DesignCrowd founder doesn’t do interviews (except for this one)

A few months ago we had a sponsor named DesignCrowd that I talked about a couple of times in interviews. But in private, my team and I were saying, “Those guys are making bank.” But we couldn’t really figure out how big they were.

The more we looked into it, the more impressed we were by how big this little thing had gotten that today’s guest started in his mom’s house.

He doesn’t do any interviews. Which means we get to discover him here on Mixergy and that’s what we’re going to do. We’re going to hear the story of how this guy with an idea created a marketplace for design and we’ll find out just how big it is.

Alec Lynch is the founder of DesignCrowd, a marketplace that helps entrepreneurs and small businesses outsource graphic, logo and web design.

Alec Lynch

Alec Lynch

DesignCrowd

Alec Lynch is the founder of DesignCrowd, a marketplace that helps entrepreneurs and small businesses outsource graphic, logo and web design.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, which basically means that every time I meet someone, especially if they’re in the tech space, I immediately say, “How much money are they making? How’s their business doing?” I’m kind of a scum bucket in that way.

So, a few months ago when we had a sponsor named DesignCrowd, I talked about them a couple of times in the interviews. But in private, my team and I were sitting and I said, “Those guys are making bank. They’re doing really well. That company is really big.” We were trying to figure out how big they were. We couldn’t really figure it out, but the more we looked into it, the more impressed we were by how big this little thing had gotten, this little thing meaning I think the guy started in his mom’s house or something.

Anyway, that’s what we were talking about. Then we said, “We’ve got to get this guy on. We have to talk to him.” I, Andrew, have to talk to him because the guy doesn’t do any interviews. He’s like a hermit, I sometimes feel, which is kind of good for me because the fact that nobody sees him in other interviews, means that they get to discover him here on Mixergy. So, that’s what we’re going to do. We’re going to hear the store of how this guy with an idea created a marketplace for design that’s gotten big. We’ll find out just how big it is.

His name is Alec Lynch. He is the founder of DesignCrowd. It’s a marketplace that helps entrepreneurs and small businesses outsource graphic, logo and web design. Basically what that means is you have a design need like a logo, a website or a book cover or anything like that, you go to them, there’s a crowd of people who start designing for you, then you pick the one you like and you go with them and they have a couple of interesting things that make sure you get the right designer and the work you get from all the designers is actually really good. I know because Alec, I studied up on you guys when I was talking about you to the audience.

Speaking of sponsors, this interview is sponsored by the company that will host your website right. It is called HostGator. And by the company that will make sure that if you want to meet people, if you want to get on a call with them for sales or other things, you will get them. It’s called Acuity Scheduling. I’ll tell all you more about them later. First, I’ve got to meet Alec. Alec, welcome.

Alec: Andrew, thanks for having me.

Andrew: What are your revenues? What did you make last year in sales, 2015? Help us settle a bet here internally at Mixergy.

Alec: Okay. So, last year I think we did about $16 million of gross revenues or gross sales. So, that’s all the money that goes through the platform.

Andrew: $16 million and then some portion of it goes out to the developers.

Alec: Correct, the designers.

Andrew: What portion do you guys pay to the developers?

Alec: Yeah. So, it varies by project. We have a 15% commission on the site, which is public, but then we also charge customers a bunch of different fees. There’s a posting fee, which varies by project size. But for a design contest, which is our most popular service, that’s $59. If it’s [inaudible 00:03:08] you’d like to work with one designer, sometimes $19, for example. And then there are a bunch of other fees.

Andrew: And then there are no commissions on those.

Alec: The take is much higher than 15%.

Andrew: Got it. Okay. So, if I were to kind of do rough math, assuming only 85% on everything, we’re looking over $12 million, over $13 million that you guys keep. Fair?

Alec: It would be less than that. So, we keep less than half of the money that goes through our platform, if that makes sense.

Andrew: Oh, right. Right. You take 15%. You don’t… Right. I see. Okay. Got it. Okay.

Alec: If you add up all the different fees that we take, typically we’ll take about 40% of an individual sale that goes through the platform, but it does vary, particularly on the lower project sizes.

Andrew: Can we say over $4 million?

Alec: Yeah. So, if you wanted to, you could take $16 million and multiply that by 40% if you wanted to.

Andrew: $16 million multiplied by 40%.

Alec: Yeah.

Andrew: All right. I’m going to do that by 40%. Wow. So, you’re over $6 million. That comes out to $6.4 million.

Alec: That’s roughly our net revenue in 2015. Our run rate at the moment is higher than that. We’ve continued to grow since then, which is really pleasing.

Andrew: How much higher is the run rate?

Alec: At the moment, our run rate is approaching about $20 million annualized gross revenue.

Andrew: I keep getting told that I’m a good interviewer. Frankly, when I hear it I always say no because I always want to be better. I keep comparing where I am now to the better I want to be, so I feel like, “This is garbage. It’s not nearly there.” Then I look here at my notes here where my producer asked you before the interview what’s your revenue and you said, “I don’t want to reveal it.”

Before the interview, I asked you, “Do you feel comfortable saying your revenue?” And you said, “No.” I said, “I’ll still ask you.” And you said you didn’t want to reveal it. And then in the interview, first question right out of the gate bang, we talk about it and you get open. I love it. Maybe I am a good interviewer.

Alec: You’re like the Oprah of the tech space, Andrew.

Andrew: Right?

Alec: You’re amazing.

Andrew: I can’t get anyone to cry. I’ve tried so many times, not a single person has cried. If you go back through some of my old interviews, you see my trying like a mad man because I think that would be memorable, but I can get people to talk about their revenues.” All right. I didn’t need you to get into the specific details, but I appreciate it. The reason I like to get at least an overview is it gives us a sense of the scope. Frankly, was I right when I said that you were starting this basically from your mom’s house?

Alec: Yeah. That’s right. So, I started working full-time on the business in 2007 when I was 23. Just prior to starting the business, I was working in strategy consulting at an American firm called Booz Allen Hamilton.

Andrew: I know them. What does strategy consulting mean?

Alec: Yeah. So, it’s sometimes called management consulting. It’s a professional service, a form of consulting where typically the firms will provide teams of consultants, including partners and then more junior consultants to other companies to advise them on strategy. Broadly speaking, I would say the different strategies kind of in my experience were in two buckets. One were kind of growth strategies and the other were kind of cost efficiency strategies.

Andrew: Okay. And here you are a 23-year old walking into a business with older managers with much more experience and you analyze their business and come up with ideas that they use to reshape the way that they run it, which frankly I think is probably better than going to college, that kind of deep understanding of a business and that kind of like Harvard Business case study on steroids would make you into a much better business man than going through school.

All right. And then I didn’t know this. You told our producer that before you started DesignCrowd, you actually started another business that failed. What was that business?

Alec: Yeah. Going back a little bit further, then, I started programming in business at university here in Sydney. While I was there, I did a couple of internships. I did six months at Oracle here in Australia and six months at a bank. From those experiences, I concluded that at larger businesses, particularly as a young person, I didn’t think that I was going to get the opportunity to apply the skills I was learning in programming and web design and software development to be innovative. I had a desire to use skill and creativity and my knowledge to try and impact the world around me and do something innovative. I didn’t see those opportunities.

So, when I left uni with a friend from uni, Adam Arbolino, who’s my cofounder at DesignCrowd, we started our first business together. It was online CRM software. This would have been in 2003, I think. We built it in a technology that we had learned to use–Java, J2EE. So, it was web-based. We had one client which we were building it for and implementing, but we owned it so we could sell it elsewhere.

I guess the long story short is that was a learning experience for us. That business failed. The headline is that business failed quite quickly in about nine months. The client never paid us. We had no capital, no kind of income. We were 20, 21.

Andrew: Let me go a bit deeper in the headline and then come back to DesignCrowd. I think we’ve got a little bit of a lag. Sorry. I think we’ve got a little bit of a lag, which is why it sounds like I’m talking over you. Let me go a little deeper to understand why it didn’t work out. You got a client to pay you for the software or at least to sign up and hire you to get the software for them. Was the plan to get the client to pay you, give the software to the client and then use the code to create software for other people? Was that the plan?

Alec: Yeah, which I guess you can say is a SaaS model.

Andrew: Right, which is a smart way to do it too.

Alec: Yeah.

Andrew: But then the one client didn’t pay you. Why didn’t the client pay you?

Alec: Well, that’s a good question. Maybe they weren’t doing particularly well. Maybe they thought they’d be able to get away with it. We were very young. We were just kids. We didn’t have a contract in place.

Andrew: Wow. Something is happening with our connection.

Alec: We weren’t invoicing them regularly.

Andrew: You’re saying the client didn’t pay you.

Alec: Yeah. That’s right. So, we’ve got the lag. Internet in Australia is not as strong as the US.

Andrew: It happens. Even here it’s not that strong.

Alec: So, the client didn’t pay us. I guess some of the lessons there for us were just around charging your clients, invoicing them, having proper contract, business 101. But we were very young. As I said, we were kids. I think with that said, that happens, right? Sometimes clients don’t pay. That doesn’t always end a business. I think fundamentally I’m taking that a little bit further.

The problem that we had when that client didn’t pay us was that when we started researching the market more closely at that point and looking at competitors, we could see that Salesforce.com existed and was doing reasonably well. We’d basically built a rudimentary version of that. So, we didn’t have something that was wildly different.

We could have stuck at it and made the product a lot better and probably made sales and maybe made it work. However, we’d been sort of nine months without a salary each. We didn’t have any capital. We didn’t have the first idea about how to do that or even the existence of angel investors or venture capitalists. In Australia at that time, that just wasn’t really a thing. There wasn’t really a startup scene. There weren’t many incubators or coworking spaces.

So, we basically looked at each other and said, “Let’s go get real jobs.” Adam went to work at IBM and I wanted to learn more about business. That’s why I joined that strategy consulting firm because I felt I would learn more about business that would help me the next time around. To your points earlier, I did learn a lot of skills that have been really helpful in launching and running and scaling DesignCrowd.

Andrew: I’m looking at a screenshot of an early version of DesignCrowd, specifically at the about us page. The about us page has a couple of things that I find really interesting, like there’s a reference to Carl Jung. Carl Jung, the philosopher, believed in the collective unconscious. DesignCrowd believes in the collective creativity. I love the way you guys were thinking about this in like such big, broad, life-changing ways. But the first paragraph in that about page describes the 2007 London Olympic games and how people were upset. Do you remember what this was? Do you remember writing this?

Alec: Sure.

Andrew: What were they upset about that led you to start this business?

Alec: So, in terms of DesignCrowd’s genesis, while I was in strategy consulting, in 2007 is when I had the idea for DesignCrowd. One of the things that I saw at that time was the 2012 London Olympics logo, which was revealed in 2007. There were a few problems with that logo. So, firstly, no one liked it.

If you just Google it, it’s obviously everywhere. It’s like a yellow and bright pink logo. It was super unpopular. So, the public didn’t like it. The press didn’t like it. I think even the president of Iran publicly came out and said he hated it. He felt it spelled the word Zion. So, it was just copying it from all sides, right? If the president of Iran doesn’t like your logo, I think you’ve got a problem.

But in addition to that, it not being a great design, it was revealed that it cost £400,000 and it took one year to make. When I saw that, it kind of crystallized a few problems and opportunities that existed in the traditional design industry. Those problems were sort of in two buckets. So, the first bucket, I would say, problems, challenges for businesses buying design.

Traditionally the design process has been an expensive one, a slow moving one and a risky one in that the creative process has been a process that’s closer to art and with uncertainty over the results and therefore risk for the business. If you don’t like what you get back, you’ve got to pay more money and spend more time to get a good result.

The second bucket of problems–that logo was designed by a really well respected agency in the UK. What’s interesting is I guess there are designers around the world that I think really struggled to get a job at an agency like that or break into the industry but have a lot of talent. I had personally many friends graduating from creative disciplines in university that couldn’t find work.

When I did the research, I discovered that in Australia, there are 20,000 designers employed full-time at design studios, but our Graphic Design Association here indicates that maybe there are 60,000 who have graduated without employment. I suspect that dynamic is similar in the US, Canada and the UK. But then you’ve also got hundreds of thousands of talented designers in emerging markets in Asia and Eastern Europe who are living on $15 or $20 a day and they want to earn $15 or $20 per hour.

What these two groups of designers have in common is they’re looking to earn money. They’re looking for opportunity and they want to work in the creative industry.

Andrew: I see. On the one hand you’ve got organizations like the London Olympic Committee that are spending hundreds of thousands of dollars on designs that people don’t like. On the other hand, you have people who are willing to work for a lot less who collectively can create much more creative results and if you pick the right one, you end up with a great design at a lower price. That’s the model you saw.

Alec: Yeah. I would tweak that a little bit. I think £400,000 on a logo design is too much, but when I saw that I thought–and this is where the model, the idea for the model came from–imagine if the London Olympics [inaudible 00:17:29] instead of paying agency such a large fee, what if they had offered less, for example, £100,000 or £50,000 and put on a global, worldwide design contest to design Olympics.

Andrew: That’s the vision that you had? Did you see that anyone else had done something like this and you brought that idea to design or was it just a pure lightning bolt to the head?

Alec: It was basically a lightning bolt.

Andrew: That was it?

Alec: Yeah. So, I ended up, however, before immediately quitting my job and moving back home to live with my mom. I learned my lesson from my first business and I did a huge amount of research. I used a lot of the skills from strategy consulting. I did a lot of market sizing and then I thoroughly researched to work out who else was doing this at the moment.

Andrew: You wanted to see who else was doing any design or crowd design?

Alec: I looked at both. I also looked at adjacent industries. I concluded that the model that I’d landed on was applicable to almost any creative industry. I concluded and I researched voice acting, I researched photography, I researched a few other industries as well as design online to see was anyone else doing this.

Andrew: And no one was doing it at the time. Meanwhile, by the way, there were other people thinking about the same idea, they just weren’t exactly doing this yet.

Alec: Yeah. That’s right. There were other people. There were other people doing something similar in photography, which I discovered.

Andrew: So, let me ask you this and hopefully the connection will catch up by the time I ask this question. The thing I’m wondering is I want to see your thought process and why it led you to stick with design as opposed to voice acting or photography. What did you see that told you design is the place?

Alec: So, a few things. I think firstly I saw some disadvantages of the other verticals and then I saw a bigger opportunity in design. So, in photography, for example, I could see some established marketplaces. So iStockphoto, for example, was working quite well at the time. One of the things that they were doing was actually the sort of model–they had a model called a buy request, where you could post a project saying, “I need a photo of a blonde woman jumping on the beach,” and photographers from around the world would take that photo pull it from their library and upload it.

Andrew: Okay.

Alec: And then the person could buy the photo they wanted. The other photos went into the library. That was actually one thing that helped validate the model for me. When I researched it, I could see it was working in another industry. In the design industry online, I couldn’t see anyone doing it when I researched it. The incumbents, the leaders in the space online had a model that I felt could be disrupted by the idea that I had, particularly if it could work in the way I was seeing it in photography, where you offered $200 or $300 and got 50 ideas and designs, photos from around the world.

Andrew: I see.

Alec: I felt like the other things I saw in design were really large search volumes. I think when I researched industry reports, I think the outsourced design market globally was over at the time $40 billion per annum. Today it’s $54 billion.

Andrew: I see.

Alec: So, I could see a large market. I could see competitors online and offline that could be disrupted. I could see a challenge for designers. So, I could see an opportunity for a marketplace that could solve problems on two sides.

Andrew: Okay.

Alec: And I think another thing I could see that I liked was with design, you can get the designs and ideas back, but really to hand over the cash, you need to get the files, the vector files behind the design. You can watermark the design, for example. So, I felt like people wouldn’t be able to post a project and steal ideas, whereas in another industry, I looked at ad creators, where you sketch a billboard concept, people could conceptually just take the idea.

So, there were a bunch of reasons why I settled on design.

Andrew: Okay. Let me take a moment to talk about my sponsor. Actually, instead of directly talking about my sponsor, I’ve got to tell people about “The A-team.” See, when I was growing up, I don’t know about you, Alec, but my parents did not want us to watch TV and they were freaking cheap. So, they wouldn’t sign up for cable at all. We were really limited by what we could watch. Basically, if it was the weekend, “A-Team” was all we could watch. I kind of got into it. I was into all their little projects, how they could go after somebody by spending an hour creating some kind of tank out of a moped, I don’t know.

But there was one guy that I was really intrigued by, Templeton Peck. He was the good looking guy in the team, not the Mr. T guy, but the guy who looked really nice. The reason I was always intrigued by him was he always had a stack of business cards in his pocket and when he wanted to go and get somebody to do something for him, he’d pull out one of the business cards, and maybe it was a business card of like a banker or lawyer, and hand it over and someone would just look at the card and say, “Oh, you’re a lawyer. I can trust you,” and just start trusting him like he was a lawyer just because he had this piece of paper that really anyone could get.

The reason I was intrigued by that is this little piece of paper had outsized power, way more power than anything else that this guy could have carried with him, way more power than a little tiny piece of paper should have had.

Now, today, a business card really doesn’t have that much power, but a website has that kind of power. If you want to say that you run a consulting company, people aren’t really going to believe it, but if you have a webpage that says you run a big consulting company or you run a consulting company, they’ll believe it. If you say that you’re a great photographer, people won’t maybe believe it. But if you have a website that says you’re a photographer of weddings, people will believe it.

We need to use that fact. If there’s anything that anyone out there has in mind for themselves, maybe it’s a new project, maybe it’s a side project, maybe they want to label themselves as the experts in something, you call yourself the expert, nobody believes it. You setup a website that says you’re the expert, boom. People believe it. Try it. And I know that frankly I fall for it too. I want to see. I Google everybody and I want to see what are they up to, what do they have? It’s easy to do it if you go to HostGator.

The reason I recommend HostGator is it’s super cheap. If the idea falls flat, if you just want to setup a quick webpage that costs as much as a business card did back when the “The A-Team” was on television, you go to HostGator. They’ll set you up on the cheap within five minutes. You can setup a page with a template from them and boom, you’re good to go. And if you want to grow it as a business, they’re fantastic. They grow with you because they’ve got–here’s the thing.

Every once in a while, I talk about HostGator and someone will say, “What about this competitor or that competitor? I often respond back, “HostGator owns that company.” These guys are behemoths. Don’t let the fact that they have lots of different company names throw you. They are the leaders in this space. And they’re good because they’ve been doing this for a long time and they’ve outlasted the competition.

So, if you want a really good website from a company that’s strong, that’s outlasted the competition, go to HostGator. In fact, don’t go to HostGator, go to HostGator.com/Mixergy because they’re going to give you 30% off and they’re going to give you everything else that everyone else gets.

You’re going to pay less, but you’re also going to get the 24/7, 365 days a year technical support. You’re going to get all the templates that will make you look like an expert in whatever you want. You’re going to get the shopping cart software, which frankly if you listen to me, you can get the shopping cart software anywhere because you’re smart enough to know how to get it.

It’s ideal for WordPress, which is easy to set up, but also it will work with other platforms and they make it easy with one-click installation. If you think I’m full of it and this whole thing doesn’t make sense for you, 45-day money back guarantee. Just call them up, ask for the money back guarantee.

If you’re hearing me and you do believe me and you hate your hosting company and you research HostGator and you say that you like them much better than your current hosting company, all you have to do is go to HostGator.com/Mixergy sign up and tell them, “I have a WordPress site. Move me over while I hang out with my friends drinking beer or watching ‘The A-Team.'” Do it. They’re really good–HostGator.com/Mixergy. I’m grateful to them for sponsoring.

Alec, let’s get back to your story now. You knew what you wanted to do. You needed now to build a prototype, right? What did your prototype look like?

Alec: It was very barebones and just kind of a functional prototype. My process for getting that was basically to go back to my friend from university, Adam, who’s my cofounder of DesignCrowd and was working at IBM, and tell him about the idea and ask him if he wanted to build a prototype. He did do that. So, he was always a better programmer than me. So, he built the prototype. I paid him for that. This was in 2007.

And then I sat on the prototype for about six months. I had a few things in consulting that I still wanted to do. I did a final six-month project in Asia for an oil and gas company and then at the end of that project, I actually got promoted by it and then I flew back to Sydney and quit and moved back home to live with my mom and I started working on the business full time in September, ’07. I had the prototype, $10,000 in savings and three credit cards.

Andrew: And you were paying him even though you guys were cofounders?

Alec: Yeah. So, at that point, Adam wasn’t involved full-time in the business. I owned the site, the prototype and for the first two years of the business, I bootstrapped it by myself. I worked full time on the business. Adam joined in 2009 full-time as my cofounder.

Andrew: You guys owned equal shares in the business?

Alec: No. We don’t.

Andrew: What’s the equity breakdown or percentage breakdown?

Alec: That’s not public. I think we’re both really happy with the stake that we’ve got. Naturally there are a bunch of shareholders. Since then, we’ve raised capital. We have employees with senior management, etc., angel investors, venture capitalists.

Andrew: I’m looking at my notes from your conversation with our pre-interviewer. You said, “Look, I moved back home with my mom, with my prototype, three credit cards, a laptop and $10,000 in savings,” wow. The $10,000 in savings–where did that go?

Alec: Yeah. So, it went reasonably quickly once we start getting service and hosting, buying domain names. I bought premium domain names.

Andrew: Like what?

Alec: Actually we launched the site as DesignBay.com and that cost $2,000 or something like that. The concept was it was eBay for design. But we eventually renamed it to DesignCrowd, which was another domain we had to acquire. In launching the site, I had to get initial designers, the way to do that was to offer money.

The first thing I did was to have our own logo designed. So, DesignCrowd’s logo is the project on the site. It’s crowdsourced. I probably offered $400 for that. And then to build further designers, I offered money to redesign other company logos, including big brands just to get designers on the site. I think one of the early redesigns I requested was Sun Microsystems’ logo, for example.

Andrew: I see.

Alec: I probably offered $1,000 to do that. We did that to build the designer side of the marketplace initially and then we were able to focus on acquiring customers and of course, acquiring customers costs money as well, so, experimenting with marketing early on.

Andrew: But the first thing you did was got to get designers on board. It seems like you spend a lot of time–and I’m going to get to the marketing in a moment. I’m wondering how much time you spent getting designers on board and how did you convince them to join and where did you get them? That’s a lot of questions all in one. Let’s start with where you got them.

Alec: Sure. So, basically if I think back to our first project, we used two main approaches, one was we targeted students at design campuses. So, we handed out fliers and we put up posters at design schools here in Australia and also in the US. So, I had friends who were doing their MBA at Stanford, for example. So, they went to the design school there, which was a really well respected school and put up posters for me.

I went to like campuses near that college of fine arts in Sydney and handed out fliers myself and put up posters. That got us a super modest amount of design. That was one strategy. The second was we started designers online that we were able to find just through research and invited them to join the website and enter these initial contests. So, through those two mechanisms, we probably acquired our first few hundred designers, which is far less than we have today, but it was enough to service initial projects from customers.

Andrew: Alec, when you say that you had these designers, they had no commitment to you and you had no commitment to them, right? So, how did you know they would actually be contributing to your community and creating designs for it?

Alec: Well, I didn’t know for sure. But I was optimistic they would. They weren’t contracted. They weren’t full-time employees. They can work wherever they wanted. In some cases they were running a business, in some case, they were freelancers, in some cases they were students or just graduating. Some of them probably never really became active. That’s the case when you’re dealing with crowdsourcing. The crowd is amorphous and always changing.

But one of the things I’d done before launching was I’d researched the market on both sides fairly thoroughly. One of the things designers indicated to me is that something that would encourage them to participate would be some small payment for submitting a bid or a design, even if they don’t win. So, from day one, part of our model, which is something we’re quite proud of, is what we call participation payments, which basically works in this way. When someone posts a project offering an amount of money, for example, to get a logo design, we take that amount of money and we split it up where we can and we offer small payments to designers and we have an algorithm called our quality algorithm to offer those payments, micro payments, if you will, to our top designers.

Andrew: When you say micro payments, how much are we talking about?

Alec: They’re between $10 and $50.

Andrew: Okay.

Alec: Most commonly they’re $15.

Andrew: So, Alec, before we started I asked you why would anyone use you instead of so many other competitors and you said well, one of the things we do is we pay designers even if their design isn’t picked. The traditional model now has become for crowd design of a client like me posts a request for a logo, says how much he’s willing to pay, a lot of people start designing, the client in this case would be me, I pick the person I want, they get paid and you as a marketplace get a commission. We’re all done.

And you said, “Well, yeah, but what we do is we also pay some of the people who didn’t win.” I said, “That’s great for you. It’s great for them, the designers, but why do I have to care? Why is it better for me to be in a marketplace where the losers get paid? The losers shouldn’t get paid.” And you started answering and I said, “Hold on. Save it for the interview.” So, what is the answer to that?

Alec: So, the headline is that certainly on the designer side, that’s a fairer and more lucrative model for designers.

Andrew: Yeah, but who cares? Not who cares about the designers, but why do I have to be that concerned with the designers getting paid?

Alec: Here’s why. If you look off–this is the case on any marketplace, whether you’re Uber, Airbnb or a smaller design focused marketplace like design crowd is it’s important to look after your community and your seller side because that affects the experience on the customer side. Our model achieves a couple of things. One, it helps retain quality designers and keep them more active. So, we rank all our designers and our algorithm weights these micropayments to the better designers.

For customers, that in general means they’re accessing a higher quality community of designers, but at a project level when you post your project and you’re competing for the attention of all the designers in the marketplace, you’re competing for their attention with all these thousands of other projects, you don’t have to offer $10,000 to get their attention.

You can offer $200, $300, $500 and then these micro payments can ensure that good quality designers work on your project even though you have a small budget. So, with a small budget, we can ensure quality. And for any given budget, we can, we believe, get the highest quality result for that budget because of the way our crowdsourcing model works under the hood.

Andrew: Because even the people who don’t win end up making money, they’re much more likely to participate, as opposed to them not getting money and then they say, “I don’t want such a low chance of getting paid for work I have to do upfront.”

Alec: Yeah. In particular, if you put yourselves in the shoes of a top designer and you’ve got all these projects you could work on and repeat clients that want your attention, if a new customer comes to you and says, “Hey, I’ve got a design contest. I really like your portfolio. Here’s, I promise you, $15, $20, to submit your bid or concept.” They’re going to go, “Yeah, I accept that. I’m going to prioritize my time here.” And the customer gets a better result.

Andrew: Okay. All right. So, now we talked about how you got your initial designers, where the idea came from. Let’s talk about the first customer. Where’d you get your very first customer? Do you remember?

Alec: Yeah. I do. So, it took me a couple of months after launching. So, I launched the site in January ’08, got our logo, initial designers, started trying to get customers a couple of weeks after that. it took a couple of months. There was no press release when I launched. There was no launch party. I had no investors, no employees, still just running it from this laptop in my mom’s house. No customers came.

Naturally my friends and colleagues knew what I was doing and someone I worked with previously in consulting said, “Hey, I’ve got a friend who’s starting an HR business. He needs a logo. Why don’t you see if you can help him?” So, I met with this guy in person. He wanted to meet in person. I basically sold him the concept in person. Part of our process was–and this is perhaps why no one was buying on the site or only one of the reasons was, “Who else have you done this for?” And it was like, “No one. You’re the first.” And he was like, “All right. I’ll give it a go.”

Then I suppose that client–and then the other few initial clients once you win them, they become example clients on the site. You start building content, active designers, testimonials, etc. And that’s helpful for winning new clients and giving them confidence that you’re a real marketplace and a real business and that the service works.

Andrew: All right. I want to talk about how you grew, but first I’ve got to talk about my second sponsor. It’s Acuity Scheduling. So, Alec, I interviewed this one entrepreneur and before I interviewed him, I signed up to use his software, which I do on a regular basis. I wanted to see how the software worked.

What I learned afterwards was how the marketing at the company worked. This was a pretty expensive software. I’m not going to say what it is because they didn’t pay me to do the sponsorship message, but Acuity Scheduling did. So, I’m going to talk about Acuity Scheduling. I’ll mention their name.

This guy who I interviewed, I signed up for his software. I got to play around with the software. It was pretty expensive, so I didn’t sign up. Then a few days later I got an email from someone saying, “Do you want to get on a call to talk about how this software can help grow your business?” I thought, “This is really interesting. This is something I wish I’d known before the interview.”

They didn’t just count on their software convincing me because their software is pretty high end and it takes a little while to fully use it. They said, “Let’s get on a call with a real human being who can show you the software and answer your questions and understand your problems with it and then you’re more likely to sign up. That’s when I got it. That’s why that business was doing so well or one of the reasons. They had people who were talking to their potential customers explaining the software, making it easy of them to get started, maybe even adding their data into the software.

Anyone who’s listening to me who’s selling anything and wants to try this should give it a shot. One of my other interviewees said it on camera. He talks to every single person who signs up because his software is pretty complicated. You should do it. Either before people pay you or afterwards, either before they pay you to get them to sign up or afterwards to get them to fully utilize your software. If you do, the easy way to get them to get on a call with you is you is to use Acuity Scheduling.

With Acuity Scheduling, you could easily schedule with multiple people without driving anyone crazy. All you do is go to Acuity Scheduling, connect it to your calendar, whatever that happens to be, then you mark off what times you’re available and then you get a link that you can give people who you want to talk to, they book times with you and as soon as they book a time, like Wednesday at 3:00, that time is no longer available, so no one else is going to book Wednesday at 3:00 and you don’t have double bookings. Easy peasy.

Also, Acuity Scheduling will allow you to collect information like how big is their business, what phone number they want to be called on, etc. All that stuff can be asked right when they book a call with you. All that added data then goes onto your calendar so when it’s time for you to make the call, you know what number you need to make a call, you know who the person is, you’ve got some info on them. And they’re reminded too because Acuity Scheduling will automatically send them reminders, automatically add your conversation to their calendar.

It’s great software. I’ve talked about it for a long time. You should go check them out. But don’t go to AcuityScheduling.com. You should be going to AcuityScheduling.com/Mixergy because they’re going to give you a ton of free time so that you can try it and really see how well it can do for your business. Use it for pre-sales, use it for closing sales, use it for post-sales to welcome the person and get them involved with your software. Use it for customer development calls.

Whatever it is–if you’re in a new city and you want to have a lot of lunches with people or a lot of coffees with people, Acuity Scheduling will allow you to book with multiple people at once. Tons of uses, great software. I’ve been a customer of theirs for years. Go check them out at AcuityScheduling.com/Mixergy.

Alec, you told our producer–what do you think of that sponsorship messages as a former sponsor and someone who you said you want to sponsor again, what do you think of the way that I’ve done this? I think I’m getting better and better at doing the sponsorship messages.

Alec: Yeah. You’re great. I’m obviously speaking to you on Skype and I’m in the bottom corner of the screen and I’m sitting down. I’m not aware am I going to be there as part of that sponsor message, but I feel like kind of listening and contributing, like holding up a message, like every 20 seconds or like if I knew sign language, I could translate it into sign language.

Andrew: Oh, because you’re looking like that small little window on top of my big–yeah, it does look like a little window.

Alec: I wish I could contribute somehow.

Andrew: I’ll be honest with you. I wanted to engage you in conversation about both sponsors, but I wasn’t sure how well the connection was holding up and I thought maybe there would be a lag and I said let’s just do it without depending on a solid connection, otherwise I like that you were kind of engaged in it. I saw your expressions as I was doing it and I wanted to bring you in. Sometimes I do, sometimes I don’t.

All right. Back to how you grew DesignCrowd–I’m really fascinated by this because you’re a guy like you said, you were in your mom’s house building this thing out. I see how you got your first customers, that doesn’t scale. You told our producer that the other things that did scale, that did work for you were Google ads, search engine optimization and some word of mouth. Let me break that down. Was SEO the first big hit or was Google AdWords the first big hit or was something else big?

Alec: Probably Google AdWords. I guess you really need content to rank well for SEO and initially we didn’t have a lot of that. However, one thing that’s nice about our model and one thing you get as you make sales, such as sales through Google AdWords over time is every time someone requests a design on the site, they write a brief, which is almost like an article saying, “Hey, I’m launching a FinTech startup in San Francisco and I need a logo.”

Sometimes people make projects private so that it’s not content for Google, which is fine. But when they decide to make it public, that’s like an article for Google. Then designers upload 100 different designs and each one of those has a different webpage and Google loves images, so they index that. You start to build an amazing amount of content. So, we’ve got like 10 million design pages on our site, 500,000 designer portfolios now, tons of jobs, etc.

Andrew: But you know what? I looked at what your site used to look like, the structure of your URLs and your content. At least the earlier versions that I saw weren’t that well-structured, like your URLs used to be something like job.ASPX?id=636, right? The job title–I’m looking at one specifically right now, “Design Job: One-Look Logo,” right? It wasn’t SEO’d from the start. At what point did you get hip to that?

Alec: It would have been I’d like to think in the first two years. I think that’s a fair comment you’re making. When I look back to that first two years in general, I really didn’t know what I was doing. Even if I looked to the way we launched or the way I researched to try and validate that the idea would work, I could have done an MVP, but I didn’t. I did market research. I did market sizing, much more kind of traditional business planning and I quit my job. I paid for a prototype. I moved back home all before I’d validated it online or with an MVP.

So, from that to launching to press to SEO to raising capital the first two years, it was a huge learning experience for me. Again, there weren’t really any coworking spaces in Sydney or Australia. There wasn’t a strong–it was like, I don’t know, five or six active VCs. I didn’t even know their names. None of my friends were doing this. I was kind of finding my way.

Andrew: I see. I get what that’s like. At least if you were in a coworking space, somebody could look over your shoulder and say, “Get rid of that question mark in the URL and the numbers and so on.” What you did do, though, that I thought was interesting, you used to do blog updates with your revenues to show people what you were paying out. I think every page on your site for one period there was showing what your payouts were, right? You were trying to encourage people to participate and show that was real revenue to be gotten there, am I right?

Alec: Yeah. That’s accurate. That’s a common thing you’ll see on marketplaces to give people confidence that it’s like liquidity in the marketplace, it’s like activity happening. We still do that on some pages on our website.

Andrew: Your old blog posts were not getting a lot of action. But you still pumped them out. You still put it out there. I had one somewhere in one of my tabs. I’m like a billion tab person only in interviews. This is a DesignBay blog post from 2008, “September Update! Creative peoples and DesignBay contributors! During September, we paid out over 4,000 of projects on DesignBay and we currently have 2,500 open briefs still running! Well done to Fire Bubble Design and Jace Design for some great design submissions.”

You’re really encouraging the group. This is you just starting out by yourself. I think that there’s something so raw and authentic and so struggling and so self-believing in these early posts and I’m amazed that you kept going when you weren’t getting a lot of like comment love, a lot of people talking about you. TechCrunch didn’t write about you for years, right? Did you feel like the outsider I feel you were?

Alec: Yeah. The first two years was really quite tough. It was a bit of, I guess a crucible for me personally and also as a business person. It was really challenging. We had competition. I didn’t have capital. That $10,000, I spent that in the first four months and then started using the credit cards.

So, in addition to, I guess, struggling to get traction in that first year, I guess that was compounded by debt. So, I maxed out over the next year three credit cards, about $30,000 in total and then at that point, I still believed in the idea and I kind of doubled down. I took $30,000 of loans from friends and family, which was really kind of them and used that to keep funding the business and attempting to grow it and find what it was that would work. So, that was really a challenging period, but I’m glad I stuck it out.

Andrew: What made you believe in this enough to keep sticking it out even when according to my research here, your conversation with our pre-interviewer, the first nine months, only $10,000 in sales? And by the way, you don’t get to keep all $10,000, of course. You’re building up debt as a person who used to work for Booz Allen and made good money and wore nice suits, I imagine, went to great offices and were taken seriously. What made you, when you were going into debt, when you weren’t bringing in a lot of revenue, believe in this so much that you were willing to keep going in deeper and deeper? What was it about it?

Alec: Yeah. So, there are a few things. I think there were instances in that first two years–for example, clients or experiences that led me to believe and I guess reaffirm my belief in the idea for DesignCrowd. So one example was that somewhere in that first two years, a company from the UK, a big brand called Hi-Tec–they make shoes in the UK, hiking shoes, squash shoes–reached out to me. It was the global marketing director or something. They said, “Hey, saw your site, would love to try it out. We need some icons designed for different shoes. We need like waterproof, Gore-Tex icons, etc.”

He ended up posting a series of projects on the website, like £1,000 or something. It went really well and at the end of those projects, he gave me a testimonial. I think we got our first press hit in like the Sydney Morning Herald or something. I closed that sale on Skype from like my mom’s house with a cup of Milo.

There were things like that that were super-encouraging. Conceptually I still really believed in the idea. I had friends who ended up becoming really encouraging and saying you can’t–I can remember nights out on the town with buddies. I was like, “Maybe this isn’t working.” They were like, “No, keep going.” So, having a support network that was helpful.

And then I think to a certain extent, I was so deep into it, like one year of commitment, $30,000 of debt, $60,000 in debt, that I was like, “It’s just got to work.” Being like all-in at the table almost increased my determination to do it. While it was stressful, I decided my approach to that was to develop habits and techniques that meant I was able to perform well and be happy even though I was in debt and there was uncertainty.

Andrew: What are the habits and techniques that you used?

Alec: So, one was I did a lot of exercise. So, I did a lot of running. I always played sport in high school, but then in university, I didn’t play sport. I didn’t go to the gym or run. I wasn’t much of a jogger. I like to think of myself as a fast-twitch muscle athlete, Andrew. But I learned to jog. That was one. I started going to the gym. I did that regularly. That was really helpful. I also had been meditating for a couple of years. I started meditating when I was in consulting. I found that to be like a really useful tool. So, that was the second.

And then a third thing was I did a lot of personal reflection. So, one of the things I found in running my own business without investors or colleagues is there was like this vacuum of feedback. Examples like you shared, like you could post a blog or launch a website. If you’re not making sales or getting feedback from your users, there’s this vacuum. There’s no press. You don’t have a boss complimenting you or giving you feedback. I was really used to that. In consulting, you get these 360-degree reviews all the time. You get promoted here and there.

In university I was a high-achiever. I got the university medal, a scholarship, that sort of stuff. So, you’re constantly getting–I was used to this feedback loop. That wasn’t there. I was actually a little bit reliant on it. What I learned in that first year is that doesn’t really drive stable happiness. Even if you’re pursuing your dream, you can have challenges and it might not work. So, you can’t necessarily rely on that.

What I ended up doing was, I guess, you’re your own boss. So, each day I would write down, “Here are six things I did well today and here are six things I could improve on.” You build this stable view of yourself that’s balanced and it generally on the positive side, so you’re able to say regardless of your results, you know what you’re doing well, your strengths and your weaknesses.

Andrew: I see. So, by getting in touch with what you’re doing well, you were being more positive. And by being aware of what you weren’t doing well, you knew what you needed to focus on, where to direct your energy.

Alec: Exactly.

Andrew: What about meditation? I’ve been talking to a lot of entrepreneurs in private about meditation because they have practices and I keep asking them why. What’s the point. What is it for you that got you to keep meditating?

Alec: Yeah. Well, I think there are a few benefits of meditation and there are also different types of meditation. There are basic, western breathing meditations. I guess there are things linked to yoga and then you have Buddhist meditations and ones where you think about a particular topic. Dealing with like the basic western breathing meditations, for example, the different benefits of that include, I guess one would be improved concentration and focus.

So, I guess the best analogy that I’ve heard, which was shared in a book called “Mental Resilience” written by an ex-McKinsey consultant, was that during life, whether you’re an entrepreneur or working for someone else or raising a family, all the different things, activity in life, stimuli, stresses, challenges, great things, excitement, have this effect of if your mind is a glass of water, it’s like shaking up a glass of water and you’ve got dirt in it and the more activity that’s happening, the water becomes really cloudy. That’s what’s kind of happening to your mind.

Meditation is the process of setting that glass of water down that’s really cloudy and just letting it rest for ten minutes. When you do that, the silt and the cloud like settles to the bottom and the water becomes really clear. That’s what will happen to the mind.

Andrew: Alec, once you’re done meditation, do you feel calmer, clearer and more of anything at the end of it?

Alec: Yeah.

Andrew: I’m not talking about long-term, but right afterwards do you feel it?

Alec: I feel immediate benefits. Sometimes you don’t feel that and it can take practice to get there. I think initially when you first meditate, particularly if you’re going through a stressful period, the experience that I had and many people I know who have tried it are like, “I just couldn’t focus. That’s actually a sign that you’ll benefit from it once you get there.

It’s hard. It’s like when you’re just getting into it. It’s like going to the gym or going for a run for the first time when you’re not in that habit. It’s really tough and it sucks. It’s like gym for the mind. The more you do it, the more you strengthen your mind and the muscles in the body, when you’re going to the gym. You can create focus even though there are distracting thoughts, distracting stimuli, stresses, subconscious, etc.

Andrew: I’ve seen the results in my life. I’m a big believer of it just based on–I shouldn’t even use the word believer. Believer means that I have to trust in something that I don’t see, but here I’ve seen the results. So, I do it too. I can see how that helped you in the times when things were tough. You then raised $300,000 October, 2009. Things started to turn around at that point for you. Did you change the business based on that little bit of money that you raised? Is that what happened?

Alec: A little bit. Yeah.

Andrew: How did the business change from that funding?

Alec: Well, it did change. I’d say capital was a game-changer for us, both at that point and in later years when we raised venture capital. At that particular point when we raised that $300,000, there were four angel investors in Australia. We got our first office. Adam was able to join the business full-time. So, he quit his job at IBM. We got our first employee, Emily who worked in customer service for us.

And over the next two years–so, just another piece of context, at one point, we were making one sale per day. Over the next two years, we scaled the business, I think, 13 or 14 fold. We did that, I guess some of the things I’ve described are the changes.

So, by having someone in customer service, I was doing everything in those first two years, which was crazy. I was able to extract myself from that. Adam led the product and technology from that point onward. I was no longer doing that. That meant the product would be better than my attempts in the first two years. And I focused on sales and marketing and I guess primarily marketing.

From day one, I had attempted to make DesignCrowd global. It was multi-currency from day one and had very limited traction, even after two years at one sale a day. But with that $300,000, in addition to hiring staff, getting an office, investing more in product, part of what we used that money for was to test more marketing outside of Australia and in different channels and tried to scale.

Andrew: Beyond Google, what did you test?

Alec: Well, I’d say in that first two years from memory–so, this was 2009 to 2011–Google was the main strategy we used. I think we might have used some agencies to help us with SEM and with SEO. I think we started using not a PR agency, but maybe PR media net services to distributed releases. We started doing some tradeshows.

Andrew: Tradeshows?

Alec: Yeah. We had done one tradeshow in Australia in the first two years by myself, where we were invited by the government as part of a showcase. I got a few clients from that, including one of the things that the way the business involved in that second two years is a few agencies, so like web development or other design agencies that were traditional agencies approached me and were like, “Hey, this is really good. I think we can outsource client work for you. Do you have a white label feature? Can we do it discreetly?” We didn’t at the time, but we developed that.

So, actually on Adam’s first day full-time in the business immediately after raising angel capital, we flew to London for a tradeshow called Ad:tech in London, where we had a booth and exhibited. It cost $10,000 with the flights and everything and it just totally bombed. It was a total mistake. I guess the headline would be for that first two years, it was trial and error in terms of marketing and testing different things.

Andrew: I see.

Alec: Ultimately, search, SEO and SEM, were the two things in that first two years that really drove the growth for us. After that–and I would also say word of mouth. So, even today, about 35% of our business comes from word of mouth. More recently in the last few years, we’ve added up a bunch of other new channels, but with respect to that first two years, I think post angels, that’s a pretty good summary.

Andrew: You then did something where there was–I couldn’t find this. I’m a good Googler. I can’t find this. You and Adam took a photo with a whiteboard with–what is this? I can’t find it.

Alec: I’ll send it to you. So, this is in 2011. We started being approached by venture capital firms in Australia and the US. We decided that raising capital again would be really helpful for the business. I think we sort of validated that the opportunity was definitely global, that we were able to apply money to scale the business. $300,000 that angel round spread across the world trying to promote the business plus staff and what not is very thin on the ground.

So, we needed more capital. We decided to try and raise a $3 million Series A. We started doing that in mid-2011 and within three months, we raised $3 million from one of Australia’s larger VCs called Starfish Ventures, which was, again, game-changing for us in the business.

Andrew: Go ahead. Sorry.

Alec: Going back to your whiteboard question, at that point, I can remember the day that that would close, I think Adam and I got a whiteboard and we were in the office with our one employee. We wrote like $3 million on it in really big writing and took a photo on an iPhone to send to our families raising that. Anyway, we got some press. I think that’s when we got our first article about us in TechCrucnh, for example.

And then some publication at that point was like, “Hey, we need a photo of the founders in order to publish this article.” That was like the only photo that we had. So, we sent it to him because we weren’t in the same location when they needed this. So, we sent this photo and it got used in the article. So that must be the photo you’re referring to.

Andrew: Ah, you send them a photo of you with a whiteboard that said $3 million because that’s how much you raised. How did the investors feel about that?

Alec: I think the head of our VC–so, we got really good relationships with our investors and our VCs, but at the time, I don’t think it left a great impression with the VCs. They probably didn’t think it was that thoughtful approach. But anyway, when they understood why we did it, the context, they were fine. I think more importantly, they’ve been really happy with how we’ve used that capital and deployed it since.

Andrew: I see. Now that you’ve told me that, I’ve found the picture. It’s the two of you with your hands on your desk. You look like–in a lot of the pictures that I’ve seen, you look confident and calm. I haven’t seen a lot of pictures of Adam. Adam looks like, “Hell yeah, brother, we did it. We got there.”

Alec: Yeah. And it’s a huge milestone. I’m sure entrepreneurs that have raised capital, it’s an exciting time and milestone for any entrepreneur.

Andrew: You know what, Alec? Not around here. I’m now right in the heart of San Francisco, it’s like just the usual thing here.

Alec: Right.

Andrew: What’s interesting is that you got there after you figured out your business. Once you kind of earned the right to say, “I got this vehicle. Give me some fuel.” The other interesting thing is that TechCrunch didn’t write about you until you hit that milestone.

Frankly, going back and looking, I didn’t see everything–and I don’t want to be a TechCrunch hater, but they didn’t really write about you except when you acquired another company, like I think it was Brandstack, right? It’s not until these funding issues that they start to cover you. They don’t cover you around your business success.

We’re really going over time here. Let me just close out with two things. First is I was spying on you using SimilarWeb. I’m freaking addicted to it the way some people are addicted to Insta–what’s the Insta?

Alec: Instagram?

Andrew: Instagram, thank you. Look at how addicted I am to SimilarWeb and not Instagram. I want to see where you got your traffic. Your number one source of traffic outside of search is Vistaprint. What’s your deal with Vistaprint?

Alec: Yeah. So, one of the channels that we’ve added in the last four years since raising capital–so, since raising venture capital about $3 million series A, we’ve raised another $9 million. We’ve grown the team to 50. We have an office in San Francisco, an office in Manila in the Philippines. The US is now our largest source of sales. 80% of our revenue is outside of Australia. And we’ve added a heap of new channels.

So, we’ve added affiliates, for example. We’ve added podcasts as a channel and a bunch of others. One of the channels we’ve added is partnerships. Over the last four years, we’ve added some strategic partners that work with us to basically provide our innovative service to their customers. The ideal partners for us have been partners that work with a large number of other small businesses, particularly small businesses that are in a point in their lifecycle where they might need design.

Printing is one of those, where for example, someone needs to print a business card if they don’t want to use a template, a business card, whether you’re on Vistaprint or another website or you don’t have a design to upload, you’re kind of stuck. That’s where DesignCrowd’s service can assist.

Andrew: I see.

Alec: So, that’s kind of the model. It’s similar with–we have a small partnership with Wix.com. It’s the same with a website.

Andrew: I see that.

Alec: You may want to use a template, but you may want to supplement that with a custom logo, banner, graphic, buttons, etc. So, partnerships have been really lucrative with us.

Andrew: All right. I want to close it out with something that I usually talk upfront about but I didn’t get to it and I don’t want to leave without talking about this. You as a younger guy at 10 years old started a business that I thought was fascinating. Do you remember what I’m talking about?

Alec: Are you talking about the car washing?

Andrew: Yeah, as a ten year old. What’s this car wash business that you started?

Alec: I wouldn’t call it a business. However, I think when your producer asked me for examples when I was younger of things I did that might have indicated an entrepreneurial seed, that was one of those which my mom talks about. She’s like, “When Alex was ten, he would go around and wash cars and charge people money.”

Basically it started with like washing my mom’s car and being like, “Give me $4,” and then like going to neighbors’ houses and door knocking them and offering to wash their cars for money and like taking my mom’s like soap suds and shammy and what not to do that. And then I just ended up going around the streets in our neighborhood, so like broadening the net and then taking little primary school and high school friends with me to do that.

That was very early on. Other examples were my first website when I was 14 was like a skateboarding website. I monetized that with banner ads, which I thought was amazing at the time. This was in the 90s and I was getting checks from like HotClicks.com in the US for like $30 USD a month, which I thought was incredible.

Andrew: That is when you’re just 14.

Alec: Sorry?

Andrew: That is impressive, especially for the age.

Alec: Yeah. I guess it reflect my interest in that second example in technology. I’m sure a lot of people have stories like that. I didn’t like build an app and sell it to Yahoo at the age of 16 or something like that, modest examples.

Andrew: I don’t know if we can do this, but you sponsored Mixergy. Do you have access to the results, like can you tell if you’ve made back your money?

Alec: Yeah. We’re pretty close to that. So, our sponsorship with Mixergy…

Andrew: It was a small one. It was like the smallest that we had because you wanted to taste it to see if it actually made sense to you.

Alec: Yeah. We take a careful, really data-driven approach to almost everything, particularly marketing. What’s been interesting about the Mixergy test that we did–and thank you for having us as a sponsor–I think it was three shows. It was probably less than $10,000. What’s been interesting is that the results that we’ve had, we see this current traffic, a bit of a traffic spike to the landing page.

The landing page–can I mention that? The landing page was DesignCrowd.com/Mixergy, which we actually still have there. We still get some traffic today. It’s been nine months since we’ve sponsored it and it goes like this. What’s interesting is that of the purchases we’ve made, most people don’t purchase through that landing page. Most people don’t use the discount code that we offered, which was just like Mixergy.

But overall, you can see this like ongoing yield from that. The yield declines over time, but it’s kind of a little bit evergreen. So, I think it reflects well on the equality of your show, on your audience and its fit for DesignCrowd. So, our target market, our bread and butter are small businesses, entrepreneurs, side hustlers.

Andrew: And we have that.

Alec: We do have big brands and agencies using us, but that’s really…

Andrew: How can you tell that somebody goes to the special URL you setup for them but doesn’t buy from there? You guys are tracking them?

Alec: So, you can attribute them in different ways. So, there are a few mechanisms, however the most effective mechanism we’ve found for attributing podcast sales to podcast sponsorships is a post-sale survey, where after someone buys, regardless of the channel, “Where did you hear about us?” They’re saying, “Mixergy, Mixergy, Mixergy.”

Andrew: I see.

Alec: So, that’s been our way to kind of validate that. If you look at the landing page, we only made four sales directly through the landing page. If you relied on that, it would lead us to conclude it was unprofitable. But we’ve made many, many, many more sales based on the post-sale survey.

Andrew: That’s one of my frustrations with podcasting is that it’s so hard to track. If you’re tracking it, you’re not accurately getting enough of the results because frankly people aren’t going to remember DesignCrowd.com/Mixergy. They’re probably just going to remember that I talked about a design site, then maybe go search for it, then go to that design side and then buy. And if they do use the URL, they may not buy right away, they’ll come back later. Podcasting is kind of a tough thing that way. I like that you’re tracking afterwards. I’m glad that I asked about that. I know you guys have asked to sponsor again.

One of the reasons why we’re sold out until pretty much the end of the year is I like to record the interviews in like chunks, just to a bunch of interviews back to back, go until I’m hoarse and then take some time away from interviewing and work on other things. The only way that I can do that is if I also have a stack of advertisers who are ready to go in addition to a stack of interviews.

My guess is that you probably have been waiting to come to do this interview for a while and I was away in Bali and I wasn’t recording. So, we kind of lumped it all together. I hope I didn’t just lose you there. There we go. Oh no, actually, we rushed you. This was only 15 days. It’s not unusual for somebody to have to wait 40-45 days to do an interview. So, it didn’t go too long.

Alec: Yeah. Glad I could come on the show and thanks for having me.

Andrew: Yeah. I’m glad that you’re on here. All right. Your website is DesignCrowd.com for anyone who’s interested. My two sponsors for today’s interview are the company that will actually help you get a website and be like that character from “The A-Team.” It’s HostGator.com/Mixergy. And if you want to get in front of people by phone or in person, go to AcuityScheduling.com/Mixergy. And of course, if you haven’t yet, subscribe your friends, not just you, subscribe your friends to the Mixergy podcast. They’ll love it and thank you for it.

Alec, I love you for–this is like a weird way to end it.

Alec: Powerful. Yeah.

Andrew: I was trying to connect it to what I said before. I don’t want to sound like I’m too effusive here. I like your story a lot. I like it a lot. I’m grateful to you for coming here and doing this interview. Love I’m going to save for my son, who I’m now rushing home to go see. Thanks, Alec.

Alec: Thanks, Andrew. I loved being on the show. Thanks for having me.

Andrew: Thank you. Thank you all for being a part of Mixergy. Bye, everyone.


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