Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses and usually I do it from my office in San Francisco. But I don’t get to interview entrepreneurs in Mexico. So I flew to Texas, ran 26.2 miles over the border into Mexico and I’m here interviewing entrepreneur including Eric Northam who I know from when the two of us were both living in Argentina. He’s got a company called EasyBroker, and I like his description of what EasyBroker does, it’s like a management and collaboration platform for real estate agents. But I’m going to ask you in a moment for like a use case that will explain to people what it does.
Eric: Sure.
Andrew: First, I’ll say this interview is sponsored by a company he does not use. It’s an email marketing company called ActiveCampaign. I’ll tell you about them later. Eric, so imagine if I decided to move here, and believe me I don’t want to move to Mexico City and I think Olivia would do it. And I went to sit at a broker’s office. How would the use your software help me?
Eric: First, in EasyBroker basically, you go into his office, you sit down and you say, “Hey, I’m interested and looking for a property that’s in Condesa,” because Condesa is a really nice place here. You go in and they would basically pull up a list of all our properties that we have. We’re basically MLS for Mexico. So we have hundreds, 200,000 properties I think in all of Mexico. And so they can basically go in and search for a property, find something that is useful that matches what you’re looking for, and they can basically show me a list of things of interest for me and also basically share that with me via WhatsApp or . . .
Andrew: You mean with me?
Eric: Yeah.
Andrew: Even if a different broker found the house, they would be able to see it on EasyBroker, they would be able to print out a sheet from me with beautiful photos or send it to me via WhatsApp or since I’m American, more like email or something like that, and then I’d be able to share it with Olivia and go look at it. And they get commission if they close the sale even if they’re not the ones who listed it. All that goes to you?
Eric: Exactly.
Andrew: Are you a little upset because I didn’t cover all of the features?
Eric: No, that’s fine. It’s tough to focus on one, because you do a lot of different things.
Andrew: All right. I’ve got a sense of the revenue. I know you’re not going to give me the number. Do you feel comfortable saying over $1 million? And say if it’s profit?
Eric: In profit . . .
Andrew: Am I crazy to say more than net profit?
Eric: No, you’re not crazy.
Andrew: All right. Okay. Here’s the plan. We’re not going to stand here. We’re going to kind of look around the office, look around the neighborhood, and we’ll go to your house and get a sense of how you live.
Eric: Sure. Sounds good.
Andrew: All right. I’ve never done that before. Cool. Thanks.
You and I both lived in the DC area except you came out of your place, Columbia, Maryland. By the way, you guys allow dogs in the [East 00:02:28]? I’m noticing a lot of dogs around the city.
Eric: No, not a lot of it. Not yet.
Andrew: This is a very dog-friendly city, isn’t it?
Eric: Especially this area is known for . . . there’s a dog park right over here. You can go around and see these dog classes. They’re right on the park [inaudible 00:02:41]
Andrew: You see them everywhere and Devon is taking photos of every dog because he’s a dog person. He’s reaching down and petting them. So you came out of your townhouse in Columbia, Maryland and you thought what?
Eric: Well, I came out one day after several years of living in Columbia, Maryland and I was just like, “Why am I living in suburban Maryland?”
Andrew: Were you single at the time?
Eric: I was single at the time. And all my neighbors were either married with kids. I just walked out and was like, “This is not for me.” And I lived in Japan before in Tokyo. I really just had that bug to kind of travel again. I just thought it was a good time to kind of, you know, pick things up, sell everything I had.
Andrew: You really sold everything?
Eric: Yeah. Sold my house.
Andrew: What was hardest to sell?
Eric: No, it’s really easy.
Andrew: Really?
Eric: Yeah.
Andrew: There was nothing that you felt, “Oh, I can’t believe I gave it up”?
Eric: No, I think for some people it’s hard. But in that case I was ready to go. I sold my house, my townhouse, like it’s a townhouse in suburban Maryland. It’s not really what I want. It’s not my dream house or anything. Had my car but I’m more of a walker anyways so I think the two like big items I had, I didn’t have any problem selling.
Andrew: We’re actually in an active office, which is what the noise is, which I think is fine. I want to get a sense of your space. Where did you go?
Eric: So from there I went to Argentina, went to Buenos Aires.
Andrew: Argentina. To continue working at the same company, just do it remotely.
Eric: Yes. So basically I walked into my . . . I was working as a freelancer at that point in time and I walked into the office one day and was like, “Hey, I want to sell all my stuff and go somewhere else. I like working with you guys. If you want to continue working with me that’s great. But I’m not going to be in this country.”
Andrew: And they said yes.
Eric: After I moved to Buenos Aires for two weeks, I called them up and they were like, “We have a ton of work here.” And basically for two years I had consistent work.
Andrew: Development work.
Eric: Development work. Yeah.
Andrew: When you were looking at an apartment or a place to live, you ran into a problem that kind of informed the creation of EasyBroker. What was the problem? What were you trying to do?
Eric: Basically I tried to . . . everywhere I went I travelled a lot. I travelled to 26 countries and every time I moved to a new city or a new country, I tried to find a place that would be nice and comfortable to work at. And at that point in time, there were no coworking spaces. Airbnb didn’t exist. So I tried to find an apartment like in Craigslist or whatever means existed at that form. I think it was even looking at newspapers and such. And I called them up and every time they’d be like, “Oh yeah, I have this great apartment. It’s going to be perfect for you.” And then you go and actually go there, and it’s not what you thought it was and they couldn’t send you the photos because they didn’t know how to do it or there wasn’t enough bandwidth.
Andrew: You know what, I lived in Argentina and I had that same issue. It was over Skype, they’d send me pictures when I was in the U.S. and then when you got there, something was a little off. I’ll tell you what was off in the first place. The photos looked perfect. It was right next to the zoo. There was dog poop all over. It was the foulest situation, and there’s no way you could tell that kind of stuff and, frankly they don’t want to tell you. And it was very antiquated and you saw that and you said, “This is a problem.” You didn’t do anything about it at that point. You then kept working. And at what point did you say, “I think I’m ready to start my own company”?
Eric: Well, actually when I started traveling for those two years I knew at the end of it I wanted to start a business. So I just came up with a lot of different ideas and my first week in Buenos Aires, I came up with the idea of EasyBroker. And then from then on I just kept coming back to it. And after two years of traveling, I was like, “Okay. It’s the time to do this, time to start this.” I’m willing to invest in this for couple of years, see what happens.
Andrew: Yeah, and the first version of EasyBroker was actually called moveglobally.com?
Eric: That’s right.
Andrew: What was Move Globally?
Eric: So Move Globally was I guess the equivalent might be an Airbnb. Essentially you go in a real estate website where you can search vacation rentals anywhere in the world and you could rent them directly from the website.
Andrew: And this is people who had vacation rentals that were year-round vacation rentals?
Eric: No. It was if you want a vacation rental at the beach for a week, a month, whatever . . .
Andrew: No. I mean the person who was renting it, was it their house usually or was it . . . ?
Eric: Usually it was real estate professional. It’d be like an agency that manages 10 properties would publish the 10 properties up there and you could find them basically rent them directly with this person who would manage the property.
Andrew: And then one woman came into your life?
Eric: That sounds weird. Yes, a woman did come into my life.
Andrew: It was a broker.
Eric: It was a broker. That still sounds very . . . it sounds like you’re leading [inaudible 00:06:51]. No but I was actually living in Buenos Aires. Started working on the first Move Globally version and I was at my house and I had my first I think employee helping me out there. And the owner of an agency that had rented me the property that I was staying at needed me to sign a contract, and she came to my house with the contract and just started asking what is that? What are you doing? You know, I need something like that. Can you change it? Can you make kind of do this and or that? And I was like, “Sure, but I’m going to have to charge you for this.” And that’s eventually how we changed from the whole vacation rental side to doing more of long-term rentals and sale properties.
Andrew: What did she want?
Eric: She wanted at that time . . . there were very basic things of managing inventory so you’ve got 100 properties. You don’t know which ones are available, which ones are not, who’s the owner.
Andrew: What did they use? Spreadsheets or paper probably. Argentina’s paper, right?
Eric: I would say probably paper at that point. Probably Excel, I think Excel is probably our biggest competitor and it was a big competitor at that point in time.
Andrew: Okay. And so she was using it all in Excel and she said, “Hey, help me figure out what I got, who owns it, and when something goes on the market.”
Eric: One of the big probably for her is that she wanted a website. So you have all of this inventory and you’re publishing on maybe a website that helps you at least but she wanted to have her own website with all of her properties with the availability . . .
Andrew: To be able to show someone. So if I Andrew was moving to Argentina and wanted to see what properties she had, I could go to her site, see the photos, and only see what’s available.
Eric: Exactly.
Andrew: Got it. And that’s what she wanted. That made a lot of sense.
Eric: She had a basic website with a design who had used her colors and such and she was like I just want it to kind of look like this. So we ended up personalizing EasyBroker a little to meet her needs on design and then she was sold after that point.
Andrew: So I remember some quirks in Argentina. I talked to you about this, right? That I talked to entrepreneurs when I lived there about how difficult it is to do things like buy a computer. If someone knew you were coming from the U.S., they would ask, “Can you get me a Dell computer?” I’d say, “Why not a Mac or top of the line?” No, they can’t get any computers easily. And Dell wouldn’t get robbed, it was affordable enough . . . so if you come in and bring a Dell computer. It stuff like.
That’s fine because that happens once a year or so. The big issue was I remember talking to entrepreneurs who said they had a hard time paying their people. It would always be these random wacky things that just worked like to pay their people, they would buy cards from The Gap from the U.S. then bring them in and let the people have cards from The Gap who then traded for . . . weird stuff like that. I don’t even remember it. You had an experience like that. Tell me about that guy.
Eric: I set up my business down there. By set up I mean I had people that I was paying money to do services for me. I didn’t actually have a legitimate business in Argentina. I had a U.S. business which is hiring freelancers in Argentina, and I needed a way to pay them. So I checked into the normal ways of sending money through a bank.
Andrew: Oh, because American businesses can easily pay Argentine’s citizens.
Eric: Nope. Especially at that time.
Andrew: Why not? I don’t want to get political. But I don’t understand why not. All right. But fine. So that was an issue. Okay. What did you do to deal with that?
Eric: So through friends I made some contacts where . . . essentially I found somebody that I can transfer money into a U.S. account and someone would show up on my door the next day with cash strapped to the leg, you know?
Andrew: Literally?
Eric: Literally.
Andrew: A whole bunch of cash and it would show up and they would give you cash.
Eric: They’d give you the cash. They would count bill by bill to make sure everything was okay. They had a special pen to mark it too also to make sure the bills were legitimate.
Andrew: Real, okay.
Eric: And then you have these stacks of cash and then you go and pay your employees.
Andrew: Argentine pesos or U.S. dollars?
Eric: Argentine pesos.
Andrew: And you pay your employees in cash?
Eric: Yep. You can have dollars too if you want, but I was actually converting it in pesos because their salaries were based in pesos.
Andrew: Got it. Wow. And what would’ve happened if you would’ve gotten an Argentine company? There are issues there too, right?
Eric: The problem with an Argentina company if you actually wanted to, at that point in time if you wanted to legally send money via the bank system, it might take a month. You wouldn’t get the exchange rate at that point in time. You can get the official exchange rate which was totally false, because essentially it was a black market. The government set the price of $1 to a specific number of pesos and if you went on the black market, you got double or triple that. But depending on the timing. Changing every month with inflation that was kind of crazy. It was always going up or down. Always up, sorry. But yeah.
Andrew: You know what, I loved Argentina. It’s just business in Argentina is tough. Devon, do you want us to walk around now? Should we go take a look at the city?
Eric: Okay.
Andrew: Let’s do it. Let’s take a walk. Okay. We’re at this park. What’s this park called?
Eric: Parque Mexico.
Andrew: Parque Mexico and I want to ask you about the big mistake that you made and why you had to undo it. And I want to find out want you’re doing here in Mexico and how it’s helped your business. But first, I want to tell you something kind of awkward. Awkward because I saw a monkey-like creature on your desk, one of those dolls so I know you’re using a different email system than my sponsor. But wow, I ran and it killed my voice for some reason, not my legs. My legs are fine.
My sponsor is a company called ActiveCampaign. It’s email marketing with intelligence which means that imagine someone is on your website and they keep hitting the U.S. pages, the ones that are in English. You just tag them as being interested in English so when they sign up for your newsletter, regardless of where they’re coming in from, you know they’re English speakers because they’re the ones that only go to the English pages that on your site on EasyBroker. I like the scooters in the city. That’s the type . . . Oh, that guy almost fell.
Eric: We just had an accident there.
Andrew: I still love those scooters. And so really simply you tag them based on what they done, something as basic as the fact that they’re speaking English or are they more likely to be a customer, or more likely to be a broker, are they more likely to be in Mexico or somewhere else that . . . you guys service more in Mexico, right?
Eric: Yeah, we’ve got 15 different countries.
Andrew: And the idea is you don’t want somebody to fill out a form and say, “I’m a broker in Mexico City and I speak English and . . . no. You want to know based on their website what they’re doing and based on what they’re doing on your site, how to target them via email. And what they’ve done in your email. So if they’re clicked links, you want to target them. Again, if they haven’t clicked any links, maybe you send out some email to reactive them.
That’s the idea behind ActiveCampaign. There’s lots of software . . . you looking at me saying my software can do that?
Eric: No, no. We don’t do that at all.
Andrew: If it can, I want to know it. A lot of email marketing software cannot do it. It because a little too complicated. Sorry, they can’t do it or they can and it becomes too complicated. I’ve gone too long with this ad. Activecampaign.com. If you want to get started, go to activecampaign.com/mixergy, throw in that slash Mixergy at the end. We’ll let you try it for free. If you sign up, give you a second month for free. And the you’ll even get two free consultations with experts that’ll understand what you’re doing with your email marketing, help you see how to use software, you go and use it and then you come back. They’ll do another free consultation for you.
And by the way, if you’re on a different email provider, they’ll migrate you for free. All you have to do is go to activecampaign.com/mixergy. I’m intentionally talking louder because this is helicopter central. That’s how people get past traffic.
Eric: Yeah, it’s the easiest way to get past traffic. Yeah.
Andrew: Wow. All right. The issue you told me was you built the software, and as a developer who takes pride in his work, you felt what?
Eric: Well, I think as a technical founder you tend to be very perfectionist about your work. I always thought, “It’s not ready. It’s not ready to release yet.” And you just want to keep perfecting it and perfecting it. So I kept perfecting it and perfecting it. And after about three years and very few clients, I made the realization that I should maybe I should go out and try and sell it.
Andrew: Because you were running out of money or because you were frustrated spending money on this or what?
Eric: Yeah. I think after three years . . . I basically saved up for a long time to do business and that was a different mode. This is pre-lean startups. I assumed you need to take like a few years to build a product but I thought, wow, I really need to hear from my clients directly and see what they react . . .
Andrew: You didn’t just assumed. You told me that the company you worked at before someone there said you have to spend three years. Right?
Eric: Yeah. So I worked at various different startups and in general, they’ve . . . it was cycles of at least two years to get software out.
Andrew: Like what?
Eric: You try it and then it will be . . . it wouldn’t work so you make changes to it, that’d be another year and then maybe you got it right.
Andrew: Like what? What’s a company that you worked for that did that?
Eric: Unwired Express. It was a company I think that was around 2002 maybe.
Andrew: What did they do?
Eric: They built software for mobile devices at that time, and their whole concept was they had thing called a context engine which would try to guess . . . we got dogs . . .
Andrew: A lot of dogs in the city too.
Eric: This is dogs central right here in Condesa. No, but we had basically they built software for mobile devices back in the [lap 00:15:40] days when you had the WML and everything was like . . . So it wasn’t the best time probably to be building software for mobile devices. But learned a lot from that.
Andrew: But the fact that these companies spent years building their software and said, “You know, maybe it’s right.” You told me before there was some financial pressure after funding this yourself to finally go out and really push for customers and accept it’s not perfect, it’s not where it wants to be, but it needs to be, but it has to go out. I’m wondering where does the money go. You’re the only developer. What did you spend the money on?
Eric: No. The first year I actually hired a few people.
Andrew: You did?
Eric: I think we were about five people, five or six people for the first two or three years so I was burning some cash. But it was more of a realization looking at myself and going, “Hey, I’ve been doing this for three years.” I have like, it think it was 50 clients or something. I don’t remember, $1000 a month, something ridiculous in revenue because we’re based on having lots of clients. So I said, “I just figured out. I need to try to sell this. I need to see what’s going to happen because if I don’t, another year is going to go by and we’re going to run out of money.”
Andrew: Devon, I love this part of the story. Is the airplane going to get in the way?
Devon: No, this is good.
Andrew: Keep going. All right.
Eric: It’s going to get louder.
Andrew: Devon says we can keep going even with the airplane overhead. So you decided I’ve got to get customers, and you got to tell me what you did.
Eric: So I went out. I decided to go door to door trying to sell EasyBroker. Trying to see what actual feedback . . .
Andrew: Literally door to door?
Eric: Literally door to door.
Andrew: Walked door to door in your Spanish?
Eric: In my Spanish, as a gringo, [Spanish 00:17:05] as they call them in Buenos Aires.
Andrew: Yeah, [Spanish 00:17:07].
Eric: So I was in Buenos Aires, I literally walked out of my office and went down the street and I lived in this area called Palermo and there’s lots of real estate agents there. And real estate agents are quite obvious because they have these windows on the front where you have different pictures of all the properties they have available because that was the primary means of people renting properties at that point in time. So you go and you look for . . . you try to find the agency that had properties you wanted walking around and so I said, “Wow, these guys, if they’re posting like that, maybe they’d be good clients.”
So I literally went up to the door and started knocking on the door and I said, “Hey, yo, I’ve got this software that I’m trying out. I’d love to get your feedback.” So at first I was more trying to validate the idea and see whether . . .
Andrew: Did it work?
Eric: It did work.
Andrew: For getting customers or validating the idea?
Eric: Validating that I wasted a lot of time building things I shouldn’t have been building.
Andrew: For example?
Eric: For example, we spent a lot of time dealing with more on the CRM side of things, trying to keep track of basically your contacts, what they’ve done, all their history. . .
Andrew: You mean all the people who came to see the broker could track . . . Oh, got it. Okay. And were they interested in that?
Eric: So no. They were really interested in this feature that took me, I don’t know, like a few days to write. I think I wrote the feature myself which is basically uploading photos to properties at that point in time and when they saw that and they saw it could upload and they could order the photos, they’re were like, “That is so cool.” And I remember going, “No, no, that’s easy.” As a developer I’m like, “No, but this other part over here which is really complicated where you mix the history because you got history on a property, you got history on a contact which is all of the events, all the things that happened,” and they go, “I don’t understand what you’re talking about. But I like these photos. Can you sell me the photo part?”
It really opened my eyes at two things. One is that we should’ve gotten out of the office earlier. We should’ve tried this earlier because we really had a product that people wanted without all of these extra bells and whistles. And selling it also, I think it boosted my confidence. I’d say, “Wow, we have a good product here. We should be selling it. We shouldn’t be waiting any longer.” Fortunately I think that’s really when things started to pick up because we knew more about what our clients needed and what they were willing to pay for it.
Andrew: Okay, but getting customers door to door didn’t scale. It helped you understand the customer better. What did scale in the beginning to help you get customers?
Eric: Well, the main part once we figure out, okay. What is it that the clients want? What is the message . . . you’re out there selling door to door. Are you starting to figure out what they understand, what messaging resonates with them that maybe we should be talking about CRM and history, but it’s more about an easy way to setup your website because that’s kind of really focused on publish your properties with us on your website in real time. That’s something a lot of different agents didn’t have.
And when we started doing that, basically, we’d set up a landing page and I think it was nothing automatic. It was all developed by hand at that point in time and we tried a different ad and see if it would work. And then we started doing ads in different countries and started getting different clients in . . .
Andrew: Ads where?
Eric: Well, we tried in all over Latin America principally.
Andrew: What type of ads? Facebook ads or [inaudible 00:20:00]?
Eric: At the time is was Google. I don’t think there were Facebook ads and there definitely weren’t . . .
Andrew: They definitely weren’t as effective as they are now. I’m imagining you . . .
Eric: I don’t think they existed.
Andrew: Oh really? No even at all.
Eric: Yes, this is back . . . I’m old.
Andrew: You started the company when?
Eric: In 2007.
Andrew: 2007. Okay. So I’m imagining you buying like banner ads almost . . . or not banner ads but going into real estate sites and buying ads directly on those sites. Is that what you did?
Eric: No, we went with AdWords was pretty effective at that point in time so [inaudible 00:20:27].
Andrew: Which essentially does that. Right.
Eric: Yeah, yeah. We tried AdSense too.
Andrew: Wait. No. AdSense is putting ads on other people’s sites. AdWords is within Google’s search results. Okay.
Eric: And AdWords worked much more effectively for us because it was much more specific. At that point in time I think we were selling to the whole world which is another big mistake of mine, is basically if you try to market to everybody, you’re not going to market to anybody. We were starting to get clients, a couple of clients from Thailand. We have client from Kazakhstan, a client in South Africa, and as we started to get clients from different areas, we realized this isn’t going to scale. The requirements in Thailand are very different than they are here in Buenos Aires at that point in time and Mexico is different. So slowly we started to scaling the business back to where we just focused on Latin America and specifically Spanish-speaking clients.
Andrew: Right. It’s getting really noisy here. Because of the helicopters that you told me people use to get over traffic and airplanes and construction. I kind of like the kid noises but it’s making me miss my kids. How about we start moving towards your place?
Eric: Sure.
Andrew: Let’s do it. And we’re going to talk about I wondered you went up here in Mexico and the differences. All right. Let’s keep doing it. Thanks for [having 00:21:33] your house for this.
Eric: Sure, welcome.
Andrew: So I wondered how you ended up here in Mexico, in Mexico City specifically.
Eric: So actually the main thing was Mexicans they wanted me to be here. No. After several years or six years in Buenos Aires and I started looking at where our clients were and as I mentioned before we started doing Google AdWords all over the world, which is a big mistake. But in the end, we started narrowing down to Latin America and after six years of basically looking for clients, most of our clients were in Mexico.
Andrew: They just happened to be in Mexico? That’s where it was hitting?
Eric: Just happened to be in Mexico. Yeah. It’s the biggest Spanish-speaking country in Latin America so that kind of makes sense on one side and on the other side it’s economically, it’s been stable for a while so compared at least to Argentina. I think people will debate how stable things are.
Andrew: Brazil and other places . . .
Eric: Exactly.
Andrew: So would you start travelling here while you were working in Argentina to get a sense of your clients here?
Eric: So in 2012 I came on kind of an exploratory trip out here, and I came and the first day that I arrived here I was like, “Wow, okay, there is something going on here. I’m ready for a little bit of a change. It’d be kind of cool to test it out.” So I stayed for a month, I checked it out and decided well, okay, it’s time to set of shop basically in Mexico.
Andrew: Did you have a team in Argentina before?
Eric: I did have a team but at the time I was leaving I think there were three people left that were working. There was two people who would leave. They discovered different opportunities. And when I spoke to the three that were there, they didn’t have any problem working remotely so we continued working remotely for a while. One moved to Australia and the other strange enough I think moved to Mexico and started I think basically living on the beach playing music and decided he wanted to continue with us. And I think the other stuck around for a little while and then took off.
Andrew: There are a few things that stuck out to me when I got to Mexico City. This is where we spent most of our time here, Devon and I, as we’re shooting interviews. The first is I told you, I didn’t have to take pesos out of the ATM. Everyone takes credit cards or better yet, Apple Pay. The second is everyone has their phone on their desks or on the coffee tables at restaurants and I’m shocked. As a New Yorker I’m shocked that it’s that safe and people feel that comfortable.
Eric: Yeah. When I was in Buenos Aires I don’t know if you remember but it was the same feeling when you saw someone, I guess I was in Argentina too long when someone left out a phone on a table, I felt like that guy is stupid. I think I could just steal his phone. He’s just being stupid. He deserves it. Yeah. I think that’s a mentality probably after more than six years in Buenos Aires, maybe it’s time for me to try something if I’m thinking about stealing people phones. Later I came to the actual Mexico City and I saw that most people weren’t afraid. You go, you walk by coffee shops, you have their laptops, their MacBook’s outs, which is also kind of strange coming from Argentina because most people didn’t have at that time Apple . . . .
Andrew: What about this? Yeah. Right they didn’t have the app, but they . . . What about this? I see a lot of Army guys with machine guns. I’ve heard stories about if you take the wrong turn, a cop could pull you over, put you in jail until somebody comes out, comes over to bail you out. Are these issues here in Mexico City?
Eric: Personally I haven’t experienced it. I have actually done that part of going down the wrong way on a street when you’re driving a car. And they let me go. Of course, I’ve heard in most cases there are still issues with bribery and stuff like that here. But in terms of the actual violence in Mexico City, specifically in this area, I have to admit I kind of live in a bubble. I can’t speak for all Mexico City, but I feel very safe here and I don’t fear for little things like that. I’ve become more accustomed to leaving my phone out of the table before without having to stress too much that someone . . . .
Andrew: I’ll never get used to that. I still can’t believe that Devon’s walking around San Francisco holding an expensive camera like it’s nothing. I feel like Devon, someone could just snatch it from you at any minute. The other thing that stands out is you were telling me that when you came in here and started going to grocery stores and you watched how people were even accepting money, which was different from other parts of Latin America.
Eric: It was more like when I was in Argentina I recall many times people in the store that worked there would do inventory based on paper bags. I was also noticing sometimes there weren’t things on the shelves. This is prior to 2012 so things might have change a bit since then. But when I came here to Mexico the first thing I realized is wow, they have scanners. It’s just like being in the States. It seems . . . you see the normal change in the States and just the business practice is much more based on what I was used to growing up.
Andrew: It is very much like the States. Which is sometimes a little disappointing because you’ve got this beautiful old hotel that we’re staying in, a couple of doors down is McDonald’s Postres. And a few doors down more is a Subway sandwich and across the street is some other American place.
Eric: Krispy Kreme or . . .
Andrew: Right, yeah. Exactly.
Eric: The only one you don’t see is Taco Bell.
Andrew: Why? Oh, right. Yeah.
Eric: That didn’t work out so well here.
Andrew: All right. Let’s talk about how you grew your customers. So now you’re here, you’ve decided this is going to be the country that you’re going to focus on. What did you do to grow? Facebook ads? Google ads? What was it? What worked?
Eric: So when I came here, when I started EasyBroker, my first thought was that, “I’m a programmer. I have a tech background. I’m going to upload my software and they will come.” You know, I’ll be at the beach, I’ll just upload some code, and I’ll be good to go, you know? But I realize especially in this space it’s very important to have that contact with your . . .
Andrew: Is that the fan?
Eric: Yes, that’s fan.
Andrew: Can you turn that off?
Eric: Sure. Just hit the . . . I think it’s the red button. Left side or right side? [One or two 00:27:12] . . .
Man: Right side . . . oh, left side.
Man: Thank you, Andrew.
Andrew: Sorry, no. I think we should keep that kind of stuff in. So you’re thinking at first I put up this website and people are going to come. I’ll SaaS money. Month after month after month it’s going to grow, great. It’s not what happened. Instead you started going out and talking, knocking on doors and then you started buying some ads.
Eric: We grew a certain degree that way. But one of the problems we had eventually is you get the early adopters, you get the people who definitely know that they need this and they need a solution for a problem that they have. But then there’s all these sort of people that are left behind after that curve that you need to go out and physically meet with. Especially in the space within real estate, most of the agents are still very old school. Most of them tend to be from an older generation that didn’t grow up with internet, with smartphones so we realized coming here . . .
Well, one thing. I made a decision coming here to focus on a specific country because at that point in time in Argentina it was sort of throwing a wide net with lots of different people but we weren’t really having a strong base in one particular country. So came to Mexico, decided to focus on here. Set up something I’ve always been really big fan of is the customer experience and providing great customer support. So in the early days, I did support. The clients talked directly with me, I had Skype calls. Dealt with their problems all the time. I learned a lot about them, but what we didn’t have is that face-to-face interaction. If we could focus on one country, we could set up a team dedicated to that . . .
Andrew: To customer support.
Eric: To customer support and also the training. So we do regular workshops in our office. Sometimes we go out to the client’s office too or we travel around the country. We present the software that we have and show them how to use it.
Andrew: You travel to their office, you show them how to use the software and that’s a lot of expense for . . . how much is the monthly fee?
Eric: They start out at 990 pesos. I think it’s like $74 a month. So depending on how many users you have, the price obviously changes.
Andrew: Wait 900, that’s $200 a month, no?
Eric: No, 990 pesos I believe is . . . you take about half and round it up a little bit. But actually with the peso right now I think it’s about $50 or so. Actually it’s about almost 50%. About $50 is starting point. Sometimes you see this great SaaS software in the States, super simple and five times as expensive and I’m very jealous. But starting here, we found a way to make it profitable and the main way is in the case of if we’re meeting new clients, we invite them to our office, that saves a lot on expenses. And when we travel, we travel and meet with several different clients or we do a bigger event where people come to us.
Andrew: Like a conference?
Eric: It’d be maybe more like a workshop where we . . .
Andrew: Where they come to you?
Eric: Exactly.
Andrew: When you go out, do you stay in the same hotel room?
Eric: No. In terms of . . .
Andrew: Like when you’re traveling somewhere to present to a client.
Eric: Sometimes we use Airbnb. Sometimes we just rent like a space, coworking to do the presentations but it depends . . .
Andrew: I say that because a lot of companies do that. Devon and I traveled all the way over here. We’re going to do a lot of traveling. I still can’t bring myself to share a room with someone. So we have different hotel rooms. Am I too uptight?
Eric: Yeah, you are.
Andrew: I am.
Eric: No, go the Airbnb route.
Andrew: That actually is a good move because then you have the shared living room. I still when I’m like traveling to different countries, I want to have someone at the door answer questions for me and help me understand things. All right. I get what . . .
Eric: You’re getting too spoiled now.
Andrew: I love being spoiled. It’s not too hard for me. I love it. Devon needs to be more spoiled. We need to do room service for him. He’s never done room service.
Eric: Never?
Andrew: Yeah. Is that awkward for me to say?
Devon: No man, you’re over the top fancy.
Andrew: Yeah man, now I got [inaudible 00:30:59]. So you go to them. You do it. It pays off financially for you to show it to them and demo it to them. I get it. But that’s saying the customers you have now. That doesn’t bring new customers.
Eric: Well, in the long run I think it does.
Andrew: Because?
Eric: Well, two things, because I think really creates . . . we’ve created fans of EasyBroker, people that really . . .
Andrew: Fans of broker software?
Eric: Yeah.
Andrew: Really?
Eric: Yeah. It’s possible.
Andrew: It is?
Eric: It’s possible. Yeah. In our case we have like evangelists that basically got out and help sell our software even though we don’t ask them to do it.
Andrew: Why? What’s in it for them? The way I understand how brokers work is they’re each independent like entrepreneurs that share a brand, right?
Eric: Yeah.
Andrew: Okay. So is there someone in there who has interest in sharing with the other people who are also working for the same brand?
Eric: Well, a lot of people in our case with EasyBroker, you’re sharing your inventory a lot of time. So you have properties and you want to sell the properties [inaudible 00:31:57]
Andrew: So I listed my properties on EasyBroker and another broker is also on EasyBroker has a better chance to go see my properties?
Eric: Exactly. So you have . . . now you already have access to more inventory instead of being able to sell just these 100 properties of your closest colleagues, you also have properties of other people.
Andrew: If I bring somebody in, is there an incentive for me as a broker to . . . like would they get to show myself more? No.
Eric: Well, it depends on . . .
Andrew: You’re not juicing it?
Eric: In our case we have . . . MLS that we have is very different than in the States in that it’s more like a Facebook. We decide, you know what, we get along. I trust you. I’m going to work with you. But Devon here, he’s kind of sketchy. He doesn’t like to order room service. So I don’t want to work with Devon.
Andrew: That explains a lot. So when you were showing me the software, I saw a property, I saw the person’s face. And I’m assuming that the broker then gets to see the person’s face, see that they were willing to share permissions and get a sense of whether they want to actually send someone to them and they don’t trust them. Got it. So if I get a friend or if the broker gets a friend in the network that they trust, they’re more likely to do business with them. Got it. And that’s the network effect.
Eric: So you have that network effect there but also in the case of when you meet, I think it’s something with Mexico in general, is trust is tougher to build up. So when you want to meet someone in person in a lot of cases. I think helping your fellow broker is a good way to establish those relationships. But also in our case, I really think it’s not just because our product does have a lot of value. There is added value to has more users in our software, but that people actually really love I think the way we treat them and we really try to help them improve their business as opposed to say, “Use the software to improve you business.” We’re like, no, there’s this great course you might want to check out. We also do courses on things that don’t have necessarily a relationship with EasyBroker.
Andrew: Because?
Eric: Because we want to help the agents do [inaudible 00:33:55]. . .
Andrew: You get a commission from that?
Eric: No, we don’t. Sometimes we do charge for courses, but it’s mainly we don’t make money off of that. It’s more breakeven to pay for this space, the coffee or whatever else.
Andrew: Oh, it’s an in-person course. Okay.
Eric: Or it’s a webinar.
Andrew: As we’re touring your office I saw there was a conference room with sales people. What do they do?
Eric: So we have our inbound sales team.
Andrew: Inbound means what?
Eric: So it’s when people sign up for EasyBroker, we immediately get an alert that says, “Hey, someone signed up.” We give them a call and say, “Hey welcome to EasyBroker.”
Andrew: Immediately somebody on your team calls them?
Eric: If it’s during work hours, we generally try to call right . . .
Andrew: Really? While they’re there?
Eric: Yeah.
Andrew: Do people pick up in Mexico?
Eric: Yeah.
Andrew: They do?
Eric: Especially if you think about the sales space, they’ve got clients all of the time calling, so I think it’s a little easier maybe in our segment because they’re going to answer unknown phone calls.
Andrew: Right. Yeah. It could be a potential customer.
Eric: And our team is taught more of . . . We try to focus more on helping them learn how to become better agents, learn how to sell more. We’re trying to help them as opposed to be like, “Buy our software.” We’re more focused on trying to establish a relationship with them and helping them grow as an agent. So that’s the inbound side. They do follow-up with people who are signing with EasyBroker. They come to us. Those are the inbound leads. And the outbound we have team we call them the evangelist actually. Because their goal is more to go out and spread the word. You have to pick the word.
Andrew: The gospel. It’s okay to say the gospel.
Eric: Is that okay?
Andrew: Yeah.
Eric: No. So their job is really to go out and spread the word of EasyBroker across the land in Mexico here. And essentially what they do they focus on bigger clients or events on speaking at real estate conferences, looking for other ways for people to get to know EasyBroker and also to actively go and look for certain source of clients. So you that certain areas you know which clients are bigger, clients vary. I’m trying to focus on [inaudible 00:35:51]
Andrew: Like find them and what is it? Some emails designed to get a phone call and you work with them that way?
Eric: It’s really ad hoc so it depends on . . . and it’s a lot of who knows who. So you go, “Hey, there’s this agent over here. We have a client that works with him that knows that person.” We’ll call up the [park 00:36:07] line first and say, “Hey, do you know this person?”
Andrew: Really?
Eric: Yeah.
Andrew: What does sales person go for here? Let’s not talk about your people’s salary but roughly someone who does that kind of work in Mexico.
Eric: It varies a lot. So if you’re selling helicopters, obviously you’re dealing with a very different market. You’re dealing with certain luxury goods.
Andrew: Which is [SaaS 00:36:24].
Eric: So salaries in general if you’re dealing with customer service, things like that between 10,000 and 20,000 pesos, net pesos if they make a salary, would be kind of a standard price. For sales, you might have a base salary of like 10,000 pesos and then you have commissions based on that. And those commissions are based . . .
Andrew: 10,000 pesos is how much . . . ?
Eric: It’s like a $500 base, something like that would net with . . .
Andrew: 500 per month.
Eric: Per month, yeah.
Andrew: Per month. Got it. So that’s why you can afford to have more outbound sales people. Also you have to take into account, I think generally you’re looking at a sales team, you take about 20% of what you’re looking. You take the lifetime value of that client and that’s kind of what you can use for your sales team. That’s the number I’ve been recommending for a [inaudible 00:37:11]
Andrew: 20% of what the lifetime value of the customer is . . .
Eric: Can be . . . Yeah.
Andrew: Can be what? The bonus?
Eric: It’s what you can use for the commission. You know there’s a scale and there’s not [topped out there 00:37:21].
Andrew: Let me close out with this.
Eric: Sure.
Andrew: I have a sense you have a chip on your shoulder compared to like the U.S. entrepreneurs. We have looked at your LinkedIn profile and other things. You say I run and you talk about what the company is very clearly, very concretely so we understand it and it’s profitable. I sense that you feel like entrepreneurs in the U.S. some of them get a lot of attention for funded companies that go bust fast, like the one I told you, a friend of mine as we’re walking around and they get all of the attention but you’re building a real business with real profits and it’s just . . . I don’t know if you’re upset that it’s unnoticed, but it feels wrong.
Eric: I don’t know if I’d say a chip on my shoulder about that but I do . . . I’m a really big fan of building something that people want and charging a price for it and I like bootstrapping in general. I think it’s probably the right way for many entrepreneurs, and I think many entrepreneurs see raising capital as a measure of success even if you build it and nobody wants. And I think there’s this set of businesses, there’s so many niches in the world where you can build businesses and build very profitable businesses up where you don’t need to be the next Facebook, don’t need $1 billion revenue.
Andrew: Over million in profit, fair to say, a year?
Eric: Yeah.
Andrew: It’s not outrageous. Okay. Around profit?
Eric: Profit. Yeah.
Andrew: Profit, okay. Wow. Do you regret doing it outside the U.S. and not in the U.S.?
Eric: A little bit in terms of the time it took to get where I’m at I think would have been a lot faster in the States for certain thing. It took me a long to figure out how to build a network in another country, how to work with different cultures. I worked with Argentina, the culture is very different than here in Mexico, which both are very different than what’s in the States.
And the time I spent trying to build that network, figuring out how to be a good manager, figuring our how to motivate a team is a lot of time of maybe I could have saved by being in the States but I don’t regret in the sense of I’m envious. I think sometimes looking at software than what we do in the States, what they charge and we’re like, “Oh, my gosh. I should be in the States, I’d be doing this.”
But I don’t think in terms of . . . I’m really happy of what I do. I love the business. I’ve been doing this for 13 years now and it’s something that gives me a lot of pleasure to say that I’m helping, and this year our team is helping the industry improve, improving an experience of people who want to buy. The most important purchase probably in the lifetime is a house or renting a house, it’s something super important to people’s lives and I think to have an impact on that, even if we’re not a billion dollar company, is something that makes me very proud.
Andrew: All right. We’ll close out with one of the best things about living in Mexico.
Eric: One of the best . . .
Andrew: What is it?
Eric: I have to say food.
Andrew: You really are foodie. We walked around . . . Every restaurant here I ask what we should do for Devon’s birthday, you came up with a bunch of great restaurants. That’s what it is. And this part, what is this part of Mexico City called?
Eric: It’s called Condesa.
Andrew: Condesa. This is such a cool part of it. I almost feel uncool just walking around here. Everyone’s got a well-groomed beard, the aprons the guys wearing at the stores are all like denim, but denim that’s just the right amount of faded but not really. That’s what it is.
Eric: We also have a . . . I think the Condesa and [Roma 00:40:41] is known as like the hipster neighborhoods here. If you like food, you like coffee, you like parks, it’s a great place. It’s very walkable. I think Mexico City has this reputation of being this traffic strong city where you can’t get around, which is true to some respect.
Andrew: But not here in Condesa.
Eric: No. And it’s a wonderful place to live and definitely the food, the people, it just adds to everything. It makes it a wonderful experience.
Andrew: All right. I’m going to tell people not to go if they want to check out your site, not to go to easybroker.com, but to easybroker.com/en, right? Isn’t that the English version?
Eric: That’s right.
Andrew: I was going to it some many times I know it by heart. I want to thank the sponsor who made this interview happen. ActiveCampaign. If you want to switch over to them, they make it super easy. They’ll even migrate you away from your other software. Email marketing activecampaign.com/mixergy. And this voice is courtesy of me running a marathon here. I just crossed off North America for list, next is South America. If you want to see how I’m traveling the world and doing interviews with entrepreneurs, go check out runwithandrew.com and I’m looking forward to being here actually. I should have extended the stay.
Eric: Thanks for staying longer. You can move down here with Olivia.
Andrew: Olivia, please, let’s move to Mexico City. I’m done with San Francisco. She won’t move. Bye, everyone.
