Andrew: Hey there, freedom fighters. My name is Andrew Warner. I am the founder of Mixergy.com, home of the ambitious upstart.
Today’s guest is smiling a little bit because he’s heard this before. He’s a Mixergy fan who says he used to run a consulting company and it’s a drag doing coding work for clients. It’s a drag, especially when they’re a little tough to work with. You’ll hear some of his stories here.
Today, he’s moved on. He’s running a business that teaches coding skills and he loves it. The company is profitable in the process. John Azzi is the founder of BitFountain. They offer iOS and Android development and design courses. We’ll talk about how he built it and how he made the transition from doing coding for others to teaching how to do it.
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John: Thank you. I’m really happy to be here. Longtime fan, like you said.
Andrew: Thanks. It’s so cool to have you on here. I’ve read your story. It’s inspiring. The olive oil story alone almost brought me to tears as I heard it. I relate to it. I know people in the audience will. But before we get to how life was back then, today, dollars and cents, how much money did you make teaching development?
John: In 2014, we made $2 million total revenue, over $1 million in profit.
Andrew: Get out. Unreal.
Andrew: So, when you have a website called Million Dollar Instructor and you’re teaching on MillionDollarInstructor.com other people how to teach and how to develop their own teaching business, you’re almost underselling it by saying it’s Million Dollar Instructor. It should be Two-Million Dollar Instructor.
John: $2 million in revenue, but we want to keep-profit is all that matters at the end of the day for a bootstrap company. So, we want to be realistic for that, give people realistic goals. Even though $1 million doesn’t sound realistic, but I think we have a playbook that explains that process and we’ll go into that for sure.
Andrew: I could imagine that at one point if you would have heard it, you would have thought, “This is not possible.” In fact, I introduced you as a guy who used to do consulting for others and you weren’t crazy about it because it was a drag. Give me an example of a time where you did work for someone else and it just was painful.
John: So, we were in New York City consulting and our biggest client, bringing in like 80 percent of our revenue, he would, middle of the day, change up the items that he had us working on and then debate with us. When we couldn’t finish those items on time, he would debate with us about paying us for the work that we did, even though in the middle of the day-we were using Trello as a test management software-he would go in as an admin and change those up and then at the end of the day, end of the week, end of the month, we would have huge debates on what he wanted to pay us for.
It was just a disaster. It wasn’t what I was interested in doing. I think that everyone at BitFountain-BitFountain was also the name of our consulting company-we all had our eye on moving on to something else. Teaching was something we were always doing. Even since the first day of BitFountain we were teaching. We were doing an apprentice program.
So, we brought in people with no experience in programming and paid them $2,000 a month to sit with us all day for three months and learn how to code. The expectation would be that they would be proficient enough at the end of three months to work on client projects for BitFountain, get paid a regular salary in New York. It would be a win-win for us because you know how hard finding developers is.
Andrew: So, you would hire people who weren’t-did they have any development skills at all at the time?
Andrew: So, how would you know who to pay $2,000 to sit next to you?
John: That was a complicated process. We did have someone who didn’t work out at all. He went into another career after he finished with us. But three out of the four people who came in and worked with us as an apprentice, they became full-time developers. Actually, the co-founder of BitFountain, the teaching BitFountain, was one of those apprentices.
John: Eliot. Yes.
Andrew: Eliot Arntz. What was he doing before?
John: Eliot was an accountant at News Corporation, FoxNews. He was an accountant there for about a year and a half. I knew him from college. He was my roommate. We were living together in New York City too. He hated his job. He just despised it. Every day he would come home miserable. He was making less money than me. I was working as a developer at the time at a startup. When I started BitFountain, I had the idea right from the beginning to do this apprentice thing, so, training people to work with us and in the future. I really had no idea if it would work out.
Andrew: But why him? What was it about Eliot that made you say, “You know what? This accountant is going places. I should have him in my life and I should have him on my team later on?”
John: Eliot was always asking questions about what I was doing and programming. He would tinker with programming. I knew that he had the work ethic. So, it wasn’t like I was making a blind decision. He also had the loyalty and the drive to get out of his career, which I think is the most important part of it.
Going from a miserable career in accounting-I’m not saying that all accountants are miserable, but he particularly was-fueled him to work harder in something else. All he needed was a door to open for him. So, once he got that, he was working like 100 hours a week learning only making $2,000 a month. After three months, he was actually a leader in the teaching scene in New York City. He was teaching at General Assembly. Through BitFountain, he started hosting the biggest iOS meetup in New York City. So, he really made something out of it.
Andrew: Yeah, I’ll say. So, he decided that he’s going. General Assembly is what?
John: General Assembly is… How can I explain it? General Assembly teaches classes in New York City, San Francisco, Boston, some other cities around the world. They teach courses on programming, design in general, tech and startup skills.
Andrew: Do they have sales and business development? Do they have user experience design?
Andrew: This is all in person?
John: I think now they have expanded to some online courses. But at that time, they were in person. At least we were teaching in person through them.
Andrew: I see. So, were you teaching first or was Eliot teaching?
John: Eliot started.
Andrew: Eliot. So, he said, “You know what? I’m learning so much here but I’m not getting paid that much. I’ll go teach at General Assembly and I’ll sharpen my skills. I’ll get to meet some people.” He also started collecting email addresses of people who came to the event, right?
John: Yeah. Every person that came through his courses at General Assembly and at our iOS meetup, Eliot would write down their email addresses. I don’t know why he didn’t put them in his Gmail contacts or something. He would write them down on a piece of paper-so high-tech.
Andrew: Alright. And this factors into our story. In a bit, people will find out why. But he’s collecting those email addresses, he’s learning, he’s doing some teaching somewhere else so that he can practice teaching, bringing in some money from doing it. He’s doing the meetups. How is he getting anyone to go to the meetups?
John: Meetup.com had some organic growth. At the time, New York City four years ago, three years ago, it wasn’t what it is today in the tech world. So, people were hungry to find events to network with other developers, other designers. I think we had the advantage of getting in at the right time in New York.
It was pretty much all organic growth. We actually outgrew our office space and another factor for our growth was that Guilt found us, Guilt, the online e-commerce company. They found us and said, “Hey, guys, why don’t you host your iOS meetup at our huge office space?” Then they started pushing it to their networks too. So, it just grew exponentially. We were getting like 200 people every other week to come.
Andrew: And through that, your network as a company is growing. Meanwhile, you’re still doing consulting work, you’re still not enthused about it. I have to say, your experience isn’t like most people’s experience. You’ve had, I think, higher highs than others as a consultant but also this experience where somebody is going into a Trello board I’ve never heard before, where he’s manipulating the information there.
Andrew: You told our producer that you decided to get into consulting because there was some lucrative deal, contract that got you going. What is that?
John: So, I was a software engineer, iOS developer at a company called Cameo. We developed an app. They later sold it to Vimeo. At that time, I was teaching a guy how to code just to make some extra cash, just to meet some new people. I found it really rewarding to teach. This guy, he wasn’t so serious about learning how to code. He wanted to vet a developer through having that developer teach him.
So, one day he just offered. He’s like, “Hey, why don’t I pay you like $150 an hour full-time work to code for me and my project?” He had a dream project which was sort of a test management. I don’t want to go too much into his dream project. $150 an hour was a ton of money. For me, I was 22 or 23 at the time. He’s like, “Why don’t you get one of your friends to help as well because we need a back end for this project too.” So, that’s $150 times two.
One of my friends who is an amazing developer, he was immediately on. He quit his job as well. We just started coding for this guy. We were bringing in so much cash that we decided to make it a business. We allocated some of the cash for the apprentices. We got an office space. We started getting new clients.
Andrew: And it’s all because he said, “Code for me. I have some money. While you’re coding, teach me what you’re doing so that I can learn and I can vet you and I can see what’s happening with my project?”
John: No. It was the other way around. So, he said, “Teach me how to code.” He found me online. “Teach me how to code.” And after he saw that I was capable of teaching him, he decided to offer me a job.
Andrew: Oh, I see. That was his way of vetting you. Instead of giving you a code test, he said, “Teach me.”
Andrew: Got it. How much into teaching him did you get?
John: We actually got pretty far into it. I think I met with him about 10-15 times for an hour each time. So, that’s quite a lot. I guess two months.
Andrew: There used to be this thing that those who know do, those who don’t teach. That is so outdated. Today, anyone who really wants to learn what they do have to teach. You have to teach it. I’m not just talking about the way you’re doing it. That’s one way to do it.
But Ben Horowitz in his book, “The Hard Thing About Hard Things,” he’s the venture capitalist at Andreessen Horowitz, he says, “Teach your people all the time. You have to be a teacher or else your company is not going to grow. People aren’t going to be on the same page and so much else.” I can see that you more than most people I’ve interviewed have been teaching all along. Is this a passion of yours or were you just kind of doing it because it randomly fell in your lap? I mean teaching.
John: You know, I would never market as an explicit passion of mine teaching. But I’ve always been doing it. Even while I was a software engineer I was teaching. That’s how I got this contract. And then the first day I opened up BitFountain, we brought on apprentices and we were teaching them. So, I think it was always a passive passion.
Andrew: Interesting. You know what? I should be doing more in person teaching too. I keep thinking we have these scotch nights at the office. I love them and I love how personal we get. Now I think what if we go to another level? What if it’s not just scotch night but it’s like whiskey and wisdom, where we talk about something, I’ll pass on what I’ve learned and then we get to the whiskey afterwards and we talk about each other’s sex lives and mistakes.
John: Yeah. That stuff is really fun. But you also reach a ton of people with your online teaching. You do have those online courses.
Andrew: That’s true. I do feel, though, that doing it in person gives you something-another understanding, better feedback. It adds more humanity the way that you communicate if you try first communicating in person. What do you think of that?
John: I think it helps the teacher craft his or her skill. But I don’t think it helps the student with the final results. Learning online can be just as effective and maybe even more if you consider price and time availability. But as the teacher, I think that that facial feedback that you get in the early stages, I think that could really help you.
Eliot, people send us emails every day saying-they call him Mr. Eliot-“Mr. Eliot is the best professor I’ve ever had in my life,” or, “The best teacher in the history of teaching.” It’s because he’s had so much experience teaching in person. I really think that because he treats the online experience, even though people can’t respond to him, he treats it like a conversation.
I think people feel really comfortable with his style. He’s teaching a super technical subject, but he makes it a conversation where people see his humanity and they see his mistakes, but he doesn’t cleanly edit it all. It’s all there.
Andrew: I could see that. Not that I can see that his mistakes are there, but I can see how keeping your mistakes in helps. If anyone wants to get a sense of what Eliot’s teaching style is like, they can just go to BitFountain.io and he teaches a class called-actually, here’s one, “How to Develop for the Apple Watch” that’s coming out.
John: We just launched that course last week. It’s a ten-hour course making three different apps for the Apple Watch. But his famous course is the iOS 8 Immersive. It has thousands and thousands of students, amazing feedback and the students have done some really cool things after finishing it.
Andrew: The way to get from developing for others to creating this course that did $2 million in sales last year, $1 million net profit for you guys, the path to that was starting to teach yourselves online for your own business, right?
Andrew: Did you create the course? No?
John: No. We didn’t put the material online that we were creating for our apprentices. I have to admit that a lot of the material that we used to teach our apprentices made it into our online course, but the way it came about is that Eliot was teaching at General Assembly and he started a course for Coalition of Queens to help underprivileged people learn how to code.
So, he was really into the teaching community. I was really coding by butt off at BitFountain. We hit an apex where I hated it. I hated the consulting. Eliot was thinking about getting a full-time job. The other people at BitFountain wanted to move onto other things. It was just so grueling to do. We may have had bad clients. I don’t know. It just wasn’t for us as a unit.
So, I said, “Hey, Eliot, let’s put the stuff online that you’re doing. You have all this material. People love your courses that you’re doing in person. We can reach more people at a lower price point.” So, yeah, Eliot obviously used some of the material that we taught him, but we didn’t put that BitFountain material online in the first place.
Andrew: Okay. I didn’t mean you literally were taking the same material. I meant is the first thing selling it or is the first step creating the material?
John: We started selling it before we had a single lesson written.
Andrew: How did you do that?
John: We put up a launch page. We connected it to Stripe, collecting payments on Stripe. We put up a launch page that explained our goal. “We’re going to have 30 hours of video. We’re going to take you from zero to junior developer-level. Here’s our reputation.” We had reviews from all of Eliot’s teaching. So, it looked really credible. It was credible. We put up that launch page and that’s how we got started without having any material. Before we even launched, I think we had like $25,000.
Andrew: $25,000-so, that’s real proof that people want you to teach this. Now let’s go back to the paper email list. How did that factor in the $25,000?
John: Yeah. Eliot’s brilliant strategy-he’s a super networker in a really low-fi way. He was collecting these email addresses on paper from everyone he met in the developer community. When we launched this launch page, we went one by one through everybody on the list emailing them personally, writing in the emails by hand.
Andrew: Why personally?
John: Eliot knew their situations. Most of them he would email, “Oh, hey, how is it going with whatever you’re doing? Listen, we just launched this.” So, that personal email would make them respond and then engage in a conversation.
Andrew: I see.
John: The fundamental thing in education, especially at the beginning is trust. Us just launching a launch page with no course material, trust was even more paramount for us. So, we had to do anything we could to earn it. That was writing personal emails and responding every question possible.
Andrew: What was the URL of that?
John: That one was CodeCoalition.com, when we thought we were just going to be teaching code. It’s no longer live, but we launched as Code Coalition.
Andrew: I see. Because you decided you want to expand beyond code, you needed something that was a name that was broader.
Andrew: That makes sense.
John: So, we owned BitFountain already. We reminisced on the tradition that BitFountain had with the apprentice program. So, we just though, “This really is the fundamental goal of BitFountain anyway. Let’s just go with it.”
Andrew: Was the site also called BitFountain Code at one point?
John: It was called BitFountain Code when we were consulting.
Andrew: I see. That’s why you switched to just BitFountain. We’re going to be about more than code everywhere.
John: Yeah. We want to really be the best at six to eight startup skills-code, design and maybe some growth hacking.
Andrew: I see. I’m actually looking at an old snapshot of CodeCoalition.com. It was three months iOS apprenticeship program. “Code Coalition is running an immersive iOS online development course aimed to take you from absolute beginner to making your own apps in three months.” This is the first thing you were selling, right? You called it apprenticeship instead of online course.
Andrew: You were going to teach Core Date, Git, Analytics. You talked about who you were. I see. Okay. So, that gets you your first sales, that plus the meetup list.
John: Yeah. So, Eliot had those emails too. We were covered with that. Between all the events we were running in New York and Eliot’s teaching, we did have a foundation to start with. Those were all of our initial sales.
Andrew: I see today you’re running on Fedora, the platform that’s run by past Mixergy interviewee Ankur, who introduced us. When you launched, you weren’t. You were running on edX. What is edX? I don’t know it.
John: EdX-many may know edX as the MOOC, massive open online course platform. It was started by a joint Harvard-MIT initiative. They do massive online courses that teach programming through Harvard, programming through MIT, physics through MIT. They have a consortium of schools now-I think like 20 or 30 schools.
Andrew: I didn’t realize that individuals can teach on there too and businesses.
John: No, they can’t. So, they released an open source version of the code that runs their platform.
Andrew: I see.
John: We took that kernel of code and manipulated it to fit our needs.
Andrew: Okay. How did that go for you?
John: It was rough. I have to say, with such a small operation, both coding a platform and making the best material for the subjects that we wanted to teach was almost impossible. At one point, we had to stop making material to upkeep the code and then we would have to stop upkeeping the code to make the material. There was always a constant battle between users having bugs or wanting more features versus wanting more material.
Andrew: It is very easy to get sucked into all the development work around creating your own content. But then again, there’s also an upside to it because it allows you to customize it to their needs. If someone says, “I would like to be able to bookmark or take notes,” you don’t have to go back to the company that manages your platform and hope that they add it. You can just add it yourself, right?
John: Totally true. But taking into account us being a bootstrap company and being much more passionate about teaching the material-we aren’t even web developers. So, we had to become web developers to do this. So, it’s not like building the edX platform is a passion we have. We wanted to teach this material that we were really good at, which was iOS.
Andrew: Give me an example. I just interrupted you. I really should let you finish your sentences before. But I want to understand the problem with edX. It’s Code.edX.org for anyone who wants to take the code and run with it. Give me an example of a bug that you had to deal with or something that distracted you from actually teaching.
John: A really simple one-edX doesn’t have payments implemented because edX is a platform built for free open courses. We had to implement payments with Stripe into a platform that doesn’t natively accept payments-all kinds of bugs surrounding that because they have this huge platform that lets you do every kind of thing imaginable and we just need a certain subset of that. So, you actually introduce bugs just by not using everything. It was really a monster to grapple with.
Andrew: I get that. I can see how that would be a real issue and indicative of a cultural mismatch. You launched on that. Who created-I guess the first courses. Where were they created? At home? On a laptop?
John: Yeah. We created all of the first courses on Eliot’s laptop using the iPod ear buds.
Andrew: You didn’t even have this kind of mic.
Andrew: Those are the worst. I tell people usually not to have them, but for you it works.
John: We immediately got complaints on sound quality. It worked in the sense that people looked past the lack of quality and really valued the content. So, they were willing to forgive us for that. But in the next go around when we launched the iOS 8 course, we bought a Yeti mic and it’s totally changed the game for us.
Andrew: Which one? The Blue Yeti?
John: The Blue Yeti.
Andrew: The Blue Yeti-changed the game for like $65 mic.
John: Yeah. We really had no idea what we were doing. We just knew that we knew how to teach iOS development. All of the other things were like, “Oh, it will come together.”
Andrew: But John, don’t you say, “Hey, there are all these other people who are already teaching it. The world doesn’t need another person teaching iOS development. There are all these other companies, all these others schools.” What about that?
John: Yeah. Well, we would look around at all these other schools, all this other material and realize that they were not teaching the complete skillset to get people jobs as a developer. If you look at the Treehouse iOS course, you code in the browser. It’s a toy.
You cannot take that and skip the whole struggle of dealing with Xcode, which is the development environment for iOS apps. You can’t skip that and go through that struggle. You can’t not know Git, which is a version tool that developers use every hour of every day that they’re coding. You can’t not know how to navigate the file system.
Andrew: Doesn’t Treehouse do Git too?
John: They have a separate course for that. But again, it’s all one skill. It’s not a separate course. It’s how does an iOS developer use Git? There are unique problems that iOS developers face when versioning their code.
Andrew: I see. So, where other courses say, “Here is iOS development as a course. Here is Git as a course.” Unless they marry the two, you’re saying they miss some subtleties, in fact, more than subtleties. And the other thing is, “What about coding in the browser?”
You know I’ve done interviews with other entrepreneurs who have built really successful, bigger even frankly than yours, more people on their team, in their businesses and they allow coding in the browser. So, if you learn something, you can type it right into the browser, you can hit finish and even if you get it different from what the system is expecting, if it works, the browser comes back and says, “Yay, you did it.”
John: That’s amazing. I think it’s an amazing place to start. We actually recommend a lot of our students start there to see if this is really for them, to get the very basic skills that they need. But when they want to start dealing with the real tools that developers use day-to-day, our course has 30 hours of video where you’re in Xcode-30 hours in Xcode, which is what you use day-to-day as an iOS developer-30 hours versioning on Git, 30 hours sharing it on GitHub.
I see the value of coding in the browser for the very beginning stages. But how do you get to the next level of doing this yourself? Our whole philosophy at BitFountain the consulting company was learn by doing. Sit there, deal with the problems that developers face. There are bugs that Xcode comes up with-dependency bugs depending on other programs that you need to download, depending on other files that need to be in certain places on your laptop.
The only way to get through those things is to get through them. When you get to a job, it’s not going to be like it is in the browser.
Andrew: I’m looking at the BitFountain iOS 8 with Swift Immersive course. A couple of things that stand out for me-the first is it’s just Eliot with a backdrop that looks about as interesting as my backdrop talking into the camera. My lighting is even better than him. I’m amazed that you guys-I’m not putting you down for it-I’m impressed that you can launch with something like this. This is him promoting it saying, “Look, I’m not spending a lot of money on fancy video production. I’m just going to sit here and tell you what’s on this course. If you want to enroll, you just click the button to enroll.” What do you think about? You’re smiling as I say this.
John: I think it’s a testament to how much the quality of the material is important rather than the quality of the production. Code School does an amazing job with Greg in these videos and diagrams popping around his head and stuff and cool stuff like that. I think I read in your interview with him that production of the course costs like $60,000-$80,000 or something. Production of our courses costs like $100.
Andrew: So, aren’t you intimidated by that?
Andrew: I’m not asking this question to put you down. I’m asking this question because I know when I talk to my members. I know when I create stuff myself, there’s a part of us that all looks at, “Hey, look at what the competition is doing. Look at what we have to offer.” The competition is beautiful. Everyone is saying that good design is just the cost of getting in the game. It’s not even the way to win. You need it just to even get in the game. Here you are just talking into the computer with a Blue Yeti mic that costs less than $100. Do you feel any of that? Do you feel any of the intimidation?
John: No. We feel like people are sick of that. People no longer want to deal with these tricks. I think they’re tricks, frankly. I think it’s a trick to have these diagrams popping over your head. Unless you’re specifically marketing to people at the absolute beginner stage, then don’t promise people that they’re going to get jobs from taking your material. The fact is that what you’re doing is cool to get started, it’s cool to get someone passionate about coding, but it’s not going to get them jobs as developers.
What we’re doing is taking you through the life, no tricks. Just sit there, look at Xcode for 30 hours, which is what you’ll be looking at as a developer. So, why change it up? Why make people feel like it’s easier than it actually is? Programming is hard.
Andrew: I see.
John: So, yeah. I get that everyone in the game says, “We need this high production quality. We need all these things.” But that’s not the reality. We’re getting results without that. We’re getting comments saying that Eliot is the best teacher in history in any subject. Sure, we’re not reaching as many people yet as those other companies. But we have a super loyal following who buy everything that we launch.
Andrew: The other thing I see-by the way, I agree with what you’re saying. First of all, even with interviews, I know when I got started I could invested at Mixergy more money on better design, everything from graphics within the interview to getting a better backdrop than this. I said, “No.” First of all, I’m not in love with designing this up. I am in love with the content.
Second, I’ll take that money and I’ll bring in people who can do research for me. I’ll bring in people who can help figure out who’s a good guest and who’s just trying to trick us.” Frankly, you can never get it 100 percent. But if I hire a group of people whose job is to investigate and to learn from their mistakes, then we get as close to 100 percent as possible. I’d much rather plow more and more resources into getting the information right than getting the design right. I get you.
Here’s the other thing I’m wondering. The course is priced at $149. Nobody charges that little. Why? How do you come up with the price?
John: Initially I was thinking about the price of a programming book in iOS development. Nerd Ranch has an amazing programming book, probably the most popular for beginning iOS developers. You pay like $30 or something. So, for us, we wanted to give people lifetime access. Of course we had to charge a premium over a textbook. I think it’s a fair price for both ends.
Andrew: But did you look at your competition? Did you look at anything to tell you, “This is where we should be pricing it?” You did.
John: Yeah, in a basic sense. Stanford runs a course, an extremely popular iOS development course for free. So, that pulls down our premium pricing. Then some people charge thousands of dollars for in person bootcamps. That can pull up our pricing model. We played around with it. At one point, we were selling for $500. At one point we were selling for $100. $149, I feel like is a fair price for both ends. We feel like we are getting enough money to keep going and the customers, the students, it’s in their reach, their budget.
Andrew: What do you use to test your pricing? How do you know that’s the right price?
John: We don’t have a scientific method. We’ve fiddled with it. We’ve actually sold at different prices. For months we were at $500. For months we were at $100. After a year and a half of doing this, $149 is the price that we’ve settled at. We think that it’s a really reasonable price for people. It’s accessible for someone who could potentially get a job in this field, in these fields. But it’s not too much whereas to price people out.
Andrew: Okay. So, it’s just you checking things out and saying, “Hey, you know what? I think we’re getting a little more sales.” That’s it. It’s not even you backing into a spreadsheet how much you get per hit, nothing like that?
John: No. We should do that. But we don’t.
Andrew: Yeah. I’m surprised you’re not using Optimizely, a visual website optimizer, something like that.
John: No. Again, creating the best content-we are still pretty new at this, a year and a few months. Creating the best content-there was a massive amount of competition on the market for us. So, we really did have to put everything we had into creating the best iOS 8-
Andrew: How do you know what goes into the content? I understand your experience had helped you learn how to teach. But where did you learn how to teach beyond it. Experience isn’t enough. You need someone to train you otherwise you’re just continuing the same mistakes. How did you learn how to structure a class? How did you learn what to teach? How did you learn the way to show it off?
John: I learned through teaching the apprentices. Eliot learned through being taught as an apprentice and then teaching.
Andrew: I get that. What else? I know I’ve learned a lot about teaching by doing courses here on Mixergy, by doing interviews. But I also know that that wouldn’t have been if not for the training that I got at Dale Carnegie where all they do is teach people how to give presentations on learning twice-first, learning from the class how to give presentations and second in the class teaching students how to give presentations.
That teaches me how to communicate. I read books on it. I studied other people. I invited people on Mixergy to teach me how to teach. What else did you do to learn how to teach? It’s not an easy thing. If it’s all about the product, I want to know how you built the product.
John: Right. Eliot’s a maven for books on teaching. I can’t say I am. Right now he’s the main teacher at BitFountain. So, he’s read a lot on it. The biggest part is probably the feedback from students. We have over 100,000 students. They are really quick to tell us what doesn’t work for them and what works for them.
Andrew: But you can’t go back in and edit a 30-hour course when-
John: Yes, we can.
Andrew: You can.
John: And we do it.
Andrew: See, I like that you just interrupted me there. That clearly offended you that you can’t go back and edit. So, you do. You go back and edit all the time.
John: Yeah. We always edit. When someone tells us there’s a problem, either we edit the notes as fast as we can and if possible, we make a new video. We have even reshot the entire iOS 8 course to use an upgraded version of Xcode when people are saying that they were running into small, small bugs. We were just like, “Okay, We’re going to spend the time and do this right and make it even better because the competition is always going to be creeping up on us.”
This isn’t easy. It’s an extreme amount of work. Yeah. We’re paid for it. We’re paid well now. But it’s not like we just put up this course and it passively starts making money for the rest of our lives. No. It’s something that day-to-day we’re updating. The iOS 8 course launched in September of 2014. Today is January 27th, 28th and we are still adding material to it.
Andrew: It was finished and you’re adding more.
John: Yeah. And we’re editing and adding.
Andrew: I have so much that I have to ask you about, including what did you do when edX did not work for you and how did you keep moving from there. But I hinted at the top of the interview about something to do with olive oil when things weren’t doing well. Maybe now when we’re talking about how well things are going we could take a step back and reminisce. What happened that led you to olive oil. What is this thing?
John: Yeah. We quickly came out of the gate. I think we got up to $40,000 in sales very quickly in the first month or two. Eliot and I were living in New York. We moved to Berlin, Germany. The cost of living is extremely low there. But after we got our initial sales, we weren’t marketers. We didn’t know how to get more people to pay for our material. So, we ran out of money completely.
Andrew: Why? Where does $40,000 go, especially if you’re living in Berlin?
John: $40,000 for two people to live five more months in New York City. We were in New York. That’s actually practically nothing after taxes for two people.
Andrew: I see.
John: So, we’re in Berlin. It’s probably February, 2014. Eliot and I are running on fumes. Eliot has no money. I’m consulting, freelance work, developing apps, splitting the money with Eliot. We’re eating bread and olive oil in Berlin.
Andrew: Why bread and olive oil?
John: My friend from Italy produces olive oil. Bread is quite cheap in Berlin.
Andrew: I see. So, you went for something cheap and something free and the combination is what sustained you when you guys didn’t have much money.
Andrew: Did you feel like failures at that point? “Look at this, everyone thinks we’re doing well. But we’re living on olive oil and bread. This is a failure.”
John: No. We had that core group of students who were finally starting to produce results. So, it took them months to get through the course. Finally, we’re getting some testimonials. Although, financially it was rough, we’re developers. We can pick up any time and do a freelance project, make a few thousand dollars, sustain ourselves for a few months. That’s what I was doing so Eliot could keep teaching.
Andrew: I see.
Andrew: Alright. Let’s go back to software. EdX failing you, failing your customers, not even letting you charge and making it so distracting that it’s keeping you from teaching. You decide to get another platform. The platform you went to was?
John: We made a move on Udemy for a few months. We initially liked that they were doing marketing for us because we weren’t marketers and we’re like, “Oh, great. Now Udemy is going to get all our students for us and we’re going to produce awesome content and be the best course on Udemy.” Then we wanted to send our students on certain things. We wanted to lead them. We wanted them to be our students. Udemy doesn’t really allow that. You’re using a Udemy student and Udemy controls the way you communicate with them. That just didn’t jive with the way we were doing things.
Andrew: Why? What did you want to do that you couldn’t do with them? You wanted to email them. They let you message students.
John: They do let you message students. We would like want to send them promotional things on things we weren’t doing on Udemy. We were selling iCompacts for designers and stuff like that and we couldn’t do that.
Andrew: I see. They only want you to sell more courses.
John: Yeah. And not only more courses, but more courses on Udemy. My reasoning was people like the work that we’re putting out. They keep asking us for more. If we can really do this long-term, let’s make this our community rather than Udemy’s community.
Andrew: I see.
John: So, that’s when Ankur . . .
Andrew: Actually, before we get to him-the benefit of working with Udemy though was they did help you promote. Once you started getting good reviews, they realized, “All right, this is a course that our customers are going to be happy with.” They emailed their audience and said, “Here’s a course on development specifically.” They described it and so on and it got you some customers.
So, it gave you a little bit of room to continue to grow. Ankur, who, when I interviewed him he used the word spam to say he looked to see who was on Udemy, who was doing well and he started contacting them. He contacted you. You’re one of the people who he was telling us about.
John: Yeah. Ankur contacted us maybe in March, 2014. We could obviously see he was contacting the top teachers on Udemy. It was pretty easy to find those people. His proposition was, “Hey, you keep your community. I’m going to build the tech for you. Your mailing list is your mailing list. If you ever leave Fedora, that’s still your mailing list. All you have to do-there are different pricing tiers.” We are at the highest pricing tier, which is not much money for us. “All you have to do is pay this. You have a small transaction fee and you get the full price no matter what sell you make. You would get the full price of the sale.”
So, it sounded great to us. It relieved us from the problem that edX caused, which was maintaining our own technology. It relieved us from the problem that Udemy caused, which was not having our own community. So, we moved immediately. We tried to get all-Fedora built a scraper. We didn’t even have to do any work.
Andrew: It scraped all your content off and brought it in.
Andrew: I don’t even think that I would have known that you were using Fedora unless I knew what Fedora looks like.
John: Ah, another benefit of Fedora.
Andrew: Yeah, no branding. I wasn’t sure. When Ankur came on here to talk about creating Fedora — this is Ankur Nagpal — I thought this was solved. This problem is already figured out. Why are you getting into it? But he’s such a smart guy I thought, “Alright. He could do it.” Now I’m looking. One at a time, one at a time, he got you, he got some other people. Ryan Holiday’s platform is Fedora. It’s amazing what he was doing.
So, you didn’t have to do anything. He scraped. He moved you over. You’re not on Fedora. Were things stable at that point?
John: On Fedora?
John: Their technology? Yeah, it was stable. They had some features that were actually much better than Udemy for us. First, we could see the signup sources for a lot of our incoming students.
Andrew: Because you can use Google Analytics, can’t you?
John: You can plug in Google Analytics. You can plug in Mixpanel. You can plug in MailChimp so every user that signs up to your Fedora school also gets added to your MailChimp email list-pretty cool. Just a lot of things that really contributed to what we were doing. Since Fedora is so new, they really wanted to build features that their teachers needed. So, Ankur shares a Slack group with us and is always taking our bug concerns, taking our feature requests and they’re on it immediately. It’s awesome.
Andrew: Let’s not make this into a commercial about Fedora. You’ve got to give me one thing about Fedora that you’re not happy with. Otherwise, people are going to think that I’m a shill for them. He introduced us. So, I want to make sure that we get open about the challenges too. What’s one challenge with Fedora?
John: That it’s not us developing, that Fedora still has to be democratic about the features that they add.
Andrew: I see. So, is there a feature that you would have wanted that only works for you and you could have built it if it was your own platform? What is that?
John: Bulk downloading of videos for our students-so, right now each student can download each video individually, but they are really pushing us to have a button that downloads all the videos in one shot. Fedora hasn’t added that for us even though it would be quite easy to them. The reason is bandwidth costs.
Andrew: I see.
Andrew: That makes sense. Alright. And I get how other people may not have that issue. I understand too why people would want it. I’d want to be at my VLC and hit the play button on my Mac and hit the pause button on my Mac when I need a moment.
John: It’s even more important for people who are in third world countries who have poor internet connections. They download this stuff as they’re sleeping and then the next day they watch it. We actually have a huge amount of users from like Africa, Russia, India and they want to download this as they’re sleeping. If they’re downloading one at a time, they can’t do that because they have to keep pressing download over and over.
Andrew: I see. Alright. That makes sense. I get now the issue. You still are at a place where you now have to market for yourself and you guys are not marketers. What did you do next? I have a couple of ideas, but I’d like to hear from you first before I start spewing off.
John: We were in a really interesting position. We had our iOS 7 course, which had a few thousand students. Apple announced that they were launching iOS 8 and a new programming language over the summer. At that point, we decided to release our iOS 7-we took a huge chance-we released our iOS 7 course for free.
We actually didn’t know what would happen. We didn’t have this grand plan. We just were like, “Let’s get like 2,000 emails and sell the iOS 8 course to them.” That’s how micro we were at that time. “Let’s get 2,000 emails and sell the iOS 8 course to those people when it launches because it’s going to be so hot. We can probably get 50 percent yield on that.” So, this was our marketing acumen.
So, we launched the course for free. It leaked to so many places. It was front page of Reddit Programming. It was front page of Hacker News. It was number one-at the time it was the most upvoted thing on Product Hunt. I think we got 65,000 emails in two days or something like that.
Andrew: 65,000. You were aiming for 2,000. You got 65,000. The reason this made sense was, “This is going to be obsolete soon anyway or less exciting at some point.” You thought, “Great, let’s use it for what we could.” That’s fantastic. I see you on Reddit here with it. I see people talking about how much-here, look at this. “My experience just going on to YouTube and checking out books is the best way to learn. Some people prefer a more structured environment, though.” People say, “yes, I do prefer more structured.” And then they’re continuing the conversation about it. I don’t see you guys on Product Hunt.
John: I can send you some screenshots of us number one on Product Hunt.
Andrew: Is Product Hunt “The Complete iOS Design Course with Sketch” from-
John: No. That’s one of ours too. But that’s not the iOS 7 course.
Andrew: Let me do iOS 7.
John: Say “The Complete iOS 7.”
Andrew: Ah, “Complete iOS Course,” you’re not even in the name on that one. That’s why I couldn’t see it. Yeah, 420. That was huge at the time.
Andrew: Got it. Okay. And guess who posted? Ankur from Fedora.
John: Ankur posted that for us. We really didn’t know what to expect. We had no idea that it would even make the front page of Product Hunt. I think like Apple’s announcement was just a little bit more voted than ours. Their announcement for iOS 8 just had a few more votes than our course.
Andrew: The site started to take off because of this.
John: Yeah. We didn’t make any money from this directly. What I mean to say is that once the iOS 8 course launched, we had a lot of people to email, a lot of people who were directly interested in the topic that we were teaching. That’s the story.
Andrew: Yeah. I think it was in August when you did it, right?
John: It was in August when we launched iOS 8. We did the free thing I think right before. It was during the summer, maybe July.
Andrew: Around August is when the traffic really took off. But maybe I’m looking at August data that’s more reflective of what happened before in July. I see. So, that is what I thought happened. Hacker News starts sending traffic, Product Hunt more than anything else. You’re getting all these email addresses.
John: Reddit was huge too.
Andrew: Reddit. You’re getting all the email addresses. How did conversions go once it was time to sell?
John: Quite good. We did a presale. The presale, the course wasn’t even launched, in the tradition of BitFountain.
John: Yeah. We hadn’t developed any material. But now we had so much trust built up over having all this material from iOS 7. We did about $300,000 in presales direct to our customers.
Andrew: Wow. And this is over how long?
John: A month.
Andrew: A month. That’s fantastic. So, this was more of a success than you expected. No, you didn’t get 50 percent conversion rate, but you got solid numbers.
John: Yeah. It was so much more. Me and Eliot were walking through a park in Berlin and I was like, “Hey, I think we’re going to make like $30,000. Eliot’s like, “I just hope we make $10,000. And then like three days later, we have $70,000. And then a week later we have-it’s just exponentially growing.
Andrew: Unreal. So, no more bread and olive oil. What did you eat to celebrate?
John: We were travelling a lot. I think it was more focused on drinking than eating.
Andrew: Actually in Berlin you really can go out and party, right?
John: Oh yeah. For four euros you can go out and have fun.
Andrew: Really? Four euros? What could you do for four euros at night?
John: You can have some good beers and go to a club. Most clubs don’t charge cover charges to get in. It’s a really, really cheap city. You can drink on the street there. So, you don’t even drink in the bar. You can buy a bunch of beers at a little shop for four euros and drink outside of the bar and then go into the bar.
Andrew: I see.
John: We had a lot of tricks.
Andrew: I see. That makes sense. Where are you today?
John: Today I am in Paris.
Andrew: That’s fantastic. And before this where were you?
John: I spent a month in India for the winter break working from the beach in Goa. We were developing the material for the Apple Watch course that we just launched.
Andrew: And you were just on your laptops in India on the beach developing the course.
John: I was in India. Eliot was in America in New Jersey.
Andrew: I see.
John: We usually work from different places. He was most recently living in Barcelona, Spain. Next week he’s moving to Melbourne, Australia.
Andrew: Wow. You’ve come a long way. I’m looking to see where else you’re getting traffic, what else worked for you guys. I can see there are a bunch of deal sites linking to you, right?
John: Yeah. So, we use affiliates. Stack Commerce, which they’re now called-they were previously known as Stack Social. They are one of our affiliates that we use. They have a bunch of like white label brands, I guess. They have all these white label brands that really are technically Stack Commerce. So, they run deals for us and we give them part of the profit.
Andrew: I’ve seen you guys with them. Stack Commerce, actually their founder is a fan who did an interview here. What they do is they create deal sites for other content providers, like I think they’re with Gizmodo. So, Gizmodo runs a discount on your course. They send traffic to you and you split he discounted fee with Stack Commerce, Gizmodo and some of it, of course, goes into your pocket. That’s been working for you. What else is working for you? I want to learn from someone who’s not a natural marketer.
John: You know, I think that I could be much better at this. So, I’d love to get pointers from other people. But what’s working so far-reputation, word of mouth. We just really do put a lot into the content and people are talking about it. So, even when we’re not running deals or email campaigns, we’re getting a few thousand dollars a day in revenue. So, those are organic.
Andrew: Okay. Reddit, like you said, sends you-I’m using, just to be open with you, SimilarWeb. I love them. I have the pro account there. I’m just going through it. I can see Facebook sends you traffic. It’s hard to tell. Facebook, Reddit, maybe it’s a tie. Reddit, other people write about you. Facebook, you’re kind of promoting on Facebook, including tis BitFountain group, right? How effective is that?
John: I think that’s the only promotion we do on Facebook. Our BitFountain group is quite big. But that’s not a promotion outlet. We do have some promotion. When we launch a new course, we post it there. But the reason for the group is to ask questions to the teachers of the courses. So, Eliot answers questions there and people post job postings and stuff like that.
Andrew: I see. So, if you’re getting traffic, it’s not new customers from that group, more like people who are existing customers getting help.
John: Yeah. If they’re in that group, they are an existing customer.
Andrew: What about the freebies on Reddit? R/eFreebies and iOS programming, who manages that? Who makes sure that all these different sub-reddits know about you guys? You’re smiling. Is that you?
John: Yeah. I’m so bad at that, though. I think that we don’t get too much traffic from there besides our iOS 7 course. We launched these free courses which are just like 20-30 minutes peeled from the beginning of our immersive courses.
Andrew: I see.
John: We use those as promotional tools. We’re starting to build up our YouTube channel. We’re starting to post this on Reddit more. But I don’t think that our conversion is strong yet.
Andrew: I see. So, the idea is you pull a piece of your course out, you make it available as a freebie, people talk about it on Reddit. In order to watch even that sample they need to give you their email address?
John: Just the email.
Andrew: Just the email and then from there you get to market to them to tell them about the rest. I see what you’re talking about. I thought that was going to do better for you but you’re saying, “No, not so much.”
John: Not as much as we’d like. No.
John: Not yet. It’s a new thing. So, I think that it’s too early to talk about the results that we intend to have because for the past year, we’ve been focused so much on making these immersive course what they are. We’re going to put a lot more into that. But as of now, it’s a small project.
Andrew: When somebody finally goes through one of these courses, why don’t you give them a certificate? Why don’t you just say, “Here. You’ve got a certificate. Take this to your future boss.”
John: We get emails about this all the time. My answer is so blunt that I think it annoys our students. But I really believe it and I’m not going to change my mind. The fact is that the proof that you can do your job is not a piece of paper that says you completed a course. The proof is that you can code a project because that’s going to be your job or you can design a project.
So, we have our students build portfolios. They have assignments in all of our courses, pretty big assignments. They use those apps on their portfolios and we teach them how to build a portfolio, with GitHub, with their developers, with Dribble or Behance if they’re designers. We teach them how to do that and show off the apps that they’ve built.
If companies really care about certificates, then I think that those companies really need to realign their hiring process and start focusing on what people actually build. I’m not going to contribute to what I don’t believe in, which is this certificate culture of hiring.
Andrew: I like that. How has this interview gone for you? What do you think? We’re almost at the end.
John: It’s been fun.
Andrew: Yeah. I’ve been looking at you to see if you’re a little uncomfortable. I get the sense sometimes that you’re a little nervous when I ask you questions and sometimes you’re impassioned.
John: Which questions made me nervous?
Andrew: You know what? It’s the run of the mill ones that you seem to be nervous about. The ones about, “Why don’t you offer coding in the browser?” that you felt like you could rip somebody’s head off but you were holding back on. How’s my analysis?
John: I think that’s accurate. I haven’t done many of these interviews yet. We’ve had some like Business Insider things that are coming up and stuff like that. So, I may be nervous on the bread and butter answers. But when I do get impassioned by a question, I think that I forget about the nerves and just go for it.
Andrew: I sense that. Before we started, I intentionally asked you about a couple of challenging questions like your competition. I didn’t mention their names. You, in the conversation before we started, mentioned their names. You, in the conversation, didn’t shrink when I asked you about coding in the browser. You got fiery.
I do that intentionally so I know, “When I ask this question, do I have to pitch it in a soft way or can I really throw it at him and then have some fight so that people get to see who you are and not have you suddenly get turned off because of the way I’ve asked it?” So, once I knew that you were really ready for that question, that you could take it that way, I got excited. I stopped you and I said, “Wait, let’s keep this for the interview.”
John: Right. Right.
Andrew: It’s all intentional.
John: I’m glad you did. Those are the key things that I really believe in and I think that what separates BitFountain from our competition. So, I’m willing to talk about them for days on how coding in the browser is not our thing, certificates and all that stuff.
Andrew: Well, I’m really proud to have you on here. I can’t believe how much you’ve done. I can’t believe you’ve been listening, that you were in the Mixergy audience and here you are today now doing this interview.
John: Yeah. I’m psyched about it. I’ve been watching since college and now I’m here.
Andrew: What did you get out of Mixergy when you would listen?
John: That it was possible to be an entrepreneur. You hear about these bread and butter careers like, “Go into law, medicine, engineering, blah, blah, blah,” but then with Mixergy, you look at these interviews where people are wearing ear bud headphones and are on Skype where you can see their apartment and you’re like, “That’s who they are. They’re really just some normal kid. I can do that too.” So, it makes people not seem like the gods of enterprise.
Andrew: I know what you mean, actually. Even when I get to see them in person and they come in in flip-flops and they’re a little bit clueless about how to have a conversation with a stranger, I think, “Boy, this is someone who I really thought of like a god of industry. He’s just a regular dude with a really good idea, interesting process for building it out and set of beliefs.”
It does make it more attainable. I’m glad that the interviews give that impression that they don’t try to make the person seem cooler, more interesting, more formal. I’m the only one who’s supposed to look that way. I usually wear a t-shirt, but I say I should spruce myself up for these.
As a follow-up, for anyone who’s listening who wants to talk about how to market courses, I did this fantastic master class with a guy named Dan McCall who all he did was promote and sell online courses for a while there. He’s fantastic. He’s brilliant. I’ve gotten to know him outside that course. I really urge anyone who’s out there listening to check his course out as a follow-up. It’s called “Generate 200 Percent More Traffic.” Boy, we could have really given it a better name now that I look at that. It’s more than just traffic. He really is about getting more customers. He’s fantastic at it.
Alright. I want to thank a couple of people who put this together. Ankur from Fedora-I like that he introduced us and I’m really glad that this interview came about because of that connection and that recommendation. This interview was produced by Jeremy Weis who did the pre-interview. It was researched by Andrea Schumann. It’s going to be posted up on the site by Arie Desorma. I’m really getting used to her last name. She’s got a very French sounding last name. It used to be Arie Saint for those of you who are now on the site. It’s not Arie Desorma and I’m so proud that she’s the person who I’ve been working with for five years here. I thank her. Thank you so much for doing this interview with me. It’s fantastic.
John: Thanks for having me. I had a great time.
Andrew: Thanks, John and thank you all for being a part of it. If you want to check it out, the website to go to is BitFountain.io. We also talked about how he teaches how to create a course. That is called MillionDollarCourse.com.
Andrew: Excuse me. MillionDollarInstructor.com. So cool to actually see you did it before you taught it. So many people say, “Hey, Andrew, I created this course. It’s how to make a zillion dollars.” I say, “Did you make a zillion dollars?” “Not yet, but I know the course is good.” “All right, well go use it and then come back.” Well, you did it and now you’re teaching it-MillionDollarInstructor.com.
Thank you so much for doing this. Thank you all for being a part of it. Bye, everyone.