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 for an audience of hungry, ambitious entrepreneurs. Yeah, there’s some people who are just okay where they are. God knows they must have done good therapy. They’re happy where they are. They don’t need more. Why should they even bother with the anxiety of listening to Mixergy?
But for the rest of us, for the few people, I should say, who are in a world where they just keep wanting more, they just keep wanting to build something bigger, they want to keep going, well, then what you’re hungry for is to hear what’s working for other people, to get ideas that will help inspire you to come up with something brand new for yourself, and that’s what Mixergy is all about.
Joining me is an entrepreneur who, when he had a job working at a company called Udemy, he heard the founder of Udemy on here doing a Mixergy interview, and he said something to himself and then he worked and here he is today building . . . actually continuing to build a company but he created a company and he sold it.
The entrepreneur is Max Altschuler. He is the founder of SalesHacker. Get this. I had no . . . I’m so fascinated by this. I can’t wait to have . . . Max, when you told me you might not be on, I was going to go into freaking Seattle just to get you on here because I’m fascinated by your story.
Here’s Max’s story. The guy starts out with meetups, actually produces money with meetups. Who makes money with freaking meetups? This dude does. Then he gets into conferences. Again, who makes money in conferences when they got no audience? But he figures out how to get an audience. He figures out how to get a partnership, which I thought he wasn’t making any money from. I knew about the partnership a little bit. I assumed he was doing it just like for reputation. No, he was making money from it.
He’s got these conferences around sales. He’s making money. He’s doing well, got every reason to be proud and then has me punching my arm. He gets knocked by the fact that the software vendors are creating their own freaking conferences and they don’t care about like making money from it, so they can splurge and any other person would just have a cute story. I had this big business. It did well. I went out of business. Here’s how it happened. And we learned a lot and we admire him for doing it. But Max’s story didn’t end up that way.
Max, I got to find a way. I got to find a way, and I think because he had a good mentor, a good guide in this story that you’ll hear about. He found the way. He found a way to take what was working for him offline, bring it online, do it with strength, and I want to find out how he did it. How is he . . . Anyway, how’s he doing online education? How’s he doing online conferences? How is he doing online content in a way that’s profitable? All those things feel like they’re done, but they’re not for him.
All right. So that’s Max’s story. He’s going to tell it here in much more detail. We’re going to figure out how he did it and, more importantly, how you the person who is listening to me can get at least one idea that will fire you up and a few years from now you, just like Max, will say, “I heard that interview and I had to be here,” and then you’ll be here. And we’re going to do it thanks to two phenomenal sponsors. The first will host your website right, it’s called HostGator. And the second, Max and I both know really well. It’s a company that will help you hire developers. It’s called Toptal.
Max, what did you say to yourself when you heard Gagan Biyani on Mixergy at the time?
Max: It sounds like seven years ago, one of the first episodes and I was like, “Wow, I’ll be on there one day. I’ll make it.”
Andrew: You did.
Max: You had some good ones on there too, at the time, like some really good entrepreneurs, and I’m sure you still do. But I remember it was the early days, and I was like, “Wow, it’s pretty high quality here.”
Andrew: I know. We were getting started. And the reason I had high quality same reason now is because the people who are on are people who are listening. You were an early employee of Udemy, the site where anyone can host a course and people can go and buy courses. And you noticed that there was a side of that business that no one was paying attention to. What was the side?
Max: Oh, yeah. So I built the supply side of that marketplace. So online education marketplace, supply side, demand side. So demand side was our marketing, our students. Supply side was the sales side, that was our instructors who taught courses. So we had everything from like, what would be in SaaS and SMB, which was your individual instructor who could teach one course all the way up to your enterprise, which was a publisher who signed a deal with Wiley, they put their whole catalog on Udemy, so almost had Outreach there in a different world but on Udemy.
So, at the time, we really started from scratch, didn’t have much of a process in place and got really hacky with it. Built out a team of virtual assistants in the Philippines, used a company called TaskUs, which has also blown up since then. And we used a company called ToutApp, which happens to be a company that got acquired by Marketo, and now I’m currently employed at a competing product, but built this really hacky sales process and really went off to the races. We were growing superfast and . . .
Andrew: Here is what I remember. We do courses on Mixergy. I get proven entrepreneurs, we train them to teach, we organize their ideas, we publish their courses on Mixergy. And I started to see, at some point, they were contacting me and saying, “Andrew, ever since I’ve been on Mixergy, now I’m getting contacted from Udemy to go put my courses on there.” I contacted Gagan and I said, “Gagan, can you back off of these guys?” My sense was from what he told me, this was a team of virtual assistants who are scouring the internet, and not even virtual assistants, but virtual employees, virtual people. They weren’t employees even. Scouting the internet, looking for courses, and then finding contact information and then sending out messages. This is what you created?
Max: Yeah. So what we did was we used a . . . So we would use, let’s say, our category that we wanted to create was technology. So we’d go on Amazon and look at the best technology books like, best seller, and then we’d rank it, “Okay, we need PHP, Ruby on Rails, Python, Node.” These are the most popular ones. We’d rank it all the way down.
Andrew: When you say “we,” how much of it was there before you got there?
Max: Not much. None of this.
Andrew: Not much. This process wasn’t there, but you said, “Look, I need to have development. I need to have coding courses on here. Where am I going to find coding courses? Amazon, of course.” Anyone who’s written a book has been screened enough through someone’s process. You go through and you find the top people. And then what did you do?
Max: Yeah. So, from there, we use the keyword search tool. I actually have the link somewhere. I got to find it. But what you do is you would put in box one video courses, lessons, and box two would be the actual subject matter, so Python or Ruby or whatever it was. And then the last box would be beginners, intermediate, advanced, etc. And so what you do is you press Convert or Go and it would type out all these different strings of the three boxes in a row. “Beginners Python Courses. Beginners Python Lessons.”
And we would put that together and have the virtual assistants in the Philippines, whose English wasn’t that great, go out, type in, in all the Content Search catalog, so Google, Bing, SlideShare, Slide Six, YouTube, Vimeo, all these different keywords strings, and what came out of that, they would fill out these spreadsheets with all the people who came up for courses. So now we built these directories of all the people who taught courses in these different programming languages, also the best sellers from books, and that was like our low-hanging fruit. So if you already had a course in Python, well, we just want you to put it on Udemy. If you had a book on it but not a course yet, well, we want you to create a course and then put it on Udemy.
Andrew: And you had different email that you would do for each one. And the reason that you were talking about ToutApp is that . . . Also created by a Mixergy fan. That software would tell you when someone opened up your email so you know that they read it when they clicked over so you know when to follow up. Software has gotten really sophisticated when it comes to this type of thing, but you were using that at the time. This is what helps you get courses. Now once you get a course at Udemy, how natural was the flow of new students from that without marketing it?
Max: 33% of all our new students at that time came from instructors.
Andrew: Meaning the instructor would promote it or . . .
Andrew: It was. So once an instructor put their course up, even if the course was already somewhere else and you said, “Just bring it over here,” that would lead to new customers.
Max: In most cases, it was so much more polished on the Udemy platform that they’d rather promote it on Udemy than on their own, like, WordPress or whatever they had it up on.
Max: I remember there’s this one guy, Victor Bastos, in Portugal, we found him on YouTube. He had like seven . . . He had scattered videos from like seven different programming languages, and he can do them in English, Spanish and Portuguese. So I hit him up, we had a good conversation, he got his stuff up on Udemy, and then we started doing these Amazon daily deals like the Groupon style deals, and we got them in a couple of those. I’m pretty sure he went from making like $500 a month in YouTube ads to probably made like 500K that year teaching on Udemy because we kept putting it in these daily deals because he was like one of the best instructors we had. We can sell it in English, Spanish, Portuguese, and he had like seven different programming languages. So that guy owes me a boat or a car or something like that and I think . . .
Andrew: And this is you bring him in and, because of that, you get more customers, more customers means more revenue. You don’t have to pay any money for that except the share of the sale. So this is brilliant for you. Now you do the thing that I love about being in San Francisco. You said, “Look, there are other people like me here. I’m not the only person who is thinking in this kind of systemized way.” And you got together with people like the founders of Thumbtack.
I went to their house once. I remember sitting on like this folding table at their house, beautiful view folding table that could have been out of someone’s high school basement. Great dinner that was created by someone on Thumbtack. Thumbtack is a site where you can go and find people who will do things like mow the lawn or cook for you. These freaking guys, I can’t even reveal what they said. I swear I’m going to take this to the grave, but it was like shocking the kind of stuff that they were doing to grow. Some of it is open, like using virtual assistants like you. Some of it is like, “Holy crap. You guys are such nice, like sweet little sweethearts, and this is what you’re doing?”
Max: Yeah. I remember hanging out with Marco and Jonathan in the real early days going to the . . . They had like . . . It used to be like . . . It looked like their office was like a garage at some point. I forgot where it was, on like 5th and maybe like 5th and Folsom or something like that, but it was like a little garage. And then they raised that big round of funding, but prior to that, we would go in there and geek out on how both the companies were using these virtual assistants in the Philippines, $4 an hour, $800 a month or whatever it was. They were doing it mostly for our customer support. We were doing mostly for sales. So we would be swapping lot of knowledge on this, so it . . .
Andrew: But they were doing sales too, or maybe when you’re talking to me . . .
Max: After this. Yeah, exactly.
Andrew: After that. So then they see what you’re doing and you’re saying, “Okay, great. We could do it as sales. They also did really well with SEO and this stuff.” You guys are starting to trade ideas and you said, “All right, there’s a lot of good stuff in here. I’m being known as a person who’s doing this.” That is what led you to do the first meetup, right?
Max: Yeah. And I think in that and in similar to the Thumbtack case, it was, “Hey, Gagan, my founders, what are you guys doing to grow so quickly?” and they’d be like, “Talk to Max.” So then I kept building my network around that. There was another guy, Ryan Buckley, who would put out a bunch of articles on using Python scripts to scrape Crunchbase and I was like, “All right, that’s genius.”
So we got a group of four of us together for the first SalesHacker meetup. It was TK who was the founder of ToutApp at the time. Now he’s GVP over Marketo or Adobe now actually, so double acquisition there. Another guy, Zander Ford, who was the head of sales at BlueKai at the time, and we would meet weekly. Oh, actually, it was monthly, sorry. And we would say, “All right. Just if we’re going to open this up, only bring people who add value.”
And I think that’s the key to starting a community really honest, like making sure it’s a really high quality foundation and somewhat exclusive. And sure enough, every month, we bring somebody who added value. Zander was an investor at something called The Factory which was a building that we can go meet at and use the facilities every time. So we had like a really nice meeting room for it. Every time there was a monitor on the wall and somebody would present what they were doing. A bunch of different sales tech companies were basically founded out of it. People who would present to us really early on. And it was . . .
Andrew: And were you charging for it from the beginning?
Max: No. So this was just the . . .
Andrew: Just like a mastermind. And what you wanted was someone to come in and talk. So, before we started, we were chatting, you and I, while we were waiting for this room that you’re in right now. People can’t tell because it looks like you’re sitting in front of us. It looks so concrete wall or something. But you’re in a really good recording studio. We were waiting for the recording studio to open up and we were chatting. You were like freaking blowing my mind with basic stuff that you were showing, and it wasn’t the stuff that you were showing so much as the way you were thinking and expressing it and like, “Oh, this is great.” I said, “We’re going to talk about that in the interview.” You said, “Actually, I can’t say that part. I can’t say that other part.” And the interesting thing is you’re saying to me that you were able to get these people to speak and say the good stuff on like not a stage but in front of a group of people?
Max: Yeah. I mean, the biggest the group got it’d be between 12 and 20 people, but we brought in, I remember there was a new CEO at Kissmetrics at the time and he came in and we like picked apart his business and his sales process, and he left there and he was blown away and he was like a 20-year industry veteran and was just like, “Holy shit, I can’t believe how these people are thinking about these problems these days.” And since then, so much sales technology has been invented. Like the company I’m at right now that acquired my business, it was a half-billion dollar, less valuation was a half million dollars, and they didn’t exist at this time. This was five years ago.
Max: Didn’t exist.
Andrew: I thought that they had been around forever. But you know what? We’re talking about Outreach, Outreach.io. To be honest, I didn’t do much research on them.
Max: Four years old.
Andrew: What did they pay to acquire you guys?
Max: I can’t get into that.
Andrew: Give me a ballpark. Are we talking about like over or under five?
Andrew: Over $5 million.
Andrew: You became a millionaire, like you have an account that you can go look at and see over $1 million?
Max: Yeah, but that was . . . I could do that before the . . .
Andrew: Oh, you could do that even before.
Max: Yeah, yeah.
Andrew: How old were you do you think when you were able to look at a bank account and see that you had over $1 million in it?
Max: 2015 or ’16. So three years ago. I think it was 2015.
Andrew: Ballpark. So then how old were you in 2015?
Max: That was 28. I don’t know why it takes me so long.
Andrew: Twenty-eight. It takes long for me too. You know what? I wish that I was born on like a zero number year like an even number so it’s easier for me to tell. So, by the way, SalesHacker was founded in 2013, so we’re talking about a couple of years afterwards, that’s how . . . I had no freaking idea. I just thought you were doing this for passion because it’s good stuff and it was.
All right. So, at this point in the story, you are still at Udemy, you’re creating these groups, you’re hanging out, you’re learning from people, and really just becoming a guy with a big reputation. You go to a company called AttorneyFee. What is AttorneyFee?
Max: It’s a local legal marketplace. So, if you are in a city and you want to claim bankruptcy, had a DUI, you got divorced, personal injury, you can call this number, put in your ZIP code, press one for bankruptcy, two for personal injury, three for divorce, four for whatever else, and it would connect you to an attorney in your area. And if you were on the call for longer than 30 seconds, we would get a fee from the attorney. So it was like lead gen model.
Andrew: Got it.
Max: They were . . .
Andrew: I’m sorry. What was the website? I can’t find it anywhere.
Max: I think is local.legalzoom.com right now, so LegalZoom [acquired 00:15:26] it.
Andrew: Oh, now I got it. Okay. So LegalZoom acquired them.
Max: Oh, yeah. I went there because I saw a potential good payday. They gave me a good amount of equity and a great salary especially for the time and the ability to manage kind of both sides of the marketplace there, grow my skill set. But they were working out of LegalZoom’s offices in Mountain View, and so I was like, “Okay, this is going to be a layup. LegalZoom is going to buy these guys.” LegalZoom acquired them in like six months after I started working there. And they were like, “We want you to switch to marketing and move to Austin,” and I basically said, “There’s not enough zeros on that check to make me do either of those two things.” So . . .
Andrew: Why? You like Austin.
Max: I like Austin now. At the time, I didn’t know anybody there.
Max: Now I know . . .
Andrew: All right. And then marketing was not . . . What was interesting to you about AttorneyFee was you could kind of apply some of the stuff that worked for you at Udemy.
Max: Yeah, all of it.
Andrew: All of it. And so did you get to apply anything there?
Max: Yeah. Yeah, we had . . .
Andrew: Give me an example. What’s one thing that you did that you’re especially proud of that was impactful?
Max: I quadrupled revenue and cut spend in half. So, if you . . .
Andrew: From doing what? You cut spend by cutting back advertising.
Max: From making our process more efficient. So that’s what it is. All the . . .
Andrew: Give me an example. What do you mean by “process more efficient”?
Max: So all the hacky stuff that we do is about making processes more efficient so that you need to spend less money to generate more revenue or less resources to generate more revenue. Like . . .
Andrew: Can you be more specific? I know that there’s some things that you might not want to talk about, but it’s been a while, no one’s coming back for you now. But even within the confines that you were limited to back then, there’s got to be something you can say.
Max: You can have an eight-person sales team, but if they’re inefficient, then you’re paying eight people.
Andrew: No. More specific to like what you guys did.
Max: Well, that’s what we were doing. So, like, we had eight-person sales team that wasn’t generating their number, then . . .
Andrew: And what did the sales team have to do?
Max: They had to go out and sign up lawyers.
Andrew: Lawyers, because with the more lawyers they get, the more people are there to pay commission whenever you guys send people to them. Okay. So they weren’t efficient. How did you make them more efficient?
Max: So, if you plugged in processes like virtual assistants and ToutApp, you didn’t need eight people anymore to do the jobs to generate the revenue that they were generating. You could do the same thing with two or three, especially two or three really good ones.
Andrew: Because we were talking about . . . What is it? This . . .
Max: [inaudible 00:17:44] efficiency . . .
Andrew: The sales development rep, the SDR, that was what the salespeople were doing. Is that right?
Andrew: And so when you have a virtual assistant do it, what is the virtual assistant’s process for getting potential leads to the salesperson so the salesperson can be efficient and just focus on closing?
Max: Yeah. So this is what they were doing. So they were going to Google, typing in “California lawyers”, clicking, get the email address, type in email.
Andrew: Your salespeople were doing that.
Max: Yeah, before I showed up. Yeah.
Andrew: Okay. And by the way, this is like basic stuff right now, but back then . . .
Max: Yeah. So what I was doing . . .
Andrew: There were people who knew it. They just didn’t know about this. They weren’t into . . . Okay.
Max: So we were scraping Yelp, scraping lists, uploading it into ToutApp. We were typing canned templates. I could send thousands of emails a day if I really wanted to, and then do follow-ups and then do like, okay, when this person opens it, they get a phone call. So, like, instead, you have good reps calling every time an email gets opened instead of sitting there going down Google one by one.
Andrew: Wow. Okay. All right. How about one more? This is the kind of thing I’m looking for. Really specific. I’ll tell you what? Hold it for a second. Let’s talk about my first sponsor. It’s a company called the HostGator. HostGator hosts websites.
Let me ask you this. As a guy who’s really smart, you’ve seen a lot of businesses online. If somebody’s listening to me and goes, “Man, I’m where Max was after he decided he didn’t want to work for LegalZoom. I got to figure out my own thing. All I have in this world is the clothes on my back and Andrew gave me a HostGator hosting package, which means I could host WordPress.” Other platforms too, but let’s face it, they’re going to start with WordPress. WordPress website. What website, what business would you suggest they start in order to get themselves on track for success?
Max: Yeah. At this point with all the virtual assistant stuff, I’ve become experienced with I’d say arbitrage. Anything arbitrage is . . .
Andrew: What do you mean by arbitrage? What would they arbitrage? Arbitrage is buy something low in one market and sell it higher to a market that doesn’t know about the best price differences.
Max: Yeah. So I have a really good content writing process right now that we do at SalesHacker and now with a team of writers in the Philippines. So an easy thing for me to be able to stand up would just say, “All right. I’ll go to companies and be a marketing content team and outsource the writing to.” So just be like a project manager for the . . .
Andrew: Oh. That’s part of what we talked about before we started.
Max: Yeah, exactly.
Andrew: You started telling me, “Andrew, we actually rank really highly for this keyword.” I did screen share. And then I did the search with you looking to see, and sure enough, you were there. And then you told me about your process where you’ve got a team of people who write it and it’s basically a process at this point. You keep improving and refining it, but it’s a process.
So you’ve got that process. Someone like me doesn’t have that. We just need some content. It costs you, I’m just going to make up a number, about $200. I don’t know that you want to say the real number. You didn’t give me a permission, so I won’t. But let’s say about $200. It’s worth $1,000, $2000, right? And so you’re saying, you offer this as a service. I come to your website, I see the work that you guys have done, maybe you have a couple of case studies that you do for free. Andrew sees it and goes, “Screw it, 2,000 is worth it for us. We’ll pay Max $2,000.” I’m paying you, you make $1,800. This is what build your business and that’s the arbitrage that you’re talking about.
Andrew: And this is the arbitrage that you would look for.
Max: Yeah. I mean, if I could start a business right now, any other business knowing what I know, I mean, that’s like a good easy one where I can like . . .
Andrew: What’s another one?
Max: The main one, I think the biggest one that has like a massive opportunity over the next two, three years is system integration partners for companies like Outreach, Drift, and Intercom. So sales engagement platforms and chat platforms. If you can be the Accenture for that, I think there’ll be a lot of money in that.
Andrew: You’re saying that there are all these different sales and customer support software that are out there that we’re using, but they don’t talk to each other.
Max: Somebody can build a really big business on just setting it up in your tech stack and making sure your data is flowing, and then . . .
Andrew: That’s it. Coming into the company saying, “You got the software. We’re going to make sure that it’s connected, we’re going to go away and then be there on call whenever you need us to do it.”
Max: Yep, exactly.
Andrew: Companies will pay for that?
Max: Oh, yeah. I mean . . .
Andrew: What’s the software that they need to work together?
Max: Look at, I think is a Capgemini and then there’s a . . .
Max: Accenture or Deloitte, all these . . .
Andrew: I always thought that those are for bigger companies that they can’t figure out their head from their tail and so they’re willing to pay for it, but you’re saying even at your level, even Outreach’s level they’re willing to pay for this. Give me an example of a problem that you guys have at Outreach that this is . . .
Max: So, if we’re selling Outreach right now to a company that has . . .
Andrew: What does Outreach do?
Max: Outreach is a sales engagement platform. So we allow you to take your data from . . . Actually, you don’t even need Salesforce. But we take your data from a CRM if you have one, an email, call, do one-on-one personalized video from it, actually do LinkedIn with it, like LinkedIn messaging, connecting SMS. So it’s your one-stop shop for all things sales engagement, so engaging with your customer, your prospect, [inaudible 00:22:41] buyer.
Andrew: Okay. So I’ve got my contacts in my CRM, my address book. You guys help me contact them and help me figure out what’s going on with them and personalize it. So what’s the problem that you guys have, or what if I included it in my company at Mixergy, what’s an issue that I would have that such an integrator would help with?
Max: So you can probably do your own, but if you’re a, let’s say, you have a 20-person sales team, you buy Outreach, now you have to set up email templates for your team that they want to use. Now, you can set up your own email templates, or you can pay a company that knows every best practice in the book that does this for their livelihood to come in and set up the best templates they possibly can for your business. So now you’re set up, you have your templates. Second thing is you need to make sure your data is flowing properly. You might have bad data, so like your Salesforce might need to be reorganized to make sure your data is really good so that it moves into Outreach properly.
Andrew: Okay. And then let’s talk about another piece of software, what would that . . . How . . .
Max: Yeah. So it might be Drift or Intercom.
Andrew: If I have Drift or Intercom on my website to proactively chat with people who are looking at it, what’s the way that I might connect it to Outreach?
Max: Yeah. So you can have integration between this is coming right now, but an integration with Drift and Intercom where if somebody comes in, immediately they can get a notification and you can send them an email, connect with them on LinkedIn or . . .
Andrew: Because you know who they are.
Max: Yeah, exactly.
Andrew: Only if the software is talking to each other. That’s what you’re talking about.
Max: Yeah. Then there’s Clearbit Enrich. The modern tech stack for sales and marketing, especially in sales right now is evolving in such a way that there is a real business for system integrators who really understand not only how to integrate it all together, but like best practices around, “Okay. Well, here’s how you should be A/B testing email.”
Andrew: This might be the best HostGator ad we’ve ever done. Guys, listen to me. If you want to take that idea and run with it, we’re talking about a services business, right? It doesn’t cost much. You don’t have to do a lot of software. In fact, none. Throw up a website, understand what you’re selling and start selling and iterating it. If you want to take that idea, go to hostgator.com/mixergy. Well, frankly, your friend Andrew Warner is going to get credit for sending you over which means that HostGator is going to buy more ads. They’ve already bought every ad that I possibly could sell them for 2019, but I want them to know that they’re getting results for their money, number one, and maybe we sell them on 2020. Sachit’s a good salesperson. He’s selling like five years ahead at this point. No, I mean . . .
Max: By the way, I would still arbitrage every part of that business except for the sales process. I’d be the face of it. I would sell. I would outsource the copywriting. I would outsource the integration.
Andrew: Even the integration. So you’re saying when you build up this business, you’re not doing the integration. Other people need to do the integration. That’s all you want to do.
Max: Most of what every employee does at any company can be scaled off their plate by automation or outsourcing for less than what their hour . . .
Andrew: I think I love the way you think. And I would never know it. You know what? Because you and I are sitting here, I’ll tell you why, because you’re just sitting there like casual, “Andrew we’re just kind of hanging out.” I almost feel like . . . All right. Hostgator.com/mixergy to get the lowest price that they’re offering anyone online. Take that idea. And frankly, if you hate your current hosting company, just switch to hostgator.com/mixergy. When you do, they’re going to take great care of you. They’ll give you a low price. You’ll love it.
Let’s continue with this interview, Max. So you decide, “Screw that. I’m not working here. I’m leaving.” You look around your world and you say, “Hmm. These events that I’m doing are pretty good.” Do you see a business model in it, or were you thinking, “This could lead to the business model that becomes the business”? Which one was it?
Max: I had no strategy whatsoever. I . . .
Andrew: How does a guy like you have no strategy?
Max: For this, so I think it was like August 25th, I knew I wasn’t going to work at LegalZoom. August 27th was our next meetup. So I walked in there and I just said to the group, I was like, “Hey, we got 20 people in here now. It seems like people want this. Who here would be interested if we organize the conference around it?” So, in the room, I had Jason Lemkin, who was the CEO of EchoSign, was at Adobe at the time and also the founder and writer only at the time of SaaStr.
Andrew: Oh, he didn’t have an investment firm at the time.
Max: No, none of that.
Andrew: And he wasn’t doing any investment. Oh really? Okay.
Max: Writing Quora posts for SaaStr. There was Doug Landis, who was the VP of Sales Productivity at Box. There was Armando Mann, who was the VP of Sales at RelateIQ right before they sold. There was Matt Cameron, who had just signed on to be the VP of Sales at Scripted which had just raised a lot of money at the time. And he was the previous global VP of Sales at Yammer. And then we had TK from ToutApp who basically was like, “I’ll be the marquee sponsor. Here’s $15,000.” And Ryan Buckley from Scripted also put up some cash as a sponsor. And so we had pretty amazing lineup right off the bat.
Andrew: Why? Why did they want to be sponsors?
Max: Because they knew we’d be able to get other salespeople in the room. So like TK, from ToutApp, he said it’s the best sponsorship money he ever spent.
Andrew: Because how much was . . . But ToutApp was like a few bucks a pop, right?
Max: Tout at that time? I know they were selling decent size of deals. They were selling 20K, 30K deals.
Andrew: Oh, they were?
Andrew: I thought that was like the inexpensive software that people used.
Max: It was like the only one, so it was them and Yesware at the time, so they would do big deals. I mean, the Sacramento Kings were using them. Sacramento Kings is a decent size . . .
Andrew: No, definitely, but I thought they were just a few bucks a seat as it’s called.
Max: No. They had good deals. Yeah.
Andrew: Got it. Got it. So for him he’s thinking, “Screw it. I get one company from this. We more than make up for our money.” And then what was it that he was asking for to promote his company for 15?
Max: Kind of stupidly, but like 15K, I was like, “Sure.” We did the SalesHacker conference presented by ToutApp, so like made them the marquee sponsor. It’s like everybody . . . There were a lot of people who thought it was like a ToutApp conference, which was fine with . . .
Andrew: Got it. Okay.
Max: Got bunch of money on the event, but like, TK is like, yeah. Like, that worked for us for a long time. So . . .
Andrew: Go ahead. You can tell the story. Continue. I got so much I want to ask you, but go ahead.
Max: Yeah. So I ended up getting a bunch more speakers, and I said, “All right. We’ll do 100 people and we’ll keep it like invite only,” and then it just kind of blew up. So it ended up like 300 people, and I sold the sponsorship to InsideView for $10,000. That was like our other second biggest sponsorship.
Andrew: What’s InsideView?
Max: It’s another sales technology company [inaudible 00:28:59].
Max: And at the time I didn’t even have an LLC yet, so they were like, “Who do we make the check out to?” and I was like, “Oh, shit. I got to get an LLC and go get a bank account. I can’t have them make like a personal check.” So I went and I got an LLC. I got a bank account . . .
Max: Yeah, LegalZoom. Closed the sponsorship. Exactly. And I made like 60K in profit and I think it was like four or five weeks’ worth of . . .
Andrew: I got to break this down. This interview is not about this one conference, but I got to break it down. How did you get to 300 people when you’re at that point known by a handful of really good people who would make great speakers? But you don’t have a list. You don’t have a big blog. How’d you get them?
Max: They all promoted it. ToutApp promoted it to their customers and their customer list. And it just like kind of picked up steam. People found out about it and they wanted to get involved.
Andrew: It wasn’t part of your deal with Tout where they had to promote. It was just like, “Hey, we’re all figuring this out as friends. We’ll help you out, Max.”
Max: This is the difference between like late 2013 and now, is that there weren’t a lot of sales conferences, like SaaS companies didn’t throw their own conferences the same way and there weren’t a lot of like big SaaS companies. It wasn’t . . .
Andrew: I’m going to ask you in a bit why all freaking SaaS companies have to have conferences. I don’t understand it. Like Zoo. I was at the farmers’ market here, there was a guy who had a Zootopia or Zoo . . . What is it?
Max: Zoomtopia, yeah.
Andrew: Zootopia. That’s what it’s called?
Max: Zoomtopia. It’s we’re on.
Andrew: Zoomtopia. Zoom. Yeah. Because you and I are talking using Zoom. I go, “I get it. I love Zoom. I’m on it all day long. Do I want to go to a conference for freaking Zoom? No.”
Max: It’s a bull market and it’s category creation and so companies are spending a lot more money on marketing. And I think that’s it. But anyway, at this time, there weren’t a lot of like, VC backed sales SaaS companies. The only conferences that were out there were like two really more like old-school ones, Sales 3.0 and AA-ISP. So people were dying for like a new age cutting-edge sales conference.
Andrew: A conference for people who understood these SalesHacker tools.
Max: Yeah, exactly. Or like more technical salesperson, people who wanted to leverage technology in the sales process. And that was like our original, like, first kind of, like, mission or mantra was like, “Yeah, we’re for the people who are looking to embrace modern sales technology.” And yes, I made some good money off that conference, and at that point I was like, “All right.” It bought me some runway to figure out what I wanted to do next. I didn’t know what that was going to be, but I knew that if I kept doing this I could build my network.
And I was meeting some really awesome people, like I remember Aaron Ross who wrote “Predictable Revenue” and like he was an author. He was, like, early at Salesforce, like, he spoke at the first conference, and I was like, “Wow, I can get Aaron Ross to speak at my conference.” I didn’t know anybody at a time. I got . . . Who was it? Brian Greene from Emergence to speak at a conference. So, like, now I’m starting to know VCs, Jason Lemkin was this is pre-Storm, like, wow, he was a big deal. He just sold the company for $100 million bucks or whatever that was, $80 million. So here I was, it’s like, a kind of no-name kid who was at Udemy and then AttorneyFee, and I was like, “All right. Let’s see where this goes.” I just really genuinely geek out on this stuff and like talking about it with people.
So March came around, so this was like four or five months later, and I didn’t know if I wanted to, like, start my own company, if I wanted to join as an early stage VP of Sales somewhere, go build something on my own. So I gave myself some time, March came around and I was like, “I wonder if I could do this in New York. I wonder if there would be an audience there.”
And same thing. I think it was another like, six weeks 50K profit. And at the same time, I launched the blog, saleshacker.com where I could move my stuff over from I think was like Max Talks Hacks was my original site that I posted to my own content, and then I would crowdsource content from other people. I would publish the summaries from the presentations, from the conferences to something lived on afterwards.
So that picked up after the New York conference. We started making money off meetups. Somebody came to us and said, “Hey, you should run like a meetup around this. We would sponsor.” I remember I made 7K off my first meetup profit, 5K off my second one and I was like, “Damn. I should do this in every city every month.”
Andrew: And this is you at first, let me pause, you organizing a meetup in a city, you get a handful of people to show up, they’re all the right people, so sponsors are willing to pay. The sponsor gets the opportunity to tell people about their software which people like because they’re here because they like it. And they have a couple of great speakers. You’re starting to make 7K, 5K, you say, “We should do this in every city.” New York and San Francisco came first for the meetups. Then you don’t say, “I’m going to hire a team of people who are going to put these events together in every city.” You do what instead?
Max: So I actually, I just like outsource it basically. I found a local somebody in every geo and was basically like, “Here’s how it’s going to work. HQ is going to make the money and sell the sponsorships and you get the branding and recognition locally as like the person on the ground in that city.” And so we ended up in 32 cities for meetups.
Andrew: And it’s you selling sponsorships in 32 cities?
Max: Yeah. I mean, we would do like global sponsorships for a lot of them.
Andrew: Okay. But then if you’re in a local city, and the founder or the speakers there in a local city, I could understand them saying, “I’m going to sponsor this event so I get an opportunity to speak and then people will talk to me afterwards and some will sign up.” When they’re in San Francisco but the event is in Tallahassee, who’s promoting the sponsor’s software there?
Max: Visibility and the host has to say “Thanks to our sponsors,” and we sent out signage so we would have like, pop up banner.
Andrew: Okay. This is what you do. You are good at systems like this.
Andrew: The whole structure of, “Here’s my outline for how to do this. Here’s how I control people remotely.” When you’re getting a lot of different people dozens all at once who have no reason to listen to other than they respect you, what are some of the mistakes and flaws that happened?
Max: Oh, well, we ran this for like I think a year or a year and a half or something like that and then we realized juice wasn’t worth the squeeze. So, at first, it was pretty profitable, then things got more saturated. Everybody was doing meetups. Again, this is like the starting of like phasing out of these in-person events for profit. But what we realized is I’d have to pay taxes on every state that we did a meetup in, so like, next thing you know the money it costs for the accountant to do the taxes in that location plus the tax bill you had to pay per city, just like kind of made it not worth it.
Andrew: Wait. I’m shocked by that. If you would have used Eventbrite, would you have still had to pay taxes on it, or is there service on . . .
Andrew: You would have?
Max: If you make money in an event in that state, you have to pay taxes in that state. Like if you’re an NBA basketball player, you have to pay taxes.
Andrew: In every state where you’re making money and there’s no online like ticketing system that pays out for you? It handles it. They can. Wow.
Max: You got to file in every state.
Andrew: Wow-wee. So how much did it cost you to do taxes at that point and get an accountant?
Max: [inaudible 00:35:45]. Let’s just say that. Yeah, exactly. So . . .
Andrew: Wow. Okay.
Max: It was not worth it. The second thing that became not worth is we couldn’t control the quality as much as we would’ve liked. So I remember we had a big conference in New York coming up and a potential sponsor went to our London event, a London meetup, and then the next week we thought he was going to close to sponsor the New York event for like 25K. And he said, “Yeah. I didn’t like the quality of the meetup. I’m not going to sponsor the conference.” And I was like, “Damn. I shouldn’t have just . . . Oh, man. I shouldn’t have thrown that meetup and we’d have 25K more for this conference right now, like that sucks.”
Andrew: When you sell . . . Well, he didn’t want to sponsor the conference because the meetup sucked.
Andrew: Oh. So now it’s starting to rub off from the events to the big one. Okay.
Max: Because we couldn’t control the quality of the meetup, now I lost a 25K sponsor.
Andrew: What did you do when now it’s your product to sell, it’s not someone else’s team at AttorneyFee or Udemy, it’s your product to sell? What did you do that was clever for getting sponsors that other people wouldn’t think of because they’re not you?
Max: I can probably share this now.
Andrew: Don’t hold back. Be the person people love, not the one that go, “Oh, he’s such . . . ” Go ahead.
Max: One of our favorite hacks for selling sponsorships was we fill out people like sales tech companies or our ICP. So the people we sell to are companies that sell to salespeople, so companies like Outreach. We would fill out their webinar forms and eBook forms and stuff like that, and then when the SDR reaches out to us to try and sell us, we say, “Hey, we’re not your ICP, but we’ve got 80,000 people in our database that are, or we’ve got 1,000 people coming to our conference that are,” whatever it was. “We should get you in front of them. Let me know if you want to put me in touch with your marketing person.” And then we flip it on them.
Andrew: Got it. So you’re like applying as if you’re a customer who found at a conference and then you say . . . Got it. And when you say “we,” you had other people sell for you too at this point?
Andrew: It was you?
Max: I’ve always said we from the very beginning. I don’t know what it is. I can never say I. It’s we. We are SalesHacker. I’m a sole founder. There was nobody who started it with me early on. I had employees over the amount of time, very valuable ones, like people who were . . . We wouldn’t be here today without them, but from the very beginning, it was just me but I could never say “I.” I always said “we.”
Andrew: That’s impressive. It’s not a forced thing. It’s just who you are.
Andrew: All right. I’m going to talk about my second sponsor, Toptal. And now we’re going to introduce the guy, Jason Lemkin. This guy who showed up at your event who I think is one of the most brilliant people I’ve told you that before we started. I haven’t had him on Mixergy, not because I’m afraid to ask him to come on or I think he’d hold off. I could see him absolutely being on here. I want to find a way to make it good because he’s so good.
All right. I’m looking for the right angle. Here’s the deal. The second sponsor is a company called Toptal. Max, you know Toptal, right? What do you know about them?
Max: Hiring top talent and mostly devs.
Andrew: You know what? They started out exclusively with devs, and then they said, “Let’s add some designers because our people need designers.” Then they acquired a company that does all this for MBAs. They said, “Look, these big companies when they have somebody . . . when they need to create a presentation or they need to analyze their business, they go out and hire top business consultants. What if we offered it less expensively?” And so now they also do that, and smaller businesses will use them to create . . . Sorry. What were you going to say?
Max: No, I said that’s awesome.
Andrew: Yeah, it’s brilliant. They’re smaller businesses that actually have raised around the funding but now they need to put together data for the next round of funding. They don’t want to do it themselves, they go to them. They are businesses even like mine. I didn’t want and didn’t need a full-time CFO, but I needed somebody to look at my revenues, look at my profits and just be the person to just keep nudging me in the right direction and pointing out the mistakes that I’m making, and so I got someone like that from them.
Look, we’re in a really hot market right now. I feel like this is the opportunity to capitalize. I’m going to say something that I don’t think Toptal is going to love for me to say, but I think it makes sense. At some point, this whole thing is going to collapse and you’re going to start to see massive layoffs for people. Think about it. And everyone at that point is going to say, “I should have grabbed more while the grabbing was good and built up my business faster while it was good.” And then there the second thing they’re going to say is, “I hate letting people go because it’s really painful.”
Here’s the deal, you go hire someone from Toptal, first of all, you can get started with them super-fast, phenomenal developers, build your business fast while there’s an opportunity to actually capitalize, and then if the economy tanks which at some point, let’s be honest, it’s going to, you don’t have a bunch of people that now you’ve got to go layoff. This is all Toptal talent. You go back to them and you say, “Guys, we got a problem.” And by “we” I mean, “Thank you. You got a problem.”
This is what a flexible workforce gives you. Flexibility to hire fast, flexibility to let go fast when it doesn’t make sense. That flexibility is what makes this, I was going to say this country great, but this world great, but that’s an exaggeration. Let’s be honest, you don’t care about this world or country in the context of this ad. You care about your new hiring needs. Don’t delay. Don’t wait until the whole thing is over and regret it. Jump on the opportunity right now.
And when you do, don’t be like everyone else who just goes to toptal.com. That’s just for the rest of the world. That’s for the hoi polloi. I’m very proud that I understand what that word means. For you, you get an opportunity to get 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no-risk trial period of up to, you know and I’ve read so many times. Here’s what I don’t say very clearly. Top as in top of your head, tal as in talent, toptal.com/mixergy. Go sign up, really. I love them. You’re going to love them too. Toptal.com/mixergy. It’s a kind of company I could see you hiring from.
Max: That was smooth.
Andrew: Yeah? Thank you. I’m kind of watching myself with them. I did . . . I think Regus is no longer going to be a sponsor of mine because I said, “Look, I get my own space unlike these other co-working places. I got my own space. I have my own four walls. I could have sex with my wife here if I wanted to. No one’s going to know. It’s not like in . . . ” And they asked for an edited copy of every ad that I ever did. So I realized there’s some sponsors like Regus I need to be a little more formal. Toptal too, I got to be more formal with, and then there are others who are just like, “Do whatever you want.”
Max: Yeah. [inaudible 00:41:54]
Andrew: So I got to watch it with them. Okay. Let’s continue. Jason Lemkin emails you and he says what?
Max: Yeah. Subject line was something like, “I want to do an event,” and then body was, “Need help.” And that’s like his type of messaging. So I wrote back and I was like, “Sure, I’ll help you promote it. Let me know what I could do.” And he was like, “No, I need logistical help,” like, “Do you want to team up on it?”
So I was like, “Yeah, sure. Let me think about what it would be worth,” because at the time I was building SalesHacker and I had owned 100% of the company, so I was like, “If I’m going to spend time on something else, like it’s really got to be worth it for me, otherwise I’m just taking away time that I’m spending on the thing that I’m building.” So I said, “Yeah, I would do it for a 50-50 profit share and basically like a guaranteed sum if we didn’t make money on the event.” But I knew we were going to make money at the event. I knew like at the time, his brand was so strong and logistics were great. So he was like, “Yeah, sure. I just don’t want to lose money.” That’s all he said. “I just don’t lose want to money.”
Andrew: Let me pause for a second. The logistics of conferences are pain in the ass. Why are they so easy to you? What is it about the conference logistics that you thought was nothing? Look, you’re even blowing it off as I’m talking, but to me it’s a little scary. What is it?
Max: Conferences under 1,000 people, like, it’s not union. It’s cookie cutter. Like, you don’t have to do . . . There’s not too much to it.
Andrew: What do you do? You get a location . . .
Max: You get a location and . . . I mean, at that point, we had done a couple of these already, so like, we knew how to whip this thing together. You get a location but you also get a team, like, you go hire a team that just does pretty much all the work. For you, it’s really just . . .
Andrew: You mean setting it up. You get the design of the banners and all that, they set that whole thing up for you.
Max: Yeah, exactly. And so, like, we have to promote it, we have to get sponsors, we have to get speakers. But working with Jason I knew it would be easy because he can get speakers in his sleep, and we had too many speakers. For sponsors, I knew it’d be like a good event, a SaaS event, he had a great network. Again, like, sponsors wasn’t hard, but we were really good at selling sponsors. Like, this is what I’m good at.
Andrew: But who do you get for SaaStr? So, you know what? For people who don’t, SaaStr is a conference for creators of software as a service business, right?
Andrew: That’s what he draws in. What are the sponsors that need to reach the creators of software as a service? I can imagine Stripe maybe and a couple of API businesses, but who do they have?
Max: Yeah, everybody. I mean, it’s just another niche, it’s just another category, like, HR, insurance, software companies. So anybody would want to sell to them. We would, at Outreach, try to think like what the best sponsors where. It’s like Sage Intacct, so they were like financial software.
Max: Who else was in there? Any recruiters. So, Betts Recruiting was another one. Like, TryNet, also Zenefits, all those project companies.
Andrew: Because the people who are running software businesses they still need to hire because it’s a hot market and they need to pay their people. Got it. Okay.
Max: Insight was another big sponsor.
Andrew: Look what you got. You got Jeff Lawson from Twilio to be on there as one of the speakers.
Max: Our first year, so like this no-name conference out of nowhere we had Stewart Butterfield from Slack. They just raised like their first big round of funding, so he was like the hot, the “It” guy. We had David Sacks and Parker Conrad from Zenefits, same thing. He had just come on, signed on and they had raised their big round of funding, so they were like the hot tandem. And we had Aaron Levy, and I think Box. It was right before they IPOed, like, a couple months before. I actually think I remember us getting the email like, “Hey, we’re about to enter a quiet period, like, I’m not sure how much I can say on stage.” So he spoke anyway, but I’m pretty sure they were in that quiet periods at that time. And then we had a bunch of other amazing speakers but those were like the top four.
Andrew: Why does he have such great reach? Is it SaaStr, the blog? What is it that got him such a great reach at the time?
Max: His authenticity is huge. I mean, he just writes like he thinks. There’s no holding back. It’s just, here’s his opinion, here’s what he does, here’s what he thinks, and he’s just going to put it out there. It helps a lot of people. I think he’s super well networked just because he’s been in tech for so long. He has been in tech probably 20, 25 years and he was successful in tech. So, he’s networked through VCs. He’s networked through other successful entrepreneurs in his class. And that’s what I’m seeing now. It’s like the people you come up with, like, when you see these people, like TaskUs, like the two founders of TaskUs are really good friends of mine. They just sold half their company for $259 million like, now they’re on a whole another level, but like this is our class. These are the people who are moving to Austin. I know a lot of people who I came up with who started companies around the same time that I did.
Andrew: So you’re saying all these people who are sitting in a conference room like a dozen or two dozen at a time talking about these ideas for what’s going to work out, they ended up working out and now you know them because you were in the room with them when they were trying to figure out how to get customers. I got it. Why does Jason Lemkin gave you half the revenue from this business? I was surprised. I thought he just hired you as a someone to do it.
Max: He wanted to do a conference and he didn’t want to do . . . He just wanted somebody to take it on the whole thing. He just wanted to promote it and do speakers and have fun with it. And he’s not doing it for revenue. He just sold his company for . . . I think it was $80 million or something like that.
Andrew: And so the upside for him is what?
Max: The brand. To build the brand, to build SaaStr.
Andrew: To build the brand, get more people to come to SaaStr, and then for him to then invest in the SaaS companies that respect him because they met him at the conference, respect him because they read his blog post. That’s the thing
Max: Build the biggest brand in SaaS. I mean . . .
Andrew: And you don’t think he could just do that offline, I mean, online? Why does the offline part help?
Max: I think if you want to build the biggest movement and you want to be the person behind SaaS, you need to build this like big empire almost. I also think that like, when you have enough money you do things that aren’t monetary. Like, some things are maybe done for like ego or just because you want to. Like, what does it matter at that point? Like, let’s just go big, right? $90 million SaaS fund, largest SaaS conference in the world and the most traffic SaaS blog.
Andrew: He’s really good at just growing things. He’s not this like laid back person. The thing that always stood out for me with him where I realized it was value in what he was saying and it wasn’t just interesting is, when he does SaaStr people will come to town, they know that Mixergy does scotch night or dinner at my house, or whatever, they’ll message me and I realized that the SaaStr people are some of the smartest people that come for scotch night. Super bright. He drags a certain kind of person to him. He draws certain kind of person. Not drags. Okay. So, you get people to show up in this conference, the conference does well. How much money do you make from the first conference?
Max: Yeah. So that was our most profitable conference we’ve done to date which ends up helping fund SalesHacker. I can’t . . . So this is his business. I don’t own any of that business so I can’t get too deep into the numbers there. I don’t want to . . .
Andrew: You kept over $1 million you made in the first one?
Max: No, not in the first one.
Andrew: Okay. All right. But it’s profitable and it’s enough . . . I get that we’re not going to drag him into this. My sense is that he would have no problem talking about it, but I also understand why you wouldn’t want take that off to yourself.
Max: Yeah, exactly.
Andrew: All right. I’m really good at pushing because I know where I shouldn’t push and I know where I should and I can see here that it’s not really worth it. But this is opening your eyes to what’s possible. You then start to get into the conference space heavy. What’s your biggest event that you did without SaaStr?
Max: Yeah. So, at that point, once we did the first SaaStr, I was like, “Wow.” Let’s see the timeline here. So that was 2015.
Andrew: Was the SalesHacker conference was the next one?
Max: Sale Stack was our biggest conference to date. So we did one big sales tech conference.
Andrew: Okay. Sale Stack, that one does 7.5 million in revenue.
Max: No, no, no.
Andrew: That total year was 7.5. Fair?
Max: The best year was the second year of the SaaStr annual. So, yeah.
Andrew: So that’s when you were doing your event and his event. Why did you call it Sales Stack?
Max: Yeah. So it’s Sales Tech Stack. So it was like a sales technology conference.
Andrew: Like all the tech that you need in order to sell. This is for people who understand that they need a stack to sell. This is going to draw them in. You got attendees how? How did you get 1,000 people to show up?
Max: Yeah. So, we had done a couple of our SalesHacker conferences. The blog had been running, we’d had a list building, we had probably at that point over 10,000 subscribers, not huge but substantial to, like, get people to come. And we had a brand and people were writing for us. So it was crowdsource content, so there was practitioners helping practitioners, and we just said, “Okay, there’s not a lot of colleges that have sales education, sales programs. Even if they did, even if they had textbooks, they’d be dated by the time they were out.” So there are people that are out there building companies right now doing cool stuff at those companies that they should share with other practitioners. So SalesHacker became that destination, that go-to resource for all people in B2B sales, looking to learn from other practitioners.
Andrew: I feel like I skipped something. I’m sorry I’m interrupting because I don’t know how much time I have with you. How much more time do you have? Can we go over?
Andrew: So we’re going to go over time. Good. Sorry, you were going to say something or should I just continue.
Max: Whatever . . . yeah.
Andrew: Okay. I’ll just continue with my interruption. You were growing it . . . You know what? Here’s one thing that stands out for me. You have 40 different sponsors at this event. What can you give 40 different sponsors that allow them to stand out in an event like this?
Max: Yeah. I didn’t know. I didn’t know at the time. It was brand new for me. And I was selling ahead of what I was promising in that case too. I was like, “Yeah, I think we’ll get 1,000.”
Max: Yeah. I was just like, “All right. This is not . . . ”
Andrew: And you were just trying to riff and see what . . . But my guess is also you were looking at other conferences. What are they offering when they have 40 sponsors? What are the other sponsors get? And looking at price lists for other people. Is this you by the way when you’re doing this, Max, going into other conferences and pulling in what they’re charging or do you at this point task someone else and say, “Go to these top 10 things, tell me what they’re offering, we’re going to create an offering”?
Max: I don’t even need to go anywhere. I can get a company in the space that I’m friends with to send me the prospectus for other conferences so I can see what they’re charging, what I should charge.
Andrew: And it’s you doing it and you going through every one of them?
Max: Yeah, exactly.
Max: I mean, it’s not a lot of work. It’s research and it’s R&D for me. It’s making sure that we’re on par. And yeah, if you have 40 sponsors at an event and you have 1,000 people there, then your attendees sponsor ratio is what is it? 25. I mean, it’s okay. It’s still good. It’s a proper trade show now. It’s a sales technology trade show versus just a conference. It’s actually now sponsorship revenue is like 75% of your revenue versus ticket sales from before. So that’s when like the balance completely shifts. Like, SaaStr one was still more like ticket sales than sponsorships, but SaaStr two was like former like, trade show.
Andrew: Why is it better to earn more from sponsors than attendees?
Max: Because they can pay way more. I mean, you’re talking about, “Should I get $1,000 a ticket or should I get $50,000 from a sponsor?” Like, it’s easier just to sell based on . . .
Andrew: The part that I realized that I was interrupting you earlier about was, you at some point was struggling and you went to Jason and you asked him for advice, “What do I do with this conference space?” What was the feedback that he gave you and why did that make sense?
Max: Yeah. So that was a little bit later. So we had stopped doing SaaStr at this point. So we did the first two SaaStr annuals. And SalesHacker was moving and we were doing these conferences, but we felt that the conference business was getting super saturated and all these other sales tech SaaS companies were starting to raise decent rounds of funding, which meant that they can now afford their own conferences. So now there’s more and more sales technology conferences coming out, and when a SaaS company does a conference, it’s a loss later. They can lose $1 million on it, but they can make $3 million in software sales, so they don’t care. So they have sushi for lunch, and they can have Magic Johnson do the keynote, and they can have Taylor Swift do the after party. Probably not. Like, Nelly do the after party. Right? So it’s like, yeah, a big step down.
Andrew: You know, I want to understand why. So I invested in a company called ManyChat, they do marketing automation via Facebook Messenger. They did a conference, 1,000 people showed up. The founder is still in the building mode. Why does he need to create a conference where 1,000 people show up? What’s the goal for him with that? What’s the goal for people like him? Why are marketing software companies doing it?
Max: We’re in the same boat here right now. I mean, you want to . . . For most of these companies is about creating a category and it’s about creating a movement around your company. It’s about people feeling included in a tribe, in a club when they use your software. And if it’s done right, it works really, really well. I mean, it’s something that we’re doing right now around creating this brand around Outreach where . . . Like, yeah, if you’re going to use a product in this space, like, you’re going to use us because you’re a smart savvy VP, right? You know what you’re doing, so you’re going to use Outreach, you’re not going to use anything else.
There are . . . You just want to be included in the fun, so you know that like, if we use Outreach you’re going to be included in the best events and the best dinners and all that kind of stuff. Versus like if you’re not, well, you’re just not going to get invited or you’re not going to be able to attend because you’re using a competitor’s product. And there’s a lot to that. Like, we have our conference, a Paradise Point in San Diego for three days, and our competitor has it at Cobb Galleria in a mall in Atlanta. So it’s like, all right, well, if you’re a customer and you’re going to come to a customer conference, would you rather go to San Diego, sunny San Diego in March on a beach or to like a mall in a weird part of . . .
Andrew: But why? Wouldn’t I just rather use whatever software is best and then I’ll go take my trip anytime I want, anywhere I want?
Max: You can use whatever software is best, but in most cases, one, in the evaluation process, you should use whatever software’s best. But in a lot of cases, it’s, there is not that much difference. And in many of these companies, a lot of them are commoditized where they’re very similar, or you’re at the end of the evaluation, you can go one way or the other, this can put it over the edge, or it’s something that can get you a lot further in the evaluation. Like, sometimes a company wanting to get to that stage of the evaluation because they’re like, “Oh, I just don’t want to work with those people. I don’t like those people. I don’t like the relationship that they’re building.” All those types of things.
It’s one big relationship building thing and it also puts you on the map, it establishes you as an actual company. It develops the further relationship with customers and pipeline influence and things like that. So I think it’s worth it. And we’ve seen I think historically that it’s been worth it for companies, but for us, we were like, “Shit. Our window is closing to make money off of conferences because we couldn’t charge as much for tickets, we couldn’t charge as much for sponsorships.”
There were so many other conferences now where that we were bumping up on other conferences. Venues were getting more expensive because they could. People wanted . . . The demand was high and the bull market we’re doing really well. Companies are raising more money than they need, so they’re spending more money and go in hyper-growth.
So, anyway, I knew we needed to get out of conferences, like I knew that the business would be dead if we stayed in conferences as our main revenue driver. So I had a random lunch meeting with Jason and I was telling him the situation and he’s like, “Just grow.” And he’s always . . . He is kind of like a crazy genius, but he’s always very short like that.
Andrew: Why? Why does this growing help? Because if the conference space doesn’t make sense because there are too many competitors in it and every software company can outsell you, I mean, out-do you with sushi and everything else, having more people is not going to undo that.
Max: Yeah. So it wasn’t just grow your conferences, it was just grow your database, just grow your subscriber base, just grow your views, because it’s true. It’s like, if you had a bigger audience opportunities will open up. I mean, like right now, if you had a bigger audience, you can charge more for the ads and the sponsorships. Like, that’s . . .
Andrew: So growth solves everything.
Max: Yeah, exactly. Right. Eyeballs.
Max: Yeah. Targeted eyeballs solves a lot.
Andrew: So then you get that . . . Sorry, you go ahead. Dude, this is what . . . I got to tell you, you’re one of my best freaking most exciting guests. I can’t stop interrupting because I can’t sit still as you’re talking. I don’t usually chew my pen as I talk, but I can’t sit still, so this is me like putting something in my mouth just so I shut up. But go ahead. Sorry. He tells you to grow.
Max: Yeah. So we got to a point where like, “All right. We got to get . . . ” Like, I thought the wall was closing in on me. I mean, there were a couple of days where I’d go home to my apartment, I’d lay on the floor and stare at the ceiling and be like, “What the fuck am I going to do?” And then the dog would walk over and licked my face and be like, “Okay, life’s good. Just get up and figure it out.”
So, yeah, we were growing and we said, “All right. What are some things we can do now that we have like, a large enough database that people will pay for? So we started doing webinars. And I remember we charged like 5K for our first webinar. We got 250 people on it because we had a 20,000-person list or 30,000-person list at the time. We were able to get more people on our webinars than like most of this SaaS companies could get by themselves. So they were willing to pay for it. It was a lead gen program for them.
Andrew: What was the software vendor that you were doing a lead gen webinar for them? Which one?
Max: Oh, I mean, there were a ton, but I was like . . .
Andrew: Do you remember the first one that you did with?
Max: Either Lead Genius, or Betts Recruiting, or what would be one of the first companies that we worked with.
Andrew: Okay. So it’s Lead Genius, they have software, I mean, a service where I can go and get leads, right? Custom B2B contact and account data. They’re teaching people about what in this webinar? Is it specifically selling Lead Genius or was there bigger topic or did it . . .
Max: Best practices around whatever their category is. So it’s all educational content. So they would be a thought leader. They would lead the conversation. So, usually, typically they sponsored conversations or sponsored thought leadership pieces whether it’s blog posts or webinars or whatever else on SalesHacker is. We retain full editorial control and it has to be fully educational. So you need to be able like a viewer or listener, whatever, reader needs to be able to walk away with actionable advice or material without having to spend $1, but if they happen to have some budget and want to make it 10,000 times easier, they can buy your product. So . . .
Andrew: And that happens . . . And you let them sell at the end of the webinar.
Max: Yeah. So, for Outreach, for example, like, we might do a webinar on sales engagement and teach you the best practices on omnichannel Outreach. So how to do a proper sequence where you call, then leave a voicemail, then send an email that eludes that voicemail, then you connect on LinkedIn, and then you leave a LinkedIn message and then you tweet at them and then you do this, that and the other thing and that happens over 21 days and there’s like a whole rhythm to it.
Max: We might do a webinar on that and you can get a ton of valuable actionable items out of that. Maybe you’ll track it with a spreadsheet and use email and dial on your phone. You can do it. You don’t need to buy any software.
Andrew: And you’ll teach people how to do it on the spreadsheet.
Max: We’ll walk you through the process and if you want to take it to a spreadsheet, you can.
Andrew: Got it. Okay.
Max: But, by the way, if you have some budget, you can buy Outreach and it’ll blog for you, anyway. So making it a lot easier.
Andrew: And then is there like, ideal usually, if you buy it now we’ll even give you a better deal because it’s part of this webinar. Not necessarily.
Max: If they want to. And we don’t say it on the webinar. It’s like, “Buy it now and get this,” and is like, it’s literally, “Thanks Lead Genius. That was a great episode. I look forward to seeing everybody on the next one.” And then they get the list from the webinar so they can follow up.
Max: We also use GoToWebinar for most of them. Now we use Zoom, but I think they have similar functionality where you can like see the history of the chat, so we answer audience questions at the end, so sometimes people who have questions around the product that they can take offline. So it’s engaging. So we did one webinar, 5K. We’re doing one webinar a week, then our audience kept growing. We ended up doing 10K for a webinar. But it was two week for 5K, then we switched to the 10K, two-week, and then we started launching eBooks and other things that people could pay for.
So companies were using us almost like an outsourced CMO to not only help them get in front of an audience of B2B salespeople but also give them a little bit of credibility by attaching their brand to ours. We had an amazing bird’s eye view on the entire sales technology landscape and understanding of how salespeople like to buy, so they used us a lot of times for like messaging [inaudible 01:02:58]. And I remember like a couple times we were working and like, “What should our webinar topic be?” It’s like, “You’re the VP of Marketing [inaudible 01:03:06]
Andrew: Oh, yeah.
Max: And then we end up going into this thing and now like it becomes their messaging for their company, and it’s like, “Oh, man, I should have charged him like a CMO fee or something like an advisory fee.” But that actually ended up opening up a whole other thing where I started advising companies. I’m an investor and advisor of about 55 different private companies now through like this kind of wormhole.
Andrew: Have you gotten anything any like positive upside from that yet financial?
Max: I will. There are a couple that I’m in now.
Andrew: You will, but not yet.
Max: So Outreach was actually my first investment, angel investment.
Max: And their last round was at a 515 valuation.
Max: But I’m an advisor . . .
Andrew: And you are the angel round.
Max: Angel, yeah. Exactly. And I’m an advisor in Drift which will be another big one.
Andrew: Drift is phenomenal, yes.
Andrew: Why do you think, by the way, Drift? I keep thinking about Drift. Why is Drift succeeding in a world with Intercom? Drift is this same kind of proactive chat in a world where Intercom is on everyone’s site.
Max: Same thing I said about a tribe in a movement, they are angling to be the cool kid brand, the company that you just want to buy, like, if all things were the same. Well, let’s just go with the one that like, we would want to go to a dinner with, right?
Andrew: And essentially it is the same. The one thing that they have that is ahead is they’ve got the love of sales more than the love of customer service where Intercom is a very lovey-dovey, people need to ask their questions, you need to answer. Drift is, “You’re a smart salesperson. You know that you need software to help you sell better. We’re going to do it.” That’s the thing that we’re talking about.
Max: Drift is actually angling for sales and marketing chat and Intercom is more support chat.
Max: There is like a little bit of a differentiator in terms of that market message there.
Andrew: Okay. All right. So you then start to figure this stuff out. You’re creating eBooks. You told me before we started, every webinar not only is getting new people to the webinar but it’s bringing new people into your world because people are sharing and inviting other people to show up. You’re starting to understand this space. It’s starting to grow for you. Wow. How high did you get in revenue before you sold?
Max: The highest we had was that 7.5 million year, that was SaaStr and SalesHacker combined. Then when we had just SalesHacker as grad, 3.5 million was our highest revenue number digital.
Andrew: Three and a half digital. And that’s all advertising?
Max: So we don’t call it advertising. It’s like sponsorships. Yeah.
Andrew: Sponsorships. All sponsorships. I thought I went to your site and I guess the way you guys presented it, it didn’t feel like it was sponsored anything.
Max: Yeah. Like, if you go to webinars you’ll see like the little logo in the corner.
Andrew: Let me take a look.
Andrew: Why did you sell? You were doing great. You finally figured it out.
Max: Yeah. So I actually wrote a blog post on this on LinkedIn and like going into all the details and . . .
Andrew: How did my people not find that freaking thing? Okay.
Max: Yeah. So it’s actually pretty interesting. So we were a highly profitable year-over-year cash flow business and that’s all well and good, but the valuation of a company like this it’s not going to scale the same . . . Like, I couldn’t find a way to like 4X it. I couldn’t find a way . . . I couldn’t see that and I was like, “All right.” Well, if 4X it from where I was at, not 4X the number, but 4X from like what the valuation was before I sold.
And so I was like, “Well, if I can’t scale it like that, is there somewhere I can go where I can?” At the same time, you kind of wondering like, when is this recession going to happen, and if it does, well, does it wipe out my entire business? And so what I essentially did was I sold it for cash and stock and way more stock than cash, like, 80% stock because I wanted to be able to 4 or 5X where my valuation was at the time and go big and at the same time lower my risk in a market correction.
Now that I’m established company with enough money in the bank to weather storm versus it potentially wiping out my entire business previously. The other tradeoff was, do I go . . . I had a really nice lifestyle. I was doing summers in the Hamptons and bought house in the Hamptons. I was doing summers in the Hamptons, winters in Miami. And I was like, “Do I want to switch that?” And what I realized was I was bored, like I really liked this stuff and I was manufacturing, like, hobbies and things. I remember I was making my own, like, tanks to wear in Miami in the Hamptons . . .
Andrew: Tank tops.
Max: Yeah. Tank tops.
Andrew: Oh, really? Okay.
Max: I couldn’t find any good ones. And I still . . . I called it Pineapple Dog, made a little logo for it. It’s really cool. But I started a healthy coffee alternative with my girlfriend called Sutra. Sipsutra.com is the site, but it’s like turmeric, Chai lattes and like activated charcoal, like, hot cocoa. It’s like really healthy beverages. I’ve been caffeine free for six and a half years, so I needed something like robust and hearty that wasn’t tea.
Andrew: Wait. If I get . . . So I’m breaking myself of my coffee addiction. I basically have, but I need something to drink. You’re saying you got something that tastes like coffee but doesn’t have the caffeine?
Max: It doesn’t taste like coffee. It’s just it’s a hearty decaf . . .
Andrew: That’s what I’m looking for. I want something that tastes like it’s going to punch me in the face. Not sweet. That’s what you’re talking about.
Max: So this isn’t sweet. So this is like a spicy Chai. It’s not really sweet.
Andrew: What about sutra black? Should I be getting that?
Max: That’s like a hot cocoa. Yeah.
Andrew: That’s a hot cocoa. All right.
Andrew: But is it actually cocoa?
Max: Yeah, it’s cacao.
Andrew: It is.
Max: Cacao and the activated charcoal and a couple of other things. Yeah.
Andrew: Activated charcoal? $60?
Max: Well, I think it’s like 30, that’s like a big box or something like that.
Andrew: I got to get this. Okay, go ahead. I’m buying this freaking thing right now.
Max: I think it’s like $20 for 10 pack or something like.
Andrew: But anyway, you know what? I’m not buying jack. I’m sending a note to my assistant.
Max: There you go.
Andrew: Yeah, go ahead.
Max: Yeah. So I was like . . . We’re coming up with hobbies and that’s like a separate sort like sutra we went from idea to shipping product in three months. I have a post on The Hustle about that. But yeah, just why did I sell? I’m challenged here, we’re building a big company, we’re doubling revenue year over year. This is a company that’s going to IPO or potentially be a fairly large acquisition like over $2 billion and I saw a really logical way to say, “Okay. My upside is so much bigger. My risk is reduced in a big way and the hit is really just like the short-term lifestyle that I was living and the short-term cash flow year in year out which is fine. I got cash up front also, so my lifestyle is just fine. Not a lot has changed in terms of . . .
Andrew: Except for Seattle. Now you’re living in Seattle instead of where?
Max: Yeah. I just came back from 33 days on the road in 12 different cities. So I . . .
Andrew: Doing what?
Andrew: Doing what?
Max: Actually it was on like a little a little tour just shaking hands with all my SalesHacker supporters saying thank you and also, hey, reminding them that we’re at Outreach now, so let me know how I could be helpful.
Andrew: And so Outreach is paying you to go do this travel.
Andrew: You go with your girlfriend?
Andrew: Just go in your own.
Max: We came and we had two weddings in New Orleans in New York, so she came for those.
Andrew: Wow, dude.
Max: Yeah. Yeah. I was out bouncing around in Salt Lake City, Denver. We have for SalesHacker, we have people everywhere and for Outreach too, so now we’re kind of like merging those two audiences. And it’s nice to build the community that way. We don’t need to spend a lot of money on demand gen or like fancy dinners because people want to be associated with SalesHacker and be part of this community.
Andrew: I’d love for you, if you’re in San Francisco, come to my house for dinner. I want to invite a few people. I want to have you talk about some of the stuff that you said I won’t talk about publicly that I think is phenomenal.
Max: The category creation stuff we’re doing is really cool. There’s some stuff . . .
Andrew: What do you mean?
Max: SalesHacker and Outreach stuff that we can talk about at dinner.
Andrew: Okay. Do you think I should be doing webinars too where I bring somebody in and say, “You teach about your software and do webinars, do a webinar about it and charge them for that”? Should Mixergy be in the webinar business?
Max: Yeah. I think people will pay. I mean, you just have to, like . . . You have to figure out what your segments are, though. So it’s the same type of people who would pay for a podcast for a webinar. So, like, if that’s working for you, if that flow is working for you, then you don’t really need to change it. If you had a niche audience, I’d say the webinars are really efficient. So, for us, for example, we had B2B salespeople, so . . .
Andrew: That’s a really good audience.
Max: They pay us to get in front of salespeople. If we had B2B marketers, same thing, like, marketing software companies would pay us to get in front of . . .
Andrew: Wait. We have entrepreneurs and they don’t have huge budgets and they’re buying one at a time.
Max: Yeah, exactly.
Andrew: Right. That’s the difference.
Max: And podcast ads are perfect for that.
Andrew: Yeah. All right. Podcast ads and what I’m going to do an ad for in a second, but first I’m going to close this out by saying, Max, thank you so much. Where’s a good place for people to go and see you now? Personal blog? Should they go to SalesHacker?
Max: Follow me on LinkedIn that’s where most of my stuff is. Instagram I’m also on as HackitMax. And then saleshacker.com for all things B2B sales. We’re still posting fairly regularly, we have an amazing podcast there, webinars, everything, completely unbiased. I know we’re owned my Outreach now, but we still put our competitors in the blogs alongside us and do everything else that you’d expect the unbiased community to do. Still number one goal is to grow it and never do anything that would negatively affect the reader or listener or viewer experience. And then outreach.io. So, leading sales engagement platform if you are selling by email or phone, you should check us out for sure.
Andrew: Who’s taking pictures of you when you’re shirtless in your Instagram?
Max: Oh, my girlfriend is like . . .
Andrew: That’s your girlfriend . . .
Max: The Insta wiz. She’s amazing. Yeah.
Andrew: Yeah. I like the shots of you just kind of hanging out. I was wondering what the hell is a guy who’s into like sales software going to be posting up there? Travel photos?
Max: Oh, it’s good. I’ve been to 80 countries. We traveled a lot in the past few years while I was running SalesHacker, so there are some pretty good pics of . . . I work from anywhere. We are a completely remote company, so if I’m in Japan at Mount Fuji at Ryokan, I got my laptop out sitting in a bathtub like staring at the mountain. That’s a good . . .
Andrew: Because you got good style. You’re here with just like a hoodie. This is partially why I thought it’s just like a regular dude, and then you blew my mind with what you said. On your Instagram account, even your T-shirts look like they cost $1,000. What the hell? What is this? Some of them. Like the one where you’re holding up a crab, that looks like your casual, but it feels like you went to Barney’s before you went to get casual.
Max: I probably . . .
Andrew: That’s good. That’s got to be.
Max: It was back in my personal shopper days.
Andrew: You have 281 likes on that thing.
Max: Hell, yeah.
Andrew: All right. I want to say thanks to my two sponsors. Number one, toptal.com/mixergy when you’re hiring, really. How many entrepreneurs are now coming in here? One of the things that we’re talking about over scotch is, will the economy explode? Everyone’s preparing for that quietly and hoping it never comes. Toptal.com/mixergy. Build while you can and be prepared for just in case things fall apart. Number two, save money on hosting by getting a good hosting company that you’re going to be proud to be a part of. Go to hostgator.com/mixergy.
And finally, Max, here’s our big revenue generator. I listen to my interviewees and I look for some who have ideas that our audience need to learn from. Here’s one guy who I interviewed this month. His name is Scott Bintz. He got really burned down when his company was doing about three . . . I don’t remember, $3, $5 million. It’s all the same when you’re at that level and you don’t love life. He said, “I got to find a way to live life.” He took a tour of the companies that he admired, understood how they build culture, he brought back the best ideas to his business. And he was selling truck parts online. And suddenly he loved working at his company. And yeah, the money was starting to grow too and before long he hit $100 million in sales because he couldn’t build it to 100 on his own, but his team could once they got passionate about it and they got going, got it to $100 million in sales and he sold it.
Now he’s on a mission to talk about how to build culture. He wrote this book. And I said, “Hey, Scott, do you want to do a course on Mixergy? We got a . . . ” I hired someone to turn his ideas into a course. He did it. It’s available to anyone who’s listening to us at mixergy.com/premium. We charge you guys to go listen to it, mixergy.com/premium because this the kind of thing that will actually change the way that you do your business. Even if you take one idea from him, I’m telling you, and there’s one that we’re using. A phenomenal success. What do you think of that as a model, Max?
Max: That’s awesome, yeah.
Max: Familiar. Yeah.
Andrew: Here’s the one problem that we have. I should be saying, “Go to mixergy.com/scott,” or something like that, go take you directly to it. Number one, you probably have five other ideas but . . .
Max: You don’t have, yeah, a short link to that or something like that? Yeah, SEO would be big. So, you’re like . . .
Andrew: On the course material we need to have somebody. Right.
Max: Yeah. Some really good SEO landing pages for anybody who’s looking for like . . . I think the topic was what? Culture or what was . . .
Andrew: How do you create a culture that grows sales?
Max: So that should be like if somebody types in like “company culture,” you should be the first thing that pops up, right? Like, that’s the SEO game.
Andrew: All right. That is our next goal here. First, I want to keep building these courses properly, but no, it has to be hand in hand, right? That’s what you would tell me. “Hand in hand, Andrew.” Max, thanks so much for being on here.
Max: Oh, man. Thanks for having me.
Andrew: Thanks. Bye, everyone.