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Hi, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart and a place where you come to listen to entrepreneurs tell you how they built their businesses. How does an entrepreneur generate publicity for his company? Joining me today is David Hauser. He’s the co-founder of Grasshopper, a company that’s been featured in Entrepreneur Magazine, Business Week, CNN, Inc. and other well-known media outlets. I invited David here to find out how he does it. Grasshopper, of course, is a virtual phone system that you’ve seen me advertise here on Mixergy. It allows you to add unlimited extensions, get your calls anywhere and have your voicemail transcribed and so on and so much more. David, welcome to Mixergy.
David: Thanks, for having me Andrew. And we appreciate your support for the many years that we’ve known you.
Andrew: You bet. I just realized you might actually even be sponsoring this episode. We may have to pull that out to make . . . I don’t know. The point is that I’ve known you for a while. I’ve seen you do publicity really, really well. People talk about you like they don’t usually talk about phone systems, and I wanted to find out how you did it. So, let me ask you this. Do you have an example of one media hit that you had that we can talk about how you got that? And then we’ll spend time talking in general.
David: Yeah, absolutely. I think the example I’m going to talk about is really key, because it took a long time and a relationship had to be built over that period. So, we had wanted to be in the AP for a long time. Clearly for a good reason. Right? One article gets distributed to hundreds of publications. You get all the SEO benefit. You get all of that stuff from getting one article written. So, we had worked on this for a while. There happens to only be one reporter at the AP that works on small business. So, we had obviously tried to reach out to him. Wasn’t always successful. We finally made a connection with him, because we sent a thank you card, which is a very simple thank you card that said we appreciated the article you wrote about X, here’s Y. That was it for the business card and that started the relationship. From there about a year later, after he had featured three of our customers, because we provided them as sources; he then wrote an article about us, and that had huge distribution, big impact to us, but like really showed that takes a long time, over a year. Takes a lot of using your customers as resources for you and not getting yourself mentioned. So helping your customer in that way and helping the reporter. And then just doing nice things, like reaching out to someone, sending a thank you card.
Andrew: Okay. So that’s a lot of time, it’s a lot of relationship building. And at the end of it how many new customers did Grasshopper get?
David: So, it’s an interesting topic, because I don’t like to measure that necessarily. I think the thing about PR is it’s hard to measure the number of eyeballs that see something, or how many exact number of orders we get. My COO asked me this the other day, “How do I justify how much you guys spend on PR? We have two full-time people. We have a budget for doing promotional stuff. We have all sorts of things. How do I justify it? How many orders do you get?” I’m like, “I don’t know, but I know good things happen from it.” That’s always been my answer. I just deal with good things happen from it and it’s very hard to measure. So, I don’t know if we got one order or a hundred or zero from the AP article. But I know that it built up to where we are today, where we get an article in Inc. Magazine or something else.
Andrew: All right, I’m going to come back later and find out how you think someone who doesn’t have two full-time people and an experienced PR, CEO, how they could get publicity. But for now, I understand that you may not be getting customers, but you did say that good things come from it. Can you give me examples of some of the good things that come from getting PR?
David: Yeah, absolutely. So, we’ve gotten partnerships because of it. We’ve gotten relationships because of it. But most recently I got an email forwarded to me from one of the people that does the PR for us now saying, “Look, so we’re doing this thing called BarCamp Tour where we’re going to BarCamps all over the place. We got a few other sponsors working with us.” It wasn’t a huge budget. It’s not a ton of money. But we were really passionate about it, so we got it started. And in doing so we were working with one his designers from Wufoo, who happens to be a really popular designer. He has a really popular blog, so and he mentioned us on his blog very recently.
From that we got multiple orders. I’d say last time I looked, it was like 15 or 20 orders and hundreds of views easily from that one link. It wasn’t about us. It just said, “Grasshopper by the way did something like this.” Not about what we do or anything. I think those are the things that come from the relationships you build over time, and that’s really hard to measure. Do I know exactly why he mentioned it? No, but I have a feeling that it’s because it was at the top of his mind as a company he’d seen, worked with. All that came together for that.
Andrew: So, when I think of PR, I usually think of what I listed in the beginning of this program, CNN, Business Week and paper, television media. You seem to be including bar camp in there. Bar camp the self-organizing event for tech start-ups.
Andrew: Is that right?
David: Yeah, so I . . .
Andrew: What is PR then today?
David: To me, PR is your target customer seeing you everywhere they are. So, that includes on Twitter, on Facebook, on blogs, on podcasts, in published media print, blogs, all those different things and in multiple contexts. It’s not always about the product. I think it’s really important that there be other things. For us we’ve used the culture. The other things that we do and talked a lot about that. So, I look at . . . and I’ve always directed a team that works on this. A great day for me in PR is we’re on CNN or whatever major wheel . . . like “real” publication that people traditionally think of. But then also in the same day, Jason from 37signals says he’s using our system for his office hours. The FreshBooks guys are having a meeting in our office or doing a workshop here. All of those things are our target customer seeing us in all the places they are. And not just about what we do, but that we’re an interesting company.
Andrew: So, FreshBooks, by the way, uses your office for what?
David: So, they came in . . . Mike McDermott emailed me and said, “We want to do a workshop in Boston,” a year and a half ago or so, and said, “Do you know a space?” I’m like, ““Yeah, I know where you can do it. You can do it at the office. We have a training center that holds 40 people. You’re free to use the space. Just pay for the food and you order if from wherever you want. I don’t care.” So, like that. So, then what happens? They post it on their blog. It’s on their Twitter stream. It’s all those things start coming together. That’s PR.
Andrew: See I never would imagine that that’s PR, and you’re absolutely right and that is PR. And when I hear that Twilio, for example, is allowing anyone who needs to use office space to come in and work from there, that’s more significant to me and much more credible to me than even reading about them on CNN, because it feels like, oh these guys really care about developers. That’s what I think.
David: Absolutely. So, we just opened up our office space, and we have entrepreneurs here that are using the space for free. So, we’re in the suburbs of Boston. There are lots of incubators and free space in Boston. In the suburb, we’re 10 miles out of Boston. There’s nothing. So, we said, “Well, there are people out here,” because we’ve been out here. So, how do we really provide that to them? And we just opened our office up for that and it’s been great to have them here in the office.
Andrew: All right. How do you discover the topics that you’re going to talk about? If I were in your shoes and sitting down with my team thinking about how can we get PR for Grasshopper, I’d say, “Maybe we can talk about the big trends in phone systems. Maybe we can talk about the big trends in offices letting their employees use cell phones and talk more specifically about the product.” But you guys talk about culture and you guys talk about entrepreneurship, and the product is maybe third.
Andrew: How did you pick what you would talk about, and why not the product?
David: Yeah, so we tried all of those things. We spent a lot of time talking about the product, and we found it very hard to get press, because you have an instant “no” from the reporter. Like, “Ah, it’s not interesting right now. Don’t really care.” But when you can take pitches there, every company has these pitches. So, obviously, you mentioned some of the stuff that we do. We just talked about culture, things like that. The easiest possible pitches for other people to use is new entrepreneur doing something interesting. Any company that can do that . . . if you’re within [inaudible] two or three years even, you can say “new entrepreneur.”
Now age, another easy one. Young entrepreneur doing something. Old entrepreneur doing something. Retired entrepreneur. Recently fired entrepreneur. All of those things is what the press can easily say yes to, because it’s not about a specific industry that they have to care about. They can just say, “Oh, that sounds interesting.” So those are the types of pitches that we try to make [inaudible].
Andrew: The pitch about who you are and you happen to be creating a business.
Andrew: What about picking a topic generally? When you sat down and you said, “We’re going to help entrepreneurs,” or, “We’re going to be the company that is known for encouraging entrepreneurs,” is that the kind of thing that you sit down and say, “Well, there’s a big trend that we want to jump on?” Or is that something that you say, “What are we really passionate about?” Is it a cross between the two? How do find that topic?
David: So, for us, that’s our core purpose empowering entrepreneurs to succeed. So, that we can easily talk about. But when we take that as a pitch, we have to tweak that a lot. We have to say now how are we doing that specifically. So, we’ve done charity things. So, like how did we generate 25,000 hours of donations for a charity that’s about entrepreneurship and that becomes a story. So, we took a video that we created and two major companies wanted to use it. We said, “Okay, no problem. You can use it, if you make these donations.” So, our cost to make the video the first time was $20,000. We’ve now generated $45,000 in donations from companies just making a small tweak to it and using the video. So, that’s an easy story to take to the press, $20,000 turned into $45,000 for charity.
Andrew: I see. Okay. All right, I want to know how we can do it. Actually, before we get to us, let’s get to know you a little bit more. When you were trying to get the AP to write about you, you said, “We pitch them article . . .” No, actually the first thing you said was, “We sent them a thank you card.” What was that about? A thank you card about what?
David: A thank you card about nothing more than saying we appreciated an article you wrote, and it said nothing about . . .
Andrew: Was it related to you at all?
David: The only thing it had . . . I mean it was a Grasshopper thank you note, so the front had a grasshopper on it and the back has our URL. There was a business card in there, but it did not say anything else. Not about what we do. Not I want you to write about me. Nothing.
Andrew: Was the article about you guys in any way?
Andrew: That you thanked them for? No. What was the article about do you remember?
David: It just happened to be an article that we thought was interesting.
Andrew: Got you. So, it was just, “Hey, thanks, for writing a great article.”
David: Yeah, and we do this all the time. Think about this from the reporter’s perspective. They’re never getting this stuff in the mail. First of all, no one’s thanking them for writing anything in person, in the mail, on phone. It doesn’t matter. But they’re definitely not getting it in the mail. So, to get a thank you note that is not asking for anything is just a way to start building your relationship, and it has to be genuine. You can’t just go write a hundred thank you notes a day and kind of be done with it. It was a genuine, “We enjoyed the article,” and that was the start of our relationship. They then reached out to us and said, “I’m curious. What do you guys do?”
Andrew: Oh, really?
David: We’ll tell you. “Hey, I’m not writing about that right now, but I do need entrepreneur in Texas who’s doing this.” “Well, hey, we happen to have hundreds of them. We’ll be happy to provide you with some.”
Andrew: I see. Okay. So first you reach out and just build a relationship. Then you make introductions for them, help them write their articles, and then what?
David: And then we wait until we have something that’s very specific for them that would make sense and we can pitch it. Now that we’ve built this relationship, they’ll at least listen to our pitch. And they might [inaudible] or they come back to us. In this case, the reporter came back to us and said, “I’d really love to write about you guys, because I’ve learned a lot about you. You helped me out. Now, I’d like to write about you guys.”
Andrew: I see. Okay. So, going back to what I asked earlier. What about someone who doesn’t have two full-time people and a CEO who knows . . .actually, you’re the CTO? You’re the CEO or the CTO?
David: I’m the CTO. I don’t really know why I have that title anymore, because I don’t do anything technical, but it works.
Andrew: So someone who doesn’t have a C-level person who’s as experienced with publicity with PR as you are. I shouldn’t even say publicity. It’s more about like it’s relationships. It’s more about speaking at conferences and as you said BarCamp . . .
Andrew: . . . than the publicity title might indicate. But for someone who doesn’t have that, what do they do? What do you recommend?
David: I’d say this is the founder’s job. The founder is the best person and the most passionate person. I would have done this myself. I just didn’t have the time to do it. I think the founder’s probably better at this than anyone else. Now, yes, obviously you can hire for it and I can talk about that. I would never hire a PR professional for it, and I can talk about who we hired and why. But the founder has created this. You could not find someone more passionate to talk about why the company is a success, why they’re passionate about this industry, any of those things. But you have to dedicate the time. This is not like an easy send three emails and be done. This is pick up the phone. This is build relationships. It takes time and it takes effort, but any founder can do this.
Andrew: So, what’s the first thing they do? Should they just follow the same path you did, which is say, “Whose articles do we like? Let’s send them a card with maybe our business card in it”? Is that the first step? Is there another first step?
David: I think the first step is reading and knowing the names of all the reporters, bloggers and people that would be interesting to your audience. You should know that in The Wall Street Journal there are three reporters that possibly write about small business and that one of those three only writes about technology.
Andrew: I see.
David: If you’re running a technology company, you should be reading that newspaper every day. Now, if blogs are more relevant . . . you should do this across all mediums. But find those people, know who they are. Even take a big tech blog like TechCrunch, there are reporters that focus on specific areas. It doesn’t make sense to reach out to Michael Arrington for certain stuff, where it does for other things. Right?
David: You better know what those people do. Follow them and then yes reach out. I believe there are three ways you can do that that are most effective. If you only can find an email address, that’s the last option fallback. Yes, email gets to people. You can reach out with a physical mail like a thank you card or the phone. Very few people get phone calls. So, if you can find a phone number for one of these people, I would call.
Andrew: Pick up the phone, call up, maybe not the person at TechCrunch. I can’t imagine they want phone calls, but . . .
David: , that’s probably not the best person to call.
Andrew: All right. But a card in the mail, I could see how that stands out. So that’s the first thing we do. We know who’s out there in our space, who’s covering the stories that our customers are reading. If we see something that we’re interested in, send them a thank you note, or send them a card or a phone call somehow to reach out. What’s next?
David: So, now that they kind of know who you are, I would always in the back of my mind have my three top pitches, because you don’t know. When you make that first phone call, they might say, “You know what? I actually have 10 minutes right now and I’m willing to talk, so tell me what you want to say.” It can’t be, “Grasshopper’s a virtual phone system that’s really great.” They’re like, “Don’t care. I’m done with the phone call.” If Grasshopper has the most amazing culture, because we do core values over the past five years. We have a Nintendo Wii [inaudible]. “Oh, and by the way, we love doing really weird stuff with the press, and we send out a bunch of chocolate covered grasshoppers.Oh and by the way . . .” Have those top three pitches ready to go, and you better be able to say them in like one sentence each.
Andrew: I see. Kind of like when you come to my website you see a bunch of headlines, and then you click on the one you want. You’re just throwing headlines at them and saying, “Which one do you want more of?”
David: Yeah, which one interests you today to help you do your job?
Andrew: I see.
David: And your job is really simple. You want to be on the front page or the front section or whatever it is, the most popular post. So, how can I help you do that? I can give you pitches that make sense for it.
Andrew: So, I was actually talking to Barbara Corcoran yesterday, and as I was growing up in New York, she’s one of those people who just dominated the headlines over and over and over again. And what she did was she found . . . shoot I just lost my question in the middle of the question. Whew, what is it about Barbara Corcoran? I’ll come back to that.
David: Too much excitement.
Andrew: What’s that?
David: Too much excitement all at once.
Andrew: You know what? I think it might be the hot light here that I’ve got right on me. I’m going to get a drink of water. Oh, I know what it was. Right. She became the go-to . . . she got into the press over and over for real estate, because she became the go-to person. Anytime a reporter wanted to find out what was going on in real estate or wanted to talk to someone in real estate, they called her knowing that they’d get to that person. How do you become that person? How do you become their go-to person?
David: Yeah, so that’s another really good point is this expert kind of task. You can pose yourself as an expert very easily. Start really small. Even in real estate, if I would start doing that today, I wouldn’t say I’m expert in real estate. I would say I’m an expert in commercial real estate in downtown New York, and start really small, because no one can dispute that. Like, “Oh, you’re definitely not.” Well, how do you know that? There’s no way to know. I just told you I am. Start really, really small and start building that up and you can build that extra profile. The great thing about so many industries is there is no expert. You can start placing yourself there, even at the smallest blocks and start building that over time. Again, it takes time, but start building that expert view and expert commentary. Again, it’s not about your company. It’s not about what you’re doing. It’s you having viewed it as interesting and then your name goes next to it.
Andrew: And then if I want to be the person they come to, if they need a contact in that space, how overt do I need to be? Do I call them up? Send them an email and say, “Hey, if you guys ever need a contact in the whatever my niche is, contact me and I’ll let you know. I’ll find them for you.””
David: The best way is to find the first in. The first time they ask someone else to be an expert, the first time they have a question that’s not answered, like if it’s a news thing or whatever, then you have an in to say, “By the way, you guys were talking about this, but didn’t have an expert. I’m happy to help.” The other thing is when reporters go and they look for experts, they’re looking for where else someone has been. So, that’s why I start with the smallest block, because they’re going to go and search and say, “Is there an expert in real estate in downtown Manhattan during these [inaudible]?” I’m like, “Well, my name came up three times and on three different blogs.” They don’t know what the blogs are. So, now next time they search [inaudible], it’s going to come up on CNN. Again, just time. It takes time.
Andrew: Ah, I see. Yeah, you know what? I even do that here. Before I do an interview with someone, I just go and see who said what about them before.
Andrew: And even if it’s a small blog, especially, if it’s a small blog, I give it more credibility because I assume that the person who’s got the small blog is working his tail off and he’s like specializing in that little part of the world that he cares so much about, that he doesn’t care that he doesn’t have a huge audience.
David: Oh, yeah, absolutely.
Andrew: Okay. You said earlier that we should talk about who to hire. So, if it’s not a PR person, who’s a good person to hire?
David: All right. So I have an interesting thing, because we have two people I said. The first person we hired had never done PR in his life before. The second person we hired had come from a PR agency. So, my [inaudible] is very simple. I don’t think that if you are hiring for this position for the first time, you can do it the best way you can with someone who has PR experience, unless they really did not like the industry all that much, because there are just ingrained habits that they want to stick with. They’ve been trained on which part of that is sending press releases and doing all of this stuff they’ve just been trained on, been taught for years as right. So, this person we hired first, Jonathan, had never heard of a press release, had not used Twitter, was not involved in anything that we were doing. He was a contract recruiter. Young guy out of college, sales job. Knew how to pick up the phone, how to make a connection and build a relationship.
So I think that’s what you hire for. It’s the sales ability of building relationships. Knowing that you get “no” on the phone. Being able to talk to someone in person, being able to go to a conference. And that’s why when we hired the second person, Steph. Could definitely pick up the phone and ask a reporter and build a relationship. Could stand in a room and talk to 20 different people easily. That’s what we hired for.
Andrew: Jonathan is your PR guy?
Andrew: I didn’t know that. I said, what you guys give him a title that’s like . . .
David: Ambassador of Buzz.
Andrew: Ambassador of Buzz. For some reason I didn’t think of that as a PR thing. I thought he was just like, “You guys need anything? I’m here to help?” You know?
David: That’s their job. Both of them are here to help. They spend a lot of time talking to customers, just connecting our customers with each other, obviously talking to the press. All sorts of other things, but they also travel a lot. They split the BarCamps up, so that they go to those. They go to conferences, all that stuff. Because again, to me like it’s all together. It’s PR and buzz together. It’s all of those things. So, when Jonathan or Stephanie is having a conversation with Mike from FreshBooks, it’s not because we want to get an article. But we want to build a relationship with a great brand or Shopify, one of your sponsors, people like that. Those types of things make a lot of sense.
Andrew: Jonathan’s the guy who whenever I do something good he tweets it out and let’s people know. All right.
David: And I think Jonathan was involved in talking to you way back, when we did the sponsorship.
Andrew: Yeah. I don’t even know how. How did I connect with him? Oh, you guys were in some book I think. He might have reached out to me or I reached out to you, but I knew you guys because you were in some book. I think it was called “Upstarts” or something.
David: Yeah, with Donna Fenn.
Andrew: So I read your story back in Argentina, and from that I somehow connected. No, maybe even in L.A. and I did an interview. Anyway, I feel like I’ve known you guys for a long time. Jonathan, I think was the first guy who made the introduction.
Andrew: So, it’s interesting, because I do kind of see you guys everywhere. So, we talked about press. We touched on BarCamps and on other kinds of publicity. Tell me what else there is, BarCamp, inviting people to your office. What else is there? If I can’t dominate CNN, maybe I could dominate some other area first.
David: Yeah, so, we also believe a lot in small conferences and going to them, and not necessarily being sponsors all the time, but definitely participating. I think the biggest thing today is participation in a community. Not just throwing your name or logo on something. So, we go to small conferences. If it’s me speaking somewhere, if it’s Jonathan or Stephanie going and participating. There’s a few that we really love and we’ve always gone to, and that’s where the whole BarCamp thing came from, which was how do we talk to local communities in that way and participate and give something back.
Then there’s obviously Twitter and Facebook. I’m not even on Facebook, so I’m not going to talk about what we do necessarily on Facebook. I am on Twitter and it’s been very helpful for us and engaging a certain group of our community. Not all of our customers are on Twitter. We’re not that type of company, like a social media company with customers like that, but it’s been great for us there for the customers we have connected with.
Andrew: Do you have an example of what’s come to you guys as a result of Twitter?
David: Yeah, absolutely. So, even with Chargify too, we’ve seen a lot of results with Twitter. But for me personally, I use it when I travel all the time to connect with other entrepreneurs, most of which are never even customers. Maybe they become a customer later, maybe they don’t. I don’t know. But I’m happy to say, “Hey, I’m in San Francisco for the next two days. If you want to grab coffee with me, just let me know.” If I get a few responses, hopefully a few of them I can have coffee with, that is the best use of Twitter ever. I don’t care about tweeting out stuff and how many people follow me or anything else. But if I can have two or three coffees when I arrive in San Francisco with interesting entrepreneurs doing something, that’s the best [inaudible] of Twitter.
Andrew: So, here’s something that I don’t understand. I’ve seen you say that and I know you do that and we’ll talk about other things that you do that are similar to that. But it takes up a lot of time to do that, to sit down and have an hour-long coffee with someone, and then maybe another hour-long coffee with someone else. You could be spending time at your desk planning out big media pushes. You could be sitting at your desk planning out new technology initiatives, new companies like Chargify. Why is it that that one conversation with one person or maybe five people is worth as much as an hour of thought on a new business or a new product in the business?
David: So, for me it’s two things. One is our core purpose is empowering entrepreneurs to succeed and we have to live that every day. So, if I’m not doing that, I think that we’re not living our core purpose. We serve that community. The other thing is I never know what’s going to happen from that conversation. I don’t know if that person is going to be a customer later. I don’t know if they’re going to make a connection that’s the biggest partnership connection we’ve ever made. I have no idea.
But I know that if I can provide them with some value today, hopefully that comes back to me. I think the only relationships that really last are those that you have some sort of in-person meeting. I can talk to you on email and Twitter forever. It’s hard to build a relationship that way. I can have coffee with you for one hour, and I will remember who you are and you will remember who I am much longer.
Andrew: That’s true. So, then in order to be able to do that, do you think about your company as a collection of people who handle every responsibility, so that’s it’s all handled? All you have to do is go out and meet people, and think about what next needs to be handled? Is that the way you structure things to enable you to go out for coffee with strangers?
David: Yeah. So, obviously, today I have a little more flexibility in my time than when I was in the startup stage; where I was literally programming things and doing stuff like that. I had some flexibility in that, but I think anyone can do this and it scales too. So, what we do are these customer dinners, which is the same exact idea, but it scales now to 15, 20, 30 people. Because say like when I went to Miami, I said, “Okay, well, I’m going to be here for only two days. I know we have a bunch of customers here. I can’t meet all of them. So, why don’t we invite all of them to a dinner?” The cost is marginal. We didn’t have a full sit down dinner with appetizers and drinks. The cost was maybe a few hundred dollars. My flight was already paid for, because I was at a conference. My hotel was already paid for, because I was at a conference. But now I’ve met 15 or 20 of our customers in person.
They’re never going to cancel. Never going to move to someone else. They’re going to know that they have a relationship with someone. So, if I can do that. But yeah I have some flexibility in my time personally now. That is the benefit of having people working.
Andrew: How do you get to that place where you are . . . because I know a lot of entrepreneurs who have lots of people working for them and because of that, they end up spending even more time on their business. I don’t want to go too far away from PR, but . . .
Andrew: It’s important to understand how you get the time to do this.
David: So, I’d say I took a [inaudible] transition period, where I just hired better and better executive team to handle more and understood that me personally as an entrepreneur, I had to give up some of that responsibility of people reporting to me. I’m not a great coach. I had to realize some of those things, and realize that what I’m best at is building new companies and talking to entrepreneurs. If I can do that more during the day, I’m going to be more successful for the company.
Andrew: So, talking to more entrepreneurs. How many entrepreneurs would you say you’ve had conversations with . . . what is today, Thursday, this week?
David: This week. So, this week I’ve had five phone calls with entrepreneurs. I had a phone call 30 minutes before our interview. So, that would be kind of a typical week I’d say, and that’s just random people. Two of them I met at conferences. Two people I know a little bit better. One is at a company I mentor. So that’s pretty typical. But then also last Saturday, I spoke at a conference, so I probably connected with 30 or 40 people even just quickly. Yeah, and that just happened to be out . . . I was driving back from New York. I was going to this conference, like that was to fit all of that in. Because if I can connect with that many people on a Saturday, that’s great.
Andrew: So, do you have somebody, maybe Jonathan, in the office say, “Here are the real influencers or the people with the big audiences or big Twitter following, these are the people we should invite out to dinner.”
Andrew: No. You just whoever wants to come out to dinner, you do it?
David: Absolutely. Yeah, so we don’t have any crazy technique. It’s like we take our customer lists and say, “Is your address in Miami [inaudible] close by,” and we send all of you an email.
Andrew: Oh, really?
Andrew: That’s it. “If you’re customer anywhere near Miami and I happen to be in Miami, let’s get together.”
Andrew: So, what does that cost you roughly? I don’t mean to get too deep into the tactics and the dollars and such. But if you were to put together a dinner for 20 people, appetizers and drinks, how much are you guys out?
David: A few hundred bucks at the most.
Andrew: Like $300, $400?
David: So, let’s say the exact example in Miami. So, that cost us I’d say $350, and we had across the whole time maybe 15 or 20 people show up.
Andrew: Fifteen, twenty people. All right.
David: Yeah. So, there’s like one and a . . . like one drink. Some people didn’t have any drinks. There were just appetizers on the table. It was pretty easy. And that . . .
Andrew: Can you say what one new customer is worth to you, just to put that in perspective?
David: What one new customer is?
David: Yeah, so a new customer lifetime value is well over $500.
Andrew: Got you, okay. All right and I know that beyond that dinner, I happened not to go to that dinner. I think you’re talking about SuperConf. Right?
Andrew: Right. So, I happened not to come to that dinner, but . . .
David: Oh, so you missed out?
Andrew: I missed out. The only reason I wanted to go is I know you and I said, “Why should I go in there just to eat his food for free?” I’ll give him room to talk to the other 15 people. But the only reason I wanted to go was . . . and I don’t even know if I was invited, by the way. But I wanted to go and I said, “I’ve got to see how David does this, so that I can copy some ideas and do it myself.” I didn’t get to do it. I ended up at a dinner. But what was interesting to me was how many people were talking about it. “Will you be there? Did you get a ticket before it closed out?”
Andrew: It was kind of . . . that to me is interesting. I liked that more than I like the best food in the world to just hear and to see how people put these dinners together.
David: Absolutely, and like even that example, people were talking about it, who didn’t go to the dinner and said, “Oh, did you go to the Grasshopper thing?” “No, I didn’t. I couldn’t,” whatever. I did one when I was in Las Vegas a few months ago and two people came. It happened to be a weird weekend. It was a holiday, whatever, so two people showed up. Neither of them were from Las Vegas. They happened to be in from L.A., so they’re like, “I want to go.” I’m like, “Okay, cool.” We had drinks. That cost me, I don’t know, $30. One of them was a customer for more than seven years, and he’s like, “I really appreciate that you bought me a drink.” I’m like, “You’ve been a customer for seven years. Don’t worry about the drink.” He said, “I really appreciate that you took the 20 minutes to talk to me.” I’m like, “Anytime.” So, it doesn’t have to be 15 or 20 people. It can easily work with a few.
Andrew: See that’s a concern that I would have. I would say, “What if I put this dinner together? What if I put it out that I’m going to have drinks with people and only two show up?” It’s reassuring to know that that’s okay.
David: Oh, it happens. We’re not all that popular and cool and it’s going to be all sold out and all this crap. Two people showed up. It was a great time. I learned a lot about both their businesses and I made a connection.
Andrew: All right. I want to do that more often actually. I definitely want to do that. I want to invite people into my office, because I see how well that works for Twilio. Let’s talk about BarCamps. What do you guys do for BarCamps? That’s a huge way to connect with real developers.
David: Yeah, absolutely. More and more I’m seeing more entrepreneurs, not just developers at BarCamps. So, we got introduced to BarCamps two years ago or two and a half ago, like our first real experience with it in Florida, where I was at a BarCamp after another conference. And I was like, I really like this. I really like how engaged the community is. Not just like, “Let me show up to a conference. Hear some people speak and leave.” It was like a really engaged community and I said, “How do we help this community?”
So, last year we said, “Well, what does a BarCamp really need?” And it was, “Well, it could use some money for coffee. It could use an after party.” These aren’t big dollar things. These are pretty reasonable things, but it makes a better conference.
So, we did that I think three times last year. People that we knew or had connections with, we spent between $500 and $1,000 at most on a BarCamp. We went, participated and found that the after party drinks worked really well for us. We said, “Well, okay, this is cool. We connected with a few communities. We’d like to do this more.” So, I was sitting in the office here and I said, “How do we do this more?” I said, “Well, next year let’s go on a tour,” and that’s where it started and the idea was really big at first. It’s like let’s get the big tour bus and we’re going to paint on the side of it and everything “BarCamp Tour.” It’s going to be like a rock star thing like everything. Right? That was a little bit overboard, but we went with the concept of the BarCamp Tour. We got a bunch of brands that we loved on board and said, “Here’s how much we’re each putting in. We don’t know exactly how this is all going to work, because we’ve never done it before. But if we’re all willing to put some money in and try this, I think it will be great.”
Andrew: And when you do that, BarCamp happens on the weekend. That means that Jonathan has to give up his weekends. Jonathan and Stephanie, right?
Andrew: Have to give up their weekends and then have to travel in order to go to all these BarCamps.
David: Oh, yeah.
David: And all of our partners do the same thing. They have someone who comes to the BarCamps. Now, we don’t all go to all of them, so we kind of break it up a little bit, but we try to, but yeah it’s a significant cost. We all said, “Here’s how much we’re putting for as a shared cost.” We all have to cover our own travel. So, in essence, I’d say it doubled our cost, when you include travel.
Andrew: Right. And so, I know that gut instinct it feels right. Is that enough for you on this, because the overall expense isn’t that much? Is that enough to make a business decision, to say, “Yeah, let’s go for this”?
David: Are you talking about the BarCamp part, or the whole PR thing that we do?
Andrew: Let’s say BarCamp specifically.
David: Sure, so the BarCamp specifically, yes, it’s not a huge cost. The biggest cost to me is the time of Jonathan and Stephanie being out of the office and focusing on this, because this means they can’t call a reporter, they can’t go do something else. So that I thought about very seriously. The other part of it was not a huge budget item. For me it was, if we can really make that many connections and an average BarCamp has 200 people of a highly engaged audience that is social and influential in the community, I have to believe that if I spend $10,000 in a year, 1 of the BarCamps out of 10 that we go to has to be worth it. That’s kind of the break even number. Now, if I get two that were worth it, I’m really happy. If I get anywhere near the 10 that we go through that we’re worth it, I’m breaking the bank, like this is the greatest thing that’s ever happened. That’s how I like to see the numbers.
Andrew: BarCamps are wonderful, because like you said, they just need money for donuts sometimes. They just need money for Wi-Fi sometimes. If you could just get them the wireless routers, they’d be happy.
David: Oh, yeah.
Andrew: But if you guys are organized, they’d make no money from organizing it, but they have to beg people to participate.
David: Yeah, it’s crazy. And we’ve seen BarCamps of like 50 persons, people all the way up to a thousand, and at Minneapolis it was enormous and very professional run conference. But still same community that’s what’s key.
David: It didn’t [inaudible] conference community, but yeah, they’re like literally, “I just want coffee.” That’s what they’re asking for from a sponsor. “Okay, that’s easy.”
Andrew: Yeah. Literally, “I just want coffee.” All right. Going back to the press, when you said that Jonathan won’t be making a phone call because he’s going to be out at BarCamp, what kind of phone calls would he make on a day-to-day basis, in order to build those relationships?
David: So, the number of phone calls, I’d break it into two categories. One is, maintaining relationships. So, checking in with people who we’ve already had contact with. “How’s it going? Do you need anything? Can we help you?” Just kind of keeping that relationship alive. “Oh, by the way, we spoke a month ago. You said check back in,” stuff like that.
Then reaching out to new reporters and bloggers and everyone else saying, “Hey, found your article. I thought it was really interesting. Hey, here’s my pitch ideas.” Hey, like whatever. He can kind of vary his aggressiveness, depending on how important the outlet is to us, if we risk losing them or whatever, like all that stuff. But yeah, we’ve had fluctuations in the amount of phone calls. We started with tons of phone calls. Then we kind of said, “All right. Well, maybe phone calls are good plus email.” Then we said, “Maybe email is better.” Now, we’re kind of somewhere in the middle.
Andrew: A little bit of email, a little bit of phone calls?
Andrew: What else? What else should I know about PR that I didn’t even know I needed to know? What am I missing in the questioning here?
David: So, I think the other thing . . . so, we talked about PR. It’s more than just blogs and press and stuff like that. I think that’s the big thing. The other thing that’s really important to me is just not measuring the crap out of this. We always talk about all these metrics. And trust me, we have every metric you could possibly imagine here. We measure everything down to the hour and the day and we have guys that that’s what they do. There’s someone who is a hundred percent of his time is business intelligence. So, I understand the value of metrics, but for PR you can’t do that.
Some people have tried all sorts of methods like let’s measure number of eyeballs on blog times some variable number, but don’t care, because we’ve gotten better stories on blogs that had a hundred readers, than blogs that had a million readers. And better in terms of the click-throughs, the response, all of that stuff and the engagement. So I don’t measure any of it. The only thing we measure is PR, and this is what we drive the team around is number of mentions. Number of mentions is the only thing we look at and that’s how we measure success, and a mention can be the name somewhere. Don’t care how that is. If it’s a blog post, if it’s in a podcast, if it’s on . . . I don’t care. You count it as a mention.
Andrew: I see. So, you do this interview, that’s a hit. It’s a one.
Andrew: Someone else blogs about it, that’s another one.
Andrew: That’s it.
Andrew: And a third person who didn’t even watch this interview just says, “I was using Grasshopper and that’s how I got my phone call, when I was traveling through Europe.” That’s another mention. That’s all you keep track of?
David: That’s all we keep track of. We don’t look . . . obviously on Twitter we don’t count those, because that’s a little too . . . it doesn’t really make that much impact. But in a source that sticks around, that’s a mention. Same . . .
Andrew: Do you know what you use to keep track of that?
David: We just use Google alerts. Make sure we track everything and just keep a list of it, and we track it by month and then by quarter. So not too scientific or crazy. The only other that thing we do a little bit differently is we do incentivize the team around top media outlets. If I say, “I really want to be in Inc. Magazine this year,” we actually do cash bonuses based on getting some of those hits, because we know it takes time. We know that you just can’t call up and say, “I want to get this done.” It could take two years. It could take longer, so we incentivize around what we call our “top list.”
Andrew: What about the video that you guys put out? The one that I saw I think on both Mashable and TechCrunch on the same day. You know the one I’m talking about?
David: I don’t know. Was it the new dork video?
Andrew: Yes, the new dork. The guy who had the beard that was like around . . . yeah, that was a great video. So how much did that cost to put together?
David: So, the total cost of that campaign [inaudible] it was . . . I’m trying to think back, because that was about a year ago. So, all in with production and everything, plus the distribution and seeding and everything else was probably about $40,000, maybe $60,000 at the most.
Andrew: What goes into distribution and seeding?
David: That’s one of the biggest parts about a viral video So, the actual production wasn’t all that much of the video.
Andrew: How much was production?
David: Maybe $20,000 at the most.
David: So we used a firm that does this. That’s what they do. But the seeding and all the other stuff is what takes the time and the money. So it’s everything from getting views on top blogs, getting placed on top blogs, reaching out to every single person in that video. So, that video was an engineered viral video. We reached out to every single person that was in there and said, “By the way, you were mentioned at second 1:22” with whatever it was. If it was TechCrunch, if it was Perez Hilton, if it was Ashton Kutcher, they got an email that said, “Go to this exact part of the video. Here’s where you are.” People love that. That’s all about their ego. So, people put it on their blogs. “Look, I’m mentioned here.”
Andrew: So, before you put the video together, you guys put together a list of influential bloggers and you said, “We got to include them in there.” And you took that to the video production company and you said, “Make sure to include their names in the song and make reference to them somehow.”
David: Yeah, absolutely. And some that aren’t even included in the song, we just had a picture of them flashing. We still emailed those people and said, “By the way, your picture’s in the video.” So, that was engineered, and we switched those people around during the production and made all sorts of choices. We’re like, that was a very specific strategic move and we created that video.
Andrew: Okay. So, one thing you did you said, “Every single person in that video needs to know that they were in that video. They’re probably going to want to tell their audience about it.” What else did you do to seed it?
David: So, then we went to StumbleUpon and Digg at the time, because it had some traffic, and other places and tried to do that. Reddit, Hacker News, all of those places and used the things that we built over time in our profiles and influence to try to bring views that way. We used purchased views on YouTube, so sponsored video views. There are all sorts of other seeding techniques that you can use to buy views on Facebook and other places for targeted communities to start spreading that. But otherwise, there’s not a way to just make something viral. That happens once in a million. You actually have to engineer this and do it and pay for it. It’s not . . .
Andrew: That’s the part that I don’t know very well. So I understand about buying YouTube ads, and I’m starting to discover how powerful that is. I understand Facebook ads, and I’m discovering how powerful that is. Where else can you buy traffic? Where else can you put money to help spur the virality along?
David: So, StumbleUpon you can now buy premium stumbles and stuff, so that’s direct [inaudible]. It’s not super high-quality right now, I don’t believe, but it does get you something. There are a few ad networks that are built around doing this for viral videos. They do it in in-game display, which is forced plays. Then they also do it in non-forced plays, where it’s still in-game, but they don’t have to click it to play the game.
Andrew: I see.
David: There’s different pricing for those two things and different kind of virality.
David: But that gets you there. I think if you look at most of that, that’s where a lot of the paid stuff is coming from. You then have to look at all the other places in the seeding campaign as a whole. You’re talking about going to all these blogs, reaching out to them. That’s where you get all the free views. The Mashable, all that stuff. That’s reaching out to our contacts and networks to get that.
Andrew: Did you do anything to encourage a virality beyond the paid views? So, if someone saw it on YouTube, did you do anything to get them to tell their friends? Or did you just allow the YouTube process to . . .
David: Just allow the YouTube process to work. You have to assume they know what they’re doing. So, if YouTube thinks that’s the way to get people to talk about a video, then we’ll just go with it.
Andrew: So, I had Jason Fried here recently. I remember hearing you at a conference saying, “”I don’t care how many times Jason Fried says you should not buy ads. You should. It works. I wish that he would understand it.” So, I made the point to him or I brought up the fact that you’ve been telling him to do it, and he says he’s buying ads right now.
Andrew: So, would that be . . .
David: A little bit late in the process though.
Andrew: Because it’s getting more . . . why is it late?
David: Because he built the company for years saying you shouldn’t, first of all. And I think missed an opportunity, because they were pretty early in some of these spaces. If you look at a product like Campfire and even Basecamp, when you look at Basecamp, originally the CRM space was not as competitive as it is today. I think they could have owned that space much more than they do today, because today they own that [inaudible] in a very small segment – designers, developers, kind of that group. Not like [inaudible]. Now, if they had gone to paid advertising, that segment would have been very different and not just Google [inaudible], but real paid advertising. I don’t know what their numbers are like today, but easily I think you could double their numbers, if they had used paid advertising.
Andrew: You guys even buy . . . do you buy ads on Howard Stern?
David: Yeah, we use print. We use all sorts of things. Driving very different segments. And you got to measure it and make sure you’re doing it profitably and all that stuff. But those are the things that you can grow your business from. This word-of-mouth which is great. You love it. You use tons of it. But you take this chunk and now you can double it. That’s pretty cool for a business.
Andrew: Yeah, what’s interesting to me about you is that most people who are good at PR will rag on the paid people. They say, “Of course, you’d never buy ads. It means that you don’t know how to do PR.” People who buy ads will say, “Why are you wasting your time with this unmeasurable source of customers?” You do both, which makes me wonder . . . and I’ll get back to Jason Fried in a moment. Makes me wonder why don’t you guys piss people off in order to get PR? Jason’s really good at just pushing the world’s buttons. Jason Calacanis, the other Jason, is especially good at pushing the world’s buttons and getting them all to write about them.
Andrew: How do you resist that?
David: So, to me I think that’s just a personal preference. That’s just not who I am. If I was like that and I wrote very opinionated things on my blog and all sorts of stuff, then that’s just how it would work. I don’t think that’s a tactic as much as that’s who Jason is, either of those Jasons. That’s just who they are. I don’t think it’s as strategic as it could be. I would say it’s his mistake to try to make that strategic move. If I said internally, “Look, we’re going to start writing stuff that really pisses people off,” I couldn’t stand behind it. I couldn’t legitimately get on stage and say, “You know what? This is really right.” And then that’s a failure.
Andrew: Do you feel like you’re missing out on media mentions by not pissing people off, who’ll write about you when they’re explaining why you’re wrong?
Andrew: You are. And you’re okay with it, because it’s just not who you are?
David: That’s not who I am.
Andrew: I see.
David: Even like I think about my blog the same way. I wished that I spent more time blogging. I just haven’t prioritized it myself personally. I know that I could build a great following. I know that I could do those things, and for me personally, it’d be great for the company. I just haven’t prioritized it personally. So, it is what it is. I’m not going to force myself to do it. Honestly, I prefer to ride on my bike and just do that. Like, sorry.
Andrew: So, what I was going to ask about Jason Fried is, you seem to now be in this community of CEOs and the tech startup world. The ones that the startups look up to. How do you get into that little club? Why am I not in that club yet? I’m interviewing and talking to them all the time, and I’m not invited to the clubs.
David: Well, first of all, I didn’t know I was in that club. So, I appreciate you telling me that. But I don’t know, I think it’s . . . there’s a number of things. First of all, I don’t think being in that “club” is all that useful. I don’t think that I’m [inaudible] group. I think there are a lot of people in the San Francisco startup scene that that’s very important to, for both personally and [inaudible]. But I think there are a lot of problems with that. There are a lot of people that I . . . I go to a lot of conferences. There are a lot of people that get up on stage and talk about all of these things, but aren’t actually doing anything and that really bothers me. It legitimately bothers me when I hear this entrepreneur on stage saying, “Oh, you should really [inaudible] to do this. But by the way, my day job is angel investing.” Sorry, I don’t care.
That’s great you made enough money that you can throw money around and kind of take risks on angel investments or whatever. But I just don’t care, because you’re not doing that today. You’re not actually implementing something. So, for me it’s more like that’s, I think, the problem with the club. Getting into those things and stuff I think it’s just public appearance stuff. It’s conferences and all these things. Once one place kind of picks you as a place to speak, it kind of just starts adding up. And unfortunately, I don’t think that’s a good way to pick speakers. I’d prefer to see more speakers at conferences that have not been at other places. I would prefer that someone not invite me and pick someone that hasn’t been there and is going to have an interesting story to tell.
Andrew: Those are just so hard to find, even for interviews here. A lot of the people who are working don’t have time to, because they’re in the stage you were a few years ago. Or they just don’t know about them, because we’re not all talking about them. It’s really tough, but you’re right. I would love to have more of those people on here and I’d love to see them more at conferences.
David: And we have this success disease. We just want to talk about success and sometimes it’s great to talk about failure. But importantly, I think it’s better for entrepreneurs to talk about the space in between, which is, how am I getting to success? How am I taking that step to [inaudible] that are going to get me there. Compared with, “I got success a few years ago and now I’m going to talk about it.” Those are the people I want to hear. Like you said, very hard to find.
Andrew: Let me ask you this actually. I don’t know who, but we’ve got someone in your company who’s about to come on to do an interview as part of my failure series.
Andrew: Mike is going to be the guy who’s going to talk about that?
Andrew: I guess Mike was the one who was running . . ….
David: The product manager [inaudible].
Andrew: Why are you guys allowing him to do that, considering that you have a reputation as like the entrepreneur’s go-to guy. You’re part of the successful speaker series. Why are you coming on here and being open about failure?
David: Because first of all, we were open about our success. When we had success with the chocolate covered grasshoppers, we wrote a case study about it. We gave out all that data on how much it cost. So I think you have to be just as open with the failure. And more importantly, it was a failure that we learned from internally. So, we want to be able to share those lessons and it was a very expensive failure. I would prefer . . . like that cost us over half a million dollars. So, I would prefer that in the future someone else not make that [inaudible] . . . well, make that half a million dollars or whatever the amount is, making a successful entrepreneur endeavor, being that next success.
So, if you can learn one thing, I think that’s valuable. And then when it comes right down to it, I think if you look at it from a PR perspective, failure is just as interesting a topic as success from a PR perspective. So, I think there’s a lot of power in sharing that and being genuinely open. Not just saying, “Oh, we’ve [inaudible] and failed and it’s kind of okay,” whatever. But genuinely like, “It cost us a lot of money, a lot of time, a lot of people’s time. Here’s what we did right. Here’s what we did wrong.”
Andrew: I’m looking forward to hearing that. I didn’t realize it was half a million dollars you guys invested in the product.
David: Oh, yeah, when you factor in people’s time. I mean there were multiple full-time people on the project a year and a half almost. Building the product three times. Making mistakes that are not [inaudible] startup techniques, like all sorts of stuff, but we learned a lot. And that team has now since moved on, and is now a very strong team working together on a new mobile product for Grasshopper. But they learned all that stuff along the way. So, the first thing they did was pick up the phone and talk to customers. The first thing they did was . . . like all the stuff that they’ve learned is now coming back to us in another product.
Andrew: Oh, I can’t wait to do it. This is the story of Spreadable, and we’re going to talk about what happened, what went wrong, what you guys learned from it. And you’re right, we had a lot of people who wanted to participate in this failure week, but they weren’t able to yet think about what went wrong. They weren’t able to fully understand it and that doesn’t make for a useful interview.
Andrew: But you guys I’m looking forward to hearing what you learned.
David: Yep, you got to be willing to open yourself up a little bit and be a little bit vulnerable. I have to say Mike did an amazing job writing the case study. I’ve seen it. He’ll do a great job in the interview. I’m sure of it. But he genuinely was hurt, when we closed the product. It was something that was deep down and he was passionate about it and he cared about a lot. It wasn’t easy for him to sit down and write that.
Andrew: Is that public yet?
David: It’s not. So, I think the first thing he’s doing is the interview with you.
Andrew: All right, good. I’m looking forward to reading that too. Maybe you can get me a copy of it before we do the interview to prep.
David: Absolutely, yeah.
Andrew: All right, cool. David, thanks for doing the interview. Where do we send people, if they want to connect with you?
David: All my contact information on DavidHauser.com. My email address, Twitter name is DH on Twitter, so it’s pretty easy to find me. But really anyone has any questions, I’m happy to chat with them.
Andrew: And any city that you happen to be in when David’s in, make sure to take advantage of dinner.
David: Yeah, absolutely. Follow me on Twitter and drop by for coffee or something or one of our customer dinners. And we call them customer dinners, but you don’t have to be a customer to come.
Andrew: All right, well, cool. Check out any customer dinners. Thank you, very much, David. Thank you all for watching.