Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com and this is a place where I’ve done over a thousand interviews. My goal is to bring you entrepreneurs who have real businesses, growing businesses, not just the ones that you might see on TechCrunch because they just got funded by someone, but the companies that are actually growing, doing interesting things and frankly, are underreported by the tech press.
And today I’ve got a founder who had a fan-freaking-tastic business. You’re going to see the size of the business and you’re going to see how he built it. It’s going to be one of the best interviews on Mixergy, I know it. And the thing that spurred me on to get him on here is that he got really into chat bots before anyone else did and understood how to use them. So he and I recorded a program for Mixergy, which I hope you’ll hear on Mixergy about how he does messaging bots, but also wanted him to come on here and talk about how he built up these businesses. And he’s got a collection of them.
He is the cofounder of BOOM by Cindy Joseph. They sell organic skincare and cosmetics for women of every generation. He also has this tool that allows you to do a one-click upsell. So imagine you buy something from BOOM and then after you buy, they say, “Do you also want this other thing with it?” And if you click, then they add that thing to your order and boom, they’ve increased their revenue. I’m saying “you” because he created it. He turned it into a plugin that anyone can use. That’s a whole other business that he’s got. It’s called Zipify. They make ecommerce plugins for Shopify stores.
Finally he’s got something called SmartMarketer.com. That’s where he teaches everything that he knows about ecommerce marketing, and he’s got to be one of the best in the world at ecommerce marketing. So I invited him here to talk about how he built his businesses and learn as much as we can about his tactics for growing.
This whole interview is sponsored by two companies that you probably know by now because I can’t stop talking about them. The first is the company that will help you hire your next great developer. It’s called Toptal and the second will help you do marketing automation right–ActiveCampaign. I’ll tell you more about them later.
Ezra: Hey, man. Thanks for having me on the show. I just noticed that you have some kind of beads covering your microphone, and I didn’t know that microphone swag was a thing until just now.
Andrew: You know what? It never was. I’m just really into this like meditation for focus and beads for helping with focus and I knew I needed something to dress this thing up. I thought, “I’m into beads. I’ve got a bunch of them. Let’s put them on.”
Ezra: I’m going to get a beard now for my microphone.
Andrew: A beard. How about a man-bun?
Ezra: A clip-on man-bun, for sure.
Andrew: A clip-on man-bun for the mic. Dude, I love how like casual and comfortable you are. We had dinner at a conference recently and I enjoyed talking to you. Then I looked up online and this BOOM by Cindy Joseph like your other businesses is huge. How much revenue are you doing with BOOM?
Ezra: BOOM did like $17.8 million in 2016 in revenue.
Andrew: How much funding do you guys have?
Ezra: Zero. We built that from the ground up, you know? I invested a couple hundred grand. But that was over several years. It wasn’t like I had a couple hundred thousand dollars. When I started BOOM, I still didn’t have much money. I was running a wig business, actually, which is a whole other story.
Andrew: That’s where you made your first money?
Ezra: Actually, so I moved to New York when I was 18 to play poker for a living.
Ezra: I grew up on a hippie commune, which is a really interesting–I mean for lack of a better way to describe it, it’s actually an alternative lifestyle experiment. I think it informs the way that I do business. We just had this whole conversation about relationship intimacy, connection, value, which is what I strive to create in all my brands. If you give me a minute or two, I can tell you the story of this place, which is super interesting and I think feeds into the conversation around how I built these businesses.
Andrew: Yeah. We kind of talked about that on the drive over to the dinner that we had a few weeks ago. I’d love to hear it, yes.
Ezra: Sure. Thank you. I just basically requested permission to tell it.
Andrew: How weird would it be if I said, “No, I don’t think so?”
Ezra: That was the thing. I put you in this really uncomfortable sport where it’s like you can’t just be like, “No, dude, I don’t want to hear that.”
Andrew: You know what? I’m a good interviewer. I would say something like, “Yeah, we’ve got to get into it, but first let’s talk about this other thing,” and then if I don’t want to, I won’t. But I know the background and it’s interesting, and even though I’ve heard it, I want more detail, so please.-
Ezra: Thank you. Here we go. So we’re going to go back to around 1944, post-Great Depression, okay? Post-Great Depression, post-World War II, President Roosevelt is looking for a way to stimulate the economy and he comes up with the idea of the GI Bill, which is this bill that they signed that was designed to give the soldiers returning from the war access to affordable housing and they invented the suburbs.
They invented military tract housing, and what they did was repurposed the factories that were being used to make tanks and planes and war stuff to make consumer durables, to make washing machines, to make toasters, to make dryers. And they had the first mass broadcast system that wasn’t radio or newspaper, and they leveraged that mass broadcast system to promote this sort of lifestyle of “two in a box,” which I air quote for those of you who are listening to this on podcast.
But basically, if you look at America, which was developed east to west, the houses in Philadelphia, in New York are these big, huge sort of Victorian types of houses that families would live together. You’d have aunts and uncles and grandparents, whole big families lived together. As you go west, it starts to get less and less that way and obviously more and more of the suburbs. This really, really worked because every single family unit was going to need a washer, was going to need a dryer, was going to need a consumer durable.
So, basically, it really worked as a way to stimulate the economy and what happened was the baby boom, right? The soldiers came back from the war, the baby boom happened, which is my parents’ generation. These children who came of age in the nuclear family, which is what it’s referred to now, who were born at that time, came of age in the late ’60s, early ’70s and we’re talking about a time that was pre-AIDS and post-penicillin, no STD out there that can kill you, hence the free love movement, right? That’s what happened.
On the coasts of America, they rebelled against this status quo, against this nuclear family and started having more and more communes. It’s estimated that around 8,000 to 12,000 popped up around that time. And to this day, 49 years later, if you look at the statistics, there are like 5 left from that time. And the reason there are so few is because when you get into relating with another person, things come up–jealousy, money, possessions, communications, sensuality–all these things that come up in relationship to having a pleasurable relationship with another human being–and most relationships fail.
I mean I know we’re here to talk about marketing and we’re going to talk about marketing. But most relationships fail. Most marriages fail. People are failing at this, this concept of how you win at relating with another human being. This group of people who grew up where I grew up has been studying this over the last 50 years. What does it take to live pleasurably with other people? How do you relate across the gender line? How do you relate in general? They are a super-fascinating group of people, and their body of research is all around how to have winning relationships, which comes down to things like communication, which comes down to power structures and stuff like that.
But what’s interesting about them before we transition off that is they are a descriptive, not prescriptive organization. So you have these like organizations that have content around how to have a pleasurable life, and many of them are coming from the viewpoint that you’re broken and you need fixing and if only you would subscribe to their dogma, you would then be some kind of a right person. So they’ve got some body of information that they’re going to prescribe to you that you must then subscribe to in order to get well.
And this group where I grew up is more coming from the perspective that like, “Hey, we’ve been researching this over the last 50 years. Here’s what we’ve found to work. Check it out. We’ll describe it for you. If any of it sounds interesting, try it on. But we don’t think you need fixing.” They’re not out there trying to make a bunch of money. They’re not for profit, so that’s freed them up to just do their research in relationship to how to have winning relationships.
The reason this feeds into my business conversation is because I cannot separate my sort of view of the world from this place I was raised. What’s had me win at business–I know have 45 employees. I basically hired all my friends and family, which is a whole other conversation about whether or not that works. It’s worked really well for me. We’ve now gotten to the point where we’ve expanded beyond friends and family.
And just a quick aside there–one of the interesting things that happens when you hire all your friends and family is you end up with a very not culturally diverse group of people because you tend to relate to people who are similar to you, so then we’ve now had this movement towards how do we diversify the community of folks who are working in our businesses, which has been really good.
Andrew: Okay. So then how does has this growing up helped you become this entrepreneur that we’re about to get into?
Ezra: Okay. So, basically I had access to this information that nobody that I knew had access to in relationship to how to relate with other people. So I moved to New York at 18 to play poker for a living, which by the way was not the best strategy in the world.
Andrew: Where did you go? I used to go to these like middle of nowhere, like Astoria, there’d be some guy who had poker in the upstairs of his house and then at the bottom, an old grandmother would cook food for everyone.
Andrew: And you’d just play poker for I don’t know, thousands of dollars, but not high thousands.
Ezra: Totally. When I moved to New York, in 2005, like all these poker clubs were all over New York City. They were mostly mafia-run. You had guys like Vinny the Limo and Frankie Bananas and Tommy What’s It to You. They called me Johnny How You Doing because I was like super young and I would always say, “How you doing?” trying to fit in. But these were not legal establishments.
Andrew: You’re saying, “Look, I understood people. I brought that to poker.” How did poker lead to this wig business?
Ezra: So I met this guy who was–so, we’re talking 2005. Now the idea of a coach has penetrated mainstream society–relationship coaches and health coaches and life coaches and business coaches. At this time, coaching had not really made it as a core concept.
So what this guy was doing was he was using search engine optimization, which was the traffic source of the day to sell eBooks on how to build a life coaching business when people would type in queries like, “How to make money online?” because in the coaching industry, there’s no governing body. Any schmoe can say, “I’m a coach,” and sell someone their services, which is both good and bad.
So he was like making money and selling these eBooks on how to become a life coach. He would take these courses that my parents taught. So I met him and I was like, “Hey, dude, you’re making money on your laptop, and I’m staying up all night under a bunch of fluorescent lights with degenerate men. I think I really ought to learn what you’re doing. Why don’t we do a trade? I’ll teach you how to play poker and you teach me this.” So I ended up doing search engine optimization for him and starting to learn about the concept of not trading time for money.
I actually remember, like this group that I grew up in, was always freaked out about money. We were always freaked out that the lights were going to turn off. We always were worried about money. I identified as a poor person, which has been an interesting journey, not even realizing that I had viewpoints about people who were rich. I ate the school lunches. I had the hand-me-down clothes, like I was ashamed of the cars that I would get picked up in. I had this identity I didn’t realize I had until I was in a different financial class.
But basically this guy taught me search engine optimization, and he was doing things like having long-form sales pages and doing webinars and like he was doing what I do now in my information publishing business all the way back in ’05. I ended up cutting my teeth, taking over his business learning about marketing. I ran into guys like Ryan Deiss way back when and started learning about information publishing, information marketing. The place I grew up, they are information publishers. They sell content. That’s what they do, essentially. It’s just done in a different medium. Now I’m doing it online.
And my actual family history aside from this commune is that of merchants. So my great grandfather was a trader. What he would do is he lived in Kolomyia, Russia and he would take this carried wagon over all the way to Vienna and he would trade bolts of cotton and wool for bulk leather. He’d then bring that leather back and trade it. He’d do this trading thing and that worked really well until the war.
Andrew: How does this come into–bring me to the wigs because I’ve got so much I want to cover with you today.
Ezra: Yeah. All right.
Andrew: Yeah, what did that do?
Ezra: Long story short, I learn about visibility, about how to generate visibility for a product offering via search engine optimization.
Ezra: And I start doing it for this guy and I start learning about landing page psychology and selling things online. I get this concept. Ecommerce was like just evolving in 2005. It was just becoming mainstream, the Gen-X, Gen-Y, baby boomers were just crossing that technology chasm. They weren’t afraid to use technology to use technology anymore.
Andrew: What about the wigs?
Ezra: Ecommerce was becoming a thing. So the wigs–don’t worry, I’m getting there.
Ezra: I am semi-long-winded, if you haven’t noticed. So I am looking for a product to sell online. I take a job at a makeup studio doing special effects makeup in the Lower East Side of Manhattan. This woman is selling wigs in her makeup shop, and I remember one day, she sold like 15 Elvis wigs and I was like, “Man, if I can sell 15 Elvis wigs, I would be made. I will have made it.”
So I went and found out who she’s getting these wigs from, which are these Hasidic Jews in Midtown who kind of supply all the wigs to the Broadway shows and they import them from China or wherever they import them from. So I got a wig catalogue from them. I took all those products. I put them online and I used search engine optimization to do a drop shipping business selling Elvis wigs, Afro wigs, mullet wigs, and we sold a lot of those.
Andrew: How much did you sell of that?
Ezra: I sold that business for about a quarter of a million dollars in 2012. I think in the lifetime of that business from the time I started it to the end of 2007-ish, I sold about $1 million in wigs.
Andrew: What was the URL on that? I’ve got to go to Internet Archive and see what that looked like.
Ezra: If you go MyCostumeWigs.com, I’m actually on there. I’m on there. You can see pictures of me and my wife and these wigs, all of our friends at the time. We took all these pictures. But through that website, through this early ecommerce website. Basically nothing has changed. The only thing that has changed is the visibility sources that you leverage to generate attention for your brand, the ability to track more data and do more dynamic communication based on whatever it is you’re communicating about. That stuff has changed, but fundamentally, nothing really has changed in regards to retail. You’re still buying for one, selling for two.
Andrew: I see it. This was apparently a Yahoo store.
Ezra: Yeah. It was back when Yahoo stores were big, man.
Andrew: You’ve got the Afro wigs, the Elvis wigs.
Ezra: If you go to Elvis wigs, you can see me on there, mullet wigs, you can see me on there.
Andrew: The images didn’t actually make it, unfortunately, to Archive.org. But the general gist of the site I get. All right. So you sell the business. How do you connect with Cindy Joseph?
Ezra: So Cindy is–this is an interesting conversation because she is a 55-year old woman at this time. I’m an 18-year old guy. She would come to my house in California to take these courses that my parents taught. And she was a famous–she was a makeup artist for Cameron Diaz, Naomi Campbell, all these big models in the ’80s. She was a makeup artist for like 27 years.
When she was 47 years old, after she cut off the last of her dyed hair, she was approached on the street for a Dolce & Gabbana campaign that you can still find to this day, a really fascinating campaign. She thought they were just messing with her because she’d been on the other side of the camera for so long. She ended up booking this campaign and becoming a super famous fashion model, becoming the face of the baby boomer generation, because it was at a time when advertisers realized that baby boomers, they were sort of pushing the economy and they needed people that looked like them in the ads.
So she had this big modeling career and we became friends. When I moved to New York, I moved in with her. I called her up and said, “Hey, I want to move to New York. I’m not going to go to college. I want to come live with you and go play poker in New York.” She said, “Cool.” And we became like best friends, sort of an odd couple, 18-year old guy, 55-year old woman. We’d have these conversations about what it was like to be a man in society, what it’s like to be an older woman in society.
And just so you have context, listener, the way that western society treats men and women is a little different. As a man, I get value for production. So the more that I produce in the eyes of society, the more my value increases. So my value actually increases over time with the more that I produce, the more money I make, etc.
Women–and this stems back to 100 years ago when women were more valuable in society during their childbearing years–women are valued for youth and beauty. Women are told that they’re great until about 35, then it’s all anti-wrinkle, anti-age, Botox, stop this at all costs.
And you’ve got 75.8 million baby boomers, which is now the second largest part of our demographic. Millennials just surpassed them as far as largest part of the demographic. Half of these baby boomers are women. They’re all having this experience of everyone telling them that their value is declining, and it’s really not an accurate picture. I don’t subscribe to this viewpoint. I think that your life gets better. Every stage of life is a different kind of beautiful.
So, anyways, Cindy, we would have these conversations and I was learning about ecommerce and I said, “Hey, really, we ought to start an ecommerce business and a makeup line because you are a former makeup artist, and a blog around this particular topic.” And Cindy’s response was like, “Does this world really need another tube of lipstick?”
Andrew: That’s exactly what I would have thought at the time. And I’m guessing you said, “Look, it may–what it needs is your perspective on it and my marketing and the two of us together will do wonders.” Did you partner up 50-50 even though you were putting in the money?
Ezra: Yeah. Actually her–I didn’t have any money at the time. I was working at a makeup studio running the wig business.
Andrew: I see. So you started this before the wig business.
Ezra: No, this started after the wig business, but the wig business was just making me enough money to pay my rent in New York City. The margins on wigs were very low. Drop shipping, you’re only making like a 20% margin. I did not, by any means, have a lot of money.
So, basically, the way we got to start it was like a lot of the content that Cindy has produced for BOOM was informed by this place that I grew up, by that content. I thought, “Hey, look, we don’t necessarily need another tube of lipstick, but we do need this message amplified. Like when you talk to women about this, they respond. This is something that is different. We can have a positive impact and create sustainable, high quality, relevant products.”
Andrew: Okay. So what was the breakdown in the ownership of the business then?
Ezra: Say that one more time?
Andrew: What was the ownership breakdown? Did she own the company and you helped or what?
Ezra: Initially, I owned 10% and she and her husband owned 90%.
Ezra: And then over time as we saw that my marketing skill set and–essentially, I just ran the company, so then the ownership changed to where now my wife and I together own 40% and Cindy and her husband own 60%.
Andrew: I see. Okay. How did you guys–you guys got up and running, where did the original set of customers come from?
Ezra: So the way we started was by creating a bunch of content that was in this sort of–my viewpoint is that a business is a community of people and several different communication mediums and that really what you’re doing as a business is you are engaging with a person around an experience that they’re having and hopefully adding value to their life and then making them offers that you think are relevant to them.
So we start all of our businesses with content, because what I want is a brand that is engaged with a specific group of people around a specific experience that they’re having. So we started with a blog. We started amplifying on Facebook. We didn’t have a lot of money. So we spent very minimal amounts to amplify it, but what was happening was like it was starting to work. It was like, “Whoa, people are responding to this message. We’re making sales.”
And we also engaged a PR firm. So we engaged a traditional publicist who got us some pieces of press. Like we got this San Francisco Chronicle article that was responsible–like we had done $100,000 in revenue in like a six-month period. And that one article generated about $100,000 in revenue and we thought, “Wow, if we can get mass exposure, this message really works.”
Andrew: What was the message that got you so much press?
Ezra: What’s that?
Andrew: What was the message that got you so much press?
Ezra: It was just the story of Cindy and the story of our brand, which is kind of what I just told you in short-form.
Andrew: Yeah. I see it. I’m looking at early versions of the site. The site looked good even back when you started, which was what, 2010, 2011?
Ezra: 2010 was when the site went live. Yeah.
Andrew: Yeah. It’s just full of press. I see a USA Today article. I see a Style article CNN . . .
Ezra: The first channel of visibility that we leveraged was traditional PR. It made us some sales, but it just dwindled out pretty quick because it wasn’t like–they didn’t want to keep running the same story.
Andrew: And the story was essentially, “Look, baby boomers can look good even as they age.” That’s the big message.
Ezra: The story was like aging was not inherently bad. We have a pro-age viewpoint here and our cosmetics are sheer and you can see right through them and they’re about celebrating you as they are now and let’s reclaim makeup for what it was meant for, which was a celebration of the beauty that is within. Let’s not approach makeup and cosmetics from a fear-based perspective where we’re trying to hide or cover up or we’re being conditioned by society to believe that we need to remove the wrinkles from our face, etc.
Andrew: All right. I’ve got to talk about my sponsor, but let me ask you this–the plugins that you have, only Shopify, not WordPress, right?
Ezra: That’s correct. Yeah.
Andrew: Okay. All right. Guys, listen to this–imagine you’re listening to this interview and later on in the interview you’re going to realize how Ezra realized that he needs to have one-click upsell for his Shopify store and he created it for himself and then he said, “I’m going to make this available to others,” and then he ended up with a product that now he’s selling, a software product that he’s selling to other people and is generating a lot of revenue. Maybe you’re sitting back and you’re saying, “I could use something like that, but I’m a WordPress site or I’m a something else site.”
Well, at that point what you could do is say, “Damn, I wish that I was on Shopify,” or what you could do is say, “I’m going to find a great developer who can actually build something like this for my WordPress site because there are other people who sell on WordPress,” go to Toptal, get the best developer possible to build something rock solid that you can build a business on, say basically look, take what Ezra has and make it available on WordPress. The developer will make it available to you so you can have one-click upsell on your site and then you take that plugin and you start selling it to other people who sell on WordPress.
Now, this is just like a thought exercise, but what I want you to take away from this is not that you should be copying Ezra, though it sounds like he’s okay with it. You’ve been nodding as I say this. What I want you to take away from this is that if you have a pain in your business that you haven’t solved because you don’t have a great developer or you don’t have enough work for a full-time great developer, cut that out.
You do have great developers available to you at Toptal. They screen them out, make sure they get the best of the best, top three percent, excuse me. I know that because they’ve rejected some of my friends who are really smart and went on to do great things because they want not just great people but fantastic great developers who also are good people.
And so, any idea that you have, you go to Toptal, you get a great developer to build it for you. It helps you with your business, helps you overcome your pain and then you can take it and turn it into a product that you sell to other people who experience similar pain. Anything that you want, Toptal is there for you, they’re great developers–full-time, part-time, whole team of people, just one person, project basis, whatever it is, whatever your platform, you can go to Toptal.
The URL that they’re giving us is not the same one they give everyone else. They’re giving us something that’s unique because they want to give anyone who is part of the Mixergy community 80 free hours of Toptal–excuse me, 80 free–wait, let me read it exactly as they have it. Mixergy listeners are going to get 80 hours of Toptal developer credit when they pay for their first 80 hours and that’s in addition to a no-risk trial period of up to two weeks. That’s a fantastic offer available at Toptal.com/Mixergy, Top as in top of the mountain, tal as in talent, Toptal.com/Mixergy.
Ezra: Andrew, you said–I just want to say something really quickly.
Andrew: Yeah, hit me.
Ezra: Apparently, I want to say a lot of things.
Andrew: I have a lot I want to hear from you.
Ezra: I do want to say this one thing, which is my viewpoint is that in life, what you want to do is develop the skill set of mastery, which is simply the willingness to put your attention in one area consistently over time. You pick up the instrument 30 minutes a day, you’re going to get better at it.
The way that we made BOOM work was we paid attention to it consistently. We tweaked. We iterated. We moved in the direction of trying to grow the business every day for five years before it actually took off. So it’s about consistent action in the direction of your goals. We tried a bunch of stuff.
What finally made BOOM work was we were doing a couple hundred grand a year for several years, and then, in 2014, we like tripled in size, 2016, we tripled in size. What it was was finally really, really consistently putting attention on advertising the business, which we hadn’t done previously. As soon as we started consistently leveraging advertising, which by the way, the training that you and I just did before this call on Facebook Messenger bots, we touched on some of our advertising philosophy.
Which I think if you’re interested–if you have a brand that you’re using to run ads for, we spend about $6 million a year on Facebook ads, which is a lot to some people, a little to other folks, but like we have figured out how to amplify brands. We’re doing this across multiple brands. And so we’ve got some strategy and tactics that are relevant to any business owner, whoever’s running your ads that you should check out, but that’s what did it for us. It was the consistent advertising.
Andrew: Tell me what didn’t work for you. Give me an example of something that didn’t work and then an example of something that did work that helped in the early days to take off, back when you weren’t spending this much money on advertising but you were just starting out.
Ezra: We were trying very hard to make our brand work by just trying to shove our product down people’s throats, basically, like, we were just like–
Andrew: What do you mean?
Ezra: Meaning like all of our advertising, we were creating all this wonderful content and we weren’t amplifying it. What we were amplifying, what we were advertising was like the store and the product offering.
Andrew: So the ad would go to a specific product.
Ezra: Yes, which is how I grew up in the industry–search, find, buy. I grew up on search engine optimization. I grew up on Google AdWords. I thought the way you advertised was using–telling people to buy your products, but what I didn’t take into account was that traffic sources change sales funnel.
Here’s what I mean by that. When you’re using a query-based traffic source, which is the traffic sources that I grew up on, people are searching for something, you can show them a product. When you’re using a contextual traffic source, which is what Facebook is, which is what Instagram is, which is what Twitter is, where you’ve got multi-data point contextual targeting, i.e. you’re building groups of people based on multiple different data points–you know how old they are, you know where they live, you know what they’re interested in, what their past behaviors are.
You can’t just say buy this product unless it’s a very cheap impulse buy type of thing where it’s like $10, $15. If you’re trying to make any kind of sale work in today’s environment, you’ve got to start with a value first approach, in my opinion, with a content first approach and once we switched to that and we started figuring out who was interested and where would they live and what devices worked, that’s when things started to work for us.
Andrew: What did your first ads look like when they were directed not at a product but at more of a connection with the audience, with your potential customer?
Ezra: We would literally just have a blog post that we would amplify to women who were–our first group was just like women over 50.
Andrew: Okay. So it was women over 50 should get this blog post and then somewhere on the blog post was a link to the store?
Ezra: Yeah. The blog post was hosted on the website. So the header would have a link to the store, the footer would have a link to the store. But even back then, what we were trying to do was once you landed on the blog post, get you to sign up. So we had all these different things that were designed to get you to sign up.
I don’t even think retargeting existed at that point. Maybe it was in its very early stages, but we certainly weren’t using it. So we were trying to get people on our email list, then we would email them and try to offer the products and some very small fraction would watch the video and then purchase, but mostly people were watching the content, signing up for the email list and then making purchases.
Andrew: And that was the big change.
Andrew: And today you talked to us in the other recording that will be on Mixergy about the whole–your funnel is really long, it’s very intense and it’s based on not just did they watch a video on Facebook, but what percent did they watch and based on that, you know how to retarget them.
Andrew: Give me one technique that would work for someone today who’s relatively new for ecommerce?
Ezra: If you’re brand new–here’s the thing, we know for a fact that two-thirds of purchases that are started on a social network start on one device and continue on another. People are moving from small devices to big devices to make purchase decisions. We just talked about this in the previous episode. So what you want to do is give yourself the opportunity to reengage with people because you know that they’re going to purchase from you on that first engagement.
So, if I was brand new to the game, what I would do is I would create a video. I would think Kickstarter. What does Kickstarter do? It enrolls you in a story about a brand and what they’re up to in the world and talks about the solution that they have to a problem that a group of people is facing.
Think Kickstarter video–create a Kickstarter-style video for your brand that tells your story about who you are and why you are and what problem you solve and amplify that on Facebook and then retarget anyone who watches 50% or more with a direct product offering. That’s like a blanket statement, really easy way to amplify a brand today that would really work.
Andrew: At that point, if they watch 50% or more, you’re saying it is okay to offer them something. It’s going to work.
Ezra: Totally because they’ve consumed three minutes of face time with your brand. If they watch like let’s say less than 50%–now, I’m considering a four to six-minute video here. If you’ve got like a one-minute video, then you might want to do 75% or 95% of viewer audiences.
Andrew: I see.
Ezra: If you get someone–it’s like $0.80 right now on average to get someone to watch like three to four minutes of content on your brand. If that content is sort of produced well, the audio quality is good and you’re actually telling a good story and solving a problem that a group of people are facing, you should be able to make that work.
So I’m a big fan of native video assets on the social medium to engage someone in initial conversation, not ask them to leave that social medium, but just add value to their life by telling them a story or engaging them in a conversation. Then after they’ve proven interested, follow up with them and ask them to engage with your product offering.
Andrew: There’s something that you said earlier that I wrote a really bad note on my–the envelope that happened to be in front of me. You said that you went from 10%t to 40%. How?
Ezra: 10% to 40% of what?
Andrew: Of ownership of the business.
Ezra: Oh, of ownership? Because all of the value in the business, all the revenue was coming from my activity and my marketing. I was learning over here through my wig business, through SmartMarketer blog, which I had started through this industry that I was in, how to make brands go. And so once we all realized that like what was happening was I was driving the revenue of this business, in order for me to be more incentivized to spend more time on it, I needed more ownership of the brand.
Andrew: And then did also putting more money in the business give you more of a percentage ownership?
Ezra: No. Any money that I’ve put in I’ve gotten out. It was more about I want to feel sort of incentivized to put my attention on this brand because I had BeeFriendly Skincare. I had SmartMarketer. I had other things that were making me money that were obviously going to be my priority because they were more–they had more upside for me.
Andrew: I see.
Ezra: But the thing is I cared about BOOM in a way that I didn’t care about the other brand that existed at the time, which no longer exists, because BOOM had–it just had this special, I don’t even know how to describe it, it was changing people’s lives. It was changing the way people viewed themselves. It was having a positive impact beyond selling a product.
Since we had that experience with BOOM, you’ll notice that the tagline for SmartMarketer is Serve the World Unselfishly and Profit because I believe that if you are in a role of service and you are doing unselfishly, that you can’t help but profit. I think that is a descriptive statement, Serve the World Unselfishly and Profit. I think that’s what happens. That’s what I’m out to do in all my brands, which is why I take this content first approach.
Andrew: Okay. When you go and try to work out a deal to get a bigger percent, is it based on results, like if I hit this milestone, then I get that? No?
Ezra: Actually, they came to me and they were like, “Listen, we want you to have more ownership. We want you to have more ownership. We want you to do more of what you’re doing. What do you want?” So we just came up with a fair deal, whatever was fair.
Andrew: The business was started, according to your LinkedIn profile, 2011. 2012, again, according to your LinkedIn profile, you created SmartMarketer, which is the site that you were just talking about where you teach marketing. I’m looking at early versions of the site. It seems like it wasn’t until March, 2013 that you actually had content on this WordPress site. I’m wondering what you were trying to do with the site.
Andrew: Is it weird that I’m looking at your past history like this?
Ezra: So SmartMarketer, I didn’t really intend to be an influencer or personality or teacher or coach or whatever you want to call me in this space. What happened was back in the day–our industry has evolved. We have a real industry. We didn’t have an industry. It was a bunch of bums on their couch who met up at masterminds like in 2007, 2008, 2009, 2010. Our industry was just evolving.
I through the forums found out about all these mastermind groups, ended up hosting and running the SEO mastermind because I believe in being the catalyst for community. I want to be the bartender at the party because everyone wants to come talk to you. I want to create the experience so that I have access to the community because I think that you get what you want from people who have it and so I was interested in marketing, so I found all the marketers.
And so through this mastermind that I was running, I ran into these guys at DigitalMarketer, Ryan Deiss, Perry Belcher, Roland Frasier, Richard Lindner. They were like, “Hey, man, we want to do a course. We want you to share your ecommerce experience through our brand and we want you to teach a course.” I took some convincing. I was like, “I don’t know, man. What am I going to teach people? Don’t people know this stuff?” They convinced me to do it. I did the course. It was responded to extremely well.
Andrew: What was the course?
Ezra: It was called Brown Box Formula. It was about how to start a drop shipping business. It came out in, I think, 2013.
Andrew: Then they produce it with you, you teach it, you co-sell it?
Ezra: They sold it through their platform. I got like a 10% royalty or something. But what happened was people started to ask me to speak at events. So I started to speak at these events, and I remember very distinctly my first speaking gig, I got off stage and like some woman was crying. She was like talking about how I changed her business.
I realized at that point, I was like, “Man, I have a knack for this stuff.” I like it. I enjoy it, which is the same thing as I like it, but I’m not just repeating myself. And I’m good at taking this stuff and making it understandable to people. I really ought to do something with this.” That’s when I started the SmartMarketer blog.
And what I call what we do is I call it the chocolate-covered carrot. My wife really does not like that analogy. She wants me to come up with a better one. The reason I call it that is because people come to me to learn about how to drive traffic, how to make more money, increase their average order value, but what I’m actually doing is that’s the chocolate.
What I’m actually doing is talking about integrity, relationship, talking about communication, talking about value and brand and intimacy, talking about the things that actually make a business work, which is connections with human beings around content that is valuable to them. I’m talking about not just drop shipping some random thing from China where you don’t know how it’s made.
Like we are promoting a message of integrity and purpose and passion and intimacy that is a little bit different than what you see in the space. And also, we had great training on how to do Facebook ads and stuff like that. We still do all that. We do it really well. We love it. We also have this layer of like–you’ll see videos on my blog of me and my wife talking about–my wife and I talking about our relationship and how we look at–you’ll see a new couple posts in that regard.
We are doing two things here–we are creating content about how to grow your business. We’re also creating content about how to have a pleasurable life that allows you to actually run a business that’s successful because you’re not burnt out spending all your time working.
When I first came around, everyone was talking, “Hustle, grind, sacrifice.” I’m like, “Dude, that is misguided advice.” That is not really what you want to do. I run into–I get the opportunity, just like you, to relate with thousands of entrepreneurs every year. Number one thing is burnout. Everyone is burnt out. Everyone is overworked. Everyone is looking diminished and putting in 15-hour days. It’s like yeah, that’s necessary sometimes, but that’s not the status quo. That’s not what you want your life to be like. What’s the point?
Andrew: What do you do now for fun?
Ezra: I do jiu-jitsu. I hang out with my wife number one, talk about life and relax and walk in our 10 acres of forest and chill out and skateboard.
Andrew: It looks like you’re in a jiu-jitsu studio of some kind right now.
Ezra: Yeah. This is my jiu-jitsu studio here.
Andrew: Yeah. The walls are padded.
Ezra: I got [inaudible 00:37:53] there in the corner.
Andrew: We were going to record this last week and then there was a mat on the floor. I was wondering what that was about.
Ezra: Yeah. Well, that was as a guest bedroom. Sometimes we put a mat down here for people to sleep downstairs. But I’m interested in people and I think that the juice, the good stuff in life, it is relating with other people is connection, intimacy. I like to hang out with my friends and talk about life, but I also do love jiu-jitsu and marketing.
Andrew: I hate to go from that to this, but what kind of revenue are you guys doing at SmartMarketer?
Ezra: SmartMarketer did $3.5 million in 2016. We’re projected to do a little bit more than that this year.
Andrew: How much of this is profit for both of those businesses?
Ezra: What’s interesting about BOOM is profit margin is on the $18 million, it’s about $4 million. So I can’t do that math in my head, maybe 25% to 30%. SmartMarketer is a little bit higher. We’re about 50% margin on SmartMarketer because it’s information publishing. But our businesses work kind of in a weird way where–so BOOM, BeeFriendly and Zipify are 100% product-based businesses.
So BOOM only hires support people, BeeFriendly only hires support people, Zipify only hires developers, and those brands are focused around product. Then those brands, which I own or have ownership in, buy marketing services from SmartMarketer. So SmartMarketer on a monthly basis, SmartMarketer has copywriters, project managers, advertisers, social media people.
Andrew: I see. Why do you structure it that way? Why don’t you let them have their own marketers?
Ezra: Because it’s easier from an organizational and infrastructural standpoint to have our core competency of marketing all under one house and project managed under one house and then have these other brands be 100% about the product and then buy those services from SmartMarketer.
Andrew: I see.
Ezra: So my payroll is offset by my other brands.
Andrew: I see. Does SmartMarketer take on work from other people? I know you guys have courses on there.
Ezra: Yeah. It’s been an iterative process. I’ve failed at many, many things, which is why I think consistency is really the key here and there’s no secret to it. You’ve got to keep at it. I had a services business for a long time–the short answer is no and then I’m going to ramble a little bit.
We used to sell advertising services, social media services, development services. I could not figure out how to draw a container around services. I just failed at this because I want to help people. I don’t want to say no and I just–I was a little younger. I’m now a little older and I understand a little bit more about container and stuff, but I didn’t get that. So I could never draw a boundary with a client and hold it.
So then I ended up never making any money on services. So I thought, “I cannot sell services. I am failing at this.” That’s why we focus on only doing education. We don’t do anything for anyone. We do and then document. We figure out what works. We do it for our brands. We document it and we’ve really specialized in getting really good at that.
Andrew: All right. Let me take a moment to talk about my sponsor and then I want to come back and ask you about the software business. Somehow you got into software. What’s the percentage–how much does software do in sales?
Ezra: Now we are at $120,000 a month with our SaaS business. We’re about 12 months into it. I will tell you exactly why we did it and what we do there.
Andrew: All right. So the sponsor is called ActiveCampaign. Here’s the thing. Ezra, you might have noticed this. Every NPR show seems to just talk about this standard email marketing software, email service providers. That’s what they’re called.
Andrew: We know what it is. They’re all very, very simple to use and they look really nice and polished and so every entrepreneur who needs to send out email says, “I’m going to go sign up for one of these big guys that does email right and their name is everywhere and NPR trusts them. I’m going to go sign up.”
The problem with those guys is they just let you send out stupid email. Stupid email means the same email to everyone. You sign up today, you’re going to get the same email as someone who signed up a year ago. You buy today, you’re going to get the same email as someone who didn’t buy. That is not the way that email should work. It needs to be much more targeted for it to work out well. The problem with targeted email is it was either too expensive or too complicated. Actually, it was often both.
That’s where ActiveCampaign said, “This is our opportunity. We have a name. We’ve been around for a long time. We have clients. Let’s just step it up. Let’s make this the email marketing–the marketing automation platform that anyone can use to really sell, to not just buy it and then think I have all these features and never use them, but actually buy it and have the features they will be able to use.”
That means things like if somebody comes on to your site and expresses an interest in I don’t know what, let’s talk about the wig business. Let’s pretend that someone has a wig business right now. If they’re interested in mullets, we should just be sending them mullets. That’s what they should get via email.
If they saw video about how to put on the Elvis side burns and they got to the end of the video, if you have ActiveCampaign, you could send them an email about an Elvis wig being 10% off because you know what they watched, that’s what ActiveCampaign is about. Somebody takes action, you keep track of it and then you can target based on the action they took on your site.
Let me tell you guys this–even if you don’t sign up for ActiveCampaign, I really urge you to go check out their website because it’s beautifully done and it’s going to show you all the different ways that you can automate your marketing right. Even if you choose to go with one of their competitors, you should take a look at the flow chart that’s on the page that I’m about to tell you about because it will give you in one image an understand of how you should be doing email marketing, marketing in general.
Here’s the URL. It’s ActiveCampaign.com/Mixergy–ActiveCampaign.com/Mixergy. Just scroll to the middle of the page and you’re going to see that one flow chart that explains how marketing should be done. If you decide to work with them using that URL I just gave you, it’s going to give you your second month free and you’re going to get two free one on one sessions with their experts. They’re going to work with you one on one about your business and tell you how you can do marketing automation right and really get something personalized.
Finally, if you did go with one of those other products like the one that NPR is talking about–NPR talks about a few, actually, I should say–if you did go with the wrong company, they will migrate you for free. Go check out ActiveCampaign.com/Mixergy for that offer, ActiveCampaign.com/Mixergy for that offer and also to understand how marketing should be done, how smart it can be.
Andrew: You were starting to tell me how you got into software. I had this vision of how you did it. Talk to me about how it really happened. How did Ezra Firestone become a software entrepreneur?
Ezra: Well, what was interesting is like I, again, this is part of the we’re not doing anything special here except for having fun. And this is another aside–everyone has these grand aspirations about building these billion-dollar unicorns. No. What I want to do is enjoy my life, have fun, add value to the folks, my user base, my community, my subscribers, and if I’m doing that, my business will grow, but I don’t have any grand, like I’m not trying to–I don’t have any agenda beyond doing that.
I also think if you’re listening to this podcast, you have a responsibility to leverage where you sit in society, where you sit in the world to generate surplus and use that surplus for good things in the world because you have the ability to do that. It’s easier for you to do that than it is for some other people. So use that ability–
Andrew: You are such a hippie, Ezra. You are such a hippie.
Ezra: I know, dude.
Andrew: I’m asking you about your money, where you got the business idea and you’re telling me about loving the world. You basically are putting a flower in my hair.
Ezra: I just hugged a tree when you weren’t looking.
Andrew: Can we talk about how one of the things you told me on that drive over to the dinner is that you want to create another commune?
Ezra: Yeah. I do. Well, I don’t really want to create a commune. What’s interesting about commune is like where I grew up, people are sharing houses. I grew up, there was like 20 rooms in one house and there were a whole bunch of people. Everyone’s sharing kitchens and bathrooms. My wife ain’t having that. She doesn’t want to share a kitchen.
Andrew: I don’t want that either.
Ezra: But what I am interested in is shared responsibility. I’m interested in support around raising kids. I’m interested in support around schooling. We’re confronting this like how are we going to have children and maintain the kind of lifestyle that we have and also not necessarily–yeah, you can hire living help. Luckily we’re in this position where we can afford that.
We’re confronting this conversation about how do we have children in a way that’s pleasurable. What we see is that it would be really fun to do it with friends who also wanted to have kids at the same time. It would be really fun to have some form of shared responsibility around parenting and watching kids and things like that. So, yeah, we’re in this conversation.
Andrew: I think the ideal for me would be–I’m not much of an apartment person anymore. So I would want kind of like if you saw “The Godfather,” where they had that compound, something like that. I want multiple houses in the same area that’s just ours and then everyone can say things like, “Hey, you know what? I’ve got to go out tonight. Can somebody keep an eye on the kids?”
Ezra: Maybe you’ve got a shared–there’s one big place that’s like the community place. Some people I know are buying cul-de-sacs, multiple houses in a court and kind of trying it out that way.
Andrew: Yeah. That will work. It’s not the same. Tony Hsieh also seems to have that thing with his RV campground thing. I forget what it’s called.
Ezra: Yeah, I’ve seen it.
Andrew: All right.
Andrew: Tell me how you got into software. What got you into it?
Ezra: I was actually selling–remember that first course I told you about, the Brown Box Formula published by DigitalMarketer, who I love them. They got me into the game. I still hang out with them to this day. Genius, by the way, love those people, go to their blog, DigitalMarketer.com. That course came with a theme, a piece of software for BigCommerce, that was, “Here, you want to have a replica ecommerce store to mine that I’ve done all these split tests on? Take this piece of software. Put it on your store. Upload it. It’s going to look just like mine.”
I did not yet understand that when you’re selling software, it really makes sense to have people pay you on a subscription basis because it’s going to break and they’re going to want it to be fixed. So, for years, I sold themes. I sold BigCommerce themes. I sold Shopify themes. I would build stores for people. I was doing sort of high-end development–a couple grand, we’ll build you a store, $20,000, we’re build you a Magento site.
So I had a development background in that I learned how to build Yahoo stores on RTML. I had been working with development teams overseas to build these ecommerce stores. So I was leveraging that. I was basically buying and selling labor early in my career where I’d be like, “I know what you need. You need an ecommerce store. You need it set up this way. You need it functioning this way. You need all these bells and whistles. I will build that for you. I’ll use a development team. I’ll make it happen.” People didn’t know I was outsourcing the dev. I was saying my team was doing it, but I was using a–which was my team, they were just white label.
But basically I then figured out that number one, I don’t know how to draw boundaries or containers around service clients. I just keep doing work for people for free. I’m losing money selling these one-time pieces of software. But what kept happening was there was development being needed for my ecommerce stores for them to function the way that I wanted them to function. And through SmartMarketer, I had this platform and this community of people who were interested in having the same thing that I had.
And the thing about SmartMarketer, it makes a couple million bucks a year, wonderful business, I love it. It’s not an asset. It’s a cash flow business. As soon as Ezra–it’s based on my personality. It’s based on learning from Ezra. As soon as Ezra goes away–I am talking about myself in the third person, which feels a little weird–the business is gone.
Ezra: So how do I take this community that I’ve built, that I’ve built engagement with, that I’ve built a relationship with and translate that into an asset-based business for myself. I saw Brian Moran do it with SamCart. I’ve seen some people go from information publishers to software as a service providers and I thought, “Wow, maybe software as a service is the way that I can sell services that have a clear container, that have a clear boundary, that give me recurring subscription revenue, which is something that I had learned about in my ecommerce world that was a cool thing to have and a good way to do business.”
So I started Zipify, which is applications for Shopify because Shopify, while it is the best ecommerce platform out there, it lacks a lot of these direct response marketing principles that you know about from the information publishing world, that I know about from the information publishing world. So, I started building these apps.
Andrew: What’s the first app that you created?
Ezra: What’s that?
Andrew: What’s the first one you created?
Ezra: The first one I created was the one that you were talking about, the one-click upsell application that allows you to do post-purchase one-click upsells for Shopify. Now, what’s interesting about one-click upsells is everyone knows about them, right? You know a purchase and before you take someone to the thank you page, you say, “Hey, would you like to add this on to your order? Here’s a discount on some other item. Yes or no? You can add it on.”
It’s very easy when you know what the front-end product is. You know what they bought first. You know what to offer them second. But what about a multi-SKU ecommerce store where any number of things could be in the shopping cart. What do you do in that case? So, we had to write algorithms and solve this issue of how to manage post-purchase one-click upsells for a multi-SKU ecommerce store where any number of things could be in the shopping cart.
Andrew: I see. To use the previous example, if I bought a mullet, you don’t want to say, “Do you want a mullet with that,” right?
Andrew: McDonald’s doesn’t have you buy a hamburger and says, “Do you want a hamburger with that?” They say, “Do you want fries with that?” because they know that a hamburger and fries go together. So that’s what you built. How did you know that was the first product you should create?
Ezra: Because it was the first thing that I wanted as an ecommerce business owner who was selling on that platform. I just do what I want.
Andrew: How did you know that other people would understand it, let alone want it enough to pay for it.
Ezra: I happen to be pretty good at communicating. I think that fundamentally marketing is communication.
Andrew: What did you? Did you talk to them first, or did you say, “I know how to sell this because I know they need it, I trust myself to sell it?”
Ezra: Dude, I just started building it. I’d been selling information, by the way. I’d been selling courses. I’d been doing webinars. I’d been selling information products. The way that I sell all of my software and all my information is all the exact same thing–all I do is produce a case study. Remember whitepaper marketing from back in the day? That’s what I do today. I just do it online.
So, basically, I produce a case study about how I did something and I put a ton of value in it. I make it so that if you consume this piece of content, you could take ideas from it and implement them in your business. You do not need to purchase anything that I’m offering. Then I say, “Hey, if you enjoyed this and you would like more, watch my webinar or visit my sales page about this offering that I have.” Then I offer them software as a service or an information publishing product. That’s all I do.
Case study content around how I did something or I how I use some piece of software to grow my business, here’s how I did it.
Andrew: I see. You knew, “I did one-click upsell, I know I’m going to be able to do this for other people.”
Ezra: Yeah. Who doesn’t want to increase their average order value? And my application company is all built around average order value, lifetime customer value. We don’t do logistics. We don’t do any of that. All we do is how can you create more value from the order perspective? The reason we do that is because it’s easy to sell that, number one, and number two, if you’re making more money, you then have more money to invest in better product in better support, etc. So it’s a pretty easy thing to sell.
Andrew: I’m imagining you sold to your list then, right?
Ezra: What’s that?
Andrew: You sold to your list, to your site?
Ezra: Sold to my list, then advertised on Facebook to a bunch of other Shopify people, went and got folks I knew in the industry to endorse the application, to do case studies on it, to amplify it to their community, although to this day, we’re at $120,000 a month now and like maybe only 5% of that is affiliate. We do all ad model businesses. Everything is advertised because that’s our skill set, you know?
Andrew: I was looking at the early version of your blog. One of the first posts was “How to Do a JV Partnership.”
Ezra: Oh my god.
Andrew: You were big on those back then. Not anymore?
Ezra: I think that that’s because I had just gotten published by DigitalMarketer and I was like, “Man, this whole JV thing is amazing.”
Andrew: Oh, I see.
Ezra: Yeah. I was just like–I had just experienced firsthand that joint venture was cool. I was like, “I need to tell people about this immediately.
Andrew: That’s the way it kind of works for you, right? “Here’s what worked for me. I’m going to go out there and now tell everybody about it.”
Ezra: Pretty much, I do and then document.
Andrew: You know what? I’m looking at where your traffic comes from because I’m kind of a SimilarWeb.com addict. One of your big sources is My Shopify site. It’s other sites sending you traffic. I’m guessing you have them link back to your app?
Ezra: Are you doing that for Zipify?
Andrew: Yeah. There’s MakeItRain.com sending you traffic, for example–no, MakeItRain.MyShoify.com, which basically means the My Shopify store for RainPerformanceCenturion.com. Every Shopify store has a My Shopify URL. Do you have anything that has your store owners link back to you?
Ezra: I don’t think we were doing that because I always found it kind of annoying when you forced your subscribers to tell everybody about you against their will by saying, “This service was provided by this company.” I only want people to do that if they want to. I don’t want to build it into our application. I don’t believe we have that–
Andrew: It’s pretty clever. There are a lot of people who do that, right? On the positive side, I think Sumo.com does it really well.
Ezra: Free service, though, right?
Ezra: They do it with a free service. They give you something for free, and then when you use it, it says it was built by this thing.
Ezra: They’re not saying, “Pay us $37 a month and then you must tell everyone about us.”
Andrew: You know who does that? ClickFunnels does it. If you create your first page on ClickFunnels, there will be a little thing on the bottom right corner that advertises ClickFunnels. You have to uncheck a box to get rid of that.
Ezra: Maybe we should add it. I try to be less aggressive. I try to like err on the side of being cool.
Andrew: For the most part, what they do is give you an affiliate commission, right? They keep it on there and then you get a commission every time somebody buys, but I think you’re right that the more popular model is give it to you for free and in return, you put branding for our product on your site. How did you know what the next tool should be? I see the next tool was Zipify pages, which is build quality conversion-tested landing pages. We’re talking about like Leadpages for Shopify, right?
Andrew: How did you know that was so necessary.
Ezra: Leadpages for ecommerce. All the landing page builders on the market are built for WordPress and they’re built by information publishers or coaches, speakers, authors or people who are not–ecommerce is very specific and it requires specific templates. It requires specific code structure that integrates directly into Shopify so you don’t have subdomains and all this kind of stuff. Basically I saw that people, like it’s really hard to code a high quality landing page on a Shopify store. You need a developer. You need a designer, all this stuff.
We, again, had this pain point where it was taking us with designers on staff, with developers on staff, 30 to 45 days to put out a new landing page. I thought, “We’ve got to fix this.” I knew about landing page builders because I came from a community that had them and I thought, “I’m going to build this for Shopify.” It took me like 18 months or maybe a little bit less.
Andrew: 18 months to create this?
Ezra: $150,000 into it.
Andrew: The price is worth it, but wow.
Ezra: I’m just basically breaking even on this software business.
Andrew: Who did you pay to build it?
Ezra: I actually have internal development. I’ve got a whole development staff.
Andrew: I see.
Ezra: But initial I started out on Elance and oDesk, and then I eventually started having development staff in house as my businesses grew and then as we started selling more and more software type stuff, I had developers. Then now as we have software as a service, I’ve significantly expanded my developers. I’m a big fan of bringing stuff in house as quickly as possible because I think that service providers have many masters and they don’t really care that much about your stuff when it comes down to it.
I think the first thing that you bring in house is customer support. You shouldn’t be doing that yourself. The second thing that you bring in house is platforms–so someone to do your Leadpages, Google Analytics, Facebook Pixel, WordPress, Klaviyo, ActiveCampaign–someone to manage all those. Everyone gets bogged down in the operations of the platforms. I’m like watching people–I watched my progression from being a single operator who did everything himself to learning to delegate, learning to project manage, learning to buy help effectively because you are buying help when you’re hiring someone.
Ezra: And help gets better over time. The first week, they’re not as good as they are the eighth week.
Andrew: So you would hire someone to just use all the platforms for you. So WordPress is an example of one. I’m guessing Zapier, that kind of thing?
Ezra: Shopify, anything that is a technology platform, I have them–do Slack channels that feed in the blog posts of every tech platform that we use so that my platform person can be reading those for three hours a week taking notes about–
Andrew: You’re forcing them to study the platform they’re using?
Andrew: But do you think that–I get as a first hire, it would be customer service, but do you think there’s a full-time job in managing all these platforms?
Ezra: I think your technology stack is your business. Maybe you’re hiring that part-time at first, 20 hours a week. But most of the time, I’m like, “Where do you spend your time?” when I talk to ecommerce business owners. “Well, I’m building out my Klaviyo flows.” It’s like, “No, that is not your job. Your job is to hold vision and container and strategy and figure out what to do. Not to build the flows in ActiveCampaign.”
Andrew: What else would you do? Would you also have somebody go in Asana and manage your Asana for you?
Ezra: That’s project management. So then my next role is project management. The next hire I would do is someone to actually organize and manage the project flow of what’s happening in your business and who’s doing what.
Andrew: I see.
Ezra: That’s like third.
Andrew: All right. What’s the next role after that that you would do?
Ezra: What you could do is take the platforms person if you’re just starting out and get them to learn advertising at the same time because my fourth one is advertising.
Andrew: Really? Is advertising something that is easy to teach somebody who’s like managing your software?
Ezra: Everyone in my business besides designers and developers have been trained from the ground up–my advertisers who manage–it’s only one guy. He manages $6 million in advertising. My copywriters–I went and found people who knew how to tell stories, Hollywood screenwriters. Everyone in Hollywood is not making any money. Teach them direct response. Put them through all of Dan Kennedy’s books, out them through the Eugene Schwartz copywriting books.
So I think that if you’re willing to invest in your people, you’re willing to give them autonomy and freedom and pay them for six months just to learn, like people are like, “I hired someone and they didn’t work.” No. You hired someone and you didn’t work. It’s about what you put in to them, right? Did you give them access to education? Did you give them a way to win? Did you put very clear deliverables and specifics around what you wanted them to do? It’s on you to make sure your help is helpful.
Andrew: So six months you don’t know whether they can even deliver and you’re okay with that, paying someone for half a year, you don’t know whether they can even deliver if they’re the right person?
Ezra: I’m willing to take that gamble because I am interested in having the people who work for me be the best in the world in their field. When I bring someone on I say, “Listen, I want you to be one of the best copywriters in the world within 12 months. Here’s how I’m going to get you there. I’m going to have you read all these books. I’m going to have you do all these courses. I’m going to talk to you one hour a week about what you’re learning. I’m going to have you journal. I’m going to have you have a Slack channel that’s populated by every copywriting blog, and I’m going to have you spend three hours a week in there.” I give them a way to achieve this result.
Andrew: What else do you use? We’re definitely over time here, but I’ve got to just understand your process. You use Slack to education your people. What else do you do in Slack?
Ezra: We use Slack for like a lot of stuff. We use Basecamp. We’re old school, man–Basecamp.
Andrew: I prefer Basecamp to Asana. The reason we use Asana is someone on the team installed it and started using it and the reason they did it is it’s free for the first 15 users. Now, I don’t think it’s the best because there’s too much going on in Asana but I’ve learned to like it.
Ezra: We tried Mavenlink. We tried LeanKit. We tried Trello, which actually we’re flirting with Trello again. I hear rumblings.
Andrew: Ultimately you don’t get to make that decision, unfortunately.
Ezra: What’s that?
Andrew: Ultimately you do not get to make that decision. You can’t say, “I want to use Basecamp over Trello.” Somebody else–
Ezra: I don’t ever want to be in Basecamp is my view. I don’t ever want to be in there. I want someone else to do that for me. I want to talk to people like you. That’s what I want to do.
Andrew: Right. No one else can do this. I wouldn’t have that Basecamp person come on and do this. All right. What do you do in Slack? Tell me more about how you organize your team or how you lead it?
Ezra: What happened was like 18 months ago or maybe two and a half, more like two years ago I realized I was the bottleneck for everything in the business. Everyone had to go through me to get anything done. I thought, “I have to fix this. I have to navigate, not drive.” I spent my whole career driving. It’s time to navigate. That’s when I really became bullish, to use the parlance of our time, on delegation and project management.
So, in Slack, we’ve got a channel for every individual department, like the copy team has a channel, the customer support team has a channel. So each department has a channel. We have a greater team meeting where everyone gets together once a week and then we’ve got our sub-team meetings that happen once a week as well.
Andrew: And they happen via Slack, your team meetings or in person?
Ezra: We use Zoom, but there’s a channel in Slack where you have ongoing communication. And then each project has a channel–Zipify’s integration to Recharge is a particular project. There’s a channel for that communication. Obviously everyone who has consistent action items each week has Basecamps for those action items. We’re actually doing a training course on how we do project management.
Andrew: I would really like to see that.
Ezra: So what happened was I actually hired who I considered–you know I say train everyone, bring them up, they’re more loyal, hire your friends, train them. There are some people you can’t do that with. Our big strategy there is find whoever is the best in the world, pay them for a quarter to come in, whip you into shape and then hire someone to replace them once they’ve laid the infrastructure.
That’s what I was trying to do with project management about a year and a half ago. I was like, “I’m going to find the best project manager in the world. I’m going to pay her to whip us into shape. I’m going to let her know from the beginning, be very transparent that we intend to hire someone we can afford who is not you.” Then she came in and I was like, “Man, we cannot afford to lose–now we can’t afford to not hire you. We’ve got to figure out how to get you on board.” She’s now our COO.
We’re doing a training course on how we look at project management, i.e. how she looks at project management and it’s going to come out at the end of May. It was like that in tandem with the–the growth spurt, we went from $7 million in 2015 to $22.5 million in 2016 over all brands. Yes, a lot of it had to do with advertising, but also a lot of it had to do with the management and oversight.
Andrew: What’s one insight? I started looking at–while I eat lunch, I watch YouTube videos. I started watching videos about people’s project management techniques. Some people are way over-detailed and I could never live like that. There are people who put like the books they want to read in project management, the fact that they need to tie their shoelaces in project management. Then it becomes this big clutter of a lot of to-dos that you don’t want to live in.
Andrew: What’s one tip, one insight you got about project management?
Ezra: Well, I think that it’s more about the overall goal of what you want done and when and then working back from there. My problem with project management was I was way too loose. I was like, “Yo, get it done, come holler at me when it’s finished. Let me know how it went.” I’m very much not a good manager in that way. People didn’t feel held enough. So we had to create more accountability for people so they knew what we wanted them to do.
So we created this thing called the paper charter, which is like who’s involved, what the overall goal is. We have a spreadsheet that’s like a very high level of the project and then there are little tabs that–I actually did a post, Facebook.com/MeetEzra, I did a one-hour interview with my project manager about how to go from a solopreneur to someone who has employees and manages projects. It’s like the second post on my Facebook wall right now. We could link to it at Mixergy.com/Ezra, maybe.
Andrew: Yes. Actually, wait, we’re going to link to that video course from that. Give me that video course. What’s the URL of that course? I’m going to make it easy for anyone who wants to learn from you. What’s the other course that you had?
Ezra: Well, it’s not out yet. I just have a one-hour free blog post on Facebook about project management.
Andrew: I mean you also had this like long URL before we started.
Ezra: Oh, SmartMarketer.com/Video-Ads-Training. I know. I need to work on that URL.
Andrew: I just worked on it right now. While we were talking, I turned–Mixergy.com/Ezra will take people to that video. What’s the video training about?
Ezra: It actually redirects to a much longer URL?
Andrew: That’s okay. Oh, that’s your short URL, SmartMarketer.com/Video-Ads-Training? Yeah. The better URL is Mixergy.com/Ezra. It will redirect you. I don’t get any credit or anything for it, but I’m curious. What is it?
Ezra: So we figured out how to advertise very effectively using Facebook video ads. Along the lines of ad value first before trying to offer anyone anything, we put together a three-part video series about 45 minutes, three 15-minute videos about how we are doing advertising for our brands, and it breaks down specifically what we do and how to do it and whether or not you decide to engage with us on our product offering, which is a full scale, eight-week video advertising training course, if you just watch this three-part series, you will be a significantly better advertiser on Facebook. Like it’s really good stuff. You can give it to your advertising manager if you don’t do your ads, but it will be beneficial to you. That is at Mixergy.com/Ezra.
Andrew: Okay. I’m going to lead people with that URL, Mixergy.com/Ezra. And then that also is going to redirect to Ezra’s full site, which is–actually, there are so many different sites. I’m going to say SmartMarketer.com is the site that I will end this with, but of course there’s also BOOM by Cindy Joseph. There’s Zipify. There are a lot of businesses going on here.
Ezra, thanks so much. I really–my favorite part of this, I got to know you better and I like that. The part that I’m really curious about lately is the nitty-gritty of somebody’s business. You know how when you first started doing–when you starting watching people’s webinars, your eye would go to, “What’s that in their taskbar? What’s that in the menu? How are they doing with Chrome?” That’s interesting on a personal level.
I think at this point, I want to do the same thing and see how someone runs their business. What are they doing in their Slack channel? What are they doing in their weekly meetings? There isn’t anyone who talks about that, but that understanding is really helpful.
Ezra: Yeah. Thank you. I will use that feedback to make this project management course even better.
Andrew: I’m looking forward to seeing that.
Ezra: I agree. How are you actually doing what you’re doing? It’s interesting.
Andrew: Yes. I think most people who create those things are just so lost in their software, that’s why they love creating videos about it that they forget that there’s a whole business to run. I’m not here to enjoy the details of my project management software. I’m here to almost forget that it exists.
Andrew: All right. Mixergy.com/Ezra. If you want the link, I just spit as I said that, which means I must be excited. I will also say thank you to my two sponsors. The company that will help you hire your next great developer–maybe you have an app in you, maybe you have a plugin in you for Shopify, for WordPress, whatever, maybe you just need more developers for your company. Go check out Toptal.com/Mixergy, top as in top of the mountain, tal as in talent, Toptal.com/Mixergy. And if you’re really into marketing and you want to do marketing automation, get it done right. Go check out ActiveCampaign.com/Mixergy. And Ezra, thanks.
Ezra: Thanks for having me on, man. Thank you, Mixergy listeners. I enjoyed it.
Andrew: Same here. Bye, everyone.