Andrew: Hey there freedom fighters. My name is Andrew Warner on the founder of Mixergy where I interview entrepreneurs about how they built their businesses and I do it for an audience of real entrepreneurs. I mean, the people listening to my interviews are actually building stuff.
Today we’ve got an entrepreneur who created a search engine and sold it to Google about 18 months after launching. He took some time off and in his off time he invested in some companies, learned the other side of the entrepreneurial journey, and now he is back with a brand new business. So let’s get some more details on that quick overview.
The previous company that he created was called Plink. It created visual search engine. Imagine being able to take a picture of something with your phone and then finding out more about it. That’s the business that Google acquired and it took their technology and merged it in with the rest of their business.
And the current company is kind of interesting. It’s called Pointy. What they do is they plug into a company’s barcode scanner, and as a result they know what’s in the store, what’s being sold, and they allow people to . . . And Mark you can correct me if I’m wrong. They allow people who are interested in buying things locally to understand what’s available around them locally.
The founder who started about those companies is Mark Cummins. I’m happy to have him here to talk about how he did it and what he learned from building it. And this interview is sponsored by two great companies. The first will host your website right. It’s called HostGator and the second will help you hire your next great developer. Mark, how did I do with the descriptions of your companies? I’m trying to read you, but I can’t tell.
Mark: You have pitched for me, so you’ve done my job which is very nice. Thank you. Perfect.
Andrew: You know what? So I asked our producer to get some numbers on your business. And she said that at the time that she talked to you, you guys had 2,200 stores that had your hardware in them. Is that about right?
Mark: That was then. Yeah, we have 3,300 now.
Andrew: Thirty three hundred. I still can’t tell, and this is the message that I sent to Ari. I said, “Ari, this is meaningless to me. It’s 3,300 a lot? Is it a little? Is there money in that? Is there . . . ” Put some flesh on that.
Mark: So 10,000 stores would be 1% of all the stores in the U.S.
Andrew: Okay.
Mark: So we hope by the end of the year to being about 1% of all U.S. retailers.
Andrew: And as a result of you being at the barcode level, you know what people buy. How does that help me understand what’s available to buy at the store?
Mark: Right. So let me maybe back up and tell you a little bit about just on how it works and why we’re doing it. So 90% of commerce still takes place in brick and mortar stores. It’s actually 91%.
Andrew: Ninety percent?
Mark: Yeah, 91% actually. And that’s like U.S. Census Bureau data. That’s like perfect data. So people think Amazon is eating the world. Amazon is still relatively small. There’s about a $4 or $5 trillion a year of sales going through retailers in the U.S. and 4.5 trillion of that are through the offline sales channel. And those retailers, they’re very big part of the economy, but they’re relatively . . . they’re still behind. You can’t easily find out what’s in your local store especially if it’s a mom and pop store. The method of trying to find a particular product, you go Amazon, you search, you find it immediately.
If you want to find it locally, it’s still a process of essentially wandering the streets or making phone calls or just hoping that you chance upon what you’re looking for especially if it’s a little bit harder to find, right? If it’s a can of Coke, no, that’s not very hard, but if it’s something a little bit more obscured, that’s difficult. And we solve that problem for the local retailers. So they attach our device to their barcode scanner. And when they scan a product of the store, we’re going to put that product immediately on the website that we create and maintain and host for them. So we’re going to find the product image, the description. We’re going to make them like a great listing page. It’s kind of like Yellow Page, but with all their products listed on that.
Andrew: So this is an inventory barcode scanner, not the barcode scanner that they have at checkout.
Mark: It is actually the one they have at checkout because a lot of them don’t scan on inventory, but we can take the discount pattern and work out when products are in or out of stocks. So if you imagine they’re going to scan milk every 20 minutes and they don’t scan milk for three hours, then they probably went out of stock with milk. So we can take that data and make it into sort of inventory data. And the reason we do that is like our entire philosophy is to make it as low friction and easy for a retailer as possible. We don’t want them to do any extra work ever. We want them to plug in our device and it’s just going to bring additional customers to their store without them doing anything new.
Andrew: All right. This seems like a segue, but trust me, there’s a point to this. So right standing next to me is a guy from India, Patel Shadon [SP]. He came in from India because we had a sales challenge at Mixergy and people who applied some of what they learned from interviews and courses at Mixergy to build up their businesses and we took the person who had the most interesting success story and flew him here and put him up in San Francisco. So that’s why he’s here.
When he got here, one of the first things I did was get him on a bike, and then we looked through San Francisco on our way to the office. And we stopped at a store and he said, “Andrew, does anybody even go to stores anymore?” And I laughed because I said, “I do only when I want to see what’s available to buy online.” So that’s kind of a long way of saying to you that, first of all, we fly people in when they’re killer sales and when they put killer sales numbers. And I’m glad that he’s here. Hopefully, I’ll get him on camera later. And number two, we’re not really going into stores. Isn’t that the path going into store, shopping, putting things in bags, taking it home?
Mark: I think that’s the sort of San Francisco bubble speaking. I think the numbers speak for themselves, is 90%.
Andrew: But you know what? That kind of reminds me of when I went to this VC’s house from Clear Stone back in L.A., and he said, “You know Andrew, everyone’s very excited about the iPhone because the iPhone has all this stuff in it. But Blackberry is got a much bigger market and that’s why we are . . . ” And he told me about the company that they invested in that was Blackberry based, and it’s gone.
So yes, today there are 90% but they’re dwindling, aren’t they? Because why would you even want to go to a store? And while you say bubble, I say it’s the future. The future is not stores, and San Francisco is where the future is going to be. You see automated self-driving cars here in the streets. In the future it’s going to be in other places too. You see people getting deliveries within two hours of things like drugs from the drug store. In the future that’s going to be around, don’t you think? And I’m challenging you here because I want to understand your thought process, not because I want to shut you down.
Mark: It might not be 90% in San Francisco, but it’s still above 80%. I mean, people buy an awful lot from offline stores. They buy them because they’re walking past and it’s convenience or they wanted immediately or they want to touch it or they want to talk to someone, or it’s like they’re making . . . they’re going to the store for a service type reason. Like they want to get dog grooming and they pick up some dog food when they’re there. There’s a whole set of reasons why people buy things offline. And I do think it will decline as a percentage, like there’s no question that e-commerce is going to grow.
But the question is, is offline retail going to zero? Is it going to be 0% to the economy from 90% now? I don’t believe it’s going to zero. That’s a contrarian batch if you’re in Silicon Valley. I think it’s more intuitive if you’re in the rest of the world. But yeah, it’s not going to zero. It’s going to shrink, but it’s still enormous and it’s going to remain very big. And what they need are tools to stand up on the same level as Amazon and those e-commerce retailers to get some of the same sort of advantages that e-commerce retailers take for granted.
Andrew: And you’re banking on them not just being around to some degree, like you said, maybe not 90, let’s say they’ll be 80% that’s still sizeable and is still the majority. But you’re banking on not just being around, but being destinations where people will look on their phone and say, “Where can I buy milk? Where can I buy dog grooming equipment?” and then go to the store. That’s the bet that you’re taking with your business.
Mark: Yeah, right. It’s a bit like Google Maps. How many times did you consult a paper map before Google Map existed? Maybe once a month or less. How many times do you use Google Maps today? Probably multiple times a day. Right?
Andrew: Yes.
Mark: So I think if it becomes very easy and very natural to find where is the nearest place that has X, and that data is very dense and very useful, then I think people will use it all the time. If you can say, “It’s raining. I need an umbrella. Where is the nearest umbrella?” Okay. It’s like 500 feet over that way. People are going to use that kind of information.
Andrew: Okay. So 3,300 stores have this. You guys charge them for that?
Mark: Yeah, they pay $300 to join.
Andrew: Three hundred dollars one time.
Mark: One time, yes.
Andrew: One time.
Mark: Yes. After that . . .
Andrew: And after that? Sorry.
Mark: After that it’s a sort of a freemium service. So there’s no charge to be on the basic Pointy platform, but they can run ad campaigns through us for AdWords, for example, and we charge a service fee for that.
Andrew: So $990,000 roughly in sales just from the one time setup. And then can we say what the recurrent revenue has become because of this?
Mark: Oh, we’re not disclosing that.
Andrew: You’re not disclosing it. Okay. Let’s go back and understand how you got here because this is not your first big company. Well, it’s not your first company. I get the sense that this is actually going to be bigger than Plink. But you’re a guy who started out with not an entrepreneurial passion, but a parent and grandparent who were entrepreneurs. What companies did they start?
Mark: Oh yeah. So my grand-dad started a bell foundry and . . .
Andrew: At what factory?
Mark: A foundry, so like a metal casting.
Andrew: Wow. Okay.
Mark: They made church bells and they made equipment, all sorts of things. Yeah. So metal casting operation. And then my dad sort of moved on to that family business, and it evolved over time. It became much more about metal recycling as metal waste recycling and ultimately chemical recycling, all sorts of stuff in the recycling industry, the waste industry. And then I did something completely different. I went and did a PhD in robotics.
Andrew: I can see that. My sense is because the metals business is not terribly exciting. They’re making a good living, but they’re not doubling month over month away that you might, right?
Mark: Yeah. Exactly.
Andrew: And so you said, “I want to go get a PhD.” What was it about? It was robotics that attracted you, right? And you just wanted to get a PhD in robotics.
Mark: Yeah. Well, it was kind of like the decisions process I . . . When I finished my undergraduate degree, I did engineering and computer science. And when I finished that I applied to Google and Google rejected me, and as a result I was like, “Oh what am I going to do?” And I got some job offers. And I was like, “Well, I wasn’t too excited about any of them.” And kind of almost on a whim, I decided to do a PhD, and yeah. Initially I was going to do something in medical research or medical imaging. And then I saw just a video, a demo video from somebody called Andy Davidson who is a sort of famous person in robotics. So I demo video and I was just so inspired by it and I go, “Yeah, okay. I’ll do robotic and stuff. That’s great.”
Andrew: And then you and someone else who you met while you were getting your PhDs, Charles Bibby connected and you said, “You know what? I think we can start a company.” The comp . . . Right?
Mark: No. The first time round was a different guy. A guy called James Phillip [SP].
Andrew: Oh, I see. Okay. And how did you meet him?
Mark: We were also doing our PhDs, so yeah.
Andrew: Wow. PhD apparently is a good place to me a co-founder. I wouldn’t have thought.
Mark: Yeah. It is a great place to meet a co-founder.
Andrew: So then what was your original idea that led you to launch it?
Mark: To launch Plink?
Andrew: Yeah.
Mark: So Plink was a computer vision company. It was search with image. So you take a photo of something with your phone, that tells you more about it, or people have probably experienced on Google with sort of reverse image search where you can drag an image on to Google Images and find other copies or similar images.
Andrew: Which apparently they took away recently, I guess, because of what happened with Getty, that lawsuit.
Mark: Oh, I didn’t know about that.
Andrew: But it was magical. You could take any picture. I’d have a photo on my desk and it was too small to do anything with. I drag it into the search bar of Google Image Search and it find a bunch of others like it, some bigger, some different. It’s so good.
Mark: Right.
Andrew: I’m going to look it up right now so that I’m not just a . . .
Mark: You [inaudible 00:12:01] that another way, but that was sort of related to . . .
Andrew: You’re saying, you got excited about that and you said, “I think we can do something like that too.”
Mark: Yeah. And my PhD topic was essentially that kind of technology and it had been sort of . . . it had been developing for decades in academia. And I had just sort of got to the point where you could do interesting, useful stuff with it. At the same time, the iPhone had just come out, the first Android phone was just coming out. There was this big sense of opportunity and everything was changing and I kind of thought we could do something. We had some interesting technology that would be useful. So initially, actually tried to license the technology to another company.
Andrew: But you did this on your own.
Mark: To begin with, yes. So initially, I tried to license my own PhD stuff to another company, and that went very slowly and was kind of frustrating. And there were some other people around, I could see starting companies and just people I knew through academia. And I thought, “Well, if they can do it, why can’t we as well?” So I just started got frustrated with the slowness of doing things.
Andrew: I’m sorry. What I mean is, you guys built this on your own, you coded this up on your own, this image search. And I want to just correct myself, it turns out Google does still allow you to search by image. Just drag an image into their search bar and you can do it. So you guys created something similar to that on your own and then you decided to license it and build a business. The reason I’m pausing on that is, that seems really impressive, and a large part of why you got so much attention was because you are two guys from nowhere who were still able to build this, one of which was turned away from Google for a job and still able to build this. And isn’t that impressive? Am I being overly dramatic here when I say wow?
Mark: Well, I mean, it was . . . We did build a nice working system, and it was technically very good and I think that’s sort of why that business worked.
Andrew: Okay. So you tried to . . . You tried to license the technology. Was it you getting on a call every day trying to sell it?
Mark: Yeah. Initially, I was a PhD student and I didn’t really know anything about running a business. I was completely uncalibrated. I just had no concept of how things worked. So I was just trying to cast around and I thought . . . I knew what we had at some value. So my first step was like, let’s try and see if anyone out there, just an existing company wants to just buy this technology from us. And that doesn’t happen that often as I really know that at the time.
So I called up some companies who I thought might be interested. And one of them sort of said, “Yeah, we might be interested in licensing this IP from you.” But that process went really slowly. This was just me. I didn’t have any permission from the university, I didn’t have any permission from my colleagues. Actually, they got a little bit annoyed when they found out I was getting a . . . It all went well in the end. And yeah, that was going really slowly, so I thought, “Well, I can do a better job with this. Let’s just start a company. And all this exciting stuff is happening with the iPhones and I see other people starting companies, so let’s start a company and make a go of this ourselves.” So it was kind of born out of impatience and frustration, I would say.
Andrew: All right. Then you go to Seedcamp, you get up on stage, you show off this technology. You said you did a killer demo, a tech demo, and as a result . . . I saw a look on your face. Was it like . . . I find that so many entrepreneurs who have no substance are really good at flattering themselves. With you, every time I say something really nice, I look at you and it’s like, “We need a little word of caution on that Andrew. We need to tamper that down.” Where does that come . . . Am I picking up on the right vibes here? Tell me about that.
Mark: You got it right. Yeah, yeah. I really don’t like overselling things or like . . .
Andrew: You don’t. I see that.
Mark: I like to tell people the real, real truth.
Andrew: I want the real, real truth too but I’ve got to tell you, when a guy creates something like what you did, it’s impressive. And it’s not just Andrew standing here behind the mic saying it’s impressive. You get up at Seedcamp, you give this presentation. Reid Hoffman as a result of that does what?
Mark: Yeah, we spent a couple of hours with Reid. He sat down with us and helped us figure out what we should do with the business. He is an incredible guy. His mind is just like he just gets to the center of things straight away.
Andrew: Do you remember one thing that he told you that helps you understand that he can do that?
Mark: I remember so many things, I mean, so many things. He had . . . One of the things we were thinking about the time was like, should we create an API for other people to use the technology or should we build a product around it? Yeah, he gave us really good advice. He was like, if you set up an API, first of all, probably nobody will use it. But if they do, maybe . . . If you’re really successful, maybe 20 people will use it but only one of those will be meaningful. One of them will completely dominate the others. And you’re kind of better off doing a product and sort of showing the use cases of your technology rather than trying to let other people figure it out because that’s just sort of not how it tends to work.
Andrew: I see, because people will not know what to do with this image search engine.
Mark: Right.
Andrew: I see. Okay. And the reason that that was so smart and insightful is, in a short period of time he didn’t just understand your product, but he understood the market for your product and how that fits in with the industry as a whole and gave you advice that even in retrospect, you look back and say, “That is reasonable. That makes sense.”
Mark: Yeah, exactly.
Andrew: Okay. What else did he tell you? That is impressive.
Mark: Oh, what else did he tell us? Let’s see. A lot of stuff around the mechanics of like how . . . At the time, I think we already had an excellent offer from Google and he was sort of telling us how to play that, a lot of the mechanics of that. What else was he telling us?
Andrew: You had what from Google?
Mark: We had an acquisition offer I think at the point.
Andrew: Oh, really?
Mark: Well, not in the first meeting, but we met Reid later I think when we got the offer and just sort of asked him for some more advice on how to play it. He gave some good sort of tactical advice there. I mean, it’s a while ago. I don’t remember all the details in the conversation. My general impression was, it was great.
Andrew: You know what? One of the things that I remember is Phil Libin said that having conversations with Jeff Bezos blows his mind. And do you ask him . . . I forget who it was who asked him. “Give me an example.” And he said, “Well, I said, it’d be really amazing to go to Mars.” And Jeff Bezos says, “Well, why would you want to go to Mars when what you’re thinking of is a poorer environment to what we have on Earth? Why not just create a standalone place in the sky? Or actually, Earth is even better than Mars, more hospitable to humans than Mars. Why not take the things that we don’t want to do on Earth like factories and moved them up into space instead of people into a lesser environment.”
And that way of thinking is interesting because it challenges the way that we’ve all been looking at the world, which is we progress from this planet to the other planets, and then the first one that makes sense is Mars. I like that kind of thinking. And I like to hear what stuck with you. And I think it’s interesting that Reid Hoffman can have that kind of conversation right off the bat with you and be so useful. You also got to meet one of the, I guess, the founder of Spotify, Daniel Ek, right?
Mark: That’s right. Yeah. Actually, I really met Daniel. I mean, he had sort of no business meeting us in the sense that we weren’t doing any deals with them, but he was in London and we were in London and we had that sort of mutual connection. And he just gave us an hour of his time just for advice. I mean, that’s one of the wonderful things about the startup community that’s got this sort of pay it forward mentality. And people who are just way ahead of us would just help us out because just they were helped and they were passing it on.
Andrew: And because you had something of substance. If you were just a guy with an idea, they wouldn’t want to do that.
Mark: Yeah, exactly. We did have some credibility. I think people knew that we were doing something interesting.
Andrew: And as a result of all this, you got some angel investors, right?
Mark: We had angel investors interested to come in but we didn’t take the angel money.
Andrew: You never took angel money.
Mark: No. We won a competition. So we won the Android Developer Challenge. We got 100,000 of prize money from that and then we won a business buying competition, which I wouldn’t recommend people doing business buying competitions, but we did it with . . .
Andrew: Because?
Mark: A little bit more money there. And so we could actually run ourselves off that money. And we did a very early sale as well. We did an early sale of some essentially kind of consulting work which we got a bit of money from as well. So we didn’t need to take the angel money at that point.
Andrew: Did you ever take angel money?
Mark: Well, no, because the money that we raised was enough to . . . and we weren’t taking a salary. Initially we were actually running at the same time we were doing our PhDs, so we had a little bit of PhD stipend. And then by the time we were out of our PhDs, we had enough money in the bank, and we already had some sort of discussions going on with Google that we never needed the money.
Andrew: Okay. What was the Google AdWords competition thing that you did?
Mark: So Google had launched Android at that point, and they were . . .
Andrew: Oh, Android competition. Okay, yes. And then what was their competition?
Mark: So they were trying to catch up with the iPhone, and they had something called The Android Developer Challenge to try and get more high quality apps on Android. And so people would create their apps and enter them into this competition, and I think the prize money was $100,000 in 10 different categories. So we won $100,000 [tradeoff 00:21:10] for having just a very good app.
Andrew: I see that now. This is 2009 that they did that. It seems like . . . Sounds about right?
Mark: They did in 2009. Yeah, that’s right. And then there were two rounds of it. So I think there was another one maybe the following year.
Andrew: Impressive. All right. Let me take a moment to talk about my sponsor, then I want to ask you why you picked the first product that you picked and then why you sold to Google, and then one question that I’m not going to tell you ahead of time because I want to just have a natural response from you. But the sponsor is a company called HostGator. Have you ever heard of HostGator or am I about to introduce you to them?
Mark: I have heard of HostGator.
Andrew: You have. Okay. Then I’m not going to blow your mind, but I’ll tell you this, here’s something you may not know about. The other day. I talked to an interviewee and I said, “Have you ever heard of HostGator?” And he said, “Oh yeah, I started a website on it.” I said, “What did you start?” He said, “It’s called Your Best Digs.” I said, “What is that?” He said, “Well, we realized that just like people who need to get a new phone or need to get new earphones want to go and research all the different options, but what the end of the day want is the number one option that they should pick. So people around the house . . . people with the needs to buy stuff for their homes have the same requirement. They want to do enough research to understand the options, but they eventually want someone to give them a conclusive response and then link them to go buy it.”
And so this guest said, “That’s what I created Your Best Digs. We review things like irons, we review things like water flosses, and when people click to buy it, we get a commission.” Very similar to Wirecutter. The thing that’s interesting is all he did was get a free WordPress software which anyone could install with one click on HostGator and frankly, you could install it anywhere. But he went to HostGator because HostGator makes it easy to launch ideas like this and easy to manage them. And as they scale up, HostGator will scale up with you.
So anyone out there who wants to take any of their ideas and go and implement them, it’s so easy to do it especially with one click install of WordPress and so many others on HostGator. All you have to do is go to not just hostgator.com. That’s where any old shulb can go. But if you’re coming from the Mixergy audience, they’ve got a special URL where they’ll do two things. Number one, they’ll take up to 62% off because 60% off is not enough, 62 is really where the big shots go. Then number two, they’ll know that you came from Mixergy and they’ll always take great care of you because of that.
So go to hostgator.com/mixergy, you’ll get that big discount, you’ll get unmetered disk space, you’ll get 45-day money back guarantee. If I’m full of it, you’ll be able to go and get your money back, but I’m not. You’ll like it. And they’ll give you $100 AdWords offer. Go to hostgator.com/mixergy. You decided to go with art, PlinkArt. Why did you use art as the first platform?
Mark: That was a very sort of short term kind of decision actually. So we were entering this competition, this Android Developer Challenge. We kind of wanted something crowd pleasing that hadn’t been done before because we thought, “Well, if we win this $100,000 prize, it will help us along.” And so we thought art is just a very nice demo. We know we can get a nice dataset and make it work very well.
So yeah, we did that. I mean, we did that out from start to finish in three weeks. It was sort of a very short term project. We worked really, really hard in it but it just all came together very quickly. And we did it pretty well, I have to say. It was a nice experience. It wasn’t just image recognition where you take a photo of thing, but we also ingested a bunch of Wikipedia and you could like read about artists and it was all linked between paintings and artists and art movements and all these stuff, which neither of us knew anything about it, but it actually was quite a nice experience.
Andrew: I saw that it was nice execution. Like I said before, I started this interview I was knee deep in your world and I saw a lot of praise that came through for this software. I don’t think that it’s useful on a day to day basis, it just demos well. Am I right?
Mark: Exactly. It was primarily a sort of crowd pleasing demo. It wasn’t . . . I don’t think that would have been our long-term business.
Andrew: So why did you sell to Google instead of continuing on your own?
Mark: That was a very difficult decision, actually. It’s weird. When it comes to it, you’ve got this sort of . . . Everything came into this like love, honor, money, fame, where do you rank those things, because we had obviously there was money on the table, but then there was also, Google wants us to move to California and so this had an impact on our personal relationships. Some of us are not into long distance and there was stuff about myself and my co-finder’s relationship. We discussed it pretty hard back and forth but we weren’t initially sure what to do with it.
I think in retrospect it was the right decision because we were probably a little bit too early for the market. Like even right now, there isn’t . . . Even with AIs taking off, the sort of image recognition stuff, there isn’t obviously a big standalone business around at the moment. I mean, there are some social media monitoring and stuff, but it kind of was one of those technologies that was probably more valuable internally to Google than it was externally as a standalone company.
Andrew: I could see that, that there are handful of companies that could use it. It’s very small, not even a handful. People like Amazon which has that photo recognition thing. If you want to buy something that you have around that . . . Right?
Mark: Yeah. There are some businesses around it. I think social media monitoring is one where people sort of say, “I want to understand how my brand is being seen on Instagram or something,” or people want to do copyright tracking, like people are taking copyright images. There are use cases out there for sure on targeting is another, but it’s one of those things that’s probably . . . It’s better as a part of a larger company than as a standalone business.
Andrew: How much did you sell for?
Mark: We can’t say that.
Andrew: Can you give me a sense of scope? Are we talking about 1 to 5 million, 5 to 20? Just to get a sense of what a product that is technically advanced but not going to be a big hit on its own.
Mark: So we can’t say the absolute numbers, but it was a life changing amount of money for me. It sort of meant that work was optional and . . .
Andrew: For the rest of your life.
Mark: Yeah, it depends. It’s probably not like flying private jets or anything, but kind of . . . Definitely, it was life changing amount of money. It did mean that I could become an investor, this major investing, all that kind of thing. It was very meaningful to us for sure. And in the scheme of the big exits like it certainly not [Uber 00:27:40]. So yeah, I think that’s the most I can tell you about that, but . . .
Andrew: Okay.
Mark: The interesting thing about it was like, in the scheme of things, a relatively small acquisition, but it wasn’t a [happy hire 00:27:50] in the sense that they did take our technology and implemented internally. And that was very satisfying. So we got to take what we built and role reverse [inaudible 00:27:59] to the Google and process, hundreds of billions of images with this software we developed part of our PhDs. And so that was really nice to see it become productive and used.
Andrew: You know what? I’m a New Yorker with a very New York sense of . . . I live in San Francisco, but I’ve got very New Yorker’s sensibilities. And it’s amazing how much I still love money because that’s the way that everything is measured in New York, like even where you get to sit in a restaurant if you even get into the restaurant. And at the same time when you were talking about the technology lives on that is strangely meaningful to me. It means a lot not just if it happened to me, but to know that it happened to you, to see that this was integrated into Google, was Google Glass, right? It was into the company.
Mark: Yeah. It was used everywhere like all sorts of places internally. Our team, we became part of a larger [their division 00:28:51] team internally and the team that built a number of systems that are used everywhere. So something I spend a lot of time working on was Google Translate where you can put your phone in a text on paper in a foreign language and get it rendered into your language if you’re reading . . .
Andrew: Yeah. That sort of thing. So Patel Shadon [SP] and I were talking yesterday and he goes, “Andrew, you should talk about more factory businesses, talk more about mom and pop type.” And I told him that’s not changing the world as much as tech companies. That two guys, two PhD students with an idea and the intelligence to go implement it can change the world in a meaningful way for so many users in use cases that you couldn’t have anticipate at the time. Like you said, Google Translate where you take a picture . . . Am I right? Take a picture, you hold your camera up on foreign language, and it reads it and it helps you identify what’s there.
This is what we’re doing here. It’s not just making money, starting company, selling them, surviving, getting reputations. We’re meaningfully impacting lives with very little resources to start, not a huge factory behind us, just a huge intelligence. What do you think?
Mark: I think that all of the best entrepreneurs are motivated by impact and not by money. I like to see things happen. I don’t particularly care about money. I’d like to see the world be changed and I have to see impact on stuff, and I like to see technology actually going and doing something useful. And that’s always been my primary motivation and I think for many, many entrepreneurs, that’s also the case.
Andrew: And where else could you have it beyond what we call, let’s say, the startup world, right? You can say in politics but in reality it’s very little chance that a single human being or a pair of human beings can have huge impact on policy. But in tech, you can. Okay. So . . .
Mark: Yeah. You need an amplification mechanism, right? And then tech it’s the four loop. The four loop amplifies your thing, and it makes it enormous. In politics, I guess it’s hierarchy and you can also have like avalanche, that’s like a revolution or something. And maybe there’s religion is another amplifier, but tech is certainly one of them. Tech, politics, religion and revolution, I guess.
Andrew: And how many people in religion as an individuals have impact this large? Okay. So you take some time off and you start to make investments. You’ve invested in a few companies that exited, you’ve invested in one that just stands out for me, Canva. You’re one of their early investors in that. Am I right?
Mark: They’re an amazing company.
Andrew: Yeah, they really are. Every time I need something designed in here, I go like my iPhone or something, and then someone on my team would go, “Well, Canva can do that. Canva can do that? And so Canva can do that.” Canva can do everything. It’s like competing with keynote presentations. I bought a Canva presentation, that’s the basis of my presentations everywhere. I had photos from a scotch night that I did the other week. I needed them designed nicely so I could send them out via email. Canva has a thing. But anyway, so you got to learn a lot about investing from that . . . about entrepreneurship from that perspective. Is there one or two things that stand out before we go on to what you did next?
Mark: In terms of what you learn . . .
Andrew: What you learn as an investor about businesses, about startups, about . . .
Mark: Yeah. I guess two things. So you see a lot of term sheets, and so you begin to learn what’s market and what’s not market. So that’s just . . . You see it from both sides of the table, you understand when I get an offer from an investor right now, I know immediately, okay, now this term is nonsense. This is not going to pass and this is . . . You just get calibrated on those terms and you just sort of know like . . .
Andrew: What’s a term that you’d see in a term sheet that you know it’s actually not going to survive.
Mark: Certain kinds of ratchets and anti-dilution terms, you get just sort of where the evaluation is. There’s a whole lot of stuff that especially less experienced entrepreneurs, and less big name investors will tend not to do it to you. But smaller investors, you see some ludicrous term sheets like really bad stuff. And so you know where to push back. So that’s the first . . .
Andrew: What do you mean? As a small investor, you’re being given these bad terms from entrepreneurs.
Mark: No. I think smaller investors are more likely to give bad terms to entrepreneurs.
Andrew: Got it.
Mark: While big investors have . . . their reputation is more valuable and they tend not to screw you around so much.
Andrew: Got it. Okay.
Mark: So that’s the first thing, just seeing a lot of term sheets. The second one is actually the investor update. So all these companies will send you through maybe once a month or once a quarter like an email just saying how they’re doing. And you see a lot of patterns there. Like the best companies and the worst companies behave very differently and they say very different things and they focus on different things.
Andrew: Like what?
Mark: Sometimes it’s hard to put into words, it’s like a sense of what they focus on. And I think product obsession is a very important one. I think building the right kind of team like structuring the team in the right way is another one. I think actually just the frequency of updates is a very good signal. Like the best companies are kind of eager to tell you what they’re doing. The ones that sort of disappear off the map for a while, I don’t know why that is. I guess they’re just like they’re struggling and they don’t want to tell you. Yeah. I should probably have some more specific examples of that, but . . .
Andrew: Tell me if I’m right in this analysis too, that I find that the best entrepreneurs just can’t help but analyze all the time. And maybe the reason that you’re getting a lot more reports is that they just can’t help but sit and analyze the industry doing what Reid Hoffman did for you. They do just instinctively all the time.
Mark: Certainly, good entrepreneurs think constantly, and by constantly I mean, every minute of the day about the problem they’re working on, about the team that they’re building, about the culture of their company, about the market that they’re in. Not necessarily about their competitors, but about those things. And it’s not just while they’re in the office, it’s sort of their entire lives are kind of like about solving the single problem. And it’s not work, it’s obsession I guess.
Andrew: Obsession. Were you up last night thinking about a problem too?
Mark: Sure.
Andrew: You were?
Mark: Yeah, of course.
Andrew: How many hours of sleep did you get?
Mark: I sleep very well. I sleep nearly eight hours a night. I’m very good at sleeping.
Andrew: I’m on and off on that. But I’ve been using this app, AutoSleep, to keep track of how many hours I sleep. And what I’ve discovered is the way I feel is not directly correlated to how many hours I sleep. It’s what I’m feeling during the day. So if I’m excited about the day and I have five hours to sleep, it doesn’t matter. I’m fully pumped and fully energized. If I’m dragging and I’m hesitant about the day, then even having eight hours of sleep is going to mean that I’m kind of tired and off. Okay. So what I’m wondering is then why after all of that, why go and start Pointy?
Mark: So I was at Google for . . . I stayed longer than my [inaudible 00:35:52] I stayed three years. And I was enjoying launching and I wanted to see the project launched, I wanted to see it have impact, I had great colleagues, I was enjoying it. But I felt a little bit like fat and lazy. I felt like it was too easy. My friend has a great analogy says like being a zoo animal. You get fed a tasty steak but you’re still in a cage. At some level if you’re an entrepreneur you kind of want to be out in the wild and see. And it’s so much harder to run a company than work for Google. I mean, Google is a fantastic place to be, but being in the big company is safe and it doesn’t have the same challenges. And I think . . .
Andrew: So . . .
Mark: I was surprised to find myself doing a second company. I was surprised to find myself doing a first company. I don’t really know, to be honest, but I always just like, I think, a lot of things about like markets and problems and I start picking apart and I get excited about ideas. And so I had these ideas that I just wanted to make happen, and probably they didn’t really fit very well within Google. And so I thought, “Yeah. Why not? Why not give a shot?” which is partly like sort of naivety, not knowing exactly how hard it’s going to be because it’s really, really, really hard, but then, yeah, it’s rewarding too.
Andrew: That’s the part of how you think that I’m curious about, that you didn’t think about Pointy because you had like the idyllic origin story. You’re trying to find hat, and you couldn’t figure out what store had the hat and you wish that there was an app that would do it, and you said, “Why didn’t anyone create it? I’ll go and create it.” That’s not the way that you ended up with Pointy. It was more like . . . Was it?
Mark: Well, there was an element of that for sure. That was sort of a little spark, but it wasn’t purely thought, I would say.
Andrew: It was that as a set of experiences, but also a markets and products analysis.
Mark: Yes. I think that’s fair. Yes.
Andrew: So the first part I’ve heard a lot from entrepreneurs, and frankly, we reward them with telling that story because it’s the kind of story we could repeat. If you had a hat story, I would tell a friend and then they would be amazed by how you came up with this idea. So we hear a lot about that. The markets and products analysis, we don’t because it doesn’t travel well and it’s more intellectual. I’d love to hear from you how you thought about markets and products and how that led you to create Pointy.
Mark: So there was an element of that first story where I just had a friend who we turn around and turn back and forth ideas, and he was just telling me this story about not being able to find something and we were kind of thinking this is sort of ludicrous that this problem can’t be solved . . .
Andrew: What was it that he couldn’t find?
Mark: In the official version I said it’s a craft beer. It was actually like chapatis or something which it doesn’t . . .
Andrew: What is that?
Mark: It was some sort of Indian food.
Andrew: Oh, got it. Chapatis.
Mark: In most stories I say it’s craft beet because when I try and explain exactly what this is, nobody knows what that is. And yeah, he was trying to find something in particular. And so we were thinking about like, “How can this problem be solved?” And at the time it was 2014 and we’re thinking, “Surely, somebody else is going to solve this problem.” But nobody had for years and just been opened for years and years.
So that started me thinking about it. And so I went to start talking to customers. So I just walk into stores. I just asked them, “Have you got five minutes? Can I ask you some weird questions?” Generally, they would say, yes, and I would ask them, “How do they manage their inventory? Do they have a website? How could we solve the problem?” And I started thinking about in very weird ways. Like my initial plan, and I was very serious about this plan. I thought about [creating for a 00:39:13] month, was that I wanted put a robot into every store. So I’d get a Roomba like a vacuum cleaner and put a camera on top, and this would drive around the store every night and photograph all the shelves and I would read the product availability and the prices. I spent ages thinking about that problem. And the reason I rejected it was I thought that the mobile phone subscription for the data would be too high like the images. And that was the only reason I thought that problem.
Andrew: How? But that is so smart. And you just can’t anticipate that they’re going to have Wi-Fi that’s available to you. You can’t count on that.
Mark: In retrospect, it was probably a crazy idea. I mean, it was a crazy idea. But that was like my first approach to the problem. And then, yeah, then after a while like you sort of spend a while with it and you’re like, “Oh, okay, maybe we could get the data in this other way.” And so you just sort of pick it apart and think all the different ways you might sort of do the technical part of the problem, and then sort of doing back of the envelope costing. And it’s amazing how far you can get with that, doing it like . . . Do you know the term “for me problem” where you just sort of estimate something from like what is magnitude? So even before like sitting down with a blank sheet of paper and just in an empty room even without the internet, you can work out pretty well. How many retailers can we acquire for what cost? How big is the staff going to be? What are the cost drivers of the business? Who are the potential customers? You can sketch out the whole business pretty well just from thinking about it in an empty room. And also talking to customers. So that was how we started. That was the initial.
Andrew: So you actually would go into customers, local stores and say, “If this existed . . . ” what? What was the question that you had for them?
Mark: Initially, I just wanted to understand how they ran their business. So I was like, “Do you keep inventory? Is there an inventory system that you have that I can tap into? Do you use a barcode scanner? Do you have a website? Would you be interested in this product if it existed?” Yeah. So to just kind of getting basic facts about the highly existing world was setup.
Andrew: How many conversations would you say you had like that?
Mark: Not that many. Maybe 15 or 20.
Andrew: Okay. I still . . . You know what? I think that we underestimate how much guts it takes to walk into, maybe “guts” is the wrong word, to say, “You know what? I’m going out of my spreadsheet world, out of my robots can rule a store world into an actual store where the person has no interest, no financial gain in talking to me and asking them about something that would be a little confusing at first.” And I find that that’s something that separates the people I interview from the people who just have ideas and don’t get interviewed.
So you know what? Let me take a moment to talk about my second sponsor, and then we’ll come back and talk about there are two things that I highlighted for our producer and I said, “I love that you got this. This is the way we should be talking to our guests because this is what makes things interesting.” All right. The first note about a company called Toptal. Have you heard about Toptal?
Mark: I have not.
Andrew: You have not. Good. As an entrepreneur, I think you’re going to really get to love them. Here’s the thing about Toptal. They recognize the same thing you did, which is, Google is a wonderful place to work, but there are a lot of people who don’t want to work at Google. Even though they have offices in many parts of the world, there are many great engineers who say, “I’d rather live in my home town and work on interesting problems. And those are the types of engineers who would have the thoughts like you, which is, “What if we put a robot in a store? Well, that wouldn’t work. But what if there’s this point of sale scanner? Can we connect to that?” They think about problems and then come up with creative solutions for it. They don’t want to be told, I need this, this and that exactly. They want to be told, here is the problem and I could think through the solution because I’m the engineer, this is what juices me, and this is what I’m great at.
That’s the type of engineer, and correct me if I’m wrong, that Google and Facebook and some of the top businesses here in Silicon Valley are known to attract and that’s what makes them great. The thing is, if you’re an entrepreneur and you want to hire that level of talent, and it’s really hard. It’s hard to go through the tests, it’s hard to go through the time to find them. It’s hard to actually attract them. That’s where Toptal comes in. They have a reputation for attracting that top talent, that’s why they’re called Toptal, top talent, by creating these great tests, by challenging developers, and by saying to them, “Once you go through these tests and you pass and you’re in our network, first of all, that’s a point of pride because other engineers will know that you’ve done the work. And second, it means that we’ll place you in great jobs where you can work on interesting problems for great companies.”
And so that’s the proposition the Toptal has made for engineers. As a result, they have a network of fantastic engineers, I’d say Google quality, Facebook quality, etc. I don’t know that I’d officially want to put those companies stamp of approval on anything because I don’t have permission to use their names, but I as an individual can tell you that’s what they’re aiming for, that level of intelligence.
And so when an entrepreneur comes to them and says, “I want to hire a great developer.” Toptal will talk to the entrepreneur, talk to the CTO and say, “How do you guys operate? What’s the problem you’re working on? What’s the environment that you guys have? What software do you use?” And then they could say, “All right, we have people in our network, we’ll introduce you to them.” Or, “Actually it’s not a good fit. We can’t help you out.” And if they introduce you, you can often get started within days.
There’s a reason why Andreessen Horowitz and so many others have backed Toptal. This company is fantastic at doing this, at finding the best of the best developers and introducing them to businesses that need them. If you are a Mixergy listener, they’re going to give you 80 hours of Toptal developer credit, and I’ve got to tell you, Mark, many interviewees have taken me up on this offer.
Eighty hours of Toptal developer credit when you pay for your first 80 hours, and that’s in addition to a no risk trial period of up to two weeks. You have nothing to lose by working with them, you also have nothing to lose by calling them up and saying, “Hey, I need a full time person. I need a part time person. I need a team of people. I need someone for a project. I need someone for a year.” Whatever it is that you need, you go to Toptal, they’ll talk you through it and they’ll let you know if they could find the right person. It is, well, 100% satisfaction guaranteed.
But I want you to go to the website and look at the details. The details aren’t in fine print, they’re right there on the page that you’ll see when you go to toptal.com/mixergy. You’ll also see a very gorgeous model over there. All right, toptal.com/mixergy. The gorgeous model is me.
I wonder how many people think I’m a sexist for saying gorgeous model. Well, I’m just trying to like pique people’s interest and then say, “Hey, you go over. They took my photo and they put it on.” That’s also smart that I had the founder of Toptal in my house for dinner. He talked about how he sweats every pixel on the site, every detail. So they couldn’t just do what everyone else does, which is create a URL redirect, and then put the offer up. They had to say, “We have to match it up with Mixergy’s brand, we have to make sure that Andrew is on there so that people rec . . . Every bit of it has to be micromanaged. Anyway. All right. You came up with this idea, you then needed to find somebody to help work it out, and this is where Charles comes in, right?
Mark: Right, right. Charles . . .
Andrew: Tell me about where Charles was and why you connected with him?
Mark: Charles is a great story. I left Google in late 2013 and early 2014. So I spent a little while just sort of kicking the tires of the idea of myself and just sort of basically convincing myself it would work. And I started looking for a co-founder. We have a hardware, a part of the business where we build this device that connects to the point of sale. We make the circuit board, we do the firmware. We all do that really low level stuff. We have like a factory making these things. That’s a world I know nothing about it. And so I needed somebody to help with the hardware side of the business.
And Charles was a friend from PhD who I knew had experience there. But I also knew that Charles was busy and there was no way he could become part of the business. He couldn’t be my co-founder, but I thought he’d know the right person at least. So I rang Charles up. So Charles had gone this two years sailing adventure. So he sold all his possessions, himself and his girlfriend, they bought boat, they’d had sailed out of the harbor. He proposed to her on the way out of the harbor. They’re on this two-year trip. They were engaged. They were about two months into that or maybe three months into that. So they’d sail from England down to Mediterranean, and they were anchored off New York at the time.
So the rang was up and I said, “Could you recommend me a good hardware engineer to help me with this business?” And Charles got really excited about the idea and he was like, “Well, maybe I could be the co-founder.” And I was amazed and delighted because I thought, “Well, Charles is the best possible person, but I just never thought that he’d be interested given that what he’s done.” So he said, “Okay, I want to just sort of sanity check some things.” But he was on a boat in the middle of nowhere with no equipment. So he got his fiancée’s father to fly down with his hand luggage full of oscilloscopes and soldering irons and breadboards and stuff. So he brought then all his equipment. Charles made a prototype of the Pointy device on his boat that anchor off New Yorker like rocking rand and it worked.
And at that point, he had about a week of really hard thinking with himself and his fiancée and they decided this is a good opportunity because Charles had already been looking for startup ideas. I think himself had been thinking when he comes back he might do a startup, but this one just sort of really resonated and I think also he’d been experiencing the problem actually, which is really good because he’s been traveling and he’d pull in to foreign port, maybe like, “I need some particular product that would be very hard to find.” So he’d been really experiencing the problem as well, so he thought, “Okay. This is really good.”
So he turned his boat around and he sailed back to Ireland where we’re based. And our first conversations were really about like, “Could you get across the Bay of Biscay before the winter storms arrive?” So it was like hard, hard questions for our startup. And he sailed into Dublin and he still lives on his boat in Dublin now with a one-year old child as well. So he’s living on his boat and I’m running Pointy with him together.
Andrew: I’m looking at his page on Oxford University’s robot subdomain. He seems like the perfect fit. His research interests at the time of this writing were Active Vision and SLAM. SLAM is Simultaneous, Localization and mapping. Did that sound right?
Mark: Yeah. That was when he did his first PhD, but he also did a lot of marine electronic. So he built a lot of the systems that went into the lifeboats and he actually built a lot of the security systems for the part of the London Olympics. A lot of the things that go into super yachts as well and the things for the military. So . . .
Andrew: I’ve looked at various tracking methods and how they could be extended and applied to track marine targets. And then it goes into detail of it. Yeah, I could see how this guy would be the perfect fit. So the two of you got together, he starts building this device. I can’t really describe how small it is beyond saying it’s smaller than your hand. It basically, if you close your hand, you could make it disappear. Am I right?
Mark: Right, yeah. It’s kind of like a size of a matchbox or something. It’s pretty small.
Andrew: Yeah. And so all the stores have to do is put it in their stores and now it’s on you, if I understand it right, to go into stores and say, “Will you put it in?” And so you start walking store to store to store and you go to Donnybrook Bikes.
Mark: That’s right. Initially, we did store to store. So the very first day we had an investor demo coming up and we had a store that was owned by a friend who had agreed to put it in and we showed up in the store and there was a technical problem, it wasn’t going to work in that store. So we felt, “Oh crap. We’ve got an investor demo tomorrow, we have no demo store setup.” So I just walked into local neighborhood bike store, I just walked in and I was like, “Hello, you’ve never met me before. I have this random product. I want to attach it to your point of sale.” And it’s not the easiest sales pitch, but amazingly they said, yes. And that was a very good sign. So they got set up and we showed that it showed it working and they’re still one of our customers now three years later.
Andrew: And you’re doing it for them for free.
Mark: We did it for them for free. They were like one of the first . . .
Andrew: So I’m looking at the back end of their site, their source code. Their site is a WordPress site and all it shows is every blog post is basically . . . the way they upload images of what they have is in blog posts. Am I right?
Mark: They have an existing website, a WordPress website, but they also have a site on pointy.com that’s listing all of their inventory.
Andrew: So how do I find the one on pointy.com?
Mark: Well, I guess you search “Donnybrook Bikes Pointy” you’ll probably find it.
Andrew: And it’s pointy.com, so I wonder if it’s just Donnybrook Bikes . . . All right, I’ll do a search for that. Okay. I see. So whatever they have on their home page is not the right answer. It’s not what you guys built. Okay. I see it here. Got it. Okay. This looks much better by the way. They even have . . . There’s a Snickers Protein?
Mark: I guess there is.
Andrew: I guess so. All right. So . . .
Mark: One of the weird thing is like, so we see new products coming through. We’ve seen . . . Every single day we see 3,000 new products that we’ve never seen before. So the world is just producing products constantly.
Andrew: So here’s the thing that’s interesting. I can see it here. I can’t buy it on the site, at least not this Snickers protein, but I can get directions to the shop. Excuse me. And above the button, there’s a Stock Status button where I could check to see if it exists in the store. How do you guys do that?
Mark: So that’s based off the scanning pattern. So if that snickers bar is selling every 10 minutes and that doesn’t sell for two or three hours, like our model looks at that data and says, “Okay, it’s gone out of stock.” And that actually does a surprisingly good job.
Andrew: Wow. I wouldn’t have thought that would work. Okay. So I see what you’re doing, I see how you get him up and running, I see the first store. How many of these stores did you guys sell yourselves before you started to bring in a sales person?
Mark: We probably did the first 20 ourselves, just myself, my co-founder and the early team. And we spend a long time. We spent several months with those first 20 stores just refining the product and making it better. Then I think we too took on our first salesperson around then and he did the first maybe 500 stores. And we initially did them door to door, but door to door works fine to get started but it doesn’t really scale. So we really reinvented the whole sales process after thus, and now it’s very much online.
Andrew: So I want to understand how that evolution happened. And that actually is the one bit of criticism that I sent to the producer. I said, “I want more details about how they went from one store, Donnybrook Bikes to 3,300 today.” And so here’s what I got. First was just go door to door, then it seemed you hired a team of sales people, team was two people, right? In Ireland?
Mark: Just one person to begin with, yeah.
Andrew: Okay. Eventually you got to two people, and then with two people, you got 14% of the stores in Dublin.
Mark: That was with one person.
Andrew: With one person.
Mark: Yeah.
Andrew: Okay. All right. So then with one person, you’re just going door to door, and stores are willing to put this in for $3,300. They believe that they could get $3,300 in incremental sales from . . . How?
Mark: Three hundred dollars.
Andrew: Oh, 300.
Mark: Yes.
Andrew: Oh, hang on a second. So $300 . . . Did I put that math right? Times three though . . . I see. It’s the 3,000. Got it. Okay. It’s 300. I got that wrong. Okay. All right. So they believe they could get an extra $300. How would they get an extra $300? Is it people Googling for Snickers Protein and then discovering that Donnybrook has it, and that . . .
Mark: Yeah. That’s exactly it.
Andrew: That’s what they believe.
Mark: And there’s an enormous number of those searches going on. Google has this whole thing about near me searches, people saying, “Where can I find a bicycle helmet in purple near me or something?” Those searches are as popular searches for the weather, which is one of the biggest searches online. So there’s enormous volume of people looking to find where is stuff available and by being on Pointy and having their products displayed, they just start appearing in those searches. There’s very little competition for those searches because not many people are listing their product inventory especially locally, so they can pick up additional traffic and somebody comes into the store. And we have all these great stories from retailers saying people drive across town or sometimes they drive even across the state to find particular things that they’re looking for. They come into the store, the store makes an additional sale. And you don’t have to make very many additional sales to recoup that $300 investment.
Andrew: Yeah, yeah. I could see that that makes sense. And I could see how it’s been showing up in search results. That Snickers Protein didn’t show up in the first search result, but number one, I’m not in Dublin, so it’s not that look at the advantage there. And number two, you still showed up on the first page. Okay, so that’s the sale. You do this, we’re going to start getting you natural SEO and start naturally bring people in the store, and that’s an easy sell. That’s like less than what it would cost them to advertise in the daily newspaper.
Mark: Yeah. And I think that’s really why we got this very high penetration of stores because retailers here they’re like it’s kind of a no-brainer. If it brings one additional customer a week, it’s going to pay for itself. It doesn’t have to do a lot to be worth it.
Andrew: And it’s a set it and forget thing and they don’t have to do any more than that. What about all the data you’re collecting about what’s being sold where? Is that the kind of thing that you’re able to sell? Is that the kind of thing that you’re able to use as market intelligence?
Mark: We don’t do any of that. Like we thought about . . . It’s a sensitive issue because the retailer privacy is really at the center of the business. We want to make sure that retailers have to trust us and be comfortable with us. Otherwise, we have no business. And so we have talked to some retailers. We’re kind of thinking, well, we do see patterns here, we do see what people are searching for. And we do give a little bit of that reporting to the retailer where we say, “These products are trending at the moment. There’s a lot of search interest in those products.” And we have thought about maybe like saying and recommending people like, “You should start selling this product because we think it’ll sell out of store and that kind of thing.” But that’s still a discussion with the retailers. We want to do something that’s not crossing any lines there because we’re very, very conscious of basically doing that correctly and not crossing the privacy line.
Andrew: All right. So you have to keep scaling up. You get one person, he does a lot of damage, 14% of stores in the city is really impressive. Then the next step is you start to hire . . . you look to hire more people. You told our producer, “We thought getting keynote presentations or having them actually present to us would give us an indication of how good sales people they are. It turns out that’s not true. Why isn’t it true? Why isn’t someone who sells to you using a presentation, a good salesperson necessarily?
Mark: Well, they might be good at enterprise sales, but we’re selling to retailers. So this is when we run our first sales hiring process, just we got them to come in and talk to us and give us a PowerPoint presentation. And it turned out at the end of the interview process we had no idea who was good and who was bad because we just couldn’t tell them. And so what we decided was like, let’s take them out on to the street and let’s run a live sales example with them. Let’s walk into stores and try and sell Pointy to stores. And if we create a little bit of carnage by doing this, like we have to pick up the pieces a little bit afterwards, that’s okay.
And so we took, I think maybe four or five candidates out on the street and just walked into stores with them and then just saw how they performed in a live situation. And that was infinitely more informative and let us pick like a good sales person. So I think the key to every interview process is trying to make the interview as similar to the job as possible. Our coding interview should be by coding, our sales interviews should be by selling because that’s what you’re trying to measure. So let’s try and make the interview as similar as possible. Giving a keynote presentation or a PowerPoint presentation is not very like selling to a store.
Andrew: Right.
Mark: So it was that interview.
Andrew: So, it worked in Dublin and you said, “Great, we’re going to go to San Francisco because these guys embrace technology.” I’m telling you. You should see . . . And I’m sure you did see how many restaurants have six iPads on their counter because they’re willing to try every one of the local companies that will deliver or let people order via an app. You’ve seen that?
Mark: Yeah. Well, I think that there’s a pro and con to that and that they’ve been sort of also bombarded with check offers. We definitely have good uptake in San Francisco. We have a pretty decent density of stores here, but what we found recently from our marketing is that some of the city . . . the other cities in the U.S.A even in the rural of U.S. that are responding better because . . .
Andrew: Really?
Mark: It’s they’re not so bombarded with these offers. And it’s also because in a rural setting, sometimes people are driving further to local stores and . . .
Andrew: Makes sense.
Mark: And the need is a little bit sharper sometimes. So we’ve had a really, really good uptake really across the country. So there’s retailers in all 50 states using this now. You can name pretty much any city or even small city of U.S. and they’ll be one or two retailers there using . . .
Andrew: And what about this then? You had the Irish guys come in, you put them up at Airbnbs, you add an Airbnb and you said, “Go to town. Go around and do the same thing you did back home here.” Why didn’t that work?
Mark: It’s a good question. It didn’t work as well. I guess it’s like there’s just differences between different markets. We just iterated on the process. We find that slightly different things work better in the U.S. You just have to figure out how to talk about it, what the local market needs are. It’s always a little bit different, not very different but small things matter in a sales process. So yeah.
Andrew: Is there [one of them 01:00:25] that stands out to you?
Mark: It’s actually quite hard to put your finger on it. It’s sometimes, there’s a lot of small things that we had to change. There’s . . . I can’t give you any . . . We’ll use that example. But a lot of small things and they add up to quite a big difference in whether people are going to be interested or not.
Andrew: You said you started going online, that helped. What was the online process?
Mark: Yeah, I think actually one of the things I would say is that we had less media coverage in the U.S. So when we came . . . In Ireland we had some reference pieces in the newspapers and the radio and stuff that kind of helps. In the U.S. we were starting off, we weren’t . . . we probably even were using the wrong words. We weren’t using like American words to communicate properly. We didn’t have the media references and stuff. It took a little longer to build up those test cases. And people always want to see references. They were like, “Show me another story using this,” but it’s more they’re like, “Show me another pet store using this,” or, “Show me another store in the Bay Area using this.” And so until you have those reference cases, it’s harder to convince people. And so we spent a little while building that up.
Andrew: What did work online? Facebook ads seemed to have worked for you guys for reaching stores, right?
Mark: Yeah, Facebook ads are our most sort of productive channel.
Andrew: So you’re saying to me that someone owns a store will see on Facebook an ad for this thing that will help bring customers and they’ll click it and then they won’t buy it right away, right? What will they do?
Mark: Sometimes they buy it right way or sometimes they just want to learn more about it. And they will basically schedule some time with one of our team to speak about it on the phone. So they might speak about it on phone even for five minutes. It’s just to kind of sanity check things for their point of view.
Andrew: And then you go in and install it.
Mark: No, we post it to them and they self-install it.
Andrew: And they self-install it. Okay. And then finally, as you were trying to rejigger this whole sales process, you had six months of no growth in sales. And you told our producer, and this is the last sentence that she wrote in the notes for me, “But I was never worried, I never had doubt.” How do you not have doubt when you have six months of no sales and you’re going against the stream of going offline when everyone else is going online? What is it about your making?
Mark: Well, we didn’t have no sales, we just had flat sales. They weren’t growing for about six months. Yeah. So we were like we’re fine. And now we got the model right and they’re kind of really, really [inaudible 01:02:47]
Andrew: I get it now, but back then, what do you think it is about your make up that made you say, “We’re going to figure this problem out,” and not, “This is just not for me”?
Mark: I think partly we’d seen it work in Ireland and we knew that retailers ultimately would respond to it and it was just like the tactics and the sales mechanism that we had to get right. We know that when retailers hear it and get, they respond very, very well. It’s kind of like a no-brainer for people when they engage. I think we just weren’t initially kind of reaching the audience. We didn’t have some of the reference cases and that kind of thing. So we never really doubted that it was going to work. It just required a bit of persistence.
Andrew: And you did it. You raised a bunch of money, you built it up, you’re constantly growing now. I’m excited to have you on here. Thanks so much for doing this interview. What do you think? How did this interview go for you?
Mark: It was pleasure talking to you. Thank you very much.
Andrew: For me too. I really like . . . I like how substantive you are and how detailed you are in your memory of what you did. All right. For anyone who wants to go check it out, here’s the thing that I found about. You got great press now, like really good press, complete with . . . I don’t know who takes the photos, but here’s one. Oh, it’s you guys. Somehow one of you guys took a photo or someone in your company took a photo of you and Charles. It looks good. You guys, your press is dialed in. Here’s the one thing that I found that some media makes a mistake in or maybe I made a mistake. They say that there’s an app. Is there an app for Pointy?
Mark: There was an app in Ireland. We didn’t launch it in the U.S., so that’s why it gets some confused media on that one.
Andrew: Yeah, so they say users can go get an app. I go on the App Store I’m trying to find it. I go online to look for a link for it. I go on your website to look for it, and it doesn’t exist.
Mark: We took it away. We took it away. So that’s what happened there.
Andrew: Okay. That makes sense. All right. For anyone who wants to go check it out . . . Well, frankly, if you have a store, you can go check it out. If you don’t . . . Well, you’ve got a question. Can you take a question from the guy who we flew in here?
Mark: Sure.
Andrew: Patel Shadon, come on in. Get on mic. Look, it’s calibrated to your dark skin too.
Patel: Hey Mark, how are you?
Mark: Fine.
Patel: Okay. I was listening to your interview, the whole interview. I had just one question. How do you make sure that there is an entry barrier to someone who is entering your business? How do you ensure that?
Mark: We solved a number of very, very hard technical problems. So we have like a very wide moat, I would say, and we’re not particularly worried about competition. We have no direct competitors. I mean, when we talk to retailers like they evaluate this as a unique proposition. They’re not sort of lining it up against anything else. So the technical part of how the hardware works is extremely hard. We have some patents on that, granted patents, and also we have to build up the product catalog data. So when you scan the barcode, we have to get the image in the description. We have a really big data pipeline to get that right that was very hard to do. Then we have all the SEO, which is like there’s a lot of investment to get it right. We have relationships and integrations with other places. And then of course, we have our sales model and our brand. So there’s really quite a lot of barriers to entry. Selling or distributing to small retailers is very hard in itself. So that distribution is a barrier. I don’t worry at all about competition really.
Patel: Okay. And do you see this kind of application going to, let’s say, for restaurants or, say, medical store?
Mark: Restaurants, maybe not so much because it’s tailored to people who sell products, package products. Medical stores in the sense of pharmacies, for sure.
Patel: Yes, pharmacies.
Mark: We have a lot of pharmacies and user is actually is the second most popular category. So yeah, they can definitely use it. It’s for a lot of the things sold in the pharmacy, cosmetics, but also over counter medicine and all those kind of things, yeah.
Patel: Okay.
Andrew: How has it been to be here at Mixergy office?
Patel: Really nice.
Andrew: Yeah?
Patel: Really nice.
Andrew: Well, good.
Patel: Thank you.
Mark: All right.
Andrew: Thanks for jumping on camera here. I’ve said in the past, people can come in the office whenever they want to and he’s here working for the day and of course we spent the day yesterday, two days ago, working together. All right. It’s pointy.com for anyone who wants to go check it out. And I want to thank the two sponsors for making this happen. The first will host your website right. It is called hostgator.com/mixergy. And the second will help you hire your next great developer. It’s called Toptal, Top as in top of your head, tal as in talent. So it’s toptal.com/mixergy. Thanks so much for doing this interview, Mark.
Mark: Very nice talking to you. Thank you very much.
Andrew: Same here. Thanks. Bye everyone.
