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, for an audience of upstarts. Yeah. The people who are listening to my interview, are actually creating real companies. And frankly, you’ve heard them. You’ve heard them come on here, talk about how they built their businesses and while listening to Mixergy. That is the proudest thing.
You know what, Sean? I was just talking to Elad Gil before after and I think even during the interview, he told me that he was a Mixergy listener. I felt like, “Yeah, that’s the guy I’m going for.” You know him?
Sean: I do not. I do not.
Andrew: He’s an angel investor in a bunch of well-known companies here in San Francisco. Built a couple of companies himself. Anyway, I am going for that kind of person. The person who is really building companies, people like you.
Sean: I love it.
Andrew: So I’ve got a team. Nobody is here in the office because apparently, I’m not really good to sit in the office with. Did I feel a little intimidating as we were talking about the mic?
Sean: No, you felt fine, man.
Andrew: Because you know what? Because here you are, you’re doing an interview with me and I’m like this the whole time like, “What the hell with the mic? What are we doing? We got to get this right. Come on.” So nobody can stand being in the office with me. And I don’t like having anyone in the office with me but I love working with a team of people all remote.
Sean: Exactly. It’d be like Basecamp, right? You go totally remote, good to go.
Andrew: We actually do use Basecamp a lot. We were converted into Basecamp from all these other tools. And one of the things that I’ve discovered is when you’re communicating with people remotely, you got to do video screen share because people will not understand what you’re talking about. As much as it seems like you could communicate with text, you have to sometimes show them and you have to show them a video. Like I used to tell people step by step using a Google Doc how to edit my interviews.
And I realized, “Oh, no one understands.” When you’re communicating with people, video, show them. That’s what helps. And today’s guest is nodding along as I say this because he recognized this and he built a company to help people who have this, this realization that video communicates better in many ways than text. His name is Sean Higgins. He is the creator of a company that’s got a brand new name. It’s called the VidGrid. What VidGrid does is it helps you record, edit, organize, and share video files quickly. So one use case is what I mentioned, if you’ve got a team, you could create a video for them. And then they’ll actually put in a bank so that everyone else after the first person learns from the video, everyone else gets to watch it and use it.
But it will also help you if you’re working on customer service, do some videos to show people how to get unstuck and if they’re still stuck, you can send them a link and they could share their screen, record for you what they’re doing and you can understand and give them more feedback. Anyway, that and so much more is what they do. I invited him here to find out how he came up with the idea, how he got his first customers. Boy, this is like a real hustle story for getting customers.
Sean: Totally.
Andrew: And I invited him here to bust his chops about his mic. His name is Sean Higgins from VidGrid. We’re going to find out all that thanks to two phenomenal companies. The first is a company that allows me to work remotely but still get comfortable work done. It’s called Regus. I freaking love working out of their office space. Look at this. I had a pop filter. I added a pop filter, it didn’t work out. But in order to install it, I needed a screwdriver. These guys at Regus, they got me hooked up. They bring a screwdriver in. If I need tea, it’s like green tea. They got me hooked up. They bring it in. Anyway, I’ll talk about them in a moment and I’ll also talk about my second sponsor HostGator in a moment. Sean, good to have you on here.
Sean: Absolutely, Andrew. Thanks for having me, man.
Andrew: What kind of revenue you guys doing? Annual revenue. Hit me.
Sean: Yeah. So I won’t say what revenue is today, but I will tell you that a year ago we broke a million dollars in annual recurring revenue. So at the end of 2017.
Andrew: The end of 2017, you hit a million dollars.
Sean: In annual recurring, yeah.
Andrew: And this year, you’re doing better than that, but you’re not going to say how much. Am I right?
Sean: Exactly, yeah.
Andrew: Okay. All right. And I gave some really good use cases. I want to get an understanding of how you built this company up to where it is today. And it kind of goes back to Pokémon. Your cofounder was into that.
Sean: How did you find this out? This is really interesting. This never comes out. I don’t know.
Andrew: I’ve got a really good team. They put together good research docs for me on people.
Sean: Absolutely. This is a great story. All right, so the team, all right, so when we were making VidGrid or as it was originally called ilos, and we can get into that later.
Andrew: You know, let’s pause for a second. I asked you before this, what the hell is ilos? I love VidGrid. I get it because like [inaudible 00:04:06].
Sean: It makes sense. It makes sense.
Andrew: What’s ilos?
Sean: So, you know, the tricky thing when you’re starting a company, Andrew, is like TBD Inc. is taken and you have to pick a name when you incorporate. And so ilos, it was something that we came up with. You know, it means something in like Greek mythology. Totally coincidental, it has nothing to do with what we’re doing. We just liked the way it sounded and it was memorable. People kind of remembered what we were doing. Ultimately, the part of the switch was there were issues like it didn’t actually reflect what we did very well, and ultimately it was hard to kind of pronounce. The number times I got ilos in a meeting, oh, man, were through the roof.
Andrew: I get it. Let me say this to anyone who’s listening to me, stay away from Greek mythology. Like it might be fun to read, but as names, it’s just really difficult.
Sean: Hard to pronounce, man. It’s a killer. It is for sure.
Andrew: Right. And frankly, ilos is not that bad because at least I could spell it. Like when I heard it from my team, I said, “I know how to spell it. I got it.” And I’m a terrible speller. All right, so going back to before, long before this.
Sean: Pokémon, yeah.
Andrew: Kind of talk to me about Pokémon.
Sean: Absolutely. So there were three of us founders in the business, and our technical founder, Peter, I met him in high school. We went to the same school over in Mendota Heights, Minnesota, always sunny Minnesota. And when I met Peter, he was buying up these Pokémon games at the time and he had a flash program that he’d used to mod the game. And the game mod he made would be ones that you wouldn’t have to trade with people to catch all the Pokémon.
You could catch all the Pokémon in a single cartridge, which as a high school kid is like a big deal. And Peter didn’t just stop with modding the games, he actually would sell the game files on eBay. He was like the first person in the country to think to do this. And so when I met Peter in high school, we were both 16. He was making 10K a semester flipping these Pokémon games, and I was working at Kmart for 725. And so right. Then I was like, “I got to be more like this guy.” And so, you know, we stayed in touch. And ultimately, the third founder of the business, Nick, our product visionary and CEO, I met him in college at St. Thomas.
And so his role, he was really kind of figuring out the product side. So in terms of how could we deploy video in a really novel and unique way because video was something that had been around for a while, right? When I told my parents I was starting a company and video, they said, “Sean, we’ve got bad news. There’s this thing called YouTube.” And I was just like, “Okay, thanks, mom.”
Andrew: So wait, why were you drawn to video? I heard the things you guys wanted to do was create a corporate YouTube. Why start with that? Why start with video as the premise?
Sean: Absolutely, absolutely. So the corporate YouTube side was really based off of experiences that we’d had. So we’d all had jobs at, you know, different companies, and we’d encountered this issue where you just needed to know something. And the people who had the info like they were busy, they were in a meeting, they weren’t around. And so what do you do? You spend two hours beating your head against like the instruction manual and you never find what you’re looking for. It just sucks.
And so we said, “Man, like if there was a way for us to find the information that we need at the moment we need it, that would be really powerful.” And what we learned throughout this process is that if you make video really fast, like you give people the ability to record, edit, organize, share, you make it seamless, people use it. And it opened up all these use cases in support, in sale, stuff that we hadn’t even thought of when we started.
Andrew: It started out with you saying Nick had a corporate job. He somehow needed to understand what was going on at the company. Nothing was working via paper. I mean, the tech stuff wasn’t working. He said, “I need some kind of video. Let’s create the company that does that.” That was . . .
Sean: Absolutely.
Andrew: And you guys were at what stage in your lives? How old were you when you came up with the idea?
Sean: Oh, man, 22, 23? Something like that.
Andrew: And this was 2012, right?
Sean: Yeah, back in the day.
Andrew: Oh, so this was . . . so you guys didn’t get into TechStars until a few years later, huh?
Sean: Well, so we did everything a little bit backwards. So 2012 is when we incorporated, which, as someone who started a business now, like I would tell you is not the thing you want to do first.
Andrew: Why?
Sean: Like, I mean, it’s great to have it and to like have that structure in place, but we didn’t even know if what we wanted to do is technically feasible. Like we hadn’t built any prototypes, like nothing. And so like we don’t know if this is even going to be real. And we’re like let’s incorporate and make it LLC. We thought that was what you should do first. And I think it’s you want to make sure what you’re working on is possible first and then you want to make a business.
Andrew: Okay, all right, so you do all that.
Sean: Validate a little bit, yeah.
Andrew: How long before you started creating the first version?
Sean: So it took us about a year and a half to make the product from when we incorporated. So we incorporated, it was like August to September 2012. And then, you know, flash forward, basically, two years to 2014, we had something that was like ready to get into the market a little bit. It was our early version.
Andrew: You know what? I’m looking at your LinkedIn profile. I see that you’re doing vendor management at Express Scripts at 2013, but that was it.
Sean: Living the dream.
Andrew: So that’s what you were doing while you guys were trying to figure out this product.
Sean: Yeah, I was siphoning my money from my Express Scripts job into this startup, yeah.
Andrew: Okay. All right. So you finally get the very first version up on online and who do you sell it to?
Sean: So we started off by doing a lot of network sales, and we didn’t really know many people, which is a super relatable spot most startups find themselves in where you’re targeting this industry, you don’t know anybody, and you’re trying to figure out who can I get in front of.
Andrew: And when you say this industry, was it someone or it was just anybody at that point?
Sean: I mean, it was anybody. We had theories, right? You always have theories. We thought for us, Andrew, we thought staffing agencies. Staffing agencies and we’re the best. They do so much . . .
Andrew: From the very beginning, staffing agencies.
Sean: That’s what we thought.
Andrew: Why?
Sean: Like that was day one. That was a theory we had.
Andrew: I get it.
Sean: It didn’t turn out to be super right, but we were like, “We got to get in front of these staffing agencies.” [crosstalk 00:09:50]
Andrew: Staffing agencies do a lot of training of their people, you imagine. And then they would want to show them videos to teach them.
Sean: Right. Because they have a bunch of text documentation. Like they have this big PDF binder and it’s just not working. So that was our theory.
Andrew: Okay.
Sean: And so we validated that. We’ve got in front of a couple staffing agencies, and some of them bought from us. They were our early customers. We’ve got in front of them mainly through network referrals. So we leveraged our school, St. Thomas, there was a guy on like one random advisory board who we got connected with who was great. He was very forward thinking about tech. He was one of our very first customers. He still cuts us a check to this day, which is awesome. And he kind of tested that market with us. But in terms of getting new customers, it was entirely going through LinkedIn figuring out who we thought would be good titles, who we thought would have your use cases. Just taking any meeting we could.
Andrew: And the people that you are reaching out to, I love what you told our producer, you said, “Look, it turns out people don’t really know the people they’re friends with on LinkedIn. They’re just kind of adding everybody, right? So if you’re asking for a referral, they say, ‘Yeah, but I don’t really know the guy.'”
Sean: You get a lot of duds. It’s true. I think early days, especially. It’s a volume game. Like one of the things I wish I would have done differently is started talking to prospects and customers earlier. Like I remember the moment and it was funny. So when we started, my original role was I was going to be the finance guy, Andrew. I thought this was a job at an early stage company. That’s how little I knew about this. And so I remember one day like, you know, Peter was coding something up and Nick was drawing a feature.
And I looked at them and I was like, “Wait a minute, who’s going to talk to the customers?” And like I look at Peter and I look at Nick, I’m like, “It’s not him.” I’m like, “It’s not.” I’m like, “Oh, it’s got to be me.” And that was a huge moment for me. And that was really when I started like doing the network sales we talked about, but I wish I had known that going in like, “Hey, we got to figure out if this is working or not.” And ultimately, the customer decides that.
Andrew: I’m looking at an early version of your site from 2014.
Sean: You’re hitting me on the Wayback Machine.
Andrew: Yeah, man, I love that thing. It says workplace communication just got easier. You were from that point realizing this is about making communication easier. And it looks like you guys had an iOS app at that point and Android app because . . .
Sean: Yeah. So on the mobile side, right, one of the things that we were part of a trend, Android actually released the ability to record your mobile device screen. And that opened up all these mobile possibilities for show don’t tell via mobile video. And so we launched an app, it was a free app, just to see like what kind of the reception would be for that kind of capability. And it blew up. I mean, we had people, individual users from like Google who would make their reviews of latest OS’s using our app, which was amazing. They didn’t end up paying us for that one, though, Andrew. We didn’t monetize that one but it got a lot of good traction and like helped us get our name out there a little bit which was nice.
Andrew: Okay. So you’re contacting people. You’re sending out email, and you’re realizing, “You know what? Maybe staffing companies are not the right ones to go after.” How? How did you recognize that they weren’t the right ones?
Sean: Yeah, I mean, really, it was just a number of at-bats. So we had two staffing groups that closed and we’re deals for us and then we had a large pipeline of folks. And it’s interesting, I’m a big three questions guy when it comes to sales. I believe there’s three questions you have to be able to answer for your customer. And it’s why anything, which is why my product category matters, why us, why you should pick me and not the other guy, and why now, which is why you should work with us today and not in six months. And we did not have a great why now for staffing agencies. We build pipeline and then it would just kind of sit there. And yeah.
Andrew: They needed it, but not right now. And it’s because they weren’t really doing the training. They would have a bunch of people on staff who were qualified to do the work. And then they’d let them go work at the company. And the company would do the training.
Sean: Exactly. And we didn’t know that at the time. That was news to us.
Andrew: And were you literally going door to door knocking to try to get customers too? Really?
Sean: We did this. We did this in the beginning. And this is . . . I do not recommend this. This was like something we just didn’t know what we were doing. I remember like walking into like random staffing agencies. Like you see the no soliciting sign. Like you walk in. You show the person at reception the app and you’re like, “Hey, can we get a meeting with this person?” And most the time it’s no. I think it’s a waste of time. We eventually shifted our strategy as we got better into more of an inside sales approach.
So, you know, using email, using the phone to book meetings, qualify out opportunities, make sure they were ready to buy and then do demos. That was a huge, you know, paradigm shift for us. We realized showing the product and educating them on what video could do was actually providing the prospect with the benefit. It wasn’t something we should just be throwing out there for everybody.
Andrew: And you’re doing that kind of work for . . . let me see, some people were on the free version. Other people . . . where’s the pricing from beginning there?
Sean: Oh, man.
Andrew: Eight dollars a user.
Sean: So pricing was definitely a work in progress. I remember we signed our first big customer and it was Ted from TED Talks. I had been working with them for three months and I was so excited. When I got that phone call, Andrew, I lit up like a Christmas tree. And they said, “Sean, we’re going forward.” And I was like getting ready to fist pump and like high five the team. And I said, “Great. You know, how many seats do you want.” And they said, “We’ll take three seats.”
And I was just like, beside myself, I was like, “I spent three months with you and you’re going to pay me like 20 bucks? Like what’s going on?” At that point, we knew the pricing needed to change. And so ultimately, we figured out this individual per seat license wasn’t really the way to go. We wanted to have minimum requirements, really kind of getting more tiered pricing. Which is ultimately what we did and we found that was way more effective to get a minimum price order quantity that just made sense.
Andrew: So now I’m looking at the business level, it’s $500 plus $2 per user per month.
Sean: Absolutely. So one of the things that’s tricky with our business is the more users you have, there’s a bit of a network effect, right? Suddenly, you’re able to get more value because you got more content getting aggregated. And so having a fixed component because you’re getting a base level value, if you’re on that plan, just the features you get, but also a variable component where you can kind of get that step as you’re seeing more value with the network effect. The two-part pricing, I think, definitely can be effective.
Andrew: That’s impressive. I got to believe you guys are doing over three million easy, probably over six. Am I right?
Sean: I can’t say anything.
Andrew: You can’t even say that.
Sean: I can’t say anything. I’m sworn to secrecy.
Andrew: Let me talk about my first sponsor and continue on with this story to see how you ended up getting customers and what happened when you went to Upwork and Mechanical Turk.
Sean: Yes.
Andrew: My first sponsor is a company called Regus. Do you know Regus?
Sean: I don’t actually.
Andrew: You know what? A lot of people don’t know about them. I’m surprised. People come into my office, I rent office space from Regus. They don’t know I’m in a Regus office because they don’t put their branding on the wall. They put my branding on the wall. So when you [crosstalk 00:16:32].
Sean: That’s awesome.
Andrew: . . . it feels like it’s my office. The receptionist will greet you. It’ll feel like you’re coming into Andrew’s office. And I love that I can get a quiet office space in here where I can record. Nobody can get in my way, shut the door and have my stuff exactly the way I like it. And people clean in here because I don’t clean jack shit. And, again, when guests come in, they’re greeted nicely. They’re shown a couch area where they could sit and have some coffee and then I’ll greet them. It really it gives them a good impression.
And for me, I liked it. Everything I needed including. Like I said, I needed a frickin’ screwdriver so that I could adjust the pop filter on my mic because I want to keep improving my audio sound and they have it for me. Everything that I need is taken care of. But I’ve told people about this all the time. If you want to get productive, get good office space where the people and the environment is geared to getting you productive. But I can talk about myself all day long. People are going to say, “Andrew, you got self-interest. You love Regus and also they’re a sponsor of yours.”
Let me tell you about a guy who they’re not sponsoring. His name is Michael Branstad. He runs a web development business and it’s growing an app for golf and ski enthusiasts. He has a team of 20 people across three continents. Just like me, he doesn’t want people all in the same office and he expects to make more hires. But he needs flexible global office space and he doesn’t want to pay for anything that it doesn’t need. Which, again, for me too. If I want to be able to grow as much as I want and say, “Hey, I need a bigger space this week or this month and then smaller space next month.” And they’ll accommodate me.
Traditional office rentals don’t offer any kind of flexible leases like that they’re not nearly as nimble and you can’t grow with them. And frankly, if times go bad, you can’t shrink with them either. But with Regus which had 3,000 locations in 120 countries, flexible terms, they offer the ideal solution. And so he said, “You know what, I’m going to sign up with them.” As a result, he’s got great comfortable options for himself and his team and they can continue to grow because Regus will grow with them. If you’re out there and you want to sign up for Regus, I got no discount codes or jack because these guys are just too professional apparently to customize anything for me.
So I’m just going to tell you with full love if you go to regus.com/mixergy you’re going to get a great experience. The same experience everyone else does. They’re not giving you any discount for using my URL. What they’re going to do is know that you come for me and take good care of you and frankly you’re going to be to throw me a bone and saying, “Hey, Andrew referred me. I want Andrew to get credit.” So go to regus.com/mixergy. But let me tell you this, forget myself interest, don’t even use the URL if you hate me and you don’t want me to get credit. Go sign up. Take that away from me. You’ll still fucking love Regus. They’re so good. They take good care of you in a professional environment.
Where else can you say, “I need a screwdriver,” and have a screwdriver come in? “My guests are coming, please have them sit down for 10 minutes and keep them occupied because I have to record an interview for another 10 minutes.” They’ll take care of you. My wife comes in. We had to sign our . . . what’s it called? A will. We had a kid. I needed a will. We get a beautiful conference room for free. My wife and I sit there lap of luxury with the lawyer. We’re going through everything and figuring out how we’re going to die and who gets our kids and money. You need that. Regus will help you do that. All right, Sean. Stop selling these fucking Regus ads. I can’t shut up about them.
Sean: No, no. And I will say on the office space side though, that is a big deal. So I remember when we were looking for our first office, I would have people who had pitched me on like five-year lease terms. And just like there’s no way. Like I’m trying to find an office for like 1,000 square feet, there’s no scenario where I’m here in five years. Like you’re either blown up or gone out of business. Like why would I get stuck on this crazy kind of term?
Andrew: Because they come from a backwards world and then their offices are either super high end and then you got to build them out or they’re super shitty low end and they’re waiting for the lawyers who don’t . . . apparently, lawyers don’t give a rat’s ass about office space. I don’t know why. But if you’re like a one-man operation lawyer, CPA, you’ll go into any old piece . . . I can’t do that. I need to be inspired in my office space.
Sean: Totally.
Andrew: Are you like that too?
Sean: You want to work in a place that you actually want to be in and I think that helps the time . . .
Andrew: Let me tell you this again, Regus, that’s my frickin’ kids. I will say to them, “Where do you want to go this weekend?” “You’ll go anywhere. Let’s go to Petaluma to the pool. We’ll sit outside the pool and enjoy the sunshine outside of San Francisco because it’s sunnier outside of San Francisco.” They’ll go, “No, we want to go to daddy’s office.” And who wants to go daddy’s office? All right. Then the reason they like it. They got candy at the door. They got a lot of space for themselves to walk around. The receptionist has these popsicles in the refrigerator in the freezer, anyway. All right.
Sean: Nice.
Andrew: Sean, this is not about Regus. Regus is not paying for all this. You did what with Mechanical Turk and Upwork? I love this kind of hacking.
Sean: Yeah, totally. So as a new founder trying to get into a new market, you don’t know anybody. And you’re just trying to figure out how can I get in front of people. And one of the biggest barriers that you’ll find is it’s hard to find people’s contact information. So you won’t know phone numbers. You won’t know emails. But the great thing about Mechanical Turk and Upwork is that you can hire people, they’re data scrapers, and it costs you between 15 to 35 cents of contact, and they’ll get you the person’s name, email, phone number.
Andrew: What kind of guidance do you need to give them on Mechanical Turk to have them do that?
Sean: Totally. So you want to know the industry and usually have titles. So I would say, “Hey . . . ” If I’m targeting corporate trainers, for example, I might say, “Hey, I want SVP of HR, senior director HR, director of HR. I’m targeting the Fortune, you know, 1,000 companies, and I want their name, I want their email, I want their phone.” And then I would just set them loose and they do great work. You get a ton of contact info in a short amount of time.
Andrew: Did you pay 15 cents an email? Is that right?
Sean: Fifteen cents for the whole contact, the whole thing, yeah, yeah.
Andrew: Okay. All right, so now you’ve got that and it’s on you to reach out to them and try to convert them.
Sean: Absolutely, absolutely. So, you know, once you have that right person, I always say, you know, early-stage founders, they usually mess up by they’re saying the wrong thing to the wrong person, or they’re not following a good enough sales process. So once you have that right person’s contact, it’s on you and your sales process to make sure you’re getting in front of them.
Andrew: All right, you told our producer, “Look, my sales process would not be good at the beginning.”
Sean: Totally.
Andrew: What was it like when it was not good?
Sean: Oh, man, geez, well, I’ll tell you what? I’ll tell you an example. So I would email very heavily. So I didn’t use the phone very much. And I think if you’re not using multiple channels, you’re making a big mistake because I’ve gotten customers where I would email them four times and they never responded. But the moment I got them on the phone . . . I literally had this guy who was a school who said, “Sean, I love this. I wish I’d known about this earlier.” And I was like, “Oh, your inbox, though, your inbox. It’s just in your inbox.”
Andrew: Sean, for like 12 bucks a user, you are emailing and calling people?
Sean: Not at that pricing. So we changed our pricing shortly thereafter. So when you get to like $250 a month for a contract and we would start billing annually. That was a big realization. We were like, “Oh, they could pay us the money up front.” So I can get 3K in annual contract value. So at this point, it was probably around 3 to 6K is what we were shooting for annual contract value. And we ran some back of the envelope numbers. We were like, “Okay, if we can call them and like actually get them to close, that’s worth it for us.”
And so that’s when we started doing, you know, some of these their tactics. But early days, I was very email heavy. I didn’t follow up. The first emails I sent, it took me a month to realize that I should be following up with the people I had already emailed. So they just got one email from me and then that was it. And I was like, “Oh . . . ”
Andrew: I totally get that. And then so when you decided, “Hey, I’ve got to follow up with people.” And I forget I had this like these stats from Yesmail showing how following up will increase your results that many people will not respond to the first email, but they will the second or even . . . I think the Yesmail chart was showing the seventh email is even effective.
Sean: Totally.
Andrew: But how did you keep get it organized so that you could follow up with them? What was your process?
Sean: Yeah, so I think that there’s two things that are important to remember with this and one is automation. So setting up a sales process is incredibly important. So where you’d say, “Hey, I want to send an email. I want to wait two days then follow up. I want to dial them on day four.” Like setting that up that that rhythm is very important. But the other thing I think is equally important is committing to automating the parts of that process that you can.
Because in sales, especially startup sales, there’s a little voice in your head who asks you, you know, anytime you’re calling someone that you’ve called before, emailing someone for the third time, there’s a little voice that says, “Am I being annoying?” And if you don’t have steps automated, you’re going to find yourself going up against that little voice a lot more times than you really need to be.
Andrew: Oh, you’re saying that if it’s on you to remember that you have to send out an email and then write that second email, your voice is going to say, “You’re annoying them. They don’t want to hear from you.” And you’re going to procrastinate and not send it out.
Sean: You’re not going to send it or it’s going to take you a lot longer to send it and you won’t get as much done. So automate those steps. So for me, one of the big benefits, we started using SalesLoft. And this was in the early days of SalesLoft back when they charged, you know, it was like 20 bucks a month. And so we lived off of that. We could send emails. We’d automate our emails. It could tell me when I was supposed to call people. And then the little voice went away. I was just being proactive every time that I said, “Oh, it’s time to dial.”
Andrew: So I don’t understand this well.
Sean: Yeah. No, no. Yeah.
Andrew: Sorry, I interrupted you because I got excited about this thing that you were using. What did SalesLoft do? How did it help you become a better salesperson?
Sean: Yeah, so SalesLoft is an email automation tool. So if you’re familiar with things like insidesales.com or even like HubSpot automation tools, they have like their sales stack and marketing stack. SalesLoft was kind of an early version to send emails and have them scheduled to go off. Well, the nice thing about SalesLoft is you could thread emails to make it seem like you had replied to an email you had sent earlier.
Andrew: Okay. And it’s like this automated email that would go out where you send the first one out, and then you send a follow up one when they don’t respond and that kind of thing. And the difference between them and other software was it would also pin you and say, “It’s time to call them?”
Sean: Exactly. So they have a dialer capability as well and it say, “Hey, Sean, you said you wanted to call them on day two if you haven’t heard back. It’s day two. It’s time to call.” And it made it easier. Just clicking a button on your phone and you’re not actually having to think and you’re just doing it.
Andrew: You know what? I’m a little nervous about software like that. I could see how well it works but I can also see how could really fuck up your relationship with people because, you know, I’ll get emails from people that say, “Hey, Andrew, I know you hate getting contacted from people but I love your podcast. Mixergy startup stories from . . . ” and then they use all the keywords that I stuffed into iTunes and I go, “Oh, you clearly just . . .
Sean: Copy paste.
Andrew: Right. So what did you do to avoid that kind of experience?
Sean: I think it’s going back to your message, right? So one, you want to make sure you’ve got the right people. And when you validated your theory a little bit, you know, kind of who you’re talking to, what are the messages or problems that they have today that you can actually solve? And then it’s much more discovery mode, right? So you’re not pitching them to buy your product in any one of your email. You’re sharing with them how you helped a company that’s like them with a problem that they seem to be having as well.
Coming much more from that consultative, like trusted advisor approach, I think it’s the only way to play because otherwise, you’re sending out stuff that’s too generic, right? That’s just kind of that blanket statement. And you want to be specific. You want to show that you know the industry, you know this person and some of the pain points that their peers are dealing with.
Andrew: And you can do that in an automated way so it doesn’t come across as weird? Yeah, you’re smiling because . . .
Sean: You can. Yes, you can. It’s not easy. Like you want to iterate on your messaging. But ultimately, the formula is, you know, you have those three questions, why anything? Why us? And why now? When you’re building out your emails, you’re answering the three questions. And so when folks are responding to you, even if they’re saying no, what I’ve learned from, you know, founding a business is no can mean a lot of things. And most time founders, especially first-time founders assume no is like the definitive, “No, I hate you leave me alone.” But I had customers big accounts like 3AM or Informatica is a Fortune 500 company.
Like I had big accounts who told me no, then six months later bought the product because no really meant, “Hey, Sean, not right now. Check back in six months.” And no also can mean, “Sean, I don’t really know what the heck you do and I need you to leave me alone right now.” And so from understanding, “Oh, wow. Like you don’t know what I do. I didn’t explain that very well. My why anything sucks.” Or shoot you’re doing with a competitor, “My why us sucks.” Or, “Man, you’re pushing me out eight months. Man, my why now needs some work.” So getting that data on those feedback points.
Andrew: So if they say check in with me in six months, you know my, “Why should they do it now?” The answer that question is not strong enough.
Sean: Isn’t strong enough. It’s interesting in . . . oh, yeah, I was going to say in sales there’s always a closed lost reason, right? If you closed, lost a deal in Salesforce or HubSpot, your manager usually says like, “Hey, what happened? Was it a competitor? Was it pricing?” But they’re very rarely is like a prospect lost field and I encourage you to do it and have those three categories where you can say, “Wow, it was my why anything. It was my why now. And that way, you’ll know where your message is weak and where it’s strong.
Andrew: You know, we do that. I’ve talked about this a lot. We use Pipedrive to close guests for Mixergy. And when you say that somebody said no or didn’t respond, the software requires you to tell the software why they said no. And the reason that I want that is so that once a year, several times a year, not more than let’s say four or five, I could go in and see why are people turning us down. And what we could see as things like audience is not big enough or don’t know it or don’t have something to promote. And so we use that to adjust how we pitch in the future and understand what guests are looking for.
There were other tools though, Sean, to do what you’re doing. We’ve been doing like video screen sharing forever. Some tools are little bit clunky for it. Like Screen Flow is super clunky. You have to go and upload it to YouTube. And I know they think that they’re elegant but it’s a little bit clunky for that. I love it for video editing but not . . .
Sean: Totally.
Andrew: They’re tons of tools. Why you?
Sean: Yeah, why us? So the thing about VidGrid really is about simplicity, right? So if you don’t do end-to-end video, like, if you only really specialize in video editing or video recording or video sharing, it’s going to take you time to upload a video, to edit a video, to put it in a different spot. And ultimately, you’re going to miss out because you don’t have this centralized place where all the action happens. If you have everything flowing through one spot, you can invite collaborators to edit on video. You can, you know, share content up from a certain spot.
Andrew: Wait, what do you mean collaborators? So wait a minute I’m going to . . . I love this, this software I feel like we need it and that’s why I’m going to interrupt you because I’m getting excited about the use case. So we use tools like Loom for example, right?
Sean: Yeah, totally.
Andrew: Everyone on the team using another frickin’ piece of software. One of my frustrations is all in Basecamp and I can’t figure out where it is. I understand how you would solve that. We’re all using the same tool. We know exactly where everything is. What do you mean by editing collaborating? If Rebecca is doing the screen share for me on how to use our email software, how would I collaborate on that?
Sean: Yeah, totally. If Rebecca makes a video, she could send it to you for feedback and then if she adds you as a collaborator to that video, you could actually go in and suggest edits and say like, “Hey, I want to blur out this. Or use the client’s name in that video. Oh, we can’t do that. Let’s hide that.”
Andrew: But I can actually edit the client’s name out of it?
Sean: Exactly.
Andrew: Yeah. All right so here’s another problem that I have. Rebecca I’m going to use because I don’t know what tool she uses. But she’s really big on video screen sharing and she’s good at it. My challenge with it is I can’t ever search it. I can’t go back and find it. I can’t remove this one thing to change and so what it becomes is a one-time thing. She sends it to me, I get it, I understand it, it’s super helpful but I could never search for it again.
Sean: Totally. So in terms of making videos findable a lot of services will only search things like video title. And, you know, on VidGrid, you get video title, you get tagging, you get the ability to kind of group things by categories. So if it’s a sales related video or if it’s related to like a customer success story you might have, you can actually filter and find it in those relevant folders for you.
And what’s cool about it is if it does come down and you have to update your video, you can actually replace the video from VidGrid and it’ll update any other spot that you post it. So maybe you’ve got it on your website or it’s in client emails that are six months ago. They favorited it that they’re still looking at. Instead of being that guy who has to send out the update and say, “Hey, please don’t look at that anymore.” You can just update it wherever it lives instantly.
Andrew: That’s the problem with YouTube, right? If you ever do an explainer video for someone on your team on YouTube, they have that. You have to go and take it back. You can never replace it on YouTube.
Sean: Totally, totally. So VidGrid solves that problem.
Andrew: Okay. I feel like what I would love is for there to be some kind of OCR for video so that we could search within it. Show me any video that has a reference to . . . I don’t know, whatever the word is. So you eventually evolve the product beyond what we just mentioned, which is screen recording to explain something. And you’ve improved that as you talked about categorization, better search, etc. One of the things that drew me is that you guys also do sales videos, etc. How did that come about?
Sean: Oh, man, it’s interesting because when you’re recording what’s happening on your screen, it’s very different than recording, you know, what we’re doing right now. Even just getting your webcam in the mix or being able to do kind of both. And the one thing that’s interesting when you’re recording video in general, you know, videos get big, typically. If you ever upload a video to YouTube and you had to sit and watch the wheel spin, it can be depressing and usually, that’s because we’re uploading video of like real life like things happening.
And videos get big when you have data changing in your video frames and you don’t have that as much with videos that are of your screen because most of the time your screen is pretty static. Even if you’re like moving your mouse around constantly, most of the screen is just set there. And so you know gearing up for kind of more sales video content you have to be able to handle and process bigger video files. But for us, it was much more around like exploring the use case. So we had even one of our early customers back when we had individual plans, was a sales rep at a software company. And he would make follow up videos for all of his presentations. He was actually the first one to do it and then we started doing it because we said, “Obviously, like, that’s something we should be doing.”
Andrew: So somebody was doing, he would do a demo for someone and then afterwards he would shoot them a video using your software. It was called ilos at the time, VidGrid. And he said, “Oh, this is a great idea.”
Sean: Absolutely. Well, think about it. You know, you send your champion off into that meeting and they have to go pitch the product. What if they didn’t have to pitch the product? What if you could pitch the product again in a video format? How many things would you get right that they might mess up? And it streamlines the process it makes it easier for the prospect. They’ve got this resource. They can fall back on. They know it sounds and hits the points that they need to hit. It was a great discovery.
Andrew: And so you’re seeing the people are using it that way. And you say, “You know what? If they’re using it that way, we’re going to turn the software into that too. We’re going to allow that feature and then ask our customers who are using it and need it what else do they need built into it?”
Sean: Totally. And so there’s two parts for sales, right? So there’s that part. Which is much more of an account executive use case, right? I do my demos. I want to make a recap. Send it off. See who’s viewing the video. See who’s sharing it on. Get analytics to know like, “All right, they said they were going to do this. They haven’t done it yet. I should follow up with them.” But the other side is prospecting, right? Which is just that ability to show someone that you took time out of your day to leave a custom message for them, which is going to drive your open and response rates through the roof.
Andrew: All right, I’m going to talk about my second sponsor and then come back to this story. Second sponsor is a company called HostGator. How many times have you heard me do interviews with someone and I bring a HostGator and say, “You know what? I actually started on HostGator.” Well, you know what? People like me continue to run their businesses on HostGator. People like me and Syed Balkhi. I keep talking about him. I freakin’ love that. Do you know Syed Balkhi? Nobody does.
Sean: No, I don’t.
Andrew: Syed Balkhi, the thing that attracts me is that he started out as a kid with a WP beginner website which was just teaching WordPress. And then he starts adding all these different pieces of software. OptinMonster is the biggest one, but then he says, “You know what? The forms for WordPress are kind of crappy. I’ll create my own form software.” And now he’s becoming, in addition to having this collection of software companies that are all doing well, he’s also now an investor in WordPress-based companies. And I freakin’ love that guy. He is super cheap. He’ll buy a big building, but he’ll also watch every penny and he . . . I can’t say this publicly because I don’t even have my own Netflix account.
He said his gardener said, “I have Netflix.” I think this is story. Said, “My gardener said I have Netflix.” He goes, “Can you add me to your Netflix account?” I love how freakin’ cheap he is. So who is he using to host this website, he’s using HostGator and if you’re out there and you’re looking for a website hosting that just works allow you to scale up just like Syed’s business and also not cost you an arm and a leg, go check out HostGator.
Not just hostgator.com but hostgator.com/mixergy. They’ll give you a super low price, make it easy for you to install WordPress with one-click install and a lot of other tools. But frankly, most of us these days are using WordPress to publish our websites. And unlimited email and unmetered bandwidth, all that. Here’s what you don’t see on their website, you’re going to see that they’re going to give you a bunch of credit for buying ads and all that stuff.
Here’s what you’re not going to see on their website that people like Syed and I when our businesses grow and we need to grow, HostGator, they’re not big on advertising it, but they will have these bigger hosting packages that will grow with you. And so we’ve leveled up to I think the biggest we could possibly have with them. And we’ve been signed a three-year agreement with them because we freakin’ love them. Hostgator.com\mixergy to get that discount and to be tagged as a Mixergy listener, which means they’ll take super good care of you. And I know it because we had one person who had an issue over the last two months, only one person, they were tagged as Mixergy people.
They contacted me. I immediately got my contact at HostGator on and said, “Hey, this is one of my people. I got a big fucking mouth. Help him out.” Actually, I shouldn’t sound like I was that threatening but there’s that underlying, “Andrew is a bit of a dick.” All right but you’re going to love HostGator. If one person in two months has a single issue, that means they’re doing great. All right. What about this? When you’re adding features that then start to address different people within a company that starts to address different types of uses, aren’t you splintering the product?
Sean: Yeah, so from a product management perspective, it’s always a little tricky when you have something that can serve a lot of different needs, right? So if you think about, you know, utility tools and apps that you use, that can serve a lot of different functions, you always have to be very diligent from a scope creep perspective. And so even from the get-go, we had things that we said we would do and things we said we would not touch.
And so, you know, in terms of splintering off, like, you know, we have training use cases, we have sales use case, we have, you know, customer support use cases. The nice thing about all three of those is that it’s really about teaching someone something, right? So if I’m in sales, I’m teaching you about my product or service and if I’m in support, I’m teaching you how to solve your issue. If I’m in training, teaching, basically the name of my job. And so regardless of which function you kind of find yourself in the org, it really helps and it all comes back to that same kind of basic use.
Andrew: I get that, but I think that then the homepage doesn’t speak to any one type of person. The feature set has to change, right? Because training an existing customer is different than trying to get a new potential customer on a demo call with me, right?
Sean: Absolutely. Yeah. I mean, so from a sales perspective, it’s similar to what, you know, you’d see with like other tools that are similar, like a Dropbox or Box where it’s like, “Hey, there’s a million ways you could use this.” But if you go to their website, you know, you see similar what you have with VidGrid is you have solutions pages. Where, hey, if your sales team, here’s how we can help you out. Hey, if you’re a higher education team, you’re a school, here’s how we can help you do teaching and training for your student population and really breaking it down that way.
Andrew: Okay. I remember you telling our producer that you guys had some trouble explaining the software to people and you and I are now recording on Zoom. You would do demos on Zoom. What was that like?
Sean: Yes. So I remember I knew I had problems explaining the software to prospects. When I had someone who said, “Sean, no thanks. We use Zoom.” And I was just thinking like, “I’m trying to book a Zoom meeting with you to show you the product. Why would I do that if they were a competitor of ours?” And so, you know, it’s interesting. Like ultimately, it taught us to kind of refine that message, right? Like that why anything. That wasn’t crisp.
Obviously, they didn’t know what the heck our category really was. They thought we were video conferencing. And this is actually one of those areas I mentioned earlier, we said, “No, we’re not going to do video conferencing. They’re going to be a lot of great solutions out there for that. That’s not our expertise. Our expertise is this asynchronous video. Hey, I record, then you record, then I record that type of thing.”
Andrew: It looks like you guys had 22 people at the company? I’m looking at LinkedIn.
Sean: Yeah, so it’s about 20 right now. Yeah.
Andrew: Oh, I see because Marc Smookler is an advisor so not officially.
Sean: Yeah. You got some folks like that advisors, investors. Yeah.
Andrew: And so what was I getting out with that? Shoot, I forgot where I was going.
Sean: Team growth?
Andrew: I let myself distracted. Shoot, you know what . . .
Sean: We also can jam on TechStars. That was a great experience.
Andrew: Yeah. Let’s talk about funding. Let’s go to that and then I’ll come back about why I was bringing up the number of people at the team.
Sean: Yeah. Yeah. Do you want to jump in?
Andrew: Yeah.
Sean: I can just jump in on funding.
Andrew: The question is at what point did you say we need to get funding and then let’s go into the process for getting it and the challenges with it?
Sean: The moment we moved out of Peter’s basement, I think was probably the moment we realized we needed funding. Because we started having real expenses like you have Amazon and you’re like, “Ooh, I have to pay these people.” And you have like a small office and you go, “Ooh, I have to pay these people.” And then we started bringing on other developers and it’s the same thing with these people. And, you know, we started off being bootstrapped. So we each put in a little bit of money right at the get-go. But ultimately, we knew we needed more.
And so, you know, the moment that it was really kind of defining for us was when we realized, you know, we had a product that people loved. Our initial customers like kept using the product even though at that time it wasn’t the greatest. It solved the need for them and like they were willing to like put up with bugs and we were very responsive in solving those bugs. But ultimately, they just kept coming back. And we’re like, “Okay, that’s a good sign.” So now we just got to get more of them. And so ultimately, we made the decision to go raise some money. And for us, TechStars was huge in that process. So TechStars is a top accelerator program globally. They’ve got, man, now it’s like 50 programs. So they’re run throughout the world.
We were with them when they only had like 15, and we went through their cloud program down in San Antonio. And through that program, we got exposure to a bunch of investors and learned really about our message and how we could take the business to the next level. And with that in mind and our refined story, we were able to go out and raise a million bucks right after the program. And we also raised an additional round last year which brought our total financing up to three million bucks since we started, which is great. I mean, it mainly went to scaling the team, the development of the product and getting some sales out the door.
Andrew: How did they help shape the product and the business being in TechStars?
Sean: Yeah. So it’s messaging, right? So the mentors are the magic behind TechStars and they get you in front of 100 mentors in 3 weeks. And so you get whiplash. You show the product to that many people in that short amount of time. And like everyone has ideas, like, “Oh, you can do this. You can do that. You can do this.” And you have to get really good at knowing what’s relevant and what’s not. And it was such a powerful experience for us kind of going through and realizing, wow, maybe we should be targeting this market or this use case. We’d only need one feature to go into that space. And it gave us a lot of clarity around what we wanted to do and what we want it to be.
Andrew: Because you had all those options you said, “No, we have to be clear about who they are. What options we’re going to pursue.”
Sean: Totally. Totally. And the power is like you walk into a mentor madness meeting, which is only 20 minutes. Like you’ve got 20 minutes to get this person a download on what you’re doing and they’ll give you advice and feedback. And you’re walking in the next meeting and you might get the complete opposite piece of advice. And so your head is literally like a top spinning around.
Andrew: It’s a little challenging, isn’t it?
Sean: Totally. Totally. So you get really good. You build that capability of your team being able to handle differing points of view, different opinions and keep it all in your head.
Andrew: You’re saying messaging was the big one that you walked away from.
Sean: Yeah. I mean, so it was interesting before TechStars, if you told me we were going to sell to schools, I would have said you were wrong. Like I just would have flat out said you were wrong. Never say never but I would have said never. I’d be like, no, wrong, but . . .
Andrew: You wouldn’t have thought they would be good customers, but . . . ?
Sean: Yeah. I mean, they were great, honestly. So we had one school that we worked with early on. It was our former school, St. Thomas. They were awesome. Shout out to St. Thomas. And since then like we didn’t really pursue it much. But, you know, we went through TechStars. We got kind of a clear understanding of where we wanted to be and we started building some school pipeline. And then later that year like our outbound strategy, we targeted schools for exclusively for a period of several months and just started bringing in some deals.
Andrew: Why? What is it about your software that schools like?
Sean: Yeah, so there’s two pieces. It comes back to simplicity. Simplicity is the piece that everyone likes because schools traditionally get evaluated based on adoption. We came in at an interesting time in higher ed. A lot of times people would sell these enterprise level solutions that would just have, you know, junk adoption metrics. And then those people would either lose their jobs or like their budget would get cut next year.
We came into this climate where everyone’s kind of afraid and we said, “Let’s do the opposite. Let’s not go for a huge enterprise contract. Let’s run a pilot. For 1,000 bucks a month, let’s get you and your faculty using this product and we’ll run that for six months.” And we would get a ton of people making videos. And so we’d be able to go back to the IT folks say, “Hey, like we’re not going to be a software that sits on the shelf. We’re software that gets used.”
Andrew: Why? What do they do with these videos?
Sean: Yeah. So there are trends that were happening in higher ed at the same time. We learned this later on. The biggest one was the school out in the East Coast. Southern New Hampshire University. Southern New Hampshire University had 3,000 students 8 years ago. Now they have 80,000 students. And what Southern New Hampshire University figured out well before anyone else was it if you recorded your lecture and made a video, suddenly you had online content, suddenly you could serve not just the people on campus but you could serve anybody and everybody.
And so it almost takes the traditional school model, which has a lot of infrastructure and costs bound up in buildings and facilities and onsite stuff, and it made it like no cost and it like quadrupled, quintupled the revenue potential and so they started making like quick short snippet videos. Think of it like a Udemy class but something you could distribute online.
Andrew: Like what? What’s an example? So you’re saying that small private high school . . .
Sean: Yeah, this is a college. They’re a small private college.
Andrew: Okay. So colleges were the ones who are doing it. So small private college would use it to record the teacher, not while the teacher is teaching the class, right?
Sean: So the teacher would be like at their whiteboard. And they’d say, “All right, let’s go through and talk about demand and supply.” And they would like do the video. Like, all right, choose demand and supply, market equilibrium and they’d make like a quick five-minute video.
Andrew: Using those computers’ webcam.
Sean: Yeah. A recording through VidGrid. Then they would upload that. And then we’ll also do videos on their screen and say, “Okay, here’s a problem I’m going to work in Excel and they’d show you how to do it. Here’s me on my like smart board on . . . ”
Andrew: And what they’re doing in Excel, they’re recording their screen and projecting it. So that’s why YouTube wouldn’t be an appropriate medium for them because YouTube doesn’t do such a great job of recording a screen.
Sean: Well, and with YouTube, the issue they would run into is rights. So YouTube takes ownership rights of stuff that you publish. And so if you’re at school and you’re faculty person, you get very freaked out about who owns your content because that’s kind of your livelihood. Like if you switch schools like you need to own your content.
Andrew: So they put it all on their website, on the school’s website, and then who would buy it? You said that helped increase . . .
Sean: Yeah, so the school would sell it. The school would create online programs. There are things called like fully online programs or MOOCs, Massive Open Online Courses. As well as hybrid courses, which were part in person and part online. And enable them to serve more students while keeping their fixed costs the same.
Andrew: Okay. All right. And then they would still need to upload this to some service to allow that like Teachable or something, right?
Sean: Exactly. So they didn’t go through Teachable. They would just use their LMS. So higher ed, they were using Blackboard, Canvas. But similar to Teachable it’s a way where all those lessons are organized.
Andrew: Okay. Wow, I remember the question why I was asking about the number of people. I wanted to know, I see your sales process when it was just you. At what point did you start bringing other salespeople and how did you bring them up to speed with your process?
Sean: So there were two moments when I knew we needed to add and bring on new heads. One moment was I had a purchase order in my inbox from a customer that wanted to pay me 11 grand and it sat there for 10 days. And I found it again and I was like, “Oh, that’s something we should do. Like we’re dropping the wrong balls here.” And I was like, “Okay, we’re slammed with stuff.” The other indicator to me was the fact that I was busy. Like I was doing the account exec role, the customer success role, the BDR role, like doing all the stuff. I was involved in fundraising stuff. Like a lot of balls in the air.
And I wasn’t really allocating the appropriate amount of time to any of those things. But I was able to generate meetings. That was a good sign. Like I was spending maybe like 20% of my day outbounding, like calling, emailing people and I was generating like a handful of meetings a week. Like qualified good meetings. I was like, well, if I could do that, like someone else full time should be able to bring in 10 meetings a week.
Andrew: And that was the first person that you started to bring in.
Sean: Was BDR. Yeah, meeting center. Someone who would come in and book meetings. So then I became the account executive and the customers . . . and eventually, after I kept getting more and more busy. That was like our indicator. When I got too busy we would backfill the role someone to take over.
Andrew: All right, why aren’t you saying what your revenue is?
Sean: Oh, man, I can’t disclose that.
Andrew: I’m so fascinated. I’m curious about how big you guys are right now. What software do you use to manage your sales?
Sean: So we use HubSpot. And actually, we switched from HubSpot to Salesforce this year.
Andrew: Okay. And then I see the first person that you brought in. What’s the next person that you brought in to help with your sales process?
Sean: Yeah. Yeah. Yeah. So the sales process, the second person, we were actually brought in another BDR. So I was still able to keep up the workload when we had two BDR feeding deals. After that, we brought in another account executive and then it was customer success. At that point, we had a decent amount of customers. And one of my tricks that I would use anytime we were down and out for the quarter of the month like I would just call up all the existing customers and share all the new features we had and say like, “All right, who wants an add-on?” You know, and sometimes folks would be more than willing to do that, which is awesome.
Andrew: Oh, you know what? So I’ve heard that in one of my past interviews, that the reason the customer success pays for itself is, yes, their goal is to make sure the customers are getting the results they’re paying for. And that means that you reduce churn and you’re getting to be embedded in their world. But the second goal is if they’re happy with it, they may not know about another feature and upsell them on the next feature and then they pay for themselves. That’s the thing you’re talking about.
Sean: Totally. It’s the renewal. It’s going from the pro plan to the enterprise plan. It’s saying, “Hey, we’ve got this extra feature. It’s going to be six grand.” Like all that stuff. It makes it well worth it.
Andrew: And now you can see it in Salesforce and see where they are or how much they have, and you can call them up and . . . wow, I get it. I get it. You’re saying that you have a mic because you do your own podcast? What’s the podcast?
Sean: Yes. So it’s actually, it’s like a spoof podcast. It’s called “Poor Pivots.” “Poor Pivots.” It’s myself and another guy who runs a startup in town over in Minneapolis. We look at established businesses so like Airbnb, Dropbox. We analyze like how the business works and then we take pivots that other companies have pulled off successfully and we apply it to like situations where just like blatantly will not fit and like talk about all the ways it would basically ruin the business that was so great a minute ago.
Andrew: If they did that pivot, here’s how . . .
Sean: What would happen? Yeah, it’s exactly it.
Andrew: Why are you doing this, Sean?
Sean: It’s like the lessons on what not to do. Yeah.
Andrew: You got a lot going on. Why are you telling them what not to do in this fake, made-up world? You and Nels Pedersen.
Sean: Exactly, yeah. So what we do there, I mean, it’s just a lot of fun for us. And what’s really valuable is like the business analysis. So being able to like see a business understand the workings there. That part is like very educational informational and then we like to have fun with it when we apply our pivots.
Andrew: Interesting idea. All right, the whole business . . . so I understand it, the whole business is based on outbound sales. You have identified a group of people who should be using your software. You then start to get their contact information. You have a system for emailing them for following up with phone calls, etc. You take their feedback and you improve the product for other people like them.
And then you move on to another group of people that you go after. And this is your whole process. And the reason you could afford to do this is because you’re no longer cheapening your product by selling it for a couple of bucks a month. You’ve got a big monthly fee plus a per-user fee and that allows you guys to take care of your customers and pay for all the sales involved in getting them. Am I right?
Sean: Absolutely. I mean, think of it this way, you know, your go-to-market is directly related to your annual contract value, right? So if you’re at 100 bucks a month, you can do marketing, you can do a lot of inbound stuff. If you’re at 100 bucks a month and you’re trying to do outbound sales, it’s really expensive. Like if you have to pay for a BDR and account executive, success rep, like there’s no way you’re going to get that with 100 bucks a month. And so you run into negative unit economics super quick. On the flipside, if you can get into you know several grand a year, like suddenly it all can start fitting together.
Andrew: All right, I’m going to testing out this new audio thing. It just went crazy. Are you into constant improvement too? Did I just lose you, Sean? There you go, right? Oh, good. I didn’t.
Sean: Yeah, I’m back.
Andrew: Are you in constant improvement? I feel like my whole team, all I do to them is say, “All right, we’re doing great . . . ” actually I never say, “Great.” For some reason, I’m never happy with what we’re doing. I say, “How do we improve just a little bit more? How do we improve just a little bit more?” And the latest like little bit more is wearing these earphones and now I’ve got to find a way to pipe your audio in and that’s working for me. I want to just keep improving. I want to keep mastering my craft. All right.
Sean: Totally. So for me, I remember a big moment in sales. When we brought on those BDR’s and I gave them like the stuff that I’ve been doing, my playbook, what I was saving on the phone. And then two months in, I found that they were doing basically the same stuff that I’d been doing. And that was like a full stop moment where I said, “Wait a minute, like you guys are closest to the prospect. In some regards, like you should be learning about the customers like faster than me. You’re talking to way more of them than I am.”
And I think it’s a missed opportunity. So if you’re doing outbound sales or if you’re just in a role where you’re trying to get feedback from the customer, like make sure you’re trying different messages. Make sure you’re trying different value props, different subject lines, heck, even different times a day or days of the week to be contacting folks because that insight you can pick up, if you find something that’s a winner, the rest of the team can use that. And suddenly you’ve just raised the whole level of the sales force.
Andrew: How do you make sure they do that and that it then gets passed on to the team? What’s your system for doing that?
Sean: Yeah. I think it has to come from the reps itself. So I’ve never had success like trying to force getting better down people’s throat. What I would do is I’d create time on the calendar for us all to get together as a team. We used to have this bogus stand up meetings. We would just go through how we did for the week and it’s like that’s the report in Salesforce. You don’t need to do that in a meeting. And what we changed the meeting to it was, “Hey, like what are we going to test for the next three weeks?
And the reps would come up with ideas. They’d say, “Oh, I want to run a campaign where this is the message. I think this will get a lot more demos.” Or, “I think if I started my dials really early in the morning or really late in the afternoon, I think that’ll get more demos.” And then we’d say, “All right, go do it.” And we actually had our best campaign ever. We had a show us your bill promo. We had this one competitor that was more expensive than us. We knew they were more expensive. We didn’t quite know how much.
And we ran a campaign that said, “Hey, if you show us your bill in this month and switch to us in the next quarter, we’ll save you 20% guaranteed.” We had within the first week, Andrew, we had 12 people send us their bills. People we hadn’t even talked to. And they’re like, “Oh, here’s what I’m paying for your competitor.” And it was crazy. I mean, the customer we were going to quote 12k, they were spending 50 grand in a competitor. Like we had no idea that the price gap was that high at that time.
Andrew: Got it. Got it. And so that’s a great idea. Get together with the team. What can we do to . . . what are we going to test over the next, whatever, period? All right, go ahead. Good luck. And we come back at the end of that period. And you see the results and if it’s working, boom. And that’s the way you’re kind of not forcing it but encouraging it by having conversations about what are we going to do to improve?
Sean: Absolutely, you put that song in the calendar and that improvement will start to happen automatically, which is awesome. And it leads to these ideas that the team generates. Like that one, I just mentioned on the discount savings. Yeah.
Andrew: All right. For anyone who wants to go check out your website, I love the new name VidGrid, vidgrid.com. And also, you know what I like about you? As soon as we went live and like in the actual recording, oh, you came alive. You’re such a fucking good presenter. You’re good.
Andrew: Thanks, brother. No, I appreciate it. Well, I’ve had my share of experience doing these types of video calls, right?
Sean: Yeah, it helps actually. It really does help. All right, for anyone who wants to go check it out, vidgrid.com. I want to thank my two sponsors who made this interview happen. The first is the company that’s going to really get you in a great office space. And if you have any doubt about how an office space is going to influence the way that you think, just go and try it with them. In fact, go do this, contact them by going to regus.com/mixergy and say, “I want to take a tour.”
And then don’t just take a tour of one place, take a tour of five places. I’m in an area . . . maybe five is too much in your area. I’m in a place where I’m really surrounded by Regus offices. I will switch from time to time just to shake things up. This is the one that feels right to me. There’s some that just . . . I can’t live in them but I could visit them. So go take a tour of Regus. You’re going to see that they have great office space for you. Regus.com/mixergy or contact us, contact@mixergy.com. Email my team. We’ll introduce you to our person there, contact@mixergy.com.
And if you want your website hosted right, go check out hostgator.com. And finally, I’m going to tell, you know what? I’m going to tell you this since you’re the guy who likes to improve. There’s this guy, Scott Bintz. Here’s this book. You probably never heard of them because he’s in the truck part space, Scott Bintz. And he had a business that got to $2 or $3 million in sales. I forget the exact number. But he said, “You know what? Life is not that great. It’s blah.” He said you couldn’t feel the energy. He said I’m going to find a way to improve. You identify with that in some way?
Sean: Totally.
Andrew: So he said, I got to find a way out of this. And so he said, “You know what? These guys over at Zappos, they’re doing culture stuff. They allow people to come and visit.” So he went and visited and took a bunch of photos. He said, “Google does interesting stuff with their office.” He went and visited and took photos. He said, “They’re a bunch of different companies.” He went and visited them. And then he brought back ideas on culture from them. And then after failing with culture and thinking it doesn’t make sense for him, he implemented his ideas in a very systemized way. This guy is just a maniac when it comes to documenting his stuff.
So he has all the questions that he asked his team, all the answers if they got from them. This whole process first systemizing his culture. And suddenly the team started getting excited about work. They were producing better than he could. They were starting to really get energized and coming up with great ideas. They grew their sales to tens of millions of dollars. I think it’s about $100 million in sales and they’ve uphold it.
And now he’s at a point in his life we’re just doing stuff that he’s passionate about. Like he wrote this book called “Principles to Fortune.” I don’t love this name. I think it sounds a little to get rich quick but it’s full of great photos and great documentation of his process. I invited him and I said, “Look, Scott, you love teaching this stuff. Will you come to Mixergy and teach my people how they could grow by creating better culture?” He said, “Sure, I’ll do it.”
And with his Southern type accent, not at all Silicon Valley person, he did a course for us on how to create culture that and over 100 other courses taught by proven entrepreneurs like Scott available for everyone who’s listening to me @mixergy.com/premium. Go sign up and you’re going to be . . . like the founder of Twitch is one of the people teaching there. Scott Bintz is one of the people teaching in there. Mixergy.com/premium. Sean, did I just talk right over you?
Sean: No, you did great, man. I love it. That’s awesome.
Andrew: Do you have that problem too as a salesman where when you get excited you just can’t shut the fuck up?
Sean: Oh, totally, totally. It’s the worst. Like especially when you know that, you know, if you haven’t done the discovery in the call, like you know there’s questions that you still should have been asking, you’re like, “It’s too late. I’m going in.” Yeah.
Andrew: Oh, I would love to go and work with you for just a week just to get your energy and your salesmanship. I like having you on here though. Thanks so much, Sean.
Sean: Absolutely. Thanks for having me, Andrew. It’s been fun.
Andrew: Cool. Thank you. Bye, everyone. Go kick ass.
