Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart.
Let me ask you this. Imagine if I told you that there was a business that would take popular nonfiction books and the kind of nonfiction books that should be popular but people aren’t reading enough of–it takes all those books and it summarizes them. This app not only summarizes them, but makes them available by audio. So, if someone prefers to read them, they can just listen to them on their mobile phone.
If I told you that was someone’s business idea, how much revenue would you assume, would you say that business made? Well, that’s what today’s guest did. I’m going to ask him in a moment what kind of revenue he did. But first, I’m going to introduce you to Sebastian Klein. He is the founder of Blinkist. Blinkist does exactly as I described it to you. It’s a mobile app that you can use to read summaries of your favorite books or have those summaries read to you.
This whole interview is sponsored by HostGator. Actually, I’m going to do the HostGator spot later on. But I got a note from HostGator. First of all, Sebastian, you might want to congratulate me. I’m going to congratulate myself here. HostGator re-upped sponsorship on Mixergy. Isn’t that great?
Sebastian: That’s really great.
Andrew: You’re an entrepreneur. When a customer says, “I love your work so much. I want to pay you for more,” you feel like, “Great. I did a good job.” It’s not even about the revenue. It’s about, “I did a good job for them.” And my customers are happy with HostGator.
But HostGator sent me a note here with three things that they would like me to do differently. First, he says–this is our contact there–he says, “Apparently our ads are far too into the show.” That makes sense. Usually I wait until like halfway through the show before I do the sponsorship spot. So, I’ll mention is at least at the beginning.
Number two point is, “Most of the audience probably already has a website. Can you please do the same kind of read, Andrew, but insert something like, ‘And if they have a website, they will transfer the content and in some cases even the domain for free.'” So, yeah, guys, HostGator is a hosting package. They will transfer your site for free if you already have a site and you want to move over.
Finally, they want me to emphasize support. So, as a hosting company, here’s what they say. I, by the way, have told people, “HostGator–great hosting company. They’ll host WordPress. One-click installation of things like online store and so on.” But I also said that if your site goes down they have 24/7, 365 days a year support. What they’re telling me to say is not only does it help if the site goes down, but if you don’t know how to install WordPress or need help changing your themes, HostGator will actually do it for you. They’re going to walk you through it.
So, there, I’ve said it all. And you know what, Sebastian? I think I did the whole sponsorship message. We might not even need to do an ad for them. All I’ll say is go to HostGator.com/Mixergy.
That was a little awkward, wasn’t it, Sebastian? I was trying to like include a note that I got from the sponsor and make it kind of casual and instead it came across a little awkward for you. Did it?
Sebastian: Not really. No.
Andrew: No, not awkward for you at all.
Sebastian: No.
Andrew: Was it inspiring? Do you feel like maybe shutting down your company and going and installing WordPress on a HostGator account?
Sebastian: Maybe. Not exactly.
Andrew: Not shutting down.
Sebastian: I think you did a good job, though.
Andrew: So, what kind of revenue are you actually bringing in with Blinkist?
Sebastian: Currently we’re about $120k per month. We jumped to this and actually four-folded our revenues by introducing audio summaries last December. And that was quite a major shift. For this year, we’re aiming at $2 million in revenue. That will be a goal for this year.
Andrew: Wow. So, even since the time that you did a pre-interview with Jeremy Weisz, your numbers have gone up.
Sebastian: Yes.
Andrew: You told him $100,000. Now you’re at $120,000. That’s incredible.
Sebastian: We can’t complain. It’s really going quite well at the moment.
Andrew: Tell me if this is inappropriate for me to comment on this. You’re a guy whose company creates summaries of English books in English and you have a German accent. You’re not in the US, right?
Sebastian: No. We’re based in Berlin in Germany. Right.
Andrew: That’s impressive that you can do such work. I want to figure out how you do it. The process of pulling a book and summarizing it and making it interesting is not easy. And the process of actually getting customers to pay for content I know is pretty freaking hard.
Sebastian: Yeah. Absolutely right. Yeah. I have to say we started out with German content because we’re a German company. The good thing is that Berlin is a very international country–very international city, sorry. So, on the one hand, summarizing books has a lot to do with logic. You have to find out what are the most important parts. What are the key messages of a book?
And then it’s about language. You want to write about it in beautiful language and you need native speakers for that. Fortunately we’ve got quite a few of them in Berlin here. So, it was a challenge to setup this international business, but Berlin is a great spot to do it.
Andrew: All right. It’s not just that it’s beautiful language. It’s also just engaging. You tell the stories from the book and you keep the stories interesting. So, it feels like I’m not just getting the facts of the book, but I’m getting the enjoyment of reading the book without having to go through it.
All right. Let’s understand how you did it and, like I said, how you also got your customers. But going back a bit, where did the idea come from?
Sebastian: The idea is really old. I started thinking about book summarizes more than six years ago when I was still at university. Two of my cofounders and I, we had this challenge. Who had the most unfinished nonfiction books beside their bed? Because we were all really book nerds. We loved those books, the concepts you could learn from them, their pieces of inspiration. But we never really finished them.
So, we thought there must be a way of getting the key nuggets, the most interesting idea out of those books without actually reading them in full. Yeah, and we’ve been thinking about it for a while. After graduating, we went to work. I worked in management consulting and I didn’t finish a single book in my first year.
Andrew: Forgive me for just one second–
Sebastian: Sorry. Yeah?
Andrew: There were companies that summarized books right now. GetAbstract was around for years, even before the internet, I think, right?
Sebastian: Absolutely. Yeah.
Andrew: So, what was the problem with the companies that were out there?
Sebastian: We looked at all of them, of course, and we got the impression they were not really summarizing the problem. If you were summarizing the book, you usually were summarizing for yourself. You’d take the buzzwords and the abstract terminology. But usually you’re not creating nice, easy to read, entertaining story when you create a summary.
As you said, getAbstract is from the pre-internet age. So, it’s also just a PDF. We thought the content has to be entertaining and you want a nice user experience, like a nice looking, easy to use app, which is what we tried to do. It took us a while. But I think now we’re pretty good at both things.
Andrew: I see. So, it wasn’t just that you had a whole bunch of books and not enough time to read it. Here’s why I’m hesitating. I feel like there were a lot of people who saw this opportunity who said, “Everybody wants to read these books. I don’t even need the content creator’s permission in order to summarize a book.” Actually, do you?
Sebastian: We don’t. But we’re trying to cooperate with them because we appreciate their work.
Andrew: And it helps them because you’re helping to promote their book.
Sebastian: Exactly.
Andrew: It seems like just one of those businesses that a lot of book nerds have seen. I know I’ve thought about it a lot. I’ve seen others try it in the Mixergy audience. They say, “I’ll read the book. I’ll summarize it. I’ll sell the summary.” Is that where it came from more even than a market need, just an understanding that the economics would work?
Sebastian: Actually yes. We played around with many ideas and this was the one idea where we felt like it’s something that was really motivating for us and we thought this was a good base for a business model because people would be willing to pay for great summaries, for great content. As you said, many people have been thinking about it and it seems like a straightforward thing to do, but it has been quite a lot of work. Doing it right wasn’t that easy. But yeah, it’s something great to do. It’s inspiring us every day.
Andrew: What’s one of the other ideas that you have that you didn’t continue with?
Sebastian: Before I started Blinkist, after quitting my job as a management consultant, me and one of my cofounders, we sold self-cooling scarves, like scarves you put around your neck. You put them into water and then you put them around your neck and then they cool you in the summer. That’s something we did for a couple months. But as you can imagine, it’s not something that will motivate you for ten years to go forward with.
Andrew: I see. The first version was going to be an app right from the start, mobile?
Sebastian: Yeah.
Andrew: It was. And you said to Jeremy that it took you six months to create it. Who created it for you? Who coded it up?
Sebastian: We started with a team of four and one of them is our CTO, our techie. He didn’t do all the work himself. We’d also tried to outsource them or tried to work with freelancers and did all the mistakes that every startup does in the very beginning. Some cooperations worked. Some didn’t. It was a ton of work and a ton of chaos, but somehow we managed to create the first version.
Andrew: Tell me one of the big mistakes that you made that other entrepreneurs can learn to avoid?
Sebastian: I think one of the biggest lessons I always talk about is for me it seems almost impossible to outsource to work or to find someone to do work that yourself, you don’t really understand. Like these days, whenever we face a very new problem, then always one of us founders would try to not really solve the problem but at least get a decent understanding of it before we started thinking about who else could do the job.
Andrew: So, was it that you didn’t understand coding well enough to delegate it to somebody else or is it that you didn’t understand the bigger picture?
Sebastian: It was more about certain parts. Like our CTO, of course he can code but he can’t do everything himself. He’s more a back end engineer. So, then we were looking for places to outsource some of the coding. If you don’t know what’s good work in this field, then it’s pretty hard to judge like who’s a good outsourcing partner.
Andrew: Right. So, if you don’t know and you still were able to do it, how about giving us a tip that we can all use about how to do it right? What did you do that worked for you?
Sebastian: As I said, it always worked when we just did the hard work and just tried to figure out–
Andrew: Be more specific. You said something like, “We worked on it and eventually somehow things came together.” I need something a little more meaty than that. So, for someone who’s listening to us who’s also an entrepreneur who says, “You know what? I also would like to have an app built. I have something in mind. But I don’t want to go through all the trials that Sebastian and his team went through. I want to learn from their success.” What’s one thing that you can say to them that would help them out?
Sebastian: I guess like if you’re really clueless, then you probably have to make mistakes. You have to be very lucky to find someone or to find away without really going through chaos and the trouble of failing.
Andrew: So, you’re saying that those six months of failure, of hiring the wrong teams, of getting the wrong product, that helps you get it right?
Sebastian: Absolutely. We also did many things right. It’s just more chaotic if you try to setup something that you don’t really understand or going into a job that you fully understand or working in a company where somebody tells you how to do things.
Andrew: So, what you got was you got a first version that–actually, did you get a first version when you hired the first ream, the outsourcing team? You did.
Sebastian: Yeah.
Andrew: And what was the problem with that first version.
Sebastian: I would say after six months we had a version that was quite basic. As all founders, we were super enthusiastic and overestimated what we could do in half a year or even a year. After half a year we had a version that was good enough for very early adopters. It showed what we wanted to do. You could use it. You could read the summaries. But there was not much more to it. This really slick, awesome user experience wasn’t quite there yet.
Andrew: Give me an example of something that was there that was confusing.
Sebastian: Not exactly confusing, but it would really just be a very static screen where you could then select like a few categories. It wasn’t state of the art design. It just looked very simple, like a very simple navigation and 40 summaries, which is not much to choose from.
Andrew: Okay. And this was back when it was German?
Sebastian: It was half German, half English. We started with English quite early parallel.
Andrew: I see. Why do an app that’s half German, half English when you only have 40 books? Why not stick to German or English?
Sebastian: That’s a very good question. We started with German because it was me. in the very beginning, I was ready the books, summarizing them. Then I was very fortunate to have one of my best friends and our first employee join the team who is an English native speaker and has a similar background and then he started producing English content.
The idea was from the beginning to focus on English content so we could cater to an international audience. But it’s a good question, as I said, in the beginning, things were just trying to sort out what’s the right way to take. It would have been smarter to just focus on one language, maybe.
Andrew: I see. So, I think your summaries are really well done.
Sebastian: That’s nice. Thanks.
Andrew: What was your philosophy about creating the early ones?
Sebastian: So, before we really started–I actually took quite a lot of time reading about the didactics behind how can you bring something–like, “I have understood something. How can I bring something from my head into your head and make it stick with you.” So, I read quite a bit about the neurological basics of learning. I also studied psychology for six and a half years. So, I learned something about that before too. But then I still ended up with summaries that were too abstract.
You know, if you know the whole book then for you everything is obvious and you don’t need all the examples. So, we were fortunate to work with very good writing coaches who then taught us to make these summaries stickier and make them more concrete and more actionable. That was a process. Our first summaries, if I would show them to you now you’d probably not like them as much.
Andrew: I’m curious about what you did to make them more concrete, more interesting, more actionable. I’ll give you an example of what I’m looking for. We do courses on Mixergy where I work with an expert to teach a topic that they’re especially good at. My philosophy is stories are what people are entertained by and stories are what they’ll remember long after the whole thing is over.
The story needs to come from their experience ideally. So, I don’t want them telling me a story about what Apple did because a billion people are talking about what Apple did and what I want to know is what you did, otherwise you have no credibility to teach it. So, stories–it has to be your own stories. It has to be about a specific incident or else the story is a little bit too broad. And there should be some action, some takeaway that we as listeners can walk away from the story with.
So, the sum of the philosophy that goes into that. By doing that, I can make the course more interesting but also a private conversation where I’m trying to teach someone more actionable and meaningful. So, what about you? What are some of your philosophies about creating interesting, engaging summaries?
Sebastian: It’s actually quite similar. You probably also know this book “Made to Stick.” It’s one of my favorites and one of the first ones I summarized. I think this whole idea of telling stories and making things memorable by making them visual or making them emotional or making them relatable so you can take away something. That’s one thing.
We also put a lot of focus on structure, how we structure information. What we give you is every single chapter of what we give you is always one new piece of information and new wisdom. So, there’s no information that is not related to this one new thing we want to teach you.
Andrew: What you call it is a blink, right?
Sebastian: A blink, exactly.
Andrew: What we would call internally at Mixergy a tactic, you guys call a blink. The idea is to pull out of a book something that’s actionable and a big message and then you tie the story to it.
Sebastian: Exactly.
Andrew: Okay. All right. You also seem to start with questions the way that I did at the top of this interview.
Sebastian: That’s also something that’s not very complicated or doesn’t look very complicated. But the key idea is before I teach you something, I always try to make it relevant for you. I try to give you the, “What is in it for me?”
So, you have to understand that this is relevant for you and then the best I can do is create these questions in your mind, like, “Don’t you want to find out why Bill Gates became a billionaire?” This is maybe not the best example, but just give you questions that are relevant to you where you will then go into my content and say, “I really want to find out about this. I want to answer this question.”
That’s a whole different story to reading. If you have these questions in your head, then you will read very differently and you will also remember stuff much better. That’s the idea of starting off with questions and starting off with, “What is in it for me? What can I learn here?”
Andrew: Yeah. I was looking at one of your summaries here, the one for Howard Schultz’s book. I think it’s “Pour Your Heart Into It.” This one starts with the first chapter, before you even get into the blinks, your tactics, you start with a section called “What’s in it for Me?” And your response to that is, “Get business advice from a coffee master.” And then the first question here is, “What makes a great cup of coffee?” “According to Starbucks CEO Howard Schultz…,” etc. and then you continue from there. So, that’s another one of your tactics, starting out with the question because then it forces people to respond mentally.
Sebastian: Exactly. Yeah. And you really want to get people out of autopilot. If you just read through our content and wandering off with your mind and just see the words and not really focus on them, then you’re not learning anything. But if we give you these questions and you say, “I really want to find out what makes for a great coffee,” then you’ll be focused and you’ll just really try to find these pieces of information.
Andrew: That’s a really good one. Here’s another one for “Flash Boys.” “What’s in it for me?” again, the first section. And it continues with, “Find out how two milliseconds cost US investors up to $160 million a day.” And now if I go into the actual content of that chapter, it says, “Have you ever seen a stock market trading floor in an 80s movie? You know, that big room, bustling room with traders wrapped up in phone cards shouting out orders,” and it continues with that. And then the answer to that question is, “Well, those days are long gone. Today…” and it talks about how the US stock market now works on computers, little boxes in server rooms.
All right. So, start off with the question, then break up the ideas into tactics that you call blinks.
Sebastian: Exactly.
Andrew: Tell stories. Each story should connect with an actionable takeaway. What else?
Sebastian: Learning is a lot about structure. That’s always the one thing that I’ve tried to teach people. Whenever you want to learn something, you shouldn’t just start with a stream of consciousness and leave it to chance in which order you get the single pieces of information. It works much better if I just always give you what I want to teach you first and then back it up with facts and back it up with examples after you have already seen what it is, what I’m trying to tell you, these key messages that we’re using. That’s just the way the mind works.
There is a very simple example that might explain it. You have these two little girls that are friends. One of them writes a letter to the other one and tells her, “Hey, Lisa, you recently said something stupid to me, you stepped on the tail of my cat and you didn’t like the food of my mom,” which is why I hate you now. That’s how probably the little girl would write that letter.
The more logical way would be to write that letter saying, “Hey, Lisa, I hate you. Here are three reasons why. A, You stepped on the tail of my cat. B…” and so forth. That makes it much easier to work with that information. Of course, a little girl wouldn’t write the letter that way. But if you structure information in the second way, that’s much easier for the audience to understand–
Andrew: You mean by starting out with a conclusion and then the points that explain why that conclusion makes sense.
Sebastian: Exactly. Yeah.
Andrew: I see. Okay. So, you were doing all of that while the developers were working on the app. You finally launched the app. Was the app free at that point?
Sebastian: It was free, but you had to purchase the summaries individually. That was the business model in the beginning. It didn’t work out very well.
Andrew: Why not? Everyone keeps pushing for sell by the piece. So, if someone wants a “Flash Boys” summary, they should pay just for that. Why didn’t that work out for you?
Sebastian: It makes it very important to really engage people with the app and give them new content and try to pull them into the app all the time, which is very hard if you just publish ten new books per month. We had even less than that, like six to eight new summaries per month, which made it quite hard to pull people into the app. That was just how we started. It was just too optimistic to say, “After a year, we will have this well-functioning business model. People will pay for our service.” But I guess that’s always a part of starting your own big company.
Andrew: And you put it in the App Store first, the iOS App Store.
Sebastian: Exactly. Yeah.
Andrew: Okay. Do you remember how you did that first month?
Sebastian: Honestly, I think we were quite disappointed because as always, you’re working for something very hard. I was pushing for, “I need to get those first 40-50 summaries done.” And you push and you push and you push and you hope that magically people will start buying what you did and that didn’t happen. So, that was a bit disappointing, but understandable by hindsight.
Andrew: What’s the first big change that you made after the app hit the App Store?
Sebastian: It took us almost another year to really start our first real international version. Our international launch was one and a half years ago from now.
Andrew: A year and a half ago?
Sebastian: Yes. Exactly. That was really like the first big push where we actually did PR and marketing. The app looked much nicer. It wasn’t really ready to be used by a larger audience. Then we were quite excited to see people in the whole world are actually using it. It wasn’t that big yet. But it seemed like we’re getting the first real traction.
Andrew: Who did you hire to build out that first version? I mean the second version.
Sebastian: We started developing our developers team. We started with our CTO. Then we got another developer. We got one developer for iOS, one for Android and another web developer. We just slowly started to develop that team. That has been our attitude since then that we just tried to build a team. We don’t just want people to work for us and then go away. We want to just find the right people and then keep them here.
Andrew: At what point did you raise money?
Sebastian: We did three times now. It’s a bit different here in Germany compared to the US because at the moment it’s quite easy or somewhat easy to get seed funding and then if you are a bit more mature and if you really want to grow, then it’s also not super hard to get growth money. But in between, like many startups really die after the first or second year because it’s really hard to get something where your optimism seems not to work and you need more money because you’re not really there with the first bit of seed funding.
Andrew: So, when was the first seed funding? How long after you launched?
Sebastian: We got the seed funding right before we even started developing.
Andrew: Okay. How much did you raise?
Sebastian: That was something like $300,000.
Andrew: From whom?
Sebastian: This like German telecommunications venture arm.
Andrew: How did you get in touch with them?
Sebastian: It was really through our private networks or extended private networks.
Andrew: And you have one because you worked with the Boston Consulting Group.
Sebastian: Actually, one of my cofounders, he worked at Deutsche Telekom, which is like the company that’s–
Andrew: The big phone company there.
Sebastian: Exactly.
Andrew: So, he worked at Deutsche Telekom. And then after you guys started working together, he went to them, to their venture arm and raised money there.
Sebastian: That’s a bit simplified but we just knew some people. We got the contacts to talk to them and then we could pitch our idea and ended up working with them.
Andrew: Who else helped you? Who else did you raise the money from?
Sebastian: The next round we did with some business angels from Berlin. And then there was another round with a little publishing house and like a Berlin based investment fund, like a state-owned investment fund.
Andrew: So, at one point did you get the second round and how far along were you guys with the business?
Sebastian: I don’t know how far. We had our first bigger round after the first one and a half years. Hang on, actually. I have to think about the dates. I always mix them up in my head.
Andrew: The specific dates don’t matter. What I’m trying to get is how far along are you? Did you actually get customers before you got that second round? Did you, at that point, figure out that charging per piece is not the right way to go and charging a subscription is better? Which one was it?
Sebastian: The problem here is, as I said, we were quite optimistic. In fact, the business angels came on board when we hardly didn’t get any traction. They just believed in the idea. That was really great. Even the next round, that was also even before we got some proper traction.
It was also in people believing in our idea, seeing, “These guys are doing a good job. Just that they’re not doing a significant revenue yet doesn’t make this a bad business.” That’s something probably specific to Germany. Usually people want to see revenue quite early. And then as you heard, we finally found out how to do the revenue as well.
Andrew: And then a year and a half into it, you said you redid the app. What was different about it?
Sebastian: As I said, the first version we had was really more of a prototype. You could read the summaries, you could get the basic idea, but it didn’t have a nice user experience. When we launched the second bigger version that was after we had finally really understood like, “What do we need to in terms of user experience?” We got some really good support there form user experience designers. It just looked very different. It turned form this functional, not so great looking thing into something slick and well-designed.
Andrew: Can you teach me some of what you learned from the user experience people?
Sebastian: You’re talking to the opposite of an expert with me. For me it was even new, like our first approach and probably also something typical German would be to sit down, make a very complex plan without ever speaking to customers, without ever getting feedback. And then we got into this modus of really thinking about features and immediately getting customer feedback, really sitting down with people, showing them early prototypes, asking them like, “Where would you click? What feature would you use?
Andrew: Ah, I see. Would you bring them into the office?
Sebastian: Yeah. Either that or one of our designers [inaudible 00:27:18] just asking people, “Can I buy you a coffee? Could you just click around here? I just want to see how you would use it.”
Andrew: Wow, okay.
Sebastian: It seems very obvious. For anyone who is an expert, it is obvious. But I have to say for me it was quite new.
Andrew: It’s pretty intimidating also.
Sebastian: It can be.
Andrew: Is it? It wasn’t. Okay. And now I’m looking at this article from Lauren Ingram at TechCrunch. It says, “Blinkist Book Summaries Arrive to Improve Your Commute and Make you Look Smart.” It starts off with, “Do you own a copy of ‘The Lean Startup?’ Have you actually read it or is it in your bedroom or eBook reader barely touched? This is where Berlin-based startup Blinkist comes in.” That sounds like a perfect introduction for you guys. How did that go for you? Did it help?
Sebastian: These articles really helped us a lot because they show what service we can do to our customers. These articles have helped us a lot, which is also why we focused on content marketing quite a bit in the last one and a half years. It’s perfect to be–if people write about us, explain to people what’s the use case, how they can use that service, that’s awesome.
Andrew: At this point, you already had moved into subscriptions. It was either $10 per summary or $225 to get a year’s subscription.
Sebastian: It’s less than that.
Andrew: Now it’s less, but at the time it was more.
Sebastian: It was a bit more. Sorry.
Andrew: What did you do to get so much press when you guys relaunched?
Sebastian: A lot of work trying to talk to the right people, feeding them with the right information. Our story also is not–there are many startups with great stories, but also some journalists seem to like our story because we also really had this problem ourselves and we wanted someone to solve it to get these great ideas out of the big books. I think some journalists just like–
Andrew: Were you the one that got this TechCrunch article?
Sebastian: Not really. I was really focusing on content for the first two years in the company. I started also working in marketing after that, but the first two years I was really focused on content.
Andrew: Okay. Were you starting to hire content creators at that point?
Sebastian: From the very beginning, I read the books myself, did the summaries. Then I started finding freelancers who would read the books, do the summaries. Then we saw the first way we did it wasn’t really scalable because it was hard to find the people. And then it was more about like really building a more elaborate system that allows us to really take the books and summarize them quickly in a matter of one or two weeks. So, I know it’s quite abstract talking about that, but it was more about setting up this process. I think that was my big task in the first three years.
Andrew: It looks like Lauren actually moved to Europe already. She moved to Berlin, I think, according to her Twitter account.
Sebastian: I think she lives here.
Andrew: Yeah. All right. So, you get on there. That does well. But it wasn’t until about six months later that things really took a turn. That’s when Forbes magazine wrote an article about you. I’m actually looking at the article right here on Forbes.com. The headline has got nothing to do with Blinkist. It just says, “What the Greatest Self Help Books of the Last Decades can Teach You in Seven Minutes.” What it is is–actually, you describe it. What is this?
Sebastian: It’s an interview basically I did with the writer, Kavi. He approached us and asked like, “Hey, you guys are doing a terrific service there. I think it would be great if we could do an article about an interview where you just try to distill it a bit more and just in a couple of minutes, give us some recurring patterns that you find in all these books that you’re reading.” We sat down and tried to do that. People really liked that article and they saw great value in it. So, it funneled a ton of new users to our website in just one weekend.
Andrew: Yeah. You have this big dashboard at the office that everyone can see. What is this dashboard?
Sebastian: Like I described before, our etch team always has been quite small. So, from the very beginning, we said we need to be visual about our achievements. We need to make all the data visual so everyone can see it and it took forever, like it took one and a half years before we had this big screen, a dashboard with all the relevant numbers–new customers, how many summaries have been read and so forth.
I think we had just installed that and the numbers were quite small back then because it hadn’t really taken off. And then we had this article. And after the weekend, we came into the office and the numbers had really skyrocketed and we were all quite happy about that, to see the numbers like ten times.
Andrew: From how many a day to how many did it go?
Sebastian: My memory is not that great, but it must be something form like ten to more than 100.
Andrew: More than 100 a day? And did it stick around?
Sebastian: It wore off after a bit, but we were still quite enthusiastic for a couple of days.
Andrew: This is a really well done article too. Like you said, it’s key takeaways from all these books that you’ve summarized, seven of them actually specifically. The first one is, “Find the why that drives you.” And then there’s a paragraph about what you learned from “Drive” by Daniel Pink. The next one is, “To succeed, practice your craft and learn from others.” You talk about what you learned from “Outliers” and from Robert Sutton’s “Weird Ideas that Work,” and form Robert Greene’s “Mastery.”
And all of these postlink over to Amazon, but we know that if we want to get a summary instead of getting the whole book, we can go to Blinkist because there’s a link to you at the top and I think even at the bottom of the post.
Sebastian: Exactly.
Andrew: That is a great article. But you didn’t have anything to do with it. It’s someone else on the team that had something to do with it, that put it together.
Sebastian: I actually put it together. I didn’t do the copy because I’m not a native speaker and we always, of course, want to have the best copy we can get. We worked together with Kavi, the journalist who published us there.
Andrew: Okay. So, you get this big jump up. Everything is doing well. Then you get the summer slump. What’s the summer slump?
Sebastian: Like we had these little peaks from articles like this one that brought us a ton of users or new customers and then in the summer, we didn’t have a great article out there. We didn’t have any sustainable marketing channels back then.
Things really cooled down. Everything slowed down, no new customers. Everybody was on holiday and we were quite unhappy about that, apparently, which is where we finally said we need to find sustainable reputable marketing channels as any serious startup–when we focusing on that and since then, things have become much more controllable for us.
Andrew: What was the sustainable marketing channel that you found early on?
Sebastian: The first channels that really worked for us were mobile install ads. Like if you’re in our target group and you’re not yet a customer, you just might use your Facebook app and see a nice ad trying to pull you into our service. That’s something that really worked for us because that’s the use case, when people are on their smartphones, they would be willing to try us. It took a while to play around with those, but they were actually the first really good marketing channels for us.
Andrew: Okay. What was the second big one?
Sebastian: It was still doing a lot of content marketing. But we said rather than just publishing articles on other platforms in other magazines, we just said we’re going to create our own online magazine because we have so much content that we can reuse and put into articles, which is why we started this online magazine called Page19.com. That’s another source that we’ve been working on quite a bit to make it more controllable for us to get people into our service.
Andrew: Are you in charge of that, Sebastian, or is it someone else?
Sebastian: It’s not me. It’s a team here in the company. I’ve been involved when we set it up, but we are shifting people around quite a bit. Everybody just works on the projects that they’re best at and that they want to work on.
Andrew: I can’t tell how effective Page19 is because I know it’s getting you some traffic and you’re telling me it’s a good marketing channel for you, but every post has, “Comments: 0, comments: 0, comments: 0.” So, maybe it’s just that there’s no engaging, but people are reading.
Sebastian: It depends. It depends on the articles. At the moment, single articles are getting a lot of traffic while others are not getting that much traffic. But also, this whole Page19, through this we’re trying to publish articles on other platforms on bigger magazines. We’re trying to get guest posters. But to be honest, it’s not like a marketing channel as big as mobile install ads at the moment, but it’s growing. It’s fitting quite nicely into our strategy and brings us customers.
Andrew: Okay. I think the way you charge is pretty smart. What you do is you give people only three days to try it. That’s enough time to get a good experience. It feels kind of like there’s a deadline, you better go use it. Then you charge annually, not monthly. Let’s talk about that. How do you figure out how to do that, where to cutoff the free trial and then we’ll talk about the rest.
Sebastian: We just tested it. In the beginning, we had a much longer trial period. In the beginning, we thought that, “Hey, we have a great service. People should be willing to use it. They have to make the decision by themselves,” which is why we give them a month of a free trial and then everybody can figure it out by themselves.
The problem is that even though people like our service, it’s still the typical problem. If you’re in the subway or if you have to make a decision, you might still say, “I’m going to Facebook. I’m doing something else. I’m not opening Blinkist even though I would like to read some more,” which means if we give you a very long trial, it might make it harder to form the habit of actually using the service. We just tested different links and three days turned out to be the optimum for us.
Andrew: I see. Even though the price shows what it would cost per month, you charge people annually. What was the decision like, instead of charging monthly, which I see a lot of mobile apps do?
Sebastian: We tested that as well. As everything, we might change it again at some point. We just saw that this really works out the best for us. Quite frankly, as I said before, in Germany, revenues are quite important, meaning that if you can charge bigger sums up front, that’s better for the business, here at least. It might be different if we were based in the US, but here it’s just something people are focusing on.
Andrew: All right. And then the next step was Blinkist version three. This is the one where you included audio and Evernote integration and a Kindle feature. The Evernote integration, I know, highlights within Blinkist, gets saved into an Evernote account, right?
Sebastian: Exactly.
Andrew: The audio is simple. You have a professional voiceover recorder, a voiceover artist read the book summaries. What’s the Kindle feature?
Sebastian: If you have a Kindle account, you can just send all the summaries from our app to your Kindle device. Some people just said, “Hey, I’ve got this device where I read all my eBooks. I don’t want to read Blinkist summaries on my smartphone. Why can’t I just send it to my Kindle?” That’s why we built that.
Andrew: I see. And I guess the advantage of charging annually is you don’t have to worry about somebody signing up for a month, sending all the summaries to their kindle and then moving on.
Sebastian: Exactly.
Andrew: How did those three changes impact your revenue?
Sebastian: It was really great. We weren’t prepared for that. But somehow, when we launched those three, that was really when our revenues went from like $30,000 to $100k per month. And we’ve been talking about audio especially forever. That’s also maybe one aspect because we’re here in Europe and people here aren’t as crazy about audio as people in the US, even though the US is our greatest market.
So, it took us longer to say, “Hey, guys, we really need to focus on this. It’s not a killer feature, but it’s something to drive revenues.” It did. So, it was quite good to finally get life.
Andrew: I’m wondering, how does it impact revenues? It’s not like new people discover it because it has audio? It’s not like people who hadn’t signed up. Where is it coming from? Where are these new people coming from that are recognizing that you have audio, that you have Evernote and so on and signing up for those features?
Sebastian: It’s a good question. My take on it would be that I think there were many people, there were always tons of people who like our service but they don’t really decide to pay for it. Our conversion rate is not nearly 100 percent of the people that try it, so there are many people that always decide, “This is great, but I’m not willing to pay for it yet.”
But once we said, “Hey, you’ve got audio summaries included,” quite a few people said, “Okay, if there are also audio summaries, I can listen to them while I’m commuting or while I’m going for a run, then I’m actually willing to pay for it.”
Andrew: I see. So, was the conversion rate on already–it was the conversion rate on your sales funnel that increased.
Sebastian: Exactly. Yeah. I think that was the main driver. And of course we also got some great new press coverage after introducing those new features.
Andrew: Yeah.
Sebastian: Even Evernote–we were surprised. We thought Evernote was more a feature for some specific users, but there were many people who said, “This is really a feature I’m loving,” and they shared it with their friends. Let’s see what the next release brings, hopefully another four-fold increase in revenue.
Andrew: Yeah. What did Tim Ferris say about the Evernote integration? I know he’s an investor in Evernote.
Sebastian: Oh yeah, he was on his podcast just saying that it is such a shame that the Kindle doesn’t do that, that it just doesn’t allow this feature that you can just [inaudible 00:41:34] to your Evernote account.
Andrew: I feel that way too, actually. As a Kindle reader, I want all my highlights in Evernote. But they keep them in Kindle. There’s a way to get them out. It’s just such a pain in the butt that it’s not worth going through that trouble. But I get why they would want it. All right. So, that’s what took you to roughly what the revenues are today–adding new features, increasing your conversions.
A lot of your customers are coming in from content. In fact, I’m looking at your profile in SimilarWeb. They say your top source of non-search, non-social traffic is Medium, where you’ve got articles. Product Hunt is number two. I see Product Hunt on so many people’s referral list. Stack Social, there’s another one. I interviewed the cofounder of Stack Social. What they do is they do deals on products like yours. So, I guess you did a Stack Social deal.
Sebastian: Exactly. Yeah.
Andrew: How effective was it?
Sebastian: It’s quite effective. Many people are there just looking for new products to try out. We’ve been quite happy with it. I think we did two deals there and we liked it.
Andrew: Two deals with them. It’s kind of like Groupon for digital products. No, actually, Groupon for more than digital products because you can even buy a drone from them and watches and all kinds of stuff.
Sebastian: Really?
Andrew: Yeah. As a reader, I really love really there stuff. Evernote sends you traffic for, I guess, obvious reasons, right? Whenever someone sends notes to Evernote, they’re also getting a link back into Blinkist. Page19, I see, is sending you traffic and Forbes is still sending you traffic. Cool. Let me see if there’s anything. Did I miss anything in this interview? I know you’ve got a–who’s the meeting with that you’ve got coming up in a few minutes?
Sebastian: My girlfriend is coming to pick me up.
Andrew: I see. Where are you guys headed?
Sebastian: To go out, eat, because it’s already 9:00 in the evening here.
Andrew: Oh, I really made you wait late. How do you feel about having to wait this late to do this interview with me?
Sebastian: I’m really happy to be here.
Andrew: I’m trying to get the–now that we’re at the end of the interview, I’m trying to get a feel for how you like this interview. I think from the beginning I felt that maybe you were put off by the interview somehow.
Sebastian: How do you mean?
Andrew: I don’t know. I don’t know. I’m trying to get a sense of how excited you are to be here and you don’t seem super excited. I thought maybe it was because of my read of that HostGator ad but that’s not what it was.
Sebastian: No, no, no. I think you probably have to take into consideration that you’re speaking to Northern European. When we’re excited, it’s probably not as obvious as an American founder. But on the inside, I am as excited, honestly.
Andrew: All right. Well, cool, thank you so much for doing this. Enjoy your dinner with your girlfriend.
Sebastian: Thank you very much. Thanks a lot for having me.
Andrew: Cool.
Sebastian: I hope I can still give you some good stuff even though I might seem like I was put off.
Andrew: You did. Absolutely. All right. Let me say this. To anyone who is listening, if you like this interview, please go to iTunes and rate me. The way to do that actually, the easiest way to do it, if you’re in a podcast app right now, just slide up on the cover art and you should have a link that takes you directly into iTunes so you can rate this interview. If you’re not subscribed on your favorite podcast app, go to Mixergy.com/Podcast and subscribe.
All right. I’m grateful to you for doing this interview. I’m grateful to HostGator for sponsoring. I think I could have done a much better ad for HostGator. What do you think now that we’re just at the end and we’re evaluating each other?
Sebastian: I think you did a very good job. I would be very happy if I could advertise stuff as good as you.
Andrew: Thanks. Here’s here I think I could do better. I’m always looking to see how I can do better. One way I think I can do better with that is I should have at least said what HostGator was before I read what they said, right? Maybe people already know what HostGator is.
Sebastian: I think the name is quite self-explanatory.
Andrew: I should have said why they go to HostGator.com/Mixergy. If they do go there, they get a bi g 30 percent discount. But otherwise, I think reading the note was a good touch. In fact, I should be doing more of that. Anything a sponsor tells me should be fair game to read in the spot. All right. Maybe I shouldn’t say that. I think people are already afraid of what I might say in an interview. So, I won’t say that.
I will say this. Thank you to HostGator. Thanks to you, Sebastian. Thank you all for watching and listening. If you want to go check them out, the website is Blinkist.com or just go to whatever your favorite–actually, go into your app store on Android or iOS and install it. Thank you, Sebastian for doing this interview.
Sebastian: Thank you very much, Andrew.
Andrew: Cool. Thank you, everyone. Bye.
