Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy and I’m so freaking excited to have this interview for you.
You see, when I was doing Mixergy in the beginning, I saw this guy who subscribed to the mailing list back when I could see every single person who subscribed to the mailing list, who commented on the site, who emailed me from time to time, who became a premium member, who was just a part of the Mixergy community.
And he ran a company called Iconfinder. I got to know him better than I got to know his company. Then one day–and I got to know the way he thought by seeing his feedback, his comments, etc. Then one day, I needed an icon for Mixergy. I think we were creating a new side panel for the membership area.
So I Googled a way to do it and I found Iconfinder and I said, “This sounds familiar,” but I was moving so fast that I didn’t even make the connection to the guy that I knew. I just bought the icon. It was so freaking easy. For $1, I bought the icon and then I bought a couple of others for just $1 each. It was unbelievably easy.
And then when the project was done and I could just sit back, I thought, “Hey, I know the guy. Of course, it’s Iconfinder. It’s the guy who I talked to for a long time, back since–I’m looking in my inbox here–since 2009. And I’m proud to have him on here because his because keeps growing and growing and growing.
I know internally here at Mixergy, lots of us have signed up for Iconfinder and bought icons from Iconfinder. If you’re designing anything, there’s a good chance that you’ve already been a customer of Iconfinder. It’s a huge search engine for icons that you can use on your website, in your app and just about everywhere.
Anyway, the founder is here and I’m proud to have him on. His name is Martin LeBlanc Eigtved–did I get that right?
Martin: Yes.
Andrew: Cool. We were just talking about how–actually, talk about the last name. Where is that from?
Martin: Yeah. It’s actually my wife’s last name. So I preferred my middle name and she liked her last name. So we just combined them when we got married.
Andrew: You’re in Copenhagen. Is that a typical thing to do where you are?
Martin: I think my generation in Denmark is fairly flexible around picking and choosing the parents’ names.
Andrew: I see.
Martin: I have the LeBlanc middle name from my French side of my family. So I’m half French and half-Danish. It’s unique to have like a French-sounding name in Denmark. It kind of like explains why I’m darker than most Danes. So people don’t ask any more questions when I just tell them I’m half-Canadian.
Andrew: There are a lot of questions I have for you. I want to understand how you created this marketplace. Everyone keeps talking about when you have a marketplace, you have the chicken and egg problem. You can’t get people to sell on your marketplace if you don’t have any buyers there, and no buyers are going to come to your marketplace if you don’t have anyone selling stuff. You figured it out. I want to understand how you did it. I also want to understand how you came up with this subscription.
One day I looked on your site and you suddenly had a subscription. It had something to do with your understanding of the problems your customers had. That’s what made your subscriptions so natural to create. I also want to understand how you use Mixergy so that anyone who’s listening to us can get as much out of this as you did so they can build great companies and hopefully be on here to do an interview and talk about it.
This whole interview is sponsored by two companies that I’ll tell everyone about later. The first will help them hire great developers or designers. It’s called Toptal. The second will help actually organize their books so they know how much money they’re making, how much money they’re spending, etc. It’s called Bench. I’ll tell everyone about both those later.
First, Martin, you’ve known me for a long time. You probably know this is going to be my first question. What’s the revenue of Iconfinder at this point?
Martin: So, right now, we have a revenue of about $150,000 US per month.
Andrew: $150,000 recurring revenue?
Martin: Yeah.
Andrew: And in addition to that, do you also have a lot of people who do what I did when I started out, which is buy individual icons for $1?
Martin: Yeah. So that part is contributing less and less to the overall revenue, but it’s still there.
Andrew: It’s mostly recurring at this point.
Martin: Yeah.
Andrew: And the whole thing start because you said, “I want to be an entrepreneur.” You were in business school. You had this plan that led to three different projects. What was the plan that you had?
Martin: Yeah. So basically, I had a really, really good teacher in business school. She taught about–when I started business school, I studied computer science and business administration. It was this combination of computer science and business administration.
A lot of these teachers in economics, they were teaching us about how you produce pencils and all that kind of stuff. And I was just like the economics of producing a physical product is not the same as a digital product because you don’t have any marginal cost of producing another icon, for example, compared to a pencil.
So I was looking at all these books and stuff, and I was just frustrated about being taught economics in a world where I was just seeing myself going in a digital direction. So I signed up for a class with a really cool teacher, and she taught about a really nice book. It’s actually by Hal Varian. He’s the Chief Economist at Google, I think. He wrote a book about information products and all the dynamics around it.
Andrew: What’s the name of the book?
Martin: It’s called “Information Rules.”
Andrew: “Information Rules?”
Martin: I think it’s basically my favorite business book. It’s quite easy to read. It’s not really hardcore economics. Most people would be able to read it. But it goes through all these different ideas of how you build. For example, it has a chapter on getting to critical mass and then they look at PayPal. It goes through all these concepts, and I was blown away about can you actually build a business like that.
I decided in business school I needed a big project I had to launch once a year. So the first one was a mobile app, Android app. It was basically a little app that worked at a–if you went to a concert, you could take photos and all these photos would go into the same gallery, so all the people who took photos at a concert, they would have the same place to find photos. So if a guy was upfront, he could take maybe a photo of the front guy of the band and then somebody else would be able to get that nice photo.
Andrew: Why did you come up with that idea?
Martin: Some of my friends from–we signed up for–Google had some competitions in the beginning when they launched Android. So they just had ran some competitions to get the app ecosystem started.
Andrew: Where did you get the idea to have what you called the temporary social network for concerts?
Martin: We all liked the same kind of electronic music and we always went to concerts.
Andrew: Just the kind of thing you wanted to have at the concert.
Martin: Yes. That was purely that. It was close to impossible to monetize. It didn’t turn into any business. So we kind of like left it alone.
The second business was a consultancy in web analytics, primarily optimizing sales in ecommerce. We went in, installed Google Analytics, set up all the ecommerce tracking and all that, and then we helped the company improve their conversion rate and maybe do a lot of the data analysis.
Andrew: So that makes sense, a consultant company that looks at analytics and then does the work to increase conversion rates. Why didn’t that one work?
Martin: It worked fairly well except that we launched basically in the worst month in the past 100 years. That was exactly the month when the whole financial crisis started. So all the companies that we went out and tried to sell to, they all said it sounds really nice and everything, but I’m not allowed to spend any money.
Andrew: Really?
Martin: Yeah. For half a year, we could just see–we all put a little bit of money in it–we could just see that we weren’t able to pay our own salaries. After a while, it just became too tough to go any further. Also from my point of view, it wasn’t really a scalable thing to do consultancy, even though it was fun and everything, you put in some hours, you’ve got some money and that was basically the economics of it.
Andrew: Okay.
Martin: And then at the same time, I was also a part of this consultancy, also doing a little bit of web design optimization for these companies, helping them change a little bit, optimize the usability of the checkout flow and stuff like that. In that process, I was using icons and I started building my own little collections of icons in my head drive. There were no good ways to search icons. There were no good ways to find good free icons. It was all scattered around the internet on different blocks. There were a few icon designers who were selling icons, where you could buy like a .zip file of 500 icons. It would cost you $50 or something like that. Or you could go to iStockphoto and get these horrible icons and pay a lot for them.
So I decided to build a little search engine on my own computer that could index all the icons I had it on my own hard drive, and then I just started searching for whatever, adding and tagging and stuff like that. Then I found out after a half a year that it was really useful. This was back in 2007. Then I just bought Iconfinder.net, got it launched and put it out in the web and it got picked up on Digg. It was really big back then.
Andrew: Let’s hold for a second. When you were doing it on your own hard drive, was there any sense this could be the third business project, or were you just doing it for yourself the way I might organize my family photos?
Martin: I decided that was kind of like the project for that year.
Andrew: I see. So you had a sense. “I see that I have a problem,” you were saying to yourself, which is, “I can’t find the icons when I need them. I’m storing them on a hard drive. This is probably a bigger problem that needs to be solved.” And you kept doing it for yourself on your hard drive with the idea that eventually this would be a search engine on its own.
Martin: Yeah.
Andrew: And then when you finally launched the first version, you put it on Iconfinder.net, what did you build into it? What did it look like? What features did it have?
Martin: It had no download buttons because I hadn’t figured out how to push like an image as a download. So when you clicked an image, it would just open in a browser and you had to right click to download it. It was barely working. It was just like a search field. You could put in the words and there was a little bit of filtering. So it was really super simple. But I think keeping it simple was also what made it interesting for people.
The homepage was looking like Google with a different logo, and then it was an icon search engine. So people understood the idea immediately, and it had no ads, no fuss, nothing like popups, anything. So I think a lot of people liked it over going to different blogs, finding icons because it was like the simple, quick alternative.
Andrew: I’m on it now and I see how simple it was. I’m looking at a version from April, 2007. The logo was not a logo, essentially. It had that shine to it that all the Web 2.0 logos had and it had a beta icon right next to it, which all the Web 2.0 businesses had. But here’s what stands out for me. At the very top of the site, it says, “Dear users, due to heavy traffic, this site has been suspended by the hosting company. We’re working on a solution as fast as possible.” What happened there?
Martin: Basically I launched this on like the cheapest hosting you can get.
Andrew: What is it, [inaudible 00:12:14].dk, is that it?
Martin: No, it was on One.com.
Andrew: Okay.
Martin: But it’s a small Danish hosting company, and they basically had these servers and then they’d chop them up and let thousands of users share this little server. So, as soon as one of the websites on the hosting platform starts getting successful, then they shut them down because then it would be like the other websites on the server would be performing worse.
Andrew: I was on one of those servers for a while. It sucks. If they don’t shut you down, then everybody else suffers really bad and the company I was with didn’t shut down the person that used a lot of traffic. So my site would go down.
Martin: You can imagine what happened when Iconfinder got on the homepage of all these different sites–Reddit and Digg and thousands of users started coming.
Andrew: How did you get on those sites? How did you get on Digg? How did you get on Hacker News? How did you get on Reddit? Excuse me, I’m going to go off camera for a second. Go ahead.
Martin: I posted it myself.
Andrew: You personally did it?
Martin: Shameless self-promotion, yeah.
Andrew: And were you active on those sites? Talk a little bit about the first version of promotion?
Martin: Basically, I was active on all these different sites. I always comment about links about stuff. I just posted it. I knew fairly like roughly what kind of presentation you had to give like in the wording of the title, and I just posted it and it got upvoted. And as soon as it got popular, it sent so much traffic.
Andrew: Because a lot of the people who were on those sites were freelancers, were coding up their own websites, were people who were active.
Martin: I think when you have a website that gives a lot of free stuff and it looks interesting and it doesn’t have a lot of ads, then there’s a really high chance of you getting upvotes because people can see that you have done something that is not very selfish, in a way. You’re just putting up–it’s basically the same as putting up some open source code, for example.
Andrew: Where did you get the original icons, and how did you know you had permission to pass them out like you did on your site?
Martin: All the original icons, they came from all these different Linux distributions. They have everything like in terms of Linux, most of it, at least, is under the GPL license, public license. That would include the icons. So I actually had a class in business school about law. I was actually just asking the teacher, I wanted to do a project about digital licensing and I basically just analyzed this license and then I figured out I could use it for commercial use, as long as I presented the license along with the icons.
Andrew: And you were hunting down each one of these icons yourself at first?
Martin: Yeah. For a long time I spent half my weekend, I think, maybe four, for years, actually, I spent half my weekend just adding icons myself, pushing the content, improving the text, just working on it whenever I had time.
Andrew: Did you have any idea where the money was going to come from for this business?
Martin: I think I had an idea about like–because I could see AdWords was successful–and I really think AdWords is one of the best business models in your time. I think creating like AdWords for icons is kind of like a way to monetize this.
Andrew: You were going to use AdWords from Google on your site?
Martin: No. I was planning on giving away free icons and then presenting premium icons kind of like in the sidebar, kind of like AdWords is split up, so you have the free results and then you have the paid results.
Andrew: Which is essentially what you ended up doing.
Martin: Yeah.
Andrew: I do remember going in there one day and seeing–I thought it was at the top above all the results a couple of paid ones. It kind of made those look better because they were paid. Even if objectively they were essentially the same, the fact that I’d have to pay a buck to get it, I felt like this is a better icon. I should go for a better one.
Martin: Today the quality is a lot better actually.
Andrew: I think, for a while there, they looked a little more generic.
Martin: There was a long time where icons were more generic. There has been a huge change in quality. The designers are becoming so much better, and they’re putting more time into it. They’re earning more money, and you can see they’re really pushing trends and you can see some of the big companies sometimes pick up some of these trends. For example, I think Apple, when they switched to iOS 7, I think, they changed all the icons to offline icons. I think some of these ideas are coming from icon designers. They’re just like creating something to look nice, and then that becomes like a trendy look.
Andrew: Right. And then all the icons need to change everywhere, it feels like.
Martin: Yes.
Andrew: They go from being very shiny and round and feeling more like something you can grab with your fingers, then flatter and then all the icons of every app that I have change and all the icons I have on websites I use change. I can see how that impacts your business.
Martin: Yeah.
Andrew: Your solution, it seems like, for the chicken and egg problem that marketplaces have is to say, “I’ll just find the stuff that’s free. I’ll fill up my website. That will bring in the potential customers. Then I’ll go after people who will charge,” because you’ll have a market of potential customers for them. They’ll be attracted to work with you.
Martin: Actually, I think some of the people are actually the same because even when we had the free icons, it was still developers and designers who came there. So when we only had the free icons, we got an investment at one point and one of the reasons why we got an investment was because when we did surveys of our users, we asked them when you’re using Iconfinder, are you at work or at home? And people said, “I’m at work.” And, “What is your profession?” “Developer.”
So we concluded that our users are people at work who are developers and they could easily get access to a credit card and pay for stuff and they would be willing to pay for stuff. They’re paying for a lot of stuff that saves them time.
Andrew: So you knew that they’d be willing to pay for something.
Martin: Yeah.
Andrew: Then did you start opening yourself up to allow any designer to upload their own icons and to start charging?
Martin: Yeah. So we got an investment in 2012.
Andrew: From?
Martin: We got an investment in 2012.
Andrew: Sorry, from who?
Martin: From 500 Startups in the U.S. and a venture fund in Denmark. Basically, they got on board at the same time. We were in the incubator program in Silicon Valley with 500 Startups for a month. Basically, the whole business case was to monetize the traffic from Iconfinder. At that point, we had a little more than a million unique users per month.
Andrew: How many million, you said?
Martin: A little bit more than a million uses.
Andrew: Okay. So you said, “I have this idea for how we can monetize it. I have users now. What I need is some money to implement this idea.”
Martin: Yeah. So, basically, the business case was to build the marketplace on top of this search engine that was before that.
Andrew: Okay. So then you started adding a way for people to upload their icons. What was the split you were going to give them?
Martin: We looked at the market at that time, and you could see the biggest players were Shutterstock and iStockphoto and these giants and we were like small Iconfinder. So we needed to find out how we enter a market with those players. We talked to the designers. Basically, they felt that they were like mistreated by these big marketplaces. They weren’t listening to them. They gave them a low cut, and they were just not satisfied.
We thought if we give the icon designers a higher cut, we can basically maybe end up giving the designers the same absolute amount of money coming out, because if you get 5% to 10% from Shutterstock per sale and you get 70% from us, then in the end, you will get maybe the same amount of dollars. You might sell more on Shutterstock, but your cut would be much lower.
So we thought a good way to enter the market and be competitive would be to spend some of the money we got in funding and give the designers a huge cut.
Andrew: What was going to be your cut?
Martin: We get 30% and they get 70%.
Andrew: All right. I wonder how you ended up with your prices. $1 seems so low for an icon. If I’m going to get an icon for the site, $4, $5 seems just as reasonable as $1.
Martin: I think we always had this philosophy of not pricing low–we have actually raised the prices a couple times–but we wanted to keep everything as simple as possible. So, for example, just saying like not $0.99, but $1. It’s something that is so simple to communicate and understand as a user. You just click the button. It kind of like makes the decision process very uncomplicated. If we had like–for example, if some of the icons were $5 and some were $1, then you would all the time have to look at the price and decide is this worth like five of the other icons.
Andrew: Right. But still, if you’re going to make up the price, why not make it $2? Why not make it $5? Why $1?
Martin: We have actually raised the prices. I think we started out at $0.50, and then we raised it to $1. I think the average is $1.50 now. So it’s kind of like going up. It’s the same with the subscriptions.
Andrew: What kind of testing do you do on your prices?
Martin: Not that much. When we raise the prices of icons, we look at how much sales–the number of icons being sold and we could barely see a change when we raised the prices. From $0.50 to $1.00, we could barely see the number of icons change in the negative version. But for us, there was double revenue.
Andrew: And then to an average of $1.50, any change?
Martin: No.
Andrew: My guess is even if you go up as high as $5, it’s not going to have an impact, but it might have impact on your monthlies, which would increase the number of people who sign up for monthlies because the monthly prices include a set number of downloads.
Martin: Yeah.
Andrew: Let me take a moment here and talk about one of my sponsors and then we’ll come back and talk about the rest of your story and how you realized you should charge on a monthly basis instead of just on an individual basis because that seems huge.
The sponsor is a company called Toptal. If anyone has been listening to me for a while, they’ve seen that not only do Mixergy listeners sign up for Toptal, you’ll see the guest will write down the name Toptal because I’ll tell them that if you want to hire great developers, what Toptal did was they put together a network of some of the best developers, people who are Google quality, Facebook quality developers who happen not to want to work out of Mountain View or Palo Alto.
They want to work from wherever they are and they’re willing to take a lower price for the ability to not have to come into an office every day and take that dreaded Google bus for an hour and a half every day to the office and an hour and a half on the way home. They want a better life for themselves even though they’re smart, great developers, they won’t want to go into the office.
That’s what Toptal did. They built this network. I was actually listening to the interview I did with the founder of The Honest Company, Jessica Alba’s cofounder. As I talked about Toptal, he said he was writing it down. I saw him write it down on camera. So, it’s the thing that a lot of entrepreneurs, serious business people are using to hire developers.
But I’ve been scrolling through their website right now in preparation for doing this ad for them and I realize they’ve already started promoting not just developers, which they’ve done since the beginning of their ads with me, not just designers, which I think is epic, to be able to call up someone at Toptal, tell them what kind of design work you need and then find the right designer that’s pre-vetted for you and if you want you can work with them and if not, you don’t have to but they’ll find you someone they think is a perfect fit for you.
But now they’re also expanding beyond. I’m looking at the bottom of the site. They told me when they were doing this. They asked me not to talk about it publicly, but it’s on their site, so I can say it. They’ve now expanded way beyond developers and designers.
On the very bottom of their site, you’ll see they have things like financial modeling experts, fundraising experts, market research experts, venture capital experts, pricing analysis experts, corporate finance, Excel experts. They’ve really branched out beyond. I think they did that by buying a company that worked with bigger organizations on more the MBA-level stuff. So now they’ve expanded their available talent.
So if you need a developer, Toptal is still the top place to go. If you need a designer, still, the top place to go. But you should also know that if you want experts beyond design and development, they have them. The best place to go see that list is to go to not just Toptal.com, but a special URL they give us where they’re going to give anyone who uses this special URL 80 hours of developer credit when they pay for your first 80 hours and that’s in addition to a no-risk trial period of up to two weeks.
I should check in with them and see if that 80 hours will apply to non-developers too. My sense is yes, it will. I’ll check in with them but you should know no matter what, you have a trial period of up to two weeks with them, you can make sure you’re 100% satisfied, which is unusual when you’re working with great developers.
Google can’t say that, “Hey, we hired you. We’re not happy. Get out tomorrow.” They’re not doing that with new people. They’re committing to them. But you can if you’re working with Toptal. Here’s another thing you get whether you work with developers, designers or anyone else. You get to talk to someone on the phone.
The first thing you do is you fill out a form telling that you’re ready to talk to someone, then you book a conversation with a hiring expert at Toptal, you tell them what you’re looking for, you tell them what you’re trying to work on, how you work, how many people you need, one, two, etc. and they’ll go find them for you and match you up and if it’s a good fit, you get to continue, if not, you don’t have to. Go to Toptal.com/Mixergy for that special offer. Top as in top of the mountain, tal as in talent, Toptal.com/Mixergy.
By the way, Martin, my voice is a little bit off today because I finally had surgery on my nose. I’m feeling great about it, but I’m not fully recovered. For a long time–did you ever notice it as a listener, that I would have issues breathing?
Martin: No.
Andrew: I’ve got all these little tricks for hiding it, and I hope I don’t have to use them anymore. Well, it turns out I had these like turbinids, which I didn’t even know we had in our nose, like little balls, just little balls in our noses. I went into surgery, they sliced them open, they took out a piece of the inside, they closed them back up. Yeah, it makes me wince every time I think about it too. Now I should be able to breathe after a little more of a recovery than I’ve had so far. I should be able to finally breathe fully. It will feel great to just breathe like a human being.
When I was a kid, I wanted to be a radio host and I knew that because of what was going on with my nose and my voice that I couldn’t. Then podcasting came around and none of that mattered.
Martin: No. I was just about to say you are already.
Andrew: Sorry?
Martin: You are already.
Andrew: I love the internet because it really does make everyone’s dreams come true. I know they say–they used to say America is the land of opportunity. I feel like the internet is the land of opportunity. Look at you. You had this idea in school, boom. The land of opportunity is at your doorstep. You don’t have to go into America. You don’t have to go anywhere else. Stay where you are.
The way that you got to charge monthly recurring was by understanding a problem your customers had. What was that problem that you understood, and how did it lead you to recurring revenue?
Martin: So we built the initial version of the marketplace where you could buy these individual icons, you could buy icon sets. But it also meant that you were depositing money into an account and you had maybe $10-$20 in your account and then you use those and then you had to refill it all the time.
So it was kind of like a process that we thought was really simple when we launched, but what we found out was that a lot of these guys who were using icons, they were maybe a developer or designer on a larger team. Maybe they were working in an agency. They didn’t have a company credit card. So every time they needed to refill their account, they would have to go to a project manager or the credit card make sure they get a receipt, printed receipt, maybe do a statement for the company, whatever.
And it was kind of like we started talking to people and they all said the same thing. It was too time consuming, they didn’t want to bother. At the same time, Spotify just get started. We had a lot of these companies that were all moving into subscriptions. We thought that as soon as we have a good amount of premium icons, we can actually charge for this as a subscription.
So we actually just waited a little bit because we thought that when we launched subscriptions, we want to charge a good price for it. So we were just waiting for the content to grow to a certain size, and then as soon as we could see that okay, this amount of icons could be worth this price per month, and then we launched it.
Andrew: How did you know they were going through all that process of getting a receipt, bringing it back to the finance department, getting a credit card, trying to figure out how to make it work for the company themselves? How did you know this was an issue?
Martin: I think we’ve always been–I think maybe it comes from my background when I was working at this web analytics agency because we also did a lot of surveys. I think combining web analytics with surveys is a really good approach. I think every six months or so, we’d run a huge survey on all our users and we asked them all kinds of questions about their jobs and all that. So we started learning about the users in that way. But we would always have on these surveys, we would always have like a field at the end that would say, “If you’re interested in helping us some more, you can put in your email or your Skype handle, and we’ll set up a meeting and then we’ll talk for 20 minutes about how you’re using icons and give us some feedback. So every time we ran a survey, we might have like 10 or 20 Skype calls with different users who would just give us a chance of feedback.
Andrew: And you would make these calls?
Martin: Yeah, me and my other teammates and we were like three guys.
Andrew: What was your structure for the calls?
Martin: So I think we were basically asking them to give us feedback, and then we would prepare some questions that we will always ask them about their profession and maybe also we were interested in, for example, which software they’re using. Are they using primarily Photoshop, because then we would know that back then it wouldn’t support vector icons, for example, but if they say they are using Illustrator and whatever, then we knew this would be a customer for better icons, for example. So we were asking them also some technical questions. So that was a really useful way to learn about the users.
Andrew: That’s interesting. One of my problems with other icon sites or other places for finding icons is they always gave me vector icons. If I’m doing it and not like someone else on the team, it means I don’t have an easy way of working with vector icons. I always would have to go and find some software that would convert it into a .jpeg or a .png, and then I could put it on the site. It frustrated me to no end that I would pay for a batch of icons and couldn’t use them because of that. I always wondered how did you know stuff like that. It sounds like that’s how you knew it, these phone calls.
Martin: I think we have always been looking at our target audience in a way where we said that these guys, they are not really interested in being on our site. They are basically working on a task that could be like doing this web design for a client. It’s all about saving time for them. So if it takes three seconds for them to find an icon and put it into the design, that would be better than doing something that would keep them on the site and give them something that will require–we’ve always like been very cautious about making sure that people could use the icons without having Illustrator, for example.
We started having a big part of our target audience, which are like marketers or people who are just doing PowerPoint presentations, not developers, not designers, but they just like to create a nice-looking presentation. These guys, they don’t care about .svg at all. They just care about drag and drop an icon into a presentation and get on with your work.
Andrew: So, when you had these phone calls, they would tell you, “I need to go and get my boss’ credit card and then take a receipt.” That’s how you found out.
Martin: Yeah. We could see for these guys that it was really time consuming, and it was a hurdle for them to use the site and spend money on the site. So we could see that having a subscription is much simpler for them, because they would just borrow the credit card once upfront, and then they would talk to their manager and say, “We need icons and it will cost us $29 a month and I will never ask you for the credit card again.”
You could send the invoices to some guy at the company. So it was just lie a big relief for these guys to be able to sign up to a subscription instead. But, of course, it’s not suitable for everybody, but all these users were using icons regularly. It’s perfect for them.
Andrew: What about the price of $10 a month, I think, for the basic–$9 a month?
Martin: Yeah. So we simplified it. We started out having like plans that were–I think we had four different plans plus this plan that is always like call us into price. And it was all based on the number of users you had. So every time you wanted to add a new user, it would bump up the price. It was really painful for people because they would maybe have one project where they wanted to have three guys. Next month, they would go back to one guy using Iconfinder. So they would always jump up and down in sizes of plans, and it was just not very flexible or suitable.
So what we did was we quickly changed it to a $9 plan, which was just the simple. You’d get 25 downloads. And then we had the $29, which is unlimited, which you could add your colleagues also to the plan.
Andrew: You also have a $29 a month plan with unlimited. Do you have an issue with someone just going in and downloading thousands of icons and cancelling right away?
Martin: Yeah.
Andrew: What do you do about that?
Martin: So we really wanted to have this unlimited plan, because I think when you’re a user and you sign up for something that is unlimited, it removes a lot of thoughts in your head about, “How many downloads do I have left?” It’s kind of like if you’re using Spotify or Netflix. It’s not like you’re not limited to a number of songs or movies you can watch. That kind of removes a lot of the negativity about using the product. So we wanted to have the same experience with icons also.
What we did was we put in the terms where we just said that you’re not allowed to do automatic scraping of icons. So we have done like a little script that just checks–so if you start pinging, downloading regularly and you download hundreds of icons in a matter of an hour or whatever, it would stop you and then we would get a notification on the team. Then we’d go in and look into the history and then we’d say, “Okay, please respect that you cannot scrape like automatically.”
Andrew: So you’re limited to how much a human being could possibly download within a month, not how much a human being’s code could do it.
Martin: Yeah. Exactly. So we just say, “You’re not allowed to do any automatic scraping, but you can basically download all the icons you need if you’re just like using it as a human being.
Andrew: How you divide revenue among your creators when it’s unlimited $29 a month?
Martin: So what we do is we put all the revenue we have and we put it in a pool, like one big number, and then we take our 30% and then the 70% of that money goes out to all the designers based on how many downloads there have been. So all these pro users, they are downloading icons, and when we just count them, then once a month, we divide the money to all the designers based on the number of downloads. So, as a designer, you will not get the same amount of money per icon in this model, but you will get a percentage of the revenue based on how successful you are, basically.
Andrew: Right. Which is the Lynda.com model also.
Martin: Yeah.
Andrew: Do you have your designers promoting you in any way? Are they trying to send people over to your site the way, like on Envato, when someone lists on Envato, they kind of are incentivized to promote that they’re selling on Envato? Do they do anything like that? Do you guys get anything like that from them?
Martin: Yeah. We have a little bit from–we have actually launched a referral program recently, but before that, people were just selling it on Twitter or Facebook, but after we got a referral program, it really started getting some more traction.
Now we’re also building–we have an API, which is basically the whole site as an API. We have been building like a WordPress plugin. If you are like an icon designer, a lot of them have WordPress websites promoting their design services. Now they can just install the plugin and the whole collection of icons from Iconfinder will show up on the site.
Andrew: I see. If they’re selling it, they can sell it individually, and then you guys upgrade the customer and try to upsell the customer to a monthly.
Martin: Yeah.
Andrew: Then do they get a cut beyond for having sold beyond their individual usage for having sold someone on a monthly?
Martin: If the designer who sends a guy to our site and he signs up for pro, he will get the referral kickback. Then on top of that, if that guy also starts downloading that designer’s icons, he will also get sales from that.
Andrew: What’s the referral kickback?
Martin: How much is it? It’s 50% of the price at the moment. So it’s also fairly high.
Andrew: Yeah.
Martin: So I think we really do that a lot, basically to get stuff like started and off the ground, we bump up the cut a lot.
Andrew: I was trying to see if that helped you. It doesn’t seem like that’s where you get the majority of your customers. They’re not coming from this referral program. They’re not coming from designers. Am I right?
Martin: They’re not. They’re coming from–a majority are coming from–we have a lot of organic traffic from Google, Google Images.
Andrew: It’s very well SEO’d, right?
Martin: We have tons of users coming from Google. The thing is that a lot of these icons are only on Iconfinder. We are one of the sites compared to, for example, Shutterstock, we split up all these icons and put them on individual pages. Google really loves that stuff. It’s original content. It has their own page with their own title and URL, so it’s just perfect for search engines.
Andrew: What does Shutterstock do? They sell icons still in collections?
Martin: Yeah. If you want to have an icon for Shutterstock, you are basically buying 10 to 20 icons, and then they all put inside like a vector image. So you have to download the whole image, open it in Illustrator, pull out the individual icons and save them. And then you might have bought some icons you didn’t want.
Andrew: Right. You still have to know how to use vector images. I just did a search in an incognito window for iPhone 7 icon, and the first result was Iconfinder.com. I click on that and I see all the built-in icons in iPhone 7.
Martin: That’s cool.
Andrew: Yeah. You guys are great for SEO. What else has worked for getting traffic?
Martin: I think picking a name like Iconfinder. People can remember it. Super simple. You can just say the name and then anybody can figure out it’s .com and then they just go to the site. So we get a lot of direct traffic.
And we also have been around for a while. So people know us, even though I think it’s easy for new companies to start new websites that sell icons, having been around for a while that people know the site and the domain name, that really helps. People don’t really want to learn new. If they’re satisfied with what they’re getting, they’re pretty loyal.
Andrew: You said that when somebody hears about Iconfinder, they know to put the .com at the end, but for a long time, you were .net. That page I described at the top of the interview, that was a .net, Iconfinder.net page.
Martin: Yes.
Andrew: Can you talk about how you ended up with the .com?
Martin: Yeah. So the Iconfinder.net was available and .com was not. I really liked the Iconfinder name. So I got the .net and then I thought that someday I’m going to get the .com. I could see it was a placeholder on the .com domain. It was actually owned by a guy, I think he was involved in starting About.com, a guy from New York. Basically, he’s like been starting one of these early .com companies, and he just picked up a whole bunch of domain names.
So one day I just asked him–I was still in school when I approached him the first time. I just asked him, “Are you interested in selling Iconfinder.com? I can offer you like $500.” And he just responded something like, “I need at least $10,000.” I said, “I don’t have money for that. I’m just a poor student.” I didn’t have any income from Iconfinder back then. So I just left it alone, kept it on Iconfinder.net.
I think about a year later, he wrote me an email and said that one of my competitors approached him about buying the domain name. I was like freaking out because I thought the website was starting to take off and I’m about to loose the .com version. I was just desperate. I told him I’m going to find the money for you. I asked him, “Are you satisfied with $5,000 US?” He said, “Yeah, I want to sell the domain name to you because you already have the .net, but your competitors want to pay me a little bit more, but I want to sell it to you, so $5,000 is fine.”
Andrew: Was this Jason Cohen?
Martin: Yes.
Andrew: I think I interviewed this guy, not the Jason Cohen who started ASmartBear.
Martin: Yeah.
Andrew: But another one. There are at least two Jason Cohens.
Martin: There’s another Jason Cohen.
Andrew: Is the guy who started Centerfield?
Martin: Yeah. I think he did that. I think he was involved in About.com first and then Centerfield afterwards. But he’s a really nice guy. He told me that, “I have multiple guys who want to buy the domain and I can sell it for $5,000 US, but you only have a week to pay me.”
Andrew: How did a student like you end up with that?
Martin: So I was doing a little bit of freelance web design work. I basically called my own clients, asked them, “Do any of you need a web design in the coming month? And by the way, can you pay me in advance?” So I had a really nice guy who said he needed some web design work and he would pay me in advance and help me out. I told him the story about the domain.
Andrew: That’s great.
Martin: So I got the $5,000 and I transferred it to Jason and I got the .com domain and I have no idea if it was worth it back then at all.
Andrew: It definitely was. Yeah. But I can see how $5,000 seems so low for a great domain like Iconfinder, but I can see how it would be tough for you.
Martin: Looking at my bank account, I think I had like -$5,000. It wasn’t easy for me to get that kind of money in a week.
Andrew: Jason, I did interview him. It was Wise Ads that he created and then he sold that to About.com and continued from there and done well for himself.
Martin: Yeah.
Andrew: So far we’ve talked about all the good things. Let’s talk about that one time where I think you were in Barcelona, right?
Martin: Yeah.
Andrew: Completely disconnected. You decide to login to see, “What’s going on with my business?” And what happened? What were you doing in Barcelona and then what happened?
Martin: I was on vacation with my girlfriend and I just needed to unplug. I was working part-time job, working on Iconfinder, also still in school. So my life was really hectic. I had like no time at all for anything else. So I just had a vacation with my girlfriend for a couple days and went to Barcelona. I didn’t have any internet connection on my phone. I went into a web café, I logged on and checked Iconfinder.com and the site was down. Then I checked Twitter and I had a long list of direct messages and people asking what the hell was going on and if I wanted to sell the site because it was too bad that I had taken the site down. I was like, “What is going on?”
I was in this little café. Normally you protect your web server so you can’t login and manage the server and change anything. Normally I can do that, if I have a terminal on the computer, I can login. But when I was sitting in this café on this computer, I just like–it didn’t have any of these tools. So I have to have a web-based terminal, login to the server, try to remember this long password. Then I found out the disk had run out of space because of the .log file and then it just crashed. So I was sitting there in Barcelona and it had been down for two days, I think.
Andrew: And it’s all on you to solve it because there was a hardly a team back then. But frankly, even right now, Martin, I’m looking at your website, on Iconfinder.com/about. I see an icon representing everyone that works at the company. There are seven icons.
Martin: Yeah.
Andrew: Seven people working at the company, that’s it?
Martin: Yeah.
Andrew: Wow. Did you do anything to solve that problem in the future? How did you avoid having a site go down for two days without knowing about it?
Martin: I think basically from that point, I made sure that I never went anywhere without internet connection, my laptop. For a long time when I was working on this alone, I always had all my stuff with me.
Andrew: So if you and I were going to go on a vacation somewhere, let’s say spend a day in Paris talking about work, having some coffee, you’d have your laptop with you somewhere in a backpack.
Martin: Yes.
Andrew: You would?
Martin: Yes.
Andrew: You’re going on–are you in a relationship?
Martin: Yeah.
Andrew: Do you guys ever go out somewhere, maybe spend a long weekend in a different country?
Martin: Yeah.
Andrew: You always take your laptop.
Martin: Always.
Andrew: Does it create problems in your relationships? If I bring my laptop on long trips, my wife thinks maybe I’m not relaxed enough and not present enough.
Martin: Yeah. I think it’s definitely a little bit stressful. But it’s not like I’m opening the laptop working. It’s more like checking. For example, when I was the only person working on the site, I set up a lot of tools that would ping you. For example, after this trip to Barcelona, I would have like sign up for a service that would send you a text message through the phone.
Andrew: We do that, of course. Which one do you use?
Martin: Pingdom right now.
Andrew: I think that’s what we use too.
Martin: It’s pretty good.
Andrew: It’s a no-brainer to have that setup. You’ve got to.
Martin: You can set it up that it starts sending you emails, and if you don’t fix the problem, then they’ll start sending you text messages. If you don’t react to that, it will actually do a phone call for you. You will be woken up in the middle of the night.
Andrew: I love that it doesn’t have to come to me. Do those pings still have to come for you?
Martin: Yeah. Right now because we have a guy in the US–the office is in Copenhagen–so we have a six-hour difference. So we kind of like always have somebody who’s like awake. So we just send the messages to all the people who can do development.
Andrew: You did get to celebrate a little bit, right? It’s not all this tough work. You celebrated at a conference in Portugal. We asked you in the pre-interview what’d you do. Talk about this conference and why is that such a big celebration for you?
Martin: Which one?
Andrew: The one that you sponsored. Here’s the thing. Usually we ask people, “What did you do to celebrate?” And we never get anything extravagant. No one ever says, “You know what? I decided I was going to go to Vegas.” There’s nothing like so outrageous that they’re almost a little embarrassed to talk about.
It’s the most–I don’t know, the most calm, realistic thing to do. Except for James Altucher, who says from now on when he makes money, he will wait a year before spending it. But you might have one of the most like restrained celebrations. You sponsored a conference in Portugal. That’s your big celebrate of success? Why is that such a big thing?
Martin: We crossed like a million icons this year. We basically try to whenever–we sponsor a lot of conferences. We try to sponsor events. It’s a great way for us to–we hand out free t-shirts and we talk to people. We find this a really good way to spend some marketing money. We always try to tweak the sponsorships a little bit, because if you just sign up for a sponsorship at a conference and you put up your banner and you stand there next to Adobe, then you’re not going to–nobody’s going to notice you.
So we found out that these sponsorships, you’re in contact with the guys behind the conference and they always whittling away to do a little bit of tweaking. We talked to a guy hosting a conference in Portugal, a really big one about user experience design. We just asked him like, “Can we get a sponsorship? We only have this amount of money.” They said, “No way, it’s way too little.”
But we liked them and they liked us. So they tried to look around for an opportunity, and they found out they could actually rent a boat after the conference, like the last half of the conference in the evening. I got a fairly big boat, so they would just invite all the attendees on this boat. That was to be the Iconfinder-sponsored.
Andrew: So you’re not in a booth. You actually get the boat and everyone knows they’re on an Iconfinder event boat.
Martin: So we would have like beers and champagne. We watched the sun go down outside in the harbor.
Andrew: It still feels like you and I need to celebrate a little bit better. You’ve done a lot here, dude.
Martin: That kind of sponsorship would cost us a lot less than getting a booth.
Andrew: Did you get customers from that?
Martin: We got actually–I’m not sure if we got customers from it, but we got a really good relationship to another company where we cohosted the event later this year, where we actually got the connection to them through that sponsorship.
Andrew: I see. It’s not really about getting more downloads. It’s about building those relationships that then lead to more sales or more designers on your site.
Martin: Yeah. I think going to conferences and also being the sponsor, but going as an attendee, but sponsoring is a great opportunity to meet the right people because we’ve been sponsoring a conference in New York. Then you’re standing next to the guys from Shopify. Then you talk to them and learn about each other and some kind of opportunity appears. For example, we had like a campaign that we hosted together, where we just gave Shopify shop owners a lot of icons. For us, it’s great to have our name next to Shopify because everybody knows Shopify.
Andrew: And then it feeds in new customers to you, potentially. And then do you have to pay the designers when you’re partnering up with Shopify and giving away free icons?
Martin: Actually, before that campaign, we specifically ordered some like ecommerce icons from four different designers that did some great sets.
Andrew: I see. You paid for it, just for the Shopify partnership, then Shopify store owners got free icons, then they also got introduced to Iconfinder.
Martin: Yeah.
Andrew: That’s great.
Martin: And then, of course, we had like a discount code and then we talked about–we gave them some really nice ecommerce icons they could use in their shops and then we said, “If you need more icons, here’s a discount code and then you can sign up.”
Andrew: What other partnerships like that have you done that worked?
Martin: We also have one with Media Temple, where we kind of like did some cross-promotion of–we did some blog posts on their blog and they did some blogging for us. We really were trying to do that kind of sponsorship, especially with kind of like these brands that are well-known. I think building the Iconfinder brand is also really important. You can’t measure all these campaigns purely on how many signups you get. I think you’ll be measuring it in the wrong way. So having our name next to Shopify, you’ve built a brand.
Andrew: I get that. It does have a lot of credibility. So what about when I’m on SimilarWeb trying to figure out where you’re getting your traffic, I see there are some Chinese sites that send traffic to you, Zhu.com, Baidu.com. Why are you getting so much traffic from them? What’s your relationship with those guys?
Martin: Some of these sites, there are also some sites from Japan, I don’t really know them because I don’t use them. They’re in Japanese or Chinese, so you can’t understand what they’re talking about.
Andrew: You can’t do a site search internally to figure out where they’re linking to you.
Martin: We’re getting tons of traffic from everywhere in the world.
Andrew: What about GitHub? That’s sending you traffic. Is that a partnership?
Martin: No. I think the reason we get traffic from GitHub is because a lot of developers, when they are doing code they put up on GitHub, they are very often using icons from Iconfinder. But what they’re doing when we’re allowing them to do that is they copy the URL for the icon and then they’re putting it inside their code.
Andrew: Oh, so they’re hotlinking to icons on your site? And you’re okay with that?
Martin: Yeah.
Andrew: I see.
Martin: For us, like the cost for delivering the content is not something that is like huge. So, for us, this hotlinking is not really a problem. So we just let people do that. They keep using Iconfinder. I don’t think limiting that would be a good business decision for us.
Andrew: I was supposed to do a second sponsorship message here for a company called Bench. I’m just going to shelve it. I got so lost in the conversation that I forgot to do it. That’s when I understand why people like Tim Ferriss will just pre-record their ads and then run them without having to interrupt the conversation for it. I really like including everything in the conversation in the actual interview.
Why don’t I then close out, instead of talking about Bench, just talking about Mixergy because you’ve been a long-time listener. You started telling me before you and I started doing this interview why you listened. I think that’s something that a lot of people in the audience can relate to.
Martin: Yeah. So I started building the website alone. There were actually some years where I was working on it alone for long hours. I had to make a lot of decisions. How do you do different stuff, especially the business decisions about building a marketplace? I’ve been in Copenhagen for the whole time. So we didn’t have a lot of events for startups that you could go to every weekend or weekday.
So just listening to Mixergy where you had all these conversations about pricing and, for example, solving the chicken and egg problem, those kinds of things was really helpful for me.
Andrew: Yeah. That’s a big reason why people listen, that it’s the kind of conversations that if you lived here in San Francisco, you’d have on a regular basis. I really could go to the bathroom here on the floor of my office and have a conversation like this with someone who launched a site, asking them how they got their pricing, or often it’s something like how they got their visas in the U.S. and what kind of help I could help them from Mixergy. It’s the kind of stuff you deal with on a regular basis if you’re living here. If you’re not, my goal with Mixergy is to bring that to the person who’s listening to us.
We also have something called Mixergy Premium, which you were a part of for a long time. One of the things we’re going with Mixergy Premium to solve this issue is we’re asking members to take out interviewees for dinner and not invite more than, say, eight other people. I kept getting requests for meetups. People would say, “I want to meet other people from the Mixergy audience in my town.”
I think that we don’t need another meetup. I think the world has enough meetups. But if you could do a dinner with like five other people and one interviewee or eight other people and one interviewee, then every single person at the dinner could actually get to know the interviewee, get to know each other. They all at the end of the meeting will not have a random group of people they kind of bumped into, but a group of people they all got to know very well.
So we’re doing that. The reason I’m bringing it up is if we have someone in Copenhagen, would you be up for being a featured guest at this dinner, letting them take you out to dinner and get to know you, ask you questions, that kind of thing?
Martin: Yeah. I would love to.
Andrew: All right. I’d love that. I’ll open that up for anyone in the audience. I’m only doing this for Premium members. I want Premium members to do it because we actually do a lot of the coordination here internally. We make the introduction. We help with the restaurants and all that. If anyone is a member and is in Copenhagen, email us and we’ll work it out with you.
Martin: Also, I think most of the northern European cities are pretty close. Plane tickets for Berlin, Amsterdam, Stockholm, Oslo, it’s really cheap to get around quick.
Andrew: What does it cost to get to Amsterdam, for example?
Martin: Around maybe $100 US.
Andrew: That’s not bad. But I don’t want to put you out. I don’t want you to have to fly all the way out to a different city just to go out to dinner with someone.
Martin: I have a lot of reasons to go to, for example, Amsterdam. We have a bunch of people we work with.
Andrew: Perfect. Guys, get creative. Hit me up or Tam, who’s the community manager. If you’re already a Mixergy Premium member–I noticed a lot of Premium members have not joined the Facebook group we’ve put together. You should join it.
I haven’t really been promoting it that much because I know that everyone has already lots of communities, lots of Facebook groups they’re a part of. Damn, man, we’re doing a lot of good stuff in there. Really matching people up into masterminds so they have three or four similar entrepreneurs that they can get together with on a regular basis, encouraging and organizing these dinners.
We’ve had so many people be a part of it. Jodie Fox did the first one from Shoes of Prey. Eric Bahn, who’s now at 500 Startups but before that did an interview about how he sold Beat the GMAT. He’s doing an interview, tons of other people. I’m really proud of it. If you don’t know what Mixergy Premium is, go to MixergyPremium.com. That should work.
Cool. And of course, the site we’ve been talking about that I’ve been using and frankly to say I’ve been using it is not that significant. It’s other people at Mixergy that do more of the design work, more of the development work use it. It’s Iconfinder.com or Iconfinder.net if you want to go old school.
And if you need a developer, designer or so many other professionals, go to Toptal.com. Top as in top of the mountain, tal as in talent. They really want to emphasize that they are focused on the top talent, not the cheapo talent–top talent. Go to Toptal.com/Mixergy. Bench, sorry I missed you guys. I’ll run you in a future ad.
Martin, so good to have you on here, man.
Martin: Yeah. It was great.
Andrew: Now we need to meet in person sometime. Maybe I’ll be in Copenhagen or you’ll be here and we’ll get together.
Martin: That sounds good.
Andrew: Anyone out there who’s listening to me, please keep building your company and when you’re reading, hit me up, I’d love to have you on here to do an interview with you. That’s my goal here. For someone who’s listening to build their company while they do it, to do something meaningful and then to come on here the way Martin did and tell their story. Martin thanks for doing it.
Martin: You’re welcome. Thanks.
Andrew: You bet. Thank you all for being a part of it.
