Input Factory, Inc.: The Loss Behind Selling A Company

How excited would you be if you sold your company? Today’s guest says it was more a mixed blessing for him.

Luke Wroblewski co-founded Bagcheck, which helped people share lists of the gear that they used. Today, he has released his first iOS app, Polar.

I invited him to talk about the launch, and sale of his previous company, Bagcheck.

Luke Wroblewski

Luke Wroblewski


Luke Wroblewski co-founded Bagcheck, which helped people share lists of the gear that they used. Today, he has released his first iOS app, Polar.



Full Interview Transcript

Andrew: Coming up in this interview, did today’s guest say that the lowest point was selling his company to Twitter after nine months? Wait till you hear why. Also, how do you find the perfect business or product idea for you? Maybe the way that today’s guest had Thursday meetings with his co- founder is the right approach for you. Also, did you know that there’s a danger in making your product to easy to use? Don’t miss that part of the interview. All that, and so much more, coming up. Catch it.

Listen up. I hate to have commercials interrupt this interview, so I’m going to tell you about three sponsors quickly now. Then we’re going to go right into the program. Starting with Walker Corporate Law. If you need a lawyer who understands the startup world and the tech community, I want you to go to

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Hey there, freedom fighters. My name is Andrew Warner, and I’m the founder of, home of the ambitious upstart. How excited would you be if you sold your company? Today’s guest says it was more a mixed blessing for him. Luke Wroblewski co-founded Bagcheck, which helped people share lists of the gear that they used. Today, he runs The Input Factory, which released its first iOS app, Polar. I invited him to talk about the launch, and sale of his previous company, Bagcheck. Also, I want to find about what he’s up to at he Input Factory. Luke, welcome.

Luke: Thank you. Thanks for having me.

Andrew: To launch Bagcheck, you and your co-founder talked every Thursday. What did you guys talk about?

Luke: We used to work at Yahoo together. What we’d do in the after hours, one day a week we would get together at a mutual friend’s office, sit around a whiteboard, and talk for two to four about things we were interested in, ideas we had had previously, generate ideas together. Really, just try and make the process of what we wanted to work on together very collaborative.

The way that company started, the genesis of it was, I wanted to work with Sam, and Sam wanted to work with me. We said, hey, let’s do something together. What we were going to create, and how we were going to go about doing it, that was all to be determined.

Andrew: Why’d you want to work with Sam? What was it about him?

Luke: Actually, that’s an interesting story. When I was at Yahoo, there was a very large division called the Consumer Products Group, which has basically everything that hits the individual, outside of sales, and ad networks and things like that. So anyone that was human, that went to Yahoo to use mail or Front Page, that was included in there.

This Consumer Network thing spanned a lot of products. What they had was, every single week they would have a six-hour long meeting where they would go and review a strategy, the implementation of each product, and each team would sort of roll in there. I sat in on those meetings as sort of the design representative to make sure we had a good user experience across the board. Sam sat in as sort of the technology representative, sort of the mini-CTO of that world, if you will.

During all these meetings, we saw every single product come in. We saw all these guys talking about it. We realized we really had very common sense of, I don’t want to say critique, but the things we both saw and brought up as points. We were very aligned up. I think that made us both interested in working together. Because, hey, we really see the same things, care about the same issues, and think about things in the same way. It was sad that we learned that through six hours of Powerpoint presentations every week, but that was kind of how we got together.

Andrew: You told Jeremy, who pre-interviewed you, I took over the design team in charge of the Apple homepage design. It was a year that felt like being stung by bees. Why is that?

Luke: Yeah. If anybody out there has ever worked on a homepage redesign, you know what it’s like. That is, everybody wants their link on the homepage. Everybody needs their space on the homepage. Imagine doing that for what, at the time, was the largest homepage on the web, period.

Yahoo, back in those days, was like 15% of online time. Obviously, things have changed these days. Back then, Yahoo was the internet for lots of people. When you have a company that has tens of thousands of employees, hundreds of, if not thousands of products and they all want to be on the home page, it’s sort of like the homepage redesigned problem, magnified to a larger scale, it’s humanly possible. So there’s a lot a great things about that process but then there’s also an awful lot of, ‘Hey, I need this thing, hey, I need that thing…[SS]…

Andrew: [??] absurd request that you had to still follow the rule on because this was Yahoo?

Luke: Yeah. You know, I always love this. When I was eBay we did a project for the redesigner registration and someone on the team…came up with this phrase, I believe it was, I can’t remember exactly what it was, but the phrase was ‘No one rain drop believes they are to blamed for the flood.’ And what it represented was the eBay registration process. The marketing team wanted to ask the demographics of somebody registering; the privacy team needed them to agree to these terms and services; the legal team needed them to verify they were this and this age or something like that. And on the surface each one of those people’s requests seemed totally reasonable, especially from their point of view, right? And of course, marketing wants to know that. Yes, the legal team is totally in the right to ask that. When you add it all up, it turns into this giant form of 50 questions that nobody ever gets through and they drop off and don’t join eBay.

The same thing that was going on with the front page, right? No one in particular, was necessarily to blame, but when you add up like the small business unit and the broadcast website, and the video website and the search website and you know, every single product that Yahoo had, competing for the special real estate you run into the same problem of, it’s a flood.

Andrew: …[SS]…what do we do about that?

Luke: I think you have to very hard stance on what’s really driving the business and what’s not. So I did a very interesting exercise when I was there, which ultimately didn’t get any traction, but for me was, I thought it was a really compelling way of looking at it. I took the click through data on the homepage, on the Yahoo homepage and I mapped it out percentage basis. Like what percent of clicks go to what link, and I did a redesign where I allocated that percent of pixel space to that product on the homepage. So let’s say, for example, 40% of links go to mail, or something like that. So 40% of that screen space was dedicated to mail and your inbox and your links. It was a really interesting way of looking, at what really masters on Yahoo, and what are they going and doing and interacting with?

Andrew: I see.

Luke: Now clicks are rates are only part of the story, right, because you also have to see which one of those links actually links to money. [chuckle] And I think that’s where, in a lot of these things get hung up because the message often is, let’s rethink the design and accomplish something totally revolutionary but don’t move any of my numbers, don’t change the status quo in any way shape of form. Which is kind of like being asked to, you know, completely renovate a house but never move any of the furniture.

Andrew: Huh-huh. …[SS]…I can see why you and Sam would want to go and start your own company. And there you were getting together regularly to talk about different ideas. What was your process for finding the right business idea?

Luke: We started off with having very concrete ideas but what we gradually made our way toward was looking at a bigger picture of trends, so like actually markets. Right. So we started with look, I got this specific idea for this and I have a specific idea for that. And over time, what we found was okay, this related space is actually the thing we want to focus on. And for us at the time, one of the big ah-hahs that kind of went off in our head was when you look at what had happened with ecommerce. The top, like if you look at the top 15 websites in the world, and you look globally, right, top15 websites over the past 10 to 12 years over half the list of the top websites had changed. But if you went and looked at top list of the ecommerce websites on the web over the past 15 years, none of them had changed, maybe over one had moved into list, and everything else actually stayed the same, even when the rain kinks most stayed the same. At that point the light bulb went off and we were like, oh so much stuff has changed on the web, but ecommerce has just sort of stayed like this, right. So there’s going to be something here and it’s really interesting, so that was kind of where we netted out the focus, like let’s go into the market, let’s look at this area and rather than try and do anything, everything let’s use it as a focal point.

Andrew: Okay. And even ecommerce though is pretty broad and includes everything from eBay to Amazon to local stores. How do you figure out where you are going to be?

Luke: Yeah, so at that point, it was, okay, here’s the space we’re playing with and then let’s really try and humanize it. And the thing that created sort of a human connection to things was we are going to stuff that center day to day lives. What we realized was, if you’re really into something, let’s say you’re into mountain biking, which I am. So every time I go mountain biking with my bud we spend have the ride talking about, like, ‘Why did you get that seat?’ ‘Have you tried these shoes,’ ‘And all my shoes aren’t working to well, I think I need new breaks,’ ‘Oh which breaks should I get.’ And like half the interaction around having a hobby or a passion is around the[??]. Same like photography, even like if you’re a computer nerd or you’re talking about the mice you use, you’re talking about the monitor, you’re what have you. All of that stuff, right? And so there’s just this real world interaction going on around people talking about the gear, to use the things that they do that they love, and this naturally leads to some e-commerce thing, right? So that was kind of the impetuous for when we went with Bag Check. And that was what drove it to us. So very high level, right, commerce, products; then, very tangible real world human behavior that we really didn’t see happening online very concretely. Like, there wasn’t anything specifically that had taken that kind of behavior, and made it digital.

Andrew: And so the next step you took was to actually put together visuals of it. What software did you use to create your mock up?

Luke: I used Keynote very early on with these things. So I have learned over the years that abstract, the liver bowls, tend to lead to abstract decisions. What I mean by that is if you give somebody a wire frame of a couple grey boxes, I think it means X, you think it means B, you know? I see a zebra in my head, you see a lion, and then we never agree when we get there. So, like, what I like to do in the early stages of thinking of things is to get as tangible as possible, because then you get very, very real feedback. Like, people see the visuals, they see the moving, they see somebody actually interacting with it, and all of a sudden they have very concrete feedback, and there is very little room for interpretation. Right, I thought you meant this, I thought you mean, well, no, here it is. It looks just like a product and it’s actually moving.

Andrew: And the reason it’s moving is Keynote allows you to kind of fake interaction. When people click on one slide, they think they’re clicking on a button on a webpage, and when they’re led to another slide, they think they’re led to another webpage.

Luke: It’s actually, you can go deeper than that. Like, I make Keynote that actually simulate finger gestures, and clicks, and so it looks like a finger’s clicking it, pages scroll, things flip.

Andrew: What do you use to do that? Is that Keynotopia?

Luke: No, it’s just Keynote.

Andrew: So with Keynote, you just start designing because that’s what you do?

Luke: Yeah. So, Keynote has two features that make it really, three features, I think, that make it really good for this kind of work. One is the canvas is pixel-based canvas, so you can set it to actual screen sizes and it represents real screen sizes. Two, it has basic animation tools; there’s not a timeline or anything like that, but it’s enough for you to be able to simulate stuff. And three, its narrative software, meaning it’s sequential, right; it’s a series of slides, which naturally forces you to think in terms of stories, and flows, and interactions, instead of this flat picture. Something has to come after it. What happens after that? Right? So, yeah, it works really, really well for those kinds of things. And it’s fast. You can work in it really quickly.

Andrew: And you took that out to people and, actually, what people did you pick to show it to?

Luke: Well, at the time we were getting feedback from whatever, so when we started this process we were kind of still at Yahoo!, we left Yahoo! and we took EIR roles over at Benchmark Capital. So we were both entrepreneurs and residents there. And at the time we were talking to a lot of our friends in the industry and the VC world and sort of people we had worked with back and forth in the valley. Not necessarily getting very concrete feedback from them, but more directional and high level stuff. And a lot of that early feedback we got actually drove big picture strategic decisions that we made of the product. Yeah. Anybody and anybody who’d care to listen.

Andrew: Can you give me an example of the kind of feedback you got when you showed someone a Keynote version of the site that you had in mind?

Luke: Yeah, well, one of the best pieces of feedback we got was actually from Reed Hoffman over at Greylock. I sort of talked to him, showed him some of the things we were doing in Keynote, and he, I remember this still now, it sort of resonates with me. He said, you know, most people misinterpret what social interactions are about. Because we were talking about people interacting with each other, creating that content, so it sort of social product. And he said, you know, social, most people are interested in sort of showing off themselves, right? Luke, show their feather. Look at how cool I am. Check out my awesomeness. And the other piece is, they’re trying to make connections with each other and build relationships. And, like, that’s it. So he kind of took those two things and really distilled it down into something very simple, and those two principals were kind the bedrock of a lot of the things that we did with Bag Check.

Andrew: I see. They want to show off the stuff that they own, their gear, and they want to interact with other people that have similar gear.

Luke: Yeah, show off the stuff that you have, you know, paint yourself as an expert in it. Highlight, look, I’ve invested twenty years in making coffee, I know what the heck I’m doing, guys. Check this out. Right? Like, you sort of want to get that out, right? It’s an investment of the time that you have-

Andrew: -What about users? Did you show it to users that helped shape your vision of your business?

Luke: Yeah, yeah. So, we had a lot of early sort of prototyping interaction with people, especially as people came on. We actually built a very interesting tool which since then has sort of been productized, but what it was sort of a real time feed of all the activity happening on the site. So at any point in time we could sort of flip the site backwards, and see this person is here, they’re on this page, they just clicked on this, they just typed this in. And you could have a real time stream of each person. You can click on one of those actions, and actually see the site as they saw it. It would sort of flip you into their view, and you could see the elements they saw, the things they were looking at, and we’d highlight that thing that you just clicked on on the page.

Andrew: How did that idea come about?

Luke: It was all Sam.

Andrew: It was Sam thinking . . .

Luke: Yes.

Andrew: . . . hey, we need this in order to understand what users are doing.

Luke: Not even that, for a long time, he was, like, I want to build this thing. I’m going to build this thing. Then one night, he just took a weekend and made it. I was, like, oh, my God. This is amazing.

Andrew: I can see how that would be helpful. It’s like looking over someone’s shoulders as they’re using their site. You watch where they get stuck. You watch where they keep interacting. What about . . .

Luke: It was actually addictive.

Andrew: Sorry.

Luke: It was addictive. People on the team would get addicted to that feed, because you’d just be watching it. There was always things changing and you’re learning. It was really, really useful.

Andrew: What about when you showed the keynote presentation to a potential user, did you hear something like, hey, I don’t get this? Where do I sign up? Did you hear anything that helped shape the product in those early conversations?

Luke: No, it wasn’t that kind of stuff. Right.

Andrew: It wasn’t.

Luke: That document was all around getting us aligned on what’s the vision, and what are we trying to make. There was no usability, or any of that kind of feedback, involved with that process. That came much later. This is a high-level concept piece that’s very tangible and understandable. It was, let’s plant a flag over here that we’re all marching towards, versus, let’s get very specific with design elements.

Andrew: I see. I thought you were going out there and saying, does this make sense? Do you want to use this? If you did use this, what would you do with it? You weren’t even at that point. What you wanted to was say, this is what we’re all working for. Who’s with me?

Luke: I don’t know if I believe in that kind of methodology of, hey, do you want to use this? A lot of times you have to make it real for people. You have to make it a part of their lives, before they even understand whether or not they would use something. If you look at the history of lots of successful companies out there, the first reaction most people have is like, what is this for? Twitter. I don’t want to tell people I eat a sandwich. Instagram. Somebody tells you about Instagram. Why do I want to make my photos look crappy?

Andrew: I see. The only way that you can really get to see if they’re interested in it is to put the product in front of them. Even when you do put the product in front of them, they may hate it at first and it takes some time.

Luke: This is why you try and build lightweight up front. You try and focus on the core things early on, so that you don’t build something huge and complicated that nobody ever uses. You start to make this.

Andrew: How do you know what the core thing is? I guess, in your case, you talked to Reed, and he helped you identify the core. You understood what you would have wanted and that helped you figure out the core.

Luke: It’s actually deeper than that. Right. The core idea, as I mentioned before, was let’s take this behavior of people talking about sharing their gear and bring them online. The way we actually iterated on that front, is our whole first interface was a command line interface, so we didn’t even have any graphical user interface, or anything.

Andrew: You create all the keynote, and you still went command line first?

Luke: Yeah.

Andrew: Okay.

Luke: You know, it was like the vision. Here’s where we’re going to. Right. Then we built a command line version that we actually started to interact with. Through the command line, literally, like typing in, we would be assembling lists and making things. You could output it and see what you made in the command line. We did that for a long time.

Then the first iteration where we actually made it visual, we made a mobile website. The reason why we made a mobile website off that command line was because mobile has these tiny little screens, and it’s very constrained. We had to figure out what’s the most important. How does it work?

The other thing that was really good about that process was, because we had put it on the phone first, it was always with us. Meaning like, anywhere and everywhere, we could just pull out the phone, start interacting with it, show it to people, and think about how we would actually use it day to day, and would we?

Andrew: That makes sense.

Luke: Yeah. It took us three iterations, probably, before we ever created a traditional ‘website’, which is interesting to me because most people start out by making a Photoshop mockup of the website. Like that’s the first thing that you do. Okay, let’s make a picture of the homepage. This is what we’re building. Right. It took us like three iterations, four iterations, if you count the keynote presentation, before we ever got to that stage.

Andrew: What did you learn from the command line interface that shaped the first design version of the site?

Luke: Yeah. What actions you would take on each object. What properties each object should have. How the objects should be related to each other. It’s very fundamental to the structure of the system.

Andrew: Can you make it more concrete with a specific example?

Luke. Yeah. Absolutely. The metaphor that we created for the product. You’ve heard the name Bagcheck over and over again. When we thought about how are people going to wrap their heads around the gear that I use to do my things. We stumbled across lots of photo groups on Flickr that were called, like, what’s in my bag?

What would happen was photographers would spill out the contents of their photo bag, take a picture of it, and annotate it. A mountain climber would spill out the contents of their gear bag, take a picture of it, annotate it. Very painful process, but they’re obviously passionate enough about the stuff, that they’re doing it. We thought there was something to this kind of metaphor. Maybe we could play off of it. Hence the idea of, like, let’s check out what’s in your bag? Right. Let’s see what you’re using for this gear.”

Andrew: So I think the high-level object, the list of your stuff, we call the bag. And with the command line, you could basically go in there and say, “Create new bag.” “Okay, well what kind of attributes will we have for the bag?” “Oh it should have a title.” “Should it have a category?” “Oh, yes. Because you probably want to categorize it this way.” And then you add items, “Well, what is that item called? What kind of attributes does it have? How does it interrelate to other objects?” All that stuff gets figured out when you have this sort of raw, bare-bones command line interface, because you’re looking at things very structurally, independent of UI. So you’re thinking about relationships, you’re thinking about actions you want to take on those objects, and stuff like that.

Luke: One thing that you scrapped by going through this process is updates of where people are using it.

Andrew: Yes.

Luke: Why?

Andrew: So that was one of the other early ideas. It was, okay, well bag check, like, check in too. I’ve got my photo gear. I love taking photos. Everywhere I’m at, I’m using my thing over here, look at what I’m creating. We ultimately scrapped that, because when we had this mobile version that we carried around in our pockets, I realized we would never do this. [laughs]

Luke: I might want a picture of my pedals to show that these are the pedals that I’m using, and show them off. But I wouldn’t want to show you where I took them.

Andrew: But I’m not doing it every single time I’m riding my bike, right? Every single time I’m riding my bike, I’m not saying, “I’m riding my bike. I’m riding my bike.” So that was a superfluous thing. And, frankly, it was casting the net way too wide, early on. We were just trying to do way too much. And that was another kind of big lesson I took away from the bag check work. I was really trying to focus things down even more than we had. Pretty important.

Luke: Okay. So now you’ve got a vision, you’ve got a product, you’ve got to get some users. Where did you get your first users?

Andrew: Well, with Bag Check, we took a very conservative route; meaning we did not do anything to commercialize it, we didn’t do any press, we didn’t talk to anybody about it. What we did was we just sort of politely started telling our friends about it, and I started posted some things on Twitter, and stuff like that. So we pretty organically started growing the audience through our shared connections, and the audiences we had in our industries, more than anything else. And that was strategic, because we wanted people who were really web people, and sort of deep into things. So it was a lot of kind of inviting, and a lot of personal connections, and stuff like that. But we didn’t do any press, or launch announcements, or anything of that sort.

Luke: It’s kind of a challenge, though. Because when you reach out to your friends, they get offers to try so many new things.

Andrew: Yes.

Luke: And so many of their friends are tech people who want them to try new things. How do you get your friends’ attention, and get them to actually use this when all you did was tweet?

Andrew: I had to pull favors. No. [laughs]

Luke: So you reach out and you say, “Hey, can you do me a favor, and do this?”

Andrew: Yes, kind of. I think what you want to do is have a core base that you know would actually get in there and try stuff. And so really, as I’ve met many, many people, and I do have certain people who I know are kind of into this sort of thing, and like to try early things, and want to see what I’ve been doing. So you leverage your more personal relationships early on, and then over time you sort of extend it further and further. Our philosophy was we want to get the product really right before we ever go very large with it. And we ended up in a situation where we were trying to get the product righter and righter, and not really going bigger for a long time. And ultimately I think that was…

Luke: What do you mean by righter, righter, righter?

Andrew: We just kept fixing things we knew needed to get fixed. And we kept adding things we knew would make it better. That list (?)…

Luke: How do you know what to fix? What’s your process for knowing what to fix?

Andrew: Us? A, dog food it. Just use the damn thing all the time. If you use your thing all the time, you will know really quickly what the pain points of it are.

Luke: Right.

Andrew: I think that is something that a lot of companies just don’t do enough of. Especially when you get into larger organizations, and they’re making things for other people. People never even use the product. Right…

Luke: Maybe in larger organizations. But I feel like in smaller organizations, the more they use it, the more…it’s like petting a dog, and the more you pet your dog, the more you love your dog as he is. And you accept him jumping up on your leg, because now you’ve petted him so much that you want him to come up on your leg and make it easier for you. And pretty soon…

Andrew: Yes.

Luke: …what you’ve got is a dog that jumps up on people, and you love the dog even more for doing that. So the same thing, taking it back to software, I’ve found that people who use their own software a lot, they get so into the mind of their software. And they adjust things just for themselves that when I finally get in there, I have to get into their mind, into their way of thinking, and then I can understand the app. And even after that it’s just completely useless to me. (?)

Andrew: (?)

Luke: How do you hold that?

Andrew: I think it matters in your perspective. All I see is flaws. So I don’t see the dog jumping up on me and being happy, I see, like, “Oh my God. The dog needs a haircut. Oh my God. The dog’s fingernails are dirty. Oh my God. The dog’s ear is messed up.” And that’s what I see when I start using it.

You know what. I’ve got someone in mind here. Smart guy. I don’t want to mention him specifically, but I feel like he’s a typical person, where he uses his product so much that he thinks the solution is to be able to make his product easier to keep using. To keep creating with his product.

I am so confused by all the different things that you can keep creating that I’m overwhelmed. I don’t even know where to start with it. I don’t even know how to use it in my life. He just keeps creating all these different things with it. He loves it.

Basically, I’m saying, when you use your own product, it becomes your product. I imagine . . .

Luke: Yeah.

Andrew: . . . then if you get other people to use it, and other people to signal what their problems are with it, that you then make a product that fits their lives better.

Luke: Yeah. Absolutely. Don’t get me wrong. I was not saying that’s the only thing that drives what they’re doing. Right?

Andrew: I didn’t think so. What I’m trying to get at is how do you do it?

Luke: Yeah.

Andrew: What’s your process? Are you like KISSmetrics where on the bottom of every one of their pages, Hedon Shop [sounds like] puts an info box asking for feedback. Are you like Noah Kagan, who on all his pages, he tracks the hell out of you so that he can tell what you’re doing? Are you like Ramit Sethi who might send out surveys constantly to people? What was your process for getting that feedback?

Luke: Whatever and however.

Andrew: Give me an example of . . .

Luke: I’ll take anything.

Andrew: . . . of something you do.

Luke: I mentioned that tool we built. Right. That tool we built was all about collecting as much, you know, so what we’d do is we’d launch a new feature. Let’s say we changed the registration flow to include an additional step.

Andrew: Okay.

Luke: We changed the registration flow. I’d do a tweet or an email blast to x number of people. What we’d do is watch them come in, see exactly what they’re doing, see where they trip up, and start fixing things immediately.

Andrew: How do you know when they trip up? What’s an indication that . . .

Luke: We see every single step they’re doing. Like, oh, my gosh, ten people cut off on this and this step. Or, hey, this isn’t working because we’re only getting six values here. Okay, let’s try something different, throw a next set of people at it. If we saw something we didn’t understand, we’d literally reach out to people. We’d contact them and like, hey, our admin system, our robot, saw you did this and this. Can you please tell us what you were thinking about? Can you tell us what happened here? How did that work?

Andrew: Ooh, I see. You might watch someone attempt to add an item to their bag and then stop. Another person attempt to add ano-, and then you’re realizing, okay, something here is broken. Because if they’re trying to add it, and they’re not doing it, it’s either the software doesn’t let them, or we’re not making it compelling enough for them to do. Gotcha. You’re watching them that way.

Luke: We’re watching it all the time.

Andrew: For someone who doesn’t have a Sam, a partner who can build this quickly. If they wanted to be able to watch people, do you know a software that lets them do that?

Luke: Sure. Well, you mentioned KISSmetrics. Google Analytics. Flurry. There’s a whole bunch of tools out there that will give you the analytics. The problem is, though, what that gives you is what. This is what is happening. That’s prone to a lot of interpretation. Okay, everybody stopped right here. Oh, I think that means x. No, no. I think that means y. If you’re an active user of your product, you have some sense of, okay, what could that actually mean? Because it might have happened to you before. Right.

You’ve seen that issue. Oh, I got confused by that too. I know what that is. If you still don’t know, then you can go ask people. In addition to this tracking thing, we had the feedback links, on all that, on the site. That gets used really, really rarely, unless you’re hyper-focused on it.

A lot of times you lose context with those sort of generic ‘send us feedback’ links. It’s cool to have a ‘send me feedback’, but it’s much cooler to see, oh, this person was at step 13 of step 15. He’d sent to enter data that said x, y, z. Let’s contact him for feedback, versus generic guy sees box, enters whatever random comments he wants.

Andrew: That’s a good point.

Luke: All data is good data. Right. You just have to know how to interpret it and how to work things. Similarly, your own experiences using the product or data. It’s good data, but you know how to fold it into the bigger picture of what’s going on.

Andrew: Early on, you told Jeremy that you were told that you guys should probably be a content business. Not a social network around here, but a content business. What’s the distinction, and why was that the approach you took?

Luke: Yeah. We got some feedback from one of our early investors that what we should really be doing when we were talking about generating this content, is go for deep, tangible structured content, like stuff that’s really meaty, so that it has a long-lasting value when you build up this sort of database of really accurate information about products.

That sort of led us down a path of where we had very structured information. We had a whole product database. We had attributes about each product. We merged duplicates of the products all the time. We were building up a very structure organized product database, and we asked everybody to just sort of help us build that as they were creating things. Which is cool, so we sort of hit that.

The downside of that was, the more structure, and the more sort of depth and ‘quality’ that you create with the content, the higher the bar to participation is. We would have people making very amazing things on Bagcheck, but they would make one a month. All right. That fundamentally was a bit of a problem. All right. Especially in the early stages, you want people kind of interacting, or whatever, but we made it so, like so how shall I say.

Andrew: Good.

Luke: It’s kind of epic, but so important or so correct that people would spend like weeks thinking about what they were going to write in there and we’d see them because we’d see them come in, do some edits and leave. I started thinking about it really deeply like writing a complex article or writing a book or whatever, which was great because the content that came out in many cases was amazing. But the quantity of that content was not nearly as amazing as if we had taken a much lighter weight approach to doing things.

Andrew: I see, and so you decided to make it easier for people and less serious and how do you do that? How do you communicate, hey you know what you don’t have to have your perfect year here all assembled. You can just add your favorite peddle.

Luke: So we did that. So we said okay let’s try it totally opposite for one time and so we created a system where we had your e-mail address so we could basically go and see if you were on Flicker and if you’re on Flicker you just hit a button. We’d go and pull your Flicker photo history. We’d go and look at the exit data, figure out what cameras, what lenses you used, and we’d assemble a list. OK. Here’s what we think your photo gear is. OK. We think you have used these camera bodies, used these lenses oh and by the way we’re going to include a picture that you took with each lens and with each camera body and so “tada” here’s your camera gear. So with like a minute you could assemble your camera gear. Super lightweight, super easy. And what we found with that was that the content ultimately sucked. Because people would go in there, they’d publish this thing here’s my camera and they’d never say anything about it. All right, it wasn’t interesting. We didn’t know when they chose the lenses. We didn’t know what the combination of the lenses of the camera body meant for them. We didn’t know when they used which camera body and which lens. So we didn’t have that steps and this was the constant tradeoff. You can make it super lightweight, hit a button “tada” here’s your photo list and nobody cares once you’ve seen 10 of those or 5 of those even. Or we can make it, hey, it’s really hard to get all this information but this thing that comes out is amazing and everybody loves it and that was the tension. That was probably the biggest tension point of that company throughout its whole history was balance of lightweight participation versus depth of content, because they were always sort of on a seesaw for us, right?

Andrew: And, I keep saying peddle and you keep talking about camera equipment. Is that because you started to focus in on photographers?

Luke: Oh, no, no, no it’s just an easy thing that everybody grasps.

Andrew: Gotcha.

Luke: And, with Flicker we did the photography thing because frankly we could just build it with one click. There wasn’t a similar thing for other kind of areas of interest.

Andrew: Was it eight months later that you guys sold to Twitter?

Luke: Nine months after launching the product we sold.

Andrew: How did Twitter approach you?

Luke: We had through one of our connections on the investor side so one of our angel investor is actually on the board of Twitter.

Andrew: OK. Which one?

Luke: Peter Fenton.

Andrew: OK. How did they reach out to you?

Luke: We had been talking back and forth with them here and there, but I think Sam just started talking with Mike Labbit who used to run engineering over there and I don’t think he is over there anymore. I think he is over EIR or somewhere around.

Andrew: So, here’s what I was getting at before we started this interview. In the notes that Jeremy made on your pre-interview we always ask guests what was your lowest point because we don’t want to just celebrate success. We want to understand how you got through the tough parts. In your lowest point you said was when we shut it down and sold it to Twitter. Why?

Luke: Twofold, one was at that point we had built up a system and a way of working that allowed us to crank out lots of ideas quickly and we had a flow. A lot of starting companies as I’ve learned over the years is getting all this stuff in place so you can actually get going, right? I mean, there are so many things to do before you can actually start producing product and when you get to the point where you’ve g to it. You have all these tools and you have your processes and you have your team and everything. That’s the awesome state, right? So that is kind of the state we were in. We had everything put together. We knew how to work together and we were liking and enjoying working together and so it was a real downer for me to sort of stop it around that phase. And I think that was probably, I enjoyed the job I had. I enjoyed working with the team. I enjoyed doing what I was doing. I enjoyed how I was doing it and change in general is not great, right? But I think that was the thing that made it sort of “the mixed blessing for me”, right? Obviously, we’re thrilled to have the kind of outcome we had, but it was very bitter sweet because we wouldn’t be doing what we were loving to do anymore.

Andrew: That’s the other thing. You did say hey Andrew don’t make it out like this was a horrible situation, it was more of a gray area. Nothing is black and white.

Luke: Yeah.

Andrew: So, I understand the disappointment. What was the exciting part about selling to Twitter?

Luke: Yeah, I think to step back half a second and talk about this. When most people talk about start up positions they have this vision in their head of like it’s a pot of gold with a rainbow, right? And like everybody is dancing and there’s unicorns around you, and all this sort of stuff. It’s been very romanticized. I think when you actually look at the realities of it, you’re making choices, like you are every day. Day to day. Okay, we can keep going, but what does that mean? Oh, okay, well, what if we sell to this entity? What does that mean? What does the next couple of years look like? What happens to the product?

There’s all this stuff that you have to sort of weigh, and make decisions on. Some of those are actually really, really big decisions that hit you kind of hard. You’ve made friends. You’ve got probably deeper than friends, if it’s like founders, or co-founders or things like that. You’ve got personal relationships in the game. You’ve got financial circumstances, and money.

What are the most stressful for people? Changing jobs, changing primary relationships, and changing homes. For like any kind of thing like this, you’ve got at least two of those involved. Right?

Andrew: Right.

Luke: Money, jobs and then personal relationships.

Andrew: You started this company because you wanted to work with Sam. According to the TechCrunch article from the sale, Sam went on to Twitter. You did not. That’s a loss.

Luke: Yeah. That’s right. That’s like you’re breaking up kind of your co- founder after working together. We only worked together for 18 months, plus if you count the time when we, yeah, we worked together for many years. During the startup, I sat here, he sat there, for 18 months. You spend more time with that person than you end up spending with your actual wife or husband or whoever.

Andrew: This was an Apple hire, wasn’t it? Where they wanted the team, where they wanted the minds. Not necessarily to keep the site going.

Luke: The site’s still up.

Andrew: The site is still up.

Luke: I can’t comment on those sorts of things. The site is still up and running. I still get notes and comments and interactions on there all the time.

Andrew: Twitter did not want to get into the Bagcheck. They wanted to get into the Sam business.

Luke: I can’t say that.

Andrew: You can’t say that. Okay.

Luke: No. That’s a question for them. I would say the site’s still up and, obviously, they saw something of value to them at the time that made all this possible. We’re glad that we were able to give them something of value.

Andrew: Okay. How did you guys do financially from the sale?

Luke: Still living.

Andrew: [laughs] Did you become a millionaire because of the sale?

Luke: I have not taken a salary for the past three and a half years because I’ve been working on startups. My philosophy, when I left Yahoo, and my philosophy from anything that happened with the Twitter thing is to sort of keep putting things away, so that I can keep working on things that I’m passionate about. It was part of a mixed blessing. I’m really fortunate that we had that part of the Twitter thing. It kind have allowed me to keep going doing things that I want to do. That’s it. That’s cool.

Andrew: Congratulations on that.

Luke: Thanks.

Andrew: Let me see what else. Before we talk about the input factory, the other thing that you told Jeremy was that, one of your challenges is that you have lots of different ideas. I hear this from people in the audience all the time. They will email me a list of really good ideas that they want to pursue. That maybe they’re pursuing one, but then they go to the other. Then they pursue the other, and they go to a third. How did you deal with that?

Luke: I think it’s still a problem. I still have way too many ideas pop into my head. The bottom line is, there’s the idea, and there’s everything else. If you look at the amount of time that everything else eats up, you have to make commitment. Right? The hard part, I think is, believing in the idea enough to make the kind of commitment that you have to make.

We look at Bagcheck. That was an 18-month commitment. Right. If you look at my current startup right now, we sort of got going in March with the idea we wanted to work together. We formalized it-ish, June-ish, July-ish, and now we’re already in March. Right. Having an idea is one thing, but then putting that commitment and that hard work behind the idea is a whole ‘nother ballgame, and I think that’s . . .

Andrew: Once you go with one, do you cut off all the others?

Luke: No. You can always keep them in the back of your mind. Put them on the shelf. Come back to them as appropriate. Pull them out. Right. Regret ones that you didn’t do and should have done. I think it’s very easy to say yes to things, especially today.

You can build whatever you want, especially in software. Build whatever you want. It’s very hard to say no to things. Because that means you’ve made an explicit decision, and there’s consequences to that decision. Most people have a hard time, including me, absolutely, I have a hard time saying no to things as opposed to saying yes to things.

Andrew: I do to. I found though, with ideas, that if I’m working on one thing, and then another idea comes up, and I say, you know what, I’ll work on it part-time just to see where it goes. Basically, the thing that I really care about, I’m not going to give enough attention to. In fact, at the points where I’m feeling at the lowest, where I really have to push myself to continue, and overcome an obstacle, that’s when I say, you know what, I have this other thing on the side. Let’s go there. I don’t push myself to overcome the obstacle. How do you deal with that?

Luke: I think it’s all about making a commitment. So first of all, I’m terrible at making commitments. It took me a year to buy a couch; it takes me six months to decide which TV to buy.

Andrew: How long to decide to marry your wife?

Luke: About four years.

Andrew: Four years.

Luke: Probably.

Andrew: That’s too bad.

Luke: It could have been, could have been, four years of thinking should I do it?

Andrew: But you knew very sooner, you knew before then?

Luke: I, yeah, we’ve been together longer than that. But yeah, so, you know, I’m not a very-

Andrew: So how do you get yourself to make a commitment then? When you’re commitment-phobic?

Luke: I’ve got to be pushed. I have to, at some point I just do it, and I become very, very comfortable with it, but it takes me a really long time to get to that point, and I probably try every single way to get out of it before I ever make that commitment.

Andrew: Can you give me an example?

Luke: Well, let’s look at every single way I can possibly hedge my bets before I jump in. Right, so if the current company, like, if we bootstrap the whole thing, for many months, and then when we couldn’t do all the work that we needed to do, between the two of us, we started hiring people adhoq[??]. And then, you know, instead of going and raising money, we’re like, OK, we’ll just pay this out of our pockets for a while. Oh, maybe we can just do, like, a really, really small tiny, tiny seed round[??], just to go for a couple months. So we looked at like all the different ways to hedge our bets, before we were 100 percent sure we wanted to make that commitment.

Andrew: I see. To say, hey, we’re fully in here, it’s OK to hire someone, it’s OK to raise a little money.

Luke: Well, that’s, I mean, that’s, I think when you hire and when you raise around, those are pretty big commitments, because you’re sort of diving deep into it. So for me, it was like every way we could not make that decision, we did, until you hit a point where, look, you’ve got to either jump or fall.

Andrew: That’s totally different than how I would do it, and other entrepreneurs who I interviewed here on Mixergy, but it seems to work. You’re saying, hey, you continue with it until it’s so real that you have to commit to it.

Luke: Or not.

Andrew: Or not. And if it’s not at that point, then you know what, then the world has made the decision for you. Or the business has made the decision for you. It’s not strong enough, it’s not mature enough to survive on the little attention that I’m giving it, so why give it even more?

Luke: Yeah. And, you know, it’s actually a blessing if you find out it’s not going to work, or it is going to work. Most things end up in the middle ground, right? Oh, it might work; oh, it could work if we do this. You know, that sort of, that’s the thing that I’m most scared of, personally. I’m most frightened of being in this middle stage where we’re, like, oh, what if we do this, well, maybe; you know, just. That can suck you up for years.

Andrew: How’d you get the idea for the input factory?

Luke: So the idea for the company came from me and my co-founder, again. So, like, I guess I’m turning this into a pattern, but it’s, I try to find someone that I want to work with, and has a complementary skill set to what I’m doing, right? So with the input factory, my co-founder is Jeff Cole. We worked together eight years ago or so on a company called Patients Like Me, that he was the founder of. It was very early sort of web 2.0 meets health. And as Jeff and his other co-founders, like I say, they spent most of their early budget on me doing conceptual designs for them. So he ran that company eight years he was there, and then eight years later we sort of reconnected again and decided we wanted to try something different. And when we did that, you know, his background at Patients Like Me was founding the company, building the engineering team, but also starting a data analytics group, which looked at all the stuff that people were sharing on the side and tried to find patterns, insights, and things like this. And my background is mobile, plus design, plus input. And so what we sort of gravitated around through a similar process that me and Sam went through, where we’d iterate back and forth, talk about ideas, we sort of blended in this space of, well, let’s see if there’s something we can do if we can get really lightweight engagement on mobile, like input, and turn that into data that we can analyze on the back end to create something interesting. So that’s our big vision thing, similar to our big vision over at [??], was, hey, e-commerce is due for a shakeup with the advent of some of the things that changed the web over the past ten, twelve years.

Andrew: OK, so I give you just a little bit of information, like answer a couple of questions, do I prefer this or that? And then you give me something meaningful in return.

Luke: Yeah, sort of. I mean, the first product we put out under this big picture thesis is called Polar, and, Polar again, now we go into, like, you know, what’s the real world insight that’s actually generating a product from this? And what we have there is everybody’s got an opinion. You have an opinion, I have an opinion, we’re talking about our opinions right now, right? Whether or not you even want my opinion, sometimes I’m going to give it to you. But the means for collecting opinions on the internet and in software[??] is just abysmal. You think about your typical survey form, or feedback form, or any way you try to collect information from people; it’s a five page form fail, it’s got, like, these checkboxes, these radial buttons, and they’re so crappy that companies and organizations are paying people to take them. Right, here’s $25 if you take this survey. And even then, they have, like, .1 percent participation, right? So, it’s just horrendously broken, but at the same time, everybody wants opinions, everybody collects opinions, everybody shares opinions. So, we said let’s see if we can take our big principle and apply it to this area. And what we tried to do is invert that whole system. Make it so painful that no one does it, to make it so fun that everyone will want to do it. And I spent a lot of time doing it, and I enjoy doing it. And that’s kind of what the whole first product is about; can we change that dynamic, and turn opinion collection into something fun and engaging versus something crappy and avoidable at all costs.

Andrew: I wanted to use this expression that you used to describe the input factoring (?). Let’s just describe what the business (?) is. What we use this suite that I sent out to explain it. Why did you call it a mullet in one of your tweets?

Luke: Yeah, so this relates to sort of the big picture idea. I call it the tech mullet. Now what I said there is it’s small, mobile with micro interactions in the front and big data in the back.

People got these mobile devices with them anywhere and everywhere. They’re pulling them out for a minute here and a minute there. They’re pulling them out anywhere and everywhere you can be online, you’re online now.

So you have the opportunity to collect lots and lots of small bits of information from people. And then there’s also this big trend for big data, which lets get tons and tons of information and lets mine it for interesting insights and things like this. So, that’s sort of what I call the mullet. It’s kind of the opposite right? The thing you’re doing upfront on mobile, your client and it’s all about small, tiny, very quick and easy. Where we’re doing it on the back where’s it giant, big, complex to figure things out. Which isn’t exactly like a mullet, but put those two opposites together in one.

Andrew: Alright, let me do a quick plug here, and then I want to ask you a question about this one sentence that you happen to say to Jeremy that I think is important to talk about. And one final, actually two things. And then I want to ask you about this surprising thing that I saw about the input factoring. But first, to everyone who is listening, if you’re not a premium member go to right now and, well. In the interviews that we do what we do is tell the stories of entrepreneurs and how they build their business.

One of the things that people love about Mixergy Premium is I invite entrepreneurs back and teach what they are good at. Show you how they do it. If they’re good at getting traffic and you have an issue getting traffic I ask them to turn their monitors on and show us step by step what they do to get traffic. If they’re good at monetizing that traffic I ask them to walk me through that process step by step and show me how they do it.

One of my favorite courses that I don’t think enough people are taking is the one with Juan Martetahe. He is the one who works for Mind Valley, the Hispanic version of it. And he shows how he structures his business, how he structures the funnel of his business and what he does to improve it ten percent each time. And he says, ‘look with compounding interest if all you get is ten percent increase this week, and then another ten percent on top of that next week, so on and so forth. The business grows’. He showed his revenues to show how big the business can grow and what he did to get it there.

If you are struggling with your process, with organizing your business into a funnel that makes sense and delivers customers to the end. That’s one course I highly recommend; pick Juan’s course., I guarantee it.

Alright, now that the plug is in there; and I’m really hoping people will go and check it out, and I see that they keep going back to it and I appreciate it. By the way, in addition to getting all this for yourself, you also help fund the editing that we do on these interviews, the research and so on. So, thank you to all you Mixergy Premium members. Here’s a thing that I noticed. You had a business coach at Yahoo. What did the business coach help you do back when Yahoo was going through lay- offs?

Luke: Yeah. So, when I said business coach it essentially was executive training. And they put me through a rigor of personality tests. And when I came out I came out with two binders this big about me. And the most useful thing to me was I realized what I don’t want to do. What I shouldn’t be doing. And there’s two schools, there’s like here’s your strengths go build on them. Here’s your strengths you got to go work on. I sort of firmly fell on the camp of here’s your strengths go crank on them. And then fill in the gaps so you can work more on your strengths. As opposed to filling in the gaps.

And what that process oriented me towards was, I like to make products, I like to ship things, and I like to it quick. I hate not seeing things come out, so hence, start up play.

Andrew: I see. And if someone wanted to go and take that kind of strength binder tasks and know what strengths they are, what do you recommend? Is it strength finder process based on the book? Or is there something else?

Luke: One of the most complete ones we took was actually one the military uses. I think it’s called the Hogan Performance Assessment Test. I don’t know if those are available online. I think it’s called the Hogan, we took like five or six of these different tests. The one that was sort of most complete, and interesting to me, was the one where they put military commanders through it to see how you’re going to react if some ones doing whatever. That was kind of cool.

Andrew: Finally, I was going to tell people to go check out your website, the input factory. But I believe before I went I started this interview, when I went over to the site, it wasn’t up. Is there a site for the Input factory?

Luke: There’s no site for the Input Factory. Polar bee, as in, that’s where you can find info about the app, but there’s no like corporate site. Or anything like that.

Andrew: And if someone wants to connect with you and say ‘hey, I’d really like your idea. I want to work for you or something.’

Luke: The email is on the bottom. In the Contact Us link.

Andrew: Email right on the bottom of I thought I had it completely wrong.

Luke: Nope. You got it.

Andrew: Alright Luke, thank you so much for doing this. Thank you all for being a part of it. Oh, you know, one more thing. To the editor, keep this in. I keep hearing about people who are entrepreneurs who are listening to these interviews, connect with the guest and somehow they end up doing business with them. This now feels like a business development show. People watch these interviews and they end up with biz development and opportunities. Almost though it starts off with the persons listening saying thank you to the guest. That’s why I always do it, that’s why I always urge you guys to do it. That’s why I always try to find an email address for you guys if you’re listening to it. Find that email address, send Luke an email, say thank you and if you got anything of value out of this. And maybe a business relationship will come out of it down the road, but definitely something good will come of it. Try it, you’ll see. Thank you all for being a part of it. Bye guys.

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