Andrew: Hey there Freedom Fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs for an audience of real entrepreneurs which means that we don’t just kind of brush over the details. We actually spend time reveling in the details. Wow, wait until you hear this guy’s story. I can’t believe that I didn’t know about this. I got Brandon Evans here. He’s a guy who started a company and sold it. Frankly, that alone would make for an interesting interview. Then started another company and was fired from it and that too could make its own interview and now he is running something else where he’s taking entrepreneurs on Ayahuasca journeys. Again, that alone would make a great interview question or a great interview conversation.
All right, he’s name is Brandon Evans. The company that we’re going to focus on is a company called CrowdTap. It is about influencer marketing that actually works and we’ll find out about that. We’ll find out how we got there. I’d love to talk to him a little bit about his dad because his dad did something that I as a kid fantasized about. And this whole interview is sponsored, thanks to two great companies. The first will do your books, it’s called Bench, bench.co and the second will help you hire your next great developer or not and we’ll explain why that or not is in there. I mean or not meaning maybe you end up working with them and we’ll talk about that too.
And Brandon, welcome, good to have you here.
Brandon: Thank you. Great to be here.
Andrew: You know what, you sold your previous company before you started CrowdTap you sold it for how much?
Brandon: We sold it for 50 million.
Brandon: Five-zero, correct.
Andrew: And what did that company do?
Brandon: We were one of the first social marketing agencies, so back when Facebook was really still college only we were a millennial/college marketing agency and we built out technology to help, to create brand ambassador networks, so we were creating brand ambassador networks, and this was kind of the predecessor to CrowdTap actually. But ambassador networks, so the Coke and Microsoft and all these companies could run, could have college ambassadors all over the country.
Andrew: And what do the ambassadors do? What exactly does that ambassador network mean or what did it mean back then?
Brandon: Yeah. So I mean back then we built out technology that was maybe similar to a Basecamp or back then that didn’t have a lot of these collaboration technologies, so we built out technology that would allow us to hire two ambassadors, let’s say 150 schools nationwide and then they would represent that brand on their college campus, so they would promote it. They actually were very effective at getting articles in the student newspapers. Back then Facebook was just coming out so we started to see how they were leveraging Facebook to promote to their friends. We were creating some of the first links that actually tracked back to the individuals, so we can track like how they were sharing and what they were able to do. They were putting on events on their campuses. So we’re really tapping into influencer marketing really before it was really a thing.
Andrew: For Coke, students would actually want to go out and promote a soda?
Brandon: Yeah, absolutely. Mountain Dew was actually a huge client. Pepsi, we worked with more so than Coke but, yeah, we had a large program with Mountain Dew, we had programs with JetBlue, Microsoft, you know, companies, there’s a few companies like Apple that run their own college ambassador networks and then for the rest of them it’s very hard to kind of setup the logistics and the technology and the management of all that. So we kind of had that whole thing down.
Andrew: I see. And this was really, really cutting and we’re talking about 2005 when you started this thing. Most people didn’t even know about brand ambassadors, didn’t realized that students were doing this or capable of, and as you say, if they were able to do this or knew it, managing it became really tough.
Andrew: It was called Mr. Youth in the beginning and then changed it to MRY?
Brandon: Correct. And then the technology within that was called RepNation, so we had that with that platform.
Andrew: Okay. And then how did you . . . what was the process for getting the student to ambassadors? I want to know a little bit about it and then understand why you sold it and then why you made this move to CrowdTap?
Andrew: So, yeah, how did you get the students involved?
Brandon: Yeah. I mean we build kind of a great engine internally and then we had a lot of very young employees that were very tapped into still kind of early removed from college campuses and they really kind of helped us really learn how should we go after these people and a lot of it was whether it’s emailing different fraternities, sororities, different student groups, professors of specific categories, posting ads in student newspapers. We kind of had kind of all of our channels kind of setup where we could we could kind of continually reach out. And normally we were at the top 100, top 150 schools that we started to build relationships with all those schools and be able to reach out and recruit people for . . .
Andrew: The next round of students and the next round.
Brandon: Yeah. And then get referrals from our previous reps.
Andrew: Do you have one or two techniques that work back then for getting students to rep a brand that would still be effective or be exciting for us to hear about now?
Brandon: Like what they would actually do?
Brandon: The marketing tactics?
Andrew: Yeah, how would you motivate them or what they would do, how would you stay on top of them? What are the things that worked?
Brandon: Yeah. So from a motivation standpoint we had a very . . . they were paid but it was a very performance based model. So we had . . . because of the technology we built we’re able to track a lot of metrics. So we we’re able to track all the events they do. They would upload reports and pictures and we would track all that. We would track links and how they shared stuff on campus. A lot of the brands we went after had specific offers that we were able to track. So made it like a mini business and made it like an internship for the students as well.
So there’s really a lot that they can learn and we also involved them a lot in the actual marketing materials. So we would actually talk to the students and before we would, say, developing a flyer for JetBlue we would ask students tell us about how you travel and have them view actual flyers and see which ones they liked best. And that carried over a lot into CrowdTap as well but actually involving people in the marketing, in the ability to create the marketing ideas and creative, really got invested in what they were marketing so they felt like they were part of the process.
Andrew: Okay. And it seems like CrowdTap was kind of spun off from that, right?
Andrew: So what was CrowdTap internally?
Brandon: So the basically the way it worked, when we sold MRY, right before that we spun off what became CrowdTap. It wasn’t anything yet. It was just the idea of taking kind of what we learned with RepNation and applying it really to other demographics, so we kind of built the model that worked well in college campuses which are the self-contained areas of where students are very densely packed. And we want to say how do we this for moms, how do we do this for teens, how do we leverage the power of people and influence to market products? And so CrowdTap is basically was built as a brand new company but we kind of seed funded it from agency dollars and had kind of the learning and the learnings from the previous . . .
Andrew: Why separate them? It feels like it’s an extension of the business as opposed to a separate standalone business?
Brandon: Yeah. Well, one of the things I learned with RepNation, I mean it’s very, very difficult to build a technology company within an agency. The agency model tends to be, “do whatever the client wants, get revenue in the door,” and so when you’re chasing that down it becomes very hard to do what really a technology company needs which is to kind of invest ahead, kind of build a model that’s going to scale. And so, we had done that internally with RepNation but it was always it was always like we could spend money when we made money and it was a very difficult to plan for. So we really wanted . . . we saw a bigger opportunity, we wanted to set it aside and allow it to kind of flourish and it definitely worked out well.
Andrew: I see. And with MRY even though you created your own software, you weren’t a software company. The software was there to support the services, your [owed 00:07:52] services.
Andrew: Interesting. You know what, I can’t tell you how many entrepreneurs in my audience who I’ve talked to who have tried to make the transition to software and couldn’t. And maybe doing what you did which is creating a Chinese wall or a separation completely at a business might be the best answer because otherwise you do keep getting sucked back into client work.
Brandon: Yup. Yeah. I mean it’s one of the things I’m definitely proud of. I mean I think we’re one of the few technologies that successfully got spun off of an agency and I’ve knew a lot of people in that world and I’ve seen a lot of people try ideas, but, yeah, the makeup of an agency tends to kind of suck you into that client work and it becomes very hard to kind of focus and take the long term perspective that you need with the startup. And I also . . .
Andrew: How far . . . sorry, go ahead.
Brandon: I was going to say also the teams that you want for both are a little bit different. You know, the type of people that want to more of an . . . take equity and build kind of a more of a long-term product, the type of developers you hire tend to be very different than what you hire at an agency which tend to be very high salaries and have specific market rates versus a startup.
Andrew: Okay. So you spun it off. At what point did you say to yourself I think it’s time for us to sell this business that launched it all, MRY?
Brandon: Wired partners, I mean the decision definitely wasn’t fully mine. I think we got to a place where we had brought private equity in I think in 2008, actually right during the crash. I remember we have to renegotiate a bit of our deal because or when the market crash but we brought private equity in, so at that point they owned whatever it was, two-thirds of the company, and they tend to have a horizon of three to five years when you bring in private equity and they’re looking for some sort of exit.
We were able to grow the company very fast. I think we sold it at the right time. We were at a point where social marketing was at its absolutely peak. You know, we got a very good multiple for it. Our growth rates were very strong. And so it just felt like the right time. We also are right around, I think it was around the $25 billion revenue number which there are tend to very few agencies that get beyond that that are independent. So I mean it tends to be kind of an area where if you want to kind of go to that next level you end up trying to sell.
Andrew: Why do you think that is?
Brandon: I mean, the agency world it’s a tough business. You’re always kind of hustling for your next customer. I think almost every year we would lose, really by no fault of our own we will lose, like we’d have a brand manager from Pepsi move to another brand and we’d lose like a $4 million deal and then . . . .
Brandon: You spend the first half of the year making up for that and the second half of the year with your growth. And I think that just tends to happen and it’s hard to kind of get out of that cycle and I think maybe some of this ability of a bigger company and being able to work across agency even though that probably doesn’t happen as much as it should but the ability to refer companies back and forth throughout these bigger agencies can tend to help the growth.
Andrew: I imagine very low net margins to that for 25 million in revenue you’d be lucky if you got a million profit.
Brandon: We were a lot higher than that.
Andrew: Wow, really? Can you say what that was?
Brandon: Yeah, I think so. I think we were around close to 5 million in profit around that time.
Andrew: Wow. Okay.
Brandon: Yeah. Part of it was the technology. I mean, a big part of . . . we were able to really shift our margins by building RepNation and building out a unique offering. So it wasn’t like . . . we would go to procurement and oftentimes they wouldn’t really know the standard prices whereas as an agency they know, “Okay, creative director can make this and an account manager can make that.” We had technology fees and other fees that we’re proprietary to us that we we’re able to charge. That significantly helped our margins, being able to offer something a bit different.
Andrew: I see. You’re saying that a client when they’re working with an agency will look at the agency and say, “I understand the number of people that they’re going to need to manage my account. I know what those people get paid. I’m going to take that and then add to it a little healthy profit and then that’s what I’m willing to pay.” But once you throw in technology it allows you to charge more or at least to disassociate your expenses from the revenue.
Brandon: Yeah. And that was something we invested in and we wanted to get paid for and it was a newer model and we were delivering a lot of value as well. We packaged things differently than a typical agency would, so we were able to, yeah, to drive pretty strong margins.
Andrew: You sold it to LBi in 2011. They are now part of Publicis Worldwide, I’m pronouncing the company right, I always think is it Publicis or Publicis?
Brandon: I’ve heard it both. It’s a French company.
Brandon: But I usually Publicis.
Andrew: Okay, probably it’s the way to do it. Same thing with like Tour de France or Tour de France. I guess it depends on like how French you want to be. The day that you close that deal, how did it feel?
Brandon: A little surreal, I guess. I mean, I don’t think it ever hit me as much as I expected it to and I think that’s part of maybe the later part of my story where it was hard for me to kind of . . . at that point I was also onto CrowdTap already. So I was kind of like, we basically had spun it off right around the same time. And so I’m kind of already onto my next thing which I think tends to be a problem with entrepreneurs. It’s very hard to ever celebrate your successes because the entrepreneur mindset is kind of always to be onto the next thing. So I think there was a bit of that for me. But, yeah, it was, I don’t feel like I really took it in and took it back and looked at wow, where we were five years before and how far we took the company and how big a company it was. And in addition to that I mean we were a top three place to work in the New York as was CrowdTap, which are kind of probably the things I’m most proud of with both companies.
So just looking at like I think that’s the part they got me the most when I looked at how many jobs we created and like the people that were there and like many of them I’m still very close with, so that part was easier for me to take in. I don’t know, the monetary part of it just never really kind of hit home for me. I’m obviously very glad and fortunate for it to have happened but that wasn’t something that I remember like really hitting home.
Andrew: This is such a small example but when I figured out Mixergy’s revenue model I bought myself a Kindle. It’s just like a $125, there was no connection between the revenue and that, but it was a moment to say here’s something I really don’t need because I love reading on my phone. Let’s just get it and then I ended up loving and connecting it with the transition. But at least there was some physical thing, a flag that said you . . . did you do anything like that? Obviously, more significant than a Kindle is fine.
Brandon: I don’t think I did.
Brandon:When we sold first the private equity I mean it was around the time I did end up getting an apartment but that was . . . I think I had to kind of started that . . . I think I put down a deposit prior to that but that definitely eased my pain and knowing that I can now pay for it.
Brandon: Not worried that I’d be able to make the payments. I don’t remember a specific purchase around that time. I tend to conserve and . . .
Andrew: Like what’s an example do a way that you conserve where other people wouldn’t even think to?
Brandon: Well, I don’t have a car right now. I moved to Miami. I’ve been here for two years, obviously in New York that’s pretty standard but most people in Miami have a car. I just have not found a value for having a car and just the thought of it sitting in my . . . I’m actually up on the Tesla 3 list now and I could get my Tesla and I’m just like I [inaudible 00:15:44] myself to put on the payment and have it sit in my garage when I Uber everywhere.
Andrew: Wow. That is a really good example of it. Okay, all right.
Andrew: So you start up this new business, you sell off the previous one. Before we get into the new business and how you launched it and what you did. I mentioned earlier your dad. I’m fascinated by your dad because of, well, there are few things. The number one thing that caught my attention was he owned a car dealership and as a kid I thought to take someone who just walks on the dealership, who has all these other options in town and to convince them that this is a car they should buy today instead of going to the other, it was just like masterful salesmanship that I always wanted to learn. Did you learn anything from watching him do that?
Brandon: Absolutely. I was around the business a lot. I mean, he would take me to work during the summers and he was actually a slightly . . . he was in the wholesale side, so he owned a wholesale car dealership. He focused more on buying cars from other dealerships but I saw a lot of negotiation. He would do a lot of negotiation with other dealers and bring the price down and I’m pretty well known as a shrewd negotiator now and I do attribute a lot of that to my dad.
Andrew: Was there a negotiating technique that you still remember that he used?
Brandon: Well, I mean he always treated people very well, which is something that you know that always stuck with me. Yeah, I think he would never make the first offer so he’d always try to get the other person to offer something up first which is definitely a technique that I use to this day. I don’t like to throw out numbers. I like to kind of hear where the other person’s at, what they’re thinking, understand what they have in the car or what they have in whatever they’re selling. And then you can start to work your way up to where they need to be.
Andrew: I see. You know, I remember my dad used to have a wholesale clothing company and he would go to the stores on Sunday to make his collections instead of staying at home. And I said, “Why Sundays?” He goes, “That’s when the end of the weekend is. They have a lot of cash in their drawer and they’re less like holding back.” And so I remember that and then the other thing I remember was he would tell me, “All right, this guy had been owing me money for months.” And I go, “Why don’t you go in there pissed? I saw “The Godfather,” why don’t you go in there?” And instead what he would do is he would go in all smiles and cheerful like happier and more social than I’d ever been in my life up until that point and even longer. And I remember taking that away as a lesson like if he would have been there pissed, he would have clearly locked out this guy as a future customer and as a person who paid him and that discipline about your personality was really impressive.
Brandon: Yeah. Absolutely, I can see both of those in my dad as well and I think, yeah, it’s all relationships. I mean in that business you follow that used car manager, whoever he bought from, like they follow them from dealership to dealership and these people he’s been working with from 30 years that sell him car and then that’s really the whole business, so you have to maintain those relationships.
Andrew: The movies do salesmanship and entrepreneurship and business such a disservice. What about this whole thing that he did. He was a magician at birthday parties. He painted curbs the addresses on curb. Why was he doing all that?
Brandon: That was me.
Andrew: That was you, oh, I see. You were a magician. Got it. I see. So this whole entrepreneurial thing was in you from the beginning and where I used to shovel snow, you would go and paint curbs, do parties, etc.
Brandon: Yeah. I think I was always just trying to . . . none of them lasted very long truthfully. But I was always trying to just do something creative or find some way to make quick money or do something a little unique. It was always harder for me to get job or do a lemonade stand or something more standard. I was always trying to kind of figure something out.
Andrew: I always wanted to paint curbs but I grew up in Queens and nobody cared. All right, because I’d see it in movies and I want a lemonade, I want to do this. All right, let me talk about my sponsor and then come back in and talk about the first version of CrowdTap, how you evolved it, and that conversation that you had with Brad Feld where you were able to impress him right away on the call.
The first sponsor is a company called Bench. I’ve said this for a long time guys, if you need somebody to do your books, I highly do not recommend that you work with a single bookkeeper. They get sick, they have issues, now, suddenly, you’ve got like another employee except one that you can’t discipline because they don’t really need you that much and you can’t count on them. So I like this Bench because they have a team of people who will do your books and they have software that sucks in your data from all the software that you use and so on. But the reason that I want to bring it up to you Brandon is you said that you’d used them in the past. Why did you use Bench?
Brandon: Yes. I run, with my business partner, we started a group that we run as a nonprofit called Miami Made, so we’re helping organized the tech and startup founders here in Miami and really didn’t want to have to deal with accounting as part of that. It’s not something where we pay ourselves and so I really didn’t have a big budget to bring on accountants and resources that I’ve had typically at companies. So I found it as a great resource to be able to kind of have that support and be able to kind of keep our books. We have a grant from someone here in Miami and need to make sure that our books are kept properly, so.
Andrew: You know what, let me ask you for one positive thing about Bench and one negative one, which is not really done in an interviewer. I don’t even know what you’re going to answer but I think that that adds a lot of credibility that people see that we’re talking openly.
Brandon: Positive, I just find it very easy to work with. I think they’re Canadian based, they’re very friendly so that usually goes hand and hand. And negative, I don’t know what my negative would be. I mean, I think overall I found them to be very helpful in general but I think there was . . . part of it was it’s probably just more on me, maybe I needed just kind of having to, I guess knowing a little bit more of what I wanted from them in that particular case. But I think overall they were very easy and smooth to work with.
Andrew: One of my past interviewees heard me talk about Bench, he signed up. I talked to him the other day and I said, “What do you think now that you signed up?” And this is Dmitry Dragilev. He said, “I love how available they are. Like I had an issue and there was somebody right there.” And he said, “I couldn’t even believe that I could get on a call with them and that it was a real person that talk to me.”
Andrew: So if you guys need someone to do your books, I urge you to go and try it for free. They did not offer us, to be honest with you guys, they didn’t offer us a great deal beyond what they were offering everyone else when they first started. People in the audience said, “Hey, why should I sign up using Mixergy’s URL instead of using the home page,” which really gives you a sense of the kind of audience that I have. Every other audience would say, “You know, because we love we’re going to going to support you.” They said, “No, we want . . . give us an incentive.” And so we went back to Bench and we said, “People are asking for it. What can we do?” And Bench said, “You know what, we’re going to give you guys a free trial.”
So if you want someone to do your books for free, I don’t know how but they’re going to do a free trial. I guess this is what happens when you raise as much money as they did. They can actually afford to do it and then you’re also going to get another 20% off for six months afterwards. I’ll give you a URL where you can get that. But frankly look at their pricing, look at their services. They’re going to do your books right. They have software and a team of people that will do it and you’ll see not very expensively. Go to bench.co/mixergy, bench.co/mixergy, Bench as in the thing you sit on.
All right, the first version of CrowdTap, what was that?
Brandon: Yes. So really we built an MVP we are really focused on what could we get out and test quickly and so kind of the idea with CrowdTap was to kind of basically create a way for marketers to directly connect with their customers and influencers across the whole marketing lifecycle. So the idea that you could actually leverage similar to what we were doing with college ambassador networks, how do you do that with tens thousands of moms or teens or other demographics? And so the idea was how do you tap into them for research? How do you tap into them for marketing your products both online and offline?
And so we started with on the research side the easiest thing for us to build was polling, the ability to poll. And so we had this very quick polls that you know that a company could launch and then we started recruiting users and somehow very quickly we were able to kind of have users complete polls very fast and I think that’s . . .
Andrew: What’s an example of a poll that a company would want?
Brandon: Anything from testing, advertising creative, lines that we’re going to use, music they might use in a commercial, the value of a deal, really anything that a marketer was wondering whether they’ll literally could do it in a meeting. You know, they’re sitting in a meeting and having argument and could quickly tap their consumers and ask them what they thought.
Andrew: I see.
Brandon: Or all the way through to kind of more developed research. And the way we set it up they could actually retarget any poll as well. So if I ask someone, if I’m Pepsi and I said, “You drink Coke or Pepsi.” I could go back and just ask Pepsi drinkers or just ask Coke drinkers and that was kind of infinite so they can kind of keep branching and asking questions ongoing.
Andrew: There were other tools that did that but you had access to the markets who would want to experiment and use you. You also needed to get access to the people who would take these polls. How did you get access to that?
Brandon: To the people that wanted to take the poll?
Andrew: Yeah. And there was a lot by the way that separate you from those other people. We’re going to get into it, but as an MVP it’s interesting
Brandon: Yeah. Wow, bringing me back. Yeah, I mean I think we looked a lot at places where active consumers were, so blogs and forums and places like that. There were other sites where people were earning points and rewards for things that we were looking at. So we focused a lot on people that were kind of already voicing their opinions and just kind of found ways to kind of to tap into them. We created a referral program so that was a big piece. A lot of, it was very gamified so initially we had this thing where people would have different nameplates and they would go from like silver to gold to platinum and people got really into that. That was kind of when gamification was really big and Foursquare and all that stuff.
So we used a lot of that and those motivations to have people kind of invite their friends and drove a lot of people to the system that way as well.
Andrew: You also rewarded people didn’t you with points and money. They could take it for themselves or they could give it to charity, am I right?
Brandon: We did, yeah.
Andrew: So I looked at the very first version of the site and it was just what you’d expect with someone who’s launching soon. It was enter your email address if you want to find out about it and then there was another link that took me to I think if I was a marketer. That was the only link on the site. If you’re a marketer, click the clink and then it took us to a Wufoo form. Wufoo was really big at that time.
Brandon: It’s like an [impact 00:26:46]. I don’t even remember this.
Andrew: You might not even have a hand in creating it. You just needed something launched quickly and your team probably understood. But the next version kind of through me because as I went through the archives I saw, there was one version that said, “Answer polls, sample new products . . . ” like you were starting to envision this is more than just asking questions online.
Andrew: But there was also a throw house parties. Was this for the marketer to throw a house party to get feedback from their people or how do that fit in?
Brandon: Yes. So when you think about well . . . when you think what we’re doing in college campuses a big part of it was these ambassadors were actually throwing parties and non-college campuses make sense. They can they have spaces, they can have people come and they can tie in to existing fraternities, sorority, whatever parties that are already going on. But at that time we wanted . . . if you think about it like a Tupperware party or you think about things that are sold within homes, we wanted to give our ambassadors a way to invite people over their houses or invite them to or bring it to work or what have you and actually like sample products in a fun way.
So part of what the value we brought marketers was not just the online sharing but how do we actually get product sample, how do we actually get people to try products and throwing house parties was an interesting way that we went about doing that as well.
Andrew: I see. All right, you know what, I don’t . . . I get it, in my world people don’t do that but I could totally see that being done. Like if somebody said, “Andrew, I’m launching a new scotch, I know you’re into scotch. Would you do a house party and have us . . . ” it would be ideal for me because now I have something new to try out and it gives me a little bit of prestige that it was sent to me because, right, and so that’s me putting myself in the shoes of the crowd.
Brandon: Yeah. I think we had a beer company. We did a beer company once and they did a barbecue where we have like barbecue sauces and so tying it into or sometimes they would be tied into Halloween, or tied into Labor Day, or we’d have different things that would tie in around the calendars, to have parties and things that people might be gathering for anyway.
Andrew: So what I mentioned earlier was you get on the phone with Brad Feld, the investor from Colorado and you want to show him the product. How did you demo it to him and give him an understanding of it?
Brandon: Yes, so I’ve been talking to one of Brad’s partner, Seth and he wanted me to get on the phone with Brad and show him the product and at that time we were just really the research. We really just had the polling and I remember I think it all ended up being about a five-minute conversation, maybe 10 minutes and quickly I think he was pretty up to speed with what it was and talk to him for a few minutes. He’s like, “Yeah, yeah, yeah, let me just let me see the product,” and I launched the poll and then really like a minute or two later we had 50 or 100 responses that had come in. And you know, he pretty much was sold from that just seeing how fast we were able to get kind of people to respond to polls that were targeted page or whatever.
It was pretty unique back then being able to just get that quick of responses. There were research agencies doing it but it tended to be a much heavier process. You had to go in and set up a research, you know, set something up and they were built very complex, like a lot of research companies tend to complicate things. I think for us it was good that we didn’t really come from that world. We didn’t really know to overcomplicate things so it’s just like how do we do this as simple as possible and that kind of paid off for us.
Andrew: You told our producer that the first client you had was an agency that you brought in a 100,000 . . . how are you doing by the way?
Brandon: I’m great.
Andrew: Yeah. Okay. I’m checking in with you to just see how you’re feeling. So the reason I was doing it is because I was sensing maybe you’re going through something but it seems like you’re fine. If you want to grab a drink or something, go for it.
Brandon: Okay. I’m okay.
Andrew: First deal was with an agency. How did you get the agency and what were you doing for them and what did you charge?
Brandon: Yeah. I mean I remember the check being over a $100,000 because I had it hanging on my office wall from that point on, so we’re pretty excited that we were able to kind of land a client like that pretty early. I mean, obviously, we had some savvy and some experience selling, mainly to brand marketers. We hadn’t really sold to agencies prior at the agency but obviously knew the inner workings of them, knew what many of them may want as a client.
And so I’d hired really junior sales guy who ended up being an absolute rock star and he was kind of helping just source deals and reaching out to different people and remember him coming back and just being like these guys are really interested and met with them and closed up the deal and I think they were leveraging it. You know, they had a couple of clients they wanted to leverage it across so they were using a lot of the research tools and just able to use it to inform their pitches and then everything through to how they drive their ad campaigns and iterate on that.
Andrew: And through deals like this you guys got to a million dollars before you raised a series A. Why then raise money? It seemed like you could have been able to do it by yourself. No?
Brandon: There was a lot of technology that needed to get built. I mean I think we saw a very big picture as to where it could grow to. I mean we saw really marketing shifting. We saw it moving from this broadcast. It was really around the time when everything was moving from kind of a broadcast mentality to how do we actually market with our customers, bring them into the process. Again, influencer marketing really wasn’t around during this time. So it was kind of the start of that, and we just saw a big opportunity and wanted to have the resources to go and build up the solution that we felt could really attack that, so, yeah.
Andrew: Did Foundry Group, Brad Feld’s company end up investing?
Brandon: They did. They were elite investor. Seth Levine from Foundry Group kind of led the investment.
Andrew: Okay. How are they like to work with?
Brandon: They’re great. I mean having I think investors in Boulder, you tend to have, tend to be a little more laidback. It was nice having kind of a bit of the West Coast mentality and that they were willing to bet on things early which in New York especially at that time wasn’t as much the case. They were more focused on revenue and so we were able to kind of even though we did have significant revenue we were able to, we had some complexities since we spun off an agency and had an interesting cap table. You know, they were really able to kind of take a chance with us and, yeah, they’re all great guys.
Andrew: I’m looking at their list of . . . their portfolio. I didn’t realize they invested in Mapbox. That’s a DC company. Yeah, they invested in a bunch of interesting companies. All right, so at that point you’re able to grow and you told our producer then we went out and we start hiring sales team. Actually before you hired the sales team you did the South by Southwest launch. That actually helped? What’s the connection to South by Southwest?
Brandon: It was interesting. So I actually went to a college in Austin and I went to UT. The code name for our project was “Project Austin” because we actually went to South by Southwest a year before with the hopes of we’re going to launch there the next year. It was kind of at the heart South by Southwest. I think the year before that we launched it was maybe the year that Foursquare came and the year before that was the year like Twitter launched and so there’s this history of like big companies launching there. It was still kind of pretty hot. And, yeah, we just decided that we wanted to kind of build up to that period and launch there.
And so I would necessarily advise this for companies now but I think we got into a good time and we kind of did something right that that really was kind of a big part of our sales strategy really to this day. So we kind of just went out. We said we were throwing the best party at South by Southwest and can’t miss party, kind of just all this hype in language and it ended up being just an amazing party. We focus a lot on . . . we invited all the brand marketers and agencies and people that our direct customers so we made it really a party for those people and that was right there on the time when they started coming down to South by Southwest in drones. So it’s become, I still have people to this day like asking me to get into the CrowdTap party at South by Southwest.
Andrew: What year was this?
Brandon: This must’ve been 2010?
Andrew: Okay. Yeah, because every time I look to see your South by, I mean looking up your South by Southwest parties you seem to do it every year. You just did one a few months ago, it looks like. There is one from 2010 that I saw where you had a battle of food trucks, VJ Culture, so you guys are just big on this and I could see why, because if you’re saying to the people who work with you, you guys should organize parties to promote the brand and to connect it with the brand and you’re doing the same thing yourself.
Brandon: Yeah. And the way we leveraged it is because it became kind of this thing, we had all these people, marketers reaching out to us. We were able to reach out to tall these marketers saying, “Hey, we’d love you to come to the party.” And we had people, we have like the, I remember the CMO of GE and like I mean just crazy people that we were meeting with down there and we would campout at the Four Seasons there and we had sales guys like, and girls 10 people at the lobby having back to back to back to back meetings. And you just weren’t able to do that anywhere else. We would come out of there with like 80, having 80 meetings and leads that would kind of fill our pipeline for the first half of the year. So unfortunately we weren’t able to replicate that but that was definitely a big part of our sales strategy through the years.
Andrew: Again, whatever you’re telling me I’m going back and like looking it up and seeing what it was like at that time. I’m looking up the launch as it was described by TechCrunch. They had a hard time explaining and maybe even understanding the investment structure. They had Mr. Youth as an early investor going back to 2009 and I guess it kind of make sense but also in incubator. Yeah, I can see how that would have been kind of challenging for them to communicate.
All right, so then you raise your money and then you said to our producer, “I built an amazing sales team . . . ” and here’s the part that I underlined in my notes with them, you brought in the head of sales with a structure to plug and play. What does that mean a plug and play structure? Do you remember that? If I’m just hanging onto a phrase, let it go.
Brandon: Yeah. I think in the head of sales when we created a plug and play structure is how I meant it.
Andrew: I see.
Brandon: I think we created a . . . we basically had a process where we would bring in and kind of grow salespeople and because oftentimes they would be more an experienced sometimes this was their first sales job, they didn’t bring a lot of bad habits with them. So we’re really about to kind of create the type of sales culture we wanted. And then we were very good at then having those people ingrained future salespeople into that culture. So as we would hire new people we had a unanimous we would have every salesperson had to pitch in front of the whole group and it had to be unanimous.
So we had the group got very good at understanding who would be good at this culture. We’d have someone take them under their wing as part of their team and usually about six months in they would be able to kind of branch out and start taking on their own clients but it’s just became kind of this ecosystem that we were able to kind of bring new people in. We knew kind of the people we wanted to hire and I don’t remember too many misses which is pretty rare in sales where you tend to be 50/50 at best and we were probably 90% plus success rate in the sales [inaudible 00:38:16]
Andrew: But it started out with a group interview where they were pitching to each other and then once they were hired they ended up doing this mentorship for up to six months?
Brandon: Yeah. We would have them often support another salesperson and often support the front end of the funnels to do more of the inside sales as they kind of learned, go along on a lot of the pitch meetings and then usually after six months they were able to kind of really start branching out on their own leads.
Andrew: Okay. And then you brought in a CMO and we’ll talk about that in a moment but first I should talk about my second sponsor which is Toptal. You smiled when I asked you before the interview if I could bring them up, you said yes and then I asked you about the smile and you said it’s because, what was your experience with Toptal? Sorry, we just lost the connection there for a moment. Yeah? So you smiled because you’ve had an experience with them and I asked you if you would talk about it even though you didn’t end up hiring from them.
Brandon: I just thought it was interesting that I’ve used both the sponsors. I’d used both of them. I had a good experience with them as well. I just ended up not hiring that . . . I was using them for a designer search and I just ended up finding getting connected to a designer outside of the platform I was looking kind of that both at the same time and ended up not hiring them, but it was they put several good candidates in front of me and I was ready to move forward with one of them and I just happened to kind of get introduced to someone else at the same time that I ended up moving forward.
Andrew: I should say I think that helps to demystify the process. What happens with Toptal is you go to them and you say, “I need a developer and here’s the type of developer. I need a designer, here’s the type of designer, etc.” And they don’t just give it to you or post your ad online and then let you look through resumes. What they do is they say, “All right, we’ll get you on a call with the “matcher,” as they call them. The matcher knows the database of developers and designers that Toptal works with. They get to know you and then they make a match and they don’t usually send more than two, maybe three candidates because their job is to screen them out and introduce them to you. And you get on the call with them. You could ask some questions. You see basically not only will they do the job for you but also do you like them? Do you like working with them? Do you feel like if you’re using Slack that they could be the kind of people in your Slack group?
Or if you’re a Zoom type of person, will they be the type of people you’d want to get on Zoom? And if they are, then you can often start with them within a day or two. I’ve hired a designer, a developer, and an MBA from them. If you’re looking to hire, I urge you guys to go checkout not toptal.com but recognize they are two Mixergy fans who started this company. They ended up doing phenomenally well. Raised money from Andreessen Horowitz, came back and said, “You know Andrew, we want to support Mixergy. How could we do that?” And we set them up with an ad and now they’ve been advertising consistently for the last, I’d say almost three years.
So here’s the deal that they’re offering exclusively to Mixergy people. You’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s an addition to a no-risk trial period of up to two weeks. So they want to make sure that you’re absolutely happy and then if you are, that they reward you for being a Mixergy listener by giving you 80 hours of developer credit. So it’s top as in top of your head, tal as in talent, toptal.com/mixergy.
I feel like I’d get to know a lot about a company by looking at the landing page they created for us. Is they could just redirect back to their homepage tag it, redirect back to the homepage but intentionally customize this landing page for us which I think is cool. All right toptal.com/mixergy.
The CMO, that seems to have been a major milestone. You got two $6 million as I understand it by hiring the sales team etc. then you were able to triple that with the CMO, why?
Brandon: Well, kind of the way I manage that I would tend to kind of take things on until I could afford to replace myself or bring someone on better or more skilled at that particular thing. So I have been running most of marketing, I had some resources assisting me, but wasn’t as a CEO wasn’t really about to focus on it the way you would want someone to focus on it which is a 100%. And so, yeah, which is I found an amazing CMO who had been in kind of similar space selling B2B services to marketers and she was able to come in and just take a lot of what we we’re doing and systematize it and make it . . . a big part of our process was thought leadership. I had been writing most of the thought leadership to that point so the ability to kind of have more of a factory creating thought leadership, having things coming out more often, that was a huge part of or process, being able to support the sales team in a lot more ways on things that they wanted. We were also scaling the sales team up pretty significantly. So obviously, the bigger the sales team, the more resources they need from our [inaudible 00:42:58]
Andrew: What’s the influencer or thought leadership do you guys added? It seems like that was a major step forward.
Brandon: Yeah. It was a huge piece. I mean, again, the space was very new when we were in it so one of the big things we did, we actually created our own metric. So a big problem we had is marketers didn’t know how to measure social media and social marketing. You know, what is the tweet worth versus going out and buying a radio ad or a web ad? And so we actually created with a . . . wow, I’m forgetting. With a big research agency, we partnered with them and created our own metric that basically factored in kind of the impacts and the influence of the source that was delivering the message so something delivered by your good friend was a lot more powerful than a banner ad you saw on a website.
So being able to measure that and quantify that and then bring that back to the marketers is such a big thing and it was something that also once we had that I was able to give a lot of speeches around it. I was able to get a lot of bylines and articles placed so we kind of have the strategy where we would create thought leadership and then we would leverage all other channels so that would drive all our banner ads that we run. It would drive our bylines at our content. We’d come out with infographics and smaller pieces of the content that would then lead back to it and then we’d use that to get speaking engagements and other stuffs. So everything kind of centered around a couple of big pieces of that a year.
Andrew: I see the advantage of it. If you see me looking down is because I’m taking notes. I realized there’s so much here that I want to make sure to take down for myself. All right, it seems like things were going well. I didn’t feel comfortable bringing this up but you do so I’ll bring it up, why did you get fired then?
Brandon: Good question. Yeah, so I mean we had 300% growth year over year for three years prior. The company had scaled to close to $20 million in revenue. You know, by all intents and purposes the company was performing very well. What happened was because we were doing well there was a lot of pressure on me and on the company to raise a lot more money and particularly to we wanted to go out and raise a $20 million round and we’d already raised $15 million at that point. I just didn’t feel like that was the right thing for the business at that time. You know, I thought we were kind of peaking in a lot of areas as far as social media, SaaS multiples. Our growth rate I thought it was a good time to maybe consider looking at how we could position for a sale in the near term. And I knew raising $20 million would mean that you know we’re building a $300 million plus company at that point.
So that was that piece and then I think the other piece that played in a lot was just my heart wasn’t in kind of this business anymore. I’d gotten to a point where I was really seeking to do something with more meaning and more purpose. I had been kind of between the two companies that had been I think 10 plus years and just got to a point where I knew there was another step for me and another place for me and I didn’t feel like I could take on another three years or five years of kind of building out CrowdTap and doing so in a way where I didn’t really see where it was going next because I didn’t see the next level.
After kind of getting asked kind of multiple times why I wasn’t excited to raise a big round or trying to get me on board, investors came to me and just had a heart to heart and asked me how I was doing and where things were at and it just became clear that the best thing for me to do was to kind of let someone else come in, new energy, and lead the company the next phase. At that point I ended up staying on another six months and helped kind of transitioned things. It was very hard to leave my employees because I really kind of cherished the team I built. But ultimately I knew it was the best thing for me and for the company.
Andrew: Is that what Mark Suster talks about where they “smile fucked” you, that’s his phrase. He says, “They sit down with you, they ask you all these questions, they make it seem like they care but in reality they’ve got an agenda.”
Brandon: Who’s they?
Andrew: They, the investors, they, the people who sat you down and had this conversation. Do you feel that they came in there caring about you for sure but really caring about a direction that they needed to either get you to get on board with or get you out of the way?
Brandon: Yeah. I mean, I think they’re doing their job. I mean, unfortunately I think the way that venture capital was setup I’ve written a bit about this as well on my medium but the way venture capital tends to be setup is it is about unicorns. And when you have one in front of you, when you see the growth rates we had, you see the revenue we had there aren’t that many companies that get to that level. You know, they want to figure out a way to return their portfolio via that company because there are only so many of those opportunities. And I think as an entrepreneur you trust that a bit, you figured they’ve been there, they’ve seen everything before and you understand that. But, yeah, I think it’s tough and it’s something that I’ve been struggling with and what I’m working on now and been trying to be almost an advocate for other entrepreneurs because I don’t think venture capital is always the right way especially when it comes to some of the stuff I’m focused on now which is conscious businesses and heart-led businesses.
There’s a lot of businesses that aren’t billion dollar businesses that need to get built that people are deeply passionate about. And that you know the entrepreneurs really should be leading and should be determining where that goes. Yeah, I think it’s just kind of one of those things that happens in this space. You know, I don’t have any ill will and I think they’re great guys and truly had a lot of good times with our board and felt that they were all great people. But I think it’s the nature of the business and I do think it needs to shift quite a bit.
Andrew: And as a result of that I feel like you went into an exploratory period in your life, like you got a tattoo for the first time after being 40. Is that what I see on your wrist right now? I’ve been dying to ask you about it.
Andrew:There, it’s a little hard to see but people can see it. And then I also noticed the bracelets. Is that a new thing for you? Are there any significance to that?
Brandon: I think that period triggered and it also, that all happened around the time when I was engaged, married, and then divorced all kind of within a three-year period. And that kind of coincided with this kind of career transition. And I think I just got to a point and I think you read . . . I wrote my first article I wrote on . . .
Andrew: Yeah, you said, “Just 10 days shy of our first anniversary we decided that we were going to divorce.”
Andrew: All right, okay.
Brandon: Yeah, absolutely.
Andrew: That’s heavy.
Brandon: Yeah. So, I mean I wrote this article called “Lost on Purpose” on my 40th birthday on Medium and posted it and it kind of went viral. And it really tells the story and a lot of the purpose that I have now and things that I want to get out is just around I kind of achieved a lot of what I thought was success. You know, I married a wonderful girl, I built and sold companies, I had a lot of success, and then I just got to this point where I was like kind of not sure what to do next. I wasn’t feeling kind of the fulfillment that I expected to feel, just like you said when I sold the company like I didn’t do it for me. That wasn’t like a . . . the money wasn’t the driver and I was kind of like what is it that I need and I kind of just went into this exploratory period really searching for deeper meaning and for me that involved a lot of spirituality.
I studied Kabbalah for a while. I’ve I took up yoga and meditation, Ayahuasca, plant medicine has been a big part of the journey and I think I mentioned to you we’re actually taking 25 entrepreneurs on Saturday . . . on Sunday to Costa Rica for an Ayahuasca retreat. Entrepreneurs.
Andrew: I can’t believe that. Wait, 25, you initially listed it as 50 in January.
Andrew: Because you ended up with 25 takers.
Brandon: Yeah. This was the first retreat. We were able to take up to 50. We have 25 people joining us.
Andrew: I wish I would have partnered up on that. I would have gotten 25 of my people to come in. This is mind-blowing. So, why Ayahuasca? What is Ayahuasca like? Unbelievable. When you said, for some reason that completely blinded, I was completely blind to the fact that you’re doing this. So you got my actual immediate response to that. I literally, you can go back and watch the tape that I recorded before we started. My mouth went like this, “Ah! What are you . . . ?” Okay, so tell my why Ayahuasca. What happens with Ayahuasca?
Brandon: For me it’s been the single biggest part of my growth. And I think for a lot of type A people and I considered myself now recovering type A. I mean I think I was this type A as they come. I was in New York walking faster than everyone, talking faster than everyone, and I think the nature of that is just to want whatever is next and you’re always trying to go on to the next goal and it’s hard to slow down. And you’re very analytical and mind-focused and I think there’s a lot of what you want in life is not necessarily in your mind and I think if you’re a smart person, you’re analytical, you tend to try to fix everything and figure everything out with your mind and Ayahuasca has been a great tool for me to really re-center myself and more of my heart. You can connect, I think through the medicine you connect your greater sense of being and oneness in the world, those around you and just give . . . it’s given me like a lot of perspectives that I didn’t have before and just I’m able to catch myself and see a lot of things differently.
A big part of that is just learning surrender. You know, I think you want to control everything as an entrepreneur and I focused a lot on like this is not figured out, that’s not figured out, you’re stressing over that, you’re stressing over that and it’s really . . . there’s an amazing book called “The Surrender Experiment.” I don’t know if you’ve read it but it actually talks of this guy who . . . he went to the woods in Gainesville to, his name is Michael Singer, to meditate for the rest of his life and then decided to do this experiment where he would just surrender to whatever came his way and he ended up building a publicly traded company from the woods of Gainesville just by surrendering to everything, still meditating in much of the day.
Andrew: You know what you kind of answered the question that I had but maybe I still want to ask anyway. The question is this. I’m a New Yorker too. I remember not just walking fast in New York but like you said walking faster than everyone else and it’s the best to walk faster than everyone else because you could be angry at them for walking fast but slower than you and they have to take it in New York, right? And it feels like a very loose, like a very happy experience to be going faster than everyone else and rub their noses in it like without feeling bad about it. But I feel like isn’t that a large part of where your success came from and if you go and surrender regardless of this one person’s experience, don’t you feel like you’re losing your power? The thing that drove you to create these two companies, the thing that drove you to be who you are. Don’t you feel like you’re going to be weak because you’re doing it?
Brandon: Yeah, and that’s a bit of the battle over the last few years of what I’m learning, learning to be powerful in other ways. I mean, I think you mentioned, do you lose your success? I mean the question is what is success? Because I mean I created what I thought was success and then didn’t fully buy into . . .
Andrew: Isn’t success what you created but more of it?
Brandon: No, I don’t know that it is. I mean, I don’t think it’s one . . .
Andrew: And you came to that realization even before you went on this journey that’s why you had to go on this journey because you thought, “I don’t want to get to $300 plus million company,” so this isn’t a new thought process for you that success is more than what you had before. This is who you were before, I see.
Brandon: Yeah. I had something wake up in me that’s like, “Okay, you need to find something else,” and that led me down the path of . . . I mean I’d always been somewhat curious. I’d always been sort of into spirituality but more from an intellectual’s perspective just reading books and like, “Okay, I get that concept,” but I never was able to experience it and I think Ayahuasca and some of these other tools help me really experience what it actually means and . . .
Andrew: Were you ever religious?
Brandon: No. I was raised reformed Jewish so we kept a lot of the holidays and the culture is important to me but I was never, you know . . .
Andrew: Did you believe in God at that time and feel like you had a connection to God?
Brandon: Yeah. I’ve always felt connected to God. I think now I feel much more of a direct connection and you definitely feel that with, especially with the medicine with Ayahuasca. So it feels much more like a direct connection like I can tap into it on a more . . . as needed I see a lot more synergy in the world. Yeah, synergies in the world, a lot more just kind of things appear and make sense, things that we’re kind of blinded to because we’re often walking really fast and looking down a narrow pathway and I think you start to kind of broaden your view. And that’s where you basically learn to find success where we’re want to call it in a different way.
You know, I think you start to learn that you don’t always have to be powering through to achieve something. There’s ways if you actually can take a step back and like look what’s around. There’s people that are lining up to help you or there’s opportunities that you may have passed over because you were so focused on this narrow one. And that’s what I’m learning and it’s still a learning process. I wouldn’t say I’ve nailed it yet but I’m at a point where things are really starting to happen, we’re starting multiple businesses, things are getting off the ground, amazing people are appearing. And so the rest of the story is yet to be told. But I’m enjoying the journey a lot more.
Andrew: It’s the number one heart, 1heart. The number one, I think the 1heart.com for anyone who wants to see this. I’m wondering why you created this though. If you on a journey why not say, “You know what I was just going to go on this journey by myself or go on this journey with some friends.” Why create an organization, why blog a about it, why bring other people to your Ayahuasca experience?
Brandon: Yeah. Well, I did for a while. I mean I traveled for a while by myself. I mean I took really a couple of years and then I mean I am someone who likes to create. I like to help others. You know, I think my purpose and what I feel is I want to see more conscious companies being built. I want to see more heart-felt, heart-led leaders be able to succeed and help support them. And along with my best friend who has a similar mission and also lives here in Miami, we decided to basically create 1heart together and create kind of an ecosystem and support system that can help enable that overtime. And so we started a couple of companies and the goal is to kind of find companies that we believe in, leaders that we can back, and basically be cofounders to them and help them create a company in a way that’s maybe a little less stressful, a little more collaborative and hopefully puts great things out in the world.
Andrew: All right, it is 1heart.com. For anyone who wants to go check it out. 1Heart Journey by the time this published will be done. I’m so curious about what that’s going to be like. You know what I’m not a drug person, I’m much more of a whiskey person but there’s something very interesting to me about doing this with you. I wish I would have found out about it but maybe we’ll do it again and I’ll get to go.
Brandon: Well, there were likely be future ones. I mean if people are interested they could go to 1heartjourneys.com and we will have, what we already have kind of a way less than future ones in a lot of people that weren’t able to make this one, so.
Andrew: I like too that you’ve had this very like driven part of you because I think that I feel like I could hang out with a guy like this. I don’t think I could loosen up with people who just are loose all the time and don’t relate to what I want to do. Like there was a really interesting guy I met at, what is it called, Baby Bathwater, great guy. He’s into music. He’s got all the drugs on him. I don’t know how he gets these freaking stuff on a plane but I don’t talk about music endlessly like he does and so it was hard to relate as much I liked him but with you I do and I really appreciate that you’re doing this and then you came on here to do this interview. It’s 1Heart Journey and, of course, go check it out on Medium. I don’t think you asked me to mention that but I think your Medium posts are just so interestingly heartfelt.
And, of course, I want to thank my two sponsors. Guys if you need your books done right, really, don’t feel guilty for not having done right. You should just hire a team that has the right software to get it done. It’s called Bench, bench.co/mixergy. And if you want to hire a developer, a designer, even a finance person, go check out toptal.com/mixergy. How did this interview feel for you Brandon?
Brandon: Felt great. How was it for you?
Andrew: Great. I love these kinds of conversations. I could’ve dived more into your personal like in the end. That’s all I do like when we’re just hanging out.
Andrew: I want to bring more of that to Mixergy.
Brandon: Saatchi [SP] was trying to like warn me and I’m like, I was like I love it, very good. He’s like . . .
Andrew: Was it Saatchi? Howe do you and Saatchi know each other?
Brandon: So I met him here. He’s part of or Miami Made founder group now and just I met him down in Miami, we tend to attract people from New York and San Francisco who end up moving down here and somehow I get connected but he’s a great guy.
Andrew: Well, I’m really lucky that he introduced us. All right, I hope I get to see you in person sometimes.
Andrew: Man, I love this kind of conversation. All right, thank you so much and I want to thank Saatchi.
Brandon: All right, bye.