Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I do interviews, not just interviews. I do the set of interviews with entrepreneurs about how they built their businesses for an audience of entrepreneurs who from time to time have their ears blown out because I talk too loudly into the mike like I did just there. Joining me today is an entrepreneur who for years, 10 years, in fact, says that his business was in a sleepy stage, couldn’t break a million dollars, couldn’t break a million dollars.
I don’t even know if they were really aspiring to do it. And then he got good at content, he got good at digital marketing, got good at opening up and telling people what’s going on in the numbers and everything else behind the business and his business took off. His name is Zachary Gregg. He is the founder of Vital Design. They are a digital marketing agency. I invited him here to talk about how their business blew up and I also want to know frankly about their early sleepy stage. Because frankly, even having a sleepy business is better than having, I don’t know, let’s say, better than having no business.
Zachary: For sure.
Andrew: For sure. All right. Okay. Then I’ll leave it there. This interview where we talk about how he went from having a sleepy business to a great business is sponsored by two phenomenal sponsors. The first as you’re listening to this and you’re hearing, wow, wait, web design he’s doing, and I think I’ve got an idea for mine. You’re going to want to go over to hostgator.com/mixergy to set up your website. On the second when you decide to level up and you need the best of the best developers, I’ll tell you later why you should go to toptal.com/mixergy. Zac, you know I’m going to ask you about revenue now. I’ve got it here on paper but until you say it publicly, I don’t feel like I’ve got permission to be open. What’s your revenue now?
Zachary: Yeah. So just sub 10 mil. So last couple of years we’ve been between 8 and 10 million.
Zachary: Very profitable.
Andrew: Very, meaning what? Over a million dollars in profit bottom line.
Zachary: You know, I come from a world where anywhere between 10% to 20% net profit is good profitability.
Andrew: You know, we didn’t talk about this before but I’m curious. Like, what do you invest your money from this business? Are you buying real estate? I see a lot of people in tech are buying real estate.
Zachary: You know, I’m investing it back into the company. We’re investing it back into the company. I have some partners in the company. Obviously, I’m the majority owner and you know, this is one of my babies. I’ve built other businesses. Like you, I’ve built some other businesses and made some good investments and some poor investments along the way. I own real estate or some rental property. I own an incubator/co-working center that has multiple locations. So I’m always finding a place to put it.
I have a brother who is one of the smartest guys in the world and he also happens to have worked in Goldman Sachs for years as an investment banker. And he’s now running his own private wealth studio and he invests some of the money for me. And you know, mostly we put it back in. We’d love to see this stuff grow. And you know, I’ve got great people to invest in and a great company to invest in and I generally like to bet on ourselves.
Andrew: Do me a favor, hit record on Zoom. I want to make sure that we get a crisp copy of your audio. You’re kind of going in and out on me. I’m fascinated by what entrepreneurs are investing in on the side. I think it might be a topic for a different interview but when I talked to them in private, I’m noticing some really interesting things. These people who for a long time were talking about, “How do I survive? What do I do to get customers product-market fit?” Now having conversations with me like they are Goldman Sachs analysts evaluating the market possibilities and they’re using some of the cleverness that they use to build software companies and service companies to invest the money that they made with it. Let’s get to how you started here. You’re a guy who started creating something that’s a coworking space back when?
Zachary: 2000. 2001 I was part of the Tech Boom. I lived in San Francisco. And I lived in San Jose. I lived in Sunnyvale during 1998 to 2001 timeframe. Came back East with my tail tucked between my legs. Started working for a developer as a BizDev guy, building some business plans out. And one of the business plans was a co . . . Wasn’t a coworking space back then. It was an executive office, Sweden Virtual Office Center. And that’s where it all started. You know, found a partner who was also a mark . . . and I had to essentially market essentially the developer kind of let this business plan hit the cutting room floor to back up. So went out and found some investors, quit the job started the . . .
Andrew: Wait, wait, let me slow it down here. You decided that you’re going to create executive offices or coworking space because of what? How did you discover this?
Zachary: It was simple. I mean, out in San Francisco and in Silicon Valley, everybody needed an address in early 2000 and late ’90s. So when it was commonplace out there that I’d meet with these companies and I’d be like, “I had no idea this huge company has an office here in the Silicon Valley.” And, of course, they didn’t. They were actually at you know, on the fifth floor of a high rise or a building. And they actually didn’t even notice. They were just meeting me in the conference room and it was an address in Silicon Valley, so their sales team could do business. Came back out East working with development company. This was somewhat novel to them. We weren’t sure whether the idea would work.
Andrew: Why did they need it? So I get why somebody would want one in Silicon Valley. That way they can put on their website. We’ve got offices in Germany and Silicon Valley, New York and Silicon Valley. But when you say back East, where is it that you went and what do they need [inaudible 00:05:43].
Zachary: I’m 45 minutes North of Boston in Portsmouth, New Hampshire. We just had the big primary yesterday here. So it’s been kind of crazy.
Andrew: So people needed a New Hampshire address. That’s what you were thinking?
Zachary: Yeah. You know, it wasn’t just the address. This was a particular office park. It was very successful. It was part of one of the base closures. And they had reborn this base into a huge office park. It was very successful. Cabletron, which was a huge company, multiple public companies that split out of it. They were at this office park, a bunch of other companies were. So there was a lot of feeder businesses. We weren’t just selling addresses. We were selling essentially a flexible office space in a place where flexibility was never something that was available. So long-term leases were pretty much the commercial office space way. This was flexible leasing. You lease by the month.
Andrew: For who? Who needed?
Zachary: Small businesses, vendors businesses, small satellite sales offices, CFOs who were remote.
Andrew: Got it.
Zachary: You know, the typical executive suite person.
Andrew: So it wasn’t the same type of need as there was in Silicon Valley to have a vanity address. But still you recognized, “Wait, there’s this idea that’s working in Silicon Valley. I think I could bring it over here, give people some short-term offices.” And so you were starting to say that somebody else had this business plan but it wasn’t working very well.
Zachary: Yeah, they’d paid me to write it up and that as well as I wrote up a business plan on a gym, which they were trying to retain customers and grow customers. So this executive suite was a concept where people could come in in small spaces and then grow out to their bigger space and they could develop an office space. They were also thinking maybe a way to retain and stop having attrition was a gym. I also wrote a plan for essentially a food court concept for a building with a food court in it. And they loved the other two ideas.
Andrew: Because they owned the building?
Zachary: They owned a bunch of buildings.
Andrew: Got it.
Zachary: So probably 20 buildings.
Andrew: Then they said, “We have this idea for what to do with one of our buildings. We’ll maybe do a gym where people can pay month to month. Maybe we’ll do office space where this guy has some experience with it. Maybe we’ll do cafeteria.” You are writing up all three business plans and?
Zachary: Yeah. First of all, I had no experience in any of it. I just was business guy and I you know, fashion myself as one and I could write pro formas out pretty quickly and come up with research and do the thing. And so I did what they asked me to do. And this one hit the cutting room floor. You know, you had some investors lined up, some of my friends from Valley who made a lot of money and had no jobs, you know, during that kind of, you know, the bust there in 2000. And you got them together. They invested in this idea with me and we [inaudible 00:08:27] out. And one of the best things about it was it had 60 empty offices when they opened. And sure enough, Vital, the lady who originally conceived of the marketing plan for it, we were like, let’s open up an agency in one of these open offices and see if we can sell.
Andrew: I’m sorry. The people who own real estate came to you to write this business plan. They didn’t want to do it. You said, “I think we could do this anyway.” And you ran with it.
Zachary: Yeah. Got it.
Andrew: And so you ended up what? Renting a floor of office space and turning it into this? You did?
Andrew: Got it.
Zachary: About 24,000 square feet.
Andrew: All right. And you were then supposed to go out and fill it up with tenants and you said, “Well, by the way, I’ll also take one of these offices for my own little idea, which is a design firm.”
Andrew: Okay. Why design firm? Why not stay focused on real estate?
Zachary: Well, real estate is a pretty simple business. You got to rent real estate and we had good people in place who could do that type of stuff. I was a marketer at heart, a kind of a sales and marketing guy at heart. And so, you know, the marketing stuff was really interesting to me. I thought we could grow that business. I made some horrible mistakes though at the beginning and completely misinterpreted what opportunity really was. We thought we’d just sell.
Andrew: Like what? Give me examples of horrible mistakes. I love horrible mistakes.
Zachary: We thought we’d sell business cards and brochures and branding and trade show booths to a bunch of small off people who are moving into this 59 other spaces next door to me.
Andrew: I see. You’re saying, “Look, all these people are renting anyway, space for me. They’re all going to need these design services. I got a built-in customer base. It’s going to be big.” And in reality what happened?
Zachary: Yeah, that’s just not a fun type of marketing to do. We’re talking about small business people who spend very little on marketing on a regular basis. And they might need a business card once but then you’re going to have to find another guy who needs business cards next month. And, you know, there just really wasn’t much there. But you know, we didn’t need much. We had free office space. The girl who I started with, Julia Ahumada, she was a graphic designer. I really let the business kind of be what it was for a while and I’d ask her questions and try to help her build it and help her sell into it. But essentially, we were selling graphic design services much unlike a freelancer and you know, a sales guy working together.
Andrew: And this was what Vital was. Meanwhile, didn’t you grow your, what was the coworking space called?
Zachary: Yeah. Today we’re 60,000 square feet where our name is oHive now. Back then it was International Office Suites. We now have multiple locations. We have a ton of square footage. We’re actually building out still to this day, more square footage and more locations.
Andrew: And you grew it, how many do you have now?
Zachary: We have two official locations.
Andrew: Today you have two official locations.
Andrew: Didn’t you have three or four or am I misunderstanding it?
Zachary: No. But we went through multiple iterations, so you know the space, you don’t take it all at once when you’re in this type of space. We had 30 offices at first, then another 30 offices were next door. We made sure to secure leases where there was potential for growth and we had right of first refusal on adjacent space. Then we moved downtown, Portsmouth, took one floor of a building. You know, the second, third floor were vacant at the time. And we’re talking about some weird times in between 2000 and 2008. I can tell you a lot of different stories but essentially we made it through both. We grew and today we’re placed for a lot more growth, especially with the WeWork debacle.
Andrew: Help me understand. You’re a guy, as you mentioned before, who invest in real estate. You’ve got tenants who are paying rent every month for space that you own. That makes a lot of sense to me. Coworking spaces that I know don’t operate that way. They lease space and then they resell it. Why don’t they own the buildings? Why don’t they own the properties that they’re reselling? Why doesn’t it work like residential real estate?
Zachary: It can. Both models work. I mean ultimately it’s a business. It’s about cash flow. Like, where can you get the most amount of cash flow going? If you can buy . . .
Andrew: But why is it about cashflow and not about building equity in the building? I’m just curious because I do see this a lot.
Zachary: Why do a lot of businesses that are successful divest of all their real estate? Real estate is a big problem. You don’t end up typically making money on real estate. You end up needing to sell when your business is having problems or you end up with problem buildings. And needing the assets and the capital in order to do that instead of investing in your business, you know. I’ve now, you know, years later realize that, you know, a business needs to work on its own. You know, when you start to mix in too many product lines and too many disparate ideas into a business, the business itself suffers and you know, somebody is going to kick the snot out of you who is focused.
And I learned that early on. I wish I’d learned it on early on. I kept touching the stove. You know, I’m an entrepreneur at heart. You know, I have five plus businesses still to this day, And each one, at some point in my life I had to figure out whether I’m going to sell it or whether I’m going to you know, pawn it off to somebody else who’s willing to do the hard work because now I’m focused and Vital and Vital only.
Andrew: What you’re saying is that if you own the real estate and you have to get tenants and you have to manage these co-location spaces for people. I mean not co-locations these coworking spaces, it’s just too many things to keep track of.
Zachary: Listen, if you can buy the facility right, if you can purchase it right. Which is rare. When the economy is growing is when you’re going to want to buy a new building and that’s bad time to be buying. If you have cash in a down economy, you can make a good purchase. Executive centers and coworking space are businesses, just like any other businesses, they have to work whether you own the building or you don’t own the building. If you think, “Oh well, I can break even because I own the building and I’m building equity that way.” You know, that’s not what your partners are looking for. That’s not what your investors are looking for.
They’re looking for a smart business and a savvy business plan and they’re looking for somebody who’s going to generate revenue regardless of. It’s not how scalable it is a business in which I got to purchase every building I’m in correctly. And you know, how many businesses have learned this lesson? I mean you see it with all sorts of businesses that used to own every real estate, you know, that they built a business in. And so many of them end up, you know, selling off the real estate and renting back from the people they sold to.
Andrew: You mentioned that you made a mistake by not being focused. What’s an example of a time when, as you said earlier, you burned your hand on the hot stove? Is there one that’s especially painful?
Zachary: Yeah, I mean, there’s so many painful moments. I’m 45, when I was 35 I was having a panic attack in my basement. At 35 just happened to be around 2009, 2010. I own five or six businesses. I had more seasonal business. I owned 10 rental company that had multiple locations. One in outside of New York City and one outside of Boston. You know, we’d ramp up 45 people in the summer, fire them, you know, lay them off at the end of the year, have books, all of this working with my steady businesses. You know, the economy crashed.
You know, I was getting through, you know, barely by the skin of my teeth. And I said to myself, “If I don’t get rid of some of these businesses and get them managed correctly, then, you know, I’m exposing myself to all sorts of problems down the road. I’m never going to be as successfully.” You know, running five businesses is no joke. I’m a guy who loves to work. I work as much as I can. And you know, you can’t out work five businesses in a bad economy. And what ended up happening is, you know, I’m sitting there trying to figure out, you know, “What do I do with each one?” It was an awesome time and I learned a ton.
I was able to sell a company at a good price. I had a great manager. I’d been kind of overlooking in another business in the real estate business who could easily handle what I was doing. And all of a sudden, I started to realize like, you know, “I got to be good at one thing. And if I’m really good at one thing, I’ll have options to sell that thing or to grow that thing.” And that’s when Vital really came into focus for me. And I actually had a huge mutiny at Vital that year. We were an eight-person company. We went down to four people in a matter of a couple of weeks period. As well the economy was going to hell. My other businesses were struggling.
Andrew: This is 2008?
Zachary: This is 2008 to 2010. It all happened particularly around the same time. I think I was 35.
Andrew: Why did Vital loose so many people?
Zachary: Well, you know, I’ll tell you, we’ve had 2 major mutinies in the last 10 years or problems. The first one was around Facebook. The second one was around Slack. You know, Facebook, it must have been about 2010, 2011. It certainly wasn’t Facebook’s fault. I was somewhat of an absentee owner of Vital. We had managed to grow from a 1 to 2 person agency to a 10 person agency, you know, in a 10 year period, which was very flat growth, if you ask me. I was trying to solve problems just by hiring people and walking away.
And I had hired a girl who was just, you know, not doing her job and spending a lot of time on Facebook. I had some really good guys at the time. Girls at the time were working hard and they’d see this girl who was getting paid more and supposed to be doing a high-level job surf Facebook all day long. And you know, it was just awful. And with all the other things going on, you know, it costs me, you know, some resignation sheets and I was pretty scared.
Andrew: Because they didn’t like the idea that she was making so much and doing nothing but being on Facebook?
Andrew: Got it.
Zachary: You know, had I been there every day and watched her work, I would’ve seen it myself. And, you know, I’d had a couple of other key members of our team were mothers at the time, they were away on maternity or coming back from maternity.
Andrew: Got it.
Zachary: And ultimately kind of wasn’t watching close enough and I lost some great people in that time.
Andrew: What’s the turnaround? What’s the thing that got you from, where were you before you were telling me before we got started, you were in the $600,000, $800,000 a year business to suddenly shooting past a million. What let you break through the glass ceiling?
Zachary: It was clearly that time. Right then, you know, 2010 to 2012, I got rid of that girl. I had four people quit, one of which I was able to get back. I’m so happy he’s still here. He’s our creative director. One of the best guys I’ve ever met. One of the hardest workers and such a talented kid. They told me that we had overlooked another candidate who had been an incredible mind. He now runs one of our legs, which is digital marketing for us, Chris Getman. Chris was able to hire an SEO strategist. One of the things we were doing right before that time was we had a lot of excess utility.
We weren’t doing so well. You know, we didn’t need to be profitable. As I said, we own the space and, it was essentially helping my entrepreneurial endeavors. If I lost $50,000 in a year, my other things were working well, and it didn’t really bother me. But I was pretty adamant about people working hard and I was really into a lot of the social media content marketing strategies that were coming out around that time, email marketing, subscription-based lists, things like that. And Vital started to like, everywhere I went people would be like, “Hey, I see your company. It helps me solve this problem.” “Oh my gosh, I love the content you’re creating.” “You know, I see you guys everywhere.”
And you know, all of a sudden where did this tiny little agency in a town of a lot of agencies and you know, we’re being seen as the top agency in our town, or at least one that’s at the top.
Andrew: Because somebody in the company, somebody at Vital decided, “We’re going to blog about our work. We’re going to tweet about our work. We’re going to show what we’re doing.” That’s it?
Zachary: Well, yeah. I mean, to an extent, yeah. We were creating great content. We were asking our clients a lot of questions. We were having customer conferences coming away with it with ideas we had writing about everything and every process we understood well.
Andrew: Were you still an absentee owner at that point, letting the business run on its own? Meaning, when you say we, it was they who was doing it?
Zachary: No I mean, I would say at this point, I am starting to say, “If I’m going to be losing money or breaking even, this is what we’re going to do guys, because I believe in it.” A couple of our key guys believed in it at the time but good guys and girls believed in it at the time. You know, the branding guard was kind of changing. And so this was a huge opportunity for us. We saw [inaudible 00:22:26]. I loved it. This was the part that was invigorating to me. So people started to understand us as this company that was doing digital marketing before digital marketing was truly a thing. And all of a sudden, we started leaning into that and hiring people who were digital marketers and really understood this stuff.
And they’d say, “Hey Zac, I really want to wear it for your company. You guys are doing everything right. You’re the kind of company we want to work for.” And I had to look around and say, “Geez, that’s not what’s going on inside. But, you know, come on in. You know, if you have the right skill set and you want to build upon this and help me understand the strategy that we’re kind of going through and trying to figure out.” And sure enough, these guys were the real deal. And one by one they helped me understand the type of people we needed to hire, the type of content we needed to create, the type of services we need to provide.
You know, you guys talk a lot about product-market fit but at this time nobody understood how to monetize social media and email marketing or blogging. They just didn’t, and we could explain it to them and be consultative and show them that we were doing this stuff ourselves. And, you know, all of a sudden, you know, between 2010 and 2012, we really started to grow. I think we’re on our sixth Inc. 5000 in a row, you know, these days, all based on what we put into place back then.
Andrew: I’m going to come back in a moment. I’m going to ask you about content that you’re especially proud of or something that you look back and you go, “This is one of the things that it exemplifies the turnaround, what we discovered that others hadn’t.” But first I’ll tell everybody about one of my first sponsors. It’s a company called Toptal. I’ve kind of been proud about this story because as I walked through my office, I’m in a Regus, which is coworking space. They also don’t own their properties. I can’t believe this.
Zachary: Can’t believe you’re in a Regus?
Zachary: I can’t believe you’re in the Regus. Well, I guess they’re doing better than WeWork but Regus is just, they’re the antichrist.
Zachary: Well, they tend to sell . . . offer really low introductory rates and then gouge people. And essentially they’re just a big turnover machine. Their individual managers at locations tend to be very good and create long-lasting relationships. But ultimately the company, you know, they’re built on having a global presence here. You’re allowed to roll out over a global, pretty awesome in that way. But as far as, you know, building great relationships in the community, it’s tough.
Andrew: I have found what you said about starting off with a low price, I don’t know that they low ball, but they do give a reasonable price at first and then they jack up the price. One of the things that I did, I negotiated with them. But one of the things that I did when I couldn’t negotiate enough and the price was going up really high in Argentina was, I sent my wife in. And you know, we have different last names, to go and look for office space. And she said, “I kind of like this space. How much would it be?” She got a price. She got the paperwork.
And I came back to the guy and I said, “I’m going to cancel. My wife got the paperwork to sign up and I’ll be her employee, I’ll be on her account at her price or we can just cut the crap and just give me the price that you gave her and let me stay in my office.” He was like, “Okay, fine. Get out of here.”
Zachary: I mean that’s awful. What a business plan, right?
Andrew: This is what I do love about it. So that’s a pain. The thing that I do love about it is they’re super professional. Like, I know I could count on everything being exactly as it is. If I need tape to tape up a box, they’ve got it. If I need stamps on something, I could just throw them in an envelope and I know that they’re going to put the stamp on it. If I need space to have whiskey night, it’s a nice location here actually. I really love this space to have a scotch night over here. You’re smiling at that, why?
Zachary: I love it. I mean, you listen. You know, I sold this for a long time and convenience is incredible. And you know, there’s nothing wrong with Regus from that aspect. They’re good. Certainly, they started the industry segment and they continue to be successful. They actually bought a company called HQ back in 2000 and they were both in bankruptcy, I believe, and came out of it together. You know, they’re lasting it there. They certainly didn’t do what WeWork did. So, I love that you’re . . . Yeah.
Andrew: One of the things, I feel like the independent coworking spaces should somehow get together because they’re missing out on this one piece, which is anywhere I go in the world, I know I can find high-speed internet, dependable people and sit down and work. And that means on my way to Mexico City, I had a layover someplace in Texas, I don’t even remember where it was. Boom, I found a Regus, I dropped my stuff off. I knew it was going to be safe. I knew I’d have high-speed internet to take video off my computer or whenever off my devices and then go explore the city, come back, pick it up and move on. That doesn’t happen with other coworking spaces. And that’s the thing that’s missing. What do you think about that? I’m watching your face for that.
Zachary: You know, they have it. It’s out there. They’ve got associations and they try to create associational networks that allow people to, you know, move within. It just doesn’t work as well. And you know, we tend to be in smaller areas. You know, listen, I’m a capitalist, so if Regus works for you, go for it. Pay the price and do it well. I also am one of those who says, you know, “You’re going to find those little privates.” You know what I hate about the little private spots, like what ours could be? Is that they tend to be dated and they don’t update often enough. They don’t have the cash flow and they’re just not successful and you can just tell.
In fact, that was a big part we rebranded as oHive. I used to look around, we were called something, office suites, International Office Suites, and iOS business centers. And what I found is that you know, about five years ago, if you look around for anything that says executive suite or office in it, it’s going to be dated, it’s going to wing back chairs and it’s going to have dirty rugs, it’s going to have crappy, you know, conference rooms.
Andrew: That is a problem, yes.
Zachary: You know, and ultimately like we’re not all built the same and people love that standardization and customization. I’d love to say to you, “Hey, wherever you go, find the local guy, you know.” But first of all, I don’t buy local. I buy the best product that I can buy. So you know, if you like Regus, some areas are going to be a better price. Obviously WeWork is so much better and you get so much more because they’re literally don’t care whether they make money. So you have free beer, you get tons of conference rooms.
Andrew: I don’t know, I’ve tried WeWork.
Zachary: No, you didn’t like it?
Andrew: Here’s my problem with WeWork, too much of the party atmosphere, not enough of your own space. Even when you get office space, there’s a freaking glass wall. What I want is quiet. I want space to do whatever I want. To scratch myself, to change into my running clothes. Here in my office if I need to and not have somebody looking over my shoulder you know, and feel weird about it. I want to have my own space.
Zachary: Seven marathons last year. Incredible, incredible.
Andrew: Yeah, man. Do you know how many times I had to change in my office right here to get into running clothes to go practice?
Zachary: Hey, listen, I said challenge the norm, you know, take off your clothes in a glass office. That piece of glass they put in that wall cost a lot more than what sheet rock costs. I’m just kidding. But WeWork is an incredibly . . . You know, you’re getting a deal at WeWork. First of all they jack you too. You know, none of these guys are in it to make long-lasting relationships with small to mid-size businesses. They’re looking to accommodate huge global work forces and you know, global expansion and things like that. And you’re just essentially a speed bump to them.
I love that you love Regus. WeWork was amazing but like we cannot afford to keep up with WeWork. I mean, you know, we had a valuation that was tech type of evaluation. So, you know, funny industry, awesome to see that you’re a part of it. But I will tell you this, I’m going to segue for you. In the last year, we sell these meeting marketing retainers that are super successful to people. And that’s really, you know, one of our legs of the stools is digital marketing. Last year we had five companies come to us and say, “We don’t want to market ourselves. We want you to help us find and recruit talent because, in this day and age, talent is so hard to find.”
Andrew: You did put it back. You know what, here’s Regus connected into it. I went to get coffee from their machines and by the way, Regus now has this weird thing where they have a credit card machine on the coffee makers and I get coffee. I’m now going off into Regus. It’s kind of weird because I’ve got to hold onto this card. No one of these, I don’t even know where it is. I got to use this card to get coffee from the machine, which is kind of awkward if you have a person over.
Zachary: It’s nuts.
Andrew: But I went over to get one the other day and I happened to meet this guy, Michael because he was wearing a Toptal t-shirt. And I go, “Toptal, do work there?” He says, “No, no, I just hire from them.” I said, “How?” He says, “Well, you see all the scooter companies and all these other businesses that are now using artificial intelligence. That’s our business. All we do is solve the artificial intelligence component for businesses.” I said, “That’s interesting. So what’s your connection to Toptal?” He says, “It’s really hard to hire people who are engineers who understand artificial intelligence, who know how to apply it properly. Who are data scientists, who are analysts. It’s hard. Since I tried 10 different companies to hire and none of them worked out. And then I discovered Toptal and I hired and hired and hired and hired and hired so much.” Then he said, “You tell them my name, they will know who I am.”
So I took a picture and I was sending it over to the Toptal people. If you’re out there listening to me and there’s a specialty that you need to hire for and you’ve hired and tried and tried and tried and nothing’s worked, or maybe you have and you just not like, not amazed, I want you to go and let Toptal amaze you. Don’t even hire from them. Just have a conversation with them, see if they could amaze you with how great their developers can be. Bring your most challenging hiring process your most challenging hiring . . . Oh, what’s the word? Challenge.
Go over to toptal.com/mixergy, get on a call with a matcher, they will help you think it through. And if it’s a right fit, they will help you hire the right person. And if you use my special URL, you will get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period. That is, here’s the URL, toptal.com/mixergy, T-O-P-T-A-L dot com slash M-I-X-E-R-G-Y.
Let’s talk about that thing that you’re proud of. Looking back that that’s an example of work that defined the change, defined what people are proud to be associated with.
Zachary: Our blog.
Andrew: Was there a post that’s like an indication? I’ll tell you for me, I know the one piece that stands out when I think back. I did a video of myself looking into the camera, put it up on the site saying I failed. I tried to make Mixergy into an invitation side. People are supposed to use it to invite their friends. That didn’t really work out. I’m closing that thing up. But I did like using it to organize my own events. I did like doing interviews with people who are coming to my events. I’m keeping both those things going and the fact that I was vulnerable and said, “This failed.” The fact that I took a stand and said, “I’m turning my back on the past and going towards the thing that I wanted.” Sent a whole lot of different things in motion. Like, guests knew I wasn’t coming from this point of view of being a jerk who was trying to get them.
I was trying to understand how to not fail anymore. My audience said, “Andrew is pretty open.” This is a place where I can get guests to be open. And so that’s one example of how things turned for me at Mixergy. I bet you have one when I give you that example.
Zachary: I want to go back to I don’t. I mean honestly, 10 years or 8 years of this now, we have had just in a meeting for our own marketing, we’re in our a $15,000 a month retainer of our own services. So we do our own digital marketing program. All right. And the words that we use to show up for we no longer show up for it because the words themselves have become dated and less searched for. So I can think of an article that I wrote that I used to brag about all the time because I had written like three or four articles for our blog. You know, I interviewed for hundreds.
Andrew: What was it?
Zachary: Well, let’s use the one Magento versus OpenCart.
Andrew: Okay, great.
Zachary: So awesome before versus post were versus posts, we were writing them. And it was incredible the amount of traffic we’d get for these things. That’s what people were searching but nobody really understood it. So we’d write these verses posts. Well, Magento versus OpenCart no longer really matters to anybody. Because OpenCart is basically . . .
Andrew: These are these two platforms for selling online. Got it.
Andrew: Now I’m understanding what you were doing that started turning things around for you. So as a result of that, you said, “This business is starting to grow, we’re starting to stand for something.” At that point, Zac, I’m curious, why did you say, “I’m going in on an agency”? Why didn’t you say what many other people say, which is, “Agencies are a pain. You have to deal with clients who are very finicky who don’t exactly know what they want but they know that they want it to be amazing and they want certain results that we can’t guarantee. I got to deal with people on the other side. I’m not selling software, I’m not selling office space, I’m selling people. People again are finicky. They have all kinds of mutinies, Facebook, lack, etc.” Why did you say, |I’m going in on this”?
Zachary: So Vital was doing well in a bad economy even though I wasn’t giving it any attention. I had other businesses that were failing in a bad economy or not failing, but certainly hurting and not growing at all. And marketing was. So it was an opportunity at a time and why was that an opportunity? Because there was a huge digital transformation. People were spending money on the web. They were trying to automate anything they could, get rid of sales forces, bring content online, bring the sales process online. So there was a lot of opportunity in between 2008 and 2012 in the marketing world. And you almost just had to be there to understand what I’m talking about but I’m sure you get it.
And by 2012, we’d put together such a good team and we were just so far ahead of so many people as far as the search and things like that using email and blogging. To me, that wasn’t a challenge. I mean, first of all, I love it when you say that stuff. You know, I am an entrepreneur and I know how easily companies . . . You know, it seems like when you live in the Silicon Valley that every company is going to be the next million-dollar, you know, billion-dollar valuation, sorry, a billion-dollar valuation. But I also hear you talk to people and they’ve worked at like 10 different companies that weren’t successful. And that’s not the business of an agency.
We either make money or we don’t. If we’re not making money, we’re out of business. And good business, when you start putting you know, $10 million on the books and you can get 10% to 20%, say maybe even up to 25% on that money, that’s real money and good money and it can’t be taken away from you. And know as long as you’re doing a good job evolving and you’re doing the things that a good agency should do and there’s so many different types of agencies out there, then I’d like to think that this is just as good of a place for your time as any, I’m not greedy. I [inaudible 00:38:10] that expectation as well.
Well, one of the things you’ll find with expectation setting is everything at Vital. We almost try to lose the sale. We tell you what a slog it’s going to be. Tell you how hard it is. We tell you how difficult it’s going to be. And if you decide with Vital, you understand what you’re about to go through.
Andrew: Okay. I’m getting then why you got in. You told our producer, “The first step once I got in was retaining the people who are great and then showing the people who we wanted to hire, like why we’re going to do the thing that they’re going to get excited about.” What about getting new customers? How did you start to bring in new customers to grow your business?
Zachary: Well, we created products around the things that we were doing. So first step is people are saying, “Hey Zac, I’m seeing you guys everywhere. I want to be seen.” And all of a sudden that just becomes like, “What are we doing right? How do we turn it into a product, productize it, and how do we then, you know, build, selling documentation around it? And then how do we sell it in consultative, you know, create retainers that attract people’s empathy. You know, and work hard at making the product successful over time.” And we started selling retainers. We started with retainer type selling. We had these fixed projects.
At the time we only had really two legs of the stool. One was essentially building brand assets and I wouldn’t even include the website in there. Those were fixed bid projects that were oftentimes getting bigger, bigger. And then we had these retainers. You know, the big change that was happening is that SEO was becoming less about keyword stuffing and link farming and cloaking and all these, you know, things that people were doing in the, you know, pre-2012 era. And they were becoming almost completely not about metadata and not about the backend and not about the things that had so long been there.
It was about telling your story, impressing customers, telling people the questions that they were asking. And don’t tell them about yourself. Just tell them about the solutions, show them things that other people hadn’t shown. Obviously, a lot easier back then when content wasn’t king. But boy did it work? And then once we started telling people how to do that stuff, oftentimes they were then first movers and then they start referring you and they start, you know, singing your praises. Which means linking back to you and people calling you and asking you to be on podcasts, not back then as much. But you know, guest blogging and guest posting and all that stuff.
Andrew: You know, one of the words that I wrote down, it was something you said at the beginning of this answer, which was product. It seems like you turned services into products that not only could you systemize the creation of but then the salespeople had clear material for explaining it. Can you give an example of that? I am not following that.
Zachary: Yeah. So what we break everything down to is you need foundational assets. And then, you know, what everyone comes to us for, what we found really quickly was in 2012, people rebuilding their sites for their second or third time at this point. And they weren’t really asking for a new website. They were asking for more leads and unfortunately, their infrastructure or their foundation was incapable of getting more leads the way it was currently built. They were on an antiquated CMSes. They were driving traffic all the wrong or you know, they had a bunch of old baggage. Hold on a second here, I’m getting some. They were . . .
Andrew: What was going on there? Was someone just messaging you?
Zachary: No, God. For some reason a bunch of pages from my desktop just opened. Files from my desktop open. So I was just doing something strange. So, listen, I think that . . .
Andrew: What’s an example of a product though? What’s an example of a service that you turned into a product?
Zachary: So the foundation was a product. So now what we did is we did a foundational assessment. The first thing we did with every client is we look through how we could drive more leads. We looked at how we could create a minimally viable product. We still do this to this day. So it’s super relevant. You know, and that takes looking at the website. Do you have buyer personas? Have you mapped out the buyer journey? Do you have early-stage lead generation content? Do you have things like, you know, there are other aspects to that foundation. Do you have the right tools? Are they set up correctly?
Andrew: And, Zac, you were able to sell that as a service or was that part of the selling process that you were doing this foundation analysis?
Zachary: Yeah. So we would turn that foundational assessment into essentially a list of chores that we would have to get done. And that was called your foundational project proposal. And you couldn’t do any of our lead gen retainers at all until we had a minimally viable product. Which meant, I can’t help you with your SEO in this day and age if you don’t have an email marketing platform that’s set up correctly, that you have templates in. And if you don’t have landing pages, I can drive traffic to your website, then I can’t help you drive traffic from a [inauidble00:43:41] perspective.
Andrew: So you did this analysis and then you came back and said, “You don’t have landing pages. We could create that for you. That would be one of the checklist items that we would set up for.” “You don’t have a good email marketing strategy. We’ll set you up with the software, set you up with a strategy and each one of these are projects.
Zachary: And the templates.
Andrew: Templates. Each one of these becomes a project for you to . . .
Zachary: Wouldn’t be the actual strategies. The other part that it was every deliverable was then a report and the plan and goals. So as part of the foundation, we’d fix essentially your marketing environment up to a minimally viable product. So that we had all of the channels that we would need. We had the cursory content we would need in the content areas on the websites. If you didn’t have a blog, if you only have one service page and you really had 12 services and we break it into 12. You know, just the typical foundational stuff that needed to happen.
From there we would say, you know, “Now what we’re going to do is put together a quarterly plan for you. We’re going to break it down into individual elements and we’re going to create a report based on the KPIs we’re going to talk about. We’re not going to talk about it at Google dashboard. We’re going to talk about the top-level things that we could report up to your CEO, your CFO, that’s going to allow us all to be accountable to some results.” And then, you know, we would overlay those goals into our reports. And say, “This is what we can do.” Because again, we were just experts at setting expectations to our clients and then almost fighting them, that if they had higher expectations, then they were being unrealistic.
And so that foundation allowed us to see if they were willing to take even more friction than our sales process was already creating. And they love it. They love that friction. And they love to be told that there’s bigger fundamental problems because they’ve tried the quick fix stuff. They’ve tried that, spent $2,000 on SEO and you’re going to get results and be on the first page of Google. They’ve tried that stuff by the time they’ve come to Vital. They’re ready to hear the equation and we gave it to them. So, and then from there, once they got this foundational proposal, we would then give them a retainer for both. What we now call digital marketing services which included SEO and content marketing and email marketing and drip campaigns and all that stuff.
Now we’re talking about actually writing the content, writing the drip campaigns out. Now we’re talking about using, you know, tons of software to make informed, you know, plan decisions on what we’re going to do each month based on which ones had the most impact at the lowest effort. And we’re going to get us the results the quickest. Because, of course, we had to be accountable to these goals that we had overlaid into these reports. It forces us to really look at a client and say, “Now that we’ve put you through all this friction, it’s time to get to work.” And those retainers were incredible. They include now paid portions to them as well as the digital marketing retainer in there. You know, we sell between $5,000 and $50,000 a month retainers with huge PBC riders oftentimes.
Andrew: I’m curious about how you figured out which clients to go after and how you got them. But let me take a moment and talk about my second sponsor. It’s HostGator. Let me ask you this. If I were Zac, you’re starting over and I were to give you a hosting package from HostGator, what’s a business that you would build? Start from scratch. You got no money, no background, no reputation. You just have this hosting package, you got to build a business.
Zachary: Right now you’re trying to . . .
Andrew: Could be a WordPress website or could be a different platform. What would you build?
Zachary: Oh, it would be in WordPress for sure.
Andrew: It would be in WordPress. What’s the business that you create on WordPress?
Zachary: You know, there’s a billion things I want to build but let’s say a retainer brain. Essentially something that manages retainers is something that I’m flirting with right now.
Andrew: What do you mean to manage retainers?
Zachary: You know, accounting software is just set up to deal with project billing and sometimes subscription-based billing. Retainers are unique in that there’s a relationship on the front and the backend that you need to be able to communicate really clearly.
Andrew: Meaning you’re charging per month a set price. You need to justify it and then there’s also an increase based on additional services. Am I right?
Zachary: Yeah, sure. It would definitely clearly talk about the financial relationship but it would also be a reporting tool. It would do a lot of data visualization about the success and the goals that we’ve achieved together and have set together. It would talk about how long, how many people been on your town, who’s on your account. When you’re in a relationship, you know, it’s incredible once you’ve been in a relationship with somebody for a couple of years. They get very attached to certain people and within your organization. They feel like if that person is not there, they’re not going to be successful with you. And it’s just not the reality.
Everything that we do here, it takes a huge team of people. And I would assume all like complex retainers, whether you’re at an engineering firm or whether you’re at an architecture firm or other service providers. There’s this communication that you, you kind of want to have with those retainers that go outside of my report of your SEO. And that . . .
Andrew: So you would create a software to manage retainers?
Andrew: But you can do that on WordPress. Can you?
Zachary: Well, the frontend, I wouldn’t do it on anything else. In fact, a lot of SaaS based businesses in Silicon Valley come to us because they realize the SaaS-based backend of the website that they’re building needs to do marketing on the frontend. And they realize that they need to detach.
Andrew: Because WordPress becomes a place where you describe what you’re doing. Describe your customer’s problems, describe how you’ve solved it for others or how other businesses like them are solving it. Got it. And then there’s a software. So maybe the first step is if you had nothing, you have no engineers, no development shops. The first step is, tell me if I’m right about this. You would go to hostgator.com/mixergy because you know me, you’d use the slash Mixergy at the end. You set up a WordPress site and you say, “Here’s the problem that I see. Here’s how other people have handled it. Start talking about the problem. Start talking to the potential customer, start building an audience on an email list. And then once you start to see a clear path for the product, go and have it developed.” Is that the path?
Zachary: I think the product is getting developed as well.
Andrew: Got it. All right. So if you’re out there and you need a website hosted for anything, even if it’s just a basic blog for your family, even if it’s a basic place to share photos, even if it’s something that’s going to be the basis of a future big business. Whatever it is, bring it to hostgator.com/mixergy, they’ll give you the lowest price possible and great service hosting. You can count on hostgator.com/mixergy. How’d you find the client that you were going to go after? I didn’t realize it, in the beginning, you were selling just $2,000 projects.
Zachary: I mean it’s been a long evolution today. We won’t touch a website that’s less than 50K. You know, we have sites that are as big as $1 million. You know, the retainers that we do are no less than $5,000. And a typical foundational period is somewhere between $20,000 and $100,000 before we get into that monthly retainer. So, how did we find them? Well, a lot of leads. So what I always tell people and all of our clients want just qualified leads. We want the qualified leads. And when I tell you if you want a lot of qualified leads, get a lot of leads. Use your content and the type of leads you’re getting to help you build better and better content over time and better and better service pages and all of that stuff.
But you know, you are looking for some certain things when you’re in sitting in my chair, which is, you know, I need to know that you’ve been spending money on marketing last year. I need to know that this isn’t just your one-off project for this year. And you have no other money to be spent. Typically what we find is that people are spending money poorly in other areas of their business. It’s hugely unmeasurable. So obviously sometimes we’re talking trade shows, we’re talking traditional advertising, billboards, things like that. When the right person comes into those companies and they’re the VP of marketing, they start asking questions and when people can’t give them measurement, they start turning towards digital marketing strategies.
When they start looking at that, they start looking for solutions out there and solution providers who really know what they’re doing. You know, they do come to Vital as often as the really crappy leads come to Vital.
Andrew: And so you’ve got blog posts, then that blog posts offer eBooks and other downloadables or other lead magnets, I guess. And then what you’re doing differently from what I’ve seen is you’re asking them for more information about themselves. How many people at the company, what’s your role at the company? You’re trying to qualify the leads as they’re giving you their contact information, right?
Zachary: Yeah. You just nailed it. I mean, that’s so insightful of you. Like, honestly, the funniest part about what we’re looking for when we divide our lists because we get over 80 leads a day. When we divide our lists, the two things that I’m segmenting are actually company size is one of the questions. But the word marketing director or VP of marketing, that tends to be there with companies that have budgets already, a marketing coordinator, CEO, you know, CFO, you know, other positions. They’re a sign that there’s no real marketing budget. Which is fine. It just means that we might not be the right fit with you.
And we’ve actually made small businesses in our town, small little agencies, we’ve made them lots of money sending, you know, the smaller clients that we get in as leads and referring them over. We take the phone call, we help them, we try to be consultative. We tell them why we charge so much and hopefully years from now they’re successful and then they come back and they appreciate what we told them. Can I jump in there?
Zachary: Because I absolutely deplore when people boil down what we do in our program or what we do as blogging because it’s just become so little of what we did like 10 years ago, 7 years ago. That was totally what we did.
Andrew: So what is it now?
Zachary: Well, what’s so crazy is that blog posts don’t show up for like 90%. I would love it if you were right and blogging was still the way. Like guest blogging can be super successful for link-building and things like that. But like, blogging in general, if we were to go and open up a webpage of one of the people we might work for and one of their key service offerings or keywords that we found around those key service offerings, what we’d find is at the top of the search engine results are not going to be blog posts anymore. The first four things are going to be ads. Then sometimes there’s going to be this local search box, which is difficult to get into if you’re from a different region.
Especially if you’re not doing your reviews correctly and you don’t have your Google. You know, Google is taking over a lot of that search space, they want you to pay for it or they want you to work with their Google My Business stuff. And so now all of a sudden organic search results are getting pushed down even further. And sometimes those results, almost always now those results aren’t in a blog post. Sometimes it’s a list of infographics or JPEGs. Sometimes it’s a list of videos. Oftentimes it’s now aggregators. So are you in bed with, you know, the aggregator posts that shows the top 10 website design firms, you know, and that’s the . . .
Andrew: If that’s not it, then what is it for you guys?
Zachary: Blogging is definitely part of our strategy but there’s no one strategy. The reason I deployed is because so many people would come away from a conversation with me and they’re like, “Oh, we just got to blog more.” And that’s not it. What really needs to happen is you need to understand the words that people search for when they’re looking for you. Then you need to meticulously, you know, understand the results around those words. You’ve heard the word skyscrapering before. It’s a, you know, big Brian Dean term.
Then you need to find a way to create the page or the result that will use up what is already there. Being on page two or page three doesn’t matter with a blog post if the first page has service pages. So if we need to go look at the service page on your website and realize that like, yeah, this service page is light on content. You went through probably a phase where you wanted to take out all the words on your page and just have pictures and graphics and all of a sudden you got to put words back on that page. And then you need to think of other client empathy. How are your client reviews on that page?
Oftentimes people are putting client reviews and testimonials on their homepage before people have even jumped into a funnel. You need to put those reviews and you need to put that . . .
Andrew: Largely, it’s still content on your site.
Andrew: It may not be blog posts. So on your blog, I think I saw that you guys hired somebody, I forget what it is but I saw that you called them the latest villain to join, right?
Andrew: That’s the language I think I saw. But if I’m going into as you and I saw before we got started, I use Ahrefs . . . everyone. It’s called Ahrefs. Why is there an A if it’s called just Ahrefs? Anyway, they’re a partner of ours, so I’ve got access to their software and I see . . .
Zachary: Amazing software.
Andrew: The number one page that I see that you guys have according to them is how to write a marketing plan template.
Zachary: Oh man, that thing kills it for us. As well as marketing budget, as well as marketing RFP.
Andrew: I guess I would have considered that a blog post because it’s the WordPress blog posts design, right?
Zachary: Those are blog posts. Those are certainly blog posts.
Andrew: What am I missing when I look at this if it’s not a blog post?
Zachary: No. First of all, the difference between that blog post and a regular blog post is each one of those blog posts has a downloadable as part of the title. So when you actually click on that, and if you were to search it, it is not just a blog post. It’s a blog post with a questionnaire or with a download. So certainly those categories are areas where blogs are certain the top. You know, that’s where the traffic’s coming from.
Andrew: And then the downloadable is the website design RFP template and that I would need to fill in a form in order to get. And that would start a conversation with you if I’m the right fit.
Zachary: Right. Now, even if we had just wrote that article but not put the RFP template on there, that article doesn’t rank.
Andrew: It ranks because you’re collecting email addresses from the next . . . ?
Zachary: The email part is just the part that we enjoy. But the fact that somebody’s going to get a download and help them with the problem that they’re having, which is the RFP template. And now they’re going to be able to go out, their boss has tasked them with writing an RFP. I mean this was just such a stroke of brilliance, we did it like four years ago. The other players in that space are like HubSpot and some of the big software companies but we’re still ranking on the first page. And what’s great is, you know, boss tells somebody to go write an RFP for the new website template. We start building trust right away. We wouldn’t be at the top of the search engines if we hadn’t put the template because what you’ll see if you search website RFP is every single post would have a template or you know, a downloadable with it to help you with the RFPs.
Again, you know, it wasn’t just a blog post that ranked, it was a blog post with a template. Now, I know that’s a nuance but you’d find that that type of preparation before you start understanding the keywords that you want to show up for, understanding the search volume before you start it and then understanding what is actually showing up and doing better, creating better RFP templates and creating better content on the RFP blog posts. Very key.
Andrew: You know what, I am on the same page, two different tabs. One of them has that RFP downloadable thing embedded in the post. That’s the one that came in from Google. The one where I clicked over from Ahrefs just has a link over to the template somewhere else. So am I understanding right, that, first of all, you change a page based on where people are coming from. And number two, if they’re coming from Google, you don’t make them click on another page to get the downloadable. It’s on there. You’re smiling as I say this in a way that you’ve got like a wily smile as I’m talking to you.
Zachary: You know, you’ve asked me two questions today where I wish I knew as much. I don’t have it up in front of me. I try not to break this podcast. But I honestly don’t know what all the cool things that we’re doing these days. All I know is I was a stroke of genius and that three years ago we started thinking like, “You know what, everyone wants to rank for website design. What are people asking that show that they’re going to be needing a website design in the future or that they need a new agency?”
So obviously marketing, planning, and marketing budgeting is something we do with our clients three months before the end of the year. But there are a lot of agencies out there who aren’t even having that conversation with their clients and it’s a huge opportunity for us. So now we rank very well for some marketing budget and marketing planning templates and it helps us build trust earlier in the buyer’s journey. And you know, it’s where we’ve just had some huge wins. I mean, we had a four-hour period where we got called by Visa, Welch’s, University of Illinois, and I forget who the third. I think it was Ocean Spray. You know, all four in a four-hour period.
Andrew: Because of what? Because they’re reading in the content on your site, whether we call it blog posts, a resource page or something else. Seeing that they like your approach and wanting to have a conversation with you.
Zachary: Absolutely. You know, answering the questions that people are asking and making sure you stamp on it.
Andrew: It’s still that? Like, I looked at your Instagram, it’s okay. There’s nothing great there right? Am I missing something?
Zachary: No. I mean, you know we’re a B2B company. Obviously the key . . .
Andrew: On LinkedIn you’ve got a little bit more content but you’re not setting the world on fire on LinkedIn. It’s all content on your site and email marketing, right?
Zachary: Yeah. I mean we’re distributing our content through those channels. We still take pictures of people when they’re wearing the same color clothes and you know, when it’s their birthday and all that stuff. But that stuff is just to help people understand our culture and who we are. That’s all stuff that’s driving traffic. What we want to do is drive . . . When we create great posts and create content we need to send out through those channels because a), the search engines want to see a traffic profile on all the pages. So one of the things that happened years ago is that you know, when people were keyword stuffing and burying pages on their website they just had the same keyword over and over again, [inaudible 01:03:08] text and all this stupid stuff.
Andrew: They want to see that there’s content that’s drawing people in and so social sends that. But the reason I’m asking is one of the things that you told our producer you do is, and that became critical for you was opening up new channels for your customers. What does that mean? Do you have an example? Maybe I’m just being a little too anal and saying that must mean Instagram because everyone is on Instagram now. Must mean LinkedIn because LinkedIn long-form content suddenly is a thing. What is that? What do you mean by that?
Zachary: Well, I mean ultimately customers don’t understand traffic profile. So we were just talking a little bit about it and what they’ll be good in is one or two channels. And so when you say opening up new channels, like yeah, I think maybe there’s some interpretation there that went on. I can’t remember when that conversation was, so I can’t recall it. But ultimately when clients come to us, they’re oftentimes very good at blogging. But that blog in and of itself, if it just sits there, we call it posting and praying as you know. You know, if it sits there and you don’t promote it, it doesn’t get traffic. And if you don’t send traffic to your own stuff, then Google’s not going to send traffic to it.
So essentially part of that foundational process is making sure that your channels are all there and that we have channels to use and that we can promote content and promote ideas and promote eBooks and white papers. Obviously white papers are probably like the worst things to promote, webinars are certainly better, podcasts are certainly exciting these days. So yeah, we’ve got to have channels and we’ve got to make sure that people are not just poo-pooing channels. Many people hate Facebook. The B2B companies hate to doing stuff on Facebook. But fortunately, there’s huge demographic advantages to putting stuff out on Facebook to certain demographics.
You know, it’s a platform for 40 to 80-year-old people who, you know, tend to have, you know, a lot of influence in organizations and when you know what they do, who they are and you can push messaging to them. It’s not something that a B2B company should say no to out of the box as with email. You know, people for so long shot that the thought that marketing was there to help sales. They were resistant to sending stuff out that wasn’t from their sales team or the biggest thought leader in their program using their email channels. Reality is that email opens up a huge audience to people and when you use it to send out content that answers people’s questions, you send it to your subscription base list, you’re not yourself a disservice. You’re doing yourself a huge service. You know, it’s breaking through a lot of things using these channels effectively and making sure that they’re there.
Andrew: All right. I’ve got a couple of notes here to close out. Actually the top one is what’s the Slack mutiny? And I know we’re running a little bit late. What is that?
Zachary: Slack was, you know, another time, you know, 2018 we’re killing it, you know, Inc. 5000, probably 5 years in a row at that point. You know, people opening up Slack channels to talk about everything that you could possibly you know, talk about within a company. You know, offline Slack, meeting with online Slack or at a company Slack meeting with inside Slack. And all of a sudden you know, what we’re finding is that there’s people getting up and leaving for lunch. And nobody is been talking to each other all day and people don’t understand, you know, how this is happening. There’s Slack groups, you know, left and right, and some of the stuff . . .
Andrew: Within your company, people are creating Slack groups and then causing somebody to be so frustrated that they get up from their desk and just go off and walk off. That’s what you mean?
Zachary: Nope. But what was happening is that let’s say five people would create a Slack group and then, you know, every day at lunch, those five people get up and walk out the building together and nobody knows where they’re going. And nobody has been invited. And there’s some huge amounts of exclusion. Well, sure enough you know, this stuff was happening in all sorts of segments. People were having conversations they wouldn’t have with people just like they have on social media, bullying, all the stuff. One of our developers walked behind somebody’s computer after they’d gotten up and left for lunch with four other people and they left their Slack accounts signed into.
We found all sorts of really, really inappropriate behavior. Nobody was saying stuff about me but they were saying stuff about each other.
Andrew: What type of stuff are we talking about?
Zachary: We’re talking about everything from, you know, saying awful stuff about your bosses in certain cases to . . .
Andrew: Like personal stuff about the bosses?
Zachary: Yeah and racist stuff and some incredible stuff. The type of stuff that happens when people think that nobody is watching. Obviously, Slack has now some commercial applications in which you can monitor stuff and they can’t do this stuff. But we had just, you know, opened up Slack and it was pretty unregulated. And even without the type of personal slander that was going on, we had, you know, just people who were being offended by the way people were talking on Slack to each other. You know, just like we have problems with email when somebody will say something and, you know, it seems a little bit negative or short. And you know, happens even worse in Slack.
Andrew: And so you let go people because of this?
Zachary: Yeah, well boy, when we found out what was being said, heads rolled. And other people got disciplined. People just felt so sad. They just felt so awful. It was just like, you know, you uncovered like let’s say 12 people were involved in it. And you know, four of them were saying horrible stuff and the other eight didn’t really know how to say, “Don’t say that.” They felt like they were just part of it. They just thought it was a lunch group chat, you know. And all of a sudden people are ripping on their bosses and saying inappropriate stuff about other people. And they’re saying, “Well, I wasn’t part of that but I was in the group.” And you know what the best thing was just, you know, take it down. You know, use the email. Use channels that are established and you know, we’re still working through it and there’s still need for . . .
Andrew: [inaudible 01:09:30]. Don’t say it. Don’t say via email. First of all, I think if something’s said about us, we need to be aware that sometimes people just say things without fully meaning it. It’s just in the moment they’re expressing something, they’re venting who knows why. And number two, try not to say anything. I’ve had people send me private stuff on my computer and then I do a screen share afterward and you know, that stuff pops up. And they’re sending it to me via iMessage or I don’t know what, via Skype back when I was using that, it shows up for the person they’re talking to.
Zachary: Yeah, it’s sick. And the people who we got caught like, you know, my conversation was like, you know, I love you. Like I absolutely adore you and I’m so depressed at what I saw. And they were like, “What did I say?” And then, you know, it’d be like, ah, man. I was like, “Do I need to really tell you what you said?” And then I would tell him like, “You know, that was in the moment, just like you said it.” It was like for them, it was devastating. For us, it was devastating. We lost some great people, you know, I thought they were great people. I guess they probably are great people. We see it in Facebook and politics and Instagram. People are just so mean to each other when they don’t think other people know who they are or when they feel like they can pile on. And it’s a weird world that the social media and some of these instant communications have created.
Andrew: I had an interesting experience where this guy, I used to search all guests I used to search my inbox to see anything they said to me. This guy was on, he saw that I was charging and he attacked me for charging via email before he knew who I was. It was just like he was a listener. He was a fan. He was angry at me for charging for anything and he sent me this really angry email. And I thought I’d bring it up because you know me, I like to bring up this tough stuff. And to me, I’m not hurt by it but I saw he was like those flop sweat involved in the interview. I could see that he was barely hanging on and he wouldn’t take it as me coming from a good place and just being interested and curious.
So I didn’t bring it up but I do wish that he was in a little bit better place so that I could bring it up and say, “Here’s what you said. Do you want to like reconsider it? What do you think about it?” I don’t think he meant it in a bad way. I think he was just lashing out at the world.
Zachary: Yeah, it’s crazy. I mean, it’s crazy. You should’ve have called them out on it. You call everyone else out on stuff. I love it.
Andrew: I felt bad for him. I’m telling you if I showed you the video, you see the guy can barely handle it.
Zachary: One of the things I saw the other day, which was, which is crazy and something that I’d like to always kind of tells people when I get a chance to talk is just like failure, you know, is something that we all need to learn from and making mistakes. We just need to learn. You know, I feel like my best moments are when my back are against the wall and your back gets to put it against the wall usually when you’re not having success. And these days I try to approach life like my back’s against the wall but there was a long time where success was maybe a little bit easier or it was I didn’t understand what I was looking for. And these days, you know, I try to approach every day putting one foot in front of the other kind of people and trying to, you know, act as if my back is against the wall.
Andrew: What do you mean act as if your back is against the wall? How do you create that atmosphere?
Zachary: You can spend too much time doing, you know, all sorts of nefarious things in your life or things that aren’t productive. Or things that are, you know, just not going to get you where you want to go. And sometimes it’s just easier to do things that aren’t great. Like, it’s easier to not work hard. It’s easier to not be nice. It’s easier not to write some guy a really nasty letter instead of thinking about yourself and weigh in on things that you can control. You know, I’ve never helped somebody by running up and down their backside. All I’ve done is . . .
Andrew: That’s not you acting like your back is against the wall. Do you put yourself in that type of situation? How?
Zachary: You know, I put like my back is against the wall every day.
Andrew: I’ll tell you one way that I do it. I took the money that I had access to and I said, just knowing that it’s there makes me feel like, “Ah, who cares? I don’t need this sale. Who cares?” I just put it away. I don’t have access to it. That changed everything. Then if I have to pay the bills, it’d have to come from somewhere. I’d go, “All right, it’s not coming from that place. So now I have to go and work.”
Zachary: Well, I think that’s where it comes from.
Andrew: What would you do? That’s not official but it’s important.
Zachary: No, I think that’s where it comes from. But like, I’ve been out of money before. I haven’t been able to make payroll before. I’ve almost lost my house. I’ve almost lost my wife. I’ve almost lost everything, you know. You know, in order to wake up every, I remember those moments. So I don’t think you need to. You know, as you get older, you start to realize like, if you don’t approach life like your back is against the wall, then your kid is not going to get into a good school. You’re not going to be able to pay for their school. You’re not going to be a good parent. You’re not going to be able to be a good husband. And so, try to just harness those moments.
Like you said, I think that’s a great one. Like, honestly, like my life when I was a kid like I always thought I’d have money. Things would be easy. I approached life like that. I never worked as hard for other people as I would work for myself. And then as I started to realize that, like, “I’d worked my ass off if it was for myself.” I started doing that. So things came easily and then all of a sudden you go through economic downturns. You can’t make payrolls. You know, you have fights that last a month with your wife instead of ones the last a night. It’s all those things. You know, you have to harness that stuff at some point in your life and get serious if you’re going to, you know, have as much responsibility as I have. I have no more responsibility.
I don’t think entrepreneurial-ism is as much about making money and selling companies and having success as is taking care of people.
Andrew: When you say you’ve harnessed those memories, it seems to me like what you’re saying is you remember, “Hey, my wife and I got into a fight that lasted for a month. This whole thing could go away. I’m going to be aware of that and put my phone away at this moment.” “I’m going to remember that I’ve had companies that closed down. I’m going to understand that Vital is really important and it could go away at any minute. I’m going to fight as if this thing could go away because it could.” That’s what you do. You just put yourself emotionally, mentally in that place where it all went away or almost did?
Zachary: Yeah. And also I see those things coming, right, when I’m like, I could go out to have a beer with my friends after work and I’m like, “You know what? I’d rather go home and get some work done.” Or you know, “I’d actually like to get some work done right now but I should be present with my kids.” Or, you know, “I could take this whole day off and let my wife take care of the kids on a Saturday. Or listen, I can get involved in driving. And I’ll listen to your podcast on the rides.
Andrew: I know.
Zachary: I’ll do the things that I can in the cracks. But I now choose to put one foot in front of the other every day in a positive way. And listen, I still make all sorts of mistakes. And as soon as I do, I try to correct and I try to harness that, exactly what you’re saying.
Andrew: All right. The website is vitaldesign.com. Is it a mistake that Vital does not have vowels in it? If I type in Vital V-I, let me see. I’m going to type in Vital, the full word, Vital Design. Let me see, does it go? No, you don’t have vitaldesign.com?
Zachary: No. I know the guy who owns it. We shot off a letter or a video like you got to that guy. He told me at one point the 300K wasn’t enough for a, what is that? A nine-letter? you know. And I told him to go get the . . .
Andrew: Yeah. And he can’t do anything with it. He can’t turn it into a design shop?
Zachary: Actually, that was the guy who owns Vital period and the vital design was another guy. Probably $20,000 would have done it but I was going to pay more than 10. The reality is put Vital into the search engine, and right underneath the dictionary meaning should be us.
Andrew: You know what, I can’t for some reason just let you say that without testing it, even though even before you said if you put in these keywords and you saw my attention went away, I tested it so that I could see if it was right. And sure enough, let me see after, no Vital source, I don’t have that. The other stuff that you said does come up. Do I have to type in Vital Design?
Zachary: Yeah. If you put it in Vital Design, we’d be there.
Andrew: Design, for sure that I noticed.
Zachary: And the reality is is that’s how people search. They’ll put in Vital Marketing, Vital Design. They are actually a bunch of agencies with the word Vital in it. We tend to outrank everyone with anything near Vital. We used to rank first for the word vital but again, some of those search engine listings have changed a lot. Now definitions . . .
Andrew: Do you know what I admire about your company? It’s like the little design touches. Like, even as I’m reading, there’s something about it and I don’t know exactly what it is. But there’s something about the font, the spacing, everything that just makes it really easy to read. There’s something about the little touches. Like, you’re sitting in front of a wall, you’re vital orange. There’s like little things that nobody would pay attention to have been thought through. And I don’t know what they are to put my finger on it, but I do feel them when I’m on the site.
Zachary: Yeah, the web design is awesome. Thanks for the feedback.
Andrew: All right, cool. Vital Design, put that into whatever search engine you use and you’ll come up with the website. I appreciate you coming on here to do this interview, Zach. Thank you.
Zachary: Yeah, it’s been awesome. Thank you. Thanks for your audience.
Andrew: Thanks for listening. Bye, everyone.