Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and this is a place where I do interviews with entrepreneurs about how they built their businesses. How they went big, really big. In 2013 I interviewed an entrepreneur about how he built a $4 million per year cleaning business. Well, his cofounder ended up leaving the business on good terms and starting a second business, which is doing really well, and so I feel like he knows what he is doing, obviously, and I invited him here to talk about how he did it and to hear the story of the second business.
Mike: Thanks for having me.
Andrew: it’s good to have you here. The guy who you’re hearing is Mike Russell. He is the cofounder of PaintZen which offers home and office painting services. I invited him, as I said, to talk about how he built a business, but first I have to tell you that I have a page that does incredibly well for turning hits into email addresses. If you have a website, and you don’t want people to hit the site and disappear–you want them to give you their email address so you can start a relationship with them and really get to know them, have them get to know you, and eventually sell them after you’ve warmed them up.
Well, I’ve got the page that will allow you to collect those email addresses. You can take it from me, put it on your site, customize it for yourself. All you have to do is go to AndrewsWelcomeGate.com. I always pause before I give the URL to make sure that everyone hears it clearly. AndrewsWelcomeGate.com. All right, sponsorship message out of the way, it’s time to get to you, Mike. Thanks for doing this interview.
Mike: Thanks for having me.
Andrew: It was $4 million per year in sales when I did the interview. Where is it now?
Mike: We’re getting close to eight.
Andrew: Eight! Fantastic and what about profits? Do you guys crack a million at that point?
Mike: Not quite, but we are profitable. A lot of the money from that business is being reinvested back into growth.
Andrew: So, business has grown well. Money is being reinvested into growth. Why leave the business? The company we’re talking about, by the way, is MyClean. Why leave MyClean?
Mike: MyClean was started back in 2009. Myself, Michael and Justin, who was my cofounder here at PaintZen. MyClean was built as a slow-growing bootstrap business. And I think once we got that business to the point of profitability and were comfortable with it, Mike took it over, and Justin and I pursued the new opportunity at PaintZen.
Andrew: You also had this vision for something that you wanted to do. Before we even get into the specific product, you wanted to build a certain size company at a certain speed. Can you talk a little bit about that?
Mike: I think Justin and I were really excited with the opportunity to do something that could become a huge national or international brand pretty quickly. When we looked at the different home service verticals–which are where a lot of our expertise was, given our experience through MyClean–we continued to come back to painting for many reasons. We tried having our places painted and went through the motions and saw that it was a really, really painful process to find a paint contractor, decide on colors, and try to figure out how much the whole thing should cost. We saw there was a really big opportunity–a market of $30 billion, some say up to $50 billion, per year–to transform how the whole process is.
Andrew: The story of going and getting your house painted and the frustration of it, that’s interesting, and it’s also helpful to us to understand how you found the problem, but I don’t want to brush over the less sexy part of it, which is the size of the market. That’s intentional, on your part. You guys on your blog at MyClean used to talk about the importance of picking a big market if you’re going to launch a business. Tell me more about your thinking behind that.
Mike: One of the things I look at when I think of committing my life to a new business is: what does the market size look like? We’re looking for these really large markets–30-plus billion dollars–that are still operating in the stone ages, which was what MyClean was back in 2009 when we brought that online. With PaintZen, our whole thing when we started was, “Look at that wall, it has paint on it. Everything has paint on it!” There is paint everywhere, and customers are spending tons of money on paint contracting services and paint every year, and we thought that we can go after that big market and be the go-to brand when you’re having your place painted.
Andrew: Is my thinking on this right? Is my explanation of your thought process accurate? You’re saying, “If there is a giant market here, all we need is a little slice of it and we have a giant business, a really big business that can generate a lot of revenue, and if the incumbents are pretty old school, aren’t online, don’t allow you to book online, don’t allow you to engage with them online. Then it’s so much easier to get, not just a little slice, but a big slice of this big market. That’s your thought process, there?
Mike: Exactly, and I think a little slice for us, at this point would be the worst case scenario. I think other than the industry really operating in the stone ages where there are walk-throughs for quotes and things are done very slowly. I think that there’s a lack of a brand, a trusted brand. So a lot of our focus now is how do we become the go-to brand? Do you need your home painted? Do you need your office painted? All there is, is PaintZen. And that’s the first thing on your mind, and then we take the whole process, we apply technology and operational efficiencies to really transform the way the whole experience happens.
Andrew: So, your experience, the market size, and there’s one other thing that lead you to this business. And that is something that you kind of touched on before: it’s your experience with customers of My Clean. What were they telling you that lead you to believe that there’s a need here?
Mike: We did get a couple of requests through My Clean for painting, which was initially what got us looking into the vertical. That was sort of the light bulb, actually.
Andrew: Why would people go to a cleaning company and say “can you paint my house, too?”
Mike: I think that they’re two totally different services, you’re still under the home, but there’s not a ton of parallel between when you’re having your place cleaned and all of a sudden, I need my place painted. I think that it’s sort of a trust level. Our average job size, for example, is about $1500. Which is a big financial commitment.
Andrew: At PaintZen?
Mike: At PaintZen, correct.
Andrew: $1500, okay.
Mike: We’re having crews go into somebody’s home, which makes it a very sensitive purchase. So, customers are looking for brand expertise. I think that they want to know that the company that’s getting the $1500 is accessing crews that know how to paint, and are sure in quality, and really has their act together.
Andrew: I see, so, if they’re going to trust somebody to come into their house and throw paint all over their walls and be next to their valuables. They want a recommendation from someone who they trust. So they might go to My Clean, a company who is sending people into their homes on a regular basis, and not having people steal or break things, and they say “alright, if they do that well then they can also help turn me on to painting.” So, that’s a third leg of the stool, those are the three reasons why you started. The first thing you did was what?
Mike: The first thing we did was build a landing page very quickly and we started doing some simple marketing to see if we can gauge interest from customers. What we did is we built like a little quoting tool and the quoting at first was based upon assumptions we had made. We just wanted to see how customers would respond to getting an instant quote. That evolved over time. We started to get a lot of interest and then we started to see if crews wanted to take on the work.
Andrew: Let me take that step-by-step. I’m actually looking at screen shots of the early website and I do see just basic buttons, they don’t look nearly as nice as they do now, asking “how many large bedrooms do you have?” It goes, a button for zero, a button for one, etc. All the way to six. “How many small rooms do you have?” A button for zero all the way to six. And then, do you want the ceilings painted, there’s a check-box next to that. Paint my trim, there’s a check-box. Then if you want us to bring the paint, check another box. And then, after doing that and maybe a little bit more, the person got a quote, right?
Mike: Exactly.
Andrew: Was that coded up, or was that just a quickie? How did you code that up?
Mike: We basically pulled painter production rates, so we were able to get average painter production rates from the national painters and decorators association.
Andrew: What’s a painter production rate?
Mike: How long it will take a painter to paint a certain amount of square footage.
Andrew: Okay.
Mike: And then we also took, and this was a starting point, average room size. And we mashed the two together, and we were able to create a simple algorithm to spit out price based upon what you’re seeing, which is very basic information.
Andrew: That sounded like a 2-hour coding project there, I could get someone on Elance to do it in a couple of hours.
Mike: Exactly, I’m fortunate enough to have a very talented co-founder and CTO.
Andrew: Justin coded it up?
Mike: My other co-founder, James, there’s three of us. He coded it up, we did the design ourselves. And we just put it up and we started to see a very promising response.
Andrew: One more thing about this page before we get to where you got that response. After people hit submit, they didn’t get the quote immediately, they gave their e-mail address and their name, right?
Mike: I believe so, it was over a year ago, so I can’t exactly remember how it works. But, there was a very manual process on the back-end. Once they submitted the information and got a quote, we would call them. Then, all the scheduling was done in Google docs and Google calendar.
Andrew: Oh, wow.
Mike: It was real MVP style.
Andrew: One of the reasons why I ask, Mike, it seems like if you’re asking people for the…you’re giving them a quote, and you’re also getting their information. If they don’t buy, you’re not left scratching your head saying well why didn’t they buy. Is it that they didn’t trust our website? Is it that they actually had seven rooms, not zero rooms? You can actually call them up, and you will call…
Mike: Mm-hmm.
Andrew: …every single one of them. And if they don’t buy, did you get a sense of why they didn’t buy? Did it help you do that?
Mike: So what we’d recently done, actually, we used to give the quote with an extra e-mail after the quote.
Andrew: Oh, I see.
Mike: So we’ve since switched that. So now in order to get the quote, we require some very basic information.
Andrew: Mm-hmm.
Mike: So at least we’re able to capture that information and have a conversation with the customer. Now we’re collecting tons of data on why a customer will or won’t book. So it’s been fascinating, what we’re beginning to learn.
Andrew: What kind of things are you learning today?
Mike: Price sensitivity. You make a lot of assumptions when you go into a business, and we assumed that there was a ton of price sensitivity. And there actually isn’t as much price sensitivity as we thought, which is really nice for us. So that was one thing. I think what else we’re learning is that we had anticipated that when you make an inquiry to the point when we actually book could be months or more. And we’re learning right now that it’s around a week, so actually the turnaround happens pretty quickly. So there’s a lot of information like that that we’re starting to get a hold of.
Andrew: All right. Creating a landing page as slick and as cool as you can make it, or even as quick and unslick as you can make it, is one thing. Getting anyone to actually go to that page is hard. Where did you get the first group of people who went to hit paintsin.com [SP]?
Mike: Yeah, we started off by spending a little bit of money with search and really focusing on our Yelp profile. So we wanted to do…no matter what our theme was, maybe our curving algorithm’s going to be a little bit off at first, and we’ll take the hit on that until we can perfect it. But we wanted to make sure all the customers just really had a top notch experience with our company, and…
Andrew: So search by meaning search paid ads?
Mike: Paid ads, yeah, so that drove in business. And then being able to have happy customers, and then getting good reviews through Yelp, through Google Plus, and online started to drive in traffic as well.
Andrew: Okay. To get anything from Yelp, I imagine you want to start with a small city first, or one city, before expanding countrywide, right?
Mike: Mm-hmm.
Andrew: So what city did you pick?
Mike: So we weren’t in New York. Until last month, we operated for about a year only in New York City.
Andrew: I see.
Mike: And we focused a lot on getting our processes down, getting our quoting right. And through that, we were able to build up a pretty substantial Yelp profile. I think we have the most reviews of any company that does painting on there with four and a half stars, so that’s been a really effective way to get customers.
Andrew: I know that helped you guys with MyClean also. But one of the problems in the early days of MyClean’s Yelp reviews was you guys hired outside cleaners, and some of those cleaners were pretty bad. And so people would go and complain about the service that introduced them to those cleaners. Did you make a decision this time to only hire your own painters to go with that?
Mike: No, so actually what we found about the painting industry is we were able to partner with crews that had existing companies. And just, we lay out the jobs, and the crews can accept the jobs if they’d like and after passing through our vending process, which I can touch upon a little bit. There’s a really, really high level of quality in that it’s delivered from the crews. So there’s no training or anything quality control that needed to go into it like it did in the cleaning side.
Andrew: It seems like that’s because people don’t need painting as often, so you don’t need that many painters out there. And only the best will survive.
Mike: Mm-hmm.
Andrew: People are less price sensitive, like you said, as opposed to cleaning where they know they’re going to have to pay this every other week or every month. And so they want to be very stingy, and that means that it’s hard to get quality people. Because they’re willing to pay more, you can get better quality.
Mike: Yeah, I think our early rates come out to somewhere about $38, and it’s a skilled labor. It really is craft, so…
Andrew: Mm-hmm.
Mike: …the crews that we work with have been working for plus five years. And then there’s a science to it. And it’s very like you either paint well or you don’t paint well.
Andrew: How did you find the first crew?
Mike: I think we got a referral from one of our hardware stores, and it was a gentleman by the name of Anthony who is still with us today. It was very lucky to have him.
Andrew: The hardware store introduced you to Anthony.
Mike: Yeah.
Andrew: And Anthony became the…So basically what you were doing was creating a web page that would take people online and introduce them to people like Anthony. Frankly, anybody in the audience about a year ago could have done this, two years ago could have? Frankly, even five, six, seven years ago could have done this, right?
Mike: Right.
Andrew: We’re not talking about sophisticated technology yet. People just fill out a form, and they get a quote. And then they get followed up with a phone call that confirms and closes the deal and then, introduces Anthony to them. Is that a concern of yours that the barrier to entry then is so low?
Mike: After seeing how complicated the quoting algorithm has gotten and how hard it is to get an accurate quote, I feel like there is some really solid defensibility there. Like, we are so perfection our quoting algorithm and now, we’ve been servicing predominantly[??]. So, now we’re starting to dive into, how do you quote a house. A five, six bedroom house when ether are so many variables that can affect your price. So, it is a really interesting challenge. On the customer side, how much information can you really ask that customer for? Without an accurate purpose. You don’t want to overload the customer. Yet, how do you take that information and turn it into an outfit brought on in the back-end to make sure that the partners and crews are protected?
Andrew: So the product/g is that important. People need an accurate quote and that was one of this first things that you were testing for on your landing page. How do you know that that is really important? What is it about your landing page that told you yes? Your theory that you’ll need a quote instantly is the key to the business or one of the keys.
Mike: It’s just customer feedback like customer after customer saying, this is amazing. This is so easy like, I didn’t know anything like this was possible. So we knew pretty early on that we were onto something with the instant quote.
Andrew: Okay, you had that. You had the ads. You knew that you were on the right track. What’s the next step that you took now that you know that you’re on the right track?
Mike: So, the next step I think we are really happy with how we’re progressing. We just recently launched our second city in San Francisco which is-
Andrew: Oh, no. Let’s go, let’s go way back, because I want to walk it step by step, because San Francisco happened about 11 month after your launch, right?
Mike: Yeah, last month we opened up San Francisco
Andrew: Okay, you had the landing page. It’s time to get more peo-, I know what, let’s dive deeper into Yelp.
Mike: Yelp?
Andrew: You don’t leave it for people to remember to go to Yelp, right? What do you do to encourage them or remind them that Yelp exists and if they’re on it they should give you a review?
Mike: There’s nothing you can really do. You can’t solicit through their platform. It’s a breach of service.
Andrew: You can’t send an email to your people after they buy saying and if you want to give us a review on Yelp, here’s the link?
Mike: I don’t know if you can or you can’t, but we definitely don’t do that. What we just aim to do is, we have a 100% customer satisfaction guarantee and we have a firm the customer is always right policy. And just by sticking to that and just by going above and beyond, we just organically get Yelp reviews.
Andrew: Really? You don’t do anything to nudge people towards Yelp?
Mike: Nope, nothing.
Andrew: I had no idea.
Mike: Yeah
Andrew: And then to boot
Mike: Yeah, it’s very frank. Customers that might not have the best experience initially and then, all the sudden that 100% satisfaction guarantee kicks in and they get touch-ups included or whatever, those are the customers that actually write a lot of the Yelp reviews, because they’re so above and beyond thrilled with the customer support and level of service that they end up being the happiest.
Andrew: Interesting. So, after a customer is done, you call them. How do you know they’ve had a they are 100% satisfied?
Mike: So after the job is complete, we send out a feedback form.
Andrew: Okay
Mike: So, based upon that feedback form, we’re able to gauge satisfaction of the customer. But, customers that are not happy, will call. For the most part, they will always call.
Andrew: All right, so the test is doing well. I guess you re-do the website or do you continue then, to get more people in?
Mike: So, right now, we are renewing the entire website.
Andrew: Back after you launched that first version, didn’t you re-do it?
Mike: So, we did a slight enhancement. Not nearly where we wanted it to be, but being [inaudible] next year we’re refreshing the entire brand. And I think we have tons of information around user experience and how to properly quote. How to do paint color selection which is something I am really excited about. We don’t really capitalize on it right now. So, I think that we are going to deliver something that is pretty next level.
Andrew: So people couldn’t pick the paint on the site before?
Mike: So, what we did is we had a card gallery and we partner with Benjamin Moore. So, we started to labor to put this plasma paint together and that paint has been through more paint. So, right now, our customer can go online and they can browse a color gallery to see what colors go together. We’re taking it to the next level. Where’s they will actually be able to assign colors to each room and see inspiration gallery and create their own swap samples and do some really cool stuff as they work towards what colors.
Andrew: As of today that happens over the phone?
Mike: Yeah, a lot of it is manual right now.
Andrew: So, actually, I am looking at one of the earlier version of your site right now and I can see how click and see how the prices change. So, I can click on one room, one bath, sorry one large room and it’s $458 to paint it. But now, if I do two large rooms and two small rooms it’s 850 bucks. Instantly I get to see it. If I click paint my trim, I get to that it’s now about 1000 dollars. By reducing that functionality or that instant-win and putting in the price on the next page or the following page, you are able to increase your sales.
Mike: Oh. I know. The change was incredible. We’re still just optimizing it. We’re constantly testing, testing the booking flow, just to figure out what works best and it’s been a lot of fun to see how much a little change can impact the results.
Andrew: Do you have an example of one small change that really had big impact?
Mike: Yeah the biggest to date is just moving where costumers miss their information. That was, I don’t have the exact number, so I don’t want to get [??]
Andrew: It’s the one we’re talking about now where people could either see the quote right away or see it after they give their email address. That change was huge?
Mike: Enormous.
Andrew: Okay. Partner with local painters. Isn’t it time to start to get more people or did you just keep ramping up your Google ads?
Mike: Yeah so, actually what we turned to over the past year was really developing partnerships. That was really, really a great driver of growth for us early on. It was partnering with interior designers so when they would have a costumer, they would need to go together and the crews that would come to us and use [Paints app]. Now we’re finding a lot of success with general contractors and management companies. We’re working a lot with concierge services and even some furniture stores as well. We were able to build up great referral sources, we call them referral sources, it’s really those partnerships.
Andrew: What does a designer get for referring someone to you?
Mike: It depends. We package in a set fee and the designer can either pass that fee along to the cost amount or they can take is as commission. The majority of the people we work with pass most of the savings on to their customers.
Andrew: I see. So if they wanted to, what they could do is they could get a quote from you and then quote that plus 10% and keep the 10% for themselves. You’re saying most people don’t do it. You don’t have a formal system for them to do it. So basically what you’re doing is introducing yourselves to people who have lots of clients instead of going after clients directly.
Mike: Exactly. So now, as of last month, we just started to really tackle client direct.
Andrew: So before you weren’t even going directly to the home owner, you were trying mostly to go to a designer, an interior decorator, who had lots of clients and they would use you.
Mike: Mm-hmm.
Andrew: Got it.
Mike: Outside of Yelp! And just a very little bit of search, we did very little client direct advertising. Most of it was through partnerships. Now we’re starting to really ramp up search and look into other direct consumer acquisition channels like Facebook.
Andrew: How do you do those partnerships? How did you get the first one?
Mike: To be honest I forged the first couple through My Clean and today we’re in need of painting services. There was definitely some overlap there which helped us get off the ground.
Andrew: All right. What’s the first one that you guys got on your own, without My Clean?
Mike: First one on our own without My Clean was actually a specialty paint company that sold paint but the costumers needed crews to install the paint, so we became their installation partner.
Andrew: You know what, this is a really interesting way of looking at business. My instinct always is to say, I have a service that costumers should use. How do I find those customers? But I notice that there are some people who I interview who just don’t think that way. They say, I have a service, where do I find the people who have my costumers and they’re the ones who are going to use my service.
Mike: Mm-hmm.
Andrew: That’s the way that you think, too.
Mike: Yeah, you know, the way we try to think about it is, a partner is a costumer and that partner is just a constant stream of referrals and if we can be a valuable resource and make their lives easier, we can always depend on that partner for a certain amount of business. Then each partner builds on the partner before. We were able to build up a lot of these reliable recurring partnerships over the past year, which has been really, really good for us.
Andrew: That explains something else, too. I was looking at my notes and you said, the best source of costumers is referrals, and I said, well even if I have my house painted and I love it and I tell all my friends that they should use you, how many of my friends are going to need a house painted this week, or this year? That’s way too slow.
Mike: Yeah, exactly.
Andrew: But if you’re talking to people who have a lot of clients, like interior decorators, they might have other friends who are in other business associates who have the same kind of costumers you’re looking for.
Mike: Yeah. You got it exactly right. Those are the [??] sources.
Andrew: So far everything in this story is going well in the early days, but if we leave people with the impression that things are happy go-lucky and simple in the first few months of [Paints ??], they’re going to have a false impression aren’t they? What’s the first big challenge that you encountered?
Mike: Oh, the quoting engine. So I talked briefly on the complexities of the quoting engine. So what we’re seeing brings back memories. This was a very simple I guess bridge where you can click on the number of rooms and then we gave you this quote. As you can imagine that quote was far from accurate. So in the early days painting being a high ticket we would take a lot of financial hits because we didn’t want to go back to the customer and ask them for more money.
We didn’t want to upset the partners and the crews and pay less money. So we took on the financial burden. So it really was a struggle from getting through to fine tuning the coding algorithm. And, you know, with every mistake that we made was a financial repercussion. Our motto was if you make a mistake, we’ll pay for it. We’ll just learn from it, just don’t ever make it again. And all learnings have now added up, and we have it down to a pretty good science at this point.
Andrew: What’s a mistake that you said, “I don’t want to make that mistake again with the quoting engine.”
Mike: So I think I’m the first iteration of the site. There’s nothing about ceiling height. This is a great example. So you see you don’t think about these things, but it’s very different to being in an apartment that has eight foot ceilings versus an apartment that has 14 foot ceilings. The crews need different equipment and different ladders and sometimes scaffolding. So early on we quoted an apartment without asking for ceiling height like it was eight feet, and it ended up being this huge ceilings like double or triple the cost of doing the job. And that was a pretty tough pill to swallow. From there we started asking the ceiling height.
Andrew: I see. So I’m wondering about your process for that. The other day I realized that I was interviewing about someone I knew, and it just didn’t occur to me because we hadn’t talked for years. So I had the problem and I went back into our Google docs and I said, all right. Here’s a doc on how we create notes to prepare Andrew for an interview. Let’s add a line at the top that has gmail search with the guest’s name. All Andrew has to do when he’s sitting down to do an interview is click that link, and he sees all the emails that he ever had with this person. Boom, done, easy. And now we solved the problem.
And now I see the problem. I go back to Google docs and I added it. What’s your system that you don’t make the same mistake again?
Mike: So we are actually big fans of using Google docs. So what we would do is we would track all the pricing errors, and we would prioritize them. When we’d come up with the big issue, we would then program it on the back end. We’d have to design for the end user’s experience as well to be sure we captured that new piece of information.
Andrew: Oh, dude, that makes sense. So anything you had a mistake you would write it down, I’m guessing in a Google sheet, right? So you’d say here’s the amount of money that we made a mistake by and here’s why we made the mistake…
Mike: And also how many times, like we’d always make sure it wasn’t a [??]. So like [??] mistakes we can live with. Like how frequently is this mistake coming up and how much is it costing us?
Andrew: Got it. All right. So you fix all that. It seems like in the early days it must have really cost you money to get this thing going. How much of your own money did you invest in the business?
Mike: Oh, that’s a good question. I can’t remember the exact amount we put in, but it was a nice chunk of change that we ended up putting in.
Andrew: What are you talking about, like over $50,000 each?
Mike: Slightly under.
Andrew: Slightly under $50,000 each, so the whole business was funded somewhere around $100,000, a little bit more.
Mike: But then we were fortunate to get a very early stage venture investment as well which lasted us over a year before we raised additional seed fund.
Andrew: Where did you raise your first money?
Mike: From Quotidian Ventures.
Andrew: Okay.
Mike: Yeah.
Andrew: How did you go about doing that before you had any traction?
Mike: We had a relationship with Quotidian and a new adviser to their fund, and we had that relationship through [??]. So when we met with them, I think they were pretty confident that since we’d been in this business phase and we had a lot of experience that we knew what we were doing. And they believed in us and the idea.
Andrew: How much did you raise?
Mike: In that round it was about $250,000.
Andrew: Two hundred fifty thousand dollars. All right. So small round just to prove out the idea and you did, it seems like. We’ll talk about your revenues in a little bit. You know what? I’m still a little curious about why you decided to use outside painters. I did an interview with one of your competitors, the founder of Got-Junk, Brian Scudamore.
Mike: Yep.
Andrew: And he created a site called “One Day Paint”. Now his site is different in that when I go to request a quote I put my zip code in and then I put my name and information and hit submit and then, I guess, I get a quote. So he doesn’t use any of that, but another thing that he does differently is he has franchisees in each city that do the painting. What didn’t you decide to go that route?
Mike: Our thought process was that if we build out the technology, like it becomes really seamless for us to expand.
Andrew: Mm-hmm.
Mike: And we had learned really early on that we’re a part of a really talented paint crew that would deliver a really high level of service, dependable level of service, that were looking for work. So those two things coupled together, we just wanted to focus on how to quote, how to get information, how to get an accurate quote, and how to match the cost of earning to the best crew. And then let the crew do the work from there.
Andrew: Not get franchisees and I guess for him, the franchisees are the ones who were basically his investors.
Mike: Mm-hmm.
Andrew: Right?
Mike: Exactly. We took the approach of having a general manager, so our strategy, for example, we launched San Francisco. We had a general manager on the ground out there that oversaw the operation.
Andrew: I see. I was looking at your face as I was talking about a competitor of yours, and you did seem to mind that I brought up a competitor’s name, right?
Mike: Oh, I have no issues with competition. I figured, coming from the cleaning space, we’ve seen our fair share of heavily funded competitors come in. So no, we’re OK with it.
Andrew: One of the things that seemed to be an issue at MyClean was the kind of work that you guys were doing. You’re basically running a maid business. And I think in one of your blog posts, I don’t know who the post, but you said we hired this woman. She’s an ivy leaguer, and she had to go back and tell her parents that she was going to work for a maid service instead of doing something much more prestigious. Did you feel any of that at all at MyClean?
Mike: Not really. I found with MyClean, there’s a lot of success stories that come out of MyClean. And I think whether it’s cleaning and the cleaners are employees, or whether we have partners that we’re matching to, I think we take a lot of pride in ensuring that whoever’s doing the work is leaning towards a better life, earning more income…
Andrew: Mm-hmm.
Mike: …and being treated well, almost looking at both sides of the marketplace as customers. So, yeah, it’s nice to see some success stories on the MyClean side of people that are now having consistent work and making real incomes and then living a great life. It’s nice. It’s rewarding.
Andrew: What about when you see someone build up an app that-I’m trying to think of what an app does-maybe sends photos in a new way or stores texts…
Mike: Mm-hmm.
Andrew: …on an iPhone in a new way. And they end up building these companies that are insanely huge quickly. Do you ever feel a little jealous, and say why am I in the paint business? That’s an old school business.
Mike: No, I’m not jealous. I love it. I love the text base. I love reading about all the companies. I try to just stay very competitive with myself. I have my own internal goals, and I compete against those goals internally. And I try to keep everything else on the outside.
Andrew: What’s your structure for keeping goals?
Mike: Both personal goals and corporate goals, so I try not to measure MyClean versus another competitor, Paints In [SP] versus another competitor. Even Paints In versus MyClean, I try not to measure the two against. I have my goals set for Paints In internally, of where I want to be in six months, in a year.
Andrew: Do you write it down at the beginning of the year? Do you do it…?
Mike: Oh yeah.
Andrew: What’s your system?
Mike: We write down our goals. I do pretty detailed financial objectives, so like growth goals. And then we have a pretty detailed tech roadmap, which is technology goals, what I want to accomplish over a certain period of time.
Andrew: Mm-hmm.
Mike: And I just ensure that the whole team understands those goals. My belief is everybody in the company should understand our goals.
Andrew: So they all see your detailed projected financials?
Mike: [??]
Andrew: And they get to compare them? And the detailed projected, do they go a year out, six months out, or shorter?
Mike: I projected out about 18 months. There’s a lot of assumptions made when you do it out that far. But beginning of every month, I go on the whiteboard in the office. I write down our projections for each city. Every person internally has some form of accountability towards getting at that…
Andrew: That monthly, it’s a monthly projection for each city.
Mike: Mm-hmm.
Andrew: So I say New York needs to hit this many customers, this much revenue, this kind of expenses, and then we’ll keep watching it throughout the month.
Mike: Exactly, and then we talk about how we’re going to get there, what our challenges are, who’s responsible for what, who needs assistance. And that’s basically the approach, yeah.
Andrew: That makes sense. You know what? I should do a quick sponsorship spot, speaking of numbers. And then I want to come back and ask you about your personal goals and how you keep track of those.
Mike: Sure.
Andrew: I told you at the top of the interview that I have a page on my site that does incredibly well, and I’m making it available to anyone out there who wants to use it. It’s a landing page or a lead page. It uses everything I learned to increase the leads that we get on Mixergy, and I’m making it available, as I said, to the world. Well, if you want to do the same thing, maybe you have a landing page that does extremely well. Maybe you have an idea for a landing page that could do well. If you want to create it and sell it without learning all the coding involved in creating the page, without figuring out where you can get customers. Well, I want you to use Leadpages. And if you do, they will code it up for you. They will sell it to their customers. And then they will send you the money. One hundred percent of it. They’re not keeping any part of it.
If you want to get in on that, go to mixergy.com/leadpages. You’ll see a box there where you can create your own leadpage. Mixergy.com/leadpages. And as I said, they will make sure that the code works. They will make sure that it gets sold. And they will send you the revenue. In fact, one of the first questions they ask you is where do you want us to send the money.
Because it’s very important to them that you keep getting paid every time you sell one of your pages, or every time they sell one of your pages. So if you have an idea for a leadpage, for a landing page that converts, go to mixergy.com/leadpages. What about your personal goals? What’s your structure? Do you do it once a year? Do you do it more often?
Mike: I guess I break my personal goals down a little bit differently. I kind of think about my personal life, like I have my family. I just had a new baby. So, obviously, having a strong family and a happy family is a top priority for me; a goal that I always focus on.
And then there’s, you know, the financial goals. Very close with managing my overhead while I take on the start-up life and risks. I try to keep my overhead very low so I can save a little bit of money for that.
Andrew: How do you do that? How do keep track of your overhead?
Mike: I basically run my personal financials like a business pnr. I go through my monthly expenses, how much I can put away each month, and I have my savings which is sort of like my balance sheet. And I can see what I can flow into savings and actually haven’t even much money in savings. I have payables and receivables section of big . . .
Andrew: Really?
Mike: . . . bills coming in or good checks coming in. Yeah.
Andrew: What software do you use for that?
Mike: I use a program called Microsoft Excel.
Andrew: Oh, really. Whoa!
Mike: Yeah.
Andrew: So you’re really getting deep into that.
Mike: Yeah. It’s probably a little overkill. But . . .
Andrew: You know one of the challenges with doing personal finances today is it feels like a large chunk of my expenses go to Amazon. Does that mean that groceries are all really high? Or does it mean that I bought too many movies on Amazon? Or does that mean that I bought too much junk for the baby? I can’t tell.
Mike. Yeah. Well, that’s sort of the hard part. I try not to get too nit picky. We’re out of control on diapers.com and stuff.com, especially since the baby was born.
Andrew: But it’s a good deal. You know what? I really appreciate diapers.com. I have a six-month old now and that’s huge.
Mike: Yeah. My baby’s five months.
Andrew: Oh, cool.
Mike: Yeah, around the same time. I remember when you had your baby.
Andrew: Yeah.
Mike: We were going to do the interview and then it got pushed back slightly.
Andrew: It was a tough first five weeks where he wasn’t sleeping through the night. And I thought I could handle waking up in the middle of the night multiple times because I don’t need that much sleep. But I couldn’t handle it. What was it like for you?
Mike: Fortunately, I have a baby that sleeps very well.
Andrew: Me too.
Mike: So we were lucky with that. The later part was a little bit challenging. It wasn’t as smooth as I would liked, but everybody came out [??] and happy. So it was an amazing experience.
Andrew: So is it taking away from your ability to work? I was listening to Startup, the podcast and what’s his name, Andrew Mason from Groupon said, you’re less productive after you have a baby. And then he said, I’m less productive now after I have a baby.
Mike: Yeah.
Andrew: What did you find?
Mike: I mean when I looked into it, like, I did a lot of research on it. And I found the most important thing is just really managing a schedule well. So I try to be really focused on time management when I’m at work, when I’m at home.
I have a very, very supportive wife, so that’s also a huge help. I gave up a lot of my social life, actually, because I knew something had to go. So instead of giving up family time with work, I chose to give up a lot of my social life.
Andrew: I’m pretty disciplined about time also. And I haven’t found that my productivity took a hit. If anything, it’s actually I’m more productive. Because I’m so into time management, there’s a book that a friend of mine gave me that I have to recommend to anyone out there who’s going to have a baby.
In fact, if you’re planning to have one years from now, you should still write this down. The book is Cherish the First Six Weeks by Helen Moon. And what she talks about is how to set up a sleep schedule for your baby. And it’s kind of tough or absurd at first, but boy, does it help now. Shep sleeps through the night. I mean we put him down at 7:30 to bed. He doesn’t wake up until about 6:30 and we pick him up at 7:00. It’s unreal.
Mike: Yeah.
Andrew: And because he gets so much sleep using this sleep schedule that Helen Moon talks about, he’s much happier in the morning. We can play with him in the morning. He’s less fussy. Frankly, there are times when he’s still fussy and obviously not happy and crying, but it’s much, much better. So it’s worth the investment of time and effort in those first few weeks.
Mike: Yeah. Certainly.
Andrew: And having said that, it’s not all, it’s frankly very little us we’re just doing what we can. It’s the baby like you said right? You have a baby that happens to sleep through the night. You have a baby that happens to be a good sleeper. Right. Everyone’s different.
Mike: Yeah. Definitely.
Andrew: All right. I’m trying to think of then what’s next. It feels like things within the last year really took off. How much revenue are you guys doing now every month?
Mike: Our one rate is well into the millions.
Andrew: So what does that mean that last month you did two hundred thousand?
Mike: Approximately.
Andrew: Two hundred thousand in sales last month? That company is how old?
Mike: Just over a year.
Andrew: Over a year? That’s fantastic to get that big.
Mike: Yeah, we’re growing pretty quickly.
Andrew: So what’s your process for getting new customers in the door? For getting these partners in the door?
Mike: Just pound the pavement early on and now what we’re finding is we have a nice foundation of partners which leads us to more partners.
Andrew: What’s the pavement mean literally?
Mike: It means get out to networking events. Meet people. Network through people. We’re doing mailers now where we’re sending direct mail to certain partners that we have sort of targeted as really good partners for us. We’re going to events so we go to a lot of events, real estate events [inaudible 00:01:19] and we’re constantly just trying to build relationships with other companies.
Andrew: When you go to real estate events what’s your process for finding and connecting with partners?
Mike: It’s just a lot of networking. Like I’ve actually found when we host the event…so we do some happy hours and stuff. The fact that we’re hosting it there’s more focus on paysend [SP] so those are the most productive for us to host.
Andrew: What do you do? You take people to a bar or restaurant?
Mike: It’s like a happy hour at a bar. It’s just like networking.
Andrew: And how to you get the people you invite to come or how do you find the people you invite?
Mike: We call up contacts, friends that we currently work with and I think that we reach out to some brokerage houses. You know and it just builds from there.
Andrew: Wow. All right and then you were talking about mailers. How effective has that been for you?
Mike: I don’t know. We haven’t actually executed on it yet. We’re in the process of doing our first mailer but I have high hopes for it.
Andrew: See because I tend to spy on my guests. I go to similarweb.com one of many sites that I use to see where traffic is coming from. Actually SimilarWeb’s the only one I use for traffic but I go to multiple sites to spy on my guests. And for you, your biggest source of traffic according to SimilarWeb is CrunchBase. Number two is TechCrunch. Entrepreneur.com is big so those aren’t really the big sources of traffic. Not the real traffic.
Mike: Mm-hmm.
Andrew: Right?
Mike: Yeah, so that’s just from a lot of the recent press we’ve gotten around our funding announcement has driven a lot of traffic.
Andrew: Mm-hmm.
Mike: The bulk of our traffic up until recently was really coming organically and just people coming direct to our site and then we all find partnerships.
Andrew: And you do buy ads. I see a…
Mike: Yeah, so now we’re really starting to ramp up search so we glance…we’re starting to get pretty savvy with Paid Search and we’re also starting to delve into Facebook and it’s a really fun challenge on Facebook. Different than others because it’s not an impulse purchase. It’s not something…
Andrew: Yeah.
Mike: …oh, I think I’ll get my. So it’s how do you develop that relationship with the customer through Facebook.
Andrew: What are indicators that somebody is going to need painting. I met a guy who came out here who’s a mixer [inaudible 00:03:26] who’s looking for indicators that someone’s about to move houses because he wants to run ads against them and he says there’s some like Baby Announcements are some. Relationship Announcements are another. So I see some of the key words that you buy. For example you have the phrase chalk paint, whiteboard paint. That’s the paint that’s over your shoulder right now, right?
Mike: Correct. Yeah. Mm-hmm.
Andrew: Can I send you InSkype chat? Is this the page that you send people to from those ads?
Mike: Let me see it.
Andrew: It should be in the Skype chat box.
Mike: All right. Just pull it up here real quick. No, that’s…
Andrew: It’s more like…
Mike: That’s just an informative page.
Andrew: Yeah, it looked like one of those or maybe it’s this one. Is this another one, or no.
Mike: Let me see another one. Well they get to…
Andrew: You send them to a landing page that…how much work do you do on that landing page because the one that I sent you doesn’t look like a landing page from Google. It just basically says here’s what custom paint is. Here’s what idea paint is. Here’s what magnetic is but you don’t even encourage people to buy. It seems like this more the kind of landing page that you do.
Mike: Are you sending another?
Andrew: This one. I’m sending one more. Maybe the first ad that I saw wasn’t…
Mike: Yeah, so this is our homepage that you come to through Ad Works. What we’ve done recently is like we built an internal dynamic landing page creator so we could create landing pages on the fly and we could have those customized to what sort of search term you’re looking for.
Andrew: Yep, yep.
Mike: So somebody who’s looking for whiteboard painting would see a landing page relevant to whiteboard painting versus somebody who’s looking to book an apartment repainting job. They would see something relevant to that. And then we focus a lot on the direct call to actions to get a free quote. So we focus a lot on how do we make it simple and easy for the customer to go get that free quote. And at that point, we can begin to build a relationship with the customer.
Andrew: That’s what I’m getting at. So the page, the second one that I sent you makes a lot more sense, and the way you describe creating landing pages makes a lot more sense. What about this though? Google AdWords are so competitive that if you don’t have experience in it, you’re going to struggle against the people who do.
Mike: Mm-hmm. Yeah, I think that’s why we stayed away from Google AdWords…
Andrew: Mm-hmm.
Mike: …for quite some time is because we didn’t have a ton of experience. Once the final [??], we were able to make an exceptional hire. And we really made it a priority to learn about Google ads and landing page creation and A/B testing. And we figured if we’re going to do it, we’re going to be the best at it. And there’s been a big commitment into learning and getting better at Google ads.
Andrew: I see, meaning lose a lot of money while you learn.
Mike: Yeah, and our numbers, every day you can see them getting better. Our conversion rates are going up, and our [??] click is going down. It’s grown to something [??], sir.
Andrew: What’s the background of the person you’ve hired to do that for you?
Mike: Very strong background in search, a marketing background, but a lot of experience in search.
Andrew: What did they do before?
Mike: Before, they were at an agency. And then before that, spent some time with the NBA.
Andrew: Yeah, I see. So we asked you in the pre-interview if you could teach any class, what would it be. And you said I’d teach how to hit the first 1,000,000 in revenue. And then you also said by the way, I would take a class on how to hit the 10,000,000 revenue mark.
Mike: Yeah.
Andrew: But the one that you do know how to teach, first 1,000,000 in revenue, what would you teach an entrepreneur who says I want to get there. Look at this guy. My gross will hit it within a year? I want to get to a 1,000,000. What would you teach them?
Mike: I think focus is key. So I think what’s really easy when you’re at least familiar when I’m starting, when I started cleaning, when I started painting, your mind starts drifting. But if I did [??] service or what if I did [??]? These crazy ideas start to come together, which might be great ideas two or three years from now. But really focusing on just being the best at painting was what led to, I think, us being able to grow so quickly.
Andrew: So one product as opposed to we’re going to do painting, but we’re also going to do the cleaning service. And we’re also going to do your gardens since you have half and half there.
Mike: Exactly.
Andrew: Got it.
Mike: Exactly.
Andrew: Okay. So here’s what I have out of this whole interview. I took some notes here. So there’s the one product idea. You said look, pick one product that you guys are going to focus on creating. You also said run a quick test, and you guys did it with that landing page that quickly told you whether people were even interested in this instant quote.
Mike: Mm-hmm.
Andrew: You focused also, so you don’t want to hire your own painters. You want to focus on booking and the whole booking experience and satisfaction there. Another one is you actually say do raise money. If you want to grow fast and big, raising money is a good way to do it. And you guys did that. I think that’s pretty…I know that there’s a whole lot more that came in, but those are the four big notes that I got from this conversation. Did I miss anything big?
Mike: No, this was great. I’m just happy to have the opportunity to talk about our business.
Andrew: And it’s great to have you on here. Congratulations on all the success.
Mike: Thank you. Thank you.
Andrew: And as a follow up to this, if anyone wants to see what he did before, go check out the MyClean interview. It’s just one word, MyClean. You can type it into the search box on Mixergy. Really great interview of how he and his co-founders did this before really big, and now he’s going to go bigger and faster. And you’re already on your way, Mike. Congratulations and congratulations to everyone at Paints In.
Mike: Thanks, appreciate it.
Andrew: Thank you everyone.
