Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their successful companies. And I do it for an audience of real entrepreneurs who are listening as they’re building their companies and, very often, as you might have noticed, coming back here and doing interviews about how they built their businesses while listening to Mixergy. So, it’s the circle of Mixergy. You listen, you build, and hopefully, you come back here and you do an interview about how you did it yourself.
On the side, I got so frickin’ fascinated by chatbots that I built this little side business called Bot Academy that’s now . . . it’s going to become bigger than Mixergy, if it hasn’t already. And I did it because I recognized that reaching my audience via email was a losing proposition. No matter how much effort we were putting into better headlines, better copy, whatever, people just don’t love email. They don’t. And I realized that we, internally, at Mixergy, we do not, as a team, use email to communicate with each other. Emails are the fifth thing I check in the day, right? Our chat with the team is the first thing I check.
So, I said “Why are we only using email to reach our audience if we’re using chat to talk to each other, if we’re using chat to talk to our loved ones? Why are we doing this?” And so, I got into chat as a way of communicating with potential customers, and people loved it, and became this thing that was really big. And then I created something called Bot Academy where I teach people how to create chatbots to reach their customers, and it’s become a bigger and bigger part of our company.
I have to be honest with you, today’s guest created software that I didn’t use for a long time. And the reason was I believe that when it comes to Messenger, which is our preferred platform for chat, for reaching out to potential customers in chat, I thought it needs to mimic what’s happening in email but be a lot smarter. Meaning, we need to ask people to subscribe to get our messages via Facebook Messenger just like we need to get them to subscribe to our email. And the benefit of Messenger is they don’t need to give us their contact information, they can just press a button and start getting our messages.
The benefit of Messenger is we don’t write long messages, we write short messages that will reach them and they actually check it. And that’s our world view of at this company, Bot Academy, that I built. And Octane was, so long, creating something really powerful, got a lot of attention, especially since they have a really powerful blog on Medium. But they had a different worldview, they said, “We’re going to create these great experiences on Facebook Messenger and people have to come to us to experience it.” And then I said, “That’s not really my world view.” And I saw them change, and change, and change, and change. And these frickin’ guys at Octane AI, I say, guys or people, I should say, at Octane AI ended up building something super powerful by just iterating, and iterating.
And now, I was just on with Matt Schlicht, the founder of Octane AI. He showed me what he does. It blew my frickin’ mind. And so, I invited him here because I saw that they were evolving. I didn’t realize how far they’d come. I think anyone who’s interested in Messenger as a way of communicating with customers has to see what they have done. And so, I invited him here to talk about it.
Matt is the founder of Octane AI. They are a Messenger marketing platform that helps e-commerce companies collect with customers and drive sales. We’ll talk a little bit about what that means. I’ll put some flesh on that in the interview. But I will tell you this whole thing is sponsored by two great companies. The first will help you reach people one-on-one and close more sales using email. Yeah, I think email still has a purpose in life. I don’t think that email is dead. I think there’s this new thing’s really powerful, it’s called Mailshake. It’s super powerful, I’ll show you how you can use it to get customers. And the second is an email marketing campaign software, it’s called ActiveCampaign. I’ll tell you more about those later. First, Matt, welcome.
Matt: Yeah. Thank you for having me. And I’m so sorry that before we started this, you know, your brain exploded. And I know we had to take a little bit of time to kind of put the pieces back together. But now, here we are.
Andrew: I think I told you I wanted to make out with you or your software. I get excited when I see good stuff.
Matt: It got crazy.
Andrew: I was not super enthused before. And I think what’s interesting to me is about you guys, as a business, is the way you got to where you are. But why don’t we start with where you are. You showed me . . . let’s blow people’s minds with a simple example, you showed me an example of an e-commerce site that sold what?
Matt: Yeah. So, I showed you Pure Cycles, which is a company based in LA that uses Shopify that sells a ton of bicycles every year.
Andrew: Okay. And when I go to stores, the way that I save things is I don’t bookmark it products I like. If I think I might want to buy it, I hit “Add to Cart.” Now, underneath the “Add to Cart” button, you added to their shopping cart experience what?
Matt: Yeah. So, we added an implementation with Facebook Messenger. And so, the thing that we discovered is that pretty much 75% of people who click the “Add to Cart” button, they don’t actually complete the purchase. They get distracted, they get hungry, they disappear, you know, whatever happens, they just don’t complete it. And right now, what most stores do is they send abandoned cart emails. So, they’ll email you afterwards, you’ve probably gotten one of this, and they try to pull you back and say, “Hey, you were looking at this, do you want to buy it?”
But the problem is that out of those 75% of people who added something to their cart and they didn’t buy it, the store just doesn’t have most of their email addresses. There’s just no way in the world that they can reach back out to them. And so, we implemented Facebook Messenger into this experience where we add the Facebook Messenger checkbox below all the “Add to Cart” buttons, so that now when you click “Add to Cart,” we enable the store to reach out to over 90% of people, when they abandon it, with a push notification over Facebook messenger. It’s making the Shopify stores we work with a ton of money.
Andrew: So, if I were on this site, Pure Cycle, I press “Add to Cart,” my wife calls me over or I get distracted by Netflix or, frankly, it’s usually work issues, I go back to work. A little bit later, if I look at my phone, it’ll buzz, I’ll see that it’s a message saying, “Hey, I think you forgot something.” I tap the notification, and Facebook’s really good about sending notifications, I tap it and then Facebook Messenger opens up and it says, “I think you forgot something.” A picture of the bike that I put into my shopping cart is there, and a button that says, “Buy it,” and I could buy it right there in Facebook Messenger on my phone or I could say, “Stop messaging me.” That’s basically it. And you told me the percent of people who bought, out of, let’s say, 100 people, hit that “Add to shopping cart,” and you guys send them push notifications, how many of them will end up buying the bike?
Matt: Yeah. So, if you sent that to 100 people, 10 of them would buy the bike.
Andrew: So, 10 people who abandoned the shopping cart now are being brought . . . this is why you blow my mind. Now we’ve got a use case that makes sense that could not happen via email and is better because it’s reaching people in a platform that they love. And the reason it couldn’t happen via email is you’re not asking me to type in under like . . . I’m not adding to shopping cart and then being told “What’s your Facebook Messenger handle or anything.” As long as I leave the checkbox pre-checked, you have permission to get me via Facebook messenger and you know because Facebook gives you that contact information what my Facebook Messenger info is.
Matt: Yeah, absolutely correct. I think it’s really important, what you said earlier, where you said that initially we were focusing on trying to create a very creative box that people would come to. But one of the things that we found is that, and you’re probably know this and people listening know this, it’s very difficult to tell people what to do because they very rarely listen to you. So, telling them, like, “Hey, there’s a great bot over there, you should go check it out,” doesn’t work very well. And so, with this kind of evolution of our software, with the checkbox, what we’ve been able to do is we can actually have the bot introduce itself to the customer at an opportune moment where it can add value to the customer by, in this example, reminding them that they were looking at this product and maybe they should get it. But also, we have a ton of other automated campaigns that uses data from the customer on the store to notify them and give them information over the bot in an automated [fashion 00:08:08]
Andrew: So, in an ongoing basis, if I don’t buy this bike, if I’m one of the 90 out of 100 people who don’t buy the bike, you still get to message me from time to time and say, maybe teach me about how to cycle better using this type of road bike that I was interested in, tell me about discounts and offers that you have. And all that lets you bring me back in and sell to me. The thing that you were doing before on Aerosmith, I frickin’ love the band, I’m impressed that you got them to build on your bot in the past. The thing that wasn’t super exciting for me was yeah, I get to see Aerosmith in here, but I see it one time. When am I ever going to say, “I got to get Aerosmith, let me go into . . . ” I guess I should say Aerosmith, ” . . . let me go into Facebook Messenger and see what they’re up to.” I’m just not doing it. If anything, I’m going to go check them out on Twitter or Facebook or, frankly, Spotify.
So now, what you’ve got is an iteration of a product and you made it make sense. I want to understand how you got here. And here, by the way, is how much revenue you guys bringing in?
Matt: So, we’re not talking about that publicly right now. But I can say that we do have stores that are using Octane AI with Shopify and they’re on their way to make over a million dollars a year just from the Octane AI bot.
Andrew: So, from nothing else, you guys are leading to almost a million dollars in sales for more than one store?
Matt: Yes, absolutely.
Andrew: This is the future, frankly, of chatbots. Not even mentioning bots, just mentioning the result and you guys are big about saying things like recover abandoned shopping carts, grow sales, etc. Let’s talk about how you got here. You’re a person who is one of the least likely people to get into chatbots because you went to a school that we’re considering for our kid, who’s like three and a half, the Waldorf School. And the big attraction for the Waldorf School is what?
Matt: Yeah. I mean, one that’s crazy that you’re thinking of sending your kid there. I loved going to Waldorf. So, definitely, you should do it. The big thing about Waldorf which trips people out, when I tell them, is that Waldorf really doesn’t want the students to interact with technology at all.
Andrew: At all. Not even at home?
Matt: Yeah, not at home, not in school. Everything is very artistic and done with your hands. You actually don’t get any grades. It’s very, very different from most schools that have standardized testing and use a lot of technology, and so . . .
Andrew: Is that helpful because what is it? Mark Zuckerberg is investing in . . . is it called AltSchool or something, where they’re the exact opposite. It’s full of tech. What did you think about being disconnected from tech for the first 10 years or so of your life?
Matt: I mean, one, I didn’t really have much of an option. Two, I definitely wanted to get Gameboy or get Tamagotchi or watch movies or watch TV on the weekends. But what ended up happening, I think, is I got my first computer, it was a really big deal, right before I went over to high school. And so I was like, 11 or 12 or something. And because I hadn’t had access to that for so long, the moment I got it, it like blew my mind. And the moment I got it, I took it apart, put it back together, freaked my parents out, and computer never worked, same since. But then when I had the internet, I was like, “Oh my God, I can learn anything I want, I can be anyone I want on the internet. And as long as I, like, portray myself [inaudible 00:11:26] smart, and like that’s how people will think of me.”
And so, I think before I had a computer, I would definitely wanted to be an entrepreneur, but it was hard to think in terms of the internet. So I was like, “Oh, I want to have a store on, like, a very busy street corner,” because that’s, like, where all the foot traffic was. And then when I got a computer and I got access the internet, which was dial up at the time, which is a whole nother story, I was like, “Wow, this is the biggest corner in the world. Whatever I do has to be on this street corner called the Internet.”
Andrew: I get it, I get it. I can imagine that excitement for the first time that you get it, but I understand. And so, you kept getting into this stuff. And I’m looking at your frickin’ LinkedIn profile, how many companies were you a founder of or a CEO of, including like Tracks.by, which is a Y Combinator company, right?
Matt: Yeah. So Tracks.by is a Y Combinator company. So, you go to college and then I joined a company called Ustream when I was 19, and this was back in, like, 2007. They did live video, which, you know, now you tell someone you did live video and they’re like, “Everybody does live video.” Facebook does live video, YouTube does it, Twitch does it, but back then, nobody did it. And so I joined Ustream, I worked there for four years, we grew massively, you know, we had, like, Snoop Dogg smoking weed, we had Obama during his campaign and it was super awesome. And when I was there, I was able to work with a ton of labels and entertainment companies and brands helping them with live video, and I ended up . . .
Andrew: And Ustream would make those relationships happen and you were there to nurture the relationships, am I right?
Matt: I mean, some of the times, I was the one that was reaching out to people and getting to know them. I started out doing business development where I would call people and I would say, “Hey, you should use live video to promote, you know, video games. Like, it’s not just for porn, like you should use it for this too,” which was like discussing that, it wasn’t just for porn . . . I know it sounds crazy, but that was literally [the experience 00:13:25] . . .
Andrew: But that was what people thought it was.
Matt: Yeah. They were like, “Live video, it’s for porn, right?”
Andrew: I thought they would think of it as just being for geeks because Ustream, for a long time, was for broadcasting live tech events, right?
Matt: Yes, yeah. But Snoop Dogg smoking weed, that changed everything.
Andrew: Okay. So that changed everything and then you would cold call these people and say, “Hey, we’re the platform that Snoop Dogg’s smoking pot on. Here’s what’s happened with it?” That kind of thing.
Matt: Yeah. So, I would do that, and then what would happen is that we would be working with these celebrities or in their teams and they’re using live video but you have to imagine that the entire social internet was new at this time. So, like nobody knew how to use Facebook, nobody knew how to use Twitter, but I’d spent more time on it that they had. And so, giving them, like they just wanted advice in general about the internet. And so, me and a couple other people at the team, we became friends with a lot of these celebrities even before they . . .
Andrew: So, here’s why I’m spending so much time on this. One of the things that I admired the hell out of with you was you were so frickin’ good at getting big celebrity names to use your product, not just here, but throughout your career. So I want to understand, in the beginning, when you were just . . . how would you get a celebrity on the phone? How would you even get to spend time with them teaching them about social media and live video, let alone getting them to actually use your platform?
Matt: I mean, look, the thing that most people don’t realize, and maybe some people you think but, like, you don’t really understand is that it is not easy to become a celebrity. They are exactly like the people who are probably listening or watching this later, like they are hustlers, they’re crazy. Anything to give them an edge, like they’re doing it. And so, it’s very easy to get them on the phone if they’re not already massive at the time. And so some of the people that we worked with, they weren’t famous, Nicki Minaj, Wiz Khalifa, Jason Derulo, like nobody knew who these people were.
Andrew: So, would you have a hit list of people who are making records or are . . . hit records . . . they’re at least represented by record companies but don’t actually have a huge following, and that’s who you were starting go after?
Matt: Yeah. We talked to the labels and we’d say like, “Hey,” you know, because at the time, the labels were all appointing like head of social media, which literally meant nothing because nobody knew how to do anything. And so, any help that those people could get was very, very useful. And we could come in and not only tell you about this great thing with live video, but we could give you a ton of tips and tricks about how to get tons of viewers on Facebook and Twitter, how to trend, and how to get hashtags.
Andrew: So, you [called the head of 00:15:47] social media at the label and say, “Hey, I’m with Ustream, do you have anyone who’s interested in getting into this stuff? I’ll spend some time with them, I’ll train them not just on Ustream, but we’ll tell them what we’re seeing in social media?”
Matt: I mean, even more aggressive than that. It’s just like “I have something that will freakin’ blow your mind and you need to do it right now.” And not only like “Can you do a live video, but we can blow it up on your social media accounts.”
Andrew: What was the one thing that you know would make their eyes light up when you showed it to them?
Matt: I mean, the ability to go live and then share that link on social media in the right way, and then suddenly have the ability to talk, like, face-to-face . . .
Andrew: And they liked that? They didn’t think, “Oh, no, what if people think I’m a fraud or what if I don’t know what to say or how do I make this cool?”
Matt: No, no, no, it was super weird. Nobody got it at the beginning because everybody was used to doing things very, very produced, right?
Matt: You go on TV, you know what your lines are. There’s editing, there’s post, there’s all this stuff. And so the concept of just turning the camera on and 10,000 or 100,000 people watching you was like super weird. But then people started getting really creative, where they would turn it on and they would just eat cereal, and that was it. And then they would look at the chat and they would respond to it and people just loved it. And then people started learning from that. And this whole era of how you interact with fans on live video kind of was created.
Andrew: Did you show them screen shots of somebody eating cereal and answering and all the comments blowing up?
Matt: Yeah. I mean, we would tell people, like, “Hey, you should call people’s names in the chat because if you do that, more people will join because they know that you can see them.”
Andrew: Here’s what I like about you. I sprung on you my request for you to show me what you guys are up to now. You had one of the best frickin’ PDFs because here’s the thing that I liked about you, you didn’t ramble, you didn’t go on into the back story and tell me the things that you’re proud of but I don’t give a rat’s ass about . . . you just knew here’s a thing that’s going to get Andrew, here’s the one thing, and it was ready in a screenshot. I’m sensing that that doesn’t just . . . you don’t just wake up at the Waldorf school, go off into tech and you understand how to explain tech in a way that makes sense. This Ustream experience seems to have helped with that. What did you show them that said, in one image, “I know that you’re scared, here’s the thing that you could do and it’s worked for somebody else?” Did you have something like that?
Matt: So, what we would do at Ustream is we would show them stats of how many viewers people would get on a broadcast. But the thing is we wouldn’t just be like, “Yeah, they got a million people to watch them.” We would make slides where we would break down that million people into physical scenarios that you could imagine. So instead of say a million people, we would be like, “They did a broadcast last week and 800 jumbo jets worth of people watched it.”
Andrew: Got it.
Matt: Or like, “Three football stadiums watched.” And like, “You could do this right now for free.” And they’d be like, “I can control three football stadiums?” That’s insane. So we tried to give them a way to visualize it.
Andrew: All right. Okay. So far, we’ve took a little bit of a segue away from chatbots to talk about you, to get a sense of who you are, and I’m glad we did. We’re going to come back in a moment about this thing that you did. I don’t know why you did it, but it’s the reason I found out about you, and I became obsessed with what you guys were doing.
But first, let me take a moment to talk about a company called Mailshake. Now, why am I talking about email software when we’re talking about chatbots? Here is the reason. I think businesses need chatbots. You’re showing it, you’ve got several companies that are getting close to hitting a million dollars in sales just from frickin’ chatbots, right? And most people don’t even know about it.
Now, how are you going to get customers for this? And here’s the thing, most businesses are not going to know that they need to set up a chatbot. They don’t even know what a chatbot is, they’re not going to know how it works, what it works. They’re not going to want to set it up for themselves. What they are going to want is somebody to actually set it up on their behalf, a consultant to come and say, “I got this, I’ve done this for a long time, I could understand your business, I could set you up with this, and I’ll be the guy who manages it for you.” I think there’s a huge market in that.
Maybe you’re a little disagreeing with me because you think your software is easy. Are you disagreeing with me?
Matt: No, no. I think that agencies play a really big role in not just bots, but just technology adoption, for sure.
Andrew: Yeah, yeah, no question about it. I could figure your software out in a heartbeat. Most of us who are listening can figure it out in a heartbeat. I would never want to be the person in charge of every piece of software in my company. Even though I love it, even though it’s my passion, when I go on a product hunt, I want to try everything. But as a business owner, I have to have a lot of discipline to say, “I’m not going to do this. I want someone who knows it to handle it for me.” And you’d be shocked at the things that we hire people to do for us here at Mixergy. So, I think there’s a big opportunity for agencies to be built around doing nothing but creating chatbots and managing them for businesses.
So, how do you get those businesses? Well, you can’t just ping them on Facebook Messenger because if you don’t have a relationship with the business, well, what’s going to happen is you’re going to go into the other inbox and they’re not going to see you. And they’re not going to know who you are, and I know that it’s possible, but I also know that it’s fraught with problems. Because I know when people reach me, it goes into the other inbox.
So here’s my suggestion for everyone who’s listening, use email. Go do your searches on LinkedIn. Find the people who are managing email at the companies you want to target and get their email addresses and start messaging them. And frankly, you could just, one-on-one, send them an email, say, “Hey, I love your Shopify store.” Frankly, you can buy Shopify store email addresses from BuiltWith, right? Do you guys do that?
Matt: Yeah, we use BuiltWith, for sure.
Andrew: Yeah, BuiltWith is fantastic. They will tell you everyone who’s got a Shopify store, everyone who has a Shopify store and uses Klavyio or everyone who has a Shopify store and use Infusionsoft, whatever the hell it is, right? You put that list together, you get their email address, and you can send out one email at a time, “Hey, I love your Shopify store. What you should be doing is considering chatbots because, look, there’s this thing called Octane AI that will actually get you . . . well, some people have gotten a million dollars in sales just selling through that.” Whatever your pitch is. But that’s going to take for, frickin’, ever and most of those people are not going to respond, and you’re not going to be keeping track of who’s responding what you sent.
So here’s what Mailshake does. They say, “Give us a list of all those email addresses and their names,” and you can pull it out of lots of different sources like LinkedIn, you can pull it out of there. There’s these tools that will suck any email address. Or you can just search for email addresses one at a time. “Tell me what your first email needs to look like, we’ll personalize it for you. If someone doesn’t respond within three days, what do you want to send after that? If they still don’t respond a week later, do you want to send another follow up message? Great. Type it all out, upload your email addresses, we’ll take care of it. And any time someone responds, we’re going to stop this whole automation and tell you, ‘Hey, Andrew, there’s someone who’s interested in chatbots. Here’s what they said.'” And you could start taking over the conversation and selling to them, say, “Hey, you know what? Let’s do a demo, I will show you how chatbots work. I’ve got this whole thing set up,” and you close it.
All right, if you’re out there listening to me and you want to use this power to sell chatbots for your new agency or your existing agency, if you want to do it to get people to link to your company and you know that it’s too much of a pain to send out lots of emails, anything that you want to reach out to people in a big way and you want it to be organized and you want it to be automated, you got to check out Mailshake. I’m going to give you a URL where they’re not giving us Jack [SP] for linking you to . . . usually people say, “Hey, look, if people use a special Mixergy URL, we’re going to give them a discount. They’re not, their prices are already much lower than the competition.
But here’s what you can get when you go to this URL. The best frickin’ demo video I have ever seen because it’s just a no-nonsense, in 120 seconds just shows you what this software does and how it’s going to change your life by helping you to close more sales. If it’s a founder doing it, too, usually a founder will ramble on or they’ll have those cartoony things, “I don’t need that. In this case, I want to know exactly how it works.”
So here’s what you guys need to do. Go to mailshake.com/mixergy. In two minutes, you’re going to understand how the software works, how it’s going to change your life. And even if you don’t end up using it, when you refer someone to it, they’re going to thank you for ever because you just gave them one of these evil genius techniques for getting customers. Most people do not know about it, mailshake.com/mixergy. Send love notes to me at email@example.com. And frankly, if you think it didn’t work, I also want to hear about it. I only want to represent companies that will change your life for the better. So if you don’t like it, email me, firstname.lastname@example.org. But when you will like it, all the love notes from you about how I introduced you and changed your life by telling you about mailshake.com/mixergy, send them to email@example.com.
Or come to my office, 201 Mission Street, twelfth floor in the heart of San Francisco. Are you in San Francisco?
Matt: New York City.
Andrew: New York City. All right. Chatbots Magazine on Medium. Why did you do this? Why did you create a whole blog, essentially, on Medium, about chatbots?
Matt: Yeah. So I was interested in chatbots before Facebook announced that you could make bots. And I was actually even doing some experiments with bots on Facebook, where you link to them. And then when Facebook announced that you could create bots on their platform, I was already, like, ready to go because I’ve been thinking about it and Facebook’s massive, so this was incredible. And so, what I realized is that everybody was going to be looking for information about bots. Everybody had a misconception around what they did. Everyone was like, “Yeah, bots are going to be the future, bots are so cool,” but you’d ask them “What is a bot?” They’d be like, “Oh, I don’t know. Do you know what a bot is?”
And so, I thought why don’t I go put together all the practical information about what a bot is and then let me go make the best guide anyone has ever created for bots. And so, I’ll go interview the experts, I’ll interview the VCs, the platform people. And so I did that and I spent a good amount of time doing it and I created this article, which was, like, the complete beginners guide to chatbots.
Andrew: I remember.
Matt: And I published it. And when I published it, I was like, “You know what? If I’m going to publish this, it’s so good, it’s . . . this thing is great. Like, I interviewed so many great people for it, that it’s going to go viral, and so it shouldn’t just be on its own, it needs a home. And so why don’t I create a publication for it and I’ll call that Chatbots Magazine, which like, you know, obviously, is a very literal name.” And so I did that, created a publication. I put this in the publication, and then at the end of the article, I made the big called action to follow the publication.
And when I shared this, everyone that I had interviewed for it shared it, everybody read it. It became the top result for chatbots on Google. It blew up, and then as a side effect, the magazine blew up. I thought “Well, you know what? Now that the magazine is blowing up, this article is getting so much traffic, let’s let other people write for it as well. Like, let’s give a home for anyone who wants to write about bots.” And so I let people apply and now we have over 1,000 writers who write regularly for Chatbot Magazine, and it reaches a quarter million people every month.
Andrew: That’s the other thing that I liked about what you did. You didn’t have to write it yourself, you’d have these top people into the chatbot space writing posts on your site. And then I also liked that you use Medium in a way that I didn’t realize until I saw your site do it. You customized the design, you made it look like it was your own site. And I know those features are out there, I just hadn’t seen them and I don’t think a lot of people used it the way that you did.
But here’s the thing though, dude, blogging and writing a content site, that’s no way to get rich anymore. We’re not even like talking about . . . and frankly, even when it was, even when Michael Arrington created TechCrunch and it became the top site in tech, he didn’t get, like, filthy rich. A guy creating a stinking, simple app could do better. Why did you go from being a founder of It’s Trending, founder of FriendShuffle, founder of Tracks.by, CEO ZapChain, like so many things. Why did you say, “All right, I’m going to get into the content space?”
Matt: Yeah. I mean, I’ve blogged successfully on Medium before. I have like 40,000 followers there, which for Medium, it’s quite a lot. And I love creating these blog posts. And so, for me, it wasn’t like “I’m going to create Chatbots Magazine as a business,” like, that was never the intention. It was literally just like I wrote this really great guide and I’m going to put it in a publication that I made. And then everything just kind of snowballed from there. So, the intent was never to make Chatbots Magazine, it’s like the next TechCrunch of bots, it just kind of happened and it didn’t take a lot of time for me to kind of maintain it. But the benefit of it was that I think that it’s educated, potentially, more people about bots than, maybe, anything else. And I think that article I wrote has over a million views at this point and is still in the top results of Google when you search for chatbots.
Andrew: You know, you really are good at using Medium because I think if I even go to the archive, it shows up as the top post, even though it’s not the top post in chronological order or reverse chronological order.
Matt: It’s the most popular one. So like the number of times I got on the phone over the past year and a half with people that talk about bots, what was crazy is they would be like, “No, I know you.” So, like, even if I hadn’t talked to them, they’d be like, “I know you because you’re the one that taught me about bots.” I was like, “What? I’ve never talked to you. What do you mean I taught you about bots?” They are like, “No, I read your article. It was the most informative thing I ever read.” So, like, that’s what the value was for me was that the content was out there, people educated themselves and then, I guess, I got the credit for it because I’m the one that they’re reading. And so . . .
Andrew: So, at what point did you decided, “I want to create software here. I’m not just going to be a guy who’s learning this stuff.” It seems like it was pretty early on then.
Matt: So, it became very obvious to me that the platforms that were out there weren’t working really well, right? And they weren’t doing what everybody was wanting them to, especially the people that I was talking to. And it seemed like bots was going to take off, potentially, even a larger scale in social media, right? Because if you if you look at it, messaging apps are the number one way that people communicate and it’s growing really, really fast. And it makes sense that every business is going to have to have some sort of automated way to communicate with people over messaging apps. And at the time, there were really no platforms that were doing it. And so, the opportunity to kind of start building that, and not just write about it, was too big to ignore.
Andrew: All right. And you needed somebody to build it because you . . . you’re not a coder, are you?
Matt: I can code. If anyone looks at my code, they’d be like “That is functional and very ugly and I should remake it for you.”
Andrew: Okay. You didn’t build the first version?
Matt: No, I didn’t build the first version.
Andrew: Is it Leif K-Brooks, is it the guy who did it?
Matt: So, Leif Brooks built the first version. And so I have known Leif for forever. And so, Leif K-Brooks, he . . .
Andrew: Why are you using his middle initials? We’re not using your middle initial. I a feel like there’s some reason there, does he always go by Leif K-Brooks?
Matt: I mean, I usually just call him Leif, yeah, yeah . . .
Andrew: Is it Leif or Leaf?
Andrew: Leif, Leif K-Brooks, okay.
Matt: Yeah. And so, Leif made a website called Omegle when he was in college back in 2009. And Omegle is a chat product where you can talk to someone anonymously. And he never got a job, he never went to work for anyone else, his site just didn’t really, really, really well. So it powered over 200 billion conversations with people, and he’s just a genius when it comes to scaling technology, especially when it comes to chat. And so when I was starting this, I was like, “Look, this is going to be a really big endeavor. I know that we’re going to get big brands and celebrities to use this and we’re going to need to build this in such a way that it can scale and it’s not going to break, who’s the best person I know from a technical perspective when it comes to chat?” And it was, hands down, Leif.
Andrew: Okay. And I see. And by the way, it’s a hyphenated last name. I thought we were using his middle initial, no, K is not a middle initial, it’s a hyphenated last name, K-Brooks. All right, cool. I thought maybe it’s like a reputation thing that he built using his middle name or something. Okay.
Matt: No, yeah. Maybe if he gets to the next level, it’ll be L. Brooks.
Andrew: All right. And then you’ve got Ben Parr. Why do you need Ben? I get Leif, why Ben?
Matt: Yeah. So Ben, I mean, I’ve known Ben for over a decade. And you know, Ben was editor of Mashable and he wrote “Captivology,” and he tours around the world, he is on TV all the time. Ben just knows everybody. And Ben is so good at going out and meeting people and networking with them. He’s an authority, especially when it comes to marketing. And so Leif was crucial because he could build everything and he could scale it. Ben was crucial because he can tell everybody that it exists and he already has those relationships and he has that reach.
Andrew: You know what? He does. I don’t know how he does it because he’s not the most outgoing guy in the room. You don’t feel like he’s going to be the guy who’s going to chat you up or anything, but he does know everybody. All right. But I still don’t see why you would need Ben because, not to create a rift between the two of you, but to understand your thinking because you already knew people in the chat space, you already knew people in the celebrity world because of other businesses that you were involved with. Social Cam is another place where you worked with celebrities. And why Ben?
Matt: I mean, here’s the thing, I know people and I can get those relationships. And a lot of the early customers, I was getting them, but my big love is product. And I spent a lot of time on that in defining what we’re going to build, where that’s going to go, how does functionality . . . is it going to work at least at a high level? Whereas Ben, his sweet spot really is talking to people and meeting with people and flying all over the world and he is super, super outgoing. Ben is the type of person where if you’re like Ben, there’s someone over there that’s very important, do you think you could go up and talk to them about this. He would be like “Done,” like, he would already be over there. Like . . .
Andrew: I didn’t know that he’d have that kind of energy. My sense is that he’ll say, “Okay, I can take care of it.”
Matt: He’d be like, “I already talked to them.”
Andrew: Yeah. Right. I get that. And frankly, to be honest with you, I wanted Ben Parr here today, even though you’re the guy who I know is the founder.
Matt: Exactly. That’s exactly my point.
Andrew: I said, “You know what? Ben’s always going to deliver.” I like Ben, I know Ben, I don’t know Matt. He’s an unknown entity. I’ve seen his writing but, yeah.
Matt: This is it, this is it. You say it like . . . yeah, you . . .
Andrew: So, how did I end up with you and not Ben?
Matt: I mean, Ben’s out there talking to people. And I am just really excited to talk about the new e-commerce functionality. You know, we’ve been working on it for a while and it’s on the product side. So the opportunity . . .
Andrew: So, you’re bringing both of them in, you’re deciding we’re going to start this company, you guys . . . at what point did you start raising money for it? Before or after you built the first version?
Matt: So, we started raising money before we had built anything. We literally had like the worst Google slide deck ever, like no design, like it was horrible. I’m also colorblind, so the colors were really bad. And I reached out to one of my friends who is at Boost VC. I reached out to Brayton Williams and I was like, “Hey, Brayton, this bot thing’s going to blow up and we have a really solid plan here and it’s big and I have really great partners. We should do something.” And he was like, “Oh, do you have like . . . have you built anything?” Like, “No, we haven’t built anything yet. That’s what we need money for.” He’s like, “Okay. Tell me about it.”
So I tell him about it and he’s like, “Okay, let me go talk to my partner, who’s Adam Draper.” And the next day I get a phone call, he’s like, “Yeah so, we want to do something.” I was like, “Okay.” And at the time, they’d only been writing very small checks, you know, for a company of maybe like 20,000 and 30,000. He was like, “Yeah, we’ve been doing this new thing though, we want to write a bigger check.” I was like, “Oh, yeah, okay, great. What do you want to do” He’s like, “I think we want to start with, let’s put in a quarter million.” I was like, “Yeah, that sounds great, let’s do it.” And so the first check was a quarter million dollars from Boost VC. The turnaround time was a day, we had no product built, it was just a really ugly deck. You know, arguably, they probably just invested based on the idea. They knew me and I said that Ben and Leif were incredible.
Andrew: Going back to your previous companies, you raised money from Y Combinator, right? You build your Tracks.by, it’s not up as far as I can see. You built ZapChain, it’s not up as far as I can see. And ZapChain, I think, went through a couple of iterations. And didn’t also ZapChain get money from Adam Draper, too?
Matt: Yeah. So ZapChain was a bitcoin social network. It was just a little too early, right? So it’s kind of an experiment in applying bitcoin technology and blockchain and micro transactions to a consumer facing experience. So it’s almost like a online community, kind of, like Reddit where when you uploaded something, instead of just internet points, you actually got a tiny amount of bitcoin, which was a huge, you know, it’s a huge [benefit of bitcoin 00:36:42]
Andrew: Yeah. And I understand you guys . . . playing with it. There’s like a post and I saw with Ben Parr using it, and to the right of Ben Parr’s photo was a tip button in green. And if I like what he said, I could hit tip and I could tip him in bitcoin. The thing is Adam Draper invested in your company. It went away. He lost his investment, right?
Matt: He did, yes. So, it was too early, right? So at the end of it, he was very, very successful within the bitcoin and blockchain community. So I know pretty much anyone who started any meaningful bitcoin company because of that, but when we tried to get people outside of bitcoin to use it, it just was not gaining traction because people were like, “What is this bitcoin thing? This is weird. I don’t want to use it.”
Andrew: I get all that. Here’s a part that I feel like now that you know me, I’m coming from a good place with this question. Why did you feel like a failure? You lose this guy’s money, these two companies that you had didn’t work out, and you still have the guts, the balls, I would say, to go out with nothing but a slide deck and say, “Give me more money for this new idea that doesn’t exist anywhere except to my imagination?”
Matt: I mean, look, yes, like there’s no way to sugarcoat it. It does not feel good when something you try to do doesn’t work, right? So I’m not like emotionless or anything, right? So it’s like if something like that fails, I worked on that really hard. I really believed it, I still believe that it was a good idea, it was just too early. And telling, you know, your investors like, “Hey, we’re going to have to shut this down because there’s no way that this is going to work yet,” is the one of the most difficult things you can ever do. So like, for sure, super difficult. But the other side is like, “I didn’t die,” right? I’m not like I can’t just go through life not trying it or not thinking about what else has been happening . . .
Andrew: You didn’t even seem to just go through a period of a year or two traveling through India to try to figure out what life is about. It’s like 2016, ZapChain goes under, 2016, editor and founder of Chatbots Magazine, 2016, founder of Octane AI. I want to understand how you got yourself back up because, frankly, I might go through that period at some point. And even when I don’t, I’m projecting next 10, 20 years, there’s going to be a big failure at some point and I worry about it. Now, I want to know how Matt got back on his feet and had the guts to say, “This is the next big thing, even though before, it didn’t work,” so that I can feel comfortable today going into the rest of my life.
Matt: So, look, you can choose to go through life like when you have one of these failures, where just every day is horrible and you’re not picking yourself up and you’re just sad, you’re upset. But who wants to do that, right? So what I did is just a matter of looking for things that are interesting and looking for things you can spend your time on that are productive and that you can build on top of. And for me, it happened to be a bots that I saw, I had a vision for in the future that, that was going to be really big. And I didn’t immediately say, “Look, I’m going to start a bots company, I’m going to do that. I didn’t start out with those guts.
What I started out doing was, “I’m going to write an article about bots because that’s something I can do that’s better than just wallowing and being upset. And I’m not going to half ass that article, I’m going to make the best article,” right? So like what I try to set out to do, even if it doesn’t work, is if I’m going to try to do something, I’m at least going to try to make it the best thing it could possibly be. And it turned out with that guide to be that.
And then I was able to build on top of that and get to the point where I could confidently say, “Look, we started Octane AI, we’re going to be able to get customers. This is going to be a big thing. Like we can really do this. I have great partners and I’ve learned a lot from these past experiences.” And the reason that Boost VC, Adam Draper and Brayton, invested so quickly was because they previously invested, right? Because they knew me for years and that . . .
Andrew: What do you think you did that gave them confidence in you despite the end result?
Matt: I think that, look, I don’t want to speak on their behalf, but I think what they know is that I will try my hardest and I will be fully dedicated.
Andrew: Everyone says that, but you did. What’s an example of something that shows that you try harder than anyone else should expect you to?
Matt: I mean, I think in their experience with me . . . and I think one story is I created ZapChain and they invested a little bit of money into it. But then I needed more money and instead of raising more money from them, I actually convinced them to sponsor ZapChain, and be the sponsor of it. And it made a lot of sense because their real business was around investing, and it still is, is around investing in the future of technology, especially around blockchain and virtual reality and artificial intelligence. And so I went to them, instead of saying, “Hey, invest more, I said, ‘Look, I run the largest community of blockchain entrepreneurs and your new batch of investment is coming up, and so you should advertise on the site, and I will help you find new companies.'” And I did and a lot of those companies ended up getting investment from Boost VC.
Andrew: I see. I see, I see. And that’s a clever way of raising more money when you need it without raising more money. How much did you sell the ads for to them?
Matt: I mean, not a lot. I think it was like less than $10,000 for like a month. I was very excited about it.
Andrew: Impressive, frankly, because VCs don’t have a lot of money to spend. You don’t walk around seeing ads from Y Combinator or ads from . . . What is it? I keep on calling them NPR. What’s the one with the three letters? It doesn’t matter, none of them. All right, let me take a moment here to talk about my second sponsor and then I’m going to come back. But here’s the big takeaway. It’s not like you’d suddenly woke up and said, “Hey, you know what? The last business didn’t work. Here is a new Power Point presentation, I need to raise more money.”
It’s, “You know what? I’m curious about this thing, most people would just go and read about it. I’m not going to read about it. I’m going to study it by asking people, by reading about it, and I’m going to put together this ultimate guide, then anyone else in the world can read.” And that got you excited. You built on it by creating a blog on Medium. You built on that by recruiting more writers. You built on that by getting more readers, and that just keeps boosting and boosting, not just confidence, but boosting your understanding of what’s possible in your excitement about what’s possible. All right, that’s a good way to recover.
All right. So next time, have a big setback? Forget about finding the next big thing, just publish the next thing that I’m excited about. Study it and get excited about it and then use that to guide me to where the next new path will be. I’m a little over here with time. I just can’t stop talking about this whole chatbot thing.
Here’s a second sponsor. It’s a company called ActiveCampaign. Again, this is email when we’re talking about chat. Here is the thing, and by the way, I never say email is dead. I think email is going to be around for a long time. I just think that it’s not the only game. There was a period there where you could say, “I’ve got email marketing, I’m set.” Now, you have to say, “I’ve got email marketing, but I know it’s not the most effective thing that I could possibly do, let’s see what else is out there.” The problem with a lot of the ways that people do email . . . Matt, you probably have seen this yourself, they use one of the just basic email software. Yeah, you know I’m frickin’ want to mentioned it. People use stuff like MailChimp, right? I used to use AWeber.
Good companies, I like them, but all they do is help you send out your newsletter, the same thing to everybody. I don’t want that when it comes to email. I want intelligence. I want to say, “Hey, this guy bought from me,” the next email shouldn’t be my weekly newsletter, it should be “Here’s how to take advantage of what you bought. Here’s how to use it,” so that they love what they bought. And I’m not going to go to someone who bought from me and say, “I’m offering a 10% discount or Black Friday sale.” I’m going to say, “You’ve already bought it.” It’s an insult to come back to you and say I’m offering it for less, I’ll leave you out of it.
And more importantly, if somebody is on my site, and let’s suppose, and this is going to happen, if someone’s going through my email, going through my website, and they’re watching more of my content about chatbots, I’ll let you in on inside secret, then and only then will I come back and say, “Hey, you know, we have this thing called Bot Academy where we can train you into creating chatbots, show you how to get clients who’ll hire you to build for them and so on.” That kind of intelligence at this point, I should not be telling my audience about. I should not be trying to get them to use it. It has been around for a long time but most of us don’t use it because it’s too tough, it’s too expensive to set up. It’s just too much of a distraction from our main business, but it doesn’t have to be.
If you’re out there and you want to reach people using email, you should do it intelligently and the software that’s going to help you do it intelligently and make sure that you actually use it because it’s easy, it’s called ActiveCampaign. It’s not just me saying it, go talk to your friends who’ve been using ActiveCampaign, go talk to people who do email marketing automation and they’re going to tell you if they’ve used ActiveCampaign, it is the only one that’s both powerful and easy. You will not have to hire $10,000-a-month consultants to manage ActiveCampaign for you. It just works.
So here’s my offer to you. Don’t take my word for it, go and try it. Just sit back one night, watch something on YouTube. I keep saying BoJack Horseman because of the kind of mindless. Do you watch BoJack Horseman?
Matt: I don’t.
Andrew: I’m surprised how many intelligent people watch it. It’s weird but I started watching it, I like it. When I don’t want to think, I will watch BoJack Horseman. So watch something like that and go to activecampaign.com/mixergy. In the upper right, you are going to see a button marked “Try it for free,” and try it for free, just try it, understand it, and see how easy it is to create automation based on what people have done on your site, what they’ve clicked on in your emails, so you can follow up intelligently with them. If you’re happy with this free trial, you can become a customer and obviously pay. But guess what, your second month will be free if you use the URL that I just gave you. And because I know that it’s so easy to sign up for software, to know how you should use it, but not really knowing, not really get started.
Because of that, I’m going to give everyone who’s listening to the sound of my voice two free one-on-one sessions with a professional who will show you how to actually use this in your business, which means they’re going to talk to you about how to use it, you are going to go use it, then you’re going to come back and say, “Yeah, this part worked, this part didn’t work. A part that didn’t work, I want to get some more feedback on. The part that I didn’t know, I now know what I need to know next. Give me a little more advice.” And you get that second conversation to build on the first one.
So they’re not abandoning you, and you’re going to get free migration. So if you’re using any of the email competitors that I mentioned or others, they will migrate you to ActiveCampaign for free. Try it out. I have not had a single person tell me “I’m not enthused about ActiveCampaign once they try it.” I’m telling you, they’re really good for email marketing. Go to activecampaign.com/mixergy, it will change the way you do business. All you have to do to understand the power of it is when you go to that URL, scroll about two thirds of the way down the page and look at the image on the right, that is the one that’s going to blow your mind with an understanding of how easy and smart your email can be. Activecampaign.com/mixergy. It’s amazing how good, really good images add a lot of weight.
All right, so the first version you built, you were thinking “I’m going to create,” like, I must think you wanted to create a Wix or a Squarespace. You tell me, what was your vision in the first version?
Matt: I mean, in the first version of Octane AI, we were doing our best to create a platform that allowed people to make their own bots and they could put together their own conversations and everything was very focused on content. And I think the big thing that we realized is that the tools were very, very powerful, but most people just don’t know how to make a bot or what to put into the bot or what they should be using it for. And so that’s kind of where we started. And then when . . .
Andrew: Can I disagree with you on this? I think it’s not just that they don’t know what it should be used for. I think even if they did know and they created the perfect bot, most users don’t say, “I need to go and book a hotel, I’m going to go to Facebook Messenger. I need to go and buy a stationary from a local store, I’m going to go to Facebook messenger.” And you guys were very much about establishing the store front on the online presence in chat, and people would have to know to come back and return, as opposed to what you do now, which is intelligently go to the user when they need to and follow up with the user afterwards when they don’t think of you.
Matt: Totally. In the beginning, we were trying to change your behavior right off the bat. And we’re trying to convince you “You should go to the bot and you should make that decision on your own.” Whereas now, this second evolution, which I think it’s a ton smarter because we see the results, is instead of asking you to come to the bot, the bot goes to you when it can add value to you. And it does that automatically without changing your existing behavior.
Andrew: So you built it, it was good, it worked. And here’s the thing that you had that just blew my mind. And now that I’ve studied you a little bit in preparation for this interview, I get how you did it. You got artists, well known brands, on your platform. And even when Ben Parr used to go out there and people would say, “What do you do?” You’ll talk about being with Octane AI. I think he called . . . Does he call himself the co-founder?
Matt: Yeah. Actually, he’s a co-founder.
Andrew: Yeah. Right. And so he’d say, “I’m a co-founder of this thing called Octane AI,” and he would list off celebrities. Like who are some of the people that you guys would mention?
Matt: We have 50-Cent, Aerosmith, KISS, Jason Derulo, YouTube stars like Poppy, we have ton.
Andrew: Yes, it’s frickin’ amazing, the names that you guys were able to rattle off. And now I understand why, it’s because of the people that you were working with before, your past businesses. And it wasn’t your business but the businesses you were associated with, Ustream, we mentioned, Social Cam, we did the same thing. Also with . . . who was the other one? It was Hipset, too, you guys used to do here. Right, Hipset also worked with celebrities?
Matt: Correct. Yeah, I worked with celebrities ever since my days at Ustream. And I think that one of the things that helped it a lot is that I built really deep relationships with people at the labels, especially, and a lot of them are still there but they run entire departments now . . .
Andrew: [crosstalk 00:50:37] . . . Do you ping them from time to time, invite them to parties, what do you do?
Matt: Yeah, I mean, I talk to them on Facebook Messenger or I’ll talk to them on the phone once in a while or I’ll see them, a lot of them are in LA and New York. But these are just, like, people I’m just generally friends with and I have built relationships with, right? So, I’m not even trying to nurture them, these are just people I like talking to.
Andrew: So what do you say? I remember Heidi Roizen, she’s now a VC. She was an entrepreneur, sold her company. I remember she told me, “I don’t like people who are networking with me because they want to be my pen pal,” that’s the word that she said. “They’re just kind of pen paling me and there’s no reason for me to respond. I’m not looking for a pen pal, I’m busy.” What did you do to not be in a pen pal situation? Give you a reason to talk to people that was natural that felt good. Because I lose touch with a lot of my interviewees. I’d like to learn from you.
Matt: I mean, I think, like, one of the big things is the first time I met these people, I might have been like 19 or 20. And like, to them, I’m some kid that didn’t go to college that looks like he knew something about something that’s kind of interesting, and they were much, you know, they were older than me, even if it’s like five years or 10 years older than me, that’s how the relationship started. And I think, since then, a lot of them have just been able to watch me and give me advice. And like you can’t really break a relationship like that. It’s not focused on business at all. Like it’s just . . .
Andrew: This, I didn’t get. So, I found an old article of yours about Hipset. What did Hipset evolve into, it had a different name, too, right?
Matt: So Tracks.by is what it started as, and then that evolved into something called Hipset. And basically what we were doing, and this was when Facebook apps were starting to become really big, is we built the most viral way for musicians to watch content on Facebook. We ended up having to shut that one down because Facebook changed a bunch of their APIs and a lot of different things that the Facebook pages could do, and the product just no longer worked. But for a little bit there, we had . . . anyone you listen to on the radio was using our software to distribute their content.
Andrew: So again, I do my research, I want to understand. I went back in time, I found an article where you’ve talked about how you enabled artists to grow their YouTube subscriptions. You had a lot of clever ways of doing it. Things like an artist could require their fans subscribe to a YouTube channel before they could get a video. Or like them on Facebook before . . . it was all these different ways, so I see. From that, I thought “Matt’s technique for staying in touch with people over the years is he gives them tips about the things that he’s seeing that works in social media and saying, ‘Hey, check out what he’s doing, you may not notice it, but behind the scenes, here is how it’s happening.'”
What you’re showing me here in this conversation is it’s not just that, it’s not just you teaching them over the years. It’s also you going to them for advice and saying, “Here’s what I’m trying to figure out,” and getting advice from them. And they know you as a guy who started out years ago and they want to help you out.
Matt: Yeah. Plus, when I come to them and I say, “Hey, there’s this thing called bots, you should really check it out,” and then they do, and it starts giving them really great results, you know, that’s . . .
Andrew: Always good results. So I love that you told our producer, “Look, I reached out to one of my friends who worked with G-Unit, 50-Cent,” I said, “You know, I’ve built something, you should check it out.” You hopped on Skype, you did a screen share and you showed it to them, what do you do for them? How did it work out? When you say work out, what did you do for them?” Did you sell stuff for them?
Matt: Yeah. I mean, G-Unit, specifically, they were using it for 50-Cent to promote, like, new YouTube videos and they would send out a message to all their fans. And the response they would get on that was much faster than if they posted something in social media or if they sent something out in an email.
Andrew: So they would get someone to subscribe to their chatbot, and their chatbot would, from time to time, say, “Hey, we got a new video,” and send it out. It wasn’t a drip campaign, it wasn’t based on, let’s see, got it. It’s all the stuff that in the ad for ActiveCampaign, I was saying, people shouldn’t do, but you started out doing that. But at least you had that. I think a lot of your competitors didn’t even think that way. All right. Then at some point, you guys switched. You started going after . . . was it brands that you were going after?
Matt: Yes. So we started working with some awesome companies. We got really lucky, we worked with companies like L’Oréal and GoPro. Also, all the music labels. And then now a lot of Shopify stores. And early on, when we’re working with them, we realized that the way they were using their bots in Messenger marketing is they wanted to get people to purchase products on their store. But the big problem was that the bot was trying to almost replace the website and then the bot also wasn’t connected to the site, right? It didn’t have a connection to the database of customers. It didn’t know what products people were looking at or anything like that.
And so, we’re like, “Look, this is what people and brands are obviously trying to use our product to do. If we could simply figure out a way to connect our technology to their actual stores, so that we could track the customer journey, what they’re looking at, what they’re buying, what they’re adding to their cart, we could make something that automatically was really, really smart and could bring over a lot of the campaigns that they’re already used to doing over email, but make it possible over Facebook Messenger, which is something that’s very easy for these brands and these stores to wrap their heads around.” And once we started doing that, it transitioned from something that was, like, cool and novel and, like, would get good open rates to something that you would turn it on and it would have an impact in terms of revenue or time saved on your business.
Andrew: How do you do that? Because Facebook doesn’t let you pixel people on the site so that your chatbot knows what they’ve looked at. Technically, go a little bit geeky with me, what do you do to enable that?
Matt: So, for Shopify stores, as an example, we created an Octane AI Shopify app. And so, if you have a Shopify store, you’re going to click a couple buttons and you’re going to connect your store to Octone AI. And when you’re connected to Octane AI, Octane AI is able to use Shopify APIs in the background to keep track of what the customers are doing on the site, to keep track of the different orders . . .
Andrew: It’s like a plugin into Shopify. I don’t need to separate store for you, you just have a plugin into Shopify. Shopify knows to connect the Facebook Messenger user with the Shopify store person who’s on Shopify because they press the button on Facebook Messenger.
Matt: And then we keep track of all of that on our end. So . . .
Andrew: So I see, when they press a button, you know their unique number, their unique Facebook ID number I think is what it is. And throughout the site, you attach their whole browsing back to that ID.
Matt: Correct, yeah. And then we can automate abandoned cart campaigns and receipts and shipping notifications and anything.
Andrew: That’s really powerful for you because, frankly, it makes it hard for somebody to say, “I’m using Octane AI, now I want to go use this competitor.” If you do, all the data is lost, Facebook does not connect it back to the Facebook account.
Matt: But yeah, that’s true. And I think, like, we’re left thinking about that. And I think that our big focus is “Let’s make this as easy as possible for people to just turn on, right? Let’s remove this concept that they need to invent the bots and build it from the ground-up and customize everything, and they need to be the bot expert. Let’s make this something where they push a couple buttons, it turns on, and it’s very easy for them to monitor . . . ”
Andrew: What I like about your software is that it’s . . . we don’t have to know how to write every piece of content. We just need to say, “Start the abandoned cart campaign and Octane AI will know what to send, what picture to send out, what text to send out to close my sales for me.” How did you get to L’Oréal and other big brands that you don’t have big relationships with? What did you do?
Matt: So, I mean, that’s where two things come in. One would be just our general presence in the space. And a big thanks of that is for Chatbots Magazine, right? Because we’re the first place where a lot of people are educated. And then after they’re educated, if they want to have a bot, we’re a very great place for them to come talk to. So that’s one place.
Andrew: So right now, you didn’t have this in the beginning, but now, on the top right of the site, there’s a fire emoji, and it says, “Bots for e-commerce.” There was a period there where you started adding that, it didn’t exactly say e-commerce when you didn’t know it was e-commerce that you were going to go after, but you’re saying people would hit that button, they would register for an account and you’d keep an eye on who’s registering. And if they were a brand or someone who could connect with the brand, that’s when you’d reach out directly to them, is that right?
Matt: Yeah, that’s one. And then the second one is . . . again, this is where Ben Parr, my co-founder, comes in because he’s just so connected. And what’s happening around the world is you have big businesses who are starting to think, “We need to have a presence on Messenger, we need to have a bot, we need to figure this thing out.” And a lot of those people know Ben already, and they have relationships with him. And so he’s a natural person for them to then follow up with and say, “Hey, you know, we’re looking at doing something. We should talk about this.”
Andrew: I feel like Shopify is going to end up having to buy you out. They have a chatbot. It does a lot of what you guys do, like receipts.
Matt: So, one thing I will say, which I’m very proud about, and I haven’t had an explicit conversation with Shopify about this, but listen to this later. If you go look at the Shopify bot in the Shopify app store, they have a video that is highlighting an example store. That store uninstalled the Shopify app and they use Octane AI. And it’s purecycles.com, it’s a bicycle company . . .
Andrew: That’s the one that you showed me in the example.
Matt: Yeah. So I actually didn’t realize that when they signed up and they turned it, and then I was looking at the video and I was like, “Oh my gosh . . . ”
Andrew: Can I ping Harley and tell him that?
Matt: Yeah, you feel free.
Andrew: Okay. Yeah, because you know what? They had one that was smart about sending receipts. They had one it was easy to use. They had a lot right about it. What they didn’t get right was they weren’t doing Messenger marketing, which is a phrase you guys have adopted, too. And as a result, because they weren’t great in Messenger marketing, this is what I’ve heard from their users, people would end up connecting two different bot controlling software, right? One that would actually come from Shopify to send receipts, and so on. Another one that would go from Messenger marketing software. And the combination of the two worked, but when it didn’t, it created awkward experiences where two different bots would interact with the same customer in a same chat window, and that’s weird. I see. All right.
So this is the evolution. One more piece, how did you know that e-commerce was going to be your sweet spot? You basically had to change your way of thinking completely and distance yourself away from people who were using you to say, “We are focused on e-commerce.”
Matt: Yes. So, the real way that it happened is that this is just how the businesses we were working with were trying to use our technology. We just hadn’t taken that step back to say, “what can we do to really focus on helping them connect with their customers and increase sales and kind of free up time for the people who are working on those businesses?” so it was like it was already happening, we just weren’t supporting it because we didn’t realize that that was the entire goal from these businesses. And the moment we did, that was a huge moment for us because we’re still working with all the same brands, but now we’re growing a lot faster because our focus is so much more clear, and the value prop makes sense, right? It’s not like, “This is a bot.” This is like, “No, this is you already do email marketing, this is Messenger marketing. It does all the same stuff, it just makes you more money and it works better.” And that pitch, it’s much better than saying, “This is, you know, this is the evolution of Siri, and you’re going to have a free phone conversation about . . . ”
Andrew: That’s the way people . . . and this is what bugged me about your site and, frankly, your Facebook group. That’s the way people are talking. There are too many posts on the site about NLP, natural language processing, and there are too many people going into the Facebook group saying, “I can’t get my bot to understand when someone types this, that it doesn’t mean that.” And I think “This is just not here yet, why are you guys obsessing about this geeky stuff? Obsess about fucking . . . sorry, about dollars, about money.”
Matt: Yeah, about something realistic, right? Because I think everybody has this pipe dream, everyone has watched movies, I’ve watched movies. I love movies, right? Everyone wants that futuristic AI that you can talk to as your friend, but the reality is is that it doesn’t do what you think it does right now. And what happens is a lot of people, they hear the term bots and they immediately think like, “Oh, we can do this now, we should implement it into our business. Humans are going to go extinct, robots are going to rule the world. Whereas like, you just need to wake up and realize that we’re not there but there are still very, very practical applications of Messenger marketing even though, like, we don’t have bots that are artificially intelligent and they understand that they’re alive. That’s not a real thing yet.
Andrew: Right. Anyone who wants to go check it out can go to Octane . . . actually it’s now octaneai.com, it’s not even octane.ai, the way it used to be, right?
Matt: You can do both.
Andrew: They both work?
Andrew: What’s interesting to me is I just thought while I’m talking to you, I got to test something before doing it. Right now you’re at a place where people have to ask to get on the waitlist and request a demo. I entered my email address before and I went straight to your calendar, pretty much. Now, as a test, a few seconds ago, I said, “Wait, test a fake Gmail account.” So I did firstname.lastname@example.org. Then you guys asked me to answer some more questions, basically, to help you decide whether to even connect with me or not. Like what store am I using and more about me and about how many customers I have and all that. And then I was taken to a form. This is you guys using . . . what is called? Clearbit or something, to decide who to bump up straight to your calendar or not? How do you do that?
Matt: So we use HubSpot to do that.
Andrew: HubSpot. And HubSpot will evaluate and if you don’t have enough information to say, “This is a great customer because he’s with L’Oréal or something like that,” then you use a qualifying set of questions?
Matt: Yes. So we have a whole set up of . . . it’s a whole flow with forms, where depending on how you answer questions, you get routed to different forms asking different follow ups. Because our time is super valuable and we need to make sure that we’re talking to the right people. I’ve found HubSpot to be super, super, super useful. We launched Chatbots Magazine and that did really well. And then more recently, you might not know this, but we actually launched a new magazine which is called E-commerce Magazine. I know we’re very, very creative with the magazine names.
Andrew: I think you were right to do that.
Matt: But this one, we didn’t launch on Medium. We built the entire thing on top of HubSpot, and the reason for that is because we can actually track who’s going to the magazine and then it syncs up with if they end up on Octane AI. And then we already know what blog post they read, what they’re most interested in. So I think that’s . . .
Andrew: That’s smart use of HubSpot. And that really is. As much as I love Medium for getting an audience fast. For marketing intelligence, it’s just not there and they don’t want to be there. That’s not where they want to play, and it’s unfortunate.
Matt: Yeah. I mean, the extent . . . like, it even was difficult for me to convince the Medium team to put my Google Analytics code on the publication.
Andrew: Really? What about this. I know you use the calendar widget, calendar feature from HubSpot, so that if I’m interested, I can go and book a time with you. Why am I seeing your photo on all this? You’re not doing all the demos, are you?
Matt: So right now, I am doing a lot of the demos. We do have other people that do them but I find it very useful to be able to talk to the people who are looking at our product, right? Because this gives me a very clear idea of why are they interested, what are they most interested in, what are these questions? And then we can use that data to pass it back to the product team. So like, when you asked me earlier, “Can you show me what this looks like?” I want to be the person that’s prepared to show you what we can do, right? The alternative is I’m like, “I can’t do that right now,” and you’re like, “I need to have someone else do it.” I don’t want to be that person.
Andrew: I get it, and you know exactly what buttons to [press, right 01:06:59]. I think you do a great demo. I think a lot of founders do not do great demos because they get too distracted by all the details that they care about that the person in front of them doesn’t. It’s been interesting to watch you guys evolve. I especially like . . . Ben Parr was on Jason Calacanis’ podcast, he said, “We are marketing an automation company,” and Jason started laughing and goes, “Change that, nobody knows what the hell that is.” He’s good, that guy, that Ben Parr.
Matt: You see? That’s another . . . You asked me, why Ben Parr? And that’s just another reason.
Andrew: But here’s the thing, you’re also good at it. I get that some people don’t have any connections. You have it from Chatbots Magazine. Some people don’t have an ability to express themselves, you do. I get why they would need him. Don’t get me wrong, I’m not putting down Ben. I’m just thinking most people in your position would say, “I don’t need him. I’m going to just go do this myself.” I thought it was clever to get him, I think it’s smart to have partnered up with him. I think he’s one of the smartest people out there. I was also, frankly, I could . . . if he was on here, I would say why did he end up with you because he’s also running this other business. I forget what it was. It was like an email thing that he was doing, right?
Matt: Not another business. He has an email newsletter that he runs.
Andrew: But it was going to become more than just an email newsletter. I forget what his plans were for it. He was smart to jump on this. This is really good, but I thought it was also a gutsy move. Why would he come and work with you when he had this whole other thing, this whole . . . and it fit so well with what he was doing in the past.
Matt: I mean, I’m super happy that we were able to convince Ben. So, don’t try to . . .
Andrew: I’m excited about what it was. I think anyone who does a demo with you is going to be really happy about it, but will you explain really well what it is? I think what’s happening in the chat space is going to change a lot of the way that people connect with companies. I think we’re just at the beginning of this, and it’s so easy to say, “It doesn’t work because I don’t know anyone who’s using it.” It’s so easy to say it doesn’t work because, because, because. That’s the thing about starting brand new. How many people had iPhones in the beginning and it was so easy to knock them? If Jason Calacanis used to send out an email saying, “I sent this for my iPhone but I prefer to be on my BlackBerry,” he would use the iPhone reluctantly. And so it’s easy to look at the world at that time and say iPhone is not going anywhere.
There was one VC I remember, just pick a name, he said to me, “And why are people so excited about the iPhone? Do you know how many more people are using BlackBerries?” And he started explaining it to me, “You know what? There’s a lot of rationality. More people are using BlackBerry, but I’m not excited about it for some reason. I can’t articulate it the way that you can articulate why we should be building on the BlackBerry platform but you’re wrong.” Same thing here, there’re a lot of people using all this other technology. I’m telling you, chat may seem small but it’s damn powerful, use your intelligence. Don’t look at just the numbers and you are going to see that there’s something really powerful here. And Octane AI has blowing my mind. You didn’t blow my mind before, you’ve fricken blowing my mind right now.
Anyone who wants to, you can go check them out at octane.ai or octaneai.com. If you want to get customers or get people that’ll respond you en masse, but also in a very personal way, your secret way of doing it is a company called Mailshake. Go check them out, I talked to you about them. I don’t think they’re going to . . . frankly, Matt, they’re not going to buy a bunch of sponsorship ads for me, you know why? It’s owned by one guy, he’s a Mixergy fan, that’s probably why I bought his ad here. It’s his own money, he’s probably better at getting a lot of SEO using his Mailshake app to get people to link to him than he is at buying ads in Mixergy podcast. So you guys are not going to hear from him a lot. I’m telling you, store this a way somewhere, mailshake.com/mixergy.
If you want to cut me out of completely, just remember the name Mailshake. It’s funny, it’ll stick in your mind, it is such a fricken powerful way of getting people to respond to your email. It’s almost so good that you’re not going to want to tell people you use it. It’s like this evil genius way of doing it. And if you’re not in email marketing automation yet, you are like five years behind me and Matt and everyone else who’s been in this space for a while. Go check out ActiveCampaign.com/mixergy, you will love me, you will want to come to 201 Mission Street, twelfth floor, and buy me a Scotch. You don’t need to do it, you can just shake my hand say thank you, You’re going to love it, I’m telling you guys, activecampaign.com/mixergy.
And finally, there is like a laundry list of things here. Finally, if you want to see my chatbot, got to botacademy.com/mixergy. Check out what we’re doing with it. We keep experimenting and we’ll teach you about chatbots through our chatbot botacademy.com/mixergy.
All right, Matt, go continue to blow other people’s minds. This was good. I’m glad we got to talk about this.