Hey, my work at Mixergy is sponsored by three great companies. First is TeamworkPM. TeamworkPM.net is where you go when you want project management made easy. If you are already using a project management solution and you’re seeing prices increase, go to TeamworkPM.net. They’ve got very reasonable prices and a system that will scale up with you as your organization grows. Scale up to the place where Universal Studio trusts them and the University of Texas at Austin and the U. S. Army and so many other organizations. So check out TeamworkPM.net.
And if you need a lawyer, you need the entrepreneur’s lawyer. That’s why I keep recommending Scott Edward Walker of Walker Corporate Law. He’s a lawyer who blogs. He’s a lawyer who answers questions on Quora. He’s a lawyer who’s in this community, who knows who is in it and can anticipate what you’re going to be looking for. You’re probably going to want to know how to deal with options for your employees. You’re probably going to want to know how to raise money and how to structure your deal. You’re probably going to want to, at some point, either sell or buy a company. You need a lawyer who is in this industry, who can help you with all that and so much more, which is why I always recommend Scott Edward Walker of Walker Corporate Law.
All right. And finally, I want to tell you about the last sponsor, Shopify. Shopify is where I first went online to set up my very first store. It’s dead simple. You get your own store front with your own company name and your own dotcom which is why I urge you, if you need to set up a store to check out Shopify.com and get it all up and running easily and quickly. Shopify, by the way, also is so easy that if you’ve got a friend who needs to set up a store or who has been talking forever about selling something online, that’s where you can send him, Shopify.com.
Here’s the program.
Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart and the only place online where you can consistently go to find out about successful entrepreneurs and to hear them tell you how they did it openly.
Well, earlier this week I was on the phone with Jon Crawford, and he told me that he bootstrapped his company by selling t-shirts. I thought it’s a very interesting way to build a business. And he says, “Andrew, we reached a million dollars in sales.” I said, “Interesting. Come to Mixergy. Talk about how you sold a million dollars worth of t-shirts. Teach my audience how you did it and teach me. I’m always fascinated by that. And we’ll also find out how you’re using that money to build your business which is Storenvy, a cool shopping marketplace and eCommerce platform that’s free to sell on.” Jon said yes and, Jon, welcome to Mixergy.
Jon: Hey. How’re you doing?
Jon: Glad to be here.
Andrew: So, people always say, Andrew, you exaggerate. You’re trying to sell. I don’t know what they think I’m trying to sell here with this. But they doubt my numbers sometimes. Million dollars in sales of t-shirts, did I get that right?
Jon: Well, actually that was 2009, and in 2010, we’re on track to definitely be over two million. But it’s actually not t-shirts. It’s t-shirt printing. So, we were actually the service provider for our merchants who wanted to print t-shirts to sell on our eCommerce platform. So, we offered our online stores and then at the same time had a t-shirt printing service to enable them.
Andrew: Gotcha. So, if I wanted to sell t-shirts on your website for Mixergy, I’d go on Storenvy.com, that’s Storenvy.com. I’d create my store. I’d want to sell t-shirts, but I can’t print them. I’d go over to you guys. You print my t-shirts, and you help me sell them to my audience.
Andrew: That’s how I’d get the Mixergy t-shirts printed out.
Andrew: All right. Let me ask you this. You have an interesting idea for a shopping marketplace and I’ll ask you about that. Why not go out and get funding for it? Why do you have to get into t-shirt printing and servicing and carrying inventory and all that headache?
Jon: So, at our heart, the guys that I started the company with, we’re real do-it-yourselfers, real sort of wanted to learn all the lessons the hard way, wanted to say we did it all by ourselves, and also not lose the fact of the element of business, that we’re serving DIY businesses, all the mom and pop places and smaller people who just had an idea for a t-shirt or a band.
So, that didn’t really seem to fit the culture that we were after from the get-go. And also, we immediately just saw this opportunity to say, “Hey, we know people need t-shirt printing because they are selling t-shirts on our platform, and we have a connection to an outstanding t-shirt printer. So what if we’re the middleman? And it just worked out.
Andrew: What was your background? What were you doing before you ever launched this business?
Jon: I was just a Ruby on the Rails contractor. I ran my own web design shop for a few years. That went really well. My partner actually decided that he wasn’t that passionate about the web and went off to be a furniture designer. So, that kind of put the kibosh on that. So I was doing my own thing for a while. I built a number of eCommerce tools and realized that nothing was being built for average people, for people who just needed to sell something online. And nothing was being built that was kind of keeping up with where the consumer and social web were going.
Andrew: Why were you building those tools before? Were you trying to sell them? Were you trying to learn? Were you trying to build businesses off of them? What was the motivation for building those tools?
Jon: Well so, before it was all contract tools for other people, for customers, people in need. The first eCommerce tool I ever built was a windshield wiper company for Classic Hot Rods. They needed to be able to sell their windshield wipers online, and so they called us.
Andrew: Gotcha. OK. So, you’re building this for other people, and you decided at some point I’ve got to build my own thing. What’s the first own thing for you only that you built?
Andrew: Storenvy? This is it?
Jon: This is it.
Andrew: And you partnered up with whom?
Jon: I partnered up with actually the operator of one of the platforms I built originally. So, there was a record label that kind of had this smaller idea, hey, let’s build an online store that we’ll run. You can’t sign up for it. We’ll operate it, but we’ll let people send us their goods, and we’ll fulfill all the orders and da, da, da, da.
So, I made this platform for them. There were about 60 people using it, and the guy that they put in charge of running the platform and I became friends. So, this young guy, he was the one who dealt with all the customers. He was the one who handled all the customer support, dealt with all the bands and whatnot. And so, he and I just got to chatting and said, “Hey, what if we did something on a bigger scale?” He ended up leaving his job, and the rest is history.
Andrew: You know what? I’m finding a lot with entrepreneurs who make the shift that you just made is that they couldn’t for a long time find the time. They couldn’t keep from getting distracted by their client work, and so they didn’t get to spend enough time on their own work. How did you find the time to do it? How did you make sure that your stuff got the time and the urgency the client work got?
Jon: Well, I think it’s a couple things. One, I’ve never had a real job. I’ve had college jobs and stuff. But ever since I graduated from college, I’ve been working for myself. And so, I was kind of used to starting my own thing. And when we first started our web design company, we did a really bad job of pricing everything. We ended up working ten times more than we were billing anyone for, and so I got really used to getting by on next to nothing and not needing expensive cars and whatnot in my life. So, that was one big thing.
The other is just that I am just the kind of person who I hate the idea of helping everyone else make their dreams come true while I’m sitting there not making it happen for myself. And so, I got one big project in late 2008, and I saved a bunch of money from it and then quit my job in early 2009 and worked for six months to build this.
Andrew: So, it took six months to build version one.
Jon: It took six months to build version one.
Andrew: And day to day, you were feeding yourself. You were housing yourself with the money from that previous client job.
Jon: Yeah. Well, also I made one awesome decision as well in my life. I married someone with a job and insurance. So she was kind of my initial angel investor, maybe. So that really helps when you’ve got somebody else that’s kind of, at least, keeping the bills paid.
Andrew: You know what? That’s interesting. I’ve noticed that it does help. I wonder about the other side of marriage. If you were just living by yourself, you’d be able to work non-stop on the site. You’d be able to eat cereal, Ramen, pizza, whatever you want. You didn’t have to get up and go and be with someone on the couch or hang out and have dinner with someone else. You’re married. How do you make that work? How do you find the time?
Jon: It’s definitely all about the person you’re married to. She is incredibly driven herself and has projects going all the time, and she’s the son of a business owner. Sorry, the daughter of a business owner. She’s going to kill me for that. She’s the daughter of a business owner.
Andrew: I was hoping you would say that she was. I thought, wow, this could be really interesting. He said she and he. This is a story. That’s a headline right there.
Jon: I was trying to say her dad. Her dad is a business owner, and so she would then household where he was working all the time, just to make things happen the way they needed to. But it’s just a miracle I happen to marry somebody who is incredibly flexible that way.
Andrew: All right. What about you? I see right behind you, you’ve got a beard up on your wall. I see you’re wearing a t-shirt that’s got multiple colors. Your hair is kind of in that spiky thing. You look to me like an artist. Were you a guy who was always an artist? Even as a kid, you were drawing. You were building websites with design more than function or a financial goal in mind.
Jon: Well, point of clarification. I didn’t know what a break tag was when I graduated from college.
Andrew: You didn’t know what a break tag was? How did you graduate? What’s a break tag?
Jon: Yeah. I didn’t know what an HTML was? I didn’t know . . .
Andrew: What is a break tag? We were talking about the BR.
Jon: The break tag is one of these with a BR in the middle. It’s like a break to the next line in HTML.
Andrew: All right.
Jon: I didn’t know the first thing about building for the web when I graduated from college. What I had done before that was I got a business degree, but what everyone knew me as I played the guitar. Everybody knew me as the guy with the guitar. I did punk rock music and just all that kind of stuff.
Yeah. I’ve always had a hard time with tucking in my shirt, putting on a tie, that kind of stuff. And so, building my own product and launching my own company is kind of the only end result for a person that’s kind of damn the man like I am. So, yeah.
Andrew: Cool. All right. By the way, I catch myself interrupting and kind of loosening up in this interview, because there’s certain people who I just like, and I feel like I get along with so well in an interview that I almost forget that I’m doing an interview. I just feel like we’re hanging out right now, and the Internet’s cooperating. So, I feel like we’re just kind of hanging out right now. I should stay focused. All right.
Jon: I’ve got it.
Andrew: Six months into it, you launch version one. What does version one look like?
Jon: Version one, no one could sign up by design. You had to ask us for permission, because I’d never run my own eCommerce thing before. And so, I wanted to learn. I wanted to find out what challenges were going to come up. So, we launched.
Right now, Storenvy is this ever evolving eCommerce marketplace, meaning you can shop at all of the stores and yada, yada, yada and interact with people. Well, version one didn’t have any of that. It just was a way for someone to create an online store, and it was something that Storenvy.com, that was the URL, and the stores didn’t connect. It was just a replacement for Yahoo Stores or something. So, we ran that over the course of about a year. Shoot, we launched this in 2008. Wow.
Jon: So, time flies. So, in the fall of 2008, we launched it, and for a year we didn’t let anyone in and we gained about 200 stores, just kind of people that came knocking on the door and really insisted. And then, last November, we launched all our social stuff and way more amped up eCommerce tools.
Andrew: All right. Let’s stop right there for a minute and ask you about that first. You said in the first year you got 200 stores. How did you get 200 stores in the first year?
Jon: It was viral, all social. People would just put a little . . .
Andrew: You didn’t have viral until November of this year.
Jon: Yes, but the Internet is just viral by nature. So, we had this thing on the web. And people, the existing people that we had using the platform were driving traffic to us because they were saying, “Hey, come buy from my online store. Here’s the URL.”
And then when people would check out, it would have our logo on the page. They’d be on Storenvy.com. And people would go, what is this? And they’d go to Storenvy.com, the home page, and see what it is. It was just software as a service looking site with a sign-up for more information later box. And that’s how it happened.
Andrew: I see. So, everyone who was a shopper had an opportunity to become a shop owner on your site.
Andrew: All right. By the way, most people know that I promote Shopify.com. It’s a place where they can go and create a store online. I’ll explain the difference between the two sites. And it’s just that with Shopify.com, your store looks like it’s your own. It’s got its own design, its own URL, its own life.
With Storenvy, it’s part of a community. It’s part of a marketplace. So, customers go from store to store. They see the Storenvy brand and so on, and you also have a free version where I don’t think Shopify does beyond the trial. True?
Jon: Right. True.
Andrew: All right. So, you launched this thing, and it goes. How did you plan to make money from it?
Jon: So, the core, core, core belief of this whole thing is that eCommerce should be free because it can be free. We just live in this day and age where everything is moving to free. I read Chris Anderson in Wired. It’s an initial article in Wired called “Free in 2008.” When I read that, I was like, yes, this is how we have to do this.
He later published a book, and I gobbled that whole thing up. For anyone who hasn’t read that, the whole mantra behind that is that consumers are expecting things to be free more and more and more than they ever have before. Email used to cost money, and now it’s like unlimited storage for free. And so, it’s all this graft that’s moving closer and closer to free.
And so, we set out and we said, “Okay, if we’re not free, someone is going to be free, and we’re just going to be competing with them. So, let’s be that guy.” And so, that created a whole bunch of more questions. We said, “Okay, then, how can we make money?” What can you do with 10,000 stores that are there because they’re free that you couldn’t do with 1,000 paying stores, like what new opportunities do you have that gets huge because it’s free?
And so, the first thing we came up with, as we discussed, is t-shirt printing. It was easy because so many of our customers were selling t-shirts. And so, we launched our beta with those first 50 stores, and we were pretty much Ramen profitable right away. We were able to live off it. I think we were making about, maybe, $7,000 or $9,000 a month right away, which was, for three guys, wives with jobs, it was enough.
Andrew: Now, you were telling me how you got the first 50 stores before the interview. Can you tell the audience how you did that?
Jon: Yeah. So, the guy that I co-founded the company with, who worked at that record label operating the platform, when he left, the record label had no interest in continuing the business because they didn’t really want to put t-shirts in bags and mail them out, take them to the post office every day and deal with customer support. So, they just said, okay, if you’re out of here, then we’re just going to shut the website down. And we saw that as a golden opportunity to then just email all of the customers on that platform and say, “Hey, in a month you’re not going to have an online store. Do you want to switch to ours?”
And so, day one we launched with 50 customers who were thankful that we bailed them out of them having to scramble to set up something else. We set their stores up for them. We loaded all their products in, and then we actually did all the fulfillment for those stores, too. We had a fulfillment business until this summer.
Andrew: How did you start off with the fulfillment business? Was it the result of this, the fact that you had 50 stores all of a sudden, that you said we’ll get in the fulfillment business?
Jon: Well, there’s so many different types of merchants. Like, if you take a band that has a decent following, and we’re not talking about Cold Play size, but we’re talking about somebody who might have 500 people show up for one of their shows.
Jon: They are touring, and they don’t have time to stick a t-shirt in a bag and take it to the post office every day. But guess what? If they’re selling t-shirts every day, they’re a good printing client because they’re printing like crazy. And so, we had to figure out how do we enable these guys to pay us for their printing and eliminate that headache, because that was a real deal breaker, the fulfillment. So, we basically started the fulfillment service out of necessity and obligation, and it never made any money because it’s really hard to make money fulfilling a $10 CD order because you need half the money to make money on that.
We ended up shutting that down, but it was always 100 percent run out of the garage of my co-founder. So, we moved to Austin, Texas, at one point and we had to move all that stuff from one garage in Florida to another garage in Texas. So, yeah, it was not fun.
Andrew: I see. Okay.
Jon: So, that was the end of our fulfillment services.
Andrew: What about printing? How did you get into the printing business all of a sudden? You told me how you learned Ruby on Rails. You told me how you became a developer. What about printing? Where did you get into that?
Jon: I’ve got to credit that one up to my co-founder as well. He was pretty much non-technical and just a pretty savvy Internet user, but he had a bunch of relationships with bands. He was a former band manager and running that platform, they never intended to offer printing service at that eCommerce platform for the record label. But they had so many bands saying, “I need printing. Who should I print through? Do you guys have any recommendations?”
And since he got that question all the time, he finally just went out and found a guy. And he tried a number of different people and kind of got an eye for what is good quality. One day someone mailed him some t-shirts to put on their online store. He got one, and he just said, “Who printed this?” He called them and he said, “Who printed this?” And they said, “Oh, it’s this company in Indiana.” And he said, “Give me their contact information. This is the best printing I’ve ever seen.” And that’s who we ended up partnering with. And so he brought that connection into the partnership.
Andrew: Gotcha. I see. Okay. All right. So, you start doing this. You get to 50 stores quickly. You get to 200 stores about a year after you launch, and then you start adding social. What is social?
Jon: Social is the attempt to make shopping online more like shopping in real life. You leverage your existing connections in real life. The thing I’m such in awe of with Facebook, and it’s kind of no done now, is it was all based around your real life connections, whereas MySpace was just like anyone and everyone you could friend.
And so, this is that same kind of space to where imagine being able to show up to an online store and see just the stuff that your friends have already said that they liked. And how much does that change your attention to those things? How much more attention are you going to pay to say, like, Jim has already liked this. So, I should check it out.
Andrew: Isn’t there a risk with that when you launch though that there will be hardly any users on the site, let alone users that are related to each other? So, when a new customer comes on, he doesn’t see all his friends who liked it, he just sees nobody liked it, nobody liked the t-shirt.
Jon: That’s just classic chicken and the egg problem of social networks. And so, right, we’ve had to just put up with that for a year and try to provide a lot of that value ourselves. So, we’re constantly checking. We check out, basically, every store that gets added and favorite things and comment on things.
We try to reward the users that are doing that by pushing them out to the front. And we just put the hottest stuff on the home page so those are the things that are more likely to have activity on them.
Andrew: Okay. I see. For a long time you added the social component, but it didn’t add that much power. It takes a little time to build up, and then before you know it, it becomes this avalanche.
Andrew: How long did it go from launch to impact?
Jon: Well, we’re still in the throes of getting this sucker going. We have not seen the fruition of what Storenvy is going to be.
Andrew: How many stores do you have now?
Jon: We have 2,000 stores right now.
Andrew: Okay. So, to go from 200 to 2,000, that’s a ten time growth. Social helped you get there. What kind of social was at play there? What kind of social takes you from 200 to 2,000 stores?
Jon: Well, we have a free Facebook application that merchants can stick on their Facebook pages. So, that has helped big time. Facebook is our biggest single traffic source, people sharing out things to other social networks. So much of it is exactly what everyone should be doing, like showing people their friends that have already joined, their Facebook friends that have already joined. Right now, this social aspect of it is something that we haven’t been able to spend as much time on it as we are going to. And so, I’d say that the big value add right now isn’t social, it’s the marketplace.
Andrew: So, tell me. What do you mean by the marketplace, and how did that help you go from 200 to 2,000?
Jon: The marketplace is the ability to search across all the stores at once. A person can show up o Storenvy and shop, unlike some of our competitors out there for setting up an online store. You wouldn’t go to Yahoo Stores home page to shop. That’s a place to set up a store.
Andrew: But how does a user go from one store on your site to another? How does he discover that?
Jon: The home page is like the best sellers across all the stores or the most interesting things that we’re kind of predicting, this is brand new and it looks interesting. And so, those things you click on it. Then, when you click on that, you see other products from other stores that are similar.
If you hop in just directly to a store, when you add something to your cart and you start to check out, it suggests things from other stores that are similar to the things you have in your cart. And so, it’s all this cross store promotion.
We’ve got people tweeting and sending us emails that say, “How am I making sales on Storenvy? I’m not even promoting my store.” Well, that’s the testament to what a marketplace is. It’s like, people just show up and they search. You can search a keyword and see all the products across all the stores that match that keyword and buy it. It removes some of that marketing difficulty for merchants.
Andrew: Okay. All right. And so, you’re building more stores, and each store that you’re building is a potential customer for the printing business, right?
Andrew: How do you convert someone who just created a store for free into a paying printing customer of yours?
Jon: Well, to clarify, Storenvy and our printing service have split out, and we’re now two different services.
Jon: So, you’ve got Storenvy and then there’s now a printing service called Threadbird. And right now, it’s just kind of an advertising partnership. But the way it did work was we just had our own ads everywhere for merchants.
In a store administrative panel, it would be like, “Need t-shirt printing? Look here.” When they sign up for a store, we’ve got a big thing selling our t-shirts printing in the email that they get. It was always like, every sticker, everything we handed out, it was free online stores and t-shirt printing. It was both things at the same time.
Andrew: I see. Were you competing with the CafePresses of the world and the Zazzles of the world who were doing custom printing in giving users their own stores?
Jon: A little bit. Our take is that the Storenvy services were a lot more high end. CafePress, you print one t-shirt at a time, and it’s something called digital printing. And digital printing is a lot like running a t-shirt through an ink jet printer, and the quality’s not as good. It would wash off. You could print one shirt because there’s no set-up.
We offer high quality screen printing. It’s all this set-up, setting the machines up, but then, once you’ve got the machines set up, you can just run it, run it. And so, we had minimums. You had to print 36 or 50 shirts at once, but it was like $6 a shirt versus CafePress which is $20 plus dollars a shirt.
Andrew: So, I see. It’s cheaper for you, but you’ve got to buy in bulk. I see. I get it. But it’s also great for you guys because it means that when you make a sale you’re not selling one t-shirt at a time. You’re selling multiple t-shirts all at once.
Jon: Right. Customer support for that is tough.
Andrew: I’m in the middle of an interview and a door opened.
Andrew: I guess people were trying to call me to tell me there’s a package up front. All right. I’ve got to find a system with this office. Finally, we got the Internet working, and suddenly somebody’s coming in to the middle of a conversation here.
Andrew: So, what about the design? I’ve got a note here to talk you about how a design influences your sales.
Jon: Well, I kind of had a design background. I was briefly a designer in college, and I’ve always just focused on that. And so, when we set out to build this, we really wanted it to be the best design eCommerce platform. And we wanted it to be fun and bright. We’d seen so many of these band tools that were dark and Gothic and heavy metal. And so, we wanted it to be fun and light-hearted, and I think that comes across.
And so, what the crazy impact on that with the t-shirt printing was that almost every t-shirt printing company’s website is so bad, like really bad. And it’s always like somebody did it in some kind of Windows 95 website creation software because they don’t have anyone on staff that’s a web designer. Well, we were just web designers. We didn’t even know how to do printing. So, it was all about people hadn’t seen a printing service or an eCommerce platform that was just fun and laid back and high quality.
Andrew: I see. So, they were trying to . . . I think the way the other stores are set up is to not offend anyone, to not take a specific position, because they’re trying to appeal very broadly. And if they go a little cool and a little too young, then the guys who are trying to sell Republican buttons to older people are going to feel like it’s not a home for them.
With you guys are saying, we’re targeting this specific audience. This is the kind of vintage feel that they want, and we’re going to commit to that completely. And we’re going to understand that we’re going to appeal just to them, but we’re going to do it insanely well.
Jon: Right. Yeah. A lot of people need eCommerce. A lot of people need t-shirt printing. We found our early, early niche in just youth oriented groups, so like bands, t-shirt companies that were selling at concerts. And so, these guys don’t really go for the professional enterprise thing. And so, we really cater to them, first and foremost.
Andrew: Gotcha. OK. What else? What else did you do to bring in new store owners because it feels to me like what you did was you created a system where anyone could set up a store, and the revenue for you is going to come from selling the printing? And it kind of feeds off itself because each store is a potential lure for another store owner, and each store owner is a potential customer for the printing business, and it all grows.
But I would see that, and I would say this is a nice machine that I’ve got here. How do I get more into that machine? How do I get more out of that machine? So, what do you do to bring in more store owners?
Jon: Well, we’re definitely not satisfied with 2,000 merchants.
Andrew: You know what? I’ve got to tell you. I talk to a lot of people. You and I just happened to talk earlier this week. We were introduced through David Hauser of Grasshopper, so I knew that you were a guy who was further along than most people.
But I talk to a lot of people during the week who would kill to have 2,000 people on their site, who launch something and they can’t even get 200 or 50 or even two people to use the site and become full fledged members and set up stores the way that you would. So, how did you even get to 2,000?
Jon: Right. Well, let me clarify that. I’m sitting here. We’re at 1,999 stores right now. So, while we’re talking, I’m sitting here hitting refreshed, because as soon as it rolls over to 2,000 stores, I’m going to lose it. Seriously, like, that’s emotionally powerful for me. I cannot believe that there are 2,000 people who have chosen to run their business off this thing that I came up with.
Andrew: And that’s going to happen right now during this interview, hopefully.
Jon: It very well might, 1,999 right now.
Andrew: You know what? I wish I was doing these interviews live so that someone in the audience can go on and create a store. It’s been a long time since I’ve done that.
Jon: When I started, it was at 1,997. So, we’re getting close.
Andrew: All right. How about the first 1,000? How do you get to 1,000? That must have been an exciting time when you saw the numbers go from three digits to four digits.
Andrew: How do you get to that?
Jon: Well, it’s kind of what I was gong to say. It’s a double thing. I’m blown away that there are 2,000 businesses using this thing, but at the same time I believe whole-heartedly that this is better than anything else out there for the way the Internet is today.
Andrew: But you know what? I’ve got to tell you, Jon. That’s why I want to find out. If we just say it’s better, it’s not clear enough and it’s not useful enough. But if we say it’s better because we have this vintage look that appeals to younger people, and it’s targeted to our audience specifically, then, we’re sending our audience away with something really useful.
Andrew: Let’s come up with more of that. What else did you do? Did you buy any ads online? Did you send out emails? Did you spam? Did you do anything else that I can pick up on and understand, “Ah, this is why Jon grew from zero and others are stuck there.”
Jon: We gave out lots of shirts at conferences. We tried Google AdWords for a week, and it was so expensive that it was just not worth it. It was like $50 per conversion.
Jon: Because the word “online store” is way too competition there. It just wasn’t worth it. It’s so much better to get a recommendation. So, the best things that we’ve seen for viral growth is just get a good store on using it because then they drive people, thousands of shoppers.
Andrew: How do you get that good store? Do you see someone whose store you like somewhere else, and you go to them and say, “I’ll give you a store for free, and I’ll work with you directly to keep you here.” Do you do that?
Jon: Well, actually what I was getting ready to say earlier and I forgot to say is that one mistake I think we’ve made over the last year is I’ve just worked too much on the product and not enough on getting up, talking to people, creating relationships. We’ve done a pretty decent job. I think members in our community would like that, but I should have done more targeting influencers and saying, okay, like what you were just saying. “Come be on this. We’ll totally set you guys up with whatever you need.” And we’re getting ready to start doing that like crazy.
Jon: But right now, we’ve been fortunate to have people just find us and set it up themselves. So, one of our best sellers right now is a t-shirt by New Toy who are the makers of Words with Friends for the iPhone. And so, they’re selling the Words with Friends t-shirt like crazy. So, they’re driving a whole bunch of traffic to the website because people want to buy their t-shirt. And so, then I’m sure some of those people have said, “Hey, what tool are they using?” And then, they go on and set up their own.
Andrew: Oh, I see. Okay. All right. I got that. I’m writing that down on a note on that, too. What else? What else? T-shirts, giving those out at conferences. Did that work for you guys?
Jon: Yeah. So, I personally am a little bit burned on conference promotion. For us, there’s a specific kind of business that we feel is really great for us, and we’re really great for them. And they’re not going to tech conferences. Tech conference people can build their own online store, and they probably know enough about the web to be really, really opinionated. And while we’re still building our product, we love feature requests, but we just can’t build every single one
And so, I’m kind of any more not in love with the idea of going to South By Southwest and spending $10,000 on this big whatever. But we have done that, and people send us pictures wearing our shirts and all kinds of stuff. There’s some guy in Africa doing a charity thing, and he happened to be wearing a Storenvy t-shirt. I don’t even know him, but he was like, “Hey, we’re wearing your shirt.” So, that’s awesome, but I think the best thing is just being friends with people and getting them to say nice stuff about you and getting good people using your stuff and driving traffic and talking about it.
Andrew: What about the time and the effort that it takes to set up a new store?
Jon: Well, in ours it’s really fast.
Andrew: How fast?
Jon: Well, your store is created in 30 seconds. So, you just give me a sub-domain, the name of your store and your PayPal account, and you have a store.
Andrew: And I need to give you my PayPal account so that you can give me money, not to take money from me.
Jon: Right. Yeah, yeah. You don’t have to link it through a PayPal flow. You type the PayPal account in a box, and you’ve got a store. Now, it all depends on how many products you have and how crazy you want to get with your designs. We’ve got some people. So, we allow complete HTML and CSS customization. So, we’ve got some people that go crazy with their designs, make it look exactly like their website or you name it. And so, that takes a while because you’re programming the whole website. But if you want to get going. Say, you’ve got one t-shirt to sell, you can have your store online in five minutes.
Andrew: I’m going to be right now, I’m going to be your 2,000th customer.
Jon: Oh, shoot.
Andrew: That’s going to be good, right?
Jon: Yeah, man.
Andrew: Did somebody else become 2,000?
Jon: No, 1,999.
Andrew: All right. Let’s do it.
Jon: Let’s do it.
Andrew: Let’s make history here. I can’t imagine a more influential influencer being your 2,000th person.
Andrew: I’m still right here. All right. Oh, shoot, couldn’t set up your account because of a problem. Oh, passwords don’t match. I was talking while typing.
Jon: Watch it totally bomb. I’m going to watch it blow up. Live.
Andrew: Live, right here on Mixergy.
Jon: Breaking news. We’re going to . . .
Andrew: There you go. I’ve got my store. It’s Mixergy. Open a store, it’s free. I can see you find your friends. Ah, interesting. Link your account with Facebook and Twitter to find friends who are on Storenvy, fill out a profile market. But the one little bubble that you isolate for me is create your store. Store name, I’m going to call it Mixergy, Mixergy.Storenvy.com. PayPal email address, and we’re about to make history, people.
Jon: Boom, this is perfect.
Andrew: Here goes. And then, we have to deal with the Internet here which is a little bit slow lately, and it’s going. It’ll be Mixergy.storenvy.com.
Hey, what about the name, Storenvy? Storenvy.com. Is that an issue for you guys that people will spell out the word envy instead of N-V-Y.
Jon: It is to a certain extent. I wouldn’t say it’s an issue, but it’s definitely some people do spell it wrong. But we have both domains, so it just redirects.
Andrew: Gotcha. All right. So, if I tell people I have a store at Mixergy.Storenvy.com, they’ll know. It’s still going. It’s still waiting. At what point in this process am I going to get a solicitation to sign up?
Jon: A solicitation to sign up?
Andrew: A solicitation for printing?
Jon: Oh, well, you won’t anymore because we’re separate companies. Yeah, Yeah.
Jon: So, side note, when you create your store, it validates your PayPal email address, and PayPal has been totally freaking out and tweeting about it all day. So, that might be what’s holding up the 2,000th store.
Andrew: That actually is exactly what’s going on. So, can I do it without PayPal?
Andrew: PayPal email address, this tracking ID store already exists and can’t be duplicated. I wonder if I already have a store. Let me see. No, Mixergy gives me an application error. Let’s try it again.
Jon: Well, your store got created. I think maybe PayPal is just bombing out. Check your email.
Andrew: Oh, yes. It’s okay. I see it now. All right. So, now I am officially the 2,000th store owner of Storenvy.
Jon: Wait, wait, not yet, not yet. We actually have . . . let me tell you real fast. We actually have 6,000 stores, but only 2,000 are open and launched.
Andrew: Gotcha. Okay. So, now how do I launch this thing?
Jon: So, check your email.
Jon: And it’s going to give you all of the links. Now, you go to mixergy.storenvy.com/admin.
Andrew: Okay. I clicked on send and receive my mail. While I’m doing that, what did you learn from David Hauser? David Hauser, I know, has founded several companies. The most famous one is Grasshopper. He apparently has been helping you. What kind of help has he been giving you?
Jon: Well, he helped first push me towards doing this business like a real Internet startup. I don’t think he would know that I would say that, but I started this thing in Kansas City originally, and there’s not a lot of big Internet movers and shakers there that are startups. It’s all big enterprise size companies. So, there’s not a lot of action in the startup world in Kansas City. Let me put it that way. And so, I started talking to him after I met him at LessConf, and he was like, “Hey, I can introduce you to a whole bunch of angel investors, and you guys should apply to Venture Hacks.” And we got accepted to Venture Hacks.
I was just trying to keep up with all that stuff. It was like he pushed me down a little crazy slide. Just a little tiny nudge, and all of a sudden I’m getting accepted to Y Combinator and just trying to keep up with all that stuff. So, he gave us the initial nudge.
And then, when it came time to break up Storenvy into the two [inaudible 43:53] we were running two businesses side by side that was just too much. He helped me navigate those waters and stay positive and stay motivated, stay classy. He was just my sounding board for the things I was doing in that phase, basically, going through a divorce, splitting of assets and stuff. He played a big part in that.
Andrew: Gotcha. All right. My store is up and running. Am I now 2,000 or what?
Jon: So, did you take it out of maintenance mode?
Andrew: Oh, how do I take it out of maintenance mode?
Jon: You go to the settings.
Andrew: Okay. Let me go to the store settings. I’ll take it out of maintenance mode. Maintenance mode off.
Jon: Oh, snap.
Andrew: Yes. Am I on or what?
Andrew: 2,000, baby.
Jon: Woo hoo.
Andrew: Sorry for shouting right into the mike, right into people’s ears.
Jon: Back of the house reeling right now. 2,000 and it shows on the home page. Search from 22,196 products and 2,000 stores.
Andrew: So, you’ve got 6,000 people who have gone through this process but didn’t do that last step which I did, which is go into the email and hit the activate button. Have you asked them why? Do you know why they haven’t done it?
Jon: That’s very, very, very soon on our road map to start sending. It’s, in our experience that the people we’ve talked to, they just simply kind of forgot that they signed up for it. And so, next week we’re going to start sending people an email three days after they sign up. It’ll be like, “Hey, remember me? Finish signing up. Here’s the quick steps,” or whatnot. And then, obviously, a wizard.
Honestly, setting up a store is kind of an involved process. We try to make it as simple as we can, and there’s a long way to go there. And so, it’s a pretty involved process. You’ve got to have the photography for your products. You have to have descriptions written for your products. You’ve got to work on the design.
And so, it’s not like signing up for a Twitter account where the minute you sign up you’re done. And so, it takes a little time. So, people just forget, and they get distracted. So, we need to start sending them reminder emails. We’re getting ready to do that.
Andrew: All right. One more thing. Since I’ve got you on and we’ve got the package while I was doing the interview. Let’s open it up. Let’s find out what it is.
Andrew: This is also a little bit untraditional with this interview. What could I have gotten here in the mail? If it’s a subpoena, it’ll be very embarrassing.
Jon: You think the Giants will have won the World Series by the time this airs?
Andrew: I have no idea. To be honest, I don’t follow sports one bit.
Andrew: Oh, I see. Do you want to wear the hat?
Jon: That’s why we have the beard on the wall, baby?
Andrew: How appropriate is this? What’s the beard? What’s the reference with the beard?
Jon: It’s the beard, Brian Wilson. It’s their closing pitcher.
Andrew: I see. Okay. All right. Did I say football? I have no idea what you’re talking about.
Jon: I started to say Super Bowl a few seconds ago, so it’s not just you.
Andrew: I’m like an old fashioned geek. We never used to like sports. We used to laugh at people who liked sports, and now some of the geeks like sports.
Jon: That’s the thing. San Francisco is on it right now with the baseball.
Andrew: So, here’s what I got. Look.
Andrew: Do you recognize the book?
Jon: Yeah, yeah.
Andrew: It’s Jake’s book, the founder of Threadlist. He’s going to come here and do an interview. And so, he sent me a copy of his book.
Jon: Awesome. I won a copy of his book, and I haven’t gotten it yet. Jake, thanks for nothing.
Andrew: I’m sorry. You’re not an influencer like me. You can’t just get a free copy of the book. You have to go out and buy it. I, on the other hand, am showered with books.
Jon: No, I won one at their touring Airstream trailer thing, but I haven’t gotten it yet, Jake.
Andrew: Well, thank you, Jake. All right. So, there it is. The store is Storenvy. He’s up to two million in sales. The company has broken up into two different pieces. Now, he’s no longer in the printing t-shirt business. He’s now in whatever business it was that he was building the t-shirts to fund.
Jon: Social eCommerce.
Andrew: Social eCommerce, Storenvy. Wait. When you got that first million, what was that like? The first million, I know it’s revenue that we’re talking about here. We’re not talking about profits. You can’t go out there and buy yourself a Bentley with the revenues.
Andrew: You have to wait until it trickles down to the bottom line. But the first million’s a big deal. Tell me what that was like.
Jon: This whole thing has been weird because we took big risks and just started working and quit our jobs. And it just kept happening, like, it just kept happening for us. People would tweet about it every day, and all of these people had signed up saying they wanted to get in when we opened it.
And so, it was a little bit like, wow, a million dollars. But at the same time because it had just kept happening for us, we were like, only a million dollars. It’s just weird. It’s both of those things which is why I’m like, oh my gosh, everybody should be on this. It’s free. It’s so easy. It’s fun. It’s social. But I’m also saying 2,000 stores, that’s amazing. So, it was both. It was both.
Andrew: All right. I feel it.
Jon: Mainly, it was like sweet. We can give ourselves almost a reasonable salary.
Andrew: Tell me if I need to edit this question out of the interview. You’ve been moving around a lot during this interview. What’s going on? Is it Red Bull? Have you got a bad seat? Have you got some issues with sitting down?
Jon: No. I’m one of those people that I walk around when I’m on the phone. I cannot stand still when I talk. I think they call it like a kinetic thinker.
Jon: Something like that, like movement actually stimulates the part of your brain that talks, a kinetic talker maybe. I may have made that term up. But it comes down to, I can sit here and listen to you without moving. But as soon as I need to talk, it’s all about the gestures and whatnot. It’s just how I articulate.
Andrew: I see. All right. I’m glad I brought that up. Yes, I’ve got a similar thing. I have to go out for runs if I really want to think. If I just sit still, I can’t deal with it. I’ve heard it happens more to guys than to girls, and I’ve heard of teachers who took their male students out to just go walk while they teach them because it helps them focus.
So, this isn’t a science show. I don’t know if any of that is true. That could just be a story that I heard, but I do know this is true. I am the 2,000th store owner of Storenvy.
Andrew: And paying for the show is Shopify.com. So, somehow I’ve got to go and deal with that.
Jon: Hey, you know what? We really like Shopify.
Andrew: Actually, it’s two completely different markets. It’s completely different products. It’s like comparing Shopify or Storenvy with Yahoo Stores. Everyone is dealing with a different type of store owner.
Andrew: All right. Congratulations to you on two things. Number one, on somehow getting David Hauser’s attention and getting him to help you out. That’s incredible. I know the guy’s very busy. Number two, on Storenvy. Number three, once again, on the very influential 2,000th store owner on your site.
Jon: We’re lucky to have you.
Andrew: Thank you all for watching. And one day, hopefully, soon Jon will get a copy of the Threadlist book from Jake the way I did. Jake, thank you for loving me more than you love Jon. Sorry, Jon. I have one.
Jon: Hey, thanks. See you.
Andrew: Cool. All right, bud.
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