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 for an audience of entrepreneurs. Joining me is an entrepreneur who was running a development shop, saw problems that his clients had and said, “I think I’m going to pursue this idea that has nothing to do with that problem.” And then, as he built that other idea, he started to understand what it’s like to build a software as a service. And he said, “You know, let me come back to this problem that I saw before.” And the problem was, it was hard for businesses to build websites. It was hard for him to do it. Dusty, am I right? I’m looking at your face as I say it. You seem pained.
Dusty: Yeah, no, no, that’s absolutely right. Specifically agencies and designers.
Andrew: And the company that he came up with is called Flywheel. They are a premium WordPress hosting company that is specifically built for design firms. Dusty Davidson created this software. Just the management of it just looks beautiful. I like your backend, sir. I like the dashboard. We’ll talk about that, how you built it. And then I think we’re announcing it. I don’t think I saw much news about this. Was it public that you sold the company?
Dusty: Yeah, it was super public. We sold the company at the end of June.
Andrew: How did freaking miss it? All right.
Dusty: Yeah, we sold the company to WP Engine at Austin actually.
Andrew: You did? All right. Please edit out . . . No, we don’t do any editing. You’re embarrassing me. All right, we can do this interview thanks to two phenomenal sponsors. The first . . . Oh, there we go. I see the article. Not a lot, but I do see it if I look for it. The first company is Toptal. If you’re looking to have something built, check out Toptal. I’ll talk to you about why their developers are phenomenal. And the second is James Altucher. He is recognizing a lot of people who are listening to my interviews who don’t really have a business going. He says, “Guys, it’s easier to start a side hustle than you think.” And he’s got a book about side hustles. We’ll talk about that later. First, Dusty, good to have you here.
Dusty: Great to be here, Andrew. Thanks so much for having me.
Andrew: Do you remember the day when you sold?
Dusty: It was blur but yeah, I remember it quite a lot.
Andrew: What day at of all the days in the process stands out to you? Is it the day when you signed the contract, when the wire happened?
Dusty: You know, there’s multiple points at which you celebrate. You celebrate you get the first email. You celebrate when you’re sort of like, “Hey, yeah, let’s do this.” You celebrate when you arrive on a number. And then you certainly celebrate when you sell a company. And then I think, you know, ultimately you celebrate when you’re hitting [refresh 00:02:40] bank account. And so all of those . . .
Andrew: Refresh on your bank account. You remember that day specifically?
Dusty: Oh, yeah. And I was on a plane. Like I was like literally like plane Wi-Fi just, you know, waiting for the wire to hit. So all of those are super fun and that’s the most crazy thing. I thought it’d be like one thing, but it was like multiple celebrations along the way.
Andrew: How much did you sell for?
Dusty: Purchase price is not disclosed.
Andrew: To WP Engine. They essentially do what you did but they go after companies directly and you go after agencies. Am I right in that distinction?
Dusty: Yeah, I think that’s we had a pretty niche focus on agencies, specifically small to medium-sized agencies. I think they serve a much larger agencies as well as direct to brands. And, you know, they’re about six or seven times bigger than us in revenue and in scale. And so the combined company is now the biggest combined company in the WordPress ecosystem.
Andrew: Bigger than Automattic?
Dusty: Yeah, in terms of headcount and I don’t know about revenue numbers. And that was part of the announcement and everything. Coming together to create the biggest company in the WordPress world.
Andrew: Wow, I had no idea. I had no idea. And I’ve got your revenue here in front of me. You gave it to us before this sale. Can we talk about what the revenue was last year? What was it?
Dusty: It’s pretty public. So I think last year, we ended year about ’18 or ’19 in ARR. So by mid this year we were in the 22 range.
Andrew: Wow. So how did it change your life to sell this business? I know you sold one before. There’s another one that’s still going that you still have equity in. How did it change your life?
Dusty: You know, I think that it’s always a goal, right? So I don’t think it’s changed anybody’s life yet. I think one of the great things about the alignment with WP Engine is that how we’ve come together to sort of continue to tackle the market of designers and agencies, just with more resources and more scale and more availability of, you know, talent and other things. And so, you know, I don’t know that it’s changed our lives yet.
Andrew: Because you have equity in . . . But, no, you’ve got money in the bank. That doesn’t give you the sense of, “All right, I think I’m okay now?”
Dusty: Well, yeah, I mean, you don’t have to work ever again. That’s nice. But, you know, we do and I’d say my partners and I here, we’re builders. We love, you know, doing and building and growing. We love scaling the business. And this, you know, honestly, it’s a cool new chapter. And so yeah, I mean, it’s life changing in some regard. And at the same time, it’s kind of like business as usual.
Andrew: The first big company that you started was this dev shop back in 2007?
Dusty: Yeah, biggest. I think it went to 10 people. But, yeah. First foray into, you know, leaving my corporate existence that’s for sure.
Andrew: Your corporate existence was also being a software developer. You worked at C&A Industries, at Genesis Systems. And then you said, you know, I’m going to create my own. You got clients. What type of client did you get?
Dusty: It was anybody would pay us to build either apps or websites. You know, it’s like, you know, classic, first, you know, consulting firm for a technologist. But, you know, we focused on that kind of like backend systems for businesses and then website development and then did a lot of work with agencies and sort of as the real partner to agencies.
Andrew: And were you starting to find that they went from wanting to build their own sites to just saying, “Give us WordPress, Dusty”?
Dusty: Yeah, I think at that time, it’s 2007-ish, I think, you know, there’s a lot of sort of WordPress was really taking off and really empowering designers to build websites more easily and kind of becoming the de facto platform, I think, in a lot of ways. And so we helped them build it and helped them build those sites, and, you know, be able to launch them to their clients. And I think that was kind of just at the intersection of the WordPress becoming popular and designers and freelancers really coming to their own and being, I think, a really big force. And so that was about that time frame.
Andrew: And so talk about the pain that you were noticing your clients had?
Dusty: Well, one of the things we noticed is that you spend, like you’d had a client, they’d pay $20,000 to develop a website and then you put it on $2 month hosting. And, you know, the client didn’t really care whether or not, you know, it was $2 or $100, they just wanted it to work. And so, you know, not get hacked and be performant and all of these sorts of things. So that was pain number one in just the hosting world. And then you have these designers and these agencies in the middle and, you know, they’re using sort of antiquated systems to work on these websites.
You know, I always say that they’d have a Google Doc with, you know, all of their clients usernames and passwords in them so that they could log into their hosting accounts. And, you know, they’d share usernames and passwords. And so, you know, we really sort of brought that control panel into the modern age and unwrapped it with a brand that I think really strove to like humanize hosting. Lots of hosting and hosting platforms were like pictures of servers and kind of clunky backend and this whole thing. And we wanted to build something beautiful for an audience that really appreciates that.
Andrew: But this was when you were running this agency, you weren’t going to . . . why didn’t you do anything about it back then?
Dusty: Yeah, super good question. We think about that a lot, actually. And in fact, I mean, one of the things that we do at Flywheel is help our customers earn recurring revenue, right? Like lots of designers will build websites and then be like, “Well, here you go.” And, you know, we really encourage them to resell and be . . . we sort of handle all the crud of that and they just get to put money in their bank.
And I look back at the BrightMix days and I’m like, “Why didn’t we do that?” Like we developed hundreds of websites. Like we would have this like phenomenal recurring revenue stream if we had done that. But, you know, it just wasn’t the mindset definitely. We were focused on project work. And so, you know, I think that we didn’t see a lot of the pain points until we kind of removed ourselves from it and looked back on it and we’re like, “Oh, yeah, that was dumb.”
Andrew: Along the same time you created Silicon Prairie News. Why? It’s a blog about what?
Dusty: Yeah. It’s high [licensed 00:08:54] startups in the middle of the country, this Silicon Prairie, if you will. You know, honestly, it was felt like it was to find more people like us, right? Like I think that we cared about startups, we cared about technology, we cared about so high growth. And we knew that there were lots of people around the Midwest that were similar. They just kind of were under the radar. And so Silicon Prairie News became a thing to really shine a light and build a community amongst those folks.
Andrew: Why? Why do you care?
Dusty: Why do I care? Well, because we live here and we like . . .
Andrew: Why do you care where people are? We’re in the age of the internet where it doesn’t matter where people live. If it doesn’t matter where they live, then go to Silicon Valley. If it doesn’t matter where they live, let’s just be at on home, be online. And online is the connection. Why did it matter that you got to know people in the middle of the country?
Dusty: Well, I think that generally, you know, you are able to get connected in ways online now that you some years ago couldn’t. But, you know, there’s still a value in being connected to the people around that you’re physically close to, right, in your community. And so, Nebraska, Omaha, Nebraska is not exactly known for technology, but it’s here and you kind of like, for us, it was about saying like, “Man, there are guys and gals out there who are building extraordinary things and I just want to learn from them. I want to talk to them. I want to be connected with them.” And I think that that’s, you know, pretty. And, frankly, encourage others that like you don’t actually have to move. I mean, in a way it sort of proves that geography doesn’t matter. Because you don’t have to move to accomplish big things. And I think that, that’s something that was missing here honestly.
Andrew: You wanted to report on it. You also wanted to do an event. You did Big Omaha. I interviewed Jeff Slobotski about that here, your co-founder in the event. Was it also thinking, “Hey, you, look, this TechCrunch thing is taking off. There are these other sites in tech. I don’t think we could compete nationally. Why don’t we create our own local one then we could really dominate the space that they’re ignoring anyway? And if it’s not as big as TechCrunch, it’s still not going to be taken over by TechCrunch because they don’t care about this, this part of the world.” What do you think?
Dusty: Yeah, that absolutely it. And certainly from a business perspective, it was about saying like how do you . . . I mean, the altruistic part was like a community building. But like from a business perspective, I think that there’s great stories to be told and there’s an audience there. And then for the conference, there was absolutely an audience for a conference. And I think we were we were certainly early on the edge of boutique conferences and really recognizing the value and not only the sort of, again, altruistic value in bringing people together and the serendipity that happens there, but frankly, you know, the ability to make money on those things.
Andrew: Dusty, I feel like the tech world has changed since then, that it really has gone into that if you want to make it big in tech, you just go to Disrupt or you go to Demo Day or a couple of other big events. Everyone else has just given up on software as a service, for the most part. There are handful of people who are obsessed with it, but it’s not the thing that they could come out of the grassroots anymore, right?
Dusty: Well, I don’t know. I do think that these are the types of companies that can exist anywhere. And as they solve a problem and you have efficient access to people who can build things, I think software as a service is, I think, only expanding in my opinion. And so what I see is lots of really extraordinary companies like Flywheel that exists in places that are outside of Silicon Valley. And in fact because it’s cheaper and in fact because there’s sort of under the radar is sort of like a lot of ways assets and to the extent that you can build companies much more quickly and more efficiently. You know, because we, for instance, are top of the talent food chain here. And because, you know, we can 10X more capital efficient.
Andrew: Got it. Cheaper or higher. Cheaper to rent space, but at the same time because you’re doing such big things, it’s easier to draw people into you.
Dusty: Yeah, exactly.
Andrew: What was the big driver for Silicon Prairie News and Big Omaha for getting people interested? Was it like . . . why don’t we go with the event? Was it the bigger the name the more people were willing to buy tickets and show up?
Dusty: Yeah, it was. And it’s certainly name driven, right?
Andrew: The speaker name.
Dusty: The speaker name drives a lot of that. But I think experience was . . . the hope was always that the experience would drive that. I think we got that in the early days, where people would be like, “Oh, this is like, South by Southwest in the early days,” or, you know, being there was valuable. And so they’d tell other people that just being there was valuable. And so it was a little bit of word of mouth around just say, “Hey, this is a great event,” and you’ll like out of it versus but then in part, like, yeah, who’s on the masthead?
Andrew: What about for the website? What was the big driver for traffic there?
Dusty: You know, honestly, it was just, you know, anytime a story of substance happens, I think that’s, you know, and sort of the day-to-day, there’s not enough really, like, sort of like gripping content happening. So that was pretty steady. But anytime a company sells or anytime a company raises money or, you know, those types of events, I think there’s a big rallying cry in part because . . .
Andrew: If you break the news or if it happens to be local and you report on it?
Dusty: Both, actually. And so, you know, the best is certainly that you . . . And, you know, those for sure.
Andrew: Best if you break the news you were saying.
Dusty: Yeah. And those were the big ones. It’s actually like anytime there’s an acquisition, I mean, that’s just a, you know, in a place like Omaha, you know, the entire community sort of celebrates it or we hope that it does, right, because that’s big impact. Certainly, it was the case with Flywheel.
Andrew: Okay. So let’s talk about the one company that you started before and then get into Flywheel the one software company. How did you come up with the idea for Tripleseat Software?
Dusty: Yeah. So, you know, we were the classic dev shop in a way looking for, you know, trying to get out of the time for money thing. And got connected with the gentleman who had worked in the restaurant sort of software industry for a long time. And he had an idea to kind of, you know, modernize how restaurants about managing their private event spaces. And so he had the idea. We were the tech guys and kind of the rest is history.
Andrew: Did he pay you or was just let’s partner up?
Dusty: He had originally approached us as a paid gig then it was sort of shook out is just, you know, was just a partnership.
Andrew: Was this Jonathan Morse?
Dusty: That was Jonathan Morse. Yep.
Andrew: Got it. And do you remember what their original version was and how it evolved in the early days after it launched?
Dusty: Yeah. I mean, at its core it’s a CRM. So it was just a super rudimentary CRM for restaurant event professionals. And, you know, I think it’s a software that takes quite a bit of complexity in what it does to be able to provide a ton of value to the restaurants. And so it was pretty bare bones for a long time, which didn’t match with the fact that it was recession and no restaurants were spending money on things. So we just kept adding features. And by the time the economy sort of picked back up, we had added enough features to where you’re like, “Huh, you’re going to actually sell the dang thing now.”
Andrew: So for a long time, you weren’t making any money with it?
Dusty: No, not at all. In fact, we kept the consulting business running to pay the bills. You know, at a time when the, you know, again, like no companies were having private events at restaurants in October of 2008. You know, it’s not exactly where they were spending their money.
Andrew: I guess what I’m trying to understand is why did the world need this? What’s the problem that it was solving?
Dusty: Well, for restaurants and if you think about a restaurant that starts and it’s a chef and it’s not like they won’t get . . . you know, they’re really business savvy, they want to get butts in seats. But if they actually can make way more predictable money in private events. And so if you treat the private event business like a sales process, you can make . . . you know, great restaurant can make half or more of their money on their private event space, if they can book it consistently. And, you know, what we’d encourage people to do is say, like, “Hey, you had your holiday party . . . ” You know, people had holiday parties last year, just call them again and be like, “Hey, we loved having you. You should have your holiday party in here again.” And so just sort of modernize how restaurants treat that portion of their business, which can be a huge, huge revenue driver.
Andrew: Because the way they were doing it was saying, “Someone booked a private event last year for Christmas, someone else is going to call us this year for Christmas. We know the Christmas happens to be hot.” And they were just waiting for the calls to come in?
Dusty: They’d just wait for the calls to come in. And, you know, they get savvy and they’re like, “Well, you know, I saw you had your holiday party. I know you had your holiday party here. You know, what else do you do? Like we’d love to have you the rest of the year sometime.” And so, you know, just making . . . sort of changing restaurants mentality to be more proactive about their business. And then more easily and more or with less friction manage that that event through, you know, invoicing or all these sort of adjacent functions. And so they start unlocking that revenue potential in restaurants.
Andrew: And were restaurants actually able to start making sales calls? It feels like that’s a pretty tough thing to ask of them.
Dusty: Well, the great ones already do. You know, many of them will have a sales manager for their banquet facility or whatever it is. And so it’s really for those folks, it’s about, you know, like making them more efficient and then streamlining the experience for their customers. And then, yeah, absolutely see restaurants sort of like as you tell the story of this is going to be a big driver for you, you know, you absolutely see restaurants becoming more sophisticated with hiring on that side of the house. And less . . . like not less focused, but you know, not ignoring it, so to speak, and just paying attention to the dining room.
Andrew: Got you. Okay, so let me talk about my second sponsor. I’d love to just find out what’s one thing that you learned from creating this business? This is the first software company that you launched? What did you learn from Tripleseat that you brought back with you to Flywheel? But first, I want to talk about my sponsor, Toptal. Do you know Toptal?
Dusty: Familiar, yeah.
Andrew: You are? But you haven’t heard from them yet?
Dusty: We have not. No.
Andrew: Here’s the beauty of Toptal. I always thought was just for people who need high-end developers only and all I have is a WordPress site. It turns out there’s some people who are really phenomenal with WordPress as you know. I had a site where I needed a bunch of little problems and then there are big issues to tackle. Little problems like why is the site just constantly not moving? And big issues like how do I let people search then growing list of interviews that I have?
And so what we did was we went to Toptal and we said, “It turns out you guys do WordPress. We need a developer who can do this.” And they found people who’ve done that, all taught and battled with these problems and come up with solutions to the ones that we were starting to get working on like search.
They put a couple of developers in front of us. Michael here on our team talked to them and said, “I think either one is good,” but he hired the one that he thought was the best fit. And that person got to work and was done with the project frankly like under a freaking week, this thing that took us months to solve. And as a result, we said, “All right, now that this search is good, let’s hire a designer and let’s really improve it.”
So that’s the thing about Toptal. Anyone out there who needs the best of the best developers, people who will really just rock your world with how good they are because they’ve done this before, because Toptal screens them to the point where when people I see, Dusty, you might see this too.
If you go on Medium, you see people who go through the Toptal process of getting hired or getting into their consulting book, those people start blogging about it. People who don’t make it will blog about why they didn’t make it. It’s that type of process. Which is why when we as clients finally hire from Toptal, we get the best of the best. All right, Dusty, I’m going to give you an offer. I don’t know if you’re still at the place where you care about deals. But here’s the deal.
Dusty: I love it.
Andrew: You do? Oh, good. If you use this link, they’re going to give you 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period. Don’t worry, you won’t have to pay for the developer, but they will if you’re not happy. Go get the details. Get this offer at toptal.com/mixergy. You know what? My guests have used it so much that I don’t even think Toptal cares if these ads ever air. They just like, boom, give them a call.
Dusty: It’s just for the guests.
Andrew: I honestly think that’s what they’re going after. What did you learn? What’s one thing that you learned? And then we’ll close it out and then move on.
Dusty: Yeah, I think the number one thing, so we were a couple of developers who started a company, right? And I remember building the first version and we made sure that you can take money and then, you know, we were going to be the basecamp of restaurant software. And you sort of like you just put it out there and, you know, they’ll show up. And I think a lot of software engineers who started companies things like that. And, you know, I think that that company certainly took many years of hustle to get there but if you fast forward to Flywheel, you know, we didn’t build anything and we ended up the splash page and then a whole lot of hustle with nothing behind it sort of the inverse in a way because we had learned . . .
Andrew: You’re saying when you get Flywheel. With Flywheel? Sorry, the URL is getflywheel.com. With flywheel you said, “Hey, let’s not make that same mistake. Let’s just put up a quick landing page.”
Dusty: Well, yeah, and people aren’t just going to show up at your door, right? And so we definitely like we actually thought that was the case. Really, it was like push publish it at Tripleseat and we were like, “Where are they?” And, I mean, it sounds stupid. But like I think a lot of people think that and especially engineers who did start little software companies.
Andrew: So Flywheel, you put up a WordPress site, you get one of the free themes, I imagine. And you say, “If you’re interested, enter your contact information.” And then you did what? You put it up on your personal blog, you put it up on Silicon Prairie?
Dusty: The early sort of hustle that we did was we didn’t use a theme, we actually did design . . . my partner is a designer. So he designed a very beautiful sort of like splash page that we then posted to these design galleries, right? And so we just had this like beautiful WordPress hosting built for designers like in the screenshot and so it became popular on these design galleries and drove just a ton of traffic in because, you know, they wanted to see it being a beautiful site. But then they get there and they’re the audience. And so they’re like, “Huh, this is interesting.” And then we would pick up the phone or we’d emailed them and then call them ultimately and just talk to them. We talked to hundreds of early customers before we . . .
Andrew: You literally talked to hundreds of customers before you launched?
Dusty: Oh, yeah. Because you’re just like literally we were saying, like, “Hey, we’re building this. We’d love to talk about your process. We talking about anything” And because we came from that world and so do our customers, you just talk to them. Like it’s just about having a conversation. And so a lot of it was validating the idea, certainly, but a lot of it then was selling but without selling, right? We didn’t have anything to sell. It’s more like, “Hey,” we were like, “In six months, we’re going to come back to you. Is this something you would buy?” And the resounding answer was, “Yes.”
Andrew: What did they tell you that you didn’t expect?
Dusty: Oh, good question. Well, I know, I think that what you did learn or you get out is that people were used to their own ways and process and they believed that they were okay with it. And so you actually learned that, that it wasn’t such an epiphany as we had thought. We were like, “Oh, god, this seems natural.” They were like, “Yeah, I’m actually okay.” And that was their mentality. But then when you then actually put it in front of them sometime later, they were like, “Oh, yeah, that’s stupid that I was doing it the other way for this.”
Andrew: Like what? What’s a stupid thing that they were doing over and over and didn’t realize?
Dusty: Well, I think that a lot. Like the example is that, you know, I think that people think that you need to just Tinker and configure and install and do all this stuff. And our belief is that it should just work, right? Like you should just like click a button and you should have a WordPress site and it should just work.
Andrew: And they believed they needed to install what? The right plugins, the right what?
Dusty: No, they manage the server and install. Like they’re used to doing it. They’ll install WordPress itself like, you know, configure it in the configuration files and stuff. You know, all these sorts of things. And I think that, you know, you sort of like learn that the status quo is like really powerful for people. But at the same time, what you’re hearing from them are their pain points. And it wasn’t until you sort of give them the product that they were like . . . where it clicks for them. But you’re hearing pain points but what they’re saying is status quo. And that’s super interesting.
Andrew: So it might be something like, you install WordPress, you’ve got to then get your password, you log into their WordPress, you have to find a way to save it so that you can give it to the client, you then create an account for the client, you then go in and you change the URL structure because WordPress back then was just the domain/a bunch of numbers instead of the nicer URL. And it’s all those changes they’re telling you, “This is a natural. It’s not that hard to do.” And you realize it’s pretty freaking tedious. And you were saying, “I think I could make it easier by eliminating some of these steps.”
Dusty: Yeah. And, you know, they were configuring backups and they were doing all these things. And like our job was, the final mission is to sort of help designers do what they love. And, you know, they don’t love doing like that stuff. That stuff is tedious. They love working with clients, they love designing. And we wanted to sort of get away all the sort of technical mumbo jumbo and let them just get back to work.
Andrew: You know what? It is easy to grow blind to that. If you and I were talking and you said, “I don’t know how to install a WordPress site,” I’d go, “Come on, it’s so easy. All you have to do is go press this button over here.” I saw your eyes light up as I said it. “I have to go and press this button over here.” And by the way, don’t forget, you’re probably going to want backup. Just install that one plugin. It’s made by Automattic. Automattic creates WordPress. Don’t worry, the plugin will back your stuff up. Yes, you do have to give them a credit card. It’s kind of cool the way they do this.
So when the credit card statement comes in, they give you this URL. So you when you see it and you don’t know what it is, you go to their website, and they tell you that you paid for. By the way, let’s go back to the . . . so you just go through this whole thing. And it seems easy. But, man, it is a pain in the butt and you’re recognizing it as a creator, Dusty, as the pain in the butt that you could solve for them. And if you eliminate it, they’ll always know they could do it without you. But, boy, this is a better solution. This is a better approach.
Dusty: Yeah. And if you’re creating 10 sites a month for clients, it’s like, you know, that adds up. And if then you are also getting paid for your time, then you’re sort of like this tediousness, maybe you’re getting paid for it. But that doesn’t maybe seem right or something. Like it’s sort of like just taking away from you being able to do productive work when it all adds up.
Andrew: So Paul Graham called it schlep blindness. The blindness to all the schlepping that has to go into the work that we actually want to do. And he gives the example of Stripe solving the schlep blindness involved in accepting credit cards. But the problem with it is that we are blind to it. I’m wondering to understand how we could all be sensitized to the stuff we’re blind to now, how did you, Dusty, how did you see this was enough of a problem that you had to create at least a landing page and probably a whole company to solve it?
Dusty: Yeah. You know, I think that . . . I don’t know. Like maybe it’s just laziness. Maybe it’s like you look at the world and say like, “Why am I doing this a bunch of times? Like that doesn’t seem right.” Maybe it’s certainly a certain product. You know, my partners and I all come from like products and product development background. So it’s like you look at the world through like a product lens, right? And say, like, well, how can we solve this problem with product and not with, you know, manual work? And then part of it is just really deeply understanding the customer, right?
We were the customer, but more so than that, we talked to hundreds of them. We narrowed our focus so much on this core customer that you just you know what they need and you can sort of look at the world through those colored glasses. And I think that that’s, you know, you generally the way that I think about it, but it is a special knack, right? It’s a special knack to be like but why do you do it like that? And then it’ll be okay with like . . .
Andrew: But you know what? Let’s look at the laziness thing. Are you the type of person who always sees the 50 steps, “I’m not going to do that,” and comes up with the quick hack or a quick process or even time consuming process that will eliminate those steps in the future? Do you do that in your personal life?
Dusty: I mean, yes and no. I mean, I think it comes from software engineering background, right? Like I think the best software engineers are lazy in that way, right? They were built around sort of monotony. And it’s probably mostly that. I don’t think that I necessarily do that in my personal life that I can think of but that’s I think where the root of it is certainly something like coming from software engineering.
Andrew: Okay, and so you started making these calls, you weren’t selling people at all, you were just saying, “I think I’m going to create this. I want to understand your work, and I’ll come back to you six months later.”
Dusty: Right. Yeah. And what actually, then what really happened is people would be like, “Well . . . ” They started saying, “Well, this sounds great. Why don’t I just give you my website now and like you build all that stuff and you could just host it.” And so we literally just spun up a server and started putting sites on it and then started collecting money.
Andrew: Just do plain vanilla, anyone who could it hosting?
Andrew: But why didn’t they want you to do it? It’s kind of a pain to give someone else hosting access.
Dusty: Well, I mean, what we learned was that they hated their hosts so much that they would literally just give us their username and password. And I, which is the most mind boggling thing, because we were just three guys in a garage with a splash page. And here, they’re turning over their credentials to, you know, their websites and their domain registrar and saying, like, “Hey, like, what you guys are building is amazing. I’m super excited for it. I hate my host that I’m on today.” And we would just move the sites for them. And so, you know, you get pushback. It’s like, “Well, you know, moving a site is a pain.” Or like, “We’ll just do it for you. And that’s a . . .
Andrew: To this day you do it. I think within one to three days, if I’m okay having I said move within three days, you just do it for me for free. If I need it moved within 24 hours or 8 hours, I think it is, it’s under 100 bucks and you guys will move me over.
Dusty: Yep, that’s right. And I think, you know, that’s sort of another Paul Graham, you know, sort of like do things that don’t scale. And we think about where you at the time we have nothing but our time. And so we just would move that do the work of moving. Today, we’ve got teams of people around the world that do that work and we have tools and automated things that handle it as well.
Andrew: But in the beginning, you would tell them, “I could handle it,” or they would just bring up, we could take it over?
Dusty: No. What would happen is like the act of moving it like would get in the way of them like . . .
Andrew: They wouldn’t even listen to you because it’s such a pain to move and you said, “I could do it for you.”
Andrew: Got it. Got it. I get it. You know what? I do fully relate to that. Whatever it is that you’re about to tell me is I could understand it’s better. It’s too much of a pain to do that I’ve got this email marketing company that we use. Whatever you tell me is better I will be . . . even if it’s worse, I’d be happy just to get away from this company. But the thought of moving is so painful. I won’t entertain the conversation with you, I get it. And so you’re saying, “I’ll do the whole thing.” And so was that money even valuable money? Or was it a distraction for you to have? Because it’s not a very lucrative business when you’re just taking one or two companies or even a couple of dozen to host their sites, is it?
Dusty: I mean, like, in the early days, you like every money is money, I guess. And you know, we grew pretty quickly back then. You know, it was, it was, you know, is hundreds of websites a week and so the, you know, that adds up pretty quick,
Andrew: Hundreds of websites that you’re calling a week?
Dusty: They were coming to us, yeah, at that point, probably.
Andrew: And at that point, you still you don’t have any salespeople. So you guys are actually having conversations with them and then moving them over. So dozens a week we’re coming and you are moving over?
Dusty: Yeah. And a lot of it, you know, and this is an interesting thing is that Flywheel as scaled, you know, we didn’t have . . . it was probably three years into Flywheel before we hired our first salesperson. So it was almost all inbound driven for all those years, including the very beginning when it was just like a splash page and we didn’t really even have anything. And so yeah. I mean, it’s not a ton of money, but like, you know, you know, three guys in a garage and, you know, even like even a couple thousand dollars a month is like, you know, pays for your sodas and whatnot.
Andrew: Was it more than sodas?
Dusty: I don’t recall.
Andrew: It wasn’t enough to live on.
Dusty: It certainly wasn’t enough to live on.
Andrew: You were still living off Silicon Valley Prairie News.
Dusty: We ended up raising like a little like friends and family round to kind of bridge that gap because, yeah, the recurring wasn’t certainly wasn’t enough to live on for some time.
Andrew: I’ve gone over the previous versions of the site to see how the site evolved. At first, it basically was you guys saying, “We’ll just make your website fly.” Yes, you are aiming at designers. But from what I saw a lot of . . . Well, I’m trying to get a sense of like how much you had built when you finally launched it six months later? Maybe I should just ask that.
Dusty: I think that I it was at the time it was effectively just great specialized WordPress hosting with a beautiful control panel. And one differentiating feature was the ability to . . . or two, I should say, to collaborate meaning invite people to be a part of that website and manage it without having to share a password and then also to then transfer the ownership of that site to your client. And they pay Flywheel directly, but you still maintain access. And so that was the one differentiating feature that we launched with that really supported this workflow of designers. But it was built on top of just like really great specialized WordPress hosting with a beautiful control panel. And that’s really the first product that we launched.
Andrew: And you were going to give them a commission, even if the client left, but stuck with Flywheel, the agency would get a commission for life, right? And that was a big thing.
Dusty: And so like, yeah, and because part of the core was obviously helping them make money on that, on sort of on that transfer. So yeah, they transferred that ownership to their client, they get paid without having to share like an affiliate link and all this kind of stuff, which is which always, you know, struck us as a little, you know, a little slimy to like, “Hey, client, will you sign up with my affiliate link?” You know, versus this is just like, “Hey, pay for this. And then it all is just handled seamlessly in the background, which is I think less slimy?
Andrew: Yeah. And free migration was still one of the big things that you offered right from the start. Another thing that I noticed was, there are a couple, the auto-backups and malware monitoring, I kind of wish everyone would have just done it because it is a pain in the butt to set up. It’s a third party, either software or a third party service. And back then it was especially hard. I remember for me for Mixergy there would be these random services I would sign up for back then they would then force me to do it to Amazon S3, which is super simple, but it’s a pain in the butt to do it and then how do I recover and I can . . .
So I get that you are doing that. You were offering malware monitoring, etc. Remember, by the way, I got malware on my site and I emailed Matt Mullenweg. And I said, “Look, this is the thing.” You know about that?
Dusty: No, I don’t.
Andrew: I emailed I’m a think this is you know about that? No, I do. I emailed him and I said, “Look, you keep talking about how WordPress is super easy. It’s easy until there’s this problem.” And to his credit, the guy actually I think he went through my site, through Mixergy and he started telling me what to fix. And he told me about caching plugin that was helping better than whatever I was using before. The guy really cared and, you know, surprised, right?
Dusty: Yeah. You’re absolutely right. That it’s crazy that wasn’t a default. And it still isn’t today, for the most part. And you know, it gets back to our core thesis about the platform that it should just work and it shouldn’t be like it should work except for malware, or should it should just work except for backups. I think, you know, certainly for when you’re the designer in the middle and you make a recommendation to about a host, it’s sort of like your reputation on the line, right? And so like our goal was to say like we want to make you look great to your client. Because if they recommend something and then site gets hacked and it was their recommendation.
Andrew: Right, it is the design company that’s at fault. I’m blaming the design company. Yeah, the other thing that stands out . . . so far, what we’ve mentioned malware monitoring, you’re installing the plugin, right? And yes, there’s some . . . no, your face just sank as I said that. Malware monitoring was not you installing the plugin? And basically, no?
Dusty: No, because we have accessed on the server side. Now we partnered with security who’s a third party, but it was seamless behind the scenes. And so, again, it’s just sort of just works and makes it seem like it’s not just, hey, they installed a couple of plugins that I could install anyway. And therefore, I could use.
Andrew: So then what did you bring because I signed up for security also. After my problem, I went to security, I signed up. Good to go. No problem.
Dusty: So, yeah, on the backend like because we have full server access, it just allows us to have more visibility and more control over that. And so it’s just an overall a better solution because it’s server side. Same with backups. Same with caching, there’s plugins for a lot of these things. But generally, they are better if they are handled not in a plugin. And that is certainly if you want it to “just work.” And I think that that’s . . . you know, I think we wanted it, again, just like the platform itself should just work. You should log in and create content or login and update your design and not have to even be presented with options around, as you know, security or caching or whatever this sort of stuff is.
Andrew: Okay, I guess I was oversimplifying it, but you are working with third parties and then you were integrating them into your site elegantly. One of the things that I liked from the early days that I saw when I researched you is you let your client have a demo site. Before the thing went public, create a thing that you could show as a demo to your client without interrupting whatever it is that their customers are seeing on the site now, right? Talk about that.
Dusty: Yeah, so the demo sites is another example of really understanding the workflow of the designer or the person building the site because, you know, what would happen previously is they’d build the site and then they’d have their client go sign up for hosting and then they put it out. It’s just like super clunky. And when we look at is like you should be able to spin up a demo site and show your client. Send them the link, like have them give you feedback on it. And then when they’re ready to go live, you just send them a billing link and they just pay for it. And so it just kind of fulfills that workflow in a kind of seamless way.
Andrew: Is that something you got out of talking to them, to talking to clients, or you knew it from your experience?
Dusty: Yeah, good question. Probably is something we got out of them in talking to them. It’s just like, you know, we focus a lot on the workflow, like how do we improve, how you do like the act of building and managing and launching sites. And I think that . . . and when we think about it through that lens, then you start to see gaps and like the demo site comes out of that in conversation for sure.
Andrew: All right, I’m going to talk about my second sponsor, and then we’re going to get into what you did after you went from this basic version. My second sponsor is James Altucher. Do you know James, Dusty?
Dusty: I do not.
Andrew: He is an author who was a hedge fund manager who ran a software company that was acquired and all this stuff, and then he lost a bunch of money and started from scratch. And he ran an ad for something here, and I totally butchered the ad and he said, “You know what, Andrew, I’m still coming back. Here’s what we do. Look, maybe we’re overthinking the thing before, maybe it wasn’t a good fit for your audience, here’s what I know.” He says, “I know how to start companies.” He says, “I’ve written a book.” He actually has written several books. “Choose Yourself” is probably his most famous book, but he’s written a book on finding yourself, on rejection, on trading as a hedge fund manager.
What’s his book on trading called “SuperCash: The New Hedge Fund Capitalism,” “The Forever Portfolio,” he wrote that. Anyway, so he wrote a book on how to find a side hustle. He said, “You know, Andrew, we still have a bunch of spots with you, instead of running this thing that for some reason didn’t resonate with you, you didn’t do a good job, maybe because your heart wasn’t in there, or because you just sucked at reading that ad.” Which is what happened, I just sucked at it, but I experiment a lot. Sometimes it works, sometimes it doesn’t, I’ll be honest. He said, “You know, here’s what we’re going to do. I’ve written a book called ‘The Side Hustle Bible.’ And I just gave a bunch of ways that people have started companies. If someone in your audience is looking to start a company, this book could help them.”
Is this going to set the world on fire for him? Probably not. I don’t think it’s really actually going to be his huge moneymaker. But he’s offering it for free, just because, frankly, he’s got ads here that we’re going to run because he already paid for them. And because it’s a good fit for the audience, and at some point, in the future, maybe he’ll get something out of it. Who knows?
But I do appreciate that he’s doing this and I do appreciate that the guy actually does know how to start companies. The guy does know how to invest money, and I appreciate that he does know how to pick podcast and to sponsor. All right, for anyone who wants this book, “The Side Hustle Bible” is available at . . . oh, no, I just butchered his ad again, where’s my link? Oh, no, I actually clicked it as we were talking. And then that took away the whole thing on my screen. So I’ve got to go back and find it. James is never going to sponsor Mixergy.
Dusty: Oh, no.
Andrew: There’s no . . . oh, there it is. It’s thesidehustlebible.com/andrew. The side . . . the . . . with the word “the” thesidehustlebible.com/andrew. I clicked on it. I said, let me make sure that thing is on. And then I got compelled by the thing. And I said, “Does it actually work that he has a video?” And then I noticed just when I was thinking if it doesn’t work for me to have a video on his landing page, and yes, it makes sense that I would have clicked on it when I wasn’t doing the podcast. But I kind of don’t want to watch this right. Just as I did that, a thing popped up and said, “Would you rather have a [transferable 00:43:59]?” That’s pretty good. Anyway.
Dusty: [inaudible 00:44:03].
Andrew: Right? I like that kind of thoughtfulness. Thesidehustlebible.com/andrew. Thanks, James. All right. You kept selling yourself. How did you feel selling? Are you someone who was comfortable with the process?
Dusty: No, I think I learned it over time. I think I was comfortable because you were selling to people like us generally, right? Like you’re selling, you’re having conversations that isn’t selling certainly in the early days. And, you know, over time, as we built out the sales org, you know, my partner, Rick is much, much more comfortable in that world. And so, he sort of took that and built that entire thing. But in the early days, it was just talking to, you know, people that we would hang out with anyway, and so that part is certainly comfortable.
Andrew: And you were taking the calls, you closed sales, and you got to . . . can I say what the number was without hiring a single person?
Dusty: Do you know it? I don’t remember.
Andrew: Revenue number. I’ve got it here in my notes.
Dusty: Oh, yeah, perfect. Very good.
Andrew: I’ll say you got way beyond a million in annual revenue without a single salesperson. It was just you two, can I say geeks? I don’t know if you are . . . Right?
Dusty: Yeah, there was three of us. We had a team but it was mostly inbound. It wasn’t because we were setting that. We weren’t really selling. I mean, we’ve talked to people after that initial phase, but you know, it’s a product that can be sold self-service. And, you know, it was a beautiful brand and sort of stood out in the market in that way. And so, we were able to grow, I think, a million dollars or more in annual revenue before we even considered having any sales, say, like formal sales action.
Andrew: How much of that was because you were known through Silicon Valley News?
Dusty: Probably none. Well, you know, I think early customers, we certainly sold to every agency and designer and design firm in this sort of part of the country, because we didn’t know a lot of them just through the community but, you know, that’s small dollar, certainly. But, yeah, beyond that, it was just, you know, it was it was clever marketing and it was inbound, it was content, it was all the things that, you know, you can house these stupid videos. Like, it’s all the things . . .
Andrew: Talk about that. You and Brian had a conversation, you and Brian Benson, our producer, had a conversation about it. What are the videos that you did?
Dusty: Well, I mean, like we . . . you know, the one that stands out is a security video where it’s, you know, my partner, Rick standing with a Nerf ax in front of my partner, Tony and I sword fighting in the back. And he says, “You know, at Flywheel we take security very seriously.” And he goes on to talk about what we do, but in the background, we’re sort of like, sword fighting with Nerf swords. And it’s . . . I think it just speaks to the whimsy of the brand, and the fact that we are trying to humanize what is otherwise just at the time, just an ugly industry of like, you know, again, pictures of servers and like just boring stuff.
And so, you know, I think we’re selling to a bunch of creative people, and I think it resonates. And so, and it didn’t cost any money. So, you know, all of those things were, I think, ways in which in the early days, we were able to scale through marketing with, and, you know, without having to, without any, I mean, phones for three years. Like there was no way to call us. And so, let alone get a hold of a salesperson.
Andrew: But you were able to call them.
Dusty: Yeah, we could call them, we were just calling them on their cell phone.
Andrew: You were just calling them on their cell phone, there was no way to get customer support.
Dusty: Customer support was over email, but phones was . . . you know, there was no sale . . . And today, we’ve got, you know, salespeople and teams [inaudible 00:47:50] and stuff, but that was . . . it was all inbound, all inbound marketing in the first three years.
Andrew: Wow, what was the biggest challenge as you went through this?
Dusty: You know, I think the biggest challenge, you know, capital is always a challenge, right? Like, especially in the middle of the country, like, it’s not a . . . you go out and try and raise money, you can’t and so then you go another year just kind of on your own, and we’re fortunate to have built a company that could cash flow, although you’re held back by your opportunity. So then there’s challenges, like, real crap, like the opportunities here, but your ability to, frankly, finance it is here, and so, that’s frustrating, and also challenging. And so that’s probably number one. And then the other is just not knowing, maybe this is an asset, but like, you know, we look back on the idea that we didn’t have salespeople, and we’re like, “Well, that was dumb.” Like, we should have like the . . . you know, next one, we will have salespeople.
Andrew: Meaning the next time we start a company, we’ll have salespeople.
Dusty: Yeah, right. And so, you know, a lot of . . . but we didn’t know any better. So we just did what we knew how to do. And so, you know, those kind of challenges of, like, basically not . . . you know, every day you wake up and it’s the biggest company you’ve ever run.
Andrew: You started your company 2012. WP Engine was founded 2010. I remember when, Jason Cohen, the founder, actually, he said, “Andrew, I’m starting this thing, do you want to invest?” I said, “I’m not an investor or anything.” Big mistake on my part, right? The site did great. But you did it after him? Wasn’t it intimidating seeing that he had raised a lot of money, he brought in ballers to come run the company with him, right? He’s a guy that’s incredibly successful on his own. Was it tough?
Dusty: Well, we’ve always had just extraordinary respect both for him. I mean, I had respect for him before he started WP Engine. And so, and just as blogger.
Andrew: That’s when he was doing his SmartBear the blog, about SmartBear company that he had, right?
Dusty: Yeah. And so . . . and then he started it. When he started it, I do remember thinking, “Man, that’s a great idea.” But it wasn’t like at that point in any way, like, we should do that. It really, you know, we’ve always had a ton of respect for them. And going all the way back to the beginning, and especially in a market, if you look at the market, there’s just a ton of like commodity players that are like . . . that are the biggest competitors, right? And I think for us, it was not as much that we were competing against WP Engine. It is that we were competing against HostGator and Bluehost. And, you know . . .
Andrew: I’m surprised. It feels like it’s two different types of customers. The HostGator audience, Bluehost, same company, right? They’re more I can do it myself, I just go set it up. If it means I save a few bucks by not having you install a backup software, I could do that myself versus you, it’s you’re catering to people who don’t have the patience and time to do that themselves, because they’ve got clients who are paying money, and they just want to focus on the design.
Dusty: Yeah. And there was nowhere at the time that really . . . maybe Media Temple was like the place for like designers and creatives, but you actually, there’s a ton at HostGator. And so, because that’s the place like there wasn’t a great answer at the time if you just wanted it to work. And if you didn’t want to, say, sort of deal with antiquated workflows.
And so, you know, we didn’t view ourselves as really competing with WP Engine for many years. I mean, like in the last two or three years, absolutely. But, you know, really, we had this narrow niche focus on the designer, the agency, and we wanted an extraordinary hosting experience. And so, we, I would say, if you looked at where customers came from, they mostly came from like a server in a closet, or from HostGator and in the early days. And so, we both had huge respect for what WP Engine built, but at the same time, we’re like, not really, it would be several years before we bumped up against them directly in the market.
Andrew: By the way, how cool is this? So I got to ask you a question, and then I went to my browser, for some reason my browser is not working, couple things are sticking to my computer. I fricking love that I’m basically VN seeing into another computer to get all my docs up so that I can look you up. It’s great. For some reason, my computer is not working, except thankfully, Zoom is still up and running. But the rest, I’ve got like a Ahrefs open with your site on it. I’ve got Fancy Chap Inc., looking that up. I’m going to talk to you about that in a moment, I hope.
I love that I can have that, that I can spin up a computer and just run that. I’m trying to understand what you did with content marketing. To me, it feels like you got a big burst of traffic . . . or a big burst of referring pages January of this year, but you’re fairly even over the years. Am I right? I’m just looking at Ahrefs to understand what you’re doing.
Dusty: Yeah, that’s probably right. I don’t know, exactly. I mean, you know, I think we created a lot of ebooks and a lot of content and a lot of just like specific content through the layout, which are publication and then, ultimately, with a lot of social, like, interesting thing about our audience is that it’s B2B, but it’s sort of B2B buying, but it’s a B2C market in a way. So like Instagram ads drive a ton of traffic, because the buyer is a buying a sort of a business motion, but they’re just a consumer on Instagram. And so, you know, I think the nature of kind of who we focus on and sold to meant that most of the inbound growth to content would have come through super cheap paid media or social ads, and so, over the years. And that has held pretty steady. And I think that’s just the nature of the market that we serve.
Andrew: Because you’re going after small, medium-sized business, SMB, and SMB is at least especially in the design space, they’re more like individual creatives, got it. Even if they have a few others there, it’s like them and their friends starting it.
Dusty: Yeah, really. And think about there’s millions of freelancers around the world, and they’re building sites either in the spare time or full time. And they’re just . . . they are consumers, right? But they . . . you know, we’ve got freelancers who pay us thousands of dollars a month because they just have lots of sites. And so, you know, pretty good.
Andrew: So the first set of customers, you put a landing page, people emailed you, you start emailing them back, getting them on calls, trying to understand what was going on, many of them would sign up for basic server help. And then they signed up for the full Flywheel engagement, then you at some point said, “Hey, you know what? Why aren’t we actually all these people are coming in? What if we call every one of them back? Is that the next step? And to do that, you needed a customer service, is that, or not customer service, but a sales team?”
Dusty: Yeah, sales team. So it . . . you know, I always say, at one point, we woke up and said, “You know, there’s 2000 people a month signing up, like, what if we just called them back?” And the goal being that oftentimes a designer or agency would sign up, and they’d sign up for a $15-month plan for the one site that they’re working on, and that’s great. And eventually, they’d hopefully sign, we add another one, and then another one, another one, and we get paid for each one of those. But the better motion is if they sign up for the $15 plan, and you call them and say, “Hey, what kind of cool stuff are you working on?” “Hey, do you have sites anywhere else?” “Did you know that we migrate sites for free? And then you migrate over 100 sites because . . .
Andrew: Call the people who were customers back or call the people who are just trying you out? Who were you calling back?
Andrew: Basically anyone?
Dusty: Or anybody who signs up, or anybody who inquires certainly because, you know, but somebody signing up, it would be like, you know, firstname.lastname@example.org, buys a $15 plan. You call them up and you go to their website and look and you are like, look, they get 50 projects.
Andrew: Okay, so it’s not someone who just fills out a form. So I’m right now on your site. I was taking a look at again, Ahrefs. We’ve got a partnership now with Ahrefs. I freaking love it. I’ve always been curious about it. And now, I’m starting to learn it. So what I’m seeing is, like, your top referring page is this CSS breakpoints responsive design, or at least it’s one of your top content pages. I moved my mouse away as I was talking to you, and then I got a little overlay say, “Try our free local development app. It stopped debugging local environments and spend more time launching WordPress sites. Try it for free.” If I try it for free, I get to try it. But maybe I’ll get a salesperson who calls me back up and says, “How is it going?” And eventually, lets me buy, what do you think?
Dusty: Yeah, so local is a perfect example of . . . you know, we bought a company and rebranded as local to become sort of the de facto and give it away for free now, as the de facto way to build sites, WordPress websites, off local machine.
Andrew: On my computer, right here on my Mac.
Dusty: Yep. So if you’re developing . . . and it’s the best practice for how you actually build this site, right? And so, and then you can easily publish it, if you want to Flywheel or to other hosts. And so, we give that away for free, there’s a bunch of other products in the market, a handful of other products in the market that that are paid. And it’s, you know, it’s downloaded hundreds of thousands of times. And so, it is an email address capture in order to do that, but it’s another example of like, if we want to get that product, it’s best in class, like it’s the best platform for the product for developing WordPress sites locally. And, you know, like I said, it certainly is lead gen. So it’s just another example of how we think about, you know, building that audience and over time, then driving over time being able to hopefully sell them on the platform.
Andrew: But you captured my email address on that form. You also captured my phone number on that form. Does that mean that I’m going to get a call back from someone who’s going to check in on me and maybe upsell me?
Dusty: Probably right now. Probably in like the next 10 minutes.
Andrew: That’s another interesting thing. I can’t get people to call me back when I call up my clients, my customers, the way that you do it is immediately when you’re on with them.
Dusty: I don’t know exactly. No, I don’t exactly . . .
Andrew: It’s fairly quickly after their . . . while they’re still interested.
Dusty: It should be, right? And it depends on like how they . . . like what their actual action is, or what their sort of, you know, they’re like scored and things these days, but . . .
Andrew: And that’s a big insight that you had. These people are trying it out, let’s call them up. And let’s do more than call them up. Let’s look at what they’re doing with what we’ve given them. Got it. By the way, one . . . I went out for a bike ride with a local software guy here who’s really good at sales. And he said one of the things that their salespeople do is they text people before. So it’ll be like a quick text message, they saw that you were on my site, can I give you a ring to talk about what you got? And that way, they get their calls responded to faster, especially if it’s from an unknown number.
Dusty: That’s awesome.
Andrew: Yeah, I love little insights like that, because I had no idea this stuff was getting so big. All right, why did you decide to sell?
Dusty: Well, it’s always the goal, I guess, in a way. But I think the goal is to build a big and successful company and obviously, that means at some points, liquidity for ourselves and for our partners. You know, for us, like I looked at it through the lens in three ways, like you want, you know, price matters, the partnership matters, and what is the outcome for the team like in the go-forward matter? And I think that and in the strategy matters, like what does that look like?
And so, you know, I think that this is the partnership with WP Engine had huge respect for them, both in the market, but also as people for a long time. And as we got to know them more closely, we understood that the combined strategy would create sort of like one plus one equals three in the market. And then at the end of the day, you know, price matters, and, you know, because we didn’t need to sell, we weren’t even looking to sell, because we’re growing fast and you can sort of always just wait. But I think the price came in at a really attractive place and . . .
Andrew: How much cash versus equity? Like what’s the percentage?
Dusty: All cash.
Andrew: All cash, wow.
Dusty: My partners and I rolled forward like by our choice rolled forward a bunch into the combined entity because we believe in the go-forward plan.
Andrew: What do you mean by rolls forward some into the entity?
Dusty: Rather than choosing to rather like rather than taking all like all cash ourselves, like taking some equity for my partners and myself, but everybody else is all cash, and so it’s like . . . but we believe in the go-forward that much that we basically invested our own dollars in the go-forward companies.
Andrew: Isn’t Matt Mullenweg also or is it Automattic that’s also an investor in in WP Engine?
Dusty: I believe that he was in the past, but is sort of gotten . . . So they cleaned up all of that, all the little investors a year ago when they did the big round with Silver Lake.
Andrew: Got it. Yeah, it’s a phenomenal company. It’s just like they did find a problem, they found a product, and now, the combination then is they go after whom? You’re sticking with designers versus them with . . . what’s their focus?
Dusty: Yeah, I think that that’s . . . I mean, it’s sort of business as usual for now, right? And it’s . . . and I think it mostly stay like that in the strategic go-forward, which is like our focus is and always in our brand isn’t always has been for like the freelance designer to the mid-sized agency, and like really just being really, really great at building products for them, servicing them, messaging to them. And I think WP Engine has a more of market brand, right? They serve bigger brands, bigger agencies, and I think that . . . So combined, you kind of service that entire spectrum, which I think is pretty, pretty great.
Andrew: Yeah, they did start going after like, I think they sponsored Mixergy for a while, I was one of their first clients. I think their goal was let’s get these bloggers who are like, Jason, right? When he was a blogger, right, a lot of traffic. Then my guess is they probably got a couple of really big clients. And then really, what are we doing dealing with, Andrew, who is a pain in the butt that we can’t let them install this wish list member plugin. All the banks coming in, they’re paying tons of money to have their website hosted and they don’t have this tiny problem. They just don’t want to deal with any of it. And yeah, I [picked 01:02:34] up, right?
Dusty: Yeah, yeah, absolutely. I think they took advantage of a trend in the market where WordPress is becoming more prevalent in the enterprise. And so that’s obviously been super successful for them and also created a gap where we like we grew as a result of that. But together, I think we serve that, like I said, that full spectrum, which is super exciting, and again, like the largest company in the WordPress world.
Andrew: Dusty, I know I’m going over. We got to close this out, but still trying to figure out like why you? What did Dusty have? I’m looking like as I go through my notes with the producer. And it’s like you said I was I wasn’t an entrepreneur going up, I was born to development. I’m trying to figure out your magic now. Yes, you’re making sales calls. But you’re not like a sales call machine. Why you and not other people? Why do you think you were able to build these companies? What’s the one magic thing that you feel like you bring to the table?
Dusty: So I think that like I like building teams, and I think that I have a skill for identifying the potential in people. And so, I believe that the way by which you build a big and successful businesses is fill it with extraordinary people. And so, and my partners and I sort of complement each other in a super interesting way, which is like I end up being sort of team and people focused. My partner Rick is sort of sales and marketing focused, and Tony is very technology focused. And I think that ultimately, what I think if I was analyzing is that you sort of surround yourself with extraordinary people and sort of point them in a direction, get the heck out of the way. And I think that that’s has been I think the key to my success when you’re right, I’m not a sales guy and I’m only a pretty like a mediocre minus developer and, you know, that sort of stuff.
Andrew: I didn’t say that. I’m glad that I asked. And I do also admire that you weren’t shying away from talking to customers and potential customers and that that has been such a part of your process and I get it even as I see the . . . yet the design over the years that I’ve been looking at Archive to see the evolution. It’s always look good, but it’s always had this special, oh, somebody who’s doing this designing for designers would only understand. It’s almost like a like a BuzzFeed blog post where it’s like 20 things that only designers would understand. It’s a bitch to have your client go and create an account on the hosting company or to get them to pay you, so we understand it we’re going to have a go through us. I said, “Bitch,” I saw your eyes. You don’t like it.
Dusty: No, I agree.
Andrew: You don’t I like that I used that language. Is no at all for you . . . ?
Dusty: I’m surprised that I didn’t. I think that’s all.
Andrew: All right. Dusty Davidson, congratulations on all the success throughout the years, and with Flywheel and sorry that I poo-pooed local Silicon Prairie.
Dusty: Oh, man.
Andrew: I get it. I’m curious about why that still matters. I wish it didn’t, but I agree with you, I think it does matter. Thank you so much for being on here and thank you so much to my two sponsors that made this interview happen. The first, James Altucher. I hope I didn’t botch this ad for you to thesidehustlebible.com/andrew. And second, the company that will help you hire phenomenal developers, go to toptal.com/mixergy. You’ll be glad you did.
And then finally, Dusty, I’ve been so proud of the different courses that we’ve been creating here at Mixergy. I bring back entrepreneurs who I’ve interviewed, phenomenal entrepreneurs. Dan Gorgone, our producer for courses said, “I’m going to create a page where if Andrew wants to show off what we’ve done lately, people just want to like breeze through and see this stuff, they could see it.” Guys go check it out. It’s at mixergy.com/more. You could just kind of breeze through some of what he’s been doing lately to get a sense of how he’s working. Why I’m so fricking proud of the courses that we bring entrepreneurs on to teach. Dusty, that’s a lot to end the interview with, right? Let’s just say goodbye.
Dusty: That’s so awesome. I appreciate the time.
Andrew: Really, I do, too. Congratulations. I’m really excited on what you’ve done. Bye.