The completely scrappy way to build a two-sided marketplace

Today’s guest caught a Mixergy interview, sent the transcript to a friend, and that’s what informed them how to start the business we’re going to talk about today. That’s the circle of Mixergy.

Mark Hughes is the cofounder of Tutorful, a marketplace where users can find and book tutors.

I want to find out how he he built a notoriously difficult two-sided marketplace.

Mark Hughes

Mark Hughes

Tutorful

Mark Hughes is the cofounder of Tutorful, a marketplace where users can find and book tutors.

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Full Interview Transcript

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. You’ve heard me say this forever. I do these interviews for an audience of real entrepreneurs who listen to these interviews and build their business, and hopefully come back here to do an interview of their own. It’s the circle of Mixergy. So, I say that today because today’s guest did that. He not only caught one of my past interviews, he took the transcript, sent it to his friend, and then that helped him figure out what to do, what business to create. I invited him here to talk about how he built his business because it’s really taken off with no outside funding. Right, Mark?

Mark: We’ve now got a reasonable amount of outside funding so a little bit [inaudible 00:00:43]. But yeah. We got it off the ground into a what’s a reasonable size without taking on any funding.

Andrew: The reason I assume no outside funding is when I asked you before the interview started, “What’s your goal with this?” and you said, “You know, we’re not raising money.” I know that’s one of the big reasons why people come to do an interview on Mixergy, to expose themselves to investors.

Mark: We’ve just raised money so that’s that.

Andrew: Oh okay. So, it’s not that you’re against it, it’s just you’re all good. You did it.

Mark: I’m very pro-money.

Andrew: That guy who’s pro-money who you’re hearing on the screen is also really pro-education. His name is Mark Hughes. Mark Hughes is the founder of Tutorful. It’s a marketplace where parents can find and book private tutors for their school-age kids. We’re going to find out how he built up this marketplace. Marketplaces are notoriously difficult because you have to go after two different groups of people. He did it. It’s going great and we’re going to do it, thanks to two fantastic sponsors. The first is my favorite conference ever, it’s Fireside Conf. I’ll tell you about that. And the second . . . oh . . . it’s a hosting company, HostGator and I’ll tell you why we use HostGator later on. But first, Mark, good to have you here.

Mark: Magically, enough.

Andrew: What was the interview that you caught on Mixergy? I know you’ve listened to several of them but what’s the one that you’ve sent out to your friend?

Mark: Yeah, so it’s actually a business in the U.S. called Wyzant so it was an interview between yourself and Andrew and it was really sort of just when we were starting out. We were banding around ideas or . . . the goal . . . what we’re trying to do is trying to, sort of, lower the cost of private tuition. And we’ve had several ideas about how we might go about doing that. I came across the interview, thought it was really, really good and my friend and so cofounder now, Scott, he was a private tutor. I sent him, basically, an edited version saying, “We’re pulling this, sort of, key highlights.” I literally ran through with the highlighter and then sort of, scanned it back in and sent it over to him.

Andrew: Wait. You printed it out, you highlighted it with an actual marker and sent it to him?

Mark: It’s easy to do that. Yeah.

Andrew: Okay. You know what, it’s interesting that you would do that because you’re a guy who actually went to school to learn how to put holes in the ground. What does that mean exactly?

Mark: Yeah. So, well, I studied engineering so that was, kind of, what I was interested in. I was interested in building things and engineering was, kind of, the standard career path that you’d, kind of, like messing around with things and putting things together. I tried that out for a year, actually. I was a structural engineer on a building site. It’s in Glasgow which is pretty far north. It’s glamour . . . no glamour involved at all and I pretty quickly realized that that wasn’t really what I wanted to do.

Andrew: And Mark, literally, it’s because you told that producer, “Look, I was frustrated telling people where to put a hole in the ground. It’s not what I dreamt this thing would be.” Right?

Mark: Yeah. Exactly. It’s 90% of . . . it is pretty mundane. Pretty mundane stuff I found anyway.

Andrew: All right. And then, you got a job at an investment bank and you started to meet founders. Founders like which ones?

Mark: I met a couple of really interesting guys. I met the founder of Ryanair, really interesting guy for notorious reasons. I encourage people to have a look at some YouTube . . .

Andrew: Founder of which company?

Mark: Ryanair. They’re a bunch of . . .

Andrew: Oh, Ryanair. Oh yeah, he wrote such a fantastic book. All about how he keeps lowering the prices by giving people a crappy experience but he gets them from point A to point B, and he’s got a good attitude. I love it. Okay, so you got to meet him. What was he like in person?

Mark: Yeah, I mean, he lives what he talks so he . . . normally, people saw a turn-up with an entourage of advisers and like that. He traveled Ryanair so every flight he takes, he makes sure that he can get places on Ryanair. He was . . . Yeah, it was rather cool things there. So one of the ideas that we’re mulling over at the time was having everyone stand up so they were exploring the idea of, you know, if you were going on a bus, you can hold on to the handle so you can squeeze to loads of people in. And they were, sort of, mulling around whether that would get past the regulators? Would it be safe? So he’s a radical thinker.

Andrew: All right, let me just put a point on that. Can we get everyone to stand up on our airplanes so we can squeeze more people into an airplane? Give them a little worse experience but reduce the price, that’s the way that this guy thinks?

Mark: Exactly. That’s was what he wanted to do. I don’t think it worked out.

Andrew: No. I love that he thinks that way. Michael O’Leary, right? That’s his name?

Mark: Michael O’Leary, yeah.

Andrew: So, you got to meet him. You got to meet also the founder of Groupon, Andrew Mason, what do you think of him?

Mark: Well, I actually met Eric. So, it was a really interesting, sort of, moment for me so I was, sort of, a young . . . it was my boss doing the meeting. And it was just after Andrew had left so Eric had taken over as CEO. I, kind of, I realized that Eric was, basically, the same age as me and he had already started a company, grown it to, I think, like 10,000 employees at that time. And he’d already been, sort of, removed, you know, or left from the CEO position. He’s done a hell of a lot and I’m kind of sitting here, still mulling over whether I want to start my own business, so it was kind of was just a good reminder that you’re never too early to start thinking about these things and the best way to, kind of, do it was, you know, just do, get started with it.

Andrew: One of the things I understood that you took away from this was, first of all, look at the possibility and these guys are taking on multiple companies like Eric Lefkofsky, he is one of the guys . . . he’s still currently the chairman of Groupon and one of the co-founders of it. And one of the things you took away was, “Look at how much he’s doing. He’s building multiple companies and I’m thinking, should I or should I not start one? Number two, it’s possible. These guys are regular people. It’s not like they’ve got some kind of, like, floating way of walking into a room. They’re people just like us, and so you said, ‘I got to jump in here and I’ve got to create something.'” Right?

Mark: Yeah, exactly. Every now and then, you would come across like a, true genius where you have to . . . you, kind of, in awe of their presence and they just say such deep and insightful things. But for the most part, they’re normal guys. They’re smart and they’re switched on, but I meet people like that every day. But they all, like, had a, sort of, passion and that was the first thing. And they just went and did it and that was, kind of, the realization I had, you know. And the job was . . . these were just, kind of, regular guys but then they’ve just gone and tried to do something. It’s not been from day one that they were destined to do these things. Like, they tried it and it’s grown, and then grown, and grown, and then they create these amazing companies.

Andrew: Okay, so you now have to come up with your idea. The way that you ended up with Tutorful. If I understand it right is, your friend was running was tutoring company. The question I have for you is, why this friend? Why do you need him? Why not just start off on your own?

Mark: That’s a good question. You know, it never ever crossed my mind. I think saying that he was running the tutoring company is probably, like, over-glamorizing what he was doing. He was, basically, a one-man tutoring company. He was trying to get a couple of other people to join along and . . . that’s the, kind of, time where we started talking about, “Hey, you know, it’s a really interesting industry.” Because it’s quite old-fashioned. It’s a network of people, you take calls on the phone and you get people to ring and you try and matchmake people [crosstalk 00:08:53], dying for something that’s come along. And so, it was never, sort of, a question whether I was going to do something on my own. It was, like, who can I find to sort of build something with. And I really like the idea of working with a friend rather than some brand new stranger.

Andrew: What is it that you like? We’re talking about Scott Woodley, what did you like about Scott?

Mark: There are a lot of things I like about Scott. Scott’s one of the most determined guys I have ever met, determined and passionate.

Andrew: Give me an example of that because it feels like everyone thinks they’re determined, but most people are not. They’re, kind of, lazy. What makes you say that Scott’s determined?

Mark: So, I mean, sort of, talking a couple of months from the early days, most of what we had to do to sort of get the business off the ground was really un-glamorous stuff so we got 10,000 flyers printed, and we haven’t got the money to pay so much . . .

Andrew: Wait, I want to get to that story in a moment but before that, did you see anything about him before you started your business? Because the flyer story is a great one worth telling, but that happened afterwards. Is it because he’s a cyclist and a runner, and you saw the guy just kept going out there? And that feels like the kind of sport where you have to be determined, where you have to be persistent and consistent.

Mark: Yeah, he sort of given up his job and grown, like, basically, he had some, sort of, network of different services that he was offering schools. Like almost these things didn’t even exist before so, you know, there were quite some more scale. But there would be things, like, he was running after-school club for disadvantaged kids and it would based around a story. And he sort of grown this all pretty quickly. He is into sports. His main characteristics is that he taught . . . comes up with a new thing every couple of months and will just get obsessed with it but a long, long time become really, really good at it and move on the next thing pretty quickly. So it’s not like . . .

Andrew: That would, kind of, scare me in a co-founder.

Mark:Yeah. I suppose it would.

Andrew:Right? Because you want someone who’s going to stick with things and not look for the next shiny object, but I get what you liked about him. It seems like he’s someone who’s actually starting a business which is a step forward beyond what you’d already taken and it seems like you’re, kind of, interested in online . . . or in education in general. And the idea that this guy was doing tutoring in the same way that it was done before the internet, still to this day, maybe, made you think, tell me if I’m wrong here, “You know what, why don’t we just do this? Why don’t we modernize this?”

Mark: Yeah, you’d think that would be the logical step. We didn’t really have single aha moment. Our first business idea was actually physical tutoring centers where kids would be dropped off where they would use computers so, sort of, teach them and they would be supervised by some good tutors. We thought, well, you know, this is cheaper. It should scale. Well, we, kind of, quickly realized, like, this business already exists and it’s pretty big. And we won’t be bringing anything really new to them.

We also realized that required a hell of a lot of money and real estate is, is a real estate business, to some extent. So, once we had, sort of, ran a couple of numbers and, sort of, figured out, like, we could actually get, like, 1000 people through this center every year, it’s not going to fly. And about that time, we started thinking, “Well, actually, I think, pure online is the best way to go. Let’s not think of it as a tech business but let’s think of online business. And we, sort of, hit upon the idea of a curated marketplace, essentially, where tutors can list themselves, but we’re, sort of, providing a certain level of quality that assures that parents are going to get are really good experience.

Andrew: Okay. I get the vision for it. I understand also why you wouldn’t want to hire the tutors yourself. That becomes really difficult to scale. All right, now I understand why you’d also check out the Wyzant interview I did with Andrew, the founder of Wyzant. Basically, they do, in the U.S. what you wanted to do, I guess starting in the U.K. and then expanding beyond, right?

Mark: Yeah, exactly. Yeah.

Andrew: You know what, you guys called the company at that time, Tutora. Why did you change your name to Tutorful?

Mark: It’s a good question. So, the, sort of, short answer is we, eventually, want to take this into other countries and we did very low research on whether that was being used elsewhere when we started so we realized that it’s trademarked in the U.S., it’s trademarked in Europe. So, we, kind of, realized that if we want to do something with this then we’re going to have to change name at some point. Let’s do it when we’re a bit smaller rather than when it becomes a real problem.

Andrew: Oh okay. I didn’t realize it . . . okay. Did they come after you, the people who had the copy . . . the trademark in the U.S.? Or did you jump on it before?

Mark: We didn’t bring it in the U.S. so they didn’t come after us, but we were . . . we, kind of, realized that later at some point, they’re going to realize. I liked the name Tutora but I’ve really grown to like the name Tutorful. It, kind of, takes a long time for something to . . . I found it took a long time for me to like that, but now, I much prefer it.

Andrew: You know what, we spend way too much time thinking about the ideal name. The truth is, what the hell is Ryanair, right? There’s nothing there. It’s the personality that you throw onto the name that really matters. The name itself is nothing. All right, I see that you got it then you went out there. Then you got a freelancer to build your website. How did that turn out? Where did you get your freelancer, to be honest about the location?

Mark: Where did we go? We actually went fairly local. A place called [inaudible 00:14:57].

Andrew: It’s called what?

Mark: Barnsley, Norchester [SP].

Andrew: Barnsley?

Mark: Barnsley, yeah. I wouldn’t expect . . .

Andrew: Yeah, I thought maybe you went to Upwork. Why’d you go there instead of Upwork, or somewhere like that if you didn’t have any money?

Mark: I didn’t really know any better at the time. So, me and Scott were still working while we’re looking to get the website built which was, like, a real mistake. We hadn’t put up enough thought and time into what the design was going to be. We didn’t spend a whole lot of time trying to find someone. I did a little bit of programming and I came across someone who I thought made from that forum post, sounded like he knew what he was doing. And to be fair, he was a good programmer so I think he didn’t do too bad a job. But a lot of this early stuff was not particularly well thought out so maybe hiring a team of people in India would’ve been a cheaper way to do it.

Andrew: What did you want the first version of the site to do?

Mark: We wanted it to do absolutely loads and it did a very little. So, the first version of site looks really good. We focused heavily on, like, the design, like, the page looked good. But behind the scenes, it did almost nothing. So, there was no payment system, there was no real messaging system. So, when we, sort of, got our first couple of clients, we would literally send them, like, an invoice and manual bank transfers to them. We didn’t have any way for the tutors to actually book lessons so, once they sent a message to the tutor, we would ring them up and say, “Hey, I’m acting on behalf of the tutor. He’s free at this time. What time can we do?”

Andrew: Wowee. So, basically, could a tutor even list herself on your site?

Mark: That was pretty much the only function that they had. You had the ability to list yourself.

Andrew: You list yourself and that’s it? And then, the students could see who was listed, but they couldn’t communicate and ask questions, they couldn’t pay. Could they pay?

Mark: They couldn’t pay.

Andrew: They could not pay and they couldn’t book a time. All they could do is say, “Hey, I’m interested.” and then you would take over by phone at that point.

Mark: Yeah, exactly. Yeah. It was a really instructive learning experience for us because instead of having this idea of how things work and then you go and build it and find out actually, like, on how people want it to work and how it should be used. We just ended up building, like, what me and Scott were doing so . . .

Andrew: You know what, let me pause there. I want to come into my sponsorship message first and then we’ll get into that. Because I think that’s actually really interesting that you decided we don’t have the best offer, we’re going to have to do it manually and then, what we do is going to inform what we end up coding up. But the first sponsor is a company . . . actually, it’s not a company. It’s an event. I freakin’ love this event. It is an event called Fireside Conf. Do you go to a lot of conferences? Mark? It’s, kind of, weird. I’m addressing you in the ad.

Mark: I didn’t.

Andrew: You do?

Mark: I don’t get [inaudible 00:18:01] conferences . . .

Andrew: Why? These conference suck, don’t you think?

Mark: I’ve been to really good conferences and every time I go to one of them . . . Actually, this was, like, it’s useful to step outside the bubble of the office. Both me and Scott try to spend, like, as much time as possible in the office. We never use to go to conferences. We had no money and we didn’t get any invites. Now, we start to get a lot more invites and [inaudible 00:18:28] and they, kind of, they make you feel important and that kind of thing.

But I resist the urge as much as possible to go to conferences. We’re also, like, out of the way, so all the conferences in London. It’s a lot of time and I would rather try and focus, like, as much as possible on the business itself rather than . . . I’ve been to conferences, a lot of conferences and I, kind of, know, like, a lot of messages [inaudible 00:18:55]. It’s just, like, doing them.

Andrew: So here’s the thing, the problem I have with them is, you really feel forced into seats to sit and watch something that you could watch on YouTube, or frankly get better on a podcast. But there are advantages so, here’s what Fireside Conf decided to do. They said, “You know what, we want to, first of all, be clear about who’s the right fit for this thing because we’re going to have everyone hang out together so they have an application process.

Once you apply, if you get in, you end up going to this legitimate summer camp location. It’s someone’s summer camp. One of the founders loved summer camp. He said, “I’m renting out this whole summer camp for the weekend and I’m going to invite entrepreneurs, investors and interesting people in the tech space. Mostly entrepreneurs, some investors, some interesting people in the tech space and also in the weed space which is getting bigger and bigger. There’s a good group of people there.

Mark: That’s not a thing here.

Andrew: What?

Mark: That’s not a thing here, actually.

Andrew: Yeah, I know it is, actually. This happens in Canada and in Canada, it’s become a thing. It’s also a thing here in California. Anyway, you’re all together. The end of the event, as I was walking out, this guy was telling me about how he got a divorce, how he’s dating, who he’s dating, stuff like that. And a friend of mine, who was standing next to me said, “I can’t believe he’s talking that way.” I go, “Why not?” He goes, “That’s a venture capitalist, one of the biggest VCs in this whole area, and he’s getting that open.”

And I realized the reason why he’s getting that open is we’re all in this camp ground together for a whole freaking weekend. There’s not much else to do, no one’s looking down at their phones once because there’s limited internet, frankly. There’s a spot where you can go if you need internet but it’s limited everywhere else. So, we’re all hanging out together. Literally, sitting by the campfire. Literally, talking to each other in person, having good meals together, having fun activities.

And yes, there’s some programming where you could go sit. They have, like, five different campfires during the day and there are people who they curated to speak and those people would give a very casual talk about what they do well. You can go there, or you can frankly just go swim in the lake which is what I did a lot with other people. You can get a room to yourself, but most of us wanted a room together with other people so you could hang. An incredible, incredible experience that just happens to be really good for business.

If you’re out there and you want to go, go check out my favorite event ever. It’s called firesideconf.com/mixergy, firesideconf.com/mixergy. They’re going to see that you’re from the Mixergy community, they’ll take it really seriously because if you’re listening to an interview this deep then you’re probably a perfect fit for that conference. And frankly, go out there and get to know other people like you.

One of the best things that came to me from meeting people at conferences is, I remember sitting at a conference telling someone I had a problem with a website, and he said, “You know, I could solve it.” And I didn’t even think that there was for it and he sat right there and he started building this thing for me, just like a little bit of code on my WordPress site. One of the best things about conferences is you get to have casual conversations and bring up issues that you’re wrestling with and wouldn’t even think to bring up to someone. All right, firesideconf.com/mixergy.

Mark: That’s good.

Andrew: A ton.

Mark: The one reason I tend to go to most conferences these days is actually to meet people rather than the chats themselves. I like speaking to other founders because I don’t have that each network of people so whether it’s, sort of, speaking about all at the same things. So I find it [inaudible 00:22:20]

Andrew: Yeah, and saying, “You know what, we were at a conference together. Both of us sitting and watching a presentation,” is not really the bond. The bond is I was rowing a boat on a lake with you, that’s the bond. I was sitting by a fire with you at night, just talking about life. That’s the bond that you can call on and say, when you need something, text a person and say, “Hey, it’s Andrew. Would you please help me with this issue?”

All right, really. Great event. I think all events need to do this. The problem with other events is that, not only do they force you to sit there, but they have these little groups where you can go and hang out with people, but they’re for a short amount of time and they’re curated by a few people, and exclude everyone from the conference. Frankly, I know, because I do it. I do dinners at conferences and I don’t allow everyone in. I’ll take like eight of the speakers and I’ll go out for dinner with them, or eight people who I need to meet.

All right, let’s go back to your story. You did a lot of this stuff by yourself, that means you, literally, would call up the tutors. You, literally, would book the student. I keep using the world literally here, but it’s true here, right?

Mark: Yeah. I mean, it was a two-man call center for about six months of really, like, we were just making calls all day.

Andrew: Why didn’t you feel like a failure, Mark? I mean you’re a guy who was an investment banker. You went to school to be an engineer. You’re sitting there, making phone calls like a $2 an hour virtual assistant from a country that doesn’t have any money?

Mark: Yeah, I was trying to program so I set aside part of my day for programming which I love, but I really enjoyed doing it and I would just dread. I mean, like, today, I have to come at 4:00 when people are coming up where I would’ve spend more three hours just on the phone. Scott was doing calls, literally, from 8 till 8 every day.

Andrew: As a tutor?

Mark: No, trying to arrange lessons.

Andrew: Wowee. You guys were just, basically, sitting there booking people together?

Mark: Yeah, I mean, at first it was okay because we weren’t getting much traffic so, you know, a new inquiry would come through our system [inaudible 00:24:16], we’ve got a customer here. And then it, kind of, got bigger and bigger and bigger, until we realized, like, actually, we’re not spending enough time, like, improving the product and building this stuff out. We’re just trying to stand still, essentially. We’re just trying to stay afloat.

Andrew: All right, I’m going to get to what you guys did there, but I want to ask two things. First, I want to know about this thing where you guys quit your job and how that impacted you. And second, how you got so many customers? Why don’t we start with, it was a low point though, wasn’t it? When you and Scott said, “Hey, we’re quitting our jobs. We’re focusing this on a full-time basis,” how did you know when the right time to do that was?

Mark: We just knew that things weren’t going to happen unless we did something about it. We were sending emails to each other. We were saying, “Okay, well, let’s have the business plan sorted by here. Let’s have a think about how we’re going to do the marketing. Let’s setup a company.” And you just got busy lives and we, kind of, got the comfy jobs where we’re running money but there was no pressure to do anything, and so nothing was getting done.

We, basically, took a decision right, okay, “This day, we’re going to leave. Let’s move down together. I don’t know anyone in the city. I’ve got nothing to do. I have to make this work.” And it was real, sort of, powerful forcing function for just making you, like, do things and get stuff going because, you know, we haven’t got huge amounts of money so [inaudible 00:25:49] unless we can get something going at a certain period of time. I’m just going to have to ask my old job back. It was brave but it was the only thing I could do.

Andrew: The only thing you could do?

Mark:Yeah.

Andrew: All right, so going back then to how you got all these customers. You actually remember your very first customer. How did you get them?

Mark: I remember my very first customer because it was a £20 lesson. You must think, “Really?” and I realize it was just an hour long Math lesson for his kid and it was 7:00 till 8:00 at night and I remember I wasn’t in the office. I got a call, I was actually out rock climbing. I had a call from him saying that the tutor hasn’t turned up, you know, I need my money back. And so, this was like the worst thing that could possibly happen and even though it was totally inconsequential in the course of the company . . .

Andrew: Right, right. What’s $25 or £20, right?

Mark: Yeah. I was stressed. I rang around all the other tutors that we had. I think we got about 10 tutors on the site, by then. All the other tutors to see if we could find a placement and they would do it. It was a really, sort of, stressful time. The tutor was actually someone that Scott would have to turn away himself. So, the student was the one who Scott would have to turn away himself. So it’s, kind of, like, at first, word of mouth [inaudible 00:27:17]. Yeah, it was pretty bad.

Andrew: I can’t believe you guys were targeting £20. I looked it up right now, that’s $26.67. That’s how much you guys were charging to teach what?

Mark: The pound is weak.

Andrew: Sorry?

Mark: The pound is pretty weak. It was an hour of Maths. I think, in general, the value of the people for our tuition is too low. My people didn’t think anything of dropping £50 per an hour of massage, but having someone who’s really qualified is not a PhD. You know, he’s going to you. He’s travelling to you, doing an hour of Maths and coming back and we’re charging £20. And I still think it’s too low so we try pretty hard to make sure that tutors are actually charging the right price instead of, what they think is a price that’s going to get in business. So, we had a, sort of, minimum floor and hourly rate a 50 . . . Bear in mind that the minimum wage here is 7.50-ish so it’s still a good way to get someone who would have another job. I, generally think, society just places too little value on this stuff.

Andrew: Okay, so that one didn’t work out and that came through a referral, right?

Mark: Yeah.

Andrew: And then, you expanded to the flyers. Now, let’s bring up the flyer thing you were telling me about earlier because I think it’s fascinating. I saw this in my notes and I said, “Okay, so that didn’t work and let’s see what did work. But I was wrong, it did.” Where did you guys go? What’s the flyer thing that you guys used?

Mark: Yeah. So, basically, we needed customers from somewhere and we had, literally, no one. I think we’ve got about two or three people through contacts of Scott. So, we hit first on the idea where we’re standing in town, you’ve seen these guys standing in town with a pack of flyers, hassling people so we were, sort of, like, you know, “Have you got any kids? Oh, if you thought about getting a private tutor, GCSEs are coming up, you know, exams are coming up.” That, kind of, worked but it, basically, involved me and Scott spending our entire day standing around town center, looking like idiots. And it’s pretty dispiriting because 9 out of 10 people, like, do not want you there. But at the end of every day, we have a list of phone numbers or emails that we could, sort of, then ring up and try and get book tuition.

Andrew: What? You collected their email addresses? If they were interested, you’d say, “Give me your email address and I’ll follow up with you?”

Mark: Yeah. Email addresses we realized were probably not the best. Phone numbers, you need a phone number. You can sell things over the phone. Email too easy to ignore.

Andrew: So someone who would take your flyer seemed interested, you’d talk to them and you’d say, “I’ll call you. Give me your number and we’ll set this up.”

Mark: Exactly, yeah.

Andrew: And it wasn’t creepy?

Mark: It wasn’t too creepy. I think people appreciate that we were just, you know, two young-ish people trying to start a business. I think we persuade a lot of people who really didn’t want to get their kid a tutor to actually have a tutor which you could only do . . . they would have four or five lessons and then stop. So, it wasn’t a great idea. We wanted to do something slightly bigger so we realized we’ll try flyer in people’s houses, so we, literally, posted flyers through the letterboxes of must’ve been 10,000 houses.

Andrew: Personally, walking door-to-door doing this?

Mark: Yeah, we would spend an entire week. Literally, like 6 hours a day.

Andrew: Why did you do that? Why didn’t you just hire some kid to do this? What you’d say? £7, £10, £8 an hour?

Mark: I don’t know. I think, in retrospect, that would’ve been sensible. We realize we had this finite pot of money and wanted to get it going without [inaudible 00:31:17]

Andrew: Just be frugal. We’re not wasting money on this. We’re going to go out and do it. Okay.

Mark: Yeah. I think, like, you learn how to do it yourself, like, you always end up doing a better job. And the idea was that, we’ll try this. We’ll see what happens and if it works, well then, we can pay someone to do it. We’ve listed that as more scalable option. I mean, standing in town was really hard to get someone to do, but we could just have, like, two or three people who spend all their time posting flyers. But that again like worked okay only if it’s, sort of, value minus Scott’s time at, like, a very, very low rate. But we did get calls from that.

Andrew: Okay, so you got some customers from there. How did you get the other side of the marketplace? The tutors?

Mark: The tutor side was actually not too bad. There’s a website called Gumtree which is basically Craigslist in the U.K.

Andrew: I’m on it now.

Mark: Yeah. People advertise everything on there. We, literally, get anything on it and tutors are the type of services on it so we went through and just messaged every single person who was advertising and said, “Hey” you know, like, “We’re actually looking for more clients. Do you want to come join our site?” They had to take a leap of faith. We had no presence, whatsoever. It’s just this website.

Andrew: Right, but how much if a leap were they really taking? The truth is, they would get paid once they got a job. If they didn’t get a job, they weren’t . . . The reason I know it is because you guys, still, are on it today. The thing you guys do is, every freakin’ city in the U.K. has its own listing on Gumtree because Gumtree lets you list jobs for free, right?

Mark: No, we have to pay.

Andrew:Oh, you pay. So you still pay for every single one? So 12 days ago, somebody at your company put something on there for . . . here’s the headline, “Become a private tutor. Tutoring jobs in Maths, Science, Music, Language and more! In Huddersfield.” Then, a similar job listing for Oxford, a similar job listing for Preston, a similar job listing for Stockton-on-Tees, a similar job listing for York, a similar job list for Leeds. They just went through and they put it in everywhere at £20 an hour plus. This is you guys. It still works to this day.

Mark: We still do that. I think it’s, like, one of the [inaudible 00:33:33] of doing all that stuff you’re so small to start off with, trying to figure out about how to scale, basically, like growth hacks. It’s something we got really good at, so we, sort of, worked out well actually we can just do this. We can do this pretty much forever now. It’s not a big part of how we, sort of, get tutors now but it’s still there and it’s still . . .

Andrew: But it worked. So the first marketplace started to form because you guys were handing out flyers in person at like the park, or door-to-door, putting it in people’s mailboxes. The other side came because you were going to Gumtree and saying, “If you need to get paid to do this, here’s a site, we’re hiring.” And you only pay when there’s a match. You start to get people to connect. You start to bring in revenue and now, you are driving yourselves freakin’ nuts because the two of you have to sit there and dial, and connect, and so on. How did you get the next version of the website? The one that didn’t require you to do all this? Because, I think, you told our producer and you told us here in the interview, you learned a lot by doing this manually? And so, what did you do next?

Mark: Yeah. I mean, it was, basically, just building out all the stuff that we were figuring out and just trying to find enough time, so, you know, this is where Scott’s determination comes in. Scott, like, just deal with the phone stuff and I found a bit of time every single day to write a bit of code but we’re still using the freelancer, so like together, the website just slowly got better and better. To the point where we decided, actually, like, once we built a messaging system, we don’t really need to give them a ring. It still worked giving a ring but let’s see if the website could just run itself. I think about 6-8 months after we started, we didn’t have to do no calls anymore. Literally, no calls at all. We could, sort of, focus on building the business and that was where the things started to take on.

Andrew: Where’d you get the next developer?

Mark: Yeah. So, I think, we got our next developer, it would’ve been in about March 2016. April 2016.

Andrew: Okay. All right. You know what, let me take a moment to talk about my second sponsor and then, I want to come back and just say specifically, you did a list of things that were wasting your time, you went to the developer and you said, “Okay, here’s our bullet list of stuff that you need to do. Automate what Scott and I have been doing, right?”

Mark: Yeah. I mean . . . yeah. Exactly.

Andrew: Okay, when I come back, I want to go through what are some of those big ones. What are some of the time wastes? And then, how did you translate the work that you did into software?

I’ll do a quick spot here for a company called HostGator. And the reason why I want to talk about HostGator now is, I think a lot of people when they start a business, they overthink the development. Like look at you guys, Mark, you could’ve created this great marketplace software that actually did all this stuff and would’ve done it perfectly. It would’ve been a distraction, right? Especially since you guys aren’t deep, hard code developers.

I think, in many senses and for many businesses, it’s just businesses. It’s just fine to have a WordPress site. I know people are going to hate me for saying this because they’re going to come up with better ideas that could do this and that. Don’t get distracted. Come up with a simple name and then, come up with a simple WordPress site that will do enough of.

In fact, let me see, “WordPress theme marketplace.” Bet you, I can find one. Here. Eleven plus best marketplace WordPress themes. Here’s another one from MOJO Marketplace, 2018’s most popular WordPress themes. Here’s another one from ThemeForest, I bought a lot of themes from them, multi-vendor marketplace WordPress theme.

Here’s what I’m saying, if I were to come up with an idea like yours today, I wouldn’t go and even hire a developer somewhere else. I’d just go throw up a WordPress site on HostGator, toss up one of these themes from any one of these search results here. Have it not be best, but just get freakin’ started and then, I could see where it breaks, where it’s deficient, hire someone to patch it a little bit. And then, understand where it can’t be patched then boom. Now, I got my checklist of things that we need to do and that’s when I hire developers to start to build it up.

The reason I say this is, whatever your idea is, frankly, there’s a third of the internet almost, 30% to be exact. Thirty percent of websites are using WordPress right now to function as full businesses. There’s no reason why anyone who’s listening to me, who has an idea, can’t just launch version one on WordPress and then build it up, patch it up and then, build it on their own proprietary software.

So, if you want to do that, where do you go to host your site? I recommend going to the site that I created a side business for chat bots because I freakin’ love them. I just went to HostGator. We created a hosting plan with them. It did great. We grew the business even more. That hosting plan could not accommodate all the traffic that we’re sending it so we went to HostGator and we said, “Up it. Give us more.” And so we did, we signed a three-year contract where they gave us way more for much cheaper than anyone else.

All right, and we love it. If you want to go get started with them or frankly, if you don’t like your hosting company, you’ll want to switch over to them. They’ll make it easy. They’ll even help migrate you. All you have to do is go to this special URL where, frankly, I’ll be honest with you, I get credit for referring you so you’ll be doing me a solid. But also, you will get up to 62% off because, I don’t know why they don’t just round it to 60% off. For some reason, they wanted to say, “We give you 62% off.”

All right, so you’re going to get up to 62% off if you go to this URL. The URL is hostgator.com/mixergy, hostgator.com/mixergy. One-click install of WordPress and other platforms if you don’t like WordPress and they’ll be able to scale up as your business grows. And if you don’t love them, 45-day money back guarantee. Or frankly, you could, 10 years from now, 2 years from now, 6 months from now, migrate to someone else because whatever you build on them, you could move off, if you don’t love them. But you will, hostgator.com/mixergy.

All right, Mark. Let’s get to the punch list. What are the things that you saw that you needed to have the software do for you?

Mark: The first one was . . . well, we do know, the messaging system. So we wanted a way for tutors and students to, like, basically send each other messages but not exchange contact details. It’s a tricky down balance of, like . . . We were, essentially, a middle man so we want to have some control over. We want you to speak but we don’t want you to disappear. And there were lots of little things around that where we have to, sort of, try and get right.

A lot of tutors who have got back to people and say, “I can’t help.” And well, we just wasted that lead, essentially. So, we built a job board that would, sort of, automatically post that request to a job board and other tutors who were close by would say, “Hey, I heard you’re looking for a tutor.” you know, “You haven’t picked me but I’m free.” And that actually went really, really well. Tutors like that as well, because instead of just having to be really passive and wait for someone to come along and say, you know, “I’m looking for you.” They could actively, you know, they have a list of jobs and they can say it right, “This one sounds good.” You’d feel much more proactive about it. That was one of the second big one. The big one really, was payments.

Andrew: Payment? To allow the students to pay and then for you guys to pay the tutors, right?

Mark: Exactly, yeah. It was a complicated thing to build, but we wanted it so we, literally, we didn’t have to do anything. There’s no buttons to press, or anything like that. We charge after the lesson has been finished which is scheduled. We get half cut and the tutor gets theirs. And that was a, sort of, really good moment. Invoicing hundreds of people is not fun.

Andrew: What about this? So, I was talking to you earlier about how we did chatbots. We started a site. People who saw it said, “You know what, I don’t want to learn how to build a chatbot. I want to hire someone.” Okay, we’ll do some matchmaking here and we’ll introduce you. And we were getting paid by clients, we were passing the money on to the developers of the bots. The problem that I had was checking in on quality, making sure that the work was done on time, making sure that it was done in the way that the client wanted it done. And it became a nightmare. What did you guys do to solve that? To check in, to make sure that the student was getting what she paid for? To make sure that the tutor was doing what he wanted, what he needed to do?

Mark: Yeah. It’s something that we’re still trying to figure out, to be honest. The way that we solved it is probably . . . it’s essentially the other way around. So, a bit like other review sites, people leave feedback so you’ve got this, sort of, built-in improvement into the platform where the best tutors get feedback, the other ones don’t and the best tutors stick around. At the start, there were lots of battles going on. But over time, people go to the tutors with the most reviews and so, the system actually improved.

Andrew: It’s the rating that mattered?

Mark: Yeah, the ratings are really, really, really key because it’s platform where we’re providing tutors, really is like a trusted, sort of, what we’re providing parents like a trusted way to find a tutor. They can ask their friends but can they read like impartial reviews.

Andrew: And that was there from the beginning? I’ve got an early screenshot of the site.

Mark: I got it right at the start.

Andrew: Sorry?

Mark: We definitely had that right at the start. That was . . . We must have this.

Andrew: And were students able to go in and review their tutors by themselves, or did they have to message you or Scott and say, “My rating is 4 out of 5 stars.”

Mark: They could do it themselves. All you have to do is go through a specific URL so anyone could have done it if they knew that URL. We would mail that out, so right, you could’ve actually had a couple of lessons before you can leave a review but initially, yeah, they could’ve left themselves review. And they did, once they figured it out.

Andrew: All right, that’s version one. That makes sense. Okay, flyers are not really going to grow a business. You need to go beyond flyers. You ended up discovering advertising actually worked for you. How did advertising work for you on Google? It’s so freakin’ competitive that it’s tough for newer businesses to do well with it. What did you discover that allowed you to do well with Google Search Ads?

Mark: We did it ourselves and I think that was a real . . . it was sort of leap at the start and we wasted a lot of money at the start. We didn’t know what we were doing but we did it ourselves and that, kind of, allowed us to . . . we really understood our business. We just didn’t understand advertising but we could then, just be more real about what we were trying to do. There was no way trying to explain it to just an agency and the agency coming back with these things and once we got the hang of it, it’s not the world’s most complicated thing. So I think that’s one reason.

The other was it’s a local business so we didn’t have to compete against Amazon and, you know. If you’re selling something, you know that somewhere, somewhere, where in the world that they’re going to be selling that stuff really, really efficiently. And it’s hard to compete when you’re doing that. But there were no tutoring companies in Sheffield advertising. In London, there were a fair few in the big cities. We started out pretty small and we just found it worked where we were because this is local business, we were able to, sort of, like, try and really hone it in Sheffield and once we got that working, we’re like, “Okay, let’s see if we can move it to Leeds and . . .

Andrew: But there was no nationwide or worldwide company that was competing against you for tutors? For students who are looking for tutors?

Mark: Yeah, there was no one taking it really seriously like that in the U.K. at that time. The big companies were, sort of, the equivalent of Craigslist. Like there were listing sites and they didn’t really advertise, it was a hobby business for them. It’s a really word-of-mouth industry. I think that’s changing but it’s, sort of, underground industry as well, you know. There’s not that many professionals do it. It’s a friend of your sister’s to teach a kid and it’s all those sorts of connections.

Andrew: Babysitting used to be that way and I’m noticing that it’s becoming more of a service with the marketplace. All right. Okay, so I see that the Labor Department started investigating the gig economy. What were they doing exactly and how did it affect you guys?

Mark: I probably can’t go into too many of the details but, essentially, the gig economy is like one of these things that the legislations not quite caught up to the reality of what’s going on. And we basically found ourselves on the wrong side of that. I don’t think through any fault of our own. It’s some governor minister decided that this is something that needs to be looked at. The message has got passed down, and down and down, and we, sort of, started getting really angry emails. And we actually had someone come visit us in the office and, you know, pre-bluntly say that, you know, the way that the business is operating is . . . we can’t do it. It’s illegal. We hired a lawyer at the time and we were really struggling to think of, like, technically, it could be true. And so that was a sort of . . .

Andrew: It could be true that they have to be employees of your company.

Mark: Yeah, it was a really, sort of, technical point that it was around employment, not that they have to be employees. It was, sort of, a quirk of U.K. law, essentially.

Andrew: So what did you do to get around that quirk?

Mark:Eventually like we kind of realized . . . Well, actually, it’s was a phrasing question on the way we were sort of billing and things like that. We spent a lot of money on lawyers. We had a lot of sleepless nights. But there were definitely times when I was like, “I can’t see a way around this. This is really bad news.”

Andrew:Can you be more specific? What did you end up having to do to get around? And what were you getting around?

Mark:The specifics, I probably should go into too much. There’s been lots of cases in the U.K. around like Deliveroo and Uber, [inaudible 00:48:03]

Andrew:Bruno [SP] has to pay health insurance, I think, for their drivers in the U.K., right?

Mark:Yeah. I think the issue with companies like that that we don’t have is for them it’s full-time jobs and they are literally told what to where, what to drive, and where to go. Whereas ours is very much, no one’s doing it really and no one’s really fulltime. You sort of choose where you want to go. We have very little control over the end product. So it wasn’t an aspect to do with that. It was an aspect to do with actually some legislation that stopped companies who wanted to advertise from taking a fee by getting work. It was kind of a real sense of what the legislation, but when it was written it was the 1970s and they were worried about a totally different thing happening and yeah, we just got caught up in it.

Andrew:All right. Let me close it out by asking you this. What’s the revenue? You’ve worked hard, you went from being a guy putting flyers door-to-door to someone who’s got real sales. What’s the revenue?

Mark:I can’t tell you the revenue. We’re doing somewhere between 20,000 and 40,000 [inaudible 00:49:16] a month.

Andrew:20,000 and 40,000 bookings a month?

Mark:Yeah.

Andrew:A month?

Mark:A month, yeah.

Andrew:All right. So you pay . . . You get paid what? Like £20?

Mark:Yeah, that’s probably . . .

Andrew:Let’s say 30,000 bookings times £20 per, we’re looking at . . . No. Could that be, over half a million dollars? 600,000? A month?

Mark:A month . . . Yeah, that’s probably [inaudible 00:49:44]

Andrew:Wowee. All right. Impressive. And you guys are how old now? Let me see actually, I’ve been staring at my notes here for a long time. There, since 2015, so about three years old?

Mark:Yeah. It’s not too bad.

Andrew:Congratulations. I imagine now somebody is listening to this podcast, listening to this or grabbing the transcript. Showing it to someone else saying, “Look at what they did in the marketplace.” They’re probably not going to create a tutor marketplace. But I imagine they’re saying, “I’ve got another idea for a marketplace. Here’s something else that’s just way too . . . ” gardener marketplace. I don’t know. Something that’s a little too antiquated in the way that it deals with its customers and maybe they’re going to upgrade because of you.

All right. Anyone who wants to go check it out, should go check out it’s tutorful.co.uk. I can’t believe you people in other countries still use the dot this dot that. Like .co.au, right? Isn’t that what they do in Australia?

Mark:Yeah. If it’s good enough for the BBC, it’s good enough for us.

Andrew:I know but it would drive me nuts. Why don’t we just go with .uk?

Mark:[inaudible 00:50:44]

Andrew:I like short. Short, short, short. Tutorful.co.uk. Really, congratulations. I see you’re getting a little bit squirmy because you’re uncomfortable that I did the math on your revenue, aren’t you?

Mark:No. [inaudible 00:50:56]

Andrew:All right. Okay. Good. I knew you didn’t want to reveal the numbers and I said, look, I’ll do a little bit of math here or something. But I won’t poke too much. All right, Tutorful. Thank you so much for doing this interview and thank you to my two sponsors. Number one, the conference where you get to go hang out with other Mixergy listeners and other entrepreneurs is firesideconf.com/mixergy. And number two, if you want to start a website or move your hosting company to a better hosting company, it’s hostgator.com/mixergy.

Mark, thanks so much for doing this.

Mark:I really appreciate it. Thanks.

Andrew:Cool. Bye.


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