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Andrew: Hey everyone it’s Andrew Warner founder of Mixergy.com home of the ambitious upstart and home of the allergies for some reason I can’t breathe clearly today it’s driving me nuts. Josh did you notice it as we did the pre-interview?
Josh: I didn’t actually, no, but funny you mentioned that I also have allergies today too so there must be something in the air.
Andrew: I don’t know what’s up. So big question for today is how does a simple piece of software generate over a $1 million in sales? Joining me is the guy you just met, Josh Bartlett, he is the founder of Easy Video Player, a video player that’s designed for marketers who want to add video to their websites. One of its unique features is that it allows online marketers to include an email opt-in box right inside the video player, something that YouTube doesn’t allow, and even a buy-now button right inside the player. It has a lot of other features that we’ll talk about it, but my question for this interview is how did you launch it, how did he make it so successful, Josh welcome and thanks for helping me figure this all out.
Josh: Hey, thanks very much for having me, I appreciate it, it’s great to be here.
Andrew: So I get a lot of flack from people for having only Internet Entrepreneurs who have deep funding from big venture capitalists, let’s start right off the bat, you’re a boot-strapped entrepreneur unlike the venture capital guys, how much money did you put into your business?
Josh: I very much am, yeah, when we first started I literally had zero cash, I had a credit card and I hardly even used credit so they wouldn’t even give me a big balance, a big credit limit on my card so I had I think $500 was the maximum I could use. I used $500 and maxed that card out and that’s how I started.
Andrew: $500 maxed your card out, what kind of guy has only a $500 credit on his credit card? I thought they were just handing out credit, no?
Josh: I know, I know, it must of just been me. I was in the UK and we really never used credit and as you probably know, if you don’t use credit you don’t exist. So they had no idea who I was and they gave me that to start with and that was my initial experience with credit and we used the $500, and back then I was worried about using just that much, which seems kind of funny really when you hear the other stories and compare it with the kind of funds that people use to start out, but that was what we started with and we grew from there.
Andrew: How long ago was this when you started?
Josh: Well, we first started this business was back in 2004, it is a slow kind of gradual process and basically for me, I learned everything I feel like I know now, I learned through making all the mistakes I could possibly make. I think I should have some sort of achievement for making lots of different mistakes in business, but I think the key thing is if you learn from them and keep going then you end up kind of doing really well from there.
Andrew: The video player though, launched in 2010 about two years ago at this point, right?
Josh: That’s right.
Andrew: That’s what did a $1 million plus in sales?
Josh: That’s right.
Andrew: How much in sales did it do?
Josh: It’s over $1 million and it’s still growing and we were really surprised . . .
Andrew: Is it over $5 million, is it $1 -$5 million overall?
Josh: Yeah between $1 – $5 million, yeah, yeah.
Andrew: Closer to $5 million or closer to $1 million?
Josh: Closer to $1 million.
Andrew: Closer to $1 million, OK, and your biggest expense is it affiliate, is it other kind of marketing what is it?
Josh: Probably it’s affiliates, we have a lot of affiliates, we really leverage affiliate marketing that’s one of the things that I think is really helped us get the product out there, and this is something I say very regularly to people is that with affiliate marketing you find that people kind of overlook what I call the low hanging fruit. We really went and approached the individual people, people who were just new to affiliate marketing that are just starting out, and we gave them the tools and education to teach them how to make some money with affiliate marketing.
So, we were approaching people that were, maybe, very new to this, but we knew if we fostered a relationship with them and really helped them that they might be able to sell one, two, three copies of our product. Now, a lot of people don’t get excited by that kind of level of sales, but for us we knew if we got a mass volume of these affiliates and we helped them, that not only are they loyal to us because we’ve helped them learn a new skill that’s really beneficial to them. Also, if you take a thousand people and they’re all billing three or four copies of your products, then you end up selling a lot of copies of your product.
Andrew: Hey, YouTube is huge. I, of course, use Wistia. There’s Vimeo. There’s Vidler. Why don’t we go with the big one? Why would anyone use your software which they have to pay for and then they have to pay for their own movie hosting on their website? All your software does is take the movie file and stream it online? Why would anyone do that when they’re YouTube for free?
Josh: Right. YouTube is a great question and a great service, YouTube, and we still use YouTube. I think everything has its place, but let me answer that by telling you how the software was born. We were using YouTube, but we were kind of frustrated because we wanted to be able to put a video on our site with no branding, with the player we wanted, looking the way we wanted it to look, and then act the way we wanted it to act.
We might want to not allow people to see the controls so they could pause the video but maybe not skip ahead, or we might want them to get a few other things. We thought, well, this is complicated. I was getting coders and people on my team to get a link of a player with Amazon X3 which is this streaming service, one of the best streaming services that’s out there.
It was taking a lot of time, so we started out very simple. We said, OK, how can we solve that problem for us? It was literally a very basic script that solved the problem. All I had to do is press a button, upload a video, choose the settings I wanted for the player, and then it would appear on my website exactly how I wanted it to look. Obviously, it’s not hosted by someone else because for us if we break some terms and conditions by accident which is possible to do, we didn’t want to worry about losing all our content, for example, which is something which can happen with something like YouTube.
Andrew: That’s happened with YouTube a lot. It actually happened to me with another major provides whose name I’m not going to give out right now. It was so frustrating, and it was a mistake. I called up the founder and I said, “Look, I’m interviewing your friends. I’m not trying to get away with anything. There’s no porn on here. There’s nothing salesy here. What are you doing?”
And then, he understood thankfully. He knew who I was, and he put the videos back up, but it happens, right?
Andrew: Give me a case study. I want to go back in time and find out how you got here, but give me a case study just to understand what this does and how useful it can be, and then we’ll figure out how you built it.
Josh: Sure. Well, a great case study, we have a friend of ours that used it who I knew and he uses video all the time because he does a lot of training online so he has educational products that you subscribe to.
Andrew: Training online, OK.
Josh: That’s right. Exactly. He started using that, and he found it really useful that one of the options that you can select has a buy button inside of the video or a subscribe box, like an option form, inside the video.
And so, he was giving away free advice and making that advice really useful making a very short video, but in that video he was embedding inside it either a buy button for his course or a subscribe button to find out more about his courses. And then, he was encouraging people to share it.
Of course, when happens is people share that video, and that video goes viral because it’s good information. He’s giving value first, but everybody that watches it, no matter what site it’s on because he actually encourages people to put it on their sites and give it to their friends and put it on their sites. That buy button and that subscribe form is always in the video, so he started seeing massive growth from that.
I forget the figures, but I think he did something like, between five and six thousand dollars in sales which was a big spike just for using…
Andrew: From the video.
Josh: From within the video.
Andrew: By the way, I looked at your landing page. I went to EasyVideoPlayer.com/whatever. It said click the buy button. First, I saw a video that showed off the powers of the video player, and then it said click the buy button on the side. The buy button wasn’t embedded in the video, the way that your video player allows and what it’s telling everyone else that they should do. What’s going on?
Josh: I know. This is the do as I say not as I do rule. [laughs] It’s like I talk about blogging and the power of blogging to people and I think I’ve updated my blog about a year ago. And its one of those things that is, do as I say not a I do, and we actually revising the website completely and we’re going to start showing off some of the cool stuff that we can do because why not like you say it’s a missed opportunity but . . .
Andrew: Why don’t you, I’m not here to criticize, I’m just here to understand, what happened that you didn’t stick it in were you AB testing and figuring out the buy button was better on the side? Did you just not get to it?
Josh: We actually just didn’t get to it. This is what really happened is we released and we didn’t really expect it to do as well as thought it was going to do. What we did is just solve our problem so we solved the problem that was causing us too much hassle in our business and we thought OK, well hey, we might not be the only people that have this problem so let’s get this out and see if anybody else wants to use it and literally we just exploded. I think the first week we did a launch so we got some affiliates on board and pushed it out and we did something like, within hours, we went up and did six figures in sales and we thought, wow, OK this is doing well for us. It was exceeding our expectations and we kind of had been on catch up mode since then.
Andrew: So within hours you did over $100,000 in sales. How much of it do you have to give to your affiliates is it 50/50?
Josh: We do 50/50.
Andrew: 50/50, OK, all right. So $50,000 within the first day in your pocket after launching this thing, let’s find out how you got to this, now you got my attention. Once you talk about money, when you’re talking about design and I can put this and remove this feature and add that color to it, who cares, but you start telling me about revenue or you start telling me about usage I get excited. All right, so you launched this in 2010 and as we said earlier but 204, 2004 you are already in business online what did you do what was this business that you launched in 2004?
Josh: My initial foray into the Internet world, was an e-commerce business. So we were importing stock, e-commerce, yea we were selling physical product we were importing it. I was in the UK then I’m in New Zealand now and we were importing from Asia and we’re bringing products in and we were selling them online. And I was learning about building websites, and throwing things online, and just sort of getting going, and learning about payment processes, and all that kind of stuff, SEO and it was all new to me, completely new to me. And obviously made a lot of mistakes and gradually built up a business, but during that time I realized that the physical element, which is great for me really limited me it limited my lifestyle I had to be there I couldn’t go on holiday I kind of had been a control freak and built the entire company around me. So if you remove me from it and the company wouldn’t continue so I took everything I knew and I thought we really want to start selling something that’s digital we can’t run out of stock and we leverage the Internet.
Andrew: What were you selling up to that point?
Josh: It was actually audio/video equipment.
Andrew: You were selling audio/visual equipment, like cameras microphones?
Josh: Yeah, like that kind of stuff and brackets for LCD TV’s and for speakers and that kind of stuff.
Andrew: And you were actually buying them, inventorying them, and shipping them out to people who paid you for them?
Josh: Right, that’s right we were shipping them out and we were shipping them out to the UK first of all and then we started shipping to Europe and the problems we found was of course, you have to have a warehouse, you have to have insurance, you have to deal with courier companies you have to deal with damaged stock and all that and not have to worry about managing maybe ten that it would take to run that business. Not having to think about things like when the shipment of the products was coming in and forward forecasting and stuff. That meant I could really step back and focus on just moving forward in the business rather than being involved in that day to day stuff. It was a gradual learning experience which, I think, it usually takes people to jump in and get their hands dirty and do all that and then think well, hang on a minute. I can’t carry on this way.
Andrew: OK. You decided to go to digital. What’s the digital product that you started to make?
Josh: We started to look at OK, well, we had started making software for us. His sole job was to sit there and take all the orders that we received, download them all, then type them into the system that our courier company used, one by one. I watched him there for maybe four or five hours a day, one by one typing these things in. It made me feel frustrated. I thought there’s got to be a quicker way of doing this. We worked with the courier company and we just created a very simple script. It was ugly, it was horrible. All it did was it took our orders, downloaded them, and uploaded them all to their system. We could basically just press two buttons and all the orders were printed, all the labels were printed, and that would go off to the warehouse.
We made that and I saw a job that took four or five hours not very long ago, with a very simple piece of software that maybe cost us $100 dollars to make, all of a sudden it was taking four minutes rather than four hours every single day. I thought there’s real power here. There’s real value in that. That really got me excited. That was kind of the final push that made me think I’ve got to do this. It was the first software product we made. We thought OK, well, I want to focus on making cool, simple software for businesses that saves time and makes them money.
Andrew: How do you find businesses in the beginning? How do you find the customers who are going to pay you for all this stuff?
Josh: Well, affiliates are a massive part of our business. I think the affiliate model is sometimes misused. Like I said, the low hanging fruit. Finding people and teaching them how to be an affiliate. There’s so many people that look for an opportunity for making a bit of money online and improving their lifestyle in some way and you find a lot of the information that’s provided is not high quality.
Andrew: Right from the very beginning you decided you were going to go after affiliates?
Andrew: Did you have affiliates when you were in the equipment business selling physical stuff?
Josh: We did. Yeah, we did. It was a different kind of model but we had a very similar kind of arrangement with people.
Andrew: How did you find affiliates back then?
Josh: We literally started looking into forums. We would go into web development forums and make money online forums and things like that. Back then it was not like it is now where it’s really exploded and it’s around every corner. We were going in there and saying hey, this is what we’re doing. This is what you could do. If you sell it you could make this much money and we could train you to do it. People were sort of biting our hand to learn how to do it. That’s how we started and gradually built from there.
Andrew: Do you hear what’s going on behind me? This is unprofessional for me to bring up but I keep hitting mute in between answers. Do you hear them? It is appropriate for me to knock on the door of the neighbor and say guys, quiet down. I’m doing an interview here. This is a professional office here. I’m paying like $1,000 for this office space here. I can’t get them to quiet down. I might as well be in the hood for the way that they’re talking, carrying on. Not like a professional office in the middle of Washington, DC one floor above the German embassy. You’d figure that it would be a quiet place to work.
People want to know why I push my interviewees so hard. Because I’ve got to get good stuff out of the interviews so that I can make this so good so that somehow I get carried out of this office into something much bigger and better. This cannot be the end, me being here in this office with them screaming. Is that inappropriate for me to bring up in the interview?
Josh: That’s fine. Great content.
Andrew: Good. All right. Let people see where my motivation is coming from.
Let me ask you this now. Now that you know where my motivation is and we have to pull out the really good stuff. It’s been over half a decade since you’ve done this. The affiliate market space is full of people doing things that are a little shady. I’ve talked on my side about the stuff that I did. I got all of my used JCrew clothes and I returned it to JCrew and I got my money back and used that to start my business. Tell me about some of the stuff that you did. Bring it open.
Josh: OK. I would say when we first started, you can get caught up in the world of affiliate marketing. This is one of the things that I completely stray away now, that is something I really don’t agree with.
Andrew: OK. Don’t apologize. We’re all a little bit naughty here if we’re entrepreneurs. I’m using the British word, right?
Josh: Right, and learn from it. The biggest problem you have is you get enticed by big affiliates who will come to you and say, ‘We can sell this much of your product’, but you have to promote our stuff. Of course, what happens the, is that you start promoting their product regardless of
whether it’s a good fit for your customers, regardless of whether you even think necessarily it’s a great product.
Andrew: Give me more concrete. What do they come to you with? Don’t give me the specific name, because then you’ll have to hold back. Tell me about the kind of product? What kind of product did they ask you to sell?
Josh: The biggest thing that we had a problem with, that we would see over and over again, was the ‘make money online’ opportunity stuff, where people would say, ‘look you can make a million dollars in five minutes.’ I know from being a business owner that that’s not the way it is. I would sit there and really wrestle with this. They’d say, ‘Well, look, this works. It’s a great product. It’s selling. We get more refunds. If you see this, then we’ll promote you.’
Andrew: So they had these CD packages or online something or another?
Josh: Right. Exactly.
Andrew: How much were they selling it for? Give me a sense of the product.
Josh: Info. products, you’re looking around $100-$200, that kind of price range.
Andrew: If you’re going to get to be a millionaire within a few days, you’d be crazy not to spend $100 or $200. OK. So, who did they want you to market it to, in return for marketing your stuff?
Josh: All of our customers, any customer, any mailing list that you have. We were trying to give away free information and build a list. So, we would give away value in return for the contact details of the customer or subscriber. Then, obviously, we’d try to sell to them. So, they would
want me to, basically, promote this opportunity to everybody that you have on your list. The initial thing, you have the devil and the angel. The devil’s telling me, ‘well, if we do this, then this person’s going to promote to huge amounts of people. And this could really skyrocket our
Business.’ The other side of me is thinking, ‘But, there’s no way of working out, if I send this to everybody, it’s just going to everybody.’ I don’t know that they even want to hear about this. So, we started to get involved with that, and quite soon into it, I realized that I’m not
comfortable with this. I don’t want to be annoying.
Andrew: But you started emailing your list, and saying, I’ve got this product. It’s going to do really well for you. You might even have had to give it the personal touch, and say, I know these guys are really good. Did you make any sales from it?
Josh: We did. We’ve made quite a lot of money from affiliate products.
Andrew: You did? How much? How much was it from doing this kind of
Josh: It was very low numbers, thousands of dollars.
Andrew: Thousands. Less than ten thousand, though?
Josh: Back then, less than ten thousand.
Andrew: Back then, less than ten thousand. But that’s a significant amount of money for you, because you’re just getting going. In return, you sell a little bit of your soul, but OK, it happened. Along the way, believe me, we all do stuff like that. So, you did that, and in return they were going to market your software. What was the software they were going to market?
Josh: We had a product which was a banner management product. So it would, basically, track clicks on banners. It would let you rotate banners. It would work out how well they’re doing and serve them, and all that kind of stuff. We had that product, which we wanted to market to people.
Andrew: Did these guys sell it for you? Did they get you enough sales?
Josh: They did. Yeah, they did. We did end of benefiting from it. It was one of those things, where you then think, well OK, this is actually working. At what point do you actually pull out from something that is working, because you don’t feel 100% comfortable.
Andrew: It’s a hard thing to do when the revenue goes down, right?
Andrew: Why did the revenue go down? Why do you think?
Josh: I know why. I think if you market with the revenue first, rather than the customer first. So, you’re not giving them value. You’re not giving them what they actually want. You’re not putting yourself in the customers’ shoes, but you’re thinking about the bottom line first. It’s only a short amount of time until you lose that customer’s faith and interest, and they’re not going to buy from you. So you might be able to sell to them once or twice. And I’m not talking about selling something that has no value. I’m just talking about selling something that they were never even interesting in to begin with. You’re going to lose interest very quickly. So, let’s say, in you’re example, if you have Mixergy, and you’re giving away interviews. Then that’s what they expect. They expect to see interesting interviews from you. You do what you do. If you give them completely different that they’re not interested in, or you’re interviewing a completely different range of people that have absolutely no relation to the kind of stuff that you normally talk about . . .
Andrew: But maybe I’m interviewing them just because I can make an affiliate commission for doing the interview.
Josh: Yes. Exactly.
Andrew: Maybe once or twice, people get hooked in. They watch the full interview. They go buy. I get good commission. It does well. But eventually, they lose me. Here’s what happens. Eventually, what would happen is, my revenue would go down, down, down. And in order to get it back up, I would double up my effort. So, maybe I would sell even more in the interview. Or maybe I would have two affiliate programs, instead of one in an interview and I would…
Josh: … push more aggressively with, I know from experience we used to do online greeting cards. I tried pop unders on those greeting card pages at one point, you know. Pop under people don’t even come to know comes on the side, but we make some revenue. It does well, but people do know where it comes from. Eventually they connect two and two and they understand that there is four and they know where it comes from, and then traffic starts to go down. Well, then you have to find new ways to get more and more revenue, you know. Because traffic has gone down, revenue is going down along with it. So what do you do? You go for more aggressive sales pitches. It is no longer just text on a pop under, now it is pictures on a pop under. And it is no longer just pictures, it is [??]. Believe me, every one of us who is an entrepreneur has, I feel been tempted, and many of us have gone down and tried these things. I want to expose it and talk about it, and talk about it in an open way. I am looking like here at Paul Grams [SP], a quote from TechCrunch. It is Paul Grams the guy who invests, one of my, one of our heroes, all of us in this space, says, ‘Startups often have to do slightly devious things. You can tell people who have the gleam in their eyes. You don’t want people who would be obedient, who would be obedient employees. We are not looking for people who did what they were told in life.’ So he is looking for people who have a little bit of naughtiness, and so of course if he is, we have to acknowledge that this is part of entrepreneurship.
Andrew: So your revenue started to go down, and that is why you distance yourself. Why do, how do you make that break, revenue is going down, you make the break, you lose all revenue, you know.
Josh: Honestly let me tell you, we did see a dip in revenue, but it wasn’t enough to really worry us. We were in crisis mode where we thought, OK, well, we have really lost revenue. Now we have got to dramatically shape things up because it is in that massive downward spiral. But I think I was, for whatever reason, I managed to see what you were talking about which I call that downward spiral where I am going to have to, if it does start continuing to go down, it is going to get to the point where then I have to be more aggressive on doing more of what, the one thing that I am not comfortable with. So, I will give you an example. We provide regular, in our software we always provide regular upgrades to our customers and we do it for free. And we will, I am not just talking about a slight tweak or an improvement or a bug fix or something like that. I am talking about we will go away and come up with a great idea and we go, ‘that is a great idea, let us give that to our customers’, and a lot of people I know, who are kind of in the business frown, like why are you not charging, say, periodical upgrade fees? We do it for free completely. So we have a team of people working on software for people who have paid a onetime fee, just onetime fee! They have already paid us for it and we are working for them still and obviously there is ongoing cost for that. And they are saying why are you doing that? Why give it away for free? And this is the best way for illustrating our point, and whenever we do that, whenever we give away free upgrades, we get, customers get reengaged with our product, so they are going back and reusing it. They are thinking about it again, they are talking about it again. So we have a better engagement with our customers, which is really important. Revenue goes up because they are talking about the product, and new people hear about it. Of course, the goodwill it builds is great, because people go, ‘these guys are looking after their customers, you know, the transaction is the start, not the end. So they are still working and providing value.’ And I realized that, you know, that is the long term thing that I need to be working towards, is doing that, because, it really comes down to common sense. If I bombard you with something you are not interested in, I might make some money in the short term, but after that I am going to be in that band and will spiral. I am going to struggle more and more to keep your attention. If I am just giving you what you want, so if, I was an office, if I was a supplier of an office, and if I say, ‘Hey, this office is completely sound proofed, and you are not going to hear the people next door, and it is the same price at what you have got now’, you go, ‘great, show me where it is’, right? So if I give you exactly what you want, might solve your problem then, I don’t need to worry about trying to make money by bombarding you with stuff maybe you are not interested in, because I am making enough money from doing that, because that is what everybody wants.
Andrew: The software that you are selling, who made it? Who covered it out?
Josh: The software. The Easy Video Player, our main product…
Andrew: The first one, I mean did you develop it yourself?
Josh: No. I am known as the back code to know what we need to do. I look at code and kind of my brain just switches off, and it is not my strong point. But I know…
Andrew: So where did you find your first developer?
Josh: So, we used freelance forum. Had some success and a lot of problems for finding the right people and then, what I was telling is that I was looking in coding forums. So I, this is my biggest tip for anybody looking for freelancing people because a lot of people go through the freelance website and what we did is when, ok, when we need, say, a PHP coder. With PHP program language we need a PHP coder. So I was on Google and I was looking for PHP forums, and I came across, I forget the name of what forum it was now, but it was a coding forum. So this is where coders hang out and talk about coding and programming, and that kind of stuff, the same way as if you like cats, you go to a cat forum and talk about cats. So this is their passion, and they’re there in their spare time in the evenings talking about coding. So, I looked there, and I really didn’t understand 100% what they’re talking about. But I looked for the thought leaders in that forum. So, who are the people that were being approached by other coders to solve their problems? These are the people that were kind of the thought leaders of that forum, the ones that were respected by their peers. And all of a sudden what I was doing, I was realizing that other coders were telling me the good people to hire. They weren’t telling me themselves, because they were trying to maybe get some money on a freelance website, they were trying to get hired. Because everyone will tell you that they’re the best coder if they’re trying to be hired. And they weren’t trying to be hired. And then I’d approach them directly, and I’d say, hey, look, I’ve seen you in the forum. You are very active, you seem to be well respected, and know what you’re doing. This is what we’re doing. This is the opportunity we could offer you, if you’re interested, then let me know. And of course what happens is, they go, number one, wow, all of a sudden, their ego gets a boost. They think, I’ve been approached because I’ve been noticed. Number two, you’re offering them an opportunity to make money, which they didn’t have before. And you’re not just another number, you’re not just another client. You’re a person who sought them out. And you found somebody who obviously knows what they’re doing. So, that’s my number one tip for finding talent. Go to a forum that’s [??], that you’re looking for, and find the thought leaders in that forum.
Andrew: Have you been working with the same people through the years, or do you just keep going back to the forums, looking for good people, every time you need a project done?
Josh: We add people in, and sometimes we use people that we might need them for one project, that we don’t need them for every project. But, our core people, the core people in my team, I’ve been working with for about five years, six years. With one of the first guys I ever did that with, he’s still with me today.
Andrew: One guy, who you found on the forums, as a thought leader. You watched his conversation online unfold. You hired him, five years now, you guys have been working together.
Andrew: That’s fantastic. All right. So, you’re building out software. You’re selling it largely through affiliate programs, and it’s growing. What did you learn about finding affiliates? I want to learn how you found affiliates, the way that you’ve found, the way that you just taught us how you found developers.
Josh: Sure. Well, first of all, we started on forums, and then what we did is, the second step for us was to use our affiliate group. Say, hey, if you know anybody else that would be interested in doing what you’re doing, because especially if they’ve made, even made 100 dollars selling your product, they are much more likely to go, OK, well I can tell other people. And we would do, what we would call, second tier affiliates. So, if you had made money selling our product, and you could recommend somebody else who could sell it, then we would give you a cut of what they sell as well. So, it’s in your interest to find maybe two or three good people. And that really ramped up our affiliates really well. So, that was probably the way the way we really grew our affiliates. And . . .
Andrew: . . . By paying affiliates to find you affiliates. You’re giving them a cut of the revenue that the affiliates they find, generate, right? And it’s only two levels, it doesn’t go any deeper than that?
Josh: No. We didn’t want to get to the point where it’s massive, multi-levels and all of that kind of stuff. We wanted it to be very simple, easy to manage, and that really worked well enough for us. Immediately, that started working very well.
Andrew: OK. I used to do that too. That was phenomenal. What about paid advertising? Tell me about your experiments with that, the early ones.
Josh: We used a lot of paid advertising back in the first e-commerce business. I used a lot of Google Adwords and we paid a huge amount of money for advertising and revenue. That worked very well, it drove us traffic. But, I always felt a little bit out of control with the reliance I had on paid advertising, because it was a huge percentage of the traffic they sent us. So the problem would be for us, is if the cost for the advertising goes up, there’s not much that we can do, because we’re reliant on it. So, all of a sudden, that really affects our bottom line. So, it was a very, actually, a very deliberate decision for me to try and diversify and find other means of driving traffic that wasn’t paid advertising. So, we really haven’t, and paid advertising is great, it can work really well. But from that first initial experience, we really haven’t relied on paid advertising a huge amount. We’ve tried to really focus on affiliate traffic. And then of course, if you really treat each customer really well, word of mouth is huge. And I think a lot of people don’t utilize that enough. The word of mouth traffic that you can generate from providing just a really good service and really good product, actually is massive. And that’s what we really try to focus on.
Josh: I don’t know if you can, but the audio is cutting . . .
Andrew: I don’t know how much to talk about me in this interview or how much to talk about you, but what the hell, people might want to know what’s going on in the background, why sometimes I’m on mute. It’s because I have a problem breathing, and when I breathe, it comes on the mike like there’s hurricane in Andrew’s office.
What I do is hit mute and I try to get a little bit of air in my lungs. I don’t know what it is. I’m always frickin’ stuffed. I’m even trying, look at me, I’m even trying a different allergy medicine. I’ve discovered that I might have allergies, and that’s been helping a little bit but not enough today. So, I’m hitting mute and sometimes I forget to hit unmute. Boy, I’m an amateur, man. I got to do what I got to do, right?
At some point, I’m going to get this. I’m pulling information out of you and all of my guests. At some point, we’re going to bring in more revenue out of advertising, more revenue from people signing up to the premium program, and I will actually pay someone to sit right here, and every time I sit and inhale, they will hit the mute button and when I exhale they’ll let it out, just like all the loud stuff.
Sometimes, I’m sure the audience hears it and go, “Why am I listening to that? That’s gross.”
Josh: You could probably build a very simple software product to do that for you.
Andrew: I like the way you’re thinking. I’m going to haunt the PHP forums later today, and I’m going to find someone who can build it for me.
What I was saying, that no one could hear me, was this. Ari and her research on you sent me a quote that you put online somewhere where you said, “I built multiple six to seven figure businesses with products that have become industry favorites et cetera.”
What’s the first seven figure business that you built?
Josh: The first seven figure business we built was the E-Commerce Company, and…
Andrew: What company?
Josh: The E-Commerce Company, literally the first business that we started. It did really well, and I’ll tell you a really, really big lesson for me.
Andrew: And this is an audio/visual equipment company.
Josh: That’s right.
Andrew: How long did it take to get to a million in sales?
Josh: About a year and a half.
Andrew: A year and a half, OK. So, you were telling me something about that.
Josh: Yeah. I’m telling you, the biggest lesson I learned from that which was huge for me and it was one of those kind of epiphanies. It is what you hear all the time, but you have to learn yourself was money doesn’t actually buy happiness. For me, the end goal was I want to make money. I want to be able to work for myself and make money.
I made money, and I realized I replaced a job with another job, and I really didn’t love what I was doing. I wasn’t passionate about it, and that’s very important. That’s really, really, pretty much everything. If you didn’t like interviewing, you would not be able to do it. You wouldn’t be effective at this, right?
Andrew: It is true. Right. If I didn’t love having these conversations, it would be really painful to always be here on mike and be on camera and have all of this attention and all of the research that goes into it. But, wait a minute. You brought in seven figures, over a million dollars, and you said, “I’ve got to leave it because I’m not happy.” There’s got to be more to it. It’s also that the profits must have been very thin on a product like that, right?
Josh: It was a very volatile business. We had a lot of ups and downs. We had a lot of costs as well.
Andrew: What were the profits on a business like that?
Josh: It would vary. This is the problem. Let me answer that the best way I can. This is the problem. Because we were selling audio/visual equipment, we not only had to think about what audio/visual equipment was important and interesting to people, but then what audio/visual stuff was good.
Let me give you an example. If we’re selling TV brackets for 32″ LCD TVs that you put on the wall, they’re the hardest thing in the world, so we’d order as many of those things that we could. We’d fill our warehouse with them, and then what would happen is some company somewhere would go, you know what, we’ve got 42″ TVs or 50″ TVs. We’re going to have a sales on those, and then their competitors go, OK, well we need to do the same thing.
Then, all of a sudden those bigger TVs are all the rage. We’re left with a huge amount of stock which we can’t shift anymore because the industry has changed. It would take us about two months to get the stock, so that could happen while we’re waiting for the stock to come in that we ordered.
I felt like I was a hamster on a wheel. I’m running constantly to try and keep up. I’m trying to juggle all these different plates at once. I’m trying to deal with the staff and the warehouse, and it was my first entry into business. To be very brutally honest with you, I was being very honest with myself. It was only a matter of time until this all goes drastically wrong, and I need to find something that’s more secure, about having more control over.
That’s really the fundamental thing that caused me to shift and to move into a different direction and something I love doing as well.
Andrew: OK. I completely understand that. The whole idea of keeping inventory and the risk of having inventory that doesn’t sell is so frightening, and it’s just not worth it, right?
Andrew: I don’t get excited about more stuff. You said earlier that you find new affiliates and you train them. We talked about how you find new affiliates. How do you train affiliates to sell for you? How do you train people who aren’t experienced affiliates to sell for you?
Josh: Right. We would talk to them about, this is what I call, kind of common sense marketing, and I think this is something that is really missing, especially in the whole — which is where we started — the whole Internet marketing, to make money online, area of the Internet. I think the thing that’s missing is think about the customer, it’s the common sense [??] has been kind of forgotten and so we literally, we start at the very basics, we can talk about things like how to build up an email list by providing value.
So let’s say you’re interested in whatever you’re interested in, let’s say you’re interested in singing and you’re trying to learn how to sing, so you’re going to get five tips on how to sing or how to be better at singing and you’re going to give that away. And then what you’re going to do is say, ‘We’ll, we’ve already given you this, so let me now ask you to subscribe to find out more,’ and then you follow up by giving more of the same. So you’re really, if you ever say anything, you always follow through and actually do it and you only ever focus on providing information that they want to know about, so if you subscribe to learn about singing you don’t start telling them about how to train dogs because it’s just not going to work, and it’s surprising the amount of people that do. They diversify and they just, I’ll throw anything at you because I now got your details.
Andrew: Let’s pretend I’m an affiliate. I want to learn, how you would train me so that I can understand the sales process? I feel like you’ve got it down. I’ve been looking at your website, hopefully I’ll have some time to talk about the details of the site and how I notice you sell, but let’s say I’m brand new, I don’t have any affiliates on Mixergy, any affiliate programs and I never will, but let’s suppose that I wanted to, I come to and I say, I’m new, what do I do?
Josh: OK. Sure, first thing I’m going to ask you, what do you do? So let’s say you already have a website, a lot of the time you’ll find, what we’re not doing, when I say new to this, we’re talking about new to affiliate marketing, not necessarily new to the Internet because we’re not necessarily going to train you to how to install WordPress, or how to have a blog, or how to open your email, but if you have say a blog and your talking about say video for example . . .
Andrew: I’m talking about video.
Josh: Well great. You’re talking about video, you have a blog well that’s great because we have a product that is completely related to that, so we may do an interview with you, we may give you a case study, which you can give, which we’ve already created so . . .
Andrew: You create a case study, I give it to my audience for free, do I ask for an email address?
Andrew: So you say Andrew, take this case study make sure to collect email addresses, do you give me the website that will collect email addresses or do I have to know how to build it myself?
Josh: We’ll show you, OK, this is how you would use this is the system, you would use it to collect email addresses, this is how you would set that up and then . . .
Andrew: You’d send me to awebber or mailchimp or whoever?
Josh: Right, awebber or something like that.
Andrew: Beautiful, OK, so now I’m learning that I need to give something away in exchange for getting an email address, do you tell me what to email people, how to drip campaign them?
Josh: We don’t go to far into, because obviously, we have to draw a line where we go, we don’t want to just teach marketing because it’s not necessary to what we do. We’re not necessarily teaching people Internet marketing or online marketing, we’re creating tools and products so we don’t go to far into that, but we’ll cover the basics and then we’ll give them advice on how they can find extra information about that kind of stuff.
Andrew: I see. So your just saying here’s something you give away for free to collect your email addresses, you know what to do and if you don’t go look it up, do you give me anymore than that? Do you give me some sample emails to send people? Do you give me some sample copy that I would use, tell me about that what kind of sample copy do you . . .
Josh: Right, so we’ll have emails that are already written out, which will give an introduction to a product for example or anything from just an introduction, write up, to a full [??] page for the product and then they can take that, they can literally copy that email and paste it into their system and send it out so they literally don’t have to worry about, OK, well I’m not great at writing emails or selling, I’m not great at necessarily verbalizing what this product does, they don’t have to worry. We have that, we also have things like the video, which will demonstrate the product so we’ll have a small video that we’ll create, be very simple, we’ll record the [??] be able to show the product in action, show what the benefits of that product are, we always stick to the benefits of look what you can do with this product if you’re using it this is what it will do for you and then they can take that and can use that on their website or send people to it collect an email address and there you go.
Andrew: All right, what’s one thing you learned about writing those emails? Since you’re writing it for your affiliates, you must really know what your doing and it’s important that you get it right because you’re not just targeting one small group of people who happen to be on your sight, you’re targeting your affiliates audiences multiple so what do you do?
Josh: I think you got to keep it simple and keep it short. I think you have to be very personal. I think, you always have to write as if you are speaking to your friend. If you’re going to write an email and it sounds like it’s from a big corporate company, you’re not going to get listened too. I think it has to be something that’s interesting. I think it, I’ll just deviate slightly to explain why I think that’s so important if that’s all right.
I think in the day quite awhile ago, generations ago, this is what people would say, parents would say to their kids go and find a big company that you can work for and you’ll stay there and you’ll get a pension and you’ll work there for the rest of your life, right? So this is what parents are driving their children to go out and do. These big corporate companies that’s where you want to be, a huge big corporate and that would be job security for life that would be the end goal and people trusted that. Where as the small time person there was less trust because maybe they’re there today maybe they’re not there tomorrow.
Whereas what’s happened obviously, especially with the economy and everything that’s happened in the world now, big corporate companies are faceless. People don’t know the people behind the door so now there’s no trust there because they can be gone tomorrow and they’ve got nobody to speak to if they have a problem. So now people are going to the individuals, I know you, I can speak to you if I have a problem, so it’s all about giving that real personal voice and being very open and completely [??] with customers and I definitely try to make sure we write in that voice and we teach people to write in that voice, so that people feel like okay, I can speak to Josh if I need to speak to Josh, we’re not sort of behind the curtain and I think that’s really, really important I think that’s the biggest thing we do.
Andrew: Hey, when you send emails out and you say this is coming from Josh, hit respond if you want to contact me or you don’t even have to say that and people will hit respond and actually talk to you, how do deal with all the email that comes in as a result of you being so personal?
Josh: Well, we do have people who reply to the email, I’ve got people on my team that will reply and I . . .
Andrew: So emails come in signed Josh?
Josh: No, not anymore. We don’t say, we won’t say speak to Josh if you have a problem, we don’t try and pretend we’re something we’re not, but we’ll say look you can get in contact with us. If we speak about our team we use their actual names, we’ve got our support desk, we’ve got photos of our team in there so they feel like they know them, we encourage them to be friendly and approachable. So it’s a small team, but if you deal with us or by a product you’ll know the people in my team if you ever contact us. So it’s about making it personal, not necessarily, I’m not saying pretend it’s Josh replying, I’m just saying that when you speak to us you’ll know who you’re speaking to.
Andrew: I talk to so much about marketing in this interview, I didn’t get to talk about technology much, how about one quick question about that, how do you figure out what features to add to your software? How do know what easy video player should have and what it should leave out?
Josh: The simple answer to that is we ask our customers what they want find out what they’re using, what their problems are, and solve those problems. And then what will do is track and see how many people are using those features. If the feature is not used, you can remove it because sometimes I think, I’m a really big fan of, I’m sure you probably are of 37 signals. What they’ve done with their products is great it’s about keeping it very simple and if people don’t know who they are they do base camp and high rise and those products and it’s all about, people don’t want to be using software, they want to have used software to achieve whatever they’re trying to achieve right? You don’t want to be sat there actually using it, you want to have used it to achieve your goal, so the quicker and easier we can make that for people the better it is so . . .
Andrew: So, you get feedback from people they say, ‘We want this feature,’ you add it and then if they don’t like it, they’re not using it, actually you drop the feature. That brings up two questions first, when you drop it some people are going to be using it, how do deal with the anger of the people who are using it and the second I’ll come back to.
Josh: Right, you know what we found, we really find we hardly have anybody, if we drop a feature, we never drop a main feature the main features are always going to be there so if we drop something, which is an extra feature, as long as the product does the main stuff that it needs to do, then we really don’t get much bad feedback about it at all. We might have one person say, oh we can’t do this, if they really, really want to use it we can probably help them out and say . . .
Andrew: Can you give me an example of something you added maybe and had to remove?
Josh: Let me think of a good example, I’ll give you a better example of why it’s important and the way we think of this. So when we started we had a page of your video settings and that page started as one page like this, and then it got to be like this, it was huge and people would scroll down, and down, and down, and down so what we did is we thought we have to completely change it so this not necessarily about removing a feature, but it’s revising the product based on the feedback we get. Now, the new version that we’ve got coming out, it doesn’t have a settings page like that at all. What we’ve done is, we’ve just displayed the information very intelligently. So, let me give you an example. If we have something called, the ability to use Autoplay, right? So, if you a website, there’s video on the website, the video will automatically play when you get to the website. Some people want to use that. Well, people also told us, that’s really annoying, because if I keep going back to the website and it keeps starting to play, I don’t want that to happen. So, we added in what we call, an Autoplay cookie. Which means you can turn it on, and then it will Autoplay the first time, after that it’s not going to keep playing every single time you go there.
Andrew: That’s great.
Josh: Maybe it happens one time a day, maybe it only ever happens once. So we do that. Well, now, we don’t display, do you want to use a cookie, for your Autoplay, unless you’ve turned Autoplay on. Right? Before, we would display them all. So, you say no, it’s still there as an option. And what happens is, people look at that and they go, I’m overwhelmed with the amount of things I’m seeing. So, I don’t want to do anything. It’s like choices. If I give you too many choices, the choice you’ll make is, I’m not going to do any of that. So, we’re trying to really limit what you see on screen, and then open up more features. As you say yes to something, will then give you the features underneath it. Which makes it much easier to get from A to B. B being, the end result that you want.
Andrew: Which features to do you listen to? You get a lot of requests, that’s the other question I wanted to bring up earlier. You get a lot of requests, how do you know what to listen to, and what’s just going to waste your time and going to have to get removed later?
Josh: Really, it comes down to the amount of people asking for it. We find that if we get like one hundred people saying we would love to have this added in, then we know there’s something there. We know that that’s something that people are going to want. We have a look in and see how people are using video. We have to be very much on the ball with our video product, for example. We have to know what are the [??] video, what are people wanting to do? So, for example, we have a new feature coming out very soon which is called adaptive videos.
Now, the biggest thing I hear about sales videos specifically, from customers, not from people who create sales videos, but from the people who watch them, is, if I have to watch this whole thirty minute video which tells me everything i ever need to know about anything, I don’t want to watch a whole thirty minute video. I’m not interested. But there is information I want to know about. So, how do we make it so that information is easier to obtain, for the people that might be interested? And at the same time, that then becomes more effective for the people that have created the video. So, we have something called adaptive videos. And what that will do, is that will ask questions while people are watching the videos. So, I might create a video and two minutes in, it might say, are you going to be using this product for this, or for this? And then there’s two buttons that come up on the screen, and you click, I’m going to be using it for that. And that will take you down a whole different path, down the other options. So that now, I’m targeting specifically what . . .
Andrew: I love stuff like that.
Josh: Right. And that just makes it so much more effective. And the reason . . .
Josh: And the way we came up with that idea, is just seeing, this is a massive problem for all of our customers, there’s noise, online. Everybody’s saying that they don’t want to have to watch a sales video. They want to get all of the information, but sometimes they have to listen through five, ten minutes. And that’s the little annoyance for me too. We’ve all been there, I’m sure you have as well. You’re watching a video, and you think, just tell me about this. I want to know if it does this. But you have to watch the whole thing. So, we thought, well, how do we solve that? And we went away and created that feature. So, that’s really how we do it.
Andrew: Like a choose your own adventure. I do love features like that, I want more video to be more interactive. Like even right now, I’d love for people to be able to skip over the part where I was ranting, and just get to the beef, to the meat of the interview. All right. We’re now at the end of the interview. I didn’t go through all of the features, and tell people exactly why this is a different video player than most. Let me go through some of their features here. Here’s what I’ve got. I got, content is secure for members only. This is a list that RA put together for me. Auto-redirect videos. With this feature, you can redirect your prospect to your affiliate site, and this will be done automatically without requiring you to do anything. I don’t know what that means. What does that mean?
Josh: Say that part again?
Andrew: Auto-redirect videos. With this feature you can redirect your prospect to your affiliate site, and lead-gen site, I guess.
Josh: OK. So, there’s two things. We have the auto-redirect, which means, at the end of the video or presentation you have made in video, you can automatically send the viewer to a specific page where there . . .
Andrew: Ah, so at the end of this interview, when people are watching it, automatically send them to your website.
Andrew: Or, like you, maybe I send them to my website. And get them to upsell to something on my site. OK. All right. I see that. That’s pretty clever, I love that. [??] in bad videos on any website easily without needing to know the core technical aspects associated with it. You get an option to utilize Amazon S-3 to host all your videos. Your videos are then hosted easier. Here, let me see what my list is? My list has A B testing. This is what I caught. The idea that I cannot just A B test, but your system will tell me what’s most effective, which of the two tests that I’ve got is most effective, and only run that video; that is freaking brilliant. Visual website optimizer does that for me on websites. I haven’t seen that done on video. You gave me stats within the video. You do content protection, so people don’t steel my video. I don’t care that much about it, but that’s pretty cool. You do sharing within the video, so if you like this part you can hit a button and share the video. Also, there’s all kinds of design aspects to it that we never got into because I’m — what is the kind of person who doesn’t understand design? What’s the word I’m looking for?
Andrew: I’m a philistine. I mean, look at the design it is? The guy’s over at Sticker Mule offered to design stickers for me for Mixergy, and they design these beautiful stickers, and they said, ‘Andrew, what do you want? We love your interviews. You love our design work. We want to be there for you.’ I said, ‘Sticker Mule, I don’t even know where to begin. I’ve got no design. I’m lost, but I appreciate that this could be useful for other people.’
Josh: Right, let me just give you, if just for a second, I’ll give you the one thing that I’m excited about with it. I mean, I’m excited about everything, but this is the one thing I use it for, and I think, okay, well this where there’s some great power and great benefit in using the product. We can tell you automatically where you’re losing your viewers, so what will happen is it will record where your viewers are leaving the video, and it will give you a timeline, and it will mark on that timeline where they’re leaving. Then you can use that in conjunction with the split testing to find out which version of your video is keeping the engagement of your viewer for longer. I think that’s really, really important. You know, split testing is great, and it does that, and you can set all sorts of different metric. You can go, okay, which video’s making me money, which ones shed the most, which ones get more people to opt in to my list for more information? You can choose all that, but I think if you combine it with which one’s keeping the attention of my viewer for longer, you can really learn how to make more effective videos that keep people watching. I think that’s really, really important. That’s one of the cool things that I love. That’s one of the little things that I like in there.
That’s something that I’ve learned about using video on landing pages. I did an interview with Miguel of Guru Media, and he taught me to create videos that can be edited so that you can pull out a piece and move it later on the video, or pull it out and completely have the video still work, and when you see stats, my video player shows me stats too. It’s phenomenal that you can see it, and you go, ‘Oh, I’m losing people there. Edit that part out.’ Or I’m getting people there, just you can see when they’re online, so you can move that to the beginning and get people’s attention earlier. There’s so much with the video that people just don’t understand because we’re too busy thinking of just YouTube video. YouTube is not business. It’s not professional video, and if all you’re seeing is YouTube, it’s like seeing a Fischer Price microphone and not recognizing all the power pod casting and broadcasting that’s available to you because all you understand is Fischer Price. I do think people, even though I’m not getting an affiliated commission on this, I’ve got no affiliate program with any of my interviewees. I just love them all, and I want to learn about your business, even though I don’t get an affiliate commission. Maybe especially because of that, I should urge people, go check out Easyvideoplayer.com. You get a sense of Josh’s player. You get to see what it does. You get to watch him walk you through it. Is that you walking people through it?
Andrew: Yes. It is? It’s you. So you get to hear Josh do it?
Andrew: Josh, congratulations on the success with the company and thanks for telling us about it.
Josh: Thank you very much. It’s a pleasure to be here. Thanks very much for having me.