Andrew: Hey there, freedom fighters, my name is Andrew Warner. I am the founder of Mixergy.com, the man who will not button two buttons up. I just realized it when I stretched my arms up, all of my chest-hair comes out. But that’s part of the fun of watching this interview, you get a show while you learn.
Mixergy, of course, is a site where I interview entrepreneurs about how they built their businesses so that you can learn from their successes, learn from their failures, learn from their experiences, go out there and build a successful company yourself, and hopefully, after you do that, you’ll come back here and do what today’s guest is doing which is share your story and pass it on.
Today’s guest is Grant Miller, the guy had a good job but he wanted to be an entrepreneur. So he worked nights and weekends at a co-working space looking and working on side projects, and that’s where he met his co- founder. He built a business with him and sold that business to Live Person. Grant is the founder of Lookio, which offers live chat within apps. I invited him here to tell a story, and this story, like so many others here, is sponsored by Scott Edward Walker of Walker Corporate Law. Why is he the lawyer that so many entrepreneurs trust, know, turn to, and hire? I’m going to live you hanging, tell you more about that later, but if you want to find out and skip ahead, go to walkercorporatelaw.com, because I first have to introduce my guest and say hi to him. Grant, welcome.
Grant: Hey Andrew, thanks for having me!
Andrew: You have such an inspiring story, especially the way that you found your idea and your co-founder. And the product itself is so slick, I was worried I wouldn’t be able to do it justice here. But before we get into all of that, you listen to interviews like this? You actually listen specifically to Mixergy interviews, you’re a fan. I wanted to find out before we started, what you look for and get out of these interviews so that our listener today will be able to get as much value out of the conversation as possible. What do you look for?
Grant: Yeah, absolutely! You know, I do listen to a ton of these interviews that you’ve done when I was sort of starting my company, before I sort of found that knowledge that you get by hearing an entrepreneur story, right? So you hear not only the things that get written in the press, but you sort of hear some of their background, and I sort of have a mind that likes to reverse-engineer things, so when I hear someone’s story from start to finish, it sort of gives me insight as to what made them successful along the way.
One of the things that I really love about Mixergy is that it’s a whole variety of entrepreneurs, right? I’m obviously not Mark Zuckerberger, Peter Tail, but I’ve had success, and I want to share that with your audience. I know that there’s a lot people who have had this sort of variety of success, and when I was listening to Mixergy, I loved that- there’s guys that built like a multi-million dollar business, right? And that’s what I kind of what I wanted to do at first, and it’s such a great medium to listen to.
I would be on my mountain bike and go up into the Santa Monica Mountains, riding around, listening to it, and it just allows you to get out of the office and do something physical while you’re listening to an interview and sort of analyzing the words you’re hearing as your-
Andrew: Analysis- that’s the goal here. There’s so many other interview shows that interview entrepreneurs for wantrepreneurs, for people who have never built a business, and never will build a business, and for them, that audience is looking for just the fun parts of business, just the highs, just the ‘you can do it’ hand slap. What I want is the de-construction, who you were here before, what you were doing to get here, and there’s so much that I want to hear about how you got here. Why don’t we skip ahead for a moment, before we de-construct how you got there? Get to the moment where you sold the business. Do you remember when you signed the paperwork and signed your business over to Live Person?
Grant: Yeah, it was almost two years ago, exactly, and it was- I’m kind of a skeptical guy, so I was like, “Well, I’m signing this but until the money hits the bank, it didn’t happen.” And I was always kind of prepared for the worst, and just had separate fund-raising that was sort of soft-circling the next round in case this fell through and I was really prepared to do the next thing, so I still, even when we signed it, I was too paranoid to think that it actually happened.
Andrew: And then when the money hit the bank- did the money hit the bank, or was it just shares and Live Person?
Grant: It was a combination of both.
Andrew: Okay. You said that it gave your co-founder who has a family financial freedom? What kind of money are we talking about that would give them financial freedom?
Grant: You know, enough to be comfortable in LA and us to sort of-
Andrew: Did you become a millionaire?
Grant: Yeah, we became millionaires.
Andrew: Wow, and long did it take you to build a business?
Grant: We built about- we started the company about nine months before they bought it, so-
Andrew: (Whistles). Unreal, I didn’t realize it was that fast. You’re a guy who was an entrepreneur even early on. When you were a kid, you had little businesses. Do you remember one of them that you could talk about?
Grant: Yeah, so I had a variety of different businesses. I may or may not have made a few fake IDs for some of my older brothers friends. I can’t fully admit to that, obviously. [laughs]. Then I also- I remember, I worked at a car wash which was great money after school, a great job. But also while I was there, I would burn CDs for the guys that worked there with me. Because I sort of had access to DSL internet and a CD burner and so I would download all of this music and sell CDs on the side while I was working with those guys.
Andrew: And you learned a very valuable lesson about pricing at that point. What did your friend do?
Grant: Yeah, so my best friend, Beret, I used to give him free copies, he’d been my best friend since second grade, and he worked at the car wash with me. One day, I had maybe ten CDs I was going to sell to these guys for like five bucks a pop, and none of them were buying them, and they’re like, “Yeah, Beret already sold us though. He sells them for three bucks a pop.” Turns out that Beret had taken the CDs I gave them and just burned copies. So I did all the work, downloaded all the music, compiled them all together into a CD, and then Beret took that work and undercut my price, so…
Andrew: [Laughs]. So, when I see a guy like you who is so into business that we didn’t even talk about how when you were a kid, you created business cards for your business, you would just kind of hand-write them, right?
Grant: Yeah, I created a list a while ago of the ten different businesses I tried to start before Lookio. The first one when I was really little was business cards. We didn’t really have a business, just business cards.
Andrew: I see. The whole business was, you have business cards so you’re in business.
Grant: So then I look at your career and you worked at Spark People, then you worked at Virtuecom, why not start your own business in a text-space where all it takes in a website, it feels like?
Andrew: So, I really think you can learn a lot from working with seasoned entrepreneurs early on in your career. I think, I’m from Cincinnati and when I was there, there wasn’t a ton going on the web. There were a few things, right? There was actually a guy who went to my high-school, this guy Christian Walters. And when we were sophomores in high-school, he was a senior, he sold a website for a million bucks, right? And seeing that made me sort of realize that man, you can build a lot to value on the web.
So, that helped spark the entrepreneurial journey, but it’s a bigger step to really jump in and build it yourself versus step into a team, take on role, and take on more and more responsibility as you go and learn from the guys that have been there before.
Andrew: So you went to work for those two companies that I mentioned. Did you really learn anything form them or was it more about stalling this entrepreneurial journey that you were meant to be on?
Grant: No, I learned so much.
Andrew: Give me an example.
Grant: So Spark People is a great example. It’s the first job I took. I was actually in it as an intern while I was in college. So I would do a quarter in school, and a quarter working as an intern/co-op is what they call it at the University of Cincinnati. So Spark People had been founded by this guy, Chris Downie, who had sold his first company to eBay, they were eBay’s first acquisition. So Chris had a ton of knowledge about building products on the web and the early web and how it evolved. He also understand great strategy, and one of the things that Chris had always mentored me about was how to think really strategically about everything that you’re doing.
So at Spark People I started off running sort of like customer acquisition, just by the fact that I started doing it myself.
Andrew: It’s a diet site that- I think they make their money by selling diet plans, right?
Grant: So, it’s really kind of a healthy weight loss site. It’s totally free and mainly supported to advertising. It’s a very community-based site so it’s not like fad-diety, and we had a kind of best-selling book that I got to work on, a bunch of other things you get to work on.
Andrew: So what did you learn about customer acquisition when you were doing it for them?
Grant: I really just learned that you sort of had to be constantly working for the next inefficient market, right? So when I was there, it was SEO when I first started doing it, like not many people were doing it, so I figured out how to do SEO, now that’s sort of half of Spark People’s millions of people per month. Then it was social, then it was mobile and so seeing new markets and new opportunities and sort of tuning into what the next inefficient market is that you can sort of take advantage of that inefficiency.
Andrew: I see, where most people would look at social when it first came out and say, “That’s just for kids. It’s just a place to chat.” You had to think about it and say, “Where’s our acquisition coming from through social?” What about creating a smooth funnel, where did you learn about that?
Grant: Yeah, I mean, we definitely did a lot of testing in terms of optimizing the customer acquisition funnel once they got to your site, but my role was more and more about how do we drive more eyeballs and more people to the site? How do we create compelling stories, through PR?
Andrew: What’s one of your biggest hits for driving people to the site?
Grant: We had the cover of People magazine, they would do these annual issues, but I think my favorite one was E! Entertainment television did this whole big episode on diet fads and didn’t really know how it was going to turn out. It was about diet fads, and then at the end it was like a 5 minute segment of how all these fads are terrible, but this sparked People’s solution to such a great way to lose weight the healthy way.
Andrew: So how did you get that?
Grant: You know, it was just kind of being out there. I would always recommend trying to just be a great resource to reporters. If they needed case studies, we had a community of millions of people, so I would provide those case studies to them.
Andrew: So, if I wanted to duplicate that or someone in the audience wanted to duplicate that, I understand that being a good resource would be helpful for reporters. What’s the way to connect with reporters and let them know that you’re a good resource, so that when they’re looking for people they come to you and hopefully one of the times you recommend yourself as a resource?
Grant: Yeah, I mean, one, I think it’s always figure out what their job is and how to make it easier. They are busy people just like everybody. When you look at business, how can you provide as much value for the other party that you’re-
Andrew: So how do you put together a list of people that you’re going to go after and how do you figure out what’s valuable for them. You can’t just email them and say, “Hey, I want to be helpful for you,” can you?
Grant: No, I mean, you can. Once you figure out who you want to help and what angles they’re looking for, everyone is looking for something and needs help in doing what they’re doing. If you were to reach out to me and say, “I’m not a recruiter, but I’ve got 10 developers that want to help you,” I mean that’s a huge thing that would help me a lot, right?
Andrew: I see.
Grant: If this is a reporter, they’re looking for real angles, for real people to be involved and I had access to that, so I would sort of open up our membership [??] and say, “What kind of profile do you need?”
Andrew: So, did you put together a hit list of potential connections that you wanted and then you would email them and say, “I’m involved in this community if you need-,”? How did you put together your hit list?
Grant: Just being observant as to what was out there. Like for weight loss, a lot of times women’s magazines and popular websites that talk about health. Just researching it as much as you could to understand what would really drive traffic. They’ve got things like bacons [SP] that give you distribution, but I think you can sort of evaluate media and content on the web by how many comments and shares are they getting? Like, what kind of distribution do they have?
Andrew: Okay, there are some things I wanted to get in much more depth, but I think it might be outside the scope of this conversation. I’ll give people later on in the interview a place for that. Actually, here I’ll tell them right now. They should go and watch the course with Stella, because Stella talked about how she got PR, Stella Fayman.
Grant: Yeah, I believe in PR as like a huge opportunity. I think a lot of times in technology we focus too much on the Tech Crunches and the Mashables and really we need to go after some of the more small publications that really have your audience. I recommend it highly as developing a great PR strategy to help reach those folks.
Andrew: So you’re learning all this stuff. You’re going nights and weekends thinking about businesses, is that when you came up with the Facebook app that did well?
Grant: Yeah, this was while I still living in Cincinnati. I was still in college. We needed some way to promote events on campus and at that point Facebook was just for college campuses. I noticed that a lot of people would replace their profile picture with a banner that would say “Come to this Greek life event and have a date,” or “Vote for somebody for student body president.”
So just like a quick idea before there were even Facebook apps, using Facebook AVIs we created a way for you to download your picture and attach a small 200×100 pixel banner on the bottom of your profile picture and upload it back onto Facebook. We branded it at the bottom with a little profilepins.com [??] url so that people would then upload this image back to Facebook and leave our URL in there and it sort of became viral.
Andrew: How many did it get?
Grant: Um, I think we ended up with around 100 thousand users on that when we sort of- then whole Facebook market launched, and we stayed with our job, and it didn’t seem like we should of, and that was actually a really interesting point, because I think it takes a couple of missed opportunities to recognize when you have to jump on the next opportunity.
Andrew: Because you saw the Facebook App Market place start to take off, and instead of jumping in and quitting your job, you allowed it to pass you by.
Grant: Exactly, we built a few early Facebook Apps like Sex in the City for the day that 300 thousand users and sort of these equivalent things that we just literally would update- it’s called FPML- stuff that we put into these Facebook windows and we’d update every night at midnight by hand, and so we had a program that could actually go through and do it automatically, but there was just a huge gold rush at that point, and had the co-founder of Profile [Pens] and I both left our jobs, he was super technical, really smart guy, I think we could have created a great business out of that, but-
Andrew: What about charging? I noticed that for Lookio you were charging, and you really had a really smart payment model there, but for the Facebook business you had no revenue coming in, did you?
Grant: This is an interesting time in the Facebook App market where people would actually pay to- if you could get someone to download their apps- so kind of a CPA model-
Andrew: Oh, so you were getting paged to promote other apps, got it.
Grant: Yeah, exactly. So like Rock You had this network, and it was funny, because the prices jumped up, it was like a dollar per Facebook App install and eventually the bottom [fallout 00:02:12] that market. But that’s where- I think it’s the game company that’s now- I think it’s like Kaboom or Kablam, whatever. We used to be Water Cooler, and they basically launched out of ‘Quote of the Day Apps’ on Facebook, and there was just a lot of opportunity to build a cool business at that point based off of Facebook Apps and then [steal] everything else that happened.
Andrew: So why didn’t you? You’re a smart guy who figured this stuff out, you were starting to bring in revenue, what kept you back? If you’re honest with yourself, what would you say?
Grant: Yeah, that’s a really interesting question. You know, I think it’s a combination of three things. I think my co-founder wasn’t prepared to leave his job, and I wasn’t convincing enough that we should both leave and do this. I think if he had been all over it as I was, then we probably would have done it, but I think I was too easily swayed that like, “Yeah, you’re right. We should stay at our day jobs and then worry about this later,” so…
Andrew: Gotcha. I know Coloft. That’s the place in LA that you were working out of. Why didn’t you just work from home or coffee shops? Why was that such a major thing for you?
Grant: Yeah, so when I was living in LA and I was working withe Will, I would go to Coloft every night from about 6 or 7 until midnight, do that probably five days a week. And it’s really isolating to sort of sit at home or- it’s really nice how you can sit in your office after hours to keep working on stuff. I did that for a while. If I went home I would end up just drinking a beer with my roommate and not actually accomplishing anything.
So Coloft was this great place where I could go where it was quiet enough that I could think and get work done, but there was enough excitement around there, like a handful of people coming in and out, that you could take your headphones off and talk to people about what you’re [up to].
It was a really place to sort of be collaborative and be productive yet do the things that you wanted to get done.
Andrew: I know that the idea for Lookio came from your co-founder, but when you were looking for ideas on your own, what was your process?
Grant: You know, I think, looking at what I was doing at that point, most of my process was around [my needs] and understanding what I saw as opportunities in the market. You know, Profile Pans was directly after a need that I had. A lot of other Apps that we were working on, our side projects, were sort of based on observations in the market and then projecting what would be next and what would do really well.
But everything was still very [??] and I think that’s an important point: I think that as entrepreneurs, our ideas sort of evolved over time, and initially I think most of come up with- you know, our first ideas are things that we’ve come up with, and then it’s already happened. Someone’s already doing it. Like oh, someone should do an App that does translation. Well, six of those are already super successful.
Then you come up with an idea that maybe isn’t done yet, but then someone launches it next week. Then you come with ideas that are sort of just features off of other things and, “Oh, this is how- it would be so much better if Facebook did x, y, and z. And eventually, you start to be able to develop ideas that one, aren’t done yet, two, are informed by the market but are maybe like six months out. So I think the idea for Lookio was only maybe a year ahead, maybe six months ahead of what the rest of the market saw, so it was still fairly iterative.
It was live chat, inside of an app, it wasn’t this new and totally different way of thinking. But eventually, I think as entrepreneurs we want to start to think about ideas that don’t exist today and we sort of have to plant our flag and say, “In five years the world will be like this, so this is where I want to build to,” and-
Andrew: So in your mind, in five years the world was going to be mobile, and this is what I want to do meaning let’s allow people to chat with the App company in real time. The best example that I saw was this YouTube video for how Hotel Tonight used it, and the Hotel Tonight demo was so cool that someone was looking at a hotel, then they clicked the help button, the help button brought up two other options: one is to call Hotel Tonight and talk to someone, the other is to do live chat.
Click the live chat, I think you pick your name, and then you start to actually text message on a little- almost like a pop-up almost, on top of the screen that you were looking at before, so what you were looking at doesn’t disappear, and Hotel Tonight gets to see the page that you’re on so they understand what you’re chatting about, right? That’s the idea.
Grant: Yeah, that was the idea for Lookio. It was sort this screen sharing, over-mobile, also integrating with chat, and it was a- but it wasn’t transformative, right? It was still very iterative. It took mobile, which is a huge trend, and it took something that existed in the web which was live chat. We basically just brought it to mobile with a good form factor of overlaying so that you’re not outside of the actually App experience.
Andrew: But how did you get to that? Mark’s idea wasn’t originally what we just described. What was his idea originally?
Grant: Yeah, Mark’s idea was originally was to do- so Mark’s my co-founder, Marc Campbell, also had been working in Startups for 12 years when we joined forces, and his idea, we brought it to a startup weekend, his idea was that he was developing apps and he wanted to be able to sort of debug and see what his testers were doing inside of the App.
Right, so someone’s having a problem, then Mark can sort of see a screencast of exactly what they’re doing live. And then I was like, “Well, we should add chat into this that you can actually chat and talk to him. And interestingly enough, now that we are doing this instead of live person, it’s really more about the chat. The screen share is still not that widely used because chats are just actually a really efficient way to communicate with customers and convert higher and all of these kind of facts around it, so…
Andrew: So, why didn’t you keep the original idea which was to say, if someone has an issue, I want to see all the screens and all the steps they took to get to this issue.
Grant: I think we saw a bigger market opportunity to basically bring this idea of chat into mobile.
Andrew: How did you know that that was a bigger market opportunity, or was it just a hunch?
Grant: Just a hunch really. I think we saw a live person as a public trading company doing live chat and we thought, “Well, they’re not doing mobile. We should be the live person of mobile.” That’s what we wanted to be. And it worked out.
Andrew: Why did Mark let you be a co-founder? The guy was a developer, still is, right? He had the idea already, and he could iterate it on his own. Why did he partner up with you?
Grant: Yeah, so we actually had another co-founder as well, Joe, who’s also technical, and Mark had worked with him for a while. But I think that, you know, Mark and Joe basically could do everything that the company needed to do, I just helped them be more efficient. I raised some money for us, I can go out and get a few more customers for them, and they can stay and really build a great technology base and a great product. I don’t think that the things that I do are the things that Mark couldn’t do, I just think, when you look at what is the most valuable thing that he could be doing at any point, it’s probably helping to build amazing technology.
Andrew: So how do you prove to them that you can raise money until you raise money, or did you say: “I will get my share of business once I raised money?”
Grant: I think I was actually fortunate to have a few friends sort of- a [Alvesta] that runs Coloft, Mark knew [Alvesta] pretty well, and [Alvesta] I met and said, “Hey, you’re going to need a business co-founder, you know Grant really well. You really should bringing him in and making sure he’s a co-founder here.”
I actually asked Mark and Joe and I sat down and talked about how we should split-up the company. I asked for a smaller percentage, because I thought, “Hey, it’s their idea,” and Mark and Joe were like, “No, we think that if we’re all going to do this together, we should all split it up equally and let’s just go, so… I mean…”
Andrew: And you didn’t do vesting, you didn’t do anything, you just gave everyone a share of the company until you raised money and we’re probably forced at that point to do vesting.
Grant: Yeah, pretty much. We’d actually never even had to do vesting, because just the timing of the sale ended up not meeting a vest, and we only raised 200k from some local angel investors, there wasn’t a whole lot of analysis into what we were doing, but I definitely recommend vesting, I think that it just helps sort of portray that you’re here for the long-term and you’re going to build things forever, so…
Andrew: Maybe now is a good time for me to tell everyone about Scott Edward Walker of Walker Corporate Law. If you are looking to start a business with a co-founder and you don’t want to just hand the person shares with the understanding that they could just disappear and still own shares of your business, you want to do vesting, or want to just in general start your company right, talk to Scott Edward Walker of Walker Corporate Law, he’s seen all of the issues that you’re going to facing loads of times, he’s prepared other entrepreneurs for it, and he can prepare you for it, too.
Call him up or e-mail him, you can find all of his contact information at walkercorporatelaw.com. I’ve referred many people to him and I was surprised by how low the price is. If you have a serious business and a serious business partner and you want to start things up right, talk to Scott. Frankly, his business is not about starting your company.
There’s not much money in starting a company and getting all of your paper work right, the reason he does it is is so he could get you set up right for the times for where the relationship is much more meaningful to both of you where you’re looking to raise money, where you actually have a sale or an acquisition or an IPO, he’s the guy who you talk to for those transactions, and by starting off with you today, he can help you set your up for a better acquisition, better fund-raising, better decisions in the future.
If you’re looking for a lawyer, no matter what stage you are of your startup, talk to Walker Corporate Law. You just go to Walkercorporatelaw.com. You built a business before Startup Weekend, then?
Grant: No, so I was working on a separate at Startup Weekend and I was just sort of there helping Mark [??] his [Goodyear] buddies. Mark really liked the idea of coming together for 54 hours and just focusing- he and Joe, sitting down and getting it done. And at that point, actually, Startup Weekend was a great platform. So Zarley had launched at the one prior, and Mark thought, “Hey, this could be an interesting place to sort of bring this idea and then get a little bit of momentum if it works out.”
Andrew: Gotcha, so you guys were thinking of it as a personal hackathon, let’s just focus completely on it. Then you told April Dykeman, our pre- interviewerer, that you had to that you had to let go of the Startup Weekend team to stay lean. Who is the Startup Weekend team?
Grant: Yeah, so when Mark and Joe were sort of the first two guys working on the project that weekend. They did a lot of programming, and there were these three other guys that helped out sort of put together some of the pitch materials for the Startup Weekend pitch and helped do some of the marketing and just sort of paint the picture for what the company could be.
Once we won, and Lookio sort of had this opportunity to raise money and build product made a really fast decision that we couldn’t take those additional three guys into the company, because it’s hard enough to raise money to support three people, let alone six, so we just kind of gave him some advisory share and asked them if they would mind taking a step back and they all agreed. You know, I think some of them would have liked to come along the journey, but you sort of have to make some tough decisions once and a while, and who you’re working with is such an important decision to make that you can’t really leave it up to the chance of who’s in your group, you sort of really have to hand-select people and be very thoughtful about what skills they bring to the table.
Andrew: How do you avoid that awkward conversation or how does someone else avoid the conversation of saying to someone who’s been working on the project, “Hey, you know what? This has been a fun exercise for you, I hope you learned a lot, kid, but we’re taking off without you.”
Grant: Yeah, I think you can take some expectations early that hey, there’s some other guys that are actually really good friends of mine now that launched the same startup weekend to start up [??], and they got a second to look at that sort of weekend. But they told their guys right off the bat that hey, you know, Matt and Ryan, the co-founders of this, we’ve had this idea, we kind of want to kind of build out a prototype here, but there’s no guarantee that anybody here will get involved in the business after this.
I think that transparency is important so I think they managed it well. It might have scared a few people away, but it also got them the opportunity to build a cool prototype, so…
Andrew: It might have even brought good people to them, you know? If you’re being open and saying to someone, “This is going to be a real exercise for you, not just one of these fun weekends, but you’re really good to see a serious company take off.” I can see that working. So then you went to raise money. I’ve seen people in LA either bomb at this or do great. Will Schroeder just walked into town from Cincinnati and I saw people, not just people who are throwing money at him, I tried to invest money in his company because he’s so bright.
I’m not an investor, I don’t want to be an investor, but I just liked the guy and I liked his hustle and I was one of many people who wanted to throw money at him, but not everyone’s like that. What was your experience?
Grant: Yeah, it was harder for me. You know, Will had several successful exits, he’s been a mentor for me through the last few years, and my experience was sort of I got a hand-full of intros and we even had some momentum after startup weekend. I left my job immediately, there’s a big story behind that I’ll tell you in a minute, but I left my job and we talked to guys and some people just didn’t get it, they’re like, “Well, now one is going to chat on mobile. No one wants to type that much. Nobody’s going to buy on mobile,” so we positioned it around mobile commerce.
And it was pretty early mobile market, right? There wasn’t that much going on in terms of commerce and all of this opportunity that you see today. So, a lot of investors were pretty skeptical, but we hustled, and we were really fortunate to sort of reach through our network, so I talked to my buddy Dustin Rosen who started Pose, who I met through Will, and Dustin introduced me to his first investor, this guy is [Tom McInerney], and then I talked to Tom and Tom decided he was in, so it was great.
We had a little momentum with Tom being in, and we were able to get a few more guys in. You know, just basically, I realize that when you’re out raising money or trying to start a business, the person that you’re talking to might not be the perfect person to be involved with, but he or she might be able to introduce you to the perfect person, right? I think we often know somebody who knows the answer more than we know the answer ourselves.
Andrew: What’s it about you that allows people to make introductions to others? What do you think you have that other entrepreneurs should learn from when it comes to connections?
Grant: Yeah, I think it’s really important to be respectful of the person you’re giving an introduction to do. Respectful of the person that gave you the introduction, and I’m a big fan of sort of introduction etiquette, like you forward an e-mail to a person you’re asking an introduction from, that’s easily affordable. They can literally hit the forward button and take a look and often-times if they want to CCU they can, they don’t have to, just be really appreciative of and respectful of the process.
“Hey, I love that intro, if you can’t do it, I understand,” and then once you get the intro, you’re on time to meetings, you’re not wasting their time when you get there and you offer to show them what you’re doing and see if there’s any interesting.
Andrew: Did it hurt that Will didn’t invest in the business?
Grant: No, not at all. So, interestingly, when I left to start Look-IO, I was working for Will, and we’d been running a handful of companies, he went back to Columbus, and I called him and I was really afraid of how this conversation might go, because we had a year and a half together, so it wasn’t two years, it wasn’t five years, and I felt like there was still a lot left for Will and I to accomplish.
But I called him to let him know that I was going to be leaving so I could start this new company, and Will was just like, “Dude, it sucks you’re leaving, but I’m so excited for you! Let me know how I can help, we’ll figure out whatever we need- you’ll be available to help us wrap up these projects you’re on, but let me know how I can help. Let’s do this,” and he made a lot of great introductions.
Then, throughout the [Sale-to-Live] portion, he was a really important mentor. And Will doesn’t really invest in a lot of companies, so actually, I don’t know if any other-
Andrew: I don’t know if he’s invested in any, actually.
Grant: Other than his own, so that’s where he kind of focuses, which I totally get, and it’s sort of the same mentality that I’ve taken on where it’s hard enough to know if your own ideas are winners or other people’s are, so I sort of take the mentality of I don’t need to invest, I need sort of preserve capital in order to build my next startup.
Andrew: I feel that way, too. Plus, I don’t have passion for it, but I feel like a lot of people invest, and frankly I was drawn to it for a while, because that is the way to show you’ve made it. In LA, if you have a car or if you have a hot girlfriend, you’ve made it. In the startup world, if you’re an angel investor, and you’ve invested into a few companies, that’s the way of showing the world that you made it, otherwise you’re not really important.
Well, if you have your own company that’s doing well, or you’re an investor, than you’re great. Otherwise, you’re not really important.
Grant: Yeah, I guess it never really concerns me. I live in LA and I don’t have a car.
Andrew: [Laughs] Really?
Grant: Yeah, I don’t have a car. I have a Vespa and I take [Uber-X] wherever I need to drive, so.
Andrew: Wow, that must be expensive, because you live in Santa Monica and if you have to get to Hollywood, what would it cost you in Uber?
Grant: I mean 32 dollars?
Andrew: Okay, that’s not as bad as I thought.
Grant: Literally, I’m such a West Sider. I live in LA, I live in Santa Monica/Venice, and I’m more likely to go to Israel than I am to the Valley. Live Person has a big office in Israel, so I fly there and back.
Andrew: I see, okay. I live not too far from you and there really isn’t much reason to leave.
Andrew: Alright. So as a nine-month gold company, at what point does Live Person start to contact you?
Grant: They got a whole of us about five months into starting.
Andrew: They contact you?
Grant: Yeah, they contacted us.
Andrew: Who contacted you from Live Person?
Grant: So it was this guy, Ethan Alexander, he was the VP at Mobile at that point. He was sort of doing all of these one-off mobile projects with customers and building stop-off Live Person’s APIs, and I think he just saw that we had this super turn-key solution that would overlay mobile into Apps, and we working on a version that overlaid into mobile web, and he was like, “Oh, this is-“, we were like the answer to his prayers, so…
Andrew: Couldn’t you just build it out? Instead of paying you guys any money, couldn’t you say, “Look, we’re Live Person, we have money, we have a reputation, we have developers, we’ll just hire- not hire, we’ll point some of our developers at this project. And if these guys did it in a weekend, maybe it’ll take us a month, but we’ll have it up and running?”
Grant: Yeah, absolutely. I mean, that’s- it’s always a decision that company’s make, the build versus buy decision, when they look at acquiring. I think that they acquired us because one, we had this mobile [??], that’s what we did, it’s what we sort of sleeping, eating, breathing mobile all the time, and the founder/CEO of Live Person, Rob LoCascio, really saw that vision and that hash and I think he liked that about our team.
Two, that was one of the decision, right? Ethan even said to me during the negotiations that, “We can build a version of this product that’s 1/10th of what you have and our customers will still buy it,” and he’s like, “I don’t want to do that. You don’t want to do that because [??] the sales team and you’re going to be competing with us, so we might as well just combine forces and build this thing great together and you can keep building product, and I can keep selling,” and just looked at it and said, “Yeah, this is the right partnership for us. The right place for us to call home.”
Andrew: Was part of the reason that in LA it’s harder to raise money, you didn’t have a super easy time doing it, so this was an easier way to build the business?
Grant: I think that could be part of it. Like I said earlier, during the acquisition we were on this dual track. So, we were negotiating the acquisition for about four months. Along that time we were also doing what I would call “soft-circling,” which means getting investor interest and understanding how much they want to put in if we do a next round. We had a full round committed, we were going to raise $1.5 million, we had some great VCs that would have been involved and we definitely could have gone down that path.
I think that a lot of people face that decision throughout their careers. For me it was just like, I talked to Mark and we looked at what we were doing. Mark and I had been working with start-ups for 12 years and none of our equity had ever been worth anything, right?
This was just a great opportunity to get a win and then build something inside a company that really loves what we’re doing. I look back on it and you know, selling your company is a really hard thing to do because it’s a lot of who you are, you’ve put so much effort into it. At that point, though, it was definitely the right choice for us. I look back on it and I wouldn’t have made a different decision at all.
Andrew: Who advised you on what to sell for, how to negotiate, how to keep from revealing too much, how to reveal enough, and so on?
Grant: Yeah, it’s really interesting. When we were going through the negotiations I was hesitant to involve any of our current investors or, we were part of Amplify LA, but I was hesitant to really let them know that this was happening yet, until we got further down the path. Because one thing, like I said earlier, about being on the dual track we sort of wanted to raise the next round if this acquisition fell through and the terms didn’t meet what we wanted. You can’t really signal to your next round of investors that like, “Hey, we’re thinking about selling the company for the valuation you’re basically giving us on the next round.” That’s not what they want to hear.
We didn’t really tell anyone else, we kept it very intimate. Will Schroter was the primary adviser and this other guy, Jamie Siminoff, who had sold a couple companies based here in LA. Both of those guys were super important mentors to me. I would call them up when different things were happening. There were a few other guys, like in New York these guys Gold Star Ventures is their name, they were going to be part of the next round but they happened to hear that we were thinking about selling it and I had a really good personal relationship with them so they sort of helped advise.
Andrew: Really? They were basically helping you sell the company that they wanted to invest in and-?
Grant: Yeah, so they were really about the relationship. They saw Mark and I and really loved working with us. This guy, Eliot Durbin and his partner Ed Sim, and they just said “Hey, you want to sell it and it’s something you’re interested in doing. It’s never a bad idea to entertain an offer.” Ed had actually been on the board of Live Person like 15 years ago, so he knew a lot about the enterprise software business. They were able to help and assist in a lot of the negotiations as well.
Andrew: The way you were charging for the software, I just like the simplicity of it. If I remember right, it was free if you’re one person, like a solo developer who’s contacting people, every extra seat afterwards costs some money.
Grant: Yeah, exactly.
Andrew: I remember talking to Ben of Olark and I think he said he just gave his stuff away for free. He was trying to build an audience. Why didn’t you just give it all away for free and then charge after you had a big enough user base?
Grant: Well, for one we never actually charged anybody.
Andrew: You had the payment structure down, but you never charged?
Grant: Yeah, we never charged anything. Most of our developers/customers were smaller companies that had a couple agents that were managing and then Hotel Tonight was our primary customer. We were just learning so much from all of our customers, because it was the first 10-15 customers that you learn so much from, that we weren’t charging them.
Andrew: So you were just comping them?
Andrew: So, they would sign up and if they wanted to hit, what happens- I’m now going to Archive.org to see what would happened if I clicked the “Buy Multiple Licenses” button, but I don’t know if I could find it there.
Grant: I don’t know, maybe we had something hooked up but I doubt we did. I think it probably just like ended up where we would get in touch with you and set you up and make sure that, and we would like hand integrate and walk everyone through everything. And help them understand how to make this work. But really for us it was about getting integrated and proving that this was a viable thing that businesses wanted and that customers wanted to engage with.
Andrew: Could someone go and download it without you or do they need to talk to you?
Grant: They can download it without us and they can set it up, and they could create their account and start playing around with it. When they do that that’s when they would sort of like reach out and start talking to them and start to build the relationship.
Andrew: Looking at to see where the address is to see if that tells me something. It’s just Coloft [??] is on the website.
Grant: Address is Coloft and the phone number was my… I think it was my Google Voice number that redirected to my cell phone.
Andrew: [laughs] Okay. Did you pay for Coloft?
Grant: We did, yeah.
Andrew: You did. Okay. I think one of the first, actually one of the last mixed review events was done in their space. They give out their space a lot to people who want to organize events. So I had Sara Lacey, who now runs Pando as the live interviews and interview in person.
Grant: Interviewing the interviewer often times.
Andrew: Yeah. And then she became an interviewer.
Andrew: No, I interviewed her and now she’s an interviewer that’s, she’s killer, she’s great.
Grant: Yeah, she’s really good.
Andrew: Let me see, is there anything else that I need to know about? What did I miss? If you were listening, what is the one thing that you would say, “You know what Andrew, you should have talked about this. I need this.”
Grant: Hmm, let me think here.
Andrew: You know what exactly April is really good. She asked you that question, ‘What’s the one thing that we didn’t ask you.” And you said it’s about picking the right co-founder.
Andrew: So when it comes to picking the right co-founder, it seems like you had an easy job. Mark had the product going. Joe and he were partnering up on it. You knew where they were going and they were developing it. You didn’t even have to quit your job.
Grant: Well I did quit my job. That was the first thing I did. I was the first to quit.
Andrew: After startup weekend?
Grant: After startup weekend I quit, like the next day.
Grant: But, yeah, so [??] is a critical group import, and I had tried to start several companies with many different co-founders over the prior 10 years. I guess if I was a lady looking for a boyfriend, you’d say I kissed a lot of frogs, right? I’ve worked with a lot of guys and girls that just weren’t as serious about building something as I was.
And eventually, working with Mark, I found… even before working together he was there at Coloft nights and weekends. He had the similar work ethic that I did, so I knew he was someone that if we went into business together, we would just grind until it succeeded. We would put in so much effort that there was no possible way this could fail. We’re both smart, we both had complementary skills. Then part of the…sort of what I see for a lot of folks that are probably listening today is, they’re likely not technical. So if you’re non-technical founder and you want to find technical founder, it’s pretty tough. I really try to develop skills that gave me an advantage as non-technical founder.
So if a customer [??] in PR, [??] et cetera, these were all things I really focused on. And then also, once you find a great co-founder, the job of the CEO isn’t to be this awesome guy that does all the cool stuff and jets around with investors. The job of a CEO is to be like, what does my team need to be as effective as us? How can I help them?
I was picking up a lunch for a team 2 1/2 years ago and literally six boxes of food and I come into the restaurant and the woman’s like, “Oh, are you an assistant.” And I was like, “Yup.” And just like picked up the left and left because half the time you have to be an assistant, you know, and you just have to be able to get through the worst work, to be there the longest, to drive and to love it. And to take the highs and lows step by step.
That sort of mentality and then also I took even like a step further I think, in my relationship with Mark which was, I figured if Mark, the best co-founder that Mark could have, would just make decisions that are always in Mark’s best interest. If selling the company was in his best interests, that’s what I wanted to do. If giving this away for free was in his best interests so we could have the best customers possible, that’s what I would do. If people wanted to be at some event, I would help them get there. Whatever I could do to make Mark successful is what I wanted to do.
Andrew: Why Mark and not Joe?
Grant: Realistically, Mark is just one of these phenomenal guys that is so dedicated. Joe is an incredibly talented developer, one of the most talented I’ve met. He just wasn’t as dedicated as Mark and I. He sort of liked security a little bit more than he liked the risk of starting a company. So, he actually didn’t come on full time right away. We kept him on as a cofounder, but he was still working at his…
Andrew: And did he get an equal share to both of you?
Grant: Not in the end. He got a pretty great amount, but not… I think it was probably Joe had 12%, and Mark and I had the rest. But, that’s because we also paid him exactly the same salary he was making when he did come on full time.
Andrew: Oh, I see, okay.
Grant: Yeah. I would pay myself $24,000. We were paying Mark $60,000. Then we paid Joe, I think, $110,000; $100,000.
I see equity and salary as these two different levers that you can pull. I paid Mark more because he needed more. Even $60,000 for a family is not enough in L.A. But, I could live on 24. Joe wanted to have some cash to put away in the bank, which is totally fine. It’s just sort of how much do you want to lever up and lever down.
Andrew: The guys from Buffer really show well how they either give more equity or more salary. They’re very open with what they do with that…
Andrew: …their formula and about how much everyone’s making. By the way, I looked up Mark before the interview. I look him up now as we start. All I could come up with is an angel list link with hardly anything on or… Let me see. Crunchbase, I looked at earlier and there’s nothing on. He’s not as public as you are.
Grant: Yeah. I mean I think that’s just the nature of our personalities. Like, he’s much more comfortable sort of having a very technical talk about the intricacies of language. Because, one, he can learn a new language in a two hour period, and I’ve seen him do it. Two, part of who I am is I like to get out and talk to people and make sure that our story is told and sort of create some of that story.
Andrew: Well, I appreciate you doing it here. Oh, I finally found a LinkedIn profile, Twitter profile. But, he’s definitely not nearly as open online as you are. But…
Grant: Yeah, I mean…
Andrew: …I think that’s because of the different kind of work you guys do, as you’ve said.
Grant: He’s creating too much value to worry about that stuff.
Andrew: I mean look at this. His Twitter name is… What is it? mccode?
Andrew: Mark Campbell code, right? mccode. Hardly tweets. Doesn’t even have his photo on there. He has an angry smiley face.
Andrew: Versus you. You’re much more of the face of the company. I’m proud to have you on here, especially as a person who’s listened for so long.
Let me give the audience some suggestions for where to follow up. If you’ve heard this interview and you want to get to know a little bit more about some of the topics that we’ve talked about, here are a few follow up interviews and courses you should check out. First, we talked several times about Will Schroter. Will did a couple of interviews here on Mixergy including the one where he started Fundable, his latest company, which helps other companies raise money, where he talked about how he comes up with ideas.
I thought his ideation process was especially interesting because I watched him build businesses over the years. He did… What was it? The one that especially did well was Go BIG Network, right?
Andrew: That’s the one, I think, that earned him the Rolls Royce and the credibility to go and build the other ones. Will Schroeder’s process for finding a business idea is something that I think you should listen to as a follow up.
We talked about LivePerson. Robert… How do I pronounce the last name? LoCascio?
Grant: LoCascio, yeah, Rob LoCascio.
Andrew: LoCascio, thank you. He did an interview here that was so incredibly open that it became one of the most talked about and most popular interviews on the site.
Grant: He’s amazing.
Andrew: Because… Sorry?
Grant: He’s amazing. He’s just…
Andrew: So open, so amazing. I had no idea that the guy behind LivePerson would be that kind of open book. Because I guess I feel like if a company is an older company they don’t need to be as open. They don’t need to be as transparent. The founder doesn’t need to be as vulnerable. But, boy was he…
Grant: Rob’s just so authentic. I think that’s the part of… I mean when we met Rob that was part of the main piece that made us decide that we wanted to sell the company to Live…
Andrew: Because of him.
Grant: Because of him, yeah. We loved him. We thought this is a guy that gets us. We can work with him for a long time.
Andrew: I get it. I admire the hell out of the guy.
Finally, as a course we talked a little bit about P.R. I told you guys about Stella Fayman. She is so structured and disciplined about the way she gets P.R., and she broke down her system. She showed screenshot step after step how she got lists of journalists, how she courted them, how she promoted her company to them and so on. I really urge you. Just type in Stella into the search box on Mixergy. You will not regret it.
All right. If people want to follow up with you, where’s a good place for them to see you today?
Grant: Yeah. I mean they can hit me on Twitter @GrantM. Or, they can always shoot me an email, grantlmiller@gmail any time.
Andrew: Well, thank you so much for doing this interview. I hope that someone out there will get to do what I’m about to do right now, and that is just show appreciation. I’m going to start out by saying Grant, thank you so much for doing this interview.
Grant: Andrew, thank you. It was a pleasure.
Andrew: You bet. If you got anything of value, please find a way to say thank you.
Thank you all for being a part of it. Bye, guys.