Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs for an audience of ambitious upstarts. And check me out, I’m wearing a jacket into the office here today. Alex, the reason I’m wearing my jacket is [inaudible 00:00:18] by the way. I usually on Thursday don’t record interviews, but I said, “You know, I work a little bit from home which I don’t love doing, but it was a nice morning. And then I’ll take one of the local bikes.” I don’t even have to pay to rent it. I pay an annual fee to be able to ride a Ford bike whenever I want. I said, “I’ll ride one of those into the office. I’ll make it in time.”
So I get out there, I look for one, I couldn’t freaking find one. I say, “Great. This is San Francisco. We have jumped bikes,” you know, the ones that everyone hates because they’re dockless. I’ll get on one of those. I couldn’t find any one of those. I said, “I can’t walk. I got to rush in here. I don’t want to be late.” And you know? Let’s get on a moped. So I have another subscription to some service where I can take a moped whenever I want. I jumped on one of those mopeds and I made it over here and I’m like, a motorcycle dude here in San Francisco. I had a great entry into the day. So I feel like I’m shot out of a cannon. And the reason I’m doing this is, Alex, I feel like you don’t know what to say as I’m saying this. It’s totally fine.
Alex: I’m just listening. Sounds exciting, by the way.
Andrew: The reason I’m doing this is you’re in freaking Siberia. If I don’t record with you today while you’re here in the U.S. in New York, I might miss my opportunity to cover your story and I really want my audience to hear it. When are you going back to Siberia?
Alex: Next week.
Andrew: Okay. And what’s Siberia like, by the way, before I fully introduce you?
Alex: Well, actually Siberia, it’s not that many people think of it. We have a regular city, half a million people, streets, cars, houses. But the very difference is, though, that we have a really long winter. It could be up to six months long and a lot of snow, but on summer it’s really hot. You can swim and it’s beautiful. So it’s not that different, but, you know, when you say that you are from Siberia, you get a credit, like what you just mentioned and it helps a little bit, but also you are really far away from tech, so it’s a disadvantage.
Andrew: I get that. I always felt like Siberia is where they would throw people when they didn’t want them around when they did something wrong. Isn’t that true? Wasn’t that part of what happened?
Alex: It used to be maybe 200 years ago, but now it’s adjusted [inaudible 00:02:20]
Andrew: Not even in the Soviet Union, they wouldn’t send people to Siberia when they did something wrong?
Alex: No. I don’t recall it. Maybe they did it.
Andrew: All right, cool. For me, it kind of puts a little bit more of an urgency around doing this interview, not because it’s Siberia but because you’re in Russia. When I have friends who go to Russia, it’s murder to try to connect with them because our hours are upside down. Anyway, I should introduce you.
So Alex is Alex Kistenev. He created this chatbot that I’ve been just watching on Product Hunt so much. Here’s what it does. You know how when you’re working with a remote team, and maybe even with a team that’s all in the same office, it’s kind of hard to check in with people and see what they’re up to. It’s hard to understand, “What is that guy doing over there? And how, if I know about it, how does everyone else get to know about it?”
Well, what Alex did is, he created a bot that works within the Slack chat app. And what the bot does is it checks in with people and says, “Hey, what are you up to?” And there’s a series of questions that you could ask. And then everybody who needs to can hear those answers and he thinks of it as a way of managing meetings asynchronously. Alex, how do you feel I did with that?
Alex: Totally correct.
Andrew: Okay. And I’m watching your face to get a sense. And I know that you’ve got more in this product and more to say about it and I wanted to make sure that I introduce it right. All right. We’re going to find out how he’s doing this, how he was able to build this without any outside funding, the clever way that he’s getting users to sign up for this, and so much more thanks to two phenomenal companies. The first will help you do your email marketing and other automated marketing right. It’s called ActiveCampaign. And the second will host your website, it’s called HostGator. And I’ll tell you guys about all those later. Alex, first, let’s give people a sense of the size of the company. What’s your revenue?
Alex: Right. So our current revenue is about 30K per month, and we hit profitability maybe six months ago. So our costs are lower than how much that we’re making. And it feels so exciting to be profitable because it’s kind of provide you enough flexibility and freedom to choose whatever you want, but it’s just . . .
Andrew: How profitable are you guys now?
Alex: Maybe 10K above our costs.
Andrew: Impressive. 10K. How many people on the team?
Alex: Seven people.
Andrew: Okay. All in Russia?
Alex: Yep.
Andrew: Okay. Cool. You lived in the Bay Area, though, for a little bit, didn’t you, working on a startup?
Alex: Yeah, that was true.
Andrew: What do you think about living in San Francisco with tech startups all around you?
Alex: Well, it’s so awesome and I dream that I can come back. And so our current company, I think will allow me to move back to United States for a while or for some time because it’s so important to be near people with great ideas with experience. So, for example, now I’m in New York and it’s such a big difference for me to be surrounded by like-minded people. So this is the thing that I miss in Siberia. Even though it’s my native town and there are a lot of great things about it, but very few companies are working on a startup there. So the problem is that you can’t talk to someone to compare how you’re doing or to get an advice. And even if you’d like to have a call with someone from San Francisco, there are time differences, such it makes it very inconvenient. So living in the Bay Area is awesome I would say.
Andrew: Yeah. And you know what truthfully? I feel like some of the best ideas come when you’re not sitting around trying to come up with them. When you’re just shooting the shit with someone about what’s going on their lives and then they tell you about something clever that they’re working on that doesn’t seem important enough yet but they’re excited by, that’s when living in the Bay Area is exciting. All right. You were running a company called Talk O’clock back in 2011 in the Bay. You’re smiling as I say. What was Talk O’clock?
Alex: I’m smiling because, like, you know everything about me, but let’s talk about it. So back in the days, we found a company that was doing . . .
Andrew: Oh, I just lost you. Let’s give it a second. And if the connection doesn’t come back, we’re going to have to reconnect.
Alex: You set the alarm clock.
Andrew: Sorry, I lost your connection. You were saying, back in the day you were looking at a company that did what? This was a Russian company that did what?
Alex: Yeah. So they did a product which was a social alarm clock. So you set the alarm clock, and in the morning you’ll be woken up by a stranger phone call.
Andrew: Just a random person calling you up and saying, “Hey, Alex, you wanted me to wake you up at six? It’s six. Get out.”
Alex: Yeah, absolutely.
Andrew: And this was in Russia? Was it doing well back then?
Alex: Yes. It was in the Russia and they were doing really well. And so we thought we can make the same product and launch it for the whole of the world, and it will be a global company. So, within one month, we launched iOS, Android applications and web app with the same technology, but focusing on global market. And so I came to Bay Area to present it on different conferences, [inaudible 00:07:45] people, native [inaudible 00:07:47] funding. And you know what? I found that while in Russia, people treated it like, “Oh, that’s awesome.” In America, people were like, “Oh, it’s a creepy idea. I don’t want to be woken up by a stranger.”
But even though, we got I think 20K users signed up for service. We got hundreds of calls a day and they were mainly people from India, talking to anyone about random things. It was not like for waking people up, cheering them up in the morning. It was more like just chatting service for random people. But the costs were really high like for infrastructure for handling all those calls.
Andrew: Those were actual phone calls that you were making, or was it Voice over IP?
Alex: Yeah, sure. It was the Voice over IP.
Andrew: And even then the infrastructure costs were too expensive.
Alex: Yeah. I don’t recall the exact numbers, but I think it was way more dozen of thousands of dollars.
Andrew: Way more than how much?
Alex: 20K, 30K, something like that.
Andrew: 20K a month?
Alex: I think it was . . . I don’t remember. It was six years ago, but it was . . .
Andrew: But just to give me a sense, you’re saying over $10,000 a month. Where did that money come from?
Alex: So we got another project going on and that’s how it helped us to invest that money into that startup.
Andrew: What was the other project that was producing revenue for you?
Alex: It was so many different stuff we were working on, like affiliate marketing, sales stuff, working on other clients. So we did a bunch of different things without having one single thing to focus on which how we are working at the moment. And I was always dreamed to find a great idea to focus all my efforts on that idea and to build a startup from the scratch, and so that’s why I founded Talk O’clock and it didn’t take off.
Andrew: You know what? Let me take a moment. I want to understand what happened with Talk O’clock, but the fact that you could actually go out there and start to produce $10,000, $20,000 in profit a month and allow yourself to invest in a new idea, is kind of interesting to me. So let me understand this. You were doing some work for clients, doing what? Mobile apps or web design?
Alex: Websites, presentations, mobile apps, different things.
Andrew: Everything from mobile apps to like PowerPoint presentations?
Alex: It sounds like this, but it was not like . . . We had different projects. Maybe we had one project for mobile app, one project for websites.
Andrew: Got it. So whatever work you could get, you’d say, “Sure.” And how would you get your clients? Upwork?
Alex: No, it was within Russia. It was within Russia, finding clients using people I know. But mostly we didn’t focus on network because . . .
Andrew: Tell me about the affiliate thing too. You were also generating money from affiliate program.
Alex: Different stuff, yeah.
Andrew: What did you sell through affiliate programs? I see that smile. Most people when they’re doing it, they don’t like to admit what it is. Now that it’s been a few years, tell me what it was that was producing that kind of money.
Alex: I think it was more than dozen. It was more than 10 years ago. And it was like some clothing, some . . . I don’t even remember what was that.
Andrew: Was it pills? Was it like little blue pills? No.
Alex: No, no. I know the . . .
Andrew: Cologne?
Alex: Huh?
Andrew: Cologne?
Alex: What is that?
Andrew: You were saying it was cologne that you were selling you think?
Alex: No. I don’t know . . .
Andrew: No. I thought you said cologne. You don’t remember any of the product?
Alex: Oh, yeah. I said clothing.
Andrew: Oh, clothing.
Alex: Yep, yep.
Andrew: Clothing did well?
Alex: Andrew, I really . . . It was so long time ago, then we switched to SEO, then we switch to client’s work and build some tiny products that we generated cash for us. But those projects they are so well spread so that it didn’t feel like you’re doing something meaningful. Like we could make something out of there, something there, then in two months, it went away. So that’s why for years I was working to find a great idea, a great startup, a great . . .
Andrew: Got it.
Alex: . . . problem that we can solve. And that’s how within years I was thinking about what should I say to you when you ask me those questions. What was I working on? And it wasn’t really like something niche or vertical where we dive deeper and found inside. So it was like spreading our efforts into different verticals. And you know what? I found that it doesn’t work. When you focus on your efforts 100% on one vertical, one niche or one problem for a long period of time, it pays off like with what we are doing at the moment. We spent three years in a chatbot space. And it took us three years to get revenue. And it took us one year to learn where we shouldn’t go for. And that’s what matters a lot, I suppose.
Andrew: Yeah. You know what? I’ve been watching you from the outside because you’re so good at being present in my world. You know, the world of startups, who love software, who are curious about what . . . who love Slack and love . . . What is it? The whole agile movement. You’re just so in our world. I can’t stop seeing you guys. I wouldn’t have been surprised if you sat here and you said, “Andrew, we’re a quarter million dollars a year.” Because you’re so present in my world, I assume you’re way bigger. And I get what you’re talking about that focus is what lets you feel omnipresent to people like me. You started telling me why the software didn’t work out and I said, “Let’s hold on to it and we’ll come back to it.” I think now’s the time to talk about it. Why do you think that it didn’t work out?
Alex: You mean the Talk O’clock?
Andrew: Yeah, Talk O’clock, why not?
Alex: So it wasn’t solving a real problem. People [inaudible 00:13:46] on Talk O’clock and I mentioned that we had, I think, over 25K users. They were there just for fun, for entertaining themselves. And that kind of problem could [inaudible 00:14:04] solved but it wasn’t really a problem for waking people up in the morning by random phone call. And so when we found that we understood that even if we grow that company bigger, even if we move to some niche, like, I don’t know, maybe even dating or whatever, we wouldn’t be able to have either revenue or have retention or whatever to spend the years of our time working on that. So that’s why we decided to just stop it and move to the next idea.
Andrew: What was the next idea?
Alex: It wasn’t that smart actually, but let me tell you about it.
Andrew: Yeah.
Alex: So we had an infrastructure for Voice over IP calls. And so I got an idea. And I have sometimes too many crazy ideas, but that was the craziest one I suppose. So I found that there is a problem of taking medicine by elderly people and sometimes they forget to take medicine and it costs a lot and people . . . It’s not good for people. So we used our Talk O’clock infrastructure to connect parents with their children to remind them about taking medicine, like you set up in a regular phone call, let’s say 5 o’clock that connects you with your mother and you say, “Hi mom. Could you take that pill? Don’t forget. It’s important.” And it didn’t work out.
Andrew: It didn’t work out. Why do you think that one didn’t work out?
Alex: Because I didn’t know anything about this niche that this market the problem and because I didn’t push too hard, like, we just gave it two or three months and that’s it. And that mistake followed me for quite some time. And it goes back to focus and hard work over the months and years.
Andrew: And so if you could go back in time, first of all, you probably wouldn’t get into that space. But if you were to do it right, it would be about spending more time talking to kids who would call . . . the children who would call their parents, the parents who would need the phone calls, understand their problem, understand their motivation, see if you could find a problem that your software could solve. That’s what you would do.
Alex: Something like that. And it would be even better to get someone on board who is in this space or who felt that problem because it was only me who found it on internet without any insights about it.
Andrew: So this was you doing it alone. You didn’t have a co-founder?
Alex: Not at the time.
Andrew: Okay. All right. Let me take a moment to talk about my first sponsor and then we’re going to get back into your story and the thing that happened when you discovered Telegram and their chatbot API that changed everything for you. All right. My first sponsor is a company called ActiveCampaign. Here’s the thing. Email marketing is something that most people do wrong, and frankly, I’ve done wrong for most of my career. What you do is you say, “Hey, I know that email is going to work. It’s the best way for me to reach out to my current customers or potential customers. I just put a form on my site, collecting email addresses, maybe even I give people something if they give me their email address, and then I’ll email them.”
And the problem with that is, it sounds great and it does work at first. The problem with it, though, is you don’t want to email everyone the exact same thing. You want to take a moment to understand, what are they about? What issues do they have?
Let’s say, maybe even segment them. Here’s a basic segmentation. You might actually, once somebody buys, stop sending them email trying to get them to buy and offering them discounts which makes you look like a knucklehead. Or if you start to see that they are on a part of your website that’s geared towards enterprise customers, maybe you don’t tell them that you have a 995 intro offer, but instead, you start sending them email that tells them, “We have a call. You can talk to our founder,” or, “We have a phone number that you can use to talk to our sales department.” Whatever you would send to an enterprise customer that you wouldn’t send to somebody who’s just looking at the free version of the site or is looking at the part of your site that’s geared towards new companies.
Get what I mean? How do you segment, though? How do you segment based on what people have done on your site, what they have done with you as a business whether they bought or not bought?
Well, it used to be really tough. Most people used to give up on it or they start to spend a lot of money on software and a lot of money on people to do the software right. It’s not anymore. ActiveCampaign will make it a snap. I promise if you’re at all interested in this and you could see how segmenting your audience based on what they’ve done on your site, if you could see how that would increase your sales and you’re at all hesitant, I promise if you go to activecampaign.com/mixergy, you will use easily understand this and see that you can implement it.
And if not, walk away, you got nothing to lose because when you go to activecampaign.com/mixergy, they’re going to give you a free month, then if you decide to sign up, if you say, “Hey, you know what? This really is easy. I could do it myself. I can hand it to my virtual assistant. I can hand it to my dopey brother-in-law who decided that he’s going to be working with me and can really handle soft. I’m going to give it to him.” You’re going to see that you can give it to these people and they’ll manage it really right because ActiveCampaign is built for simplicity, very powerful software that’s built for simplicity.
If you decide after you try the free version that you like it, your second month is going to be free and they’re going to give you two free coaching calls with their experts who will make sure that you use this to its full potential. And if you signed up for one of the knucklehead piece of software out there that doesn’t have this power and you don’t want to move over, they’ll even migrate you for free. Alex, is that a great offer or what?
Alex: It sounds really exciting. We don’t have too many users at this point, but I imagine that if you have like more than 1,000 emails, then it would be really useful to split them in different categories.
Andrew: Activecampaign.com/mixergy. What do you mean you don’t have enough? What do you use for your email?
Alex: We don’t . . . Our email list is maybe 2,000 people.
Andrew: Standuply. I’m going to go to your website right now. Let me do a quick analysis of your thing. Okay. You have a button here that says “Add to Slack.” If I don’t want to add it to Slack right away, let me see, I could request a demo. No, you’re not asking for an email address at all. What’s up with you?
Alex: It’s on my to-do list. We are a small team, so we are not capable of doing all things at once and this is what we are up to do.
Andrew: Here’s what I think you need because you guys are really good at creating content. I would suggest what you do is 10 keys for managing an agile meeting right. You just put together a list of the top 10 things. You guys studied this freaking agile thing more than anybody else I know. Wow. You do it a lot, right?
Alex: Yeah.
Andrew: Anyone who wants it enters their email address. Then what you do is you put a little bit of code from ActiveCampaign on your site and you start to see what people are doing and then you figure out how you can start to customize. Look at this. You guys don’t do that at all.
Alex: Yeah, yeah.
Andrew: Oh, you love it.
Alex: That’s good [inaudible 00:21:15]
Andrew: And then you start to teach people from time to time the questions that work well, how they could use Standuply. All right. But it’s on your to-do list. You can’t do everything. I get it. All right.
Alex: Yeah. And I won’t forget it’s a recording of our interview.
Andrew: I think it could be really powerful for you.
Alex: Okay.
Andrew: Telegram comes out with their chatbot API 2016 and you say what?
Alex: I think it was 2015. And when Telegram they released their APIs for chatbots, I thought it was huge. And so I offered my partner and co-founder Standuply, Artem, to build something in the field of Telegram. And we decided to start from just a web catalog of bots and build some tiny bots just to check out what’s happening there. And we had a huge list of ideas from fine ideas to some very complicated ideas what we can build up on Telegram. And . . .
Andrew: But wait. And Alex, just to be clear . . .
Alex: Within months.
Andrew: I’m sorry. Our connection is lagging a little bit. But just to be clear, you said, “Hey, this chatbots are now allowed on Telegram which is a chat app that’s focused on privacy. I think we need to come up with some idea.” And you started brainstorming ideas and looking for the one that you would go for, right?
Alex: Yeah.
Andrew: And then the first thing that you came up with was what?
Alex: So, first, we had a list of like dozens of different chatbots, but we decided to build their web catalog for bots that they were on Telegram.
Andrew: Why? Why was that the first thing that you wanted to start out with?
Alex: We decided to do that to understand the users, to understand the demand and to see where just it goes.
Andrew: Because if you start to see an item in your list is suddenly super popular or type of item is popular, you’ll understand this is the type of bot that we might want to create for ourselves, right?
Alex: Right. You know what?
Andrew: Yep.
Alex: Like, 90% of our users they were looking for porn, and they’re like . . .
Andrew: Oh, really? They were looking for porn bots?
Alex: Yes.
Andrew: Interesting. Okay. So you didn’t get the type of data that you were looking for. All right. So then you said . . .
Alex: But . . .
Andrew: Uh-huh. But?
Alex: And moreover, we also found that like 60% or maybe 50% were coming from Arabic countries and especially from Iran, and like we were so far away from them in terms of language barrier and in terms of culture, different cultures. So we found that it was complicated to build some product. Some business idea was just a business on Telegram. And then we decided, “Okay, let’s move on. Let’s build 100,000 platform for both developers on Telegram. Maybe it will take off.” So we launched the landing page. It was featured on VentureBeat. We got several hundreds of bot developers and advertisers. And we started manually doing all this stuff like it is a big ad platform. And what we found that user retention rate was so low. I can give you an exact example that one of the most popular bots it has 100K installs and a couple hundred active users a day, and we were like . . .
Andrew: Right. You know what? That’s still an issue, but less now than it was back then. So, right. So you’re saying, “Look, if these guys can’t get people to keep using their chatbots, then how am I going to start to sell ads to those users?” Right?
Alex: Absolutely. And also Telegram had . . . I don’t know as for now, but it had some other challenges for both developers. Like we couldn’t get any data about our users. Like their platform, we couldn’t even target advertising towards iOS users who were Android users. And with all of those challenges I mentioned, we decided that it won’t work for us, so we won’t be able to build a viable business on Telegram.
Andrew: You know what? I should probably just explain to our listeners what a bot is, a chatbot is. I think most of them know, but just in case. A chatbot is simply software that interacts with people inside of a chat application. So, for example, I’m looking at the early version of bot family. That’s your collection of chatbots. You guys had something called My Poker Bot that would allow people to play poker within a chatbot. There was Wolfram Alphas chatbot which allowed people to ask or search for anything within chat just like they would on the web but do it within the Telegram app.
Let me see if I could find another one. Al Jazeera had a chatbot with a feed of their breaking news stories. So, if you didn’t want to go to their website, but just get the news alerts sent to you via chat, you can get that. And so your vision was, look, all these people are going to start to build an audience. They’re going to want to monetize it. People aren’t paying for access to these bots. What if we can run some ads? Maybe after like seven Al Jazeera news stories, we can run one ad and link people out to that advertiser.
And you have a good point. First of all, there wasn’t enough activity in chatbots in Telegram, and number two, you couldn’t get enough data on them, so not everyone who’s in Al Jazeera is interested in, I don’t know what, the same type of clothing if you’re going to run a clothing affiliate program in there.
All right. So I see what you’re up against. And then you said, “You know what? Maybe it’s Telegram.” And I believe it is Telegram. I don’t think that the Telegram platform is meant for something like this. People use Telegram because they want privacy because they want more of an intimate connection, right?
Alex: Yeah, maybe. So we skipped Facebook, and I know that you’re still building bots for Facebook. Is it the same Facebook chatbot or [inaudible 00:27:39]
Andrew: Yeah. We got a site called Bot Academy where we train people to create chatbots on the Facebook Messenger platform and people hire our graduates all the time through us. Yeah. We ended up going for Facebook Messenger. You went in a different direction. What platform do you build on?
Alex: So we choose Slack as our next platform and been working on Slack for two years now.
Andrew: What drew you to Slack as a platform for creating chatbots?
Alex: I heard a lot about Slack and when we were discussing where to go next, we decided to choose B2B and to go for some potentially useful use cases. And my partner and co-founder, Artem, he is really into project management. He teaches project management classes. He has a lot of insights and problems with agile teams, and so he proposed, “Let’s build a chatbot that solves those problems with agile teams to remote teams that will . . . ” And so I said, “Yeah, that’s great idea. Let’s do that.” And that’s how we made it to Slack.
Andrew: And so now you finally are working on a project that’s built for people that you know well because you guys have worked with those people, not so much you, but Artem has worked with those people, so you understand the problem, you understand the needs, you understand their language. I can see how this is a world different from talking to grandparents and parents who aren’t taking their medication.
Alex: Absolutely. That’s correct.
Andrew: What’s sprinterbot.com?
Alex: It was an MVP bot at our first version, and then we changed our name second time, and then we changed our names third time to Standuply. So we experimented for six months with different value propositions, different names, different versions, and eventually came up with Standuply concept.
Andrew: When you guys were Sprinterbot, the first version, I’m looking at an early version it says, “Your in-house Scrum Master in Slack.” Scrum Master is a term from Scrum, right? A way of . . . How do I describe Scrum? It’s a way of managing projects with short deadlines and specific way of doing things, right? Like, coming up with stories and . . .
Alex: Yes, something like that.
Andrew: Okay. And so can you describe to me in layman’s term what the bot did when it was called Sprinterbot?
Alex: Sure. So, on Scrum, you work using iterations. It can be one week, two weeks, or several week iterations. We only have . . . When you have to finish all your tasks within that iteration. So Sprinterbot asked you for a goal of that iteration, so it runs and attend that meetings with your team during the iteration and also in Scrum, some teams they use story points instead of hours to [ovulate 00:30:54] tasks. So Scrum Master tracks story points of teams showing them how they proceed from like, large number of story points to zero when everything is done.
And everything was done within Slack, and it was kind of complicated because you have different setups and when you do this all using Slack commands and typing. Like, many people said that the best interface is no interface and typing, when chatbots emerged. And we found that it’s not the right thing. Something should be done using commands, buttons, but some things can be done using text interface.
Andrew: Hey, you know what? That’s always been . . . Well, in the early days, that was my problem with chatbots on Slack. I have to remember commands, or I could hit slash and then something and then list the commands and it really felt like going back in time to Microsoft DOS days where if you remember the command, then you could access the function you wanted, but if you couldn’t, you were just kind of stuck there. And I could see how that was an issue. I also feel like the early version with points, with the team’s mood, with all the other stuff that you were trying to gauge from Slack was just a little too complicated, right? No.
Alex: Maybe it wasn’t more our vision. And not all those features were in place. Maybe it was complicated, yeah, but eventually, we made a circle and returned back to being a digital Scrum Master and working towards building that. But it was . . . So we started from very tiny thing that Sprinterbot did very well. It’s running since then in that meeting stuff for more teams. And then we build the product, Standuply, that was focused on standup meetings. And as we deliver that feature, we started rolling out new features towards building a digital assistant for Slack teams.
Andrew: Wait. So what is the difference then between Sprinterbot and Standuply feature wise?
Alex: I think that from Sprinterbot that you are looking for right now using [active.org 00:33:21] and Standuply at the moment, from vision perspective it’s the same.
Andrew: What about from a feature perspective from what it did?
Alex: The difference is huge. First of all, we have all setups by a web. It makes it easier to connect Standuply to Task Trackers to GitHub. It makes it easier to schedule your reports. You have so many different flexibility to set it up like you need. You wouldn’t be able to do that within Slack. And then in Slack, it works kind of similar way because a chatbot on Slack is like a real person. It can ask you questions. It can deliver you some kind of data. So, from select perspective, I would say that they are mostly the same.
Andrew: Okay. But from asking question . . . It used to be that if I wanted to ask my team a regular question every single day, like, “What’s your mood?” I would have to write that question into Slack and structure it within Slack, and today on Standuply, I just go to your web page, I fill out a form and I say my first question is, “Hey, what’s your mood, team?” Right?
Alex: Yeah, that’s right.
Andrew: That’s the different. So it’s a user experience change even though the vision is still the same.
Alex: Yes.
Andrew: I’m wondering how you knew that. How did you know that people were too confused by your software? What kind of interaction did you have with people to understand that?
Alex: So we were just exploring how people use our product. We were exploring the funnel, like, how many of them came to our product, how many of them started using it, how many of them continue to use it. And then we understood that the funnel wasn’t that good. For example, 50 teams came to our product, 10 teams started using it. Like, it wasn’t good conversion rate in our opinion. And of course . . .
Andrew: So then did you call the other 40 to understand . . .
Alex: Some of them we asked . . .
Andrew: Did you call the other 40 to understand why they weren’t signing up or was it just trying to figure it out on your own?
Alex: We were trying to figure out it on our own.
Andrew: Okay.
Alex: And so we decided that we envisioned that it could be easier to manage the bot using web interface. And we build that and they all built it to configure questions like you need them. So, in the first version, the bot was asking just predefined questions. It wasn’t possible to change them. And so we decided that “Why don’t we allow people to change those questions and to ask anything they want?” And here comes the second version with a lot of mistakes if you want to ask about them.
Andrew: And Alex, what you’re saying is, you kind of saw just as users of your own software that it was too complicated to create the questions within Slack. You as a user of your own software were seeing where you were frustrated and you understood this is probably where your users were getting frustrated. This is what you need to change. That’s how you figured out how to iterate in the beginning?
Alex: Yes.
Andrew: Okay. The other thing you told our producer was, you said, “Look, people told us they don’t follow Scrum strictly, they make their own version of it.” How did you understand that? I’m trying to get a sense of how you picked up on users of Slack.
Alex: So far, we talked to our users, but also we talk to other people. So we composed a list of Slack communities to talk to different people and that’s how we made it to large list that we recently published 2,000 Slack communities because we found that it’s so exciting to . . .
Andrew: Wait, wait. You’re saying you went into Slack communities to understand how people were using your software or how they were doing Scrum in general?
Alex: Just to make to run the customer development interviews in general. So, we were . . .
Andrew: Got you. So you’re going to Slack communities, you start to talk to people who are on Slack, you’d start to check in with them. What’s one community that was especially helpful for you to learn from?
Alex: I don’t remember exactly because there was . . .
Andrew: What type of people do they have in it?
Alex: So we talked to project managers. Project managers send to everybody who . . .
Andrew: Within Slack.
Alex: Within Slack communities.
Andrew: Okay. So, from what I understand, you guys said, “Hey, you know what? People who are using Slack to run their companies are also members of other Slack groups to get to meet other people who are running their companies and running project management at their companies. Let’s find all those Slack groups. Let’s join them. Let’s get to know the people who are in there.” That’s part of what you did, right?
Alex: Absolutely. And it was not right.
Andrew: It was not what?
Alex: It was not right. It was a mistake.
Andrew: Why? Why was that a mistake? It sounds brilliant.
Alex: You know what? So it sounds like obvious that you just mentioned, but we had to talk to bot users. So maybe those people they work using Slack at their workplace, but probably they didn’t use bots and so when we approached them with questions, with ideas, they were like, “Bots? Standup meetings on Slack? We don’t need that. It’s a silly idea. We won’t pay for that.” And we were like, “Are we on the right track?”
And we sit down with Artem and eventually we decided that maybe we are just talking to the wrong people. And after we published our application in Slack app directory where people come for Slack bots, where people are really using them, we started engaging, we started getting customers and users who felt and who feel that it’s important for them.
And maybe those two groups were project managers, but those project managers who come to Slack app directory, they found our product useful, but other project managers who weren’t using Slack bots they just felt it’s a stupid idea. But eventually, those people with whom we talked to came to Standuply later on. Like, we literally attract some people that we were spoken to about our ideas and who didn’t use bots and who thought it was a stupid idea, after that, we found them on Standuply. It was really interesting.
Andrew: Because what it sounds like is there was a period there where people were using Slack but not yet comfortable with bots. And the people who were comfortable with bots were going only into the bot directory on Slack to look and explore and try things out. Okay. All right. I get it. I actually feel like Slack did a really good thing in the beginning by creating that directory of bots and where Facebook Messenger is struggling is in creating the right type of directory, and I see they’ve been playing with it. I don’t even think to this day that Telegram has a directory of bots. I think you have to just kind of know what’s available. And by cultivating bots on their platform, it feels like Slack turned their chat application into a real platform for software makers like you.
Okay. All right. I’m going to come back in a moment and talk about the different types of ads that you did, how you got users in there, and what was working beyond the directory especially Product Hunt. What you did there was fantastic. And I’ll be able to do it thanks to a company called HostGator. Do you know HostGator at all, Alex?
Alex: No.
Andrew: You don’t. All right. I’m going to break . . . Actually, I’m not really going to . . . I’m not going to rock your world with this. Here’s what it is. It’s simple. It’s just hosting. Tons of different hosting companies out there. So why would anyone want to sign up for HostGator? Because they’ve been around for what? Almost two decades at this point, because their software just works and it’s a low price. Are you guys built . . . Did you guys build your website on WordPress?
Alex: No.
Andrew: No. You didn’t. You guys custom-coded your website?
Alex: Yeah, sure. I think we used some framework. I don’t remember what it was exactly. And we are hosting at AWS.
Andrew: Wow. See, I am looking at it to see if maybe you’re wrong. You’re not at all wrong. You’re absolutely right. That’s kind of a pain in the butt to do because you know what, if you decide that you want to add more pages, if you decide that you want to add a blog . . . You guys don’t even have a blog on your site, do you? You don’t.
Alex: We do have.
Andrew: Do you have one?
Alex: Yes, sure.
Andrew: You do have a blog. So you guys custom-wrote it yourselves?
Alex: Yeah.
Andrew: Okay. That is impressive and also kind of scary because it feels like it’s just a distraction. Why bother to build up your site? I keep telling you why to do things different than you’re doing it just because I want to tell you about my sponsor. Here’s the thing. Perfectly fine. If this is what you’re comfortable with, host on AWS on Amazon Web Services, totally fine. You get an inexpensive price. You’ll be able to hand-code the HTML for your site. It’s impressive and a lot of people do it.
I don’t. And the reason I don’t do it is because I want a platform that’s easy for me to use that lets me just forget about even creating my website. I just like hitting that one-click install of WordPress, knowing WordPress is up and running, finding a theme out there. Sometimes I pay a designer to improve it, sometimes it just stick with what’s there. And now I’m up and running. If I decided I need a new page so that I could have a form on my site, I could give you an example.
I had a personal website. I decided I want a form for anyone who wants to come over for poker at my house that I can collect some info on them, I just hit a button, I added the form, I’m good to go. That’s one of the nice things about WordPress. Easy to use, easy to add to and there’s a community of people who will keep improving it. So, if you’re going to host a WordPress website, like 31% of all websites now are hosted using WordPress, who do you get to keep your site running?
For me, I highly recommend HostGator. HostGator just works. It starts out with a super inexpensive package. Really? One of the lowest in the business that will just work. And then as your business grows and you need more, they’ve got tons of other options, everything from a dedicated server to managed WordPress hosting to actually other things that aren’t even on their website, but if you call them up, you let them know what you’re looking for, they will give you packages that grow with you.
All right. Here’s the URL where you can get super low price, get tagged as Mixergy customer and get a whole lot of other benefits. Go to hostgator.com/mixergy. And when you use that URL you get a low price and you’ll also be supporting Mixergy. HostGator.com/mixergy.
All right. First place that you guys went to promote was BetaList, right?
Alex: Yeah.
Andrew: How did that do for you?
Alex: So we did it three times and . . .
Andrew: You know what? That’s why I freaking love about you. BetaList is all about getting beta users for your software. Most people will hit a site like that once and say, “It was great. It worked.” And then say, “All right. We’re not on beta anymore. We’re done.” You guys went back. So the first time you did it, was it effective?
Alex: Yeah, it was. So the first time . . .
Andrew: Yeah. You smiled up as you said it.
Alex: . . . was the best one.
Andrew: The best.
Alex: Yes.
Andrew: Okay. So you went to BetaList, you got a good hit. You went to Slack communities, you got a good hit. You went to social media. Did social media help you?
Alex: What do you mean by going to social media?
Andrew: I’m looking here at my notes from your conversation with the pre-interviewer. You said you used Slack communities, you used social media. Tell me about them. Did that work? How did it work?
Alex: Yeah, sure. So we got 300 signups from BetaList the first time. Then as I mentioned we changed our name. So we were able to submit it to BetaList again. So we got like, maybe 100 signups. And when we founded Standuply, we also made it to BetaList and got like another hundreds of signups.
Andrew: So you’re saying every time you rebranded, you went back to BetaList and got more signups. Is that right?
Alex: You know what? It comes back to my Siberian roots. So Siberian people who live in a very . . . It’s not really easy to survive here, so that’s why we hustle a lot. And also as I mentioned, we didn’t have any funding, so we had to find our way to get more users, to get users pay us, and that’s why we launched three times on BetaList, like dozens of time on Product Hunt. We did a lot of customer interviews, like I did maybe 100 of customer interviews to build the right product, to build a viable business. So it just did.
Andrew: You know what? I’m now looking at BetaList. I forgot how good that website was until I read my notes on you in preparation. And then I went back and they improved that site so much over the years. It’s another site where you go in and you see new products that are being built by people like you that for me is just kind of fascinating to see what people like, to see people’s feedback on it, to see the products themselves.
All right. So you went there, you started to get some results. When you went to Product Hunt you tried a few other things beyond the rebranding. Every time you have a new version, you go back to Product Hunt and you list it and you get more traffic. What are the things did you do on Product Hunt that got you users? Again, Product Hunt is just a website where people launch products, get listed, users will vote on the ones that they like. And the most makers like you will launch once and then be done. Every time you upgrade, you get on there. What else did you do on Product Hunt to get attention?
Alex: Yeah, sure. So we found that some makers, they launched on Product Hunt several times. Like they have second version of their product, third version of their product. But also some makers launched different features of their products, so we decided, “Why don’t we launch different major features of our product in Product Hunt?” So every time we delivered something great and meaningful we launched on Product Hunt.
For example, recently, we thought of, “Why can’t we send voice and video messages on Slack?” because when you communicate with remote team members, it’s useful to just, for example, if you have sunken not for a meeting, but for a discussion, you can send a voice message or a video message with information. And we do that with seamless integration with YouTube and we launched it on Product Hunt. Our community loved it. And that’s the way it works. I suppose that if you delivered some meaningful feature to your product, why don’t you let others know about it? So yesterday we did another product launch.
Andrew: I see it right here. This is video standups automated by Standuply. Is that right?
Alex: Right. Yeah.
Andrew: That was just yesterday?
Alex: Yes.
Andrew: Okay. And again, this is not an individual product, it’s a feature of your product, but you launched it on there and you get a bunch of attention. In fact, it looks like you got 658 votes which is a lot.
Alex: Yeah. Why not? We spread the word about it. Our partners of that product, [daily.com 00:49:18] also spread the word about it. And when you launch something on Product Hunt, so it’s about the product quality and about your user base. So, the more you do it, the better you are at that.
Andrew: Okay. Here’s one that did especially well for you guys. Two thousand Slack groups. You launched that on Product Hunt. That one got 1,326 votes and this is just a website, actually, a page on your website with a collection of Slack groups.
Alex: Yes.
Andrew: How did you get all these Slack groups?
Alex: Sometimes I’m asked this question, but there is no magic behind. So, me and another team members from Standuply, we just search on Google for Slack communities and we find all those Slack groups put together and only within four months of work we can get the same website up and running.
Andrew: You’re saying, so you guys just manually hunting them down and keeping a list?
Alex: Right. Not a problem for Siberian guys.
Andrew: Because you want? You’ll spend hours and hours listening to music, I imagine and just finding this stuff and putting it on the list.
Alex: Yeah, absolutely.
Andrew: Wow, man. You know what? I . . .
Alex: This way people get to know you without spending much time and much money on Facebook and Google ads.
Andrew: I’m surprised that you didn’t pay someone on Upwork some money to just go out and follow some process and put the list together for you. But it’s just you googling and searching around and finding other lists and putting your own list together.
Alex: It’s not only me personally. Another team member helped us with that task.
Andrew: All right, it was worth it. And then every time somebody comes to this site to look for a Slack group, they see that they could add Standuply to their own personal Slack and so they’re all potential customers.
Alex: Yeah, sure. So you can search for Slack groups on Google and you’ll find us in the first place. That’s how . . .
Andrew: That’s why I feel like . . . So you do have an email collection box and it says, “Subscribe for updates.” And nobody is going to subscribe for updates. Nobody, but it’s not really that compelling. But imagine if you said, had a list on that page of “10 ways to get the most use out of your Slack” or “10 Slack bots that will help you . . . ” No, that’s not good because most people on this are not . . . Well, maybe, “10 Slack bots that will help you be more productive with Slack” or “Ways to make Slack more useful for you.” People on Slack are always bothered that it’s too freaking noisy. Noah Kagan created a list of ways that he makes Slack more useful for him. Something like that. I feel like that will get more subscribers.
Alex: Thanks for the . . .
Andrew: Am I being a jerk by telling you all the things that you should be doing instead of shutting up and listening to you?
Alex: Well, it’s really useful because, as I mentioned, nobody in Siberia does startup and all this stuff, so getting feedback from experienced guys like you it’s so amazing.
Andrew: You know what? Before Standuply and after you created the first version which was . . . What was that called again? Sprinterbot. Between Sprinterbot and Standuply, there was a site called ReportChef that you told our producer that was your lowest point. Why was that your lowest point?
Alex: So it’s an interesting story, though. We decided that we can allow our users to have and to build more workflows when they change the questions. So, for example, if you would like to choose where to go for lunch, you can run Standuply or you could run ReportChef to ask everyone on your team to choose a place, or you can run a survey, what would you buy for your team members on her birthday? And with a [inaudible 00:53:27] that’s a cool idea. Let’s make those questions customizable. And that’s how we decided to change the name into ReportChef, like, a chef that builds different reports based on recipes. And it sounded like a cool idea, but people were struggling to understand what we were up to.
Then when we pitch that idea to different people. Of course, we pitched to the wrong people, but also the pitch wasn’t compelling enough or it wasn’t clear enough, and also at the time Slack bots were not so popular, and so we were not getting traction. And at some point, we had maybe three or . . . No. Maybe 30 or 40 active users and that’s it. And we were not growing. So I went to a conference in Europe to talk to people and to pitch that idea and everyone I was approaching were like, “I don’t know. We don’t need it. It won’t work.” And so I thought, “Maybe we are doing the wrong stuff here. Maybe we have to pivot to another idea or to another platform.” And that was the lowest point in building our Slack bots.
Andrew: And the way that you kept going was you saw something in the bathroom there.
Alex: Yeah, that’s a funny story, though. So, with all those thoughts, yeah, I was feeling low at this point. With all those thoughts, I went to men’s room and when I looked at the door, I found the writing at the door, “Never ever give up.” I was like, “Thanks bro.” And I decided that I will spend like maybe six months more to get it up and running. And maybe by coincidence or maybe it was just something we did right after that. Within a month or so, we started gaining momentum.
Also it was because we were accepted to Startup Sound Acceleration program in Helsinki where we did a lot of thinking, where we did a lot of talking with experts, and it helped us to craft that concept of Standuply which we launched two years ago, and from that standpoint after we launched Standuply, it just took off and we are growing every single month and we are growing every single month for the past year in terms of revenue. And now when I get back to those thoughts, it’s like been so far away from where we are now.
Andrew: Part of the reason why you guys are doing well is you’re charging. You took about nine months to build out the product before you started charging then you got customers. What did you discover when you started charging?
Alex: We had to start charging earlier.
Andrew: You wish you’d started charging earlier. Why?
Alex: Also we should listen to our free users because . . . You know what? Many people were saying that, “Guys, you are building a nice to have tool. We don’t want to pay for it. It’s not that important. It’s just tiny bot and we need the free version of that.” So we started with a free version in beta. We got traction, we got users, but we were struggling to pull the trigger on and start charging them. And before we started charging them, we did several surveys asking, “How much are already to pay for us in that?” and like 80% said nothing.
Like, some people said, “Okay. We’ll put, guys, $10 in your pockets.” And a few people said maybe $25 a month and that’s it. After we rolled out pricing, we found that it was wrong. People paid us $50 a month, $100 a month. Not much, not many but still. And those folks who are paying us, they see a lot of value and they don’t complain about it, it’s been nice to have. And if I knew that from the start, maybe would still keep the beta free but we would listen to those folks on free plan not so attentively.
Andrew: Yeah, that’s a totally different type of person it seems like. Hey, my friend Devon just came into the room. Devon, can you move that chair out? I wasn’t planning to have you in here. I want to ask you a question here in a second.
Alex: Okay.
Andrew: Why don’t we close it out, Alex, with you’ve done it after struggling in that bathroom, after struggling for years, what’s the best part of getting here and building it to this level?
Alex: The best thing about it it’s freedom and working on the things that you believe that matters. And when you talk to people and when you meet people who uses your product, for example, we were with Artem at the meetup yesterday in New York. It was just a tiny meetup with 30 people.
Andrew: Of your users?
Alex: No, no. It was just a meetup of . . .
Andrew: Just a local meetup?
Alex: Yep. And we found cool customers there, like, randomly. It’s awesome when you meet people who are using your product and who believe that you’re doing meaningful work. It’s so inspiring.
Andrew: I’ll call here . . . Let me get Devon on camera. Hey, we just got a piece of mail as we’re doing it. Devon, do you want to come on camera to say hi?
Devon: Yeah.
Andrew: There he is.
Alex: Hey.
Devon: Hey, man.
Alex: How are you doing?
Devon: Alex?
Andrew: I often say in the interviews that if anyone happens to be in the area in San Francisco, they should just pop in. The office is 201 Mission Street. Devon sent me a text message and said, “Should I come in?” I said, “Yeah, come on in.” Devon, you’ve got video background. Do I look green to you? Alex, do I look green to you today? Do I look green?
Devon: I mean, your screen is highlighted in green, so you might be . . .
Andrew: Am I getting . . . Do I look green because the background is green?
Devon: I mean, this wall is pretty gross.
Andrew: It is, huh? I need better design for this.
Devon: You only put green in the background if you’re going to replace the green with something else.
Andrew: Oh. So what color should I paint the wall? [inaudible 01:00:30] Alex?
Devon: You’re like a good . . . You’re just a white background guy.
Andrew: Really? Don’t you think that’s going to be too plain? Look, he’s got a white background and it doesn’t make him look sexy.
Devon: Yeah, but he’s sitting right up against the wall and you can see his shadow, there’s a crack in the corner. He got a clean white background, he got some separation.
Andrew: That’s it?
Devon: Andrew, this is a white wall at its core.
Andrew: Regus will paint this white for me, but I always thought that white is just not going to be interesting enough.
Devon: We should just Photoshop this wall in various colors and take a picture.
Andrew: And to see what it looks like.
Devon: See what you look good in. It’s like going to Barney’s and seeing what your color is.
Andrew: You know what I would like, is to have like a . . . I was just at my house today talking to people and I like how Olivia has got this like old wooden sideboard, and then we’ve got my whiskey collection behind me and a few other things. We’ve got an old typewriter there, a record player. I feel like that would be a nice backdrop. What do you think of that? Yeah?
Devon: Oh, yeah, definitely.
Andrew: I need that, but I can’t do that myself.
Devon: If you want to go above and beyond, you should definitely add some texture.
Andrew: I don’t know how to do that. All right. I’m glad you came in here. I wanted somebody with a professional eye to actually take a look here and give me some feedback on this. He’s actually worked in real productions.
All right. Alex, anyone who wants to go check you out should just go frankly, to any place where they launch websites or talk about Slack because chances are this freaking guy is going to be there, or they could just go to standuply.com. And yeah, you do have a free version still which people can try but they’re probably going to want to take one of the better versions and use it to ask questions of their team, right? What’s the number one use of the software?
Alex: It’s for the [inaudible 01:02:11] for remote teams for folks who are spread all over the world. It’s easier to connect using the bot or I call every single day when it’s inconvenient for someone to get on the call.
Andrew: All right. And I want to thank my sponsors for making this interview happen. And the first is activecampaign.com/mixergy. I’d love to see Standuply do better with their email marketing. I think you guys would love ActiveCampaign.
Alex: Yes.
Andrew: And frankly, I’m going to say you don’t even need HostGator. I think HostGator is a great site for hosting . . . a great company for hosting most websites. It feels to me like you guys are more of the DIY’ers. You want the whole AWS thing. Anyone like you should probably stick with that. But if you’re like me and you want to use WordPress, you want somebody to actually make it easy for you to keep your website up, hostgator.com/mixergy. Alex, thanks so much for being here and have a good trip back to Siberia.
Alex: Thank you. Bye, bye, guys.
Andrew: Bye.
Devon: Bye.
Andrew: Bye, Devon. Actually, no, Devon, I’m going to hang out with you. Bye, everyone.
