Case Study: Niche subscription box service Plate Crate

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 businesses. I’m kind of shot out of a cannon. Sometimes, that happens with me. Joining me today is an entrepreneur who’s running a company that I just don’t understand how people are buying it and at the same time I have deep admiration, maybe a tiny bit of envy.

Josh Band is an entrepreneur who said, “You know, I think . . . ” He’s a professional baseball player. He says, “I need to make some money on the side, so you know what I’m going to do? I’m going to create a box of baseball products that I’m going to send to people but only if they commit to getting it every month and pay me for a subscription to it.” And the thing that I don’t get is, like, why are people subscribing? Why can’t they just say, “I need five things, I’m going to go online and buy it?” Why does Josh have to pick the stuff out for them?

But the thing that I admire is we’re all selling bits and bytes, there are services that are ephemeral. He’s selling stuff that you can actually feel, people can actually keep in their house, and he’s got a subscription which gives you the same comfort that you . . . Well, I don’t know if it’s the same but it gives you comfort of getting money coming in every month. I was going to say the same as software but I don’t want to keep comparing it to software. I want to understand it.

So that’s what Plate Crate is. It’s a subscription service that delivers a box of baseball gear monthly. I want to understand it. I wonder if I should be creating a product and selling it monthly. I wonder if I should be doing a box. I saw Tim Ferriss, I’ve known him for years. He came out with a box. I don’t know if he’s still doing it. I’m fascinated by this.

We’re going to be able to find out and dig into this business and understand how we could sell more thanks to two phenomenal sponsors. The first, man, you guys have heard me talk about them so much. I know they’re getting tired of me talking about them, but they’re at least happy that the results keep coming in. The two companies are, first, HostGator. I kind of wish that I can go back in time and introduce Josh to HostGator. He might [inaudible 00:01:44] different product now but I know he had an issue. I can still see he has an issue, but HostGator would’ve had him starting upright with a WordPress website if he wants or any other thing up and running quickly. And the second sponsor is Toptal. Oh, again, instead of going for one of his design, we’ll talk about the issues, he could’ve gone to toptal.com/mixergy to hire. I’ll talk about those later. Josh, good to see you here.

Josh: Yeah. Thanks for having me. I’m super excited.

Andrew: Let’s talk . . . you’ve listen to me so you know what I’m going for. Let’s start with, like, the numbers. How much revenue are you producing?

Josh: Yeah. So this will be our first seven-figure year. So we’ve done about a half a million so far this year, and the holidays are a big time, so Black Friday, Cyber Monday, first two weeks in December, that’s where we really kind of take off. So we’ll do about 1.2 million this year. We did about 700 last year.

Andrew: So, wait, 700? So is it fair to say the last 12 months, you’ve done over a million?

Josh: No. So we’re heavily on the backend, so . . .

Andrew: Yeah, I know, but the last 12 months would include this past December.

Josh: Oh, yeah. So, I mean, that doesn’t count growth from this December, so we’ve done about 850k in the last 12 months.

Andrew: Oh, got it. Okay. All right, so growth is picking up a lot.

Josh: Yeah.

Andrew: I was trying to figure out, like, what the website is hosted on. I thought maybe it’s a Shopify thing. I went into the source code. What is this?

Josh: Yeah. So, I mean, I can give you a whole story. You know, Plate Crate was my very first business, you know, that I had a website that I did anything, and we can get into that, but, actually, it started on WordPress.

Andrew: Oh, it did? Okay.

Josh: Yup. So it started on WordPress with WooCommerce and I had Woo Subscriptions. And, yeah, so I had a designer develop my website, which was a big issue to start with. So, basically, what we found out that happened, we had Woo Subscriptions, it would try to charge people and it got to a certain point where it tried to charge everybody at one time because the way that we bill people is all at once so we can batch shipments, so it would just freeze. It couldn’t do a certain number of subscriptions and there was no fix to it. There’s absolutely no fix other than changing my billing model, changing my subscription model, changing the way that I wanted to do my business. And the things that I’ve tested that have worked, I couldn’t do that so I needed to get off.

Andrew: You know what? Let’s save that detail for . . . Now I understand why this is, like, a long, arduous process. Okay.

Josh: Yeah.

Andrew: You know what? I’m surprised that this was, like, your first big thing. You were a professional baseball player playing where?

Josh: Yeah. So I played . . . it’s called independent ball, so it’s independent of major league. You get paid, you know, you’re still in minor league stadiums and things, play about 100 games in a season. But, I mean, all over the Midwest, kind of, I started off in the South in Louisiana, I went to Texas, I went to Illinois, I went to Kentucky and Missouri, and that’s kind of . . . you know, I can go into exactly what my . . .

Andrew: How much were you getting paid doing that? Yeah.

Josh: Yeah. So my rookie year, I got paid $600 a month.

Andrew: Wow. Is that enough to actually pay for the food and the travel involved?

Josh: Yeah. So this is where . . . I mean, if you’re in a major league affiliation, if you’re not. I mean, if you’re a minor leaguer, I worked kind of all the way up to $1,200 a month, which I was really, really proud of eventually. But you get meal stipends, you get meals at the stadium, you get breakfast and lunch provided for you. You get housing picked up. We stayed in college dorms because we were playing in the summer. So most of your expenses are covered and you get meal money, so, I mean, the $600, I mean, I was 22 to 24, 21 to 25 years old when I was playing. I didn’t need anything. You know, we got really good deals on bats, and gloves, and everything from sponsors.

Andrew: Got it. And, meanwhile, you’re focused on the thing that you love which is playing baseball and you’re trying to make it into to call the big show still into the show.

Josh: Yeah.

Andrew: It is? All right. So that’s where you were, and how did you decide, you know, “I’m going to go set up an online store”?

Josh: Yeah. So, I mean, I did . . . I said this was my first business but I’ve always had side businesses.

Andrew: Going back to school as a kid?

Josh: Yeah, definitely going back to . . .

Andrew: What did you do as a kid? What kind of stuff did you sell?

Josh: So, actually, it’s funny. Your producer talked to about this and he said, “What was your first business,” and it was selling bouncy balls. So I used to sell bouncy balls in sixth and seventh grade. So I’d get them super, super cheap from these, like, little carnivals pretty much free, I’d sell them for 50 cents. And you’d get a deal for three and then you could pay me a dollar in a week. I used to do that, and I had a couple little side businesses . . .

Andrew: For free and then a dollar in a week? And then what would happen if they didn’t pay you?

Josh: Well, that was where I ran into an issue because I’m not going to fight someone for a bouncy ball, so I stopped doing that. But, yeah, I sold a bunch of bouncy balls that when I was in sixth grade, you know, I had kind of a bunch of little side businesses like that just because I wanted to buy my new bike. So I had a bike in mind and . . .

Andrew: And did you buy a bike with it?

Josh: I did buy my bike with it. I bought my bike, it was $500 when I was 12, which was, like, an insane amount of money for a bike, and I spent . . . every dollar I had was going to that from bouncy balls, so . . .

Andrew: Really? Literally?

Josh: Yeah. From bouncy balls and I had another thing where . . . so kids would basically say, “Hey, if you go get my lunch for me because I’m too lazy to leave the table, you can kind of keep the change,” and I made, like, 500 bucks doing that when I was in seventh grade and people were just kind of lazy, and I would pay for my own lunch and I would keep the change after that. My mom would give five bucks for lunch and I kept that as well. I saved that up, so that’s back sixth, seventh grade, and then ever since then, I’ve had, you know, a bunch of little things. I always knew I was going to start something and Plate Crate, which is kind of an idea that stuck with me. Looking back on it, I would never would have done it again. I’m really happy I did because there’s so many different reasons I shouldn’t have started it and so many people that told me not to, but I’m glad I was so naive.

Andrew: I feel like this business came from a, “What do I love to do and what do I want? I love baseball and I want subscription payments.” It is like that. It wasn’t like there is a need. People wake up every day saying, “How do I get something to figure out how big my bubble gum bubble is? Got to have it,” right? It’s not that, which is one of the products in one of your past boxes. It’s more like . . . am I right about that? It’s more like you’re saying, “This is what I think I need. This is what I love.”

Josh: Yeah. So, you know, when I came up with the idea, I was Googling and I said, “You know what? There has to be a baseball subscription box. It’s such a popular sport.” Birchbox, BarkBox, ButcherBox, all of these amazing boxes are coming out. I know it’s not a commodity but it’s definitely a place for people who are passionate and a place for people who are spending money. And it wasn’t even something . . . it was just something I knew how to do. It’s pretty much the only thing I knew how to do. I played baseball in college, I worked in batting cages, and retail, and it was something I knew intimately and it was a vehicle for me to learn subscriptions. I really wanted to learn subscriptions.

Andrew: Because?

Josh: Because I love recurring revenue and it’s relationship-building. You know, it’s so hard to sell things piecemeal and then kind of to get people to reengaged and sell them again even though it’s cheaper. The subscriptions just really, really caught my eye. It’s something that I really wanted to learn. Plate Crate was the best opportunity for it, so I said, “If I can make two grand a month, I can keep playing baseball, I can learn subscriptions, I’ll have time to read, I’ll have time to do baseball, I’ll have time to do kind of everything without sacrificing.” So I was pouring concrete at the time, I was doing baseball lessons, I was personal training, I was working on Plate Crate, and there was just too much. I just wanted to do one thing that could subsidize me playing baseball.

Andrew: And so what came first, finding the products in the box or was it finding customers?

Josh: So, I mean, I needed products first. So I had to kind of ask myself the question that you asked me at the beginning of the interview, “Why would people buy this?”

Andrew: Yeah, why would people buy it?

Josh: So the initial pitch was baseball players were little tinkerers. They love to invent stuff. So playing minor league ball, being in baseball retail, I just saw a lot of things that weren’t in Dick’s or Modell’s or in big box stores. I said, “I already have these relationships. Let me just kind of bridge the gap.” So kind of the value prop was I’m going to introduce you to gear you wouldn’t have been introduced to otherwise and you’re going to be supporting small business owners.

Andrew: Got it. And baseball players like the little new things that they could experiment with?

Josh: Well, they liked being early adopters. I mean, I was introducing them to gear they’ve never heard of.

Andrew: Like what? What’s an example of something that they would be excited that you just introduced them to?

Josh: Yeah. So there’s a product called the Two Hands Pro. It was the very first product that I put in the Plate Crate. I saw it, it was this weird prong thing. It helped you keep your glove open so you could practice using two hands, and I saw it and I said, “No one knows about this.” I’ve worked in batting cages, I’ve worked everywhere, so, basically, I just negotiated the wholesale pricing and there was a little bit of margin in it for me so I just introduced it. Now, we do monthly themes, we do our own artworks, so we’re creating other value that way. But, yeah, just to start, we wanted to create something fun and a cool gift, things like that, and it’s kind of evolved from there.

Andrew: Okay. I get that. You know what? I do notice that when you get deep into anything, there gets to be this early adopter niche group of people who are obsessive. Like, I’ll give you an example, I got a GoPro because I told you I’m running a marathon on every continent this year.

Josh: Yeah.

Andrew: I went to see some videos on YouTube for how to use a GoPro to take good shots, and it turns out there’s this tinkerer community for GoPro. They want different cages to hold the GoPro, different mounts because you want to have a microphone mount which I used to laugh at but then I got one of those freaking things because I need it. I was so desperate. There was someone on Instagram who sold it from some, like, long-distance Chinese shipment and then I saw it on Amazon. I said, “I’ll buy it from both. Whoever comes first . . . ” I get it that you do become this obsessive, and so I didn’t realize that existed in baseball and I didn’t think about it until now, and so those people maybe want something new and fun that they wouldn’t have thought of for their product. All right. So the first box, was it you creating it yourself and then going to get in customers?

Josh: Yeah, yeah. So this started . . . the beginning is always fun to talk about. It was my parents’ basement. So I was 23 in my parents’ basement. I bought 100 of everything, so I spent $2,500 on my initial website and just horrible, horrible . . . you know, first editions of everything. And I just assembled everything in my parents’ basement.

Andrew: Before you even had customers, you said, “I’m going to get this . . . ” Yeah?

Josh: Yeah, yeah. So, I mean, I had no launch strategy. I would do it much different now. I would build my list, I would build content, I would work, you know, with distributors. I had no idea what I was doing. I just knew that I wanted to learn, I loved it. I mean, Tim Ferriss, obviously, he’s someone that really kind of kickstarted me in 2008, 2009 when I was really young. But, yeah, I was in my parents’ basement. I said, “I can’t sell anything until I have a product anyway. I can’t sell nothing.” I didn’t know how to build a list, I didn’t know any of this, so, yeah, I said, “You know, why don’t I start off by buying something? Now, I can take photos of it. If I take photos of it, I can put it on a website. If I put it on a website . . . ” It just kind of let me down a path of asking more questions, yeah.

Andrew: Got it. All right. And then you were starting to get creative about it. The first name was what? It was called . . .

Josh: So the first name was Batter’s Box. It was the Batter’s Box, but, originally, it was . . . and I never used this but I just wrote down . . . I have a notebook of business ideas and it just said, “My Baseball Subscription Addiction,” in, like, 2012, and I was like, you know, “I’m going to put this away. It might be something fun later on,” which is just the worst name in the world. But, yeah, you know, when I heard Plate Crate, I brainstormed it for a while and it just worked. It rhymes, it was different than everything out there. And the main reason I didn’t take Batter’s Box, it was too conventional but I couldn’t get the domain name. I didn’t want a dash in the name, I didn’t want a .net. I was just uncompromising on that, so I was so glad I got Plate Crate because it kind of differentiated us from there.

Andrew: You own platecrate.com?

Josh: Yeah.

Andrew: I didn’t even think of that. I just kind of assumed it would be in a .co or something. And you just bought that for what, like, $9.99 or whatever it was?

Josh: Yeah. It was so cheap, yeah.

Andrew: Okay. All right. So you had your site. How much were you charging for the first box?

Josh: So the first box, it was 29 bucks plus $8 shipping and handling. That’s just because that’s what I thought it should be priced at. And it’s interesting because I love to talk about pricing, too. You asked about pricing structure, why people would get this. Actually, I raised my prices this year.

Andrew: To $40, I think?

Josh: So it’s $40 for a 12-month subscription but it’s actually $49 for a month-to-month subscription, and I saw no decline in sales, zero.

Andrew: Even new sales? It’s not just that . . . Did you grandfather in older people?

Josh: I grandfathered in older people. New sales, there was no decline, but, I mean, the $29 price point, it was completely arbitrary. I just thought it sounded good. I didn’t have any money at the time, so $29, I was like, “You know what? Forty-nine dollars seems like a lot of money for someone to spend on baseball gear.” Now that we’re putting $60, $70, $80 worth of stuff in the box, we can definitely justify it, and sell it, and feel really, really good about it, but at the time, you know, $29 was just a starting point and we kept that for a long time.

Andrew: Do you remember what was in the original box?

Josh: Yeah. So I’ve changed the pricing structure, I’ve changed what’s in the box, I’ve changed the way we do things, but it used to be you bought a box. The first box was always the same, the second box will be always the same. I quickly ran into . . . I’m going to have a million different SKUs of inventory on hand at all times. Yeah, so the first box was the Two Hands Pro. It was . . .

Andrew: No, the very first box that you sent out was a Two Hand Pro?

Josh: Yeah. It had a bunch of different things in it. So it had a little welcome letter, it had a Two Hands Pro, which is a really cool training, it had a pine tar stick, it had Plate Crate bracelet, and it had a bag of SwampSeeds, which is this little Cajun sunflower company where I spoke directly to the owner and they only sold them to Louisiana. So that was kind of the fun part of Plate Crate in the beginning is someone in California has never heard of SwampSeeds and we got to introduce them. So people love . . .

Andrew: What is SwampSeeds? I’m looking at it. It’s a green box with something on a fire but I can’t really understand it. Fish thing? What is it?

Josh: Yeah. So they’re Cajun-spiced sunflower seeds. So they’re spicy and they have, like, gumbo-flavored sunflower seeds. But, like you said earlier, you can go down the store, you can buy David Sunflower Seeds at a gas station. I wanted to give them a spin. I know baseball players love sunflower seeds, let me give you something you’ve never had or you can’t find.

Andrew: I don’t know why baseball players love sunflower seeds. I love sunflower seeds and I’m into different flavors of them. I’m looking at the original box here, and it kind of reminded me of the old baseball card boxes. Do you know what I’m talking about?

Josh: I know exactly what you’re talking about.

Andrew: Rectangular boxes. Was that intentional?

Josh: No, that wasn’t intentional. That was the cheapest box I could find. It was on Uline. I didn’t know how to make boxes. I couldn’t pay $2,000 for a die-cut box with custom graphics on it, so I bought a stamp from stamps.com and I just stamped boxes for years.

Andrew: And, Uline, I’m looking at it right now. It’s a letter U and then the word line. They just make and sell boxes. That’s where you got your boxes and shipping stuff?

Josh: Yeah. I mean, Uline is just a massive industrial supplies company. So I typed in white boxes, that was the right price, that’s what I had to work with. But, yeah, I mean, when I started, I just wanted to get a sale. I wanted to get one sale. I wanted to see if someone that I didn’t know would buy a Plate Crate. So I wanted to have a box that was clean, I wanted to have items that were clean, I wanted a website that was clean, and then see what happens and see if I could make, you know, the $2,000 a month.

Andrew: Josh, you mentioned the startup capital. How much money did you invest at the beginning?

Josh: Twenty-five hundred dollars.

Andrew: Twenty-five hundred dollars? I heard you had to go and cash in a bond or something that you had. It was like your last dollar going in this, am I right?

Josh: Yeah. I mean, you know, I had $800 in bonds, I think, from when I was born. My grandparents, I think, put in $500. It accrued to $800, I took it out, but I had no money to begin with. I didn’t care. It was much more interesting to me to start something and see, you know, how to not lose money instead of get money. So, you know, it didn’t matter whether I had a couple grand in my bank account or zero. It was kind of all the same. I saved up all of my money so I could get that website, and then as I started going, you know, I started to realize I need a little bit more capital. But, yeah, I mean, we’ve never raised capital. We’ve never done anything [inaudible 00:19:02]

Andrew: And meanwhile, though, you ended up with a couple of financial issues which we’re going to talk about before you figured out how to recover from them. I’m going to talk about my first sponsor and then we’re going to get back into this story. And the first sponsor is a company called HostGator. If you’re starting out and you need a website hosted fast, I urge you to go to hostgator.com. One-click install, you get WordPress. Actually, I’m with you that I think there’s some issues with WooCommerce which is the WordPress plugin for sales. I wouldn’t use them with WordPress for subscriptions.

What I would do is go to either Stripe or third-party tool that would integrate with Stripe to do subscriptions. That’s what I use actually, frankly, at Mixergy. It sounds a lot of headaches. I feel like WooCommerce is phenomenal but they’re not competing strong enough. Anyway, this is within an ad for HostGator which actually offers WooCommerce as an option. It’s available but I think that WordPress is a good model and I think that there are other places and other tools that you can use to sell on WordPress. You don’t have to use WooCommerce.

One of the things that I love about your story that I think connects with this HostGator idea is that if somebody has an idea, just go and start it out. Go to HostGator, just go to hostgator.com/mixergy, install WordPress, play around even if it’s just to learn it and then shut it down. And I like that option that we have at HostGator that gives you unlimited domains so that you could try an idea, shut it down, try another one. Try another idea just for fun, not even to do anything, and then keep it going for, like, your personal thing and then go start another one until you figure out what it is. This is not generating businesses. This is like a sketch pad.

If we think about websites as this precious thing that we have to do it perfect or else we can’t launch, there’s no way to play. It’s no way to experiment. But if we think of a WordPress hosting company as our little sketch pad that when we have a little idea instead of just thinking about it in our heads, we go and we execute, just go create it and see how fast it is, even if the first 10 are stupid and we don’t fully launch them, the 11th will benefit from the intelligence we got and the experience we have from the first 10.

And, of course, HostGator is a great place to do it, and if you already have a hosting company and you hate it, HostGator is a great long-term hosting company. They’ve been around for years. They do things right, they’re inexpensive because hosting is basically a sob solution. Go to hostgator.com/mixergy. Get started right now or shift over to them right now. You get a super low price when you use that URL, the best price that they have online to my knowledge. It’s because Sachit Gupta, our ad salesman, just kept pushing them. And unlimited [disk space 00:21:26] unlimited unmetered everything that you need. Basically, you got everything that you need and they’ll grow with you when you need, even more, hostgator.com/mixergy. I appreciate you guys using them and supporting my podcast.

The website, let’s talk about that now. Who built it? How do did you do with that?

Josh: Yeah. So, you know, I basically Googled someone who was local. I wanted to meet someone in person. Now, you know, it’s a little bit different. I just, once again, didn’t know what I was doing right when I started. I would do so many things different, but . . . So I had a designer, I liked his website so I hired him. I said, “If you can build your website, you can build my website.” That’s not the case at all, but it started off on WordPress and it was nothing against WordPress. WordPress is super easy to use but when WooCommerce crashed, and we can talk about that, and they had 800 customers a month at the time and . . .

Andrew: Whoa. No, let’s save that for how you got to 800 because that’s kind of interesting, too, but . . .

Josh: Yeah, definitely.

Andrew: So the first website, they built it just WordPress, WooCommerce plugin, everything. Did it look nice? Did it look like what you were looking for?

Josh: Yeah. So it did look good.

Andrew: I like it.

Josh: Yeah. I mean, one of the things that really helped is my girlfriend is a professional photographer.

Andrew: That’s where you got those freaking photos. Because the photos are the best part of the site. Like, the person who . . . so you’ve got a person, I’m looking at the Internet Archive, that has got the glove down on the ground with, I guess, one of the things that you were offering. That’s her taking that photo?

Josh: Yeah, and that was me in the photo. So, I mean, it was her taking photos of me, but . . .

Andrew: My favorite photo. I’m sorry to interrupt. I think the photos are fan-freaking-tastic on this site. The one that I used to understand what was in the box with SwampSeed and the thing and, whatever, the Two Hand One Hand thing. Sorry to just, like . . . I like it. The big league, too. That photo looks phenomenal. It’s on, like, this old wood, it has a baseball bat that feels real, she took that?

Josh: Yeah. So we both took that in my apartment. So that laminate wood or the . . .

Andrew: Yeah, what is that?

Josh: . . . old wood that you see, you can buy it online for 40 bucks on Amazon. You just roll it out. It’s [inaudible 00:23:30] canvas. So [inaudible 00:23:31] go on Amazon, Google photography background. They’re super cheap. But, yeah, that was the first . . .

Andrew: That looks hot, man. That looks good.

Josh: Yeah. So, I mean, that was how we got started, just being reputable. Great photography is just something I didn’t want to compromise on from the beginning and a great logo and everything, too, just because people went to my site, that’s their first line of trust with me, and I wanted them to . . .

Andrew: I’m going to say, the site does not look bad. Usually, first versions of sites look horrible. This does not look bad. The problem with it was, what, converting it from a design to a WordPress theme or what?

Josh: No. So, I mean, it was just the backend. I mean, if you go to my site now, the layout’s pretty much the same. We swapped out some pictures, we swapped out some copy, you know, but it’s basically on [JPEGs 00:24:16] which is why we’re actually . . . We’re launching a brand new website completely redesigned, everything on the backend. We can go through how we built that in about three weeks. So we’ve been working on that for a couple of months now.

Andrew: Oh, wow. Okay. So then the problem was just the backend. Was it a problem in the beginning?

Josh: It wasn’t a problem in the beginning because we changed the way that we billed people. So when we first started, if you . . . say it’s the 31st, if you bought something on the 31st, order would come in, it gets sent out right away. Next month on the 31st, you get billed, we’d send it right out. I didn’t like the way that worked because, you know, some months have 30 days, some days have 31, so people were getting duplicate boxes. You know, we couldn’t batch our boxes at the same time. So I wanted everybody to be billed on the first of the month so we created different windows, and once we created that window, we basically charge all of our customers right away and that just froze WooCommerce and it actually at one time double-charged everybody. So we double-charged, and that was when we double-charged the 800 customers which we can get to later, but . . .

Andrew: Okay. I guess we’ve been bringing this up so much. When you double-charged them, how do you fix it?

Josh: So I spent three days in a coffee shop manually . . . well, I manually refunded them. So I used WordPress WooCommerce and it was on Stripe. So Stripe was billing. They didn’t have subscription features yet, so WooCommerce was just telling Stripe when to bill, Stripe was processing it . . .

Andrew: This is 2015. Yeah, I guess it did take Stripe a little while to get going, 2015, 2016. Yeah, I wish they would’ve had subscription sooner. I don’t remember when they had it, but, okay, I get it. All right. And so you just sat down and you manually gave people refunds. Did you do anything else? Did you lose any customers over this because they were charged and they think that you’re a jerk?

Josh: Yeah. I lost a ton of customers. Yeah, tons. Well, I mean, if you’re expecting . . . You know, and, honestly, a lot of my customers are kids. They’re 16, 17, 18 years old, so one of the biggest problems was I overdrew a lot of people’s accounts.

Andrew: I didn’t even think of that for $29, $20, whatever, yeah.

Josh: And I never would’ve thought of that either, but since I have 16, 17, 18-years-olds, which, number one, was flattering because a kid was spending their allowance on a Plate Crate, but, number two, I overdrew their accounts. So not only did I refund them, you know, I took the hit on the processing feature with Stripe. I lost a ton of credibility with everybody because I was getting beaten up, you know, online in reviews, and then I refunded everybody’s overdraw fees.

Andrew: You did? And so then you had to make that up from where?

Josh: From my profits, I mean, my small profits that I had. I just felt so bad. That was my fault.

Andrew: And you still lost customers? Even though you ended up spending all of this money, you still lost customers over it.

Josh: We still lost customers but I will say the customers that I personally talked to . . . because I called a lot of them. I called so many of them. Not all 800 but I called a lot of them just to tell them, “Hey, we double-charged you. It was my mistake. We’re going to refund your account. You should see it in two to four business days,” all of this. So I left tons and tons and tons and tons of voicemails, tons of emails.

Some people just canceled I never heard from, but the people that I talked to, they were even stronger advocates. So they were like, “Don’t worry about it. It’s fine. Thank you so much for telling me. That’s so great.” Some people I got to develop great relationships, so I don’t have the analytics to see. Maybe I converted people into longer-time customers that I spoke with, which kind of offset the people who churned, I don’t know, but I was really stressed out at the time. It was just me and the company and I had no one to talk to. I had no developer. I had no other people, so . . .

Andrew: That’s so painful to hear. All right, let’s go back and let’s see how you even got those. Your first customers came from an unexpected place to me. Where did they come from?

Josh: Instagram.

Andrew: Talk about that a little bit.

Josh: Yeah. So, 2015, there really weren’t influencers yet. No one was paying . . . and, I mean, I’m still entrenched in kind of that, you know, community paying for ads online and now it’s kind of, you know, being way more popularized. 2015, there was no information about it, but a kid reached out to me. He said, “Hey, I’ll post on my page an ad for Play Crate. I saw you just launched your store,” because I launched it the day before, and he was like, “Oh, 20 bucks and I’ll shout you out to 50,000 people.”

Andrew: Wow.

Josh: So I said, you know, “That’s a deal.” Gave him 25 bucks, he posted an ad, I got a customer. I was like, “Wow,” and it was my first customer ever. So I ended up getting 18 customers on our launch date.

Andrew: From that 20 bucks?

Josh: Well, I said, “If you’re doing this, there’s going to be a bunch of other people doing this,” so then I reached out to anyone. I was like, “Oh, you have 10,000, you have 20,000, you have 40,000,” whatever and I just reached out to them. I said, “Hey, do you do posts, too?” And all of them said, “Yes,” but no one really knew how to make money doing that. Now, there’s agencies and there’s a lot of formalities with it and people are signing on with agents and it’s much different, but back then it was so ridiculously cheap to buy shout-outs and to convert them. So that’s how I got my . . . you know, that was basically our strategy for the first full year, I would just buy bulk ad deals.

Andrew: I’m picturing you with a spreadsheet keeping track of where you’re buying it, sending out PayPal. Is that what it was?

Josh: That’s still what it is. So you still send PayPal. I mean, think about the kids who are building these great baseball communities. For me, they’re kids. They’re 16, they’re 18 years old. There’s not a 60-year-old guy that’s building, you know, a baseball page that’s relating to all of these kids who are the ones that are actually interested in buying Play Crate, so my audience was built by other people’s audiences in the baseball community.

Andrew: I forget the name of the company. I just interviewed a guy who creates a software to manage all of this and it was fascinating how deeply involved this was. Oh, Popular Pays. Pop Pays is what he called it, popularpays.com. It’s a whole thing now. It’s a CRM management tool for this and also a way for you to find more influencers to, like, put out proposals to. And it’s not just for that, it’s also for photos. Like, if you didn’t have your girlfriend’s photography skills, you could just go there and say, “I need a photo of my stuff on a diamond,” anyway, and a bunch of Instagrammers would offer to do it. Wow, it’s become a real big thing. Did you feel like you were getting away with something at the time? Like, maybe it wasn’t right to do or it was a little bit shady?

Josh: I never felt it was shady at all. I mean, I was paying money. The people that I was paying absolutely loved it, and I was putting out ads and content and I was trying to build a community. I didn’t know anything about selling but I knew if I built something online where baseball players could hang out virtually and just give them content to engage with or talk about or enjoy, you know, eventually, I could tell them about Play Crate and I could build a relationship with them.

Andrew: What do you mean? What’s the content that you gave them?

Josh: Honestly, some of the best performing content for me and Play Crate relating to our customers are memes, which sounds a little crazy but humor was the best way for us to relate to people.

Andrew: Can you give me an example? I’ve looked up your hashtag on Instagram, I’ve seen what people post. I’m not sure that I’ve seen that.

Josh: Yeah. So, I mean, we have a memes page, too, but I just posted right before we got on the call.

Andrew: What’s your meme page?

Josh: It’s just called Play Crate Memes.

Andrew: Dot com or on Instagram?

Josh: Oh, no, it’s on Instagram. It’s Instagram.

Andrew: Okay. Got it. Okay. I’ll go to it. And so you just posted something?

Josh: Yeah. The one I just posted, you know, 30 minutes ago, you know, it was a picture of a dashboard and it had a little dirt on it, and it said, “Every baseball mom’s dashboard,” something like that. So it’s something that only . . . you feel like you’re in on something. It’s a community that the only people that would know what that means is a baseball community.

And since I played baseball for so long, I really, really deeply intimately understood what was funny with baseball players. Cleating yourself in the back of the ankle is something everyone does. The way that your coach talks to you when you, you know, do something bad, the way your first base coach talks to you if your pocket comes out. Really, really subtle things that only baseball nerds, die-hards, and I’m fine using the word nerds because I used to be a baseball nerd, you know, only people who really understand the game baseball and really loved the game of baseball will understand and appreciate.

Andrew: I see it, coach’s face when you miss a sign and then it’s this guy just, like, so bewildered, Samuel L. Jackson in a role. Got it. I see what you’re showing. I see what you’re doing. Okay, and so this was your vision, “We’re going to create a place for us. We’re going to create a brand for us.” And the first year, do you remember what your revenue was?

Josh: Thirty-five thousand, 2015.

Andrew: Okay, $35,000, 2015. The extra money that you made, you told our producer, “I just invested it back into Instagram posts. Whatever we could do, we put back in there.” And so the 800 subscribers, and they were subscribers who were paying monthly, they came from Instagram posts, almost all of them?

Josh: Yeah. Oh, yeah, definitely. And then I started to learn . . . you know, for me, it was just what’s next. I started learning about Instagram, and then I started learning about Facebook Ads, and Facebook Ads led to other different types of things and content creation, copywriting. So everything kind of blossomed, you know, from just starting on Instagram and just keep going. And, I mean, that’s still what I do. That’s still my strategy is just kind of keep figuring it out. I was actually on . . . you texted me before the show from something called the Bot Messenger.

Andrew: Oh, yeah, yeah.

Josh: I was like, “What is this?” I went right on the site, I read everything, you know, I’m filling out the form, and then it led me to another blog but I saw you did a video. But that’s how I’ve treated this for the last, you know, four or five years.

Andrew: You’re just experimenting? So, actually, my message to you, my iMessage to you came in from Bot Academy.

Josh: Yep, Bot Academy.

Andrew: How is that happening? How is it not coming from my phone number? iMessage drives me nuts sometimes.

Josh: Well, I didn’t know what that was and I’ve been looking into an SMS feature because I want to, you know, create different deals around that, but I was like, “This might be a great solution.” So I went to that page, I saw the video that you posted, and that was what I was doing right before you . . .

Andrew: How did it even connect it? I have no idea. It’s not even part of . . . I feel like iMessage is fantastic except it’s got kind of weird quirks. Like, my wife and I have two different chat messages going to each other. How could that be? And then, here, it’s not even in this. I don’t mind it, but, really, there are no freaking secrets. Let’s take a look. Oh, I sent and received from four email addresses. Got it. Start a new conversation. Start a new conversation is from Andrew Warner at Mixergy. Look at that. It’s just like it’s clearly styling it that. iMessage is such a . . . it’s just screwing with my head.

All right. But I like that you . . . that actually tells me a lot about you that you notice where it came from, that you said, “I’m going to go and hunt this down and understand it.” And maybe this is a thing for us and that’s what you were doing in the beginning. You know what I noticed about you? Not about you, about your site, that YouTube sends you a bunch of traffic from social. I went to your YouTube channel because I’m fascinated by YouTube lately. You told our producer you create a lot of YouTube videos but you don’t have, like, high viewership. You’ll have some videos on YouTube that have, like, 400 or 500 views.

Josh: So we don’t create YouTube videos. We have affiliates. Affiliates are a big part of how we got customers and I’d love to talk to you about that, too.

Andrew: What?

Josh: Yeah. So, you know, part of our influencer strategy was let’s find people who have the audience that we want to reach and that we want to engage with. You know, Instagram was one of them, Facebook is another one. There’s obviously different demographics. Instagram was a little younger, Facebook was more baseball moms. The age demographic was 35 to 45 on all of our ads so we started creating different groups there. But I have a mentor who said, “Josh, you need to get on . . . ” I use LeadDyno. He said, “You just need to get on our affiliate program.” He showed me his affiliates and what they were doing, and he’s like, “Go start this. Go do an affiliate program, come back to me.” And that’s kind of how our relationship started. He said, “Go start this,” right away.

Andrew: Who is this guy? You said that he was . . . you’ve told our producer he’s really influential. How’d you know him and who is this mentor?

Josh: Yeah. So I think he’d be . . . I mean, he’d be fine if I use his name but his name Mike Salguero. He’s the owner of ButcherBox. So they do grass-fed meats. It’s a amazing service company. They have hundreds of thousands of subscribers. But he’s in Boston, and my friend worked for his company so he’s actually . . . My best friend’s old roommate used to work there and I said, “Can I just ask your CEO one question . . . ?”

Andrew: I love the way you work, dude. The level of curiosity on you. Okay, yes, go ahead.

Josh: Yeah.

Andrew: [inaudible 00:37:13].

Josh: And we can get to that, too, because I’ve got to meet a lot of really cool people asking that and then traveling around.

Andrew: [crosstalk 00:37:19] I just want to ask one question. What’s the question that you got to ask him?

Josh: I didn’t have a question at the time. I just really wanted to meet him. Their site was amazing. And she got back to me and she goes, “Oh, I just texted him. Do you want to meet him for an hour?” Absolutely. So I went in, we had coffee for an hour in Boston. We talked a lot about Plate Crate and that was literally the day he said, “I need you to read this book and I need you to start an affiliate program and come back to me next week.” So I said, you know, “Absolutely.”

Andrew: What’s the book?

Josh: The book was . . .

Andrew: E-Myth?

Josh: I read it . . . No, it wasn’t E-Myth, but that’s, by far, my most recommended book for other people. It wasn’t “The ONE Thing,” it was something like that. I read it four years ago.

Andrew: Okay. We can come back to that. And then he said, “Create an affiliate program with LeadDyno.” Here’s the thing that I’m wondering, what’s in it for him for sitting down and helping you? Let’s understand his motivation so that we know how to get other people like him to care about us.

Josh: Yeah. I did what he asked me to do right away. I think he saw a little bit in me what he used to be, so I’m sure he had help when he was starting off. I’m sure you mentor people, too, and if they earn it. I know my place. I wanted to really earn it, so, you know, I read the book right away. It was fine. I had nothing to do but work on Play Crate and read, and then I started the affiliate program. It was not rocket science or difficult and you could do it, but, you know, a couple of years later, we have a really great relationship and he told me . . . You know, I asked him, you know, “Why did you keep doing this,” saying that question you asked, and he said, “You just did what I asked you to do. That was pretty much it. You kept coming back.”

So he was just beyond generous with his time and he gave me a lot of great steps to go through. He asked me a lot of questions and, you know, half the things he said just edified, you know, in my brain that I was doing things right away. Because I had no one to talk to at the time just because I was by myself, so I didn’t have anyone to bounce ideas against, I didn’t know if I was doing the right thing. Sometimes, just going to him and him saying, “This is great, it just takes longer than you thought. Keep going with this.” So that was really helpful.

Andrew: And you meet every week still to this day?

Josh: We don’t meet every week, maybe once a month. He’s grown his company like crazy, but, yeah, I mean, I’ve got to talk to some really, really awesome people just by showing up at their door.

Andrew: So what you’re saying, “I just have one question.” And then you think what the one question is and naturally, if it’s a good question, in fact, it’s going to lead to another conversation anyway. Got it. And that’s your approach?

Josh: Yeah. And, I mean, I always have one question that’s specific to that person. You know, you’re much different than Mike and you’re much different than, you know, all of the other people. I want to ask you a question that only you would know that could help me. It’s not something I could find on Google, it’s not something . . . you know, it’s not an easy answer, you know, for, “What is that thing?” And then if you tell me to go do something, which you probably will, that’s my top priority. Even if it seems arbitrary or mundane, I’m just going to do it in good faith just because you told me to, so . . .

Andrew: I imagine he’s also learning from you. By thinking through and telling you what works for him, he’s analyzing it for himself. He’s reinforcing it in himself and then maybe you come up with some new ideas because you’re obsessive that you share back to him and helps him with his business, am I right?

Josh: Yeah. I mean, I’m sure I am. I mean, he’s got a really big team now and I’m sure I help him think through things, but I think the relationship is definitely one-sided.

Andrew: One-sided.

Josh: He’s definitely helping me more than I’ve helped him. And I have a lot of people in the subscription industry that have helped me a lot and they’re so generous of their time. And, honestly, one of the biggest things that’s helping me as well is I asked Mike to introduce me to people. So Mike’s introduced me to other people or, you know, one of my other mentors I met at a wedding. I was photographing the wedding because that was a side thing that I was doing, and the groom told be that he owned a subscription box company so I talked to him. He said, “If you’re ever in San Francisco, you know, give me a shout.” So I flew out to San Francisco. I was like, “Hey, I’m in San Francisco for a week. Are you around?” So we met up and, you know, we walked around. So I stayed in a week just to have that one meeting with him, but he told me so many things that I could use and, you know . . .

Andrew: What was his business?

Josh: NatureBox, Gautam Gupta.

Andrew: I know him, yeah.

Josh: He is one of the kindest people I’ve ever met. He is so generous. They’re in the same complex as EA Sports. But just sitting with Gautam, I mean, they raise so much venture capital. You know, obviously, that’s such a different business than a baseball subscription business, but, you know, he said, “Don’t raise capital. Get creative. Don’t rely on paid ads. It’s like crack. Once you start doing paid ads, you can’t stop.” He said, “Keep tinkering, keep hacking away, and then you’re going to start to see that product market fit and that’s where your growth will come from.” He helped me a ton, but he was just, you know, at a wedding, and he said, “If you’re ever in the area,” and I was in the area, so . . .

Andrew: I think I interviewed him. Let me see, I interviewed him . . . oh, it was actually this year I interviewed him. I thought it was further back. He changed from, like, a subscription-only, I think, to one awful . . . We’ll talk about that in a bit. We were also going to talk about your YouTube strategy. Let me take a moment to talk about my second sponsor and then we’ll get back right into it.

Josh: Yeah.

Andrew: So our second sponsor is a company called Toptal. I think you should file these guys away in the back of your head, at some point, you’re going to need them. Here’s what Toptal does. When you need developers from, like . . . not San Francisco, Silicon Valley, like, down south of San Francisco level, people who are obsessive at developing, but you don’t want to pay the prices of, you know, Palo Alto, Mountain View, what you do is you go to Toptal, you tell them what you’re looking for, and they get you that level a developer.

They are amazing. They’ve got this network of developers that they put together by screening over the years by making sure that they have the harshest, toughest test possible because they know that good developers want to pass those tests, and then once they do, they’re in the network. And then when someone like Josh or I decide that we need to hire a developer, we go to them and they introduce us to a couple of developers who are perfect for what we’re looking for. And if we’re ready to go, we can hire them, and if we’re happy, we can continue to work with them, and if we’re not happy, they won’t even charge us. It’s kind of crazy that they do that.

All right. And the way to get that offer where they won’t even charge you, I’m kind of whispering here because I don’t want to emphasize a fact that if you’re not happy, you don’t pay. I don’t want to start off with, “Don’t pay,” but they’re already giving us an incredible offer. If you go to toptal.com/mixergy, here’s what you’re going to get, 80 hours of developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to 2 weeks. If at the end of the period, you’re not 100% satisfied, you will not be billed. That’s top as in top of your head, tal as in talent, toptal.com/mixergy. Super-fast way to hire great developers. Toptal, thanks.

Going back to YouTube. So you had an affiliate program. How did that translate into YouTube videos?

Josh: Yeah. So, you know, we started doing unboxings. I said, “How can we get people to see what’s in the crate?” Best way to do that is let’s find people who are doing videos who have, you know, a big audience. We’re going to give you free Plate Crates and then you can do an unboxing every month to show your people. You get a discount code, they get a tracking link. You know, when they use that tracking link, you get a $10 commission.

Andrew: Got it, got it. So it wasn’t just, “Hey, I’ll give you free stuff in exchange for you to do videos,” it’s, “I’ll give you free stuff and tell people if they go to the link at the description and sign up, they could get the same thing.” Got it.

Josh: Yeah. So it’s a way for them to monetize their accounts, you know, in a space where, you know, some people aren’t making a lot of money. Even though they have these disproportionately valuable audiences, it was just another way for them to make money on the side. They’re already baseball people, they’re fans of baseball people. People would want to open up and see what’s in a Plate Crate so they actually had to create content with that. And then we just found family vlogs and we found different types of influencers on YouTube, and we still do that and we still . . . you know, I hired an affiliate manager because that was so important because you see how much of our traffic is coming from YouTube. We don’t do any YouTube videos.

So, yeah, I mean, we love our affiliates and I want them to make money. That’s in my best interest. We built out, you know, our program that if they sell a Plate Crate, they make money and we also make money.

Andrew: How much are they making per crate?

Josh: They make $10.

Andrew: Ten dollars, so per deal? One time, not lifelong?

Josh: Per sale, yeah.

Andrew: Per sale. So what is this? The Bevo Family. I’ve seen their stuff.

Josh: The [Bevonworths 00:45:56], yeah.

Andrew: Is that who they are? I only saw their stuff around Christmas where one of their videos went viral. I’m looking at it now. They had a video that got 2 million views around Christmas. They have another one about first baseball tournament, 1.1 million. How did they end up doing the video for you? Same thing? You reached out to them?

Josh: They were our very first affiliate.

Andrew: They were?

Josh: I reached out to them and . . . And this is the other thing with affiliates and influencers is I value my relationship with that family so much because not only are they creating evergreen content that you’re still seeing a video, you know, from . . .

Andrew: I see one from five months ago got . . . Oh, right. For their stuff, yeah.

Josh: Yeah, but they’re also growing. So they’re going to keep growing. They might be at 1 million, 2 million followers one day. People are going to go back and watch those videos. So we’ve really tried to figure out how we can create content that’s going to stay online forever and then invest in people to help them grow because it’s in our best interest as well. So we’ve done that with a lot of our affiliates. Let’s shout you out to our community, build your community. You shout us out to your community to build our community, and we’ve been doing that for a long time

Andrew: Yeah, look at this. Another one is Fuzzy. Do you know this guy?

Josh: Yeah. He’s relatively new but he does an amazing job, yeah.

Andrew: Yeah, he’s getting you, like, 24,000 views on this, and then he . . . So all of the branding that comes from that is just yours to keep, but the sales he gets benefit of. Now I understand. I don’t think I’ve seen people do this. I don’t know how common it is. I thought most people who work with influencers are straight up, “We’ll pay you or give you a free product,” not, “Let’s do an affiliate program.”

Josh: Yeah. Well, I mean, the affiliate program was better . . . it was a better deal for them a lot of the time. We also do, you know, we incentivize our affiliate program in different ways. We saw that, you know, they’re still trying to sell a product. It’s hard to sell something online. You can’t just post something and people will buy it. Same thing that I had to do, develop a relationship with them, give them a value prop, educate them, and then eventually convert them. So we noticed people were posting once or twice, they stopped posting. So then we said, “You know what? We’re just going to give you a flat rate for your first five posts. Let’s get you to five posts,” and then we saw everyone just kind of kept posting from there.

Andrew: Meaning, like, “Regardless of how many orders you get, we’re just going to guarantee you a certain amount?”

Josh: Yeah, just to give them some type of incentive. We saw a huge drop-off. You know, they would get a crate, they won’t get sales. They get another crate, they won’t get sales. So we just wanted them to keep posting and keep posting until they started making money, because then once they start making money, they love it. But, yeah, I was tinkering with that program, but that program has been really important for, you know, our content strategy and getting people to our page.

Andrew: Yeah, look at this. You did an unboxing. Because I heard unboxing was big for you guys. You did an unboxing February of last year, 3,000 people viewed it. Roughly the same time last year, Dyches Fam did something with you guys, 467,000 views.

Josh: Yeah. So when I said . . .

Andrew: Antonelli Baseball, 35,000 views from last year doing a Plate Crate unboxing.

Josh: Yeah. So, I mean, when we do our unboxing, I’m not talking about our unboxing. So I’m talking about our affiliates.

Andrew: You did it. You were sitting in front of boxes. You were doing unboxing. I thought it was kind of interesting, but it’s . . .

Josh: So I think we’re actually going to bring that back and do it again. I have other affiliates that will come on and we’ll do unboxings as well, but, you know, when we started doing that, I said, “You know what? Let me get in front of the camera. I want to build trust. I want people to know that, you know, it’s someone who really loves baseball, that knows baseball. I used to play baseball.” And I was sitting in a batting cage in our office because we put a batting cage in our office, so I wanted the kids to see that. We kind of got away from it. I didn’t love the videos and how they came out but I’m definitely going to circle back around to that.

Andrew: I think you could use more of your personality in there. I think I need to see more of you, more of, like, your friends or something, and then the box happens to be the thing that we’re looking at, you know what I mean?

Josh: Yeah. And you know what? That is something that’s definitely cultivated from doing it over and over and over again.

Andrew: Yeah, yeah, yeah. Tell me more about that, actually.

Josh: Yeah. You know, when the camera’s off, you know, you can be yourself and everything. When you’re on camera and you’re not used to it, you’ve done 1,800 and this is your 3rd episode, I think, I don’t think you care. There’s not as high risk as when you first start something and you’re thinking if people are judging, you’re judgmental. So I was trying to do what I thought other people wanted to see instead of just being myself which is authentic and it’s . . .

Andrew: But it’s also hard to figure out what it is. So I’ve done a bunch of these. I could do these really no matter what. I was going to talk to this billionaire from Israel this morning super early. I was exhausted because I worked on something last night that I was carried away with. I said, “I’m a little worried,” and then I said, “No, I think I’m fine. I’ll figure it out,” because I’ve done it a bunch.

But I wanted to just stare into the camera here or tell a story from one of my past guests in three minutes and send it over to this video crew that’s going to be doing some work with me, I couldn’t do it. It’s like, “How do I do it?” And then it ended up being just me talking with the camera which is the closest to do an interview. What I would’ve preferred is just take the freaking camera, go outside, show my day, show something as I’m doing it. Why do they have to see me here at my freaking desk? It’s very bland and it doesn’t show anything about me. The same words could be said on video but outside and it’s tough.

You’re right. So I guess the thing that I’m taking away from you is you got to just do it a bunch of times. Just keep doing it to the point where you could get so comfortable that you could, Andrew, do it in your element. And through the little mistakes and changes over the course of doing maybe a few dozen, maybe I’ll find a way of doing it outside of this office in a way that’s me that’s not what I expect.

Josh: Yeah. And, I mean, I have no problem getting in front of the camera, I’m just not comfortable doing it. We started doing a vlog because I really wanted to show kids, you know, we have the cage in our office. It’s somewhere fun to be. We get baseball, we understand baseball. I just wanted to build that trust with them. I want them to see that I created Plate Crate and that I was just like them, you know, but just 10 years ahead of them or 15 years ahead of them. And it’s getting much easier because the camera is on all the time and I don’t really think about it, and we just have to edit out some squares and things like that, but other than that . . .

Andrew: I see it from two weeks ago. I wish I could just hit play on it right now. There’s your vlog number one two weeks ago. I see [inaudible 00:52:09]. All right, I can’t hit play on it now because we’re talking. Let me come back into business for a moment here. Around the time . . . so this is what got you to about a million people . . . a million in sales, excuse me, roughly. Actually, at least that’s what’s in my notes, but I guess at this point, now that I’ve known the data . . . now that I have the data in more detail, I can say that it was less than that. But the sales were growing high. You decided, “Look, this thing is actually run chaotically. I got to step away and go and fix the structure here.” What broke that forced you to sit and get it organized and then how did you get it organized?

Josh: So you’re talking about back when I was on WordPress and WooCommerce?

Andrew: No. I guess I’m talking about internally. I know that you guys are changing software. What are you going to? Shopify?

Josh: Shopify, ReCharge.

Andrew: ReCharge?

Josh: We’re switching to Klaviyo from MailChimp. We got a new redesign and we changed up kind of the format of our website, so . . .

Andrew: What’s ReCharge? I think I know them, I just can’t think of what they are.

Josh: Yeah. So it’s a subscription payment platform, but if the . . . The website’s rechargepayments.com, not ReCharge . . .

Andrew: There, I see it. You know, this is why you’re right to have gotten a .com. It’s just so hard especially with a generic name like ReCharge. Okay, I’m on their website right now. No, I’m actually on maybe a different one. Okay. So they’re a payment subscription process.

Josh: Yeah, exactly.

Andrew: [inaudible 00:53:30] Shopify well it looks like.

Josh: Yup.

Andrew: Got it. Okay. All right. So I mean the internal stuff. You told Brian Benson, our producer, “Look, I had to sit down and just organize my company. I went through trouble. I went through my calendar. I went and just, like, systemized it and made, like, a to-do list on steroids.” What is the problem? What broke down that made you have to do that?

Josh: Gotcha. And I know you’re going to like this because I listened to your episode with Chris Ronzio and you talked about how you wanted to have dinner and talk about people’s systems.

Andrew: Yeah. Oh, I said that out loud? Okay, good.

Josh: Yeah, and I want to go to that dinner. So “The E-Myth Revisited” was a super important book for me to conceptually understand what a business actually is, working in your business or working for your business and then running an actual business, you know, and stepping back. So I did everything. I had to do the graphic design, I had to do the website, I had to do the customer service, you know, and that’s not a sob story. I’m really happy I did that so I can understand what my business was like.

But then I obviously needed to grow. What happened was I was just dropping the ball on so many things. I had no system for . . . if we had an interview right now, I might put it in my calendar. Was there a certain alert? Was there something to remind me? I had a lot of different things. I had a lot of Evernotes, I had a lot of notebooks, and I started dropping the balls when things were getting . . . when I had too much.

And I also let go of a lot of great ideas and great projects because I couldn’t order them the right way and I couldn’t prioritize them the right way. So the fix for that was Trello. I took a full day, like I told your producer, and I went to my favorite coffee spot and I said, “I’m not getting up until I feel beyond organized with my business and I can go to work tomorrow, know exactly what I’m doing.” So I can tell you how I organize my Trello board, I organize my employees’ Trello boards. Everything has a system.

Andrew: How?

Josh: So my personal Trello board . . . I mean, do you use Trello?

Andrew: I’m not. I used it for a little bit but what I didn’t like was it was hard to communicate with people within tasks. We switched to Basecamp, but I’m sure I can get a lot out of your process.

Josh: Yeah. So we ended up integrating Trello with Slack, and then we had kind of a comments section in Trello as well and then I assign people with different roles within Trello. But on my personal Trello board, I’ll have a . . . so on the far-left, I’ll have what’s called a bucket and then any idea I ever have that I think is going to be anything, I’ll just throw in there. It’s just kind of an idea dump place. It might happen, it might not happen, I just need to get it out of my head, get it onto paper. I’ll go into the note, I’ll explain what it is, and then, eventually, if it materializes, I’ll start creating checklists.

Next to the bucket is my goals for the month. So I’ll drag things from the bucket into the goals for the month. From the month, it goes into weekly, from weekly, it goes into daily, and there’s only three things that go into the daily. And then what else do I have? Next to daily, I have my one important project that we’re working on which, right now, it’s website. I have my one thing from the book, “The ONE Thing,” which I actually really liked which used to be hiring people. I didn’t look at anything but hiring people because I really needed that. It since switched to inventory, since switched to something else, and then I have, you know, some other notes.

But just prioritizing things, making sure that things that are important are getting done but also things that are pertinent. So what I couldn’t dissociate was I have things that need to get done right now. I need to respond to this email, I need to get back to this customer, but I also had things that are really important for the business and I didn’t know how to allocate my time properly. So Trello really helped me organize things that I need to do right now and things that have to get done for Plate Crate to grow. And now I have a place where I can order that as pertinent and important and I can prioritize things for days, put in due dates, you know, etc.

Andrew: And internally for, like, when an order comes in to systemize how you respond to that, to handle how you buy, do you have systems for that, too?

Josh: Yes. I mean, order systems, you know, for my customers?

Andrew: Yeah. For when you’re buying product and getting it in the boxes and making sure that subscriptions are taken care of. Was that you sitting down at a coffee shop and creating those systems, too?

Josh: Yeah. And, you know, I still . . . I mean, it’s never-ending. It’s going to be a continual edit of creating the best systems. But we have, you know, my personal board, we have a campaigns board, we have a sourcing board. So each board is different. Like, our sourcing board will have ideas for inventory, inventory that we’re either procuring or negotiating, shipped with all the information on it, you know, and that’s kind of a back-up. Because we also have other systems, we just went to a fulfillment center so we have all of our inventory and POs in there.

Andrew: Who’d you go with?

Josh: ShipMonk.

Andrew: ShipMonk? You know, we considered ShipMonk and ShipBob. I think we went for ShipBob for . . . I’ve got these sets of beads that I . . . I used to send them out from my house. It drove me freaking nuts. No, never from my house, from the office over here. Then people on my team were sending it from their house. I said, “You know, let’s just find a shipping company.” What I needed was . . . there was, like, ShipStation. I needed it to work with ShipStation so I could connect to Zapier. Does ShipMonk work with ShipStation?

Josh: So ShipMonk is built on ShipStation.

Andrew: Okay. Then maybe I am with ShipMonk. I forget which one I’m with but, yeah, that’s . . . that type of thing is . . .

Josh: Are they in Florida?

Andrew: I don’t even know. They are in QuickBooks. I see that. That’s all I know, and for some reason, I don’t even pay attention. I’m just kind of watching how much do I have to pay on light shipping months. You know, I want to get back to . . . there are two things that I said that I would get back to. One, I want to do a little bit more on marketing because I think I saw something that you do that I wanted to talk about. And then the second thing is we kind of brought up the issue that you had with payment. Why don’t we go to the negative first so we can end on a high? You had an issue. Since we’ve been talking a lot about successes, let’s talk about a big challenge. You had an issue with payments, didn’t you? Am I right about that, where you even overextended your credit card? I don’t remember the detail of it.

Josh: Yeah. Yeah, so, I mean, there was one month. It’s a little bit ironic because my dad’s a CPA, he’s an accountant, which you would think I would know accounting really well. I don’t know anything because I’ve always had him to kind of bridge the gap. But there was a month where, basically, we went to . . . I mean, I had $0 in my business bank account and I was extended on my credit cards as well.

So I had $40,000 out of my credit cards, I had . . . and when I say 0, I think I took a screenshot. It was, like, 16 bucks in my business account. And then I ended up overdrawing it, and, basically, what it came down to, I was just such a ball of stress and I was like, “Where did I go wrong? What happened?”

And, basically, I did a couple of things to fix it. I looked at why that happened. Number one, I just paid too much of my credit cards at once. I overextended myself. The way that I ran my business, and then, honestly, I still run my business is I max out a bunch of credit cards every single month and then I get recurring inventory and then I pay all of those off before I have to pay financing or, sorry, the interest on it, which isn’t great and I’m starting to get new strategies but, at that time, I just paid off too much of my credit card to not have enough in my bank account.

Then all these charges came into my bank account and I overdrew my account. It went all the way down, so I realized, you know, the reason that happened, the cause, was I was spending . . . I was buying more inventory because we were growing a lot so I was spending way more upfront. I was buying it way ahead of time because since we have more inventory, it took a longer time to produce. So I was fronting, you know, three months of inventory. And I think at the time, we had 800 or 1,000 customers at $15. We spent about 15 bucks a box, so at any given time, I would have out of my own pocket about 45 grand, that’s why I was in debt about 40 grand.

Andrew: Wow.

Josh: But I had recurring revenue, so I knew it would come back. So it was just kind of a timing thing. And then, you know, I paid off that debt when my next couple orders came in, and then I changed my billing structure to pay 3 months at a time, pay 6 months at a time, pay 12 months at a time because now I’m getting way more cash upfront that can actually fund those orders.

Andrew: How did you do it before, then?

Josh: It was you pay every single month. They had one subscription, it was pay every month. So you would pay this week . . .

Andrew: No, I’m looking at the first version of your site. There was 12 months was $25 a month, 6 months was $27 a month. Was this, like, their subscription commitment?

Josh: We switched from that when this happened. So we switched because I said there’s too many subscriptions. I just want to focus on the monthly which is the highest-paid one which was the wrong decision. So I . . .

Andrew: So you focused on the annual?

Josh: Yeah. I said, “Let me focus on one thing. It’s going to consolidate, you know, my message.” It’s going to be much more easier for a customer to understand, you know, the paradox of choice, all of these things. I probably read the wrong book at the wrong time. And so I said, “Let me just do one subscription,” and it turned out I didn’t have enough cash flow to buy three months of inventory ahead of time or four months, and now we buy four, five, six months ahead of time but it’s funded from the customer, not always from my credit cards.

Andrew: Because now you’re . . . Because before when you used to have a 3-month subscription, 6 months and 12 months but then you killed it because it was too complicated?

Josh: Well, also the three months wasn’t billed at one time. So, right now . . .

Andrew: Oh, so if it was 3 months, you just billed them $28 a month for 3 months?

Josh: Yeah.

Andrew: Oh, got it, got it. All right. We’re talking about, like, really . . .

Josh: Which crushed me, yeah.

Andrew: Yeah. That makes sense. Okay. So you get none of the upside of their commitment? Got it. Okay. All right. Here’s the thing, so I’ve figured out, yeah, like, that you’re getting a bunch of traffic from YouTube because I was using SimilarWeb. I signed up for Ahrefs and now back when they were a subscriber, I started to really understand them.

I’ve been digging into you on Ahrefs. I feel like at some point last year, January, February of last year, you decided, “We’re going to start to build up our own site,” and you started going after . . . where’s my overview page in here? This thing is giving me so much insight. You started . . . no, it was even actually the end of 2017, you started building up traffic to your site. You started getting links back to your site. You started going after . . . and I’m trying to figure out where this came from, they’re like coupon sites that you guys are targeting. Like wethrift.com has Plate Crate 50% off discount, I don’t know if I should be saying this, modernsportsmom.com, right? Fifty percent off from Dealspotr with, like, sport spelled [inaudible 01:04:20]. I feel like you started going after stuff like this, am I right?

Josh: So we didn’t . . . I’ve never talked to a coupon company. They kind of searched the web and they find deals to give to people. So if you type in, you know, Play Crate deals, they’ll pop up. I never went after any of them. They helped with conversion and I was promoting those deals so I didn’t care where my customers got those deals from, but I never talked to a coupon company.

Andrew: This is all organic? You’re not creating content on your site or a content strategy that’s leading to all of these different people who are writing about you like inspiks.com? How are you guys on there? Oh, that’s Instagram pics. Never mind. Okay. [inaudible 01:05:00].com is now you’re in there. What is this?

Josh: Well, like, Modern Sports Mom is an affiliate.

Andrew: Got it.

Josh: Lots of those people are affiliates. They might be on Pinterest, they might be on YouTube, they might be on Instagram, Facebook. We have some on Twitch now, but most of those are affiliates. All of the coupon pages just kind of scour the internet for different coupon codes.

Andrew: And so what I’m seeing if it’s not a coupon, it’s not you working with fatherly.com to get written, it’s fatherly.com realizing, “You know what? We can do a thing on subscription.” No, they’re just linking to you. They’re not using an affiliate link as far as I can see.

Josh: So Fatherly, so this is where it gets a little muddy. Fatherly never reached out. They never reached out for photography. They never reached out for anything.

Andrew: They used a photo that your girlfriend took from years ago.

Josh: Exactly. And we’ve reached out to Fatherly since and said, “Hey, can we do a re-up?” They did that writeup by themselves. They never called me. They never emailed me. I’m super appreciative for it, but there was a few things like that that happened. It didn’t happen consistently so I’m looking more for things that I can do consistently which is why I’m doing more podcasts and why, you know, we’re doing much more, you know, reaching out to people right now to get writeups like Fatherly and me doing guest vlogging and things like that because we realize how important those back links were in that strategy. So, yeah, we reached out to Fatherly again and we said, “Can we give you better images? Can we give you better content?” And most people that I’ve already featured are sort of, obviously, you know, into it, so . . .

Andrew: Right. So you go back to the people who did? Got it. Look at this. So I’m still hunting down in here. Ahrefs gave me, like, personal training before this sponsorship, and I don’t feel like I fully understood it. Then, I just kept after that going through it on my own to understand what’s going on. I got a little bit more into it. We’re going to try to get them on to sponsor. I think I totally screwed up their ads for them but I just love this so much now. I’m sure that we’re going to get them back. Not sure until you get it. So if you screwed up their ad, right, like, they’re not seeing any sales, like, “Andrew, what are you doing? The whole ad was talking about how we didn’t give you a discount to promote.” [inaudible 01:07:07] the whole thing.

Josh: Well, what’s the way that they track it? Because I know you talked in one of your episodes that . . .

Andrew: Yeah. They track it . . . so I figured it out. Yeah, I had to go back and re-sign up to understand. They ask, “Where did you hear about us?” and I’m sure that that’s what it is but I would’ve liked to, like, say to people, “I know you can think about it later, but if you use it right now, you get $3 off,” whatever it is. For some reason, people even will take $1 off. I think it was like a . . . never mind. So one of the things I’m seeing is that Baseball Subscription Box sends you a bunch of traffic but Baseball Crate is really big for you, but I don’t know what to make of that. They’ve got to come on here and tell me a little bit more.

I tried to get the founder of Ahrefs to do an interview with me. I flew to Singapore. I thought he was in Singapore. I don’t know if he is or he isn’t. I can’t find out. I’m freaking fascinated by them, and I’m fascinated by them because their competitor, Rand Fishkin from Moz, talked about how good they were. Like, he shouldn’t be talking about how good they were. Then I tell him, “Look, Rand, it’s kind of awkward. You’re about to do an interview with me. Ahrefs is a sponsor. Are you okay with it?” He goes, “Yeah, I’m okay,” and then he went and he did the ad for them.

Josh: I listened to that episode.

Andrew: It was something, right?

Josh: I loved his Whiteboard Fridays. And I was not a non-SEO person per se. Most of it was over my head, but he was such, like, a nice guy, you know, with his beard and everything, but that episode was crazy because, I mean, talking about his business, and how much they were doing, and how much he was making, and everything. I loved that episode. That was great. Rand Fishkin . . .

Andrew: Yeah. Me, too. I loved it. I didn’t realize how good it was until he posted a tweet about it. He said, “Look at all the things that Andrew asked me about like, ‘Do you regret not having kids?'” I go, “I can’t believe I said it. That’s awkward.” I’m in the middle of a conversation, I don’t think through.

Okay. All right, for anyone who wants to go check out the site, even if you don’t give a rat’s ass about baseball, you should go understand how this guy built up his business, platecrate.com. I walked in here saying, “I don’t understand how this works,” to, “Wow, I don’t understand how far he got.” Like, if I wanted to start, I would have to put in an insane freaking amount of work. It’s not like Josh came to me and you said, “Here’s the answer. The easy answer is go get an affiliate program and a good logo.” No, it’s just an insane amount of work and every bit of it . . . I don’t see anything except for getting Instagram influencers back, like, in the beginning when it was easy. There’s not a single bit of it that gets you super far all at once. It’s every freaking bit of it gets you another set of inches forward, am I right?

Josh: That’s definitely right. And I think that there is something out there right now that was like the Instagram influencers in 2015, and that’s what I want to find. So there’s always something and it’s led me down a path where I could really start to learn digital marketing, and learn content creation, and learn things that I’m really interested in, so it’s been great to learn, like, that. But, yeah, I’ve heard it a million times, there’s no silver bullet.

Andrew: I feel like, for some people, there’s a thing but there isn’t. And, you know what? The reason I asked you earlier if you felt like it was a little shady, the whole Instagram thing, is because I do think that many people who are into it did feel that way, that they felt like, “Maybe we shouldn’t be doing it. It’s adding commerce to somebody’s feed.” No, it worked out.

All right. For anyone who wants to go check it out, you now know it’s platecrate.com. I want to thank the two sponsors who made this interview happen. The first will host your website right, it’s called HostGator. Check them out at hostgator.com/mixergy. The second will help you hire developers, it’s called Toptal. Check it out at toptal.com/mixergy. And, finally, since we talked about Chris Ronzio, this is something I’ve got to learn to do better within the interviews. The next step for me is to talk up the work that our team is doing to create courses.

So, Chris Ronzio, I was so excited about him. When Dan, our course producer, said, “So who should we get to do a course,” I said, “You know, I can’t stop thinking about Chris Ronzio.” This guy, all he does is . . . he used to have a photography business. He used to photograph cheerleaders and a bunch of other stuff for the cheerleaders, give it to their parents in the events, right? And he had this problem where his team didn’t show up on time and there was all of these problems internally of keeping the company going, and he said, “I’m going to figure out systems.” He figured out systems. He got so good at it, he shifted from doing, I guess, photography to just doing systems for companies, and now he’s got a company called Trainual that manages other people’s system software.

Anyway, I said, “I’m fascinated.” The guy knows how to systemize other companies, bring him on, so he said, “Sure. I’ll do it.” He sat down with Dan for at least an hour. Dan did a bunch of research of hours, put together a course on how to do it based on what he learned. I’m spitting because I’m so freaking excited. And you’ll want to go check it out. It’s at mixergy.com/courses. Dan’s just killing it, and one of the things that he keeps telling me is, “Andrew, it’s so easy to work with the entrepreneurs who you invite on because they have such a good feeling from being on Mixergy or listening to Mixergy.” And I really appreciate it. Josh, thanks so much for doing this. Congratulations on all of the success.

Josh: Thank you so much. Appreciate it.

Andrew: You bet. Bye. Bye, everyone.