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. And when I started out, I was determined not to accept advertising because I thought, you know, advertising actually is going to be a distraction. It turns out I was wrong. Advertising actually turned out to be pretty helpful for me. But what I wanted was a direct interaction with my audience. I wanted my audience to like something that I create so much they’d be willing to pay for it, which is why I created a premium membership on Mixergy where people can get courses taught by the entrepreneurs that we have on here. And when I first came up with it, people pushed back on me and said, “Andrew, no, you shouldn’t charge for anything. The internet wants to be free.” Do you remember all those?
The internet does not want to be free. Content does not want to be free. They’re all inanimate objects or figments of our understanding. They’re not sitting there in jail saying, “Please let me free.” Instead, what I found was by creating something that my audience actually wanted, I was not only able to monetize, but able to be more in touch with what they’re looking for.
All right. The reason I’m bringing all this up is because today’s guest is someone whose background I’ve known a little bit over time and his latest business, he’s created a bunch of them, his latest business is called Podia. Podia allows content creators to sell online courses and memberships, oh, and digital downloads. So he is all about selling content, selling information, selling education to audiences. Actually, his software Podia enables content creators to sell it. His name is Spencer Fry. But Spencer, I’ve actually known him a little bit more because of Carbonmade. Dude, Carbonmade kind of set your reputation, didn’t it?
Spencer: Yeah, it sure did. It was, you know, the first online portfolio for artists and designers to display their work online back starting in 2005, and it grew into a huge business, and it was a fully bootstrapped business too.
Andrew: I’m actually going to say it’s not because it was the first, because frankly, people could have put their stuff what was it? Try this or . . .
Spencer: [inaudible 00:02:08] platform.
Andrew: You know what it was? It was the first one that looked good, that made artists feel like they should belong on there as opposed to some other crap that was designed for posting portfolios. All right. So I’m going to ask you about that too. I want to ask you about how you built up this latest business. I want to ask you some questions that I know you’re not going to want to answer about how a successful Podia is.
And I could do it all, thanks to two great sponsors. The first is Regus. I rent office space from them. I use their office all over the world. I want to promote it to my audience. And the second is the company that I recommend to anyone who wants to do marketing automation use. It’s called ActiveCampaign.
Spencer, I’m going to ask you the question that you do not want to answer. You told our producer, “Tell Andrew to back off of this question.” But I got to ask you. Revenue, how’s Podia doing? I want to get a sense of size.
Spencer: Sure. So, I mean, we’re doing very well. We’re entering our fourth year in business. But as I mentioned earlier, like, we are venture capital-backed business, and so we don’t really talk about our revenue, mainly for the reason that there are a lot of competitors in our space. We have a lot of people that we’re sort of fighting over customers for, and we don’t really want [inaudible 00:03:13]
Andrew: But you’re not going to lose a customer because you’re making half a million versus 10 million. You are?
Spencer: For sure. For sure. No, I’m saying it’s less about us losing customers. It’s more about we don’t want, you know, anyone that’s in this entering this space because there’s already enough people.
Andrew: You don’t want people to listen to this say, “This dude, Spencer’s making money from this, and I’ve seen that these other companies are making money from this. I could create software myself and monetize it”?
Spencer: I mean, that’s part of it. I think also when you sort of set your revenue and kind of let that number be known, you do have, say it’s like, more competitors, you do face, like, more kind of heat from your competition. So whereas with Carbonmade we were more . . . Yeah.
Andrew: My sense is also, you don’t want to be measured against them. This is a clear metric . . .
Spencer: That’s a big thing too.
Andrew: . . . that once you put out there, everyone can say, “Well, these other people are doing 2x more than him. That means their software must be twice as good. These other ones are doing half as much. That means their business is half as good and maybe they’ll catch up.” It kind of puts you in this competition with them in using a metric that you don’t necessarily want to use for evaluating what you’re doing.
Spencer: Yeah. Like, head count is another big one like that. Like, we obviously talked about how many people work at Podia, but that’s another one where people sort of say, “Well, you have a fewer employees so you must not be as big.” But obviously that’s not always the case.
Andrew: How many employees do you have?
Spencer: We have nine.
Spencer: [inaudible 00:04:33]
Andrew: And then, could we say whether you do over a million or less than a million in revenue and I’ll leave it there? I promise I won’t ask any follow-up questions if you answer that one.
Spencer: I’ll just say, we can’t talk about it, but that everything’s going very well.
Andrew: Okay. I see the numbers here. I’ll be honest with you, I like you, I admire your style, and I would have had you on for Carbonmade, but I wouldn’t have had you on for Podia unless the numbers were strong, and I see the numbers in front of me, and we gave you our word that we wouldn’t share them without you sharing it. I also gave you my word that I would push like hell to get you to talk.
Spencer: You did. You did.
Andrew: All right. I get it. I want to get to an understanding of how you got here. Let’s go back to when you were 16 years old and the FBI came knocking on your door. Shall we?
Spencer: Yeah, yeah.
Andrew: What were you doing at 16?
Spencer: Sure. So, I mean, basically from the age of 11 . . . so I’m 34 now. So this was a while ago. From the age of 11 to 18, I was living on Yale’s campus. Both my parents are professors there. So I had very, very high-speed internet from an early age. So I got really excited about computers. You know, I started building my own computers, programming, etc. And then at around 16, I started getting into like illegal file sharing, illegal file sharing market and started kind of trading wares, files, mp3s, etc., kind of around the time of Napster.
Spencer: Yeah. And then one night my mom actually got a phone call to our house. We were living actually like on campus. And they thought that she was running a Oscar’s website because our household was using a third of Yale’s bandwidth. And she’s a film professor, I should mention. So it was the night of the Oscars, and they were like, “Professor Peucker, you know, your household is using a third of Yale’s bandwidth.” Like, “What’s going on?”
And she obviously called over to me because she’s not . . . Well, at the time she wasn’t very computer literate. And then I was like, “Oh my god, it’s my hotline servers.” And so I immediately pulled the plug on the Ethernet cable, started to take apart the computer. And then later that evening, broke the hard drive and put it in different dumpsters around the campus.
Andrew: And you were also doing . . . first of all, wow. Did your parents punish you for that?
Spencer: No, because they actually never really found out.
Andrew: And then, didn’t you also do web hosting, IRC, bots? What was that business?
Spencer: Yeah. So that was actually around the same time, but during the summer, my friend and I started this company called Alternate, which was like a web host, an IRC file sharing service. And we also did like shell service, which for IRC, which is like this bot program back in the day. And then we had these co-located servers in Madison, Connecticut, because I grew up in Connecticut. And we started kind of processing credit cards and signing up customers right after school broke for the summer. And then by the end of this summer, we kind of got a bunch of issues because we started getting a bunch of charge backs from our customers because we were advertising on IRC, and everyone was using illegal credit card.
And then one night the FBI called and said, “Hey, we’ve got some issues,” and then it turned out that someone had hacked our servers because we weren’t very good like network sys admins at the time. And then they hacked our servers, and then hacked the FBI computers using our servers. And then there was about a few weeks, and like about a month of me having to share logs and ultimately, we shut down the business. But that was a very . . .
Andrew: But then by hacking . . . they hacked your servers, and then they put in credit card numbers for what? To test see [inaudible 00:08:04] working?
Spencer: So that was like a separate issue. The credit cards were just our customers that were using illegal credit cards, and then the FBI thing was completely different. Like we had a [inaudible 00:08:15] hole in our server, and hackers had hacked into our computer and then hacked the FBI computers using our computer.
Andrew: Oh, got it, got it.
Spencer: Just to try to kind of mask things.
Andrew: And what was the business, again? You were selling what?
Spencer: It’s called Alternate, and we were selling a web-hosting shell service, which was these IRC bots back in the day. And then we did like a few other different types of hosting. But those were kind of the main . . .
Andrew: IRC was just internet relay chat. It’s the way that people chatted before Slack and Skype and AIM even.
Spencer: [inaudible 00:08:47]
Andrew: But was the bots that you guys were creating for that platform?
Spencer: There was this service called like the shell accounts and basically what those were were, it would sit in a channel, and they would kind of act as an administrator, and you had various commands on the bots, and it sort of kept the uptime for an IRC channel because technically if everyone left an IRC channel, then anyone could claim it. But if you had a bot that ran in there 24/7, then no one would leave the channel, and then you would stay the owner basically.
Andrew: Got it.
Spencer: So all these popular channels like Hash, Mac and like Hash Wares and stuff like that were all like bot-protected.
Andrew: Okay. And then 2003 . . . Wow, man. Impressive. Do you make good money for that?
Spencer: So the hosting company, not so much. The illegal file server, oh, yeah.
Andrew: Oh, because people had to pay to get onto your file server. And then once they were there, they could trade any software they wanted.
Spencer: Yeah. Pretty much. I made about $50,000 in three weeks until that got shut down.
Andrew: Wow. And I’m guessing that you created some kind of script that would go and post on all the IRC boards. This is available, go get it. and that’s how you promoted it.
Spencer: Yeah. We actually had a really brilliant system for collecting money too. So back then pay-per-click ads paid about $3 or $5 per click. And so I had this dummy website with ads on it, and then I would tell the users to go to the website and click the ad, and then the login would be the first word of the first sentence and the password would be the second word of the second sentence. And that’s how they got their credentials. And then I bought fake traffic to and direct it to the website so that the click-through numbers look legit. So I had a whole scheme going on.
Andrew: Wow. You know, the fun thing about that is that there are no rules when you’re in a world where you can get away with this stuff, right? Because you’re a kid.
Spencer: And you’re so young, you know.
Andrew: And you get to see the results of your actions, and then you can start to put borders around which you’re allowed to do and which you’re not. At that point, did you become like a business creator? At that point did you become an entrepreneur and a true creator, maker, sense of the word?
Spencer: Yeah. I mean, I grew up on the internet. I spent so much time on it. And at the time it was such a wild, wild west, and there was, like, because people were playing around with things and doing like all sorts of neat things, and I just got really excited working on the internet. And just seeing that you could make money from, you know, your computer, from your home, it was just thrilling.
Andrew: You know what? I finally took all my book notes since I started using the Kindle. I exported them. I created a table in Airtable so that I can have them all organized, and then I created tags for each one of my notes. And one of the tags that I created is the word gray. Just to tag all the stories of the gray area, shady stuff that entrepreneurs whose biographies I read about, all the stories of the gray things that they did when they were getting started. And it’s amazing how many of them were willing to do that. How many of them in that creative space did push the boundaries beyond where they should go. And I think that there’s some correlation. I’m not scientifically looking at it, but I do have to stand back and say, “There is something going on here. There is a connection.”
Spencer: Yeah. I mean, we didn’t really know that it was. I mean, we kind of knew it was illegal, but we were young, and also the internet was such a new place that we didn’t really kind of know what’s going on.
Andrew: All right. Let’s talk then about the more significant thing. I still want to get to, I keep calling it Podia, but you’re saying if Podia.
Spencer: Podia. Yeah, it’s the plural form of podium, so kind of Podia, podium.
Andrew: I didn’t think of that. All right. We’ll get into that in a moment, but I want to build up here. The first, like, real business that you created seems to me to be TypeFrag, right?
Andrew: What was TypeFrag, founded 2003?
Spencer: Most like long term, you know, old school gamers will know it, but it was the biggest voice over IP company for computer game players to be able to talk online. So at the time in 2003, basically all communication in game was via, you know, keyboard. So TypeFrag was this idea that you would die the frags when you were typing, that’s where the name comes from. And so the voice communication was kind of just starting to get implemented games, but players weren’t really using it. They preferred kind of, external software. And so we came along and we built a typewriting and basically we started in December 2002 and we launched it in March 2003. And our big innovation was that we were kind of the first to build a control panel, we called it, that allowed people to completely modify and customize their voice over IP channel and rooms.
Andrew: Okay. And, you know what? Today, people still need this. I like working out on a stationary bike in my backyard. And I can’t just look at the numbers. So I started using this app called Zwift. Oh, it’s so good. Riding in my backyard, but kind of every time I cycle the character in this virtual world cycles, there are other real people who are also cycling in their backyards or in their homes, and I’m racing against their virtual characters in this world. I can’t talk to them. All I could do is type. But, you know, you could use Discourse to communicate with each other, and tools like that still are necessary today. I see that you were early into this. I also see here a note, can I give the revenue from that for the first month or . . . ?
Spencer: Sure. Go ahead, man.
Andrew: No. Why don’t you give it?
Spencer: [inaudible 00:14:25]
Andrew: Because this is pretty baller, dude.
Spencer: So, yeah. So we started, I mean, the interesting story there actually is that when be launched in early March, the first two or three days, we had no customers, right? So I remember my partner at the time, this guy, David, was like, “This is a failure. Like, we’re not saying, like, we’re never going to have any customers.” And then literally within the first few months we grew from . . . by that summer, we were doing 100k MR, that we grew really, really fast almost overnight.
Andrew: How? How did you get to $100,000 monthly recurring revenue so fast?
Spencer: So I like to say, and I think this is accurate, but, I mean, I’m sure there’s someone else who might’ve done it too, but I feel as if we were the first ever to advertise on podcasts. This is pre the word podcast, and we actually were sponsoring these Counter-Strike and World of Warcraft. I think World of Warcraft was just about to start, but basically talk shows, and they became really, really big. So there’s a combination of, like, all we had to do was give them the server. We didn’t even have to pay them at the time, and they would just shout us out to their audience to start.
And then we also were probably one of the first, if not the first to sponsor professional gamers. So we started to sponsor Counter-Strike teams. And we actually went to a bunch of events and, like, I went to Texas and New York, etc. with our teams. Complexity Gaming is a huge team right now. It’s one of the esports teams. So we actually were one of their first sponsors back then. So it was a combination of sponsoring teams and the podcast market.
Andrew: Wow wee. And I’m imagining the reason you knew it is because you were a fan, and so you were watching, and you started listening to some of these shows and said, I would do anything. They say, “Let’s see if we can make a deal with them.”
Spencer: Yeah, exactly. And also, especially with the teams, because a lot of the teams back then they had IRC channels as well. So I was like very familiar with IRC and IRC has like these subject lines, and they would do like sponsored by typefrag.com. You know, best voice servers.
Andrew: And you wouldn’t even pay them for that. You would just give them free access.
Spencer: It was so early. Obviously, likes gaming industry is completely different now. It’s like multi-billion dollar industry, but at the time it was so early that all we would do is give them a free server, which had a value of 50 bucks to 100 bucks a month.
Andrew: Tell me about this tan suit that you went to New York to buy.
Spencer: Oh my gosh. So, yeah. So I ran TypeFrag for about four years, and then I sold the company. Well, I sold my half to my partners, and we were 50/50 partners [inaudible 00:17:00]. And then I had a bunch of money, way more than I knew what to do with, like over a million dollars from the sale. And I landed in New York City as I just turned 22. I just graduated college. And I was like, “I need a suit.” And so I went to like Barneys on Fifth and I had no idea . . . I’d never bought a suit before and I spent $4,000 on a tan suit that I wore once. And it’s just terrible memory.
Andrew: And Barneys tends to have good stuff. They don’t seem like the tan suit company.
Spencer: I know. Yeah, I’m not the tan suit guy.
Spencer: I was saying I’m not really a pantsuits guy either. So I don’t know what I was thinking.
Andrew: My sense is you went to the cool store, but you weren’t quite like cool enough to know what to buy over there.
Spencer: Yes. Oh no. Definitely not.
Andrew: Believe me. I’m not. Here’s what I learned though, with stores like Barney’s, they have personal shoppers. And if you could resist them overselling you, they will spend enormous amounts time telling you what’s wrong with you and what you should be doing. All right. Impressive. Impressive. Did you buy anything that was actually useful? Something that you’re proud of because of that?
Spencer: Did I buy anything useful? Actually saved a lot of my money, which was smart I guess, looking back. I did have a super nice apartment on Park Avenue. And, you know, like, it was a $4,000 a month apartment. I split with someone else, and so I was living the life as a 22-year-old, you know, going out to nice restaurants, that sort of thing. But I don’t really spend much money on materials things other than [inaudible 00:18:25]
Andrew: Be open with me with this. Spencer, did you date in New York as a rich guy?
Spencer: I did some dating, but I didn’t really do many relationships early on.
Andrew: Did it actually work out for you? Were you cool enough? Or was it interesting enough to go out and . . . ?
Spencer: Yeah, I think everyone was very impressed at someone who was an entrepreneur, you know, because a lot of people had just graduated college and trying to figure out what they’re doing. And, you know, they were impressed that I had sold the company and that I was working on something new. And New York at the time there were very few startups. I remember going to the New York City Tech Meetup when there were 20 people there. Like Scott Heiferman and the Foursquare people before it was Foursquare, that sort of thing.
Andrew: Yeah. Wow. All right. Let me take a moment to talk about Regus, and then I’m going to come back on and continue with the story. By the way, I work out of a Regus office. Spencer, I know you just muted yourself. I’m curious, you don’t work out of an office. You’re working out of where?
Spencer: Well, I’m actually working out of an office today. About two to three days out of the week I do work out of an office. Do you know Harvest, the Time Tracking Invoicing Company? Yeah.
Spencer: This is their office.
Andrew: So you used to go to their office?
Andrew: Why? Why do you go to their office instead of your house?
Spencer: So my girlfriend is also a freelancer. So she’s often working from home too, and it’s just in New York City, tight apartment, small, so we like to kind of come to the office, get some space. But twice a week I like to stay and work from home.
Andrew: So you know what? You can mute yourself if you want while I’m rapping about this. But I got to tell you, I was in a situation where my wife and I were living together. I finally got her to move in with me. Life was good, but it’s awkward when she comes home at 5 o’clock and I want to work till 6:00 or frankly even till 5:30. You want to go and say hi and then say, “Hey, I got to go and work. I need to leave you alone.” It’s tough conversation to have. It’s also tough when you have all the distractions of your house to stay focused. And so I went and got an office. I said, “Let’s give it a shot.” I went and I examined all the offices that I could. I went to the ones that are cool with the beer, the ones that have dark lighting and cement walls, cement floors, cement . . . I checked them all out.
The thing that I found was, the ones that had the parties, the beer, the concrete cement, this and that were all distractions. I’m not looking to go from one distraction to another distraction. I want to stay focused. Regus on the other hand was so good at staying focused that if I wanted a coffee, there was someone there making sure the coffee was there for me. If I needed water, there’s someone there making sure the water is there. If a package came in, there was someone there to make sure the package came in. And if someone was loud, there was someone there to make sure that they got out of the way so I could record. And so, I started working from Regus. And man, did my productivity shoot up? I actually was able to get stuff done. It’s amazing. Where the environment is supportive of the work you do, you’re more likely to get stuff done. So there are people who are listening to me who are working out of offices where they have to manage it themselves, don’t do it.
One of the beauties about Regus is they give me my four walls over here and a door, but there’s someone who will pick up my packages and bring it over here for me. There’s someone who if I need to mail an envelope, and this happens from time to time, they’ll write . . . they’ll address the envelope for me, or they’ll mail it for me, and they’ll put a stamp on it because my handwriting sucks, and I like to be pampered so I could focus on work that matters. They have that and it’s all included in Regus.
If I need to have a guest over here, they’ll have a conference from setup for me. If I need to have dinner or lunch or something, they’ll have space for me. That’s the beauty of Regus. If you’re out there listening to me and you’re working from home, you want to get more productive, go to Regus. If you are working in an office and you don’t like the experience, go to Regus. And frankly, if you have a remote person who’s not getting stuff done, maybe they’re not telling you, but they are distracted. Sign them up for Regus. And as a side benefit to all this, whenever you sign up for Regus office or frankly even Regus desk, at all the Reguses all around the world, they have a desk ready for you. They have coffee ready for you, and whatever the local drink is. Like I was in Argentina, they have yerba mate.
All right. If you want to work with Regus, go to regus.com/mixergy. They’ll take good care of you because they’ll know that you’re a friend of mine, or just frankly contact me and my team firstname.lastname@example.org. That’s our email address. Contact@mixergy.com and we’ll introduce you to our contact at Regus. I freaking love them. I’ve been with them for 10 years almost, and I’ve worked so hard to get them as a sponsor. They don’t sponsor podcasts. All right, regus.com/mixergy, or contact us guys and we’ll introduce you.
All right. You sold the business. You moved on. Is the next big thing that you got into was that Carbonmade?
Spencer: Yeah. That was the next thing. So basically right after I moved to New York, maybe six months after that, I started working on Carbonmade.
Andrew: Now, you actually didn’t found Carbonmade. It was other people who created it. Dave and Jason, I think, right? They were the ones who created this as a side project?
Spencer: Right. Yeah. So David and Jason, they were working on this [inaudible 00:23:11] called Interface out of Chicago. And right after I sold TypeFrag, I started working on a new project called Uncover. It’s basically like Foursquare before Foursquare but just web only. It’s kind of like pre-iPhone phone. [inaudible 00:23:27].
Andrew: What I would need to do is tell my friends, “Here’s where I’m going.” And they would all get to see it and tell me where they’re going. But, okay, it’s all desktop. And so you called them up because you wanted to buy something from them.
Spencer: Well, so I wanted to work with them. I wanted to hire their agency. So just the two of them. So I reached out to them, and we started working together, and we worked at it for about to three months, kind of developing Uncover, like building out the website design and development, etc. And then about three months into working together, they asked if I wanted to join as a one third partner. So I said yes and bought into the company. And so the three of us started working together as an agency.
And Dave had basically designed Carbonmade like the first version that he was just using for himself at the time. And then I came in and one of the first projects I took over was basically building Carbonmade into a business and start out as the CEO. And then the three of us worked together for about four years. They actually moved to New York City. We opened up an office in Soho and worked together for about four years.
Andrew: When you first tried to work with them, they upsold you. And I thought, I think I read a blog post where you said, “This is one of the things that endeared me to them.” It was going from $500 sale to $50,000 worth of work from you. Right?
Andrew: The thing that gets me, that’s pretty cool. You called them up, you just want $500 worth of business cards. They ended up selling you on $50,000 worth of design work. What that makes me wonder is, why didn’t they do the CEO role? If they’re that good that they could find an opportunity that they had the guts to sell you, that they had the confidence to lead you in the right direction and get you to pay a 100 times more than you wanted, what was it about the CEO role that you could do that they couldn’t?
Spencer: So I think a lot of it had to do with the fact that, you know, it was a client business and they had a lot of clients that they’re working with at the time like Scribe [SP], or Scrib, I can never pronounce this. It was one of the clients that we were working with. And they were just completely kind of engrossed in the kind of the design and development role working with those companies, working with our clients. And basically, it fell on my shoulders. So I’m not saying that they would have been any better or worse than I was, but I was the man that was in line. And now Jason, actually in 2018, Jason is the CEO. So since I left he took over and has been running it ever since.
Andrew: And at first it was him doing it because he needed a way to put his portfolio online. Right?
Spencer: For Dave, yeah.
Andrew: So, Dave, sorry. And then did you guys know from the beginning that this was a problem that other designers had that they couldn’t put their portfolios online?
Spencer: Yeah, because originally, it was just for Dave’s portfolio, and then his kind of designer friends are like, “Hey, I really want to use this too.” And then that’s when we started to kind of build out additional functionality like user account, payments, etc. And the first year we kind of just working through that process. And so then, you know, throughout 2006 and 2007, we were kind of building the product.
I remember it took about two years for us to get to 12,000 MRR. So we were basically paying ourselves 4k per month. And we, at that point we sort of stopped working on client work. And then 2008 hit and the financial crisis, and we had tens of thousands of out of work artists and designers and creative people that had never had a portfolio before and needed a portfolio. And we were the number one result for online portfolio and free online portfolio on Google. And we also had some good kind of social mechanisms. And we just skyrocketed.
Andrew: Tell me about the social mechanisms.
Spencer: We had a lucky break.
Andrew: I had the sense that by then there were some places where people could put their work online, right? Designers could have gone to WordPress. They could have gone to Typeform. They shouldn’t have, but they could have. They could have gone to Flickr. There places that they could do it. Why didn’t they set up their own websites? Why did they use that? And then let’s get into the virality of it. But why were they using you instead of any of the other options?
Spencer: The biggest thing that we sort of advertised was this idea that, you know, you could focus on your work, you could focus on, you know, getting new customers, you could focus on getting new jobs, and having to kind of mess around with WordPress, having to mess around with Typeform or whatever it was, it just the time out of your day that you don’t want to like mess with things, especially if you need a portfolio really quickly, which a lot of our customers did. Because it was like, you know, maybe I was out of work on Friday and I need a portfolio by Monday, you don’t want to spend the time to kind of manage that whole process yourself. Ours worked. You know, it’s mobile friendly. Out of the box. It’s designed for designers. It’s designed for artists. So we’re just a great solution for them. And it wasn’t expensive. I think we were charging $12 a month at the time.
Andrew: And there was no free version at the beginning?
Spencer: We had a free version. So we have freemium. Basically, the limit was that you had up to 35 images, and then if you wanted more, you had to pay. And then if you wanted to video, you had to pay too. [inaudible 00:28:30]
Andrew: I’m looking at the early version of the site. It wasn’t beautiful at the beginning. Now it’s beautiful. It actually . . . I like that whole unicorn thing that you guys had. The first version was just pretty straight up simple. It was all then coming in from Google, or largely coming in from Google or your connections, right? Who people would come in and try it for free and then hopefully upgrade. And then you were saying that there was some social hooks, right?
Spencer: Yeah. Social, probably the wrong word, but on the footer of all these portfolios, we had a sort of powered by Carbonmade thing, and a lot of like, artists and designers who would always send it to their friends because they want to get feedback first. So, you know, you’re an artist, you want to ask your artist friends, like, “Hey, what does that portfolio look? Etc., etc.” Then they would see that it was powered by Carbonmade too, and then they were like, “Oh, maybe I should have a portfolio.” And that kind of . . . Those two things were basically the biggest two levers that we had.
Andrew: You know, so I could put my own stuff on there, but I could also, if I were looking for someone else to work with, I could go in, from what I know, back then I could have gone in and looked for someone who worked with Adobe Photoshop or for someone who worked with Acrobat, etc., or did 3D, right?
Andrew: So part of what you guys were thinking is each designer could show off their work with a clean site, but also you could be the hub for finding designers, right?
Spencer: Yeah. So that was sort of the like stage two plan. Stage one was get hundreds of thousand portfolios. I forget the number now, but I know it’s over a million. And then it’s sort of like, step two process was, “Okay, now we have all these portfolios. Let’s get them to like categorize themselves, let’s get them to see whether or not they’re available for work, and what their rates are and that sort of thing and make it sort of this marketplace where you could hire and find account.”
Andrew: All right. You know what? I do see that. I’m looking at a July 20, 2007 version of the site, and on people’s listings I see available for freelance is a little image on the side if they are available for freelance. And how did that work out for you guys in the early days? The marketplace?
Spencer: I think we did a poor job. I think everyone would admit to that of sort of figuring out the marketplace side. I think it’s mainly because we sort of just displayed all the content, but we didn’t actually do anything to make the connection between, say like, you Andrew, looking for a designer. It was basically just like a contact me button or a form. So we didn’t facilitate any of that process. So we never got to really show our value to, you know, agencies or people hiring that sort of thing. It was more just like a massive directory.
Andrew: And I think now, let me see. I’m going into one of your users, but I can’t tell. I could just contact them directly, right?
Andrew: Did that survive the marketplace?
Spencer: The marketplace is running? I don’t know how well it’s doing since I haven’t been there since 2011. But I know that at least at the time we were getting a lot of traffic to it. But I don’t know how many like leads we were actually capturing.
Andrew: What was your biggest win there? You personally?
Spencer: I think building into real business was the biggest thing. I think it was, you know, it was a side project for a long time, and just saw like a lot of potential there. You know, we saw that a lot of people wanted this thing, and we were able to just put it into people’s hands. So I think part of that, that’s, you know, because to me, but I think also just, you know, we started to build out the team. I think we were 13 people by the time I left, maybe 11. We started talking to like different partnerships and just kind of growing the team, growing the maturity of the business, growing the maturity of the product, those sorts of things. CEO stuff.
Andrew: You know what? You did this blog post where you said, “I’m moving on.” I thought you were pretty cryptic in that blog post about why you moved on. What happened?
Spencer: Legal reasons.
Andrew: Oh, really?
Spencer: Yeah, yeah, yeah. I mean . . .
Andrew: What can you tell me today. It’s been a few years now.
Spencer: I think the main thing I can say, because I think it’s like a 10-year thing. 2021 come back. But basically, like three of us were partners, you know. It was an LLC. We each owned a third of the company. And after four years, it was time for me to move on. I felt anyway. And so, you know, it wasn’t maybe like the most mutual breakup, you know, that happens with co-founders. And eventually, like, I was bought out of the business over a couple year period. But we still talk. Like, Dave and I still talk, and there’s no real hard feelings, but I think that we just saw the business in two different ways. Like, I really wanted to build it into this really gigantic massive business, you know, similar to what kind of what Behance ended up doing. And they wanted to sort of stay bootstrapped, stay small, you know, keep things like, keep the culture smaller, I guess. And I kind of wanted to build a bigger thing.
Andrew: Why did you want to go bigger? What is it about you? And I know that now you’re trying to get to that bigger level. You raised money for the first time in your life. You’re thinking bigger. Why is that important to you? Instead of collecting a lot of money on an ongoing basis?
Spencer: You can do both. I mean, the main thing is, I think I’ve done it before. You know, I’ve had some, you know, multi-million dollar exits when I was younger, and, you know, but I’ve never had that business that’s, you know, growing at a really fast rate, bringing millions of dollars and, you know, really can capture the market. I think I’ve had two opportunities where we got really close to leading the market and being there for the long term. Like, I remember reading how Behance sold to Adobe for like $140 million and that could have easily been us. But they, you know, they raised the money from Union Square Ventures, and they, you know, continue to build out the team and sort of do all these things that we just sort of didn’t do. And so I think it’s a lot of my past haunting me and wanting to just grow bigger.
Andrew: What do you think Behance did? I’m actually on their site right now.
Spencer: Social, that’s everything.
Andrew: What do you mean cultural?
Spencer: Oh, social, sorry. So they were the first to really turn portfolios into this social system with like, up votes and like, likes and like, this work is great. And so it got a lot of creators interested in getting feedback.
Andrew: The appreciate project button.
Spencer: Exactly, exactly. And they started to grow. Like, we started before them, and we were actually for a long time we were bigger, and then three years into their business, the whole social virality of like Facebook and Twitter and all these things launching, people wanted to share their work. And they were less likely to share just their portfolio, and they would be like, “Here’s a piece I’m working on. I’d love feedback on it.” So they just started to get tons and tons and tons of customers, and they really built this community. And Scott’s amazing. So we actually, he was my like, mortal enemy for four years. And then after Carbonmade and we actually grabbed coffee in Soho and we spoke for like two hours and I was like, “I actually like you.”
Andrew: Wow. And you know what? I see what you mean. It’s kind of subtle and I didn’t pick up on it, but you’re right. There’s on every single image, as far as I could tell, there’s a way to share it. And that seems very much like the Fred Wilson influence.
Spencer: Oh yeah, yeah. I’m sure. Yeah. And our whole philosophy was like a portfolio should never be shared and portfolios shouldn’t be social because a portfolio is for getting work. It should be professional. And while I still like agree with that in some sense, you know, if you want to grow, you need shares.
Andrew: A marketplace though was a really good idea, too. And that’s a hard thing to do.
Spencer: Yeah. Totally there too.
Andrew: And why do you think that one didn’t work out for you?
Spencer: You know, we had a problem where we just weren’t kind of iterating as fast as, you know, that we do currently with Podia, but we just didn’t build product fast enough, so we didn’t get that sort of feedback fast enough, and we just weren’t able to kind of figure out what the product would be like. If it was too much churn ahead for too long, and then we would release it, and then it would take us too long to kind of get to the next step. So I think we knew what we needed to do, but we just weren’t doing it fast enough.
Andrew: Fair to say you ended up with more than $5 million from that one?
Spencer: I literally can’t say unfortunately legally.
Andrew: Wow. Can you call up your two former partners at any moment and get a beer with them? Or is it a little too awkward now?
Spencer: One, for sure. The other one, we haven’t spoken since, actually. But I’ve been meaning to email him because we were roommates for two years. We were super close, but it just didn’t end well, but I have no kind of ill feelings towards him.
Andrew: Was it Dave?
Andrew: And he’s still in New York?
Spencer: No. Well, they both moved back to Chicago. After I left the business, they moved the company back to Chicago. And then I think Dave is in California now, but I haven’t looked in a few years.
Andrew: Oh, you know what? I clicked his Twitter account. I don’t think he’s on Twitter anymore.
Spencer: He might not be. I’m not sure.
Andrew: He might not be. Yeah. It used to be @DaveGorum. It’s not there. All right, as far as I can tell. All right. Let me take a moment to talk about my second sponsor then maybe into what you’re doing right now with Podia. It’s plural form for podium. I had no idea. It makes sense.
My second sponsor is a company called ActiveCampaign. Here’s the deal. A lot of people are doing pretty stupid email, and there are two shades of stupid. One shade of stupid is everyone gets into your mailing list, and they all get the exact same message. If they don’t click on anything to get the same message as people who click. If they buy, they get the same message as people who don’t buy, which is kind of weird, right?
You go to somebody who bought and you say, “Hey, this is why you should buy.” Or, Here’s a new discount.” Really screws things up. The smart way is to say, “Let’s figure out what they do. What did they click on our website? What do they click on overall? Maybe we ask them a couple of questions.” I interviewed one entrepreneur who, the first thing he does after someone signs up to his email list, is he says, “Tell me why you signed up. What are you looking for?” And he collects the one out of seven responses, and then in the messages that he sends afterwards, he says, “My services are especially good for people who . . . ” and then he fills in the blank with whatever they said. So at least they feel welcomed. At least they feel like there’s a connection with what they’re doing.
All right. So one shade a stupid is not to do that. The other shade of stupid is one that I’m more familiar with. I’ll be honest with you guys, where you say, “Oh, I need marketing automation. What’s the best full-on featured program? What do people use? Let’s go sign up for that.” And the problem with that is the ones that have the most features often have the most complexity. And they seem great because, you see all of these features that you can use, and you either don’t use them or worse, you end up having to hire a team of people or a single person to go and manage it. And frankly, go and check out some of the competition of ActiveCampaign, and you’ll see that . . . talk to people who use them and you’ll see that they’re often spending thousands, literally thousands of dollars a month on consultants to manage their email because there are all these tags, and all these funnels and all these sequences.
All right? So if those ways don’t work and you really want to sell more, what works, ActiveCampaign. The beauty of ActiveCampaign is it has all the features you need and really, that seems like I’m qualifying it. They have all the features that the best competitors have pretty much. I can’t think of one that they don’t, but simple. You can actually use it. And more importantly, you as the head of the company maybe could use it, but then you hire a virtual assistant and they’ll know how to use it because it all makes sense. It’s all simple, easy to use and it integrates with software, like I just discovered Podia, right? Like Spencer’s, like so many others. Guys, if you want to do email marketing, right? Go to activecampaign.com/mixergy.
And I have to be honest, they do more than email. They hate when I keep saying that. It’s email marketing automation. They do text messages and bunch of other stuff. But, look, you’re going to sign up for email, then you’re going to notice if there’s all this other stuff you can do. And you’ll actually get to do it, which will feel great. When you go to activecampaign.com/mixergy, they’re going to let you try their software for free so you can see whether I’m full of it or not. If I’m full of shit, tell me, call me on it, but if I’m not, keep using it and what you’ll find is the second month is going to be free. So if you decide that you like the free and you start to pay them, second month is going to be free because you use a special URL. Also, they’re going to give you two free sessions with their experts so you can understand how to use it, how to do marketing automation right.
And then try it and come back again for another call. And finally, if you use one of their worst competitors and you want to move, you’re not stuck. They will migrate you for free. Just say, “Hey, ActiveCampaign, Andrew told me you’ll do the work, do it.” And disappear on them. Here it is, activecampaign.com/mixergy, activecampaign.com/mixergy. And don’t take my word for it. Ask your smartest marketing automation friend and you’ll see ActiveCampaign keeps getting the most praise.
All right. Let’s talk, Spencer, about how you ended up with the idea for Podia.
Spencer: Sure, sure.
Andrew: Where did that come from?
Spencer: Combination of a lot of different things. I should mention, like, after Carbonmade, I started a different business, which is the B2B company called Uncover, that ran for two, three years before selling it. And I really just hated B2B. It wasn’t for me. Since I knew I wanted to get back to sort of working directly with consumers. But I did like the Carbonmade type customers. I love working with traders. I love working with people that felt that they were a business, but still an individual. So I knew that. I knew I wanted to do that. Also going back to the sort of the Yale thing, my father was actually the one of the first people to ever create an online course on the internet. It was actually so big. So he’s an English professor. Apple almost shot a TV commercial with him. So he had to, like, sign all the releases and so on.
So I saw firsthand how, you know, how his course was going. He would actually get several emails per day from the students and that sort of thing. So it was a combination of . . .
Andrew: Is it still going on? This is Open Yale?
Spencer: Yeah. Open Yale. If you search for Paul Fry, you’ll find it. But it was one of the first big iTunes courses. And on YouTube, I think it has like hundreds of thousands of views as well.
Andrew: I see it.
Spencer: [inaudible 00:42:43] English Lit class.
Andrew: Oh, look at him. I see videos of him on YouTube.
Spencer: Yeah, yeah.
Andrew: He’s an older gray-haired gentleman with charisma and still, like, stage presence. Am I right?
Spencer: Yeah, he’s like a brilliant professor. He just retired, but he was, he’s basically the world’s leading [inaudible 00:43:02], Shelley, Keats, like the Romantic period scholar. But yeah, so he was doing courses. You know, I wanted to get back to working with creators. A lot of my friends are artists, designers, etc., selling content online. And I felt that there was like a good opportunity to go to business around the idea of helping creators, helping them monetize. And that’s sort of like the inkling of where Podia started. It took a couple of years, kind of flesh out all the detail. But we started in early September 2014, so it’s been about four years. And it took about two years to sort of really set the groundwork, and then we’ve kind of been rolling ever since.
Andrew: One of your best friends was a tutor. What did he tutor?
Spencer: My friend, Erf. So [inaudible 00:43:56] LA, unfortunately I’m from New York, but he was the, one of New York’s best GMAT and GRE tutors. So he was an inspiration too because he would always complain to me how much drive the Uber to Brooklyn and I got to go teach for, you know. And then, you know, I was like, “Well, you should just sell content online.” So we actually worked together with him to help kind of create a course for his first GMAT course, that actually never saw the light of day, unfortunately.
Spencer: He never finished.
Andrew: You know, it’s actually an interesting thing that one of the big problems is people don’t actually complete creating the course. It’s hard to do.
Spencer: Yeah. And I think his problem was that, you know, he had a book through like McNally that was selling really well, and he was just such a perfectionist that he would try to . . . he wanted to create like the entire GMAT curriculum. And I was like, “Erf, no. Just take a section.” Like, “Let’s build that out. Let’s launch that. Let’s start small.” And he was like, “No, no, no. I want to do the whole thing or nothing.” And, you know, that’s something that we tell our customers too is start small your courses, you can always build on top of them. Get a few lessons out there, start to sell and then see how things go.
Andrew: The first version of the software was about tutors. Was it about getting their ideas, or, sorry, getting their lessons online, or was it about helping them do one on one tutoring?
Spencer: Yeah. So we started our name was Coach back then, the name I was trying to shed from the internet.
Andrew: What was the URL?
Spencer: It was withcoach.com . . .
Andrew: With coach?
Spencer: Yeah. We couldn’t get coach.com unfortunately, handbag company at all. But, yeah. So we started mainly with tutors and teachers because of Erf, in a sense, you know, like the first prototypes. For the first year, I put in $30,000 of my own money. We didn’t raise money at that point, and I was sort of just building out this software with him to help get his course launched. So we started this coach tutor market, you know. At the time, I felt like, “All right. Let’s start with a very specialized market because Erf knows a lot of people. Erf knows a lot of tutors. This will be great for early testing. And then fast forward a couple years later, or even a year later, we basically had 2% tutors and 98% content creators. And it was pretty obvious decision that we should scrap that.
Andrew: I’m looking at the first version of the site here With Coach. $100 a month for the basic plan going all the way up to a thousand dollars.
Spencer: Yeah. We also had other features at the time too. So we not only could our customers sell content, of course, there’s downloads, etc. But we also had scheduling tools for them back then. We built our own scheduling tool. We had an invoicing tool
Andrew: Scheduling tool because they would schedule one on one with their students?
Spencer: Right. Exactly. So maybe you take Erf’s course and now you want to follow up with some private Skype lessons. So we built all that functionality. We ended up removing it when, you know, fewer than 5% of our customers were using it at the time. And then we just started focusing on the online content side because that was really what was like drawing traffic.
Andrew: But one of the things that stands out for me is you were selling backlinks too. A thousand dollar a month plan includes 2000 backlinks.
Andrew: No? Okay. I see professional membership sites. We work, you profit. Done for you membership sites, check. Membership site training, check. Done for you SEO, check. Make money on autopilot, check. And then each plan had a number of backlinks to it. But it seems like what you were trying to do is think. You were thinking a lot like you, like a business person. People need to be discovered the way the Carbonmade was discovered using social, using search, and we’re going to add all those tools in. Right?
Andrew: I see you’re uncomfortable as I say this. I’m watching the way you’re uncomfortable.
Spencer: I see your screenshot.
Andrew: You want to see it?
Spencer: Yeah. It that the right With Coach?
Andrew: I think so. You know what? If I share my screen, it’s going to be a bit of a pain for you.
Spencer: All right. No worries. No worries.
Andrew: You know what? One of the things that I love that happens here, I turned it over to you. It’s a little hard to find them, but you’ll find. One of the things I love that happens with my interviewees is, after the interview is done, they’ll call me and they go, “How the hell did you get that?” And it’s usually something to do with like, “How did you figure out where my traffic was coming from?”
Spencer: No, this isn’t us. Because it’s 2014?
Spencer: Interesting. So we didn’t even have membership sites at the time.
Spencer: That’s strange.
Andrew: But I’m getting where you were. I’m getting that you had to get tutors.
Spencer: Oh, wait. Yeah.
Andrew: Did it work for you to actually . . . You were out there recruiting tutors. What did you learn as you were trying to get them? Did that work out? Recruiting tutors?
Spencer: Yeah. Basically like my acquisition channels at the time or my plan at least was, Craigslist. So I would reach out to every single tutor on Craigslist starting in New York City and then I actually wrote them scripts and hired some outsourced people to do it across all the cities. Yeah, because Craigslist is actually really crazy with, you know, contacting. You have to basically contact people with the same IP. So someone who is in New York City, I can only contact other New York City people.
Andrew: [inaudible 00:49:30] worked that way. Okay.
Spencer: Yeah. At least with the automated, like, send an email link. Otherwise Craigslist is pretty smart, and they’ll block you. So I ended up using like [VPNs 00:49:41] and stuff, but anyway, yeah. So I reached out to a lot of tutors that basically was like, “Hey, like, can I get advise on kind of what I’m building here? And I want to learn more about your business.” Like, are you tired of only making money through your hourly work?” And then he’ll be like, “Yeah, I am.” And then it actually ended up finding a lot of tutors come to my office because I was in right about Soho at the time. And, yeah, we started to build out a really pretty decent sized community of tutors in New York city and other cities as well.
Andrew: All right. And as you were talking to them, were you finding different needs that they had, different ways of working with them? What did you learn?
Spencer: Yeah, I mean, I learned fairly quickly that tutors are not super tech savvy people. So they love teaching, and that’s awesome. But they don’t love doing anything online, you know, they prefer to get paid via check or cash. And they preferred to basically meet in person or maybe . . . they were even a little bit skeptical like working over Skype and especially selling content was another thing. So I learned pretty quickly that it was just the wrong market for us to be in.
Andrew: You know what? That makes sense, because the successful companies that I’ve talked to in the tutor space, what they do is create marketplaces. It’s like, “Yeah, I know you don’t want to invest in your tutoring career.” Just come to us and we’ll get you clients, and we’ll take a commission.” That seems to work. Do you feel like you should have done that before you created with Coach, to talk to them to try to sell to them, to create personal sites for them?
Spencer: Yeah. I mean, so, the first year was really a lot of that. Like, I’m sort of known to talking to like thousands of customers. So the first year was really just figuring all that out. But at the same time, you know, you can only talk for so long, like you have that [inaudible 00:51:28] something that you can put in their hands, something that would sort of show them kind of what they were getting. So, yeah. So it was like beta. It wasn’t really kind of like a full-on release there. But this is the product, and it was something that can I continue to evolve, especially like, some of the stuff that we were building like the downloads, the courses, etc. We were getting other customers even though it’s called Coach, even though it was marketed towards tutors, and that’s how it like, sort of allowed us to evolve into what it is there.
Andrew: Ah, you’re starting to see that people who are content creators we’re using it. What’s an example of someone who really opened your eyes to how content better?
Spencer: Justin Jackson was probably, he’s pretty well-known guy, content creator. He was our first big customer, and he just really, really loved what we were doing. So we use them a lot now for testimonials and stuff like that because he’s basically our earliest customer. But he was the first one to sort of see the advantage of having all your content under one roof. So he had courses, and he launched his book “Jolt.” And instead of having to, like, sell “Jolt” in one place and sell his course in another place, he really found Podia to be helpful for him because he could just have all of this customers in place. And also have all payments in one place too. [inaudible 00:52:40] success story.
Andrew: Look at this. Justin Jackson still has a profile on With Coach. This is still live to this day. Justinjackson.withcoach.com is up and running. “I’m Justin, I’ve been helping SaaS businesses grow since 2008.” That’s what his site says. And then for 26 bucks, I could sign up to Jolt and it says, “There’s a lot of noise online these days. We as consumers and intimidated with [inaudible 00:53:05].” Got it right. There’s a lot more of content there that I should do. Wow. All right. So this is what you created. And look at this on the very bottom. You had a link back to your site because this is something that you learned from Carbonmade. Everyone who looks at Justin’s site, should consider creating their own account on your site too.
Spencer: Exactly, exactly. And if you go to justinjackson.podia.com, it’s the same site because he was one of our first users, the With Coach still works, and so we just kind of mimicked the site because we didn’t want to break his links at the time. But, yeah, that was, you know, one of our first acquisition channels was what I learned from Carbonmade was throw a little powered by on the flare.
Andrew: Makes a lot of sense. Okay. And then you told our producer in 2017 you spoke to 3,500 people live chat, video chat, phone. How did you get to talk to so many people?
Spencer: I still talk to a lot people. It’s, you know, Monday was a holiday here in the U.S. and our whole team was off, and I just sat on live chat from 8 in the morning to 6 p.m. in the evening.
Andrew: So if I would’ve been on podia.com at the time, I might have chatted with you.
Spencer: Talking to me, yeah.
Andrew: What do you learn from doing that?
Spencer: So much, so much. That’s why I still do it. I mean, I don’t do it as much anymore in the sense that like I’ll jump on it a couple of times a week, usually like on the weekend, etc. But I’ve learned a lot like what our customers are looking for. So if you are a customer of ours, and you have, you know, certain questions or complaints or feature requests, etc. I’ll learn from that bucket. And then also the people that are, you know, just coming for the first time wanting to like learn about the product, like, I get to know what they’re [inaudible 00:54:44], and maybe things that we don’t have that they would maybe want to just learn a ton.
Andrew: Do you have an example of something that recently came up and because of it you were able to grow your business?
Spencer: Yes. I mean, there’s a lot of those that, you know, most recently I think for about a year, our customers were clamoring for payment plans. They were like, “We want payment plans. We want payment plans.” And . . .
Andrew: You mean to offer their users because if they’re selling for thousand dollars, most of their users, most of their customers can’t pay a thousand at once.
Spencer: Exactly. Exactly. So, you know, split that payment over three months, that sort of thing. So that’s one of the things where you can, you know, get an email once in a while and sort of, like, “Oh, yeah. Maybe we should have payment plans.” But if you’re like sitting on live chat and you’re talking to customers all the time, and you can really engage with them. And the thing that I love to ask is like, you know, someone’s like, “I want payment plans.” I’ll say, “That’s a great idea.” Like, “Why do you want that?” And then from that, you know, tend to learn so much more. And after hearing about that for probably two years, honestly, that’s a feature we launched I think in May or June of this year, and it’s become wildly popular.
Andrew: Wow. All right. That’s a lot. By the way, you guys are, on Twitter, you’re @podia.com doesn’t burn you that the guy who’s using @podia is not touching it?
Spencer: We’re working on it.
Andrew: Yeah. Twitter will work with you on it. They could be a little unpredictable. Their goal is if the person’s not using it, which a person is not using the Podia account. They will pass it on to you.
Spencer: We have the trademark too, and I’ve done some trademark filings with them. We’re still kind of in the process. But, you know, I understand their perspective too, but, you know, we’d love the Twitter handle [inaudible 00:56:20]
Andrew: If they haven’t been used, if that account has not, there’s not a reason to do it. The 47 following it. It’s only like, you and your 46 friends were following . . .
Spencer: They claim that the person could still be like logging in and viewing content. But my pushback is like, “Can you check the user log?”
Andrew: And you know what? Also then just switch them over to a different domain if they’re not using it, a different account. But you know what’s interesting, is the people who are following are all podiatrists. My sense is that it’s podiatrists who are trying to, and I’m assuming you to. Yeah. Foot Health Center is following them. Localpodiatry.com is following them. Podiatry Fledgling is following them. All of them waiting for the day that this guy gives it up.
Spencer: Yeah. One day.
Andrew: One day, but it should go to podia.com.
Spencer: It’s fine.
Andrew: I do way too much like snooping. You know, my problem is when I on a conversation with someone, I can’t stay focused on them if I’m online because I’m so used to doing research, every word out of their mouth I’m researching, or writing down. And I’ve also started listening to my older interviews. Some of them are just like “whack, whack, whack on the keyboard.” The guy says something and you could tell Andrew is just got to check it out. “Whack, whack, whack, whack, whack. Let’s go find out”.
Spencer: I think I remember those videos.
Andrew: Thanks for continuing to . . .
Spencer: If you remember I think we almost spoke, I think, in 2010 or something. Or 2009.
Andrew: Wow. Was I being a dick? I was unreachable?
Spencer: No, you almost scheduled a chat, but I don’t remember what happened at the time, but the ball got dropped. Yeah, I have the email.
Andrew: See now, I got to back and look at it. But I should be more present in the conversation. You know, the thing that I highlighted in big letters in my notes was, this line that you told our producer about how you started doing the surveys and user research to find the pain point. Why was finding a pain point so important?
Spencer: So, you know, the biggest thing honestly, is for . . . when I talk to customers I really, like I mentioned earlier, just trying to find out why and what’s driving them, and I think that that to me is the biggest pain point, whether it’s a feature or like why are you doing online courses? Why are you selling downloads? And from that, you can kind of figure out and get this sort of persona of the person, and then at that point, you can sort of break that down and figure out like what’s not working for them, you know, why have they had success in the past, or not had success in the past, and you can sort of use that to craft your product.
And we’re really good at that. Like, I think, as I mentioned earlier, with Carbonmade, we went through these really, really long development cycles. Now we sort of develop things that we’re pushing every day. And just getting that feedback from customers, figure out the pain points, really lets us continue to improve the product all the time.
Andrew: But there’s something about pain that makes people more attractive as customers. Right? I’ve been exploring that a lot in these interviews. What would you say that is? That someone who’s in pain seems to be a better customer?
Spencer: I think that they’re just ready for a solution that, you know, serves their needs. You know, if you’re really hurting, you know, maybe you’re coming from a different platform, or maybe you’re just really want to do something and you sort of addressed that need for that person, whether it’s, you know, through live chat, or through, like I do a weekly webinar, through, you know, the product, I can really speak to them directly and say like, you know, “We’re going to take that pain away from you.” And they’re just like, “Wow.” I mean, we literally get customers that are just like, “Thank you so much.” Like, “Before you, like, I couldn’t do it, etc., etc.” Now I can do it. And, you know, if they were just like, “Yeah, maybe this is cool.” They’re not really going to be as good a customer for us, [inaudible 01:00:01]
Andrew: I told you before the interview started that you have a lot of competitors. And I was going to list them and talk about how you can compare to them. I don’t think we have enough time for that, but I’m curious about how much of a challenge that is to you, that there are competitors out there, that they’re trying to poach your people, that there are a lot of options. What’s going on? And why would you even be in this space with so many competitors?
Spencer: Two things I always say about this, like why I don’t feel it is if we have any direct competitor, because we really are the only, all in one digital storefront on the internet. We have a lot of competitors in different things that we do. So, you know, we do courses, we do downloads, and we do memberships, and in each of those sort of areas we have competitors. But there really isn’t any other online storefront that does all three. So while we have competitors in certain bits in the business, we are sort of beating at our own drum, which I really like, because we are doing something much more innovative.
Andrew: I might be able to sell my course and have people buy it on another platform. But if you want also download it or buy a PDF for me, I’d have to use a second piece of software, where we . . .
Spencer: And the third biggest point is like having a membership too. So, you know, a lot of our customers come to us, maybe they already have an online course, they bring their online course to us and now they want to sell an ebook, or maybe now they want to create a membership, and you really until you couldn’t do that on one platform. You know, you’d have to go sign up for another service, and then you’d have to split your customers. And the worst thing is when you have to split them into three buckets, downloads, courses, and memberships, and you have to have Andrew entered credit card information. Again, and it can be really messy situation.
Andrew: All right. But you have had people even tried to call or contact your customers. You know what I heard that was weird? I’m going to call them out? It was Udemy in the early days when they finally figured it out. I remember Gagan Biyani sat me down at South by Southwest. We had lunch, and he said, “I took all this money. I didn’t know what we’re going to do with it. We finally figured it out. We’re going to create courses. Things were good.” He asked me to do it. I said, no, because it just wasn’t my kind of platform.
And then I started getting emails . . . Oh no. My course leaders on Mixergy, these are just regular entrepreneurs who I’d bring them to teach something. They would get from some strange dude at Udemy, because I think they hired a bunch of interns and said, “Go. Anyone who seems like they’re creating a course, go hit them up.” And they started complaining to me, being on Mixergy they said was annoying because the Udemy people were so aggressive.
Spencer: Yeah, and they’re not the only ones. I’ve been through [inaudible 01:02:33]
Andrew: Then it happened again, and then the message Gagan again, and it stopped. And it was just like back and forth. But you’ve been a target of those types of things too and not necessarily from Udemy.
Spencer: Yeah. I mean, we get a lot of our “competitors” signing up for our product. I think because we are sort of leading this space and sort of innovation, that every week we get a new person multiple times a week from different companies signing up for a product. You know, what if they changed today, what their on-boarding code look like?
Andrew: Oh, they’re going through your signup process to even see how you’re operating.
Spencer: Yeah. Yeah. All the time. They even come to my weekly webinars. I do a weekly webinar every Tuesday at 4:00 p.m., and I’ve seen competitors in the chat and trying to like sway my customers. I’m just like, “Come on guys.”
Spencer: Yeah. I recently learned about the ban function in webinars.
Andrew: You do a lot of webinars, three different types of webinars, and it’s you personally doing it?
Spencer: I do, I do the weekly demos. So for, actually one thing I forgot to mention is in part of those like 3,500 calls, I used to do it online, a one on one demo with a customer, whatever they wanted it. So I was doing like 10 to 15 a week, 30 to 45 minutes long. But now I just do it all one in one every Tuesday. And then Len, who I work with, he runs the kind of our masterclass webinars.
Andrew: All right. What’s the revenue?
Spencer: I’ll tell you once we go public in a few years. Right?
Andrew: I know it. I mean, you’ll tell my audience. I found the email that we went back and forth on. This was from 2010.
Spencer: Back then, yeah.
Andrew: The subject line, I was the one who initiated it. Subject line was, “I saw your post on Hacker News. I’d love . . . ” and then the body was, “I’d love to interview you on Mixergy. Do you have a metric?” Look at me, metric obsessing back then. You know metric shows how big the company is? By the way, freaking great blog posts.
And then you come back to me and said, “Someone suggested on Hacker News that you do this. You gave me your numbers. I don’t have permission, so I won’t necessarily reveal them. Now we haven’t taken a dime a funding.” We went back and forth and back and forth with me trying to get you on a call. And I couldn’t make it work with you. At one point you said, “I got to go and get beer with a friend.” So here I got it. “I’d love to, but I’m about to leave the office for the gym, and then I’m heading up a meeting up a friend for a beer or two.” So that didn’t work out.
Spencer: Oh, man.
Andrew: We tried.
Spencer: Younger me.
Andrew: We tried. Yeah. I’m glad. I’m glad that we made it work. See, sometimes it takes eight years. It’s actually been over eight years.
Spencer: Yeah. That’s amazing though, you know, that we’re both still doing this eight years later. I love it.
Andrew: Yeah. I’ll be doing this into my hundreds. I hope I’ll live to be over a hundred years old. I never want to die, and I never want to stop doing this and part it is because I’m excited about like how somebody can have an idea, build it up, and boy, you’ve had a few of those ideas. Frankly, even the one that you had as a kid was kind of exciting to me.
Andrew: Spencer, thanks so much for being on here. Anyone else who wants to sell online, whether it’s a course, a membership or download should go and check out Podia, P-O-D-I-A, podia.com. You haven’t taken that much in funding. I’m still researching as we’re talking. It’s not that much.
Spencer: We took $3 million.
Andrew: Yeah. All right. Congratulations on your success. And I want to thank my two sponsors who made this happen. The first is a company that lets me have office space. Guys, if you’re intimidated by office space, you feel like it’s not you, just go and get a desk from Regus or just go and call them up and have a nice day where they walk you through their office. It’s going to blow your mind. Regus.com/mixergy. Or, if you want to do marketing automation right, go to activecampaign.com/mixergy. And, Spencer, thanks for sticking with me through all this. Bye, everyone.