Andrew: Hey there, freedom fighters. My name is Andrew Warner.
I’m the founder of Mixergy, where I interview about how they built their businesses. And I know that some of you who are listening are probably thinking of yourselves as wantrepreneurs joining me today is an entrepreneur who maybe would’ve considered himself. That I think actually before we got started, he said, I wasn’t even a wantrepreneur.
I just thought that people who are entrepreneurs are these like other beings somewhere else. I didn’t pay much attention to them. And I didn’t think that was a path for me. And he said, you know, there’s something to be said for just listening to entrepreneurs, tell their stories. Eventually, if it’s for you, you start to realize, wait, I don’t have to just listen.
I could be the guy doing this. I could be the person building a company like that. Anyway, that’s his path. And I wouldn’t have known about it, except that I think it was like two days ago. My friend Neil Patel’s send me a message. You said Andrew, you’ve got to meet John. He’s a good entrepreneur. He he’s a lawyer who hated the law, became a chief revenue officer and then went on to build a multimillion dollar business, growing tech companies on a performance basis.
Here’s the part that he wanted me to highlight and to notice for myself, he says, go, John grows their business and they pay. And if you lose his money, do you take on the losses? Go, John? Did I understand that right?
Gajan: Never lost this, but.
Andrew: But you’re guaranteeing it to that degree. There’s you’re not wait if there were losses who, whose pocket did that come out of?
Gajan: Well, the beauty of experimentation is it’s almost impossible to lose money. Cause if it doesn’t work, you switch it off.
Andrew: And all you’re doing is AB testing for businesses to help them squeeze more leads, get more revenue out of their existing traffic. Am I right?
Gajan: Yeah, absolutely.
Andrew: All right. That’s good. John retina Salba. He is the founder of spiralize. We’re going to talk about how he did this. And if he says, look the way that he did this, if there’s someone out there who’s looking to start and hasn’t started, this is a model for you.
And we’ll talk about some of that. Thanks to two phenomenal sponsors. The first, if you don’t have a website, you need one go to hostgator.com/mixergy. They’ll get you a great website. Good price. The second, if you’re doing any kind of post gait or your.
Gajan: that’s awesome. That is the company we started with.
Andrew: I freaking love that. So many people I interviewed will say they started on HostGator
and these days HostGator will scale up. I think a lot of the other ones almost became embarrassments or became swallowed up by the same HostGator parent company. the second sponsor is a company that if you’re looking to get into AB testing, if you’re looking to do your own landing pages and your own conversion, you should go get to know click funnels.
They didn’t even pay me for this, but I feel bad about something. I’ll tell you why I’m going to do this ad for them for free first question, how much revenue you’re doing right now? Give me the number.
Gajan: Last year, we did 3 million
Andrew: 3 million. Okay. And how much profit
Gajan: I’m not going to share that one.
Andrew: would you say if it’s over a million dollars.
Gajan: Dad. I’m not going to share that one.
Andrew: Okay. All right. Fair enough. Before this, you were working at a pathology lab, that’s where you helped them generate more money. How did you do it for them? What’s one example that you did for them.
Gajan: Yeah. So, so big businesses often have little dials that you can turn to, to make them more profitable. a cork of the American insurance system is that if you and I are both doctors pathologists, and the same patient comes in. And sends a specimen to you and a specimen to me. And we do the exact same work because you might have a different contract with that person’s insurance company.
You might get paid triple. What I get paid, you might get for the same exact they’re called CPT codes or procedures. You might get 600 bucks and I might get 200 bucks and it’ll be different with different insurers, so they can be an insurer. Where I get 600 bucks and you get 400 bucks.
So my big idea for this company, we would do hundreds of millions of dollars worth of, of these cases was instead of just assigning cases randomly in the morning and saying, Andrew, you got 20 cases in Goodjohn, you got 20 cases. What if every morning we did some math and shuffled those cases. Now it can be a little complicated, cause you might have labs and lots of different locations, but that’s why FedEx exists.
Every morning. Someone gets up really early. It says, look at all the cases coming in, look at the insurers and let’s just shuffle them. So Andrew gets the cases that pay him really well because John gets the cases that pay him really well.
Andrew: That makes so much sense. If you think about it, was it hard to implement?
Gajan: it was very hard to implement.
just, there was a lot of resistance, but. It’s it’s the same kind of thing you see in the lean startup world of you start small, you say, okay, well, I can’t shuffle all 10,000 cases. I’m just gonna take a hundred cases and I’m going to do it in the most manual inefficient way possible. I started doing it myself and then I hired a temp and had temp just manually walk these hundred cases around looked and measured results and said, did it work?
We filed insurance claims and if it came in great starting to work. Okay. Let’s start to automate more of it.
Andrew: So how much money did you make for them? Bottom line.
Gajan: So they made an extra 8 million bucks a year in profit just from shuffling cases.
Andrew: Alright. Now you were an employee at the company. You got a salary, but you also got a bonus. How much you made you made them $8 million. What was your bonus? Roughly
Gajan: Yeah, 8 million bucks a year, which for a company you should really think of it as 80 or $160 million because companies are valued in a multiple of So I’m pretty excited. I’m like, this is going to be a good year telling my wife and my boss. He’s like good John review. Awesome. You’re killing it.
This came at the right time. The company really needed the money. Here’s your burners. And so I look at, can I look at it, it looks like two or $3,000. and that’s two or three. There’s nothing that’s real money. but it was a tiny fraction of my salary. It wasn’t what I was expecting. And so I said, Hey, you know, you made the company a hundred million bucks here.
I got 2000 and he’s like, well, it was bad year for the company and you got a really good bonus compared to other people. So backpedaling. And then for me, it was kind of a breaking point. I was like, well,
Andrew: and so that’s the point where you said, I think I’m going to go all in, on entrepreneurship.
Gajan: Yeah. It was pretty soon after that because I was doing a bunch of stuff on the side, but I never thought I would leave my job, but that kind of put. The nail in the coffin.
Andrew: Let’s talk about some of the stuff you did on the side, your, you grew up in Australia, you said a lot of people who you knew, just weren’t thinking about entrepreneurship, your, your parents work for the government, this wasn’t you, but you started to dabble a little bit with what was it that you were selling on eBay at first?
Gajan: muscle stimulators. So they’re these weird things from blank. The nineties, two thousands, that were advertisement infomercials, and you’re strapped them onto your abs and fire electrical impulses. and you know, in theory, you’d get six pack abs
Andrew: While watching television, because it would fire an electrical impulse, which would force your stomach to your AB muscles to contract like they were working out and then they would relax then contract again at the next muscle. And it’s like, I guess. According to the ads like doing sit ups, except you could actually sit up and watch television.
And that’s what you were selling on eBay.
Gajan: Yes. Except I will tell anyone that wants to try them. It is not relaxing. It is really intense. it is not a passive sport.
Andrew: Oh, okay. I always imagine I just sit on the couch and eat and while I’m doing this, no, you’re saying it. You really feel the pain of it.
Gajan: Oh yeah. Like it is, it is a strong and contraction is, as you can imagine, it’s more like, have you got a cramp or Charlie horse? Yeah. That’s what I sort of feels
like. for the abs it doesn’t work at all because the problem is, is the Cheetos you’re eating.
Andrew: Okay. You know what, that’s the part that really frustrates me about working out. It’s not enough to even run a marathon because you run a marathon. It’s what I burned. 2,600 calories. When I do 2006, when I do 26 weight, I do 26.2 miles. That’s only 2,600 calories. I could burn that at a nice dinner with drinks, with friends, right?
So it’s not that much. It’s really what you eat matters more than I imagined.
Gajan: I had the same experience, you know, the, the stat, there’s a stat, the average person that transformed marathon, what you’re, when you’re training, you know, you’re running 50 miles a week. Like you’re really burning calories. The average person that transfer marathon will actually put on weight because it ramps up your appetite.
Right. And you feel
justified. You’re like, I can eat that. I just ran 20 miles this morning
Andrew: Alright. So then the AB machine didn’t actually undo all that didn’t work for giving people ads. What about for you as a business? Did you make money? What happened with that?
Gajan: so I learned a ton and, you’ll kind of see this theme through all these businesses have a definitely made money, but the other part is you get in the flywheel going, you learn these skills and then they all end up coming together. what was interesting is I learned how to, you know, Reach out to a distributor or buy in bulk. And I was selling on eBay and had these great margins. Cause I was the only one selling. And then what happens on eBay is when people realize you’re making money, other people start doing it, right? So your margins get competed way that the only way they know how to compete, so they cut the price. And so then you have to cut the price, So I had this great idea. I noticed. A lot of people that I’d sell them to, they wouldn’t get the most out of it cause they didn’t know how to use it. Cause they, they came with crappy instructions they’re, made in China, minimal documentation. and so just over time I learned how to use it.
Cause I’d use it on myself as you can tell in my, my ripped physique. and so I was like, alright, I’ll write an ebook. And I wrote an ebook and I bundled it with the product. So I escaped, I could charge a little more
than my competitors cause people would pay more to get the thing with the ebook. what I didn’t realize is, again, Eva is the dregs of humanity.
It’s terrible business. Don’t do it. Isn’t my competitor just took my ebook and then ebook
Andrew: They copied it.
Gajan: yeah, they didn’t even change the cover.
Andrew: wow. \ Wow. That’s so frustrating.
Gajan: So at some stage I had like a hundred left left over, and I gave them to everyone I knew for Christmas that day.
Andrew: One of the other ideas of yours actually, or one of the other businesses did better. It was the electronic dog fences
Andrew: What was that?
Gajan: That was the first business that really hit, So for those of you with a dog, a gentlemen, a dog fence is a, it’s an American thing. if your dog is escaping from your yard or you live in, like in the Midwest, a lot of people don’t have yards. It’s a training device that trains your dog to stay in your yard.
and there’s this company awesome company it’s called invisible fence. Put them in for you and they cost about 2000 bucks. So the only downside of this company is it’s 2000 bucks and they’re these DIY kits that are, like 300 bucks, but they come with basically zero instructions. So you don’t know how to install it.
Installing it’s quite complicated. You don’t know how to train your dog on it again, quite complicated. and you imagine if your dog is escaping from your God and it’s missing for hours, you’re terrified. Right. And your neighbors are complaining. You’re not in a good emotional place. It’s a very stressful event.
so I had this situation, with my dogs and I paid this invisible fence company. And then I moved and I was house porch on this giant house. And I was like, this is ridiculous. I’m going to put it into myself. I put it in, but it took a ton of time. And so I was young and optimistic and I was like, I’m going to.
Document it I’ll put it all online. And so I made this great blog. It was this guide to how you do it. And there was nothing at all online and people started coming. and then one night I was like, I’m just going to start selling the fence. Cause people would often email me with questions and they’d say, well, who should I buy it from?
So I stayed up and I was working. It was a lawyer at the time and working 24 seven seven until two in the morning filling Yahoo store. as two in the morning.
I was wired when I finally finished and pushed this thing live and, I couldn’t go to sleep straight away. I said, I watch some TV show for an hour. as I went to go to bed, there was a sale at two in the morning. And so I’m a McKinsey guy, so I’m doing spreadsheets in my head and I’m like, Oh, if I sell one an hour, every hour
now I really can’t sleep. I go to bed. Cause then I need to get up early. The next day going to be awesome.
Andrew: And was it? It was
Gajan: nothing for the next seven days, but then, so as you start put together pieces, right, you need to do this SEO stuff. And, and then we got traffic and then you need to do, I learned how to AB test to get more people there to buy. And, at the time it didn’t feel like it, but in retrospect it was a rocket ship.
It went from like zero to like 4 million bucks in, like two or three years.
Andrew: Because of SEO.
Gajan: because of combination of SEO and then AB testing, cause SEO got you, the traffic there, but then you need it to figure out why should people buy from you right? Instead of Amazon or Walmart, or, it was a great business in some ways, because in the old days there was a lot of what’s called map pricing. That stands for minimum advertised price. You means the manufacturer says you cannot sell this product for less than this price. And so it would give you this big, big fat margin. but the downside was cause you couldn’t discount. You need to convince the consumer why they should buy from you so we learned a lot about testing optimizing on that site.
Andrew: What did you optimize with? And what’d you learn with at the time spiralize now is just killer good at this. When you were just figuring it out, what are some of the first things that you learned?
Gajan: the first thing we learned is great design had almost nothing to do with conversion.
Andrew: Okay. And what did improve sales then?
Gajan: So what really worked with just testing everything instead of just saying, okay, we’re going to make this improvement, push it out live is to say, okay, we’re gonna make this improvement. And we’re gonna show that to half the visitors and half the visuals get the old and we’ll measure. And some of the things will work.
Some things work. One huge thing for us was if we could get someone to call in. Get these awesome people working for us. They knew this product inside out. And if someone called in to ask a question, they would always buy from us. Because if you call Amazon and you’re having a problem with the dog fence, like
Andrew: Right. So the fact that they called meant that they knew after the sale, someone would be there.
Gajan: Yes. So they might have some technical question, but as soon as they called and talked to our people and our people are good too, about closing the deal, then answer the question and then. Say, Hey, now
Andrew: Oh, they would just do that right there.
And if the person said no, we weren’t pushy enough. In retrospect, we should’ve been more pushy.
If the person wasn’t ready, we would just ask them like, Hey, do you want us to follow up with you? And often they’d say, yeah, call next Tuesday,
the deal. that was another learning at first, I answered all of them and which is actually great. Cause you learn the business. you learn the kinds of things, people asking, and then you put that on the website. we hired a couple guys that we trained. And they kind of evolved from customer service, just running a whole business, two brothers, the Rio hus brothers.
And they were just awesome. And they loved the business and treated it like their own.
Andrew: timers with you, or this was part of
Gajan: one of them started full time and then eventually it got too much for him and he hired his brother. and, and so between the two of them. the fulfillment was all handled by someone else, but between the two of them, they could handle all the customers,
Gajan: asking what works.
How do you get people to call in? you know, we tried everything, intellectual arguments with people about what, trying to persuade them. and then it turned out the thing that really worked was we put, the face of, one of my employees. I think it was their stepdad. And, had an in the header and said, call Stu I had a phone number
people called and they asked for Stu and it, it was, it was Epic, but that single tweak was worth about 20%.
Andrew: And then of course, when they called it, wasn’t Stu who was there? They’d say, sorry, Sue’s not available, but I can help you. Got it.
Of course, that makes sense. So I know your wife has a website called, is it okay for me to say what her site is? Yeah, of course. She’s a, it’s a baby sign, language.com you guys have had it, I think since 2011, am I right?
Gajan: Maybe even earlier. Cause I have a 10 year old and it
Andrew: Okay. So it seems like even now on the website, I clicked the contact. I said, let me check, are they still doing this stuff? And I saw a phone number and it’s an eight, five, five phone number. Does it go to a real human being? Okay. All right. And even that helps with sales. I imagine because people just want to know that they, that there’s some phone number, even if they don’t test it.
Gajan: Yeah, I think so things change over time. In fact, when we’d started the dog fence business e-commerce was relatively new, I’d say 50% of the calls. They didn’t really have a question. I just wanted to make sure, like, are you a real person? Is this a real thing?
And they didn’t want to put their credit card in online.
The, the calls were really just their way of feeling out like is this, this is a real business. And, and they’d give us their number, their credit card number over the phone. Now I was never quite sure what they thought we did with their credit card number. Cause we would just type their credit card number into the internet, but we didn’t discuss that with them. the, the baby sign language or the dog fence or
Andrew: The dog fence, baby sign language. You still have. I saw your wife wrote a book. I saw it on Amazon and all these other bookstores. What about,
Gajan: The dog fence business. So with all these businesses, we start them, staff them up and then. Kind of move on to the next thing. And so the dog fence business, just as beautiful light it’s someone just writes you a check every month for work that you did five years or 10 years ago. it of churn out money for maybe
eight years and it just went into further and further decline.
Andrew: Yeah, I see the website now just says this account has been suspended. Contact your hosting provider. It’s dog fence lee.com. Fence. Wait, what is it? Doug fence, diy.com. Now I get it. Got it. Wow. All right. Let me take a moment to talk about my first sponsor and then we’ll come back in and figure out now that you had this background and you finally realized working for a company, even if I make them a lot of money is not going to be my way of growing with them.
You decided you were going to start your own thing. I want to know how you came here with the idea for it. But first, if you’re listening to me and you’ve heard me talk about HostGator, if you like all, Oh no, let’s talk about click funnels because we just talked about AB testing, click funnels does a lot of AB testing, a lot of quick landing page creation.
How would you recommend that somebody uses click funnels to create a quick landing page for an idea, or what AB tests would you recommend that they do since ClickFunnels is so good at making AB test easy.
Gajan: Well, the first thing is just start, right? Just throw anything out there. the beauty of testing is that you’re going to keep improving this every two weeks. Just get something out there, get it in market. And then the biggest thing you can do is just talk to your customers And what you really want to talk to the mistake people make is they talk to everybody, right?
What you really want to talk to is people on the bubble. So imagine a hundred people come to your website to end up buying 90 of those hundred people are just never going to buy anything from you ever. That’s just the reality, but they’re probably another eight that nearly bought, but didn’t what you really want to talk to.
There’s eight people on the bubble,
huh? Yeah. So that’s the hard part. The mistake people make is they survey everybody cause it’s easy. Or they survey just the people that bought again. Cause it’s easy. people have bought are okay, but they like you too much. It’s like asking your mother for feedback.
Right? how do you get people on the bubble? There are a bunch of techniques, you know, one is if someone’s been on your site a long time, that’s what I find really effective is to just ask them so you could pop a modal. Up says, Hey, is there anything, is there anything stopping you buying today? Another thing you could do is offer them money, like say, Hey, we’re trying to talk to some customers.
Can we send you a $50 Amazon gift card to talk to you for 15 minutes now it’s gotta be now because a day later they’ve forgotten and they’re making stuff up and then just have a real conversation with them. The same. The same way you would, if you manage your retail store and you saw lots of people coming in and just leaving, just be like, Hey, no, you just shine up your badge and you’d be like, Hey Andrew, I noticed you came in.
I noticed you picked up
Gajan: and you looked at it. And then,
and then you left. I’m just curious. Tell me, tell me what happened. And you will say things. Some of those things will just blow my mind. But favorite example is we had a SAS client cloud Sask line, So fast when we asked customers, 10% of them said, I’m not buying.
Cause I don’t know if it works on a Mac.
Andrew: And it’s SAS, which means it’s, it works in any web browser just
Gajan: Yeah, it does. The question doesn’t even make sense. Right. Which is why we never answered it. But sure enough, when we answered the nonsensical question, you put little Mac and PC logos all over the side
Andrew: Wow. You know, one way that I found to do to figure out if, to talk to people who are almost buyers is to put out an offer. To ask it to break up the payment or a process into two steps. Step one, give me your name and email. Step two. Give me your credit card. Anyone who doesn’t put in their credit card, a follow up at least via email.
Okay. And say personal email and say, I noticed you didn’t by telling me why not. And sometimes I will take their email address, put it into iMessage. And if it turns into an I message bubble thing,
Gajan: Oh, I love that. That’s awesome. And I think what you said about just being human, this personalized message, Because what you want is as representative a sample as possible, you don’t want, when you send out like a mass email, you tend to get, you know, what I think of as serial complainers and the price is too high, it doesn’t have some weird obscure feature.
And, and those people are often just full of shit. They weren’t going to buy anyway and there’s making shit up. that personalized message of just like, Hey, I’m the owner. I’m not trying to sell you anything.
Just curious. And they’ll tell you stuff, and then it’s up to you to grade it and triage it. but they’ll tell you stuff and it’ll some of it you’ll be like, I can’t believe
Andrew: For anyone who is listening to me, the reason that I like ClickFunnels is because they make this stuff really easy. You can quickly put up a webpage. It looks really nice and just drag and drop the elements that you’re looking for. So if you decide, Hey, this guy, Andrew suggested that I break up my offer into two pages, just drag and drop.
A name and email field onto page one. They’ll give you a template for page two. And on page two, you can ask for a credit card and they’ll tag it. They’ll tie into Stripe. They’ll make it easy for you to collect payment. But if anyone doesn’t follow through, I’ll have their email address and you can follow up with them.
If you decide from one of my future emails are from what, excuse me, one of my future interviews, you hear somebody say, once somebody buys make them an offer for something else, especially since you have their credit card in your system. And you say, I want to try that. Again, drag and drop in click funnels, and you’ll be able to use this.
They bought a bunch of ads for me, I guess I didn’t kill it for them with the ads. So they said, Andrew, don’t worry about it. Don’t even do ads for us for click funnels. And so, instead talk about our podcast, which I did, and I think I got them a good number of people that go subscribe to the podcast, but I feel bad that they didn’t get enough customers of ClickFunnels because it is a tool that I love.
And so I’m saying this for free. I don’t expect them to buy another ad. Again, this is not what it’s for. It’s just to say, I want them to do well. And I want anyone who’s listening to me to really understand click funnels, fricking rocks. And you won’t know that until you try it for you. I didn’t until I tried it.
So I’m gonna let you try it for free. By going to click funnels.com/mixergy. When you do you get to try it for free. If you’re not happy, just move on. If you are happy, it will change the way you do business, because all these ideas that you have in your head will suddenly turn into action.
Clickfunnels.com/mixergy action, which will then grow your revenue.
you can test really easily on click funnels. So something up.
Andrew: Anything that you throw up? There’s a copy and then turn it into an AB test, right?
Gajan: And I always say the first version of everything, it never works. The first version never works. Right. and so the game is just keep iterating. I remember the first version of the dog fence site, maybe one in a thousand people bought, and eventually we got it to about two and a hundred, right.
20 X difference. And so think about,
Andrew: good money out of that?
Andrew: You did. Okay.
So why would you, why were you still working then full time considering that this thing was, was showing success?
Gajan: it didn’t seem real. It didn’t seem real. And you know, my mom had a job. My dad had a job, everyone, you had a job. it just didn’t occur to me.
Andrew: It seems like almost a hobby, not, not a real life goal.
What would your parents do?
Gajan: They both worked for the government. Yeah.
Andrew: Doing what?
so I was at this consulting firm,
a lot of,
Andrew: firm. It’s the top consulting firm in the country. It’s
Gajan: yeah. So it’s where we’re kind of all, the fancy MBAs go. and you consult the company is and work on big problems and try and figure out how to turn the profit dials. Um, and every MBA that works in a big company, secretly frustrated, small business owner,
and so launched.
They’d talk about their business ideas, talk about doing, um, and. And occasionally a client would be like, Oh, that’s, that’s interesting. could you do that for us? And so at some stage I was like, yeah. And so a lot of these split testing ideas, where you could get more revenue or more leads out of your existing traffic, Big companies didn’t test it all at the time.
They still, for the most part don’t test and testing is basically like free money. I would say it’s like having a eccentric uncle that owns a casino and they say, Hey, Andrew, come in. Anytime you want play all the hands of blackjack you want. If you win, you keep the money. If you lose, don’t worry about it.
and so the dominant strategy is to do two things. It’s play every hand of blackjack you possibly can. Right? And the second is, you know, play good hands every time. So, th the same tools that we could use to grow the small dog fence business, we found you could use to grow, especially
Andrew: So your first big customer was, was it Netflix? I went back. And looked at what the website
Gajan: Yeah, it was pure luck. We knew someone and they had, they already had a team that had this one thorny problem. and I think they took pity on us. I think they knew we had just opened the farm
they they sent us this business and
it was awesome.
Can’t go too much into it, but they were having, they had just gone international in these international markets.
Andrew: Okay. at the time?
Gajan: I, I think we went through a couple of names. and at first we did a bunch of stuff. I think, we called ourself Sandhill SEO to start cause, my partner was in Palo Alto. And it just over time, it became clear that the most value we added
Andrew: And so spiralizes what, like the spiral of improvements. We’re going to do that for you.
Gajan: This upward, this Epic upward increase in
Andrew: Who is your, there was another co-founder. It was you, your wife was listed on the site as a cofounder, right?
Gajan: she was, she was definitely part of it early on, but, I had a business partner who I had, I had worked with, he was my boss.
Andrew: The RAF was Zack. Is that
Gajan: VRF was one of Ali’s friends.
Andrew: Okay. Oh, Ali
He was, he
Gajan: Brilliant guy.
He was my boss in a previous job and we both kind of left at some stage started spiralize, at, I think we got to a certain size and, actually last year I bought out his stake.
Andrew: You did. Okay. I felt also that maybe you put your web, your wife on the site with her maiden name to make it feel like it
was a bigger team coming on.
Andrew: name that she uses on her books.
Gajan: yeah. McAlpin was her maiden name
Andrew: Okay. And so this was you
trying to hustle?
Gajan: One is we want it to look bigger than we work. Cause we started with T.
Andrew: I might’ve just,
Gajan: second is if I put her married name on people would realize she has extraordinarily poor judgment and would never hire her.
Andrew: it does feel like, well, all right, is it a family run business or not? And, and you, you dealt, you got that out of the way you told me, Hey, look, Andrew. You want to know the hard time it was after Netflix, we got Netflix. And then what happened? That was so painful.
Gajan: Yeah. So we got Netflix, maybe one or two big ones and I’m like, this is great. There’s this easy, kill it. and especially after that, well, I would say we worked for Netflix, and the phone didn’t ring, it didn’t rang and rang and it didn’t ring. And, and I, I think it was completely our fault, especially having come out of McKinsey and being really junior that I had no idea how business comes in the door and it just, as a junior person there, this is just turns up.
It seems magical when you just. Pick up the phone. for our little company, it, it just didn’t business. Didn’t come in the door, no one was ringing, no one cared. And so we realized we had to go out and had no idea for years, how to do that.
Andrew: What are some of the bad ideas that you had
Gajan: I don’t know about the bad execution, like content marketing, never really worked for us. random networking meetings for a while. We did this, sorry, I’ll turn this off. for a while we did this stupid thing that we read on line of, if you like. Calling people to network with them, which, which is a terrible idea because they assumed we actually wanted to network and, you know, we were trying to sell them something and it’s just a
Andrew: I’ve seen people do stuff like that. Why didn’t you, why don’t you say, you know, what. I got really good results from selling products. Why do I need these companies to validate me? I’ll just go create more products. I’ll
my own. I’ll create eBooks.
Gajan: Yeah. So I was definitely doing that and continue to do that. on the, on the side that the challenge with these businesses, at least the way I did them is they’re quite capital intensive for the first year. And then I would, but then you get this annuity for the rest of your life. Like if you think about that baby sign line, which business, It’s probably a hundred thousand dollars put into it and a lot of effort in year one.
Andrew: no, I don’t, I don’t agree with that. I’d the other side I saw that this, I, I get the details. No, one’s touched, but I like that somebody said, Hey, parents are in lockdown over COVID. We’re going to write a blog post talking about how this could be a good time to work on sign language. And here’s some of our free resources,
Gajan: Yeah. Did we do.
Andrew: depth work, but you did something.
Gajan: So when I say don’t do anything you, part of, of setting it up in the first year is hiring the right people.
compliment them on it.
Andrew: So this was not you doing it. It was someone’s going in. It’s working. Got it. So you’re saying, look, Andrew, I could have created more of these businesses, but it would have
Gajan: And I was, I was, but you can’t, you need to balance out the cash flow of getting, doing things that bring cash in
Andrew: So consulting or not
like we’re talking about with spiralize brings in money faster and L got it. Okay.
Gajan: The flip side is leverage, right? Cause if I double the size of my own business, right? Let’s say the baby sign language business is doing a hundred thousand dollars a year and you double the size. It’s, extra a hundred thousand, which is great. It’s nothing to sneeze at. if you take a big business, Like let’s say Netflix, and you got them even 2% more business.
I don’t know what their market cap is, but a 2% increase in their conversion rate turns out to be about a 6% increase in enterprise value, which is probably a couple billion dollars,
Andrew: got it.
Gajan: right. As five or $6 billion. Right. That seems like crazy math, but it’s true. so it in, so a fee that a client will pay on on a large business of magnitude more
Andrew: And you said, all right, we can take a peak. Did you, from the beginning, say, I’ll just take a piece of this.
Gajan: early on, we decided that a performance model was more fun. It, it. It was what we liked doing. It was skin in the game, you know, every morning I’d get up checking the client’s stats. cause we have skin in the game and it made us move fast. And,
paying the bills,
but it’s still split some of our clients, especially, The Netflix’s of the world, want the fixed price engagement, and we get that, but about half our clients are just purely success fee.
Okay. I think I saw in the beginning, it wasn’t that you would only get paid if you got, if you delivered results. I think I saw that your marketing said we will hunt for the big wins in your data and we guarantee results. So it wasn’t like we get paid if we do this, but we guarantee that you’ll get paid.
That you’ll make money or else we will. All right, I get it. what did you do after Netflix
Gajan: Yes, this is humiliating, but this is actually the business. I think you asked me this really interesting question of what’s the business. You would start if you had to start from scratch. I realized there are lots of big companies that have really crappy websites like you get there and you’re like, this is awful and, and they’ll often redesign it and they’ll still be awful.
And the problem is it just turns out to be quite hard to, to buy tastes or judgment or good design, or it gets at site gets killed by committee. Right. You get a good designer in. And personal marketing wants to sing and a person themselves sales wants to sing. The CEO has an opinion tune. It comes a mess.
So we would unilaterally. We actually go to office buildings.
Gajan: I’m here in Atlanta and we’d look at the directory and we do some recon and see kind of which of these businesses a big we’d look them up on LinkedIn. And then we. Knock on the door and pretend to be lost scat around and just make sure they had money. crappy and had no money.
Andrew: Okay, by looking around, you can see, there are a lot of people here they’ve got yeah.
spending on furniture.
They’re spending, right? People are well-dressed, this is a business it’s winning, not dying. And then we just redesigned the homepage without telling we wouldn’t have any conversation with them. And then we would print it out. We bought this big printer and we print it out on this big, it, a photo paper, and then we’d glue it onto poster board.
And it was beautiful. It had a stand on the back. And so it’d be like three feet by two feet. Big. The key was big. And then we would, I say we, it was, I would walk in to. office uninvited with the thing under my arm. There’s something about carrying something that an and this is, you know, less security five years ago.
And you’d walk in and say, I’m here to see so-and-so or even better. If the receptionist wasn’t there, you just find them one of the hallways. Hey, I’m looking for Andrew. Have you had the big thing under their arm? They almost always let you through, um, cause they assumed you’d. And you’d kind of look you’d angle it.
So they’d see it was their weapon a bit. Is that the new they’re like, I have to talk to Andrew about it. You’d go in and you’d see Andrew, and like two times out of 10, they throw you out. what was interesting is about 10% of the time they would, they would essentially buy it on the spot. They would see it.
It would be And what was great about that was
it, it was very inexpensive to fulfill the business cause they wouldn’t be about a bunch of back and forth. What you showed them is what you sold them. Right. That’s what they wanted was really interesting though, is we’d get another 10% converting the throws out and we’d leave there on the stand.
It was important that I had to stand up, put on their desk.
Yeah, it was a little cardboard stand that glued on the back,
Andrew: I’ve seen those. Yes. Right?
I’m on Amazon right now. Actually looking to see what this printer costs. I can get it for less than $2,000
Gajan: yeah. HP has a subscription thing too, which they charge you per page. And if you’re printing full color pages, really good deal should do it. so. We print out, we leave it there. And psychologically, I think what happened is it’s very hard to throw out something that’s nice and big. It doesn’t fit in the trashcan and someone else would walk into their office and say, Andrew, is that the new website?
It looks way better than what we have now. And you get this call a week, two weeks, sometimes a month later. And they’d be like, Hey, and we glue our business card in the back next to the stand. They’d say, Hey, can you that, that website, it looks really good. Can you come in and talk? My boss wants to talk about it. And so about two and 10 would end up closing.
Andrew: Okay. That’s killer idea. You know what? I had somebody come into my office with a big board with my site on it and some bullet, it wasn’t my site because he wanted to redesign it. He wanted to help me rethink my business. And of course he comes in here. You can’t say no, that person clearly did work right.
And you’d be an idiot to be someone who’d pass up a hustler. Like that’s of course we sat down, we had a conversation and you’re like you said, I kept that we can cardboard box cardboard thing that he created for years. I don’t know what I thought. In retrospect, it wasn’t until Colby that I finally said, I have to throw some things out to be lighter.
That when I did, I realized I could have just taken a picture of this, but it seemed like there was so much work involved in it. I didn’t want to get rid of it. Alright. Second sponsor is HostGator is a yeah. HostGator, your first hosting company, many people who I’ve interviewed their first hosting company.
When I asked you before the interview started, what idea would you have for somebody who is listening to us, who is a wantrepreneur or not a preneur, and thinking about it, you said this idea that we did, that’s the one to steal. So I’m going to suggest anyone out there who wants to get started. You don’t have to barge into people’s offices though.
You still, frankly, could slowly make your way into offices. I’m noticing, but if you just get, I’m ask, leave it outside their desk, let them look at it. I do find that in general, if you start creating things for people, well, there’s so much more likely to use it. So whatever the first services still work, people still want stuff done for them.
They don’t want to do it themselves. I was actually supposed to do this interview using Riverside’s video software for doing interviews. It looks beautiful, but I have one little freaking change to make. And I said, I’ll just stick with zoom for one more interview. And so I didn’t use it. If the founder would have said, Andrew, let me just set this thing up for you.
Here’s your account. Just go to town. IBM. That’s the way ClickFunnels was set up for me. I just kept using it anyway. So services it’s still very big. People still want stuff done for them. And yes, if you just start off by showing them what you could do for them, it could be a big plaster board. What is it called?
Plastic. It’s the thing that you put it on poster board. Excuse me, big poster board. Or I’ve even seen it just be, here’s a link somewhere I created for you. That’s big.
Gajan: Now, if physical is huge, physical is huge.
Andrew: can’t, I can.
Gajan: emailed them cause we thought, well, let’s service the rest of the country.
Andrew: Doesn’t work.
Gajan: it much, it works but much lower conversion. Right?
Andrew: Still drop it off at their home or office. Give it to them right there. That’s what you’re suggesting. Alright. Bring that idea over. one COVID business that I started was for this guy, Andrew, who works at the zoo, drew from the zoo was really big on doing zoom sessions with my kids and teaching them about how, How insects work, how a snake eats, showing them the whole thing was so much fun.
I said, can I create a for you where others could hire you to do one of these sessions for their kids? He said, yeah, we did it. He got paid and he’s running the site now. And we did it all on HostGator and I didn’t have much time cause my kids were still being homeschooled at the, at that period. And so while they were playing for a bit, I sat down with HostGator.
I created a brand new account. I want to know the whole experience a to Z. And I just started playing around until I came up with what the idea would be. And I built it. I gave it to him and now he’s got it. If you’re out there and you haven’t started a website, go create. A host Gator account. It’ll just get you started to let you experience it.
If you’re not happy. Of course, they’ve got a guarantee on it. If you are happy, you’re going to get the lowest price available. If you use my URL and you’ll get tagged tags, the Mixergy customer that’s hostgator.com/mixergy hostgator.com/mixergy. And by the way, Mixergy wasn’t hosted on them for awhile. I then switched over.
Nobody knew it. Nobody could tell. The only thing that we finally did was we put a logo on his to give them credit because HostGator just freaking works. Oh, the only difference is now price is lower. I go into QuickBooks and I see lower price. If you’re out there, move over to HostGator, save yourself some money.
Alright. You now had your, your customers, you had to start to create a process for working with them. What was the process that you created to allow you to
Gajan: Yeah. So, I think in the early days it was just super ad hoc. It would be go talk to the business owner. It’s very freewheeling. It is a life lesson kind of one of the hard way is it didn’t scale at all, right? Because there’s only one of me. It was also I think, frustrating for the owner. Cause they
Andrew: It was just you thinking through here’s
Gajan: right. And they had no timelines. They had no budget, you know, so I’m just over there over the course of time. So developed processes and documenting them was really important that, so then as you added more people, the, these processes grow and get more complicated. and, and you’d learn from experiences.
Something would go wrong or something would go, right. You’d be like, okay, let’s amend the process.
what does your process look like now? Is it I asked Neil Patel is he created digital agency. I said, what is your process for setting this stuff up? Do you have a checklist? And he said, no, that doesn’t work. People need to have more flexibility. Do you work with, with the checklist?
Gajan: we are huge users of checklists and process documents, a great service called process street, where you can
create the processes I’m talking about. Yeah.
but if you want to start out just Google doc, Google spreadsheet would work, and, and documenting them and involving them and, and they can get quite complex.
Cause now we work on these kind of big enterprise accounts. a big thing is quality control. you know, if you build a Patriot home that should just be perfect on every device. And so we used to rely on the brilliance of our people right. At. And just over time realized, well, that it’s kind of fragile or just they’re having a bad day.
What if you have to hire new people and everyone kept you that brilliant. and so we just create a process and obviously the first versions tend to be pretty rough, but I think the checklist for when we quality control a client site has like 75 items or something like that.
And. Every time something goes wrong or something goes very right.
There’s a weekly kind of a debrief meeting where all the, the people in a particular department meet and talk about what’s gone, right. What’s gone wrong. And if the process needs to change or evolve, so they say, Oh, you know, this edge case happened, on a form on Safari. So let’s amend the process or Hey, It went really well when we’ve framed as discussion with a client with this visual aid.
So great summary of the process.
and so you could even come up with new AB testing ideas, using a checklist.
Gajan: Yeah. So, we use a database and we capture all the results from our tests. We also go out and scrape the internet and try and steal other people’s AB tests. Put them all in a database. and it’s basically a big checklist. So when a new client comes in the door, we said, Oh, what tests do we run on people that like you had similar problems to
and we said, okay, this test is one, six times out of seven. Let’s start with this one. Okay. Okay. This other test is one, one time, not five. Let’s
put that toward the end of the list.
our engineers spilled a crawler that goes out and it essentially screenshots the entire site. And then it looks for visually, it does it from several different IPS and it looks for visual differences. And, it, it then with a bit of human intervention to, Oh, this person’s running a test. then we come back a couple of weeks later and we say,
Andrew: Ah, okay. Got it. Wow. What are you using to test using different IPS?
Andrew: Amazon web services?
Gajan: no, it’s, it’s rocket something,
there are a bunch of these services they’re built for people that are doing usually nefarious things like, trying to bomb Ticketmaster to buy tickets.
But I get what you’re talking about. So you’re using one of these services and as I’m doing a search here, I can find a bunch of scraping sites. I,
Gajan: Yeah. So ScrapeBox is awesome tool for scraping. And there are a bunch of utilities that are services that work with ScrapeBox to provide all these different IPS.
Andrew: You know what? So scrape box looks like a prime candidate for somebody to remake their site. It looks like it’s just an old windows app from, I don’t know when, and I don’t think I would have trusted them. If not, you’re, you’re mentioning them. Look at the bottom of their site. Even they have one of these things.
It looks like a coupon that you’re supposed to cut using scissors. Right. Like that old thing that used to work, I feel like nobody’s done any AB testing on it in awhile,
Gajan: They have a, Neil Patel testimonials,
Andrew: Yeah, that would, that would add a lot of credit credibility to, but you know, it’s an old site and an old quote because it’s Neil Patel, CEO of QuickSprout and he sold that site a while back. But that’s the tool that you’re, that you’re using. And it seems like it’s popular because as soon as I started typing in scrape, for some reason,
Gajan: We don’t use the tool, but to do ScrapeBox as a piece of software, you need some hosting that can
Andrew: and so whatever
Gajan: you get banned, right. They’re called proxies. The company I remember now is called stom proxy, but they’re a bunch of these proxy companies
Andrew: Got it. Okay. Okay. All right. So that’s how you do it. And then do you do anything to co to come up with more creative ideas and other people have
so a lot of it’s what we were talking about before it’s, it’s looking on the bubble. So how about half our ideas come from kind of existing tests
Andrew: got it. And then saying, what is it that kept you from doing it and then FA got it. Okay. That’s that makes a lot of sense. And then are you using one of those muddled popups to come up? If somebody is on the site for a long time, that works for you?
Gajan: So we will go to the ends of the earth to try and get an edge on a test. Cause we got skin in the game. We’re going to lose, losing money. Every time we run a test that doesn’t work right. We’re losing my money.
So we’ll go to the ends of the earth to figure out why people aren’t converting. I find to sales reps is a huge thing because they talked to lots of customers.
So customers will tell them, I find mining live chats is huge. I find picking and the brain of your competitors. You’d be surprised how often if you call up. A competitor’s customer service agent. They’ll tell you something physical. I find physical stores really helpful. We did something for a big appliance seller, and we just went down to home Depot and Lowe’s and talk to your appliance salespeople there and just talk to people buying appliances.
Okay. Why are you buying a washer? What are you looking for? So anything you can do to get an edge
Andrew: If you, if you’re talking to salespeople of a competitor, I should be doing that too for the interviews. But if you’re talking to them, do you say why aren’t people buying.
Gajan: yeah, went set straight out of the box, but we’ll definitely, and we might phrase it in a different way.
looking at washers, have a conversation, and then you might drop in like, Hey, a good phrase that would use all the time is like,
Hey, what kind of questions do people usually ask? Pretend to be a little lost,
Like, I don’t even really know what to ask you. Hey, what do people usually ask? I bet you and I use this phrase. I bet you get asked the same 10 questions every time.
Andrew: That’s great.
Gajan: You don’t wanna hear one or two things you want to, to 10. So I’m dropping that anchor. They’re going to respond with one thing or two things.
You summarize it back to them. Oh, people really want to know about delivery time. They really want to know about, and as you consumption. What else? And you do this a few times, and then at some stage they’ll cry uncle, but it’s often you’ll go back four or five times summarize what else? And I’ll tell you
Andrew: you said these five things, what else?
Gajan: And then another really powerful thing is to say, Hey, I noticed a, and I’ll do this with our. sales reps, it’s
harder to do with the competitors. Hey, this side effect are talking to me, is it, it gets people’s brain thinking. And I know an hour later, you’re going to come up, have this other idea.
So I am going, I want, when you have that idea, I want you to call, leave a business card and say, is it okay to, if I check in in three days, And just see if anything else. Of course they say yes. And so I’ll have my assistant, someone else give him a call three days later Hey, was there anything else?
Andrew: That makes a lot of sense. I find that when I interview people or especially in the early days, they would come at the end of the interview and say, I just realized there was something else, which is why we started instituting pre-interviews I pre-interviewed you here today. But we often will do before COVID we did a full on producer pre-interview because people will come up with a bunch of things.
And they’ll stammer through them. So the producer will put the, put the list together. And then when they come on with me, they’ll say, you know, Andrew, what I forgot to tell you a producer was, and then they come up with the next thing because now their mind’s been primed and the pressure has gone off.
All right. Give me one other thing. If somebody is listening to us who says, you know what, I’m not, I’m not yet ready for spiralize.
So I just get in this rhythm of talking to customers, especially customers on the bubble, creating a backlog of ideas you’ll get 10 times more ideas than you can possibly test triaging that list. So.
That list. Do you want to prioritize things that are relatively easy
to do first and that you think will have the most impact first then every day, every week, just pledge. I’m going to test one of the things on the list and you’ll be surprised. Imagine. It goes back to that analogy.
I told you, it started show. Imagine having this crazy uncle where you get to keep you winning bets and you don’t pay for your losing bets. If you do one thing a week. And even if that imagine only you’re terrible at testing, you’re the world’s worst tester. Your ideas are worse than chance. Let’s say only one in 10 of your things wins.
That means you’re gonna get five wins a year. So even on a really small scale, and let’s say each of those wins, is it pretty pathetic when it’s a 7% man, you’re 35%. You’re making 35% more revenue and on a profit basis. Cause it’s, it’s all upside. You’ve already paid for those visitors, basis.
You probably have 50, 60, 70%
that’s your whole business. What’s a good size business for spiralize. At what point should they be calling you?
Gajan: So if someone is spending more than a hundred K a month on paid, then it’s usually such a no brainer. They’re buying dollar bills for quarter. is the greatest thing they’ve ever done.
Andrew: do that at a hundred K a month.
Gajan: Dusting. My guess is 3% of, of big companies test.
Andrew: Hmm. I wonder how many of my past interviewees would do it? Like, was it roommate, they’re doing a bunch of ad buys. I wonder if they AB test their stuff at all,
Gajan: Yeah, that’s funny. People do a lot of AB testing ads, very little for the landing page. And even when they test. so I’d say three of 3% maybe doing it seriously. Maybe 10% are doing, you know, we’ll change a couple sentences here, button color there. where at that scale you should be running a lot of tests and you should be taking big, big swings,
Andrew: Major tests.
Andrew: And then what software do you use to let them redesign to let your team redesign the page quickly?
Gajan: Yeah. So, We’re lucky we have the luxury of, we probably have 30 developers. And so we usually just redo it in code. So it’s fast and we have extreme flexibility, but your listeners should not follow our example. You should use Google optimize. Yeah. It’s free. It lets you change
Andrew: All right. Fair point, you got 30 developers and you’re doing what’d you say 3 million in revenue.
Gajan: yeah. Yep.
Andrew: are the developers that you can keep that many
Gajan: So our business is a little quirky in that our fees are back-loaded so work I’m, I’m getting paid for work now that I did last year. Cause we’re on a performance basis. So a client.
you just have to, you just have to understand the
We’re really investing in a client and then the payoff a client will pay us over the course of 12 months after a win. So if I start working now, I probably get the first check four to six months from now,
Andrew: Wow. That’s a tough way to be. Alright. It’s great for your customers though, for anyone out there who is at the right size. Spending over a hundred thousand a month, or frankly, even if you’re spending less than, you’re just kind of curious about this business, go check out. Spiralize of course we’ve got the name, team and everything linked up here in the show notes, but it’s SPI R a L Y Z e.com.
And I want to thank two sponsors who made this interview happen the first, if you are not yet creating landing pages and testing them, this is a good piece of software. That’ll do it for you. Right? Right. Now we use it for free at clickfunnels.com/mixergy. And second, if you have a hosting company and you think it’s.
You could say it’s some money switch over to HostGator. If you don’t yet, have anything go get started by working with HostGator and you can find them at hostgator.com/mixergy. Thanks for doing this interview and thank you all for listening everyone.