Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. And you know, one of the things that get most excited about doing here on Mixergy is featuring entrepreneurs of big businesses that, frankly, I hadn’t heard of and that I bet you hadn’t heard of either.
Joining me today is an entrepreneur from Australia–I believe that’s part of the reason why we hadn’t heard of him–who had this idea for–actually, I’ll let him explain the idea in a bit. I’ll just introduce him as Sam Chandler. He is the founder of Nitro. Nitro makes it easy to create, edit, share, sign and collaborate on documents online and offline.
And this whole interview is sponsored by HostGator. This is probably going to be my last sponsorship message for HostGator for a while. But good news, they asked to re-up. Their results have been good. People are signing up to HostGator because of Mixergy. So, after I run through some other advertisers who signed up, I expect to have them back there talking now to Sachit on the Mixergy team right now to buy three more months of ads. I’m really proud of that.
And later on I’ll tell you what HostGator is, guys, but first I’ve got to introduce Sam. Sam, good to have you here.
Sam: Thanks for having me, Andrew.
Andrew: So, this whole thing that I hadn’t heard of you–that’s a thing, right? People in my audience, we can expect to probably have not heard of Nitro.
Sam: Yeah, which is kind of crazy on one hand and not so crazy on the other.
Andrew: Why is it crazy?
Sam: It’s crazy because we have over half a million paying customers and more than a million paying users of Nitro Pro, our desktop product. We have several million active monthly users of Nitro Cloud, which is our smart documents sharing solution for the browser and for mobile. So, even though we have this significant worldwide reach–every month we sell into 190+ countries, half the Fortune 500 uses us–these are all reasons that you should have heard of us, but we’ve never really spent much time talking about what we do. So, our customers and our users know us but very few other people do.
Andrew: And so the reason you and I connected is unlike many of my past guests who have come through friends or past interviewees, you and I got connected because of your PR agency.
Sam: Yeah, I expect so.
Andrew: So, you’ve hired a PR agency to help you guys raise your profile.
Sam: Yeah. We think we’ve got a good story to tell, whether it’s the product story or the Nitro story. So, I think in the last year or two, we’ve made a concerted effort to actually build a brand or build a profile. I think at a certain point in a company’s lifecycle, it actually makes a lot of sense.
In the early years, we spent more time inside the business building the business. We were profitable from day one or had revenue from day one and had been profitable this whole time. We’re ten years old as of last month. So, we’re starting to feel like the veteran now. But in the early years, I think we focused on building a business, building revenue, keeping the lights on, growth. I don’t think we stopped very often, if at all, to really tell the story and think about how to present the business externally.
So, I think at this point in our lifecycle, as we’re hiring, we’re nearly 200 people now worldwide, we’re hiring pretty aggressively. We’ve hired 50 people this year.
Andrew: I’m sorry to interrupt. It feels like that’s what it’s about. You guys are hiring and if nobody heard of you, people aren’t going to get as excited about working for you. You’re probably going to do some biz dev deals, am I right?
Sam: Yeah, exactly.
Andrew: So, raising your profile–how does it feel that I just interrupted you? I’m looking at your face as I interrupted you. Some people feel like, “Yes, great, Andrew has got control of this interview.” I’m looking at you and it’s like, “Andrew is such a rude jerk. What am I doing here?”
Sam: No. You’re the host. You can do whatever you like. This is working just fine. They’re all good questions. So, I think for us, building the profile to recruit talent given our hiring plans and also from a biz dev point of view it makes sense. But even from a customer acquisition point of view, we are starting to penetrate more and more into the Fortune 500 and some of those accounts are getting bigger and bigger and bigger. And if we were a known brand, it just makes those much larger transactions a lot easier.
Andrew: Okay. All right. And this whole thing goes back to you working out of a workspace, shared workspace in Melbourne, Australia. What were you doing there before you came up with this idea? What was the business that you were working on?
Sam: So, I had an email marketing company at the time that we came up with the Nitro idea. So, this was mid-2004 and email marketing startup was my second startup, really. Although, it was a spin out essentially from my first startup, which was an email marketing services company.
Andrew: So, you’ve done a lot of email marketing. I actually have here in my notes a story about how when you were a kid, you wanted to get some of your money and you decided you were going to do some email marketing, right?
Sam: Yeah, when I was teenager. So, I started that business when I was like 16 in the mid-90s.
Andrew: What kind of email marketing were you doing in the mid-90s as a 16-year old?
Sam: The most basic email marketing imaginable. Back then, the tools weren’t particularly sophisticated. Email marketing wasn’t particularly sophisticated. But I sort of went around hustling all my friends’ parents, anyone who had a business, basically convincing them that it would be great to give me money to do email marketing and websites.
Andrew: Do you remember one of the parents, what he did or she did that you were helping out with?
Sam: It was a wide variety of things. So, it actually grew into quite a decent little business. For example, all the auto dealerships in Northern Tasmania where I grew up were all clients of mine.
Andrew: I see.
Sam: Local banks and wealth management firms and local real estate groups.
Andrew: So, you helped them grow their mailing list or would you send out the email on their behalf?
Sam: Both.
Andrew: I see. And it was kind of like an AWeber-type of business, it sounds like, or a Mailchimp.
Sam: Yeah, so, that’s what it became. Once we started to grow, we became pretty dissatisfied with the tools that were available to us. At the time, ESPs were pretty basic and pretty crap, quite frankly. So, we decided to build our own. That’s really what we were doing before we decided to effectively give that business up and focus on the Nitro Pro idea. We were building an ESP, which was quite unique for its time because we were trying to do marketing automation.
This is in the early 2000s before Salesforce existed. So, we were trying to do what we called at the time trigger-based email marketing where we would host all this content and based on the interactions that people would have with that content, we would then deliver additional, more targeted emails as a result. So, it was somewhat ahead of its time.
If you look at the success of Eloqua and business like that, Marketo, since, we were definitely trying to something very similar. Ironically, the business was called Aliqua. So, if we had been successful and it was Aliqua versus Eloqua in that market, it would have been very confusing.
Andrew: What’s ESP? You mentioned that and I didn’t know.
Sam: An email service provider.
Andrew: Gotcha. All right. So, that’s what you were actually doing when you were working out of the shared space and then an idea hits you. How did this idea hit you?
Sam: Yeah. So, the shared space had another company in it. These guys were building plugins for Adobe Acrobat. So, back in the early to mid-2000s, Acrobat was a fairly incomplete product in many respects. So, this began in the late-90s. There was quite a developed and burgeoning third-party plugins market for Acrobat.
In conversations with these guys who shared this office space, I pointed out to them that I didn’t think their strategy of building plugins for Acrobat was necessarily going to create them the biggest business. I sort of thought it was pretty niche and destined to be so forever and probably going to get smaller as Acrobat gets more and more sophisticated.
So, in conversations with these guys, which is kind of the classic startup story, I think the inception where you have a few people who are just like-minded chatting over the water cooler and probably over beers in our case in Australia, we were talking about how this small plugins business really wasn’t going to be a billion-dollar business. I suggested to the guys that perhaps replacing Acrobat rather than adding onto Acrobat would be a remarkable opportunity. The idea kind of got me thinking.
The more I dug into it, the more I realized there was a massive opportunity. At the time–the case is still the same case today–if you look at the deployment of digital document capabilities inside most organizations, no more than about 5% or 10% of the average knowledge worker population has the ability to create and share and sign an collaborate and do all that stuff from their desktop or their web browser or their mobile.
Andrew: I feel like for sharing and collaborating, there are lots of options. For signing, there aren’t a lot of options. Back in 2005, it would have just been email. They would have created a Word doc and then emailed it back and forth. What’s the problem with that?
Sam: So, typically, people created a PDF and emailed backwards and forwards. So, as part of my research, I won’t name this company, but they are a Fortune 100 company, back in 2004 they had a PDF room. In this PDF room, they had 20 machines with Adobe Acrobat installed and a bunch of people working on these machines basically 24/7 in shifts.
If you wanted something to send to a client or a customer or a partner or whatever that needed to be a polished, final form document, you would email it to this group email list, somebody would pick it up, convert it to PDF with the copy of Acrobat they had installed on that machine and then email it back and then you would send it on to the customer. So, that was really typical.
Andrew: That was typical? Why didn’t they–by the way, this is one of the things that I love about your story. To me, even in 2005, I would have assumed, “No way this is a business. No way anyone needs this. Everyone is working the computer just like I am.” What you did was you made phone calls to people and you understood, no, these people are operating in a much more complicated way than I would. So, that’s how you understood this business. But that’s why I’m also a little bit in shock. They would actually send–why wouldn’t they just give everyone a copy of Adobe Acrobat? Because it cost too much money?
Sam: Because it was $400-$500 a seat.
Andrew: I see. So, they just would buy one seat and hire one person or several people to sit there and use that one computer. I see. So, who would you call to figure this stuff out, to see is there a really a market and how is the market using the existing tools?
Sam: I called a bunch of Fortune 500 companies. It was pretty basic market research at the time. But it was effective. I probably spoke to, I don’t know, 20 or 30 companies in total. I also did a bunch of less formal surveying of small or medium-sized business owners that I knew. It was really clear.
When I said, “If you could get these capabilities onto everybody’s desktop, if you could enable all your knowledge workers to create and share and sign and collaborate and do markup and convert between formats and do all these document productivity things they need to do every day, if you can get that onto everyone’s desktop, would that be exciting and interesting? What if you could do it for free or for significantly less than Acrobat?” It was a resounding, “Yes, we would buy that solution tomorrow.”
Andrew: I see.
Sam: So, it was the single biggest validation that I needed, that exercise in speaking to prospective customers. There was an opportunity here. And so, when we launched Nitro Pro in May, 2005, we were the first replacement for Adobe Acrobat. Today, we’re the leading replacement. But at the time, we were the very first.
Andrew: And in order to launch it, you said to the other guys who were with you in that workspace who you wanted to work with, “You guys have to shut down your companies and partner up with me on this. You can’t do both.”
Sam: We both did, actually. So, I basically had to shut down the email marketing startup. They had to shut down the Acrobat plugins startup. We basically pulled our teams together and get going on Nitro.
Andrew: Why did you need them? Why couldn’t you just start this off on your own?
Sam: Well, these guys had some specific format knowledge and specific format expertise, which was really, really useful. They had a great engineering team, which we didn’t have. Our team was much more web and front end-focused. These guys had a bunch of Windows desktop expertise that we would need for a desktop productivity solution. So, it was just a good combination. My team was probably more sales, marketing and front end and theirs was much more product and engineering.
Andrew: Okay. So, you were willing to take this big gamble on this new company working on it together and you didn’t want to build the software from scratch. You wanted to license someone else’s software. Why?
Sam: Yeah. We didn’t necessarily want to. It was rather that we didn’t have much choice if we wanted to get to market swiftly. So, to build from scratch what we launched in 2005 would have taken probably two years. Instead, from idea to launch, it took about six months because we licensed a bunch of technology from a couple of different companies that allowed us to take advantage of the time window we thought we had and be the first to market.
Andrew: Sam, today, I’m on a Mac. If I want to turn anything into PDF, I could just go to print and my Mac will give me the option to save to PDF. This is the kind of thing you were talking about that didn’t exist at the time.
Sam: Exactly. So, if you look back to 2004, if you wanted to do anything more that create a PDF–creating PDFs has always been effectively free, or at least since probably the early 2000s. We have a free PDF creator. Lots of people do. If you want to do more than that, if you would to take a PDF and convert it into Microsoft Word or Excel or PowerPoint or if you want to mark up a document, if you want to apply any signature, all these things have either cost money in the past or still cost money today.
Andrew: I see. That’s the stuff that you were doing. It wasn’t just about turning a document into a PDF.
Sam: Correct. It was everything you could possibly want to do in terms of digital document collaboration.
Andrew: Was the website even back then GoNitro.com?
Sam: No, I think it would have been NitroPDF at the time. It was NitroPDF for years and we changed it to GoNitro.com last year, kind of celebrating the launch of Nitro Cloud and kind of our separate chapter.
Andrew: I see. Yeah. I was trying to do some spying on you guys to see what it looked like in the past and see what the offering was but I couldn’t figure out the domain. Oh, I see it now. “We are proud to announce the release of Nitro PDF Desktop, our PDF creation and editing product. Priced at $99,” This is from your early website, “Nitro PDF Desktop is the most affordable, fully featured PDF creation and editing tool there is and is the first alternative to Adobe Acrobat for serious PDF users.” I see. This is what took off. This is what the beginning was.
Sam: Look at that, a blast from the past. Yeah. When we launched that website, we had our first sale within 45 minutes, so we knew we were onto something.
Andrew: How? How did you get anyone to even know this thing existed? That’s one of the things that I wanted to ask you about. I heard you were in San Francisco here. In fact, you’re in San Francisco today. That’s where the office is. You were sitting down and you looked at your Blackberry and that’s when you saw the first sale. What I’m curious about is how did anyone even know that you guys existed?
Sam: Yeah. So, funnily enough, the first time we ever did any PR was around this launch because we believed we had a story. We were the first alternative. We were talking to a bunch of journalist telling them we were the first alternative. I think we even called it back then, “The democratization of digital documents,” or something like that.
Andrew: Freedom. I saw something on your site that you guys featured, “Finally people could get freedom, the freedom of choice.”
Sam: Yeah, freedom of choice, like real document productivity freedom. If you spoke to these Fortune 100 companies–I’m not going to name names, but literally I probably talked to half a dozen at that time. They were all extraordinarily limited in terms of the day to day document productivity they could do. Most of their knowledge workers were just passively viewing documents, not actually creating them or interacting with them or signing them or anything like that. So, we really put that message out pretty hard before we went live in May.
So, we actually launched the product in April, did a bunch of press, basically spoke to a bunch of journalists and said, “We’re the first Acrobat alternative.” We’re the very first choice that IT buyers have got looking to equip individuals, teams or even entire organizations. So, we probably got our first sale off the back of PR. Then after that, the next big thing that really drove all our growth from then through to today has been freemium.
Andrew: Before we even get into freemium, it seems like in the launch, part of the thing you did–did you, before you went freemium–back when you were charging $99 for the software–did you upload it to sites like CNET and Software.net and other sites like that?
Sam: Yeah. I remember those days.
Andrew: Yeah.
Sam: So, back then, of course, you had these download portals for tools and utilities and games and things that were actually pretty big drivers of traffic. In fact, those partnerships were pretty instrumental for us for user acquisition in the early days.
Andrew: Okay. But when you weren’t doing freemium, when you were charging for the software, were those sites listing you as paid software that people would buy or was there a free component even back in the beginning?
Sam: Yeah. So, there was always a free trial. We started with a free trial and really evolved that strategy over time. But certainly the freemium aspect was key and critical to our success, even from day one with the free trial. And then I think back then, we were trying everything to acquire traffic. We did everything stupid you can imagine, from buying banner ads by the millions to–I think we even did print at one point. What the hell were we thinking? Desperate times.
Andrew: I don’t want to stay so high level that I ignore the tactics. I’m really curious about what you did to get on the phone with so many Fortune 500 companies, with so many businesses that are hard to reach and hard to navigate, even for people who work inside. Do you remember what you did that allowed you to get on so many phone calls?
Sam: Yeah. Look, it was a combination of two things. The first was the plugins business that I mentioned, they already had their plugins deployed in a number of larger organizations. In fact, that was probably the most typical kind of customer. It was usually a Fortune 500 company that was doing a lot of hardcore document publishing.
So, they’re doing heavy duty document publishing where they might be preparing, for example, training manuals that get distributed to thousands of employees or whatever. So, these documents have to have a high level of polish or security and bookmarks and indexes and all those kinds of things.
So, I leveraged that customer base first and foremost. And then the second thing I did was basically when we used that one contact we had, it wasn’t typically with an IT manager, it was typically with a head of electronic publishing or something like that or somebody in part of the creative function of the business or whatever.
I’d basically say, “Could you reach out to your CIO or IT director or IT manager? I want to know how much they’re spending per year right now on PDF or document productivity and I want to know if they’d be interested in doing what they do today for free or for significantly less.” I had, I think, a near 100% strike rate on that reach out.
Andrew: Meanwhile, you said, I think, that Adobe costs $500, $600? It was only a sixth of that, $100.
Sam: Yeah.
Andrew: So, that’s not such a huge savings for a Fortune 500.
Sam: It’s material at scale. It’s really material at scale. If you think about the classic Fortune 500 that might have, let’s say 5,000 knowledge workers. A lot of these companies may have tens of thousands of employees but only a certain percentage of those are knowledge workers.
If you think about the cost of trying to get thousands of employees to run Acrobat and some other suite of solutions that are related to productivity, the costs setup very swiftly. In fact, most IT managers then and now struggle to justify spending hundreds of dollars a user for these sorts of capabilities.
It was pretty clear that if we could offer even compared to Acrobat standard, which was $300 and Acrobat Pro at the time was $449, I think. If we could offer something comparable in functionality with a much better service experience, it was easier to use than Acrobat–that was kind of key–and a much better support experience, we knew we were onto a winner. So, if we could say it’s $100 a seat rather than anywhere from $300-$450 a seat, that was extremely compelling.
Andrew: I see. Having an in already with these clients because you partnered up with a company that already was selling to them I could see would allow you to have phone calls with them faster and with more openness than if I just started to do it. All right. That makes a lot of sense. I’m also looking at your original website. There’s a section called Goals, where you talk about how you want to make things not just cheaper and you do say affordable is one of the key steps, but you also want to make sure there’s security. You want to make sure there are all kinds of things.
But in the bottom part you say community involvement, “The people who buy our products are the people who put food on our plates and geeky toys on our desks. For that reason, we think it’s critical that we listen to what you think of our products, our support and our service. So, if there was something you wish we were doing or you’d like us to do better, feel free to sound off.” It’s such a basic site. I see you smiling as you’re looking back at this trip down memory lane.
All right. I want to talk about how you grew. Now that we have the business, you scaled it up and along the way, you actually had a hard time putting food on your table. I want to talk about that too. But first, I’ve got to thank my sponsor, which is HostGator. As I said earlier, this is probably my last time mentioning HostGator for a little bit because I’ve got some other sponsors lined up, but they will be back.
In the past, all I’ve talked about with HostGator is how to start a new site by going to HostGator. They make it so easy that you can do one-click install of major software, like WordPress, like your shopping cart. Today, what I want to say is that if you already have a website and you’re not happy with your hosting company, you don’t have to put up with them. It’s very easy to move your site over to HostGator. In fact, they’ll help you do it.
I’ve got a note here from our contact, Kyler over at HostGator, who says, “Andrew, your audience probably already has a website. But they should know that if they have a website and want to transfer it, we will do it. We will help them out.” So, HostGator will help transfer your content and in some cases, they’ll even help transfer your domain depending on where you registered your domain. They really want to help you out.
In the past I’ve also said that HostGator has incredible support. If your site goes down, if you have any issues, there’s a number you can call. I’ve actually called them up in one of the first sponsorship spots that I did for HostGator. Within 90 seconds, I got on a call from them. It’s not because I had any special treatment. You try it yourself. Go Google their support number or see it on their website and call them up and I bet you you’ll get through in under two minutes.
Anyway, I did it and the reason I said it in the past is because I wanted you to know that HostGator is there if there’s a problem. But Kyler from HostGator emailed me and said, “Andrew, even if there isn’t a problem, even if there’s something smaller, we’re there for them.” He gave me a couple of examples. He said, “If people don’t know how to install WordPress,” it’s a one-click install, so freaking simple. But if you have trouble doing it, their support will be there to help you out.
If you have trouble changing your themes–look, if you have a WordPress site, you know that most hosting companies will not want to touch you once you install the WordPress software. They don’t want to help you with your themes. HostGator has emailed me to complain that I didn’t tell you that HostGator will help you change your themes and do things like that.
I’m saying all that so that you know the kind of company that I’ve been doing business with that I’m encouraging you to check out. Go to HostGator.com/Mixergy. You’re going to see that not only can you get unlimited bandwidth, unlimited support, all kinds of stuff, but you’ll also see that they will give you advertising credit. So, if you’re starting new or if you have a business that you’re transferring over, they will even help you get traffic to it.
Go to HostGator.com/Mixergy. Read all about it and get an exclusive–actually, is it exclusive to me? They probably are offering it to other podcasters. I’ll just say if you go to HostGator.com/Mixergy, you’ll get a big discount, 30%, and that’s really significant and they’re a great company and I’m proud to do business with them, HostGator.com/Mixergy.
Sam, you’re a business man. What did you think of my last read of the HostGator ad?
Sam: I think you nailed it.
Andrew: I think I did pretty well. There have been times, frankly–this has been going on now for weeks, maybe even months–there have been times where I haven’t been very happy with my read. There have been times that I’ve been ecstatic. This was a really good read.
Sam: I’d give you at least a nine out of ten.
Andrew: All right. See, and the part of me that appreciates it is very small, the part of me that goes, “How do I get the ten out of ten?” is very big and I’m going to have to sit down and think about that.
Sam: That’s good.
Andrew: But thankfully they’ll come back and we’ll help them out. All right. So, now what we have is our first couple of customers. You told our producer that one of the things that you did early on to help get more customers in the door was search engine optimization. How effective was that in the beginning?
Sam: It’s one of those things that gets more effective over time. We initially experimented with content, right? So, we had this strategy which we called at the time, “All roads online lead to Nitro.” So, if you were looking for anything document productivity related or PDF related, creation, conversion, editing, signing, etc., you’d find us. You’d find either Nitro Pro, the premium product or maybe a Nitro free product or service.
Before we got to free products and services, though, really what we were doing was a lot of content. So, you might recall back in the early to mid-2000s, that classic phrase, “Content is king.” We learned that. But what we also subsequently learned was that if content was king, then free services, free products, free apps were the rulers of all.
Andrew: I see. This was something that works to this day for you. Instead of just creating a blog post with some content that people could link to, you create tools like some of the ones that I looked at earlier when I saw what SimilarWeb said was sending traffic to you, PDFtoWord.com is one of your domains. It’s a tool.
Sam: Yeah.
Andrew: What is that tool?
Sam: Well, it’s a tool that converts–it does exactly what the domain sounds like it does. It converts PDFs to Word. That’s in the top half a percent of web traffic worldwide, that site. It’s incredible popular. We have millions of visitors a month. Between our collection of properties, we have many, many, many millions of visitors per month. But delivering these very specific tools turned out to be the most effective way to drive organic search performance that we’d ever known.
Compared to content–content was good. But not all content has a long tail. Some content tends to be popular this week, this month, this quarter, maybe this year and then it becomes less relevant over time. But great products or services, assuming that people need whatever the tool is day in and day out and that situation is not going to change for years, they will get consistent traffic for a long, long period of time.
Andrew: By the way, this tool actually, if I’m reading it right, it does more than just PDF to Word. It even will do Excel to PDF, Excel to Word–it’s a pretty robust tool. In fact, you have it under several domains to emphasize all the different features. What was the first one that you came up with?
Sam: The first one was PDF to Word. That’s by far the biggest property. That’s a really popular search term.
Andrew: How did you know that that was what you should be building?
Sam: We actually mapped the landscape. We sort of did two things. We looked at basically the plethora of free PDF-related tools and services that were out there and we kind of looked at all of them and we considered the M&A landscape, really, like, “What should we buy here or try to partner with or acquire?” We did a couple of those little deals.
We also did a really good analysis of just kind of Google trends to try and understand what people were searching for, what did they want. It was actually a real leading indicator for us kind of for feature development. If there were a significant number of searches for a particular kind of feature and that was growing, then that was what we wanted to build for.
Andrew: I see. It was Google trends for the word PDF. You just kept seeing, “What are people searching for?” What are people doing with PDF?”
Sam: And all variations thereof. So, convert PDF to Word, convert PDF to PowerPoint, PDF editing, free PDF editor. There are a lot of those terms that you can target and if you are successful in building properties that really target them and you can get lots and lots of inbound links, you need popularity and we certainly had that pretty swiftly, over time you build up this incredibly powerful network of properties that collectively for us now have millions of users per month.
Andrew: Why do you put them all on their own domain instead of putting them together?
Sam: So, they do live together at NitroCloud.com. So, all those features are available as part of Nitro Cloud. There are different domains because they’ve always been there and we don’t want to mess with the organic search goodness.
Andrew: I see. What about the fact that your product was there to help out people who had those PDF rooms where one person, where their job would be to take Word documents and turn them into PDFs. You were selling a product that did that. Why would anyone need it if you were now offering that feature for free on a standalone site?
Sam: Because Nitro Pro always did more. The simple model with freemium is you want to give a certain amount of features and functionality away for free and that should be compelling. Freemium done well means no strings attached and genuinely compelling for people. But then if they want to do more beyond some level of what you’re prepared to give away for free, then they have to buy.
So, if people came, for example, from PDFtoWord.com and used a free online conversion service, it’s quite likely that they might end up buying Nitro Pro at some point if they need to do more than that, if they want to do collaboration, if they want to do PDF editing or e-signing or whatever.
Andrew: I see. And all those features are already in version one. I didn’t realize that.
Sam: Yeah, the vast majority of them. So, it’s always much more functionality in the premium offering. Funnily enough with freemium, we actually found, contrary to our expectations, that we got significant business leads from freemium where we thought maybe it was just going to give us prosumer/consumer-type of sales.
In fact, a lot of our Fortune 500 deals, a number of them we have secured off the back of an original free feature or free product or service that somebody used many years ago that eventually led to us being recommended into the office of the CIO at some point later which then turned into a 5,000 or 10,000 user deal.
Andrew: Oh, wow. Now, that’s something that you actually have told our producer. You said, “We spend a lot of time making sure that the emails we send out to people are helpful and help convert them into paid customers.” What’s your process for improving that system?
Sam: Look, I don’t think there’s a magic bullet for doing email nurturing well. And I think we do it better than most, but think we could do a lot better as well. What we try and do is have product owning kind of the user journey. So, there is somebody who can actually see across the whole process from the first interaction with the product to second and subsequent interactions, like what is their onboarding look like, what content should we be providing based on where they’ve come from, how they found us and the features they’re using and so on.
I think with nurturing you’ve just got to–going back to my old email marketing days–you’ve just got to be respectful. If you bombard people, if it’s too much of a hard sale, if it’s too much of a sales pitch, people turn off. So, I think you’ve just got to be kind of mindful that people don’t want generally to be interrupted and they don’t want spam. They want something useful.
If you do look over that whole journey, like every interaction they’re going to have with the product and you think about every email and you make sure that kind of feels always like it’s pretty seamless and pretty fluid and all part of the same journey–if you do that and you ensure that you’re not spamming or being annoying, I think you’ll be successful. Good email marketing or good nurturing–
Andrew: Do you have one tip for improving sales via email nurturing? You’ve done this for a long time and obviously your company is doing it really well.
Sam: The one big tip is just test.
Andrew: Test everything.
Sam: Test everything and test often. Build that into both your web content and your email marketing solution. Ensure that before you can ever send an email, you’ve got that instrumentation in place.
Andrew: Ah, I see. It really is so much harder to get the software in place to test and measure than it seems. What about this? So, one of the things that a past guest told me is at the end of your sales sequence, send out an email with the subject line that says, “Do you hate me?” with like a little smiley face. You’re smiling already as you hear that. Basically, it’s just kind of a kidding message that says, “Look, I’m trying to improve. You obviously didn’t like my stuff, totally fine. I’m not looking to sell to you. I just want to learn from you. What could I have done better or what is it about this that didn’t work out?”
The headline gets so many people to open it and hit reply and say, “No, I don’t hate you, but…” and then they say what it is. Do you have a tip like that for learning from your customers how to improve sales or a specific email that’s worked well for you?
Sam: Well, an email that we have done for a long time, I’m not as involved as close to this anymore as I used to be, but one thing that works really, really well for us. I know it still works. I’m not sure it’s as effective as it used to be. We send follow up emails from me basically thanking customers for buying Nitro Pro or signing up at Nitro Cloud and asking for feedback. It’s amazing how much feedback we’ve gotten through that channel. I do occasionally intervene. I’m on that email list.
There are some others on the email list so it can be very easy handled by support or sales or whoever makes the most sense. But if I see something that piques my attention, I will jump in. I’m surprised at how many people will reply to what looks like a real personalized email from the CEO saying, “Look, if there is anything we can do to help, we will.” I think the email says something like, “Look, I don’t necessarily read every single one of these, but I try to.” So, if it sounds like it’s a genuine attempt to do the right thing, I think you’ll get a response rate that’s–
Andrew: And you send that to all your customers?
Sam: Yeah, when they buy. Yeah.
Andrew: All right. Things are going well so far in our story. But about five years into the business, you had some trouble with your board.
Sam: Yeah. I think every company that’s been successful at some point has some fractured relationships at board level.
Andrew: Who’s on your board, Sam? Do you guys raise money?
Sam: So, we’ve raised money now from two VCs. So, we were bootstrapped for a long, long time.
Andrew: Until what year?
Sam: Bootstrapped basically until 2012.
Andrew: ’12. Okay. So, this board issue was before you raised money.
Sam: So, it was before we raised institutional money, but we’d raised some seed money in Australia. In amongst that group of investors, we had a number of just, I guess, private individuals, classic angel investors, I guess you would say. Most of them were current or former Australian technology entrepreneurs.
Andrew: Okay. I see here on CrunchBase Andrew Barlow was one of the other ones.
Sam: Yeah. Andy led our first ever round. He was kind of my first investor, like the first person who ever really was prepared to back me. So, I’m eternally grateful to Andy.
Andrew: And this was like a million-dollar round that you raised a couple of years after starting. That’s where some of the money came from to be able to create the tools that you created instead of content marketing. Okay. And then it looks like five years later, 2012, you raised money from venture capitalists. Starfish Ventures was one of them, Anthony Glenning, was he the partner?
Sam: That’s right. Yeah.
Andrew: Okay. So, this whole thing happened before then. What’s the deal with the board issue then?
Sam: We had one of those situations where the board became, I guess, split over how to move forward. This was five years in. We were growing really rapidly. So, it’s one of those incidents that should never have happened. At the end of the day, what we didn’t do, I don’t think, was think very carefully about who we wanted to have on the board at that time. I’m not going to name names and say who was involved or whatever. But we had brought somebody aboard who had his own agenda. And it was not necessarily well-aligned with the company’s best interests.
Andrew: What was his agenda?
Sam: His agenda, I think, was to do his own thing. He wanted to really impress his own personality on the company and his own ideas about how to grow it. I don’t think many of us agreed with his approach. So, when the board started to fracture a little bit, it really was a case of, “Well, are we supporting this guy or are we supporting Sam?” So, it became a very tense environment there. Over the course of a month or two, the business was incredibly unstable. Apart from nearly running out of money in 2007, we’ve never been so close to losing the business.
Andrew: Why did you nearly run out of money in 2007?
Sam: So, in 2007, it was very simple. It was a bit of probably hubris and kind of post-first ever money raised excitement. We hired a bunch of people with the expectation that revenue would climb. Then we had the worst product release that we’ve ever had.
Andrew: What was that?
Sam: It was Nitro Pro. I forget what version of it it was, but it was terrible.
Andrew: Okay.
Sam: It went backwards. Like imagine you upgraded, but instead of it being a better version of the product you just had, it was much, much worse. And unfortunately, we couldn’t just revert to the old solution because there were some technology licensing issues that complicated the whole thing. So, we were basically using brand new technology that didn’t work and revenue dropped by about 30% month on month and stayed there. So, all of a sudden, we were burning cash. We weren’t making as much money as we were spending and we had hired a bunch of people and it was pretty awful.
Andrew: Is that way you ended up bringing in investment?
Sam: No. So, we didn’t raise any money again until 2012, right?
Andrew: Oh no, I thought you were saying in 2007 you came out with this release that was a step backwards. I could have sworn that’s when you guys raised money the first time from Andy.
Sam: No, good point. But the money raising was actually in January ’07 and then we ran out of money in Q3 that year. So, it would have been nice if we had taken the money–
Andrew: How did you turn things around before you raised the next round?
Sam: It was freemium. We launched our first ever freemium product. In fact, it is kind of hilarious. It was a product called PDF Download. It was like a Firefox extension. At the time, it was the ninth-most popular Firefox extension in the world. We saw it was doing massive download numbers, massive install numbers and had huge usage.
So, we had this idea–like I said before, we had mapped out the M&A landscape for all things document productivity and PDF-related. We found this product and we were like, “Well, if we had that and it’s doing as much traffic as we think it is, if we rebranded it as like PDF Download by Nitro and we started marketing Nitro Pro instead of it and around it, would that work?” And would you believe, it seriously worked.
So, we were running out of money, going towards the end of 2007. We were in really bad shape. And I was telling the board that we’re going to launch this new strategy called freemium. Of course, the board was laughing at me. I wasn’t calling it freemium. Back then, freemium didn’t exist. It wasn’t a word yet. I couldn’t point to any blog post and say, “Yeah, look, guys, here’s all this credible content talking about this strategy and how it works.” It was more a hunch I had than anything else.
Anyway, in the end the board said, “Look, okay, we’ll do this, but only because we’ve basically got no choice. We either run out of money and we do this and it works.” So, it was a last-ditch effort, but we bought this plugin. We actually acquired it, rebadged it. It cost us tens of thousands of dollars. That was it. That was a lot of money for us at the time. And then the acquisition paid for itself in a couple weeks in incremental revenue. Literally I think we actually launched it on Christmas day in 2007. That was how dire straits, how much trouble we were in.
Within a few weeks, it had paid for itself. We had all this new traffic. We had all this new revenue. And it basically was the aha moment for us. It was like, “That is absolutely a model that we’re going to follow.” Freemium has really driven the business ever since.
Andrew: I see. And this was a plugin that allowed people to save a webpage as a PDF, for example, among other things.
Sam: It did that. Believe it or not, it actually did something that was quite specific but at the time really useful. You may recall this, back then–this is going back quite a number of years–Firefox didn’t deal well, most browsers didn’t deal well with PDFs in the browser. So, with Firefox, often when you would click a PDF it would crash Firefox. So, this, number one, stopped Firefox from crashing when you clicked a PDF link. Number two, it gave you a really quick document conversion if you wanted it. So, instead of having to wait for a PDF to load, you could actually display that PDF as HTML in the browser, so, a preview almost in the browser.
Andrew: I see. All right. So, that turned things around. Now, 2010, you’re in another tough situation. You’re saying this is the toughest since you guys almost ran out of money. This has to deal with a board issue. What do you do? What do you do with a board member who’s trying to take the company in a different direction from you?
Sam: Look, it’s hard. I think what we learned is it’s very easy when you are a young CEO. I must have been in my mid-20s at the time. It’s very hard–mid to late-20s–it’s very hard to be credible. People who are sort of older and more experienced are almost always perceived to be right or believed by people generally to be more credible.
So, for me, it was really a fight to prove that the direction we were going in was the right one. It was the subject of a lot of debate over a couple of months and the board was going this way or the other and a bunch of us threatened to resign or whatever and it got pretty heated. In the end, we were victorious, fortunately. The business won out. But it was so destabilizing that the company, again, was running out of money pretty swiftly. Again we went into a cash burn phase and only got out of it after this particular director had left.
Andrew: Why? How does that hurt the fact that people are still coming to your sites, still using your free tools, still upgrading to your software, still engaging with your email? How does a board affect all that stuff?
Sam: Because at the time, I had basically left the business temporarily. I basically said, “I’m going to go and fight this in the courts. We’ll see if we have to get really serious.
Andrew: I see.
Sam: So, I was temporarily out of the business for a number of weeks, about six weeks or seven weeks if my memory serves me correctly. What that does is it causes a real destabilization inside the organization. If you’ve been an ever-present founder, you’ve been running things the whole time and there are a few key people who have really been very visible and very active in the business and all of a sudden it’s clear that there are some problems at the board level, that can very quickly cause the morale to fall off a cliff.
And then what you have to bear in mind–we weren’t just selling online at this point in time. So, at this point in time, probably a third of our revenue was coming from inside sales. So, this is from basically leads that are being generated through all of our online activity like an inside sales team. So, we were depending on a number of key individuals to actually close business every month.
Andrew: And those people were on your team or distracted?
Sam: Exactly. Once you think that there is turbulence at the top–my lesson to anybody who’s got board issues is don’t. Don’t have them. You simply cannot ever afford to have a divided board. If you do, it will paralyze the company. The problem with boards is you can’t just fire them. It’s a very delicate thing.
With management challenges, if somebody’s not working out, you part ways and it’s pretty simple. But with board staff, it’s so delicate, yet it affects everything that you’ve just got to be really careful about who you appoint to your board and you’ve got to make sure that you are completely aligned.
Andrew: Is this Richard Crocker?
Sam: No.
Andrew: I’m looking around to see was there a lawsuit with anyone. He was on your board at the time, I think.
Sam: No. We’re not going to go into…
Andrew: We won’t go into that. All right. So now things come out your way. So, you’re back in the business. You’re running things. What do you do to help the company recover from this trauma?
Sam: Well, initially we actually–it sounds kind of hilarious now and a little bit timely in the context of what’s going on in Greece–but we put into play what we called an austerity program. We were burning cash.
So, we actually pulled back on everything and basically I told the whole company at the time that–I was very honest. I said, “We’re very close to the edge here. It’s going to take a concerted effort by everyone over the next several months to really pull this thing back on track.” Everybody got behind the initiative to get revenue back up. We just focused on revenue, revenue, revenue, revenue. We cut costs wherever we could.
So, all of a sudden, there was no food in the kitchens. It was literally one of those Greek-style austerity programs. It worked. Within about three months, we had a record month. We had a record-level EDITDA or profit in that month. So, it literally only took about three months to fix but it was still a very turbulent time.
Andrew: Was there some way that you know you could get more business if you needed to? I think a lot of people have that in their back pocket. If there’s something they need to do, then they’ll really push themselves and get to do it.
Sam: I was convinced we could do it. I was convinced we could get revenues where we needed to get them. I think I just blindly believed that. We sort of made it happen. It’s like the old saying. If you really want it badly enough, it’s going to happen. So, we were all so fixated on turning the company around and not losing it. We spent five years building it at this point and came so close to losing it that it gave us great perspective on what we had. We had been ungrateful or just not as aware of how lucky we were up until nearly losing it.
Andrew: Sam, was there any one–how do I phrase this? What I notice is when companies go through these dark periods, they end up becoming stronger if they come out of it, partially because they have these stories that they take back to the team that become part of their culture, like, “When we had our backs up against the wall, we did X to grow our sales. That’s how crazy good we are.”
Like Gary Vaynerchuk says, “I cared so much about customer service that if my FedEx guy couldn’t deliver wine, I remember driving in my car from New Jersey to Manhattan to personally deliver it to the client.” That’s a story that he tells the rest of the team what they’re like and what this company’s culture is about. Do you have one of those from those days?
Sam: Yeah. Look, we do tell some of the 2007, 2010 stories to new Nitronauts as kind of lessons in our persistence.
Andrew: What’s one of the persistence stories that helped you grow your revenue in that difficult time?
Sam: I’m not sure I’d point to anything specific like tactically from that era. It was more that we had a core group of people, either founders or people who had been with us since very early on. We all loved the company and we realized how much we loved it through these horrible experiences and through nearly losing it. I think we convinced everybody else that the mission we were on was a good one.
So, in those years, I remember working seven days a week and 12-15 hours a day to the point where I didn’t really know if it was a weekend or a weekday. It was quite normal for me to not really be aware. I actually remember the first time in years that I hadn’t worked a weekend. I came into the office on a Monday morning and I was completely shocked at how good it felt to have taken a couple of days out of the office and there were lots of us who were doing those kinds of silly hours in that era. I think it was really people management.
At a certain point, the specific tactics are one thing. But it’s really can you keep everyone committed to the vision and can you keep the morale levels high enough through those really tough times. That’s when people start to head for the exits if there’s any discontent. So, I think we’ve always been pretty good at getting people to believe in the vision and come on the journey with us and stay on the journey with us.
Andrew: You said one of the things you realized because of all this is that before this tough period, you didn’t enjoy the journey so much. You used to say to yourself, “I’m going to be happy when I hit this amount of money. Then I’d be happy when…” You’re smiling. You recognize that.
Sam: Big time. I think nearly losing the company in 2010 was a really good wakeup call. When you’re an entrepreneur and you found a company, you have so much of your own personality and self-worth and everything wrapped up in that business. So, if the business fails, then you’re a failure.
So, what I realized at that juncture was that I’d actually stopped doing a lot of the things that I liked to do, whether it was cycling, motorcycling, skiing, all these things that give you a bit more of a well-rounded life, I think what many of us learned was that we’d spent seven days a week, ten-plus hours a day working in this business for forever.
We hadn’t taken any time to sort of wake up and smell the roses. It was all about, “Let’s build this thing up and then we’ll sell it for $100 million or we’ll sell it for $1 billion or whatever and we won’t be happy until that happens. Sooner or later you realize that you don’t build billion-dollar businesses overnight. There aren’t that many Instagrams or WhatsApps or Slacks. They don’t come around very often. For the rest of us, we’re a decade in now. So, if I wasn’t enjoying the journey, I’d be a very miserable person.
Andrew: But isn’t it worth it, then–if you really were to look at it and say, “By being miserable, I worked harder. By not being happy until I hit the next milestone, I worked hard to hit the next milestone. If it means that for the next 10-15 years of my life I’m not super happy, so be it because then this misery is going to fuel me to work harder than ever in my life and I’m going to set myself up and my family for generations to come with wealth and prestige and knowledge and everything else that comes with it.”
Sam: Yeah. I think everybody who starts a business has some amount of intrinsic motivation, right? And you need that. You’ve got to have that. But at the same time, you want to make sure that you treat building a startup like the marathon that it is. My view is that you’ve got to balance yourself. We call it here a sustained success culture. In other words, we’re not interested in you being successful just this month or this quarter or even this year.
We want every Nitronaut to be successful over the long haul. There is incredible business value to somebody having significant tenure. People who have been with us for five or six or seven or eight years have so many more data points, thousands versus hundreds for almost any given issue that they encounter at Nitro. They become that much more valuable.
So, we’ll have this view that over time, over tenure, it’s really important if you can stick it out to have a bit more of a balanced life as time goes on because you will continue to contribute to the company in a really, really meaningful wand and an increasingly meaningful way. What you lose over time if you don’t have that balanced life is thinking smarter and being creative.
So, if it was just a race to work the hardest, then that would be one thing. But the markets that we play in, particularly in the smart documents space–cloud document sharing, signing, collaboration, approvals, workflow and so on–this is probably the hottest space in enterprise SaaS today. There’s no way that we’re going to win by being the hardest working. We actually have to be the smartest.
So, having balanced life, I think, helps people to be more creative and therefore, as a company we’re going to be more successful. So, I’m all for working hard and we’ve always worked our asses off. We tell everyone to work their asses off. But you’ve got to have some amount of balance in there, otherwise you’ll burn out after two or three or four years.
We’ve seen people burn out from early crew. Many of them, some of them didn’t ever really get over the 2010 time. We’ve definitely had a number of people who have just not been able to stand the pace over the years. And I think if we had more of a commitment to a success culture at that time, I think we would have been more successful in the long run.
Andrew: One of the things that you said that you could teach is–by the way, I don’t want to blow past that answer. That’s a really good point. The reason I brought up this, “Shouldn’t you be miserable when you achieve things so that you’re firing yourself up?” is because I know a lot of us believe it or believed it at some point. I also hear a lot of entrepreneurs who are further ahead say, “No, that doesn’t work for us. We need to be more consistent.” To be more consistent, you have to love what you’re doing. You have to give your mind some rest in order to get it to be more creative.
Sam: Exactly.
Andrew: You said that one of the things you have is an expectations rule book. What is an expectations rule book?
Sam: This is a Nitro thing, but it’s not my own. So, basically it’s part of how we’ve codified our value system at Nitro. So, I think one of the single defining characteristics of high performing companies is that you will find consistency in behavior throughout the organization. You won’t see a large range or a large variance in terms of the way people behave.
It doesn’t matter–performance is one thing. So, some months people are performing great. Other months, people are performing less great. It’s never 100% performance across 100% of the company over time. Those things go up and down. The projects that we work on every day change. But the one thing that should be consistent and is in most high performing companies in my experience is the way that the team behaves.
So, after this 2010 incident, we actually started to take culture very seriously. We reflected on the fact that the company had become a place that was burning people out. We knew we were burning people out.
We also realized that we were getting to a size where the culture wasn’t for everyone. It was basically started with a bunch of young Aussie guys in a room drinking beer, all fairly hard charging and saying, “Let’s go out there and build this multi-billion dollar business and we’re going to knock over anyone that gets in our way.” That will get you through the first year. You need a bit of that almost military attitude in the first year or two. It’s got to be very hardcore otherwise you probably won’t survive.
But once you get bigger, you realize that all of a sudden, the girl that you’re trying to hire for this support role, she’s not attracted to that kind of culture. She’s got no interest. Or the person that you’re trying to hire for the sales team in this role has no interest in this boys club culture or whatever you’ve created.
So, at a certain point we said we actually need to make sure that this culture is attractive to everybody who could possibly want to join Nitro because we want people to be happy here and we also want to have the widest possible talent pool to choose from. We don’t just want to have to hire guys or girls or whatever. We wanted to make sure we had diversity throughout the organization. We wanted to have a real commitment of a culture that was accepting of just about anyone.
Then we thought we should codify–if we’re going to have a very specific culture, we can’t just talk about, we should actually codify it, try to put it into words so people have something to look to, a bit like the Constitution here in America or a bit like any kind of law that dictates how people should behave or operate.
So, we actually came up with two things. We have what we call our Nitro values, which are really easy to remember. Every Nitronaut knows that we have three values–high performance, number one, no bullshit, number two and being good, number three. Performance comes first.
The no bullshit thing is all about just being direct, transparent, honest. We believe in that stuff big time. And then the third thing, be good, is just like be a decent human. Be respectful. Be respectful to your colleagues, your peers, partners, customers, whoever. The high performance, know bullshit, be good thing is easy to remember and it’s written that way to be easy to remember.
But then what we also have is what we call the Nitro Way. That’s the expectations rule book or whatever you’re referring to. So, the Nitro Way is the 15 or 16 things that Nitro will or will not tolerate. So, we say things like, referencing our earlier conversation, we say things like we will not allow burnout. We have things like we will not tolerate anything that damages our team or our company. We also have–I’m not sure I’m allowed to swear on this podcast.
Andrew: Yeah, do it.
Sam: We have one that says no fuckwits.
Andrew: What does that mean for you guys?
Sam: A fuckwit is a bit like a no jerks policy. It’s just a bit more Australian and everyone laughs at it and remembers it. But the expectation rule book that we have is really important because we actually use it when making in particular promotion decisions and even termination decisions and performance review decisions.
Andrew: Has someone actually been fired for being a fuckwit?
Sam: Yes.
Andrew: But don’t all companies want people who aren’t fuckwits, want people who work well together? What’s different about this?
Sam: Of course. So, it’s like every company saying that they hire for culture, which is bullshit, right? The vast majority of them actually don’t. If you really hire for culture, you have extremely disciplined hiring process, you have your values codified, you walk the walk. I think the different probably, Andrew, is we generally will terminate people for being out of sync with the expectations playbook.
Lots of companies will say this but they don’t actually do it. If you go back to our headline values–high performance, no bullshit and be good–most companies when they’ve got somebody who’s performing but failing on those other two things will keep them in the gear.
Andrew: Yeah.
Sam: So, I won’t talk about the specific incident. But last year, we actually removed several people at one time who were all participating in something that was very much in contravention with no bullshit and be good. And we removed several people in a single day on that basis.
These were people who were, in some cases, extremely high performing and removing them had real business consequence, genuine business consequence which we are still, in some respects, feeling today. As an executive team, we sat down and said, “This behavior by this group of people is really not cool. We really should terminate them. But if we do, there’s going to be a business cost. They are high performing in most cases.”
So, we made the decision to do it because we believed it was an opportunity. We thought it was the necessary thing to do but we also thought it was an opportunity to remind everyone that we’re really serious about how you behave at Nitro. I think codifying your expectations and your values goes a long way to being that playbook.
Andrew: And acting on it when it’s not in the immediate best interest of the company, that goes a long way to making the point.
Sam: Yeah.
Andrew: What did they do?
Sam: I can’t really talk about unfortunately, but it wasn’t cool.
Andrew: Like theft or…?
Sam: I’ll just say it wasn’t cool.
Andrew: All right. Are you guys doing more than $10 million in annual sales?
Sam: Oh yeah, many times that?
Andrew: Like $50 million in annual sales.
Sam: Closer to that than $30 million, closer to that than $10 million, rather.
Andrew: So, it’s somewhere between $30 million and $50 million.
Sam: Yeah. Exactly.
Andrew: Wow. Do you remember when you became a millionaire? Do you remember the day?
Sam: You mean the business or me?
Andrew: You personally? Like when you knew, “You know what, if I needed to cash out now I could. I don’t need this headache anymore. If it was a headache, I could do it.”
Sam: This is a really personal question.
Andrew: Remember the no bullshit policy.
Sam: Yeah, no bullshit alright. So, I don’t recall ever trying to watch it tick over. The thing is when you do funding rounds as the company grows, you get a sense for what your shareholding might be work.
Andrew: But you took the money out in one of those previous fundraising rounds.
Sam: Sorry, Andrew, what was that?
Andrew: Sorry. You took some money out in the previous funding round, right?
Sam: No. I’ve never taken money out.
Andrew: You guys raised $15 million November, 2014.
Sam: Yeah.
Andrew: Wow. And you could have taken money out, but you decided not to.
Sam: Yeah. I’m fully committed. I believe that what we’ve built is something really special. So, my view is you shouldn’t sell unless you really need to. And you know, we’ve had offers to buy the business before and we’ve turned them down. It’s because if you’re enjoying what you’re doing and you don’t really need the money, then why would you sell? I think that’s the same view I take.
Andrew: You live in San Francisco?
Sam: Yeah. I do.
Andrew: And you can afford the housing here. Do you have a place–I looked up so many places where the bathroom and the sink to wash up after the bathroom are in different rooms.
Sam: Don’t get me started on this housing market.
Andrew: Do you have a place where the bathroom is like an outhouse essentially?
Sam: No. I’ve got a great apartment here in the city. I’m just up the street. It’s nice and convenient.
Andrew: One of the taller buildings.
Sam: It is one of the taller buildings up on the hill. That’s the hardest thing about this city, I think, for anybody. It’s frightfully expensive. It would make you tempted to sell some stock. That’s for sure.
Andrew: Yeah. That’s what I’m getting at. It’s awful. My first two months here, I think I was going through some kind of depression. I couldn’t deal with it. It wasn’t that housing was expensive. That’s not that big a deal. You can’t find anything. So, you just keep going out and you can’t find anything because nothing is available. Or worse, I would see places for $7,000 a month and you think, “All right, this is going to be beautiful. It’s $7,000 a month,” but the landlord still has his $3,000 a month mentality because that’s how she used to rent it.
And it doesn’t matter that she’s not cleaning up the corners because at $3,000 no one cared and frankly now at $7,000 no one cares because it’s 8 people who all work at tech companies who are all crowded in there who are never going to be in their houses because they’re all Tindering and then going out with people on Tinder. And if they’re at home, they better not be in San Francisco. You’d be in a different city.
Sam: Yeah. That’s the way it’s gone. I’ve watched the price of residential real estate basically double in the time that I’ve been here. The cost of your classic one or two bedroom apartment in the city has definitely doubled in that time. I think average wages in the city have doubled in that time as well.
Andrew: You know who has a good place? Ryan Allis. Ryan Allis, the guy who sold iContact, this is an email program, simpler than what you were looking to build. He bought, soon after or maybe just before he sold iContact, he bought a place–I think he even bought two places–that guy was smart to get in back then.
Sam: I think anybody who got in any time before today was smart because it seems like every year it’s another 15% or 20%.
Andrew: All right. The important part is I didn’t know much about your company before we started this conversation. Now I know a whole lot. Now I’m not just in inspiration of the company. Now I’m in awe of the company. It’s incredible to see how much you’ve built and without having TechCrunch articles about you every month.
Sam: Yeah. I don’t think TechCrunch articles really do that much, to be honest. I think they give you a little bit of attention or buzz for a short time. But if you’re not building a real business, then you’re not doing anything in the long run.
Andrew: You know what’s impressive about your business? There are a couple things. Here’s one. I’m looking at referrals on SimilarWeb as I told you before to see where are you getting your traffic. It’s all sites that you own that have huge traffic on their own, like PDFtoWord.com, PDFtoExcelOnline.com, WordtoPDF.com. The only thing I see that’s weird is what this Shell.Windows.com, but that’s not sending that much.
Sam: That’s probably because we are pre-loaded on Lenovo machines–Lenovo is a big partner of ours. We’re on Lenovo machines, that could be something to do with the Nitro Pro preload.
Andrew: Oh, that makes sense. I’m glad I asked that. All right. Thank you so much for doing it. The website is GoNitro.com for anyone who wants to check it out. Thanks for doing this interview, Sam.
Sam: Hey, you are very welcome, Andrew.
Andrew: Cool. Thank you all for being a part of it. If you like my interview style, please rate me on iTunes. I’m trying to get more ratings there so more people discover this interview. Frankly, if you haven’t subscribed to the podcast, you should. I’m doing good work here and I’ve got a good team of people who are helping to make these interviews better and better with more and more research, more and more preparation and I don’t want you to miss any one of them. All you have to do is go to your favorite podcast app and subscribe to Mixergy. Subscribe to Mixergy.
Sam, thank you for doing this. Thank you all for being a part of Mixergy. Bye, everyone.
