docstoc was you were really good about capturing email addresses, which at the time software companies weren’t good at. What I saw you do was if I wanted to download one of the docs and it was always very clear how to do it, I could click a button to download it, then it would say, “Enter your email address to create an account and then we’ll let you download it.” Was that one of the big sources of email subscribers and then repeat business?
Jason: Yeah. We had 50 million registered users by the time I sold the company to Intuit. That was huge.
Andrew: 50 million?
Andrew: So what else did you do to get more of those users?
Jason: Well, remember in our case we were one of the most trafficked sites online. We were doing 30 million visitors a month, but it was primarily from search. So, as more and more people uploaded more and more documents, we drove more and more traffic from search. Then people would find those documents in search, try to download them and then we would get their emails in the process and then we could remarket content to them.
Andrew: I see.
Jason: That was kind of how the flywheel worked for us. But it’s the same for Comparably. We have a give to get model. When you come to Comparably.com, you’re going to get the absolute best salary data you’re going to find anywhere and break it down by gender and ethnicity. You can see equity data. You can see exactly what people like you in a situation make. But you have to register and then you have to contribute your salary up front.
Andrew: In order to get that data.
Jason: Absolutely. Yeah.
Andrew: One of your competitors does that. It’s standard. They’ve done this for a long time, so they’ve built up their salary data. How did you get your salary data on day one?
Jason: Day one, I’ve been doing this for ten years, so I have a lot of relationships with other companies and recruiters. We’ve seeded the site, but we really just had data for three major cities, like L.A., New York and Austin.
Andrew: How did you seed it in those three cities?
Jason: We got data directly from companies and from recruiters.
Andrew: You went to those companies and you said–what do recruiters get for doing that?
Jason: Personal relationships.
Andrew: That’s it?
Andrew: Just get to know the guy who’s about to build this whole thing?
Jason: Well, a lot of the folks I had already known a few years. So I’d either pay them a bunch of money to place candidates for us or I’d helped them or we knew of each other. The nice thing is if you raise your hand and ask for help, a lot of people want to conspire for your success. I think people don’t understand that sometimes. We’re all competitive. There’s always that thing like, “I want to be the best. I want to win.” But it’s not a zero sum game. It makes me really happy when I see other people have success. I want to support them in that journey, whether it’s financially with an angel investment or with my time or with something I can do for them.
So, when you raise your hand, especially as a good person that has good intent, a lot of people conspire for your success. That’s how we got the records initially. Then we got a ton of press at launch. We had a pretty impressive cofounding team between us. We started six companies and sold five of them. The press drove a ton of ongoing usage. Now we do a lot of online media. We get search traffic. We get a lot of press. We have more email addresses to do that marketing and that’s how we continue to drive more salaries into the product.
Andrew: I’m looking at SimilarWeb to get a sense of how guys are currently getting traffic. We’re talking about Comparably right now. Your search isn’t that high. I would have expected you with your SEO background to do so much from search. But if SimilarWeb is right, 50% of your traffic is direct, 13% is Facebook and then after that, about 10% is search.
Jason: Yeah. Search is small right now. Search just takes time. Remember, Comparably.com has only been live for six or seven months. Docstoc, it took us two years to really get the flywheel going on search. But we’ll get there. We have a team that knows that as well as anybody else, so we’ll drive a lot of traffic. Comparably is a lot more now. You go there to see how much you get paid.
But we also have a platform where employees publically rate their companies and it’s done totally different than other sites. It’s not focused on the written review. It’s really a light, easy process. We’re able to show how companies’ CEOs are rated by their male versus female employees and by employees of different race and by employees of different department and by employees that have worked there different amounts of time. And now we finally added the last leg of the product where we really help you find the best career opportunities.
So, by coming to Comparably and filling out a dream job and seeing what companies you want to work at, we’re actively making those matches happen on a daily basis. We only launched the feature two weeks ago and have already driven candidates to almost 3,000 companies. So that’s the stuff we’re really excited about.
Andrew: I see also that you get to use all this data to create infographics and other shareable content, like, “How long do you take for lunch breaks?” is one of the infographics. It looks like, if I’m reading this right, women eat at their desks 29% of the time versus men 21% of the time. Women spend less time eating than men, it seems like. Wow. So that’s the kind of thing we’re talking about.
Jason: Yeah. We have some of the most robust–we already have millions of culture data points since we launched. So, you can see tons of auto-generated infographics on everything you’d want to know about work and see how you compare to other people like you.
Andrew: These are auto generated?
Jason: Yeah. If you just go to Comparably.com and click on culture, the one that you’re looking at was design, but you’ll see that we have tons of auto-generated content. The idea is that we want to let you know more about the job market than anybody else. So, we’re going to show you how much money you should be getting paid and what your worth and what your value is. We’re going to show it to you at such a specific level. We’re going to tell you what kind of experience you’re having relative to your peers.
So, if you’re an engineer in San Francisco, what kind of experience are your peers having? We’re going to show you how your current company and other prospective companies are rated by employees in a really rich data format and we’re going to broker matches between you and potential employers and always make sure that you know of the best opportunities for you and that the most amount of companies are competing to bring you in as a candidate. We think that’s a pretty valuable and meaningful place in the market to be.
Andrew: Going back to Docstoc, you finally had this audience. You knew how to grow it. You were starting to figure out what the right kind of content was. What were you doing for advertising or for revenue in the beginning?
Andrew: And then did it go–actually, you know what? So I remember you being on Jason Calacanis’ podcast where you guys were talking about how we need to be profitable now because the world is going to be a lot tougher, it turns out the world was not necessarily tougher, not as tough as we all expected. You said, “By next year we will be profitable.” And I always wanted him to circle back and say, “So you said you guys were going to be profitable. Were you?” And it sounds like you’re saying you were.
Jason: Again, remember, we only raised $4 million and that lasted seven years. The money had to come from somewhere. The real business was subscription. By the way, Mahalo made money because I showed Jason how to use AdSense, like I walked into the office and was like, “This is exactly what you should do.” We’ll see if he gives me credit for that.
What we did in year three or four is we launched our subscription product where instead of being able to download the documents for free, you could download all of our content but you had to pay $20 a month at $120 a year. And then on top of it, we started producing really high quality legal forms ourselves.
Andrew: And then you were sharing the revenue with your content creators?
Jason: We were and then just the model kind of changed where we became the publishers of the content ourselves. We created 10,000 really high quality business and legal documents, and for $20 a month, you could download all of them. It was a really amazing value proposition. So that was the main driver. We grew to hundreds of thousands of paying subscribers, and I think we were on like a $15 million run rate when we sold the company to Intuit.
But keep in mind, it was 100% gross margin. So we had over $1 million a month hitting our bank account each month. That wasn’t revenue that had any meaningful amount of margin on it, so that’s how we were so profitable as a company. When we sold the company to Intuit, we had virtually all the cash that we raised in the bank.
Andrew: Wow. I had no idea. So, when you allow people to download all the documents they want right away and then go away, how do you keep them from going away, just grabbing everything, cancelling and then coming back later on? Frankly, that was an issue we had to deal with here at Mixergy.
Jason: Yeah. Part of it is just that at scale, you just kind of accept that that’s the case. You have some good actors. Part of it is if people wanted to pay for the subscription for a month and then cancel, that was okay. They could do that. It worked for us because we had such a large volume of people. At our peak, this really turns people’s heads. They don’t understand.
But at our peak, we were doing 50,000 registered users a day on Docstoc. Now all of them obviously were paying subscribers. That would have been a very different outcome. But imagine without having to spend any money on marketing, you gain 50,000 people a day signing up for your product. We had a huge funnel. We had a large source of new revenue every single day. We just believed if we kept making a good product, the revenue side would take care of it over time.
Andrew: How did you get 50,000 people a day to sign up?
Jason: When you’re doing a million unique visitors a day, it’s just math. The way it basically worked is call it like 15% of people tried to download a document every day and then a third or those folks registered. So, if you have a million people a day come to your website and you have 150,000 people attempt to download the document and you have a third of those register, then you have 50,000 registered users a day.
Andrew: I see. And they needed to register in order to get their download. That means two thirds of people said, “I’m not going to download this. I’ll just go away somewhere.”
Andrew: I see. So, first of all, I didn’t realize because you always seem so serious, so much like the weight of the world is on your shoulders, usually people like that have excessive swagger, right? You didn’t have that. There was a little bit of discipline there to keep it quiet. Or was it that it was more challenging like you described at the top of the interview?
Jason: It’s a lot of things. First of all, I hope I’m the person that no matter what’s going well or wrong I don’t have excessive swagger. There’s a difference between confidence and cockiness, and I hope that I always have a lot of confidence but I don’t cross the line to that cocky person. Everything is hard, anything can go away. I think before you started Mixergy, you had this good success. You built your greeting cards company. You sold it.
Andrew: I definitely got excessive confidence.
Jason: Yeah. I remember it at its peak. But until you also have that first win, you’re kind of always worried things can go away. So I’m a little more calm now, but in some ways, I’m just as competitive and there are things that I’m more intense about these days than I was before and other things I’m more easygoing about.
Andrew: Did you have these go away? Was there anything earlier on in life that made you feel so concerned about losing it all that it was like your version of the great depression for the baby boomers?
Jason: I mean, it’s the immigrant mentality. I grew up in Beverly Hills. It’s a weird thing to say because I really felt like I was growing up poor because no matter what my dad said we didn’t have money for things, but obviously I was really advantaged. Now, I don’t think we were as wealthy as it might seem to saying you grew up there. But my dad was an immigrant. My dad is Persian-Jewish. He immigrated to the country and he had a mentality and he still does to this day that everything could go away. That was really ingrained in me that no matter what success you have, you have to keep fighting, you have to keep working hard. So there was a bit of that.
And then there was the reality that I had a lot of people’s money I was responsible for and a lot of folks that worked on the company and I wanted to make sure it was a good outcome for them. So my code of ethics is just I’m going to worry about that and make sure things go right until they do. I just think that you can’t ever get too confident, too high on what you’re doing.
You should believe in yourself. You should be aggressive. You should think that you can be the best at whatever you do, but the moment you start thinking, “I’ve got this. No one can beat me. I’m better than everybody else, you’re just going to lose. That’s why I like being in the position of David to Goliath. I love the fact that we’re taking on Glassdoor and LinkedIn and we’re going to build something much bigger and better than what they have because I’d rather be the underdog or the smaller resource. That’s always where I felt more comfortable.
Andrew: All right. Let’s get into this new company and why you even got into it. I had this other vision for what you were going to do next and I’m wondering why you didn’t go there.
First, my second and finally sponsor is a company called HostGator. Let me as ask you, as an entrepreneur, as a guy who’s advised other entrepreneurs for years, as a guy who’s invested in other entrepreneurs, if you had to start over with nothing at all except I say, “Look, here’s a HostGator hosting package. You’re going to host your website right, but you’ve got to come up with the idea,” what would you do? What would your scrappy beginning be? You can’t get funding. You have to figure it out.
Jason: I’d do a commerce site. I’d find a product or a good that I could sell.
Andrew: Okay. Is there one that you look at and you say–like I heard Jason, not Jason Calacanis, but Gary Vaynerchuk I guess at some point said, “I could sell rocks.” And people said, “How would you sell rocks?” He said, “I kind of threw that out as a line, but if you’re pushing me, I would sell a rock by painting it a little bit so not I take it out of the marketplace for rocks and people have a higher perceived value and then I sell it and it’s probably going to be content and then he went into the whole thing. Is there something that you’re looking at? It doesn’t have to be rocks. It can be shoes. It can be something like cases for the iPhone. I don’t know.
Jason: Well, my oldest friend has physical beauty supply stores, Kristy Beauty, like if you go to Beverly Center in Los Angeles in Beverly Hills it’s a store. Beauty is an amazing category. There’s tons of margin. There’s an insatiable need for it, whether it’s hair care products or skin cream or makeup or sunscreen. I would say if you want to find something to sell online, that’s not a bad place to start.
Andrew: What a great example because I actually did interview of a company who did that. He said, “We didn’t really have much, but we went over to Alibaba. We found someone who had some hair extensions we could actually sell.” He and his wife shot video of her teaching women all the beauty tips she knew, not necessarily about hair, not necessarily about hair extensions, but beauty tips on their free channel.
Then they started selling these hair extensions on their own site and telling people at the end of these videos, “Hey, if you want hair extensions, here’s where we’ve got them,” and linking over. That was a business that I thought was not going anywhere and so when it was first suggested to me as a guest, I said, “Eh, cute.” It turned out it was hugely successful.
So I see the power of that and whether someone who’s listening to us wants to start that or any other business or just take this idea and run with it on their own, they should go to HostGator. When they do, they’re going to get hosting that actually works by a company that will be there by phone to help them out if they ever need it. I really urge you guys to go check out not just HostGator.com, but a special link called HostGator.com/Mixergy, where they’ll take 50% off the hosting package and not only do they take 50% off, but you don’t have to commit to months and months in order to get it.
Frankly, Mixergy as an interview site was kind of like a side project for me. I just said, “You know what? I want to interview these people out of curiosity.” I didn’t even know if it would go anywhere. But I hosted a site, simple WordPress, started doing interviews. It took over my life. I loved it and still do to this day.
So, if you have an idea, go jump on it. If you hate your hosting company, even better, switch to HostGator, then you’ll really love them–HostGator.com/Mixergy.
So, Jason, what I imagined you were going to do next–I remember saying this to Mark Suster years ago. I said, “Jason would make a great venture capitalist.” You analyze people quickly. You quickly understand what they could be doing or you have suggestions for them in the moment and the suggestions actually make sense. It’s based on real business sense. Why didn’t you become an investor? Why didn’t you go do what Mark Suster did?
Jason: I think I’ve got more in the tank. I like being in the arena. I always have. I think as a venture capitalist you’re supporting an ecosystem. It’s a real lifestyle. You can make a ton of money. You can do a lot of good in this world. But I like working with a team. I like solving hard problems.
I like competing. I’m an ultra-competitive person. Sometimes people don’t realize that about me at first because I try to be nice and easy going. But if you and I are playing a sport together, I would want to destroy you on the court and then afterwards I’d be like, “Hey, let me take you out for lunch and go hang out,” but on that court, you’re my mortal enemy and I want to humiliate you. I don’t want you to think that you can win a single point.
Andrew: It never feels like, “Hey, it’s just a game. I’ll let them win. Who cares?” You don’t see things as, “Who cares?” It’s, “I care. I want to win.”
Jason: Most times if I’m going to do something, I want to win at it, really.
Andrew: I see.
Jason: I think there are things that are different in nature that aren’t collaborative and I think there are different contexts. If I’m playing my brother, who’s older and got some physical issues, I want to have fun. I want to enjoy the day with him. But if we’re competing, I’m in it to win. I have a lot of respect for what some large folks do like LinkedIn, but I want to beat them. I want us people to be talking in a decade that Comparably is the place you should go for your career, not to LinkedIn and I have no bones about wanting to destroy them in every way possible while respecting what they do. So there’s that side of me. I enjoy being in the arena. I enjoy building and leading teams. I think that entrepreneurship is a young person’s game. It’s just hard to do as you get older. At 38 now, I have a lot less energy and stamina than I did at 28, than I did at 21.
Andrew: So you feel this is your last big chance. If you’re going to go after a giant, it’s got to be now. It’s not going to be when you’re 45.
Jason: Yeah. I think if I’m going to do something from the ground up, I need to do it at this phase of my life. I don’t think at 50 years old I’m going to want to be working until 12:00 and 1:00 a.m. every night and working weekends and building products.
Andrew: Do you do that now?
Andrew: You do? How do you maintain your relationship?
Jason: I have a really supportive wife. She’s really amazing. Most of the weekdays I’m just really focused on work and she gives me the space to do it, and on the weekends I try to make as much time for her and the rest of my family and my friends. So that helps a lot.
Andrew: So it’s almost 3:00 Pacific time, midnight you’ll still be there today or 10:00 p.m. you’ll be there today?
Jason: The average day if I’m just kind of in the office, I’ll stick around until 11:00, I’ll go home, see my wife for an hour and then I’ll get back on the computer for an hour or two. The biggest thing is I never get off. From the second I get up until the second I go to sleep, I think about how can we build the brand to really help people in their careers, really make it so they understand what they’re worth and they find jobs and they understand companies.
Andrew: Why this business? Why did you decide to take on this problem? Why not say, “You know what? Small businesses are where I made my previous hit. I’m going to go back to that well again. I know them.” Why go after the other side?
Jason: I think part of it is you want the intellectual challenge as a person of doing something different. But also like you said, I spent 10 years of my life helping people start and grow small businesses in entrepreneurship. I think now I want to do something at a bigger level. We want to work with companies of all sizes and help millions of employees all around the world, companies of all sizes.
And I think that there is a better way to help people in their careers. For example, I think the way that we find jobs is broken, especially for in-demand candidates. It’s still based upon a couple hundred years old model.
Andrew: What’s an in-demand candidate mean?
Jason: It just means that the employers are actively looking for you, versus where there’s more demand for the job than supply. For example, someone that’s an hourly worker, they may not be an in-demand candidate. There are a lot more workers for the jobs than there are jobs for the workers. If you look at an engineer or somebody that really excels in marketing or even an attorney–
Andrew: I see. They are deeply in demand. What’s broken about going after them? It seems to me like they’re going good. I’m seeing them get all kinds of offers, signing bonuses, moving bonuses. Why is it broken?
Jason: I still don’t think we’re matching the best companies to the best candidates, and I still think it’s more work than it needs to be. It’s one of those things that you think the best way to do something is no one else has shown you the easier way and then you see the easier way and you’re like, “Oh my god, this is how easy it can be?”
Andrew: What’s it like now and what’s the easy way that you envision?
Jason: Yeah. Think what it’s like now is that you should have more transparency into what’s going on in the job market. So right now you don’t typically know how much people like you are getting paid. You don’t really understand what it’s like to work at a company. You only find companies to work at when you’re actively looking, and then you go to job boards, which is like a 400-year old model based upon ads and classified papers. Let’s take each of those.
We want you to understand at a moment’s notice what your value is in your market and we’ll send you weekly updates to that effect of like this is what the market value is for your rate for people like you.
Number two, at a glance, you can see at any company you’d want to work at in detail how are people in your department rating that company? How do they compare to other companies? What’s the leadership team like at Facebook versus Google versus Uber? What’s the compensation like? You should have that information at a moments’ notice and companies should have that feedback from their candidates which we give them. Check.
Number three, instead of looking for a job when you’re out of work or you’re unhappy, you should constantly be notified of the employers that would potentially want to hire you. You, Andrew, should be able to say if you were in a situation where you were looking for a job, you should just be able to raise your hand anonymously and every single week, you should get employers that are saying, “Andrew, based upon your background and who you are and what you’ve done and who you know, we’d want to hire you.”
Then you just can pick at any time if you want to move on any of those opportunities and it should maximize what your market value is because you have multiple employers competing for you to join their team.
Andrew: And this would be anonymous.
Jason: Yes. That’s what it is on Comparably. It’s totally anonymous so you don’t signal to the market that you’re actively looking for a job. We put you in a situation to find the best career opportunities, know what you’re worth and find the companies that have the best culture fit for you.
Andrew: You know what? I know this is a one-off, but I was looking at a TechCrunch article about you and in the comments, this guy, Matthew Hughes, said that one his friends got contacted by a manager because he left a review on Comparably and it turned out not to be fully anonymous. He said, “I tried to have the review removed but they wouldn’t delete it.” Your team did say it was a mistake, but isn’t it always possible that what you leave publicly can come back and end up revealing who said it.
Jason: It’s possible. That’s a big reason a) why we focus on structure data instead of written reviews, so it’s a really simple 60-second questionnaires about a company. I think what we’ve gotten really good at now is if you say, for example, and you’re African American and you work in a marketing department, we now know if that’s potentially going to expose you’re identity and we hide that until there are a lot more candidates.
That was something just in the first 30 to 60 days since we launched we didn’t move on quickly enough just because we’re growing so fast. Now we have those tools that if anything about your identity could expose who you are, then we don’t show that result on the page.
Andrew: And the revenue you expect will come from commissions when you place someone–actually, payments when you help a company hire and data companies will get on their employees, how their employees rank them overall?
Jason: Sort of. The platform is always going to be free for employees. We’re not going to charge employees. We do have a set of tools currently for employers. We give employers all of our salary data. We give them advanced analytics on what their employees are saying about their company, which is super valuable. I’m sure you’d want to know everything about the people that worked for you, what they think about and what kind of experience they’re having and what they like and don’t like.
Then the third thing is we’re going to be driving candidates to them, the people that are raising their hand and saying, “I want to work at this company.” So, between all those sets of tools eventually we’ll start monetizing. It will be a SaaS product where companies pay us x-number of dollars per month and year.
But our goal right now is just to get the word out, have as many people using it. We’re fortunate we raised $6.5 million at the end of last year. We have a small team. We have a long runway. We already have VCs leaning in to want to do our next round with us. So, our goal is to have a lot of market penetration over the next year. Then eventually we’ll be charging the companies to get access to all those tools.
Andrew: I use Glassdoor sometimes to research my guests so that if they say, “People love working here,” I have an understanding of whether that’s true or not. Often it’s much more subtle than that. I want to know what is it like working there. What is the management like? What is there process?
One of the things I’ve been finding lately is I think people are good at gaming the system. The companies know that other potential employees are going to be reading those reviews, and they go encourage them to go and write positive reviews, which then leads to very useless data. It feels very happy go lucky, which is not what we’re looking for. How do you avoid that?
Jason: That’s our entire product experience. First off, I’ve got a ton of respect for Glassdoor and what they’ve accomplished and their mission, I think, is really meaningful and helps a lot of people. They’ve got a billion-dollar valuation. They’ve been around for eight years, but they don’t have any credible competition.
From my perspective, I think there are a lot of things in their product that feel old and tired and that’s why we’re coming into the space. I think that when you focus primarily on written reviews, whoever does it, you tend to get really angry people that got fired or–
Andrew: Who are willing to put the time in to write?
Jason: Yeah, or didn’t get hired and they go there and they lambast the company and then you get really positive reviews because managers go to their team and say, “Hey, we have to leave positive reviews. Go leave them.” So you get this weird bifurcation. That’s why we’re not focused primarily on written reviews. We have a structured data approach where you can answer yes and no and multiple choice and one through ten questions.
We don’t really encourage our platform to be the place. You either come to trash a company or just say great things because you were asked. It’s a more thoughtful experience. I think if you look at the product experience, people have really been enjoying what we’re doing and that’s part of the reason we’re having early success.
Andrew: All right. Well, I’m looking forward to seeing this business grow. Why don’t I close this out with this question? You asked me to do this interview. I should have asked you heard ago, but I’m wondering why did you ask? What’s the benefit to you of doing this interview?
Jason: Well, the selfish benefit is we want everybody in the world knowing about Comparably. We’re a new company and we want to help a lot of people and we want to build a big business and help people make a lot of money. You’ve got a great audience of people that are our target market right now and it’s a huge benefit.
Andrew: Are they? It’s more entrepreneurial than I would have expected you’re want.
Jason: Yeah, but those are the folks that are starting companies. Those are the folks that are going to become big companies. Those are the folks that are talking to people that work in startups. So, hopefully as they learn about the message, they share it with their friends and with their family. So, besides that, I’m going to turn the table back on you. I think you’ve done something really unique. I’ve done this live event for a couple years now. As an interview, one of the things I try to do is ask interesting–like if I’m bored, then I know the audience is bored.
Jason: And you have a really interesting interview style because you ask the questions that I think are on people’s minds that other people don’t. You don’t do this weird stuff that people do where they write out all the questions. You just take the interview wherever it goes. It’s super conversational. This is kind of like if you and I were having drinks in a bar and nobody was there, these are the kinds of things you’d be asking anyway except you get to do it for your audience.
That’s a pretty special thing. I’ve been on a lot of interviews. I’ve seen a lot of interviews. You kind of do it better than anyone I’ve ever met in person. You’re kind of in the Charlie Rose kind of category there. So, keep up doing what you’re doing because I’m excited to see where this is going to go. I remember when it was just a WordPress site and I remember those first ten interviews of Mixergy.
I remember when you literally first got it started and bought your first mic and you were in a Mexican restaurant in Santa Monica you were saying how you were thinking of doing this thing and you and Olivia for there. So, for me to be on the sidelines and see what you’ve grown this into is really pretty awesome. It’s a pretty amazing thing. You should keep it up for as long as possible.
Andrew: Thanks. I appreciate you saying that. I’m glad to see what you guys have built here. One of the cool things that I recommend doing on Comparably is this. Forget searching for your own salary. I like if I meet somebody to go online and see, “What does that person make? What does someone like that make?”
If I find out that they’re an engineer–let me just type something in here. Let’s say they’re a mobile developer engineer in my zip code. I’m in 94105. I like to see what kind of salary does that person–wow, average in San Francisco, $134,000, pretty interesting.
Jason: How much money are you making these days from Mixergy? What are you making a year off it?
Andrew: Not enough to brag about, frankly. I think that that was the original sin of–
Jason: Would you brag about it even if–you don’t seem like a braggart.
Andrew: You know what I would do? I would walk around with more swagger if it was, definitely.
Jason: What’s the big vision for Mixergy? Five years from today, what do you want it to be?
Andrew: I don’t know. I had a clear vision before. The vision was I really liked the idea of creating courses by real entrepreneurs, bringing them on and teaching, having them teach the thing they’re especially good at and having a team of producers who can bring out that excellence in them. Lately I’ve been thinking, “I don’t know that the world needs that anymore. I don’t know that the world needs more content like that anymore.”
I know there was a period where you were doing it at Docstoc where you were bringing people in and doing professional video shoots. I think back then, I should have gotten more professional. Not that we’re not at that level–professional as in sharper video, more polished look–not that we’ve missed that, I don’t know that the world needs that content anymore. Maybe I need a different direction and I need some time to think about what that is.
Jason: Can I give one unsolicited recommendation to you and all your listeners and maybe people will leave in comments and respond and see if they like this?
Jason: First off, I think you’ve seen Udemy has built an absolutely massive business, raised close to $200 million and so I think that there is an insatiable desire. I think what you do is I don’t think it’s about the production value that it needs to be, it’s about the quality of the content. If you could do it more scale what you naturally do, which is explain to me this marketing growth. How exactly do you do this with email? What is the copy that really compels and works? How do you close this business development deal?
You take these core things that you need to do in business and sales and business development and marketing and running and leading a team and you break that down, I would pay as a business owner easily, like a couple thousand dollars a year to have access for my team to really understand the ins and outs of specifics of how you drive core metrics in your company. I think you do it already and if you can do more of it, there would be a huge need for it in the market.
Andrew: That’s encouraging. That’s the kind of stuff I’d love to do. All right. I’m looking forward to hearing from people in the comments, in person here at 201 Mission Street or any other way please let me know as you guys think.
All right. I appreciate the two sponsors, AcuityScheduling.com/Mixergy, if you want people to actually meting you, AcuitySchedulinhg.com and to have your website hosted right, go to HostGator.com/Mixergy. And of course, finally, Comparably.com. Congratulations on such a good easy domain. Bye.
Andrew: Thanks. Bye, everyone.