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Hey, everyone, it’s Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. I do an interview here a day with an ambitious entrepreneur who’s left his mark on the world and today’s guest is a gift to me. Scott Rafer was scheduled to do an interview today and he had to reschedule at the last minute and like a mensch–and this guy is a mensch–he introduced me to today’s guest at the last minute.
Today’s guest is David Cancel. You were smiling as I said that Scott’s a mensch. He really is. He’s one of the guys in the industry that everybody seems to know and love and respect and now I see why.
David: Yeah, absolutely. I got to work with Scott at Lookery and a little bit at Compete when I was about to leave Compete. So I think your description of him is accurate. Mensch is the best single-word description for him.
Andrew: We’re all in business. Stuff comes up at the last minute. I was telling a live audience earlier about a guest who just kept cancelling and cancelling and cancelling. And I understand when things come up in business. But when a guy like Scott can come through at the last minute and introduce me to somebody like you, well, then I can understand why so many people respect him.
So you said that you’re the cofounder of Compete, a site that I often use when I check up on people who I’m interviewing to find out how much traffic they get. You also cofounded Lookery, Ghostery and most recently you launched Performable.
David: That’s right.
Andrew: Actually, instead of me reading this line that I’ve got on my screen on what Performable is, you’re the founder–what is Performable?
David: So Performable is a marketing platform for your business website. So the emphasis is you’re a business website, so it’s how do you connect with people once they get to your site? Forget about acquisition, forget about Google AdWords and all that. But once they’re there, how do you make that connection?
Andrew: Is it A/B testing? You help me create a landing page that will let me test different buttons and test different text?
David: Yeah. That’s a lot of what we do. So optimize the experience for when people come to your site. So everyone who comes to your site brings with them a context. But for the most part, we’ve done a bad job at responding to that and treat everyone like they’re the same when they come to your website.
So a lot of what we do is helping you build landing pages off of your site to connect with your users, build in A/B testing so anyone can do it, any marketing person without any technical help can do it. But then we also integrate back into your site so that we can test elements within your site and test messaging and see what works best for different channels and different types of users.
Andrew: Okay. Let’s come back to that later on because I want to talk about how you got here. I was looking at your LinkedIn and did a little bit of research in the time since I found out about this interview and there were way too many names. I listed a few of the companies you’re involved with. I can’t get into all of them in the intro, let alone this full interview. Why don’t we go over the highlights and start with Compete?
David: Yeah.
Andrew: Compete was an Idealab company started with one of the legends in this industry, right? Who was your cofounder on this?
David: So my cofounder was a guy named Reed Sturtevant, who was around for the first year of the business. So he was kind of a utility infielder, was doing sales, biz dev and had come out of Gartner and the kind of syndicated research world. I had met him through some friends at Idealab. Idealab was starting a Boston office, and they were branching into doing investments outside of their natural incubation mode that they were in.
So Compete was one of those. They matched me up with Reed Cundiff, and then we started to work on this idea. But unlike most Idealab companies, we went out and raised our own series A within 30 days. So we were an Idealab company only for a little tiny–a month.
Andrew: Is Bill Gross considered–that’s the legend I was talking about.
David: Yes.
Andrew: A guy who founded Overture, GoTo.com is what it was called when he launched it. He’s the reason why Google–his idea anyway is the reason why Google is making any money because he’s the guy who created those ads in search results, right?
David: Exactly, with Overture, which was called GoTo back then.
Andrew: Was he one of the cofounders?
David: He was. He gave us access to a bunch of raw clickstream data, which was what Compete was based on and he had a prototype internally that he was using to suss out deals and then we took that and started to build an idea and a company around that.
Andrew: Okay. And this was 2000. This was still when he was at his height, right?
David: This was at the tail end of his height because we started the company in October of 2000, so this is post-crash. The crash was March of 2000, so things were going down pretty quickly and we raised our series A amazingly in November of 2000. So, it was a time when no one was raising any money.
Andrew: All right. Let’s go back to where the idea came from. Where’d this idea come from?
David: The idea came from an internal prototype project that Bill had, Bill Gross had, with Idealab. He needed a way that was deeper than what was available back then like Media Metrix and comScore type of data, which just told you, “This site is bigger than that site.” He needed something that went down to the long tail in order to suss out opportunities in different categories for internal ideas that they were working on.
Andrew: Can you give me an example of what he was hoping to do with this data?
David: What he was trying to do was find out are there opportunities in–I won’t use pets because a famous Idealab company flamed out on pets, but a very small niche category, whether it’s travel for college students, let’s say, is that an interesting niche? Are we seeing a surge in interest in there? He was basically looking for moving categories that other people were ignoring.
Andrew: Why wasn’t it enough to see which website were doing well, that there’s a site that’s geared towards college students and it’s getting a lot of traffic. Why did he have to go more granular than that?
David: Because the most important thing was that back then, those comScore and Media Metrix were only reporting on the top 1,000, maybe top 5,000 websites. These sites were not yet big enough to make it into that listing. He was, as any good arbitrager, was looking deep into the data to find those opportunities.
Andrew: Actually, didn’t comScore, Media Metrix–who was it, the one that Nielsen owned, didn’t they allow you to dig in deeply and see which specific webpages were doing well and where they were getting traffic at the time?
David: Not at the time.
Andrew: No?
David: They were basically doing lists for media buyers–which are the top sites in different categories? How are they moving? How are they changing over time? They really weren’t going that next–
Andrew: When did they start doing that?
David: Much later on after we had started Compete. The reason was they had a very small sample size. What we were trying to do at Compete was license data from different choke points in the internet so we could have a panel that was an order of magnitude bigger than anything available at that time, which you would need in order to build the type of business we wanted to at Compete.
Andrew: Let me tell you how powerful this is, just from my own personal experience, this kind of data. I used to make a ton of money from online greeting cards and I was too small and too vulnerable to allow anyone to know that online greeting cards was where it was at.
So, what I did was I had a homepage that basically talked up the side business that we were in, which was email newsletters. People would see we were getting a lot of traffic. They go, “Email newsletters are where it’s at. Let’s go steal that idea and rob Andrew’s business?” Then somebody, I won’t say the guy’s name, a competitor signed up for one of these services and started to dig deep and say, “Okay, which newsletters are the ones that are doing well?”
He’s clicking through and he’s realizing no, it’s not newsletters. It’s this one tell a friend form, a form that lets people resent a page. He’s going, “How’s Andrew getting all the traffic to the tell a friend form? Maybe I need to be in that business if not newsletters?” He looks around and he says, “Ah, that affiliate is sending him traffic and that website is sending him traffic. I didn’t know much of this is going on.” And then little bastard goes out to them and he says, “Why don’t I make a deal with you to take you away from Andrew?”
Now, before this data was available, all people saw was newsletters. As soon as this data was available, they saw not just which specific business was doing well for me, but who was sending traffic to me. That’s the power of data. Now, you’re saying you guys were originators of that kind of data?
David: Absolutely. So there was no one else around at that time where you could get that level of granularity and that’s what we were doing. That’s the kind of data that we were selling to our customers.
Andrew: Okay. Now, Bill Gross, you said, had this idea. This guy is an idea machine. Why does he hand the idea over to David Cancel? Why doesn’t he hand the idea of Andrew Warner or to anyone else? Why you specifically?
David: He had lots of ideas, prolific. This is just something where he wasn’t really thinking about it as a company yet. It was just an internal tool. We got to look around at different things that he was doing internally and kind of gravitated to this because of my cofounder who had come out of this syndicated research world. He knew the power in this type of data, another type of business that has the same problem with low sample sizes. So, they can’t go very deep.
Andrew: Now, you had this business partner before you met Bill Gross and Bill Gross just shows you around some of the ideas that he has and then you gravitate towards the one that makes the most sense for you and you go, “We’ll take it on and we’ll be the guys who run it?”
David: I actually met the business partner at Idealab Boston. So, he was hanging out there getting ready to do something and it was kind of like an EIR kind of thing. He was entrepreneur in residence, kind of waiting out to do something, we kind of teamed up and did this thing.
Andrew: How did you team up? Why you?
David: We were the only two there at the time. So, that was it. For me, everything that I had done previously was really focused around kind of big data, servicing, marketers, everything I’ve done before and since has been pretty much the same. I service marketing folks, people who are used to being neglected by technical folks. I build products for them and I’m fascinated by big data and analytic problems. So, it was a natural to start this.
Andrew: Somebody in the audience is giving me a hard time. He’s saying, “Can Compete.com tell me why Tim Ferriss gets so much more traffic than Andrew Warner with just one post a month versus my post daily?” Tim Ferriss has made a reputation for himself. I am still building my reputation one chatroom jokester at a time, one viewer at a time. Now actually I’ve brought two people in the office with me. I’ve got Christina and Steve from the U.S. They stopped in. I’m going to build my audience one person at a time.
So what were you guys doing that was different? Can you talk more about that? You said it earlier and I went back in time. Let’s pick up the story there.
David: So, up until starting Compete, the traditional way of building a type of an online measurement business was to go out, build a panel by paying people, getting them to fill out subscription forms, surveys, a chance to win something, sweepstakes and then paying them to be part of this panel. This is kind of replicated in an offline process. This is how Nielsen does TV ratings. They pay people to fill out a book and Nielsen and Media Metrix and comScore was still taking that approach.
And we thought we need to take a whole new approach if we were to get to the long tail. We were going to go out and license data directly from the ISPs, directly from the choke points and amass that data together so that we had multiple samples so that we could detect bias in any one of those samples, normalize and then have the biggest data set out there. No one had done this before.
Andrew: How’d you make deals with the ISPs, the guys who were bringing the internet to the end user?
David: Yeah. It was hard going at first and then the more that the public markets tanked, it became easier and easier as they were looking for any way to bring in some revenue. And so really that was the secret–the market tanking, they were looking for revenue opportunities. We had money in our pockets.
So, they started to license data to us. And we did it in such a way that we protected the user’s privacy. We always promised these data providers that we would never sell their data alone. It would always be mixed in, this pooled kind of data so then no one could pick out ISP one versus ISP two. And so it took a while, but we got access to lots and lots of data.
Andrew: How did you get in the door with them? How’d you know who to talk to? How’d you make the introduction there?
David: Yeah, the old fashioned way–calling, flying on planes, begging, waiting in lobbies, that kind of stuff. This is before we could find people like this on the internet and be connected through some social network or LinkedIn. We went out and cased out these places.
Andrew: Wow. So Bill Gross didn’t have an in there, one of his friends didn’t have an in there?
David: No.
Andrew: Wow.
David: So, that was hard going.
Andrew: All right. You said that November you raised you’re a round. How did you do that after all the trouble that was going on in the market?
David: So, I look back at that a lot. We went and raised an A from one investor, Charles River Ventures here in Boston, and at the time met with Ted Dintersmith, who’s retired now, but was one of their lead partners. And we had only a handful of meetings and we raised $6 million in this series A.
I think it really came down to two things. I think it came down to Ted was looking in this category for a long time. He was a Stanford PhD, mathematician and so he liked data businesses. This was something he had been thinking about. We didn’t know that at the time. I think the other reason really was I had at my last business hired someone away from Ted, someone that he had tried really, really hard to get into one of his companies and that didn’t happen to people like Ted. So, he remembered my name. When I went to pitch him, I think a lot of it had to do with that. It comes down to team and category at the end of the day.
Andrew: No hard feelings, respect for what you were able to do.
David: Yeah. Exactly. That’s it. I think about startups the same way now. It comes down to category and your team and if anyone ever tells you that there’s a process or a framework you can follow, I don’t believe it. A lot of it comes down to timing and luck.
Andrew: Was there any concern on their part about the economy and your ability to build a business in the wake of the dotcom bubble burst?
David: Not at all. So, Ted, luckily for us, had a strong position within his firm. It was pretty much a done deal when he committed to do that round with us. So, there was very little concern. He put his faith behind us and continued to throughout some really tough times. 2001, 2002 were really, really tough times for our business and he really stood by us. You hear lots of bad stories about venture investors and I had plenty of them. I was scarred from it. He was by far the best investor I ever worked with, hands down.
Andrew: I’m going to make a note here to come back to talk about the bad experiences with investors. I want to find out about that. I’m really actually making a note there. I’ve got to learn shorthand to not be distracted. What about Idealab? How much funding did they put in the business?
David: Very little. So in the hundreds of thousands, low hundreds of thousands of dollars. They put in a lot of help, but pretty much very tiny angel round type of funding.
Andrew: Mostly they gave you the idea, some introductions, office space and data.
David: Exactly, office space and a little bit data, yeah, to start with, to be able to model out the idea.
Andrew: All right. We talked about how tough it was to get deals with the ISPs. By the way, did you get the deals with the ISPs before you raised that A round you talked about?
David: No.
Andrew: No, after.
David: We had nothing. We had a ten-page PowerPoint deck.
Andrew: I see. Okay.
David: Nothing else and two people.
Andrew: All right. So I could see how hard it is to pay money to the people who you want data from. You’re about to give them money and it’s still tough. What was it like to sell to users, to customers, the people who have to give you money in an environment that’s tough?
David: Much harder than buying the data.
Andrew: I imagine. How’d you do that?
David: At the time, everything is crashing. We went after two categories in the beginning just to get some business. That was online travel because travel was still happening and then media companies because the logic at the time was that media, entertainment, movies, what have you were kind of anti-cyclical, that everything else was crashing and burning, but people were going to still spend money and go out to the movies.
So those were the two kind of areas that we started to sell into, which was great until 9/11, where we lost pretty much 100% of our customer base. Online travel was gone as a category pretty quickly. And then the media and some retail people we were dealing with were pretty much gone right after that. So, 2001 to really ’03 were the toughest part of our business. There was no easy way to sell to people.
The context was–this was before Google had paid out tons of people and showed people how to make money on the internet. It was still a time when people had lost their 401(k)s to these bleeping internet stocks and people were shuttering and shutting down their ecommerce departments. Here we were going in trying to sell internet data. It was as soon as we mentioned the word internet, we would hear lots of four-letter words and people would throw us out of their offices. It was really that bad.
So it was kind of missionary-type selling. We were selling something that cost, on average, $350,000. That was our average subscription price per year per product. So, it was just hard, hard work.
Andrew: I didn’t realize it was that much that you were trying to sell.
David: Yeah.
Andrew: Before we get into that tough period, I want to understand the aha moment that you gave your customers when they started using you. Maybe we can talk about a travel business. They’re online. They’re spending money on advertising. People are actually buying travel online, high ticket product. In you walk to their business and you’re about to give them an aha moment and show them why they should keep forking over tens if not hundreds of thousands of dollars. What did you do for them?
David: We would do almost exactly what you described that someone did to you. We would come in say, “Here’s your competitive set. We know everything about them. We’ve analyzed them. Here are two things that they’re doing really well and this is what it means when it translates to your bottom line. This is how they’re still business from you or here’s how they’re kicking your ass.
Andrew: Do you have an example of how someone was getting their ass kicked and then discovered it using Compete?
David: Lots of examples. I think a lot of people were late to kind of the search game when that started to emerge. So fast forward to my current business, it was around creating landing pages and microsites and kind of really bringing in–once you got a user, how did you communicate with them? What was the way that you were communicating with them? What were the offers you were giving them? What was the difference on this page versus that page? We have a check-in process like everyone else. Did you know it was these three items on the page that really caused people to come back?
Andrew: You do that now. The previous business, Compete, couldn’t do that. You could just say where traffic was going.
David: Compete we could look at the data, the clickstream data and find out those answers. What we couldn’t do is address them. So we weren’t an operational tool. We couldn’t fix it for them. We could just tell them about it. And in my current business, Performable, we’re on the operational side. We fix it for them.
Andrew: Okay. All right. So let’s talk about year 2001, 2003. Every one of us is going to have years like that. Many of us are going to give up some point in the middle. By the way, Christina, are you an internet entrepreneur? Are you an entrepreneur at all?
Christina: Somewhat.
Andrew: You are? What are you selling?
Christina: Well, as a lawyer I sell kind of my business itself.
Andrew: Oh, you’re selling legal work online.
Christina: Yeah.
Andrew: Okay. All right. So she’s going to have a tough year. I know Steve is going to have a tough year. God knows I’ve had tons of them. Let’s talk about how you got through it. What do you do during those years?
David: I think we spent a lot of time looking inward. The thing that was really carrying us at the time was like we had the data. We could do the analysis. Every time we would look at the data it would just totally blow our minds, the amount of things that we could tell a client on how to radically shift their business, that stuff, every time we looked at the data, it was amazing to us. So, that’s what fueled us.
But we went out and kept meeting and meeting with clients. We decided to focus in on a few key verticals and win those verticals, prove that we had traction there and then launch vertical by vertical after that instead of having a more horizontal kind of solution which compete has now.
Andrew: So, when you lost travel and media, what was the next vertical that you went after?
David: Weirdly enough autos. So, automotive. It made no sense. Those are the slowest moving companies on the planet. But they believed in one thing at the time and they still do, that nobody was going to buy a car online but that they were going to do all of their research online. Here we had data that we could look at, “How are people looking at your vehicle before you launch it?”
So all of your spend that you’re doing online or offline, it’s driving people to go and search for this new type of car. How is that happening? Who are they comparing us against down to the model and kind of feature set level? Before this, people still thought that they were–Ford F-150 was being shopped against a Toyota pickup and that wasn’t the case. People were looking at maybe a pickup versus a station wagon versus a sedan. That’s the type of data we had. And they believed in that. They were early believers in this online research data.
Andrew: So, if you were able to make up for the two verticals that you lost by going after autos and other verticals, how did your business suffer? Can you describe what those tough periods were like?
David: Well, the tough periods were picking a vertical like autos, getting that first customer, that first customer is really, really hard to do. There are no proof points. You have nothing. So, getting that first customer was really hard. Getting the second customer is hard and then getting the third, fourth and fifth to come on is really easy. And so we saw that and proved that on autos and then we started to do that in other verticals, go vertical by vertical.
Andrew: How did you do it? What convinced them to trust you?
David: Yeah. This was the hard part, especially with the automotive companies. These are people that unless you’ve grown up in the auto industry, they don’t believe anything you say. So, there’s a bias towards automotive experience.
So, what we did to get passed this because this was our main roadblock was to go out and hire people out of Toyota and Ford and bring them on and make the face of our team even though it was us data geeks in the back building out everything, building these products. We would put these faces of people that they recognized as kind of industry experts out there. Once we did that and got some press around the data that we were doing, the more that they believed us.
Andrew: How many customers were in this space?
David: In the automotive space? We signed up every car company in the US as a customer of Compete, still is, most of the kind of part manufacturers. So, there’s not a large number of them, but there are 25 or so addressable clients in that space, but the way that we worked is we may sell one product for $300,000 but that might be for one vehicle or type, right? We would sell into GM. We would keep selling across the organization.
Andrew: I see. Okay. So, if you can hire one good salesman, one good face at $100,000 a year but he brings in a single sale in the whole year, your net a quarter-million up?
David: Yeah.
Andrew: Okay.
David: And then that person could spend a very long time going through the rest of the organization selling to Chrysler and selling to Jeep and selling to all these different businesses within this giant company.
Andrew: All right. Mickey D in the audience is saying, “Why did it cost $350,000 a year for a subscription?”
David: Well, good question. So it cost that because of the people that we had to hire out of the industry to go and service this. Even though the data was all the same, the same backend was processing this, the same technology, same kind of analysts, we needed these industry experts and we needed to deliver it in a way that felt like high-end consulting at the time. So, they weren’t going to buy in an online product in 2001. There’s no way.
So it had to feel like something that you would buy from someone like McKinsey, someone like Bain. We hired a lot of Bain and McKinsey consultants to work for us like a very high touch service despite on how it was actually built. So, that’s why it cost that high level and also because we sold through kind of direct sales. We needed to go into these organizations, spend a lot of time getting in there and selling and our typical customer was a CMO within those companies.
Andrew: Why not go for a cheaper product, have it sell itself online and go for volume?
David: It was impossible at the time. It was absolutely impossible. If you go to Compete.com now, which you can get free data and get premium stats and pay with your credit card, we built that in 2000. We had that totally 100% in 2000. No one would even look at it.
Andrew: People weren’t even going to the free site to look up other people’s traffic?
David: Nobody wanted it. Because what fueled a lot of interest in free traffic was online advertising, which wasn’t really a category then, arbitrage opportunities, not a category then. It was like, “Yeah, great, my site is doing better than the other,” but that really didn’t matter to anyone at the time. There wasn’t a way for an average person or even a small business to monetize people online at that time. So, nobody wanted it. Same exact product, same exact feature set, nobody cared.
Andrew: All right. Let’s talk about the highest moment and the lowest moment. I sometimes feel like the people who I interview have moments that are so freaking painful that they earn their success just by suffering through it, never mind all the work that they have to do to come up with creative solutions to get passed it. Can you talk about some of that pain?
David: Yeah. Absolutely. So, at Compete, I had a very long stretch of that pain. Like I said, from like 2001 through almost the end of ’03 to ’04 was the hardest period of my life professionally, unprofessionally, whatever, personally. It was really hard. That’s because we were out there selling and getting the 2×4 across our head every day.
Andrew: So what were you going through? Did you feel like, “Well, maybe I’m not really–this is my first entrepreneurial venture. Maybe I’m not right for this. Maybe I picked the wrong business. Maybe this partner of mine is not right.” What were you going through? Let’s talk just about you and not about the company.
David: All of it. So, “Is this the right business? Do we have the right product? What can we do differently?” The context for the time is what you can’t forget. So, we were really in this survival mode. We needed to survive. We had no other options. Our back was against the wall. There was not, “I’ll just go work for Google. I’ll just go work for this company.” There were no options. It was either we make this succeed or we’re all out of luck. So, that was what was going through my mind.
Andrew: This was a period when Fortune Magazine, the Magazine that for a long time loved Bill Gross, put a smiling picture of Bill Gross on the cover and that’s when they decided to get clever with their titles and they said, “This Man Lost $1 Billion: Why is He Smiling?” something like that. It was like this was a time for everyone who didn’t get rich or lost money in the bubble to just take their potshot, “Take that, entrepreneurs. Take that for trying, you bastards.”
David: Yeah. We felt that every day that we would go into talk to a CMO and five minutes into the conversation they would tell us how they lost x-amount of money on Yahoo or some other internet stock and their 401(k) was in the toilet and why were they going to buy some internet data–the first five minutes every time.
So we would go back with our tail between our legs and just wonder how we were going to do this. And I think a lot of it came down to we had this really strong, I mentioned before, investor who stood by us in this time. I still don’t know why. He had no reason to, but he did and he believed in us and he motivated us.
Andrew: I’ve got to get him on here. I haven’t had him on Mixergy. I’ve got to find out. I’m going to ask him that question. I said, “Why do you trust David? What was it about him that you trusted for so long?”
David: Yeah.
Andrew: All right. What about the high, that moment where you’re closing big sales to tough customers. Can you talk about one of the big highs?
David: Yeah. I think we started to get into all these verticals–autos and wireless and telecom and finance. Each of those brought their own high. But really for me, my personal high was when we launched Compete.com, which is what everyone knows Compete for. They don’t know us for $300,000 analytics at all. For a long time, even in the Boston area, most people didn’t know that Compete was here. They had no idea what Compete was.
Compete.com was this skunkworks project that a few of us in Compete started to work on. Like I said, we had built this back in 2000. We were using it as an internal tool and I wanted to release it. The rest of the business was going well at that time. So, we had some convincing to do, I should say, to our board and to the rest of the management team. Luckily I held the keys to the website and we just decided to push it one day.
It was hard going when we pushed that because we had an inside sales team who all that they wanted was more and more kind of support from the rest of an organization because they always had this mythical million-dollar deal that’s in the wings that if we could just help them a little bit more, they would get this deal. Why are we spending time on free data? Who gives a crap about free data?
We pushed it out. We met some resistance internally and that big kind of personal high for me was when we did go into some accounts after pushing Compete.com out, we started to see our data being printed out and hanging on cubicles as we were going to go meet our buyer there. I still remember the day just walking by and seeing our stuff printed out in different cubicles within an organization. These were big car companies at the time that we were walking by, so not your typical kind of internet data geek.
Andrew: And they were just printing out their own charts to see how much their traffic grew?
David: Yeah, and they were printing out our blog. We had a blog where we would start to talk about, “Here’s what we’re seeing in autos.” We were using that as kind of a lead in to get into some big accounts, but they started to print it out.
When you said, “Hey, Southwest, JetBlue is kicking your ass online,” as a blog post, you know who would call you immediately? Southwest. It would be five people on the phone who would never return your call otherwise and say even if it’s just for self-preservation when their boss finds out, “How did you calculate this? How does this work? What can we do about it?” It was the best kind of lead generation mechanism ever, give away free data.
Andrew: Did you specifically write about companies that you wanted to do business with? I’ve talked to other entrepreneurs who did. You did?
David: Absolutely. We did that. We would post about it. We would email them before the post is going to go live and say, “Hey, FYI, we just did this thing about you, just wanted to let you know.” Immediately the phone would ring and say, “Before you post that, can we have a conversation?” so that they could have their story straight for when their boss saw that.
Andrew: That’s great.
David: Yeah. So, that was huge.
Andrew: One of the things that I love about Compete.com is like Steve Morin–do you have a personal blog, Steve?
Steve: I do.
Andrew: Okay. When I go check out Steve Morin’s personal blog on Compete, I’m not just going to look at it. I’m going to say, “How does it compare to AndrewWarner.com?” I love that little competition. That wasn’t out there until Alexaholic came up with the idea of competing stats, right?
David: Yeah. It was before Alexaholic was a different way to look at Alexa data. So Alexa data had been around at the time and they were kind of like scourge at the time because their data was–no one could figure out how they calculated their data. There was a big sample bias in their data. If you were to go look at the top 100 sites, there was a disproportionate amount of them in South Korea, of all places.
So, no one really trusted their data. If you were to search on Google at the time, you would see people hating, “I hate Alexa data.” So, we came out with our data and explained how we calculated this and we’re open to this community, where Alexa was a black box really because Amazon had acquired them years before and kind of had put it on the shelf, so it was kind of an ignored project.
Andrew: All right. Do I have anything else, any other questions from the audience on it? Do you guys have any questions about this part of the company? Steve?
Steve: I do.
Andrew: Yes? This is kind of cool, by the way. I actually have people in here. Usually it feels really stale. It’s just me and this like prison wall behind me. What do you think?
Steve: Well, my question is you mentioned how you had a $350,000 price point and you needed it because you had to offer it as consulting. Before you reached at conclusion, this is a lot of thing a lot of people building products have is what process did you have to figure out this is your product, this is how you price it?
Andrew: Yeah. How did you know that was going to be the product? Good question.
David: Yeah. There weren’t many books on this whole like customer discovery thing back then. So, we did it the hard way. We did have that online product. We tried to market that in the old fashioned way. We did lots of customer interviews, which still is a good way to find this out. So, we went out to those target customers, those marketing people, those CMOs, those marketing professionals and talked to them about what they would pay for. What were they interested in?
It wasn’t until we started to talk at a very high level about the strategic impact of our data that it really started to resonate because again, those people who were marketing managers, there wasn’t something that they could change day to day based on our data. But those strategy folks, the CMOs who controlled the budgets, the big budgets on advertising, mostly offline at the time, could do something with our data. So elimination–we just went through every single price point.
Andrew: Who do you have over there on your side who’s whistling? They’re not adding to the conversation the way Steve and Christina are.
David: Sorry about that.
Andrew: The boss is doing an interview, a high profile interview with Mixergy.
David: Sorry. I think they all have their headphones on.
Andrew: How much money did you guys raise?
David: At Compete total by the end almost $40 million, so $39 million, $38 million, something like that.
Andrew: And you sold for, I think, $75 million to $150 million?
David: Yeah, $150 million.
Andrew: Based on the–there was an earn out of $75 million and an upfront of $75 million.
David: Exactly.
Andrew: So that’s not considered a huge exit. What did that mean for you personally?
David: It was great for me personally.
Andrew: How?
David: I think because of back to this great investor, I think we were able to preserve a good amount for the management team at the time more than was probably–it was our fair share, but more than probably would have happened with someone else, someone who really watched our back.
Andrew: What share did you end up with?
David: I don’t want to disclose that.
Andrew: Can you say if it’s over 10% of the business at the end of seven years, I think?
David: Seven years, yeah. It wasn’t over 10%.
Andrew: It was not. Okay. Christina, you had a question?
Christina: Yeah, I just have a quick question. With what Steve said with the advanced charge, did they end up losing any of their customers just due to the economy being more difficult?
Andrew: Oh, did they lose customers because the price was so high?
Christina: Yeah, because of the economy itself. Everyone had decisions to make and if so, was it that the offset wasn’t that great that it was expendable in that sense?
Andrew: So you did lose customers because of the economy.
David: Yeah. We lost our first batch of our customers who were travel and media. But once we got into the other verticals, autos, and started to grow from there, we had a very low attrition rate of customers. Our biggest problem was not attrition rate. It was how to grow the account year after year.
So we were selling to a CMO, usually a person who gets fired every 18 months for an organization. Before Compete.com, no one else in the organization knew who the hell we were. So, not only we were coming in, in the fourth quarter trying to get a renewal, but we were trying to get an upsell and usually the person was different. It was like, “I don’t know who Compete is. No one here knows who Compete is. You want us to pay what? Like how is that going to work?”
Andrew: Let’s move on past Compete here. We’ll come back to the bad experience with investors later. Lookery–what was Lookery, the company you started right after Compete?
David: So I started Lookery with Scott Rafer right after leaving Compete. Basically what it was was a social ad network when we started it. So a bunch of our friends, Facebook had just launched their developer program and Myspace was getting ready to. So, we had a bunch of friends who were building apps.
And we knew we wanted to build a data business and we thought an easy way to get that data is to offer an ad network and then as part of that network we can start to collect more and more information and whether we keep the ad network or not, who knows? So it was three of us at the time, me and Scott and one part-time person, so two and a half of us. We started to work out of our homes on this idea.
All of a sudden, fast forward a few months and we’re doing a billion ad impressions a month. The next month we’re doing two billion, then all of a sudden we’re doing six billion ad impressions. We’re still by that time a three and a half-person company. It was all because we took this idea, which I still think is a good idea, but there were a lot of sites out there that had a ton of traffic but found it hard to monetize that traffic.
And everyone back then, this was 2007, was talking about, “Oh, I could get a $40 CPM,” which is cost per thousand impressions. What they never would like to talk about was they could only get that one percent, two percent of their traffic and the rest of it was this remnant inventory, stuff that nobody wanted. They were getting nothing for it, basically nothing.
So Scott and I took a very contrarian view at the time and said alright, we’re going to go after remnant network. We’re going to offer a fixed guaranteed CPM that was laughable at that time, let’s say like $0.15. We’ll pay you $0.15 guaranteed for all of the traffic you give us. We don’t care. Most people laughed at us at the time. But what we saw really quickly was within a week, two weeks, the same people who had been laughing at us would sign up for us. They would use us for 90% of the traffic that they couldn’t monetize.
So that’s how we got the bulk of our traffic. We were really developer friendly and we paid out at a much cheaper rate than Google. Google, one of the things that no one talks about is they have a really high threshold before they pay you out. For most of these developers, it would take them a really long time, if not forever, to get to that. So they would never really see a check even though they were running Google.
Andrew: What was the payout threshold at the time?
David: $100.
Andrew: $100 and they still couldn’t even reach $100?
David: Yeah.
Andrew: And these are Facebook app makers?
David: These are Facebook app makers.
Andrew: Okay.
David: And certain developers who are moonlighting and building apps on their own.
Andrew: So you get to $3.5 billion ad impressions. Is it all word of mouth? What else are you doing to lure people in?
David: It was all word of mouth. Scott is a fantastic promoter. So he would go out and blog about things and give different talks. Most of the time that’s kind of when I learned about through Scott kind of controversial marketing. He would say something incredibly controversial and everyone would get their panties in a twist and then–
Andrew: Do you have an example of how he got people’s panties in a twist?
David: Yeah. The first one was the CPM. This was a time when people were talking about $40, $50 CPM. He goes out and says, “I will pay you $0.15 CPMs.” You could hear the laughs in the audience. People were laughing and mocking. And people would laugh about it when they would write it up. So he would do things like that over and over again.
Andrew: What else did he do like that?
David: He was right.
Andrew: I would like to get people’s panties in–I’m too nice a guy. It’s true.
David: Yeah.
Andrew: What else did he do?
David: You’re going to have Scott on, so I’ll let Scott tell you.
Andrew: All right. I’ll ask him.
David: But he was great at that. We got a lot of people like that. Then developers told other developers.
Andrew: You know what else seems to get attention? I did research on him this morning and then I had to stop and do research on you–apparently declaring something is dead is the way to get attention, especially something everyone loves. I’m going to right now declare Skype dead because everyone is moving on to iChat with the iPhone. Take that, people. Go blog that and be pissed.
David: Yeah. But the trick is that he would actually believe it.
Andrew: So somewhere in the middle there, Facebook changed their whole system, right? What was the change?
David: So we thought at some point that Facebook was going to continue to become more open because the app thing was them taking their first step of being more open. And so what would happen pretty quickly was that we saw them having a lot of grey areas in their terms of services, cracking down on a bunch of developers early on and making it harder and harder, burying those apps within the Facebook interface.
At first they were really prominent and all of a sudden everyone’s traffic starts to decline. They kept doing this step after step. Again, we didn’t think we were going to be an app ad network at the time. So we started to diversify, had a bunch of regular publishers as well and at some point we decided to sell the ad network and we sold it to a company called Adknowledge, which is a very large ad network based in the US and sold that and then took the money to help fund the rest of Lookery. We were out of the ad network business at that point because we saw pretty quickly what Facebook, what path they were heading down.
Andrew: Why didn’t you guys–I talked yesterday to an entrepreneur who sold SuperRewards to Adknowledge also.
David: Oh yeah.
Andrew: When that came in, why didn’t you guys jump on that?
David: The awards thing?
Andrew: Yeah, the idea that CPA-based advertising in exchange for giving people gold or weapons or moving up a level in a game.
David: We looked at that and we had some friends who were starting things in that area, but we were thinking about our original idea then, which is we wanted to be a place where publishers could put in data, still own the data, not put it into a blind exchange, not have someone like Google take it and use it for their own use, but put it in, have full transparency for the end user and allow that person to make money on that data.
So, an example would be like you have a great site targeted at startup folks. You could put a Lookery tag on your page and say, “Hey, this guy is really interested in startups because he’s watched all my videos.” We would take that piece of data and then we would sell it to an ad network somewhere. You own that data, right?
And then when we made money on that, we would give you a cut of that. That was a way for you to make money without putting more advertising on your site, without giving any private information about a user. So, for publishers, it was great. And then at any time you could say, “I want all my data back,” and it was your data. It was not Lookery’s data.
Andrew: That’s great. Let me just say this too. People are going to hear that I say that’s great and they’re going to say, “What about privacy?” Privacy is dead, people. Go blog that. It’s great to have a live audience here. It’s actually like interacting with somebody.
Plus, let me say this, two things that I love about this interview–you have a great history. I love talking to people who have real backgrounds, not who are just starting out. It gives you a lot to talk about and talk with confidence. And the second, for an internet entrepreneur, it’s very rare to have solid internet connection. Your connection has been wonderful. I feel like they can hear you. They’re on the other side of the room. Usually I strain. I feel like I can see you through a window. It’s perfect. What happened with that part of the business?
David: So we were too early with the data business. It was before anyone really knew–the publishers loved it. So it was easy to sign up publishers because they owned the data. They would make money without any more advertising.
What was hard was selling into ad networks because ad networks are mostly sales organizations that don’t have lots of technology behind them. I’m not talking about Google here and I’m not talking about a few startups in this area, but the big ones at the time weren’t easy to integrate with. We were all API-based. They would have to connect with us. So, getting into them was hard and so it was kind of a long sales cycle again.
After Lookery, this became an official category. These kinds of companies now are called DSPs, data service providers. There’s a whole slew of them making a ton of money in this area. It was a known kind of thing. It wasn’t at the time. In startups, too early is still wrong.
Andrew: Right. You spent seven years with Compete building up that business.
David: Yes.
Andrew: One of the things that I noticed about Scott’s bio is he doesn’t spend seven months at a company. That’s an exaggeration, but the guy is just all over the place. He’s just testing out ideas. If they pop, he blows them up. If they don’t, he seems to move on. If you guys would have stuck with this business, it was only three people, do you feel that you could have come out the other end doing as well as some of these other data service DSPs–what is it, data service providers?
David: Yes, data service providers. I definitely think we could have. So I think that is one of my regrets. I think we definitely could have come out of the other side. We were really capital efficient. Scott and I had histories at that point. Raising money if we needed it was pretty easy to do.
But Scott definitely has that view. He wants to be in and be out quick. He had no interest and he was explicit about this early on about raising institutional money, meaning VC money. And so we had to shut down that business. I think we definitely could have raised money. I think we could have probably sold that company for sure and that is a regret in my career.
Andrew: Yeah. He doesn’t seem to like institutional money. I did an interview with the founder of MyBlogLog. They credit him, Eric credits Scott with taking MyBlogLog to the next level. What most people know is MyBlogLog is his idea, but he also says he wanted to sell to Yahoo instead of blowing it up because he didn’t want institutional money.
David: Yeah.
Andrew: How did that conversation happen where you decide to close? Now, in this case, you might have made the wrong decision. In many cases, it’s the right decision. But it’s a tough conversation to have. I’ve talked to more entrepreneurs who’ve hung on too long than entrepreneurs who say, “I should have hung on a little bit longer.” How do you have that conversation? I’m dying to know that.
David: It’s tough because I think this is one piece of advice that I talk to a lot of folks about now, which is one of the biggest risk in startup land is a hidden risk that I call alignment risk. It’s the risk that you never learn until the last minute. This is when you’ve gotten your startup to a certain point and someone wants to buy it or you need to raise money, those moments of truth, that’s when you have the real conversation with your cofounder, with your board to see if you’re really aligned.
No matter how many conversations you have about this up front–and most entrepreneurs don’t have it at all, they focus on the other risk, technical risk, which is very low on the internet right now, marketing risk. Can we get enough people? Can we build a channel? Can we build an audience? Then the last risk, operational risk. Those three risks, people spent all their time thinking about.
Once it actually takes off, can we actually build this as a business? But I do think it’s this fourth risk, alignment risk, that is the most dangerous because that’s when you find out when an offer is on the table to buy your company is the moment you find out if your board, if your cofounder is really willing to sell at that price, right?
That was the conversation that we had. It was at the moment, at the end, right before the end and it was a hard, difficult, conversation because like I said, it wasn’t a case where we couldn’t raise money, where we couldn’t hang on to it. But when you’re equal partner doesn’t want to do it, there’s not much you can do. At the time, I decided to leave that business before it had imploded officially.
Andrew: And you wanted to stay on. You had this conversation where he said, “I don’t think it makes sense for us to continue. It’s not the kind of situation I like to be in. If it doesn’t have momentum, it’s not for me.” You said, “I think we can get moment here.”
David: Yeah. I think we can get momentum. I think we can raise money, for sure. That was the conversation. It was really around, “Should we raise money? Should we not raise money?”
Andrew: I see.
David: The rest is easy.
Andrew: Why did you take it on yourself?
David: Good question. I think about that a lot. Maybe I should have at the time, but I was ready to work on my next thing. I wanted to run my next business and I had been a serial CTO for a long time and I was really feeling ready to run my own business. So, I had a couple ideas in my head and all of us startup guys had some level of ADD and so I was ready to move on to the next idea.
Andrew: The next idea was Ghostery. How did that turn out?
David: Ghostery was my pet project.
Andrew: What was Ghostery and how did it turn out? And then I want to get to Performable.
David: Sure. So Ghostery was something that I started while I was still at Lookery. It was my night and weekend project. Basically it was a thing that I didn’t think anyone would ever care about. It was a browser plugin that you installed online on Firefox at the time. And when you would visit a site, it would tell you what third party things were on the site, meaning ad networks, web analytic providers, widgets.
Andrew: DSPs because privacy is dead. I see. Okay. So first you plant it and then you say, “Hey, guys, I’ve got the solution for it.”
David: Yeah. Lookery was the number one thing, the first thing that we ever detected, that I ever detected. So I created this thing. I didn’t think anyone would care. I sent it over to Scott. Scott used it for a little while and then I kept sending it to friends. Then it was one of these things that unlike my past businesses which were kind of like pushing a boulder up a very steep hill, it had a life of its own.
I really didn’t do much with it. All of a sudden people were blogging about it. I didn’t promote it. I’m usually marketing whatever I’m doing. I wasn’t really promoting it. I talked a little bit about it on my blog. All of a sudden I look up and a million people are running it, then two million people are running it. At first I had no idea. Then all of a sudden I’m getting emails every day.
Andrew: Every day from Scott saying, “Hey, can I get in this new business with you?”
David: More from like grandmothers in the Midwest, like, “Oh, I love Ghostery. I wish it could block these things too. I wish it could do this. I wish it detected that.” I was kind of drowning in emails because this was my nighttime project and kind of user feedback. So, I kept adding features. I added the ability to block things selectively. I want to block this one thing or these five things. And then it just kept going. In the back of my head, I kept going, “It’s just a browser plugin. There’s not really a business there.”
I really didn’t think of it as a business. I’m not sure why because I had such traction going with it without me doing anything. So, I just kept doing it for a while, all the while thinking, “What am I going to do for my next business?” That’s when I had started to plan Performable with my cofounders. Still Ghostery is growing and growing and growing.
And then I had a few offers to buy Ghostery. Two of the offers were from companies that I thought were the exact type of companies that Ghostery users would not want to be associated with. So, I turned those down pretty quickly. Then one was from a company that wanted to do something in the space whose kind of ethics aligned with the Ghostery community.
To me, it always felt like Ghostery was the community’s. There was this huge community that was using it that loved it. It was very little to do about me. But I had my name all over it, so I didn’t want to sell it to just anyone. I wanted to be very careful about it. I really didn’t need–everyone needs cash, but I really didn’t need the cash at the moment. So, I didn’t really care of it just sat.
But this company came along called Better Advertising based in New York and they’re trying to reform the advertising world. And a bunch of ex-privacy folks had come out and had started to work on this company. These were privacy and kind of legislative people working on this new company.
Andrew: So, you sold this recently?
David: I sold it to them in November of last year.
Andrew: What did you sell for?
David: It’s undisclosed.
Andrew: I’ve got to like blank out my face so that it gives the expression that the other person goes, “I’m expected to do it. I’ll go along with it.” I haven’t yet mastered it. It’s kind of hard on camera. Car salesmen are good. They go, “Here’s the price. Follow me to the back,” and then they keep walking and they go, “All right. I better follow him to the back.” Before we get to the last company–
David: That was part of the deal, that it was undisclosed. But I was very happy and it was almost 99% cash.
Andrew: Wow. You’re impressing Christina over here. I’m going to keep interacting with the live audience. The chat board is dead. Sorry Jordy, sorry App Rabbit. Mike B, you entertained me for a long time. I’ve moved on, my friend. Before I get to the current company, I just want to ask about the perils of institutional investors. Can you give me one experience without mentioning the name of the company because I might want to have him on as a guest in the future?
David: Yeah. So, before starting Compete, I had my share of bad institutional investor experience. Most of them were the same. They were folks who would come in, investors, into board meetings who would have no context in what you were doing and would demand that you start to do x. “This is what you need to do. You’re an idiot of you don’t do it. Why aren’t we doing this? This is where the market is going.” And of course we would do x. They would come in the next board meeting and say, “Why are you doing x? What’s wrong with you? You’re a complete idiot. Why would you do x?”
Andrew: Can you make it more concrete. Give me an example maybe from something that you did, again, without mentioning the name of the company. But what did they say to do and then they said, “Why are you doing it?”
David: It’s hard without naming the company, but a lot of it was kind of product-driven. So, “We think you should build this type of product because everyone has this type of shopping experience.” I’m starting to give away the company. But, “Everyone has this product. Why aren’t you doing this? The market is moving in that direction. You’re doing this business over here which no one really understands yet and I don’t know why you’re doing it. Why don’t you do both of these things, see which one works.”
The same advice that any of them would tell you not to do, focus on one thing, “Do both of them, let’s see which one works.” Then a board meeting later, they’d say, “Why aren’t you focused? Why aren’t you doing the one product? We always believed from day one that it was this solution. I don’t understand why you’re doing this product. Why did we waste all this money on this?”
And then in the early days–and you’ve probably heard this from a lot of entrepreneurs–it was really around advertising. So, “You should go and spend this much money with Yahoo and buy these kinds of ads.” It quickly becomes, “Why would you ever spend your money that quickly on advertising? You’re crazy.”
And on the technology side, I would hear all the time like, “You can’t build a business unless you buy Sun hardware and Oracle,” and these expensive things which were multimillion dollar commitments. Of course, every one of those bit me in the ass later on. But why would I spend that kind of money?
Andrew: I remember there was one company–I’m going to let you go in a minute because I know you’ve got to go back to work–but there was one company, I went in their office one day. They were in the email business all of a sudden. I go in the next day, they’re in the B2B because business to consumer is dead. Now they’re in business to business. That’s where their investors told them to go, so they go there. Next day I come in, they’re in the text-based business. They’re doing text email, text-based whatever because now mobile is the future.
David: Yeah.
Andrew: I guess that’s where it comes from. I’ve got them looking over my shoulder. If you guys get on camera, I might have to pay SAG fees for you and I don’t want that. This is a low budget operation, my friend. All right. Performable–the idea is easy to create quick landing pages, easy to switch them out. I thought Google had a solution for this. Why do people need Performable?
David: Google doesn’t have a solution for this as far as I know. The reason that we created Performable, the reason people need Performable is again, going back to that customer that I’ve always provided services to, that CMO, that business owner. To them, creating a webpage, creating a microsite, doing something custom for someone who comes to their website is incredibly hard, not because of technical issues behind it, but because of logistical issues.
We saw this all the time at Compete. We’d go in and say, “We need to make this one change. You’re driving all this traffic to this site. And the CMO would say, “I hear you. I love it. I can’t,” over and over. I’d hear this every time.
I’d say, “Why can’t you?” “Well, we didn’t create this website. I don’t know how we access this website. I wanted to create it internally, but my internal IT folks wouldn’t do it, so I hired an agency and I paid them a gazillion dollars to build this for us, but the agency won’t be back for six months, so we can’t do anything. In the meantime, I’ll keep driving $50 million worth of advertising to this broken website.” This would go on and on and on.
I would see this at the low end with small business owners, where I would say, “You really need to fix up this page or that and just like, “Well, I have this guy that I per hour or developer but he won’t call me back. I can’t get him to do anything even though I’m paying him or I don’t know how to do it.
This was the problem that we wanted to solve. Really, at the end of the day putting marketing as close to the customer as possible. The product people, the product owners as close as they could to customers without having to go through IT people, developers, designers, just have that kind of one to one connection.
Andrew: And you’re creating brand new landing pages. From what I saw–by the way, your cofounder happened to be here in Buenos Aires, Craig. I met him here at a party at Morgan’s house having a beer, talking about it. He gave me a free account on your system. I don’t know if you know it, but I’ve got a free account. Thank you.
David: Okay.
Andrew: What I saw as I went through it is it’s pretty templated, right? I can’t go in and make it look exactly like my site. You’ve created the basic template that I have to stick within, right?
David: Actually, that’s the type of account that we let you into. What we decided early on was we have to play to the edges. We with our alpha version, we had kind of a thing that was WYSIWYG, which you could create pages with and kind of make them look pretty good, but what we found out is that non-design people are pretty bad at design and it was pretty quickly they could make it look like crap.
So we decided to go to the edges. We created the interface that you saw, which is highly templated and basically you just fill out a form, like Google AdWords. You fill out a form, headline, subheadline. You hit submit. You create these pages. You don’t need to know anything about how they were created. We automatically test them for you.
And then we have a different interface which you don’t have access to which is built for CSS, JavaScript and full HTML control, 100%. We have our own markup language that lets a designer within an organization or set of designers build a bunch of templates that then their marketing folks can control 100%. So once the official corporate templates are in, now I can create 1,000 pages, 1,000 tests based on those templates.
Andrew: I see. Okay. All right. First of all, I’m not taking that badly because I wouldn’t be able to do anything with the CSS or with your own markup language. It’s a good thing you guys kept it simple for me. The idea is what I’m supposed to do is say, “Look, let’s take some of the ads that I’m spending with Google, some of the ads I’m buying everywhere else, direct them towards this landing page that’s on your site that I created in a second with your system,” I keep using the name when it’s new, but with Performable. You guys will just keep testing everything.
David: Yes.
Andrew: The colors, some text and then you say, “Boom, Andrew. This is the layout that you need. We’re just going to keep running that,” and then I guess test after that a little bit.
David: We’ll do that, which is the very high-level of just like, “This is the version that’s working overall.” But I think that is kind of a flawed thing in most testing tools because the truth is that there’s never one winner. That is really where we excel. We will tell you this is working for your Twitter followers, but this version over here is working better for first-time users.
See this version over here, it’s kicking ass on people who come in through Google. You start to know which ones are working for which parts of your audience and then you can control that within our interface and say people who come through there through this channel, they see this version. They see that version, again, with no technical help.
Andrew: That’s what you meant earlier. I had a note to ask you about that. You said, “Most landing pages don’t have any contact, don’t have any sense of where the person is coming from. All they’re doing is just testing. I see what you mean.”
David: Yeah.
Andrew: What else do I want to find out about this? What about this–who comes up with the language and colors that are being tested? Is there a whole other system? Who does that?
David: Two ways that it happens today–one is the marketer itself comes up with it with the language and may play with some of the colors if they want to, that’s optional. But we also have what we call the Performable Army. And it is a bunch of UX, UI and copywriter folks who we’re starting to connect with those marketers, through let’s say a marketplace where they can connect with those folks and say, “I want to connect with Andrew because Andrew is the baddest ass email template designer in the universe.” And how do we know this? Look at all his stats within the Performable system. We have all the stuff that he’s created within Performable for other clients. We’ve seen how those things have performed.
Andrew: And they will create new copy from scratch for me?
David: Yes.
Andrew: How much does that cost? That’s a pretty expensive thing to get.
David: Well, right now that’s worked out between the designers and the copywriters in that case and the custom marketer. So they go off and they can discuss that. But what we’re working on now is kind of a middle hybrid solution where we’ll have packages around that where we can have another low cost kind of price point.
Andrew: I see. So if I’m in real estate. I’ve got a template that works for me where I plug a couple of things–this is great. I love it. What’s the funding on this business?
David: We raised a series A, $3 million, in October of last year.
Andrew: Wow.
David: So, 2009.
Andrew: All right. I love this business. I’m so glad that I got to meet you. This was a fun interview for me. Christina and Steve will be back tomorrow and the next day, true? No. They’ve got to–
Steve: Maybe.
Christina: Maybe.
Andrew: There might be a yerba mate in it for you, the local drink here. They’re into it. David, really, thank you for doing this interview, especially last minute. I asked you for a few extra minutes so I could do some research on you. I don’t like to come into these interviews blind and you found a way. I know you had another appointment. You found a way to make that time for me. So thank you twice for coming here, for doing this.
Let me also say seriously, again, thank you Scott. If you’re an entrepreneur–I’m kidding around sometimes in this interview, I want to be very clear–if you’re a young entrepreneur or any entrepreneur working on a business and Scott calls you, that’s one of the best phone calls you ever can take. Listen to my interview with Eric, the founder of MyBlogLog. Scott calls him up, everything changes. Everyone is starting to pay attention to him. So, let’s thank him.
Let’s thank you. How can people connect with you personally or connect we you beyond this interview?
David: They can connect with my website, DavidCancel.com. And all my information is there. I’d love to hear from folks and thank you for taking the time. It was great talking to you.
Andrew: Thank you. And thank you–well, I thanked everybody. I’m going to thank you again. Thank you, David.
David: All right. Take care.
Andrew: Bye.
