Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I’ve done interviews with over a thousand entrepreneurs about how they built their businesses.
A while back, I did an interview with an entrepreneur who you’re going to meet today. It was about two years ago now. I talked to him about how he started an insurance fraud investigative company, which he sold for $20 million. Throughout the interview, I saw in my notes that he had this new social media app. I knew he wanted to talk about it and I frankly didn’t.
Even at the end of the interview, I gave him a little bit of time, but I brushed it aside and wanted to get back to the main focus of the interview, which is how he built this company and sold it. Well, I know my reason for it. I want Mixergy to be about what people have done, how they did it, etc., not what they’re going to do. This was kind of a going to achieve type of story.
But I’ve stayed in touch with him because I really like the guy. He’s one of those people who’s easy to stay in touch with, easy to get to know, easy to talk to because he has this sense of comfort and confidence that makes me feel more comfortable and confident about being around him. Anyway, throughout the last couple of years, he’s pinged me from time to time to check in and say, “Hey Andrew, here’s how this business has done. Here’s how many new customers we’ve gotten. Here’s how big we’ve gotten.” I finally said, “Hey, I’ve got to get you on here.” I started asking him to come and do an interview here on Mixergy about this business.
His name is Tim Fargo. He is the founder of Social Jukebox. It’s an automated social network management tool. I invited him back here to talk about how he did it. This interview is sponsored by two companies you probably already know by now. The first will host your website. We use it. It’s called HostGator. The second is the company that will help you hire your next great developer or designer. It’s called Toptal. Tim, welcome back.
Tim: Andrew, it’s great to be here. It’s been almost two years to the day.
Andrew: Yeah. I’m looking at the interview. We published the interview July 31st, and we’re about two years from that. Let me ask you this. Why don’t we get to the numbers? You’ve been pinging me over the years. I don’t want to say any numbers unless you feel comfortable sharing it. Do you feel comfortable saying what your monthly recurring revenue is or your annual recurring revenue is?
Tim: Yeah. I can spitball it. I don’t like calculate it.
Andrew: It’s not an automated financial statement. So I’m okay with it being rough.
Tim: There’s not going to be anyone handing me an envelope. We’re doing just over $300,000 a year. That’s coming off a total — I just literally pulled this up. This number is actually fresh unless someone signed up in the last five minutes. We have a total of 21,823 users, and that includes free and paid. And then of that, we’ve got as of this morning, 1,943 paid users. So that bounces up and down. I just got an email from someone. I get people that are for free that convert to paid and unfortunately people also going the other direction for a variety of reasons.
Andrew: How many employees of the company?
Tim: You’re looking at him.
Andrew: That’s it? This whole thing is you?
Tim: It’s me. That’s it.
Andrew: Now, you’re not a developer, as far as I know. Who’s coding up the site?
Tim: I’m using a group out of Russia.
Andrew: Okay. So fair to say bottom line is two-thirds of revenue, roughly?
Tim: A bit more than that.
Andrew: Wow. So this is considerably less than the business that you were doing before. How does it feel to — I know I measure myself against my past all the time. How does it feel when you’re measuring yourself against this past business that was a $20 million business?
Tim: It’s awesome.
Andrew: Why? I see a big smile. Why?
Tim: Because I had 300 employees, over 300 employees. It’s nice to have that revenue, but that’s a little village to be running around like you’re the chieftain or something. So there’s kind of a psychic cost to that, whereas this, I do have a relationship to this development team that I use. I have a dedicated engineer. I used to have more than one. I had a team of three and I scaled back. We’ll get into that later, if you’d like.
But I actually think there are a number of things that make this business far superior to the last one. Like the fact that I was in Ukraine all last week with my son, totally running the business, everything was just business as usual and it didn’t make a stick of difference that I was buried in Eastern Europe.
Andrew: Not working on a minute by minute basis and spending time with your son. This is like the ultimate lifestyle business.
Tim: Yeah. It’s great, for me anyhow. I’m sure everyone’s got their own kind of like boxes they need to check and things like that. For me, this is hitting on most of the cylinders.
Andrew: I like to go back and do research. You told our producer that after the last business, you let yourself get heavy. I found a photo of you heavy. You look so lean and like in control of life right now. Maybe it’s the way this photo looks. You just, I don’t know, you look like a retiree who’s got nothing going on and maybe has never had anything going on. It’s amazing how a few pounds make a difference in the sense of a person’s personality.
I’m just looking at one photo, and all these things are going through my head, which I’m kind of ashamed that I feel that way and that I’ve said it out loud. But it is a huge difference. What was going on in your life after the sale that got you to what I’m looking at in this photo here?
Tim: Wow. I’ll try not to dive too deep into this. So I sell. I’ve got a lot of money or at least enough for me.
Andrew: How much? Give me a rough estimate.
Tim: I sold for $20 million. I had to pay taxes. I had a partner that owned 22% of the business. We busted through some of the covenants on the agreement. There were some reps and warranties we made. We busted through a couple things. So I had to give them back $300,000 or $400,000. I don’t remember exactly.
Andrew: Okay.
Tim: It was very clear to me when I was writing the check. But anyhow . . .
Andrew: Fair to say over $8 million?
Tim: Oh yeah.
Andrew: Well over $8 million. At the end, that was what was in your account? Okay.
Tim: So you do that, then every day is Friday. You move to Sweden. You get divorced in a very, at least from my perspective, divorce-unfriendly country. So I relearned division very quickly.
Andrew: What do you mean? What happened? What’s the divorce like in — you said Switzerland, right?
Tim: Sweden.
Andrew: Sweden, excuse me.
Tim: You split it down the middle. You can fight things, but it’s really ridiculous to even try to do that. There were some reasons for me not to do it anyhow because my kids were involved. Do you really want to turn your domestic life into a battlefield? As much animosity you might feel towards the other person, there’s collateral damage that can occur when you do stuff like that. Anyhow, the number got smaller. Fortunately, there have been some investments that have allowed that number to grow a little bit.
But I think more than anything, in the process of that, I started drinking a fair bit. But I was really fit. I mean, in terms of like I was running half-marathons and stuff like that. I was super fit. When I stopped drinking, I started eating. It just took me a while to kind of sit down and — I kept promising myself that I was going to turn the corner on it. I’d actually started trying.
In the last time we talked, I lost a small amount of weight. Since the last time I talked to you, I’ve lost 80 pounds. That’s all been — I would have never believed it when I was younger. It’s all been nutrition. I’ve certainly been working out, but the change that made a difference was changed input led to changed output.
Andrew: I have to tell you, I hate that nutrition makes such a big difference. I like doing more of something, not being careful and watching. When it comes to nutrition, you have to care about the individual ingredients in each food, how many calories you’re taking in and so on. I’d much rather that I can just run it all off. There you don’t have to think so much, just run more miles.
Tim: It works. I can tell you for the younger members of the audience, they probably hate hearing this from an old dude liked me. When I was younger, that totally worked.
Andrew: Just run it off?
Tim: Yeah. It was sort of who cares what you put in the furnace? If the fire is hot enough, it will melt everything. I’m not 40 anymore. I’m 56 now. The fire doesn’t burn quite as hot. For whatever reason, that really made a difference. I can remember being a guy that when I was young, I was super lean. But I’d do stuff like I’d go to Denny’s and order a pie, not a piece of pie. I’d order a pie.
Andrew: Their salad is like 1,000 calories, I think. So I can’t imagine what the pie has. I get it. You put on 100 pounds. You’re probably also thinking as you told our producer, “What am I doing here with my life?” Here’s what you said to the producer. “I feel like I’m just running out the clock, meaning just waiting to die, essentially.” That just wasn’t the right way to live. You picked yourself up. You wrote a book about how your business, “Alphabet Success,” right?
Tim: Yeah.
Andrew: You then said, “If I have a book at this point in the world’s evolution, I need to have a Twitter account, start promoting it.” You started to do what on Twitter that lead to Social Jukebox?
Tim: Well, I was posting. I started with inspirational quotes because I thought it’s a fairly broad kind of shotgun approach. There are I’m sure arguments to be made for a more nuanced approach, but I thought this would get me a lot of eyeballs. I was doing that. I was posting. But I was continually having schedule things. The problem with that is there’s no value add to the audience. People don’t care if you climbed Mount Everest, with your last breath, send out the tweet. It looks the same to them.
So, as a result of that, I was actually in South Africa with my wife. We were getting ready to kind of go to the Outback, the Karoo. I was trying to figure out where we would be and when I would have access that I could upload posts that I could keep my feed going. I finally got so frustrated I called the guy that used to be the head of IT for Omega, the company I sold. I just said, “Look, this is ridiculous. This is really a database and a posting engine. It’s not like super-complicated. So can you build me something?” In the beginning, it was just for me because I was just tired of —
Andrew: Why have him build it? There were tools at that point that existed. I used software that allowed me to schedule my tweets. Why couldn’t you just use one of those?
Tim: Okay. This will get into something great later on about creep of scope with regard to a piece of software. But I found that using some of the products that did that, that allowed you to continually post, which is what Social Jukebox does, it will go on forever. As long as the Amazon server bill is paid, it will keep posting and as long as your token is valid.
But the problem was you get these products where they do so many things and then trying to get it to do the one thing you want, it does a zillion things, but none of them particularly well, at least in my opinion. So I wanted to focus on having something that was super easy for me to use and I didn’t have to spend a lot of time like monkeying around with it.
Andrew: I see. You knew a guy who could create that and you said, “You know what? Let’s just go to him.” How long did it take him to create that first version for you so that you could tweet on a scheduled basis and not have to be interrupting your day to tweet?
Tim: I would say probably about two and a half or three months. The interface was like pretty horrific.
Andrew: You called it something out of the early ’90s is what it looked like.
Tim: Yeah. That’s actually probably a little bit flattering, overly flattering.
Andrew: But it was just meant for you?
Tim: Yeah. So it didn’t really matter. I wasn’t trying to do anything more. I knew where the things were that I needed to use.
Andrew: You want to do more than tweet, if I understand this right. It wasn’t just it’s Monday morning, I want to schedule my tweets for the rest of the day and the rest of the week. It was also what about next Monday, if I don’t post anything, I also want to go into this archive of tweets because they’re evergreen and retweet some of those, at least. Is that part of it?
Tim: Yeah. The thing is when I got on to Twitter and I was doing these inspirational quotes, I went and I pretty quickly assembled a couple thousand quotes that I thought were pretty good. I viewed this as actually my differentiator, because I looked at other people that had similar accounts and I thought some of their stuff was pretty anemic. So I tried to have a fairly strong quality filter on what I was posting in terms that the quotes were — I tried to stay away from things that were too fluffy and puppy doggy. But it didn’t matter.
For a while when I was scheduling stuff, I sort of imagined myself as a social media disc jockey, like, “At this hour, this would be the perfect thing.” I so often was completely wrong. Something that I thought would get minor traction did great, and something I thought would be a homerun barely got touched. You don’t know who’s going to be on. You don’t know who’s going to be paying attention.
That is actually one of the things that also led to me thinking the tool would be great, because you aren’t picking a particular post to go out a particular time, but I don’t think that matters. As long as you’re identifying that it’s a certain genre of post and it’s going out within a certain window, I think it’s fine.
Andrew: All right. That’s the functionality. You had it, 2013 you built it for yourself. 2014, you decide, “I’m going to make this available to other people,” right?
Tim: Yeah.
Andrew: What was it that made you say — I guess maybe 2015. I saw you hesitating. I’m looking at my notes. Maybe it’s 2015 that you finally did push it live to people. But I’m wondering what was it? What was it about the — what was it that made you decide, “I’m going to send this out to other people?”
Tim: I can tell you people were a lot more interested in my software than they were my book.
Andrew: Interesting.
Tim: The thing is when you fulfill a bona fide need — I think this is true of books. If you came out with a book tomorrow that would explain to people how to dominate Instagram or Snapchat, those are two really popular channels right now. That’s something that’s super topical. If you have a book that becomes the must read on that topic, people are going to go to it because they’re looking for that like right now today. It’s time-sensitive.
So the tool actually is the same thing. It fulfills a direct function, whereas my book was more like general principles and things like that. I think a lot of people, especially in the case of my book, it fell into the category of a lot of things they think they already know. They probably do know them, they just don’t do them. Most people know the basic elements of execution. But how many businesses do you go into that are run like crap? It’s not that the owner probably doesn’t understand intellectually what they’re supposed to be doing, but they just don’t implement it. So, in any event —
Andrew: You’re saying, “I’m tweeting out about my book. Everyone is asking me about the tool. I’m getting asked so much about it that I finally said let’s launch it as a business.”
Tim: Well, go where it’s easy. You’re not going to get any points in life for trying to do the hardest thing on your plate. People were much more interested in the software than the book. So it was kind of a no-brainer.
Andrew: All right. Let me take a moment to talk about my sponsor and then come back to why I saw a website for you in 2014 before it was public. I’m looking at a screenshot of it from April, 2014. But the sponsor kind of ties into that. It’s a company called HostGator.
I had a new business that I wanted to launch recent. I got really excited about chat bots and I wanted to create a place where anyone could learn how to create a chat bot and also hire one of our graduates to have them build a chat bot for them. Do you know chat bots, Tim? I’m so into them.
Tim: I don’t, actually. I think conceptually I know what you’re talking about.
Andrew: For anyone who doesn’t know, essentially a chat bot is software that talks to people using chat apps like Slack or Facebook Messenger. I think it’s such a growing area that I’ve made some angel investments in this space, and then I said, “I want to teach people how to create chat bots.” We created a business to do that, and then, as I said, I wanted to let anyone who doesn’t want to learn it, they just want to hire a graduate, we set them up with a graduate so they could hire one of our graduates to build a chat bot for them.
Anyway, the first thing I needed was a website where people could go to find out what we’re about. I said, “Where do we go?” Well, I’ve been talking about HostGator for years. I said, “Let’s go sign up with them.” One of the best parts about working with HostGator is they have a cheap plan that I think will cost $3.20 a month, something really inexpensive like that. I said, “You know what? I want your best, the best of the best,” meaning I want dedicated server, I want —actually, frankly for me, with them, it’s just dedicated server. That’s all we really needed.
So I signed up with them. I think we started out with their $3.48 a month is their cheapest plan, but I quickly said, “Upgrade me to the best.” They upgraded me to the best they had. We ended up doing webinars, and I had a thousand people register for a webinar within two days. I’d have hundreds of people coming into the site not just within the same hour.
But something like 600, 700 people joined my webinar within the same ten-minute period. And the website withstood all of that traffic and not just allowed people to come into the webinar, but also allowed people who are students of the program to go in, people who wanted to hire graduates to go access the site, people who are just looking on the site to go look at it.
It’s all because HostGator is that freaking dependable. I’ve talked about them forever. I’ve used them. I’m highly recommending anyone who needs a web hosting company to go use the company that we use. It has all the things that you need even at the cheap plan, $3.48 a month is where they start. You’re going to get at that point, unmetered disk space, unmetered bandwidth, unlimited email addresses, free website builder templates. I think when you’re starting, just use one of the templates.
365-day tech support, that means every day, every minute of the year, they have somebody available to take your tech support issues via phone, live chat, email, however you prefer. If you’re not happy with them, within 45 days, they’ll give you your money back. We’ve been really happy with them. We went beyond that little plan I just mentioned for $3.48 a month. If you’re out there and you want to get started, that $3.48 is a good place to start.
If you’re more advanced like us and you expect to have thousands of people come to your site every day, then they will talk to you about upgrading to a much more robust plan. But they’re flexible, very dependable. I’m happy to be using them and I’m happy to recommend them. If you want to get that low price that I just mentioned, which is 50% off what other people pay, go to this URL, go to HostGator.com/Mixergy.
Speaking of websites, Tim, it does look like you kind of put up a website as soon as you started it just to see what people were going to do, am I right?
Tim: Yeah. We’ve had kind of a soft launch because I had friends from Twitter that I turned on to it and just said, “Hey, kick this thing around, see what you think,” before we sort of invited the public at large, so to speak.
Andrew: Okay. This is such a wordy website, I’ve got to tell you. Your website now looks so good.
Tim: At least by comparison.
Andrew: I think it looks really good. It’s super clear at the top. I know exactly where I’m supposed to click. The early version of your site had paragraph after paragraph explaining what the website did, why it was there, what a thank you tweet is, etc. I get that that’s important to communicate, but this new site just describes it much simpler.
Okay. So you decided, “I’m going to launch this.” Was part of it your goal to build a business, start getting some revenue? What was the goal there?
Tim: I think I wanted to just see what would happen. I had never done anything like this. Every day is kind of a new thing, right? I think that’s, at least for me, that’s a really great thing. As I talked in the pre-interview, it’s awesome to have this equity event and sell, right? Do you really want to — like if you scored a bunch of points in the first quarter — apologize to anyone who hates sports analogies — but you scored a bunch of points for the first quarter, are you going to play defense for the next three quarters of the game or the last half? Even if you have a great first half, it just feels weird.
So going back to your question, I think I wanted something stimulating. I wouldn’t even dream of going back in the investigative business even though I know it pretty well. So this was more interesting as both an opportunity to make some money and an intellectual challenge to see if I could figure it out.
Andrew: Okay. Then your first users, where do they come from?
Tim: People I knew from Twitter, social media, and people that were asking me like, “What do you use? How does it work?”
Andrew: You send them a link, say, “Hey, try this out?” It was free at first?
Tim: Yeah. We were free for a good long while. And then I generated a lot of anger when we got close to have a payment gateway and we took away some of the free privileges. I got some interesting email.
Andrew: That is a tough thing to do. Usually what people would do is grandfather in their current customers and give them access to the stuff that was free or add new features and charge for those. Why didn’t you decide to do it that way?
Tim: Because I wanted to make money. You’d never convince someone who felt differently, I suppose, but to me, in the end, this kind of tool is never going to be something that’s a huge thing like Twitter or Facebook or Pinterest or Snapchat or LinkedIn or whatever. It’s a tool. So you’re going to have a certain size of audience. I think you need to just make a decision. Do you want to just have cute metrics to talk about at a cocktail party, or do you actually want to have a bona fide business?
It actually answers a better question anyhow. Lots of people will sign up for free stuff, but do you have something that people actually pay for. If they’ll pay for it, you probably actually have something.
Andrew: All right. So how many users did you have before you decided that you were going to start charging, roughly?
Tim: We probably were around 15,000, I’d say.
Andrew: 15,000 free users?
Tim: Yeah.
Andrew: Talk to me about how you got them. Was this thank you thing part of the way you got people?
Tim: Sure.
Andrew: How did the thank you tweets work, and how were you able to grow your audience, grow your user base?
Tim: It was all through that, word of mouth and things like that. But the whole point of the thank you tweet, for one, I guess you’re thanking people, but the other reason that I advocate for it is social media is pretty heavily channel surfed, especially something like Twitter. People might see something in your feed or it got retweeted by someone they follow and then they click on it, but they won’t remember you. So, conceptually, the idea — I was doing thank you tweets by hand.
Andrew: The thank you tweet is I mention you and you send me a thank you tweet. That’s what you used to do by hand. It was just a note that says, “Thanks for tweeting out about me.”
Tim: Right. It’s a more general message, because typically I’d put four to six usernames, like thanks for interacting, whatever. Then I would send those out over the course of like a Friday or whatever, like on follow Friday. It gave people a chance to be reminded of you and come back. I find that to be pretty highly effective. I have 505,000 followers on Twitter. I’m presumably doing something right.
Andrew: Yeah.
Tim: And I have a ton of impressions as well. There’s that, and then I think when people saw that, it got the word out quite quickly. We generated a ton of enemies over it because people are like, “It’s horrible.”
Andrew: How did that help you grow your subscribers? I don’t see how that’s bringing more people into the software.
Tim: You just have to get noticed. That’s the hardest thing I’d say in the market today.
Andrew: Anyone who talked about you got another reminder that you guys existed and another opportunity for them to sign up to use your software.
Tim: Right. And as the user base grew and more people were sending thank you tweets, more people saw them and more people saw them.
Andrew: Okay. So then you automated it, so your software enabled any user of your software to send out these thank you tweets. Was it linking back to your software?
Tim: Sure.
Andrew: How? I don’t remember that.
Tim: It’s just at the tail end of the thank you tweet. Then if people clicked on it, it would take them to a page and it would say thanks and give them an opportunity to also sign up for the tool.
Andrew: I see. It was kind of like — it was called at the time Tweet Jukebox, so via Tweet Jukebox type of thing. They’d click the URL. They’d see a bigger thank you on the landing page, am I right? And then also have an opportunity to sign up for Tweet Jukebox.
Tim: Correct.
Andrew: I see. I didn’t realize that’s how it worked. That helped you get subscribers. I can understand that. Every one of your users who’s thanking their people is also mentioning your software, and you have another opportunity to bring new people in to use your software. What else did you do that helped you grow your user base?
Tim: I think just being positioned — by having a decent-sized account, that’s a sort of social proof that the tool works. Some of the people that were sending the thank yous also helped. I haven’t actually done as much social media posting. Buffer is kind of an entity unto themselves when it comes to posting about social media and things like that.
Part of that is because I find writing those posts to be a little bit boring. But I have written some of those and that’s helped to grow the tool. I actually tried to — I’m trying to do more of bringing out like verticals for my customer base, like explaining like how will Social Jukebox benefit a podcast or how will Social Jukebox benefit a blogger.
Andrew: And you’re writing posts about this.
Tim: I’m writing posts and/or doing a video and sharing it with the audience.
Andrew: I see. I’ve never gotten one of those videos. Do you have a video about how Social Jukebox helps podcasters and then you send it out to people like me and say, “Andrew, you should understand how we can help you?”
Tim: That actually may be perhaps a bad example because I haven’t done it yet. I had a conversation —
Andrew: But that’s the kind of tactic that you would use. You would create a video for one group of people and send it out to each one of them individually.
Tim: I think a vertical post probably makes more sense than just a general post because there’s such a huge environment—
Andrew: Are you individually sending it out to people?
Tim: No. It would be sent out kind of en masse to the customer base, just like trying to get it —
Andrew: Okay. Everyone on your mailing list would get it and they’d all understand. Is that right?
Tim: Correct.
Andrew: Got it. Okay. Give me one other thing you did to help grow your audience base, your user base in the beginning that allowed you to get to a level of people you can start charging?
Tim: That’s it, man.
Andrew: That was it?
Tim: I didn’t spend a dime on advertising.
Andrew: Doing videos, I get it. Okay. Then you started to charge. How did you know what to put into the free version versus the paid version?
Tim: I tried to look at what people used the most.
Andrew: That’s what you would put into the paid?
Tim: Correct.
Andrew: Interesting.
Tim: I mean if you’re not going to take a pain point and make that the place you’re going to charge, you’re not maybe going to be that successful.
Andrew: What was used the most?
Tim: People want posting. It was interesting because, in the beginning, I thought people would want more storage. I don’t know why I thought that. But people want — a lot of my customers want to post more times per day, so by constricting the number of times they can post in a day, that makes it appealing to a certain group of people.
Andrew: I see. So the high power users are going to be more likely to need to pay, and they’re the ones who are using the tool most. That’s where you put it. Okay.
Tim: As far as knowing what to charge, I kind of took a page out of Derek Sivers’ book. I just looked at what everyone else was charging. We were a narrow tool and we launched and we were just on Twitter. So we came out — there are so many things in retrospect I’m like, “What was I thinking? $12.99 is like the weirdest price point.” I just kind of pulled it out of the air. I don’t know, $12.99 sounds good.
Andrew: You know what, though? So there’s Buffer, Post Planner, Meet Edgar, SocialBee, Hootsuite, in a world with so many competitors, why did you think that you could do well? Why wouldn’t anyone just go to any one of those other software options?
Tim: I had this thing when we were going to launch — I really think it’s important for anyone who’s thinking about starting a business in a space where there are already people — you look at a car. I’m not a very big fan of Peugeot, but they sell cars. They’re never going to sell a car to me, but they sell cars. I don’t really know why people buy them, but there are a lot of products like that that I can’t even conceive like who their audience is. Who buys this product?
So sometimes I think when people are going to launch something, they think if you’re not a giant shining diamond at the top of mountain, then you have no chance. That’s not true. You only need to be appealing to a certain audience. If you can find that audience, you’ll be okay.
Because I didn’t put much more into the tool than the cost of development and then creating a couple things that would help me try to generate awareness, I didn’t lay a huge amount of money, so to speak, on the table. It was kind of, “Why wouldn’t I try and see what happens?”
Andrew: You’re saying when the market is big enough, there’s room for a lot of competitors and there’s an audience for each one. I’m wondering then who’s your typical customer or who are you going to target that might not have been addressed by others?
Tim: Let’s take Meet Edgar, because I think Laura has done a great job with that business. But her customers are probably a little more judicious in their posting. I probably have an audience that’s much more hammering out, like I do, I post 600 times a day on Twitter, which is by most people’s standards, an insane amount of posts.
Andrew: 600 times per day?
Tim: 600 times per day.
Andrew: I have your Twitter account open as we talk. It’s tweeting as we’re talking.
Tim: Yeah, man. It’s going.
Andrew: Okay. So then she has a more judicious group of people. They’re basically bloggers who are posting their own stuff on schedule, right?
Tim: Right. My tool is more based off like frequency. One of the things we created, because I had people that were getting frustrated because they inadvisably schedule things over the top of each other because we used a frequency-based system, so I came up with this auto scheduling system where you just say how many posts you want for each reservoir or jukebox, as we call them, per day. Then you just press Schedule and it generates a schedule that accommodates within whatever time, like if it starts at 8:00 and goes to 5:00 and you want a certain number of posts in that time period, it will create all the slots for you.
Andrew: So who’s the person who would want that? How would you describe that person?
Tim: Aggressive.
Andrew: I see. I get it. So where she’s going after a more judicious audience, you’re going in the exact opposite direction to someone who’s more aggressive, someone who wouldn’t mind having dozens if not hundreds of posts going up. I get it. I see it. I see now. So then you start charging. People complain. What was the feedback like? Do you have an example?
Tim: People were calling me a greedy asshole and things like that. I survived.
Andrew: Okay.
Tim: I think on one hand, to me, that’s a little ironic because isn’t it a bit greedy to just expect me to kind of provide you a free tool sort of ad infinitum. Yeah. I don’t care about my kids. Let me just keep paying this server bill so you’ll be happy. There was some feedback like that. There were people who — actually, this is one of my favorites. I encourage people that have a tool that get feedback from people that complain about price points and things.
I would get people that say, “Well, $12.99 is too much a month. Here’s all the reasons why.” I’m thinking, “Okay, if your business acumen is so extraordinary, why is it that you can’t pull together $12.99 a month to pay me?” Maybe that doesn’t make me the nicest guy. But wow, you’re like an expert in business, but you don’t happen to have $13 a month. You get feedback like that. If everyone loves you, you’re probably not going to be successful. There’s always going to be a point where you’re going to ask for something and you’re going to disturb a certain number of people.
Andrew: Okay.
Tim: But look, we made some people mad, but we got I think it was 523 or 525 initial paying customers, something like that.
Andrew: I have the number here at 588. Does that sound right?
Tim: Yeah. Okay.
Andrew: 588 paying customers paying you — did you say $12.99 a month?
Tim: Well, it was a variety. Some people had the basic advanced account. Some people brought a pro plan, which was $24.99, and some people bought a business plan, which was $49.99.
Andrew: We’re talking about roughly maybe $10,000 a month?
Tim: Yeah.
Andrew: Maybe a little less than that. That’s not bad. That’s a great start. All right. You’re off to the races. You’ve got a business. You’ve got real customers and things are starting to grow. Before I talk about when Len left, Len is the guy who created the software for you, what was he like, or what is he like as a developer?
Tim: He’s an awesome developer. I can’t say enough about —
Andrew: What made him so good?
Tim: Look Tweet Jukebox, no one has touched that code since he left, and it’s firing away unstoppably. There are no bugs. There are no complaints, nothing. I think you’re talking about a piece of software that’s doing thousands of thousands of posts every few hours, and it’s bulletproof.
Andrew: And you haven’t coded it? You haven’t touched it since he left? No, you did because you hired this new team of people in Russia, right?
Tim: Right. But what we did is we took the existing tool and we modified it and moved over to a new domain.
Andrew: Got it. So you’re saying the previous site is still up using his software right now.
Tim: Yeah.
Andrew: Oh, wow. I didn’t realize that. Okay. I see. That does show me how strong his work is, that it’s still working. How long has it been since he was there?
Tim: Over a year.
Andrew: Wow. All right. Let me take a moment to talk about my sponsor and then come back and ask you what happened that led him to leave and then how you did, how you handled it when he did leave.
All right. The sponsor is actually a good fit for this conversation, Tim, because it’s a company called Toptal. There are not a lot of people who are fortunate enough to know someone like Len Sixt, who created the first version of your software, but those kinds of developers are phenomenal. They don’t just code exactly what you tell them. They know how to figure out a solution to a problem that you present to them, create code that they’re proud of. They love the challenge of creating a product that they can be proud of. Those kinds of developers are why so many startups move to San Francisco, to find those developers, to be around those developers, to hire them.
Well, the team over at Toptal realized that there are a lot of businesses that don’t want to move over here or can’t move over here and there are a lot of developers who are the best of the best who also don’t want to live here. I understand why. I have friends who go all the way down to Mountain View from San Francisco. That’s an hour and a half by bus each way. That’s not a life for a smart person.
So Toptal said, “Our focus is going to be on finding these incredible developers, allow them to live wherever they are. We’re going to have a screening process that will basically beat people up because it’s going to be so tough.” But people who are great developers are going to love the challenge. The top three percent, 3 out of 100, who make it through this process, those are the only ones we’re going to put in our database and when a company needs to hire the best of the best developers, they can come to us at Toptal and hire them.
So that’s what they have right now. Andreessen Horowitz loved the idea and executive so much, it’s a blue chip venture capital firm, so much they loved it that they invested in the business. Anyone out there who wants the best of the best developers, they will change your business, change your product. They will have a huge impact on what you’re creating. If you want to hire the best of the best, I want you to check out this special Toptal URL. By the way, it’s top as in top of your head, tal as in talent.
If you go to this URL, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no risk trial period of up to two weeks. That URL is Toptal.com/Mixergy. I’m grateful to them for being such long time supporters of Mixergy.
Why did Len leave? Great developer, changed so much. Why did he leave?
Tim: He retired.
Andrew: That’s it?
Tim: Something your audience is probably not going to be — well, not for the same reasons. Len retired because he’s 65. I think Len had — his sister passed away, his younger sister. I think he just thought, “Do I really want to be plunking around with this? I’ve worked on a lot of projects. I’ve done a lot of interesting stuff. I’m going to move on.” I’d put a pretty good run in it trying to keep him around.
Andrew: It’s kind of scary when someone who is such an important part of your business suddenly leaves. How did you feel about it? How were you able to deal with it?
Tim: That was really hard. It continues to be difficult to — look, there are a lot of competent people technologically. There are a lot of people who can code. Then there are people who can code around a business idea. Len’s the kind of person, he just took so much incredible amount of pride in what he did and was so keen on making sure that when he solved the problem, he wasn’t creating a new one, which was something that very often happens to development, like, “Hey, we fixed this.” There are 20 other things that are now broken.
So he was super good at that. That was a really difficult transition, but he was super at stepping in and looking at what we — we let a couple different groups poke away at a couple problems we were trying to solve, and then we looked at how they were trying to solve the problem and their approach and how they dealt with this. Everyone is going to tell you they’re going to do an awesome job, right?
Andrew: I see. So you said, “If we’re going to find a replacement for Len, what we need to do is not just interview people but have them work on our actual problems, have Len look at their solutions to see not just how they solved it, but how they think about it and what else they touched as they were solving it.” The ones who did the best work, that’s who you ended up hiring to take things over, right?
Tim: I would encourage anybody who’s thinking about doing something like this to take the same approach. Whatever perceived cost you’re going to incur as part of doing that will be a drop in the bucket compared to what will happen if you get it wrong.
Andrew: Yeah. I’ve got a friend who I think you know him, he is really struggling because he hired a team of people who do good work, but man were they causing all kinds of other problems, as you said, broke other things. He’s now just trying to figure out how to fix it. It’s months and months of work, lost a lot of momentum because of it. So painful.
All right. So you got your audience. You’re starting to charge. You get to about $10,000 a month. What did you do to double that? You’ve been sending me texts and email messages — actually email messages is how you and I have been communicating — to show progress. What have you been doing to grow?
Tim: When we were going to Social Jukebox, I started beating the drum. One of the things I did was say — and I’m honoring this. If you came in at the intro pricing — because we’ve raised our prices, $12.99 is now $19.99, $24.99 is now $29.99 and the business plan stayed the same. But I started beating the drum pretty hard on, “Look, if you want in on this original pricing, you’ve got until this day to do it.”
So we got a lot of people came in for that. That, though, I have to say, I had a nice run of like boosted people up. Now, we’re treading up and down, and I’m actually grappling with having to now like actually probably do some heavier lifting when it comes to marketing if I wanted to grow.
Andrew: What about the affiliate program? How is that doing?
Tim: You know, I thought that was going to be a really big deal. I have to say that what I think I’ve done is I’ve just signed up a bunch of new free people.
Andrew: Because you gave affiliates free accounts in order to get them to promote.
Tim: No, because what’s happened is people have come and taken a look at the software and if they’re people who are of that judicious audience, they may say, “Hey, five posts a day,” which is what you get with a free account, is plenty. So they’re going in. They’re scheduling their five posts. They’ve got their reservoirs of content set up, and then they go and do something else. I’m glad to have those people because you get valuable feedback from all your customers.
But in terms of converting, we’ve tried a few different ways. We’ve tried playing around with some contests and comp structures and things like that, and I don’t think that’s — that doesn’t appear to be the root problem. I know we have some really avid fans. I don’t think the problem is the enthusiasm or the comp. I think we’re either faced with do we get rid of free completely and just go to free trial and say, “If you want to be on the product, then it’s either pay or go away.”
Andrew: Yeah.
Tim: Maybe what I’m encountering is that the number of people who are aggressive just isn’t that big. I have a nice business. Don’t get me wrong. But maybe if you want more people, you’re going to have to just face the fact that you’re going to have to say — it would be better in a way too because there are a lot constraints on the free version and it would almost be better to say you’ve got 30 days. Here’s the full monty, do whatever you want. At the end of that, you either provide a credit card or it goes away.
Andrew: I’ve seen a lot of businesses go that way too. What you’d lose there is that branded tweet, the branded thank you from the free people. Is that helpful?
Tim: That’s the rub, right? Do you want to keep growing free in the hopes of someday monetizing it, or do you want to just like pull the switch? If I got rid of free tomorrow, I know I’d increase my revenue. That’s unquestionable.
Andrew: But would you keep growing your business? That’s the big question.
Tim: Yeah, exactly.
Andrew: The name change, we didn’t get to that. It was Tweet Jukebox before, right?
Tim: Right.
Andrew: Why did you change it?
Tim: I think we’re not Twitter-centric anymore. We post to Facebook, LinkedIn, and Twitter. I didn’t want to have a name that was that Twitter-centric. Actually, I don’t know if like — there are a lot of tools out there that use tweet and Twitter in their name. That’s against their terms of service.
Andrew: They don’t let you use the word “tweet” in your name?
Tim: If it is within the scope of possibility that Twitter would actually send their legal team to shut you down. Whether they’ll do it or not, who knows?
Andrew: You do LinkedIn, Twitter, and Facebook. My guess is Twitter is by far the heaviest use, right?
Tim: Yeah. We have a fair number of people using Facebook. And LinkedIn, of course, you have advocates for all these tools, but because of where we started, yeah, we have a pretty Twitter-centric audience.
Andrew: Let’s talk about the spam issue you had. What was that?
Tim: When we were getting started, there is a company, who shall remain nameless, which is more than I can say for the way they treated me, but I think they were reporting us and getting everyone they knew to report us as like a spam bot problem, whatever, so we had some users that were having rejected posts. This was like very early days, but it was extremely disconcerting. But it was right when we started charging. So people are like, “It was fine until you started making me pay for it.” Fortunately, I managed to reach out through some people I know and explain like, “Look, tell me what we need to do and —
Andrew: What were they doing? They were taking your customers and marking their tweets as spam?
Tim: They must have been.
Andrew: How do you know it’s them?
Tim: Look, I don’t, but I don’t know. If there’s a group of people who are constantly posting threats and making pretty nasty comments to you online . . .
Andrew: From their company they were making nasty threats to you?
Tim: Yeah. I found it really bizarre.
Andrew: Who was it? Let’s not connect them directly to the spam, but which company was sending threats to you on Twitter or saying nasty things to you.
Tim: Do you really want me to name?
Andrew: Yes. I want to know just the company. We’re not going to say they’re the ones who did the spam thing. We’re not going to say they’re the ring leaders.
Tim: It was SMQ. They’re based in Australia.
Andrew: SMQ. I don’t know them. They would tweet at you and say, “You’re not creating great software. It’s leading to spam?”
Tim: “It’s spam, you’re a wannabe.” I’ve got to be honest, man, for me, just given the nature of social, it’s like what are you guys doing? I was in the investigative business. That’s kind of a cheesy, sleazy business in many ways. I thought I’d kind of seen it all there. Then I’m encountering this. I was like, “What are you guys doing?”
Andrew: What’s the company, SMQ? I’ve never heard of them.
Tim: It was amusing. There was a guy who was trying to ask them a question. I started like looking at their feed a little bit to see what they were talking about. One guy was asking some questions about the software, and I guess they were pretty fired up about me and they accused the guy of being affiliated with me, and I had no idea who the guy was.
Andrew: Wait, it’s called SMQ?
Tim: Yeah.
Andrew: Never heard of them? What’s their website?
Tim: I think it’s SMQ.com, I think.
Andrew: I can’t come up with it. So you then knew someone at Twitter. It’s not SMQ.com. It’s okay. So you went to Twitter and got them to understand you’re not creating a tool for spam, and that’s what helped you get out of the doghouse with the them?
Tim: My first question was, “Are we being targeted?” The answer was no. So what it turned out to be is that some of the customers were being individually targeted. So we went through a lot of conversations and iterations, and I think that finally these folks moved on to something else, this competitor. But the dust settled, and it’s no longer an issue. We also put in some safeguards. Because we had at one point groups of people that were signing up for accounts and turning the on at the maximum speed and things like that, so we had to kind of self-regulate a bit. It’s one thing to be aggressive. It’s another thing to be insane.
Andrew: I see.
Tim: We had to just step in and do that. But yeah, we managed to find a way to calm things down enough that we moved forward.
Andrew: How big a feature is that Jukebox feature, the one that lets me select tweets from a library of other people’s tweets?
Tim: I think it’s the most underappreciated piece of the software. It blows me away that people aren’t using it more. Part of that is my own fault. I’ve tried to get people to understand like if you were doing a book launch, all you have to do is put something in the library, then get your friends and your launch team to sign up for a free account, load the jukebox and turn it on.
Andrew: They will all be tweeting the same thing with me and helping me?
Tim: Yeah. You’ll have all this stuff going out. You can be promoting a particular hashtag. It’s a super easy way. What’s the greatest challenge of getting people to help you? If it’s hard, they won’t do it.
Andrew: Even if I ask someone to tweet out an interview, I need to make it easy for them to tweet it by writing the tweet for them. You also allow me to say grab tweets from Zig Ziglar. So if I want his quotes, somebody loaded him up as a jukebox and I can take it and you’ll randomly send those out, right?
Tim: Correct.
Andrew: You’re saying it’s still underappreciated. It’s the heart of the business, part of why you started. But people just aren’t using it. The big thing that they’re using is what?
Tim: It’s a mix. There are people using it, but I think it’s interesting to me that such an easy way of creating distribution for content isn’t more popular, because it’s definitely a differentiator. I don’t know anyone else that has that. I think it’s an easy way to do it. We do have people taking quotes from other people, whether it’s stuff we put up or other customers that have put things in to the library. But a lot of people, they’re putting their own content in or what I advocate for a lot of them is doing a little bit of a mix so that they have —
Andrew: I don’t have to write all of my tweets. I can just go into your library of tweets, select a handful and you guys help enrich my Twitter stream with your stuff.
Tim: Correct.
Andrew: All right. Why don’t we close out with this. Before we started, you said, “I don’t need to dominate the globe.” What do you want?
Tim: I think this might sound like a really goofy answer, but I’m actually just interested in having fun.
Andrew: What’s fun for you now, now that you’ve got the lifestyle business kicking off revenue, helping you meet new people, growing your profile online? What’s the fun thing you’re doing with all this revenue, with all this freedom?
Tim: Spending time with my kids. I was just in Sweden for two weeks. I have triplets. They all just graduated high school. I was able to spend two weeks knocking around up there and then did this trip to Ukraine. My kids are turning 18 in August. I’ll be back in Sweden renting a summer house in the archipelago Stockholm for a week. We’ll have their birthday party.
I can kind of go anywhere and do anything I want to do. I have to take care of my customers, but it’s not this like super daunting thing, and I think when you asked about the comparison between the old business and this business, this business will sit on its own for a couple hours while I go do something. But if I have an investigator that got thrown in jail, I can’t really go, “You know what? I’m a little busy right now.”
Andrew: Yeah. That is a great benefit.
Tim: Yeah. It’s huge.
Andrew: The website URL is SocialJukebox.com, really simple. There’s a free account if you guys want to try it. The two sponsors that I’ve had on today are the company that I use to hire developers to help us out at Mixergy. It’s called Toptal and the hosting company that is hosting my new business. It’s called HostGator. If you want those discounts from them, just add a /Mixergy at the end. So, HostGator.com/Mixergy or Toptal.com/Mixergy. Tim, thanks. Good to have you back on here.
Tim: Andrew, an absolute pleasure. Thank you for having me on.
Andrew: You bet. Bye everyone.
