Andrew: Hey there, freedom fighters. You know me. My name is Andrew Warner. I’m the founder of Mixergy. It is, of course, home of the ambitious upstart.
Basically what that means is that I do a set of interviews with really successful entrepreneurs for an audience of people who instead of listening to music or comedy podcasts or frankly just wasting time on YouTube watching short clips, these people want to get obsessive and understand the details of how other entrepreneurs built their businesses. To me, that is home. To hear those stories, to be with people who want to hear those stores, that is and always has been my dream. I love doing these interviews.
One of the reasons I love doing it is because I keep getting surprised, like who knew this would be such a big business. Get this. Today’s guest, you’re about to meet him. His name is Christophe Primault. He realized that you could create a directory of software that businesses need to use and have reviews and ratings and have them all be clearly understood what’s in the directory.
But anyway, you could create that directory and people come to it and people will make buying decisions based on it and that would be a whole freaking business. I had no idea. I would never have known. But the business is there. He started it in 2010 with a cofounder and 2015 he sold it to Gartner. I invited him here to talk about where the idea came from, how he launched it, how he got users, what makes it so special and hopefully we’ll get in to also why he sold it.
And this interview is sponsored by two great companies. The first is Toptal. Since I tend to eat my words, let me say it very slowly–Top as in top of the mountain, tal as in talent. I’ll tell you more about why if you need a developer, you’ve got to go check out Toptal. And it’s sponsored by KickoffLabs. If you need to grow your mailing list, later on I’ll tell you why you’ve got to checkout KickoffLabs. But of course, I’ve got to welcome Christophe first. Good to have you here.
Christophe: Good morning. Nice to be on your show.
Andrew: You know, let’s get into how you found your cofounder first and then I want to understand–actually, when I was shocked that this was such a big business, is that an unusual reaction for you?
Christophe: No, actually. You’re the first one with this reaction. Anybody in this business understands that software is changing a lot. It’s moving to the cloud. There are more and more options for companies to choose from and more and more smaller companies that used to buy software are moving to cloud-based software. Usually it’s not shocking people. People understand that–
Andrew: Everything you said makes sense to me, but that a directory, which lists it is even necessary in the world of Google, and of course it is, but that that would be so necessary, that that would be such a big business, to me that’s a surprise and that it supports several companies–you’re not the only company in the space doing it. I interviewed another entrepreneur who did it. It’s just, to me, surprising and impressive because there’s a simple elegance to it and a clear business need and I would have completely missed it if you hadn’t told me this was already working.
Christophe: Actually, Google is also doing it.
Andrew: Google also in addition to search, they have a directory?
Christophe: Absolutely. It’s called the Google Apps Marketplace.
Andrew: Oh, I had no idea. And still you did so well. The reason that this whole thing got started is because a guy named Manuel walked into your office when you were running a different startup and he shocked you. What did he do?
Christophe: So, this guy came to my office. As any new company, we decided to have everything in the cloud. So, we were using cloud-based applications ourselves. This guy was working for Sun. He was selling physical servers, which is clearly something we would never think about buying. He still managed to sell me one. I found that pretty impressive.
Andrew: You still bought it? I thought you didn’t end up buying it. You just were impressed by his salesmanship.
Christophe: Yeah. I did. I think we never used it. But he managed to get revenue out of it.
Andrew: What did he do that was so good? I would like to be such a good salesman.
Christophe: It probably convinced me that I needed to have some sort of backup and that I shouldn’t be so confident about the new technologies and I need to be old school or something. He was wrong but–
Andrew: He was wrong but you still ended up buying it?
Christophe: Exactly.
Andrew: That is impressive.
Christophe: And I’m a pretty tough buyer, actually, which is what made it even more surprising.
Andrew: And so you guys became friends after that, I’m assuming?
Christophe: Actually, we became friends along the way. So, we didn’t start as friends. But it was pretty clear to me when I launched GetApp that I needed to have a very good salesperson joining me. He was the guy and I liked the personality. As we developed the business, we became closer. Now we are pretty good friends. Usually it works the other way around–people start their business as friends and it ends up in tears. For us, it has been the contrary.
Andrew: So, where did your idea come from?
Christophe: Actually, I was running this other startup. It wasn’t doing that well. We had a pretty cool product, cloud-based. We were doing some encryption on the fly. I knew that there were companies out there that needed my technology, but I didn’t know how to get visibility from that. I couldn’t reach out and they couldn’t find me.
So, I already thought to myself there’s a problem. I’ve got a niche product but I know people need it and will probably want to buy it, but they can’t find me and I can’t find them. I need to find a newer way to match providers of cloud-based solutions with companies out there, specifically small and medium businesses. It’s basically how the idea started.
Andrew: I see. You noticed your own problem. You realized other people who created software must have this problem too. Let’s see if we can create a software or website that solves that problem for all of us.
Christophe: That’s exactly how it started.
Andrew: Classic way of getting an idea. What about the previous business? You told me that one didn’t do well. Why did it fail?
Christophe: It failed because we were trying to offer transparency to data. We were trying to do it for industries that we thought needed more transparency, like gaming or government agencies. They partly do, but I’m not sure they recognize it. So, they wouldn’t buy our solution.
Andrew: They didn’t recognize that they needed this. Was it a problem that they really had?
Christophe: I think they do.
Andrew: They still do.
Christophe: Yeah.
Andrew: Am I pronouncing the company name right, Kinamik?
Christophe: Kinamik. Yeah.
Andrew: So, they do have the problem. They just don’t recognize it and if they don’t recognize it then they’re not going to buy the solution. By the way, the URL for that site is not just Kinamik.com, right?
Christophe: It used to be, but I’m not sure it’s still up because the company went bust.
Andrew: I see. So, it looks like an e-cigarette company took over that URL and now they’re selling e-cigarettes or a magazine on e-cigarettes.
Christophe: I have not checked for a long time.
Andrew: I see. It looks like it’s a magazine for people who are in to e-cigarettes. All right. So, you noticed this problem. You found a partner and you said, “Let’s get started with it.” The first version was a simple version that you eventually had to redo. What did it look like?
Christophe: It was okay. It looked like a traditional directory. So, we had this big challenge of matching thousands of products from some types of companies. So, we started a classifieds kind of website where we built a taxonomy of the solutions that existed out there which didn’t exist at the time. We started to add products to it. That’s it.
It looked okay. It was not great. It looked okay. None of us were developers. We still are not. We had to pay an external agency to do the first development. They did an okay job. When you’re paying people to do whatever, you assess whether it’s good or not. Our first idea of this website was just okay. But it worked.
Andrew: What did it cost you to have this first version? I’m looking it at right now, by the way.
Christophe: I’d say it was nothing. It was less than $50k.
Andrew: Less than $50k. It was custom made and from what I see here, I could come in here and I could pick a topic based on either a business need like marketing or sales or the industry that I’m in or an IT need or services. So, it was just a bunch of different software that was online categorized in lots of different ways.
Christophe: Exactly.
Andrew: That was it?
Christophe: Yeah.
Andrew: What was it missing?
Christophe: Not that much, actually. What was missing is people’s opinions. So, we were putting all of this together, but we were not very smart at recommending the right product for people’s needs. So, we had a lot of content, but it was not intelligent. There was no business intelligence behind it to make the right recommendation.
So, the main improvement to the site today is that we’ve got five years of data. We know what people are searching for. We know which product people want to buy and when they are using other products. We know which products are popular. We know which product to propose to companies based on their profiles. We’ve got people who are signed up and are telling us what they are using. We’ve got people using our site to drop reviews about products they use and so on. So, now we’ve got much more data and much more intelligence. We can make some smart recommendations. Initially, we just had products to offer. People had to do the job themselves.
Andrew: I’m looking at it right now. It’s just a straight up plain directory. It could be in a book, this first version, except that I could leave a rating here and I could leave a review. So, there was room to turn it into something more than just what could appear in a book. There’s also something else that stands on for me. On the right margin, I see something called “request a demo.” Who was I supposed to be getting the demo from? Is it the app maker or is it from someone at your company, at GetApp.com?
Christophe: It had to be the app maker. I think we started with a few thousand apps. We couldn’t pretend that we had enough knowledge about each of these apps. Actually, we our own service to select the first app to start our business. It also started this way. When we had the first idea, we were ourselves in the position of searching for the basic applications. It had to be cloud-based to get started with our business efficiently. We basically had to eat our own dog food and this is how we started it.
Andrew: I see. So, I’m guessing that the company that got to put a schedule and appointment to get a demo with you was a company that you had a direct relationship with. You wouldn’t offer it to everyone, right?
Christophe: We would either, for a company that had a relationship with us or lead directly to whichever page the company website [inaudible 00:11:21].
Andrew: Okay.
Christophe: Just to explain how it works–we are trying to be very small, recommending the right solutions to our plans. But then we need to make a living out of it. So, we basically put on top companies that are paying us to get referrals. It’s exactly the same with–it’s the same thing that Google does with AdWords. You will have a mix of organic results and paid results.
Andrew: Okay. And also you get paid on every one that I pick?
Christophe: No.
Andrew: If they have some kind of–
Christophe: No, no, absolutely not. We get paid by a fraction of the company you can pick. The vast majority of the companies are on our websites today are not paying us.
Andrew: They don’t pay you?
Christophe: No.
Andrew: Is that because they don’t pay anyone? I thought that if they have an affiliate program, if they have some kind of payout, then you sign up for that. If they don’t, then you don’t.
Christophe: Sorry. So, we don’t use affiliate programs. We only have direct relationships with our clients.
Andrew: Okay.
Christophe: Basically if they feel that we are good enough at recommending their solution to the right companies and that they can close the deal with this company, they will financially pay us to get access to these results. So, it works both ways. This business, it can only work if you’re good at recommending the right products to the company buying or searching these current products. But also, if you’re really good at recommending the right leads to the app maker.
Andrew: Okay. And they pay you for the leads that come through. What other revenues do you get?
Christophe: No. They are paying us per click or per lead.
Andrew: Per click or per lead, click to their site or a person who fills out a form saying that they want a demo.
Christophe: Exactly.
Andrew: Got it. Okay. I still like the model a lot.
Christophe: It’s helpful.
Andrew: It is. And it was as simple as that.
Christophe: It helps businesses. Our sweet spot are companies that are new to business software. The beauty of cloud-based software is that it allows much smaller companies to get access to enterprise-class software, which didn’t exist a few years ago.
So, now whatever is your company size, you can get access to an inventory management application, an ecommerce cloud-based software, an email marketing solution, whatever is needed for your business, whether it’s a horizontal application or vertical application targeting a specific industry or segment, you can now afford it on a subscription model. It’s a great thing for small and medium-sized businesses to be much more efficient.
Andrew: Yeah. That’s the way we work here at Mixergy. We pay for online software on a subscription basis.
Christophe: That’s what we’ve got too. We are using probably 20 or 25 of these tools.
Andrew: What was I going to get to? I guess there are a couple of things I’m wondering. The first is if you don’t have somebody internally who creates software, then don’t investors dislike companies like that because it means that you don’t have internally the key capabilities to build this business?
Christophe: Yeah, of course. We do have people building our own software today.
Andrew: But at the time you didn’t. Is that an issue for you?
Christophe: No because we bootstrapped the company. So, we didn’t need investors initially. So, we just wanted to have a good test market appetite for these kind of service, both with the end user and the app makers and then eventually when we launched, actually, we had an immediate success and we decided to hire an engineer and we write all the code and own our own IP. So, when we’ve got an investor coming two years later, at that time, we have our own IP.
Andrew: Do you recommend it to other entrepreneurs that if they don’t have the internal capabilities to program that they could just hire someone to build the first versions and then eventually hire the team internally? So, hire a contractor then a team.
Christophe: Yeah. I would recommend that. At the end of the day, what as an external agency we do is exactly what you’re asking them to do. They won’t tell you whether it’s good, it’s bad. They just execute. It’s a great way to test your model. You need to know, though, that if you succeed, you will likely ditch everything and rewrite the code. But that’s okay. At that time, you’ve tested your concept. So, for non-technical founders like us, it’s a pretty good option.
Andrew: All right. In that case, let me do a quick sponsorship message that kind of does that. I was expecting you to say the opposite, that that was a mistake, but it’s encouraging to see you say what we don’t hear from others.
The sponsor is Toptal. What Toptal is, is a network of top developers who have been tested, vetted and proven to be among the top 3% by their peers. So, if you need anything built or if you need more people for your team because you don’t have enough resources to get the things that you want built, you can go to Toptal, go to their site, Toptal.com/Mixergy, fill out a form and they will contact you often within an hour.
You get on the phone with them, tell them what your company is like, tell them what you’re trying to build and they will bring you the perfect person and if you’re not happy with them you can ask for someone else and if you start working with someone and you’re still not happy, they will not charge you even though they will pay the developer. So, we’re talking about a company that’s really confident that they can find the right match for you.
Actually, Christophe, let me ask you this. If you had nothing today, you weren’t with GetApp, you had nothing but a developer who was from Toptal. Is there a business idea, is there some software that you would want them to code for you?
Christophe: Yeah. There’s actually not one but plenty. So, what we are seeing in the development of what we call the software as a service industry is micro-SaaS. So, it’s a piece of software that are tackling a very specific process. So, it may not be a big need out there, but for sure there are a bunch of companies that need it, can develop it internally because the vast majority of companies don’t have internal development capabilities and we’ll be ready to pay for the software and pay quite a lot.
Andrew: What’s a micro-SaaS that you’d like to see built that would actually produce some revenue?
Christophe: Probably let’s say something that will connect our clients directly with end users that are requesting the mode to schedule an online meeting in real time, something like that. That’s an idea that comes out. But seeking through it, they would probably be a lot. Now we’ve got internal capabilities with product development, so we’ll probably do it in house, all via APIs.
But with the cloud, there are many processes that you can automate where you can achieve business efficiencies without spending too much money. I don’t know about this company you just mentioned, but probably a right way to test something. That’s the concept.
Andrew: I see what you’re saying. People are already using big software as a service. They’re paying big money for it, but there’s a little feature that they need that’s not there. That little featured could be a micro-SaaS that you can charge not as much as the main software, but you can charge for it.
I’ll give you an example. I happen to use Pipedrive for my CRM. Pipedrive works in stages, right? Stage one, we find a guest. Stage two, we invite them. You were in there, right? Stage four, we do something else and so on.
I would like it if–and I don’t know if this is something–I would like it if when we move someone to the remind to do an interview column or if they sit too long in the haven’t booked an interview column if there would software that would just shoot the person an email saying, “Hey, I noticed that you didn’t yet book your interview even though you did a pre-interview. Here’s all you have to do. Click this link and go book an interview with Andrew.” Right now I have a human being who does that. Would I pay for that?
Christophe: Yeah, sure. So, you’ve got two ways of doing that, either you find a developer that can integrate just for you Pipedrive with your online scheduling tool or your email reminder or whatever is your process. That’s pretty easy to do. Or you can find companies that are specializing actually in building this integration. So, which online scheduling software are you using?
Andrew: For scheduling we use multiple things, but what we do is we link people to a secret page on Mixergy and we say, “Here’s all you have to do to schedule.” So, basically what I’m saying is if someone sits in one stage of our booking process for too long, I’d like to be able to fire off an email to them with a message that says, “Here’s the next thing that you should do.”
Christophe: Yeah. So, you can use solutions like Intercom to do things like that. But you cannot install GoTo–there are a couple of companies that we just mentioned, one that is doing a good job called Zapier. What these guys do is they offer you a platform where you can integrate cloud-based solutions together.
Andrew: Yeah.
Christophe: So, you go there. Even if you’re not the developer, you can link the–
Andrew: I do that right now. Right after this interview is done, I’m going to go into my CRM, hit a button and then Zapier is going to know that my editor, my video editor needs to edit your interview and it will automatically send him an email to say, “Hey, Joe, please edit Andrew’s interview. It’s done.”
Christophe: If these guys offer it, great. Use them. If they don’t, hire a developer to do it.
Andrew: What you’re saying is if enough people have this problem, create a micro-SaaS, a little product that does nothing but this one feature for this one piece of software, charge a little bit of money for it and that’s one idea that you would take if you had a Toptal developer.
I will say this. I usually promote Toptal to people who already have companies and already have development teams and need a little bit of help, but if you’re listening to this sponsorship message for Toptal and you just have an idea that you want to get off the ground the way Christophe did and you want to hire a solid developer to do it, to really think through the product, not just to be a dumb pair of hands for you, a real thinker who can make this happen like a rock star–I hate the word rock star–like a really smart engineer from Silicon Valley’s best.
Well, if that’s what you need, go to Toptal.com/Mixergy. They’re offering a special deal to Mixergy fans which is if you pay for 80 hours of development time, they will give you 80 hours of development time. And of course, if you’re unhappy, they have a two-week guarantee that you can take advantage of. You will not have to pay if you’re not happy. Go check out the details at Toptal.com/Mixergy. I’m grateful to them for sponsoring.
So, Christophe, you’ve now built the software. You have your site. You’ve filled up the directory with lots of apps. You have a vision for where it’s going. You know where the revenue is going to come from. The one thing that we haven’t gotten into is the problem that you had when you were running the previous business. How do you get users now? How do you get people to actually come in and use the product so that you could get paid?
Christophe: So, when you’re building a marketplace or directory, you need to keep a good balance between offer and demand. So, it’s usually easier to start with the offer side, so building an inventory of products, not necessarily people ready to pay for you, but you can find information about these products or this is where we started. Then you need to find users, people who are coming to your site.
So, you’re relying pretty heavily on Google to start indexing your page and thinking that you’re providing value to users when they’re searching for specific terms. But this takes time. So, you’re trying to find people out there who have an audience and think your idea is interesting and who are willing to talk about you. So, in our case, it has been TechCrunch. The guys from TechCrunch have been pretty cool with us. They produced an article the first month we launched.
Andrew: That’s where you got your first hit, from TechCrunch, your first set of users?
Christophe: Yeah.
Andrew: TechCrunch, that one article?
Christophe: Yeah. I don’t know how it is today. But at this time, it was huge. When we are sitting on the trellis at my girlfriend’s house and the article went up, we’ve seen a huge peak of traffic. We had no idea if our servers would handle the load, but it did, fortunately. But more importantly, we had software vendors, app makers signing up for the service. We’d sign up our first clients the day we launched, which was a bit of a surprise to us. I have to say that they really helped us getting started.
Andrew: Let me see. I have the first client was WORKetc, right?
Christophe: Yeah.
Andrew: You remember their name–sorry?
Christophe: Yeah. They are from Sydney, Australia. That’s an interesting setup, actually, that internet businesses can do. We started this business in Barcelona. We are targeting the US market because it’s the most interesting one, by far the biggest market both in terms of app makers and users. We ended up signing up our first client in Sydney, Australia. Pretty cool, huh?
Andrew: By client, you mean someone who added themselves to your directory or did what?
Christophe: Exactly, adding themselves to our directory and are willing to pay us for referrals.
Andrew: Oh, I see. Up until then no one was paying for you referrals.
Christophe: No.
Andrew: Got it.
Christophe: They had no traffic.
Andrew: I see. Why didn’t you just call up the people in your directory and say, “We’re going to get traffic soon. Will you pay?” Why didn’t you do any outbound calls like that?
Christophe: No. They wouldn’t do that. You first need to be very public and show them that this traffic is real and is of good quality. They’ve got tools, good marketers have tools to figure all this out. They can look at your site, understand where all the traffic is coming from, which are the key words, sending traffic to your site, how much volume of traffic you’ve got. Once you’ve started selling them traffic, they can monitor your traffic, see how it converts to them. You need to prove yourself. It’s not as easy as saying, “I’ve got a great idea. Why don’t you try it?”
Andrew: Look at this. I’m looking at the TechCrunch article. The first comment that I see here is someone who says, “Great concept, but they have a long way to go to catch up to Capterra. Capterra profiles 23,000 business software products and more than 10,000 companies. They’ve been mentioned in Businessweek, Inc., etc. What was your response to that, that this business had already existed and someone else was doing it?
Christophe: It’s interesting that you’re picking up this comment about Capterra. I forgot about it. But I’ll tell you why it’s an interesting story. So, when we started, these guys were being [inaudible 00:27:15]. They were out there. They were doing a pretty good job, although I would say that the look of their website was pretty ugly at the time. I know pretty well their CEO now, so I can say that. But they were focused on traditional software.
What was different with us is that we were only trying to match small and medium-sized businesses with cloud-based software makers, while they were covering a much broader market of any kind of software makers, targeting from very small to large companies. But I have to say that we got somehow influenced by these guys when we started, but we saw there was a niche that was not really well-occupied and we wanted to carve this niche.
Andrew: So, your response to that is you were going for a niche. You weren’t going for every kind of business. You were going for these medium-sized businesses. You weren’t going for any kind of software. You were only going for cloud-based software.
Christophe: Exactly. We thought at the time that it was the fastest growing market segment. It still is. But the irony of this is we’ve got acquired of July of this year by Gartner. In September of this year, Gartner also acquired Capterra. So, we are both in the same company now.
Andrew: Yeah. That’s how you got to go the CEO so well.
Christophe: Exactly.
Andrew: Were you guys competitive at the time?
Christophe: Yeah?
Andrew: You were. How competitive did it get?
Christophe: We still are.
Andrew: Give me an example of one thing that you did.
Christophe: No, it was a fair competitive relationship where we were probably spying a little bit on what these guys were doing and they probably did the same. When we saw they had a good idea, we tried it out. It’s this good level of competition that helps everyone doing a better job. So, we always had a pretty cordial relationship.
Andrew: What about Product Hunt? I had the founder of Product Hunt on here. He’s got kind of a similar business, but it’s definitely not going after business people and he doesn’t have the business model you do. But he’s creating a directory of products. What do you see in it? I didn’t see anything when I interviewed him. I didn’t see the business in it. But I feel like you’ve been in this industry for so long, maybe you see something I don’t.
Christophe: Yeah. I think he’s building a community. So, it’s like different. He’s probably in there for a longer term play. He’s just trying to build an audience. We probably apply a business model to it at some stage. I’m not very familiar with Product Hunt. So, I know what they do.
You’re telling me that they don’t have a business model, which I didn’t know. But I will assume that once he has a big audience, he will have two ways to monetize his business, either the traditional referral business model that we are using or just selling data. Once you’ve got thousands or hundreds of thousands of people setting their preference for any type of products, you’ve got some pretty good information to sell to companies.
Andrew: What do you have that you can sell and who’s going to buy it?
Christophe: So, it can be app makers, product makers. So, to develop their initial product or when they accept their product, they will be able to figure out which market segments it should target and what kind of features these companies are the most interested in or end users. It can be also investors or other investors.
If I want to know if there’s a market for a new product, I want to hear it from someone else and the founder of the company I’m going to invest in and I’m going to try to buy some parties’ data sets. In the consumer app industry, you’ve got a company like App Annie and this is exactly what they do. They are selling data.
Andrew: App Annie. Yeah. I use them when I want to figure out how well an app I’m about to do an interview about is doing.
Christophe: Exactly. Are you paying them?
Andrew: No.
Christophe: Okay. But many people are paying them just to get an extended set of data.
Andrew: Yeah. I use the free data that’s available in there to give me a sense of how the app is doing in the app store. By the way, you’ve got a French accent but you built the business in Barcelona. How did you end up in Barcelona?
Christophe: That’s an interesting story. So, I was working in London. I got a bit tired of it. I loved London as a city, but I wouldn’t say you get the best quality of life or at least it wasn’t for me. So, I decided to go back to Paris, but two months prior to moving back to Paris, I had to do a business trip in Barcelona to meet with the client.
On my way back to the airport, I met with a friend who invited me to have lunch by the beach. It was just one of the most amazing lunches I’ve ever had. So, on my way back to London, I decided, “As we are moving, why don’t we move to Barcelona?”
So, I basically invited my wife for dinner and told her, “You know what? Everything is set to go back to Paris, we’ve got jobs, school for the kids, a flat and everything, but why don’t we go to Barcelona where we don’t have any flat, where we don’t speak the language, where we don’t have jobs and no school for the kids, but it looks pretty fun out there. It’s sunny. People are happy. There’s a sea and mountains and it looks pretty good.”
Yeah. I had to do a bit of convincing, but she eventually told me, “That’s fine as long as you do everything and I don’t need to get involved.”
Andrew: As long as she doesn’t have to find the place there.
Christophe: Exactly.
Andrew: That would be. That’s the kind of deal I make with my wife. “I’m all for it. I don’t want to do any work. Let’s do it.”
Christophe: That’s what happened. It was a good choice, by the way. It’s a fantastic city to live in. It’s also a good city to build a business, especially if you want to build an international business because you’ve got a lot of international people who are attracted to Barcelona.
Andrew: So, going back to the story, you now have your first client, the first person who’s willing to pay you, you have a bit of traffic coming in–actually, a lot from TechCrunch. But that’s still not enough to build a business. You still have to get more business who need software and more software makers who are willing to pay you to get access to those businesses. Let’s take one at a time. Where did you get the rest of the businesses who started participating in your site–excuse me, the rest of the advertisers?
Christophe: Yeah. So, first we needed to have end users. So, then you need to become very patient. So, TechCrunch is great because it gives you a good shot of traffic, but then you need to start optimizing your site for Google and Google doesn’t need you. So, you need to be very patient and do a pretty good job at building the service that is truly useful for users. So, when they come to your site they find what they were looking for, they engage with your site and you send a pretty good signal to Google that when they send traffic to your pages–
Andrew: What are some of the things you did to SEO your site so that it’s more Google-friendly? What worked for you?
Christophe: At the time, people were trying to game Google a little bit by certain keywords and things like that. We did a bit of that, but not that much, actually. We toed the line of saying, “We’re going to be patient. We are going to be on something very useful for the end user. This is what’s going to win in the long-run.” That’s what we did.
So, it takes a little bit more time, but it’s much more sustainable. We have to be very patient. We had a bit of traffic, not that much. Because it was a really good idea and there were a lot of app makers out there dying to get leads and to be in front of businesses, they wanted to pay us, but obviously we always had more inventory for more clients, so we always had more app makers willing to pay us then we had general traffic to offer because we are very picking in all the quality of traffic.
Andrew: It looks like one of the things you did was you added a question and answer session. That helped with SEO and that created a bit of a community. Did it work?
Christophe: No, not much.
Andrew: It didn’t? Oh, I see, Answers.GetApp.com.
Christophe: Yeah. We killed it probably because we didn’t invest much into it. If you want to build a community like Product Hunt, this requires a huge level of investment. It takes time. You need to be very smart at doing it. We’ve been very smart at building a directory that worked very well and that still works very well, that does a good job for the end users and app makers, but you don’t spend enough time building a community. It’s actually two different businesses.
Andrew: I do see a little bit of keywords on the site. I wouldn’t call it keyword stuffing. I’ve seen keyword stuffing when I’ve looked at past people’s sites. But I do see business software, enterprise applications, solutions all included on the bottom of the site. What else worked then for getting traffic from Google?
Christophe: So, building articles–so, we built a lot of articles, very simple articles to start with, “These are the best software for dentists or these are the best product management software on a shoestring,” or things like that. Then you’re trying to get people in Twitter, LinkedIn, Quora–actually, Quora didn’t exist at the time. But you’re trying to use social media to be in front of people and slowly but surely you’ll be building your audience.
You can take shortcuts or you can actually buy–it’s pretty easy to get bad and cheap traffic. You can buy that for a few cents a visit. But it’s a really a short-term play because eventually your clients will pay you for that, but it will never convert into paid clients and they will stop doing business with you. So, we never really got tempted to doing that.
Andrew: Did you do any ad buys? I don’t see much now.
Christophe: No. Now we are doing a little bit more, but again, only from highly qualified sources. Any ad buys we did on sources that we are not to the quality of the organic traffic we had, we stopped.
Andrew: Yeah. I see. According to SimilarWeb, you guys are doing less than 15% of your traffic is paid traffic. So, it’s not a big source for you. So, what else worked for you for getting traffic, for getting good quality traffic in the early days when you were still figuring things out?
Christophe: Honesty, just being honest with the end user, writing articles, trying to put yourself in their shoes, what they would be interested in, trying to write content that talks to them, not trying to only promote products that you are being paid for, just doing something useful.
Frankly, it’s not that much complicated. Google is setting some rules. You obviously need to follow these rules. Have some good technical pages. You need to provide some good content, get some good engagement metrics when people land on your site and get people to talk about you on social media or by linking to your pages. It’s pretty simple.
Andrew: I’m going through the archive of your site. I don’t see a blog even here in 2010. I don’t seem to see one in 2011. Let me go over to 2012.
Christophe: Yeah. Actually, we had one. So, it’s probably hidden somewhere.
Andrew: I see. But it was still a major source of traffic for you?
Christophe: It’s not a huge source of traffic. But if you’re doing it well, it drives good engagement and a good signal to Google. So, in terms of volume of traffic, it’s not messy, but this is what helps you lifting the quality score if you want of your overall site.
Andrew: I see.
Christophe: With editorial content, this is where you can really deliver quality. When you’re listing the features of a product, there’s only that much you can do. You can’t present it in such a way that it’s very useful for the end user, but you can’t go beyond the featured product. But doing some really good editorial content or multimedia content–we are doing what we call video walkthroughs.
So, we are doing something that most app makers don’t do. We are simply talking about their products. We’ve got a great editor, video editor who is learning about the product and is talking to the vendors and is asking very simple questions like you do about the product. So, he’s interviewing me about my company and he’s interviewing them about their product. He gets them to talk with very simple words about what the product does for end users and that works.
Andrew: I get that. As someone who interviews entrepreneurs, I wish that more sites and walkthroughs and explanations that are very clear on there so that I don’t have to sign up for every single app that I do an interview about and try to hunt down what’s important to me and what’s important to their users.
I see you did a little bit of that. I see here a blog post from 2012 by Stephanie Watson that is a review of eMAM. I don’t know what that is. But it’s software that you guys spent a lot of time reviewing–the pros, the cons, the screenshots of what it does, will it fit your budget, is it right for you–that seems to be a big thing for you guys too.
Christophe: Yeah. We did quite a lot of that. Now we are getting even smarter and we go even deeper with our product analysis. Being part now of Gartner, you know what is Gartner’s traditional business, which is to give research about the IT industry to users, to companies, large companies. We are moving more and more toward that. So, doing some independent research and helping companies of any size, in our case smaller size companies making the right technology choices. This is what we love doing.
Andrew: I get it. You know, T.A. McCann, a guy who I interviewed about how he built a company and sold it to Research in Motion, the people behind Blackberry, he was starting a new company. He took me and a few people out to dinner. He said, “You know, I’m trying to figure out which payroll company I should use.”
He said, “I get really good feedback when I talk to other entrepreneurs, but I don’t get to talk to a lot of other entrepreneurs about details like this because they have bigger issues to think about.” He said, “You at Mixergy should do that–put together a directory of the software, of the services that we need when we’re starting a company and the feedback from other entrepreneurs.” It’s not my model, but it does make sense, doesn’t it?
Christophe: Yeah. It does.
Andrew: He should be able to tell who should do not just his payroll but his HR services, his outsource service, who should do his books.
Christophe: That’s what we’re trying to do. You see on our site, we’ve got a lot of user-generated content too. So, it’s true that it’s difficult to talk to your opinions and most of the time you don’t even know them. To know what software they are using and why you choose the software in the first place and if they’re happy with it, but they will eventually drop a review. Whether they’re happy or not happy, it doesn’t really matter. Actually, we are taking all kinds of reviews as long as people are genuine users and we verify that. We let them talk about their experience.
Andrew: How can you verify they’re real users?
Christophe: Yeah. They’re real users.
Andrew: How? How can you tell? I’m looking at someone here, Gabrielle Laur. Right next to her review there’s a checkmark that says “Verified Reviewer.” How do you verify someone?
Christophe: So, first of all they sign up with their LinkedIn profile, so it’s very difficult to hide.
Andrew: So, you can verify that’s a real person, but how do you know that she’s really using the software?
Christophe: So, typically, we never publish a review without reviewing the review. So, we know the products. So, we look at how they talk about the products and if it makes sense, what language you use. We will also verify that this content has not been written by anybody else anywhere else on the web.
If somehow we are not convinced that this person is a real user based on what they wrote, we will reach out and ask them, “In which context are you using this product? What are the pros? What are the cons?” When you get experience, it’s pretty easy to figure out if people are making it up or actually using it.
Andrew: Let me do a quick sponsorship message and then I want to know about how you got your advertisers, the people who are paying.
The sponsorship message is for KickoffLabs. Here’s the deal. If you’re listening to me, you know you need to build a mailing list, right? Every business now is building and growing their mailing list. That allows you to have a tight connection with your audience and allows them to let them know what you’re working on so you get more traffic and action for it and also allows you to sell more.
So, how do you grow a mailing list? Well, KickoffLabs has a handful of things that they do. One, they create landing pages that are really good and increase conversion. I’ve got a message here from someone named Steven Turlig who said he got a 50% conversion rate on his landing page because KickoffLabs is just the experts at it and they create it.
The second thing they do is they create widgets, widgets that allow you to collect email addresses in unobtrusive ways. My favorite–if you guys have listened to my interviews have heard me talk about how they an exit intent widget so that when someone is about to leave your site, you can have this exit intent pop up and say, “Hey, before you go, we have this PDF that answers all the questions that you might have come here to look for. Just give us your email address and you’ll get it.”
So, all those things they’re really, really good at. They’ll integrate with other software that you use and make it easy for you to use them. That’s just part of the game here. It’s table stakes here that you have to have that.
Here’s the part that they’re just amazing at and I don’t think anyone else does. Usually when you give an email address to a site, what do they do? They say, “Thank you.” That’s it. It’s considerate, but it’s not effective enough. So, what KickoffLabs does is on the confirmation page, they let you say thank you to your audience and they let you say, “You know this PDF you just got? If you share it with your friends and they take it, we’ll give you this other thing, this free tutorial, this free course, this free something.”
One way that companies are using it is in the widget they’re saying, “Give us your email address for a 10% discount on future purchases.” Boom. Beautiful. And on the confirmation page, they’re saying, “If you tell a friend about it, you’ll get an additional 10% so you get 20% off.” That’s an incentive that gets people to really share and helps you get some viral growth.
So, you’re not just getting one person’s email address. You’re also getting many of their friends’ email addresses and you’re growing your list organically and effectively, essentially for free. I say essentially because there’s a little bit of a payment for KickoffLabs unless you try them and I’ll tell you in a moment how you can get a trial.
This whole viral growth is something that worked for a guy named Dan from Power Toothpaste. He’s the guy who posted on Reddit about how happy he is. He said that he got 20,000 people to sign up for his newsletter because of KickoffLabs and that here’s the number–84% of them signed up because they were referred using kickoff labs referral system.
It’s really unique, very effective and if you want to try it, here’s the URL to go try it. Go to Try.KickoffLabs.com/Mixergy. Try.KickoffLabs.com/Mixergy. If you don’t remember, don’t forget it’s in the show notes and we’ll link you directly to them. And I’m grateful to them for sponsoring. I think this is their last sponsorship message in this bundle that they bought. So, write it down one last time–Try.KickoffLabs.com/Mixergy.
So, Christophe, how did you then get your customers? I know the first one came from that TechCrunch article. What happened next?
Christophe: So, when we got this TechCrunch article, we didn’t get one client. We had probably hundreds.
Andrew: Hundreds of people paid?
Christophe: No, they didn’t pay in the first place. They basically sign up and say, “We’re interested.” And then that was a great starting point for us because we had their app details and we could start a conversation with them. As we were growing the traffic and we were growing the traffic in the categories of products they were belonging to, we had the opportunity to reach out to these guys and say, “Hey, now we’ve got traffic. So, you want to test it out. So, why don’t give us a bit of your AdWords budget and try us?” And this is what they did and it worked.
Then it’s a snowball effect because their competitors are obviously watching what they do and where they advertise and we could see they were starting to advertise with us and then we got their competitors interested in us. Pretty quickly, you can fill up categories. The more advertisers you’ve got in a way, the more value you can offer to your clients, to the end users and this is how you build this kind of business.
Andrew: Why? Why does having more advertisers help your clients, considering that you already have a directory? All your clients are doing is paying to get more attention in that directory.
Christophe: So, the main thing is once you establish a relationship with a vendor, an app maker, they will give you a lot of information about their product. So, you can enrich your content, like with videos, more features, change to the price so it’s always accurate. There are many things you can do. That offers a deeper catalogue if you want and more information about products and multiple products for users welcoming to your site and user adoptions.
So, the more you know people and the more the they work with you, the deeper your catalogue gets and the smarter you are at recommending the right product to the end user. That’s how it works.
Andrew: So, I see that Freshdesk is one of your big advertisers right now. I see that you’ve got videos now from them that they created, “What’s Freshservice?” “What’s Freshservice Demo?” “Asset Management in Freshservice.” Oh wait, is this Freshdesk? No, this is Freshservice I’m looking at. Freshdesk is one of your sponsors.
Christophe: Yeah, I think probably both of them and probably KickoffLabs. If they are not, they should be because it sounds like a great product.
Andrew: Which one?
Christophe: KickoffLabs.
Andrew: KickoffLabs. Yeah. KickoffLabs should be in here. Do they have to pay or just let you know they want to be in there and then pay for more services?
Christophe: It depends. The problem with this industry is you’ve got a lot of companies emerging every moment. So, just to give you an idea, I’m not going to give too many numbers, but I’m going to [inaudible 00:52:13]. We’ve got about 150 companies knocking at our doors to join GetApp every month. We are talking about app makers, business app makers. We don’t have the resources to cater for all of them.
So, we are doing a lot of research to find out if they are a legitimate company, if they’ve got a product that is out of beta, if they’ve got users, what people think about their product. We also want to make sure that we are going to build a long-term relationship with them and we should invest in them. So, we are asking them to test our service, to see if it’s fit for them. So, we aren’t asking them to test it for a lot of money. It’s very little money. But this way we pretty much make sure that we are onboarding the right companies I’m sure we recommend to our end users.
Andrew: So, one way you screen people is by seeing if they’re willing to pay?
Christophe: It’s only one way, but it’s one of them. We may change our opinion on that, but for now it has been working well for us because we had limited resources to do a good job at building their profile in our database.
Andrew: I see. Okay. So, once they pay, they then get these videos that are listed on there. They get screenshots and everything else in their profile.
Christophe: Yeah.
Andrew: Okay.
Christophe: But the vast majority of the companies are the directory have never paid us anything. So, if we consider that a product is important enough for an end user, we will add it to our catalog for free and we serve this recommendation to the end user and it works both ways. The more you tell us about you–so, if you sign up to GetApp and you tell us, “This is my profile, the size of my company, the industry I’m in. These are the other products I’m using.” We are going to give you a completely different recommendation. We will be able to pinpoint exactly the product you need to use.
One of the main criteria is integration needs. So, exactly as you explained earlier I’m using this CRM. I need an online scheduling tool. I want to buy an online scheduling tool that integrates with my CRM or my email marketing tool. So, that’s one of the main criteria. So, the more you give us, the better we are at making recommendations. Very often, in fact, most of the time we will recommend on top a product that is not paying us. That’s okay. This is the only way for you to come back. Eventually, one day we make the recommendation of a product that he’s paying us for that and you’ll be happy with it.
Andrew: One challenge you told our producer that you have is hiring. In fact, at one point, you guys hired a crook.
Christophe: Yeah. I don’t know if he was, but at least his previous employer said he was. In fact, it was not our first hire. It was our second hire or something like that. It’s very challenging as a startup to hire. This is what I found being by far the biggest challenge. We started our first employee is still with us. He’s an amazing developer. Thanks to him, we managed to be successful.
But our second hire was not that successful. So, we basically hired the guy. We thought he was great. Two days later, he updated his LinkedIn profile and we received a call from his previous employer saying that he was not to be trusted and that he had some issues with him and recommended to us not to work with this guy. We basically had the guy’s opinion but he said it wasn’t true. We thought it was a bit too much to bring the guy on board as our second employee. So, just one experience that maybe entrepreneurs are facing when they’re hiring.
Andrew: What did you learn about hiring from that?
Christophe: I learned to do a lot of due diligence, make a lot of calls to understand who people are and not being impressed, not hiding behind the hollow effect. So, usually when you’re hiring someone, there’s always something really good about them. We all have very good aspects to our personality and we are all pretty good at talking just about that in a job interview.
But if you really want to hire the right people, you need to go beyond that and think, “That’s great. I love this guy for this, but what is next? What are the other things I didn’t see? Am I honest about it? Am I objective in my hiring process?” So, typically you will have other people interviewing the same person, but also you talk to previous employers, especially their direct boss and figure out if there’s something else that may not be a fit in your organization. So, I’ve basically learned to be cautious about the hollow effect when hiring. It’s very true.
Andrew: Yeah. There are some people who just feel like they’re going to change everything for you because they have the right background, they’re so good at seeing a vision and you need help and they feel like they could take your problems all on for themselves.
Christophe: Yeah. To be fair most of the time, they don’t say that. This is what you think because you’re so keen to hire this person. You put yourself in this mindset. But most of the time, people are just not seeing it. They’re pretty honest about seeing it. But your interpretation is very different.
Andrew: Did you make a couple of acquisitions before you sold? I don’t see them right now, but I thought I saw it on CrunchBase.
Christophe: Yeah. We bought a couple of products. So, one of them was actually an integration platform. So, we spotted the need for users of multiple cloud-based apps to integrate these apps together. So, we bought a small company in Portugal that was doing that. We tried to launch it to the market. Actually, we did not succeed. There was a lot of interest for the submission. We had a lot of signups for the product. We had a pretty good technology, but we didn’t focus enough on it.
Andrew: It was Tarpipe.
Christophe: Yeah. The company we bought was called Tarpipe. It was a pretty good technology. But it was building a second company within our company. This is one thing I’ve learned the hard way, not too hard actually, but something I’ve learned. You need to focus.
Andrew: What was the problem when you tried to do Tarpipe?
Christophe: It took a lot of–we had the money to do that, but it took a lot of management time to build up a new company, to understand the market, to position the product into the market, to do efficient marketing campaigns, underwrite user experience. No one sees the need to get right when you’re launching your company or products. All the times we spend doing that was some time we didn’t spend on our core business.
So, that’s one lesson I learned. If you’ve got a business, especially if your business is doing okay, just be patient. Don’t lose focus. Keep on going with your core idea as long as you know that your idea is going to fly. So, if nobody wants to pay for what you’re doing, you’ve got a problem. But it was not our case.
We had a lot of clients. They were happy with that. They just wanted to have more traffic. Instead of only working at getting more high quality traffic, we focused on something else that we thought was smarter and probably was except that we didn’t have the bandwidth to take care of these two babies at the same time.
Andrew: It looks like then you also bought AppAppeal, is that right, and AppStorm?
Christophe: So, that’s after the learning of trying to do something different, we decided that we were doing exactly the same thing we were doing. So, we do the opposite and said, “Okay, we know how to do that. We do it well. Let’s go after smaller properties that are doing more or less the same thing and let’s try to integrate them with our environment.” So, the objective of acquiring these properties was to drive additional quality traffic.
Andrew: The company that I interviewed was run by Don Fornes. I interviewed him in 2013. At the time, the revenue was $10 million. You guys do more than $10 million?
Christophe: We are in this area.
Andrew: In that area?
Christophe: Yeah.
Andrew: Okay. Do you know his business?
Christophe: No. What’s the name of his business?
Andrew: It’s Software Advice.
Christophe: Ah, Don Fornes.
Andrew: Oh, did I mispronounce his name?
Christophe: Of course I know this guy, Don. So, basically in this industry, you [inaudible 01:01:58] with market leaders–Capterra, Software Advice and GetApp–all three got acquired by Gartner.
Andrew: Oh, he was also acquired?
Christophe: Yeah. He was the first one, actually.
Andrew: Oh, I had no idea that he was acquired by them. Great story over there. So, now you guys are all buddies where before you used to be competitors.
Christophe: Yeah. We’re still buddies and competitors. We are trying to serve different agencies with different recipes.
Andrew: Why did you sell?
Christophe: So, there are different reasons. The main one is probably because when we started this business, we had an objective, which was to be useful to both app makers and small businesses buying software. I wouldn’t say that we wanted to change the world. We wanted to build a good, honest, sound business that was delivering value to all the stakeholders, including us. Do we need [inaudible 01:03:03] and this is what we need.
We got approached–we didn’t really want to sell–but we got approached by an acquirer that we thought was a really good fit with our company. They met us. The further we spoke was acceptable. We saw that we had achieved what we started the business for and that our business had more chance to scale in the right way under this new roof and us [inaudible 01:03:29].
Andrew: How did your life change? Did you get to buy a new home?
Christophe: No, nothing.
Andrew: No new vacations, no nothing. Do you sleep better at night now? You don’t have to worry.
Christophe: I do. This I do. That’s the only luxury. I sleep a bit better and I’ve got a little bit more time to see my kids. That’s all.
Andrew: When you say sleep better, what was sleep like before at your worst?
Christophe: You are an entrepreneur yourself and you are interviewing many entrepreneurs. There may be a category of entrepreneurs that find it easy and sleep very well and are not stressed out. Probably there are some out there.
Andrew: What was your big worry? I remember hearing Marco Arment, this developer who was working on Tumblr, say that when he started Instapaper, he would go to sleep at night worried that someone else was going to come out with an app like his and do better and that was always a huge worry. That, in some ways, panned out. Evernote created it. Pocket did it with much more money. What was your worry?
Christophe: Actually, I never really worried about competition, never.
Andrew: So, what kept you up at night?
Christophe: Yeah. Pleasing our users. So, are we doing the right things? Are we honest with the end users when they’re coming and using our service? Are we honest with our advertisers? We’re out there promoting their product on our sites. Are we honest with Google, telling them that they can send us this kind of traffic–
Andrew: So, you were worried about whether you were honest and treating people right? Was it because at times you were kind of walking the border of treating them right and taking advantage?
Christophe: No because actually we never did that. It sounds so easy to think–there are loads of business software and business apps out there and loads of buyers, “Why don’t I build a directory?” It sounds very easy. So, there are tons of companies that joined the fray over last years. Most of them disappear. Today there are probably five or six players. So, you can only see a pack of new players if you’re doing an honest job. So, we’ve always been extremely honest.
You always want to do it better. Am I good at managing our staff? Am I good at generating some value for foreign business? Am I doing a good job for my advertisers for the end users? This is what kept me awake at night.
Andrew: Do you think that there’s an opportunity to create a directory like this in other industries and build a company the size of yours?
Christophe: Yeah, probably.
Andrew: What’s one that you see that you think someone should build a directory for it?
Christophe: Yeah, I’ve never thought really about that, but probably somewhere in the general things. The marketplace, for data sets probably exists, actually, but I’m pretty sure this is something very intriguing.
Andrew: I see, a marketplace like yours for data.
Christophe: Yeah.
Andrew: Interesting.
Christophe: Yeah.
Andrew: Who’s got data to sell? Who are some of the companies that would be listed in that directory?
Christophe: Most companies that have web services collect tons of data.
Andrew: I see.
Christophe: Most of the time, they’re either it for their own services, but sometimes we talk about [inaudible 01:07:00] it make sense to resell all of the sets of their data to other companies.
Andrew: All right. Not bad for a guy who started out castrating animals at some point in your life, right? You’ve come a long way.
Christophe: I knew you would say that.
Andrew: What was it like to have done that? I don’t think I could even watch it if it was on YouTube, let alone do it.
Christophe: Yeah. I wouldn’t recommend watching it, especially for your ears because it makes a lot of noise. But you know, I grew up in the countryside next to a farm. I did a lot of farming things when I was a kid. I think this is something really important that has always been driving me as an entrepreneur, remembering where I’m coming from and always keeping it very clear on where I’m going.
This relates to your earlier questions on why selling because we achieve what we set the company for and why are you asking for more? I was happy starting it. I was happy doing it. I was happy selling it and I’m happy now helping the company acquiring our business, making it better.
Andrew: That’s a good place to leave it. Congratulations on everything you’ve built with GetApp. Anyone that wants to check out your site can go to GetApp.com, pretty straightforward. If you remember my sponsors but forgot the URL, here are the guys who are going to help you grow your mailing list. They’re called KickoffLabs and if you forgot the name of the company that’s going to help you find a developer, it’s called Toptal and I’m grateful to them for sponsoring.
Thank you all for being a part of Mixergy. If you haven’t yet subscribed to the podcast on iTunes or in any Google app that’s out there, I urge you to do it. When you do, you’ll sign up and get every single one of these interviews directly delivered to your phone. Otherwise, I think after the first two weeks they go into members only. So, you might as well get them by subscribing and they’ll be there free, easy for you to get form your phone or other device.
All right. Christophe, thank you so much for doing this.
Christophe: Thanks for inviting me. It was a pleasure spending time with you and your audience.
Andrew: It’s good talking to you too. Thank you all for being out there. Bye, everyone.
