Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. I was not too long ago, actually. What’s too long ago. Jason was how long? Like five years ago we said, or eight years ago. What was it?
Jason: When we saw each other, it was 2012 or so. So that’s like eight years. Yeah.
Andrew: Eight years. This was back. Automatic had an office here in San Francisco. They had an event. Um, and Jason, I just got to talking and he had a plugin that enabled people to create membership sites on top of WordPress, kind of similar to what we have. And the idea is that you pay them. A fee in our case, it’s monthly or annual, and then you get access to extra content.
And at the time, most people didn’t realize that that should be a thing. And frankly, even to this day, most people don’t realize that could be a thing. And so they go to Patrion, they go to this, they go to that and they try to make it happen on other people’s platforms. When in reality, it could just be part of your natural platform.
In fact, for us on Mixergy, people who want to have access to what we call courses masterclasses. They just log into the site, except if they’re logged in the same site that has been non members do, except when they log in, they get extra content. They get those master classes taught by pass gas. Anyway, Jason Coleman created a plugin that enables anyone to do that.
On top of WordPress, it’s called paid membership pro it’s a WordPress member, WordPress membership, plugin, plugin, and support community for membership sites at the time. I don’t think you were quite ready to do an interview, right. Jason, where were you at the time? Jason Coleman.
Jason: Uh, you mean business-wise
Andrew: revenue wise, business wise. Where was it?
Jason: Um, there’s a bit of a connection issue, but I’ll try to get through it. Uh, yeah, I remember, you know, I was a fan of your show and that was interesting, that word camp I had met up with the developers who helped you set up the membership portion of your website, and we really hit it off.
And he was like, Oh, you do like these five things. We had to custom build those. And they were custom things that we had already done. Um, and he’s like, when with Andrew comes like you have to meet them. So I think I met you. Context of, you had just gotten done upgrading your membership site and it was kind of too late to get you to use paid memberships pro.
Um, but business wise in 2012, we were still doing consulting. And when I say we it’s, um, my partner, Kim and I, um, and she’s my wife as well. Um, we’ve, we’ve been in business, um, the whole time since like 2005 through, um, all the businesses. So. We had just launched, paid memberships for, I was a plugin and we were using it really to sell our consulting, to set up membership sites, um, and trying to transition from consulting into products.
So I think at that time, maybe we were doing, um, you know, five to $10,000 a month. And I didn’t feel like the kind of success story that, you know, uh, I saw on your, on your, you know, podcasts at the time.
Andrew: And it’s five to 10, including your consulting fees back then. Right?
Jason: Well, that was just paid memberships pro I think, um, we were, we were doing pretty long consulting. I’d have to look at the charts. I shared transparency reports every once in a while on our blog, so we can look them up. Um, but Kim and I were also doing like, probably at that time, like 10 to $20,000 in consulting.
Um, and so we really had to struggle with that. Like spend time on the membership plugin that, you know, didn’t make as much money as, you know, charging hourly rates and things.
Andrew: Meanwhile now you’ve grown tremendously. What’s the revenue today.
Jason: Uh, so we’re doing over a hundred thousand dollars a month, um, each month, this year. So we’ll, we plan to hit like 1.2 million. We’re about to cross a million for the year, like this week. I think. So my team keeps reminding me and I’m like, what do you want me to do? Like throw a party. I don’t know. Maybe they want a bonus.
Andrew: want to know about it. I get excited about that. I’ll tell you what I did when, when Mixergy hit that we went out and we celebrated with ice cream as a family because I wanted to Mark it and yeah, I wanted to include them in this and let them know that they’re going to see me work because I believe in work and they’re going to see the benefits of it, because I want them to understand that hard work leads to something.
By the way, I should say this interview where we’re going to talk about how Jason Coleman pulled it off with paid membership pro is sponsored by two companies. The first, if you want to. Use his plugin on WordPress. You can get your site hosted at HostGator, and he’s got some advice for how to do that.
Right? We’ll talk about that in the ad. And then the second is top tile. If you have an idea for a plugin for WordPress, one that you need for yourself, for your business, but maybe one that you’re going to sell to others, the way that Jason’s doing with paid membership pro you should check out top talent.
I’ll tell you why you should hire from them later. Uh, first. Let’s get into this. This is not your first big idea before we get into how paid membership pro work. Let’s talk about that idea that you had before. The one that you told our producer was big, or your first business failure, what was that?
Jason: Yeah. Um, I mean, we did a lot of things, but, uh, one thing we focused on between like 2005 and 2010 was a site called wine log.net. And it was, uh, you know, web 2.0 era social network for wine drinkers. Um, the site that was existed at the time and has survived and upgraded is called like cellar tracker. Uh, so it was kind of like a nicer looking more modern seller tracker
Andrew: W what was seller seller track over someone else’s site that you saw that it existed? What, what did it do?
Jason: So cellar tracker, you could keep track of wine that was in your seller. And it really was focused toward the high end, like people with hundreds of bottles of wine in a wine cellar room and they, they lose track of it. Um, yeah, like they, you know, they, they buy a bottle of wine and they have an idea of when, when one of their main features was telling you when to drink it.
So you buy a bottle of wine that should sit on the shelf for five years. And so you need an app to tell you, you know, three years
Andrew: You know what? I had no idea that people were like that. I went to see 80 in a, the founder of e-commerce back in, uh, 2019 in South Africa. The first thing I noticed when I got into his house is he has this beautiful, um, uh, what is it called? Where you store your wine wine, but it wasn’t in the cellar. It was just like up in the living room.
It was just stunningly gorgeous,
Jason: a walk-in refrigerator. Yeah.
Andrew: Um, yeah, but even that doesn’t do it justice, the design of it is stunning. And then my wife was a wine drinker. Um, told him what type of wine she was into when he asked. And then he brought over the perfect bottle of wine. And we were amazed by how many bottles he had.
He said, this is nothing have storage in town. And he talked about how he has multiples of this in storage. And so I guess if I think about people like him, then this type of software makes sense. Are there a lot of people like him or into wine at that, to that degree?
Jason: Yeah. I mean, there’s quite a few of them. It was fun getting to meet them and travel around and have that experience. You had like people that was really cool wine sellers. Um, There was like a group in New Jersey called the, um, dead poets wine society. I don’t know if I’m giving away the name, people are going to look them up.
Um, but it’s one of those in town. Like I’ll, I’ll store your wine for you. Uh, the guy who runs the business, but all those wealthy people, you know, wine once a month would meet up and, and bring there’d be, you know, uh, the theme of the month. And they would let me come in. Even I was, I was too broke to buy wine, but they would let me come and drink all their expensive wine with them.
Cause I, you know, it was in the biz.
Andrew: We didn’t have a wine cellar, like the one we’re talking about. Where did you come up with this idea then for wine log?
Jason: yeah, so wine cellar is pretty good for all kinds of wine drinkers now, but it’s focus toward that high end, but it didn’t really serve me and Kim who just, you know, we don’t have a wine cellar. We have like a, you know, like the counter in our kitchen has three bottles of wine at a time and we drink it and then you go get more.
Um, so we didn’t have to like catalog, get a big database of wine, but we did one help, you know, figuring out what kinds of wine we liked. And we did want to keep track, like, for instance, you know, if I, if I drank a bottle of wine, Did I did. I like it. Like I wanted to remember, I have a terrible memory and so I will go back to the wine store and I’d be like, that was familiar, but I don’t remember if I liked it or didn’t like it, you know?
Um, so the wine, like database would help keep track of that
Andrew: so you said I’m going to create this better version of something that exists. And did you know how you’re going to make money from it? You didn’t.
Jason: no, not really. And I. You know, I didn’t think it could make a lot of money. I thought we could make some money. Um, but the psych kind of took off. So I scraped some wind data. I’d put like a really cool web 2.0, you know, front end on it. You could search. We did like, you know, it was, it was a really good exercise
Andrew: from what I can see.
Jason: If people visit it, it’s kind of shuttered and I’m not really in use anymore, but the website still exists. Um, But yeah, like the, the main way to make money would be to get involved in selling wine. But that’s really hard legally. There’s lots of regulation on it. Um,
Andrew: Look, I scraped it. It’s working. I’ll figure out how to make money later, but probably there’ll be some way for me to sell. And so you built this thing up, it got some traction with impressive people in the space where some of the people who started looking at it and liking it.
Jason: So the site took off kind of traffic wise, for sure. And I remember, um, that was my first experience with like VCs in Silicon Valley and they would call me up and I visited San Francisco and went to some wineries and my companies out there. And, um, you know, they, they wanted to invest in, build something bigger, but again, I wasn’t convinced that could make millions of dollars, you know, and so I kinda turned them off.
Um, Uh, but we, we thought it could be a lifestyle business and, um, you know, so the main way to make money as we put, like by length. So like we’d have a line on the website and we did great SEO. So. What worked about the website is we had better SEO than the wineries. So if you search for like, I don’t know what your favorite wine is like, uh, maybe like, I don’t know, um, you know, like a, a good I’m, like which winery could I like call out that I like, so, like twisted, twisted Oak, uh, was a winery that was like really friendly with us back in the day.
If you would search for their wine, oftentimes like maybe our website will come up above it. And you would go to wine log first before you would even go to the wineries website. And we used to get like email, people would think we were the producers website and they say this bottle of wine was quartz and I’m like, Oh, wrong, wrong website.
You want to go, go talk to the winery?
Andrew: it. So SEO was bringing people in your speed was keeping them there. The big database that you scraped in order to sell start off was also adding a lot to it. And so people like Gary Vaynerchuk with the time was doing a wine show, wine library, TV, and others in the wine industry where we’re on the site, they were talking about it.
They were excited about it. And then it came time for you. As you mentioned to come to San Francisco, you were thinking of raising money and you told our producer I was terrible at raising money. What made you so bad?
Jason: Yeah. I mean, cause like I couldn’t lie to them. Like I, I, I’m a pretty honest person, so I always imagined I’m like, I couldn’t sell computers at best buy or something. Cause I would like talk people out of it and tell them to go somewhere else cheaper, you know, it’s like, um, so I have trouble. Um, Yeah, I can’t lie.
I have to be honest. And so when I would talk to them and we try to figure out how to monetize it, I’d say it will be really hard to make money because of all these regulations and it’s not kind of obvious. Um, and, and, and it was, it turned out to be hard to monetize. We, we, we did, uh, like Gary Vaynerchuk would advertise on the site.
I remember kind of. Uh, he advertised on the site once and I, I, I saw an ad for like $1,500 for the month. Um, and it kind of, it kind of upset him cause he was trying to talk me down and say, he’s like, that’s your, site’s not worth $1,500 a month, but I really want to be on your site. So I’m going to do it for you.
And I think he probably admired like my Gusto a little bit. Um,
Andrew: Because in reality, if you’re honest, you, you told her producer. I think it was actually, the ad was worth $500. He tried to negotiate down to even a thousand. And you said, no, I’m not willing to negotiate with you, Gary. You ended up taking his $1,500. And in retrospect, you regret a little bit, why.
Jason: I don’t know if, um, I don’t, if that was part of, he ended up buying one of our competitors at the time, there was a site called court that was built by Dan Cedar home. Um, and they were also like a nice looking line database. Um, and, and that was a problem, you know, that like building a wine database was almost like, I don’t know if it’s.
Everyone did it, you know, once a week there would be a new competitor. Um, so it was interesting, like, you know, them coming up and going away. So, um, yeah, I don’t know. Gary was like a really cool guy. I wanted like him to appreciate us and talk to us to market. And he did, he has a nice guy. Like, I, I don’t think he let that bother him.
He probably doesn’t think about it, but I do like. He’s selling like sneakers and stuff now, and every time he’s selling something different or a book, I think back to like how he gave us, you know, an ad back in 2006 or something, and I’m like, Oh, Oh, Gary went out by his sneakers. Not yet. I need to though. I think they sold out. I did once. Like there was like the, you know, he launched them. Um, but I’m sure they’re available now.
Andrew: Yeah, he was selling them like collectors items so that he can hype up the resale. And then, um,
Jason: I think it’s cool. Like entrepreneur should have sneakers too, you know, I guess like Connie last.
Andrew: I agree. I don’t care to wear a Kanye West sneakers. I have no affinity for him, but I do for entrepreneurs. And I also don’t want to feel like a rapper, but I would want to feel like the ideal entrepreneur. I totally get that. All right. So you failed to raise money. You did those say, you know what, I’m going to try to make some money from the site.
And at the time Amazon came out with this, uh, They were going to start to sell wine, which means that you could have the same type of affiliate program that got Google started when they were trying to, to sell advertising or to make money from, from sponsorship. And so you started building towards their API and allowing people ideally to be able to see something on your site and then go buy it from Amazon.
And then Amazon did what.
Jason: Yeah, well, yeah, they, they changed their mind. Um, and this happened with numerous companies, you know, over the years, working with wine log, it was Amazon. Facebook would renege,
Andrew: take techniques. Let’s stick with Amazon.
Jason: but yeah, Amazon,
Andrew: did Amazon do?
Jason: I think, um, so we were integrated with some other third parties that tried to do like affiliates for wine, and that was weird regulatory space.
And some of those companies went out of business, but then Amazon announced like, Hey, we’re going to sell wine on the website. Maybe again, like they might’ve sold wine. For a little bit and like 2001 or something. Um, but it was the big announcement and, um, and it might even have gone live. Like, I kind of forget the timeline, but we, it was like, Amazon is huge and their API works great and that their database was really good.
So like all these struggles of trying to connect, like is this wine in this database? It was good to have one source instead of many. So we put a lot of effort into integrating with, with, um, Amazon, and then it was months like maybe two or three months into song and they changed their mind. And I don’t know if it was like a legal thing for them.
They were starting to get like sued by every state to pay sales tax and stuff back then. And. It might’ve just been, you know, maybe was like a legal decision. I’m selling wine in the United States. Like every state kind of wants to get their piece and it’s, it’s a mess. I don’t know if that, I don’t know exactly like why they changed your mind, but like kind of overnight their API like stopped having wine in it.
And all of a sudden, like the way we were making money disappeared.
Andrew: And this was after you spent how much time building towards what they were going to launch or what they had.
Jason: Yeah, we probably had maybe like three months and this was side project at the time. And that was another issue we had was we were also consulting. We also had like an investor geeks blog that we put some effort into and some other things. Um, and so it was really part-time work, but maybe, maybe he came and I spent like three months, um, integrating with like the Amazon API and then they disappear.
We’d have to pivot to a, another way to make money.
Andrew: And then you were starting to say that this happened with others, who are the others that you build with, and then. Well, let
Jason: yeah, the final straw was Google and that was another one where like, uh, you know, Google came out and they have Google shopping. You know, when you search for stuff, you could click, click the shopping tab and find stuff. Um, I don’t know if they have wine now, but they didn’t for a while. And then they, they announced too.
It’s like, I think there was write-ups were going to sell wine through Google or like link to it. Um, and so we built tools around Google again, and that was, um, we built like a whole new website called super wine search, which will compete with wine searcher that basically searched Google and then had a, a layer on top where we would use the wine database.
We had to make your search a little better. So if you searched for twisted Oak. You know, we would recognize like, Oh, that’s a winery name and the full name is this. So let’s search for the full name. And we basically got better search results than if you went directly to Google and we curated them. Um, and that gave us like, the problem we had was we had about, you know, at the peak, maybe like 2000 people a day coming to the site.
And over 200 people would click buy now on a wine. So like there was people with the intention to buy wine. And then we were like, where did we send them? Like we have to send them somewhere. So we build our own sites, super search, and we would send them to our site that then linked through Google to, um, other people selling wine online.
And we even then though we weren’t, we were making money. Google didn’t have an affiliate program, but what we were doing is we were keeping track of the websites we sent. Link we sent traffic, uh, traffic to, and then we would reach out to them personally and say, Hey, wine library.com. Last month we sent, you know, 2000 people to your website.
If you collect by now on a wine, they’re probably buying wine. Let’s try to set up a relationship. And that was going really well. And then Google flipped the switch and said, yeah, we don’t have wine in the search results anymore. And overnight, like the database has just stopped working. And instead of seeing wine on the website, um, you’d see like wine, like grapes, you know, or like other stuff that was wine related, but not wine.
Andrew: That’s awful. You’re doing this part-time while you’ve got a full-time job, right? Yeah.
Jason: Yeah. We were freelancing and doing consulting work and that, that was where we spent the majority of our time.
Andrew: Okay. All right. And then did you eventually just say, okay, I’m giving up and moving onto something else or did it just Peter out while you started something else?
Jason: Yeah, we, I mean, that was kind of the final straw for wine logon where we said, Hey, we’re not going to try, um, to build it up. And we had already started on paid memberships pro at that point. So a few of our consultant clients, uh, that we had that we had done e-commerce on, were progressed in the past and probably like four of our customers need a membership sites and the plugins at the time were not great.
Um, so we thought what’s that. Um, they were either like, uh, there was one in the, in the WordPress repository that was open source, but it wasn’t very good. Um, and there was two that were pretty popular, like wishlist members, which has kind of had a come back recently actually, but they, they weren’t, um, open source the office skated their code, so they, they weren’t developer friendly.
And um, so we figured, Hey, now’s a chance to build, you know, an open source membership plugin, and kind of do it the WordPress way and, and try to
Andrew: Because what you were doing was Jason. If I understand this right. In order to make money, you were helping other WordPress sites with their online sales. Enough of them were coming to you saying we don’t just want to sell. What we want to do is create a membership. You were doing it for them. One off.
Will you personally coding at Jason?
Jason: Yeah. So I’m like the backend coder and Kim is the front end designer. And that was kind of our
Andrew: So you would build it for them. When you found four customers who wanted the same thing, a membership, uh, site, you coded the same thing for all four of them. And that became the foundation for paid membership pro
Jason: Yeah, exactly. Yep.
Andrew: that’s fantastic. Because now you knew exactly what they needed. You had paying customers who were basically paying you to build the first version of what you’d end up selling to others.
What was it that they were looking for back then? What’s the commonality.
Jason: I mean, The basic needs they had were to charge for access to things on their WordPress site. So they needed to collect payment and they needed to lock down like their posts or files that they were serving or videos. Um, uh, Or, or kind of functionality like for some of them, like one, um, is Philly side art.
I think it’s still around. I wonder if they use our software. Um, it was like a community of artists in Philadelphia and they would connect to galleries and other people who kind of put on art shows. And so artists were paying for access to like a tool we had already built for them to help connect, um, the artists to the gallery.
So it was kind of, you know, there’s an access to your site and existing e-commerce plugins were. You know, focused on inventory and they’re focused on shipping and, and for membership sites, you don’t really care about that stuff. It’s a distraction. It gets in the way it kind of weighs down your site. Um, so we really streamlined it at the time we had like a one-page checkout.
We still do, but it’s not as popular now. People want multi-page checkouts. It’s a different world. But like, that was like our big selling point. It’s like, it’s all integrated. It’s one thing. And you know, it’s fast.
Andrew: All right. I’m going to take this moment and talk about my first sponsor. I know you’ve been considering hiring people. What are you guys now? 15 people at the company,
Jason: Yeah, we have 15
Andrew: and you want to get to 30. What’s keeping you, by the way, from using top towel, I’ve talked about them for a while. You’ve heard me talk about them.
Jason: Yeah. You know, we had, when we started hiring, it was tough, but we started with subcontractors and at one point, uh, we took two of them and we made them full-time employees and kind of overnight, there was the mental shift where they were focused. On our business full-time and they kind of gave us ideas that maybe they wouldn’t have given us before and they felt more bought in to the business.
And so after that experience, I was really, you know, we have a trial period where we subcontract, but we really try to push people to full-time. So like I’ve been in the mindset of hiring people. Full-time to really be like full on team members, but lately, um, You know, I, I want to explore, you know, hiring contractors, uh, for, you know, we kind of know more specifically what we need.
Um, and I think the relationship with a subcontractor where you kind of send the work out and you’re, you’re focused on one project at a time, um, you know, would kind of work with some of the things that we need done right now.
Andrew: I think what you’d be able to find is, um, long-term, full-time obsessed on you. Yeah. Team members from top Cal. I know that my past guests have done that. Yeah, absolutely. Where they will, they will hire from top towel. They will do it as yeah. Experiment. And then often they’ll just work with them for years and years and then hire more people from them.
But if you bring that question over to top towel, there’ll be open with you. If what you have in mind, that type of relationship can’t be done, they’ll turn you away, frankly, the way that they’ve turned away, some of the people who listened to me, um, But it’s a good way to get started to just go to toptal.com/mixergy, hit that big button and just have a conversation with them and see if it’s a good fit and see what they could do and bring all your objections to them.
And I can imagine by the way, that people who are listening to me right now might say, you know, there’s a plugin, there’s a thing. There’s a feature. There’s this little thing that our customers need, or that we need. It’s little doodad. We don’t have enough time to create it. What, if they could hire somebody from top tile to build a for them, what if they could also take the path that you, Jason have taken you and Kim, where, what you do is you take this thing that you need or your client needs and make it for them, but then also make it available to other people.
And then suddenly it becomes another revenue source for anyone out there. Who’s listening. I mean, to me, if you have an idea, if you have a project, if you have a need and you don’t have the team members to do it, you should go to top. Towel.com/mixergy. When you do, you’ll start a conversation with their mattress, they’ll help you understand what you, what they could do for you and see if it’s a good fit.
And if it is, you can often get started with your developers within days. And when you use that slash Mixergy at the end of the URL, you will get 80 hours of developer credit when you pay for your first 80 hours. In addition to a no risk trial period, that’s top talent.com/mixergy top as in top of your head, talents and talent, T O P T a l.com/m I X E R G Y.
All right. You had this thing, the first product you put into, I’m guessing into that wordpress.org repository, that every one of us who has a WordPress site goes to when we’re looking for new powers. Right. And because you decided you’re going to offer it for free, with a paid upgrade, right from the start freemium.
Jason: Yeah. So I really. Embraced open source and actually like your, um, for that interview you did with Matt Mullenweg and Chris person from, uh, thesis was like, that was like the pivotal moment in WordPress. Like, so I saw that interview, but also in the WordPress space at like the conferences and the chatter, there really was a struggle of, um, you know, basically moaning leg.
You know, trying to get everyone to adopt the GPL license and, and not just like the license. Um, I think there’s a lot of companies in WordPress that. They almost reluctantly. They, they, they, they probably don’t even mention it on their website. They just kind of like check, check a box and pretend it doesn’t exist.
Um, but I was really solid on like, to create good software. The GPL license is a good way to do that because it encourages collaboration, uh, in a way that more restrictive licenses don’t and so
Andrew: And what that is, what, what you’re saying is that Matt Mullenweg, the creator of WordPress said that he wanted all the plugins that were working on WordPress to use the same licenses, WordPress, which means that other people can take them and build on them. And for you as a creator, the danger is well, that means that Andrew can take my plugin and make a little bit of a change.
And suddenly he’s going to call it the Andrew membership plugin. Right.
Jason: Yeah, sure. I mean, that’s, the risk is let’s call it 4k. And when someone takes your code and basically rebrands it and then tries to sell it. Um, so that’s the rest of that’s there with open source software, but the, the other risk is if it’s open source, it’s, it makes it’s usually easily able, you can use it for free.
You don’t have to pay the main website to download it. Um, and so. I think people are uncomfortable that in traditional business and software, and I get like the, where they’re coming from. Um, they, Oh, shoot. My phone is I have Gmail open. It started calling me. Sorry. Um,
Andrew: But you’re in favor, prove that you wanted it from the start. You were comfortable with that because.
Jason: Oh, because, so I think it’s the way to make the best software.
And my idea for business was to start with the software and build the best platform for memberships on WordPress. And then assuming that’s successful, I would be the Matt leg of the membership world, not the whole WordPress world, it’d be a smaller bubble, but at that point, you know, there’s lots of opportunities for business on top of it.
So we’ve always run our business that way, where we make decisions, you know, from the developer for respective, what’s going to. Lead to the best platform and the best software, because that’s, what’s really going to drive. Use a WordPress is, you know, a lot of things, half our customers, our end users who don’t know how to code and they get by and they do the things they need to, um, and half of our users are developers who, or, you know, like really smart DIY implementers and they like to tweak things.
Um, and so that’s that DIY attitude is like in the WordPress community and that’s part of the GPL license as well. So we, we embrace all that to get the best software and then. Let’s build a business on top of it and charge in ways that we’re able to.
Andrew: And the way that the market was working back then was you offer your software for free. But support is then the community is the paid, uh, is the paid ad on. And anyone who’s going to install your plug-in is going to have some question and they want to know that there’s a person that could contact that they have a relationship with.
Who’s going to answer it, not someone that they’re going to have to come back to and say, Jason, I’m sorry, I copied your software. I didn’t pay you, but could you help me? Right. That was the model. And so you started off with that. You started listing yourself for free, with a support. And I think it was community from the beginning as the add on, am I right about that?
Or was it just support in the beginning?
Jason: Uh, yeah, so it was just support. So all our code was free. And if you wanted to ask us a question in our form and get her an answer, you know, you paid for that.
Andrew: Okay. Um, people were starting to download it. They were starting to use it. How long did it take for you to make significant money from it?
Jason: Um, so between like, 2004, like around 2010 or 11, like we finished it and then it took another year and a half. Like, I really thought like, Hey, I have it working on these four websites. Um, you know, but to release it generally took another year and a half. I remember I gave a talk at a conference where I was like, next month, we’re going to release it.
And it took like a year and a half to really like, get it ready. Um, I, I didn’t anticipate how much work there was, but between like 2011 and 2015, We, we used it to drive our consulting. So when, when we started focusing only on membership sites and then not just membership sites, but like, like, Oh, you, you heard a payment, which is probably like, we built that, like, we’ll build your website on top of that.
We know exactly how to do it. We started charging more. So our consulting rates went up, our per site rate went up. Um, so between like 2012 and 2015, we were using, we were, you know, maybe, uh, people who were paying for support for PM pro is like around $10,000 a month. Um, We were making like 20 to $30,000 a month doing consulting at that point.
Andrew: And because now you’ve got your software, it gives you credibility. Now you’re the maker of, and people just want the maker to often install and upgrade it. Ad. Got it. I see it. And so then the next, the next thing was these ad-ons that now I think only paid member to get right. That’s another advantage of being a paid members as opposed to a free member.
What’s the first, what are the first few ad-ons that you created?
Jason: Um, yeah, let me think. We, we like directory functionality. Uh, we built, um, when we built that was popular was sponsored members. So, uh, if you have a membership where one person pays for the membership, like the accountant at the company, but they had get five seats and five people at the company and get memberships underneath it.
Um, so that was an add on that we released early that differentiated, um, And also like it, third third-party integration. So we had to build out ons for MailChimp and, you know, constant contact and, um, you know, every other service, most of those were released for free though. But yeah,
Andrew: Okay to do what what’s the MailChimp integration. Cause I know that that’s an issue for you.
Jason: Oh, yeah. So, um, you know, when someone becomes a member on your site, you also want to sign them up for a specific list or tag them a certain way on MailChimp, um, and keep those things in sync. Um, and one thing about that experience was, and this was, you know, Kim and I are pretty good at building stuff and getting it to work.
So we built just like an add on for our members. To integrate with MailChimp, but when we were doing it, we realized like this plugin, like anybody in WordPress could use this, like it’s tied to PM pro, but let’s make it work general purpose. Um, and we, we, we, we put some effort into that, excuse me. But we passed on like marketing it or really trying to build like a, you know, a separate business around MailChimp plugins.
And then meanwhile, other companies came and built MailChimp plugins. Um, that weren’t as good as ours at first and then eventually, but like now they’re really good, but I kept
Andrew: Money than you from this thing that was yours. Add-on they made more money than you made with a paid membership pro with PM pro as you call it. Right.
Andrew: And what, what is it that they’re, that they did in the beginning? When you say it hooked into the directory or the user base of WordPress, what are we talking about?
Jason: So, I mean, Yeah. So on the page, the PM pro add on would, you know, when, if you’re having a certain membership level, put them in a certain list on MailChimp, so they get the right thing.
Andrew: that way I could email my members a separate in a separate way, a different way than I’d email my non-members. Okay. So what did, what did these, uh, copycats or these other,
Jason: Yeah. And I don’t know if they’re copying, I think they were starting from scratch too, but, um, but they did, they focus directly on MailChimp, like a MailChimp user.
Who happened to use WordPress? I want to embed a MailChimp form on my website. I want to make that as easy as possible. And then I want to keep my WordPress users in sync with MailChimp so that if they leave my site, you know, they leave the list or they can manage their access to lists for my site. So there was a cross, you know, All the functionality that those MailChimp plugins had, we had to develop, and then we built more functionality to do the membership stuff.
And so we saw like plugins and had even less functionality it’d be more successful because they, and I should’ve really, that’s kind of what we were doing. We were building a membership plug in the head, less functionality than any commerce plugin, but because of focused on a market, it was more successful.
Andrew: And so in hindsight, would you have then turned that into its own product, do you think?
Jason: Um, yeah, so we, we had the idea as we were building it and we’ve had this idea numerous times on other things that like, Hey, instead of building this just for our members, let’s build it in a general way for WordPress in general. Um, because there’s only, we have like a hundred thousand sites using paid memberships pro now, but for instance, some plugins that we built for membership sites would work on any e-commerce site and there’s like 7 million.
WooCommerce websites. So we’re like, Hey, we should, you know, build these plugins for WooCommerce instead. It’s a bigger market.
Andrew: All right. And you’re kind of doing that now. Right? We’ll talk about in a moment about how you’ve got this new thing coming out for black Friday. Let me take a moment though, to talk about my second sponsor. And I want to ask you, uh, ad for HostGator. If someone’s listening to us and says, you know what, maybe I should be creating a membership site.
Do you have an example of someone who’s doing an especially well on WordPress with paid membership pro that could be a model for our listeners of what they could do. If they decide to turn WordPress on HostGator into a membership site.
Jason: Um, man, I don’t know if I have permission to like share specific people, but there’s all kinds of sites, uh, running membership
Andrew: one that’s think about one. That’s a great example. Don’t give us their name, but just give us a sense of what they’re doing.
Jason: Yeah. So there’s a few, I just saw, um, another one today and I told the team like, Hey, we should write up a showcase. It’s a, they’re teaching ukulele. So it’s like ukulele lessons on their website.
And we have, there’s a really popular, you know, a website about how to learn saxophone. Um, and they, they have training videos. Um, so a lot of. Yeah, when everyone’s locked down in the pandemic, they’re not necessarily going to piano and saxophone lessons. And so instead the option is to take those lessons online.
Um, and so lots of, uh, music teachers are creating websites, videotaping themselves, doing what normally would have been a lesson and putting it up behind a membership website and charging for access.
Andrew: and you could even do a live session on zoom and again, charge on your site. Once you have a membership. You start to think about what your audience wants and you add that to the membership. So maybe you start off with videos that you create, and then you start to discover the people want some more comradery, some more community, and you can create by just adding to WordPress, uh, an online forum, or you discover that what they want is a weekly session where they get to actually see the teacher.
So you add that and all you have to do is add it as a page or a post onto the site, and then tag it and say, this is for my members only. When I started with Mick Mixergy, I didn’t know what the membership would have. So I just took all my older interviews and I said they would be for members only. I knew at the time that that’s not going to be where I end up.
I just wanted a place to get started. And so we did that and then I started thinking, what else can I add there? And people wanted a action guides that said, I’m listening to the interview. I don’t know what to do with it. So I came up with a Mixergy action guides and members got that. And then I came up with these weekly webinars and then members got that.
And then I. I did all these things and then masterclasses hit. And that’s what became the heart of our membership site. So all this to say is if you get started by going to hostgator.com/mixer G you can install WordPress within a moment. And yes, soon after that, you can go into the WordPress repository and get paid membership pro.
And start to play around with what you’re going to make available to members. Maybe you decide you’re going to create a podcast like this, make the podcast available for free, but then add another 10 minutes at the end with your guests and that’s members only, maybe that’s your bad first idea. And then you build a new build and you build on that.
Let me just point out something that Jason told me before we got started. He said, Andrew, truthfully, I think that this shared version of companies like HostGator, those inexpensive packages probably won’t work great with paid membership pro tell me why. And then I’ll tell you the answer that I, that I use, that I recommend.
Jason: Yeah, so that the entry level plans that are, I don’t know, five or $10 a month, they rely on caching and it like pretty extreme cashing them make them fast, which is good in general. But when you have a membership site, You need to hit the server. So to speak, to tell if they’re a member or not, and then serve different content to members and non-members.
And so that computation of figuring out if someone’s a member or not, it, it takes computing power and it breaks the cash. And so those, those sites can run, um, you know, slower on the low end hosting. But what’s great about. Something like HostGator is that, um, they make it easy to upgrade. So if you start to, you can set up your website on, you know, cheaply, uh, before anyone’s using it, kind of push it out there.
And when you start to gain traction, um, HostGator will, you know, that you slide into a higher plan and they kind of upgrade things for you behind the scenes and all of a sudden your site’s a little bit faster or a lot faster.
Andrew: And it still stays less expensive than the competition. That is essentially what I did. I went to liquid web at one point because I didn’t realize it. HostGator has these higher plans that are more advanced. And then I said, well, they’ve got to have it. I called them up. And they said, yeah, absolutely. They matched everything that liquid web had for us.
And then they reduced the price, I believe by a third. So that means for every $3,000 we were paying, it would. He cut down to a thousand, which was dramatic for me. I always think about extra thousand dollars as an extra iPad pro. And so now I’m getting to with extra pad pros by switching to HostGator, and nobody knows about anyway, hostgator.com/mixergy.
You’ll recognize how great it is and inexpensive it is. Your audience is just going to enjoy your site. Go get started there. And of course, if you want to add paid membership pro. They’ll support it. hostgator.com/mixergy. Let’s continue with the story then. Um, I mentioned earlier that you have this idea now that, uh, for a plugin, it will stand alone.
What is this new thing that you’re, that you’re creating?
Jason: Yeah. So we have a plugin it’s called site-wide sales, and it really is like a way to run black Friday type sales on your website. And it, we built it for paid memberships pro first, and we launched it as an add on and, um, you know, there’s like a thousand or 2000 sites using it for membership sites, you know, using our technology.
But we spent the last couple of years building it for WooCommerce as well. So any WooCommerce site, uh, when you enable the plug in. It, um, it’s basically a one pager to create both like a banner to tell people that there’s a sale on your site to have a landing page. And we have themes that kind of look fun, um, that, you know, ally, this is the landing page that explains to sale and can do a countdown timer.
And then we also do like all the technology in the backend to keep track of like the coupon code that you set up for your sale. Um, and make sure that people who hit your landing page automatically get the discount code applied when they eventually check out and we do reporting. So we keep track of like how many people view the banner, how many people get to the landing page, how many of them convert to sales so that you can really see if your sale is effective?
Like if you just lower the price on your products, um, you know, People check out and you all, all you have is like the top line revenue maybe. And you’re like, I don’t really know if the sale is effective or not, but we keep track of which customers saw the sale and which just happened to check out, um, through other means.
And that can tell you if a sale is really effective or not.
Andrew: and this will work both with paid membership pro and woo commerce, which means that even basically anyone who’s who’s selling on WordPress now can use this right.
Jason: Yeah. So, I mean, there’s other, e-commerce, uh, plugins for WordPress and we’ll eventually add those as modules. We built it so that we can do that. But WooCommerce is the biggest, um, you know, e-commerce plugin on WordPress.
Andrew: what do you think of WooCommerce as a way of selling, compared to say Shopify I’ve been seeing fewer and fewer people get excited about WooCommerce.
Jason: Yeah. I mean, I think Shopify is great and I like. In my everyday life. When people ask about like a quick way to sell something online, I think Shopify, uh, is probably one of the best ways to do it. What happens is if you. Or are kind of serious about the business. You’ll usually have something in the business that you need more control over, and WordPress is the best platform for that.
It’s flexible. So if you, you know, there’s a brand new social network that came out, you know, that no one knows about and Shopify is slow to add functionality. Like it’s going to have an integration for WordPress. And you’ll be able to install that plugin and get it. And if it’s not automatic, like you could hire a developer on top towel to wire it up and make it work exactly how you want to.
Shopify does have ways to, you know, build plugins of their own and things like that. But it’s not, it’s not as, as easy as it is on WordPress. So WordPress has do more control over the whole experience.
Andrew: And didn’t move commerce. Then also add membership. I interviewed an entrepreneur who was using WooCommerce membership.
Jason: Yeah. So there is a, um, just a few things. So like with e-commerce they have a subscriptions plugin so that you can charge recurring payments. Uh, and then there’s a memberships plugin so that you can. Put people in membership groups. Um, and so you need both of those extensions for WooCommerce to do what paid memberships pro does and paid memberships pro itself.
We have integration with WooCommerce so that if you want to check out on move commerce or have your membership products and move commerce, but manage your membership, uh, what’s locked down and pay memberships for you can do it. So, yeah. There’s yeah.
Andrew: So then what’s the advantage of using paid memberships pro instead of the WooCommerce option?
Jason: It’s. If some people, so some of the other add-ons that we have people like. Um, and so if you want to use some of our payments, just pro add ons that we have imported over to WooCommerce, the only one we’ve really poured it over is that site-wide sales one. Then, then you need to be using paid memberships pro um, I think there’s also, um, like we really pay merchants.
Pro acts is like the central hub for your membership. And it’s, it’s kind of like a different mind mindset where, um, You know, instead of having like membership is almost like an afterthought on the, in the membership extension, like, um, we, we kind of expect to integrate with, we have like 90 plus ad-ons that we integrate with.
Um, and so,
Andrew: that you don’t expect somebody who, unless you really in membership to think that you’d need like a checkbox for auto renewing, right?
Jason: sure. Yeah.
Andrew: if I think you have an option where if someone could just say, I want to sell an annual membership and just be done there one year and you’re done.
Or have a pre-check box that says renew me every year, right? That is a feature that you guys have available as an add on. And somebody could put that in. Um, then I think you also offer variable pricing, right? I think I did that in the very beginning of Mixergy. I said, pay what you want because I wasn’t sure what people would want to pay and I let them pay five 15.
No, it was five 25 and 50. Believe it or not. I made more money off the 50 than I did off the 25 a month. But I, uh, still shifted to 25 because I wanted to prioritize having more members instead of more
Jason: Exactly. Yeah.
Andrew: So you allow us to let people pay whatever they want on a monthly basis. Kind of like a Patrion.
Jason: Yeah, exactly. So if he’s the variable pricing model, it’s motor patron.
Andrew: All right. I I’ve been hesitating to talk about this because it’s so painful for me as a dad to talk about. But as you were launching paid membership price, paid membership pro you’re basically in the hospital with your, with your new baby, what happened?
Jason: Yeah. So I think your producer asked me something like what was like your biggest challenge in business and, um, there’s been lots of challenges, but like what, what came to mind was, um, in 2008 and you know, that’s like the economic downturn, uh, you know, my wife was pregnant. We had just bought a house.
That’s kind of the background of what was going on. My son was born in November that year and he had, um, You know, he had, he had issues when he was born, um, like a birth defect where his trachea was not attached to his stomach, um, which is just a congenital disorder that affects, you know, I don’t know, one out of 4,000 kids.
Um, and he had to be, you know, they, they, he was born at like two in the morning and that, you know, They thought maybe he was sick because he was like spinning up. Um, and then like, we fell asleep, my wife and I, and then like six in the morning, they woke us up and man, it’s tough. We took like this photo, like they, they kind of like, it’s almost like photo, like your kid might die photo.
Like, it’s really weird. I don’t know if I have it. Like, we probably got rid of it, like, you want to take a photo? Like we had to make a decision, like the rush, rush them to a children’s hospital where he could have surgery. Um, and they were, and they had to explain somebody wake up because she had been in labor for a day.
And we’re kind of delirious and we have to like, what is this thing I don’t understand. And then, um, you took this photo and I had to leave Kim in the hospital. We had other family there, but my dad and I kind of like followed the ambulance, you know, like two hour drive from Redding to Philadelphia where he was going to be, um, at a children’s hospital.
Um, and, and he’s finding out like, so it’s, it’s amazing. Yeah. Like modern science, like it’s like, it’s kind of like plumbing, you know, it’s like his esophagus then attached. They just cut them open. Attached it. Um, yeah, yeah, yeah,
Andrew: Because otherwise he can’t eat. He w he wouldn’t be able to
Jason: He couldn’t swallow, like nothing would go. Yeah. Yeah,
Andrew: yes, you are pulled in to go and be by his side while he was going through this surgery, or I guess outside the door while he was going through it. But you were also pulled in by somebody to make sure that you could pay, what was that?
Jason: Yeah. So, and I mean, so 2008 also was like the, you know, um, people were talking about healthcare a lot, you know, politically and Obamacare and the ACA. Um, but so I, I kind of like lived through some of those moments that the day, so the day after he was born, They were going to do surgery in the morning, I think around nine in the morning.
And at sometime around seven, they told me I had to go to the billing department at the hospital. And at this point, like, I didn’t really think about any belt. We had a little bit of a concept of like the normal cost of pregnancy that, you know, like there would be a bill at some point. Um, but this whole thing then, you know, we were just focused on the kid and everyone else was too, like all the doctors and nurses, but then at one point they’re like, Hey, you have to go to the billing department.
And I was like, I guess my family was, you know, there and I was like, I gotta go. And, um, and someone told me, like, I went to the department, they, they kind of, I skipped the line and then, um, which was nice, but I talked to a gentleman who was telling me, and he, he had this idea, like, I don’t, he was really solemn about it.
Like he was worried, I wouldn’t be able to pay, but basically I had to pay the $700 that was remaining on, or like out of pocket, maximum on our health insurance and, and any,
Andrew: Or they would even start, you had to pay the seven. So for $700, they were taking you out of your experience. 700. Okay. So while you’re freaking out, you go, you pay, you pay the $700.
Jason: Yeah, it’s funny. I was like, I was like cash. I don’t have check-in. I was like, do you take credit cards? He’s like, yeah. And like, I remember feeling like throwing my wallet or my credit cards. I was like, I was like, this is so stupid. Yeah. Yeah. I was like, I was like, here it is like, I have some, yeah, just put it on my credit card and he’s like, Oh, okay.
Um, and it’s weird. Like that’s the way the insurance in the hospital industry works is that all told at the end, like the, you know, It was maybe like a half, a million dollars in expenses. Like the, that the insurance company paid the large majority of it. Um, and I think it’s like the insurance company at that time, they don’t want to pay.
Right. They, they, they have people who are hired to kind of find some kind of reason like, Oh, you know, Jason didn’t pay his copay. So we’re not going to pay for that, you know, half a million dollar surgery. And so the hospital has to figure that out, like all the incentives were in place that everyone has to worry about money when like, you shouldn’t really have to worry about money in that moment.
Andrew: I’m imagining the, the vast majority of the half a million dollars or so bills was covered by the insurance company. What was your out-of-pocket? 10, 5,000. Yeah.
Jason: Yeah. So, um, yeah, I think we, over the course of like two years, it was, you know, 15 to $20,000. It was, it was like a $5,000 copay. Like one thing you learned, she was like, so Kim had her. Um, what do you got? Like a copay maximum. And as soon as the baby was born, like, Oh, he’s a different person. He has his own $5,000 and you’re like, Oh, I guess, yeah.
Okay. And then it was like the end of the year. So the next year there was followups. And so there’s like, Oh, now it’s a new year. Like it’s only been 30 days, but it’s a new year. So $5,000 again. Um, and. And even that was like, we, I, I’ve been pretty conservative financially, um, all through business. Like I didn’t take that VC money and kind of go into the deep end.
I’m a, I’m a pretty risk adverse guy. Um, so I had savings, but you know, we, we weren’t working like when we were taking care of, you know, we were there at the hospital, um, You know, we weren’t working as much. I remember we did some work. I remember like from the Ronald McDonald house, which is a great, um, we eventually got into the Ronald McDonald house.
Like we stayed at a hotel for a while. Then there was a spot. They let you stay. Um, like if your child’s in the hospital, they let you stay for free. And it’s like right across from the parking lot. But I remember doing like some work from the Ronald McDonald house and then going to visit my son in the hospital.
Um, but yeah, so finances were tight and that January, like we really thought about. Like wine log was still around. And we, we, um, had a suitor who wanted to buy the company and hire us. Um, and, and that fell through, but we, like, we almost took that because we were kind of worried about being able to, like, we didn’t know if we’d be able to stay in business as freelancers or something, you know?
Andrew: How did it change you afterwards when your, your relationship with your business, did it make you go back in with more determination? Did it do something else?
Jason: Yeah. And, um, I think we did like, and this is what I kind of learned, like talking through this with your producer beforehand. Cause I hadn’t, you know, I, I try not to think about this moment too often, but, um, We, we did realize, like, that was like a painful like three months or so. And we wanted the kind of business and the kind of wealth that like, if something happens, you know, and you have to take care of family, like you want to be able to just like, Oh, it’s like, forget about it.
And so sorry. Yeah. So,
Andrew: I get it.
Jason: I think it’s, there’s like a natural progression of freelancers moving from services to products. And I, I feel like I thought about that history of our business in that sense. Um, but maybe I didn’t really realize like how that moment, you know, motivated us to do that
Andrew: Because of that said we are not going depend on con consulting because consulting means. That if we’re in the hospital, for whatever reason as his parents, we can’t earn enough money to keep our family growing and whole. And because of that experience, you went all in on product and said, we have to, you didn’t make that straight up decision.
It’s not until you had a conversation with our producer, that you had some space from it that you realize we started moving towards product and letting go of the safety net of consulting after our son was born.
Jason: Yeah. And it’s, um, so like we wanted like to scale and make more money and have financial freedom that way. And also, um, when you have like consulting clients, they they’re very demanding. You have like 30 clients a year and when they need something done on a weekend, or like when you’re in trouble, you know, they’re, they’re paying you a lot of money and you kind of have to.
Perform for them and show up at times. Um, and we take care of our customers that pay membership sprout, but like, we don’t do support on weekends and everyone just kind of waits. And, you know, we we’ve built a team that can handle stuff when we take vacations and go away. Um, so we’ve, we’ve switched for like 30 customers to have like 5,000 customers now.
Um, and it’s, it’s its own effort. Uh, but it’s, it’s kind of less demanding, um, in the same way that like consulting is. Yeah.
Andrew: What’s the longest you’ve been able to take off now that you’ve got this.
Jason: Um, I, I think I took like two weeks. It’s been crazy. I’ve been trying to retire. And actually before the pandemic started, like I would, I would kind of joke about it and I’m training my team to take over for the things that I do. Um, and I don’t know if I would retire and like do something else, but I think there’s other opportunities in business that.
That needs like full attention and space. Um, but then the pandemic hit and I, I, I had been taken off like every Friday and every Thursday and I was working my way to like work in one day a week on paid memberships pro. But, um, it’s, uh, it’s been really demanding lately because yeah,
Andrew: what’s going on.
Jason: we, you know, we, we call it the COVID bump where any, and if you’ve seen this in your own business, like any business, that’s sell something online.
Had a kind of, you know, 50 to a hundred percent increase in sales. Um, I think like there’s the chart of like total e-commerce was like 15% of all e-commerce, um, e-commerce was like 15% of all commerce in general and now it’s like 25%. Um,
Andrew: did you see that in your business, you saw yourselves double.
Jason: Yeah. So our, our new sales doubled. So if we were selling like five, we have recurring revenue as well, like from old members.
So it’s like 50, 50 recurring and new. And so our new sales doubled, so it’s, it’s been about a 50% increase in total revenue month to month,
Jason: which is it’s. It’s nice. It’s like, it’s a good problem to have. Um, but it definitely is like, there’s, you know, we have to grow a little bit faster than we were thinking we would.
I mean, you know, there’s more
Andrew: And I know that hiring has been a challenge and, um, well, I get it, but I’m happy to hear that things are going well for you. Um, I’ve got a friend who’s a VC who says that as soon as COVID hit his life just got turned upside down because it became. A situation where some of his portfolio companies were just absolutely devastated by this.
And then others just saw their numbers grow dramatically. And again, they needed outside help because suddenly everything was breaking all at once. And it’s not easy on either way, but if you’re going to pick one, it’s great that you guys are growing. The website is paid membership pro.com. I write about that URL
Jason: there’s paid memberships, pro.com.
Andrew: paid memberships pro
Jason: we own the other one and it’ll redirect, but yeah, memberships, plural paid memberships, pro
Andrew: There it is paid memberships, pro.com. It actually looks so similar to the earlier versions of the site. I was going through internet archive and, um,
Jason: I like the purple color reset, like a purple color.
Andrew: it looked a lot more like a blog, like, uh, like let me see if I can even find the theme that you guys were built on. Yeah, there it’s probably power. No, I don’t see the
Jason: We, we would have built, we’ve always built our own thing. We have a theme. If you want to look like our, exactly. Like our website, the theme is called member light and you can get that in the.org repository. It’s like
Andrew: you just make it available to anyone. All right. Paid memberships, pro.com. And I want to thank the two sponsors who made this interview happen. The first, if you’re hosting a website, go to hostgator.com/mixergy. And the second, if you’re ready to create a tool that you’re going to build for yourself internally to use, or for your customers.
Frankly, if you need to hire developers, just go to top talent.com/mixergy, and I’m grateful to them for sponsoring and you Jason. Thanks. I’m glad that we had a conversation that, uh, those eight years ago and that you followed up.
Jason: Yeah, I appreciate it.
Andrew: Thanks. Congratulations by everyone.