Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder Mixergy where I interview entrepreneurs about how they built their businesses. And by now, you probably know that I’m kind of fascinated by chat. I feel like chat is replacing emails the way we communicate with each other. But it’s also becoming the new way to communicate with machines.
I think we’re going to look back on this, Dan, you correct me if I’m wrong on this in your prediction, but my prediction is we’re going to 10 years from now, 5 years from now, I don’t know when, chat with our software much more than we’re going to go look for the right place and the right menu and the right sub-menu. We’re just going to say, “I want to do this,” and it’s going to do it. And so into that new world comes Dan Reich. I’m pronouncing your name right?
Andrew: Okay, good. He is the founder of multiple companies. Most recently, a company called Troops. Website is Troops.ai. What they do is they say, “You know, salespeople really hate using software more than anybody else.” God knows forget salespeople. I do too. I just talked to someone on my team. She told me something really important. I wanted to go and fire up my CRM and add some notes so I remember for next time. And I go, “Freaking, hey, I got another call. I got to go.” And I didn’t do it. It’s in my head. I’ve got to remember to do it at some point later today. So I remember the details of our life. So next time I talked to her, I’ve got it.
For salespeople, it’s even worse. When they have to update a deal and they don’t do it in the software, other people on the team management suffer for it because they don’t know what’s going on with the sales process.
So he says, “You know what? I’m going to do it all via chat. And I’m going to connect it to Slack, the number one chat platform for business right now. I’m going to connect it to Salesforce, the number one contact management software for salespeople.” And that’s what he’s built. And it’s doing well, and I invited him here to talk about how Troops did it. And I’d also like to find out about some of his other companies, most specifically for me, TULA, this cosmetic company that he had before.
All right, we can do it all thanks to two phenomenal sponsors who make this interview happen. The first will host your email marketing right, it’s called ActiveCampaign and the second will help you help host websites right, it’s called HostGator. Dan, good to have you here.
Dan: Thanks, Andrew. Pleasure to be here.
Andrew: You were in the makeup business before. You know what? Before we even get into Troops, did you like being in the makeup industry? You were good at it?
Dan: I liked the business of cosmetics. But at the end of the day, I grew up as a technology geek and nerd building computers and needed to get back to software. So that’s why I’m back in building a software company called Troops.
Andrew: I want to find out about some of the businesses that you had before, like this drop shipping business that you had in high school. But Troops, I want to give people a sense of how big it was. I didn’t realize how big it was until I started Googling you. Tell me revenue-wise, where are you guys?
Dan: So we don’t disclose revenue, but we have about 200 paying customers. Some of the fastest growing companies in the world, companies like Slack, WeWork, Looker, InVision, Flexport, Andela. So most of our customers are literally the fastest growing companies in the world, and they’re reorienting their entire business processes around Troops.
Andrew: And I’m going to ask you about one of them. I’d love for you to talk about WeWork. I saw a YouTube video that you guys had about them. That’ll give us a sense of how Troops works. But is it fair to say, Dan, over a million in revenue is easy at this point, right, to say?
Andrew: We won’t go any more any deeper than that. Am I right?
Dan: That’s right. Well, more than a million, less than 100 million.
Andrew: You took on funding?
Dan: We did take on funding.
Andrew: How much?
Dan: We raised about $22 million in venture capital financing so far.
Andrew: Wow. All right. Let’s give the WeWork example that you and I were talking about before. WeWork is a client. What do they do? Give me a sense of like how they use Troops so that I understand how Troops can be used by other businesses.
Dan: Yeah, great question. So WeWork uses Troops in, you know, hundreds of different ways. But I’ll give you one sort of easy example. And before we jump in, let me tell you a little bit about Troops to elaborate on kind of the point here, and you were getting at this early earlier. But really every employee at work is either in front of their computer or on their phone. They have 20 to 40 different tabs open or 40 different apps on their phone. And then each and every one of those with a salesperson job or a customer facing role, you have to update a bunch of fields, forms, buttons, and boxes in your CRM, whatever. That’s painful, but so important.
Meanwhile, everyone’s spending all their time in Slack. It’s becoming the new operating system for teams, quite frankly. And so at Troops, what we’re doing is we’re bringing that mission critical workflow, data systems out of those important databases like Salesforce into that operating system where people are spending their time.
So back to WeWork, an example is a sales rep is out in the world or out in the field hunting for deals. They close a deal. For them closing a deal means a customer is about to get a brand new office space. And so what that salesperson will do with Troops is they’ll update the CRM right in the messaging interface. So they won’t have to log in to this painful or heavy thing. They’ll update the fact that the deal is closed. They’ll update the square footage, how much the deal size is for.
And all of a sudden Troops will share that information back to the entire organization in Slack. So the CEO will look at this and celebrate the fact that they’re booking real and meaningful revenue. Maybe the executives will applaud that individual. But more importantly, that kicks off a whole chain of events because now the deal is closed, the real work begins. And in the WeWork example, a deal closing means, “Holy cow, now we need to build a whole new office space. We need to find the space. We need to get the specs. We need to design the floor plan. We need to figure out furniture. We need to figure out . . .”
Andrew: And Troops is automatically firing off those messages to the people on the team who have to take the next steps?
Dan: That’s right. And so as the deal progresses through a stage, at every single stage of any deal whether it’s WeWork or Onboard or some of our other customers, there are different next steps that are important to seeing through a successful launch or . . .
Andrew: Are you doing project management too, Dan? Or is it just automatic set of messages goes out and then that’s it. You guys handle it from there?
Dan: Some people use us for project management. But let me give you another example. Really, what we’re talking about here is customer management. And so another example might be for customer support or service. So how often does a customer have an issue when they write in and a ticket is filed, and then maybe that ticket doesn’t get responded to right away and then you have an unhappy customer that churns and goes away?
So Troops, the minute that case is filed or ticket is filed, we’ll notify the right person at the right time in Slack, which, again, by the way, is where they’re spending their time, just much more human versus having to wait or trudge through a heavy clunky interface.
So the real . . . Yeah, go ahead.
Andrew: Go ahead.
Dan: So what I was saying is the real point here is humans prefer to interact much in the way we are. It’s very conversational. In fact, at the time when we started Troops, 6 of the top 10 apps in the world were messaging apps, right? It’s literally the most ubiquitous digital behavior on Earth. Think about your personal life. Instagram, Snapchat, WhatsApp, text message. This is how humans want to work. So it seems crazy to us that we live in this world where, you know, Elon Musk is launching rockets into space and have self-driving cars. Yet at work where we spend over a third of our lives, if not more, we’re still logging in to systems that looked like they were developed in the ’80s and ’90s. And that seemed crazy for us.
Andrew: And you know what, frankly, Dan, even if they’re not looking like that old, it’s still a pain in the butt to go find the right place. And I’ll be honest with you, I tell my team, “All you have to do is just go put this task in whatever,” and still I don’t have the patience to go even fill out the task form. What I do is I will ping somebody, send a chat message to somebody on the team and say, “This needs to get done.” And I count on them to create a task with the information that I sent. It is much easier to chat than to go look for the right form.
One problem that I’ve got with Slack I’d like to bring up and then we’ll get into your entrepreneurial story, because you’re not here to talk about the future of chat, though that’s part of what your business is about. I still feel like Slack is so freaking noisy. I had Jason Fried, the founder of Basecamp on and I told him, “I switched to Basecamp because Slack was too noisy.” And he said, “Why do people want everything right down to the doorbell to go into Slack? It just distracts.” I get his point of view. I live in his world. You live in the other world of Slack. What do you think about this point, which is Slack gets too noisy, too much chat and too much going on in there?
Dan: Yeah, look, I think everything has a time and place, but same can be true about email. I mean, I don’t know about you, but for me, my inbox feels like my to-do list that everybody else owns, right? Moreover, you know, how many times are you on a group email thread where one person hits reply all and then the next thing you’ve got this purgatory?
Andrew: Right. And what I’m wondering is the win that you guys are in Slack or is the win that you guys allow me to chat instead of filling out forms. Why isn’t it that I could just go to troops.ai and say, “I just closed a sale,” and let your chatbot just deal with it? Why does it all have to be in Slack? What’s the reason for that?
Dan: There. So I think there’s three elements. The first is it’s real time. So I’ll give you another example of a customer of ours, which is HubSpot. HubSpot is the, you know, arguably the best inbound marketing company in the world. In fact, they’re so good their conference is literally called Inbound. And they had a problem and the problem was they were generating so many inbound leads, and those leads would go into Salesforce, and then nobody would work them. So they’re generating prospective customers and revenue that nobody is focusing on. And the reason no one was focused on them is because they were forgetting to log in and look for it and didn’t know where to look when, how, or why.
And so they had a thought and the thought was, “Wow, you know what? The whole company prefers to work in this new thing called Slack because it’s easier. It’s more collaborative. It’s transparent. What if we reroute those leads the right rep at the right time so that they can work this prospective customer?” And they did that with Troops. And what they found was that after Troops, they were able to increase their lead work rate by about 100%. So 100% increase, which for them manifested in many tens of thousands of dollars in revenue that they were recapturing a week that they weren’t previously doing. And so, the point is in that example, it’s real time and relevant.
The second piece is it’s incredibly transparent. I just got off the phone with the customer. Back to the reply all inbox, there was a huge thread with an important customer and the VP of sales got accidentally removed from an email thread. And all of a sudden that customer account looked completely sideways and he freaked out. And they almost lost the big deal.
By having something in Slack and these public channels, inherently, the information is transparent. And if you ask any employee, I think in fact, there was a study done not too long ago asking . . . that was looking for why employees are happiness. One of the things that study found was employees crave trust and transparency. What a better way to drive an amazing culture and alignment than to provide full transparency within an organization?
And not only does it drive great alignment, but back to that customer example, if it’s in a Slack channel, you know that not only will that VP of sales get kicked out of that thread, by the way, product can jump in, engineering can jump in, executives can jump in. And so for the first time ever, we’re breaking down silos and really democratizing information around customer accounts. In fact, we’re launching a new product very soon. That’s premised on this theme we call account-based collaboration, which, by virtue of it living in Slack, which is cross functional, the entire organization can align and organize around the most important deals. And that’s never really been possible before in a way that’s easy.
Andrew: It is becoming the operating system of teams, as you said, as of companies. Let me get to know you and how you got here. You’re a guy who was an entrepreneur from a young age. Tell me about this first real company that you started back when you were in high school? What was that?
Dan: Oh, man, back to high school. So first real company I started was a website that was really an ecommerce site that let people buy urban apparel wholesale. So the idea was you can go on to this website and you can add to cart, you know, 10 pairs of, you know, jeans. And so I was the first real company I started and . . .
Andrew: What did you call the site? What was the URL?
Dan: So the site was called thefashionpassion.com. And it was an amazingly beautiful, great ecommerce site, especially proud when I was, you know, 15 years old doing it. I didn’t really know much of what I was doing but nevertheless, built the business. And the way it came to fruition was in high school, I would go on eBay. I would buy bouncy balls wholesale and I would just start selling them to my classmates. And for a high school kid, I made a pretty good dollar doing that. And a buddy of mine saw this and took notice and said, “Hey, Dan, you know, you’re good at selling bouncy balls, but my father knows a guy who could probably get us like urban clothing that we can sell. And you know a thing or two about the internet, maybe we can sell it online.”
And so me and my friend took a drive down to of all places the Jersey Shore, which is a bit of a foreshadow into how this story ends. But we go down to the Jersey Shore we go into this warehouse and, lo and behold, this guy has inventory everywhere and so the idea was I would build a website and I would do all the marketing and I would handle all of the customer orders. And he would do all the fulfillment and drop shipping. And that’s what we did.
I went into business with my mom. I turned one of our bedrooms into an office. And so with a credit card processing machine and computer and so at, you know, 6:00 in the morning, I’d get up. I’d activate Google and Yahoo ads. They’d run all day and my mom would take orders throughout the day. I’d come home. I would check the ads and calibrate the campaigns and check the orders and we would rinse and repeat for four months we were doing this for at least . . .
Andrew: I’m on your site, by the way. I see it. You had things like Negro League apparel, which I used to go to school for high school and near where Spike Lee worked and I would see him. He’s the guy who popularized this. He said, “Look, there’s this whole baseball league nobody pays attention to and their designs are just hot.” You guys had that. You had ladies leather, you had men’s fragrances, motorcycle apparel. This is the stuff that was on your site?
Dan: Yeah, that’s right. It was like, I said, urban apparel, kind of the hip hop culture. You know, I grew up a big hip hop guy. And so that was the business. And so business started doing well and what we realized really quickly we were getting customer complaints. You know, “Hey, this isn’t what I ordered.” “This is damaged.” On and on. And so we took a drive back down to meet with my partner and hash it out with him and he assured me that you know, these are just mistakes.
So after a while of it still happening, like just one in one didn’t add up and seemed to me like I didn’t have a good partner and there was something not so right there. And so we cancelled the business. We shut it down. And kind of a compelling event led us to shut it down was we got a customer complaint. One of our customers from Russia and it was like, “This is not what I ordered. And in fact, this is so bad that if you don’t fix it, we’re going to come after you.” In like very specific location in where I grew up in New Jersey.
Andrew: They knew where you were?
Dan: Yeah. So that was the last straw. I shut down the business. Long story short, it turns out that that partner was just not operating in a way that was, shall I put it, of integrity.
Andrew: What was he doing? Not sending product out? People would buy and he would just keep the money?
Dan: Yeah. Basically the way he was getting his merchandising wasn’t kosher. We’ll just leave it at that. So we shut down the business. And that was my first lesson in starting companies. And that first lesson was make sure you choose a good business partner. You know, you often hear a refrain that your co-founder is like your spouse, and it’s so true. So I learned that lesson early. And that was kind of the first and most important lesson that I still hold true to this day.
Andrew: It’s impressive that your mom was willing to help you with this business and support you and not say this is distracting from school and have all these other issues. And I kind of feel like it might have something to do with the fact that your family was kind of in business. Your grandparents were in real estate?
Dan: Yeah. So, you know, my grandparents, Holocaust survivors came here after the war with nothing. Built a chicken farm from scratch and then got into the real estate business, which is that my father got into the real estate business. So literally growing up, I was around building buildings.
Andrew: In New Jersey?
Dan: In New Jersey building buildings, building homes . . .
Andrew: What were they doing?
Dan: They were building homes, residential, single family homes, all throughout the state of New Jersey. And so I just, you know, would quite literally see the process of building nothing into something. And that to me was amazing and fascinating. It just turns out that the things I’m building are not homes, they’re products, services, software.
Andrew: Do you still have real estate? Like do you put some of your money in real estate?
Dan: I do. Yep. But right now everything is when you do a startup everything becomes secondary to the startup itself.
Andrew: All right. So as I mentioned earlier, this is not your first startup. The big one that, man, you got so much attention for was TULA. I want to get into it like how you got that and why. When people talked about you at TULA, they called you the ecommerce expert who came in.
First, I’ll quickly just talk about my first sponsor. It’s a company called ActiveCampaign. Dan, do you know about ActiveCampaign? You’ve been in the internet for a long time.
Dan: Tell me more.
Andrew: All right. I will. These guys have been around forever. And I think because of that people underestimate how powerful ActiveCampaign is. What they do is this, Dan. Imagine if on your site you had some people who are really heavy into the articles that you had about closing sales and others really heavy into the integration. You might recognize that there are two different types of people and the way that you know it is because they’re looking at two different things on your website. Why send them both the same email newsletter?
What ActiveCampaign does is say, “Look, put a little bit of code on your site.” Right? We all do this. “And then we’ll watch.” And allow you, Dan, if you say, “Hey, you know, we’ve got this new integration to just target the people who are into integration.” If you’ve got people who are reading articles about small businesses, and you have no small business product, because you’re an enterprise, fine, keep tagging them.
When you do have a small business product, you can reach out to them and say, “We’ve got this beta of a product that works with small and medium-sized businesses. We’re looking for people to try it.” And you don’t hit your enterprise customers. You only go after people who are in small, medium-sized businesses, and you know it based on what they’re doing on your website.
So that’s what ActiveCampaign does, based on what people are clicking, what they’re buying, what they’re seeing on your site, what videos they’re going through all the way to the end, you can tag them and then message them differently. This stuff has been available for ever from lots of different software companies. The problem is it’s too complicated, too expensive. ActiveCampaign said, “We’re going to make it so simple that anyone even a non-techy can use it.”
And so, Dan, I didn’t do like a BuiltWith search on your site to see what email marketing software use. I will do that now. Do you know what email . . . do you make those decisions for your company?
Dan: I let my team make decisions like those.
Andrew: I see you’re full on HubSpot, which makes sense. Look at this HubSpot messaging, oh, you use Intercom for customer service. You probably use one of the HubSpot’s products. I think they own like Marketo or something. Good products, very complicated and expensive, which is why most people don’t manage it themselves. If anyone wants that kind of power and wants to be able to do it themselves or let their virtual assistant or other people on the team manage it, all they have to do is go to activecampaign.com/mixergy.
And, Dan, when you and others go there, what you’re going to get is a free trial so you can see if this makes sense or just learn it. Then if you sign up, second month free and then they will even give you two free human-to-human consultations with their experts. So you learn, you do, you come back. Another conversation they teach you more.
And finally, if somebody’s listening to me and they’re using it different email marketing company and they don’t like it, ActiveCampaign will migrate them for free. All you have to do is go to activecampaign.com/mixergy. Why Mixergy? Because I thought let’s make it super complicated. I should have just said Andrew, right? Doesn’t matter, activecampaign.com/mixergy.
The business of TULA, how did you get into that? This is a cosmetics company. Where did it come to you?
Dan: I’ve always wanted to start a cosmetics company, of course. I’m just kidding. Yeah. So I think to understand this business I think we need to go back a little bit further, understand the business before that. So I started a software company with two buddies from college, you know, in 2000 . . . I don’t even remember ’09, ’10 give or take. And that company was called Spinback. And at that company, we helped online retailers and brands and ecommerce companies measure how much money they were making from Facebook. It was at a time when every brand on earth needed to and wanted to be on Facebook, and had absolutely no idea what it meant for their bottom line.
We ended up merging that with another company called Buddy Media, which is the leader of B2B marketing and social media. And then we sold that to Salesforce a little while later. And after that time, I left and tried to figure out what I wanted to do with my life. And so I spent some time working in a venture capital firm’s office trying to stumble on my next idea. And lo and behold, I did and that new idea was another software company back in the retail space. I wanted to build another analytics software company that helps brands and retailers through the next wave of not social media, but kind of the world we live in today. And so it is I went back and I pitched all my old retail clients. And one of them was a retailer called QVC, the home shopping channel that many people know about.
And people have seen it once a bit on “Shark Tank” as well. So I had a conversation with them, and I pitched them my software idea. And then they told me a story that was a little bit more intriguing. That story went like this, you know, they realized the world was increasingly becoming digital, knew that television was finite in terms of shelf space for in their world television time. And wanted to see if they could launch brands digitally, but didn’t know where or how didn’t know where to start. And so they said, “What do you think and can you help?” And recognized I knew digital well and knew their business well. I didn’t know anything about beauty. And while I was working out of that VC firm’s office, I became close with a private equity investor that started his own beauty company with his wife and a few others called Bobbi Brown Cosmetics.
Andrew: This is Ken Landis?
Dan: Yep. This is Ken. And at that point in time, I got to hear his story and he heard mine. And we realized, you know, maybe let’s go learn more and see what’s there. And so we got lunch with some folks from QVC. And that evolved into several meetings later with their executive team. And lo and behold, we realized we had a unique opportunity to build our own brand from scratch with a motivated retailer partner, QVC. The problem was neither one of us knew we would ever be a good salesperson for beauty or cosmetics. So we knew we needed another partner to help really understand what we would become.
We knew we had distribution, we knew we could support the logistics, the manufacturing, the tactical ecommerce component, but didn’t know what we were going to do. And we had ideas. And so we basically, my wife knew we were looking for another partner. And so she saw Dr .Raj is my co-founder on a TV show. She happens to be the medical editor for Health magazine on TV three, four times a week. This is Dr. Raj. And so sends me a video clip and I watched the video and I realized she can be amazing. And so I sent her a cold email, cold email becomes a phone call, phone call becomes an in-person meeting.
And ultimately, we realized like all the stars aligned, she was very into starting her own business and changing the world with products. And when we really unpacked it, she said, “Hey, have you guys looked at probiotics?” She’s a gastroenterologist. You know, everyone knows whoever eats yogurt. We know generally, probiotics would be good for our gut, for internal health, our internal organs. It just so happens that skin is literally the largest organ on your body. And no one had ever really looked at that. And so here we have this gastroenterologist and what she noticed, her patients that were coming in, that looked amazing with healthy skin. The thing they had in common is that they were all taking probiotics.
And so we started doing our homework and research and it turns out at that time, the American Academy of Dermatology released a research report that basically declared probiotics would be a beauty breakthrough. And so we did more homework and more homework and determined like wow, this is it. This is what the business will become. And so we came up with the name called TULA, which is the Sanskrit word for balance, balance the inside and out. And that is how TULA was born.
And we launched with QVC to start all the while was building the ecommerce engine behind the scenes. And then we launched as pretty much a digitally native brand. And fast forward today, TULA is available on our own website tula.com, on QVC, Amazon, Dermstore, few other digital outlets. And then also in retail store, so we’re also in Neiman Marcus, Bloomingdales, Space NK, Nordstrom, and more recently, Ulta. Were also available in the United States as well as other countries like Canada and the UK.
Andrew: I think there’s Baby Tula now too. Is that you or it that someone else?
Dan: That’s somebody else.
Andrew: Somebody else is using the name. Got it.
Dan: And so what did you bring into it? Not to put it down. But I’m trying to understand. Dr. Raj, she is on Oz, she’s got the reputation, and it’s her face that’s going on there. Your partner was in the cosmetic space already. The other partner was the TV shopping side. What’s your expertise? Is it ecommerce?
Dan: Yeah, I think it’s twofold. At that time, it was definitely the ecommerce and digital component. I mean, I studied Electrical and Computer Engineering at college. I was building computers and websites my whole life. So certainly, that’s my piece. But the other piece, and I think most founders can appreciate this, zero to one, you don’t need to be necessarily a functional expert in anything but you need to be really good at everything and create momentum and alignment, most importantly.
And so in the beginning, my primary job was like getting all the pieces together, getting people smarter than me at manufacturing and beauty. And getting people better than me at, you know, the hard science and the medical component, getting a distribution partner, getting the third-party support to help us with launch. So it’s really just amalgamating resources with like no budget, because you’re bootstrapping to get the thing out the door and ship. So that was really where I spent most of my time plus the ecommerce component.
Andrew: What part worked for you for you for ecommerce?
Dan: The part that worked for us in the early days were bloggers, right? So, you know, I think what’s changed over the past 10 years is once upon a time, if you wanted to sell anything, you need to get it into a store. Like why? That was the shelf space and that’s where the eyeballs were. That’s where fulfillment was and that’s where the marketing was. Today, it’s bifurcated. Literally, anybody can spin up a Shopify site in five minutes and be in business selling anything to anyone all over the world.
The other thing on the other side of that coin, however, as you look at what’s happening with Instagram and social media is people, individuals have more eyeballs and attention than many retail chains have. And many even publishers or media companies have like literally single individuals. And so what we realized was the fulfillment part was easy. That was technically feasible. The hardest part was eyeballs. So out of the gate, we thought about distribution early and often.
And so for us, having a motivated retail partner was key, which is what I helped influence. But then also working with a lot of these health and fitness and beauty bloggers early before we even launched, helped them lean in with product development ideas. Helped them see this out to their fanbase before we even a real company. That was key to our launch. And it’s still a core component of how that business operates today.
Andrew: I kind of hinted at why you weren’t there. I want to get into the Troop story. Can you talk about what happened? Like you were in the room from what I understand, talking about makeup? And you said, “This is great, but it’s not really where I meant to be.” How do you mean?
Dan: Yeah, yeah. I think three things happened that led me to get back to software. So the first thing was, you know, in the first year to launching a consumer packaged goods company or consumer product, it’s a lot of hurry up and wait, right? You’re literally manufacturing a physical product that has lead times, there’s back and forth on design. It could take up to a year before you have anything to sell. So I just had a lot of downtime. And I have idle hands syndrome and need to be working on something always be busy. That was one.
Two was this thing was working. So I knew I needed help and knew I needed people better than me to keep pushing this thing forward. And so I always knew we were going to have to build a leadership team. Period.
And the third piece was probably the catalyst. I remember having a quote “product development meeting,” looking at, you know, nine different lab samples on a table determining which lab sample smelled the best. The one that smelled like mint or lavender or citrus. And I remember how having an out of body experience thinking, “Man, this is probably not how I should be spending my time at work.” Probably, other people better than me, more passionate than me to do this stuff.
And so yeah, I got connected with another friend in the kind of startup space. She was working at another startup called Bauble Bar, running business development and partnerships. And she was just fascinated at the opportunity and story. One thing led to another and she came on to help me run the business day-to-day. And what I said to her was like, “Look, you know, you’re probably better than me to run this business. So let’s just start and see how things go. And if things go really well, I’m going to basically fire myself and you’re going to take my job. And I’m going to go start a software company.” And that’s exactly what happened.
Andrew: And so she took over with TULA, so that you can go to start Troops.
Dan: She took over day-to-day of TULA and yeah, that gave me time to go start Troops. And again, you know, generally, I try to understand what I’m good at and what I’m not. I’m not going to try to do things that I’m bad at for the sake of ego or because I think I need to do them. Ultimately, that’s not good for me or shareholders or partners or customers. And so I recognized that I should probably not be running this business. And so realized for our shareholders and customers, I would, at that time was the right call to step aside. And also go to where my passions were. And again, my passions were in software.
Andrew: Look at these freaking investors. I just happen to click on the “about us” as you were talking because I wanted to get the names of the people who you’re going to refer to later on. First of all, TaskUs, most people don’t know who they are, you got the CEO, you got the co-founder of TaskUs. They’re the ones who do this, the work that most people think is being done by software, right? It’s their team that does the work for other software companies. Joshua Schachter, the founder of Delicious is in there.
Ken Landis, I saw you on . . . I saw Troops on his investment firms website. I forget what it’s called. I think it’s like Landis Ventures or something, right? The founder of Sunrise, Slack’s an investor, anyway, a lot of people. I want to get into like the first thing that you did, because the first thing you did was not create software, you did something else, and then talk about how you kept building it.
First I want to talk about my last sponsor, it’s called HostGator. Anyone who needs to host a website of any kind should go to hostgator.com/mixergy. When you do, you’re going to get hosting that’s just done right. It’s super easy. Dan, some people in my audience already know I run marathons. I’m going to be running seven marathons on seven continents in one year.
I wanted people to get on board and believe in it, and to see what it is and to help me out. So I quickly went to HostGator. I created a website, it’s called runwithandrew.com. And now, when I tell my doctor, “Look, my leg hurts. I’m not just another punk with like a need to get to the front line. Look, runwithandrew.com. I’m doing this thing, it’s big thing. Will you help me to make sure that I achieve my goal?” They look it up. It feels real. They want to get on board and support it. That’s the thing when you add a website to something, it gives it more gravitas.
So anyone out there who’s listening to me, if you have an idea, if you’re working on a project, take it out of that whatever it is somethingsomething.com/something, give it its own website, give it its own domain and watch it take on a life of its own. If you want to do that, all you have to do is go to hostgator.com/mixergy. They’ll give you the lowest price available, money back guarantee, one click Install WordPress ba ba ba ba. Look, bottom line, it’ll work, you’ll get credit for being one of my customers as we know. I’ll always take care of you. And frankly, you’ll be helping out my podcast because they’ll know that you heard them on my show. Go to hostgator.com/mixergy. So first step was not creating product. What was it?
Dan: Yeah, first step is we don’t want to build anything if we didn’t know we can sell it. So we started selling before building and what we started to sell was really coming up with the beauty company. We have this idea of in the future, we felt like a beauty company was going to need salespeople. And so therefore, we would need a way to find, train, hire and manage those salespeople. And so thought, “Man, how great would it be if there were a marketplace for these sorts sales associates that had a corresponding Uber like app that could help us organize and manage those individuals?” And so we started pitching this idea to organizations that had field sales teams.
And the pitch was like, “Look, we’re going to help you find these people and more importantly, train and manage them, a la a CRM, or a mobile CRM. And what we realized was, you know, in general, this type of sales fleet is in the field mobile. And truthfully, not all that educated honestly. And so we knew we needed a solution that was lightweight, mobile, and so easy, anyone can do it. And so we’re like, wow, actually, what is the thing that has all those traits? And we realized it was messaging. Right back to that stat earlier at the time, 6 of the top 10 apps in the world at the time were messaging apps. And so we felt like this is super easy, everyone understood this. And so we started facilitating CRM workflow over text messaging.
And so we built a very, very basic, cool product. It was like a web UI of really a place we can send text messages to these sales people in the field. We would see their calendar, so we would know what meetings they were going to end where. And we would send them notes like this. We’d say, “Hey, Mr. and Mrs. Sales rep. How did your meeting go? Or are you at the store? Or what did the merchandising look like? Or what did the competitors look like? Like all the questions you would generally see in a CRM. And we do it all over text messaging. And the bot was me and my co-founder, Scott. That was it. That was the MVP, that’s what we were going to [solve 00:37:09].
Andrew: Humans doing the work.
Dan: Humans doing the work.
Dan: Not cheating. Providing a valuable service.
Andrew: Like doing Mechanical Turk, the way that the Mechanical Turk used to play chess, like the original.
Dan: Yeah, something like that. And look, the reason this is important is we wanted to validate the problem set and solution before we really built anything and invested meaningful time and energy. And what we learned was it was working, it was working really well. And moreover, we realized, you know what? This paradigm is not only useful for field sales people, but like every single salesperson, every single employee, period, would probably prefer to interact with this type of information this way due to its, you know, elegance, its lightweight nature, its intelligent nature and its ease of use.
And that’s when we realized, wait a minute, this is much bigger than just field salespeople. And right around the time, Slack launched their developer platform and they launched numbers of their growth. And we just remember looking at those two things, thinking, “Wow, this could be and might be the next most important ecosystem in the enterprise.” And then shortly thereafter, launched their Slack fund, I think it was about an $80 million fund. And that told us, you know, not only do they . . . we think they think this, but now we know they think this. And they’re about to put their money where their mouth was and dedicate a fund to making sure this would be a vibrant ecosystem.
And that gave us more conviction to say, “This is probably where people would spend all their time like very specifically in Slack.” And that was a few years ago, and fast forward to today. Here we are. I think they’re one of the fastest, if not the fastest growing business application of all time, which is pretty, pretty crazy.
Andrew: So the first customers came from where?
Dan: Our network.
Andrew: Just you reaching out to your investors, to your friends saying, “Do you know somebody who can do this?”
Dan: Yeah. So, you know, you mentioned that person Ken Landis before. He was my co-founder. He is my co-founder on TULA. And he was also our first investor and partner on Troops. And so he has an extensive background in the CPG space, which again, inherently those companies have field sales teams selling into retail stores. So he had a bunch of customers they were able to connect with early on.
Andrew: I’m looking at the first version of the site that I can find anyway, May 2016. Does that sound right?
Dan: That feels like it was probably a little bit earlier. Don’t remember when we turned on the website though.
Andrew: So the first one I was able to find in archive is that. I’m trying to see like how the product like description changed over the years. And it looks like at first, it was more about an easy way to get data in and out of Salesforce and to get reminders from Salesforce. Is that right?
Dan: That is right. And in many ways many of our companies still use us for that primary reason. I mean, here’s another example, the company that we use is . . . one of our customers is a company called Envoy. If you’ve ever gone to someone’s office, you might see sometimes, now, there’s an iPad where you check in and then something. So that’s Envoy. So they’re a customer and one of the problems they had is what you’re alluding to, their sales reps were spending way too much time running around to meeting to meeting and then having to remember to then go back to their desk and login and update information, next steps, notes, what have you.
And so with Troops after a meeting and this is truly automated, the sales reps at Envoy will get a notification that will say, “Hey, Mr./Mrs. sales rep. I see you just had a meeting with Coca Cola. Do you want to log any notes? Next steps, change the amount, field stage what have you.” And we save each rep about an hour a day, which if extrapolated over the course of the year, not only is a lot of time saving, but that’s time that they get back to sell.
And so that is one use case. But the other thing we learned along the way by a symptom of doing this in Slack is Slack is inherently social and collaborative. And so what we realized is not only can we create value for individuals in like one player mode but we can create a lot of value for teams in multiplayer team mode.
So back to that WeWork example. By simply showing some of this information and making it actionable in a public setting, you are all of a sudden driving huge but subtle but still huge like cultural shifts in alignment at the organization. And you are democratizing what we believe to be some of the most important information at a company. How is your customer base doing? What is the pulse of your organization in terms of revenue, in terms of success metrics, or whatever KPI is important to you?
Troops facilitates that for the whole organization, both for the team, but also back into the one player mode examples. Which we also learned aren’t only for salespeople, account management, customer success, operations. You know, an account management example. What do account managers do? Often their job is to manage the account and upsell them in many, many cases. So Troops facilitates workflow for many of our companies around buying signals, “Hey, Mr./Mrs. account manager, your customer just increased their product usage by 40%. You should reach out to them.” Or, “Your customer just exceeded their free seat allotment by 50%. You should reach out to them.”
And so, again, these are like really important data signals that historically just get buried in a database unless you know to look for them or you’re nudged and prodded to be reminded to go find them. And so, again, what Troops is doing is we’re providing that visibility in a way that’s collaborative, real time in a medium that’s easy and where people are spending all their time.
Andrew: Why did you fire your first customers?
Dan: We fired our first customers because they wanted and were pulling us into products that looked more like inventory management or yield management that were more rooted in manufacturing and consumer packaged goods than they were in like business operations. And so we got more excited about the horizontal opportunity to bring a solution to literally any company on earth versus companies in that specific industry.
Because, again, back to why I was more excited about Troops as much as I love TULA, you know, I don’t necessarily think I’m a beauty guy or should be even though I am now and believe that something rooted in software was much more intriguing and aligned with my interests at the time. But five years from now my interest would probably change. And maybe I will be a beauty guy or some other type of guy. But at that point in time, really wanted to get back into software.
Andrew: You started then outbound sales. Can you talk about what you did that worked for you when you were trying to get customers?
Dan: So all of this stuff is momentum. I think about it like a snowball. It doesn’t just become a massive. Snowball starts small. So to start small we started in our network. And so between me and my other co-founders, Scott and Greg, we had a pretty extensive network of friends and founder friends and colleagues working at companies that could be target prospects for us. So we all just started reaching out. Email, call. I told them what we’re doing, got their feedback, and many of the calls that were feedback in nature of became, “Oh, yeah, we’ll become a customer.” Or, “We’ll certainly try the product.”
And that’s how we got our first few beta customers and guinea pigs, if you will, to test with and see if this crazy idea would really work when rubber met the road and we started to build real product. And so we did that for about the first year with a few dozen or so companies. And after the first year we realized, “Wow, you know what? This thing is working. The people like the product.” And I was trying to solve old problems in this very, very new way. Now we need to see if we can make money doing it. And so then we said, “Okay, let’s see if we can charge for money . . . charge dollars.” And so we would just go back to a lot of the free companies that we had and said, “Hey, guys, look, it’s not free anymore. You have to pay us something.” And, “Will you?” And sure enough they did.
And so we began to convert a lot of those free customers into paid customers. And then we realized, “Wow, this is actually creating a lot of value. Let’s just keep going.” And then we built out like the foundations for proper sales organization, a proper outbound motion, and really stand up, and continuing now, to build out what is a proper sales and marketing team.
Andrew: And it’s largely outbound. You finding people who would be good customers and reaching out to them?
Dan: Actually, it’s been mostly inbound and word of mouth. So because we had such happy and delighted customers, they would do a lot of the selling for us. So we would get customers referring us other customers, which, you know, as a startup person, that’s all you can hope for, right, when you don’t have to sell. And so that was the early majority of how we got leads. And then, yeah, we wanted to also see if we can do outbound as well to augment inbound. So we started doing outbound formally. And then we hired, you know, our first salesperson and then another. And then we hired, you know, recently two BDRs to help specifically and exclusively focused on outbound. So, you know, this part of our business is still very much wet cement and all work in progress but, in short, realized we could stand up more dedicated help on this side of the business.
Andrew: BDR, Business Development Rep. How does that work now at your company?
Dan: So they do prospecting to try to figure out, “Okay, what companies should we be reaching out to and why? And all those companies who at them should we reach out to?” And they were . . .
Andrew: So what’s the type of customers that you guys would be looking for?
Dan: So companies we look forward today, if you think about our products are companies that generally use and have to use both Slack and Salesforce as our Venn diagram.
Andrew: Okay. And how can you figure out who’s using Slack and Salesforce?
Dan: So, you know, in general we found that technology companies are users of both. So like, “Are you a fast growing technology company?” as a broad filter is how we filter today. And that seems to work. But as Slack continues with their success momentum, we’re beginning to see that expand beyond just technology to other categories. Media, manufacturing, law, healthcare . . .
Andrew: How can you tell who’s a fast growing tech company? What do you use for that?
Dan: How can we tell? You know, we’ll look at Crunchbase and sort of LinkedIn and Play Growth. We, you know, we’ll look at a multitude of different sources.
Andrew: And then I saw you guys did a blog post a while back about, I guess, it’s a year to now . . . three years ago? Four years ago? No. Three years ago, you guys did a blog post about how to scrape contact information from LinkedIn. My sense was that’s what you guys were doing. You were saying, “Here’s the potential customer for us. We’re going to pull their information, put in a spreadsheet, get their contact information.” That’s the kind of stuff that the BDR would do. And then the BDR with send out the first contact, right? To try to get the person on a call with a salesperson.
Dan: You got it. You must have done the job before.
Andrew: I didn’t. I’m learning how important that is, how important of a role it is. And then they get the person on a call with one of your sales people. And your sales people’s job is to explain, demo, close the sale. Am I right?
Dan: That’s right. Yep. That’s right. And in general, that’s how many, many software as a service companies will build out their sales organization.
Andrew: And then I was trying to see if you guys have any inbound through like content but you don’t seem to get much traffic from the content, right? And you don’t seem to be active on other people’s sites, content-wise. Am I right?
Dan: Not yet. It’s a focus for us. You know, if you go on our website and our blog, we do have what I believe to be incredible, very tactical and informational content on how to do some of the things that we’re doing. And that’s just a new initiative underway to get it out there. We also see the great source of traffic on LinkedIn, you know, as you can expect. That medium is very, very good for people that care about this sort of thing. You can imagine sales people living on LinkedIn all day long for the reasons we just discussed, which inherently bodes well for us. But, yeah, so we have we have content. And now next up for Troops is to think about how do we do a better job getting it out there so more people can understand about this transformation that’s occurring.
Andrew: Yeah, I’m just like looking through it and seeing. Tell me if this is a jerky thing to say, but I feel like the way that you get people to give their contact information could be improved. Like it’s under the article and it says, “Learn with other modern sales organizations using Troops.” The offer could be so much more compelling for signing up.
Dan: Absolutely. Look, everything in our business in any startup or any business can be better. So you know, look, we know we have a lot of work to do and a lot work ahead of us. We’re still a small and scrappy startup trying to grow up and improve.
Andrew: But the thing that’s helping you largely is people on Slack, they’re looking for tools on Slack. And they’re coming in from that. Am I right?
Dan: Yeah, I mean, CIOs are recognizing now that chat is not just an afterthought anymore. You know, once upon a time, you had free chat, ChitChat, WhatsApp, text messaging, and this is in general people would at work communicate, in addition to email. And I think what Slack has done is they’ve opened everyone’s eyes and said, “You know, look, if people are your most important asset at a company and creating alignment among those people is really critical. And to do that, you need to have open communication and dialogue and collaboration, chat should not be an afterthought. It’s just as important if not more important than email.
Moreover, if you think that email is the best last form of digital communication, then you’re probably not pushing the limits or thinking in terms of innovation anyway.” So what’s happening now is heads of information, CIOs, business ops, sales ops, people in the position of managing and overseeing business systems, processes, revenue, whatever it might be, are recognizing that this is a medium that can completely change and up level their whole company, period, end of story. And this is the conversation that’s now happening at every company all over the world.
Andrew: I can see it. And you know what? Where if you use Google Sheets, you’re not looking for plugins. You might be smart enough to know that there’s some out there and maybe you’ll add it reluctantly. But if you use Slack, you’re looking for more additions, for more bots to add on. Am I right? It feels like it’s something that they want.
Dan: Yeah, that’s right. One of the reasons you know people look . . . I think many naysayers would like Slack and say, “Why is that so special? It’s just about better version of IRC.” For those that remember chat back in the days. And I think the thing that they miss is technologically speaking, yes, it is just chat. But one of the things they’ve done a really great job on, aside from the user experience and the polish and the delight is the fact that it is an open platform and ecosystem, making it very, very easy to plug in third-party technologies. And once you do that, you become very sticky because now you’re weaving in the various systems that you use in your company. And that becomes, in many ways, this new operating system.
Andrew: That is the new operating system. That’s a part that’s exciting to me, and I feel like the smarter it gets, the more it’ll just become embedded in our lives. I can imagine a world where anything I want, like just text it in instead of going to a website. And frankly, you do have the latest AirPods? Are you using the latest ones with “Hey Siri” in it?
Dan: I do. These are in my ears right now.
Andrew: Do you actually use the Siri part of it?
Dan: Not yet. Not really.
Andrew: Oh, I use it all the time, just like, “Siri remind me this.” “Siri pause.” “Siri play.” Those are basic things. “Switch podcast.” All that stuff. Oh, here’s a big one. Before I leave, I always will say, “Siri text my wife, ‘Baby, I’m coming home.'” Boom, it just goes. It’s fun, freaking fantastic. And that’s the way I want to communicate with my phone in the future. That’s the way people want to communicate with their CRM, with Salesforce, and I think with other tools in their company. Troops is enabling it. Anyone who wants to go check it out, should go check out troops.ai.
Dan, I’m really glad that you’re out there talking about this and talking about your business experience. I feel like when I looked you up, there wasn’t that much about your background before. I don’t get the sense that you love doing . . . Am I right about this? I don’t get the sense of love being like the face of the company all the time.
Dan: Yeah, I don’t need to be. I like to just get stuff done and so that’s where I’m focused.
Andrew: Unlike Dr. Raj who’s good at being a face, you’re now a face and you don’t really love it, but I think you’re good at it. I appreciate you being on here. I’m glad that you’re out there talking more about your entrepreneurial experience. I’m looking forward to hearing from people what they think of Troops. And I appreciating my two sponsors made this interview happen. The first will send out email right, it’s called ActiveCampaign. Check them out at activecampaign.com/mixergy. And the second will host your website right, it’s called HostGator. Check them out hostgator.com/mixergy. I think that’s everything. Dan, thanks so much.
Dan: I appreciate it, Andrew. Thanks for having me.
Andrew: Bye. Bye, everyone.