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Andrew: Hey everyone, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How did two co-founders of different ages work together to build a company? Jose Akle was 23 when he launched his company. His co-founder was over twice his age, at about 50 years old. We’ll hear how they worked together to build Solutrust, a company based in Mexico where Jose is right now. What the company does is provide accounting and legal services as well as software for trust departments.
Jose, you know the first question I am going to ask you? I’m not even saying hello. We said hello before in the pre-interview. We talked for half an hour. Now, first question is: what size revenue is you guys doing?
Jose: We’re doing in the couple of hundred thousand dollars.
Andrew: A couple hundred thousand dollars? Wait, wait, wait. It’s more than a couple. A couple means two, right?
Jose: Yeah, well, monthly, so we’re probably reaching a million dollars in revenue this year.
Andrew: This year. And up until now, what have you done on average monthly?
Jose: Well, we came from zero, but on average for the last year it has been around that hundred thousand or a little bit less.
Andrew: Around a hundred thousand, little bit less than that. All right. I actually should say hello. It’s kind of odd because you and I spent over half an hour on the phone together just plotting out this interview, making sure that we hammer out the important points, but pushing out the points that won’t be useful to the audience. And then, we come on and we pretend like we just met and are starting our.
Jose: Well, I think it’s a great job. It’s a great job you’re doing, you’re preparing for the interview and giving out the important information to your viewers.
Andrew: Thank you. I take this stuff really seriously. I don’t just want to come out here and hang out with you on Skype and have my tea and find out about your story. I want to know ahead of time what’s going to be really useful to my audience. Where do we go with this interview? And that’s why we plotted out an outline for the interview. It doesn’t always work out. The first step is taken care of.
Now, we have to make sure that the interview lives up to all the hard work we put into it. Let’s see. Let’s establish a couple more things, and then we’ll go back in time and find out how you got to this place with your business.
People are going to wonder, what’s a trust? How do you explain what a trust is since you guys manage trusts for companies?
Jose: A trust is a collection of goods, that someone else, a third party, is taking care of for some other beneficiary, or for yourself. In Mexico how it works, it has to be a financial institution. In the U.S., lawyers can be trustees, but not in Mexico, so we have those institutions manage that whole process and keep the books clean.
Andrew: Gotcha. So for example, if I had a child and I wanted to give that child some money but not have him run around and waste all that money, I would put the money in a trust.
Jose: Yeah.
Andrew: In Mexico, it would be a bank that would manage that money for my child and make sure that he does not go crazy with cocaine, drugs and all kinds of other things, in the U.S. I could have my lawyer take care of it. Is that it?
Jose: Yeah, and that is something we do a lot. We have education trusts, so for example, all the parents in the schools set up a trust, and if one of them ends up being away, the trust would pay for the child’s education. Another example would be, American’s are not allowed to buy property in Mexican beaches. How it works is they set up a trust that owns the house and property, and it is totally legal, and then they are the beneficiaries of the use of that property, and they set up that with banks. That is another very common use.
Andrew: I see. You know, this is why I always love to see examples. I have the statement in my intro about what your company does, but until I hear an example, I do not fully grasp it. Now, you guys create trusts on behalf of banks, why don’t banks just go ahead and create the trusts themselves? Why do they need to work with your company?
Jose: Well, what we do is go to new banks and new financial institutions that are just starting up, just as ourselves, and we tell them, ‘You know, you have to take care of a lot of things. You have to take of deposits, ATMs, investments, and we already know how to do this very well. We can do this for you, at least for the beginning and we will share revenues. You do not need to invest, you do not need buy the software, you do not need to spend a lot of money hiring people, learn and take risks along the way. We can do it for you. We already do it for other banks.’
Andrew: How many trusts do you manage now?
Jose: In the hundreds.
Andrew: In the hundreds of thousands.
Jose: Yeah.
Andrew: Excuse me, is it in the hundreds, or hundreds of thousands?
Jose: Hundreds.
Andrew: Hundreds, right. I added extra zeros for no reason.
Jose: We are getting close to the first thousand trusts.
Andrew: Okay. Alright, and technology is a big part of how you do that.
We are going to find out the whole story, in order, chronologically.
Jose: Yeah.
Andrew: Why don’t we start with where the original idea came from?
Jose: Originally, the idea came from a couple of the investors that had their own jobs or companies and they thought that the software that was available for trust management was just too old and incomplete. It was client-server software, it was not web-based, it was not easy to use, it was not feature-rich, and so they thought we should make a better software.
They called me and they said, ‘Well you studied that. You say that you want to start a company, you should be able to get a team together and write the software that we want to get on the market.’ So I told them, ‘Yeah, that is fine, but we need a subject matter expert because I do not know anything about trusts, so I need to learn about it.’ And they said, ‘Well, we have the right person. He has got a lot of experience. He has been doing this for 25 years and he also wants to start a company.’
We worked with one of the investors and so we told them we need a little bit of money to start this out. We started getting together, I went to my co-founder’s office and he explained how the whole process worked, the vocabulary, and all of the people that would be involved. We started writing the software and it took a long time.
Andrew: That seems kind of like an arranged marriage. When you are building a business with someone, you want to make sure that there’s chemistry with the co-founder. That you trust each other, like each other, that you can almost read each other minds, and definitely love spending time with each other.
Jose: Yeah.
Andrew: When you’re matched up with your co-founder like that, do you feel that chemistry or do you say, ‘It’s not important to me right now, I have a business on my hands, I’ve got to focus on that?’
Jose: Well, yeah, that’s what I thought. I thought, just let’s get this going and we’ll get to know each other in time, but it’s definitely been very challenging working with someone that wasn’t really a very close friend. Somebody who I had worked in similar projects with, that was definitely hard to get two people pointing in the same direction.
Andrew: What about the idea that they came to you and they said, ‘You should create this business.’ Investors don’t usually approach strangers and say, ‘You should create this business and take my money to go build it.’ Why did they approach you?
Jose: Well, they were close friends. So, what they did at the time . . .
Andrew: They were family friends of yours?
Jose: Yeah.
Andrew: So, friends, what kind of relationship did your family and they have?
Jose: Just friends. Professional friends. It’s a close knit society and we had mutual acquaintances. They had some professional activities together and I said, ‘Well, they seem trustworthy and they know what they’re talking about and I think it’s a good opportunity. I’m just getting out of college. It’s a good opportunity to try and do my own thing. Why not, instead of looking for a job or something.’
Andrew: I see they see a problem. I see why they talked to you? What is it about you that made them feel that you could run this business for them? I’m looking at your past here, you don’t have a deep entrepreneurial experience. You have a couple of small projects under your belt. What was it about you that they felt they could work with?
Jose: Well, I don’t know. I think they probably saw I was able to show results quickly.
Andrew: Show results where?
Jose: When we started writing down what the software had to do and the initial .001 versions of the product, we got them out really quickly. I was able to assemble a team fairly quickly too, with some friends from college or recruiting.
Andrew: Are you a developer yourself?
Jose: Yeah.
Andrew: They knew you were a developer. They had a sense that you could put something together, if it’s in their minds and that’s why they approached you?
Jose: Yeah.
Andrew: Is it the kind of situation where when someone’s really good with computers, anytime a family friend or anyone in the family has a problem, they say go to that person?
Jose: Yeah. Yeah, that happens to me a lot.
Andrew: So, people hear that you’re a developer and they say, ‘Jose take my idea you should build this out.’
Jose: Yeah.
Andrew: They happen to be one group of people that did it, out of many people who asked you similar things, but they actually had money, a good idea, and a potential partner to introduce you to who could help see it through.
Jose: Yeah.
Andrew: OK.
Jose: Professional experience was very important. They knew what they were doing. They were not just a couple of kids with another social network idea or whatever. It looked like it was a real hard problem to solve and that it needed solving. I asked around, I asked other people have you used Trust Services? ‘Oh yeah. I hate them. They’re so slow. I need to send faxes to them. I just hate it. Why don’t they have an Internet portal where I can do all my trust management?’ I was like, yeah we’re on to something. We can probably get this together so, I took the plunge.
Andrew: I alluded to previous entrepreneurial projects.
Jose: Yeah.
Andrew: Let’s talk briefly about them and then continue with the narrative. The first one that I saw online was something called Rongo. What’s Rongo?
Jose: That was a text book exchange service.
Andrew: Text book exchange service?
Jose: Yeah.
Andrew: OK.
Jose: We did it in college. We thought text books were so expensive, so recyclable. It was at the same time probably that [??] and the other big American exchange services got off and so we used that as a class project. We used it as an alumni association activity. We then turned it into a business, and we got it into some other schools. And so, it was really fun. We thought we were doing something useful. But eventually it just died down. I passed it on to my brother when he came out of college but he wasn’t really a software developer. He liked the project and all of that, but he couldn’t keep improving upon it, and it just slowly died.
Andrew: OK. All right. But for a school project, it did very well. I see that as a project you’re proud of as a student, that you were able to do it.
Jose: Yeah. Absolutely.
Andrew: Let’s not take away from the significance of it. There’s something else that I saw on your LinkedIn profile, a company called SinSecretos. I lived in a Spanish country for a year, and I still can’t pronounce certain words. How do you pronounce that?
Jose: SinSecretos..
Andrew: That means what, without…
Jose: Without secrets, no secrets.
Andrew: No secrets. What is that?
Jose: So, that’s the name of the company. What we actually do is we sell bottled smoothies, somewhat like a naked [??] or innocent juice. I started that off at the same time as Solutrust, and it was a hard decision to make because I started that with a couple of cousins who I have a lot more chemistry with, and they’re still going on. They have a new brand, and they’re selling at Wal-Mart and Costco.
Andrew: They’re in Wal-Mart with this stuff?
Jose: Yeah.
Andrew: U.S. Wal-Mart or Mexican Wal-Mart?
Jose: Mexican for the moment.
Andrew: Impressive. That’s quite something. You’re clearly an entrepreneurial person.
Jose: Yeah.
Andrew: Why? What is it about you that made you say, I’ve got to go and start a company. If they toss smoothies at me, I’m going to create a smoothie company. If someone says go work with this guy who is twice your age on trusts and I don’t even have a trust, I’ll go figure it out, and I’ll jump into that business. Why? Why do that?
Jose: Because it’s a lot more fun. You can learn so much, and there’s no limits.
Andrew: What do you mean? Give me an example because when you tell me it’s just fun, I feel like running is fun; playing basketball is fun; but I’m not going to do either one of them for a living. There’s something about this that became obsessive.
Jose: I don’t know what it is. There’s something that’s missing.
Andrew: Yeah. That’s what I’m getting at. What’s missing for you? I know what it is for me that brought me into entrepreneurship. I was a frickin’ dork who didn’t understand how to deal with the world, and I figured if I stuck with business I’d get enough money to hire people who can help me understand how to interact with other people and interact with the rest of the world. But that was like a deep need that I had to satisfy. What is it for you? You said something is missing. Share it.
Jose: Well, I was thinking something is missing in the outside world, but probably also inside me that I probably had a need to show that I’m here and that I can leave a mark.
Andrew: No, go ahead with that thought. I don’t care if… Believe me, I just had a couple grammatical mistakes as I talked up until now, so if you make them, it’s perfectly fine. Something… Go ahead.
Jose: It’s kind of cheesy, make a dent in the universe, you know. I don’t like seeing any situation that’s not working or that’s missing something, leaving it there. If I can do something, I’ll do it. For example, for the juices that was my idea. It was not them who came to me. I actually convinced them to do it, and I just thought, juices suck. I hate them. They’re just full of color. They are so fake, and there’s nothing really healthy to drink at the supermarket, so let’s just make them and see if they sell. And they did, and that’s so cool.
Andrew: I see. Where most people would just say, the world really…I guess it depends on your world view. If you’re the kind of person who’s just a complainer, you might say, somebody needs to fix this.
Jose: Yes.
Andrew: If you’re the kind of person who thinks there’s conspiracies everywhere, you’d say, there’s a kabala in the business world. They’ll come and get us and kill us with these poisons. If you’re an entrepreneur, you express yourself by saying, hey, you now what, there’s an opportunity here. I’ll go and I’ll solve it. I have to solve it because I see the opportunity.
Jose: Yeah, and I’m pretty good at complaining, and I think it’s kind of a therapy for that probably, too.
Andrew: What about the other side? That’s the external fixing the world. Internally, you’re saying that you want to leave your mark on the world.
Jose: Right.
Andrew: I have expressed this too. I walked through Manhattan as a kid, and I would see that all of these people are important, buildings were named after them, companies were named after them and were around long after they died, I felt like nothing in comparison, and I said, ‘I have got to find a way to scream out, ‘I am here, I am on this planet too!’ Go deep with me. Really go deep and tell me where that comes from for you.
Jose: That is kind of hard, because I do not really have such a drive to try to show off, I am pretty introverted. The thing is, I just cherish seeing people enjoying the things I make. If you are looking for a self-centered answer or something, it is probably that; just seeing people happier. For example, the juice company, we get so many messages on Facebook and there is almost never anything negative. They just write to us, ‘I love them. This is amazing. It is amazing it is Mexican. We can do it.’ That just makes me so happy.
Andrew: I see. Billy Crystal said that when he was growing up, he would perform for his family around the living room. The family would all just clap at his performances, and they would all be so proud of him. He said, ‘That became my fuel. That is what I lived for even as an adult.’ Did you have situations like that, where as a kid you made stuff or sold stuff, and you got positive reinforcement from the world, that is similar to what you are seeing on Facebook today?
Jose: Well yeah, sure. It is maybe something around that, like seeking approval.
Andrew: Give me an example.
Jose: So for example, with my cousins when I was little, we loved to set up haunted houses inside rooms, and then we would get the adults going around, and we would scare them like hell, and they would just laugh so much.
Andrew: I see. Did you do it for money?
Jose: Yeah, we sometimes charged like ten cents or something like that.
Andrew: So it was a business. Did you come from a family where that was okay to do, or that was looked down upon because you were charging?
Jose: Oh yeah, both sides of my family are very entrepreneurial, my father is an entrepreneur, my grandfather is an entrepreneur in all kinds of different industries, so it was never looked down upon. It was also celebrated, like, ‘This guy is going out trying to do something on his own, that is cool.’
Andrew: That is what I was getting at. I do sense from you that there is something inherent in who you are, that needs to do this, and I can see that, it seems like, tell me if I am wrong, as a child you put these little stores together, places where you could earn some money, you got a lot of positive feedback, you said, ‘This is the way I can make the world happy, by making it better, by building a business around it and not just by painting on the wall, but giving things to people.’
Jose: Yes.
Andrew: Alright, I have diverted a little too much from the narrative here, but I had to go back and understand you.
Jose: Yeah sure, but I think it is very important. The business side or the money side of things, it is just that way to validate that you are doing something useful. If no one wants to pay for it, it is probably just funny or something, but not useful. So I think that is also a way to measure if you are doing it right or not, at least for me.
Andrew: I keep saying this over and over, in the movie Barbarians at the Gate there is a line where the head of Nabisco says, ‘All I am is a salesman. People buy you when they buy what you are selling.’ And that is how he explains why he has to keep running Nabisco, because when people are buying Oreo Cookies, he was feeling a sense that they were saying, ‘Nice work. Pat on the back.’
Jose: Yeah.
Andrew: ‘You did good. You gave us some good stuff.’ And if they did not buy from him, it meant that he was not getting the positive reinforcement from the world. It is like the cash register cha-ching is like an applause to a performer, that is what you are feeling?
Jose: Yeah, that is it.
Andrew: Okay, so we see how you get your partner, you are in business now, these guys who said that they would invest with you if you came up with the idea, they put in how much money?
Jose: Around $100,000.
Andrew: $100,000?
Jose: Yeah.
Andrew: Okay. Then you guys have to launch software to manage the trusts.
Jose: Yeah.
Andrew: Somewhere around the time where you were building out your first version of software, you decided that you needed to do consulting.
Jose: Yeah, well we were running out of money.
Andrew: The $100,000 was not enough because?
Jose: We were paying salaries to people and a little bit to us.
Andrew: Do you mean to the developers?
Jose: Yes, to the developers and also to ourselves. For example, my partner left his job and needed an income to keep his family up, and we were running out of it. It lasted for about a year, or even a little bit less, we said, ‘We need to get started with some revenue.’ We started selling manuals to trust departments that already existed, that did not have their processes written down. We would also go in and examine if their documentation was complete, if they were missing anything, if they were complying with all of the laws.
That diverted the attention as well, because we had learned about the business, but we also took time off from implementing the software side of things. In the end it turned out really well, because we ended up pivoting, that is a new word for changing your way of business.
Andrew: You ended up pivoting as a result of these client meetings?
Jose: Yeah, we found out that some people did not need a manual because they did not operate trusts and they needed to learn how to do that. So we said, ‘Well, we are not just going to teach you how to do it, why don’t we do it for you?’
Andrew: I see, so if I understand you right, before you were thinking, ‘We are just going to create software to enable companies that already have trusts, to manage those trusts better.’ Now you are walking around saying, ‘Whoa, wait a minute! We thought they all had trusts, too many of them do not have trusts, there is an opportunity for us to do it for them.’
Jose: Yeah, definitely.
Andrew: Okay, let me ask you something. You said that you paid yourself?
Jose: Yes.
Andrew: From everything I know about you, in the pre-interview, I only talked to you for a 1/2 hour, but it was an in-depth 1/2 hour and I am pretty intuitive at this point after talking to so many people; it does not seem to me that you are the type of person, especially at age 23, who needs to take out a lot of money from a company. Is it because you had an older co- founder who had obligations, who had to quit his job, that you had to say, ‘We need to give him a salary, and if we are giving him a salary, I should take one too.’ Was that one of the impacts of working with someone older?
Jose: Yeah, definitely.
Andrew: Tell me about it.
Jose: I thought that was the fair thing to do. He was getting half the salary he was getting at his previous job, but we were writing down as debt, the rest of it. I thought, I am not just going to work for free. I also want to save up a little, and so I paid myself, but a lot less.
Andrew: It was a little money, but if you did not have a co-founder, you would not have taken it in the early days?
Jose: Probably not. We would have hired a larger team and…
Andrew: You would have hired a what team? I am sorry.
Jose: A larger development team.
Andrew: Got it, so you would have hired more developers.
Jose: Yeah. The other thing is we had a very unequal share in the company, I had a larger share of it.
Andrew: Why do you have a larger share than him?
Jose: Because I was willing to take a larger share instead of more salary.
That is something that we negotiated at the beginning.
Andrew: I have your percentage here on paper, do you feel comfortable revealing it in the interview?
Jose: Not really.
Andrew: Alright, it is substantial.
You understand what is going on the marketplace, you still continue with the software, you launch the software that is going to manage trusts for companies, and bring it into the modern age; no more of this client-server technology. It is going to be much more web-based, you are going to learn from Web 2.0 clients, what is the name of the software that you launched?
Jose: It is called Protrust.
Andrew: Protrust? That is the first software?
Jose: Sorry, that is the second one. The first one we launched was something we used to compliment our revenue. We also saw that the Board of Directors and committees at large companies did not have a good platform to work on.
Andrew: Um-hum.
Jose: [speaks Spanish to unidentified person] I am sorry about that.
Andrew: You had someone work behind you, for anyone listening on MP3 or reading the transcript and wondering what you were saying.
So, you were going in and you noticed another thing, you said, ‘These guys do not have a way of…’ Of doing what?
Jose: They do not have a way of managing their meetings. The same thing with the trusts, I just went around the people who needed that and asked around. We got a quick, very light version, kind of a SharePoint for committees and boards. We started selling it, and that helped compliment, and also I returned revenue because we started selling software as a service. That also helped kind of give shape to what is now a larger business which is the trust back office services, because we learned that recurring revenue was a lot better than One-Off Sales, you know?
Andrew: What were you doing as One-Off Sales?
Jose: For example, the consulting was a One-Off Sale, you know?
Andrew: I see
Jose: For the manual, they’ll pay you a good sum, but then you need to start searching for the next one. You’re not providing custom value to them.
Andrew: You had a big smile on your face as you were saying recurring revenue is better.
Jose: Oh yes.
Andrew: Tell me about that. I interrupted it.
Jose: Well, you’ve got fixed costs, right, in your business? You’ve got people to pay, you’ve got rent to pay, and you need to cover that. If you get One-Off revenues, they have to be large enough to last for several months so that you can pay all these people. So you kind of get a big boost in reserves and then deplete them slowly. Then you’re going to need the next boost, it’s almost like a drug fix, you know? You become addicted to selling whatever you have and eventually, I think you kind of start to force it on them. Whereas if you’re providing custom value to somebody, for example we’re using Skype right?
We’re not paying them right now for it, but probably I’m going to call somebody later and I’ll pay for the long distance call on Skype, and so they get a little money out of me. I have an online number where people can call me and I pay a rent to Skype you know? That helps them keep paying [??] to make it better. That’s the same for us. I mean, if you’re providing custom value, like we’re constantly making new trusts for our clients and we’re keeping their books every month, and receiving all the instructions, and doing all the transactions constantly, you can get a closer relationship. It becomes like a real symbiotic relationship.
Andrew: I was looking over for John Warlow’s book. I interviewed John Warlow about just that thing. He says that “Recurring revenue is the only way that he believes in building a business and he explained the headaches that he had before he had that. Then explained how after he had a recurring revenue based business, he was able to actually sell the business because he could give the acquirer a predictable revenue strain.
Jose: Yes
Andrew: I see the benefit here. I’ve heard that in past interviews. I see the smile on your face as you’re describing in it your business. Let’s go then to the next step. The next step is to launch the real software that you guys were built to create which is called…
Jose: Pro Trust.
Andrew: Pro Trust. That’s trust management and consulting software.
Jose: Yeah. What we started doing when we got our first clients…
Andrew: Excuse me, trust management and accounting software, it helps…
Jose: Accounting. Yeah, that’s right.
Andrew: Right.
Jose: What we started doing when we got our first clients was, we were using an off-the-shelf accounting package, and then folders and Excel and whatnot. We kept building the software, and then we started using it ourselves. We just learned a lot from using it ourselves.
Andrew: What did you use it… you were saying you were “dog fooding” it?
Jose: Yeah.
Andrew: Essentially using your own software to make sure that it really works.
Jose: Yeah.
Andrew: Did you have trusts at that point that you were managing?
Jose: Yeah very few, very small ones.
Andrew: In the process of doing consulting you said ‘Hey we can start putting trusts together’ before you even launched Pro Trust, the software that manages trusts. You started launching your own trusts on behalf of banks.
Jose: Yes, on behalf of financial institutions that were not banks, so they are much more limited in what trusts they can do, but we started managing trusts for them. But, it was a mess. We were such a mess. We really needed support we are getting.
Andrew: So suddenly, you really are realizing that the software you had in mind, was necessary. The pain that the investors who came to you and said, ‘This is what we are suffering. You build something for us.’ That was true, you were feeling it, it was time to create the software and use it.
Can you give me an example? I do not feel your pain yet. Give me an example of what kinds of problems you had as a trust management company, that the software solved.
Jose Sure. We did not have the books on time, for example, because sometimes it took a month to close the books for just a couple of trusts. That was just so silly.
Andrew: These are just the books that say how much money is in the account, how much the account has accumulated since the last time the books were done?
Jose: Yeah. It was probably simple accounting but we just messed it up, and it took us so long to close the books. Also, for example, we did not have all of the documents well organized. The client’s information that we needed to have, we did not have it digitized. We could not look at it quickly, and so, we were just doing a lousy job, really. They got kind of angry at us a couple of times and we eventually lost that client. But we learned a lot. It gave us some recurring revenues to begin with, and we thought that was the model to go pursue, just do it well, do not screw up.
We fortunately got another client, we were now using our software and we were doing a lot better. We got a better team, we had learned what we did wrong, and so we cannot inadvertently launch our software, and then other people started realizing what we were doing and they asked for the software, we offered it to them, and some of them bought it. Most of them have now become customers of the whole service, not just the software side of it.
Andrew: I see, they want your software, but then they also want you to do their trusts for them.
Jose: Yes, we tell them, ‘Yeah sure, the software is this much, you can use it as a service or you can install it in your infrastructure.’ Then they would start using it for a month and then they would say, ‘Why don’t you just do everything for me?’ And we said, ‘Sure.’
Andrew: By ‘everything for them’ they mean entering the data into the trust software, or managing the trust?
Jose: The whole thing; the trust, structuring new trusts, talking to their clients, keeping the books and all of that.
Andrew: So, talk to me about the influence of having an older, more experienced co-founder, on getting to this place. So far, it looks like you are doing really well. How did your co-founder help you do it?
Jose: First, he gave me a lot of security, because there were times when I would think a certain situation was insurmountable, or maybe we would get in trouble with the authorities because we were doing something that was new and was not really regulated. He knew how it worked, he knew a lot of people around the industry and so that helped us get the sales at the beginning. It was a very good relationship from the start, but at the same time, we have different business philosophies, and probably future expectations about what the business is about. So that was the hard part, getting the two of us to take the business to the same destination. We definitely did not want to go the same way.
Andrew: Okay, let us break that down. I am writing it down. How unprofessional, I figured out how to do a good pre-interview, I figured out how to lead the interview towards significant moments in the guest’s life, also towards a narrative that makes sense, I still have not figured out how, if you say something great, to not write it down and make sure to bring it up again. So, the occasions while you are talking that I am writing and you are done talking saying, ‘Okay Andrew, it is your turn.’ I say, ‘No, I have to finish writing this down.’ I am that anal. But I did write this down.
I want to start off with the security. He gave you a lot of security. There are moments when business problems seemed insurmountable and he helped you overcome them. Remember before how an example helped us understand what a trust is?
Jose: Yes.
Andrew: Give me an example like that so that we understand it.
Jose: I will give you an example. I had serious doubts if what we were doing was legal, because in the law it says you cannot provide trust services if you are not regulated, at least not the ones that we were doing. So I asked him, ‘Are you sure that what we are doing is fine?’ He said, ‘Yeah, well the thing is, it is not prohibited being a provider to these banks.’ Also, there was a lot of new regulation at the moment that said that you could do certain operations on behalf of financial institutions, and so he said, ‘I know the guys who work at the regulatory institutions. Just go talk to them. I will get a meeting with them and tell them what we are doing and they will tell us if it is fine.’ And he did!
That seemed to me, like going to the authorities of the country as a new college graduate, I thought that they would not even give me a meeting. He thought it was just normal and had already talked to them and they told him, ‘It is fine. I am not going to put it in writing but it is fine, you can go ahead with that.’ So we said, ‘Yeah, sure, we will go ahead with that.’
Now that we are providers to banks, we have gotten the necessary authorizations. Now they know about us and they have even recommended our own sales to us. That was funny, we went to them with one of our clients and we were doing this trust, but we had a third party that was doing it for us and they said, ‘There are some guys that are already doing that, I know one of them that is called Solutrust.’ And we told him, ‘Yeah, that is us.’ He said, ‘Oh that is great.’
Andrew: I see, so now, not only are they not giving you trouble, but now they are recommending you.
Jose: Yeah, well not officially, right?
Andrew: Not officially, right. Nothing is. Is that a Mexican thing, by the way, where they would not give you anything in writing when you asked if you could do that?
Jose: That is how that regulatory authority works. They are more like a sanction, they do not approve.
Andrew: They what?
Jose: They sanction.
Andrew: I see, they are there to sanction, not to approve. I guess that is the way the legal system is here. They do not give you an okay before you do something, they wait for you to get sued and then the judge figures out if it is okay.
Jose: Yes.
Andrew: And lawyers before hand, cannot tell you 100% often, if what you did is right or wrong. They say, ‘If you get sued, you will probably be okay. Or probably if you get sued you will not be.’
Alright, I was going to ask you about the legal trouble when you brought that up, now I understand how helpful that can be to have someone who is experienced. What about the different directions? You were saying that you have one vision, he had another, tell me about that.
Jose: Well, I think it has a lot to do with cash requirements. I do not have a family and I am not married, I can take a lot more risks. For example, I like to innovate, so I wanted to get into other businesses, take parts of the software that we had and sell it by itself, give a lot more structure to the company so that it did not need me. So I could delegate everything and just become an owner, not an employee forever. That was my vision. His vision was, and I do not read his mind, but I think his thoughts were, ‘I have a family, I have to have a high salary.’ He probably likes to have a lot of people under his control, telling them what to do and whatnot. He has a smaller percentage of the company so he could not just become an owner and he needed to be an employee. So that takes the company in totally different directions, and it carried a lot of friction.
Andrew: I see.
Jose: Yeah. I think that’s been one of the hardest challenges. When we started off, you were saying it seemed like an arranged marriage, I don’t know in India they make them work. It could of worked out, it could of not. We don’t have arranged marriages over here so, we’re not used to learning how to adapt to other people so close to you, that want to go probably, in the opposite way, right?
Andrew: All right. I want to ask you about ProDoc. When I asked you about it in our pre-interview, you said, ‘I didn’t even know that was on the website still,’ but it is, it never took off. What was ProDoc?
Jose: ProDoc was simple document management system that we adapted for [Trust] apartments. We wanted to provide them with a way to be sure that they have all the documentation that’s legally required and/or required by internal politics of the company. To know that their Trusts are well structured and complete, but nobody wanted that. They wanted a lot more, it was not enough, it was not a solution to a big pain. It was probably, you can say it was a [??] instead of an [??]. It was a little bit better to have everything organized, but that was not where they were feeling the pain. We ended up writing a whole document management module for the ProTrust system. We don’t even sell ProDoc anymore. That’s why I was surprised it was in the first place.
Andrew: In retrospect, we learn a lot from these set backs, in retrospect what could you have done differently? What did you learn that if you could go back in time you’d say, ‘Ah-ha, that’s where we made the mistake? That’s the critical area where we could have taken this in another direction?’
Jose: For what specifically?
Andrew: For ProDoc I’m wondering, as you look back on it, was it that you didn’t talk enough to your clients? Was it that you didn’t have the energy to build out a full product, based on the pain that they had? What was it?
Jose: It was probably a lack of focus. At the time we didn’t know we wanted to do the back office services. We were just thinking about launching, and launching, and launching new software products. Eventually one would catch on. I think we lost some time, but we also, the developers learned how to develop better.
Andrew: How long did it take you to build it?
Jose: Probably around four to five months.
Andrew: Four to five months that’s a significant amount of time, but you’re vision was, we’re going to create this product, and we’re gong to have a collection of products, and this will just be one of those products, and it will take off. I see. Was it then that the product needed more energy or do you feel it could of used less energy? Where if you launched something in a month, you would of gotten a sense of whether the clients wanted it or not?
Jose: Yeah. We should of done the [??]. We should have gone to, and sell it to them, and then make it . . .
Andrew: Ah, first you would have gone to them and said, ‘Do you guys need this way of organizing your documents?’ They would have said to you, probably now that you know them?
Jose: Yeah and they probably would of said, ‘No, we don’t care about that.’
Andrew: I see. It’s interesting, but not excited.
Jose: Yeah. We never got an excited response for that, yeah.
Andrew: Never did get an excited response. OK. We learn from the set backs too.
Jose: Yeah.
Andrew: I’m looking back here, one of the things that you and I talked about was the set back. Losing your first client . . .
Jose: Yeah.
Andrew: . . . was a big set back. Tell me about that.
Jose: That was really hard because it was our only recurring revenue client. They paid us a fair amount and we just gave them such a bad service. We were so slow. When we lost them we thought probably this is not going to work out. Probably that is not the way to go. We’ve got to do it better. We could even try again, but we’ve got to change a lot of stuff.
Andrew: What did you change? What’s one big thing that you changed after that negative experience?
Jose: For example, we got a very good accountant who had experience in [??].
Andrew: So you could never I see drop the ball on documents to a client.
Jose: Yeah.
Andrew: What else?
Jose: We started using our software. We said we are not going to do it with off the shelf stuff forever. We’ve got to start getting one step ahead of us even. We need to start giving them a place where they can have their information online anytime. They wouldn’t have to send us emails any time they wanted to know something.
We also set up processes and we documented how things happened. Very simple ones. We tried to make sure that the processes were followed. We started really creating a whole system, a whole organizational machine. We improvised too much at the beginning and we thought that that was the way to go and it probably is when you’re starting and when you’re learning, but when you’re done learning it’s not that good to keep improvising.
Andrew: You put a system in place. Because if there’s no system things aren’t going to happen. If there’s no system and things don’t happen you end up losing your first big client.
Jose: Yeah, and you don’t know why. There’s so many things that you’re doing wrong and you don’t know which way to go.
Andrew: And if you had a system you’d know. You’d go back to the system and say we lost it because of this step right there.
Jose: Yeah, and you would get advanced notice. You would know we’re behind, but what really happened is we got the call.
Andrew: Do you have a piece of advice for someone who wants to organize systems? What have you learned about doing it right?
Jose: Well, keep it simple. That’s really important. I’m an engineer you know and I love complicated stuff because it’s like a puzzle. But you don’t need to make puzzles for yourself. Just set up something really simple. Write it down. Just look at it every once in a while and make small tweaks and you see if it works better or not.
We probably were not that beta driven. We’re not frugal with other numbers and stuff, but you can get a pretty good intuitive insight about what’s working and what’s not. If you’re writing it down, at least a simple version of it, helps so much.
Andrew: The final question is about having an older co-founder. One piece of advice for someone who has a co-founder who’s at a different stage in life than they are. What do you advise them?
Jose: Make sure you look eye-to-eye and really enjoy being together. You’ve got to really know that. Do you do activities outside of work together? Do you go to lunch together? Do you laugh together and have fun? Do you really almost love each other?
It’s probably one of the things I’ve learned, it’s not that easy to adjust. There’s an idea and there’s a need and there’s a good market and you can get a good team together, but your co-founder is almost probably like your wife. I’m not married, but now after 5 years I think it’s so important. I would say, if you would book a hotel room together would you sleep on the same bed and be comfortable? That would probably be a good way to know if that should be your co-founder.
Andrew: That’s funny because you say it is like marriage and right to that point. Would you feel comfortable if you were on a business trip and it was just one room, one bed? Would you be able to sleep in the same bed comfortably, or would it be awkward?
Jose: Yeah.
Andrew: You and your co-founder today, five years working together. Is it awkward or comfortable?
Jose: No, it’s too awkward.
Andrew: Too awkward.
Jose: Right.
Andrew: All right. Let me get a quick message here based on what I just saw online, Jose and the audience. I was on Tim Ferriss’ blog yesterday, and I noticed this guy who had a profitable side business, and Tim Ferriss asked him this question on his blog. He says, “What resources or tools did you find most helpful when you were getting started?” And this is what the guy said, and it’s useful information. I was so proud to see this. The founder who has a profitable side business who Tim Ferriss is talking to on his blog says this. He says the best resource of learning directly from other owners and entrepreneurs.
That’s why I want you here, Jose, to do this interview, and that’s why I’ve done hundreds of interviews because going directly to entrepreneurs is more helpful than listening to someone else pontificate about what entrepreneurship is like, and then discovering that person has never been in business.
But he goes on. It gets better, Jose. He goes on and he says, “For instance, Mixergy.com does a great job of putting out interviews with entrepreneurs who have been successful.” Now, how cool is that to see that? That sent me, I think, over a thousand hits in less than 24 hours, but forget the hits. I care more about…this is what I want, to do the work and have people appreciate it.
And he goes on, “Taking those nuggets of wisdom and implementing them into my business has been extremely helpful. This includes everything from tactics from increasing conversion, tackling statistics, sales language and more.” And it’s true. I know that there are a lot of places that will give you focus on search engine optimization. I know that there are a lot of places that will teach you how to write great copy, and I know there are a lot of places that will focus on just hiring people, but in business you want to do it all.
And so, that’s why I want to bring in entrepreneurs from all walks of life to talk about every aspect of doing their business well so we can learn from them and every part of the world. That’s why. Jose is in Mexico. That’s why I’m excited about having him here.
Anyway, the founder is Vincent Ko. He created a leather iPhone case that’s also a flip wallet. You guys can all see it on iflipwallet.com, and if you ever see Vincent, say thank you on my behalf for that. In fact, no, I shouldn’t say to the audience, say thank you on my behalf.
I’m going to say thank you to Vincent. Guys, if ever you’re in front of Tim Ferriss and he’s asking you a question for your blog, if you could mention me you’d be friggin’ making my day.
In the meantime, if you want to do what Vincent did, Vincent signed up for the sales conversion course I saw him in. Anyway, he’s a premium member. I hope you guys also become premium members by going to Mixergy.com/premium. If you like these interviews, the courses take topics, and we go more in depth on them. We don’t just talk about conversions, how to increase them and how to get more customers online.
I bring in an expert who is an entrepreneur, who does it really. I have him show you his computer. Unfortunately, so far it’s been mostly his, but whatever. We have him look at his computer, and we have him show exactly what he does to increase conversions. He often will bring in other people’s websites and do conversions on them, and that’s just sales conversions.
And then, we had other topics that we pick up on, like how to get traffic; how to sell advertising; all tackled with that kind of depth.
All right. So, Jose, be honest with me. You’ve listened to my interviews for a long time. You heard me push back earlier in the pre-interview when I thought a topic wasn’t interesting and draw out an interesting topic. Be that honest, brutally honest with me. How did I do with reading that? Was I going too long? Was it useful? Give me feedback here in public with everyone watching us.
Jose: On the pre-interview?
Andrew: No, not the pre-interview, this little conversation I had with you about what I saw online on Tim Ferriss’ site. Was it useful? Did it look self-congratulatory? What do you think?
Jose: It was probably a little bit long.
Andrew: A little bit long.
Jose: Yeah.
Andrew: I should have maybe stuck with two sentences to explain what he said and moved on.
Jose: Maybe not, maybe a little bit more. I would probably cut it almost in half. You kind of lost me on the second part, like the first part where this guy says I love Mixergy, like you should listen to other entrepreneurs and Mixergy is a great place to do it. That’s great, but the online conversion stuff and all that was kind of like two advertisements with each other.
Andrew: Yeah. The one where I say, “Look at all the good stuff we’ve done and how proud I am of it” and the other where I say, “Go buy.”
Jose: Yeah.
Andrew: I see. The two messages didn’t even coincide with each other. If he said, “I took this conversion course and that’s what did really well for me. By the way, I think everyone should go and get it.” Then, that would make sense, but he didn’t do that.
Jose: That would have been enough.
Andrew: I see. All right. Well, I want to learn. I want to learn in public. I seem to do this a lot where I make mistakes in public, or I just try to figure it out in public, and I think as I say this isn’t working out right or I didn’t feel it or it didn’t go right, some people in the audience are saying, “Andrew, you’re being too hard on yourself.” Maybe, I am but I know it’ll get better, and I know the only way it’ll get better is if I admit, hey, that didn’t really work out so well. I could have done a little bit better. Help me figure out why.
So, I’m not doing it because I like to insult myself or because I have some confidence issue, I want to find out how I can do it better. I know that what I’m doing right now is not exactly it. I know the pre-interview went well. I know the interview went well. I know that little bit at the end was not very good. It was genuinely not very good. It’s not because I have low self-esteem that I say that. Vincent Ko, your part was good. Me reading it was not very good.
All right. Never mind me. This whole interview is about you, and I haven’t even told people where to go you. So, what’s a good website for them to go check you out?
Jose: So, they can check out Solutrust.com. It’s written S-O-L-U-T-R-U-S-T.com. They also can check out the juices. I’d love to have them in the U.S., but…
Andrew: What’s the juice company?
Jose: That’s called Ola Smoothie. So, that’s like hello smoothie.
Andrew: Ola Smoothie.
Jose: Yeah.
Andrew: Cool. And you’re in Mexico City?
Jose: Yeah, we’re in Mexico City.
Andrew: All right. And if anyone in the audience happens to be in Mexico City, first of all say hello to Jose no matter what, even by email if you can, but if you happen to be in Mexico City, shoot him an email. Maybe, the two of you can get together.
Jose: Oh yeah, sure. You can write to me at Jose Akle, J-O-S-E-A-K-L-E@gmail.com
Andrew: Cool. Jose, thanks for doing the interview.
Jose: Yeah. Thank you Andrew, and you’re dong something great. I’m just so happy to be here, and I really want to see what you have up for us in the future.
Andrew: I want to see what I have up for everyone in the future, too. Actually, the good news is you’ll see me goof and screw up in public, and then you’ll figure out where I’m going as I figure it out. I really appreciate you doing this interview. I appreciate you all for watching. Go out there; use it; tell me what you’re dong with it. Tell the world what you’re doing with it, and I promise in the future I’ll read it better than I read Vincent Ko’s message. Thank you all and good-bye.
Jose: Thank you.
Andrew: Cool.
