Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy and the guy who’s been getting a lot of feedback about how I am not speaking into the mic properly. So I’m going to do a better job of that here.
The other thing that I get a lot of feedback on is that I ask too many personal questions in my interviews. As much as I want to accommodate the audience in what you want, I have to be honest with you — I’m never going to accommodate that. I will never cut back on the personal questions that I ask. I think, actually, that you, the listener, needs to ask more personal questions too. I think you’re going to see in this interview that personal questions lead to an understanding of the business. It’s not just prying. It’s getting to know the person, but it’s also getting to know their business.
I’ll give you an example. It actually comes from a story that I experienced with today’s guest. About a year, maybe it was two years ago, I wanted to do a post on Facebook and I wanted it to look really good. So I started researching tools that would take my little bit of text and make it look eye-catchy so my private Facebook group would get to really notice what I wanted to say. I came across this tool called Snappa. The freaking thing was gorgeous. I have no design style. Look at me. This shirt barely fits me properly. But I was able to use the tool, and in a second I had this thing that looked good and people were asking me if I hired a designer or Mixergy hired a new designer.
It looked so good that I did what I often do when I get excited — I found the founder’s contact information. I emailed him a love note. He replied back and said, “Andrew, I’m actually a fan of yours. I know Mixergy and I’m excited to hear you’re using the software.” I said, “Well, if you’re a fan, first of all, the thing freaking rocks and I’m proud to have you in the audience. Number two, you should come over for scotch one time.” I’m going to tell you the listener too that if you’re a fan and you’re ever in San Francisco, come have scotch. It’s a great experience. It’s a good way to ask personal questions and get to know each other and our businesses.
So the founder’s name is Christopher Gimmer. You’re about to meet him. When he came here for scotch, I noticed the guy was so freaking calm. Who comes to San Francisco and is calm? If you’re in tech, you’re like, “I’ve got to get shit done.” So I asked him personal questions like, “Why are you so calm?” And that leads to, “What did you do today?” And he tells me that he went to Alcatraz.
You, listener, if you’re in San Francisco, ignore all the touristy things. San Francisco is not good for tourists except for one — go to Alcatraz. Right, Chris? It’s beautiful. It’s more than beautiful. They do a good tour and good production values on the audio that they send you through after the live tour. Am I right?
Christopher: Yeah. It was a really good experience, glad we did it.
Andrew: Except it takes a long time to get a ticket to Alcatraz. I was shocked. I said, “How did you plan ahead?” He said, “I didn’t.” I said, “How’d you get in?” And Chris says, “Well, I got up early and I waited in line.” I said, “How long was the line?” “A couple hours.” I said, “You’re here in San Francisco, you’re this calm, you have a couple hours to kill just waiting in line?” “Yeah.” I said, “What else did you do?” “I went and had brunch.”
I said, “How are you able to run this phenomenal company and still go and like do touristy stuff like that and run your company and be so calm about it?” He says, “Well, the company kind of runs itself. I improve it. I work on it, but the company runs.” I said, “Tell me what your revenues are because I thought maybe this thing is like a side hobby of a designer that I got excited about.” He told me. He’s doing well. Bootstrapped company, very un-San Francisco like So, I said, “Bring up your laptop, tell me, show me how you’re running your company.” He goes, “I don’t have a laptop with me. I have a Kindle.” “A Kindle?”
So then I say, “Bring up your phone,” and he brings up his phone and here’s the magic, guys. If you ever see Chris, you should ask him to do this too. He uses Trello to organize his company so he knows what tasks he has to do, what tasks he has to work on, what things they want to add, what features they want to add to their business and keep it all organized. For customer service, he has a Google doc, right?
Christopher: Yeah. That’s right.
Andrew: A Google doc with the common issues and the responses so that anyone on his team can go in and give an intelligent, helpful comment in response to anyone that has a customer service issue. If there’s a new issue, they can add it and improve their doc. Basically, what I learned from him is how to organize your company in a way that allows you to take a break and really be thoughtful about what you want to do in your time off and also what you want to do next.
Chris is going to tell us that he has a new software company that allows you to invest. We’ll talk about that. I imagine this organization is what gave him the freedom to do that. I invited him here to come to understand how he came up with this idea, how he structures his business and also what he’s up to next. I think it’s going to be a great interview.
It’s all thanks to two great sponsors. The first is a company that systemizes my sales process. It’s called Pipedrive. The second is a company that I just hired a phenomenal person from. I’ll tell you guys about them later. It’s called Toptal. I’ll tell you about both sponsors later. Chris, good to have you here.
Christopher: Thanks so much. That was quite the intro.
Andrew: I know. I told you before we started I was going to go longer than usual, but I think it’s important to get the message out. The system that I saw, Trello board, give me a description of what it’s like and then we’ll get into how you started this company and we’ll come back into more details later. What is it about your Trello organization that allows you to run your company so well?
Christopher: Yeah. So there’s basically three boards that I use. So one is actually my own personal board. So anytime I come across something that I need to do, I’ll put it on what I call a backlog, essentially. Then at the beginning or end of the day, I’ll look at all the tasks that are on there and I’ll put them in basically a queue and things that I want to get done the next day. I’ve found early on that when you don’t know what you’re going to work on when you wake up or you have a big task, you waste so much time figuring out what you need to accomplish that day.
The next one is we have a marketing/operations board. So that has all of the recurring tasks that need to be done. So, for example, publishing a new blog post, creating a new YouTube video. Then we have due dates. So whenever they finish that recurring task, they just change the due date to the next week, and then we also have like one-time tasks that need to be done and I’ll go in and assign those to the team.
The third board we have is basically our development boards. So any feature requests that we get from people we add it on there. It basically has a roadmap so our development knows what feature to work on next.
And pretty much through those three boards, we can pretty much run the company and then, like you mentioned, we have some Google docs that have some instructions on like customer support, how to do certain things so that if one person leaves or we hire someone new, it’s all there for them.
Andrew: I should explain Trello can do so many different things. I remember Joe Spolsky, the founder, told me that he wants it to be the spreadsheet of the internet. But in this context, we’re talking about Trello as a shared to-do list. So if I were to say to you, “Hey, Chris, you have Instagram post formats here. I can design an eBook cover using Snappa, but what I can’t do is create an image for a chatbot, you would take that idea, add it to the Trello board for the developers and you wouldn’t act on it. You would then go back and consider all the things on that board, pick one and work on one at a time and assign it to the team.
Christopher: Yeah. That’s correct. Typically for features [inaudible 00:07:56], we’ll add it on there. and then every month or two we’ll go and say what is the most important thing that we need to work on and then we’ll go ahead and assign those and put them on basically like our 30 to 90-day roadmap.
Andrew: When you say the most important thing, how do you know what’s most important?
Christopher: It’s a combination of the amount of requests that we get for a certain feature and then as a bootstrap business, obviously revenue is very important. So we really look at what feature is actually going to move the needle in our business. So we get a lot of feature requests that I would call them nice to haves. So we really look at two things. Is the feature going to convince more people to actually sign up and upgrade, and is this feature going to reduce our churn rate? Those are the basically the two things that we look for when prioritizing our development.
Andrew: How do you keep track of your churn rate? What software do you use for that?
Christopher: We use Baremetrics.
Andrew: Okay. You guys have Stripe, and so it connects directly into Stripe’s payment platform. Then how can you tie something back to an improvement? It takes a while before people churn. How do you know whether something you added reduced churn when it can happen months in the future?
Christopher: A lot of it is intuition in the beginning, but you start to see different trends and whatnot. We also use like Mixpanel. So we basically have events that fire anytime someone cancels or sends a cancellation request. So Baremetrics, it will impact the churn rate when the account actually gets cancelled at the end of the billing cycle, whereas Mixpanel, you can see the day that they click cancel, so you can basically run like cohort reports and see if things are making the difference. But I’d be lying if I said it’s an exact science. Sometimes it is different factors. There are certain things where it becomes obvious this really helped.
Andrew: What’s your revenue now?
Christopher: So, right now, we’re doing $36,000 in monthly recurring revenue.
Andrew: Outside funding?
Christopher: No, it’s all bootstrapped.
Andrew: Profitable?
Christopher: Yeah, profitable.
Andrew: I imagine at this point you’re over $30,000 in profit.
Christopher: Well, if you consider salaries, I mean net of salaries, for sure.
Andrew: You mean before salaries.
Christopher: Before salaries, yeah.
Andrew: How many cofounders?
Christopher: Just me and one other cofounder.
Andrew: As I look at you, you clearly are an entrepreneur. You’ve got a new business we’re going to talk about later on, but you weren’t. You were actually a guy with a government job. It was a well-paying government job. How much money were you making?
Christopher: Right around the six figures mark.
Andrew: When you looked around at the people at your office, they had this calendar. What were they doing on the calendar?
Christopher: A lot of people in the office were counting down the days until they retired, especially when they got to the two or three-year mark and they would be literally x-ing out days on their calendar. I had a wakeup call at one point, where I was, “Man, these people are literally wishing for days of their life to pass by to his retirement.” I’m looking at my retirement like I’ve got 20 to 25 years left. I can’t be doing that.
Andrew: I actually don’t think that showed up on your LinkedIn profile. You don’t talk about it much. What were you doing for the government?
Christopher: I think I originally had it in LinkedIn, and then while I was trying to start these businesses, I kind of didn’t want to draw attention to the fact that I had a full-time government job but was starting all these side hustles. So I think I got rid of it on my LinkedIn at that point.
Andrew: What were you doing?
Christopher: I was basically a financial analyst. My job was to help put the budget together at the beginning of the year, do all the reporting and making sure that we stay on track.
Andrew: There’s another thing I don’t see on your LinkedIn profile, but I’m going to ask you about it in a moment. First, I’ve got to hear about this trip. 2010, you in your government job, you get your four weeks’ vacation, you decide, “I’m going to go. . .” where? Where do you go and what happened on this trip that changed everything for you?
Christopher: Yeah. I ended up going to Southeast Asia with a friend of mine. At that time, I think I only had like three weeks’ vacation. So, previously, most of my trips were to Italy because I still have family there. So when I went to Asia, we did Thailand and Vietnam and Malaysia. It was just such an amazing trip. I wanted to do more of it. The last couple of days, waiting to go back to the cubicle life and waiting another year to get away again, I was like, “I’ve got to do something to get more freedom.”
Andrew: Did they give you some time off to figure things out, or did you quit?
Christopher: So what happened was I still kept working for the next year or so and then I met —this would have been maybe two years after that. I met Marc, who’s now my cofounder. We were like the youngest people in the office. Most of them were a lot older, so obviously we became friends pretty quickly. One day, he was like, “Come check this out,” and he was working on this real estate listing website. I was blown away. At this point, I had not much tech experience whatsoever. I thought you had to be a genius to build a basic website.
So when I saw what he could do, I was super excited. I was like, “Holy crap, this guy can code. Maybe we can start something together.” At that point, he was also not the biggest fan of working in the government. So we just started thinking of different online businesses we could start and make our escape.
Andrew: It seems like one of the businesses you started was something called Nosco Media.
Christopher: That’s basically just like our holding corporation.
Andrew: Okay. Nosco is something I didn’t see on LinkedIn. Another thing I didn’t see was ClassmateCatch.com. What was that?
Christopher: That was the first thing we started.
Andrew: That’s the first real project. I’m on a version of the site right now. It’s 100% free, kind of like — actually, why don’t I let you describe what it is?
Christopher: Yeah. Classmate Catch was a student-only dating website. We’re based in Ottawa, Canada. So you basically had to have a school email address. So we were open to Carlton, Ottawa U. and Algonquin College. So it was basically like a Plenty of Fish-type stuff, but you had to have a student email address to sign up.
Andrew: Okay. Facebook started that way. I think it makes sense. You had your idea. I see the website. How did you get people to sign up?
Christopher: Very old school. We basically fliered the school. We just put fliers all over the place. One of the other things that we did too before the site even launched is we got a few press mentions in the local newspapers. People are more likely to write about you if you’re a local person. But back then, my internet marketing skills were abysmal. So we didn’t even have any sort of email capture. We actually had all these people come to the website, but it was like a splash page that said, “Coming September 1st,” or something like that.
Andrew: So all of the traffic coming in was seeing a coming soon and nothing they could do about it.
Christopher: No. They could stare at the screen and know we were starting September 1st. I laugh a lot about it now, but when we did launch on September 1st, miraculously, people did come back to the site and sign up, which looking back is quite astonishing.
Andrew: Yeah. I’m pretty surprised by that too. It seems like things were going okay. What happened to the business?
Christopher: We actually got a decent amount of signups in Ottawa. I think we had about 1,500 within the first couple months. But we were basically relying on AdWords and at the time, what you got paid on AdWords was pretty crappy or AdSense, I should say. I think we were making $100 a month, which obviously can’t support two people, and we didn’t have a lot of success expanding outside of our local city. So, once again, we didn’t really know what we were doing marketing wise, so it was just not possible to fly around or drive to different schools and put fliers in bus shelters all day.
Andrew: Plenty of Fish was making money off of AdSense. I remember the founder used to post his checks online, have a picture of it. I get it. I get the model. I think there’s some things about it that made sense. I get also that you weren’t experienced enough in marketing to promote it and grow it. Then you read a book called “Traction,” a book that actually kind of got formed because of a Mixergy interview. I interviewed the founder of DuckDuckGo here. I asked him, “What happened to this book you told me about a while back?” He said, “Honestly, I haven’t been able to spend time on it because DuckDuckGo is working out, but I’d like to.”
Then someone, Justin Mayers, in the audience heard him and said, “I’m going to contact him.” He said he’d help write the book. They wrote the book. You read it. I actually heard one of my close friends who’s a VC says that he recommends this and hands this out to entrepreneurs they fund at his VC firm because it changes the way they think about marketing. What did it do to you to read “Traction?”
Christopher: The thing it did for me is, number one, it opened my eyes up to all the different channels and tactics that are available to try. So, like I said, I was very inexperienced at the time. I never worked in any sort of company, never did any sort of marketing. That was one thing. The second thing that really opened my eyes was people usually build products and then try to market it after the fact or start worrying the marketing after the fact, whereas “Traction” really preaches to actually start marketing from day one as you’re building the product, even before you’re building the product so that when you launch, you actually have some sort of path or at least one channel you think will be successful.
Andrew: Okay. So you realized, “We don’t have any of this.” Why didn’t you keep working on this one business instead of starting this other company that I think is a phenomenal idea? Why did that change the business you were working on, not just the marketing?
Christopher: I think the model for something like Classmate Catch is not a great bootstrap business. You need a ton of users before you can start making money. You need obviously just a lot of resources in the beginning to get it going. I think also in terms of how differentiated we were from Plenty of Fish, I don’t think having a school email address was really enough. I think at the time, you could filter by student on Plenty of Fish if you really wanted to. I felt like we were essentially fighting an uphill battle and would have had better success at least as a bootstrap business to start something where we could generate more meaningful money from day one.
Andrew: All right. Then you did. You came up with an idea that actually took off, and then you came up with after that Snappa, the business I love so much that I sent you a love note about. Now you’ve got this new company. We’re going to talk about all that in a moment and how you actually got your groove. But first, I’ve got to tell you and everyone else. A while back, I had this issue where I said, “I’m the only person looking at our financials.” Who looks at your financials other than you? This is a sponsorship message I’m about to do for Toptal. But who looks at your financials beyond you?
Christopher: So Marc and I both usually stay up to date with the Baremetrics stuff, but if we’re talking purely financial statements and accounting, I’m the only one who looks at that.
Andrew: So, for me, it was like that too. At the top, it’s me. I’ve got a bookkeeping company. I’ve got accountants who look at it. But really, month to month it’s me who’s making the decisions and them who are organizing it and giving a little bit of advice, but mostly, they’re doing a job. I had this sense that there’s got to be more.
So when I talked with Toptal about the next generation of their sponsoring with me, I said, “I wonder if you guys can help me with that.” They said, “We have a finance area now too. We don’t just help you hire your next great developer and designer. We also have these finance people.” So I said, “Could you hook me up with someone?” And they said they could.
So the first thing that happens was this guy Steve, who run that part of the company, got on a call with me and he understood what I was looking for. I used to phrase it as I want a CFO on loan or a part-time CFO. He looked at that and he understood what I was looking to do and he said, “No, you want a profitability advisor. That’s really what you’re looking for, someone to tell you how to increase your profits by looking at your financials.”
He sent me a bunch of different options and the one guy that I picked was a guy who had McKinsey background. McKinsey is a phenomenal management consulting firm that you have to be like a Fortune 500 to get access to. He then went on to run I think a couple of companies with the Carlisle Group. So he has experience as a CEO. He knows the financials. I interviewed him.
In the interview, I said, “I want to show you my financials to just get a sense of how you think about them.” He was thinking so fast and giving me so many directions, I said “Can I just give you mouse and keyboard control remotely so you can keep going through this.” So he did and he kept going through. What I like was that he quickly identified where our biggest expense was. He said, “If I could help you get 10% in changes there, then it’s going to dramatically impact your bottom line.”
That’s actually really intelligent, and I like that you’re starting to think about a bottom line. He also talked to me about tax savings that we could have that I wouldn’t have thought of that kind of merged the business and the personal because he immediately understood the way my business was structured. He was just such a smart guy that I immediately said, “He is the one.” So he and I are going to start on Monday. The reason I’m telling you this and everyone else is we think through our financials and our business on our own, and I think that makes sense because we’re the leaders of the company, but I don’t think it has to be that way.
What I love about Toptal’s finance department now is they have these people — I think it was two out of three people I spoke with that are basically at like retirement age. They could be retired people, but they wanted to still keep their hands in business. They come in and bring all the experience of their business and they’re here as my advocate, so not representing my investors or representing somebody else.
They’re here in as my advocates and they don’t have any stake in the day to day business. They just can give me feedback. They can give you guys feedback on how to price. If you want that, they have people who have experience on how to price. They can give you feedback on cohort analysis. They can give you feedback on management with people. If anyone out there need a developer, go to Toptal. If you need a great designer, you know Toptal is going to give you one of the best.
But what I didn’t realize until I started working with them is how good they are at helping with the business side of business. If you want to get started with them—boy, this is also going long, but I think it’s important too. Go to Toptal.com/Mixergy. That’s Toptal.com/Mixergy. They’ll take care of you because they know you came from me and they’re going to give you an offer I’ll let you read on the website. They are good and I’m glad they’re a sponsor and I’m glad that I’m a client of theirs. Go check them out at Toptal.com/Mixergy.
Cool, Chris. What did you think of that? I was trying to read your body language as I did it. I’m going to be honest with you, I feel like I love the way that I did that, but I’m not seeing excitement in your reaction, so be open with me just like I’m open with you.
Christopher: Yeah. I think it was good.
Andrew: See, I feel like I didn’t fully nail that. Do you get that way about yourself too, you’re constantly evaluating, “How did I do? Can I do better? Where could I do better? Who else can I kill so that I can go and perform?” I don’t know why I want to kill something. I’m a vegetarian, I’m not even killing cows.
Christopher: Sometimes.
Andrew: You do. But you’re pretty chill.
Christopher: I try to be chill, yeah.
Andrew: You are. Does it take an effort on your part?
Christopher: I don’t know. I think I used to be more of a stressed out kind of person. I don’t know. I’ve just learned to chill out over the years, I guess. I do get stressed out about certain things sometimes.
Andrew: What?
Christopher: If the company is not growing as fast or sometimes you tend to overreact on little things.
Andrew: What did you overreact about recently? What’s a big overreaction that you said, “I’ve got to learn to chill?”
Christopher: I mean like I think for us, it’s a big seasonal sometimes. So, last Christmas, we weren’t growing that much and then the summer, there was a bit of a lull. So I was like, “Oh man, we’ve got to keep growing,” that kind of stuff. I think too in the earlier days of being an entrepreneur, I used to stress myself out about having to grow really fast and do as much as you can.
Andrew: Because you felt inadequate in comparison to these other entrepreneurs like the people I interview?
Christopher: It’s a combination of just wanting to be ahead of where you are, and yeah, that’s also it too. Nowadays entrepreneurship is pretty glorified and the startup culture. So you can’t help but compare yourself to other people sometimes.
Andrew: I get that. The first thing if you were going to compare yourself to others like Plenty of Fish would have really frustrated you, but it’s okay, you still had a job at the time, right?
Christopher: Yeah.
Andrew: Your next idea was what? What was Bootstrap Bay?
Christopher: So Bootstrap Bay was a marketplace for Bootstrap templates. For the non-developers out there, Bootstrap is basically a front-end framework. So it’s kind of like WordPress essentially.
Andrew: It’s a design framework. So tell me if I’m wrong. I could use a Bootstrap, a theme that’s built on Bootstrap to skin my WordPress site, am I right?
Christopher: Yeah. That’s correct.
Andrew: It’s a design framework, am I right?
Christopher: Yeah, exactly.
Andrew: So you said, “I’m not going to make the same mistake I made last time.” How did you correct for the lack of marketing and the lack of organized business model?
Christopher: Yeah. So, before Bootstrap Bay, that’s when I really started to learn a bit more about online marketing. That’s when I started reading books like “Traction.” One of the things that I thought was really interesting was keyword research. I thought it was fascinating that using Google AdWords you can see how many people are searching for certain keywords and evaluate the competition. So, at that time, we were actually looking at creating a drop shipping site because that was kind of all the rage back then.
And then Marc had kind of stumbled across Bootstrap themes because he’s a developer. It was a really growing framework, and when we looked at the competition, there was basically one main site where you could buy Bootstrap templates. There were a couple other free resources, but there was a ton of search volume for it. So we thought this is perfect. We wouldn’t even have to worry about drop shipping items. It’s all done electronically. We thought that was good and we can make money from day one. So we thought it kind of ticked a lot of the boxes.
Andrew: Okay. I get it I just happen to love the whole Bootstrap—the Bootstrap design aesthetic, I love the way they think about creating new sites. I’ve used Bootstrap themes that I loved. I get it. You now have your idea. What do you do next? Do you start to get customers first or do you create a theme marketplace first or what?
Christopher: Yeah. Obviously, with the marketplace, you always have that chicken and egg problem. So it actually was pretty difficult to start. Looking back, maybe it wasn’t the best bootstrap business. So, in the beginning, we knew that we had to have some supply. No one’s going to buy themes if there’s no themes on there.
So Marc actually created the first six themes on the website, but we didn’t want to make it look like it was our site and we were the only ones who made themes. So we created a couple fake theme authors to make it look as though there’s actually independent designers that are submitting stuff on there.
Andrew: Okay.
Christopher: So once we had about six themes on there in the beginning, we went to all the other marketplaces we could fine, tried to find the emails of those developers and basically emailed them directly and said, “Hey, we’re launching this new marketplace. It’s going to be new. We’re going to send all kinds of traffic to it. Now’s your chance to get in early.” Shockingly, we got maybe like 10 theme authors at that point. So, basically from the start, we had I’m going to say about 15 to 20 themes on there.
Andrew: Okay.
Christopher: Then we started promoting mainly through content marketing. One thing we noticed was because the Bootstrap framework was new at the time, there really wasn’t a lot of content about it other than the actual Bootstrap websites. So we wrote articles about how to create a Bootstrap carousel, how to install Bootstrap, anything that we can—any sort of keywords that we could target, that’s what we did. We started getting a lot of traffic through the blog and the other thing that worked well is through affiliates.
We created an affiliate program. There’s a lot of websites that would offer free themes. So we got them to put us on there. It took about like, I would say, two to three months before we started picking up steam, but then after a while, we started ranking on the first page for Bootstrap themes, Bootstrap templates, a lot of the content we’re writing about. That’s predominately how we generated sales.
Andrew: Okay. I can see it. I’m seeing your old site. The first thing I should tell you is the very first thing that’s published on your site is a coming soon with a request for an email address. You did learn that lesson pretty fast.
Christopher: There you go.
Andrew: Then you guys even started adding your own free version, so free themes were now an option on the site because you saw that was going well. I’m seeing all your old articles, “Nine Free Tools to Make Your Next Web Project a Success.” Actually, that was Christy. Who’s Christy?
Christopher: I think that was a guest post.
Andrew: Okay. So things were taking off and as you were creating all this content, you had a problem with design. What was the problem?
Christopher: The problem was I was the only one creating the blog content, I guess with the exception of a guest post here and there. Every time I was going to publish something, I needed a nice featured image for it. I suck at Photoshop. We didn’t have money to hire a designer. Marc was too busy working on the actual site.
So I just always struggled my way to create these featured images. They didn’t look that great. I thought, “There’s got to be a tool for content marketers, social media people to be able to create these graphics really easily.” When I looked around at what was out there, I didn’t find anything that I really liked. I thought there was an opportunity to build a graphic design tool for more of like a marketer and business owner as opposed to an actual graphic designer.
Andrew: What about Canva? That existed. Couldn’t you just go to Canva and get an image you want and use it?
Christopher: I still wasn’t a fan of Canva. I found that it was still a little clunky. Canva is a good product, but their mission is to empower everyone to design. I didn’t want to design. I didn’t care about being a graphic designer. I just wanted something I could do really quickly so I could get back to running the business. That’s kind of what I wanted. I didn’t think that Canva really accomplished that.
Andrew: I like Canva as a business a lot, but the reason I didn’t use them when I was looking for Snappa was there were too many things. I could create an infographic, a blog graphic, social media poster, etc. and what I really just wanted is one thing that was very specific and I don’t want too many elements of it that I could change. Just make it look good. I just want to type in and make it look really good on my screen. Even now as I’m going through them, I can’t fully do that. I can change way too much, I feel. I get it. But weren’t you a little scared that Canva was out there before you started Snappa?
Christopher: Yeah. So, at this time, for a low-priced tool getting into SaaS, I knew that it was going to be pretty difficult. So, learning again from previous mistakes, we wanted to make sure that we had enough traffic and some sort of validation to begin with. So what ended up happening is on the Bootstrap Bay blog, I had written a post about where to get free stock photos. It basically went viral. I think StumbleUpon out of all places, it just kind of went crazy on there.
So what ended up happening was like a month or two after I had written this post, we’re now ranking on the first page of Google for free stock photos, which was pretty insane. So this was when a lot of these newer hipster-style photos were coming out released under Creative Commons. So we’re linking out to all these different websites. At the time none of them had search functionality. So we thought why don’t we just make our own free stock photo site with search functionality. So that’s what we did. It was StockSnap.io.
Then we started getting a lot of traffic to StockSnap. So this was great because we had the idea for Snappa. Now we have this stock photo site getting a lot of traffic. We knew that a lot of those people would probably be interested in Snappa. So what I did was I did a couple of surveys to people that were on our email list for StockSnap and then I even did a few Skype interviews.
I wanted to find out what tools were they using, what was our current process for creating graphics just to see if there actually was other people that had the same pain as me, and after a few of those interviews, it did become pretty apparent that we really thought there was a need for this product and it gave us the confidence to go ahead and start building it.
Andrew: I’m on StockSnap.io. It looks beautiful. You keep saying, “I’m not a designer.” Who the hell is designing this stuff then?
Christopher: Marc’s a designer. So he’s super talented, but Marc doesn’t have the time to create a featured image for one of our blog posts. That was kind of the whole thing.
Andrew: I see. All right. I get it because a lot of the stock photography sites were charging money even if it’s a buck per image, if someone’s doing a blog for fun, it kind of sucks to have to pay a buck for an image just to make it look good. A lot of the stock photography sites at the time, and maybe to a great degree to today, are a little too corporate. They’re at a point where you can kind of make fun of how stiff they are. So I understand why there are so many free stock sites and why they were doing well.
What you were doing, if I understand it right, was were you pointing to them? Were you saying, “Here’s a list of all the free stock sites?” Or were you pulling in free stock photography from them and putting it on your site?
Christopher: Yeah. So, on the blog post on Bootstrap Bay, we were basically curating. It was basically a list post. So we had all these different kinds of free stock photo sites that you can go to, and then for StockSnap, in the beginning, what we did was because a lot of these other free stock photo sites were releasing under Creative Commons, we were just curating the best photos.
Andrew: So you pulled the stock photography from those free sites, put it on your free site so you don’t have to buy it or create it yourself, and you add a search functionality to it.
Christopher: That’s exactly it. Then what we did was we opened up submissions. So then people could actually submit directly through our site so that we didn’t have to keep curating.
Andrew: Okay. So did you have a business model for StockSnap.io?
Christopher: No. There’s no business model. Our kind of thinking at the time was if this became successful, we can just use this as a really good generation for Snappa. That’s basically what it was.
Andrew: I actually don’t see a lot of Snappa mentions on the site back then. But it’s smart. You know who’s doing this really well is Brian Harris right now. He keeps creating these free tools that add more subscribers to his email newsletter that then he can use to promote the paid products that he has. It seems like that’s what you were doing.
Christopher: Yeah. That’s right. We actually ended up selling StockSnap a couple months ago. So that’s why you don’t see any mention of Snappa on there at this point.
Andrew: Even in the past I don’t see that much.
Christopher: Yeah. The main thing that worked really well was we showed — there’s a pop-up of an animated gif of something being designed in Snappa and that thing worked like crazy.
Andrew: The other thing you did was when I hit the download, it said, “If you like this site, do you want to share it?” There’s a share on Facebook, share on Twitter button, and underneath a note, “Thanks, give me my download.”
Christopher: That must have been like really early on. We did that when Snappa wasn’t built yet just to drive more traffic to StockSnap. Then after we launched Snappa, we thought what if we used this to promote Snappa. So that’s when we added the gif thing and it worked really well.
Andrew: So, when you were doing customer surveys or customer development calls to understand what you should be building with Snappa, what did you learn?
Christopher: So, at the time, I was more looking at — I kind of did it in two stages. The first stage was do people actually have this problem. A really good book that I read after the fact that I wish I’d read at that time is “Lean Customer Development” by Cindy Alvarez.
Andrew: Yes, it is phenomenal. It’s such a step by step how-to guide for this. She does not go big picture. She goes specific — how long your calls should take, what you should do, etc.
Christopher: Yeah. So if anyone’s doing customer development, highly recommend that. So the first run of interviews, I was really just looking to understand do people have this problem. So I was trying not to leave them with like, “This is what we’re building. What do you think of this?” I was asking questions like, “What tool are you currently using? What’s your current process for getting a graphic done? How long does it take?”
Naturally, people would say like, “I’m using Photoshop. It’s a pain in the ass,” or, “We have a graphic designer, but sometimes it takes two days to get the graphic back. I wish I could do it myself,” or, “Revisions are a nightmare.” I started hearing things like that and I was like, “Okay, this is good.”
So then what we did is we put together a very basic MVP of Snappa and went back to those same people and said, “Here’s what we’re thinking. What do you think about this?” That’s when we got more specific feedback about the product itself, like we really like this, it would be great if it could also do this, that kind of stuff.
Andrew: How did you find these people. You know what? Before I get into the details of how you did that, let me take a moment to talk about my sponsor. It’s a company called Pipedrive. Have you used Pipedrive ever?
Christopher: I haven’t, but it looks like a pretty cool product, similar to Trello.
Andrew: You know why you should not use it? Yeah, it’s similar to Trello and I’ll talk about the similarity. But of course you shouldn’t. You know why? You’re not doing sales one on one. You’re creating landing pages. You’re creating websites that promote your product, creating content. If anyone’s doing that, content to an email form, to a sequence of messages that gets people to buy, you don’t need Pipedrive, I’m going to be honest with you. But if you are someone doing one on one sales, meaning maybe you’re doing it over the phone, maybe you’re doing it via email. Maybe you’re doing it via Facebook Messenger.
I don’t know how, but if you’re reading out to people individually, you need a process. It’s kind of a mindfuck to do that, to be honest with you. I was trying to think, “Do I really want to piss off another sponsor?” I accidentally in a Formspring commercial said that their name sounds like this other company and the company failed. They didn’t complain, but I could see they were insulted. Yeah, it’s a mindfuck.
Here’s why it’s a mindfuck because we think we’re making a lot of calls at first. We think that things aren’t working out because maybe our message is wrong. Maybe nobody likes us, whatever. Or if we’re passing it on to a team, we think maybe they’re not doing a good job. It’s us messing with ourselves. What we need is a clear number, a metric, something that tells us here’s how many people you reached out to this week and here’s their response.
So what Pipedrive does is it organizes all of your sales process, what’s your step one, what’s your step two, what’s your step three, what’s your step four, etc. It forces you to put each one of those steps into a column, very similar to Trello. But here’s why I don’t use Trello for this. Everything is geared towards keeping track of the customer name, the customer company, the contact.
When you send a message, it automatically gets saved in the person’s card in Pipedrive. It allows me to have other people on the team to collaborate so I can get stats on how they’re doing. How many people did Andrea suggest that we interview this month? She’s killer. She’s doing a lot. How many people did Ari suggest this month? Well, she’s actually been busy with other projects. So she’s only done two. So you get to see how many people are you suggesting that you go after? How many people are you following up with? How many people are rejecting you? How many are ignoring?
The whole system you get stats on, so you get to see how you’re performing. If you’re out there and you’re selling one on one, I urge you to go check this out because I’m very proud of the ad I did for Toptal. I think I did a pretty shitty job explaining how Pipedrive works and why it’s so magical. I think it’s because it’s such a visual product. Here’s what I’m going to tell you. I’ve been using Pipedrive to sell.
I’ve been using Pipedrive to get people to say yes to doing interview. I’ve been using Pipedrive individually. I’ve been using it as a team. I can’t recommend them enough. If you are selling anything or trying to convince a group of people in a one on one situation where you’re reaching out to them one at a time, you’ve got to go check out Pipedrive. There is a one-minute video on their site that will explain this so much better than I did.
All you have to do is go to Pipedrive.com/Mixergy, scroll to the middle of the page and you’re going to see this one-minute video that will explain how your business will get revolutionized. I promise. I’m not using that word carelessly. It totally transformed our business. It helped us get more leads, more guests here. It helped us get more sales in an organized way. And when you go to that URL, you’re going to get 14 days for free plus 25% off for three months after. They’re a long-time friend of Mixergy and a long-time sponsor. I love them. I urge you to go check out Pipedrive.com/Mixergy. What did you think about that ad?
Christopher: Awesome.
Andrew: No, it wasn’t. Now you’re being too nice. The first one, I feel like you weren’t understanding how good I did. This one. . . This is why you couldn’t be an interviewer. I feel like you’re a little too nice. You’ve got to push back.
Christopher: Maybe. I am Canadian. So we’re always accused of being too nice and polite.
Andrew: Oh, because you’re Canadian?
Christopher: Yeah, maybe.
Andrew: I see. Let’s talk about this process. How did you find people to call up?
Christopher: So, basically, we had an email list for StockSnap, so people that wanted to get notified of the new photos that we were releasing. So the first thing I did was send a survey that asked them what their role was and what they were using the photos for. So for people that were content marketers or social media managers, I would then follow up with those people and say, “Would you be down to do a Skype interview?” We’re working on this new product. I just want to see how you’re doing visual content for your content marketing. I gave a link to the calendar and then booked the interviews that way. Pretty simple process.
Andrew: And how many people said yes? I’ve found that this is a process that works. A lot of people have talked about it on Mixergy, and every time I try it, I find that people don’t want to talk. It takes me way more requests than I imagine to get yeses and to get people on the phone. What was it like for you?
Christopher: It’s hard to remember the exact numbers. I think we had maybe 100 people that responded to the survey at the time. I got about like 30 interviews. So it was a pretty high success rate. I found people are more helpful than I thought they would be, especially if you’re reaching out to them personally. The more of a personal touch you add. . .
Andrew: So you mentioned what they said in the survey?
Christopher: Yeah. I think I might have even in the survey, yeah, I’d send an email to them personally, it wasn’t like through MailChimp or something like that, just trying to add a personal touch.
Andrew: There’s a process that can use Pipedrive for organization. I see. Your response rate seems to have been higher because you’re only reaching out to people who filled out a survey and they’re kind of qualifying themselves. Anyone who would fill out a survey who’s got something to say. If you’re responding to somebody that filled out a survey, they feel like they’ve been heard. So there’s more of an opening to say more to someone who’s going to listen more.
All right. I get it. Was there one question that was especially useful for you, one that you’d recommend that we use?
Christopher: One of the things that is really valuable that I read in the lean customer development is — the first thing is not to ask leading questions. So if you ask someone, do you think this is a good idea, everyone is going to say yes.
Andrew: I get that all the time from people who want to do customer development on me. They basically want me to bless what they’ve created because they’re too far along or they’re too married to the idea and it’s kind of off-putting for me.
Christopher: Yeah. The other thing too is people overestimate what they plan to do in the future. Let’s say you’re working on an email marketing tool and someone’s not doing email marketing. If you ask them like, “Do you think you’re going to be doing email marketing in a couple months?” Everyone’s going to say, “Yeah, I’m totally going to do that.” But what you need to focus on is what they’re actually doing today, not what they say they’re going to do, what they plan to do, what they’re actually doing today.
So I ask questions like, “What are you currently using to create graphics? What is your current process? Who’s doing this? How long does it take?” So not asking leading questions, not asking what they plan to be doing, what their process will look like in two months, just trying to understand what their current workflow is.
What you’ll find is that if there actually is a pain point, they will self-identify themselves. Like for example, people said things like, “Yeah, I’m using Photoshop, but it’s a freaking pain in the ass,” or, “we have an in-house designer, but sometimes it takes two days just to get the graphic back. If I have to make a change, then it’s another day. I wish I could do it myself.” That’s what you want them to say without leading them to that.
Andrew: What were they using? What was the tool that you were finding that you guys were replacing?
Christopher: A lot of it was Photoshop, and a lot of it was people that had an in-house designer but it took long for the designers to create the graphics. The turnaround time was too slow. There’s some things that a designer should create. You shouldn’t create a logo by yourself. I’d recommend a designer for that, your website, branding kind of stuff. But when you’re putting a quick image on social media that’s going to disappear in a Twitter feed in 15 seconds, it’s not worth having a designer spend like an hour to create that and two-day turnaround time and that kind of stuff. They just want to be able to do it themselves.
Andrew: I get that. You know what? I think that there are probably a lot of businesses like this that aren’t being launched because people are scared that their clients have departments that can handle it. I keep thinking about David Cancel, the guy who is now running Drift. Before that, he had a company that creates landing pages and he sold it to HubSpot. I said, “How’d you create landing pages?”
He said, “I went and I talked to people who were marketers, and I wanted to see what they were doing. It turned out that a lot of them had this whole team of designers creating landing pages for them, but it was such a pain to get a team of designers to go work on this because the designers wanted to create products that actually were servicing existing customers and so it would be this drag of back and forth. I said ,’If I create an easy way to do it, would you be happy?’ And those marketers said absolutely.”
I wonder what else there’s a team of people doing at a company that can be replaced with software and we’re not paying attention because we’re thinking our potential customers already have that problem solved but it’s not solved right.
Christopher: It’s very similar to what we found.
Andrew: The Bootstrap business eventually plateaued, right?
Christopher: That’s correct. We were relying pretty much on SEO. So, once we got to the number third ranking, it was hard to go above that.
Andrew: Why didn’t you — I could see that if it plateaued, you would switch over to Snappa and spend more of your time on that. Why didn’t you say, “We aren’t just Bootstrap, we’re a theme site. We’re going to promote ourselves as a theme site. We don’t have to stick with Bootstrap. We can start adding more people to our marketplace.” Why didn’t you expand this thing that worked instead of moving on to something else?
Christopher: So there’s already ThemeForest at that time, which was like super huge, and that was kind of the number one marketplace and they had WordPress themes and Bootstrap all kinds of stuff. Because we were so focused on Bootstrap, I think that helped us rank. If I’m being perfectly honest, we weren’t super excited about selling Bootstrap themes after two years or whatever. We really wanted to get into the SaaS space. We wanted to have our own product, something unique. We were basically selling other people’s products with Bootstrap Bay.
Andrew: I get it.
Christopher: I think it was a combination of passion as well as just seeing a bigger opportunity with Snappa, whereas Bootstrap Bay, we’re kind of fighting an uphill battle at that point.
Andrew: I like the model of Bootstrap Bay. I happen to love the whole Bootstrap design. I like the idea of quickly creating this thing. I feel like that could also work in many other areas.
Christopher: Yeah. I’ve felt that we’ve always tried to level up. We focus on what we can do today, where the opportunity was and we kept trying to build momentum off of that. It was great business when we did it. It was just time to move on when we did.
Andrew: That hit like $2,000 a month in revenue?
Christopher: That hit $10k a month in revenue.
Andrew: $10k? Consistent $10k?
Christopher: Yeah. We were paying out like 50% in commissions, but it was more like $5,000 in profit.
Andrew: So you guys were not able to quit your jobs with that.
Christopher: No, not unless we wanted to really — I had a house at the time too. So, between the mortgage and the lifestyle, it wasn’t going to cut it.
Andrew: At some point, you did quit your job. Tell me about that because that was a bit of a risk.
Christopher: Very big risk. So what I did was in the government, fortunately they let you take a year leave of absence and you can come back to your job if you want to come back. I was in a bit of a sticky situation because I was offered a promotion a couple months before, about a year before I left on the condition that I’d get my accounting designation. So when I took my year leave of absence to focus on building up Bootstrap Bay and some of my other businesses, I was like, “I can’t do this accounting designation at the same time. I don’t want to be an accountant.
So I basically dropped out of the CMA program. So, if I had gone back to my job, I would have basically got demoted because I had dropped out of the accounting designation. So I had taken a pretty big risk where I had to make it work, otherwise I’m going to look like a fool if I went back to my current job. Your audio just cut off.
Andrew: Sorry. That was my fault. I hit the mute because I was sniffling. Was that actually as helpful as Napoleon Hill said in his book “Think and Grow Rich” to burn your boats and have no other option, or did it start to freak you out?
Christopher: Well, when I took the initial leave of absence, Bootstrap Bay was still growing and we had — it was getting a bit of profit. I still had some money coming in. I could see a bit of growth. So it’s not like I quit my job without having an idea, without having any sort of momentum. That would have scared the shit out of me if I’d done that. I think the other thing too was I felt that I had kind of had some decent marketing chops at that point. I think I told myself if this doesn’t work out a year or now, maybe I’ll just go work for Shopify or something like that. I think I just didn’t want to continue on the path that I was on. So I think I kind of had some options somewhat.
Andrew: All right. And you were starting to bring in customers because of the stock photography site. At what point did you guys turn profitable? How long after you launched?
Christopher: Yeah. We launched Snappa officially November 2015. I think we got to $10k a month in MRR maybe like I want to say less than a year, like I think like six to eight months after that. So we also had some of the profit from Bootstrap Bay. So, within a few months of launching Snappa, we were actually able to pay ourselves a pretty livable wage and not as much as we were making in the government, but our happiness was a lot higher and we know that long term Snappa was going to be more profitable than staying in our current job.
Andrew: You told our producer that there were technical issues, technical obstacles that you had to overcome in the early days. What were some of those?
Christopher: So, when we first built Snappa, we used a framework, like a Fabric.js and that helped us build the product a lot faster to get going, which was kind of a good thing and a bad thing. What ended up happening is we officially launched our product, we started getting more users, and then we started getting a bunch of feature requests. When we started looking at where we had to take the product, what kind of features we had to build, we realized the current system wasn’t going to cut it. We made the difficult decision to refactor a good chunk of the code base. That took about three months. This was literally a month after launching.
So when you’re asking me about how do I stay calm and chill, that was one of those shit my pants moments where I was like we just took a bunch of people’s money and now it’s going to take us three months before we even had a new feature.
Andrew: Yeah. I feel like with your personality, that’s not something you could live with and let go. Were you waking up in the middle of the night? How’d you deal with it?
Christopher: Initially, I was like really stressed out about it, but it’s one of those things you just learn to deal with it. Surprisingly, people kept signing up, people kept paying us, people kept using the product, we still kept getting good feedback. One thing I learned about software is you think that a feature is so important that you have to build it and when you do, you’re going to change your growth trajectory. What I’ve found is that really doesn’t that happen that much. Customers aren’t as anal as you think they are. So over time, throughout Snappa, I learned to chill out a little more about adding features requests super quickly, fixing bugs within three seconds.
Andrew: What’s a feature that you thought would change everything but didn’t? What about this image resizing thing where someone would create an image on Facebook and then they need to create one Twitter? Are you really forcing me to start from scratch? Can I just change the dimensions? Was that a big one?
Christopher: Yeah. That was one of those few game-changing features where we released it and we saw an uptick. When we had those technical issues, that was one of the main triggers where that was one of the most common feature request. People would say, “I started this graphic for Instagram. I want to resize it for Facebook.” But they had to basically restart it or recreate it with the new dimensions. The only way we would be able to add that feature is if we built out our own custom framework.
Andrew: So when you’re — I’m looking on your site right now to see how would you know people are asking for it. Is it all through the contact form where someone tells you what they’re looking for?
Christopher: Yeah. That’s correct. Once you actually get in the app, we basically have like a Help Scout widget. Number one, they can search the knowledge base. So we can see what people are searching in the knowledge base. So if they’re typing in like a feature we don’t have, that’s one indication, but the majority of it comes through them actually contacting support. They’re like, “I’m trying to do this. Is this a feature? If not, can you add it?” That’s how we get a lot of our feature requests.
Andrew: We’ve been using that Help Scout widget more and more. I didn’t know I could go back and see what people are searching for. It’s that little circle with the question mark you have on the bottom right side of your app. I click on that and what I type right now is Facebook post because I imagine I’d want to have a Facebook. Immediately it says here are the answers to the question we think you have, like how do I connect my Facebook account? Actually, these do not all have to do with Facebook. But you can see what people are typing in there so you can see what their challenges are?
Christopher: Yeah. So, in the knowledge base reports, at Help Scout, they basically generate a report of what people are searching. So you can see if there’s things that people are searching for that you don’t have articles for. You can see what the most popular searches are. So it’s pretty helpful, especially in the early days when you’re just building out a knowledge base and you don’t know what people are having difficulty with.
Andrew: Because what you want to see is what are they typing in that there isn’t an answer for? What are they typing in that they’re looking for an answer for and let’s create a knowledge base entry about it. The knowledge base entry is like a blog post response to this common question. If I don’t have or if I don’t see that question here in this widget, I can click contact support and right in there I can type in whatever I want and I’m guessing you get the email address because I’m logged into my account, right?
Christopher: That’s right.
Andrew: So what I feel having done all these interviews is that entrepreneurs need to be problem solving machines. So you explained how you did that in the beginning. You had your own problem, you needed to solve it. Before you create this for a customer base, you want to make sure that they also have this problem. When they did have this problem and they refined your understanding of the problem, your job was to solve it and so Snappa version 1.0, which was Snappa.io and not Snappa.com, started to solve that.
But we don’t stop solving problems once we get a customer base. We go back to the customer base and back to other potential customers to understand the next problem and try to solve that. So, for you, the next problem was this works really well on one platform. I want to easily move to another and I have a problem making that transition. If you see that enough people have that problem, your job as an entrepreneur is to solve it. What do you think? Am I right?
Christopher: Yeah. A lot of being an entrepreneur is just putting out fires, thinking of the next thing to solve. That’s a good way of putting it, for sure.
Andrew: The reason the dating site didn’t work out was there was no problem you were solving. There wasn’t a big group of people who said, “I want to only date other students.” So, when you launched Classmate Catch, you weren’t addressing that problem.
Christopher: It wasn’t a burning problem, a meaningful problem that needed a solution to solve.
Andrew: That’s right. I have a lot of little problems, like why do I have to take one step up to get on my treadmill every day. That’s a problem, but it’s a minor one. How do you know what’s a minor one and what’s a major one, because you’re right. Our job is not to solve their minor problems because they’re not going to pay for it. They’re not going to come back for that solution, but it’s to solve the big ones. How do you know it’s a big one for you?
Christopher: You have to — if we’re talking about bootstrapping, it’s are they going to pay for it?
Andrew: How do you know if they’re going to pay for it?
Christopher: It’s tough. I mean you kind of—one way you can do is are they paying for an alternative. Like if someone’s paying for Photoshop and they’re fed up with it, why wouldn’t they pay for an alternative product that suited their needs better? If they’re paying for stock photography and your graphic design tool already has a bunch of free stock photos baked into it, why wouldn’t they pay for your tool? That’s one thing to look at.
A really good blog post about pricing is on the Price Intelligently blog, where they ask four questions. One is you try to anchor a price point. One is like what price point is this so expensive that you never consider it? At what price point is it too cheap you’d consider the quality. At what price point is it a little expensive but you’d consider it? At what price point do you think you’re getting a deal? That way, you’re not really asking like, “How much would you pay?”
You’re giving them ranges and that tends to be a little bit more accurate and then you can figure that out. What some people do is they actually will ask for their credit card because people might say they’ll pay for something but until you charge their credit card, you never really know sometimes.
Andrew: I think that makes sense. I try to do that as much as possible. Let’s close it out by talking about this new business that you’re starting. What is it called?
Christopher: It’s called Coinsprout.
Andrew: So is Coinsprout at all related to cryptocurrency?
Christopher: No. We were trying to find a name that was kind of — we didn’t really want to use wealth or riches or anything like that. Coinsprout was one we kind of liked. That was one thing I was thinking, are people going to think it was cryptocurrency. It’s actually meant for DIY investors to essentially automate a portfolio of ETFs. So it’s kind of like a robo advisor, but instead of investing through us, what we do is connect with your brokerage account and execute the trades on your behalf.
Andrew: What’s an ETF?
Christopher: An ETF is an exchange traded fund. Instead of buying 1,000 stocks individually, you can buy one that holds hundreds of thousands of different stocks.
Andrew: Like one that would represent the S&P 500.
Christopher: That’s exactly it. It just makes it really easy for individual investors to diversity.
Andrew: So you’re not going to let me buy one share of Apple. You’re going to let me buy a diverse basket of stocks or something that represents a diverse basket of stocks.
Christopher: Yeah. So the way it works is if you’re an individual investor and you want to have a portfolio, what you would do is you would maybe pick three different ETFs, one representing bonds, one representing Canadian equities, and one U.S. and international equities. You would say, “I want my portfolio to be 30% bonds, 20% Canadian equities, and 50% U.S. equities.”
So what you would do in Coinsprout is you would actually tell us what those percentages are, and then as you add new money to your account or your portfolio makes changes, we will automatically execute the trades to keep you in balance. So you stay at the target weights that you want to, and you don’t actually have to execute any of the trades yourself. It does it all automatically.
Andrew: Is this a big issue for people? Don’t they just say, “I want a little bit of this, a little bit of that, I’m just going to buy it, then nine months later I might go back and re-jigger it.”
Christopher: It’s a big time-consuming. People are basically doing this with like spreadsheets right now. Some people will just rebalance once a year, but there are some hardcore people that contribute the same amount each month, open their spreadsheet, figure out which ones they want to buy, buy that. Then there’s also things that come into play, like you don’t necessarily want to fully rebalance or sell a fund if it’s 29% instead of 30% because then you’re going to get transaction costs.
So what we can do is we can say we’ll just keep buying the lagging funds, the ones that are underperforming. We’re not going to do a rebalance unless your percentages are really out of whack. That’s typically what a robo advisor does, but they will charge a percentage of your whole portfolio, whereas we just charge a low annual fee so we’re not actually eating into your returns as your portfolio grows.
Andrew: Did you do the same thing that you did for Snappa, where you actually were talking to investors, understanding they really had this issue?
Christopher: There’s two things. I’m a DIY investor. This is exactly what I’m doing myself. I like the idea of a robo advisor, but I said, “Why would I use a robo advisor if I’m going to have to pay 0.50% of my returns and that will shrink my portfolio? I can just do this myself.” At the same time, it was a pain to whip out the spreadsheet every month, execute the trades and all that.
Andrew: Okay.
Christopher: So one thing I did was I actually looked at Reddit. The Personal Finance Canada subreddit is pretty popular. Every week, there’s like a post about, “Hey, I created this rebalancing spreadsheet.” People are pretty gung-ho about it. Then I started reading through the comments. I started reading other people building scripts and stuff to do this for them. I know there was some kind of a need there. Then I also talked to some other DIY investors. Again, tried not to ask leading questions, ask them what their current process was. Based on that, I thought there was a need here.
Andrew: Here’s one. “I made a buy only portfolio balancing spreadsheet. Thought some people might find it useful.” 25 people did. The top comment on that is, “Neat, I wrote a Python script to do the same. It’s really stupid, but brute force is the optimal solution. We’ll compare results there.”
Christopher: There you go. That was one of the threads that I read.
Andrew: I get the need there. This is the r/PersonalFinance/Candada that you’re talking about.
Christopher: Yeah.
Andrew: If anyone wants to go check it out, I’m not going to send them to Coinsprout.com, though I’m impressed you got the .io for Snappa and now it’s Snappa.com. I’m going to tell them they should go to Coinsprout.ca because this is built just for Canadians.
Christopher: Yeah. It will redirect to .com. But yeah.
Andrew: I get it. Why aren’t you going after the U.S. market?
Christopher: That’s a good question. I think this is a pretty niche product. So, for us, we want to — it’s a good question. Number one, like I mentioned before, [inaudible 01:12:15] has an open API, so it’s a brokerage that we can easily work with to accomplish this. We want to prove it out before we really expand. I think it’s a better strategy to make sure we can get the traction, make sure we can get viable. If there is a big need, then we can start opening up to different countries and different brokerages and that kind of stuff.
Andrew: Okay. I think it makes sense. I like what you’re doing. I love the product still. I’m going to tell people go check out Snappa.com. If you really stink at design but you admire good design, just go check it out. You have a free account too, right?
Christopher: Yeah. There’s a free plan. So if you need to create a couple of graphics here and there, you can do that for free.
Andrew: If you’re going to post something online, like a request for comments on something or say here’s the thing that happened. If you just type it out, no one pays attention to it. Yeah. You can add a little bit of background color now with Facebook. Everyone is using the same design. It doesn’t stand out. Go to freaking Snappa.
There are tools that do more than you. They’re going to make more money than you. I’m going to be honest with you. They’re going to kill it financially at those other companies that I talked about, Canva, for example. For just getting the damn thing done and doing it fast and moving on to the freaking Facebook post and not getting sucked in to another rabbit hole of design, I don’t know of a single other product that does this.
So I’m a really big fan of yours. Frankly, not yours. I feel like you and I were too chill to hang out. I’m a fan of your products. You guys know how to focus on the details, get it done and systematically keep improving. I freaking love watching that. Anyone out there who wants to go check it out should go to Snappa.com. You will love it. I’m glad you’re a Mixergy fan.
It really makes me proud. I’ll tell you what. Everyone keeps asking me what my numbers are and I don’t give a rat’s ass about them because it’s so easy to get more numbers. Here’s what I care about. Last night, I was at a VC event. I’m not a LP at a friend’s VC, at Eric Bahn’s VC, another Mixergy listener who now runs a VC fund called Hustle Fund. How many people there knew Mixergy, listened to Mixergy? We’re talking about LPs in this fund, real entrepreneurs building real products, they listen to Mixergy. God damn, that’s what I care about. So I’m really proud that you’re listening.
Christopher: I just want to say a couple years ago, you were one of the first podcasts I was listening to, and I said it’s going to be my goal, I’m going to make it on Mixergy. It does inspire a lot of people, and I think podcasts like yours are awesome. Very proud to be on here.
Andrew: Thanks. I’m glad to have you on here. Guys, my two sponsors are the company that helps us organize and pre-interview and make sure we really get people on Mixergy. It’s called Pipedrive. It’s built to help you sell more. Go check them out at Pipedrive.com/Mixergy. They do a much better job of explaining the product and how it’s going to change your sales than I did, Pipedrive.com/Mixergy. If you’re looking for somebody to give you some financial help, put together spreadsheets for you, help you think of your business. For me, it’s be like a finance advisor on the side to help me think through my financials. Go check out Toptal.com/Mixergy.
Finally, my team and I are revamping the audio of these Mixergy interviews. For the next few interviews, I’ll be asking you guys for feedback. Please let my team know what you think if there are issues with the audio, if we’re doing better with the audio. Just email us, contact@Mixergy.com and the whole team will get to see what you think. We’re trying to re-jigger things here, and we can use your feedback. Chris, thanks so much.
Christopher: Thanks a lot.
Andrew: You bet. Thanks, everyone. Bye.
