Andrew: Coming up, you are going to see that, today’s guest has a big grin on his face, and when I ask him about it, he’s going to reveal something that he never revealed in public before my interview. Also, how can being a slut help you get customers quickly. You are going to hear that in this interview too. And, finally, if you’ve ever felt like you are just in way over your head, well, you are going to want to watch this interview. All that and so much more, coming up.
Andrew: Three messages before we get started. If you are a tech entrepreneur, don’t you have unique legal needs, that the average lawyer can’t help you with? That’s why you need, Scott Edward Walker, of Walker Cooperate Law. If you’ve read his articles on VentureBeat you know that he can help you with issues like, raising money, or issuing stock options, or even deciding whether to form a corporation. Scott Edward Walker is the entrepreneurs’ lawyer. See him at WalkerCoorporateLaw.com.
And, do you remember when I interviewed Sarah Sutton Fell about how thousands of people paid for her job site? Look at the biggest point that she made. She said that she has a phone number on every page of her site, because, and here’s the stat, 95% of the people call, and they are buying. Most people though don’t call her, but seeing a real number increases their confidence in her, and they buy. So, try this. Go to grasshopper.com and get a phone number that will make your company sound professional. Add it to your site, and see what happens. Grasshopper.com.
And, remember Patrick Buckley, who I interviewed. He came up with an idea for an iPad case. He built a store to sell it, and in a few months he generated about a million dollars in sales. Well, the platform he used is Shopify. If you have an idea to sell anything, set up your store on Shopify.com because Shopify stores are designed to increase sales. Plus, Shopify makes it easy to set up a beautiful store and manage it. Sharpafy.com. Here’s your program.
Hey there freedom-fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How does a founder, who has no idea what to do with his life, discover his profitable business idea? Richard Banfield is the founder of Fresh Tilled Soil, a user interface design firm based in Boston, Massachusetts. He told me before we started this interview that his company and his entrepreneurial adventure started as an accident. Richard, what was the accident?
Richard: Hi, Andrew. The accident was, my wife was pregnant and I lost interest in the job that I was currently in, at the time, and I went to a friend of mine and I said, you know, it’s just, I just feel like I’m lost. I don’t know where I am. And, that friend was, like most friends, looking after me, and said, go and get a job somewhere. You’ll be happy just working in a big company. And, then soon as I had to contemplate the idea of getting a job in a big company, my head just exploded. I said, there’s no way that I can do that. I had to work for myself. I had to follow a dream that I had created. And, I immediately started to think about the things that I was passionate about, that I hadn’t yet explored.
Andrew: Hold that thought for a moment, if you would. I want to get back to the process that you took, but first… The push was him just saying that you had a job, that you should a job, and that was just, hey, no way, or as I understand from your conversation with Jeremy, I think there was a job offer, wasn’t there?
Richard: Yes. I’d actually looked at a couple of jobs along the way, and, but when the reality hit me that I would have to work for somebody else and do the things that were important to them but not important to my passions. I think the reality just hit hard.
Andrew: OK. And, then you said, oh, that thought. Now that it feels real, doesn’t feel like something I want to do with the rest of my life. And, so, you needed to figure out what the right thing was. And, then you started to look through your passions, you were saying?
Richard: Yes. So, I think as you mentioned, the first thing is understanding what you want, whether you actually want to work for somebody else. And, then the second thing is trying to figure out what’s important to you. And, my passions had always been in this idea of design. Ironically, coming through a back door. And, that was biology. I’d studied biology. And, biology is pretty much all about design. You know, designing things that work well in environments. So, that was the back door I came to designing. And, I wanted to create things that would leave a marked impression on people and be remarkable. As Seth Godin says, they have to be something that are worth talking about. So, I didn’t know exactly what it was, but I knew it had something to do with design.
Andres: And, if you are building software, you’d have a minimum, viable product, that might be a small version of the software, and you’d show it to someone, and say, what do you think of this? Does this change your life? For you, because you are doing design, your minimum, viable product, as I understand it, was going to a friend of yours who had a shoe store?
Andrew: What did you say to him?
Richard: It was actually a woman. And, I said, I’ve been to your website, and it sucks. And, I think I that I can better. And, because she was a friend, she trusted me, and that was the first step towards being a designer and owning a design company. It was having a client that was willing to spend some time and money on a rookie like me to make something happen.
Andrew: When you say better, was there a way to measure better? Or, what did you mean by that? Or, did you just mean, hey, you are going to love your site, be prouder of your business after I’m done redesigning?
Richard: It’s probably a little bit of both. So, in any design, what you are trying to achieve is something functional, [??] goal, which wants to try to achieve form and the beauty that is most attractive to human beings. And, she had a very measurable goal, that was get people in the door buying stuff. Very easy goal to achieve. So, if the website was able to achieve that, then, hey, I’ve done what I’ve promised to do.
Andre: And, so, how did the numbers shake out after you were done with the site?
Richard: Honestly, I can’t even remember all the details, but I remember that she was very happy about it, and she came back to me and said, hey, we got to continue working together. So, we worked together for a while on that project and sold. She successfully sold her business, so, she outgrew me, quicker than I can [??].
Andrew: From the pre-interview notes that Jeremy made in his conversation with you, there was a number there. I’m guessing that it was a guesstimate, that you said, may be we increased it by, and you through out a number. I’m not going to repeat it if you are not feeling comfortable with it. But, there was some number that you can stand by and say, because of the work that I did, not only am I prouder of the site, and she’s prouder of it. It’s measurably doing better. Is that fair to say?
Richard: Absolutely. And, I think that, that was one of those moments in the evolution of the business where I realized that, design is not art. It doesn’t matter how gorgeous you make somebody’s website or App or application, whether it’s desktop or mobile. It’s what makes a measurable impact on the business. And, this might sound obvious to you. You might go, yeah, this guy’s not telling me anything that I don’t know really, but, you’ll be amazed at how many designers are designing beautiful things that don’t have someway of moving the needle. It doesn’t have to be a home-run every time. But, even incremental improvements are worth doing.
Andrew: All right. And, obviously one client is not a business make and we are going to find out how you grew from there and there and there. And, I also wanted to find out a little bit about your background because this wasn’t your first entrepreneurial experience. You had an experience that would turn many people off to entrepreneurship, but it didn’t [??]. And, I’m going to get into that. But, first, I want to ask you about this friend and the innovative way that you said, that you’d collect payment. Because, at first you weren’t proven. Do you remember what you were telling Jeremy about? Jeremy, apparently, is so good. He pulls out information from you that you don’t even remember about your own past. Jeremy’s fantastic that way, and I’m glad we do pre-interviews.
Richard: Well, that may be only one example of how people have repaid me. In any situation where you are starting a business, money is one form of repayment. But, you can also be repaid in a [??] in referrals. May be, in her case, she would go, free shoes for my kids, which I think is a big bonus at the time.
Andrew: Tell me if I’m picking up on the story wrong. I don’t want to make it sound like a Cinderella story. I want to really get the reality of the world. But, as I understand it, you said to her, look, let me just do this. I’m not going to worry about money right now. You can even pay me in shoes for my kids. I just want to see what I can do, and you were looking for experience. Does that feel right, or am I?
Richard: That’s exactly what happened.
Andrew: That’s it?
Richard: That’s exactly what happened. I can’t remember the exact conversation, but I remember thinking, I must be a real idiot not to be taking the hard cash for the work that I’m doing. But, I did feel like getting experience was the first step towards having a business that allows you to do the next thing, which is get the next client. Because, the next client’s not going be your friend and they are going to say, who he done work for. And, you have to have something. Got to have some reference for work that you can look at.
Andrew: I see now you’ve got the Ritz Carlton as a client, you’ve got Brown University as a client, Time Warner. I know that they are not paying you in shoes. But, if they wanted to know that you could do something, it starts out by building a portfolio. In your case, working for shoes. Going back though, in the late 90’s, you were working at an Internet company, and there was this moment where you realized you were reading Readers Digest while people were talking. Why were you reading Reader’s Digest while they were talking?
Richard: Jeremy is obviously good at remembering a story. I can’t remember the exact context of that particular moment but I think what happens with any entrepreneur is they realize there is a gap between what’s happening in your mind — your dreams, your vision — and what’s happening on the ground and you go, “Oh my god! At some point somebody’s going to want to make the change and I need to be part of that. I need to be part of that vector or that change moment.”
I can’t remember exactly what Jeremy was asking me that question about, but I know at some point you realize that you are different from everybody else and your vision needs to help them get to where they need to go.
Andrew: Jeremy’s so good. People think that he’s just having a conversation and they think that I’m here just having a conversation with you, but every part of our process is really well thought out — including the fact that he probably wore a lab coat to have a conversation with you.
Richard: He did. He did.
Andrew: He did, right? Our research shows people trust people in a lab coat more than they do in regular street clothes. People have revealed things to him and then in the interview they go, “I can’t believe I just re-. Where’d I reveal that? How do they know?”
Richard: It was therapy.
Andrew: It’s very therapeutic and it’s very useful for making these conversations not just chat sessions (which I can’t stand anywhere in my life) but useful for the audience.
Here’s what I understand. At one point, you thought, “I am way in over my head in this. I don’t even follow what people are saying in my own company.” That’s why you were reading ‘Reader’s Digest’ because you weren’t following what was going on. You thought, I think this is a quote, “Oh shit! I can’t run this company! I don’t even know what I’m doing.” Did you have that feeling?
Richard: There’s a little bit of a typo. I wasn’t reading ‘Reader’s Digest’. We were actually working with ‘Reader’s Digest’. They were a client of ours.
Andrew: Oh as a client! I misread that. That is what it said but I said there’s no way in the conversation with ‘Reader’s Digest’ [??]. So, why were you feeling out of your depth here?
Richard: We grew really quickly. This is early in the internet days when everybody was still trying to figure out what this super, amazing thing was going to do for everybody. We had grown ridiculously fast. We had gone from a two person company to having several dozen people around the world, multiple offices, and big name clients like ‘Reader’s Digest’.
When you grow that quickly, you don’t have enough time to gather all the knowledge that you need to master a domain. Not only were we dealing with the fact that the internet was new, we were dealing with the fact that — in terms of the scale of the company — it had come so quickly that we hadn’t had a chance to adapt. We had gone from being kids to running this amazing global business, and I was sitting in this meeting going, “I don’t know what the hell is going on. I really have no idea what these people are talking about. It’s over my head.” So we had to make some changes. We had to face the fact that we were a little out of our league and we needed to adjust for that.
Andrew: This was at a company called Acceleration. What did Acceleration do?
Richard: What does Acceleration do today? They still do this. We provide the plumbing for big agencies to be able to deliver the work that they do to the various publishers using products like ‘Double Click’ and allowing email and display ads to be served to the correct places. We set that up and we made sure that the agencies were able to do that and these big clients were able to use that plumbing to get their message to the people that they needed to speak to.
Andrew: And how did you adjust after you said, “I’m out of my depth here?”
Richard: I made a really painful decision not to be part of the leadership anymore, to step down as CEO and hand the reigns over to somebody else.
Andrew: So the sense of feeling like a fraud, many people might have it at a conference where they’re supposed to speak and they realize, “I don’t know what I’m going to talk about,” or when they’re having a conversation with a new hire who they feel overwhelmed by, or even just watching one of my interviews and they say, “I’m out of my depth. These guys are so much smarter.” They get in their own heads and start to feel like they’ve been a fraud this whole time and they never recover from that. Why were you someone who was able to say, “Hey, you know what? In that moment I didn’t know as much as I could have but I am still a strong enough guy to be an entrepreneur. I’m still a smart enough person to lead a company and to lead an industry.”
Richard: I don’t want to sound like I knew what the hell I was doing because it was probably a little less thought up than this interview. I think what I realized was that the company was more important than my ego. What I needed to do as an individual was put the company first, put all those people first, put the investor’s money first and understand that companies can come and go and can be created but that in this particular case I needed to give up the reigns to somebody else to do a better job than I could.
So it’s humbling. You realize that you’re not the right person for the job. But I think that it’s more important to realize that the company can progress and the [??] can progress without you and that’s the scariest moment. It’s to realize that you do not a company make. And that you need to be mature and to step away and say I don’t have to be a part of this for it to be successful.
Andrew: OK. I’m going to come back to what the does make a company. But let’s continue with the story of Fresh Tilled Soil.
You do this one site. That doesn’t make the company.
What do you do next to get to where you are today?
Richard: In our case, everybody we knew picked up the phone and in that case, at that point it was two of us, one of us was out there making phone calls.
Andrew: Who’s the other person?
Richard: A guy called Alex Federoff.
Andrew: And so you started with partnering up with Alex right away.
Richard: No. There was a couple of free lancers involved at the beginning doing the work. But very soon in the [??] business, Alex and I realized that we could work it all together. He was an incredibly good designer. I had the idea that I could go out and sell. Whether I was good or not wasn’t important. And when [??] and attended every single networking event that I could and met as many people as I could and sourcing.
You may know this really because you’re probably an individual who finds himself at networking events. This is crazy stuff. I mean, there are people trying to sell stuff to you and you’re trying to get them to listen to you and your story and I realized that is exhausting but necessary part of building a business. You got to get out there. You got to get out of the building. People are not going to call you and you got to suck it up and just make those conversations happen.
Andrew: What kind of networking events did you go to?
Richard: At the time, I was probably what you would call a networking slut. I would go to everything. If there were going to be more than 10 people in the room, I would be there. And I don’t want to sound mercenary but I think that that’s the way you start because you don’t know which of these networking events is going to be good for you. So you get out there and you talk to as many different people as possible, listen to their stories and then find out which of these meet ups or particular groups are going to secure needs. And you make mistakes. You sign off for these things and you go there and realize it’s a group of recovering insurance salesman and you shouldn’t be there.
So you make these decisions or you make that the learning [??].
Andrew: What did you learn about doing networking events right? I mean, it’s challenging because you are in a room full of people who are trying to pitch you while you’re trying to pitch them. They’re nervous, they maybe looking over your shoulder for the next person who they are trying to meet instead of you because you’re not famous enough yet or successful enough yet to pay attention to them. In that crazy dynamic, you have to find your business, your first customers.
What did you learn about doing it right?
Richard: This is going to sound contrary to going to an event with more than 10 people but I want you to meet 1 person, just 1 person per event that I could make friends with. My goal was to go and make a single impression on a single individual.
So I think some networking events tend to become this business card collecting occasions where somebody just runs around looking for as many business cards as they can, as you said looking over your shoulder waiting for the next person. My goal was to meet one person. Make a deep and meaningful connection with that person and then see where that went and that is incredibly effective and I still to this day find that that’s the best way to use that time.
If you’re going to be in an event, whether it’s a conference, a networking event, a cocktail party, find one person that you can have a meaningful relationship with.
Andrew: Why friend and meaningful relationship as opposed to the one person who is a potential customer of my business?
Richard: Because people do business with friends. That is one of those unwritten laws of business. When they need something done, they will come to you directly and say Richard, we have a great relationship. Can you help me out directly? or they’re going to say Hey, Richard. Can you introduce me to somebody that can help me?
Andrew: I see. And so even if they’re not potential customers of yours right now or even in the market if they’re friends of yours when they need what you can offer they’re going to call on you first.
Richard: Absolutely and I’m not talking about friends that you’d invite over to watch the football game on a Sunday. I’m talking about people that trust you and you trust them.
Andrew: How do you in a room full of strangers make a friendship?
Richard: You get better at it over time. At first it was a dangerous occupation because I would make friends with the wrong people. First of all you identify with people’s interests. Look for people who have the same kinds of values and goals that you do. They’re there for that reason. They’re there to meet one person. If there’s someone running around the room trying to hand out business cards that’s probably somebody to avoid.
Andrew: Okay and you said you made mistakes by going with the wrong people. I don’t want to spend too much time on this I’ve got to go back to the rest of the story but this is interesting because it’s a way to connect with customers without having to pay, it’s a way of seeing how they’re reacting to your pitch, it’s a way of getting an understanding of their businesses all quickly in real time while you’re looking for new business you’re getting to know their businesses. I was going to ask about the mistakes that you made. You said that you talked to the wrong people.
Richard: Sometimes you think that because somebody has made the connection with you that you have to treat it like a business relationship and they may feel the same way about your relationship. They feel like because you’re in a relationship and you met at a business event that you have to do business together. I think that’s a mistake.
You don’t have to try that hard. People will help you regardless. This is interesting because I think there are a lot of entrepreneurs in the states right now who didn’t grow up here like I did. I didn’t grow up here either. I’m an immigrant and you don’t have friends from school, college, you don’t have buddies that you can just turn around to.
You start from scratch you literally make friends from scratch and the one thing I’m incredibly excited about and constantly amused by is how wonderful Americans are at making new connections. It’s culturally not something that’s universal. They like making new connections. They want to help you. They want to look out for your interests. That’s something that all entrepreneurs in the state should take advantage of.
Andrew: You’re saying that even if I’m a little shaky on it I should understand that the other people in the room like talking to strangers. They come to the event because they want to make new friends and that makes it easier for me.
Richard: Yeah you travel anywhere else in the world and you’ll find that the model that’s being created here is something that’s trying to be replicated everywhere else.
Andrew: I understand how you got your first customer and I understand your approach to getting your next customers. Did it work?
Richard: Yes it worked.
Andrew: What kind of customers did you get after the shoe store?
Richard: I can’t remember exactly but there were a combination of small business owners mostly people that had immediate needs so these were not long-term big projects. These were, “Hey I need you to solve this problem right now.” When you’re a small company those are the kind of people you’re dealing with. You’re talking about a 700 dollar website if you’re lucky.
Andrew: You were building 700 dollar websites, competing basically with the neighbor’s kid.
Richard: Pretty much exactly, competing with everybody who apparently now knows how to write HTML even my 10 year old son.
Andrew: This was 2005 so he wasn’t 10 at the time but to that level that’s where you were starting out. Why did you start out that way? You were already working at a top company. You were already doing business with Reader’s Digest. Now you’re doing 700 dollar, even if it’s a 1000 dollar website that’s pretty small.
Richard: I wanted to create momentum. That was the one thing that I kept on thinking about. That was if we can do lots of these projects we can build a portfolio of referenceable customers so then when I go and see the big fish, when I go and see that whale I can say, “Hey we’ve done twenty or thirty projects.”
Say what you want but it’s a numbers game. Say you’ve done one website you get that look. Say you’ve done thirty websites you get the other look. I think by the time we were into the double digits we were ready to go off to the big fish. Very soon after that we closed GE Healthcare which I believe is because of the fact that we had a reference book listed. They looked at us and said, “Wow you guys have done a lot of work in a short period of time.”
Andrew: How do you get to GE?
Richard: Through the networking. They were looking for a company that could do a redesign of their user interface of a very large acquisition that they had made and they were asking around. When they were asking around they happened to ask one of the people that I’d met at one of these networking events. So it all comes back to that and I don’t want to overstate that because I think there is good marketing and sales techniques that are as good or as important as networking. That when somebody is asking to spend a lot of money they are going to go to their friends anyway, they’re going to go to the people that they trust and say, “Who would you trust to do this work”?
Andrew: That makes sense, but you know what else I think, if you’re doing a bunch of small time sites when you’re trying to go after the big fish, they’re thinking whose the guy that we’d call if my brother-in-law needed a website or someone whose just starting out needs a website, but we’re GE, we need a person with our kind of experience. He’s not in our world. How do you bridge that gap?
Richard: Well even though we were only charging small amounts of money, we were still doing significant projects. I wouldn’t say they were massive, but they were significant enough that GE noticed the work and said, “Hey that looks like the kind of work that we need”. They didn’t know that we were charging small amounts of money for that. We didn’t tell them that, we’re a private company we’re not disclosing how much we’re charging for each project.
Andrew: And you guys were for people at the time in a basement. Did GE see that, did they get…
Andrew: How did you tell that to them?
Richard: Let me tell you a funny story. We actually arrived at the GE meeting and I had in my mind that GE were a suit and tie bunch of guys so we all went out and got suit and ties and arrived at the meeting and they were all in jeans and t-shirts. It just goes to show you, you don’t always know your audience.
Andrew: I would’ve assumed the same thing.
Richard: Yeah, but they were suitably impressed, they liked our suits.
Andrew: OK. You hired someone who used to work with chickens.
Richard: Oh, yeah. So Dan (?) our lead sales guy, his brother introduced me to him and said, “my brother’s looking for a job, he needs a change of scenery”, and I said “great what is your brother doing”? He says, “Well he sells chicken shit to golf courses”. And I thought he was joking, I thought are you kidding me, this guy that’s what he does for a living. It turns out that Dan was selling fertilizer that was made out of chicken crap to these golf courses because for some reason that’s the good stuff. And I said if he can do that and he can still have a smile on face, then he can probably sell anything. It didn’t take us long to teach him the actual skills of what user interface design and user experience design is and he just lapped it up and he got the skills. But he had what can’t teach somebody and that is that fortitude that you can push on and deal with rejection because sales can be an ocean of rejection.
Andrew: Especially an established market like that, you know, at least you were dealing with people who may not have website or maybe they don’t have a mobile app, but he’s dealing with people who’ve been buying fertilizer I imagine for years.
Richard: Yes, yes.
Andrew: And he’s trying to convince them to change who they’re buying from.
Richard: Right, and I think the lesson here for people who are hiring is, hire people who have skills that you’ll never be able to teach. So that may be great values or high standards, maybe it’s got something to do with the way that they present themselves. Don’t worry about the skills you can teach them, send them on a course, put them through some training, onboard them correctly. You can teach them those I would call, superficial skills, but you can’t teach somebody how to be a good person or how to be a smart person.
Andrew: How long did it take you to hire a salesperson?
Richard: Probably within that first year of full-time business. So we had a year where we were part-time and then we really got into it the second year of the company.
Andrew: By that time did you have a process to show Dan and walk him through, or were you still trying to figure it out and you said if we teach him the business and he knows sales he can get us new customers?
Richard: We had something even better than a process, we had something that we still call to this day the lens, and the lens is what we define as the ideal client. So what qualities would the ideal client have? So when you’re speaking to somebody whether it’s at a networking event or you’re in a client pitch, does the client have those qualities that are going to make this a successful project? Think about it as looking through a telescope, you see a certain amount of things through that telescope you can’t see the entire landscape. The problem or I suppose the challenge that most companies face is that you’re trying to sell to many people, they’re trying to sell to a broad range of potential clients. We said what if we narrowed it down to the single group of individuals and that lens that we put over every conversation allowed us to narrow in on the clients that we were going to be successful with. And, of course, if you’re successful with a client, that leads to more referrals.
So it’s one of those things that if you focus and you get very, very clear about who you want to work with, that’s going to lead to additional introductions to those kind of people.
Andrew: What about knowing what kind of work you like to do? We started out this interview saying that you didn’t know what you wanted to do, and so I imagine at that point you were taking on different kinds of projects. Is that right?
Richard: Yeah. We took on a lot of different kinds of projects even though we knew what kind of clients we wanted to work with. So in other words, the business that we were most attracted to, they had a broad range of projects for us, ranging from website design all the way through to social media-type work and even some e-mail marketing.
And I realize, now it’s easy to say so, but it seemed like at the time we would do just about anything for them. Because we thought that they were the right client, then the project should be the right project. But we hadn’t learned that lesson yet. And it took a little time for us to learn that even if you’ve got the right, ideal client, you may not have the right, ideal project.
So it took a while for us to narrow that scope down. And we went from being, I wouldn’t say a full-service agency, but a digital agency that could do many things down to a company that only did user interface and user experience design.
Andrew: For example, what did you have to give up in order to focus on that?
Richard: We shut down our ability to do any content management systems, so now we outsource that work. And we also sold off all our search engine marketing and social media clients. And it meant letting go of somebody, and it was painful, but it actually worked out OK. That person turned out to be more comfortable in the freelance role, and we sold those clients to that person, and they were able to manage them in an effective way.
Andrew: So how do you know? How do you know who the right person is? I understand you don’t know what to do, you try something that you’re passionate about, maybe open yourself up to lots of different work in that area. For you, design is what you were interested in, and you opened yourself up to lots of different design and web work, including even as far out as search engine optimization. But at some point, it’s time to say, “Hey, I focus on this kind of client and this kind of work, and this is what we’re going to use to grow, and when we add another branch to our tree it’s going to be very methodical.” But how do you know what that first one is? How do you know what that first focus is? Was it…
Richard: You asked…
Andrew: …based on money, based on passion?
Richard: So you asked two questions, how do you pick the right people, and then you also asked how do you know what your focus should be. The one precedes the other. You have to have good people so that you can figure that stuff out, because in every single business, whether it’s a service business like ours or a product company or even a media company like yours, if you do not have the right people, it’s very difficult to have those mature moments when you decide what needs to stay and what needs to go.
The maturity and the emotional fortitude of the individuals in the company leads you to breakthroughs, because you can’t get it right the first time. I don’t care how smart or how much experience you have; you can’t know everything about your business. You will learn throughout that process. So having the right people first helps you make the tough decisions later. And those tough decisions often are in the form of “Gee, what’s closest to my passion and what’s furthest away from my passion,” because those things that are furthest away need to go.
Andrew: Can you give me an example of how having the right people helped you make a decision about what not to do?
Richard: In my case, I had Alex, who was my business partner, and he was my sales guy at the time, or still is. The choices that we had to make were going to require us to also go through financial hardship, like when we stopped doing the social media marketing and the SEO and when we stopped doing the content management systems. That meant a reduction in revenue. We were going to have to build that business, the core business of user interface design, up from scratch, essentially. So bringing all the focus in on that was going to mean we were going to have to take smaller salaries, work harder, and you can only do that when people trust that you’ve made good decisions.
Andrew: Creating a culture, in fact creating a team, has been tough. Can you talk a little bit about, well, what’s the challenge in creating the right culture?
Richard: This is my favorite topic. I’m so glad you asked me this question. I think that one day, companies will be measured by culture and not by how many people work there, or what their top line revenue is. I think that the most important thing that you can do as a company owner is create a culture where people maybe don’t want to ever leave. That they think this is their last job and that they will really miss the company and you’ll miss them if that partnership is dissolved in some way.
And how do you create a good culture? Well, the first thing you’ve got to make sure of is that you don’t force it. It’s like anything, it’s like dating. Like try too hard and it’s not going to work. You have to let it evolve, and you have to bring your personality into it, without demanding that a certain kind of behavior is expected. So, you know, having a foosball table, or having free lunches delivered on Friday, that’s not culture. Those are perks. It’s got nothing to do with the culture of the company. The culture of the company comes from the individuals and you have to be smart enough and mature enough to identify what that is early enough so that you can nurture that.
Andrew: How do I identify what the culture of my company needs to be?
Richard: You have to be aware of what the subtext of the conversation is. I’ll use of us, as an example, because I think it’s easier that way. Our culture is one of work hard, play hard. And that may seem cliche, because a lot of people say that. We were a group of individuals who had an overdeveloped sense of responsibility to the work that we were doing. We’d like working. We are passionate about the work that we do. We don’t imagine a world in which we can’t work. And you know when Friday comes around we let go and we let go in a big way. And I think that knowing that those two things can be, that they can live in harmony with each other helped us build a strong business. You don’t have to have one or the other, you don’t have to be particularly fun at work like having a foosball table, I don’t believe in that kind of fun at work. I believe that when you’re at work you put your head down, get the work done, but then after hours, go crazy, do what ever the hell you want.
Andrew: And you know this because this is part of your personal attitude – that you want to work diligently with no distractions, and you want to play in a fun way that most people only dream of. You want to do the things that are on most people’s bucket lists, when you’re away from work and do things that will help your company grow when you’re at work. How did you figure out that that was going to be a significant part of your culture. Because there’s so many things that you like to do. You like to read, you like to sleep, I don’t know what it is that you like to do, but there are so many things that you like to do. How do you say – this is what we’re going to stand for – this is what is going to help our company grow and have a purpose.
Richard: In little bit of self actualization you have to realize what you are comfortable doing. Actually, an early investor of mine, said something that I really think matters: Every company has politics, every company has a culture. What you have to realize is that there is a culture and a politic that suits your personality. You have to be aware of that and go and seek that. And we created that because that’s who we are.
Andrew: So what’s the politics that fits your personality?
Richard: That it’s OK to be brash and overly honest in our company so that you may cross the line a little bit and hurt people’s feelings from time to time. That the culture is we would rather have the honesty and the transparency and then the gossip.
Andrew: You personally know that that is the way that you like to work with people. And if that’s how you like to work with people, that’s imbedded in the culture?
Richard: Correct. And you attract people like that because the way you’re presenting the company, and that’s the way you’re communicating both to your clients and your partners and your employees. So they attract that back to you.
Andrew: Speaking of the brash, before this interview I asked you if you were profitable, and you had this big smile on your face, and you said ‘Yeah, that’s why I have this big smile on my face’. What size profits are you guys generating now?
Richard: So we’ll do north of 30% net.
Andrew: And what size revenues are you doing?
Richard: We’re on track to do…
Andrew: Well, let’s talk last year.
Richard: Last year, three-and-bit million. This year more like 8 million.
Andrew: Three-and-a-bit million, 30 percent of it comes down to the bottom line. Am understanding that right?
Andrew: Which in a people intense business, that’s pretty tough.
Richard: It’s incredibly tough and what’s surprising is that we did that in an economy that was pretty sucky.
Richard: For most of our competitors and for most of our industry, it was a nasty couple of years. But we managed to grow. We grew profitably, and we did it because we focused on cash flow and focused on group culture. And I think more important than our profits last year was that we won the Best Places to Work award. There’s a couple of companies that won that in different categories, but in Barston [??] they have this competition, and that’s very important for us, because then you can keep turnover of your staff to a minimum. Last year, we only had one person leave, which means less time is spent interviewing and trying to do the things that are stemming the tide, if you will, and focusing more on doing good work.
So most companies are dealing with crisis. They’re dealing with chaos. People are leaving. They aren’t managing their cash correctly, so they can’t pay salaries. We’re doing exactly the opposite. We’re managing to the point that we can keep everybody happy so they don’t want to go anywhere. They’re happy culturally; they’re happy financially.
Andrew: Is that the first time you ever revealed your profits publicly?
Andrew: It is. How does it feel to say it?
Richard: Not bad. I’m a pretty proud person, so I suppose you’re just really a therapist.
Andrew: I’m glad that you felt comfortable saying it. And bucket list: I mean, we talk about money and we talk about how much you’ve achieved in a tough environment, but apart from business, you’ve also achieved a lot. I understand that you’ve crossed a lot of items off your bucket list, right?
Richard: Yes. I’m one of those unfortunate, or fortunate, I’m not sure which one it is, people to have lived an upside-down life, I call it. I spent most of my youth doing things that people will ultimately choose to do when they retire. I worked as a game ranger; I worked as a dive master; I lived on an island in the middle of the Indian Ocean for a year teaching people how to dive and sail boats. I’ve jumped out of airplanes and off the side of mountains and really lived a very interesting and exciting life. I actually slept in an active volcano one night.
And I think that because I’ve had that opportunity, my bucket list is more about self-actualization and really creating something of value, versus I just need to make a buck so that I can go and do those things. I’ve done those things. They’re cool. I did them when I was young and my body was able to repair itself when it got broken. Now, I’m more interested in creating a space and a place where people can feel very creative, that’s a safe place to be creative and do amazing work.
Just like Idea [??] created a company that obviously became respected as one of the top design, product design companies, we’re doing the same thing here. We don’t want just to earn money so that we can go and sit on a beach somewhere. We build the creativity into our business so that what we’re doing here is meaningful and they all look back on it and go, “Wow, look what we created, something worth putting on our resume.”
And by the way, we send people to the beach deliberately so that they can experience what’s that like. We actually pay for people’s what we call workation. So apart from their vacation, which they can do whatever they want to, and like most modern companies we have unlimited vacation: When somebody is able to achieve their personal goals, and they set their own goals, we then send them to some amazing location, Costa Rica or Dominican Republic, something like that. And they can go and work on the beach and experience what it’s like to be Tim Ferriss, where you can sit on your ass on a beach but still be creative and productive.
And it’s an amazing experience. These people come back, and they go, “It’s amazing, but I don’t think I’d want to do that for the rest of my life,” right, because it’s a little bit of a fallacy. You can’t be on the beach in total isolation with nobody surrounding you and still be as creative and happy as you can be where there are people working around you trying to create something meaningful.
Andrew: But you will pay for them to go to Costa Rica?
Andrew: They pay for their own hotels, their own place to stay?
Richard: No. I pay for everything.
Andrew: You pay for a place for them to stay, and all they do is the same work that they would have done in the U.S.? They do it from Costa Rica?
Andrew: Unreal. Unreal.
Richard: And I knew you’d like that idea, because that’s…
Andrew: Because I was in Argentina.
Richard: …a little like your lifestyle.
Andrew: And you’re right. You don’t want to spend your whole life doing it. But to be refreshed by a new environment, to just be surrounded by different approaches to life. I say this all the time, its two things that stand about to me about the trip. The first was, you can work late and then still spend time having dinner with people and spend time with your wife. In Argentina people wouldn’t have dinner until 10:00. At first it was weird but later on I realized there are other schedules, you don’t have to live by the schedule you happened to have been born on. And the second thing is, sometimes people see this in my interviews, I drink (?) instead of coffee.
Richard: Yeah, yeah.
Andrew: And it’s got a better taste for me and it keeps me going much longer than…in the interviews I use coffee because the (?) can see that. It gets distracting to sip on a straw, but those are just two of the big ones. There’s so many others that my mind was opened up to from being away, but I never heard of a company that would pay to fly you to another country and let you do your work from there. I know of a lot of companies that would begrudgingly, reluctantly let people do it and know internally they could help but not encourage it to that degree.
Richard: Well the way to create trust is to give trust. You must give it first before you start to receive it. It’s like that networking thing, if you find one person that you can make a meaningful connection with they will ultimately make a meaningful connection with you as well. I find that that’s the way to get the best employees, is people who you give trust to and you put your time and energy and mentorship into in order for them to be successful, will return that favor. If you think that they’re there just to make you money it will be a very short relationship.
Andrew: Speaking of your people, who is Kelly? What does she do for Fresh Tilled Soil?
Richard: Kelly is our chief operating officer and she’s the one that brings sanity to everybody. She’s like our mother.
Andrew: What does that mean, I always felt like I needed a chief operating officer, someone to just really run the company so that I can do the stuff that I’m good at within the company. For you what does it mean, what kind of stuff does she do?
Richard: Let’s look at it in terms of comparisons. The most important thing that a chief executive officer can do is build those people, spend at least 30 percent of your time taking care of your people. The other 30 percent of the time, you want to be taking care of your clients and the final 30 percent is about bringing the vision about the company to your clients and possibly even beyond that. So there’s a vision ownership that needs to happen.
Andrew: That’s what’s happening right here in this interview, you’re bringing your vision of the world to people who aren’t your clients.
Richard: There is a part of running a business successfully that requires a lot of attention to detail, making sure that contracts are done correctly, making sure that your insurance policies are up-to-date, that’s where you need a chief operating officer. The reason why those things are distracting to a chief operating officer, is because and now you’re going to hear my bother just coming out. There is a physiological reason why we don’t like making decisions, because it’s very stressful. So even I think Vanity Fair didn’t ask along Barack Obama and how he makes decisions. He reduces everything to a yes, no and there’s very good reason behind it because decision making is stressful. That’s why moving and divorce and all those things are stressful, because you have to make a million decisions. Kelly takes some of that decision making away from me so that I can be more efficient and better at decision making because I’m the one who has to make the big decisions.
Andrew: So what decisions does she take away from you?
Richard: What insurance company are we going to use, how are we going to manage this particular client on this particular project? Some small thing that relates to somebody taking vacation and it’s going to disrupt a project and we need to organize around that. I want to be able to be stress free so that I can make very important decisions like who’s the next big hire that we’re going to make, how are we going to close that big Fortune 50 company? Those are the things that I should be worried about, so she takes that stress away from me so that I can focus on making better decisions.
Andrew: Speaking of you science background, maybe you can tell us how you came up with the name Fresh Tilled Soil for a user experience website, for a user experience design shop?
Richard: I think you have probably heard the term slash and burn. To us that’s the exact opposite of what we are. A slash and burn strategy is not uncommon. A lot of companies go after that next mysterious customer that’s going to bring them the success that they’re looking for and they forget about the fact that they already have customers who are already in an engagement with them, already loyal to them and will probably spend more time and energy and money with them if they just asked. So think about your telephone company. You’ll be driving down the highway, and you’ll see a big sign that’s saying, “If you sign up now, we’ll give you a free phone.” And you think to yourself, “I’ve been a customer of that company for 10 years; they’ve never given me a free phone. What are they going to give me? What about my loyalty?” And I think that’s what we’re trying to say with Fresh Tilled. We’re trying to say here we’re really invested in our people, in our clients, and if you keep on treating it as fertile ground, it’ll reward you. But if you’re just looking for the next client so that you can say “Hey, I landed another client” and forget the fact that you have a loyal, wonderful customer right there, again, short-lived strategies.
Andrew: That does make sense. I do feel a little betrayed when I see companies that I work with offer all kinds of great perks for people who aren’t their customers yet and they don’t like me and don’t care about me and they’re not giving me anything except for agita when I try to call them up.
Andrew: Hey, I’m on your website right now, FreshTilled.com, and I saw it a second ago, but I was flipping around. There it is. Bottom right, I see the Winklevoss twins and something called Freshtalk. What is Freshtalk?
Richard: Freshtalk is an opportunity for the people that we have in our circles, our clients, our partners, our employees, and we also have apprentices, to meet other interesting people. Just like you’re creating an opportunity, you’re a vector for that; we’re trying to create a vector for them to go outside of their comfort zones and speak to people who may have had experiences that they will never have or that they aspire to.
So in the case of the Winklevoss twins, here is a very misunderstood story of two individuals involved in a global media disaster, if you will, and they’ve got a perspective. What is their perspective? What happened to them? What did they say? What didn’t they say? What couldn’t they say?
Andrew: These are the people who were the villains in the movie “The Social Network,” and they were suing Mark Zuckerberg for ownership of Facebook or for money over Facebook.
Andrew: And so your vision is to bring people who have different experiences in front of your audience in person, and basically you interview them?
Andrew: It’s like Mixergy but live, and where I interview entrepreneurs, you want to interview people who bring interesting experiences?
Richard: Yeah. And we’re trying to do what you’re trying to do. We’re still new at this, so one day we’ll be as good as you, Andrew. But what we’re trying to understand…
Andrew: I will always keep improving. I cannot allow that. [??]. Just to give you an example, I’m catching up with you in design. Check this out.
Andrew: I got good lighting now, and it’s all remote controlled here.
Andrew: I hired [??] from one of my past interviewees. I got a lighting set-up.
Richard: You should get that Phillips Hue, which you can control with your phone.
Andrew: If you guys got that, then I’m going to have to get it.
Richard: Yeah. We’ve got it already. It’s too late. [laughs]
Andrew: Don’t get it.
So basically, you’re trying to do interviews in person. What’s the benefit for you of doing interviews in person?
Richard: A couple of things. First of all, as you’ve discovered, when you meet people, you discover things that aren’t available to you in writing. They may not have been able to even say the things they say, or you’ve been able to extract from me my revenues, which other people have not been able to do.
So I think when you’re in a conversation with somebody and you’re developing a trusting conversation, you find out things that you can’t do just by reading their book or an article that was written by some journalist.
There’s something that’s more important. We’re showing that there’s a [??] leadership process that’s going on at Fresh Tilled. If we are open to the idea that we can learn from other people, then there is a humility there that no amount of our saying it will help. We can’t say it. We have to demonstrate it.
And we are truly humble. We feel the same way that you do. We’re always improving. We’re never going to stop. The day that I die will be the day that I stop learning. And I want that to be part of the culture. And I want our employees and our clients and our partners to see that.
Andrew: I’m a big believer in that approach, because I think there are so many people who want to be thought leaders who say “I’m just going to keep putting my thoughts out there,” and when they don’t have any they make some up, and they feel like frauds for having to do it. And that’s just, it’s a shame, because the alternate is so much better, to say “Hey, I don’t know as much as other people do; I’m going to invite them in and I’m going to learn from them.”
I start to see those people on your website too, and I start to associate you guys with the people who have interesting things to say, who are moving the world. And that helps your brand too. It’s a way easier thing to do. Much more authentic, much more meaningful and I think it draws a crowd. God knows, now that I said the Wingloss [SP] twins are on your website, getting to speak for themselves. A lot of people are going to check that out more than they are your design work, because we’re drawn to their story because we don’t get to hear it much.
Maybe now is a good time for me to do a quick plug for Mixergy Premium, and then I’m going to ask you about a really tough point in your business career.
The plug for Mixergy Premium is, if you guys are interested in doing interviews like this, you can copy my whole system. Mixergy Premium members, I’ve got the full course where I show you the software that I use to record this, where I show you the email that I use to get guests to say yes to doing interviews. Where I show you how we edit, where I show you the whole process. Where I even show how I get guests to reveal their revenue. I really talk about that in there, and I’ve seen people copy so closely that people in my audience, my fans, say, ‘Hey, you stole Andrew’s system.’
It’s not theft. It’s all part of MixergyPremium.com. What you’re seeing is that those ideas actually work and it makes me proud to see the people out there are not just Mixergy Premium subscribers, but they’re using what they’re learning there and they’re getting results.
So if you’re interested in doing this go to MixeryPremium.com and if you’re out there in the audience and you see someone using this method, congratulate them on using and getting some benefits out of what they got in their Mixergy Premium membership. So MixergyPremium.com, that’s one of dozens of courses, hundreds of interviews that are all available to you. Go there right how and sign up. I guarantee your going to get results.
All right. Here a tough point. We talk about the ups, we talk about the revenues, but there was a period where you could barely make payroll. Let’s talk about that, because I think that’s something that we don’t talk enough about, those difficult moments.
Richard: Well, you run a business, and you try to do good work and you try to do quality stuff, but you have to run the cash part of the business. You can’t take your eye off the ball. We’ve seen more of our competitors disappear because they’re great designers but suck at business, than any other reason. Not because they’re stupid. They’re great people. They’re smart. They’re amazing at their craft, but they’re not managing the business.
My suggestion, if you’re in any business, regardless of whether it’s a service or a product, make sure you understand how to manage your cash. We lost sight of that and fortunately we learned that lesson when the payroll wasn’t . . .
Andrew: How do you lose sight of that?
Richard: Because you get too busy trying to do whatever it is you’re doing. Design, or maybe building a product, or selling a widget or something like that. You forget that you’re also responsible for the business. The business is an entity as well. Your employees are something you have to take care of. So you have to look inwards. You can’t always be looking at the product or the output, you have to also look at how it gets done. And by managing that successfully, you can be successful at the other end as well.
Andrew: I’m sorry. I don’t understand. So what’s the cash flow issue in a business like yours? I think I have an understanding of it. But I want to make sure that I’m clear. What kind of cash flow issues could you have in a consulting business?
Richard: We often are doing projects where we are doing work before we get paid. And for many big clients, some of these are Fortune 500 companies, they have a lot of bureaucracy intentionally to prevent the flow of cash out of those businesses and towards your businesses. It’s hard to extract that money and you might have to wait 45 days or 60 days for that check to arrive. But you have to pay your payroll. You’ve got to pay your rent. So if you’re not getting that cash in when you expect it, it can really hurt your bottom line.
Andrew: That is, that’s exactly what I was thinking. I didn’t want to impose my vision on you, that’s why I didn’t suggest it. But that is a problem. You’re working with customers for whom 60 days is no big deal, man. Come on. They’re paying customer over 60 days all the time. 90 days, even, if things happen because a paper didn’t go somewhere. And if you go to them, at least what I found, is if you go to them and complain about it, first of all it’s challenging to go to someone who’s giving you big money and complain, and second thing is, I always feel like maybe I come across as too small and petty for asking for it.
Richard: Yeah. Get over it. That’s my advice.
Andrew: You got to get over it and just ask.
Richard: Yeah. You got to get over it and be willing to have a conversation about money. I know a lot of us are raised in families or homes where money is a bit of non-discussed thing. People are uncomfortable having that conversation. We like having the money conversation. We have it up front now. We bring it up in those moments where things are still good, so you don’t wait until things are uncomfortable to have those conversations. And we ask our client to pay up front. Not all of, but at least
Andrew: Oh, really?
Richard: This project won’t start until we get that first check from you. And some of them might say, Well, that’s not our policy and we’ll say, we’ll just delay the project until we get that money, because we’re a small business. We have a payroll to meet. You guys have less concerns about things like that. So it’s important that we do that. If we are going to be successful, we need to be healthy. And nobody is going to turn around to you and say, I want you to be unhealthy, I want you to be unsuccessful. They’ve hired you. They’ve put their faith in you. You’re just taking that to the next step which is, fine you’ve said it, now invest in it as well.
Andrew: That’s great advice. The website is FreshTilledSoil.com and you know what, I didn’t say this in a past interview and someone in the comments said, ‘Andrew, you missed this’, and it’s important to us now. And so what I didn’t say is, how can people say ‘thank you’ to you directly. I guess there are people in the audience who’ve gotten used to me saying this and when there is someone that they want to thank directly, if I don’t ask for a contact they get upset. So if they want to say ‘thank you’ to you, what’s a good way for them to say, ‘I’ve learned a lot from this interview’?
Richard: I think twitter is the best place to find me. My twitter handle is FreshTilledSoil. It’s easy to remember.
Andrew: FreshTilledSoil. You man that personally?
Richard: Yea. I man it personally and I take care of it and look at it all, not all day, that would be unproductive, but several times a day. So, if somebody wants to have a conversation with me, we can [??] there.
Andrew: I’ve noticed that people have thanked past guests on twitter, and at first I thought ‘Well, maybe that seems a little impersonal. Maybe that person doesn’t pay attention.’ What I’ve noticed is past, and I’m not suggesting you should do this, Richard, but past people will then forward their twitters, their tweet compliments from the audience to me via DM or email. You don’t need to do it. I’m watching the stream. I pay attention. But I can see that it means a lot. And I always say this, in any place people are never pissed that you’ve said ‘thank you’ to them, and often, almost always, they’re so grateful that you’ve said ‘thank you’, that it’s a great way to build a relationship later on. Even if you don’t come back ’till years later. If you come back and say, hey, you know, Richard? I know you’re about to interview me for a job, but I’ve got to tell you, I saw your interview a couple of years ago. I forget the name of the site or that guy who was with the funny jacket, or the funny hair, or whatever. But, I learned a lot and I said ‘thank you’ and I really appreciated that you responded to it, or I really appreciate what you said and I tweeted out to you. Always goes a long way. So, I’m going to say it right here, Richard, thank you so much for doing this interview.
Richard: Thank you, Andrew. I really appreciate it.
Andrew: Thank you all for being a part of it.