The Serial Entrepreneur Behind Chargify And Engine Yard Talks Openly About His Hits And Misses

When I read this line in Lance Walley’s LinkedIn profile about a previous startup, I knew he’d be the kind of frank interviewee you’d need to hear: The system worked very well, but frankly, the world didn’t seem to care :-(

In this interview, you’ll hear the stories behind many of the companies Lance launched, including FaceBridge, the company that inspired that line. You’ll also hear how a 1% ownership difference in his first business made a world of difference.

Today Lance is probably best known for Engine Yard. Some of the world’s biggest Rails websites are on the Engine Yard Platform. Recently, he went on to be the co-founder of Chargify, which simplifies recurring billing for Web 2.0 and SaaS companies.


Full Interview Transcript

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Here’s the program.

Hey everyone. It’s Andrew Warner. I’m the founder of, home of the ambitious up-start. You guys know what we do here. Everyday I bring on another entrepreneur to talk about how he built his business, what happened along the way and what he or she learned from the business so that you guys can take those ideas, get out there, build a phenomenal business and then come back here and do what Lance Walley is about to do, which is share your experiences.

So, Lance Walley is with me for this program. He has launched a lot of companies. Some had high profiles, like Engine Yard, which provides infrastructure and support for Rails applications. Let me repeat the name of the company for the transcribers. Engine Yard. Anyone in this space already knows, but the transcribers need to get that right.

Other companies that he launched didn’t do so well, like FaceBridge, which has this statement next to it on Lance’s profile on LinkedIn: ‘The world didn’t seem to care.” Smiley face. I love that kind of openness, Lance.

I want to ask him about as many of the companies that he’s launched as I can fit into this roughly hour long interview and about Chargify, the company he co-founded and now runs.

Chargify simplifies recurring billing for web apps. So, first of all, Lance, welcome to Mixergy.

Lance: Yeah. Thanks for having me.

Andrew: All right. So, I want to take this interview in chronological order as we discussed in the pre-interview. I want to find out about how you started, what came next, and so on, and how you got here today.

But, one of the things that I love about entrepreneurs is that they just make for a better world. How are you doing that today with Chargify?

Lance: A better world? Well, I mean, we’re not solving world hunger. I guess to a small degree maybe we will eventually. What we are doing is allowing people who want to try a recurring revenue business, which seems to be the future here, to do it easily and quickly, to do it in hours or days and see if their idea works. And not spend any money until they have at least 50 customers at the moment. That, to me, is pretty cool. So, go ahead.

Andrew: Recurring revenue. I understand the significance of that. You don’t want to keep making your first sale if you can build a continuous revenue stream for your business and a continuous relationship with your customer.

Lance: Yeah.

Andrew: I completely get that. But, why do people need Chargify? Can’t they go out to PayPal or find their own connection and do it some other way? What’s the difference?

Lance: There’s a number of ways to do it. When we built Engine Yard, we used and some other tools and you can get pieces of it. But, Chargify brings it all together. Makes it automated and just simple to set up. You just define your products and pricing and billing period and whatever, and boom. You are off to the races. It takes care of following up when cards get declined. All the stuff. So, by having a team focused on that area, you get for zero dollars, or $50, or whatever per month you are paying us, what took us in my last company many man months of manual labor and coding to do. So, yeah.

Andrew: All right. So, you guys had that issue with Engine Yard. I didn’t realize.

Lance: Oh, I wrote a blog post on it on the Chargify blog early in the year called, ‘Buried in BAM.’ Which stood for billing activity management. Go read it if you want to. If you want to be entertained. Yeah. We built the company, we walked right into that mess. We didn’t have much of a choice. Other options were too much money. We got through it. But, I’m just saying, if I look back now and add up the time and energy spent, we would have so rather paid a few hundred bucks a month and put our resources into the features the customers wanted.

Andrew: You know there are all these tools out there today for building a business quickly and focusing on the core of your business and outsourcing the other stuff, or relying on experts for the other stuff. I still see people, believe it or not, who will code up, essentially, their own blogging platform.

Lance: Yeah.

Andrew: Who will, essentially, have to build every freaking thing themselves. And, it just becomes a big distraction. You are not going to be the expert in creating the blogging platform and the shopping cart and this and that. Wherever it’s possible to hand it off to somebody else who can do it right, I think it makes a lot of sense.

Lance: Yeah. I mean, I think if you just look at the world. it’s like, Basecamp, SurveyMonkey, MailChimp, all these different services that, I see it as this progression of taking a common business, dividing it up into blocks that everyone needs, and then letting a team that’s focused just on that. It’s like, I don’t want to make a survey system, I want to use SurveyMonkey or whatever. Let them focus on that. Pay them a small monthly fee, and get the benefit of their expertise.

Andrew: Yup. OK. So let’s talk about how you got here. You’ve got a big, big, big, big, big entrepreneurial history.

Lance: [laughs]

Andrew: I pulled out maybe six companies that I was able to find.

Lance: Yeah, I think.

Andrew: Is the first big one that you launched, is it Parallax?

Lance: Yeah. Parallax.

Andrew: It was.

Lance: Maybe we got a little bit lucky. Because, well, actually, that wasn’t the first one. There was one in high school with a friend of mine that, I don’t even barely remember what we did, frankly. It was some sort of computer hardware. It never really got anywhere and it fizzled out. But, Parallax did pretty well.

My friend and I started that out of high school. We were 19. We had eight dollar an hour day jobs. Or, I did. And, we just kind of followed what we were interested in. We made memory cards for Apple II’s. We made a thing later called an EPROM Emulator. We made programmers for different kind of chips. We were super nerds. I mean, we were nerds long before it was fashionable to be so, or mainstream. That was way pre-Internet. That was when you literally put together circuits and programmed in assembly language to make the circuits do what you want. Those were the days. Anyway, so that was Parallax.

Andrew: What was the original idea for it?

Lance: The original idea was an expansion RAM card for the Apple II GS. I’m pretty sure that was the first idea. This is kind of a funny story, and tell me if I am taking too long. But, it does show how ideas just spring about with no market research or anything. I had gotten an Apple II GS. The one memory expansion card at the time was like $400 bucks. And, I couldn’t afford it. And, I also thought it was just outrageously expensive.

So, long story short, I thought I could wire up the chips myself on a board and make it work. So, I went ahead and did that. I made a little one megabyte card that worked, lo and behold, without frying my computer. Went to my friend Chip Gracey, my former business partner and said, “Hey, we can do this. We can sell it for half of what Apple sells it for and we’ll make a killing.”

It was just that total 19 year old entrepreneurial spirit without having any idea about why Apple can get $400 bucks for the card. Anyhow, long story short, we did it. We made the things. We sold them through local computer stores. We maybe sold a couple hundred units. But, to really compact the story down, chip prices were highly variable. They went up. We got squeezed. And then eventually Apple threw in the card for free with every Apple II GS and we were just out of business as far as memory cards were concerned. But, we stayed in there and made other products and made it a success.

Andrew: But, when you launched, you took one of those circuit boards and a soldering iron and you were putting chips into it?

Lance: When we launched, we had the circuit boards made by a professional circuit board manufacturer and, yes, I do think we probably put the chips in and soldered them in by hand on the first five or ten units.

And then after that, we discovered that we could pay the same people who made the circuit boards an extra five or ten bucks to run it through a thing called a wave soldering machine. Which did a better job and took about 15 seconds or something. So, yeah. I’m sure we made the first few by hand and after that we went to automation.

Andrew: I thought I was pretty impressive when I was able to take those chips and stick them into my old IBM PC and just have extra RAM.

Lance: Oh, yeah.

Andrew: But, wow. You were actually building those freaking things. That’s impressive.

Lance: Yeah, that was fun. Like I said, that was fun. Making circuitry and getting circuit boards made was the equivalent today of making a Rails app or something. That was the language you worked in was circuitry itself and then assembly language.

But, anyhow, Parallax is a really cool story, to me. It taught me a lot of the basics of business. Initial terrible failure. Getting stomped on by Apple. And, they weren’t trying to stomp on us. We didn’t exist as far as they were concerned. They were just doing what they do.

We got stomped on. But, we hung in there. We found other products that resonated with us and resonated with people like us. Parallax was about a ten year thing, the total trip. Things moved more slowly back in those days. And, through that ten years, we found the magazines that reached people like us. We found the ones that worked the best. We started out with little tiny black and white ads that were $200 bucks a month and eventually had full page, full color ads that were $2000 a month that reached 50,000 targeted users. That was actually a really good deal, frankly.

We found that the nerds like us were really turned on by things that we liked. Things like EPROM emulators and programmers for different microcontrollers. The way we got into microcontrollers was, my business partner saw an article about some cool, little microcontroller chip. It’s basically a computer on a chip, for like three bucks.

Long story short, I don’t want to take up too much time. But, it just shows how being like your customers was beneficial. He saw this article, he thought it was cool, he ordered up some samples, he got a hold of them, played with them, programmed them. Thought these things are really cool and sexy. They’re cheap. Whatever. They operate at five mps, blah, blah, blah. But, what the problem was is that the devices you needed to program were like $800 bucks.

So, he’s like, “Hey. Little hobbyists like us can’t afford these development tools.” So, long story short, over the next year or two, we made some cheap development tools. And, first sold them to the chip maker, MicroChip Technology, and then later made our own and sold them through those same magazines that we discovered earlier.

So, you can see this progression where you can see the magazines that work and you discover this chip you like. You kind of figure people like you might like it. You take out a little ad, you see if they like it. They do like it.

It’s $200 bucks, it’s way less than $800 bucks. So, in other words, the programmer we made was $200 bucks. They start buying it. You start making a little profit, you invest that in another product that they like. We later made an assembler. We made an emulator. So, the success builds on the success.

And when we started out, this is something I was just telling someone yesterday, when we started out it was super hard to accept credit cards. This leads into Chargify. But, back in my day, when I was “young,” it was super hard to get a merchant account to accept credit cards. Almost impossible for a little young company run by a couple of 22-year-olds or whatever.

So, all we could accept was check in the mail or COD. Early on we were processing cards through a friend’s business, which was against the rules, but you do what you need to do.

Later, my business partner’s dad twisted the arm of someone at Wells Fargo for like a year to get them to give us a merchant account. Which, I think he personally guaranteed with his house or something, because again, the underwriting back then was much stricter.

Anyhow, long story short, by the time we were 22 or 23, a few years in business. We had a credit card terminal which was just this Holy Grail thing and we could literally take a credit card over the phone and ship someone something. I just love looking back at all the different milestones. The milestones are, some of them are products, some of them are reaching the full page, full color ad.

Andrew: Did we just lose the connection? It will come back, if we did. We’ll give it a moment or two to see if it reconnects. If not, I’ll disconnect and I’ll have to apologize to Joe for having to piece this together. We lost the connection there for a moment.

Lance: OK.

Andrew: But, I’m glad that it’s back.

Lance: Oh, cool.

Andrew: Yeah, yeah. It’s back, so we’re good. You were saying there was some milestones, some of them good, like getting the full page ad.

Lance: Yup.

Andrew: What are some of the bad milestones? Or, I guess they’re not called milestones. What are some of the setbacks?

Lance: Let me see. What were some of the bad things? There weren’t too many bad ones, frankly.

Andrew: Do you ever have nights, where you wake up in the middle of the night and go, “What am I doing here? I’m a smart guy. I know how to use a soldering iron. I know the chips in the machines that most people still didn’t understand back then work. I could get a job that earns money without any of this risk. What am I doing?”

Lance: I never wanted a job.

Andrew: Never?

Lance: I don’t mean that to sound bad or whatever. I just, I liked working for myself or working with a few friends. It was kind of in me since I was a teenager. I’ve had a few jobs, I mean, don’t get me wrong. I had jobs to pay the bills when we were starting the first company. You know, you need income.

The first company, Parallax, we had no money. No real investors. We had about $20K friends and family investment, which we blew through pretty quickly on a couple of trade shows and some fliers and stuff. So, you had to fund it just by working a day job and funding it.

Anyway, I’m trying to think of what were some bad ones. Some bad ones were, I’ve been sued a couple of times, for usually minor things. It comes up when you get big enough, and you’re noticed enough. Because you’re making some product that some company thinks is infringing on them, or whatever. A lot of times, frankly, they are nuisance lawsuits. It’s how the big boys kind of play sometimes.

Having Apple throw in the memory card for free when we were trying to sell it as our first product. I mean, again, Apple didn’t mean any ill will to us. They were just doing what they do. And, believe me, that was a little bit of a drag. We thought we were off to the races and then just get majorly stomped by an elephant.

Andrew: So, what do you do about that? Suddenly, Apple not only stomps on you, but they don’t even realize that you exist. They accidentally trampled, stomped on you as they were charging forward.

Lance: Yeah.

Andrew: What do you do inside the company?

Lance: Well, keep in mind, at that point the company was probably Chip and myself. Two of us. I had a day job. He had some money from a previous product he had made. It wasn’t going to hurt our livelihoods. It was a setback in that we thought we were off to the races and we weren’t. And, we had already spent $20K of investment money or whatever from our friends and family.

You are depressed a little bit. Life goes on. You get turned on by another product idea a few months later and you pursue it. It taught us a few lessons. It taught us that a large, consumer oriented market is tough. We learned later that a niche market aimed at engineers was better.

Andrew: So, for a few months you were a little depressed. How did you deal with it, and how did you bounce back?

Lance: Well. OK. First, I would say I probably wasn’t depressed for a few months. I mean, we were probably twiddling our thumbs for a few months. But, I don’t stay depressed very long. I mean, hell, it’s been twenty something years so I can’t really remember exactly, but I was probably depressed, quote, unquote for a week or a few days.

But, I had a day job which I liked. And, I liked the people and I liked the customers across the counter. I was behind the counter at a print shop. So, whatever. You get past it. I rode my motorcycle, I love motorcycles. Life was OK. I was 19 or 20. Life just wasn’t bad. You just move on. Like I said, we were turned on by the technology itself, and there was always new stuff coming out.

So, you don’t remain depressed for very long. You go on to something else. A common quality of entrepreneurs is you need, you hopefully are and need to be optimistic. Somewhat crazy optimistic so you can keep moving on. I mean, as you said you found in my history six companies, I think there’s actually eight. And, I like to tell people that I’ve started eight things or been a part of eight things with other people. And, I consider only one, two, three, maybe four. I consider four of them successful.

And, even one of those four I think was just mildly successful. So, I guess it’s a pretty good batting average. But, there are others I’d rather forget.

Andrew: [laughs] Like what for example?

Lance: FaceBridge. I mean, FaceBridge taught us . . .

Andrew: Let’s bring up FaceBridge in a little bit.

Lance: Yeah.

Andrew: I asked that as a trick question, and I’m adding it to my list to make sure that I do get on that.

Lance: All right.

Andrew: In fact, I was going to hit on that anyway, because of the intro.

Lance: When we get to that, there is one huge, valuable lesson out of FaceBridge which would benefit anybody and most people already know it.

Andrew: All right. I’m going to come back that. I wish we had ads so we could use that as a teaser to get people to listen through the commercials. But, we’ll have to give them a good story to keep them listening instead.

Lance: All right.

Andrew: So, we talked about the setback. Let’s talk about a big milestone. I know that you reached three million dollars in sales. Do you remember what that first million was like?

Lance: Are you talking Parallax?

Andrew: Yeah.

Lance: The first million I don’t remember. I do remember this. I remember being very happy that we were watching the revenue grow over time, and this took some number of years. And I remember the first year, knowing the figure was like $110K for the year. The next year was like 350. The next year was 710. The next year I think was 1.2 or 1.3. It was a very cool feeling to be able to say we are basically doubling every year.

And, I remember being kind of naive and having the bravado of a 23 year old or 24, whatever we were, and saying, “Hey. If we keep this up, if you just do the math. 1.4, 2.8, 5.6, 11. Heck, We’re gonna be bigger than Microsoft at some point.” What we didn’t appreciate at the time is that it’s gonna flatten at some point. So, yeah, it was great to surpass a million. That’s a great milestone.

And, frankly, a million was probably more money back then. That was, I don’t know, it was twenty years ago or whatever. And then the next was, you know what’s weird? I don’t remember thinking about two million at all. Because we went from 1.4 to 3. Then we plateaued.

I don’t know what they are at these days. I haven’t been in contact with them for many years. But, we hit a plateau. It was very hard to get over three million and I don’t really know why. I frankly don’t know why.

One of the milestones I liked, by the way, was, one of the last things I did there when I was about 29, 28 or 29, was work on getting us into Radio Shack. And it was really cool. It took about a year of visiting Radio Shack. I think they’re in Fort Worth. Talking to them, sending samples, whatever. To get them into Radio Shack. And when the first PO came in for 50 or 100K worth of our, what are called basic stamp products, that was really kick a**. It was a nice way to depart Parallax having accomplished that.

Andrew: So, this was ’96 when you departed. What happened to Parallax?

Lance: That’s an interesting story. I mean, shit. Sorry to cuss. There are so many lessons out of these businesses, because I know we are almost at the halfway point.

Andrew: Let me tell you this, by the way. I will stay here all freaking day and night and for weeks on end. I’ve got the mate, which will keep me awake for as long as you need. Don’t be pressured by the time. It’s all up to you and I’m here to hear your story. So, let it rip. Especially when you say it’s an interesting story.

Lance: All right.

Andrew: Don’t hold back then because of the time. Screw the time.

Lance: Yeah. I mean, Parallax yielded a lot of stories for everybody involved. I mean, A, because we were all young adults. We were all learning. We were learning as we went along in many cases. I didn’t know what a merchant account was when I started Parallax. But, anyway, I started Parallax with a good friend of mine out of high school. Chip. And, we grew it together. And if you had asked us early on or even up until our mid to late twenties how the partnership is and how we are getting along in the business, we would have, we did say to people who asked, “It’s the best thing since sliced bread. We complement each other really well. There’s nothing not to like.”

But, as happens in normal life, people change. They drift. What they want out of life changes. His family owned about half, my family owned about half. His family owned a few percentage more, so they owned the majority by a few points. And, long story short, we grew apart in the last few years as to what we wanted to do.

So, at the end of it, there was a little bit of a fight. A board room fight kind of thing. I don’t want to get into nitty gritty details, but my family got the short end of the stick. And, not in any malicious way. I’m just saying we had the lesser voting rights. So, I took off. I took some money out and went on to do something else. And, it unfortunately really kind of exploded the friendship in the process.

Which is too bad. Because that was a good, solid best friend kind of friendship that had grown over 15 years or so. So, it’s unfortunate when such things happen. One of the lessons I took out of that is just that we knew we were growing apart at earlier points in time.

And, there were points in time a year or two earlier where we could have parted on friendly terms and probably remained friends even though we wouldn’t have been in business together. And we let it fester. I let it fester, and then it exploded and then it ended the friendship as well as ending the business relationship. And, I think that’s a shame to have that happen.

Andrew: So, we’ve got someone in the audience who is now partners with a friend of theirs. Going OK for five years. And, they want to protect themselves from this situation. Or, maybe someone who is starting off. What advice can you give them? Is there an agreement you can put in place that would have protected you?

Lance: What is funny is, we had a buy, sell agreement. We had some of the super basic stuff. And, we had a lawyer on our board who helped us with some of these things. I’m trying to think of what might have helped. I don’t know that an agreement could have helped. Because, even with the agreements in place, you have to agree that you want to sell out or whatever. Which we did. If neither of us wants to leave, then, of course, it winds up leading to a fight. A forceful thing.

I can put most of it on me. If I had swallowed my ego entirely and just said, “Look. I only own 47 percent. And, it’s just the way it is.” I could have and should have walked earlier. Probably could have taken more money out, because it would have been a more amicable environment. Kept some ownership. I wasn’t allowed to keep any, which, I always resented.

So, if I had just walked earlier and just said, “Hey. Ego aside, it is what it is. Unfortunately I only have 47 percent. So, boom. I’m gonna make a deal that’s good. I’m gonna walk. We’re gonna remain friends.” I had a little bit of growing up to do as far as, should have left earlier and kept it all friendly. I thought they made some mistakes as well. They could have handled things differently. And, I’m sure they learned from it, too.

Andrew: Instead of battling and saying, “Hey, I’m a co-founder here. I deserve equal say in the future of this company because I had equal contribution into building this business.” That’s the way that you went, it seems like.

Lance: And, I think we both felt that way. But, like I said, when you are 28 or 29 you think differently. But, looking at it now, I would just say, maybe I don’t want to leave. But, the reality is if you push it to a fight, and you only have 47 percent and you don’t have the votes in the board room, you are going to lose.

And, you are going to expend a lot of energy and a lot of negative energy on both sides to get to that vote. And, you’re still gonna get pushed out. I bet there’s military and political parallels. I’m sure people at the top running our government or wars or whatever, they try to know ahead of time what’s the likely outcome here, and therefore what should I do?

Andrew: Yeah. And, I think Sun Tzu had a few words to say about that. Essentially, what he was saying was, “If you know you’re going to lose, don’t go into war. Find another way of dealing with the situation.”

Lance: Yeah.

Andrew: OK. So, that was from ’87 to ’96. ’97, ’98, you launched something called Stay Tuned.

Lance: Yup.

Andrew: You seem to have been really into text messaging. You saw it as the future. Right? Most people in ’97, ’98 didn’t know text messaging. Here you are, you were banking on it.

Lance: Yup.

Andrew: What was Stay Tuned as a business?

Lance: Stay Tuned, it was just an idea I got coming out of Parallax. And as I said earlier, I had a little bit of money out of Parallax. Not enough to be wealthy forever, but enough to start something. Stay Tuned was this. I don’t remember exactly why I thought of it, but somehow I just really liked the idea that, this is before cell phones had text messaging, that on my pager I could get updates of stock info or weather, lottery results. Whatever. I can’t remember what all it offered.

And somehow it just seemed really cool to me. I literally remember thinking, “Wow. I have this device in my pocket which is individually addressable wireless device.” Which was relatively new at the time. “And I can receive data on it that might be important to me that’s personalized to me.”

Keep in mind that in ’97, I think it was, ’96 or ’97. The idea that you could have a website with a database connected to it, where you could go in and put in your personal preferences and then have your pager receive information based on that. Everything I just described was pretty kick a**.

I remember going to a coffee house with a friend of mine in a nearby town called Davis, California, and showing him that, “Look. I can log into this website, I can put in a few stock tickers and then log out. And then, the system will send me updates on those stock tickers. Not somebody else’s. Not just the DOW Jones or whatever. But my stocks.”

The whole thing was pretty new and pretty cool. Anyhow, I liked it. I thought it was something that a lot of people would want for ten bucks a month or whatever. But, I found out over time that America was not the best market to be in for that. It was very hard trying to sell it.

Cell phones got text messaging. Pagers became text devices, I’m sorry, what was the deal there? Yeah, yeah, yeah. Early pagers you could just send numbers to. Later, text. Whatever. You know the history there. I couldn’t get more than a couple hundred customers in the United States to pay for the service.

It eventually supported a lot of wireless carriers and a lot of devices. I wrote the code all myself. It was written in Perl. I had a UNIX server doing the updates. I had a Windows server for the website. It was a whole different time.

Anyhow, it was a great little thing. Just couldn’t get enough people to want to use it. And, what’s funny is, I always tell myself, “I bet if I had been in the UK or the Netherlands or somewhere where texting was big, the future may have been different for me.”

Andrew: Was it carriers or getting users that was the harder problem?

Lance: Getting users. Carriers were pretty open at that point. They didn’t know what the heck was going on. I mean, no one really did. I’m not blaming them. And most of them had an e-mail address associated with each device and you could e-mail to it. And, they didn’t care what was going to the device. There was no extra charges for it or anything. Like I said, it was the Wild West days of text messaging.

Yeah. How do you find those people? This is pre-Google. It’s so early. How do you find 10,000 people who might want to use the service? I was literally going to local wireless shops and getting them to stock fliers of mine. I had printed fliers, trying to do anything I could to find customers. And, on the Internet as well, of course.

And, like I said, I had a couple hundred customers paying eight bucks a month or whatever it was. But, it just wasn’t enough to sustain the business.

Andrew: Yeah. How are you going to get customers? How are you even going to get customers to find out about the product is a key question before you launch.

Lance: Yup.

Andrew: One of the things that I heard, and you tell me if this is wrong. The reason the founders of Chargify wanted you on board is because you had access to the customers. Because through Engine Yard, where you were hosting web apps. Where you were a guy who was known in the Rails community. Where developers were connected to you and were following you. You had access to them.

Lance: Sure.

Andrew: And you could tell them about this product that they would want.

Lance: I don’t know if that’s what they wanted me for. I suppose they got some percentage of their wants. Grasshopper, the parent company of Chargify, the Grasshopper Group now. They’re really good at getting the word out, getting the brand out. It’s a two way street. It’s part of why I picked them, too.

I had met the people behind a number of start-ups like Chargify and I just was really impressed by what I saw, that they had built before and what they could do. So, I would attribute a lot of that to their efforts.

Sure, I brought to the scene I guess a fairly good knowledge of the Ruby on Rails space, the developer market, if you will. I had been in that really deeply for three or four years. So, yeah. I think I brought that to it.

But, I’m not going to take credit. I think most of our customers have been found not because of my efforts.

Andrew: Really?

Lance: No, absolutely. There’s a guy in Boston named Jonathan who does the PR stuff. There’s a whole team there that works on the website and the branding and they made sure we had a presence at South by Southwest some months back and things like that.

So, it’s the whole team that makes that happen. It certainly ain’t just me.

Andrew: Yeah. Grasshopper, of course, is a sponsor of mine. They co-own the business Chargify with you and they are freaking phenomenal when it comes to getting the word out. I would love to have them come on here and talk openly about how they strategize to get buzz and PR and how they get TechCrunch and Mashable to both feature a video that they make.

You know the video I’m talking about? There’s some kind of hip hop video about being nerds and geeks.

Lance: Yeah, yeah.

Andrew: What did you say?

Lance: There’s a few videos. I don’t remember the . . .

Andrew: Yeah.

Lance: They’ve made several and they make really nice videos.

Andrew: Yup. All right. Let’s move on with your story, though. We’ll do another interview with them. For now, I want to learn more about what you did next. It looks like the next thing you did is you went to VC backed . . .

Lance: Oh, yeah. Well, oh, OK. You are going to FaceBridge?

Andrew: No. Actually I am going to the company I mispronounced in the pre-interview.

Lance: Oh, Quios.

Andrew: Quios? OK.

Lance: OK. But, let me tell you how Stay Tuned crashed and burned and how it leads to Quios.

Andrew: All right. This is very open. I appreciate it.

Lance: No, no. Stay Tuned crashed and burned. I eventually just ran out of money. And, put up a notice on the website that said, “Hey. Thank you customers for trying to support me, but I didn’t make it. So I am closing up shop. I’m going to terminate the service in 30 days.”

I was running out of money. I almost sold a house I had. I’m glad I didn’t. I got a little apartment. I later moved into the smaller second bedroom of a friend’s apartment in downtown Sacramento. I mean, I was literally heading toward having no money in the bank. So, I was just cutting my life down to be really cheap. And shutting down the service.

And, what happened was, so I put up this notice and said, “Hey. I’m going out of business and I appreciate your business and blah, blah, blah.” Within a week or two, I remember lying on the couch at my friend’s apartment watching TV or napping or something. And an e-mail came in from a gentleman in Belgium.

He said, “Hey, Lance. My name’s Mark. I’m founding a new company called Quios.” Q-U-I-O-S. I think it was called something else in the early days. Anyhow, called Quios. “I’m a Stanford MBA, I’m getting VC. I’m gonna move to San Fran and we’re gonna do the thing.”

Because, this was 1998 or 1999. I can’t remember what year it was the pre-bubble burst years. The bubble years. So, I said, “Hey. Cool. Let’s meet.” He wanted to meet at Stanford and see what I’m all about. He said, “I’ve been watching you as one of my competitors, but I see that you’re basically closing up shop. Maybe we can work together.”

So I met him at Stanford a few times. We chatted. We liked each other. And, I said, “OK. Cool. Let’s make a deal.” So, he made a deal to basically buy my core Perl code to give him a head start and bring me on as employee number one. With a decent paycheck and whatnot. And, ultimately, a move to San Francisco and help build the company.

Again, I wasn’t one of the executive staff, but I was the first guy, early guy. Everyone knew who I was and I was a Perl developer. So, that’s how it leads into Quios. He was doing this. He knew more than me about how to get VC and all that. And so, boom. I had a paycheck and a new life experience unfolding.

To compact that story down quickly, I think it played out for several years. He got several rounds of funding, I think totaling 20 or 30 million dollars. I brought in my friend Tom Mornini who is now co-founder and CTO of Engine Yard. Tom and I go back about 20 years.

Brought in Tom as a Perl developer, lead developer. Another friend of ours from Chicago named Dan. So, it was a great experience. We all experienced living in San Francisco. We experienced seeing how VC is obtained. We never went to board meetings, but Mark remained fairly close to us as friends. Mark, the CEO, founder.

So, we would go out to dinner and we would compare stories. Because, we had this whole background of always bootstrapping businesses and just growing little businesses that were self-funding maybe up to 15 or 20 employees. But, kind of not beyond that point.

So, he introduced us. He had been a big company guy in the background in the Telco space over in Europe. So, he was learning how to get VC and then helping us understand. Like, I had never heard the word term sheet before. In fact, when somebody had mentioned the term VC to me, at the previous company, Stay Tuned, I didn’t even know what the term meant.

If you had said venture capitalist, I could kind of parse the words. I still didn’t really know what it meant. And VC was an abbreviation, I had no idea what that meant.

So, I was a newbie here, and through Mark we saw how this all works. And I think that was a great experience.

Andrew: OK. You’ve compacted it. Now we get to move on to FaceBridge.

Lance: Yeah.

Andrew: What was FaceBridge?

Lance: FaceBridge was a great lesson in when to fail fast. I love that term even though it’s improper grammar I am pretty sure.

Andrew: [laughs]

Lance: Somebody corrected me on that once and said it should be fail quickly or something like that.

Andrew: [laughs]

Lance: But, in any case, my friend Tom and I, again, we go back a long ways, we have founded a few things together. I think we were at an Apple event of some sort. Steve Jobs was talking. I think he had just introduced iChat. iChat audio video, AV. And, we both got this cool idea that, “Hey. Apply just made audio video chat pretty easy and simple for the everyday person.” It had not been up to that point.

We thought, we went to dinner that night at our favorite place in San Fran. And, we thought, “Hey. if there was a way to bill for this.” If I could bill you per minute for the video chat we are doing. If I had some expertise on language, or mathematics, or law, or whatever. Or porn. It came to mind as well. Then, boom. I could make money by selling my expertise to someone via video.

So, long story short, we spent some time, or Tom spent some time, we both spent some time figuring out how we could do this. We would set up a proxy server that would proxy requests between you and me. I would set up a separate what we called seller account that represents me. In other words, there’s Lance Walley, the real AIM address, but there’s also real estate expert as my seller addressor whatever.

So, I would define, the proxy server would have a website associated with it. And I would go in and make a profile for myself. I would say I am a buck a minute. This is my expertise. Blah, blah, blah. And, if you want to talk to me, I would give you my seller AIM address. And, when you tried to contact to me through your chat client, normal chat client, no special software, it would, through the magic of the Internet hit our proxy server because that’s where that address actually existed.

Our proxy server in a half a second or so would figure out if you’re on file as the buyer and if you have a credit card on file. Blah, blah, blah. And, if you do, it would pipe you through to the real me. And we would communicate, and I would be making money.

So, we thought we were going to set the world on fire. We thought this was the best thing since sliced bread. Everyone’s gonna use it. Blah, blah, blah. So we found a developer in Utah who knew the AIM protocol really well and could help us make a proxy server. I am pretty sure most or all of it was in Perl, but I can’t remember anymore.

Some of it I am sure was in C++ For the speed that you need. It worked. We had it working. We developed it over a year or two while we were doing other stuff.

It was very much a side project. It was never a company, legally it was, but whatever. Long story short, the world didn’t care. That’s what I said. You read it somewhere. The world gave a collective sigh, I guess. We tried to get different groups to share our enthusiasm. Be it teachers, instructors, doctors, lawyers.

We went after the porn industry pretty heavily. We went down to LA and found people who run companies producing content and to see if they would like to use this mechanism to reach their customers. Learned a lot about these different areas.

We pushed and pushed and pushed. We pushed on the rope, so to speak, instead of having somebody pull on the rope from the other end. We pushed on the rope for six or twelve months and just, what the world was saying we didn’t want to hear it.

Herein lies the lesson is, “We don’t care about what you’ve got.” We were so enthusiastic about it. We loved the technology so much. We thought, “People aren’t getting it. We must not be getting across how cool this is and useful this is or people would automatically want to use it.”

The irony is maybe someday they will. I don’t know. Maybe a decade or two from now people we be, “Oh, yeah. I should be able to charge for my video chat.” Maybe not. I don’t know. There was some weird thing where we just couldn’t get people to be interested in it. And, we spent, I don’t know what we spent over that time. 50K or 100K.

Andrew: That’s not too bad for a company that went from 2003 to 2006 that’s pretty . . .

Lance: Keep in mind what we did is we had full time consulting jobs “during the day”. I think I had, yeah, yeah. I had Quality Humans, Inc running, that’s not in your list. Quality Humans, Inc I had started when . . .

Andrew: 2002. It’s in my list.

Lance: It’s like the time line is confusing now. But anyway . . .

Andrew: 2002 I think.

Lance: OK. Anyway, so it’s like we were doing consulting gigs to pay the way and thought Face Bridge was going to be our successful product and it wasn’t. So we eventually had to give up and move on.

Andrew: Why? Why didn’t it work?

Lance: Oh, man.

Andrew: I’ve seen other companies try this. Keen back in the heyday of the dot com bubble was trying this over the phone. I’ve seen other companies do the 2.0 version of it. You were in the in between period. Why doesn’t it work?

Lance: It’s weird. It’s like the feedback we got from people, just average people, was why would I “why would I pay for video chat or chat? Why would I pay?” It was like they not only were asking us a question, they always had a perplexed look on their face, like why would I do that? And we were like well why do you pay for consulting expertise? In other words, to us it was like what’s the difference? You pay your lawyer and your doctor; you pay your language tutor and your piano instructor. I mean it’s just a different way of interacting with someone and paying them. But as much as we tried to tell people that I don’t know if it’s some weird cultural or just human thing that was just like no. I just don’t get it. So, I just really, literally don’t know the answer.

Andrew: Would it have been better to go out to potential customers and say if we build this would you pay for it?

Lance: Well, yeah, I suppose that’s the perennial lesson is just that maybe we should’ve done some research first or built a minimum viable product. I mean, I think we basically did. We made a minimum viable product. It even had some bugs in it. It only worked on the Apple platform, blah, blah, blah. I think we built it about as minimum as we could. But, yeah, just didn’t work. And I just literally don’t know the reason. We were up against some basic human or at least cultural present day belief. And again, that may change in the future but in our generation it just seemed like people don’t want to pay for that. And people don’t want to charge for it either. In other words, both sides looked at us like our idea just doesn’t make sense.

Andrew: So, it’s strange because there’s certain things that I do want to learn and I want to hire somebody to teach me, some kind of trainer. But I don’t have the patience or the time to go out and learn with them or even have them come in here, makes a lot of sense to do it on line and still I haven’t done it and I’m sure I could find a way to do it.

Lance: I don’t get it. Now it’s like I’m sure there’s systems out there to do it now. Yeah, I don’t know. Maybe it’s like maybe our idea that you could do guitar lessons over video is just not real. Maybe people want to be sitting next to the instructor; maybe the instructor wants the people sitting next to them. There you go.

Andrew: OK. We talked about Quality Humans, what was that?

Lance: QHI was basically another point in my life where I was diving toward bankruptcy and I have this vision in my head where there’s the surface of the ocean is below me and I’m in a small airplane or a hang glider or something and it’s like, you can keep, as an entrepreneur who’s pretty optimistic, I can burn through a lot of money or fuel so to speak and be diving towards the surface, which I consider bankruptcy. And then at some point you pull up before you reach the surface. And I think that was the closest I’ve ever come. It was after, yeah KIOS, the earlier company, KIOS went bankrupt unfortunately, the BC funded company I was working for bailed out of that, kept my fancy expensive lifestyle in San Francisco, didn’t know what I was going to do next. I tried, I think, El Hip Tones, a ring tone site, you can see a pattern here, right? It’s another mobile thing but this time it was ring tones and I thought hey, I’ll make money on ring tones. I tried that for a year or so, a year or two, couldn’t get enough traction. Again, got customers, whatever, but not enough to make money. And then that blew through some money and at some point I was like, oh, holy crap I’m about to just run out of money I need to save myself.

My friends at this point were telling me Lance, you need to get a job. And keep in mind you’re going to laugh, or some people won’t, it’s like in that year or two when I was blowing through money trying to get Hip Tones working I bought, on credit, a BMW Z3, a new Carillon motorcycle and a video camera. Actually, in reverse order. They were increasingly expensive. The video camera is $300 and then the motorcycle and then the car. So, what the hell was I doing? It’s like I was buying these nice things, enjoying myself at the precise time when my income is very low and probably going lower. Anyway, so I was having a good time but heading towards zero and because I was so optimistic that Hip Tones was going to save me. But it didn’t.

So, basically at one point I was just like OK, I need to save myself. So, I put up a single page website that had a video of me talking to the camera and saying I’m a good parole programmer, I’m a good guy, I have a good reputation, it’s like I’m dependable, it’s like I can do the programming you need to have done for $75 an hour. I look back on it, it was pretty quaint. It was a single page, I think black and white, there might have been some color, website and all it had on it was this video of me talking to the potential customer for three or five minutes or seven minutes or something. And then it had my rates, my contact info, a little bit of info about my past, whatever, and that thing, that started out as Perl USA.

Later I renamed it Quality Humans. That saved my life, financially anyway. It’s like I got a few customers within the first few weeks, a few clients, one was in San Francisco, one was in L.A. and that was that. It’s like the San Francisco client was doing a thing kind of like Lending Tree, a website where you can apply for a mortgage and get set up with different banks and the whole refi boom was just beginning. A great guy, great little company, willing to pay what I was asking, super nice to work with as a client. It was off to the races.

So, that got QHI going, got me an income. I later grew it to where I had friends doing programming for clients and I was making money off of them. And long story short that spanned, heck, QHI, Quality Humans, that spanned, it’s still legally on the books but I think it was active for, I don’t know what, four or five years. And it eventually grew up to maybe ten people, we were all doing consulting, I was doing consulting out in the field, my friends were, we were making money. We had a corporate apartment in Washington D.C. where we would go hang out because we had clients in Washington. And it’s like it wasn’t going to make me rich but it was a good enough business that it gave us all a decent income and it stored up money in savings. I think at some point it had 80 or 100K in savings after a few years.

So, it was doing all right and it was paying the bills and that lead to A, it was a great experience for all of us consultants, we got to see the country, we were working inside of big banks, government agencies, little customers, big customers. We were doing Perl work, later Ruby on Rails work and a bunch of other work that won’t mean anything to anybody, proprietary stuff. Again, learned a lot of cool stuff, great experience. It lead to my friend and fellow consultant, Tom, seeing the need for Ruby on Rails stuff and it lead to seeing the need for engineering.

Andrew: I see. And that’s what got you to launch Engine Yard. What was Engine Yard in the beginning?

Lance: Engine in the beginning was Tom going out to a client site in New York through QHI and coming back after his first few Ruby on Rails clients and saying Lance, this is a really cool things but there’s a lot of confusion out there about how to deploy apps and what stack to use. It’s like, number one Lance, you need to put it on the QHI website that we, he was first to say that we need to rails consulting. So, that was step number one. Step number two was when he did a few gigs was to come back and say there’s a lot of confusion, as I mentioned earlier, we need to form a rack space for Ruby or rack space for rails. It’s like that was his thought, was people want to pay to just have this problem go away and just write their apps but not have to think about anything other than writing them and running their business. So, that was it. It literally was like I got to hand it to Rack Space, we had been Rack Space customers. It wasn’t some brilliant new idea it was just like, hey there ought to be a Rack Space focused on Ruby on Rails because . . .

Andrew: What do you mean by that for people who don’t know what this is?

Lance: Oh.

Andrew: What does a Rack Space for Ruby on Rails mean? Ruby on Rails the language? What is a Rack Space for it?

Lance: OK. Rack Space first off was, I think, the first company or the first in my mind anyway, to rack servers for you that you will never see or touch as the customer and you could pay them a few hundred bucks a month to have a Linux server that was yours. You had SSH access it was yours to use but it was never yours. You didn’t own it, you didn’t touch it and they had staff 24/7 at the assistant admin level and maybe others as well, deviates and whatever, to make sure your server kept running and to help you if you ran into problems. I remember early on thinking it was just weird that you wouldn’t own your own server. It was weird in the early days that you wouldn’t touch your own server, that you wouldn’t run it, that you wouldn’t own it. Now it seems so normal but at the time when they came out it was a bizarre idea.

Anyhow, so they had been a successful company, they had shown the way. Again, from my perspective as a customer of theirs early on, it was the first step towards the abstraction of servers from me, you know the customer. I never saw my server at Rack Space. I paid them for a couple of years a few hundred bucks a month, I never saw it, I didn’t know what it looked like, whatever. The cool thing was if it broke they had to fix it and I didn’t have to lift a finger. So, that’s the idea.

So, again, so fast forward to this, the idea was there should be this company that’s dependable, it’s not cheap, it shouldn’t be cheap. It should be a reasonable/high price and you should get really good service for it and you should expect that the equipment being used is good and the policies are good and the people are good, everything’s good and you’re paying for that as a monthly fee. And by saying Rack Space for Rails you’re assuming another layer on top of the hardware. It’s like what that statement says is that we, Engine Yard, are going to be Rails focused, Ruby focused, which means we’re going to have people who know all about those technologies, who know which stack of software works best and most reliably, who know how to tune this or that piece of software, whatever. Because at the time the stack, what web server, what app server, what whatever, all these different pieces, that was not established. It was still in flux and so a lot of the client’s frustration was like hey, what pieces should I use? I heard this one’s better. I heard this one’s better. I heard this one has bugs, whatever.

So, the idea was just wrap that all together and make it where that you write you app, you hand it to us and we run it. And you not only never have to see the servers but you never even have to wonder which technology stack is the best stack. We will have people on board who know that.

Andrew: I talked to one of the guys at Rack Space3 in preparation for this interview just about an hour ago. A guy name Encore. And I asked him what he would ask you and he said he would want to know how you got the early customers because the business is still built on them and a lot of them are still around. He wanted to know how, when you guys were starting out, to get all those customers.

Lance: He said he was at Rack Space or Engine Yard?

Andrew: Sorry, Engine Yard. He’s one of your guys. Did I say Rack Space? I had Rack Space in my notes.

Lance: No problem. It’s because I know his name at Engine Yard. How did we get the early ones? How did we get them? Oh, well we started putting out the word through whatever methods we could, through forums, through user groups and stuff that hey, we got this new service and it’s something you should try out. And it was probably early enough time in history where that it was a small community and people were willing to try new stuff because Rails was new itself. And so we did that. I’m sure we did some Google ad words or whatever it was called at the time and things like that just so if you typed in Ruby on Rails hosting you’d see our ad. We had a link from the QHI website for what it’s worth. And then somewhere early on, I don’t remember the exact time frame, Ezra came on board, he was founder number three at Engine Yard, and he had a large following of people which, of course, he told them about it. So, through all the methods we could, just through the close technical contacts that our guys had with others in the community, we just got the word out there. Again, it was a small community at the time, fairly grass roots. It was relatively easy.

And that kind of points to another thing, it’s the wisdom of starting in a niche, a small niche so that you can actually easily reach the other members of that niche without spending a ton of money. Almost just by shear word of mouth.

Andrew: How did Ezra have a following?

Lance: It’s a great story. Early on when we were getting Engine Yard going, I don’t know exactly month number six or whatever it was, Tom, I think, had found Ezra online because Ezra was one of the earliest if not the earliest to work on, I think one of the earliest to make a commercial Rails app helping run the Yakoma Harold newspaper in Yakoma, Washington. I don’t know exactly what it was but there was some expertise that was recognized, certainly, and Tom found him because of that and they got to talking. I’m pretty sure that the relationship early on was hey Ezra; can you help us figure some things out? Can you consult with us, blah, blah, blah? And then later Tom just asked him, hey, do you want to come on board and be part of it? So, he had a following from his earlier work, being one of the earliest guys in the whole Rails ecosystem and I literally think I heard it said that he was earliest to have a commercial site and he’d written a book, which was also widely read. So, that’s a clear way that he had a following as well.

Andrew: And did he connect with his following via blog or did he have some other way that they were all listening to him and even finding out that he was with you guys?

Lance: Yeah, his blog and I forget that Twitter didn’t exist. It was blog and he also spoke at user groups and conferences. And later I think of him at Rails conference stuff but if I think about it now Rails stuff didn’t exist yet, I don’t believe. I don’t remember when the first Rails conference was, ’06 or ’07. But in any case he had a following through all those things, blog, book, forums, etc., all the ways people gather.

Andrew: All right. I know we’re at the top of the hour. Let’s just talk a little bit about Chargify. Why’d you partner up? Why didn’t you go and launch your own thing?

Lance: Well, here’s how that works. I left Engine Yard early last year, it was simply time for me to move on. I goofed off for a few months and then I looked back at what are the pain points that we felt and that I thought our customers felt that need to be solved.

One was telephony, which I think Twilio’s doing a great job of. And then the other was billing. I just remember thinking that this whole billing thing was a big mess and it was more of a mess than we had thought it would be. We thought when we were building Engine Yard that there would be something like Chargify out there and I asked our finance team to please look into it and find something and come back to me. I just assumed there’d be something from a company like 37 Signals for $100 a month or whatever and boom, we’d be off to the races. There wasn’t.

So, anyhow, so I’m leaving Engine Yard ’09, there was still nothing in the space, and so I spent July just working up a model of how I thought the engine of this should work. Then I went traveling in August and when I came back in September I thought OK, it’s time to get serious and do something here. I still believe in the space. I asked my Twitter followers and friends and people at Engine Yard what’s out there. Because the thing is I thought about starting it myself, I thought about trying to go raise some capitol or whatever and try to do it on my own with a couple of guys but maybe because I’m a little older, a little more seasoned I thought hey, if somebody’s already out there doing it I should at least know that they exist and see if we can partner up if they have a head start, you know.

And so, I got on an airplane and I visited all four of the start-ups in this space and spent a couple of days with each group and I liked them all. They’re all great people, they’re nice, they showed me around their respective hometowns, etc. But, again, as I mentioned earlier in interview I was really impressed by what I saw at Grasshopper in Boston and by David and (_______) as co-founder. Those guys are young, they’ve done great stuff, reminded me a lot of my earlier days and again, you just look at what they’ve done and not just the employees they have if you’re physically milling around the office but what they’ve been able to accomplish as far as customer account profitability, branding, etc. And we liked each other. We kind of hit it off. We had a good rapport and they were looking for someone to head up this new thing that they’d created six months earlier called Chargify and boom. So, it was a fit. We communicated over, I think, the following month after I got home and struck up a deal for me to come on board. I invested a little bit of money, came on board as CEO co-founder. That was last November. At that point it was spun out as a new separate company from Grasshopper.

So, I think it was a great decision. Some of my friends kind of watched the whole thing and later said hey, Lance that was a really pretty cool move. It’s like instead of trying to start from scratch, find some guys that you like and they like you and they’re already moving and they already bring a lot of benefits because of the resources they have. So, you both wind up benefiting each other. And we both together wind up increasing our chances of long-term success.

Andrew: So, what’s the part that you bring in? In addition to the credibility and the reputation that you have in the Rails community.

Lance: What do I bring? I would say in all these companies that I’m part of I usually partner up with people more technical than myself, more specialized than myself in some area. I’m usually, I don’t know how to put it, I’m usually the glue that kind of brings it all together and keep things moving forward. I’m not trying to say the other people don’t. I mean they do too. But I’m the guy that keeps plugging forward through some number of years to a hopefully good outcome. You know, a good profitable company with happy customers is a good outcome. That’s what I do. I’m not particularly deep technically. I can hang in there with most conversations but I’m not the best developer or programmer by any means. I’m not a deep finance person. I’m not a deep marketing person. I’m a jack-of-all-trades. I think I work well with most people and just kind of hang in there and keep the group moving forward. I love talking to customers and working with customers. I do a lot of tickets every day and I’m the designated phone guy. I’m the guy on the team who likes taking phone calls and talking to customers. So, I do that. I tend to be pretty close to customers and reflect that back into the organization and try to make sure we’re giving the market what the market wants.

Andrew: OK. What’s a typical customer? Let’s let people know if they’re the right people to contact Chargify. I imagine you’re looking for new users right now.

Lance: The cool thing is of course we’re always looking for new users but something like nine or ten a day sign up every day of the month. So, we seem to be striking a cord. Anyway, typical one is it changes. When I first came on board the typical customer was a one or two man shop with a brand new business idea. We still get a lot of those and we love them. But the typical customer is changing. The typical customer today is probably five or ten person company, maybe a little more established, they might have been in business for a year or two, they’re looking for an automated solution for their recurring billing and they want to plug in something easy.

We’re also starting to get bites from what I call established companies. They’re 20 or 30 people, maybe they have a pretty recognizable brand in a certain market, maybe the tech space or whatever, and they want to come on board say this fall. And what’s really interesting about what we’re seeing is the pattern is almost identical to Engine Yard, although it’s happening faster. It’s like in the early days the only people who trust you are little, tiny start ups that are taking risks themselves. And then as you mature and your brand is stable and people have seen you and you get more customers then you get the little bit bigger company. And also, of course, the early ones grow into bigger companies too. And then ultimately you start getting these more established companies and they start asking for things like SLA’s and they want to know about your financial backing. It’s like their needs change because they are changed themselves.

Anyhow, to answer your questions succinctly the average customer is still small handful of people with maybe 6 or 12 or 18 month old company. They’ve already got some cash flow going, they want to automate it. So, that’s the typical.

Andrew: So, they’ve got some system built in themselves and now they’re looking to automate it through you guys?

Lance: It’s like I would say they’ve probably built something themselves but its kind of half a**ed, in their own admission. They did what we did at Engine Yard. They built enough to get going but it’s buggy and doesn’t work for every customer, it has a lot of exceptions, there’s a lot of human hand holding, blah, blah, blah. So, they want to automate that. I don’t know exactly how the pie chart would look. I mean there’s still a large contingent of people that are trying stuff from scratch. Don’t get me wrong, they have the easiest time because they don’t have any data somewhere else that needs to be quartered over or whatever. But yeah, I think the new/established customer is becoming the center one.

Andrew: All right. Well, if anyone wants to connect with you what’s the best way to do it?

Lance: With me personally?

Andrew: Yeah or with the company. With the company I’m assuming they could just go to

Lance: Yeah.

Andrew: You’re out of beta; you’re available to anyone.

Lance: Yeah, Chargify on Twitter. We’re kind of Twitter fanatics. We try to answer that pretty quickly. There’s a phone number on the website, you can actually call and get a human. I apologize in advance if I can’t answer your call right away. We do return our voicemails pretty quickly.

Andrew: All right. Well, let’s leave it there. Thank you so much for coming here, doing the interview. Anyone in the audience goes out there and uses Chargify come back to Mixergy and give me your feedback. I want to hear from you guys what you think of the site and the service. Lance, thank you. Thank you all for watching.

Lance: Thanks a lot.

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