Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs even when I have a cold, even when I have a flu, even when I’m ready to collapse, I will not give up. Because I feel that entrepreneurship is . . . This is such a weird thing for me to say because every cult leader says this. I think it’s what’s going to change the world and it’s going to improve the world.
I think that the best, most creative ideas are coming out of entrepreneurs and, man, the people who started companies 10, 20 years ago are the ones who are really ruling the world today. And the people who are listening to this interview today in 10, 20 years will end up being the entrepreneurs who take over the world, who change the way that we do things.
But there is one problem and that is, as today’s guest will tell you, most entrepreneurs are really crap at getting PR. And he says this from his own experience. And I’m shocked to hear him say it because I’ve known him for years and years and years. He has been the most gentle but persistent person I’ve ever fricking met in my life. He touches in on a regular basis with me via e-mail, connects with me via friends, he and his wife got together with me and my wife. He’s got such a good touch and still he says at one point, he was crap and he’s got proof of it, but he got better and better at it. And then he started creating software and then services that help entrepreneurs and smaller businesses, in fact, even bigger businesses now with their PR.
His name is Dmitry Dragilev. He is the founder of JustReachOut.io. It’s a place where you can find relevant journalists and pitch them all on your own. That’s the whole idea behind a business. And this interview is sponsored by two great companies. The first will help you send out smart email better, and who would know better than Dmitry? He sends out fantastic emails and uses Active Campaign, my sponsor. And the second is going to help you as a business owner understand where your money is coming from, where it’s going, how much money you’re making month to month, why you’re making more or less. It’s called Bench, they’re software and a service that will do your finances for you. I’ll tell you more about both those later. First, Dmitry, welcome.
Dmitry: Hey, thanks from me. Thanks for having me on the show. It’s awesome.
Andrew: Alexia Tsotsis of Tech Crunch, one of the top muckety-mucks of Tech Crunch, wrote an article about you and still you told our producer that was bad. What was so bad about the article? This was an old article.
Dmitry: This was like back in the day. I don’t know if she still is there.
Andrew: She is not. She went to like a graduate school or something. She moved on.
Dmitry: Yeah. And the article was…This was like when I was at Zurb. I think you and I talked about this back in the day, right? You’re referring to the one when she covered, you know . . . Clue, yeah.
Andrew: Clue. I’m looking at an article here, September 2010. Most entrepreneurs would kill for this.
Dmitry: Yeah, there you go.
Andrew: But there was something wrong with it. Do you remember what I’m talking about? I got a screenshot if you don’t.
Dmitry: Yeah, can you show me the screenshot?
Andrew: I’m going to describe the screenshot. Here’s what the headline says, “Clue Tracks What People Remember About Your Website. It’s founded by URB and URB founder, Dmitry, says, “Clue is a memory game.”
Dmitry: Yes. So I mean that pitch was just so messed up because, A, I was not a founder of Zurb, and then, B, she messed up the name of the company.
Andrew: Not Zurb, they called it URB.
Dmitry: Yeah. And then the description of it was all messed up as well.
Andrew: You mean it wasn’t a memory game?
Dmitry: No, it wasn’t. No. It was like a testing, like it was for prototypes to test to see what people could remember from looking at a page for like 10 seconds or something like that.
Andrew: Zurb was a company that you worked for that did web development and design, right?
Andrew: And they started coming out with all these tools partially to bring people into their client services world, and partially, I felt that they were trying to move beyond doing services into selling software. This was a tool that they created that could have done either one of those things. It showed a website immediately for a few seconds and then it took it away and it said to the user, “Hey, what do you remember about our site?”
And it was a way for web designers and developers and entrepreneurs to see if people understood what their websites were about because most people would only spend a second or two on the site, you want to see whether they understand the site. And so you guys came out with it. Your job was to get publicity, you got into TechCrunch and everything about this TechCrunch hit was bad.
You told our producer the reason this was bad, and we do pre-interviews for a reason because we want to really understand what’s going on. You told the producer what was bad was a week before launch I blasted 100 reporters, TechCrunch, Mashable, Venture Beat, The Next Web and a bunch of others with email telling them about my launch and saying it’s the best thing ever, and some of them got back to you, most did not. And what’s wrong with that pitch? What’s wrong with the way that you . . . Let’s forget about Alexia right now. She is responding to your pitch. Tell me what was wrong with your pitch.
Dmitry: Well, there was no relationship with those people. Those people were just, that nobody passing me on the street, then I didn’t know them, they didn’t know me, and I was pushy, and I wanted to get things going. And I was launching this app, and I wanted publicity and get people in the door and sign up. I didn’t care about relationships. I just wanted some press and I wanted some signups.
And so I thought, you know, I can get hundreds of people on an email and maybe a few of them will respond, and who cares after. Like, who cares? Like I just want some exposure on TechCrunch and that’s it. And, you know, that was the result really. This kind of stuff. And it wasn’t really gratifying at all. And the press that we got didn’t really bring us the right type of sign-ups or any kind of like meaningful customers at the end of the day.
Andrew: And, frankly, that’s what most people do. I get their emails. These people do not understand, if you use Gmail and you copy text from one email to the other, the text may show up properly on your outbox or in your screen, but when it hits my screen, it’s two different colors, because Gmail is trying to do you a favor by highlighting what you’ve copied so that it stands out in the message you’ve sent out.
It’s totally horrible and people don’t recognize that they’re doing this, but the intent behind it comes across to me and everyone else who is being pitched by them, which is, “I don’t give a rat’s ass who you are. Get me some fucking publicity man. I got something to do here and your job is to get publicity. You should be excited that I’m coming to you.”
And that just does not work. And so that’s one of the things that didn’t work for you at Zurb. Other things did work for you at Zurb. You got the founder of Zurb on Mixergy, for example, you wrote a bunch of great content, you did a live series of interviews, right? This was back in Boston. You got guests that I would have died to get on Mixergy. Somehow you fricking got them in Boston to sit down with Zurb. What’s one of the guests that you were especially proud of having on?
Dmitry: Winklevoss twins, that was really cool. They came out to Boston to do the event when they . . .
Andrew: And by the way, this was around the time when people hated the Winklevoss twins. They showed themselves up in person at your event and flew out to be there. That’s pretty impressive. Who else?
Dmitry: Well, Tim Ferris, but with Tim Ferris, I was supposed to do it in Boston but we actually did it in San Jose. This was at the time when he did “The 4-Hour Body.” That was his big book. Kevin Hart’s event for the founder of Eventbrite, met Mullenweg from WordPress.
Andrew: And they showed up in person for you?
Dmitry: Yeah. You know that out of all of them, though, the founder of Overstock, Patrick Byrne. . . No. He’s the CEO of Overstock. Overstock just did their ICO by the way, but that interview was probably the most like touching out of all of them. Like I had pretty big and successful folks on there, Evan Williams and just like really well-known people.
Andrew: Evan Williams, Twitter medium blogger.
Andrew: Okay. What did you do back then that was actually effective for you at getting these people to show up?
Dmitry: Well, I would intersect like Tim, for example, I saw that he was promoting “The 4- Hour Body,” and then…
Andrew: Tim is a fairly easy person because he disconnects from the world, but when he’s out to promote he’ll do a lot of promotion, he’ll hustle his ass off. Let’s get some of the other people. Like Evan Williams doesn’t need to show up to your live event. You have a technique? What is your technique?
Dmitry: So Evan Williams is a . . . Like, he loves design, right? That’s his thing. And so in every venture, design was a big thing of his. And so when we were building Verify app and Notable app at Zurb, these apps were catering toward designers. And so I really saw . . . I saw when he was sharing mockups and designs of other websites, and I saw that, you know, he was soliciting feedback on them and the process could have been better. And so we were actually in the making of creating this app that would imwprove the process of getting feedback.
And so I took what he had, he had this design mockup of meeting him at the time or something he was working at the time, and I uploaded it into our app, and I solicited feedback on that same design from our own designers at Zurb. And I sent it to him and I said, “Hey, I saw that you were asking for feedback and people were commenting back on your Twitter stream.” I sent. . . “And then here is the way I would do it, you know, if I were you.” I just did it with our designers and I gave them more feedback on it.
And he loved. He was like “Wow, this is it.” Because our Notable actually lets you kind of like highlight little sections of the design and put your little thought on it. And so he was like, “Wow. This is really a better way to, you know, get design feedback on something that you’re working on.” And I said, “Oh, I’m really humbled to hear from you. I would love to hear, you know, what it is that we should build into this app. We’re still developing it and obviously, you know, you know your stuff and really humbled to hear your opinion and, you know, we take it to the team.”
And so we just started the conversation there and then we just developed it further and further and further. And I was basically trying to accumulate some bigger-name guests so that when he looks at my speaker series, he’s not going to be like, “Well, this guy hasn’t had anybody.” So I was working my way up, you know, like slowly up and up and up and up and up.
Andrew: And I feel like that’s one of the things that you do really well. You look to see what issue people are wrestling with and you come in with some free help, you come in with something that’s specific to them. By the way, yes, he was helped by what you did, but on June 13th, 2012, I see a tweet from him saying, checking in with his followers, “Is Notable app the best product like Notable these days?” There’s another one, I can’t remember. So even though you helped him, he was still doing his homework and checking out to see if anybody had anything that was especially useful, and he only got one response to that. So . . .
Dmitry: Yeah, he was like . . .
Andrew: What I get from that is, this is the way that you could work, caring about people, going out of your way to help them with the problem that they’re dealing with. And frankly, you’ve done that for me a lot of times. But at the same time. there was a part of you that was more amateur that was just desperate for publicity and did and had a mistake. And I feel like a lot of us entrepreneurs have that. We have this deep caring about people, which is why we get into entrepreneurship sometimes, and we at the same time have this need for, “Just get me some PR.”
All right. So I get a sense of how you’re working. I get an origin from you. Before we go on to how you ended up launching JustReachOut.io, this thing that basically you’re a one-man operation for you even though you’re working with a bunch of consultants. I want to ask you about Polar because I’ve got a TechCrunch article here about Google acquiring Polar. There was a lot of speculation at the time about why Google acquired Polar and what was going on there. Polar was your company. What was the idea behind Polar?
Dmitry: So Polar, I . . . It’s funny. So Luke W., who was the founder. . . He was the founder of Polar, had brought me on early on. It was him and Jeff who founded the company. They brought me on and they said, “Listen, there’s going to be this great company that’s going to allow you to poll and survey people, and we need a marketer.” And so I came on board, and the whole time I’m thinking, “You know, I want to build my own products someday and run my own startup, but I really need like that unicorn kind of like . . . I need to like prove myself where I’m not just part of a team where I’m like part of the founding few people.”
And so we scaled Polar and two years went from zero to 40 million page views through these types of tactics that I kind of was talking about earlier. And we were either going to raise a round or we’re either going to get acquired. And at that time, we had moved from West Coast to East Coast with my wife, we have traveled the world, and we settled to live in Boston. And this was right around the time when Polar. . . Like, Google comes around and is like, “Listen, here’s a great offer.” And the way they did it was kind of like sneaking, but like basically, they were like pinging us and they were pinging some of the reporters, and they were like trying to set up a lot of conversations with us at that time to acquire us.
And a lot of other companies were talking to us to acquire us. But I was kind of shying away and moving like towards the other direction, like I did not . . . Like I knew it would be a big payout, I knew it would be like stability and I wanted to have . . . I had kids. We were going to have kids with my wife and settle down. So like this was going . . . Like everything sensible around it was like there. I needed to just commit to Google, but I shied, like I moved the other away just because I wanted to build my own startup.
Andrew: And so when Google acquired this company, and you said, “You know what? I don’t want to be a part of this acquisition even though it’s a stable company, I got a kid on the way.”
Dmitry: Yeah. And I moved away, and everybody thought . . . Everybody who I talked to, whether it was my parents or my friends just did not see eye to eye with me. They were like, “Dmitry, why the heck . . . What are you talking about? This is stupid. Just go through the process, it’s four years. You have your . . . Like you got your house. Like, this is complete instability . . .”
Andrew: It’s four years and you get $1 million a year, $1.25.
Dmitry: Well, like both of them all said, like I can’t get into like a specific number, but I would . . .
Andrew: Can we say you would have . . . Can we say you’d have over a million a year, or can we say overall at the end of that you’d bank more than $2 million?
Dmitry: Probably, yeah, yeah. And we could say that.
Andrew: And that’s based on what? They gave you equity and equity over time or cash over time?
Dmitry: So the way it works is just that, well, you know, like they give you equity over time. So like you invest into stuff, so the longer you stay at Google, the more equity you get. And that’s usually how acquisitions work, like usually, you know . . . like I didn’t wait around and negotiate any deals or any kind of like equity packages. But essentially, I mean, the standard acquisition package is you get payouts, you know, like six months into it, one year into it and one and a half years into it, two years and so forth, up until the biggest payouts are like four years, and four years.
Andrew: And you didn’t want to do it because?
Dmitry: Well, it’s four years of doing stuff that I did not want to do. Like I did not want to work for a giant company and I wanted to build my own startup. So the one that came just purely from me that I ran that didn’t have anybody else involved in it, and it would have been . . . And it was in PR space specifically. I wanted to do it for a long time.
And now that I’ve gone through this process and we’ve built it from nothing to acquisition, I was like, “Listen, four more years of my life, I would be 36, 35 around this time in my life now.” Like, I don’t know. Like, these are four years I wouldn’t be able to get back. And I really would be more happy with myself if I had went after like this dream of mine. It’s probably more important than the money, even though the money is like . . . it’s a lot of stress, so like, you know, as an entrepreneur, a scrappy entrepreneur, like taking everything away and just saying, “I’m not even going to go through it.”
So I like weighed the pros and cons and I just like personally I wouldn’t be as happy, like I’ll be content, then setup, then not worried about money, but personally, there won’t be that fire inside me every day. It would be like this tiny like sliver of like responsibility and the giant corporation, you know.
Andrew: You know what? So I’ve seen entrepreneurs who ended up going to work for Google, especially now that I live in San Francisco. And you’re right. The fire is gone, but the fire goes down and the happiness goes up. They’re going on ski trips, they are buying homes without any sense of, “Well, will I be here or not in the future?” They’re going about their lives in a very happy-go-lucky way which is the danger that you are afraid of but also the opportunity that you may not have felt at the time because you didn’t yet have the responsibility of kids. And today you have a couple of kids, right?
Dmitry: I do. I do. And I think about it.
Andrew: All right. You decided, “I’m going to go out there.” I’ve seen this happen for other companies at Zurb, I saw this happen to Polar where you were one of three people, and according to TechCrunch, this was an acqui-hire. So they acquired these three people. So you see nothing but three people and an idea could end up scaling to billions of uses, lots of page views and so on and you say, “I’m going to go on this journey.”
Let’s take a moment to talk about my sponsor because we both use this company and I think it’s an important tool for everyone to be aware of, and then come back and see the germ of the idea, how did you test it, how did you make sure it made sense, and what’s this boneheaded thing you did about $10 and why was it a boneheaded decision. We’ll find out about it in a moment. First, the company is Active Campaign. You use Active Campaign to send out your email, Dmitry.
Dmitry: I do. I do.
Andrew: Why do you use . . . This is for promoting your businesses. Why use Active Campaign as opposed to any number of other people who I’m not going to mention because they don’t pay me for advertising?
Dmitry: Well, I just . . . Somebody mentioned them to me and I started using the interface and it was just such an easy way to segment and send email that I just kind of stuck with it. The user interface is just so easy to use and when you want to segment out specific folks and only send to them . . .
Andrew: How do you segment? What’s an example of a segmentation that you use?
Dmitry: Just when somebody is, you know, clicked and had multiple interactions with my email maybe they opened it and clicked and I just want to resend an email to those people in AWeber or I don’t know, and other . . . Constant Contact and all these other brands, is really hard for me to just easily sell a rule saying, “Listen, anybody who clicks and does this, send them another email. Like it’s just very hard for me to set that up, and Active Campaign is so easy, and so this is why I kind of went with it and I’m still, you know, using them as just that.
Andrew: Yeah. So you mentioned a couple of other people. They either don’t, all these other competitors, either don’t have these features, and for the most part, most email providers don’t have it, or they have it and it’s so fricking complicated that you have to do it yourself because you’re the guy who’s responsible for it or you have to hire a team of people to manage it for you. But here is an example of segmentation that we do.
We’re, in the next few weeks, going to send out an email to people about these chatbot interviews that I’m going to do at Mixergy. In addition to that, I also have a whole chatbot business. I don’t want to flood everybody . . . I do actually, but they won’t let me. They’ll get frustrated with me. So as excited as I am to tell everybody, “Here’s this new chatbot thing that I’ve got on the side,” I don’t want to flood everybody with it because they’re going to see that it’s obnoxious and they’re going to tune me out and they’re going to hate me.
So what I’m doing instead is sending out links to interviews that are with entrepreneurs who happen to be in the chatbot space, anyone who’s interested in these interviews and we’ll see how many interviews have to be interested in before we follow up, but if they are interested in them, we can identify them, segment them out and then send them an email that says, “Hey, I also have this other side business where I create chatbots for businesses. If you want to hire us or if you want to learn more, we will tell you a little bit more.”
And so now I’m not sending it to everyone, only to people who’ve clicked on links and taken some kind of action. That is the heart of Active Campaign, and you don’t have to do it based on email. Dude, did you know that if they . . . You and I both use Wistia. I could even say if they get to a certain part in the interview since it’s hosted on Wistia, then Active Campaign can say, “This is somebody who watched the whole interview on chatbots and then a whole other interview on chatbots. This is somebody who definitely wants to know more about chatbots and start sending them the emails we have about chatbots.”
This is the kind of marketing automation that used to be reserved for giant businesses or these clever marketers who have nothing to do but market all day but they have crap products. Today, it’s available to everyone. So many people who you’ve heard me interview who are real marketers, who know this stuff but don’t want to get obsessive about it and waste their whole day on the software, use Active Campaign.
If you’re curious about it, I urge you to go to the special URL where you can just try it for free, set it up. See if what I’m saying is really true by going to activecampaign.com/mixergy, activecampaign.com/mixergy. When you do, not only will you get a free trial, your second month after you sign up is going to be free. They’re going to give you two . . . You should have signed up with this, man, Dmitry, you. . .
Dmitry: I know. I should have.
Andrew: This is a better offer than you got. Two free one on one sessions with their consultants, that means someone’s going to do coaching, understand your business, tell you how you can do marketing automation with it, then set you off into the world to go do it with this easy software, but they won’t ignore you. You come back again for a second one-on-one where you say, “Here’s what I tried, this is what worked, this what didn’t work, here’s what I’m doing,” and they help you again. And if you happen to be with one of these jerky competitors that really suck, they will even migrate you for free.
Go to this page for all the details, activecampaign.com/mixergy. And I love . . . You know what actually? They’re not even afraid to talk about their competitors because if I look at that page, I see David Kadavy, who you and I both know who’s really into design. He’s talking about how he switched away from a competitor and he’s very specific about what they are. Go check him out, activecampaign.com/mixergy. I challenge you to find a better email provider.
Dmitry: Yeah, they rock.
Andrew: All right. So the idea was PR for startups, but you didn’t start launching it until you went out to meetups and you did what?
Dmitry: I wrote . . . I actually sketched out what it was going to look like and I showed the picture to people at meetups because I couldn’t design and I couldn’t hire a designer. I was back to being unemployed and, you know, from a startup salary, so it wasn’t like I had savings. And so I would just really walk around and show them my mockup that was not a real markup, it was just a sketch on a piece of paper, and I would gather feedback, and I would use feedback to, you know, like find my first customers to reel them into a relationship with me to become like . . .
Andrew:It was like this, like this napkin you hold it up and say, “So here’s what my site is going to do, and you press this button, and you get this. Will you sign up for it and pay me?” You said, “Will you pay me $10 for it?”
Dmitry: Yeah, yeah. I wanted people not to just nod their head but pay so I would say, “Oh like what should I put in there? What kind of features?” And people would say, “Yeah, this is what I would like.” So I’d go and sketch it again and I meet with them again and be like, “Well, here’s another sketch. This one has a few more buttons and a few more things you wanted to have in there. What do you think? Do you think it’ll be like a good thing? What do you think the next screen would look like?” And once like two or three iterations of that go through, I’m like, “All right. Well, Kate, would you pay $10 a month like prepay for it? You know like, the way you. . .”
Andrew: Did ask them to take money out of their pockets and give it to you?
Dmitry: The first five I did because I didn’t have a credit card.
Andrew: You did?
Dmitry: Yeah, I didn’t have . . .
Andrew: At an event, you said, “If you want this, give me $10 right now and I’ll sign you up?”
Dmitry: Well, it was at a coffee shop meeting after the event. So that event, first round the feedback, coffee shop meeting second around the feedback, and by then I’d say, “Ten bucks a month and I’ll you sign you up for the first month, and, you know, it’s like a prepaid kind of thing. So you prepaid for an airline ticket and you use it down the line. This is the same kind of deal. I don’t have credit card processing yet. I need five people to pay me $10.” All I need and give me a head nod that this is something they’d use. And it was like a figurative . . . Like it was just . . . So they commit to actually giving me feedback maybe using it down the line.
Andrew: You want to know for sure, and five people did take money out and you knew that they were serious about this. Is this really true or is this like an idealized version that you remember in retrospect?
Dmitry: No. I got . . . The first 10 people, they actually gave me $10 . . . First five people gave me $10, like . . .
Andrew: Ten dollars, like $10 in cash. Okay. All right. You also got feedback along the way. Some of it was about the product. What was your original idea for the product and how did it change as you were talking to people?
Dmitry: Well, it changed completely. I mean, my first idea of it was to get a list of most-followed people on Twitter and send them DM messages through hacking Twitter. That was the original idea and getting like exposures from them retweeting your stuff . . .
Andrew: And why did people not like that? What was it about the feedback that told you that’s not the right approach?
Dmitry: Well, it seems people like were just gaming Twitter left and right and trying to game it so much that, like everybody’s doing outreach on there and people were not as successful through this method . . . Basically, my product would have just given them like tons and tons and tons of those leads and essentially, I would be back to Urb’s founder Dmitry, you know, a Clue article in TechCrunch where I’m back to that old Dmitry spamming tons of people, trying to get publicity and exposure and not going after quality.
So I was like, “Something here is just not right.” And people were also had different types of stories, they had different backgrounds, so I wasn’t always able to pull a list of people on Twitter for them. And so like the service offering wasn’t like a good fit for me from my experience standpoint and also from the feedback I was getting from people saying, “Listen, I’m in the healthy dieting space, you know, in Europe and I need to get exposure. And how do I use your tool for it?” And I’ll be like, “I don’t know how to do that, but, you know, like I can get you a bunch of founder and TechCrunch people in there.”
Andrew: All right. So then you kept twisting it and tweaking it and trying different things and you ended up with an email list of journalists, and if they use your software . . . It’s actually, you’re not giving them the email list of journalists, you have it internally, but they would use your software to reach out via email to those journalists, right? It’s like select the journalists you want to reach and send them a message.
Dmitry: Yeah, exactly.
Andrew: And this is from you just telling people, “If I built this, would you be interested.” They said, “Yeah, I would love that.”
Dmitry: Well, yeah. So essentially people were paying $10,000 a month, $7,000 a month to PR agencies, and they were like, “Listen, we only got like three stories, two stories a month. And can I get better?” And I’m like, “Yeah, you can get like 10 stories a month, five stories a month. You can do it on your own.” And they’re like, “Well, I don’t know how to do that.” I’m like, “Well, I’m going to build a piece of software that you can send those emails out just like a PR firm does.”
And so people are like nodding their head, “All right. I want to be just like a PR firm by myself, paying you a $100 a month or $50 a month, and not paying $10,000 a month to a PR firm.” So they were nodding their head and saying, “Yeah, I want this.”
Andrew: I see.
Dmitry: So . . . But they were . . . Like they still didn’t know how to build those relationships, like they didn’t know how to reach out to . . .
Andrew: But you didn’t know that until later. At first, you said . . . And by the way, this is such an easy thing to do. I don’t know why no one else thought of it. You just, you can find those email addresses fairly easily because reporters don’t hide their email addresses. They want tips. You have a search that lets people search for the reporters based on the topic that they’re interested in, people can check off the reporters that they want, and then a box for sending out a message. Did you even suggest the messages to them in the original version?
Dmitry: Yeah, I had two. Well, I had only two. Now we have like much more, but I had two emails suggestions. Yeah, like a little template.
Andrew: Okay. And here’s something you told our producer that we wrote down that we thought was especially helpful. You said, “Not only did I understand what to make, how to shape the product based on these conversations, I understood how to explain it. Like in the beginning, I would say JustReachOut is a tool for anyone to quickly email tons of journalists.” And I could see how you think that that would be what would appeal to people.
But over time, you realize as you’re watching people’s reaction that it was a much better to say things like, “JustReachOut is a tool for startups to build relationships with journalists,” and that’s what got people a little bit more interested. I thought that was very fascinating that you were starting to keep an eye on what people reacted to. Was it as formal as testing and writing it down in a notebook or doc on your phone or was it much more casual and not more conversational and you just kept in mind what people reacted to?
Dmitry: Well, you know, how I got those people gave me $10 at first. Afterwards, I’d have a feedback session with them at a coffee shop. And I’d sit there at a coffee shop, I talked to them about it, and I say, “All right. How would you describe this idea, this product to somebody I don’t know?” And so they would turn around and I would say, “Listen, if you do that I’ll give you like a Starbucks coffee or a card or whatever.” And so they would turn around and essentially their job would be to explain this to like a passer-by or somebody who was just sitting next to them.
And I would cringe, but it would be so hard, but I could not interject, like, that person had to explain it to somebody else. And so, essentially, I would just wait for them to explain and I would pick up on that language. How would they talk about my tool? How would they talk about what I do? Because they understand what I do, but how do they describe it to others? And that was the important part. I wanted to use the exact language that people would use to describe what I do to someone else without like any kind of my own connotation, my own changes to it. I wanted to just use that same language because that’s the language people understood.
And so I was paying attention to that. And then after each meeting, I would like write down words that they used that I didn’t use yet or didn’t use to explain things correctly. Or, like you know, people’s eyes light up or they’re kind of like, “Okay. I’ve got it. I got it,” you know. So. . .
Andrew: Whoa. That was . . . I thought I hit a cough button and instead, I coughed when I unhit the cough button.
Dmitry: That’s all right.
Andrew: I’ve had this cold now for 16 days, 16 days. I went to see the doctor yesterday. Do you know One Medical. . . Do you guys have that in Boston?
Dmitry: Yeah. I’m part of One Medical. Well, I’m in New York, but yeah, we have One Medical.
Andrew: Oh New York. They have it in New York, they have it here. It feels so good. $150 a year is what it cost for a subscription, then use the app anytime you want to go see a doctor. The doctors . . . The doctor’s office is so beautiful, my wife laughs at me because I kind of hang out there before and after my meetings with them. It’s just this beautiful, comfortable couching area.
Dmitry: I do too. I do too.
Andrew: You do too, right?
Dmitry: Yeah, I love it.
Andrew:And there’s no sense being there early because as soon as your appointment is set to start, they’re ready to see you, which is amazing. And then you have a real human conversation with a doctor, they never wear the white lab coat for some reason. Often in San Francisco, they have tattoos, but, damn, they know their stuff. And then at the end of the meeting I forgot what she was telling me to do because I was paying attention to like what I wanted to ask her and what she was doing to check on my body. So she text messages me everything that I was supposed to say like using their app. Snd I text her back and say, “Is this what I’m supposed to do?” She goes, “No, this is what you’re supposed to do instead.” Wow, this is an amazing experience.
Dmitry: Yeah, they’re really got it. . .
Andrew: Yeah. This is what I’m talking about, like startup is changing the world. Think about the horrible doctor experiences you had up until now.
Dmitry: This is awesome. I love One Medical. We’re switching our kids over. They have pediatricians too.
Andrew: I know. They’re here in San Francisco. They only have two offices and they’re a little far from me.
Dmitry: Okay. There are tons of them here.
Andrew: But getting standard and stand.
Dmitry: There are tons of them in New York.
Andrew: I fricking love this stuff. So that’s why people heard me cough and hock right into the mic. I never see Charlie Rose do this. I never see the professional interviewers ever get sick on mic. I wonder if it’s they have some kind of medication that gets them past it fast or if they just don’t record it. Maybe they act like a princess. “I can’t do it today.”
Dmitry: Maybe. I don’t know.
Andrew: All right. I see what you did too. I see some of the emails on your website. Your website is, your blog is criminallyprolific.com. And I see some of the emails that you sent out to people. You’re always very nice and friendly with people, and then at the end, you get down to business and you say, “Here’s what I’m doing, here are the bare bones. The registration doesn’t work. Almost ready. Are you interested?” And you try to see if people reply back to you.
Dmitry: Yeah. Yeah, exactly.
Andrew: Is this your cell phone number that ends in 4308?
Dmitry: It’s my Google Voice, so it doesn’t . . . Sometimes it’s messed up. It doesn’t go all the way to my cell. So I’ve got a . . .
Andrew: Okay. But the reason I ask is like I’m on your website in these weird places that you might not have noticed it comes out.
Dmitry: Google Voice. Google Voice.
Andrew: Okay. All right. So then you’ve got this whole thing, people are starting to pay you. Who builds the first version of the software for you?
Dmitry: So a friend of mine who was just the part . . . he was kind of like between jobs was looking for something to do and we . . . Well, actually, before him, I had a firm in Pakistan, which was a complete disaster. My son was born 2014 in April, and the code, the spaghetti code I get back from Pakistan is about a week before my son is born. And so . . .
Andrew: How did you find this guy?
Dmitry: The first . . . So the Pakistani dude, Noah Kagan. Noah Kagan says, “Dmitry, thanks for all the help from the AppSumo early days design bundle and getting that going. I love the help you’ve given us. You know, if you ever need anything, let me know.” So I hit him up and I said, “Hey, I need a cheap developer. I just said no to an acquisition and now I’ve got no money, and I have these like five people giving me $10. I need somebody who I can pay like $100 and get some code going.”
He’s like, “No problem. We use this guy. He’s in Pakistan.” And so I send this note out and I basically get this guy and he says, “No problem. In a week, we’ll have the code ready for you.” And a week before my son is born, I get this code and I’m so excited. I’m about to launch this thing. So I hit launch and like everything falls down, like our site can’t keep up with the requests that it’s getting, so like we only had seven people probably trying to use this thing and this thing is like falling down, our server is falling down.
I write back to him and he’s like, “Hold on. I wasn’t the one who wrote the code.” There’s somebody else under him. That other person doesn’t speak English very well. It was a mess. Like I was trying to debug it. It was horrible. And so then I got my other friend who was between jobs to try and patch it up and help and we basically threw out all that code because we found it auto-generated, part of it. And I got my friend to help out part-time to kind of build it for a little bit.
Andrew: Noah Kagan, by the way, was a huge advocate of yours. You know how many times he pinged me about you over the years? Tons. And he never . . . He never does stuff like that. And it’s because you just went out of your way to help him. What did you do for him?
Dmitry: Well, most recently, I got his podcast trending on iTunes on Apple when he launched it.
Andrew: By doing what?
Dmitry: I have a bunch of people who upload stuff on like different marketing communities and forums, like this one was mainly Reddit, Growth Hackers and Quib and some of these other forums where marketers hangout. So when he launched, he kind of wanted to kind of amp it up. And so I just had a bunch of like friends and people in different forums try to upload it at the same time. And so we kind of pushed it all at once, and so it got trending on there. But before then . . .
Andrew: Tons of stuff like that. What does it cost you to get all these people to go and help out Noah Kagan?
Dmitry: I don’t know. Like a couple thousand dollars or something.
Andrew: And you get that out of your pocket?
Dmitry: Yeah, like . . .
Andrew: Because you’re investing in the relationship?
Dmitry: Yeah, like it’s okay. It’s okay. Yeah, I’m down to do that just so that it’s. . . It’s just like sending a gift to somebody, like it’s better than a gift, really.
Andrew: Yeah, it’s like an evil genius gift that you can’t get on Amazon.
Dmitry: Yeah, you can’t really. Like it’s better than sending money or sending like an Amazon gift card.
Andrew: It’s a lot of your fucking time, not just that. So you helped us. I’ll be open with everyone. I hated the God . . . I hated the damn blog posts that we were putting out. They weren’t bad. I just thought there’s so much that we should be doing. But I don’t know . . . What I hated was this, that we had no clear direction, they were just kind of making it up. So at some point, I whined like a little girl to Dmitry. And Dmitry says, “Well, here’s what you have to do.” And he goes through this, I’m like, “What the hell are you talking about? This is what you have to do. First of all, he created 10-minute video and second I had to watch it five times to understand this plan.”
And then I go, “Can you just help me out?” And he gets together with me for coffee when you happen to be here in San Francisco. And he says, “Here’s how you do it. Here’s how you think about it.” And I he goes . . . And I said, “I need systems.” He goes, “Of course you need a system. Here’s the template that we use for writing this stuff and here’s how we make it interesting and here are five examples of people who use this. Stop thinking like you have to make everything up yourself.” “Oh, this is so helpful.” But that was you doing it.
Dmitry: Yeah. Yeah, yeah. I try and help as many people as I can to build the relationships. I feel like everybody needs to kind of build their relationship from value first kind of thing.
Andrew: All right. Let me take a moment to talk about our sponsor and then I want to come back. Now you’ve got your software, you finally have everything going, it’s time for you to launch it, time for you to start generating revenue. I want to find out how much revenue you’re making and I ask you about that publicly, and I want to understand how you got your customers, and I want to understand about that big mistake that you made and I think a lot of people listening might be making too.
All right. But the sponsor is a company called Bench. Bench will suck in all your financial data from your bank, from Stripe, from whatever, organize it using their software and then they’ll have real people, real bookkeepers go in and make sure that it fricking makes sense. So that’s the idea. Let me ask you this. You have a lot of sales coming in from the courses that you do, the software you create, the services you do. The whole thing. Dmitry, who does your books? It’s okay if you tell me someone who’s competitive with Bench.
Dmitry: My accountant in Brookline, Massachusetts. My accountant does it.
Andrew: Your accountant does it?
Dmitry: He does the books and then I just do the budget.
Andrew: So if you want to find out how many sales of JustReachOut you made last month, who tells you that?
Dmitry: Well, I’ll probably look at it myself, but I use Bare . . .
Andrew: You have to go through the numbers yourself?
Dmitry: Well, I used Baremetrics, but yeah.
Andrew: Right. Baremetrics is really good, that’s how you know about your churn, right? They connect to Stripe and now other services too and they’ll tell you churn and sales.
Dmitry: You know what? I use Churn Buster for churn, actually. It’s a cool little email program, but Baremetrics has that functionality. But yeah, mainly BareMetrics.
Andrew: What Churn Buster does is it sees who canceled and then it follows up with them and it tries to get them to re-up or whose credit card expired, right?
Dmitry: Yeah, yeah.
Andrew: What is it? Is churnbuster.com?
Dmitry: Io. Churnbuster.io.
Andrew: Churnbuster.io. Noah Kagan told me about PayWell.
Dmitry: Oh, I’ve heard of them.
Andrew: He said, “It’s a free service. Go to PayWell,” so I went to PayWell.
Dmitry: They are pretty good too. So yeah, I mean, I use Baremetrics to kind of pull out data and I look at it myself. And then my accountant keeps a close eye on all that too, so he is like . . . He’ll generate reports for me, you know, like monthly or bi-monthly or something.
Andrew: Really? What does that cost you?
Dmitry: I don’t know. Like I pay him one fee a year and he just sums it all up.
Andrew: And month to month he gives you books and you get to see how much money you’re making?
Dmitry: Well, it’s all in the API, so he can just pull numbers and compile it in a nice format or I can look at them myself, but he can do that.
Andrew: That’s impressive. What I like is, I need to have one once a month where I look at every single income and every single expense and fully understand it. I have to force . . . It’s not force myself anymore. But I used to have to just force myself, stop doing everything else and look at these numbers. And I’m glad that I do because I find these like jerky expenses, these weirdo issues that you just wouldn’t expect to come up and I deal with them.
But the other thing that it does is I used to have all these like $10 payments coming in, $25 payments, some from PayPal from the time I was using that, some from Stripe, some from authorize.net. I had no fricking order. And then every April 15th, I would freak out because how do you get all this organized? And you just don’t know until the end of the year how much money you make. I was completely at a loss.
And then I realized it doesn’t have to be that way. I was beating myself up. I was feeling guilty because as an entrepreneur I should know it. But in reality, it happens to a lot of entrepreneurs. I’ve interviewed lots who actually ended up getting tax issues where they’re penalized by the government or they miss their tax deadline for a year or two or multiple years because it’s so tough to put it together.
It’s not like we’re a salaried people who can take out W2 forms to an accountant and say, “Do it for me.” We’ve all these different expenses, all these different sources of revenue. So the thing about Bench is they will organize it for you, not just for the end of the year but month to month so you could see it day-to-day, you can go in and you could see over time how you’re doing, and you can actually get to do something about it if you see it throughout the year.
If you guys are listening to me and you don’t have this amazing accountant, which is what Dmitry has. And I would even suggest that this amazing accountant is great for you, but you’re not as obsessed with your numbers as I am. I’m much more obsessed. You’re not getting like a monthly report. I want to see monthly. I want to know specifically what’s going on. If I you are . . .
Dmitry: I have to check this out too. I don’t know. Like at my expenses, I need to categorize those better.
Andrew: I highly recommend anyone listening to me, get this software and services combo that comes from Bench. Go to bench.co/mixergy. They’re going to take 20% off your first six months. They’re going to give you a free trial. Think about what a free trial entails. They’re going to do free work for you to organize your books to make sure that you like it. And if you are happy with it, you’re going to get 20% off for the first six months. Twenty percent off for first six months seems like, “Wow. It’s an expiring discount. Why not do it forever?” Because their prices are already so super cheap. It’s so inexpensive, cheaper than having a bookkeeper, cheaper than having one accountant do the books for you.
And I love the combination of both people and software to get it all down. When you know your numbers, you’re going to do better. I think of it like a video game. I play this stupid Mario Brothers on my phone sometimes and I’m burned out. And because I have to keep track of all the coins that I get, I want to get all five of those red coins, I get obsessive. I can’t stop fricking playing it until I get all five coins. Same thing happens when you have your books in order. You can’t stop until you grow your numbers. Go check them out, bench.co/mixergy. Nobody has a .com anymore. bench.co/mixergy. You’ve got a .io, right?
Andrew: Churn Buster has a what? .io also?
Dmitry: Yeah, yeah, yeah.
Dmitry: .coms are hard to come by now.
Andrew: Your launch happened on a lot of different sites like Product Hunt. What happens on Product Hunt is people get to see it, they get to try it, they also give you feedback on it. Did you get any interesting feedback or interesting connections from that?
Dmitry: Yeah, I mean, Ryan Hoover and I kind of built our relationship further along through that launch because he was a big proponent of it and he actually introduced me to a lot of my first customers after that launch on there. I mean, I met a lot of . . . My initial base of customers came in during that launch. I didn’t expect it to do so well. At that time, we didn’t see . . . I haven’t seen any PR-centric companies or products launched on there, so that was one of the first. I might have been the first to launch on there.
So, and then Ryan was gracious enough for me to. . . And once we redid the tool and once it actually was working the way I wanted to work, he let me re-launch it on there. So by that time, he had more people on the site and everything. So it was really good.
Andrew: All right. So you started to get more people in, you were charging $10 a month, right?
Dmitry: Yeah, yeah.
Andrew: Which seems like it makes sense. Did nobody tell you that $10 a month is a problem?
Dmitry: I did not like . . . I had still a bit siloed out, to kind of like solo entrepreneurs. So I feel very lonely a lot of times building this thing. I don’t have a team still and a lot of my people are on contract. And so at the time, it was purely just me and nobody else. And so like the feedback I was getting from customers was just fix this, fix that. Business feedback, in terms of like how much money I was charging, I didn’t know.
And so I would make huge jumps. Like one day, I’d wake up and I’m like, “Well, maybe I’m not charging enough,” and I’d be like, “Why don’t we make it $500 a month,” and I’m like, “No, that’s crazy.” And I’m like, “$200 a month.” And then I would just randomly change. I have so many of these. I log in to Stripe, I have all these . . . And to be fair, 5,000 customers now, we have. . . And everybody is still on their own plan, like you grandfather them in. So we have people that are paying like $25 a month and we have people that are paying like $99 a month and we have people are paying $65 a month.
They’re all paying for a similar plan. Because I was messing around with prices so much, just trying to test what would be the sweet spot. And also like quality customers, you know, like you up the price and you get more quality versus like riffraff that are like at a lower level. I’m actually about to change the pricing, I think.
Andrew: You were at . . . When you were at $10, you told our producer people would complain a lot to you, they would churn faster. Churn, of course, means that they come in, they get what they want for a month or two and then they cancel. What other issues did you have with people who were $10 a month?
Dmitry: It was just poor stories. Like it was just, “Hey, I am a one-man consultant from Arkansas. I help people with marketing and I want exposure from my consulting business.” And I’m like, “Well, who are you? Like, what have you accomplished and why would you want exposure?” He’s like, “Never mind that. I paid you my $10, give me my exposure like you promised.” And I’m like, “Well, no. I got to filter people out like yourself out of this service. Like, you don’t deserve exposure. You’ve got to build something that really deserves . . . has provided value for other people to get exposure.”
And so you get into these back and forths with people and I realized, “Well, this was like really bad.” Like at $10 a month, anybody, and everybody would sign up. So I needed to put limits in place and make it more expensive. And that’s when I started playing around because I didn’t know so I would just play around with pricing a lot. I still am, actually. We’re still . . . It’s only like been two and a half, three years now, so . . .
Andrew: That’s it.
Dmitry: Yeah, so it’s not . . . We’re still really young.
Andrew: One of the issues that you had was, and this is one that shaped the product, people were spamming. What the hell? I already have all these journalists. Who cares if this is a journalist who only writes about animals? This person should know about my product too. Boom, check the box, send them a message, and then they’d spam using your software, right?
Dmitry: Yeah, tons.
Andrew: How did you know about that?
Dmitry: Well, I would look at the logs because they would go through my system, because people used my system to send the email, so it goes through my server. And I all of a sudden, I’d see, you know, like six or seven emails with a copy paste in it and I’ll be like, “What the hell? Why is he sending it a copy paste?” And I’m like, “Huh, this guy is a $10 a month. He’s just thinking I’m going to go for a month spamming tons of people, email everybody I can and just unsubscribe and I don’t have to pay anything. I just pay them $10 to send tons of these emails.”
And I’m like, “Well, I got to put a check- n for that.” So I would put a check on copy-paste. And then people would get smart about it. They’d like change the subject line or they change the text and the email all of a sudden, and they would pass my check. And I’d be like, “Oh,” people are getting more smarter, and then people would put scripts into it. And I started this little fighting an uphill battle and I’m like, “You know, people . . .”
And then I was looking around and people would be like, “Oh, $200 a month,” and I would be like, “Well, maybe I should have like a screening call with everybody or something who joins my system and have like 10 people at $500 a month versus 100 people at $10 a month or something like that. So I started to think that way because people were just gaming it a lot. And it hurt me and my system because anybody who’s marking me a spam, that’s really bad, like that hurts my webpage.
Andrew: It hurts everybody who was getting messages from you.
Dmitry: Yeah, yeah, yeah.
Andrew: So you changed it how?
Dmitry: So, A, I introduced the $500 a month plan where we do the PR outreach for you. So we take over the whole process. So instead of you do it by yourself, we take over the process. Still relatively inexpensive when it comes to like comparing it to PR firms, but definitely weeds out the crazies that are like mom and pop shops in Arkansas doing like crazy stories that don’t make sense.
Andrew: At $500 a month, you’re writing the emails, you’re sending it out to the journalist, you’re coming up with what the pitch will be?
Dmitry: Yeah. Yeah, $500.
Andrew: And I’m looking at the pricing right now.
Dmitry: Yeah. So I came up with . . .
Andrew: Fifty email pitches every month.
Dmitry: Fifty email pitches every month. So I’m about to change that up a bit maybe, so I’m actually . . . the $65 and $113 a month will go away. I’ll probably have a $159-ish kind of a plan for the do it yourself plan where you use your software to send out on your own. And then the $497 a month and then we’ll have higher tiers after that. But I just doubled down on this, like us controlling the process and really seeking out people who are quality versus not. So $497 a month, when you’re trialing it, when you sign up, the first thing we do is we hop on a call and we qualify you to see if you’re even qualified. If you’re just . . .
Andrew: Who does that?
Dmitry: So it’s me and then my head of growth, and also Eli who is the head of outreach. We’ll just, the three of us will hop on this call and after the call, we all have to be in consensus that this is going to be a successful campaign. We can actually replicate this month over month and keep doing the outreach more and more for this person and come up with new ideas like . . .
You know, I See Cars, like they have a site that lets you buy cars or find cars at different dealerships. So with them, like we can use their data to create new stories about, “What do men prefer to buy? What do women prefer to buy? What cities are the most cheapest? What are the most expensive cities?” Those types of things are . . . Like, we can replicate, rinse and repeat every month with data that they have and pitch that data to journalists and reporters.
Andrew: You know what? Then you’re basically becoming a PR agency on the cheap.
Dmitry: Kind of, yeah. So we’re like . . . We’re tying services into it and I found that this is the easiest so far to maintain the customers, to keep the churn like minuscule, down to zero and really provide value to reporters and journalists. What happens and what I’ve seen is after three months, they get it, they get the vibe, they understand what to do, and then they have been basically taught by our team . . .
Andrew: You mean your client does?
Dmitry: The client, yeah. The client.
Andrew: The client see how you think about pulling data and, for example, and how you turn it into stories and how each month’s worth of data can become similar months’ worth of stories and pitched to the same reporters, and at that point, they could start taking it over themselves.
Dmitry: Yeah, yeah, yeah.
Dmitry: And that’s where like we’re trying to figure out the service offering there, where do we . . . are we still involved, how much where we might be just strategy consultants at that point. But during the first two, three months, they’re still learning from us very actively. But we control that process, that outreach process. It really helps to get quality pitches out and we really control the pitches themselves and value.
Andrew: And the cheap option right now, which will probably be gone by the time this interview is up, is $65 bucks a month. And that allows them to send 50 emails. There is no copy-paste. It has to be 50 new emails every time to journalists. You guarantee deliverability now because you’re weeding out the spammers. And you give them alerts whenever there’s like a reporter who writes about a topic that they’re interested in.
Andrew: And you also give them templates, which is a great benefit to give them because you’re not starting them off with a blank page that they have to fill up, but you’re saying, “Here’s what’s worked for other people. Pick any number, one of our . . . Pick any of our templates and send it out.” When we think about . . .
Dmitry: We also . . .
Andrew: Pitching . . . Sorry. Go ahead.
Dmitry: Oh I was trying to say we also like interrupt their pitching process and we say things like, “Hey, you’ve sent out seven pitches, none of them were opened. We’re cutting you off. Time to rethink your pitch.” And so our algorithm detects that certain pitches are being opened and scrolled through and deleted, for example, or the read time is really low. And so we will cut a customer off and try and make sure they rewrite their pitches at the right time.
Andrew: Who writes this software for you that allows you to keep updating all this stuff?
Dmitry: Well, the software is written, it’s all out there now, but I pardon . . . my old friend that owns a software development firm. And he and I got together and he’s like, “Listen, I’d love to help you with this stuff,” and so we’ve been working with them for almost two and a half years now and . . .
Andrew: And you pay them to build out your site?
Dmitry: Yeah, yeah. And they’re great.
Andrew: What does it cost on an annual basis to build this out, to build out justreachout.io?
Dmitry: Oh like $100,000 or something. I don’t know.
Andrew: That’s nothing. That’s cheaper than a developer.
Dmitry: Yeah, I mean . . .
Andrew: So you come up with this idea, “Hey, you know what? If somebody’s email doesn’t get open, I want you to cut them off or alert me.” You go to them, they have to write this software, write it into the software something that tracks opens, etc., and something that alerts you and cuts them off, and they go put that together, and ideas and tweaks like that all come in for under $100,000 a year?
Dmitry: Yeah, I mean . . .
Andrew: What kind of firm is this from?
Dmitry: They are called Rails Reactor. But, I mean, we’ve had a long-term relationship with them. Maybe their rates have . . . I mean, like that’s what usually, I mean, I would pay. And it’s different like sometimes we have more active development, sometimes it’s like little things to fix here and there. We have a pretty good relationship with those guys. They’re great. They are outsourced, so they’re out in Kiev in Ukraine.
Andrew: This is railsreactor.com?
Dmitry: .com. I think it’s .com, yeah. They have . . . They’re going to redo their website, but they . . .
Andrew: Yeah, the website is not very good, but their client list is amazing, and I can see they’re in Boston, so this is probably the right one. They work with Grasshopper, which is a good company, and IKEA and so on.
Dmitry: Yeah, yeah. They’re very big with a lot of different brands. And they like they partner up on equity as well with different companies.
Andrew: Did you give them equity?
Dmitry: Yeah, to the founder, yeah, because when . . .
Andrew: That’s how you end up with that. How much equity did you give away?
Dmitry: I can’t tell you that.
Andrew: More than 25% or less?
Dmitry: I can’t . . .
Andrew: You can’t even say that.
Dmitry: Less, but I can’t tell you.
Andrew: Okay. Hey, when you give out equity in a business like this, that’s not meant to be sold, do you share profits month, I mean, year to year?
Andrew: You distribute profits.
Dmitry: To your equity owners, yeah. Yeah, you share like. . .
Andrew: Okay. So you take a salary for yourself, anything beyond a reasonable salary that you take out of the business you have to give them a similar proportion. . .
Dmitry: Yeah. According to their equity.
Andrew: Okay. Yeah, I kind of like that agreement so much better than investing in a company that’s going to sell at some point in the future. So looking at some of the businesses I’ve invested in, they take like 5, 10 . . . And who knows if they’re ever going to go public, right? The founder has no interest in going public. They’re never going to sell, right? It could be one of those things that, frankly, great company but may end up selling when the founder is ready to like die . . .
Andrew: Right. Or maybe even at some point, they say, “My kids are going to keep running it or something.” I have no idea.
Dmitry: And then you have just invested all that. We’re . . . So my wife just left her job and she’s about to think about buying her stock, and she’s like, “I don’t know if they’re going to go IPO or what.” And you know, you have to buy your equity when you leave a job.
Andrew: Right. And that is one of the biggest issues here in Silicon Valley that people get so hopped up on the stock that they get and they won’t realize that and on their way out, they have to buy it. They have to put up a bunch of cash. And where are they going to get it? And then when they’re going to get the money back?” Suddenly, at that point, you’re like, a gun to your head, you just got fired, or a gun to your head, you’re leaving, you have to come up with this cash fast.
Dmitry: And I think you pay taxes on it. I think at the end of the day, when you get those equities, you pay taxes on it too, so you a pay cash and you pay taxes on it. And then who knows what will happen with it, but you want to hold on to.
Andrew: It’s a huge, huge racket. My friend Shane Mack used to sit down with people who worked for his company. I forgot the name of the company he was working for. He’d sit down with them and say, “Look, let me be honest with you. Here’s what’s going to happen here. Just be aware. People say stock is powerful, but here’s what really happens.” All right. Revenue now. How much are you bring in?
Dmitry: It’s $445,000 last year, so all together. . .
Andrew: Four hundred forty-five thousand. How much of that is profit?
Dmitry: We tried to run those numbers. We actually killed most of the profit with a lot of marketing expense. So we pretty much gear that up. We were profitable last year. We had profitability in the last quarter. But at the end of the year, I think we left like $50K in profit because I was actively trying to expense it with a lot of prepayment on marketing expenses and things like that. But we have . . .
Andrew: Did you ever get depressed and say, “What the hell did I do? I give up all this money from Google for this?”
Dmitry:I don’t know. This is the first year when we actually made decent money because last . . .
Andrew: So how about last year, did you say, “I got kids?” I wake up in the middle night. Did you wake up in the middle of the night back then?
Dmitry: Yeah, and even last year, I think I didn’t really take much out of a salary, like as a salary, I just expense it with contractors. So on the other side, I had to hustle and get consulting gigs and I had to get sell more of my course. That’s how like I make a living.
Andrew: The course produces more money than this?
Dmitry: That’s where I take most of my money out of. Like the company, I take some distribution, but like nothing like the course.
Andrew: What is the course?
Dmitry: The PR that Converts, and, you know, that’s where like I could make like $150k a year or something like that to like live off, you know. Because I get taxed up the wazoo here in New York anyway, but it’s like . . .
Andrew: Yeah. It’s expensive to live in New York.
Dmitry: Yeah. And the course supplement . . .
Andrew: What do you do . . . I got so much to hit you with and we have like a minute left. What do you do with a . . . We have a minute left because Skype took forever for us to connect. What do you do about churn? How many people sign up and say, “You know what? I just need a quick hit. I’ve got an announcement and I’ll sign back up a year later when I have another announcement?”
Dmitry: My new other goal is going to be focused directly on churn all this year where churn is a really low on $497 a month where we do the managed service for you, we do the PR outreach. But self-managed service, when you sign up $65 a month, you can do your own thing, that’s through the roof. I mean, the churn rate is high. Like this is 30%, 25%, 20% to 30%.
And so what I’m trying to do is, A, teach people to do the right kind of PR outreach, have a strategy that’s like a long-term instead of just short-term, three weeks, two weeks and I’m out through the tool and through my emails and through intercom. But essentially, transition them to $497 a month for at least a month so they get a taste of what they’ve got to do. Then they come back to like a lower level and then they can stay on and do the right thing, you know, like valuable pitches, you know.
Andrew: All right. You can teach people a little bit about how to do PR and maybe give them access to this. Where do you want to send people who are interested? How about we send them directly to your site? What’s a good URL?
Dmitry: prthatconverts.com is my . . .
Andrew: And that’s where they’re going to learn how to do PR and then if they want to sign up for your software, they can do it?
Dmitry: Yeah, yeah. There’s a little package there, all that stuff.
Andrew: And, guys, do me a favor. If you’re interested in signing up with Dmitry, tell them you’re a friend of mine and ask for a discount. Is that a jerky thing for me to say?
Dmitry: That sounds good. That sounds good.
Andrew: Don’t ask for a big discount because then he’ll know that no friend of mine is going to ask for a big discount. All right. So it’s prthatconverts.com. You’ve done a lot for a lot of people. When you do PR, you’re not doing like, “Hey, everyone, just notice this new thing that’s out there.” You do PR for things like for SEO. PR That Converts is a really good title for what you do.
All right. And the software that we talked about, it’s called justreachout.io. Go check that out if you’re interested. And finally, the two sponsors that I mentioned are the email software that both Dmitry and I use. It’s called Active Campaign. Check them out at activecampaign.com/mixergy. And the second is a company that’s going to do your books right, they’ve got software, they’ve got people that get you reports on a regular basis at a really low price. They might actually, frankly, between you and me, these will pump up their prices at some point. It’s very inexpensive. bench.co/mixergy. You’re going to points like I get every time I play Super Mario or Mario on my iPhone and you’re going to want to just keep upping and upping those points. Dmitry, thanks so much for doing this.
Dmitry: Yeah, thanks for having me. It’s a pleasure.
Andrew: All right. Bye, everyone.