Andrew: Hey there, Freedom Fighters. My name is Andrew Warner. I’m the founder of Mixergy.com.
Get this, you know how hard it is to create a marketplace? Well, today’s guest found a way to make it easier for himself. The challenge with the marketplace is let’s suppose wanted to have a marketplace for, I don’t know, hairstylists. You’d have to get a whole lot of hairstylists in there or else you wouldn’t get the customers. But why would you get hairstylists in there if you have no customers? Or maybe you get customers first but you have no hairstylists, so it makes no sense for the customers to be there because they’re going to be upset that they can’t book an appointment because they don’t have anyone local.
Well, today’s guest found a way to deal with that chicken and egg problem that all marketplaces have and he built a growing business. He will not tell me what the revenues are. I’ve tried several times in the pre-interview conversation to pull it out of him. But I did get enough to understand how big, massive this business has gotten and I’m excited to talk to you about it and to have him tell you more about it.
His name is Jerry Nettuno. He is the founder of Schedulicity. It’s an appointment scheduling software for small and medium-sized businesses. So it works on its own. And in addition to it, he now has this marketplace where you can find spas, where you can book appointments with spas or a masseuse or an acupuncturist or a hairstylist, etc.
We’ll find out more about how he built this business in a moment. First I have to say that this interview is sponsored by the company that will help you find your next developer. It’s called Toptal. Check out how Jerry actually found his developers. And this interview is sponsored by the company that will help host your site better than it is right now. It’s called HostGator. I’ll tell you more about them in a moment. First, Jerry, welcome.
Jerry: Thank you very much, Andrew. I appreciate it. I’m happy to be here.
Andrew: Did it feel a little bit pushy before the interview when I was asking you for revenue? I really like dollars and cents. I wanted to know exactly how big the business was. Did it feel pushy at all?
Jerry: No. Not at all. We’ve got things going on in our business right now and for competitive reasons, I don’t like to share it. But I’ll tell you a few things. Number one, again, we’ve got 31, about to 32 full-time employees. As far as I know, we’re the only company out there even remotely around our space that’s operating as a profitable business.
Andrew: And are you bootstrapped or funded?
Jerry: We’re bootstrapped.
Andrew: Bootstrapped, 31 employees. How many businesses now are on your platform?
Jerry: We have almost 40,000 individual service providers on our platform and growing radically. We launched a new platform February 24th. We’ve grown the company by a third in six weeks.
Andrew: In six weeks?
Jerry: In six weeks.
Andrew: What’s your pricing on that? If I was a business, if I wanted to do someone’s hair, what would I pay you guys?
Jerry: So post-our launch, as you can see, you can go on and if you’re scheduling more than 20 appointments a month, it’s $19 a month.
Andrew: Okay.
Jerry: And then we allow people to accessorize and we offer a suite of different things.
Andrew: Like text messaging, for example, is one of the add-ons.
Jerry: Text messaging, payment, on and on. We’ll have bunches of them that are coming up in the near future. They’re all things that we’ve spent a great deal of time and energy really understanding who our customers are, what their needs are. More importantly, how this whole relational economy works between service-based businesses and all of the consumers that we all are. We’ve taken all of that understanding to try and build a successful business model around it.
Andrew: Sorry. You also have a free tier. The free tier gives people up to 20 appointments every month. So when we’re talking about 40 businesses on your platform, 40 service providers, 40,000 about, we’re saying some of them are in the free monthly, others are paying $20 a month and others still have the $5 or more add on.
Jerry: Or all three.
Andrew: Okay. I want to understand how you built this up. You said this before we started that your vision was for a marketplace. I’m actually looking at your website from March 2009. It’s marketplace-centric. Like right away, you’re saying to a customer, “If you want to find a personal trainer or stylist, just tell me the city, tell me what you want and we’ll show you some.” Did it work at the time when we’re looking at the very beginning of the site?
Jerry: It did work. There were all the initial problems that you mentioned earlier, which is the chicken or the egg. We realized very quickly right in the beginning that the secret was really to build something that was of value to service-based businesses.
Andrew: Without the marketplace. If the marketplace didn’t exist, this value would still be there.
Jerry: Exactly. I felt like in the end, we would be rewarded the highest from the ability to have a true a meaningful marketplace. That being said, it doesn’t exist unless you can build a business behind it. Our goal was always to . . . one of the things I love about our business is, I don’t know how much you’ve ever thought about it, Andrew, how much you actually interact with small service-based businesses, but it would blow your mind. This is roughly half of our country’s economy-, small, service-based businesses. Yet, dramatically underserved.
Andrew: Like what? I think about the woman who cuts my hair. That’s the only person I think about who I actually have to call. It’s a bit of a pain to deal with because I can only call her during the day. I can’t call her when I’m free. But who else? Help jog my memory. Help me realize what other services providers.
Jerry: Schedulicity right now, we’re in over 60 different verticals. If you pull up Schedulicity where you are, every single one of those little pins that you see is dynamic. So you’ll only see it if you can find those kinds of people in the area that you are. But an answer to your question, I’ll give you just a small example. We’re here in Bozeman, Montana. But in Bozeman, Montana, my hairstylist is on Schedulicity. My massage therapist is on Schedulicity. My CPA is on Schedulicity.
Andrew: Right.
Jerry: I found a chimney sweep to clean my chimneys this fall. My carpet cleaner is on Schedulicity. I got a cooking class on Schedulicity. So it’s a myriad of everything you can imagine. We have dog groomers and coaches and equestrian centers and marriage counseling.
Andrew: I think I’ve got a good sense of the kinds of businesses that you’re talking about. You were, it seems like, one of those businesses. Right out of school, your first job was what?
Jerry: Me personally?
Andrew: Yeah.
Jerry: I came right out of school and I was providing services for people. I was doing roof coating and all kinds of things like that.
Andrew: Roof coating? You were also a financial advisor, I heard.
Jerry: I was a financial advisor early in my career and consulting, meeting with people, even a financial advisor is a service provider, right? You’re providing a service for people.
Andrew: Right.
Jerry: Kind of the genesis for Schedulicity was very, what’s the word I’m looking for? Kind of selfish, right? The bottom line is I was a father of two. I was divorced. I had custody of my kids. I was raising them for the most part on my own. The bottom line was I’d come home, I’d had a long day, 10:00 at night by the time I’d finished working with the girls and helping them with homework and getting them in bed.
That’s when I’d sit down and pour a glass of wine and I’m like, “I could really use a massage.” At the time, Addie, who’s my massage therapist, who was with Soma Sports Medicine, good luck. She’s not doing massages or answering the phone at 10:00 at night. So it wouldn’t happen. So think about what happens when that doesn’t happen. A, I didn’t get what I wanted. B, somebody out there lost business because there was not a function for that to happen when I wanted it to happen. More and more, we’re a people who want everything that we want and we want it right now.
So that was kind of the genesis. But in the beginning, we realized that what we had to do was really build something of value. We have always put these small businesses number one. We felt if we could provide something for them, a platform that they could run their business on that would highlight and enhance all the things that are challenges for them. Remember, for service-based businesses, again, remember, we’re talking about half of our economy.
Their biggest challenge, Andrew, is not being able to fill a slot. If you don’t have an appointment today at 3:00 and you’re a dog groomer or whatever the hell else, it’s like old bananas or rotten tomatoes at the grocery store. At 3:00, it’s worth nothing. It’s not a discounted rate. It’s worth nothing. So their biggest challenge is making sure that somebody’s there.
We wanted to provide a way that connects consumers with new service providers but also provides all their existing customers an easy, awesome experience that allows them to interact and strengthens the way that they interact and increases . . .
Andrew: I get the idea for it and I understand the value of it. Is the next step then to go and get developers?
Jerry: Yes, absolutely. Right out of the gate, we kind of decided the kind of thing that we would need.
Andrew: Who’s we? Was it just you at the time?
Jerry: It was me and a few key people that are here at the company still.
Andrew: How did you pick those few . . . actually, before I ask this question, sometimes your mic touches the collar of your shirt and it makes a little bit of a rustling sound.
Jerry: Got it.
Andrew: Not to make it even more awkward for you to stand here in this awkward position and in addition hold the mic the way that you do. But it’s helpful to be aware of it. How did you find these people who you were going to partner up with to start this business?
Jerry: You know, it was just people that I had known that I felt brought powerful, good value to the idea of building a business. As you know, building a business is not easy. I think it’s hard enough to begin with. One of the things that can make it insanely less hard is by putting the right people around you. I try to surround myself with a couple people that quite frankly every day blew me away in the way that they made think about things.
Andrew: Could you be a little more specific? How many people were there and what are the talents that you specifically wanted from each one?
Jerry: Number one, the ability for people to understand how to market, the understanding of what our marketplace looked like, the kind of concerns, the ability to empathize and understand the needs of our customers, the detail.
Andrew: So there was one person who was really good at marketing?
Jerry: Yes.
Andrew: Who’s that?
Jerry: Michael Wilson.
Andrew: He’s not with you guys anymore?
Jerry: No. He is our VP of Marketing.
Andrew: So Michael Wilson, what kind of marketing was he good at that made you say, “I need to partner with this guy?”
Jerry: Basically everything imaginable. His personality made him somebody that people gravitated towards. He had a lot of personal business building experience, very detailed.
Andrew: He owned Plonk Wines before?
Jerry: Uh-huh.
Andrew: What was Plonk Wines?
Jerry: A wine company and then a restaurant and bar.
Andrew: Okay.
Jerry: Not the prototypical background that you would find. But you’ll see that. Other than on my development side of the business, most of them don’t have that background. I think that’s one of the reasons that we’ve also been very successful.
Andrew: What about Joshua Spitzer? Was he one of the cofounders?
Jerry: No.
Andrew: He’s the CEO that you guys brought on later?
Jerry: Yeah. He’s not with the company anymore.
Andrew: Okay.
Jerry: Yeah. So you must be looking at older stuff.
Andrew: CrunchBase. Sometimes CrunchBase is up to date and it’s really mind-boggling good and other times it’s shockingly out of date.
Jerry: Yeah. That’s shockingly out of date.
Andrew: Who else?
Jerry: In the early stages it was Jane Crites.
Andrew: Okay.
Jerry: Who’s now our head of product. Michael Wilson, and again, every morning I’m blessed to be able to work with them. I don’t know where I’d be.
Andrew: What was your skill? What’s the thing that you brought to the table for them?
Jerry: I believe that my skill has always been understanding the needs of people, being able to kind of identify where there’s a problem and where there’s an opportunity to provide a solution. Secondly, I like to think that bring a lot of energy and a lot of inspiration and the ability to deal and work with people and hopefully bring the best out of people.
Andrew: So what I’m seeing is nobody was a developer in the original team. So you guys needed developers to code this up.
Jerry: Absolutely.
Andrew: Where’d you find them?
Jerry: Our company is born and raised in Bozeman, Montana. I don’t know if you know much about Bozeman, Montana. It’s a breathtaking, beautiful little city in, I think, one of the most beautiful states in our country. Over the last five years, there’s been a tech explosion in Bozeman. I even did an interview with Inc. Magazine, which was called Silicon Prairie or something. It was all about what’s going on in Bozeman. We had RightNow Technologies, which was acquired by Oracle for close to $2 billion.
Andrew: At the time, you went out of your city. I heard you went to Colorado, right?
Jerry: Yeah. I couldn’t find anybody with those skills in Bozeman. It was very rare at that time. So I basically hired a company, maybe similar to our sponsors today to help find the kind of talent that I needed. A couple of them became guys that are still here and permanent employees.
Andrew: Really?
Jerry: Yes.
Andrew: So when you were looking for developers or dev shop, how did you figure out who the right one was who could actually get it done for you?
Jerry: Just by talking to a lot of people and going by gut instinct.
Andrew: Meaning other people who had their sites developed who had sites coded up for them, you asked around and then you found this one company and they did it for you.
Jerry: Yeah.
Andrew: When you passed the request onto them, you were new at this. How did you express to them what you were looking for and make sure they got it right?
Jerry: I had already found some people that could help out locally that could kind of articulate the needs for us.
Andrew: Okay. And these were just friends who could help you express?
Jerry: One of them was one of the first people that I hired. He’s not with the company anymore. But he was one of the first developers. His background was leading teams. So he was able to share a lot of that information.
Andrew: I see. And this was before you hired him, you spoke to him and you said . . . this is before you hired him? You said, “Could you help me express to the developers what we need?”
Jerry: Yes.
Andrew: I see. Okay. Did you talk to any customers before this? Either service providers who are your customers or their customers?
Jerry: No. Most of what we did at that time was talking to people.
Andrew: What kind of people did you talk to?
Jerry: We just walked around and talked to small service-based businesses everywhere we could find them.
Andrew: Do you remember one that especially stood out that you learned something from?
Jerry: My hairstylist at the time.
Andrew: So you walked into your hairstylist and you said what?
Jerry: I told her a little bit about what our thoughts were and what we were thinking about and wanted to see if what I felt like were pain points were actually pain points. Much to our excitement, we way underestimated all of that stuff because here’s what I’ve found and that I think is really interesting. We’ll use hairstylists, just one of the many verticals that we have. But we started in that area and we did it on purpose. I’ll tell you why in a minute when you were asking me how we built the business.
But anyway, my hairstylist, as an example, is amazing. She doesn’t consider herself a hairstylist. She considers herself an artist. She’s an artist. Your wife walks in. She can’t help me much. But somebody comes in. She feels like her job is to make them beautiful and different styles. She’s always traveling and learning different things and different- . . . believe me, it’s not about cutting hair. She’s an artist. She brings joy and pleasure to people by making them feel good about themselves. She’s very passionate about it.
So one of the things I found out is that she just wants somebody to sit in that chair because she lives to provide that service. What people that provide services don’t live for is spending two hours a day on the phone talking to people, answering the phone, returning phone calls, taking somebody who’s rescheduling or cancelling and this, that and the other thing. So what our mission was we’re going to provide something to you that will allow you to spend all your time doing the things about your job that you love.
Andrew: Was there anything surprising? This is basically you getting confirmation that your idea made sense. Did she help shift your direction a little bit?
Jerry: She helped shift it in the proper way. I think that she, if anything, helped confirm our suspicions around how we felt that we could help.
Andrew: Okay. All right. So then you went and you had this development shop setup your software. How long did it take and what did it cost for the first version?
Jerry: Well, essentially we brought people in. We did everything in house. We’ve never outsourced any development.
Andrew: Oh, I thought you hired developers- . . . oh, when you say you hired developers out of Colorado on a contract basis, this is what you told our producer, what you mean is you found them and you brought them into your office and they were in your office working with your team?
Jerry: They were in the office working with our team.
Andrew: Interesting.
Jerry: Then when the contracts were up, several of them we converted to full-time employees.
Andrew: I see. That’s something that was part of the agreement that you worked out.
Jerry: Yeah. Absolutely. So going from there on, we have always done all of our development in house. I think that’s another reason that we’ve been successful. I think that personally I believe that it’s really great to be able to have those people around your team all the time. The closer they are to what’s going on in the business and the less disconnect I believe is very valuable.
Andrew: Wow. So then how much money did you use to fund the business, you and your cofounders?
Jerry: Well, I want to clarify one thing that you asked me about. We bootstrapped, but we raised money. I went out and raised money, all private money and angel money. So when you were asking, just to clarify, we have no institutional money or professional money.
Andrew: I see. I don’t know that I would call it bootstrapped, but I have notice that the term bootstrapped means different things to different people.
Jerry: Yes.
Andrew: So how much angel funding did you raise?
Jerry: In the initial time, I want to say we raised, I don’t know, $4 million.
Andrew: $4 million? And that’s all from angels?
Jerry: Yeah.
Andrew: I see here according to TechCrunch $7.7 million total.
Jerry: Yeah.
Andrew: Wow. Okay. So who were the people who you raised the money from?
Jerry: All people that I had worked with, people that were business owners, very successful investors that were familiar with me.
Andrew: Who were your customers or colleagues as a financial advisor?
Jerry: Some of them were. Some of them were just personal people that I knew or people that I knew from the community or other communities.
Andrew: Okay. All right. Let me do a quick sponsorship message. And that’s for the company I was telling you about earlier that lets people hire developers. It’s called Toptal. Top as in top of the mountain, top of the heap, top, tal as in talent.
Jerry, what these guys do is they have a network of developers that they spend a lot of time cultivating. When a company needs to hire developers like you did when you were starting out, you just go to them and you say, “Here’s my idea,” and they have somebody on staff who can talk you through the process. You tell them what you’re looking for. You tell them what you’re working on. You talk to them.
I actually saw the way that after you’re done talking to them, how they communicate internally. They start chatting with each other, going through their list of developers, finding the right one and it’s a whole team of people who get to interact on this. Then they come back to you and they say, “You need a developer. You need this team of four developers. Here are the four that we think are going to be the perfect fit for you.” You get on a call with them. You make sure they’re the right fit.
If they are, you get to work with them full time. You can do part-time, you can work on a project basis. If you want to hire them as you did, Jerry, you hired your guys. You can hire them longer term and keep them and keep working with them. But many people decide they don’t want the headaches involved with hiring developers and paying them and making sure that they’re in compliance. So they just stick with going through Toptal. It’s a phenomenal story.
What’s cool about them is I just learned about this recently. They also work with dev shops. There are some development shops who may be focused on web development and iOS development, but they occasionally get a customer in who wants Android development. They can’t keep a full-time person on staff just for that one time that they need an Android developer. In those situations, they got to Toptal and they round out their team with Toptal developers who then they pass on to their clients and say, “Here’s our developer.”
It’s an incredible way to do business. I could imagine even that there must be some dev shops that really have just one or two people working on staff who are project managers and all of their developers that they send out to work for their clients are hired through Toptal and the client doesn’t even need to know it because they just need to know they’ve got the right developer.
Jerry: It’s a great model if you’ve got that type of a company, for sure. I might even have some short-term needs.
Andrew: I’ve found that actually the interviewees often will write down the name Toptal and go to them. If anyone out there in my audience is writing down the name Toptal, they should actually take this full long URL and I’ll tell you why in a moment. It’s called Toptal.com/Mixergy. They really want to court the Mixergy audience because they know that we are the influencers. We are the people who then go and talk about it to our friends, to our colleagues, to people all over the place at incubators. So we spread the word.
So to encourage more people from Mixergy to sign up, they’re saying that listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours in addition to a no-risk trial period of up to two weeks. So they really want to make sure people are 100% satisfied and if you’re a customer and you’re happy and you get through your 80 hours of developer time, they want to give you credit for an additional 80 hours of developer time.
It’s an incredible offer. It’s only available at Toptal.com/Mixergy, where you will see a very handsome model there that they’ve picked. I don’t know where they got this guy, but I’m glad that they did at Toptal.com/Mixergy. Go check it out and sign up.
I’m still recovering from this cold that will not go away. I have a kid who’s two years old. The little bugger keeps getting colds. I am so resistant to colds usually, but if you keep flinging them at me, eventually one of them is going to attach itself.
Jerry: Yes. I know. I’ve seen it myself.
Andrew: That’s what’s happening. How old are your kids?
Jerry: I have two daughters. My oldest one is 18 and my youngest one is 17. They’re only 15 months apart.
Andrew: Do they work in the business at all?
Jerry: No. My oldest daughter is in her first year of college and my younger one is a junior in high school.
Andrew: They’re the ones that inspired you to create this business. You were so exhausted.
Jerry: I had to almost ban them from Schedulicity because they were scheduling all kinds of appointments they didn’t tell me about.
Andrew: Do you remember when you were their age what kind of businesses you had? I heard you had all kinds of different businesses as a kid.
Jerry: Yeah. I’ve always kind of had an entrepreneurial spirit. I had a paper route. I had my own landscaping business. I went to work as a partner with my friend’s dad, who was in the roofing business. So I’ve done it all.
Andrew: As a landscaper, what did you do?
Jerry: Basically several different things. Basically mowed lawns and did like just maintenance but then built landscape . . . did landscape architecture and things like that. Remember, I was in high school.
Andrew: Yeah.
Jerry: So that’s what I did and it was fun.
Andrew: Do you remember how much money you had? I still remember to this day. I got to $20,000 around the time I got to college from just saving up all this from all these little businesses I started.
Jerry: Yeah. It was quite a bit. I don’t remember right off the top of my head. I know that I was making more than just about anyone that I knew within five years of my age.
Andrew: It’s such a good feeling, isn’t it?
Jerry: Yeah.
Andrew: Did you read a lot of Forbes Magazine, business books, anything like that?
Jerry: I didn’t back then. I’m a voracious reader now of things because now that I’ve been involved in building a couple successful tech businesses and as my grandfather would say, I’ve been drug through a knot hole backwards, now I really appreciate learning about people who have had these experiences and how they looked at problems and how they dealt with challenges.
Andrew: So when you started out, one of the things you decided to do was focus on one area. Was it hair salons or was it tanning salons that you focused on first?
Jerry: We started out with hairstylists.
Andrew: Okay.
Jerry: The reason for that was . . . remember, you know this better than anyone else. The good news about our business, our addressable market it is that it’s astronomical. The bad news is it’s astronomical for a reason. That is that they’re not easy. That whole article that we talked about earlier in TechCrunch talks about one of the reasons is it’s not easy to do that. I always felt that if you could figure out a scalable way to do it, watch out. That’s a business, right?
Andrew: Yeah.
Jerry: So our idea in the very beginning was if you can get one hairstylist as an example to sign up for Schedulicity, it’s not just about them because remember, everybody gets their haircut. Everybody but old bald people and newborn babies goes to get their hair done. Who is that? Well, it’s carpet cleaners and marriage counselors and dog groomers and everybody else.
Andrew: And as a result, what would happen.
Jerry: As a result, we started to grow organically at a huge rate because what would happen is we would get a hairstylist. They would sign up for Schedulicity. They would invite all their consumers to start using Schedulicity to make their lives easier and as a result, 10-15% of those people would be service providers. They would immediately go through that process and be like, “Wow. Why don’t I have this?”
Andrew: I see.
Jerry: We got to a point where we were growing at almost 65% organically.
Andrew: What’s the name of this business that you created, Edge Inova?
Jerry: Edge Inova was just the company . . . it is Schedulicity.
Andrew: Okay.
Jerry: When we branded the company . . .
Andrew: That was the only product.
Jerry: Yes. Exactly.
Andrew: You branded from what? It seems like the business had a different name in the beginning, didn’t it?
Jerry: Well, it was Edge Inova. And then when we actually created the product, we called it Schedule Town. There was actually something out there that had the word town in it. So we were advised that it might not be a good idea, so we rebranded as Schedulicity.
Andrew: I see. So it used to be ScheduleTown.com.
Jerry: Yes.
Andrew: How was the transition from one name to another?
Jerry: We were so early on that it was nothing. It was like deciding to make a left instead of a right. We didn’t have enough people involved that it made a difference.
Andrew: You told our producer that your launch was just quiet. You decided you weren’t going to make a big event out of it. You weren’t going to buy advertising. You just wanted to launch. Why? Why not get people on there?
Jerry: Well, I think the thing is we wanted to make sure that we were doing things right first. We didn’t want to . . . as a company that didn’t have hundreds of millions of dollars in venture capital, we couldn’t afford to spend a lot of money on things that don’t work. So we took a lot of pains to make sure that we understood what was happening. We understood the data. We understood the behaviors and that when we were spending the money, that we were spending it in ways that brought ROI to the business.
Andrew: Okay. So you got your first hundred customers how?
Jerry: We got our first hundred customers by just people talking about Schedulicity.
Andrew: Meaning you guys going out to salons? Did you actually do any door to door sales? Did you make any personal phone calls?
Jerry: We walked into every place we could walk into. Believe me, everything you could think of, we did.
Andrew: And you would do this. You’re a guy who actually raised millions of dollars. That’s the kind of sale that you feel comfortable making and you still would go into a hair salon and talk to them about using your software.
Jerry: I probably did it more than anybody just because I’m not afraid to talk to people.
Andrew: Yeah. I could see you’re good at it. But what do you do though when you walk into a hair salon and they don’t even take freaking credit cards a lot of times, right? A lot of times the people who do it just are not interested in computers. I see that they have often old Android phones. They don’t want every app. They just want Instagram, Facebook and five others. You now have to tell them this whole other site they have to trust their info to and their customers to. How do you deal with that?
Jerry: It’s interesting. The problem that you just described was a very challenging problem. As I spoke to your producer before, looking back, the thing that was the greatest challenge that could have very easily taken down the company before it started was Schedulicity was before our time. What I found was we had an incredible idea that not really everybody was in the position to adopt. I have a mentor that has worked with me a lot and was a big help in the beginning of building the business.
I ran into him after a couple of months ago just before we were getting ready for our new launch and he was so excited about everything that’s going on. He said, “Listen, Jerry. What’s amazing is you guys are positioned to turn this into something bigger than you’ve ever dreamed, to own this place. And the reason is because you have built a business that’s in the best position to take advantage of the fact that right now, all of the pieces are now coming together that weren’t even here five years ago.”
Look at my daughters, as an example. They’re the fastest growing segment of the internet, is that age group. They think it’s dumb that somebody picked up a phone to call to make up an appointment. When we started just five years ago with the launch of Schedulicity, we were still trying to convince people that they could do something better when they actually didn’t realize that what they were doing was that bad.
Andrew: Right. I see. So if they weren’t there yet, you knew that at some point, they would be there. If they weren’t going to ever get there, their customers would drag them there because their customers would insist on it.
Jerry: The customers would drag them there. So that’s a behavior that I’m proud to say we nailed. So now we’ve got millions and millions of consumers. What’s crazy is we see this behavior happening all the time where our consumers are now driving adoption from our businesses because what happens is your hairdresser signs up for Schedulicity or your dog groomer or somebody.
So next thing you know, you just get an email from them saying, “Hey,” it’s all done in our app, but it basically says, “Andrew, you’re going to love me like you’ve never loved me before. Click here. You never have to call me anymore. You can now schedule with me this way.” What happens is you start doing it as a consumer.
I can tell you the time to value for a consumer is one second. As soon as they make an appointment on Schedulicity, it points out the inefficiency of every other service provider they have that’s not on Schedulicity. So what happens is then you go to your massage therapist that you tried calling for four days and then she finally got back to you, but you were in a meeting and then you returned her call and got on the phone and talked for ten minutes about Tuesday at 1:00 or Thursday at 4:00.
Andrew: There were other businesses now that do this, right? The founder of Redbeacon here on Mixergy was talking about how he started, I forget the name of his company–I’m looking here online. I see that there are companies like Setster, Appointment-Plus, MindBody, at least that’s what GetApp is suggesting.
Jerry: Sure. There are other businesses out there.
Andrew: MyTime is the other one. That’s from the founder of Redbeacon.
Jerry: Yeah. Those are a little bit different, from same similar world.
Andrew: Right. Each one is trying to solve this problem in some way.
Jerry: In some way. They’re a little bit different. MindBody as an example, MindBody is a big enterprise solution. That’s not what Schedulicity is.
Andrew: What about MyTime then?
Jerry: MyTime is different. MyTime is really about the consumers managing their time as opposed to . . .
Andrew: They’ll still do a booking service for the local business owner.
Jerry: Sure.
Andrew: But if the business owner isn’t on, the way they solve the chicken and egg problem is they will actually call on behalf of the consumer to the business owner and then they get to start promoting to them.
Jerry: Sure.
Andrew: The next hundred customers after you walked door to door came from buying ads. You guys had a small ad budget.
Jerry: We had a small ad budget which we created. This was very early. Most people had very little understanding of how to use Facebook as a tool. We were very, very fortunate to build a digital advertising platform on top of Facebook.
Andrew: You built it yourselves?
Jerry: Yeah.
Andrew: Why? What did you need that wasn’t there?
Jerry: Well, we built an internal mechanism to manage it and use what Facebook provided to actually automate how the money was spent and all these things. Anyway, it evolved into what we have today that Michael is doing which is mind-boggling.
Andrew: All for you, just Facebook ad buying software that’s just used by Schedulicity.
Jerry: Yeah.
Andrew: What’s the first thing?
Jerry: It’s not software. It’s just a whole entire, what’s the best word for me to say?
Andrew: System?
Jerry: Yeah. It’s a system.
Andrew: So a collection of spreadsheets, I’m imagining?
Jerry: Yes. It’s a whole entire dashboard that Michael uses to do all of that. But anyway, that’s how we started with a very small ad budget and then we kind of learned how to get people’s attention and who’s attention we wanted to get.
Andrew: What’s one of the first things that you learned about getting attention on Facebook that maybe doesn’t even apply today but gives us a sense of how you thought about it?
Jerry: One of the things that we thought about is I think the public thought that what you’re looking for is somebody to click on an ad which converted to somebody buying your product. That’s kind of the measure that was used for success or failure. We kind of looked at it differently than that. We thought that’s not really what happens.
What happens is it takes several touches for somebody to do something, right? A hairstylist gives somebody a haircut and the person they’re giving a haircut to says, “Hey, have you heard of this Schedulicity thing? My dog groomer and my massage therapist use this. It’s awesome. You ought to be on it.” And then they leave. So she may or may not get on it, but she’s heard about Schedulicity.
So then, she goes somewhere else, something else happens. She goes to make an appointment to get her haircut or massage and the person on Schedulicity. Then, they log into Facebook and there’s a thing from Schedulicity in front of them. What we learned is Facebook was not so much about directly deriving a sale from a click, but more about creating awareness and being one of those touches that makes people finally make that move.
Andrew: I see. You can keep track of all of it if you’re organized well. I see.
Jerry: Yeah.
Andrew: Okay. Second sponsor and then I want to come back . . . so far we’ve talked about success, success, success, but there was one challenging situation here that really had you in pain. But first, my sponsor is HostGator. They are an incredible company for hosting websites.
Let me ask you this, Jerry. If you had to start over today, you weren’t running Schedulicity, you were just someone who was starting over, is there a business idea, some website that you would launch today to get yourself going if you didn’t have capital, you just had an idea and a web hosting package?
Jerry: Absolutely.
Andrew: What’s that?
Jerry: I think there are several different things that come to mind. I’ve often thought about just providing repair stuff to help automate small businesses that provide repair.
Andrew: What kind of repair?
Jerry: Any kind of repair. It’s another huge segment of a service marketplace.
Andrew: I see. So there’s like iCracked, for example, for repairing phones and they’re doing well. Is there something else that keeps breaking for people that you could create a repair business for and then send individuals in to repair it?
Jerry: Right.
Andrew: You wouldn’t even have to hire your own repair people, iCracked doesn’t do it. You just have to find ways to recruit them and have them on standby for when you have a customer who needs them.
Jerry: Sure.
Andrew: Got it. Is there anything specific that breaks down when you’re thinking of this repair business?
Jerry: Not off the top of my head, but it’s something I’ve thought about.
Andrew: Yeah. You know what? Actually, I feel like for businesses my size, to have somebody come in and do some computer work would be helpful. Apple will not send somebody into my office. I have to take my computer into Apple’s office. To once cut the line, I signed up for their joint venture package. It cost me $600. I just needed it for one time to cut the line because I would bring my computer in, painful, but I’ll do it, I’m not going to wait in line with it. I see what you’re talking about. I bet if they interviewed other businesses, they’d see that there are other issues that keep coming up. Repair business online is a great idea.
Whatever your idea is if you’re listening to me, if you want to set it up with a website, go to HostGator.com/Mixergy. They’re going to give you an incredible 30% off discount. They’ll treat you right, give you 24/7, 365 days a year customer support by phone. The reason I recommend you start with HostGator using that package, which is a pretty simple, inexpensive package is because it’s quick. It’s inexpensive. You can test out your model.
If you like it, you can grow with HostGator. They have managed hosting for WordPress. They have cloud-based hosting for other applications. They have tons of different solutions. But if you go to HostGator.com/Mixergy, you can install your software using one click, get up and running.
They’ll give you the templates for free. Your site will be ready to roll and see if your idea works. If it does, keep growing it. HostGator will be there for you. If you hate HostGator, easy to switch away. And if you hate your current hosting company, and I think you’ll love HostGator, but if you hate your current hosting company and you hear me talk about how great HostGator is and you want to try them, they have an easy way to migrate.
Again, go to HostGator.com/Mixergy, sign up. If you’re with WordPress, they will migrate for you. Just sit back, watch something on Netflix. They’ll do it for you. If you have other software, you can easily migrate over. HostGator.com/Mixergy. They keep buying ads, Jerry, because we keep sending people to HostGator. I love it. They dominated this year. We have an advertiser that wants to come in in the summer and he can’t do it because HostGator has locked up so many dates.
Jerry: That’s great.
Andrew: Yeah. I love that. I hope the audience isn’t getting tired of me doing it though or I hope we don’t lose effectiveness for them. I want them to do well.
Jerry: Yeah. That’s great.
Andrew: So we asked you about the lowest point and you said there was a period there where you ran out of capital. What happened that led you to run out of capital.
Jerry: Well, I think that the answer goes back to what we were talking about before, which is that I think that we had an amazing idea that was a very real problem with a very real solution. But I think that in our case, we were ahead of the curve. And even though it was so obvious to us for a lot of service providers, what they were doing was painful, but it worked.
Andrew: Right.
Jerry: There wasn’t pressure by technology that we have today for people to look for other solutions. So things took a little bit longer in order to generate revenue and we were growing and so on and so forth. It wasn’t one time, by the way, there were several times over the first couple of years.
Andrew: Just to put this in perspective, you guys launched, 2005. That’s when the business was formed. The iPhone came out after you. We’re talking June, 2007. So for a couple of years, if anyone wanted to go on the internet, they essentially would have to go to a computer, which at a hair salon is not the most convenient thing to do to make adjustments versus having a phone in your pocket and being able to see it. Frankly, the first iPhone was not the ideal device. I didn’t enjoy it at all. It wasn’t until 3G that you started to see a real device that was capable of doing things like this.
Jerry: Absolutely. And by the way, in 2005, that’s not really Schedulicity. So Schedulicity, what you’re seeing today we launched in the spring of 2010. Before that, I started the company and then it was two or three years of just figuring out exactly what we were trying to do exactly. We had to make some pivots in there because essentially we started off and we were a MindBody or Booker type of a business and we had everything. We were an enterprise solution. Very quickly we realized that we were going to go right out of business because they’re just too expensive.
Andrew: What are some of the things you had on that you had to remove?
Jerry: Everything. We had POS and inventory management and everything you can imagine to do that, but then of course as all those businesses can tell you, guess what? Now you need sale people and now you need this and now you need that. I realized fortunately early on, that’s not the model that we wanted. We wanted something that was light, powerful but scalable. That’s when we kind of really dialed it in and that’s when we put together Schedulicity, 2008 and a half is when we really started working on it and we launched it in 2010.
Again, to get back to what you’re asking me about, there were a couple of times where . . . anybody who’s ever been in an entrepreneurial position knows there were scary times where payroll was due and there wasn’t enough money in the bank.
Andrew: You told our producer you were on the ground in the fetal position crying.
Jerry: More than once.
Andrew: Literally crying?
Jerry: Yes.
Andrew: How do you deal with that? When you feel like you don’t know how to solve this problem, you’re on your own, there’s no daddy anymore who can come in and save you. What do you do?
Jerry: In my case, I cried a little bit. But then it was really all about not giving up. I believed in this more than I have ever believed in anything. There’s a lot of crying.
Andrew: I get crying, letting it out and then getting back and saying, “I’m not going to give up.”
Jerry: Very quickly. “How do I solve this problem?”
Andrew: You had 30 hours to solve it. What do you do in 30 hours?
Jerry: You think about who can help you, what you could do.
Andrew: What did you do specifically? Who could help you and how could they help you?
Jerry: I thought about potential investors that could come in. I thought about what the story needed to be and then what I would have to do for them in order to make it worth their while. Then it’s like one of my favorite things, it says, “Observe, orient, decide and act.” And it’s something that has helped me a great deal in my entrepreneurial endeavors.
Andrew: So you then brought in another investor last minute like that. What did you do to make it worth their investor’s while to come in so fast?
Jerry: I told them that . . . obviously you’re asking a lot of somebody because they know the dangers, but these are people that believed in me. They’re people that believed in the company. In a couple cases, my bothers, as an example, one of my closest friends . . . and bottom line is, you don’t give up and you do what you have to do to get things going. Now here we are.
Andrew: Profitable.
Jerry: Yeah.
Andrew: You also stepped down as CEO. Why’d you step down?
Jerry: I’d gone through a very difficult time. Things had gone on longer than I had anticipated in some ways. There were just a lot of things going on where I was exhausted physically, emotionally, spiritually. And I didn’t go anywhere, which is the key. I was still executive chairman of the company. So I wasn’t involved in the day to day operations.
Andrew: What was it like when you got close to what I would call burnout?
Jerry: It was a very, very difficult time. I never experienced anything like that before. So first of all, it was just trying to figure out what in the hell was wrong and then kind of figuring out what do you do at that stage.
Andrew: Right. I feel like the problem with burnout as an entrepreneur is you’re needed even more when you’re in that burnout situation.
Jerry: Exactly.
Andrew: You can’t do even a little. You have to fully disconnect from day to day and go get bored a little bit, right?
Jerry: For sure. And you’re right. One of the things certainly for me and I’m sure a lot of your listeners and you, in my position, one of the things about being, I think, of being a leader, certainly a great leader, is that you bring that energy and you bring that excitement and enthusiasm and the ability to keep people focused and excited on the big picture and what you’re trying to accomplish.
But in trying times, you can’t not do that. As a matter of fact, you have to do it more. So it’s kind of an intense kind of thing because you feel one way because you know that there’s some significant problems and challenges, some of which could sink you, but then you can’t bring that to the table. People are looking to you.
Andrew: Yeah.
Jerry: For inspiration. People need you. So I think just trying to maintain both of those things at the same time can cause a lot of pain for people.
Andrew: What about you? Were you paying yourself a salary? Were you now having to make due with a lot less at home?
Jerry: Yeah, absolutely.
Andrew: You weren’t paying yourself much of a salary. You couldn’t.
Jerry: Right.
Andrew: That’s got to be so painful. I worry so much about something really bad happening to me at a time when my son will be 13, 14, at that really tough point, and then to tell him, “You can’t do this because this guy who you thought was a hero who you thought could do anything is suffering financially.” What do you do about that?
Jerry: Well, in my case, you go out and you do other things that are fun.
Andrew: So like what?
Jerry: Well, I helped build an entire other new business, which is also- . . .
Andrew: I don’t see that on your LinkedIn. What is that?
Jerry: It’s called Pulsara.
Andrew: Okay. And what’s Pulsara?
Jerry: Pulsara is an app in healthcare.
Andrew: Okay.
Jerry: It’s absolutely amazing. I’m blessed to be a part of it. My partner and the founder is Dr. James Woodson. But this is about Schedulicity, but that’s what I did. I still work closely with him every day. That company started around my kitchen table.
Andrew: That’s a business on its own. Is it profitable?
Jerry: Not yet. It’s still a startup. But it’s going to be.
Andrew: It wasn’t the remedy for the financial issues. It was just another way to get yourself back up.
Jerry: Yeah. Exactly.
Andrew: I see. Now I see it on your LinkedIn profile. It’s not under experience. It’s under projects.
Jerry: Yeah.
Andrew: Sorry?
Jerry: I’m not the best LinkedIn guy.
Andrew: I see. I thought maybe there was a reason to not include it in there.
Jerry: Oh no, I was just teasing somebody the other day about it. It’s like LinkedIn sometimes is like a full-time job to stay on top of it all the time.
Andrew: And more and more they want it to be a full time job. They want you to go in there and blog. They want you to go in there and update. For some people it actually makes sense. I just had somebody on teaching a course about how to use LinkedIn to get customers because it’s just full of people who are active.
Jerry: Yeah.
Andrew: Full of people who go there every day because LinkedIn is pulling them back in every day.
Jerry: Yeah.
Andrew: All right. You eventually came back. You’re now there today working from there. You had a bunch of positive experiences. I want to talk about two. There was one time you called up Verizon for your daughter. She had an issue with her cellphone and then something interesting happened. Do you remember what I’m talking about?
Jerry: Yeah. Absolutely. That same scenario has happened to me all over the country, but yes. Not long ago, I was actually on the phone with Verizon support, the 800-number you call. My daughter was having problems with her phone, so she handed it to me. I’m talking to the support and they’re saying, “Do this, do that.”
As we worked through that problem, the woman that I was speaking with said, “I’m going to send something to your email address. Is your email address still Jerry@Schedulicity?” I said, “Yes, it is.” She goes, “How do you know Schedulicity?” I said, “Well, I’m the CEO and founder.” She goes, “I love Schedulicity. I use it all the time.” And then she went on to tell me how much she loves it and she uses it all the time.
Andrew: As a consumer.
Jerry: Yeah. And then two times in the past six months I was on an airplane traveling to meetings and I’m talking to someone on an airplane. They said, “What do you do?” And I told them about Schedulicity. One was a consumer that was using Schedulicity. The other one was some kind of a life coach that was a subscriber to Schedulicity.
Andrew: It’s so cool to actually see people in the real world use the product to get action, get results from it. Meanwhile, I don’t find out about it because I’m living in a whole other world. Frankly, I don’t see it on Techmeme. I’m looking to see if TechCrunch wrote about you.
Jerry: No.
Andrew: It seems like they didn’t but VentureBeat did.
Jerry: Yeah, VentureBeat. We’ve been mentioned in Mashable. TechCrunch has not noticed us. You know what? We’re in Montana. I think sometimes we get overlooked because we’re not in the Bay Area.
Andrew: I think that’s what it is and it’s disappointing. Meanwhile, we end up with a really warped view of what it takes to build a company because all we get is companies that are built by certain people in a certain city in a certain way and we don’t really have the big picture of how it’s done.
Jerry: Sure. I could go on and on about that, but I won’t. I will say that it forces you to be smart and to do things a little bit differently. But I do believe that I like TechCrunch, I read it every day, they have chosen for one reason or another to have never written about us. Quite honestly, I don’t understand that. But whatever, it is, it is. It has not much outcome on the success or failure of our business as a whole, but yeah, I’m a fan of TechCrunch and hopefully someday they’ll see.
Andrew: They’ll wake up.
Jerry: It’s interesting. We were just talking earlier because in the past couple of years, there’s been a big buzz around . . . I’ll give an example. For several years up until a couple years ago, the big buzzword was local, local.
Andrew: Yeah.
Jerry: Billions of dollars was going into venture capital for local this, that and the other thing. What do you hear about that anymore?
Andrew: You don’t. You know what you hear about today? It’s bots. Everything bots, bots, bots.
Jerry: Right. Here’s what I can tell you. During all that time and all those billions of dollars, do you know what Schedulicity is? Schedulicity is a local, down to the neighborhood community. We have millions, we have 15 million, 16 million consumers. We’re going to be at 30 million or 40 million by the end of the year. These are right down into the neighborhoods. Small, service-based businesses are the heartbeat of local business.
I’ll tell you something else interesting. In the last couple of years, one of the big things that you see going on in the venture capital community is hundreds of millions of dollars have been invested in this home services market. Angie’s List and Thumbtack and all these different types of companies. I’ve seen in TechCrunch a lot of things that have basically shed light on the fact that not much of that has been super successful.
On the other hand, right other people’s nose in Bozeman, Montana without any of that, we have a true service marketplace, not home services, it’s not plumbers and roofers and stuff like that. But we’ve built a true service marketplace where with this thing right here . . .
Andrew: The phone.
Jerry: In one place, I can make an appointment with just about anything that you can imagine in my local community. And you can do that in San Francisco. You can do that in Des Moines, Iowa. You can do it in Macon, Georgia and in 2,700 cities in the US.
Andrew: You know what, though? The design, though, I feel like you have a lot of businesses, a growing marketplace, but the design of the consumer-facing site doesn’t match the business site.
Jerry: So that’s a great . . . I’m glad you brought that up.
Andrew: I just clicked on acupuncturists on the image. And I ended up with a bigger image as opposed to the actual acupuncturist. Let me try it again.
Jerry: I’m not sure what you are clicking on, so it’s hard for me to tell what you’re looking at.
Andrew: Here’s acupuncturists. Now on the site, I’m going to long press to open it up. I got the image from the CDN.
Jerry: Just tap it.
Andrew: Right. So then I get it. And the map isn’t visible here the way it was on the website. I feel like it’s just not as modern as the site that the business people use.
Jerry: So I feel like you teed this up just to give me a great opportunity. So right now, we don’t have our consumer-facing app. We’re getting ready to launch a consumer-facing app for Android and for iOS in the next 30 days that will blow your mind.
Andrew: Okay. I like to have my mind blown.
Jerry: Now, we already have an app for the business. So the business is using a really sexy . . .
Andrew: Yeah, when I click to go to the business part, it all feels so much more modern. That’s why I was asking you if it was two different designs in the beginning of our conversation before we started recording. I see. All right.
So you’ve got 40,000 businesses on here. You did it all in this marketplace by starting with figuring out what each individual business could use on their own and not need the marketplace. As you were giving them that service, as you were giving them that software, you just kept building more features and building your marketplace. The marketplace now is up and running.
I see if I wanted to get a haircut here in San Francisco, I happen to be kind of next to First Street. On Third Street, there’s somebody that uses Schedulicity. In Union Square, just a couple of blocks away, there are four people, I have to zoom in to see how many. So it’s obviously growing and growing and growing.
All right. Before I say goodbye and ask you one last question. I’ve got to just thank people for this. You heard I said I have a cold. Let me see if there’s anything. I got this box. I said in an interview, I just opened it. Look at this. This isn’t from me. I wasn’t sure who this came from, this bottle of plant-derived minerals, tangy tangerine tablets.
Jerry: Wow.
Andrew: I don’t know what this is. Everything looks so good. Antibacterial foam, contains no alcohol. You know I’m going to use that. I shake a lot of hands. This, I guess, for putting into drinks, spray. I’m just freaking overwhelmed by all I got.
Jerry: It’s just a present that came unannounced?
Andrew: It came when I started saying I had a cold. I wasn’t sure what it was about. I left the office with this box just sitting here. I said, “I didn’t order anything. Who knows what this is? It can wait.” And then I opened it and I realized this came from one of my listeners, two of them, actually, Duffy and Ashley. Every single thing in the box is explained here how it’s going to help me out. I’m incredibly appreciative to them with this nice note, “Feel better soon, Duffy and Ashley,” with a nice smiley face. I really am grateful to them.
Jerry: Wow. Congratulations. You’re obviously very important to your listeners. You can’t ask for much more than that.
Andrew: They’re more important to me. I should be sending this stuff to Duffy and Ashley, not the other way around, but I’m really glad they sent it over to me. Here’s a vitamin D spray to help me avoid this in the future.
You have similar, this is where we’ll end it. You have customers who are really big fans of your product. You actually decided to fly a few of them out. Who were they and what happened when you flew them out?
Jerry: Well, we flew out . . . this is closer to our launch in 2010-2011–we kind of looked around the country and we said, “Who are users out there that are not just users but are like monster gorilla users, like not only are they using Schedulicity, but they’re telling everyone about Schedulicity.” What is it about these people that makes them so not just addicted, but evangelical about our product? Because imagine if you could create that kind of evangelism among your users.
So we flew some of them in. A couple of them were massage therapists. A couple of them were hairstylists. I think we had some kind of, again, some kind of a life coach as well, took them out to dinner, spent a couple of days in the office so they could meet everybody that worked here so they could see what we were doing and how hard everybody’s working, but more importantly how important what we do for them is to us.
I think they left here feeling even more magical about Schedulicity than before they got here and more importantly, we gathered immense amounts of understanding and knowledge about how they deal with their day and the things that are concerns and the things that are challenges and other ways we might be able to provide things for them that they find of value.
Andrew: I can see that.
Jerry: It was an amazing experience. I actually just had a meeting a couple weeks ago about doing that some more in the next coming months.
Andrew: Yeah. You know what? I hate doing events. I hate organizing events. I hate going to events to speak because I don’t get nearly as much out of it publicity-wise or for the business as I do sitting here reaching so many people. But the one benefit I get out of having people here at an event or going out to a conference and speaking is I get to talk to people in person. You’re just reminding me how much more I should be doing that.
All right. So the website for anyone who wants to go check it out is Schedulicity.com. Look for the app. Frankly, by the time this interview is published, that app should be in the App Store because we record ahead of time. I’m grateful to you for doing this interview. Thank you.
Jerry: Thank you. Very nice to meet you.
Andrew: Thank you. Thank you all for watching, especially Duffy and Ashley. Thank you. I’m going to send you a personal thank you note. But I want to thank you in public. And our two sponsors, for anyone who’s listening, don’t forget, if you want to hire a developer, go to Toptal.com/Mixergy. If you want a better web host, go to HostGator.com/Mixergy. And thank you, Jerry, and congratulations on Schedulicity. Bye.
Jerry: Thank you very much.
