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 for an audience of real entrepreneurs. And a couple of years ago, after I had my second kid, I think, I finally decided that I was going to go and have a will done. And I didn’t know the beginning of it. I didn’t know what to do, but I had a lawyer come into the office. He asked me a bunch of questions, he got a bunch of data from me. And then he put together what seemed to me, like, basically something that he had in Microsoft Word already on his computer, but he just kind of selected the pages that he needed from me, filled out the blanks that he needed, and, boom, I ended up with this thousand-page document it felt like. And it was okay, actually didn’t cost me as much as I thought it would. It wasn’t as painful as I thought it would be, and my wife and I did it, and we were done.
And today’s guest is a guy who says, “Interesting. Antiquated. I’ve got a better way.” Today’s guest is a man named Dave Hanley. He founded Tomorrow. It is an app that lets you create a will and trust for free together with your family, and he says you can get it done in five minutes. And I don’t know that I would believe anyone who came in and said that, but Dave is a guy who worked at Shelfari. He’s one of the co-founders. This was a company that allowed book-lovers to record the books that they had. It actually was really beautifully done. And then when joined early, early on, he helped make it go viral and then Amazon bought it. And then he followed it up with another success. And before those two, he had another success.
And so I feel like, you know what? If anyone’s going to do this, it’s him. I invited him here to talk about how a guy who didn’t even want to get into entrepreneurship went from success to success to success, and why he is claiming that this is very much like a “Forrest Gump,” I just kind of found my way through this. I got to believe, Dave, that there’s way more intention, way more planning that goes into it. But look at you, you don’t agree with me. We’re going to find out how it happened thanks to two phenomenal sponsors. The first will host your website right, it’s called HostGator. And the second will help you hire phenomenal developers, it’s called Toptal. I’ll talk about those later.
Dave, why did you do that thing with your eyes as I was saying . . . ? I feel like you told our producer, “I’m just looking for issues and whatever comes my way.” Tell me.
Dave: No. I’ve never been favorably compared to Forrest Gump, so . . . or maybe unfavorably, either. But, no, it is true. I just keep finding fun problems that excite me. And then, I have a habit of just really running quickly in a new direction and finding myself in new and interesting places that I had not planned to be.
Andrew: You clearly have a skill in marketing and you’ve applied it throughout, but other than that, I don’t see many connections between a digital agency, a book cataloging company, and a will company. How much is Tomorrow doing right now in revenue? I know it’s fairly new. You started a couple of years ago. But are you making any money? Is there revenue?
Dave: We haven’t shared the revenue yet, but it turns out to actually be a really great business. So we’ll share that probably in 2019. The model is that we give away wills for free and it’s this social, visual way, and I can explain it later. But, basically, you make a will on your phone by tapping into the contacts on your phone, texting your family, getting them involved. And we give it away for free, and just a small percentage of our users will do other related things like buy a life insurance policy. But it turns out that even if a tiny percentage of them do that, as the broker, it actually ends up being a really nice business. And so it’s turned out to be . . . While we started out trying to solve an important social need, it’s now actually turned into a great business.
Andrew: And so how many users do you have? Can you say that?
Dave: Yes. So we have tens of thousands of users. So you’ll see an announcement next week that we’ll just . . . actually, it will come out just . . .
Andrew: Yeah, by the time this is published, you’ll basically say it. When’s the announcement?
Dave: There’s over 75,000 downloads of the app, and we are on our way to becoming one of the largest creators of wills in the country after our first year.
Andrew: Okay. That doesn’t say that much to me. It’s impressive that people are downloading a will app, but I’m looking for something that’s more like dollars and cents. Are you over $5 million in revenue already?
Dave: So we’re not sharing the revenue now.
Andrew: You’re not even going to say that?
Dave: We will.
Andrew: Okay, you will, 2019?
Dave: Yeah. I mean, but, you know, I haven’t done this before. This is not the venue to share these. We’ll make the splash and we’ll do it together with you later on.
Andrew: This kind of started because you read “The Artist’s Way” and you actually . . . did you do the whole guided writing process? You did?
Dave: I did.
Andrew: Can you tell people what that was? I tried it and I couldn’t continue as long as she recommends. What is “The Artist’s Way” and what were you doing on paper?
Dave: Well, so, you know, the story goes that, you know, I sold my last company which is a social media agency. I sold that to Deloitte and settled into . . . they made us the senior leadership to, like, partners and they’re building this digital agency. And, you know, it was nice to collect a massive salary and have a little stability. Then a good friend of mine who I was advising her on her company, her name is Georgie Benardete and she came to me and just told me, “You’re asleep. Here, you’ve done all of these things, and now you’re just settled into this and you’re completely asleep.”
She said, “I sent you two books,” and the second book was “The Artist’s Way,” which was this, like, 12-week self-directed course in creativity for blocked creatives. And so you read the first 20 pages that describes it, and then you sign a contract to yourself saying that I’m going to do this whole thing, which has lots of components, but the most impactful one for me has been my daily pages. So every day, sitting down and handwriting three pages of just whatever is on your mind. And that was a really powerful experience for me and the birth of [inaudible 00:06:10].
Andrew: What would happen? And before you came to the realization that then set you on this path with Tomorrow, what are some of the experiences that you’d have as you were writing?
Dave: So what’s interesting is . . . so I’m like, generally, a very happy person, the incurable optimist.
Andrew: I can see that.
Dave: And what happened is the first 20-pages that came out were just, like, garbage. Anger, hate, regret, like, feelings that I didn’t know that I actually have inside of me that just poured out onto the page. And I realized that, like, I was literally managing keeping everything up here and that I wasn’t really able to unlock my next level of creativity until I actually put that on page. I’m not going to sit with another human being and say it, and I’m not, you know, speaking on my own. But by actually putting pen to paper, it let it all out.
Andrew: What was some of the anger about?
Dave: You know, a lot of them are personal things, some of it related to . . . while it does look like, you know, success to success to success, there’s a lot of points in-between that were super painful. You know, the bad hires that poison culture, things that we weren’t able to come back from. And, you know, it turns out that I was actually still quite upset about that, but, you know, I’ve . . .
Andrew: You know what? This is the moment that’s going to determine the quality of this interview, this next question. Can you give me a specific without mentioning a name of a story that was in you that you had to get out on paper before you can continue? One of these really painful stories.
Dave: Yeah. There’s actually so many. So one was a moment when I chose to fire the wrong person that . . . I knew that an organizational change was made. I had these two battling forces, and one person who was sort of managerially, like, strong, so it seemed or was sort of, you know, a key obvious leader, and then there were two people who were the heart and soul of the company. And they were fighting back and forth.
And this was six months after my dad died. I was in the midst of, like, a pretty rough transition through that, and kind of in a really . . . actually, a very weak moment as a leader where I just wasn’t stepping up to lead in the way that I needed to. And facing that crossroads, I took the weaker position, which is that I chose to have the stronger person stay in place, and I fired away the beautiful culture that I had. And in that moment, even though the poison had drifted it into the company, I could’ve cut it off and pushed it out and stepped up, but I was actually personally too weak in that moment to see it and maybe even to fulfill the gap that would’ve been created, and then, you know, let go of something that we weren’t really able to bring back. And so it’s both hatred for that individual, regret, and shame on myself for not doing it, and then, like, the feeling, the broken heart of actually losing these other two.
Andrew: Why do you think you made that decision? Did it seem like one of those, “You’re the CEO. You’ve got to make the heartless decision to get to the bigger business,” type decisions?
Dave: Yeah. Well, we were at a crossroads where something needed to happen. And, you know, as I’ve hired over 200 people in ventures that I’ve created, you end up firing a lot of friends. Because you end up hiring a lot of friends, you end up hiring a lot of people, and then they become your friends and then you part ways. And it is your job, and you don’t hand it off to other people. And so, yeah, that’s painful, but it’s just become a part of what the process is.
Andrew: Okay. And so why do you think you had to get rid of that before you can become creative enough to come up with Tomorrow?
Dave: You know, I think there’s a couple other. You know, what’s funny about “The Artist’s Way” is that it unfolds . . . it’s actually based on Alcoholics Anonymous.
Andrew: I didn’t know that.
Dave: She’s a recovering alcoholic. She was a writer, actually written a lot of screenplays. And so you’re actually, you know, getting down to, this is the first step of AA, like, admitting that you have a problem. And so, actually, this idea of admitting that, like, you know, “I don’t have everything figured out,” and that it’s actually okay, that that’s actually fine. And that actually cleansing . . . what I do is sort of cleansing the canvas to be able to get out what’s in my brain and free myself which I did after writing and meditation, which I aimed to do every day has allowed me to have the clarity and freedom to build a much bigger business.
Andrew: You know, one last question about this. I read “The Artist’s Way” and I took it on a meditation retreat where I would sit and I would journal. It would help me meditate if I did my three pages because it would clear everything out and then I’d be able to be calm enough to sit. And then I left and I couldn’t keep it up. Everyday life stopped me. How do you keep that going?
Dave: So I just reached in my bag which is here next to me. I have my two journals. And so this is the one that I just finished. So here’s my pages which I’ll just, you know, read them. You’ll never know what’s on this. And so my secrets are get a small journal, meaning, like, don’t get an 8 by 8 1/2 by 11. Like, actually, you know, allow yourself to write something, turn the page and write. I like to have these nice and small so that, you know, it’s narrow so it literally physically fits into wherever I’m taking it. And then just know that it’s really about consistency.
I just spent time with a friend of mine who is very, very dedicated to her meditation and I was struggling with it. And I used the Headspace app, and I do and I don’t, and she said, “Dave, don’t meditate for more than 10 minutes.” And once you get good at meditating for 10 minutes, then you can try something else. But, basically, never meditate for more than 10 minutes. So if you wrote more than three pages, or if you wrote a big journal, or if you were trying to be exhaustive, it’s not sustainable. So, yeah, I think you got to pick your consistent thing that you can do.
Andrew: You mentioned your parents. Part of the inspiration for this happened because of something that happened at home. What happened?
Dave: Yeah. So in the last six years, I actually lost both of my parents. And, you know, my dad was sick for a long time. [inaudible 00:13:15] a little over a year. And, you know, I was able to transition him finally home after he was . . . and he died in his home. And it was beautiful, but it was still hard. And then shortly after that, I thought my mom had depression, but it turns out that she had a disorder that we still don’t know what it was, but it was causing her to have seizures. And then that started frying her brain, very similar symptoms to dementia. And so I lost my mom mentally first, and then about eight months later, lost her physically.
And it was tough on so many levels. One was, you know, it was interesting, I was meditating in prayer two months, three months after she died. And I could, like, feel this, like, pain. Like, I feel really good, but, like, “Oh, what’s this right here?” And I’m like, “What is it that I’m feeling?” And the thing that, like, burst out of me was, “I killed my mother.” And that feeling came because I’m the one who put her on hospice. I’m the one who gathered my sisters together, made a decision, “This is what . . . ” and then what is it that she would want. But I’m the one who orchestrated the conversation, signed the documents, and all of that. And, you know, that came because she didn’t have a health care directive in place. We kind of knew what she wanted, but she . . . I mean, I can tell you, to this day, she did not want to keep having seizures. She wanted to be done. But that wasn’t done, so that’s actually something that will now launch to Tomorrow. Right around the time this goes live is health care directives.
Andrew: Because she’s had that, so you had to make that decision. And now, for the rest of your life, you’ve got to live with the decision that you made?
Dave: I have to live with the feeling that I killed my mother. No matter how much therapy and logic could go into that, it’s something that I was unfortunately left with. I was also left with 30-year-old estate planning documents. My parents did what you did and they called up their lawyers, and they wrote a thing up, a very complicated trust structure that in no way justified by their assets. And, you know, so many things changed. They moved, the assets were different . . .
Andrew: Can I give you one simple thing that for me is true?
Andrew: I guess if you get a new bank account, it’s not in your name, it’s in the trust’s name. If you make a mistake and you put in your name, but you don’t go back and put it in the trust. And, first of all, it’s a pain in the butt to go back to the bank and say, “This needs to be done in the trust’s name. You can’t do this stuff online.” You can’t do it through an app as far as I know. And, second, now it’s out of date. Now, if the new account is the one that has the most assets in it because you just like it better, already everything’s a little bit screwy. Am I right?
Dave: Absolutely. So you can see a post that we put up which is The Comprehensive Guide to Funding your Trust where we have the, like, forms from the top 300 financial institutions in the U.S.
Andrew: I might need that. And I hate doing that. I wish your app would do that for me. Where is that? Is that on blog or resources? How do I get that?
Dave: Yeah. So it’s in our blog. You can probably google it, you know, Tomorrow and The Comprehensive Guide.
Andrew: For anyone who wants to go check it out, this is on tomorrow.me. That’s the domain name. Okay, so you saw that your parents did the work, but they didn’t realize that the work was out of date and . . .
Dave: It was completely out of date. So, you know, for us . . . and I’ll just show you how I’ve done it here in the app. You know, I went through the whole thing with my wife which was, you know, we had my sister being the kids’ guardian. And then her sister who’s more culturally aligned with us, moves to Seattle where we live, gets married, has a kid. I’m like, “Oh, she’s going to be perfect.” Well, you know, next thing you know, we want to make that change. We talked about it for a year and then I kind of, like, called my lawyer. And not only has he left the firm, he’s moved to California and does his practice at Washington, I have to get someone new. And then I just, you know, said that, “Forget it.” And so, now with Tomorrow, you literally just drag and drop the names or delete someone, add them, change who the guardians are, [inaudible 00:17:27], where does the money go, all of that.
Andrew: Okay. So you saw this was what happened to your parents. It also kind of coincided with the conversation you had about how do young people get life insurance? At what point did that happen?
Dave: Yeah. So at Banyan, the social media agency which at one point was the largest pure play social media agency in the country. We hired these amazing young people, a lot of them, like, fresh out of undergrad. One of our best people, we hired him . . . I think his previous job, he was a waiter. But we just found this amazing talent found by Mike Kelly who did all of our hiring. And they would come in, they now run basically all of the agency at [sale 00:18:14]. But after we sell to Deloitte, everyone’s getting huge salary bonds, they’re all getting married and having babies. And I found myself in all of these lunchtime conversations, like, “Oh, like, have you ever heard of the term life insurance? You know, it’s very cheap.” And I templatized my will, I bring people to my desk, and, you know, “Hey . . . ”
Andrew: Why were you doing this?
Dave: You know, I love these people. And I . . .
Andrew: And so you were concerned about their will and their life insurance?
Dave: I’m just concerned . . . Look, I think if I’m looking at myself, the psychology of it, I’m probably taking a more, like, fatherly role with them, being 15, 20 years older than them.
Andrew: And so this is one of the things that you just happened to care about? You probably were caring about their . . . are they saving money? You were concerned with that, too?
Dave: So I knew what I was paying them, and I knew what they were paying for their house. It’s actually how it comes out. So if you follow National Real Estate, Seattle just keeps climbing, climbing, climbing. So I knew as they’re all buying houses and I knew that there was no network, no possible way to have network around to look after these kids if anything happened to them. And so that’s actually where the life insurance conversation came in.
Andrew: Right. You lose your income, and suddenly your spouse has to maintain the house, and what happens to the family? That’s the thought process.
Dave: That’s actually where it started.
Andrew: Before you started Tomorrow, did you start to marry those two thoughts? Look, people don’t . . .
Dave: You know, I hadn’t. Tomorrow, you know, when we put one put forward in our messaging, we give away wills for free. You can see that on our TV commercials and our digital advertising, and also the reasons why you brought it with that, like, to have a guardian . . . have a plan in place working. But it actually all started sitting on a patio in Santa Monica with some friends, and I was talking to Andrea Stuermer, who was then the COO of Farmers Insurance. And I just turned to her and we had just met that night, and I had said, “I want to figure out how to get young people to buy life insurance.”
And we’re talking about young people and people who don’t have kids yet and, you know, how can this fit into the legacy that they want to leave before they have kids. And, you know, if you buy life insurance in your 20s, it’s ridiculously cheap. And so it began with that, and when I actually unpacked the problem and started talking to more and more people, brokers, companies, I realized that so many things are intertwined. Like, when you get a child, you need guardians in the will, you need this much life insurance, you need a college savings plan, you need a few things. And the truth is the vast majority of people simply don’t have any.
Andrew: And so you said, “If I can offer this first thing free, we start a conversation about the long-term finances of this family and then we can find ways to monetize that.”
Okay. Let me take a moment to talk about my first sponsor, and then we’re going to come back into this story. And what I’d like to do is just get a little bit of backstory to understand why you’re the type of person who would care about the people around you. You mentioned a few companies and I have, too. Let’s talk about what happened at those businesses, and then we’ll continue with Tomorrow.
All right, my first sponsor is a company called HostGator. Dave, I wonder how you feel about this. Hosting, at this point, is a solved problem but it’s super expensive. I’m imagining that the economy is going to go down and only at that point will people start to say, “What are my expenses? Where am I spending too much money?” Then, they’re going to go through their credit card statement. They’re going to say, “I can’t believe I’ve been spending this much money, $100 a month on basic hosting. I can’t believe I’ve been spending this much on . . . ” I don’t know what their bad expenses are. And only then they will care. Meanwhile, it had been years of them overspending.
So I’m going to say this. Anyone who’s listening to me, just take a moment. Check out how much you’re paying for hosting right now. Understand that there’s a cheaper option that just works, and it’s HostGator. If you go to hostgator.com/mixergy right now, you’re going to see incredibly low prices. I dare you to compare your prices to theirs. If you ever grow beyond those initial plans that they have, they’ll easily upgrade you.
I made a phone call . . . actually, I didn’t make a phone call. I just had one on the team make a phone call. He made a phone call, maybe even emailed or something, filed a ticket. Within like that, however it happened, phone, keyboard, whatever, we were able to upgrade as our business upgraded and we’ve never had a problem with them. Hostgator.com/mixergy, really, you owe it to yourself to save money on hosting and get really good hosting. And that goes for new companies and companies that are starting right now.
What do you think about that? What’s the biggest expense that you think someone who’s listening to us has that they’re going to regret if the economy goes down. Is it going to be housing, Dave?
Dave: It’s always going to be those subscriptions that you have. I go through and trim them out here and there, and I always wondered, “Why didn’t I do this before?” It’s not that hard.
Andrew: Hostgator.com/mixergy, guys. You’ll see really low prices and reliable service. You wanted to be an actor and performer, you told our producer. What was it about that, that dream?
Dave: She’s good at getting information out of me. She was amazing.
Andrew: Yeah. You know what? She actually had to listen to hundreds of my interviews before she got comfortable doing a single pre-interview conversation. And then, now, we hired a researcher. You don’t know this. We hired researchers to research you for her, then have her prepared so she doesn’t ask dumb questions and she can ask the insightful questions, and then she could avoid the things that aren’t going to be useful. Anyway, thank you for noticing that. But why did you want to be a performer?
Dave: You know, I remembered being seven years old and seeing this group, I guess, singing group perform and said, “I wanted to do that.” And my parents were nice enough to drive me and I auditioned. And I ended up with this group, you know, singing. I probably did 200 concerts a year with them. I’ve been to Soviet Union when it was still Soviet in ’87. I, at 12 years old, sang for Mother Teresa, sang for a bunch of interesting folks and several U.S. presidents. And I just kind of got the bug. Again, like, you know, my chosen career coming out of undergrad when I moved to Bangladesh for a while, my plan before I went to business school was to be a university professor, just speaking, lecturing. Like, there’s something about that relationship that I just love, and I’m still try and tap into it once in a while.
Andrew: And your parents allowed it. Even though you’re from Orange County, I always thought California was very liberal, and then I discovered Orange County which is conservative, buttoned-down.
Dave: You’re well behind what they call the orange curtain.
Andrew: Yeah. And so the reason that your dad was supportive is because, unlike other people there, he was a pilot. And so he was more creative, more . . .
Dave: Yeah. My father, when he was a young fighter pilot, this is sort of . . . let’s see, this would’ve been early 1950s. He had his own big band. He played trombone, wrote his own charts, and, like, his own dance band. He would play the clubs until 4 a.m., and then go straight to the airfield and fly planes at 6:00. Which may or may not be safe, but he’s always had a passion for the arts.
Andrew: Wait, that’s a way to live life. I want to do that more. You know what? My foot cracked. My heel did from running. It finally has healed. And just before it healed, I said, “If this ever heals, I’m going to go back and do a marathon in every continent the way that I always wanted to.” It’s healed. Today, after this interview, I’m going to go to the podiatrist. She’s going to check me out in five different running shoes to pick the right one for me. I got to go. I got to live life more like your dad.
Dave: That’s great. Well, I should introduce you to my friend, Mina, who is running 100 marathons in 100 days really soon. You could go join with her.
Andrew: Is she going to be doing some here in the Bay Area?
Dave: She will be. She’s doing some in California and across a few places, but she’s doing it in all seven continents.
Andrew: I’d love to run with her. I’d love to do that.
Dave: I’m not sure if she’s going to . . . she’s done in Antarctica for her last run, so we’ll have to check. But, usually, she’d [inaudible 00:26:19]. It’s to bring attention to the, you know, sort of upcoming water crisis that we have. So she runs in deserts, she runs in riverbeds that have run dry. But she’s fantastic. So the campaign’s called Thirst.
Andrew: Thirst. I’m the type of person who watches Netflix documentaries about people who do this stuff or Amazon, YouTube. I love it.
Dave: What’s great is, like, you don’t do 100 marathons at your Boston Marathon time, right? So, actually, if you wanted to go run with her, you actually keep the pace.
Andrew: And, you know, for a moment, I was thinking I have to do the whole marathon with her, but no. What I’ve discovered is sometimes I just want company for the last 10 miles. And if I’m in earlier part of my training, I’ll do the last 10 miles. But the important part, to live. To live like your dad just decided he wanted to do both those things, he goes and does it. She wants to go and run, to go and do it.
And what I found is I used to think it would be a distraction from work. Because there was this old Wall Street Journal ad about how you could either waste time in the gym or you could read The Wall Street Journal. I swear to God, there was a guy holding The Wall Street Journal in the gym saying, “You could either be a sucker who wastes time at the gym,” they didn’t use the word sucker, “Or you can read The Wall Street Journal.” My life was always like that, either waste time doing other stuff or you work.
And then I discovered, no, if you go to the gym, you’re fired up to go to work. If you go run a marathon, you’re fired up to go to work, to live life, to be you. Speaking of, so you weren’t the kind of person who sat down and wanted to be Alex P. Keaton. Instead, you said to yourself, “I’m just going to follow whatever passion I have,” very similar to your dad it seems like. You discovered microcredit which a lot of us did, right? Microcredit, you lend a handful of dollars to somebody in a poor part of the world, they use it to build up a small little business, maybe it’s a sewing business, maybe it’s a shoe repair business, I don’t know what it is. But then they pay you back, and they’re on their feet. You discover it. A lot of us said that this is interesting and gave, like, $100 loan or something. You did something different. It says something about who you are. What did you do?
Dave: Yeah. So this was actually pretty early on. This is in mid-’90s, ’97, I guess. I randomly learned about microcredit banking, reached out to someone who was . . . I was dating his sister’s roommate in college. And I reached out to him, someone named Chuck Davis. And he had just started Grameen Foundation or was on his way to go there, and I said, “Hey, send me some information.”
And then I took Grameen, which was the first huge bank out of Bangladesh, and I put it in, like, AltaVista or whatever where he is in back then. And I started reading the writings of Muhammed Yunus until, like, 4 in the morning. Right, I sent him another email saying, “I have to come work with you.” And that Friday, I quit my job, I dropped my classes, I moved to D.C. and I slept at someone’s hallway. I was there on the first day of Grameen Foundation. And because I knew, I felt it, I knew this was what I had to go do.
Andrew: So you go in there, you start being a part of this organization. This is way before, like, kiva.org popularized it, way before they got attention and it became a thing. You go in there, and then, somehow, you end up in 1997 creating the MicroEnterprise Conference. Because what? Why did you decide to create a conference around this?
Dave: Well, you know, I was in school, so you’re kind of focused in a lot of academics. There were two things that I created because, you know, there were businesses getting involved. It’s largely a non-profit scheme. And so I did two things. I co-founded what became the largest conference on microcredit banking. The first year, we had 1,000 people attend and then created the first academic journal of the subject. So I met, like, young, fresh-faced college sophomore who’s calling up people who would, you know, ultimately win the Nobel Peace Prize like Muhammad Yunus or people who are running Accion and, like, these people who are now the leaders of this industry or now have actually passed the baton. And I said, “Hey, like, would you join my editorial board?” Then they all said yes. And so there was [inaudible 00:30:10]. Yeah, everybody on there just to . . .
Andrew: For free?
Dave: For free, yeah. They were on a . . .
Andrew: And the reason they want to do it is because they want . . . the same reason you’re doing this for free with me. You’re trying to get the word out about your ideas, the way you see the world. That’s what they were trying to do. Is that right? No.
Dave: Well, I think it’s actually more than that. I think that, you know, I used to . . . there’s somebody named Sam Daley-Harris who created Results, which is an amazing citizen’s lobby and they created Microcredit Summit. I used to hang out with him. His office was downstairs from Grameen in D.C. when I was just, you know, a college sophomore. And we’d get together after work and, like, play guitar, and sing, and just, like, hang out. And I realized, you know, he’s been spending all of this time with me. I never doubted it then, but it’s because he wanted to nurture my passion for what I was doing, so maybe he saw a little bit of me in him and really, you know, propelled me forward.
And he would fly out to our conferences and, you know, Muhammad Yunus came. So, you know, if you fast forward two years, I end up doing my Fulbright at Grameen Bank with Muhamad Yunus. He wrote my letters of recommendation to grad school. And then, you know, four years later, won the Nobel Peace Prize.
Andrew: So they were trying to encourage you?
Dave: What’s that?
Andrew: So you were saying they were trying to encourage you? They saw someone who was passionate and hard-working they wanted to encourage.
Dave: You know, yeah. I think it’s absolutely that they want to give back. But I also think when you get in that passionate way . . . and you have this, too, right? When you get that passionate way, there’s a light that shines out from you. Like, it’s like this beacon that comes, and people are just drawn to you. I was actually talking about that with my son. I’m trying to recruit someone who just got offered three-and-a-half times what I’m offering him to go work at some big company. And my dad said, like, “Why is he even considering this,” right? “And why would he want to come work with me?”
Andrew: Your son said this?
Dave: Yeah. He’s 14 and he sits in conference calls, and he’s sat in on hire-fire decisions. He’s a shareholder of my company. And I said, “You know, I know this is weird because I’m your dad, but there’s just certain people who get me and just will do anything to work with me.” And I look after those people and I love them holistically and all the, you know, personal parts of their lives. And when you find those people, you do everything you can to keep them. And that’s what I’ve found. So I think that going back to your running and doing my morning pages and meditating, if I could do anything I can to protect my beacon, then I have made a much more productive day even though I’ve . . .
Andrew: And that’s what it is. You’re protecting the beacon, the thing that draws people to you and brings the best out of you.
Dave: Exactly. And, for me, all of these, like, other metaphors about being strong or Geoff Davis wrote something on protect the asset which is in “Essentialism” Greg McKeown’s book. All of these things, like, they’re super powerful, but it all felt really selfish to me. Like, they all felt like, “Oh, I’m putting myself first.” And for some reason, I was actually in a session with a Peruvian shaman in the Virgin Islands that I’ve wandered into. And he looked at me and he said, like, “You are a beacon of life and love.” And that’s when I . . . he’s like, “You need to protect the beacon.” And, finally, I had a metaphor that allowed me to have self-care for the first time in my life.
Andrew: I’ve met people who have that and worked with them, and it really is just a thrill to be around them. And you see other people feel it, too, that they have a tiny bit of that just because they’re around it. I’ll tell you who I’m thinking of. I’m thinking of, most recently, Russell Brunson, the guy who runs ClickFunnels. I never really knew much about him. I happened to be around him and his team, and I could see totally, like, living his thing. I would almost say that there’s, like, a religious element to what he’s doing, that kind of divine touch in the way that he expresses what he’s up to. It’s interesting, and then you see it in other people around him. So you had that. Is it wrong for me to ask, was it generating money? The conference, was it profitable?
Dave: No. The profit was completely done . . . You know, I made absolutely zero, didn’t even collect a salary. This was . . .
Andrew: That was it? It was . . .
Dave: It was completely done out of passion.
Andrew: Okay. And then you end up . . . I’m going to skip forward a little bit. Shelfari. I remember seeing Shelfari because it looked really pretty.
Dave: Yes. Timothy Gray the designer who’s phenomenal.
Andrew: Who was it?
Dave: His name’s Timothy Gray. He’s still a senior designer at Amazon with Shelfari. He’s basically taking a huge leadership direction there.
Andrew: And from what I remember in the early days, first of all, it looked really good in a world where the internet didn’t look that good. And it was just about cataloging the books that you have, right? And I think they also have the scanner on your webcam that would let you hold your book up. Was that them?
Dave: So there was other products that have that. I don’t think we actually implemented that feature because we were full in the way. But, yeah, it was definitely . . . it was way ahead of its time and was doing pretty advanced things using drag-and-drop on the web back when that wasn’t really a thing.
Andrew: So then I’m looking at one of the early pages, November 16, 2006, create a virtual shelf to show off your books. Connect with friends. Discover exciting titles. Voice your opinions all for free. That virality was starting to come in pretty early, right? This is like . . .
Dave: Yeah. So the guys launched and they got the TechCrunch bump, and then they’re on “Oprah” magazine. So they had 3,000 users. I knew Josh from RealNetworks. I worked on the Rhapsody the music service, he worked on another product. And he was recruiting me pretty heavily, and I, at the same time, was recruited and offered the position to be the CMO at Redfin. Redfin was about 60 people at that point. I adored Glenn Kelman, who’s still the CEO.
But Josh, you know, made this offer for me to come. I think it was about half the salary, but it seemed like a really great opportunity. But I wasn’t sure, so I went for . . . I woke up early on a Saturday and went for a walk, took a deep breath, and I just knew that I needed to go to Shelfari, which is probably the moment I should shorted the real estate market because that was 2007. But we came in and I was super excited. My first day, I log in, I pull the analytics, and I saw that 72 people have used the site. And I went home and I told my wife, “I’ve made a terrible mistake.” And she said, “You’ll figure it out.” And so I got up at 4 a.m. the next day, came in, and by the time everyone rolled in, I’d written down the 19 ways that I’m better off by inviting you to either come in or come back to Shelfari. So I went through a process of, like, “Well, these could be features. I have to remember to prioritize them.”
Andrew: The 19 ways that a user is better off by bringing other people . . .
Dave: You know, better off when I ask you for a book recommendation or pair our books together or, you know, whatever it is. We’re starting with the psychology first. And then by Friday, it was product requirements. The four of us got together. Met five, we had a fifth person up by Friday and we completely turned the focus of the company on creating these more social features. And we had 100,000 users. So we went from 3,000 to 100,000 in, like, 90 days, and from 100,000 to 2 million in a year.
Andrew: Wow. And it’s you saying, “I need people to start sharing this, and I need to make sure that it makes sense for them within this product and within their lives.” And the other thing you told our producer is this is what you’re doing with Tomorrow, but it’s not as easy as it seems. It’s not like we come up with this one viral hook, and then, boom, everything takes off. It’s iteration. Do you remember one feature that was especially powerful but, at first, didn’t do well?
Dave: On the Shelfari story or . . . ?
Dave: Yeah. On Shelfari . . .
Andrew: Tomorrow I’ve got a great one that we’re going to get to.
Dave: We tried on Shelfari a number of different things, and, you know, we didn’t have the great testing tools 10 years ago that we have now that enabled us . . . But we went in, and every night at midnight, I would pull the data on how things went. So we would do a simple A/B test. And I remember one day sitting down at Kevin’s desk, Kevin was our lead developer, and he said, “Dave, I just don’t have time to do a test.” I’m like, “Okay, well can we just do a hardflip and we’ll just do a one-day test?” And we coded and we literally just changed the subject, you know, that went up, and that was the relative 22% bump from, like, one day to the next. I’m like, “Oh, wow. That went great.”
Now, some things that don’t go great is one of the tragic mistakes we made with Shelfari, which is that we put up new designs. We kept iterating through the performance, but it turned out that people were sending messages . . . we’re basically, “Oh, we’re going to put the, like . . . yeah.” So when they invite all of these people up in the corner, and then they were inviting not realizing that it had, like, hundreds of their contacts below them. And so they’re actually getting tricked into inviting more people to Shelfari than they had intended to.
And so it was a period of about two-and-a-half, three weeks to people. So, “Oh, here, you know, we’ll cancel. There won’t be any more invitations. Sorry about that.” And then it came in and it was like, “Oh, wow. We should make this change.” And we sort of waited on it because, you know, we got selfish. We’re like, “Oh, wow. That’s big.” Like, most people are figuring out, you know, we’ve only got, like, eight or nine complaints, and then all of a sudden, the complaints just started rolling in because once you move the iterate cycle, it’s like, “Oh, this person didn’t intend to invite me and I didn’t intend to invite them.” But you realize you’re not in the world of book-lovers at this point. You’re with people who are, like, trying to figure out what happened.
And that’s when a New York Post online article came out, like, because a reporter had that experience. And I called them up right away super sorry. We changed the whole feature the next day. There was, I think, one of those times where it was a huge lesson, you know, of the morality that’s needed in the products that we do. And that even though the time period where this, you know, bug, if you will, was up, it’s bad user experience was up was probably no more than 13 days. It hurt probably 1,000 people, 500 people, some plurality of our users. And it’s a shame. I still regret that.
Andrew: How did you guys do against Goodreads? Goodreads was founded by Otis Chandler who also came from . . . he came from Tickle where they were all about virality. What did you do before the sale against them?
Dave: You know, so what’s interesting is there were three companies. There was LibraryThing, there was Goodreads, and there was Shelfari. And we all started right around the same time and didn’t find each other until about six months in. And I love Otis. And Otis, I think, took a really smart approach. So Shelfari, we built this beautiful design. It’s very tech-heavy, we have a full-time team. You know, it was all about this visual bookshelf. Otis took the other side which was his team and his girlfriend, I think became his wife but [inaudible 00:41:58] yeah.
Andrew: Yeah, they’re married now.
Dave: Otis is super smart and says . . . Ruby on Rails had just become . . . it wasn’t even quite the darling at that point, but every social app was built on Ruby. And he just said, “I’m going to keep plugging in Ruby features as much as I can,” completely contract the dev team, you know, wherever they were completely remote. Like, I want this feature in, and what he did was create a really, really lean and completely social-focused way. Goodreads became gorgeous, but it was originally, like, very, like, “Here’s a book. Here are some quotes. Here are some sharing Here’s whatever.” But he leaned in that every single social feature. He was able to be more agile as he did that. And, honestly, his burn was probably a fourth of ours. And so that allowed him to take in a little bit of money and ride it all the way through, ultimately get the virality and then take off, and that’s how he had, you know, a nine-figure exit and we had a fraction of that.
Andrew: What was your exit? Well, I’ve got an article here from Jason Kincaid in TechCrunch, but it’s not really clear.
Dave: Yeah. We never announced that number. I think it’s come out publicly. It was under $20 million, so it certainly wasn’t, you know . . . it was not . . . I can’t remember the Goodreads exit, but I think it was over $200 million.
Andrew: Oh, $200 million?
Dave: I think it was huge, whatever it was. It was a massive . . .
Andrew: Oh, it’s big time.
Dave: So now we actually have to get a number, so . . .
Andrew: I don’t edit. We got to stick it in. You mean, do you think we . . . ? Well, okay. I got a sense of it. I don’t want to go down rabbit holes which I tend to, especially because of research. Like, you just mentioned this virality issue. I found kind of an old article from LibraryThing about Shelfari spamming. They criticized you, and I go, “This is just a rabbit hole that I go down when it comes to research.” How’s the audio coming through to you? It looks like you’ve got a little issue there.
Dave: What’s that? No, I can hear it fine.
Andrew: Okay. Great. Let me do the second ad, and then we’re going to come in to the next business that you did, and then continue with Tomorrow. The second ad is a company called Toptal. Have you ever heard of Toptal?
Dave: I haven’t.
Andrew: You haven’t? I’m going to tell you what they’re about. They get a collection of developers in their database. And the way they do it is because they put out these super hard tests for developers and developers want to pass the test to be in the network. And then when an entrepreneur like you says, “I need to hire someone fast,” you go to them, and Toptal goes to their network and says, “Here, Dave. Here are two people that we think will be perfect for you.” If you like them, you hire the one that you like or the both of them and you move on.
Let me ask you this instead of doing an ad for Toptal . . . or in-between. Instead of me talking about Toptal, I’ll talk about you. What’s one tip that you have for somebody who’s hiring a developer? One tip for hiring the right developer.
Dave: Well, I like to hire people who are already friends. And so the number one thing that I found is actually finding through my existing set of friends or existing friends of our developers. They tend to stay longer and be more motivated and stay until the job is done. Other than that, you know, I can’t review anyone’s code. All I can do is actually draw them to us and make sure that you don’t fall into the common trap which they get, like, “Oh, they only care about the code.” It turns out that developers probably care more about the business and the business fundamentals than any other position that you’re going to hire for.
I think as much as a CFO, they’re going to care about . . . they understand evaluation and they understand dilution. And they want to understand the fundamentals of what’s converting, and what’s sustainable, and how big the market is. It’s actually fascinating, and your marketing people say it like, “Oh, you know, looks like a great job. Let’s go.”
Andrew: Because the operating system of the company and the economy is just as interesting as the operating system of the software?
Andrew: All right. I’ll close out Toptal by saying, I always talk about how you can hire someone full-time or part-time from them. But speaking of what Dave said which is friends, one of the things that Toptal will do is they’ve got these groups of developers who’ve worked together for a long time who then get hired out through Toptal together because they work really well together. If that’s what you guys are out there looking for or frankly anything else, go to toptal.com/mixergy. They’ll give you 80 hours of developer credit when you pay for your first 80 hours. In addition to a risk-free offer, go to top, as in top of your head, tal as in talent. That’s toptal.com/mixergy. Why don’t we do just a quick note on the sale of Shelfari? Because you guys raised a little bit of money from Amazon, and then you sold to Amazon, right?
Andrew: And it was just as the economy was getting weak, and I think at the last minute you guys were thinking, “We shouldn’t do this,” right?
Dave: Well, we were moving through. We knew we wanted to do the transaction, and we had a couple of would-be buyers in the hunt. No, we were just working through the negotiations, and then, finally, we’re like, “Okay, should we do one more round?” We’re like, “No, we’ll just move forward and close.” And we signed the deal of the next day [inaudible 00:47:06]. And we literally came in the next day and we’re just, like, fingers-crossed. Because they had a cooling-off period where they could’ve actually[inaudible 00:47:15] deal.
Andrew: Oh, really?
Dave: They had, like, 60 days out, and we literally just kept our fingers crossed and we just moved forward, and it all got done.
Andrew: This is where I kind of polluted the good vibes of the conversation by asking how did you do from the sale financially?
Dave: Yeah. So it was a nice exit for me, not a life-changing exit. You know, I think a lot of the money went to, you know, Josh and Kevin who did all the good work on their own before I showed up. The greatest thing I learned from it, though, was . . . I mean, I literally punched my entrepreneurship card. So Josh Hug who was our CEO literally brought me in as his partner and taught me all of the reps on raising money and how to work with investors or earn investors, and understanding terms. And I got a massive education on that. And then working through not only the sale to Amazon but actually the entire process of bringing multiple buyers along, and how you stage it. We had great advisors who helped us do that, so I think the education that I got was worth more than the money I took away.
Andrew: Okay. And then you . . . and I’ll spend just a little tiny time on this, you then started Banyan. But look at this. This is from some article that our researcher found. That’s when I accidentally started a social media agency, which in 2009 was a great time to do. How did you accidentally found a social media agency?
Dave: So, you know, part of it is just having friends and being a friend. A friend of the Gates Foundation reached out to me and said, “Hey, you’ve got all of this success at Shelfari. Can you help us look at something?” which was around education in the presidential elections? And I said, “Oh, this looks interesting,” and we met. We had a long lunch, and then I basically wrote her this long email saying, “These are all the things you should do.” And she came back to me a few days later and said, “Can you just do this for us?”
And in a related thing, I basically met someone who had built a massive political campaign himself. And I reached out to him and said, “Hey, do you want to do this with me? You know, you do the work, I’ll do all the analytics, I’ll manage the client. We’ll split the money.” Sure. And his name is Alex Garcia. And Alex became my business partner for seven years, and we basically bootstrapped what became, yeah, like I said, the largest pure play social media agency purely by accident.
And the only reason it became . . . as I was leaving Amazon, it was, like, nuclear winner for getting seed investments for my . . . made sure that I was started on and had started building. And so I reached out to Alex to say, “Hey, can we do some more of this social media consulting?” Sure. We reached out, and, like, five weeks later, we hit a $1 million run rate. We had signed Fox to retainers, we signed Disney, we signed Porsche, Intel, Microsoft. And pretty soon, we had, like, the most blue-chipped client base of anyone in the industry.
Andrew: And this was a time when all of those brands said, “We need to get on social.” And they didn’t want to do it themselves. They wanted somebody else to do it for them?
Dave: Correct. So we really brought Disney onto Facebook for the first time, having Snow White and the Seven Dwarves, you know, all of the dwarves talking to each other.
Andrew: How do you do that? How do you get Disney to trust you with their brand?
Dave: So that one actually came through an introduction from Razorfish, which, you know, is an agency owned by [inaudible 00:51:01].
Andrew: And what’s your connection to Razorfish?
Dave: I just [hold 00:51:02] my Google assist. A neighbor. A guy [inaudible 00:51:06] barbecue, and he said, “You do the social media stuff. Can you help us because we don’t have a clue?” [inaudible 00:51:11]
Andrew: So this is just your friendships over and over in this business at a time when . . . am I right?
Dave: Yeah. It does come that way. Someone who I was good friends with back in RealNetworks, he was actually my boss. We stayed in touch. He ends up running digital for Fox. I reach out and say, “Hey, we’re doing this.” He said, “Oh, let’s start with a small retainer.” That was a seven-year engagement that we did and helped bring shows like, you know, “Glee” into social media, enhance all that great work that they were doing. The Fox digital team was amazing, and they just had us be an extension for some creative points.
Andrew: I looked at your investors. One of them stood out, Neil Patel. How did Neil Patel end up being an investor?
Dave: Yeah. So he invested in Shelfari, and, oh, I guess also in Banyan. So Neil is an interesting guy. He calls me up randomly every once in a while to talk about business or a new idea.
Andrew: On Skype?
Dave: He usually texts me or just calls me. But Neil’s an orthogonal thinker. A fun, great experience in marketing, a hacking approach to marketing. And so he actually had created a mini-fund together with some investors in Seattle where Neil would basically source deals. So this came out of that fund, and it’s together with ECHELON Partners and a few others. But, you know, it’s always good to have people like that. Excuse me.
Andrew: No, we’re going over some. I appreciate that you’re here with me.
Dave: My Roomba decided now was the time . . .
Andrew: Oh, that’s what that was?
Dave: Yes. But, you know, when you look at who’s on your cap table, it has a huge impact on doors that can open. And there are people who are on our cap table for our current company who we’ve been, you know . . . Most of our investors are quite large, but we have these smaller investors who are there. Because I need to call them when I have a need or a question, and they always pick up.
Andrew: I get it. You feel a sense of ownership because you have ownership. You sold to Deloitte Digital?
Andrew: Why’d you sell?
Dave: You know, Alex and I, and we had a third partner, Alicia, we got together. Every November, we will do annual planning, like, what are we going to do? Are we going to invest in tech? You know, where are we going? And we were looking, and we had just signed a big deal . . .
Andrew: What were those options that you mentioned?
Dave: So investing in technology. So, you know, we were always wondering, you know . . . we were purposely a services business. Would we want to, you know, invest more deeply in becoming more of a tech company? Which every year, we would say no. And then the second part was, you know, where are we going to be . . . you know, what are key clients? Who are key people? You know, your classic offsite, you know, multi-day thing.
And then in the midst of that, I turned to them and I said, “Does anyone want to do this for 10 years?” And everyone looked around the room like, “No. None of us wants to do this for 10 years.” I said, “Well, because if we’re going to go big, we’d already gotten to, like, the mid-level. If we want to go big, it’s going to be five, six years at least. And then a three to five earnout after that.”
And so we basically looked at that moment and said, like, “You know what? This is the year that we’re done.” Because, again, it was an accident to start a services company, to start a social media agency. It was a beautiful accident that brought a lot of great people in our lives and made us a lot of money. But it wasn’t our particular passion, so we hired a bank in December. We polished everything up really nicely, we went out, we brought in all of the contacts that we had. Our bank actually brought us Deloitte, because we weren’t familiar with Deloitte’s more recent strategy of acquiring agencies. Deloitte now has a billion-dollar marketing arm. It was practiced. And so, we liked the Deloitte folks right away. They were willing to make the job super interesting for us which I can talk about why Deloitte. But, in the end, they paid cash up front, made us partners, and guaranteed to keep everyone all the way down . . .
Andrew: And you had, what? Like, 100 people, I think, on your team at the time and no earnout?
Dave: Not quite, but, yeah. It was pretty big.
Andrew: I mean, it was 50. Let me see, oh, 50 employees.
Dave: Yeah. We were . . .
Andrew: “The Deloitte Digital Group will completely absorb the Banyan brand, as well as its 50 employees,” was the article that I read. What was it that made it so interesting about Deloitte?
Dave: You know, I love solving complicated problems. I love diving into things. I went around during the diligence period, and that went, like, the head of pharma and the heads of all of these different industries. And they realized, like, “I want to figure out how to get people to take their medicines right,” and how do you use social fabric to do that. They loved all of our data. We have this amazing research team of data scientists and digital anthropologists that would do research using social media data. And they love that and they want to integrate to every practice. And, like, basically, Banyan become the tip of the spear of everything that they were doing. And they made those promises and I think really delivered on them as well as they could.
Andrew: Okay. So then that brings us to Tomorrow. Am I right in the sense that the lawyer who did our trust and other lawyers, they basically have a Microsoft Word file full of all of these? Or maybe they have another app with this in it, and they just pull out the documents that they need. Am I right?
Dave: So that seems to be how it typically works. So they’re either buying someone else’s template or they’re creating their own, Or often is the practice is your will is an iteration off of their previous client’s will or the previous client with your similar situation. And so what we do is we engaged an in-house attorney, Chicago Law grad, NYU tax program, worked in Manhattan for, you know, top firms for 10 years. And she came in, wrote all of our own proprietary trusts and will documents, and worked with 52 attorneys across the country to review those, make sure that they would abide by individual state laws. And we basically began with UI which was like, “I want to, like, cross out the guardian and add in a new guardian,” or “I want to drag and drop,” or “I want to be able to do all of these things.” We began with the UI, and then we said, “Lindsey, we need you to create the documents that will allow us to do that.” And that’s what came. It allowed us to handle, you know, marriage, non-marriage relationships, you know, gay families, straight families. Removing gender from the equation allowed us to do things that even lawyers weren’t really sure how to do. And so, we’re literally able to provide the service for not just your Leave it to Beaver family, but for every family in America.
Andrew: And then PR was how you got your first set of customers.
Dave: It is. So we had a lot of great PR who covered it first and still do. And we’ve . . .
Andrew: You know what? I’m sorry to interrupt, but it’s really hard to look up your PR because your name is Tomorrow and your first name is Dave. It’s really hard.
Dave: Yeah. So we’re making that less hard in that we are now the registered trademark of Tomorrow. If you google Tomorrow, you usually see this in the first few results.
Andrew: Let me see.
Dave: Where do we show up on your computer? Number four?
Andrew: Well, right now. But, you know what? I’ve been searching for you so much that it’s going to come up no matter what.
Dave: There you go.
Andrew: So first is a Chris Young song, “Tomorrow.” On top of that, it’s the dictionary definition of tomorrow. No, then it’s vocabulary.com tomorrow. But the first non-song . . .
Dave: These dictionaries we need to . . . yeah. And it used to be Little Orphan Annie. So we knocked the Little . . .
Andrew: Well, I mean, and Chris Young did.
Dave: So, Chris, yeah. Well, we were number one for . . . Anyway, but, yeah, we are the registered trademark of Tomorrow. That is actually . . . I just got word on Monday, I have a glass frame to give out to Eric who’s my co-founder who named the company. He reported to me that this is actually ownable space. But, yeah, you know, when you think about . . . because you’re saying, like, “Why did you . . . ?” You know, half an hour ago in this interview you asked, why did you put these things together? And part of it is because wills mean death, life insurance means death. If you actually combine these things together and then combine it with, like, building wealth for your family or saving for your kids’ college account, and just make it about family and financial wellness. All of a sudden, you’re taking death out of the equation, and you’ve created, you know, this other new thing. And so having something optimistic that’s really focusing on tomorrow . . .
Andrew: Oh, okay. I see that connection. All right. And so how did you get so much . . . You know, before I even say that, something that distracts me about you is you look really, like, approachable and, like, friendly. We can hang out and have a beer together here, but all of the photos that I saw in preparation for this made you look like you’d run an investment firm for years or you are hosting The Today Show. Whoever freaking dressed you for those shoots did a great job. Don’t you think they communicated style and financial responsibility?
Dave: Oh, that’s nice. Well, yeah, I guess it’s that combination of two things. So I do dress myself. And, actually, that’s not true. I’m dressed by David Blackham who owns this store called David Lawrence in the city of Seattle.
Andrew: Okay. It helps to find the right spot like that.
Dave: This shirt I’m wearing and everything I wear comes from one store because I’m terrible at shopping. And I used to be terrible about getting my haircut until I just started to do it.
Andrew: That helps, too.
Dave: So . . .
Andrew: Yeah, we were getting to how you got so much press.
Dave: Yeah. You know, a good Italian suit goes a long way.
Andrew: So how did you get so much press? What was it that makes this so interesting that the media covered you guys?
Dave: So I think there’s a couple of things. One is, you know, there’s always relationships that you lean on, both your relationships and others’ relationships to get you heard. I think the main thing that we really nailed is the problem. The problem is that, you know, two-thirds of Americans don’t have a will. If you’re a young family, it’s almost 80%. And so, right now, there is no plan in place for who’s going to watch your kids. And so kind of nailing that message is key.
The fact that 80% of Americans or 75% of Americans can’t deal with a $500 hit to their wallet that two-thirds of Americans don’t have any life insurance. Like, all of these things, you’re just like, “These are shocking statistics.” So we kind of nailed the problem quantitatively as well as through a few stories, and then we just came in and said, “You know what? We’re doing these things together.” It’s innovative. It’s completely done on your phone. And I think that actually not being skittish about that, we were literally iOS-only when we launched. So we didn’t even have a web version. It was like, “Why would you do this on your phone?” Why would you not do this on your phone?
And we helped realize, like, one of our key messages we launched was this is something just like you explained, right? You do it by yourself with a complete stranger who will ask you all of these personal questions about your own mortality. And instead, you start on your phone, do it at your own pace, you invite your significant other to join you in Tomorrow together with your kids. You, you know, take pictures of things that you want to leave to people, decide who gets what. You can change it any time, just print it out and sign it, but that message really landed with a lot of our users.
Andrew: Look at this, by the way. The home screen. Well, here, first question, male, female, non-binary. This feels so much more updated than the experience that I had with a lawyer who came in with this old leather bag and sat down at my office. And we sat and had a conversation. When you talk about a stranger, I don’t care . . . This is me now getting into your business, but I’m kind of passionate about this. I don’t care about the fact that it’s a stranger. I’m okay with that.
There’s something about talking to another human versus interacting with my phone that I prefer my phone. But here’s what I do prefer. I, at some point, will balk at this. I, at some point, will not finish the work, and I’d be afraid to get started because then I will not have finished it here. And what I liked about the lawyer was that guy just kept following up with me, “Andrew, are you . . . ?” Because he wasn’t going to get paid until we were done. So do you have anything like that? Do you have, like, will you nag me until I finish it? Because I’m thinking of switching . . .
Dave: We’ll help lead you down the path, but 25% of people who registered do their will like in the first week. They print out successfully a will. And that’s up from 13% in the summer, and the target by the end of the year is north of 30%. Above 30% of users is probably hard to do. I mean, we’d love to have everyone do it. But given that you’re, you know, entering a lot of information, like, your phone rings, you get a text. You know, you can decide, like, “I want to play, you know, whatever game.” Life happens, and we . . .
Andrew: What about trusts? What percentage of people end up with the trust set up?
Dave: So the trust percentage is lower. I think it’s probably under 10%. The trust takes a little more work because you need to add your assets. And I think also the values isn’t as understood. So that’s actually one of the things we’re going to do next is explain the trust . . . We have video explainers of the whole thing, but basically, if you have minor children, you need a trust. Unless you want to dump all of the money that you’re going to get from your life insurance, everything on your kids on their 18th birthday. You know, and even having anyone who’s going to, like, pay for schools, and colleges, and medical, and all of that all the way through, you need to have a trustee who’s empowered to do that. You need a trust. Only 5% of Americans have them. I think everyone needs a trust.
Andrew: I know. I had no idea. I thought all I needed was a will. The lawyer said, “Look, if you don’t have a trust, you’re opening your finances up to the world.” And I said, “I don’t think I need that. I don’t know if my kids need that.”
Dave: Your finances and your decisions become part of the public record.
Andrew: Right. That’s what he said.
Dave: If you move to this route, trust, then that allows you to, one, everything basically sits in its own corporation. It doesn’t have to go through a probate court. Anything that’s in your trust, it doesn’t become part of the public record. It’s portable as you move around the country. And then it allows you . . . I mean, a will is a clearinghouse. Like, there’s money, this is who it goes to. And that’s fine unless that’s not what you want to happen. If you want to, like, take care of your kids over time, you need to have a trust.
Andrew: Yeah. And I thought I’d want them just to all have the money right away, and then I realized, “Nah, I’ll let them wait a little bit.” So here’s one thing that was interesting to me about your PR. There was an Aretha Franklin story about her passing, and that . . . So what you said to me is interesting, cerebral, but no one’s reading an article about it. Aretha Franklin, people are reading an article about her, and then you come in there as the person who gets to explain it. Because her lawyer’s not going to jump in and explain it. I don’t think that a lawyer can do that. Her family is not going to be open about what’s going on with assets, but you can go in and explain it. And the article here, this is from Fox Business, can explain this is the CEO and founder of will and trust creation app, Tomorrow. And that gives a lot of credibility. The other thing . . . Am I right about that? That’s helpful.
Dave: Absolutely. Keep going.
Andrew: Sorry. The other thing that I saw was an article . . . this is me trying to dissect you from a distance. There’s an article about . . . I guess you were mentioned in it about how I built an $18 million company with no VC funding and you can, too. This was in Entrepreneur Magazine, so your story becomes really interesting for places like here and for Entrepreneur Magazine. By the way, you sold the company for $18 million? Is that where the $18 million came from?
Dave: I guess that is where that came from.
Andrew: Wow. Congratulations. You owned a third of that?
Dave: Yeah. We haven’t broken that out before. You’re good at asking the questions, though. But I’m good at not answering your questions but with a smile.
Andrew: I asked the question, you said, “Yeah,” but you don’t mean yeah as in yes to my answer. It’s, “Yeah, we’re not going to answer it,” right?
Dave: We’re not going to answer.
Andrew: Okay. All right, the final thing I thought we would talk about is the virality in this. I would’ve thought there would be no virality in wills. I talked to no one except for my good friend about what lawyer I should hire, and then that was it. You found a way to make it viral without making it creepy. Talk about what you did.
Dave: Yeah. So you’re not inviting everyone into Tomorrow. But, basically, how it typically works is your lawyer comes to your office and asks you for some names, like, who’s going to watch your kids and who’s going to be the executor, which is the person who basically operates your will for you, takes care of your estate after you pass. And then you don’t tell those people at all, and it’s a surprise. It’s the plot of “Manchester by the Sea,” you know, people don’t know that all of a sudden, they’re going to be guardians. And that is actually the default, is people don’t actually know.
Andrew: I didn’t know that.
Dave: And so in Tomorrow instead, you know, I start typing in, you know, a name. You know, “Oh, I watched a video about, oh, what does a guardian do? They’re watching the kids, they love my kids. They will take care of them as I would want them to.” And I start typing in, “A, oh, Andrew,” pulls your name from my contacts, keys up a message that says, “Hey, Andrew. I’m getting my act together and part of that is, you know, creating a will for me and Max. Would you be willing to be on our list of potential guardians?”
And you send that, and then that goes out to him, comes into a page, you read about it, like, “Oh, what does a guardian do?” You say yes or no by joining Tomorrow. And then you will say, “Oh, Dave did this.” You know, this was on the to-do list a few years ago. Like, “If Dave did it, then maybe I could do it, too.” And it turns out that one in three of our users come in through that net. And so that’s been a huge way for how we’re able to grow, and we keep tuning that a lot in a way that’s going to the users.
Andrew: And that was another thing that took some language changes, some iteration until you got it?
Dave: And we literally just started working on it in the last 90 days. Ninety days ago, our viral coefficient was 0.03. That means that 30 people are required to get 1 for free. Now, the viral coefficient is 0.35, which means that for every 3 users, you get 1 for free. We have a big release that’s coming out today, I think, and that may . . . you know, the target for the team is to get the viral coefficient basically by keeping the user experience as good as possible in changing what message gets sent out, what message gets received, how smooth it works all together. Their target is by the end of the year to get a viral coefficient of 0.6 which would be amazing in the financial world.
Andrew: Your customer acquisition cost is . . . I have it here, but I don’t know that we got your permission to say . . .
Dave: So it keeps getting lower. So our paid media customer acquisition cost is $8, which it was $42 when we started in paid media in March. When you factor the virality, it’s about five-and-a-half bucks. And our best performing channel in our test last week was $4.36.
Andrew: Wow. And this is for a free user who goes to create a will or someone who . . . ?
Dave: Yes. This is [inaudible 01:10:40] you click, you go to the iOS store, you download the app, you open it, you start using it. You start creating your will, but at some point, we ask you to register because you’re going to send messages or you want to print your will. And then you register and join Tomorrow. That’s what cost the . . . It’s a deeply-engaged [inaudible 01:10:58].
Andrew: That is unreal.
Andrew: Okay. For anyone who wants to go check out this app, frankly, I think the best place to go is just your App Store. Just type in Tomorrow and it’s going to come right at the very top. Or if you want, if you’re old-fashioned like I guess I was today, you can go to tomorrow.me where they’ll basically refer you back to the App Store for downloading the app. Or now I’m actually learning that the blog here is actually useful. Usually, the blog is just meaningless, but I do have a bunch of questions about this, and you guys have all of these resources there. Dave, thanks so much for being on here.
Dave: Yeah. This was great. Thanks for starting the morning this way. I appreciate it.
Andrew: Same here. And thank you all for listening. I want to thank my two sponsors for making this happen, hostgator.com/mixergy and toptal.com/mixergy. And, finally, one more thing. This guy, Scott Bintz. I can’t stop thinking about him. An entrepreneur who built a really successful company and then said, “It’s boring, it’s not growing fast enough.” He’s in the truck parts business and he said, “I’m going to go and study all of these guys who do culture well.” And he flew out to Zappos, flew out to Google, took pictures with the Google, like, logo and everything. And then he internalized it and created a great culture at his company, took his business to $100 million in sales, sold it, and now he’s doing stuff that he loves including writing this book, “Principles to Fortune.” Created coffee that he’s flooded my house with, which is great because I love his coffee.
And I invited him to do a course on how to create the right culture that will help your company grow and generate real sales. Not for touchy lovey-dovey things because I’m not that type of person, sorry, Olivia, but for business growth. If you want it, go to mixergy.com/premium to get that, and over 100 courses taught by proven entrepreneurs like Scott. I’m grateful to him, and I’m grateful to you, Dave, for coming on here to do this. Thank you.
Dave: Yeah. Thanks so much.
Andrew: All right.
Andrew: Bye, everyone.