Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, where I do interviews with entrepreneurs.
Basically I invite them on, they do me a favor of coming on and spending about an hour with me, and then I sometimes beat them up on revenues and sources of traffic and customers and I really make them regret sometimes being on here, but it all works out for the best because afterwards they end with a lot of really positive feedback from the audience who actually gets something out of this interview and not just sit back and gnashes on it like it’s some dopey cat video on YouTube.
So I’ll be honest with you and tell you that today’s guest says that he has an ecommerce platform that did about a quarter-billion in sales and I never freaking hear heard of it. How do I not hear about a platform that has enabled a quarter-billion dollars in revenue to pass hands, and I’m the guy who’s deep in this stuff and never heard of it?
Here’s the deal. His name is George Palmer, and he realized when I wanted to sell something online that there wasn’t an easy way to sell digital goods. Yeah, of course, if you want to sell physical products, you could do it through places like Amazon and others. And yeah, you could set up your own shopping cart and fulfillment and all that. But it’s kind of tough when you want to just sell a stinking PDF. Make it easy for me.
So he said, “You know? No one else is doing it. I’m going to build this thing.” And he built it up. As I’ve said, he now says that about a quarter of a billion dollars has been passed to buyers to sellers using his platform. It’s gotten way more sophisticated than that little thing that just enables simple PDFs. We’ll talk about how that developed, how it evolved.
And the whole thing is thanks to two great sponsors. The first is a company that George’s company actually integrates with. It’s called ActiveCampaign. It makes sending email to your audience not just easy, but smart. I don’t care about easy as much as I care about smart. This will allow you to do it. I’ll tell you more about that. The second is a company that helped Mixergy by helping us hire great developers and helped people in my audience start big companies by hiring developers from them. It’s called Toptal, top as in top of the mountain, tal as in talent.
But first, George, welcome.
George: Thank you very much. I must say I feel a little bit duped. I understood I was signing up for an interview, not an interrogation.
Andrew: You thought I was a nice guy too. I was like helping you with the mic and then boom.
George: I fell for it.
Andrew: Come on, is it really a quarter-billion dollars?
George: Yeah. At the time of talking, it’s live on the front page of our website. If you go to SendOwl.com and scroll down, you can see the number as it’s actually happening. So I think this morning it was $231 million.
George: Yeah. So almost a quarter-billion. We’re very excited about getting there. We’ve got a lot of PR planned around it when it happens.
Andrew: When you get to a billion or quarter-billion?
Andrew: Yeah, a quarter is a really sizeable number. I know I was kind of rounding it, but I get it. I look at SimilarWeb, your traffic supports this. I looked at companies that were using you. They clearly are using you. I actually saw the payment process. It makes sense. It’s super elegant. How much of this do you make?
George: How much of the quarter-billion have we made?
George: Well, sadly we don’t charge a percentage. We charge a flat fixed monthly fee, and that’s because we didn’t want to penalize success. The whole backstory of SendOwl comes when I was looking for an equivalent solution and was just a little bit appalled at what I found. This was back in 2010.
So I’ve built out to create the company that I wanted to find and the company that I wanted to use when I was trying to create info products. So part of that was the pricing strategy. So I didn’t want to penalize success. If you make $1 million, which over 30 of our SendOwl customers have done, and you’re paying like 5% or 10%, then that’s a serious amount of money of your profit that’s just been lost.
Andrew: But you guys work with Stripe, right, the payment processor?
Andrew: Stripe takes a percentage. Do I bring my own Stripe account and then pay Stripe a percentage directly, or do I connect to your Stripe account and then you guys take their percent?
George: Yes. So the way it works with Stripe and PayPal and all the other payment processes out there is you’ll pay a percentage of the money that you charge to them. It’s typically two to three percent.
Andrew: But I bring my own Stripe account?
George: That’s right.
Andrew: You guys are just software. You’re not a payment processor. You are the software that will connect my payment processor to my customers?
George: Yeah. That’s right. So ecommerce software and payment processes are typically two distinct companies. That’s just because the payment companies have to deal with all the regulation and the fraud and everything. That leaves the ecommerce companies free to innovate around.
Andrew: Doesn’t your competitor, Gumroad, don’t they charge a percentage and they don’t let you integrate with your own merchant processor right?
George: That is correct. Yes.
Andrew: And here’s the thing, they’re better known. My sense is they’re better known because the founder is in Silicon Valley, because he’s taken on funding, because he’s someone who’s active in the startup tech community and you are in London. To do this interview, I had to come in a little bit earlier, which I’d come over at 5:00 a.m., but the bigger point is not that I’m put out. I’m not at all put out. The bigger point is you are distant. He is here and that’s why I’ve heard of him and his product and I didn’t know about you. And also, your name isn’t on your shopping experience versus your competitors, who often put their name on it. Am I right?
George: Yeah. I think you’ve hit on several reasons why Gumroad is slightly more well-known than this. But first is they decided to go down the venture capital route. They took $7 million in funding and they got splashed over TechCrunch and they were able to get all the PR and publicity that goes with that. That worked really well for them in that regard. They also got a lot of traction early on with solopreneurs, so individuals that were writing an eBook on iPhone design or some like expertise that they have.
That crowd is very active on Twitter, where I’m sure you hang out a lot and a lot of our listeners hang out. That brand became well known in that arena. Whilst they were sort of after that crowd, we were after the small business crowd. We were after the people that have stores of hundreds or thousands of digital products and businesses of perhaps eight to ten people, quite small. That’s not to say there wasn’t some overlap.
That’s not to say they didn’t have some of those customers and we didn’t have some individuals, but the difference that meant was those customers, they didn’t want a SendOwl experience. They wanted a GeorgesStore.com experience and they wanted their logo on the checkout and they wanted it to appear that it was their checkout that was running the show, not really SendOwl.
Andrew: Yeah. Occasionally what I’ll see is something like secure–like underneath the payment is secured by SendOwl and Stripe, right?
Andrew: It’s kind of a security measure or way of reassuring your customers. I get it. Can I ask you this–look, you’re bootstrapped. That means to me you’re profitable, right?
Andrew: Can we just give a range? I’m not here to drag out your finances, whether you make $10 million or $11 million doesn’t influence me. But I want to give my audience a sense of like where are you guys as a company, either in profit or sales, something that just lets me know what are we looking at here? Are we looking at like a $5 million company? $5 million to $10 million, $10 million to $20 million?
George: Well, we don’t expose our numbers, but also I think in terms of months, not years. So I had to do a quick bit of math in my head. But let’s say we’re somewhere between $500,000 and $2.5 million a year.
Andrew: In sales or profits?
George: This is in income.
Andrew: In income, wow. All right. That’s a very wide band, but I understand why. It just gives me a sense of where you guys are as a business.
George: It’s also a wide band actually because although we charge a flat monthly fee and the consistent revenue that comes through, we also do launches for like big music albums. Like the latest Radiohead album, for example, you could buy that on iTunes, but you could also buy that on the website.
Andrew: Currently right now, that’s on Radiohead.com if I go to see it?
George: It’s on the name of the album, which was “A Moon Shaped Pool.”
Andrew: What is it called?
George: “A Moon Shaped Pool.”
Andrew: Got it, “A Moon Shaped Pool,” Radiohead, I’m going to go find it. Oh, AMoonShapedPool.com. So I’m on their site right now. I can hit the buy button.
George: You’ll go through a Shopify experience on this one.
Andrew: Yeah. I noticed that. Why is Shopify one of your biggest referrals? When I was checking you out to see how big you are, I noticed that checkout.Shopify.com comes up as a top referrer on SimilarWeb. Why is that?
George: So if you want to do digital goods on Shopify, they don’t have that built in. So you have to use one of their apps. And there are a couple out there and they’ve got a free version. But anybody that uses any kind of scale on Shopify, they recommend they go through us because we’re the only ones that have a full team behind it and have the infrastructure that can deal with these Radiohead-sized launches.
Andrew: For delivery. But the payment is still on Shopify?
George: Yes. So with Shopify it works a little bit different. There’s sort of the standalone SendOwl experience where we do the checkout and delivery and everything, but you can also use us kind of confusingly with Shopify and Shopify provides the checkout and we provide the delivery. So they’re sort of two sections to the business in that regard, as it were.
Andrew: Okay. Yeah. That’s the part that gets a little bit tricky for me. All right. I’ve seen your payment process. I want to understand how you bootstrapped to this level. In some ways, it seems to me like you’ve done better. You’ve certainly outlasted a lot of your competitors who have had money. I want to understand how you did it. So let me go–now I can’t stop looking at the Radiohead site. Let me put this away. I want to talk to you personally here. Can you notice there’s dryness underneath my eyelids? Like right above my eyelids, underneath my eyebrows?
George: Yeah. I can just about see that.
Andrew: I’ve got to go see the doctor about it. I haven’t had a moment away from work to go do that. I’m pretty sure it’s eczema and I’m pretty sure I’ll get some kind of medication and it’s going to go away, but man it frustrates me that people see it. The reason I’m bringing it up to you is I heard you had eczema as a kid.
George: Yes. In fact, I still get a little bit of it as well.
Andrew: Where do you get it?
George: Mostly in places where sweat forms, like the joint of the elbow, back of the leg, back of the knee.
Andrew: Were you able to put some cream and make it go away?
George: I had it very severely as a child. I grew up in a place called Nottinghamshire in rural England, sort of the middle of the country. We had to come down to London every six weeks on a train, go see a doctor in London and go on a special diet and all sorts. So this was kind of in my early childhood, I guess, about 18 months, age 2, before I can remember. Then it kind of got better as I got to teenage years and slowly sort of reduced, but it obviously had quite an effect on me.
Andrew: In elementary school, my friend David had what I now understand was eczema. I just thought he had dry skin. People didn’t want to shake his hand and it was a big point of mockery with him. Were you old enough that that was happening with you?
George: Yeah. So I think actually when you’re very young, like three, four and attending nursery or preschool, whatever you call it in America, I don’t think kids really notice it at that age. It’s when you get a little bit older that it becomes more of an issue. I think if I think back, I’m guessing here a bit, but maybe like 8 to 10, 8 to 12, certainly by the time you’ve hit teenage years it’s definitely an issue because you suddenly become aware of the opposite sex.
Andrew: So here’s the thing. I’ve heard that you as a kid understood how to talk to people different from other people. I’m wondering how much did eczema play a role in that, your needing to figure out how to deal with the jerks of the world who didn’t understand what eczema was and maybe were mocking. Was that issue, or am I just playing armchair psychologist?
George: No, that was very much an issue.
Andrew: Tell me about it and how you handled it and how it made you who you are.
George: I handled it very badly. I don’t think there’s any doubt about it. I was a very shy child. I can’t really remember the earliest interactions, but I remember my mom saying we went along to a party and one of the parents was like, “Oh my god, what is wrong with your child’s skin?” I think you sort of–I’m guessing here because it’s before I can remember. It sort of like altered your interactions with grown-ups when you’re very small, from being one of like, “Hey, I’m a kid. Aren’t I lovely? You should pick me up and hug me,” to, “There’s something not right of this child.”
Andrew: Right. It’s the exact opposite of what you usually would get and what you probably need for your wellbeing. Tell me about how it shaped you. I’ve heard from my producer that your childhood influenced the way that you relate to people and interact with people. I’m trying to get at that.
George: Yeah. So I think having then fast forward from there, it made me come up with different solutions and it made it quite a lateral thinker. I don’t know how much you could argue is genetics and how much is situational. I don’t think that’s an argument we should get into on this podcast. But for some reason, probably a combination of both, I’ve always been quite a good lateral thinker and quite a good creative thinker.
So then having finished university and got my degree, I went to work at a big corporate. Within six months, I was like, “Okay, I’ve figured this out. Basically there’s a pant load of politics and bureaucracy which I don’t want to deal with. There are some really interesting jobs at the top, but you’re going to have to be 65 to get them.
Andrew: Forgive me, George. I understand that we’re getting to how you decided you weren’t fit for corporate life, but I’m looking at my notes here from my producer. He said, “Look, this guy learned at a young age to interact and think differently with people because of the approach that they had regarding his looks. I’m just trying to understand that.
How did that help make you into the person that you are? How did that allow you to interact with people maybe with more confidence? I’m looking at you, you definitely have more confidence and you seem more self-possessed than most of the guests I have on. How did that influence you? Talk about that.
George: I think it makes me more aware of what other people could be going through. There’s a great quote. I can’t remember it. It’s like don’t judge a man until you walk a mile in his shoes or something along those lines.
George: I’m quite a big believer in that. But I think the point you’re getting to is not actually quite that. It’s not that I’m a brilliant person with people. I’m not at all because I would argue my situation with eczema as a child. It’s one of those skills that I’ve just had to learn over the years, especially as I’ve started a business, which we’ve been going for six and a half years now. I’ve really had to force myself to do that and get out and go to networking events, which I hate.
But then as my business has started to take off and be successful and I’ve spoken to a lot more people and they respect me more and I get asked for my opinion and I got asked to talk at conferences and events, then obviously my confidence has grown with that. But I wouldn’t say it was as a result of the eczema that I in early teenage years worked really hard on interacting brilliantly with people.
Andrew: I see. It was you as the business developed working to become less introverted, more accommodating to people, more aware of what they’re trying to do.
George: Yeah. I think the fact that I had eczema and the fact I didn’t have that normal start to life, that made me think laterally and that has been a phenomenally useful skill in starting a business because if approach A isn’t working, then I’m like, “Okay, here’s B, C, D and E. Let’s try these and see what happens.”
Andrew: All right. So you were starting to tell us about how you spent a couple of years in London and that it wasn’t a good fit and I totally understand it knowing who you are. I read on your website that you loved “The 4-Hour Workweek.” I understand that that helped you come up with this idea. How did “The 4-Hour Workweek” help you come up with the idea for SendOwl?
George: I was sort of reading this book, as I’m sure many of your listeners will have done, and said I love the idea of lying on the beach having some passive income coming in. This is great. So I sort of followed the advice, which was start out creating an info product. So I thought about what I knew, and then I was doing a lot of research online at the time. I guess because I’m a programmer by trade, a little bit geeky and was looking at what technology do you use to deliver a digital file when you’ve created your info product. How do you do that?
I was just appalled at what I came across. These websites, customer support took a week to reply. You needed like a flash capable device to access it and this was–iPhones have been around for quite a few years now and iPads were on the scene. So you couldn’t check your sales while you’re sort of like on the move or anything. The design was appalling. I’m really into minimalism in design, which I think sort of ekes through into the SendOwl branding and styling.
So I was just like, “You know what? I’m a programmer by trade. I can actually do something way better than this.” So I set out on the journey that ultimately became SendOwl and brought me to where I am here now talking to you in this interview.
Andrew: All right. We’re going to find out about that £100 that you spent and what you built with it to make your very product. But first, I’ve got to tell people about ActiveCampaign? Do you know ActiveCampaign?
George: Yeah. We integrate in with them.
Andrew: How do you guys integrate with ActiveCampaign?
George: So, if you’re selling–let’s say you’re selling a PDF on podcasting. Then when somebody buys it, you can either add them to your ActiveCampaign list or you can, if they’re already there, you can give them a tag and say, “I bought product x.” Then you can follow up with that with an email sequence or whatever you want. At that point, SendOwl has transferred the data to ActiveCampaign.
Andrew: I see. So the payment happens on SendOwl, but SendOwl, because of ActiveCampaign’s integration, says to ActiveCampaign, “Tag this guy as having bought this product.” Now ActiveCampaign can take over ad deliver the product in however the business wants, right?
Andrew: How does it work then?
George: The product will still be delivered by SendOwl, but then you’ve either added them to your email list if you’ve not come across them before or you could give them a tag, for example, they’ve bought a product. That will dictate how you do future marketing to them so you then might follow up with an upsell. You might put them into some special buyers only email list or access forum. There are hundreds of different things that you can do.
Andrew: I see. Okay. That makes sense. Actually, that brings up one of the benefits of ActiveCampaign. I keep talking about how ActiveCampaign is better email, email marketing that takes the customer into account like what you just described. If someone buys, you tag them as a buyer. If someone comes to your website and looks at a video, you tag them as having looked at that video and maybe you start to send them new emails not about general stuff, but about what that topic of the video was.
That’s what they’re really good at. They actually have this really nice flow chart design that allows you to say if/then. If somebody watches this video, then show them this email next. If somebody clicks on a bunch of links for new companies, then send them emails directed at new companies because we understand they have a new business. That’s what they’re especially known for.
What they’re not known for is creating the best sales page ever. Frankly, a lot of their competition seems to think they could do that. So, if you look a lot of the marketing automation apps out there, they also will do sales pages with their own ecommerce, with their own product delivery. It’s so deeply integrated and it stinks.
You know what? Why don’t I just mention a competitor? You don’t have to say anything about them. But Infusionsoft–Infusionsoft has their own shopping cart, their own payment processes they accept. They will not work with Stripe. What they want to do is give you everything all in one package, right?
ActiveCampaign says no. If you do everything including this sales page, it’s going to look ugly. Infusionsoft really is so ugly that you need–I hope ActiveCampaign is okay with this, but who cares? Infusionsoft is so ugly there are third-party companies that will redesign your Infusionsoft shopping cart because it’s so bad.
But ActiveCampaign says, “We’re not going to be the experts in everything. We’re going to be really good at marketing automation and we’ll integrate with SendOwl. And we’ll integrate with any shopping cart that you want.” And that’s the way that they think–integration for everything else, marketing automation obsession. So, if you’re looking to upgrade your email, maybe your email is not smart enough, maybe you’re not even ready for this yet, but you know at some point you’re going to need it.
The reason you sign up with ActiveCampaign is so you can start tagging people. What are they doing on your website? Start tagging them so you have that knowledge when you’re ready to start customizing your messages. Start tagging them based on where they came in. Start tagging them based on what they clicked.
As a result of that, you’re going to have deep knowledge of your users. You can think about, “Most of my users are actually in colder temperatures. I should be selling more cold weather jackets as opposed to light weather jackets, which is what we’ve been promoting.” And then you could keep developing your business.
All right. ActiveCampaign has come back for a big sponsorship here at Mixergy because their ads have worked well. A lot of you guys have signed up and have been happy with them. So, I can tell you that we’re offering something that they’re not offering anywhere else, which is–actually, I shouldn’t say that. I don’t know if they’re offering it at some random place, but I do know this is not what they’re offering their main people. Second month free, two free one on one sessions with one of their platform consultants so you can really think through how to do marketing automation right and a free migration.
So, if you’re with one of the–as long as I’m mentioning the competitors, if you’re with MailChimp, for example, because MailChimp has cute little ads but you realize they just don’t do marketing automation and that’s what you need or one of the other services like AWeber, they’ll migrate you. They’re only doing it for free because you’re coming to this special URL. Here’s a special URL–ActiveCampaign.com/Mixergy.
All right. You then decide, “I’m going to start this landing page.” Am I right to understand that what you said was, “Look, in Tim Ferriss in 4-Hour Workweek says start simple. The simple thing to do is create a landing page, see if anyone buys and then build the product.” Am I right?
George: Yes. I didn’t actually build the product when I started out. I built a very simple landing page, which I outsourced for a tiny amount of money and just had it so that when somebody clicked through on the Buy button, it just went to a page that said, “I’m sorry. It’s not available yet.” But what I could do was see how many people clicked that Buy button. By throwing like 100 pounds in Google AdWords, we were able to get a load of traffic and I was able to see between 1.2%, something around that and clicked the button.
So that knowledge that I could create demand from the traffic which we bought our AdWords and the fact there were other competitors in the marketplace, I was like, “Okay, I’m willing to risk this.” I’m quite a low-risk person. So I started out evenings and weekends over about four or five months creating a really minimum viable product. All you could do was upload a file and sell it. That was it.
Andrew: All you could do was what?
George: Upload a file and sell it.
Andrew: That’s it? And it’s just with PayPal is what you integrated with at first?
George: Yeah. It was really as simple as that. And then within a few months, people are like, “Oh, we have a shopping cart. Can we have credit card payments? Can we have mailing list integrations?” So the list went on and on.
Andrew: You told our producer, “I felt very vulnerable about that initial release.” Why’d you feel vulnerable?
George: I think I’m sure a lot of developers if they’re listening like this, there’s sort of a perfectionist streak that’s quite common amongst either entrepreneurs or people that work in programming, and it’s really difficult to put something out that’s not perfect and put your name to it. It’s a really vulnerable feeling pulling it out for the first time and like, “Okay, this is it. We’re going to go live.” And you sort of wait for the criticism to roll in. Actually it didn’t.
I was waiting for people to say, “You made this mistake here and you’ve priced wrong. You don’t offer feature x.” But actually our initial customers, they came to us because we were offering an alternative and we were a modern view on how this sector could go. So they were really understanding like, “Okay, this is great. We love it, but really need feature a, b and c. Would you consider adding them?”
It was so minimal, but we offered a 30-day free trial. At the end of that free trial, we didn’t have a way to charge the customers. So I was like, “This is a nice problem to have, right?” You wait for the first customer to come in that starts using it and then you’re going to find a way within 30 days to charge them. Sure enough, we did.
Andrew: You did. I’m looking at your early version of the site. There’s a photo of a guy in bed still thinking about work, “Always be creating,” right? That was your attitude?
George: No. That’s actually the first version of SendOwl.com. Before it was SendOwl it was DigitalDeliveryApp.com.
Andrew: Digital Delivery App. I see.
George: So I actually thought I had got DigitalDelivery.com was free. I went to buy it just as we were about to launch and the tool I’d used hadn’t looked it up properly. DigitalDelivery.com had been in use for donkey’s years. The whole of this site had been branded Digital Delivery. I was like, “Crap, I’m going to launch in like three days. How am I going to do this?”
I called it Digital Delivery App and was like, “Well, who cares? If it doesn’t work, no big loss. If it does work, we’ll have to rebrand.” So it did work, so we rebranded it. You’re actually looking at the first version of SendOwl.com, which is a couple of years down the line.
Andrew: That makes sense. Okay. I see. So the first version of DigitalDeliveryApp.com looks really nice. Actually, I was expecting it to look bad. It looks good. You’re using one of the templates that was kind of popular back then or the layouts, right?
Andrew: A screenshot of what your dashboard with all your payments would look like, details underneath of what’s included. It makes sense. This is what all the Y Combinator companies I think back in 2010 were using, this type of thing. This thing wasn’t fully functioning when I clicked it. I see. All right. So then, your first customer paid $9. How’d you get that first customer?
George: So we launched this thing and then expected everybody to come, as you do. And of course, nobody came. So I was like we can throw money at advertising, which we’ve done in the trial, but I also wanted to prove that we could go and get people by other channels. The first customers actually came from Twitter hustle.
Basically, what I would do is log on each morning, go to Twitter search and search for our competitors. I’d look for people complaining about them and then I’d just reply to the tweet and say, “We’re really early.” You have to be really honest because they’re going to figure out. “We’re really early, but if you’re looking for an alternative, you might like to check us out.”
Andrew: I see.
George: I probably did that for six to eight weeks and over the course of that time picked up five or six customers. Like it wasn’t an efficient method. But when the first customer came in and he was from Sweden. I remember it really well. It came through. The first customer actually paid $15. So 30 days later I got a PayPal payment of $15. That was the most wonderful feeling in the world because then it kind of validated everything for me. It was like, “Well, we know this product works because they’re happy and they’re paying and now it’s just a case of going out there and finding more customers.”
Andrew: What’s the calendar that you used to have up on your wall that you’d cross dates off? What’s that about?
George: Yeah. So then after a certain amount of time, we got like more and more customers. The way it works is if somebody signs up on the 22nd, then they’ll pay on the 22nd each month. So I really wanted to get to the point that I was getting a payment each day.
George: You kind of think, “Okay, when I’ve got 30 customers, I’ll roughly be there.” Actually, it’s not the case. I think it was about 80 or 90 customers before we got there. We just got to this point where I wrote the numbers 1 to 28 on a bit of paper and pinned it on my wall. When we had a regular customer paying on that day of the month, I crossed it off. It got down to two days left. It was the 2nd and it was the 16th. The 16th is my birthday in February.
So a couple of months just went by and nobody was signing up on the 2nd or 16th and it was killing me because I really wanted to get it so that every single day of the month we would get in some passive income. Then eventually the 16th went and at some point, the 2nd finally went and I was able to cross the 2nd off for one month and every month since. We got paid every single day of the month.
So, again, that was like a real milestone because it was like not only have we got one customer paying us $15, now we’ve got 70 or 80 customers and it doesn’t matter what day of the week. It doesn’t matter if it’s a Sunday and I’m on holiday and I’m lying on the beach, on the other side of the world, somebody somewhere is paying us for our services.
Andrew: That makes sense.
George: That was the second real big milestone that we got to.
Andrew: That’s got to have been such a good feeling. And then as I understand it, you started working one day a week on this, then two, then three, then four, then at some point you said, “I’m ready. I’ve got to go. I’ve got to start working on this full-time.” Let’s take a moment and we’re going to talk about this big, big problem you had soon after this. You’re on a high. Everything is great, crossing days off, getting paid every single day passive income and then a big mistake happens and what you learned from it.
But first, I’ve got to tell people about a company called Toptal. If you’re listening to this or any other interview, it’s kind of exciting to see that George had an idea, he implemented it pretty quickly and then he started to get customers and then a little more and then before long, it became a whole big thing. One of the problems when you’re running a business is you have these ideas, you see these opportunities but your staff is so stretched thin working on other projects that you can’t jump on them, right?
So what many people do is they go to Toptal and they say, “Look, I need a developer. I think this will be a small project. Here’s how it will work. Here’s the language that I need it in. Here’s where it will be sold. I need you guys, Toptal, to recommend a top developer,” someone who can not just do exactly what I tell them, but can help think this problem through because like George didn’t have someone telling him step by step what to do. He’s an intelligent engineer. He knows what to do.
That’s what Toptal does. They have intelligent engineers who can think for themselves along with you. So, you could go to them and say, “I need this person. Here’s how I want them to work.” And Toptal will recommend a developer to you from their network. You can talk to them. If you’re happy and often people are happy with the first or second person they get introduced to. If you are, you can get started in a matter of days. Multiple people who I’ve interviewed have come out and talked about how they’ve hired people from Toptal and I’ve mentioned them in past ads.
But if you want to do it, if you want to be one of those success stories, I urge you to go not just to Toptal.com but to Toptal.com/Mixergy because when you go there, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no risk trial period of up to two weeks.
I’ve been told I don’t pronounce their right, so I’m going to say it very clearly–top as in top of the mountain, tal as in talent, Toptal.com/Mixergy. If you create something with Toptal, please let me know and I will talk about it an upcoming ad just like I’ve talked about others who have heard me talk about Toptal and have built great products, Toptal.com/Mixergy.
George, tell me about this support person you hired and what happened there. I feel like there’s a lot for all of us to learn from that experience. What was the problem?
George: Yeah. The problem was we were a couple years in at this point and the company was growing and I was working full-time. Then at some point, the support load got from five minutes a day to an hour a day to two hours a day to three hours a day and I’m like, “Oh wait, this isn’t a very efficient use of my time. I need to make the first hire. We need to hire a support person.”
So I perhaps naively, having never hired somebody before, went out and hired the kind of person that I would like to speak to on the other end of a phone. We didn’t even offer phone support. It was all via email. But she was really bubbly and very passionate about support. She was a great employee in that regard.
Unfortunately, what I hadn’t considered is that ecommerce is quite technical in nature. So, although she had all those skills down, she didn’t have the technical skills down. We tried to teach her. After like four or five months, it just wasn’t working out, so we had to restart the process. It meant for, I guess, six months by the time we had started with this girl, hired her, changed our minds and then rehired, I was working two, three hours a day on support, plus trying to train this new person up. We were just spinning our wheels.
Andrew: Getting up every day at 7:00 a.m. I understand doing this.
Andrew: Tech support is 7:00 a.m.
George: Yeah. To add insult to injury, I was also at the same time extending my flat in London. I don’t know if anyone’s ever done this, but extending buildings, especially in the UK is not a small feat and in itself is a project. I was getting up at 7:00 a.m. I was doing support for a few hours. I was trying to do my normal job. I was then doing support for a few more hours in the evening.
I was then coming around to the flat and meeting the builders and making decisions on that. I was finished about 11:00 at night and then decompressing for an hour, going to bed and restarting for probably about two months that went on. It was just absolute hell. It was the bits. It was the worst time of SendOwl. I did not enjoy it at all.
Andrew: That’s a big frustration, actually. Tell me if I’m taking the right lesson from this. The thing I’m understanding from this is when we’re looking to hire someone in this world, it’s not just about their ability to communicate with people, it’s also a tech job. We need to figure out–we need to run tests for how skilled they are at the tech, right? Like can I have them–I’m trying to think of what I would have done. I might have asked her before hiring her to create a site and implement SendOwl on it and see if she could do that.
Andrew: And then solve one of my problems as I talk to her about what I’m doing with it, right?
George: Yeah. So when we did it the second time, we took a very different approach. That was like, “Okay, this is the level of technical proficiency we need.” So we filtered for that in the first round. I’ll talk about how we did that in a second. We’re like, “Here are four or five candidates, all of which can the tech side. Now let’s decide who would be a good person to have on the other end of the email.” So we sort of did it the other way around.
So you made a really good point. If you ask somebody like, “Oh, can you do very basic HTML or CSS or copy this code to somebody’s site, then they’ll often say yes even though they can’t because they want the job, which is kind of fair enough. That’s a little bit what people do in job interviews. So we took a different approach and we said, “Okay, we’re going to test you. So in the interview you need to screen share, and then we’d actually say, “Here’s a real email a customer sent in and we just blanked out their confidential information, write a reply to it there and then and then here’s a basic website. Can you copy the SendOwl button across the website?”
So, by doing that, it became very clear very quickly the people who said they could do basic HTML and internet tech-related technologies. It became very clear that some of them were like quite expert in it and underselling themselves and some of them were massively overselling it. So we were able to filter on that and then we didn’t have the same problem when we hired again.
Andrew: I see that. Then when it came time to building out products, I’m imagining that whatever customer support requests came in, you were somehow looking through that and understanding what you need to add on. Am I right?
George: Yeah. So the way it worked in the early days and in many ways why the SendOwl product is so–I’m not sure what the correct phrase is–but a lot of our customers refer us as new customers. We’ve got a really high customer retention rate. Churn is extremely low for a SaaS. The reason for that is in the early days I was the support person and I really understood and knew every single problem and what people are asking for. That doesn’t mean we always said yes because a lot of the time we were unable or it wasn’t a strategic direction to provide that functionality.
It meant I stayed really close to the raw edge of that that was coming in. So when we hired a support person, I said it’s phenomenally important we retain this as a company. We cannot lose this ability because that’s one of the reasons we’ve been so successful. So what happens now is every week every single request that comes into support gets fed back to me and the development team in our weekly meeting. Sometimes it will be, “There’s a workaround for that we haven’t really thought around before,” or, “Yeah, we’re happy to say this is coming in the next week/month,” or if something is not going to come in the next few months, we will tell people.
We’re very honest in our support because as crazy as it sounds, we would much rather somebody went to a competitor that had exactly what they needed and were happy there rather them being a frustrated SendOwl customer because they will then just bombard support request with angry requests and not be the kind of customer that–
Andrew: How do you know what to say yes to and what to say no to?
George: That is a very hard question.
George: So we track–if somebody asks for something, we don’t ever say yes straight away, but we will say it’s in planning the next two or three items. You can expect to see in the next few months if that’s happening. The way we prioritize features is it’s based purely on customer feedback and our strategic direction.
So, if one person writes and says, “You should add feature x,” and they email in and ask the same thing every day, some people will like to remind you, then that only really has got a weight of one customer, whereas if you have 100 people write in–so, when Stripe first launched, we got a barrage of questions saying, “Will you add Stripe? Will you add Stripe?”
And because of the volume, it looked like a really good solution, like, “Yeah, we’re definitely going to add Stripe.” And we added it really quickly. The main factor, the prioritization is we see it from the customer’s point of view, but also you’ve got to bear in mind your company’s strategic direction. So one of the things that we’re working on right now is greater customization of the checkout. So you can change the way it looks and feels and you can change the field with a lot higher degree of customization than you can now.
People have been asking for another feature which I can’t talk about yet. Really, we should have done them the other way around, but it makes sense because of what we know what’s coming to actually switch the order. So, you wouldn’t want to like have a purely account based system on the number of customers that ask for something. You’ve got to bear your strategic strategy and direction.
Andrew: How do you figure out–are people asking for something that they’re never going to use? If you’re doing it based on number of requests, often it’s tough because people will ask for stuff they actually don’t end up wanting or don’t end up practically needing.
George: Yes. There are some features that we’ve added and have been a little disappointing in their initial take up. So we added the ability to integrate in with membership systems. So there are things like MemberMouse and WishList Member which enable you to run a membership system on your site. Based on the number of requests, we thought it was going to be really popular. We added that in and the initial uptake was really slow. We thought, “That’s quite disappointing.”
We spent a lot of time and effort doing it. Then we added other features like upsells. You can ask somebody during checkout if they want to add on an extra product for a dollar. Then even after they’ve entered their payment details and they think they’ve paid, then you can pop something up. If it changes the charge from $15 to $20, it will actually still just run it through as one $20 charge like it does it correctly.
George: That was way more popular than we would have predicted based on the number of features. A lot of it is just gut feel and experience. You get a gasp of how popular something is going to be, but ultimately you just don’t know. Upsells was way more popular and membership systems was way less popular than I would have thought.
Andrew: Why does somebody need you guys for membership systems? Can’t you use just about any shopping cart for it, including the ones that are built in it WishList Member and MemberMouse?
George: Yes. The ones that are built in are okay. Generally it’s when people are already selling digital products and they want to run it all through on systems because it makes it easier to manage or what a lot of people do now which is a really good tip is if they’re selling an e-product like an eBook, then they sell access to the community once you buy the book. So, you call sell the eBook and then you can automatically set somebody up with an account.
Andrew: Yeah. Your product is so elegant, so simple that I think it was on your homepage, I saw a set up in 20 seconds. I’ve got a few extra minutes. I know we were supposed to stop now, but I messaged my next interviewee and said, “I need a few more minutes here with George.” He said, “Yeah, go for it.” So, I think it was on your homepage where I saw you could set it up in 20 seconds. You played a video showing how to set this up in 20 seconds.
What I didn’t realize until I dove into your site in more depth–you guys have a ton of features underneath there, like different payment options, which I’ve seen on some of your client’s sites and people that you pay by PayPal or Stripe, discount codes, upsells, which I’m really excited about because I see the value of it, someone enters a credit card, they want to buy something. You do want to sell them–you want to say, “You bought this little thing. Here’s a bigger thing that makes it easier to use this little thing. Do you want to do that?” or vice versa.
You say, “How about another little add on?” That’s another thing that Infusionsoft’s shopping cart that does not let you do. It’s maddening that they don’t do it and that they’re so headstrong about you needing to use your shopping cart that they make it hard to use alternate shopping carts. That freaking drives me nuts. You also have affiliates. Talk more about some of the features and why people are using SendOwl.
George: Yeah. There’s a whole features page there which you’re looking at. We only update that periodically. So, things that we added lately that have been really popular are cart abandonments–if somebody starts going through the checkout and then cancels, if they’ve entered their email, you can follow up with them. If they’ve not entered their email, you can flash up a discount.
Apple Pay was a really good one, actually. We were, we believe, the first company that had Apple Pay for the web live. So we knew it was coming. We got early access via Stripe and Apple and we had it so it went live at 9:00 a.m. on the day it was launched in the UK. We think we’re the first people. We had to look around and find anyone else that was doing it.
Andrew: That’s exciting. I wish that worked with Chrome. It doesn’t, right? It’s only Safari?
George: It’s only Safari, yeah. I use Chrome as well. The only time I really see it is when I’m on my mobile.
George: But it’s actually a really sweet experience. You don’t have to enter your email address or your card details. You just put your finger on the pad and it authorizes it and then in our case the file is delivered straightaway.
Andrew: It’s one of those magical experiences that Apple has created that we don’t pay attention to because we’re so bothered by how the iPhone 7 looks like the iPhone 6. But that checkout process, really sweet. I can see how powerful that would be. What else have you guys added that makes this a more exciting shopping experience?
George: We focused a lot the last year on how can our customers sell more. So it’s obviously in our interest to have our customers be successful. So a lot of the new features that have been coming out and ones that are still coming out are based around that. Something else that was added while we’re talking about payments it Bitcoin. The kind of philosophy at the moment and certainly the way it seems to be going to when people get to the checkout, you don’t want them to think. You want to make sure however they want to pay you’ve got that option.
Andrew: That seems like another one. Bitcoin seems like something people ask for a lot and demanded for a long time, but customers don’t actually end up using it, do they?
George: Yeah. We can see the stats. People are using them to buy products, but the volumes compared to PayPal and credit card payments are tiny.
Andrew: I imagine it’s what? It’s got to be less than 5% right of overall sales?
George: I imagine it’s less than one. I don’t have the numbers.
Andrew: Right. But it’s one of the those things that people demanded and in reality they just didn’t want.
George: It’s like the Henry Ford quote, “If I asked people what they wanted, they would ask for a faster horse.”
Andrew: What about this, I’m on one of your client’s sites, Ann Kullberg.
George: Oh yeah.
Andrew: When I go to check out on Anne’s site, this cool thing comes up that says I add one thing, I hit the checkout and something comes up in a little modal pop that says, “You might actually want this other four things too. Just hit add cart next to any one that you like.” Is that you or is that something else that she’s doing?
George: I think it is, but I have to check.
Andrew: So, can I do that? If someone’s about to buy something and adds it to their shopping cart and wants to check out, can I say, “Here are two other things that I think you’d want to buy also,” kind of like before upsell, pre-sell?
George: We looked at it but it’s tricky. At that point, people have so many different use cases and it’s very specific to the products they’re selling. It’s very difficult for us to do that. So, we just wanted to create an open infrastructure so they could add stuff how they wanted and then they leave it to their designer to work out the details.
Andrew: Who is Ann Kullberg? Do you know her?
George: Yeah. Ann’s brilliant, actually. We interviewed her. She is one of the world’s leading color pencil artists. She teaches people to draw magazines via her digital products how to draw all these phenomenal pictures. They look like paintings. She’s so successful that each year, she has part of a cruise ship booked out and she teaches people on there how to draw. She’s one of our sellers that you’ve probably never heard of unless you’re in that world. I obviously can’t talk about her numbers, but she’s a very successful seller.
Andrew: I’ve seen her I think somewhere else. She uses one of my other interviewee’s something, maybe for course delivery. She does really well, AnnKullberg.com. Cool. How do you think it went? I was a little aggressive at first and I thought I was being playful about it, but I was sensing you weren’t excited about that intro, but I think overall we did pretty well in this interview, don’t you agree?
George: Yeah. I thought it was a good intro.
Andrew: Oh, you did. Good. I was looking at you. I said, “I can’t tell if George is pissed or if George is just going along with this. He doesn’t seem that happy about it.
George: I was just like following it along and then I was like, “Okay, I need to remember to say about the fact that I signed up for an interview and not an interrogation.
Andrew: You had your line and you wanted to make sure to blur it before. It’s too late.
George: I was like, “I could say that. I could say that.”
Andrew: The whole thing is still bootstrapped, no outside funding?”
George: No outside funding, no.
Andrew: Still profitable?
George: Oh yeah, very profitable.
Andrew: How many owners, it’s you and a cofounder?
George: Just me.
Andrew: Just you, 100% you. You get to drive things. If an investor says you need to sell, you don’t have to listen?
George: Yeah. Don’t get me wrong. We’ve had some big VCs approach us and want to put money in, but I’ve always said I’m just not interested. I think this comes to risk profiles. If there’s two dollars there, one’s got $50 million behind it and there’s not a 1% change and there’s one door here and there’s one door here and it’s got $100k behind it and you get to do your own thing and go down to the gym for two hours at lunch and work from Vietnam for a month when you fancy it. There’s a 2% chance of getting, then that’s the door I will go through. I’m just a low risk person.
Andrew: What about your competitor who I mentioned earlier in the interview? Why did they struggle?
George: They struggle because the market is just not big. There are only so many people that are selling digital goods between Gumroad and ourselves. I would imagine we’ve got 90% to 95% of that market. The VCs, they pump in $7 million, $8 million and they want $50 million, $80 million back and they weren’t even going to get their $7 million or $8 million back.
They had a team of–officially on their website, it was $25 million, but I had somebody ping me via Twitter and say it was more like $34 million at the time they ran out of money. They were moving as fast as we were and we had a team of like four. But they had to burn through the money in two years because that’s what the VCs wanted. They want that money back.
Andrew: One of the people they had, they had people like Ryan Delk who’s just really good at working the network and getting the name out there. You guys do have that. That’s the big issue, I feel, with you because you don’t have that but you don’t want it. You don’t want that name recognition in that world.
George: Well, Ryan is probably the one hire that we could have done with, that they had that we didn’t. But we have actually just at the start of the year hired James. James is our Ryan.
Andrew: He’s your growth guy, from what I remember on your site, right?
George: Yeah. He’s the growth guy.
Andrew: What’s he doing to grow you guys?
George: So we have like advertising at the moment. We’re actually starting a podcast. We are reaching out to a lot of influencers. It’s more at the moment we’re just getting things set up.
Andrew: How did you find him? I’d like a growth person too.
George: I would put an advert on We Work Remotely.
Andrew: WeWorkRemotely.com. Oh, yeah. That’s the Basecamp people stuff.
Andrew: We’ve got all our hires from there. It’s $200 or something, but the quality is always exceptional. We get around–you can work remotely, which is what they’re looking for, you get around 200 to 300 CVs. So it’s insane the amount of people that will apply.
George: How do you screen out people to make sure they’re really good growth people? That’s a hard one to hire for.
Andrew: I’ve got a process for this. So you cut it down from that to about $15 to $18 for the first round interview. That’s really easy. You can just see who’s clever. They’ve done a catchy subject or they’ve written something clever in their email or on the CV that will capture attention. Or the other thing we look for is they look for a big company before and have got premium results there, like as in a big startup company, not a big corporate company. So that goes down to about 15 to 18 first round, half an hour interview, ask them all roughly the same questions.
From that, you could just tell who knows what they’re talking about. So it would say like, “What would be your approach in Facebook advertising?” James, the guy that we’d hired is like, “You’ve only got so many . . .” He had a really defined process for it. He’s like you’ve only got so many switches you can flip. The process is you’ve got to get them to your advert. You’ve got to get them to click your advert and when they come to your website, you’ve got to get them to sign up.
So you’ve got to look at each of those as stages. Assuming you’re not trying to mislead people because it would be very easy to put an advert that said “Free Porsche” and get a lot of people to click on it. So, as long as you’re not like misleading people, then you’ve only got these switches you can optimize. Then you can work out the max time which you’re willing to pay and how much the clicks are costing you and you can just work all that from that.
So he had like really defined methodology for it. So that kind of caught my eye. Then he had a lot of experience in outreach into influential people and connecting with them. He’s a very charismatic guy. That’s another reason I hired him. He’s kind of got that instantly likeable kind of person. That’s really important when you’re talking to–
Andrew: Yeah, for something like this. I feel like you’ve got that. You and I have spent over an hour together or about an hour together and I’ve gotten that sense. I’ve liked getting to know you and getting to know your product better, frankly getting to know your product at all. It’s impressive.
George: Yeah. You may have actually bought something that was delivered by SendOwl and you’ll never know it.
Andrew: I do know that I did and I definitely was exaggerating the reality of it a little bit because I searched in my inbox and I came up with you a bunch of times. It’s just surprising how hidden this is and I love these kind of hidden gems–entrepreneurs that aren’t featured on TechCrunch every other week that most people don’t know about who have a great story, a lot of hustle, great product that they keep evolving and they’re not super well known, which means we’re not tired of hearing about them, but we need to hear about them and that’s what Mixergy is about. I’m proud to have you on here.
For anyone who wants to go check out your website, it’s easy. It’s SendOwl.com. It’s not like SendOwl.co or SendOwlApp.com. It’s SendOwl.com. Good simple name. The two sponsors are first, the company that actually does marketing automation really well. It’s ActiveCampaign, when you’re ready to graduate from your simple email or just hate your marketing automation software and want something that’s elegant and effective, check out ActiveCampaign.com/Mixergy.
The second one is a company that will help you hire your next great developer or team of developers. It is Toptal.com/Mixergy. I’m grateful to the both of them for sponsoring and to all of you guys for subscribing to the podcast. Bye, George. Bye, everyone.