Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And if you’re curious about who listens to these interviews, well, you’re about to meet someone.
Joining me is an avid listener who, like me, noticed that eBay is great but—I’m going to say it. I think eBay listings are kind of ugly. I think eBay listings are not just ugly. They’re a bit confusing. Believe me, I love tech. It’s not like I’m a technophobe who can’t understand where everything is. It’s just kind of like a mess.
Well, today’s guest said it doesn’t have to be that way. He came up with a tool that allows anyone who sells on eBay to actually make their listing look good, make it easy for their potential customers to find things that they’re looking for and increase sales. So I invited him here to talk about how he did it and to find out what kind of revenue or what kind of business you can build by fixing what I think is one of eBay’s biggest problems.
His name is Victor Levitin. He is the cofounder of CrazyLister. They help you create professional eBay listings in minutes. We’re going to find out how he built up this business thanks to two great sponsors. The first—Victor, who is my sponsor? Ah, there it is. The first one will help you send out smart email marketing. It’s called ActiveCampaign and the second will help you hire your next great developer. It’s called Toptal.
Victor, good to have you here.
Victor: Thank you for having me.
Andrew: Before we started, I said, “Can I see an active account you guys have, see what someone’s doing?” and you said, “Yeah, I’ve got. . .” How many did you say you had?
Victor: It’s near 50 million now.
Andrew: 50 million people—not 50 million people, 50 million listings.
Victor: Listings. That’s correct.
Andrew: We’re talking about active and closeout sales, right?
Victor: Yeah. That’s correct.
Andrew: And there’s a link on the bottom of all of them or actually it’s not a link, it’s your logo on the bottom of all those listings, but I couldn’t find it by doing a site search on eBay because your name isn’t mentioned and you’re not linked to, but you do get credit on every one of those 50 million, fair to say?
Victor: Not on all of them, because we have a paid feature to allow sellers to remove the footer for a small monthly fee.
Andrew: Oh, I see. Got it. If I don’t pay, your logo is on there. Does it also link back to your site?
Victor: Yes, that’s correct.
Andrew: So the one that I’m looking at doesn’t link back to your site. I get how it works and I get how you get some viral growth there. Every one of these listers is another way for you guys to get a customer.
Victor: It’s one of the acquisition channels, right.
Andrew: Yeah. I see it. You know what another one is? You guys are pretty freaking active in the eBay community, right? Someone will ask a question and there’s an account called CrazyLister_Create_Awesome_Listings. That’s you?
Victor: Yeah. That’s us.
Andrew: Someone asks a question, someone on that account will jump in and respond and often link back to CrazyLister.
Victor: Yeah. Generally speaking, we are very active in the sellers’ community.
Andrew: All right. I’ve been looking into you guys, and I’m really impressed by what you’re doing. Do you feel like maybe you’re a little bit limited because eBay is not growing as fast as Amazon?
Victor: No doubt about it. If you ask me what’s the number one risk factor for CrazyLister today, it’s the fact that we are an eBay only solution.
Victor: Yes, of course.
Andrew: How much money did you guys raise?
Andrew: Was that a big issue when you were raising money, that it was all built on eBay?
Victor: Yeah. It was hard to raise money. But our vision was always much bigger than eBay. What was his name, the founder of 500 Startups, Dave McClure?
Andrew: Dave McClure, yes.
Victor: He has a brilliant piece about a “Niche to Win, Baby,” he calls it. So, as a startup, you’re better to conquer a small market but really conquer it but then expand. This is exactly what we are doing. We are conquering eBay and then expanding beyond. We are now arriving at this stage where we dominate eBay and we expand beyond to the rest of the marketplaces.
Andrew: And your vision is to do what long term?
Victor: The vision long term is to reinvent how ecommerce is done by merchants. The world as we see it, as we know it growing CrazyLister to 90,000 users is that retailers, they are great at three things—their strengths are sourcing great products, offering great logistics and providing stellar customer support. But they really struggle to convert or translate these advantages over to the ecommerce, to the online world because they are lacking the IT skills.
So we envision a world where ecommerce is accessible to any merchant regardless of his IT skills. So we are basically building a solution. So say that you, Andrew, if you don’t know anything about HTML, design, structure data, Excel, which is just a small portion of what you need to master now to sell online, if you don’t know anything, you just tell CrazyLister, you tell the machine what is it that you have to sell, what’s your price, what’s your quantity and the machine does the rest for you.
We will automatically gather the information needed, the images, the descriptions, titles and whatnot, and we will automatically list you on all the relevant marketplaces, some of which you have probably never heard of.
Andrew: I see. You’re saying, “I’m going to put you on eBay today, but in the future, I’ll put your stuff on Etsy also if it’s appropriate for Etsy and Amazon’s marketplace too if it’s appropriate and some other new site that you don’t even know if and when someone buys from one of these places, I’ll be sure to reduce your inventory so that you’re not selling it again by accident.”
Victor: Exactly. We want to make it completely frictionless from the sellers, no technical needs required from them at all.
Andrew: Now you’re talking like a Silicon Valley entrepreneur. A bootstrap entrepreneur says, “We’re going to make a lot of money by creating better listings on eBay.” A Silicon Valley entrepreneur says, “In the future, everyone’s going to have an ecommerce store. People don’t want to know how to do HTML and they don’t want to limit themselves to one store. We’re going to be the people who will put them everywhere.” Got it. Okay. How much revenue are you guys making right now? Let’s talk dollars and cents, Victor.
Victor: Sure. We are at $1.5 million in annual recurring revenue.
Andrew: Okay. And the company was founded 2015, about two years ago.
Victor: That’s correct.
Andrew: And before this, you guys were ecommerce people. You’re not developers yourselves, speaking of HTML, don’t know HTML, don’t know this, don’t know that, you guys knew a little HTML but you didn’t know that much. You were ecommerce people selling what?
Victor: Yeah. So it’s a funny story, actually. I started selling on eBay almost a decade ago back in 2008. The first item I ever sold on eBay was a fake hair straightener for girls. I made quite a lot of money, like $700.
Andrew: Fake hair straightener?
Victor: Fake hair straightener.
Andrew: What does that mean? Like I buy it to straighten my hair, but it keeps it curly.
Victor: It’s not for you, it’s for girls. It’s sometimes called a hair iron. It’s the thing that you place on your hair and it straightens.
Andrew: I get that. Why would it have to be fake?
Victor: Because it was from a Chinese supplier.
Andrew: I see. It actually works. It’s not like it will keep my hair curly. It’s a knockoff.
Victor: Right. Yes.
Andrew: You took something that was selling, some guy in China who was making a rip-off of it and you said, “I’m going to buy it and sell it cheap online.” That was your first thing.
Victor: Boom. Exactly.
Andrew: Okay. Where’s your accent from?
Victor: I guess it’s an Israeli accent. I was originally born in the Ukraine and moved here to Israel at the age of six.
Andrew: Got it. Okay.
Victor: What you’re hearing, it’s safe to say it’s an Israeli accent.
Andrew: It’s not a Ukrainian accent. You are right now in what city in the world?
Victor: In Tel Aviv.
Andrew: In Tel Aviv. Okay. Is it hard to be in Tel Aviv? I feel like when I ask you where’s your accent from, I was kind of inviting you to share where you’re from, but I sensed that you, “I didn’t realize I had an accent. What’s Andrew doing?”
Victor: No. I speak a lot. I just returned from Las Vegas from the eBay Open Conference, which is eBay’s biggest celebration and conference. eBay invited me to speak there, to do workshops for the sellers. I’m well aware of my accent. It’s completely fine.
Andrew: Good. I’ll have to look for another awkward moment. As a listener, you probably know apparently awkward moments are part of what makes Mixergy interesting. I had no idea, but people apparently eat it up even though they wince a little bit as they listen.
Victor: I’ll tell you what. I’ve got this tip once, being a foreigner speaking English, English is not my first language. You really try hard to make yourself sound fluent. I got this tip, just talk slowly. People will understand regardless of your accent.
Andrew: Yeah. The problem is you’re an entrepreneur. You’ve got a lot to say. You’ve got a lot to do. You don’t want to do anything slow.
Victor: A lot of numbers.
Andrew: But you’re right. I have discovered that people who talk slower are easier to understand and they also sound smarter. But we’re a little impatient. The audience knows, they could make the audio like half the speed if they want. So you’re saying you’re selling this knock off hair straightener product. Continue the story. What happened there?
Victor: I was selling it making a nice profit. For my first three days on eBay, I made like $700 and that’s a lot for a student, a broke student from Israel. A few days later, eBay naturally suspended my account. I got my first kick out of eBay.
Andrew: I see. You were actually pretending it was from this manufacturer. You got kicked out. What happened at that point?
Victor: Lesson learned very quickly. eBay is not a place to play games. I wasn’t really understanding what I’m doing, but lesson learned. From that moment on, whatever I’ve built, the businesses I’ve built were 100% right.
Andrew: Meaning no more shady stuff, no more gray area.
Victor: No more shady stuff.
Andrew: You continued to sell. Here’s what you told our producer. You said, “There’s a bunch of crap coming in from China. It’s good stuff, but it looks like crap online. That’s our opportunity.” What were you doing with that opportunity, the ability to buy from China?
Victor: Right. The story goes that I needed a GPS device for myself for my own use. I purchased it from a Chinese supplier from a, pardon my French, really shitty listing. It looked like crap. It looked like it will be a one-use GPS. It will take me from A to B but will not return from B to A. At least that’s what the listing conveyed in the way it looked and felt.
It’s a problem common not only to Chinese or Eastern sellers. It’s common to any seller on eBay. Most listings on eBay, like I said, they’re ugly. They do not look good. They do not convey the real value of the product. By that time, myself and my cofounder, Max, we were selling on eBay for like a year or so and being Israeli-based sellers, we had all the disadvantages. So we could not compete on price, we could not compete on shipping time because all of our transactions were naturally cross-border. So we were desperately looking for what will be our competitive angle.
I remember calling Max saying we’ve just found it. We will take the exact same GPS, which I just got, which is a brilliant device. It was really great. It still serves me to this day. I told Max we will simply wrap it in a much more professional and trust-appealing listing, kind of what Apple does. At the end of the day, Apple is selling iPhones at a price twice as high as the highest price Samsung or Android and they’re doing it mainly because of brand, because of how it looks.
Andrew: I think a lot of people would disagree with you, but we understand the point.
Victor: Right. So, with this notion, to make a long story short, within six months of constantly optimizing the way our listings look and feel, we managed to get to the top of the search results on eBay on five different eBay sites, US, UK, Germany, Australia, and France. The new method that we brought to the marketplace is basically treating listings as a process rather than a one-time creation.
If you think of it, it makes a lot of sense. It’s just like A/B testing your webpage or your landing page, you would never imagine putting your page out there and that’s it and leaving it because you get a lot of traffic, a lot of that which can you use to optimize to further increase your conversion. This was what we brought on to eBay.
Andrew: Okay. So you kept iterating on the listing, iterating on the listing, you got really good at selling it. Do you get so good that you actually overcome the fact that people have to wait for the product to come from Israel to get to them to the U.S. often or to Europe, or is it still a barrier?
Victor: Well, our view of it is that you have the price-sensitive customers, the dollar-driven ones, you have the shipping time-sensitive customers. The thing is that eBay is so big and ecommerce is so big that you’ve got enough segments. So our customers were most looking for great products and great customer support because we were selling it, our prices were among the highest.
So we were not competing on price. Our promise was that yes, you will a bit longer and you will pay a bit more, but you are completely covered and you are completely guaranteed to be 100% satisfied with your purchase and your product.
Victor: And we were selling the exact same product that the Chinese guys were selling from their listings, only that their promise looked different to the buyers.
Andrew: I’m still surprised that to this day, there are a lot of Chinese listers who still have grammatical mistakes, bad typos that I would have thought that by now they’d have figured that out. It’s not that hard to find a proofreader online. It’s not that expensive. It’s not yet been the forte of people from that country.
I’m sure that they’re going to catch up, and I’m excited that at some point in the next year, maybe two, I’m going to start to see more entrepreneurs from China here with their crappy internet connection, which always has a problem for me for video, but their stories will be fantastic of how they’re slowly conquering manufacturing and slowly conquering ecommerce, then getting better at display and starting to learn from you guys and making their products look more and more appealing so they can go direct to consumer, right? Now they have middle men. They have people like Wish.com who do it for them.
Victor: Boom. Exactly. Right.
Andrew: It’s a country that is going to start to dominate because they don’t need the middle men or they won’t for long. I could see how you did well. I’m surprised that your next step was to become a consulting firm. Why did you do it and talk to me a little bit about what that meant to be a consulting firm?
Victor: Sure. We had no inspiration to be a consulting firm. But one day during my military reserve, I got this phone from an unknown number. On the other side was a guy named Shai and he said that he is a representative from eBay Israel, which have just opened their offices in Israel. It was back in 2012. They wanted to get to know us, Max and myself, because at the time we were among the biggest and most successful sellers in Israel.
So we met with them in their offices in Netanya in Israel. They were very interested to understand how do we succeed like we do? What is the technology we are using? What’s the know how behind this? At first, we had, like I said, no intentions to share it. We were happy with our secret sauce. Then they called us again and they told us that there is a big conversion, a big party they’re having and they want to grant us with awards for having the highest conversion rate in Israel.
The next phone call was, “By the way, during that party, that convention, we want you guys to come up on stage and tell how exactly did you achieve your success and teach others?” So we kind of found ourselves being forced into people asking us or businesses asking us to provide them with the service of optimizing their sellers the way we did to ours.
Andrew: Would you get their username and password to eBay and start adjusting their copy or were you giving them advice that they would go implement?
Victor: We would actually get our hands dirty and do it for them.
Andrew: What did you guys charge for that?
Victor: It was a percentage of the revenue. It really depended on the size of the business and the volume and we found ourselves working with the biggest chains and retailers in Israel. We actually very quickly realized that this was not what we want to do, we don’t want to be this huge agency of designers and optimization experts. That’s not scalable. This way, we could probably help a few hundreds of sellers and that’s not what we wanted.
Andrew: One of the things that I’m learning from doing these interviews is that when you do consulting work, you really understand the problem because you get to experience how multiple companies feel that problem, that pain. Did you learn anything by designing other people’s eBay listings, by adjusting, by getting your hands dirty, as you said, in their business? Did you learn anything that you wouldn’t have known otherwise?
Victor: Yes, definitely.
Andrew: What’s that? Give me some examples.
Victor: I have a shocking example, at least it was shocking for us. So we were up on stage during an eBay official event. We got this award for having the highest conversion rate in Israel, which means that nobody in Israel knows how to create better converting listings than us. Then we were on stage again presenting our methodology and our tools developed in house. Business actually approached us to do the work for them. We said, “Okay, thank you. Give us the keys. Let us drive the car for you. Let us do our job.”
What really knocked us out of our fit is that businesses were constantly getting in our way with their ideas, with how they think it should work and what elements they want to add to the design, which were completely like the opposite of what we know should be there, what the data shows. It was a moment of realization for us that the way the business looks and feels online, it’s like an extension of their own selves. They really want to have a say about it.
The way your listings look and feel is kind of a representation of your own self. Businesses want this freedom to express themselves. They don’t even feel comfortable getting award winning experts to do the work for them. They don’t want to leave the control completely. They really need to have control over how the listings look.
Andrew: I see. So you’re saying that even if they know that having a more rigid design that will increase their sales, they don’t want it because the rigid design doesn’t express who they are. They value self-expression and company image more than they value incremental sales increases, right? They’ll lose a little bit of sales to make it look like they want it.
Victor: Yeah. They’re emotional about it and you would have expected a business, a business has very specific KPIs, key performance indicators like the bottom line, what’s his conversion rate, what is his sales volume. It’s not the case. They were really getting emotional about what they want expert.
Andrew: Okay. So I’d like a specific example of something that somebody wanted that you know was not going to increase sales. Why don’t you take a moment to think about that? I see you nodding, so you probably have something in mind. Let me talk about my sponsor because this is just a public service I’m about to do for entrepreneurs and then I’m going to go back and ask you for your specific example.
The sponsor I need to talk about is a company called ActiveCampaign. Here’s the deal—if you’re sending out email marketing, you’re smart. Anyone who doesn’t have an email list is really giving up a large part of their business. You all know that, right? You’ve created a webpage. You worked so hard to get somebody to come on. Of course you want to get their email address so you can continue to stay in touch with them, build your relationship with them and eventually sell, right? I’m not telling you anything new. If anything, I’m telling you something that’s kind of old, 20 years old.
But here’s the part that most entrepreneurs will miss. They’re going to send the same email to everyone, someone who watched their sales video and someone who didn’t, someone who came to their site today and someone who’s been on their list for years. Someone who’s a buyer will often get the same email as someone who’s not a buyer.
The reason they do it is because the software for sending out targeted email is either just not on our radar and I’m about to put one on your radar if you’re listening to me or it’s too complicated to use properly. So, that’s the problem that ActiveCampaign realized. They used to have a standard email marketing software, right? You just get people to sign up to your email list. They go to your database on ActiveCampaign and you could send the same thing.
They said, “We have an opportunity here. We can make it a lot smarter. What if when someone clicked a bunch of links to go to the sales page we tagged them as a potential customer? What if then anyone who’s tagged as potential customer and didn’t buy within a month of being tagged, what if we offer them a 10% discount if they buy in the next three days?” Basic stuff that you’d expect to be done that you thought when you got into email marketing, when you got into online businesses, that you thought was part and parcel of how to do business no one does or hardly anyone does.
So ActiveCampaign said, “We know why they don’t do it—because they’re not aware and because it’s hard to do. We’re going to solve it. We’re going to make it easy by creating this new drag and drop automation builder.” Just like if you can drag your ass out of bed, you can drag and drop these tags in the emails that go out based on the tags.
And you get everyone to know they bought a bunch of ads here on Mixergy and so now you’re in the know, whether you need it or someone else that you come into contact with needs smart marketing automation, I urge you to go check out ActiveCampaign. But not their homepage. I have a special URL where they’re going to give you your second month for free. They’re going to give you two free one on ones.
So you can actually strategize with a consultant who will show you how to implement this in your business and use this properly. And if you’re already with a different provider, one that probably does dumb email delivery, they’ll migrate you for free and they’ll give you all that if you come in using this special URL. That URL is ActiveCampaign.com/Mixergy. You can try it right now for free. So just go and explore it. Grab your drink, grab your wine, grab your whiskey, grab your coffee, whatever it is and spend half an hour learning this new software that can change your business dramatically.
One last thing that I’m going to say about this—the very first time that I read an ad for them I believe was in my interview with a guy named Carl Taylor of the automation company. His whole business is managing other people’s email automation software. I asked him in the interview, “What software do you use?” He said, “I know them all. We work on them all for our clients. The one that we use is ActiveCampaign.”
So, if you’re looking for a smart email automation, go check out ActiveCampaign.com/Mixergy. You will be happy. If you’re not, let me know. I’ve not gotten a single, single issue, not even a small one from ActiveCampaign customers who signed up through me. I want you to go check them out—ActiveCampaign.com/Mixergy.
All right. Victor, what’s an example of something that someone wanted to do that you’re going to pull your hair out because it’s so bad?
Victor: Sure. So the examples vary from people who argued about the colors they wanted to use on their listings to the images they wanted to use. One example that I remember is we learned from our own journey that you should make it as personal and as much about people as possible. So, you can tell a personal story in your listings to stand out, to give the listing personality for it to not just be a product listing, but a human story that actually sells this product.
Victor: So I remember this time we were working with a business that was selling military leftovers and overstock. There are lots of those in Israel. He was very bossy about how he wanted his listings to look. At the end, he was actually the first ever customer I got to fire. Sometimes you need to fire customers.
Andrew: You fired him because of what? What was he trying to do?
Victor: He did not allow us to do our work.
Andrew: What was one design element that he insisted on?
Victor: So he really insisted—he was basically like two three-man show or a really small business, an SMB. He was insisting on trying to convey this image of a million-dollar business with logistics centers all around the world. We constantly tried to convince him there is magic about the truth.
Put your small staff, your small warehouse, put it out there, tell your story. Tell them, “Hey, I’m the CEO. I’m the one who’s answering your questions. I’m the one who’s packing your orders. I’m the one responsible for you being happy with my purchase. There’s magic around this. It works. It will increase your conversions. At least try it.” He was not ready to try that. He wanted to convey this image of millions of dollars in revenue and we could not agree on that.
Andrew: I see. So, because of all that, when you decided you were going to create your own software because as you said, you didn’t want to be in the consulting business, how did it shape the way you developed your software, seeing all the things that people wanted to do, seeing how they just weren’t getting it right?
Victor: Right. Let’s look at the world of eBay and how it looked before CrazyLister, kind of BC. So you had as a seller who wants professional, mobile-optimized listings, you had two options to get that. One, you go to a professional designer and developers, pay them a couple of thousands of dollars and they do whatever is needed for you. That’s one. Two, you can settle for ready made generic templates, which will not convey your brand message.
With CrazyLister, the idea was exactly what we’ve learned through consulting. All the sellers to do whatever they want regardless of the IT skills, regardless of their HTML and design skills to allow them to do whatever they want themselves. This is kind of what Wix.com did to website building.
Andrew: I see. So you’re saying, “Look, I didn’t want to over-systemize and over-templatize what people can do. Even though I know it’s going to increase their sales to have it laid out a certain way, I know that they’re not going to buy that because I’ve worked with them. They’re too stubborn. They have their own vision. I’m going to create a way for them to basically do whatever they want within this template even though it goes against by believes and my experience because that’s what they want. Am I right?
Victor: That’s correct. That’s what the market wanted.
Andrew: Okay. So we asked you in the pre-interview, “What did your first version look like?” Here’s what you said, this is a quote, “A shitty disgrace.” A shitty disgrace—what was so disgraceful about it?
Victor: We did not even allow sellers to upload images from their computer. So if you’re a 60 years old seller from the UK and you wanted to advertise your used iPhone for sale, you had to find an online hosting, host your images on it, copy the URLs and only then paste them to CrazyLister.
Andrew: I see. Part of it you guys are not developers, right?
Victor: No. Max and myself, we are not developers.
Andrew: So who created this thing?
Victor: We were really scrappy. At first, it was my buddy from the military. It’s actually he is a good developer and I know him from the military, but he never wanted to work with us full-time. He wanted to stay a freelancer. So it was all like a remote work. It was hard.
Andrew: It was a guy doing you a favor, more that than someone who’s really in it with you trying to solve the problem you guys care about.
Victor: It was definitely not with us in the trenches.
Andrew: Okay. I’m looking at that first version. I don’t know that I would call it a disgrace, but I get what your pain is when you’re thinking about on it. You nevertheless decided we have to start getting people to use it to get users was Facebook groups. What are these Facebook groups and what was your process there?
Victor: Yeah. That’s correct. As they say, if you’re really proud of the first version of the product, you get to the market, you’ve done something wrong.
Andrew: You’ve waited too long I think was Reid Hoffman, the founder of LinkedIn’s—yes. You said, “I’m going into the market anyway. We have to get people to give us real feedback.” So what are these Facebook groups that you went into?
Victor: Yeah. There are tons of eBay groups on Facebook of sellers giving each other advice and asking stuff about eBay, teaching each other. We began taking a, just like you said, like you mentioned us taking an active role on eBay communities. So we began building our authority on these Facebook groups, not by shoving CrazyLister in sellers’ faces, “Use CrazyLister.”
We were just genuinely helping sellers sharing our knowledge. So they were asking questions completely unrelated to CrazyLister and to what CrazyLister does. We were giving them value by answering these questions. So how do I search for suppliers? Where do I find products? We were gradually building our authority and only then when people were asking about how do I design a perfect listing? How do I create mobile optimized listings? Only then did we actually invite them to try CrazyLister.
Andrew: I see. I was trying do this as you and I are talking. So, when I did a search for eBay sellers, I found a group called eBay Sellers United, which has—you don’t know that one?
Victor: I know it.
Andrew: You do know it? There are 5,500 people in that group. Is it value to go into 5,500 people and start talking in there or is that too small?
Victor: Well, at first, we had a better program. So we were just trying to get better users to complete certain steps in the app so we can learn from their experience, kind of understand what are the pain points and what do early adopters look for. So we were basically looking for early adopters.
Andrew: What’s a pain point you discovered as you were going into these Facebook groups?
Victor: We discovered the pain of creating a high converting customized professional listing is so big that some sellers are willing to go through the horrors of using the early version of CrazyLister.
Andrew: I see. I get that.
Victor: It encouraged us.
Andrew: That actually is one of the benefits of having a really bad first product because if people are using it, you’ve really identified a huge problem, right?
Victor: Exactly. Like I said, it encouraged us to move forward. Our roadmap was created like five years’ ahead because we had almost nothing, a scrappy editor that was filled with bugs. Yet, some people found it valuable for them.
Andrew: Yeah. Was there anything you remember that people told you that helped shape the product, something from the beta group?
Victor: I can’t think of . . .
Andrew: Okay. You at least had some users. You can’t think of specifics at this point, which I get. It’s been a while. But user feedback helped shape the product. One thing you realized was people need to be able to upload images to the site. We can’t have them upload somewhere else and then link over here. It’s just too messy. You needed a developer. Who started to develop beyond the first guy who did it as kind of a favor but wasn’t fully in with you?
Victor: Right. Like I said, we started out by having this ecommerce retail business and it was quite successful. We were doing like $5 million in annual sales. We put in every cent income we did from that business into the new one.
Andrew: How did you get $5 million from what?
Victor: From online sales.
Andrew: I see, from your stuff, the stuff that you were selling like that GPS device, you were doing $5 million there. What was the net on that business? What kind of profit can you make when you’re selling $5 million worth of stuff on eBay?
Victor: Not a lot.
Andrew: Like $100,000, $500,000?
Victor: At the end of the day, it was like roughly somewhere at the 7% profit margin.
Andrew: That’s not bad. That’s not as low as I thought, but that’s a lot of work getting products in. You’d have a warehouse or into your house?
Victor: No. We had very minimal inventory that we actually kept in stock.
Andrew: It was drop ship?
Victor: Yeah. It was drop shipping directly from the suppliers.
Andrew: I see. A lot of work, at least you don’t have to house the stuff at your place and 7% net, got it. So you’re taking all that money and starting to pour it into the software because this is the future. This will scale a lot better and have better margins. So did you hire a better developer? I know you guys struggled with technology for a while.
Victor: Yeah. We hired this developer, this girl, who did not have formal background, formal education in computer science. She learned who to program from her husband. She was our first in-house programmer. She helped us build the first version of CrazyLister, basically, get it out there.
Andrew: How was her stuff?
Victor: Well, she got us to initial product—I wouldn’t say product market fit, but she got us to our seed round. She got us to our initial $10k in MRR. So we owe a lot to her. Down the road, when we onboarded really experienced software developers, we had to let her go because she was just not as fast as them.
Andrew: I see. What else did you get out of working with better developers that you couldn’t out of working with someone who is knew or someone who is kind of half-assing it for you? Do you have an example of that?
Victor: Yeah, of course.
Andrew: Something a solid developer was able to do that others wouldn’t be able to do at all?
Victor: Right. So, we’ve got a lot of points down the road that we had problems that required a sophisticated solution. That would not have been possible without some serious brain power.
Andrew: For example?
Victor: I’ll give you one example. So one of the most highly requested features by CrazyLister users was what’s called the cross-sell gallery, which is basically a gallery that showcases your other items and it increases your sales, your exposures and so on. We wanted to develop this feature in a way that it will be free for any eBay sellers and as a return, it will add the CrazyLister footer advertising CrazyLister.
But the challenge we had was okay, say Andrew comes to apply this cross-sell gallery to his listings and together with Andrew, you have 100 more listings, 100 more sellers. Each and every one of you, you have maybe hundreds, maybe thousands, maybe hundreds of thousands of listings. We are working with Amazon AWS and when we calculated and estimated how much will it cost us to support this kind of operation, we got to really frightening numbers, at least for a startup. It was thousands upon thousands of dollars of value that we were giving away for free.
Our tag team, the development team, they have found a way that’s way beyond my pay grade, but they found a way to use Amazon Lambda, which is as far as I know, you only pay for the computing power that you’re using. They reserve a server for you. By utilizing this Lambda, they were able to save us like really make it from $3,000 to $30. It was really substantial, like 100-fold.
Andrew: I see. That is dramatic. I see it’s an example and it’s not accurate numbers, but it gives me a sense of what you’re talking about.
Victor: We have actual numbers because Amazon asked us to write about it for their blog. We have it in Amazon’s startup blog, the concrete example of how did they do what they did.
Andrew: And blogging was a big way for you guys to get customers. You had to go beyond Facebook. You mentioned the watermark. Let’s get into how you got customers in a moment, but first, it’s’ actually what you just said ties in nicely with my sponsor who is a company called Toptal, top as in top of your head, tal as in talent.
Their goal is to not get you the cheapest developers but get you the best developers. In fact, they kind of have a reputation in the developer world that if you’ve gone through the Toptal screening process, then you’re considered someone who’s really good and other developers kind of look up to you and understand that you’re good, you’re one of the best. You’re smiling. Have you heard that or do you think I’m exaggerating a little? Call me out, Victor. I call you out.
Victor: I’m just hear it in every one of your interviews.
Andrew: It is kind of weird People who see me out for coffee sometimes expect me to interrupt the coffee and say, “Now let me tell you about Toptal.”
Andrew: That really is their goal. They want the best of the best. I have heard people brag that they were part of Toptal, that they got through this screening process. Frankly, that is one of the best reputations that you can have that you’re too hard to get to work with. I always thought what we should do is I guess we did it in the early days when I was hiring a pre-interviewer, I made him go through a bunch of steps to make sure he really was good. A lot of people just kind of dumped out of the process because I made it too hard for them to become a pre-interviewer. They said, “I don’t need this. What are you doing?”
The best of the best, like this guy Jeremy, he had to conquer it. He said, “Andrew’s going to make it real tough for me to become a pre-interviewer here. I have to show him how good I am.” So he started doing pre-interviews, started writing up notes, all kinds of stuff. Then it’s a mark of pride. As a result, when he talks to people about his new business and says, “I’m connecting with Andrew,” he can feel proud of the fact that he earned a spot here in the work he was able to do.
That’s what it’s like with Toptal. If you need the best of the best developers, it will have a dramatic impact on your business the way that Victor was talking about hiring great developers reduced his cost overall and helped him find a solution that he couldn’t have found otherwise.
There is a site where I want you to go to sign up to talk to Toptal and see if you’re a good fit for them and if they’re a good fit for you. It is a site also where you’re going to get 80 hours of free developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to two weeks. That URL is Toptal.com/Mixergy, top as in top of your head, tal as in talent, Toptal.com/Mixergy.
The reason I’m saying, by the way, Victor, that you should see if you’re a good fit for them that I just talked to an interviewee on the phone on Friday who said, “Andrew, help me find a developer.” We talked about it. he said, “I even tried Toptal but they rejected me.” I said, “They rejected you because you don’t’ have someone there to work with their developer, right?” He said, “Yeah.” I said, “Well, I think you need that first before you start talking to Toptal.” So, they do want someone who is ready to work with them. They’re not just looking to hire anyone with an idea and a couple of bucks, Toptal.com/Mixergy.
Andrew: All right. Facebook groups work for you. Was the next thing that you did to grow your customer base, was that that link on every link on everyone’s listing back to your site?
Victor: No, not at all.
Andrew: What was the next idea?
Victor: Facebook was the initial small fire we lit up. The next thing we did is I was highly influenced by Groove, by Alex Turnbull from Groove and his blog, where he shares his startup journey. He really inspired me to start to do content marketing for us. It’s then when I realized we can actually market CrazyLister by sharing what we know, by sharing our story, which is highly valuable for our potential customers. We began doing a lot of content marketing. We started our own blog.
It was in July 2015 I wrote the first ever blog post. I invested heavily in it and with a shaking hand, clicked on the publish on WordPress. It’s called “The Perfect eBay Listing: How We Grew Our Sales by 220%.” It basically tells what I’ve shared here. It also states the numbers and screenshots of what exactly did we do in this period of six months between having the phone call with Max saying that hey, we’ve got our competitive edge until we’ve reached being the best GPS service on eBay and winning the eBay awards.
Andrew: I see that post right here in front of me. First of all, I see you holding up the award at I guess eBay’s conference. I’m looking at what a standard eBay listing looks like, a lot of colors, a lot of fonts going on in there and you said, “This is what we’re here to change,” and then you showed your numbers of how you changed it. Then you became not like Alex where Alex from Groove, the helpdesk software, blogged and constantly showed his numbers, constantly showed his sales, you didn’t do that, but you were sharing a lot, right? You shared your numbers as you continued to grow, didn’t you?
Victor: Yeah. It’s kind of a mix. With Alex, he shares is current journey. For us, we grew up being eBay sellers and now we are a SaaS solution for eBay sellers. So we share what we’ve learned in our own skin and we have a lot of new learnings now being very active members of this community, serving lots of eBay service. We naturally conduct a lot of customer interviews and we learn a lot from our customers.
Andrew: What is your process for doing customer interviews?
Victor: Okay. So that’s quite interesting, actually. We reach out to customers. We have several segments of customers and we have a way to identify which is the most interesting segment for us in terms of CAC to LTV ratio. We reach out to those customers and I reach out to them personally, saying, “Hi, I’m the CEO at CrazyLister. I would like to have a chat with you to understand your pains, what do you love about CrazyLister, what don’t you love about it? How can we make your life easier? What else can we do for you?”
We’re getting really good results for that, pretty good responses. Being in Israel, I get to speak to people from all over the world and learn from these huge businesses. The biggest sellers on eBay actually use CrazyLister. I was amazed to discover that PayPal has a store on eBay and they actually use CrazyLister.
Victor: Obviously there’s a lot to learn about them, about their processes, what they do, what else can we solve for them. This is how we device what to build next.
Andrew: By identifying the people who are going to be your best customers and getting on a call with them and asking them what?
Victor: So here’s an example. The last time we did it was like two months ago. I got on a phone call with this business from the U.S. and they are the biggest sellers for Land Rover parts in the U.S., grossing nearly $1 million a month in sales. I asked them, “How do you use CrazyLister today?” He said, “Yeah, I use you guys for eBay and Amazon.” I was like, “Did I hear you right? Did you say you used CrazyLister on Amazon?” He said, “Yeah, sure.”
I was like, “How? We’re an eBay only solution.” He said, “As brand owners on Amazon, you can design your own page.” I was like, “Yeah.” “Yes, I used CrazyLister for that. I design by page, then I take a screen share and this screen share, I upload it to Amazon as an image. We don’t even have it. Our product does not allow it.” He kind of forces CrazyLister into that. It’s a huge learning. For us, all that’s left to do is build a process around this, a customer journey inside the app.
Andrew: I see. That’s such a crazy way to do things, because the image is not going to look good on all computers, all sizes, all devices. That really shows a desperation.
Andrew: What’s the name of the company?
Victor: The Land Rover guys? I don’t have it here.
Victor: It’s somewhere in my internal docs.
Andrew: I’ll have to see what that looks like.
Victor: Oh, I have that. I probably have it here. I have the link to his listing.
Andrew: I’d love to see it. Do you find that customers are willing to get on a call with you? I kind of find that these days, people don’t want to get on calls. They’re happy to use the software, but they don’t want to be bothered.
Victor: Well, it’s not like everybody is saying, “Yeah, of course, let’s do it,” but enough people do agree.
Andrew: Less than 50%, is that right?
Victor: Yeah, by far. Yes. But it’s enough to talk to like 10, 20 customers to get these insights. You don’t need to call thousands of them.
Andrew: That’s what I hear. Okay. So Facebook groups, then you start blogging on your own site. Then you do what to get more customers. What was the next step? The watermark was another thing. It’s not a watermark, actually. It’s a link back on their listings back to you. What else did you do that helped for customers?
Victor: Right. So we did not really understand what we were doing up until a year and a half ago. We were just getting organic traffic mainly from content marketing. We did not even believe in paid acquisition because we tried paid acquisition in our previous business in the ecommerce business and we utterly failed. For a GPS that we were selling for $20 profit, we were investing like $50 into AdWords to get the sale. So it was a big fail. We burnt. We did not believe that AdWords as profitable. It’s possible to turn into ROI positive.
But then we’ve onboarded a marketing expert on our team, Amir, and he had a proven track record at big known companies and what he does for a living is he creates this magic machine that connects to Google to AdWords. You put in money and one month later, it outputs more money than you’ve put inside. It was hard for me to believe. He was telling me to be patient.
But after three or four months of concept optimization, today, we are spending around $20,000 a month and we are getting the marketing spend back even before we need to pay Google because we pay Google net plus 45. The return on investment is almost immediate. It takes less than two months. Now when I believe in it, it’s just a matter of making it more aggressive because we’re okay returning the spend within three, four, even five and six months and now we’re expanding it so we are now onboarding Facebook experts to do the same on Facebook.
To summarize, my answer is we are doing paid acquisition and we are doing greater, our CAC to LTV ratio is one to six, which means that we are getting six times more from a customer in his lifetime with CrazyLister than we paid to acquire him.
Andrew: I’m looking at some of your ads here. I use SimilarWeb, another Israeli company. I don’t know why I haven’t had that fonder on Mixergy yet. I see. You get keywords like “free HTML5 template,” “eBay template,” etc. Then the ad is, “Easily Create eBay Templates, Professional Look in Minutes. Stop wasting weeks on costly designers. Create an eBay template in minutes today.” That’s one of your ads and it links over to.
What did he do? Even by seeing this, I’m trying to understand the magic formula. What’s one thing that he did that we can learn from? You’re a Mixergy listener. You know that I want some specifics.
Victor: Sure. So a big learning for me was actually I learned it during his first days at the company. So what we did was understand what we are doing, we tried Google ads and we were directing all the traffic regardless of the ad. We were directing them all to our homepage. This was a big mistake. This was something that Amir taught us, like I said, within the first days on the job. Different campaigns, different ad sets, they convey different messages. They press on different pain points.
So, for one, it will be create professional listings in minutes. For another one, it will be create professional and mobile optimized listings. For another user, it will be create listings that are completely compliant with all the eBay policy changes. If they all land on the same generic landing page or homepage saying CrazyLister is easy to use, you’re not really connecting the page to the pain you came to solve. So he brought in the notion that every ad should link to a specific dedicated landing page who presents your product in the light that really puts the light on his pain points.
Andrew: I see.
Victor: For one, it will be CrazyLister is easy, for another one, it will be fast and so on.
Andrew: Look at what you guys send people to. This cool input bar, if I paste in my product ID number or a link to my page, you will automatically take one of the designs that I want and use it on my listing. So I did it with just this Mophie battery back. In seconds, everything looks like one of your designs. You pull out the headline and put it in the headline area. You pull out the image and create an image for me that’s clickable and scrollable.
You pull out the payment. I guess the payment is just kind of generic. You’re showing me where I could edit my payment. I see. This looks fantastic. Then I can just keep scrolling through all your designs and seeing what my product would look like on each one of your templates. Then if I want, I can edit the theme or I can buy—this looks really good. I like this one. I don’t know how to describe it.
Victor: That’s a result of a very interesting A/B test. It’s our constant pursuit after giving customers as instant of a value as we possibly can. So we use Mixpanel to understand what’s going on inside the app, optimize our own conversion funnel and we saw that on average, it takes one hour from the moment that you sign up with CrazyLister until you have your first listing live. We said one hour, that’s a lot of effort that we are asking from the users. They are playing with the tool, getting familiar with the editor, connecting their eBay account and what not.
We said it’s taking them an hour to understand what CrazyLister does to get—we know that the wow moment in CrazyLister is to see your own listing professionally designed the way you never imagined it can look like. So we thought what is the best and fastest way we can show this to you because showing just generic selection of templates, that doesn’t do the trick. You need to see your own product design in this beautiful template. What you see is the result of an A/B test, which actually dramatically improved the sign up rate because people get an instant wow.
Andrew: What was that tool you used?
Victor: We use Mixpanel.
Andrew: Got it. I’m looking at your BuiltWith.com page to see what you guys have. You guys use a lot of different tools.
Victor: We are built with a lot.
Andrew: You’re really experimenting with a lot of things. You’re on the right track. The thing makes sense. It makes sense to you. You go to your family and you say, “Look, this is what we’re doing.” And they say, “Why don’t you get a real job?” Why do they say that?
Victor: We were struggling. We went through a very hard start. So we invested everything we’ve earned from the previous company into CrazyLister. The money was not enough. SaaS is really hard to get going. It’s first with the initial version of CrazyLister, it was just like $9 a month unlimited everything. So it’s like a train. It’s really hard to get it to move. But once you get it moving, it’s unstoppable. Once you hit $10 million in ARR, you’re unstoppable.
But the first months, even the first years are really hard and we were really struggling. Max and I were not getting any salary for almost a year. We were deep in debt, borrowing money from family, from the banks. The friends or our peers who grew up with us, they were moving ahead. They were getting their career ahead, getting their families, getting married, we were just two crazy entrepreneurs with a product called CrazyLister. Not many people believed in us, but one thing we had for us is that failure was actually not an option for us. This was the only thing that we had. So we never even considered quitting.
Andrew: What would happen if you failed? What was so scary about failing?
Victor: I don’t think it’s that we were scared of failing. It’s rather that we were stubborn, like stupidly stubborn to get this work, no matter the cost, no matter the toll on our minds and bodies. We were just from our point of view, it was like CrazyLister is going to take off. The market needs it. We are experts in the market. There is a way to make it work. We will find a way to make it work. Like I said, nothing else mattered. We didn’t really care about living out of a can of beans for a week or whatever. I’m exaggerating, but it’s not that far from the truth.
Andrew: You mentioned earlier that you raised money. What was it like to raise money for this?
Victor: The number one pain for us raising the money at first was that we did not have a CTO. So we were two cofounders building a technological product without having a technological cofounder. Once we found a technological cofounder, the number one pain was that the market is too small. We were given this answer by VCs that you guys are building a great business. It’s like a $50 million exit which is very nice for you, but for us, it will be a waste of time. The economics do not work for us.
We were I don’t know if arrogant or stupid enough to approach any VCs, from Sequoia to almost Andreessen Horowitz. We did not understand how it works. We needed money. We approached people with money. The problem was that the market we were working. It was just too small for them. They did not believe us that CrazyLister can go beyond eBay at some point and expand to all of ecommerce. We had to find this investor, this VC that actually agreed with Dave McClure’s “Fine a Niche to Win, Baby,” and then grow from there.
Andrew: Who is this, is this Alta Lab?
Victor: They’re called Altair.
Andrew: Okay. I see them on AngelList listed as both Alta Lab and Altair VC.
Andrew: This is Lior Herman?
Victor: No. The head of the VC is Igor Ryabenkiy. He’s originally from Russia. He lives in Israel.
Andrew: Okay. So they just said, “I get it. We understand your thinking beyond this. We’re going to help you.” They’re listed as an incubator on AngelList. Are they an incubator or an investor?
Victor: Under Altair, they also have an incubator.
Andrew: I see. Okay.
Victor: They have an incubator program.
Andrew: I invested in a product that I really like here in San Francisco called Circle Medical. The idea is a doctor will come to your house and treat you. I really enjoy that because I have no patience to go out. But I just don’t use them because it’s kind of weird to undress in my office even though it’s a private space. But I really like the idea of having somebody come in and check me out. Maybe I should do it at home. I’m looking at their investments to get a sense of how they work.
Victor: They’re really active. They invested in 100 companies.
Andrew: They invested in ToutApp. That’s the app also 500 Startups, Dave McClure seems to like them. That’s the app that lets you know when someone opens your email and clicks on it and so on.
Victor: Right. Our story made sense to them. Yes, we are that focused on eBay and we will not extend beyond eBay until we get a really good product market fit and we are becoming—we create this brand new for eBay sellers. Only then will we expand beyond.
Andrew: That’s the risk, that maybe while you do this, the next opportunity is going to go away and you guys need to move faster. They wanted you to prove it. Other people wanted you to prove that you can go to another—
Victor: Yeah, of course. At first, expand your solution beyond without having any money, then we will invest.
Andrew: Did family kick in any of this money?
Andrew: I’ve got a note here about how you guys borrowed a lot of money in the beginning from banks. How much money did you take on?
Victor: We’re still paying these debts. We burned the equivalent of nearly $100,000.
Andrew: All personally guaranteed. So the company goes under, you guys have to pay it or you go bankrupt.
Victor: To this day, Max and I, we are personally paying back this money from our salaries.
Andrew: From your pocket, from your salaries, not even the company paying it back?
Andrew: Painful. I read that you were a big fan of “Rich Dad Poor Dad” growing up. How did that help you become the person you are now? Is there something from that that you took away?
Victor: Yes. It was the spark that ignited the idea of business in me, the idea of building assets. This is what I love about SaaS, that it accumulates, it builds, so every customer you add is an asset that actually grows as the company grows and the idea appeals to me so much because Max and myself, we are natural like—we suspend pleasure, I guess.
The marshmallow test, they did it at Stanford. They gave kids the option to eat the marshmallow right here right now or wait for an hour and get two marshmallows. Max and I are the guys that would suspend for like ten years to eat three marshmallows. So we are constantly suspending.
I think the “Rich Dad Poor Dad” he gave me the initial push into this direction, really understanding that this is what I want to do for a living. I want to do business and I want to do it to build a business for the long run, not just run after the quick money.
Andrew: That makes a lot of sense. You’ve got it. You’ve got an asset here that’s continuing to grow. I think since the time we did the pre-interview with you, the business has grown in sales and revenue and it’s exciting to see it. It’s exciting to see the vision you have for the future. If we come back and do this in two, three years, your business, CrazyLister will allow people to list themselves on multiple platforms, maybe Amazon next, maybe Etsy next, etc.
Victor: We will be connecting the right products from the right retailers with the right marketplaces and we will do it completely seamless for the sellers.
Andrew: My expectation is just like you listen and now you’re here doing an interview. There’s someone else who got the same spark that you got, the same spark you might have gotten from past interviews who’s listing to this interview who’s building a company based on that or about to change the direction of their company because of what they heard from you.
My goal and my expectation is if you’re out there listening that you will not just build that great company, that crazy success story but you will come back here the way Victor did and do an interview about how you did it because that is the circle of Mixergy.
You listen, you build, you come back here and I’m looking forward to somebody saying, “I heard that interview with Victor. I checked out CrazyLister. It opened my eyes to something new and as a result, Andrew, I’m here to do an interview.” That may not happen in a year. It may not happen in two years, but I’m looking forward to that day. Until then, if you want to go check it out, the website is CrazyLister.com. It’s a super simple website.
I actually in this case would suggest that you guys take a look at other resources to get a sense of what’s going on behind the scenes because there is so much more. I would look at BuiltWith.com and check out CrazyLister there to get a sense of the software they use. I would use SimilarWeb on CrazyLister to get a sense of how they’re operating.
There’s a simple homepage there that I think doesn’t communicate what’s going on behind the scenes and how smart the site is. I think a few research tools will really give you guys more insight. Check out CrazyLister.com but go beyond it. I’m really telling you you’re going to get more benefit. Look on eBay to see who’s using them and so on.
And my two sponsors that, again, you will be happy, your businesses will change if you use them—first, the company that will help you do email marketing right, smart marketing automation that anyone can use. Go check out ActiveCampaign.com/Mixergy.
And if you need a great developer and you can see what it did to Victor or you’re raising money and you need somebody to help you put together your deck and think through the questions you’re going to have or you’re looking for a designer. They just do more than just developers, even though I focus on it in the ads. They are the best talent, the top talent is available on Toptal.com/Mixergy. Go check it out and thank you all for listening. Thanks, Victor.
Victor: Thank you.
Andrew: Bye, everyone.