Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses, and I do these interviews for an audience of real entrepreneurs, which is why sometimes we get a little in the weeds. Real entrepreneurs want the details. Fake wannabe entrepreneurs want the big picture and the exciting Lamborghini that comes at the end of the road, at least they imagine it does.
Anyway, I’ve said for a long time, this is the way things work and that our listeners often end up being guests. Well, today’s guest is someone who’s been listening for a long time and has said, “I don’t want to be on Mixergy until I hit a milestone.” He’s hit the milestone. He’s here to talk about how he did it, where he got the idea, what’s next, and I invited him here because I’ve known him for a long time, and I had no idea how he was doing with his business, and I’m fascinated by his story.
His name is Michael Cooney. He is a founder of a couple of different companies that we’ll talk about. Most recently though, he created WhatConverts. Let me tell you what WhatConverts is. You know how when you buy ads online, people will interact with the final destination in lots of weird ways. Maybe they’ll pick up the phone and call, or they’ll fill out a form, or they’ll buy. And it’s hard to track where the leads came from, so that you can double down on the ad sources and the lead sources that are working and stay away from the ones that are costing money and not really working.
Well, that’s a pain that Michael experienced in his first company, and he said, “I’m going to solve it.” And that’s what he did. He solved it with WhatConverts. It’s software that gives you one place to track, manage, and get reports on your leads. And this interview where we find out about what his big milestone is, and how he got here, and why he was a terrible employee, and the one thing that Mixergy did not tell him right, or what he heard and it didn’t work for him, and so much more is sponsored by two phenomenal companies. The first is the company that I get my office from and have for about a decade. It’s called Regus. And the second is a company that will do your email marketing and other marketing automation right. It’s called ActiveCampaign. I’ll tell you about them later. Michael, welcome.
Michael: Hey, thank you, Andrew. That’s a great intro.
Andrew: Thanks. What’s the big milestone?
Michael: So I didn’t want to come on the interview until we had hit that million dollar, you know, annual revenue. So we hit that. So, you know, the monthly amount where it’s coming in north of $80,000 a month.
Andrew: Wow wee.
Michael: Something we’re really proud of and I thought, you know, that was a milestone I was going to hit before I came on Mixergy.
Andrew: I’m glad that you did it. I feel really proud to see that you got here. And boo, you’re not a showy guy. I saw you not long ago here in my office. I’ve known you for a while. I’ve known your wife for a long time. She took my best photo of me ever, and still, I hadn’t known that you got this far. Let’s talk about how you got here. I mentioned earlier that you’re somebody who knew that you weren’t a great employee, and it had something to do with this internship experience that you had. What was the internship supposed to be and what happened there?
Michael: Yeah, so I’m in the marketing industry now, but I actually started as an electrical engineer, heavy current. I decided to take that career path because I kept on breaking my mom’s electrical appliances. So I got the career and then the internship was to go work for an engineering company. And the first thing that happened, I arrived there. It was all preplanned that I was coming for the internship. I got there and the boss was like, “Oh, you arrived. Well, I’ve got nothing to do for you.” So I said, “Okay, I’m going to go teach myself computer-aided drawing.” And I went and did that. And he came . . .
Andrew: You get into the internship, he says, “I have nothing for you to do.” He just said, “Hey, free labor fine, come on board and I’ll find something.”
Michael: Well, this was actually the second year, and so I’d learned and I tried to prepare him saying, “I’m coming and I actually want to do real work.”
Andrew: Okay. So the first year you are doing kind of junky work, the stuff that we all do. Get coffee, make . . . well I don’t know what. Make copies or whatever that make copies equivalent is. And then second year you said, “I now need real work.”
Michael: Yeah.
Andrew: You come in and the real work he gives you is what?
Michael: Well, he points to three piles of filing about, you know, three feet high. He says, “Hey, can you file these for me?” And I was like, “Yeah, no.” I said I didn’t go and study engineering to come to do your filing. So his eyes went big and I said, “I’m going to go teach myself some computer design. Let me know when you’ve got some engineering work for me.” And that was just one example of many things. Just being in the corporate world, I just didn’t fit. I wanted to do things, I had ideas, and I also seemed very stifled.
Andrew: Were you the type of person who kept coming up with ideas?
Michael: Yeah, I’d come up . . . there are lots of ideas. I mean, so when I learned that computer design, I designed a plug where you could just push in wires, close it, and it was connected. I did things like that. I moved on to different system where . . . or different company where I had to interact with a lot of vendors of engineering equipment, and I figured out it was very inefficient. So I built the database . . . I’d never done programming or database. I built the database, I organized everything, and I categorized everything. And that was actually the foundation to where my next company started.
Andrew: Because why did you need a database and a database of what?
Michael: Because I was dealing with like 200 to 300 suppliers. And every year the old catalogs . . . we’re talking like ’94 and ’95. The old catalogs, we’ve got a date and then the salesperson would come around and bring a new one each year. So I built the database to know where it was, what was new, what was current. And I became the go-to-guy in the office. So I’m going to . . . you know, there were a couple of hundred employees, and if they needed something, they came to me, and I’m a database. I thought, “Hey, this company supplies that.”
Andrew: I said, “Michael, we need a specific kind of cable. Where do we get it?” And you say, “Oh, let me look at my database.”
Michael: Yeah.
Andrew: You go in the database, search for the cable catalog, and you say, “Actually, our cable catalog is out of date, but at least I’ve got one and I’m going to give it to you. Be aware of the prices might be a little bit off because haven’t . . .”
Michael: Yeah, exactly.
Andrew: Got it. And you created this on your own just because you love it. Just because you wanted to teach yourself and expand your . . .
Michael: Yeah, I wouldn’t say I loved it. It was a need. I had a problem, I wanted to solve it, and so I needed to learn how to use databases to do it.
Andrew: Okay. And then you went to the company and you said, “Hey, I got this idea.”
Michael: Well, I went to . . . so what happened is I went to a buddy’s house and he showed me the internet for the first time. So this time I’m in South Africa, and the internet sort of hit mainstream around ’95, ’96. And he showed it to me and my mind just exploded. I was like, “Hold on, what are . . . are you telling me that I’m on the screen? I’m seeing information that’s coming from the other side of the world.” And he was like, “Yeah.” And I’m like, “How does that information get there? How are we accessing it?” So this wasn’t their modem. So it just . . . it blew my mind and I said, “So any information is available to anyone, everywhere all over the world.” And he’s like, “Yeah.” And I was like, “How do you get it up there?” So he told me about the FTP. I said, “How do you create the pages?” So he told me about HTML and I said, “How do you know?” And he says, “Well, it’s just view source and you can see how the code is structured.”
So the next week, I go to websites, you know, just using notepad and the whole thing and FTP information. So, when I saw the internet and I had my catalog database, I’m like, “Man, why use paper catalogs anymore? This is going to be brilliant.” So that ended up me getting involved and wanting to create a catalog online. I went to an existing catalog supplier, and they weren’t interested. They said, “No one uses the internet.” So, you know, from there, that was the genesis of me starting a company, and then I wanted to put catalogs online.
Andrew: To just take the existing catalogs as they had it, scan it in somehow. Is that what you were going to do or to have someone type it in?
Michael: We looked at just scanning it, putting it online, but then in those days you remember modem, it was really slow, so you really . . .
Andrew: Generally, especially from what I’ve heard in South Africa.
Michael: Yeah, and surprisingly, South Africa at time, there’s a place called Internet Solutions. They were really ahead of the game. They got internet banking humming along before most countries did. So in some ways it was advanced. In other ways, you know, it was slow. So, yeah, I needed to go into HTML, and I thought companies would be receptive. No, you know. And that’s ultimately I got tired of hearing none of my customers use the internet, so I’m trying to create a business.
Andrew: Where do you think it was going to be? Where do you think the revenue was going to come from? If no one was willing to pay to be a part of this, where was the money going to come from?
Michael: It was going to come from creating websites for companies. I wanted to be the directory so I could add this catalog, but I realized, “Let me build some websites, get that revenue and they’ll fund the catalog until . . . because it’s like a chicken and egg. You need a big enough database of companies to make it valuable to get the visitors. And then, you know, so this . . .
Andrew: This is catalog companies, you enter their data into a database. They say, “Hey, I need a website.” You say, “I will build a website for you.”
Michael: Exactly.
Andrew: That’s the model?
Michael: Yeah.
Andrew: When I mentioned earlier scanning, I’ve got this beautiful scanner that I don’t even use anymore. A ScanSnap. I just put in 50 to 100 pages I think, and it scans them directly into Evernote for me. Beautiful. That didn’t exist back then.
Michael: Yeah.
Andrew: So you were still scanning this stuff, how? And then it would take a long time for people to get each page.
Michael: Well, I entered the data into database. So what I did is I created a category structure, and then I created like a login page, so companies could come in and they can go click, click, click, click. I do these catalogs.
Andrew: I’m on the early version of your site. So I can go . . . it was called EngNet.
Michael: EngNet, yeah. Engineering Network.
Andrew: I went to products and services, I hit mechanical, I hit valves and actuators. And then under valves and actuators, I clicked on a butterfly . . . yeah, butterfly valves and now I see the stuff that’s in there.
Michael: Yeah.
Andrew: Wow. I see the names of the companies, I see their South African branches, I see a phone number for them, I see an email address. This is, like, really well done. I mean, we’re talking about an early 2000 web version of this. This was you in the beginning typing it in manually?
Michael: Well, what we did is we . . . because we started in electrical, we started with a small amount of categories like electrical, and we’d fax over spreadsheets, not spreadsheets but checklists. We’d fax it over to the companies, and they would tick them and fax them back to us.
Andrew: Okay.
Michael: And then when they faxed it back to us, we would go into the database and go click, click, click, click and just tick all the check boxes. And then we made it where they could do it online. And when we made it where they could log in and manage their own data, that was mind blowing in the time. That was, like, ahead of the curve.
Andrew: I see it here. I even see that there was a period where they could add themselves directly in there. You know what else stands out for me in the early version of your site? That it’s really connected to what you’re doing at WhatConverts. On the right side of your site, there was a poll. How did you find us? The people were supposed to report back to you how they found you because you wanted to know, where do I spend my attention, my marketing?
Michael: Yeah. Exactly.
Andrew: There’s something that years ago I would have brushed over, but now I got two little kids, so I noticed to stop and talk about it. And that is your wife was pregnant at the time. You were thinking, “I’m getting out of the corporate world and going to do this thing.” In the past I would have said, “Hey, another issue in their life, of course it’s always risky.” What I learned now about myself and other dads is, before the baby comes, you get into this panic about, can you provide for the baby? Can you actually provide 10, 20 years from now? What . . . right? And so did you have that fear, by the way? I know it’s not universal. Did you have it?
Michael: It’s like you’re reading my script, Andrew. So what happened was my wife was pregnant. She was probably about three, four months pregnant, and I was working a corporate job. We’re getting paid. We didn’t have much savings at all, and I was just feeling so stifled, and I wanted to do this internet thing, but it just wasn’t going, and I felt like I needed to dedicate full time. Because, you know, the logical thing to do is get it going on the side and then move over. I had hardly anything going, and I just said, “You know what? I just can’t take this corporate stuff anymore.” I resigned.
So, you know, she wasn’t working at the time. I wasn’t working. She was actually trying to start the company herself, and she had got some plans, and then I came over myself, and it was really hard times. And the day my daughter was born . . . I’m not a crier, but I cried that day because for that very reason, I didn’t know if I could provide for her or the family at that time.
Andrew: I get it. And still you did it because you hated the old world. You had to define who you were.
Michael: Yeah.
Andrew: And you were starting to understand who you were. Who were you? What was the you that you understood so well that you’re willing to risk everything for it?
Michael: Well, that’s the funny thing because people ask, you know, “Did you grow up being entrepreneurial?” And the answer is not at all. No, I just . . . I lived life, I was more like a daydreamer. But when I got into the corporate world, and I had ideas, and I wanted to do things, and I couldn’t do them, it’s just . . . it was, you know, crushing me. I didn’t like people in authority, who weren’t very good in my opinion, telling me what to do when I could see a better way. So it’s just . . . it came out of frustration. I was like, you know, “I can’t live my life being stifled.” So that’s when it came. And yeah, ultimately I had to make a jump. We did do the jump, and it turned out. One thing that did help is my dad at the time was in the corporate world and that gave me the wedge in to do websites for his corporation.
Andrew: You did and you got paid, so that helped you make ends meet for a while.
Michael: Yeah, you know what we did? We went to Greece on vacation.
Andrew: Okay.
Michael: So we finally got some money and my wife and I went to Greece on vacation. She went to see family. And it was the stupidest thing we could have ever done.
Andrew: Why?
Michael: Because we didn’t have that much money. And we finally had some money, and we’ve always wanted to visit England, that’s where her mom lives too and then Greece as well. So we spent three weeks in England and Greece. So we did some work and we got paid and we used that money to go over . . . My dad tried to warn me away from it, but we wanted to do.
Andrew: Your dad sounds like an interesting character. He was an accountant?
Michael: Yeah.
Andrew: In ninth grade, he started teaching you accounting. How did he teach you accounting and how did that go over?
Michael: Well, I’ll never be an accountant because he was trying to teach me and he’d go through this scenario. He says, “Okay, you get this money, okay, and you put it in your books. Is that a debit or credit?” And I’ll be like, “It’s a 50/50 chance.” I got it wrong every time. And he’s like, “Hey, that’s credit. That’s credit.” And I’ll be like, “I have no idea.”
Andrew: It’s so funny what sticks and doesn’t stick. For me it’s, I still cannot figure out which side of the plate a fork goes on and which side a knife goes on, drives my wife freaking nuts. She writes it down. I don’t even know when I’m going to go and have the patience to do it. When something’s just not you, no amount of coercion, no amount of screaming, “It’s a credit” is going to get it to penetrate.
Michael: Yeah.
Andrew: How long did it take for EngNet to actually make the kind of salary that you are producing at your job?
Michael: It probably took a year, you know, to get to it that stage.
Andrew: A year. Okay. That’s not bad.
Michael: Yeah, and it was doing well. That corporate job from my dad helped. And in a way, it helped but it hindered later on because I hadn’t developed the sales techniques and skills to get new clients, because with that job it was fairly substantial. So it allowed us to, you know, go several months before having to go get somebody else. And yeah, that’s a crucial thing. Getting new customers is such a key to starting a business.
Andrew: What’s PC Heaven? PC Heaven.
Michael: That was just a crazy name. It’s a bit embarrassing. It’s just . . . it was just like the internet was a heaven for PCs, because if you had a PC that wasn’t plugged in, it’s like a dumb machine and now you plug it in and it’s like heaven. So . . .
Andrew: And so that’s what you called your corporate name. The website was EngNet, the corporate name was PC Heaven because, wow, you’re one of these people like me who saw the internet and said, “This is heavenly. This is going to change everything.”
Michael: Yeah, exactly. And that’s just . . .
Andrew: Someone just recently asked me about something to do with politics in the Middle East and, like, which country do I like and which one do I hate, and so eventually what it came down to, “Don’t even ask me. I’m so disappointed that we still have countries. I thought the internet was going to make us all into, like, one big giant group of people, and we’d all find our own place in it. And I thought it was going to be heavenly too.”
Michael: Yeah, because . . .
Andrew: You’re starting to make a profit. Let me take a moment and talk about my first sponsor, and then we’ll come back in and continue with how big this business got, and what big pain led you on this track to create WhatConverts, the SaaS company. All right. My first sponsor is a company called Regus. I got to tell you, you work out of your house?
Michael: Yeah, now I do . . . For 10 years, I’ve worked in an office, but since WhatConverts, we’ve all gone to remote, and I’m working from home now.
Andrew: How is it to work from home? This is still part of the ad for Regus.
Michael: It’s tough. Yeah, there’s distractions, especially in the summer now. You know, as we speak, you know, my eight year old daughter’s downstairs. So having an office and being focused is definitely, you know, preferable.
Andrew: Yeah, I have this issue where if I’m at home, first of all, I’m going to eat way more, and it’s all the little junky things that we have, and we don’t have potato chips, but we have a lot of almonds. I’ll go through almonds and then I’ll go and say, “Well, you should eat something more substantial.” So I’ll get a sandwich. And then little things distract me, and I don’t get work done. And also, if you bring somebody in to do a job, even if it’s for the day or for a meeting, it’s really awkward to bring them to your house, so you go to a coffee shop and you try to count on the coffee shop being the right experience for this, and it doesn’t end up working. I signed up for Regus, and I wanted space where I can fully focus. And I’ll tell you one of the things that I loved about Regus.
First, all the coffee I need, right? Number two, there isn’t all my junk food and distractions. They actually, unlike a lot of what you call co-working space, I have four walls and a door, so I could close the door and have quiet to myself, but if I need some space, some people, if I need some more activity, I take my laptop, I go into the lounge, and I sit down on the lounge and I lounge. And frankly, if I’m fed up with this space and I need something more inspiring, I don’t go to a coffee shop. I take my laptop and I go to one of the other Regus offices in the area, and there’s one that has a beautiful view of the bay here in San Francisco. Stunning. I go and I sit there and I have that stunning experience.
And in every one of them, if I need coffee, they have it ready for me. If I need to print, they’d let me easily print. If I need conference space, they have it for me. It’s just a phenomenal experience. And if I ever go remote to somewhere, we’re talking about South Africa, I didn’t check it out, but I bet South Africa Regus, I’ll just search real time right here. There you go. There’s Regus in South Africa. And the benefit of that is, if I happen to be there and I need a little bit of time, like half a day to go and work, I have it. If I need to have a meeting there, they have a conference room for me.
Perfect, perfect atmosphere and they start off really inexpensively. If all you want is space in the lounge, you get all the benefits of receptionist and so on that I talked about. They have it. And if you want office space, they have it, and if you’re a bigger team, they’ve got office space for that too. They will scale with you.
All right, so if you’re out there and you need to work with Regus, do this, go to regus.com/mixergy. When you go to that site, you’re going to get 0% off, I’ll be honest with you. I don’t really see a huge compelling reason for anyone to use my special URL other than the fact that it gives me credit for having sent the person over. I actually don’t even know how they track it. Speaking of the way that your site works, Michael, there’s a phone number at the top of the site. How do they know who I sent in? Like, how many people just randomly come across? They don’t.
Michael: Yeah.
Andrew: And it’s possible that they’re not going to see the full value that I’m bringing to them, but hopefully, people will use a URL and that will help track. If you want, I will introduce you to my person there. Just contact me and my team. It’s contact@mixergy.com. Contact@M-I-X-E-R-G-Y.com. I love them. Before I even moved to San Francisco, Michael, I said, “Do you have an office in San Francisco?” They said, “Yes.” I said, “Book it.” They said, “You want to come see it first?” I said, “No, no. Just get me office space there.”
Michael: I’ve been to your office, Andrew. And it’s high quality, and when you’re talking about the coffee, I remember there’s a machine there, you can make nice little espresso coffee drinks.
Andrew: Yeah, I know they brew coffee fresh all the time, but I like the little . . . the espresso drinks like you mentioned. And when you are there, the receptionist greets you. If I’m still in a call, the receptionist will say, “Would you like a bottle of water? Can I get you something to drink?” Right? There’s an atmosphere where you can sit.
Michael: Yeah.
Andrew: Right.
Michael: The receptionist even has candy.
Andrew: Yes, that’s right. And the candy is there for an important reason. Every Regus office has almost the exact same candy for breath. If a guest comes in to talk to me, I know one of the first things that they’re worried about is, first of all, bathrooms and so there’s a receptionist to go talk to about that. And second, they worry about their breath. And so Regus says, “If everyone has this issue, let’s just have little candies for them, so that they don’t have to worry about it.” And it feels like a nice treat.
Michael: [inaudible 00:21:51] this candy?
Andrew: regus.com/mixergy, guys.
Let’s continue on with this story. You now had a business that was growing. It was you running it on your own. I see the different levels that you were selling on your website. There was, like, the free listing. Then there was an intermediate listing where for 300 bucks I could get more categories on your site, the full listing where for how much? For $1,000 or so, I can have a whole lot more categories and my own five page virtual website. So I see how the business has grown. You then had a problem. What’s the issue that led you to start WhatConverts?
Michael: So, yeah . . . so EngNet was a engineering directory, and over time we merged more into like a larger digital marketing agency. So one thing that I haven’t mentioned is we started in South Africa. We went to the UK and opened up an office. It has been five years, then we moved on to the USA.
Andrew: So this trip to Greece, that was not the right time because you didn’t have money, led to a trip to the UK where Mimika, your wife, could see her mom and then eventually you moved there.
Michael: Yeah, so that actually planted a seed. So about 15 months later, we had totally immigrated from South Africa to the UK.
Andrew: You know what? Let me ask you something that’s kind of a weird question to ask. How do you afford to move all the way over to the UK where things are not cheap? You’re somebody who in conversation with our producer, you said, “You know what? I couldn’t even get a computer when I was starting out.”
Michael: Yeah.
Andrew: You told her about this idea that you had, harebrained scheme for getting . . . You got to tell people. What was your scheme for getting a laptop?
Michael: Well, I thought, you know, in the beginning I’m going to be demoing my software to people live on a laptop. And I said, “You can sponsor me a laptop and, you know, basically, I’m like your salesmen in front of people.” They all laughed at me. I mean, I went to Compaq. I went to Hewlett Packard. That’s when they were two different companies. I went to all the big laptop manufacturers. And I got one company that was going to give me two laptops and I was, you know, I was close to getting them. She went on maternity leave and her replacement came in, and he laughed at me too. I didn’t get a laptop.
Andrew: [inaudible 00:24:02] how much more I liked you when I heard that story. The nerve on you to call up these companies and say, “Give it to me for free because I’m going to go and . . .” That is, like, entrepreneurship at the level that as a kid I was drawn to. You have nothing, but it doesn’t hurt to try.
Michael: Yeah.
Andrew: So you did eventually end up with a computer. How’d you end up with a computer?
Michael: Again, through my dad, through his company, he could buy things and I’d given him the tax back, so . . . a tax break. So he almost got, you know, computers at half price, and he lent me the money, and he never asked for it back. So my dad has helped me out there.
Andrew: The debt is still there. So then how do you end up in the UK where it’s super expensive? And why do you end up in the UK?
Michael: Well, you know, South Africa politically is going through turmoil, or it has been. And at that time, we still had a lot of friends, and there’s lots of news stories about Zimbabwe, which is north of South Africa. And my grandparents lived in Zimbabwe and built businesses, and they had to leave with the shirts on their back because the government wouldn’t let them take anything out. So they were 51, 53 years old and restarting their lives.
So when I was starting my business and I’m working hard, I’m seeing these stories and speaking to friends and I’m like, “You know what? I just want an option, you know, outside of South Africa.” And that’s what started. We visited the UK, and then all of a sudden the seed was planted, because I never wanted to leave South Africa. I loved the place. But yeah, 15 months later, we found ourselves there. To get the money, we pretty much sold our house and took the proceeds of the house to fund the move, and we had enough to last us about three months. And where our first child, you know, where . . . I cried because I couldn’t see how to provide.
When we moved to the UK, because of the currency thing, I couldn’t rely on my dad, you know, to bail me out or anything. My wife was pregnant with our second child, and we had no contacts in the UK. We just had a house for about three weeks, and we had to get a house. I lasted about three months with our savings, no income and then we went into debt. Luckily, they gave us debt for some reason. And for the next two years it was pretty much hell. Oh, well, I cannot hear you.
Andrew: Hell of trying to hit your . . . so you trying to make payment on your house, hell of trying to figure out what this business was going to do.
Michael: Yeah.
Andrew: Was it that it wasn’t producing as much money now that you were in the UK, or that the UK standard of living costs so much that . . . ?
Michael: No, the UK standard of living, you can live relatively cheaply. It’s not that. And we didn’t live in London. We lived up in York, which is cheaper. It was that I didn’t have enough customers. It took me five months to get my first customer, and there wasn’t enough money. So we were still getting money from South Africa through the EngNet business, the directory. What had happened, because of my what . . .
Andrew: Wait, through the internet business, meaning what?
Michael: Through EngNet in South Africa, we were still generating money in South Africa through that business.
Andrew: You mean people were paying to be listed in the directory?
Michael: Correct.
Andrew: But it wasn’t enough money to live on in York.
Michael: It sort of covered half our expenses, but we were going into deeper into debt each month.
Andrew: Okay. And so what were you doing?
Michael: So I was just calling up, trying to drum up business cold calling. I could have got a job. I went to a couple of interviews, and I just came back to my wife and I said, “You know, we didn’t take this risk to get a job. We did this . . . ” And that was the stupidest thing to do. In hindsight, I would have got a job with an ad agency to learn the industry, to get into it. That’s what I should’ve done. But we just suffered through it, and it was a long, slow grind for two, three years.
Andrew: Wow. And you were doing . . . at that point, starting to take on more . . . is it agency work where you were helping out businesses beyond having them listed in your directory?
Michael: Yeah, we were doing both. So directory and then agency work as well. Building out websites, getting search engine, search engine optimization, things like that. And this was before SEO had tools, you know, so I would get the log files, the server logs to see where people came from and I could see the source and medium in there. So, yeah, we learned SEO the hard way.
Andrew: Wow. What year was this roughly?
Michael: We moved in 2001 at the beginning.
Andrew: Okay. All right. And that’s when you started to see a problem, and the problem was what? How did it show up on EngNet?
Michael: So the problem is people are paying you money, and then they’re not seeing the results. So we had stats reports, but, you know, we can show them clicks and visits, but we wouldn’t know . . . if they click through to their website, you know, did they come from EngNet? Did they come from, you know, Google? Where do they come from? So we could never track that. And it’s . . . that even the whole world . . . so that was always a pain and then we moved to the USA and that pain continued. So the WhatConverts thing comes a whole lot later. I don’t want to drag this out too much on EngNet.
Andrew: But I get the problem. You know what? So I’m looking at the directory, and you and I talked before we started about how if I dig through the directory and I find the right company in here, like Vac-Cent Services, I could see that they’re right for me. But there’s a phone number on there. I could just pick up the phone and dial them. There’s no way that they know that I met you on . . . that I met them on your site. And frankly, I may not even remember I met them on your site. Maybe I’d saved it for later.
Michael: Yeah, that’s . . .
Andrew: Right.
Michael: . . . that’s normally what happens.
Andrew: The answer is always, “I saw you on the internet.” Now what are they [inaudible 00:29:31] dig in deep to understand where on the internet I looked, or sell me the thing that I’m calling about. I know how I would handle that call. Same thing with if I just go to their website, there’s no way for them to know. And that’s how you started to feel this pain point. You said somebody needs to solve it, and you couldn’t find it. Also at the time, you had an employee named Jeremy Helms, who sounds like a really interesting guy. He did what for you? Or somewhere around that time you had that.
Michael: So Jeremy came when . . . I moved to the USA from the UK, and then I needed a web designer, so Jeremy joined me. This is 2006, 2007. He joined me, and he worked for me for a long time up, until 2013, and then he got a great corporate offer to be, you know, a digital marketing manager at a big corporation. And I was like, “Man, I can’t match that offer, go for it. It’s . . . you know, I think you should take it.” And he’s . . . you know, in my time, I’ve worked with people who are just special, and Jeremy is one of those guys. So I was really sad to see him go and, you know, I had . . . I tried to replace him, but it was really difficult. But he came back a few months later and he says, “I want to build something myself.”
He says . . . he came back a couple of times and he says, “I don’t want to come work for you, but I want to work with you. Do you have any ideas?” And initially I said, “You know what? We could make a really easy to configure product catalog.” But then I thought about that and it’s such a long sale cycle. I didn’t like the growth potential. And then I said, “You know, what I’m struggling with is this fricking lead tracking.” I said, “We track forms, you know, individually.” We’ve now done call tracking, you know, so we know where the calls are coming from, but it’s such a pain.
Andrew: Oh, you did this at EngNet?
Michael: Yeah.
Andrew: How did you track calls at EngNet? How would you know if I called up one of the people in your directory that EngNet is how I found them?
Michael: So it was more the case of we’re now developing people’s websites and generating campaigns for them, and we’d be using one of our competitors. So one of our competitors we compete against now, we’re using them for call tracking.
Andrew: Okay. All right. So you’re using them for call tracking. You said, “I think we found it.” So then what’s the problem that would lead you two to partner up and create a software solution?
Michael: Well, what happened is we ran a new campaign. It was actually an AdWords campaign for the specific customer. And I said, “I want to run an AdWords campaign. SEO is working great, but there’s holes that we can fill with AdWords.” And he said to me that AdWords is a scam. And I’m like, “What?” “No, the previous marketing agency got me spending five grand a month and nothing worked.” So I said, “Look, give me three months and a 600 a month budget, $600, and I’ll show you.” So we did it, and after the first month, you know, we were only checking forms and they were like 20 leads. So I said, “Look, we need to check calls.” So we checked calls, and there’s like 60 leads. So he says, “Well, how do I know those calls aren’t junk?” And I went to go look and it’s just . . . it wasn’t easy.
I’d have to go through each call and listen to them. This was a pain. So I needed something where it was a feedback mechanism. Once you got the phone call, how do you know if it’s good, bad, or ugly? So it just seemed like I got this call tracking and I showed him, “Look, this is how many calls came from AdWords.” I knew they came from AdWords, but the client still wasn’t happy.
And that’s when Jeremy came in and I said to him, “If you can develop a system which can track forms without a website changing anything on their website, I think we’ve got a product.” And initially, I was thinking we could integrate with this call tracking where we can get a feedback mechanism, so we know when a call is good or bad, we know when a form is a good or bad.” Those were the first two things. “If you can do this, you know, let’s do it.”
Andrew: And the reason you knew that this would be a big enough . . . a pain to solve is you were dealing with this. You were dealing with clients who were dealing with this. One client would not even spend a few thousand dollars on AdWords because he thought it was junk, and the reason he thought it was junk was he couldn’t see in black and white how much money he was getting back from it, whether it was paying off. I got it.
All right. And you tried alternative software. It did some parts, but it didn’t do the whole thing. And then I told you before we started, what I understood about your software and I kept bringing up phone calls and you said, “Andrew, yes, phone calls are good.” But I said, “Why aren’t you excited about the fact that you guys can track phone calls?” Because most people really want to know forms. They don’t want to change the forms on their site. They want to know who . . . someone filled out a form because that’s the way a lot of leads interact with new businesses. Where did that form fill out come from? And to me, that’s never been an issue because . . . I’ll be honest with you. There’s always a hidden field in my form that says where the person came from. But what’s going on with their sites?
Michael: So it’s in the nuances, like for a long time we’ve had that hidden field telling where it comes from. To try and get a summary view of that is difficult to go back three months and to say, you know, all these leads came from a campaign is difficult. If you have a CRM, you can maybe pass it over and do something, but it’s difficult. It’s just like you walking in mud to get what you really need. I just wanted something that was super easy. So forms is important. And I wouldn’t say most people want forms. I would say my . . . I want to track all conversions. So it’s phone calls and forms are like 90%. Now, if you use live chat, you know, or a web chat, that can be huge as well, so we track that too. So with us, if you want to know if your marketing works and your users, we can tell you. You can click on one link and we’ll show you a report and there’s no doubt. And then if it’s . . .
Andrew: Right. Everything.
Michael: Everything, everything in one place. Yeah.
Andrew: You know what? And for me, I get to pick my own software for my site because I’m the founder of the company and we have kind of a flexible operation where I could . . . it’s not super easy. I can use a different system. Your clients, you were telling me some of them have forms on their site, some have IFrame, some have this, some have that. It all integrates with their software, and they’re not ripping it out just for you. You want to just be a little addition, lets them track what they already have.
All right, so now I see the problem. I see the person who you’re going to team up with to create the solution. Let’s take a moment to talk about my second sponsor who you use, and then we’ll come back in and see how you continue from there.
So my sponsor, second one is the company you’re familiar with, ActiveCampaign. I could sing the praises of ActiveCampaign a lot. What is it that drew you to ActiveCampaign?
Michael: So ActiveCampaign . . . in the beginning, you know, with software, you get people signing up for a free trial, or you get people signing up for a newsletter. We automate the sequence of emails that they get. So sometimes we’ll have a signup form and this is one particular use case, and the first gate we have in a sense is they have to put in a credit card, even though it’s a free trial. So we get the email address before they see the credit card field, and then some of them bail or they, you know, they leave the site because they don’t want to put in their credit card. So we’ve got that in ActiveCampaign and then that goes through a sequence of, you know, the next thing is okay, you know, was it a deal breaker having the credit card. So it’s just an automated message and then it’s like, “Hey, let me tell you why we created WhatConverts.” And that’s all automated, keeps the conversation going.
And some people say, “Hey, my company won’t let me use a credit card. Can we do something else?” And then we can . . . so we haven’t lost that opportunity. And that’s all done with ActiveCampaign. We just had, like, a series of 10 emails. We automated, you know, when it goes out, how it goes out. And then if they’d go back and they put in their credit card, then they go into second automated sequence of emails.
Andrew: And you know what? I keep talking about how you can automate the emails that go out based on what people have been seeing on your website. But this is a much simpler automation than that. I like what you do here. You have two steps to signing up. Step one is enter your name or company name and email address, and step two is pay. And so now you’ve got the email addresses of people who are interested and if . . . and you tag them, and if they don’t also have a tag that says, “I bought.” You now have a pool of people who you can reach out to. So easy, I could describe it and I don’t think it’s going to come across as easy. When you tried an ActiveCampaign, you’re going to see the difference. Everyone listening to this, obviously, Michael has done this.
Anyone listening to me, when you try it in ActiveCampaign, you’re going to see how easy it can be. And I challenge you, go sign up for any and every one of their competitors and try to do a similar thing with them. Can you do it? Almost all will let you do it. Will you want to rip your hair out? I’m going to bet you that there are absolutely some that are going to make you do it. They’re going to make you doubt your knowledge, or they’re going to suck you into a week-long project because you’re like me, you have to figure out the technology.
But either way, it’s a waste and a distraction. You’re not going to be able to do it well. If you want to do marketing automation right, go check out activecampaign.com/mixergy. When you get there, you’re going to notice that they don’t have a huge setup fee, which some of their competitors have. In fact, I’m going to let you try it for free. And if you like it, your second month will also be free. If you want help, they’re going to do free one-on-one sessions with you, two of them with their consultants to make sure that you fully utilize this stuff.
So you can say, “Hey, this guy, Michael, he had an idea I want to implement in my business. How do I do it?” They’ll tell you. Then you go do it. And then when you come back and if you have any issues, they’ll say, “Here’s how you could fix it.” Or maybe you don’t have issues and I don’t think he will say, “Here’s the next thing you can do.” And finally, if you signed up with a competing service and you’re not happy with them, they will migrate you for free. Go check it out at this special URL, activecampaign.com/mixergy. You should be doing your marketing automation right, and they’ll get it there. I’ve used so many different software, so many.
Michael: You know, with the software is, like, literally five minutes to install, but there’s friction to changing, you know, and that’s why we wanted it so simple. We don’t want to change people’s business process. And the thing with emails changing, once you’ve set up an automation, yeah, you don’t want to go through that again.
Andrew: It’s really, really hard. And the competing services are good at getting you, some of them, to build these intricate setups that then you can’t leave with. And you have to start hiring their certified professionals to manage because it’s too intricate. I think there are two things, Michael, that I can go off like a crazy man about in private. I’ll keep it off Mixergy. Number one is marketing automation software. I keep thinking I should bring it into the ads, but if they hear how I rip on their competitors, ActiveCampaign is going to say, “I’m not paying this guy to rip on the competitors. It looks bad for us.” So I keep [inaudible 00:40:00]. And number two, the electric scooters in San Francisco.
Michael: Oh wow.
Andrew: I will talk your ears off about that.
Michael: Have you thrown any in the water, in the ocean?
Andrew: No, they’re so helpful. There’s such an need here [inaudible 00:40:13]
Michael: I saw an article of people getting fed up with you. So what’s the case? Is it . . . so they are good. I thought you were saying it’s a negative.
Andrew: They’re so, so good. And the fact that the city can . . . the fact that people are riding on the sidewalk. I blame some people, but I blame the city even more. The city should recognize there are people who want to get off of their . . . out of their cars and they want to be on these scooters. Let’s build real bike lanes. And I’ve seen, having lived in San Francisco now for five years, when the city builds bike lanes, it is like a build it. If you build it, they will come. More bike riders come in because if there’s a safe place to ride, you’re going to want to ride to work. It’s a . . . it’s San Francisco, the weather’s almost always great. It’s almost always good, never great.
Michael: Man, you got me sold, man.
Andrew: Sure.
Michael: More bike lanes. I’m all for more bike lanes.
Andrew: You know, the bike lanes are so bad here. My wife yesterday got hit by a car.
Michael: Oh no.
Andrew: She’s looking . . . I didn’t even ask her. It’s not the car’s fault. There’s no, like, break between the car and the bike rider. And how are you going to get more people out of their cars, and frankly, even out of their Ubers, if you don’t give them a nice environment? So don’t blame the people who are riding on the sidewalks, blame the city for not creating a good experience to get those people. All right, see I can go off like this so much more.
Michael: Yeah, I can see. I can see.
Andrew: You know what else I did? I took pictures, as I was walking into a bar with a friend of mine, of all those boxes that used to hold newspapers, the free newspapers, the paid San Francisco Chronicle, they’re sitting there empty. People put their garbage in them. The city still has those on the street, but they don’t have electric scooters. Come on.
Michael: Yeah, and you think for San Francisco, there should be awash in money. There should be money to burn.
Andrew: And yes, there should, but they . . . for some reason, they don’t have it. They can’t even help out the homeless people who are sleeping in tents literally in the street. They can’t pick up people’s poop that’s sitting in the sidewalk. We should not be waiting for the government to say, “Yes, let’s get these scooters on the street.” We, as entrepreneurs need to say, “We are better than the government. The government’s never going to rise up to people’s needs. We have to step in and if the government’s upset, it’s not that we’re always in the wrong. It’s that they are slow.”
And again, the other thing that fired them up this morning, the escalator coming out of BART, the train station, it’s almost always out. When was the last time you went to a mall and saw that the escalator was out? I don’t remember it. I go to the third world countries. They literally keep the lights low or off when you go in there. The escalator works because they need you to go upstairs to buy. The city can’t get the escalator right. We’re waiting for them to get the policy right for scooters and the sidewalk. Crowd the sidewalks with the scooters, let the city have to figure it out. All right. You see, I told you.
Michael: Yeah. [inaudible 00:42:49], Andrew. I’m with you, man. I’m with you.
Andrew: You gave me a little opening. Anyone who could read the transcript will see. You just took, like, a little interest and I’m like, “Well, I got it.”
Michael: Yeah, that’s cool.
Andrew: All right. So now you’re starting to . . . you have this idea. Did you set Jeremy off and say, “Jeremy, if you can do this, we’ll get into it.” And then he built it. Is that how it happened?
Michael: No, well, it was that initial thing. “If you can do the small part, then I think we’ve got something.” And so, once we had that, we met them at golf course. Jeremy and I love golf. And we said, “Okay, how are we going to do this?” And we just decided we’re going to go 50/50. I’m going to do sales and marketing, he’s going to do development. I’ve had bad partnership experiences in the past, so I think it was helpful. I came with that experience, and there’s certain things I said need to be defined. We have to have defined roles. What you do, what I do does not cross over. And in terms of . . . like, even salary before we even started, we created a salary chart on what we’re going to earn when we get to certain levels. All those sorts of things . . . yeah, we just decided let’s for 50/50. We got defined roles and said, “Let’s go for it.”
Andrew: That’s interesting. I keep researching as we talk. I do this with every guest. On your website, because I know what to look for, I see how . . . like that, the phone number changes when I hit it. It goes from a 704 number to a 888 number. As soon as I hit the site, it’s like it’s picking out the right number for me. I’m a little too fascinated by that. The first version of the software had what?
Michael: The first version . . . you know what? Because Jeremy was a web designer and developer, so what you’re actually looking at is like the first version, very similar.
Andrew: The design wise because he does have a design background, but the functionality was more forms. It was all about forms. You had a script to your site?
Michael: No, it was call [and form 00:44:47] straight from the beginning. So what happened is, in the initial genesis, I was concerned about the form portion because I knew we could track calls if we’re integrated with another call provider. And my initial thing was to be able to combine everything. So the initial idea of call tracking would be too difficult, and we have just integrated with another provider, but, you know, Jeremy went away and he came back and says, “No we’re going to do calls and forms.” So we did calls and forms from the get-go. And we . . . I don’t think we did e-commerce or chats at that stage. We just did forms and calls.
Andrew: To just know, if somebody is calling in, where did that call come from? If somebody filled out a form, where did that come from? But you wouldn’t know necessarily that the call resulted in a sale or that the form resulted in a customer, right?
Michael: So that’s the feedback portion that we added. From the beginning, I wanted an email notification to go out. And on the bottom it says, “Is this a quotable lead? Yes or no.” There’s two buttons. And if you click yes, it would then say that was a qualified lead. If you clicked no, it was not a qualified lead. So that would be sent out after every call, after every form was received.
Andrew: And it was self-reported, the people who got it. Okay. Your first customer came from where? Was it this one client that you told me about or . . . ?
Michael: Yeah, we used one of our in-depth clients to be the first customer. So we probably started the new customer in October of 2014, and we only commercially became available like five months later. They were our first customer, and they used [inaudible 00:46:23]. And we found that they weren’t using the email notifications. They would actually go into our system because we store each lead. And then at the end of the day, they’d just go, “Yeah, that was good. That wasn’t good. That was good.” So, you know, they had like 20 leads to go through on a daily basis.
Andrew: Okay. Did you get any feedback from them? I know it was . . . the first set of clients were agency clients, people who you are already working for, who you had a sense could use this.
Michael: Yeah.
Andrew: Did they give you any feedback that helped shape the product?
Michael: Yeah, there were things like this is too time consuming doing these leads, so I just wanted to filter by a couple of . . . like, if I’ve got somebody’s telephone number, I just want to top search for it, find it, click it, you know. So we put in that functionality. They went to sort and filters. And now you can do whatever you want in our system. If you’ve got an email address, telephone number, and name, you can search for it. We’ll show it to you. You just click yes or no. You could even put in a quote value or a sales value. So that was the feedback. The users . . .
Andrew: Meaning yes or no, like I could do a search for a name and then next to it say yes, became a customer, and no, did not become a customer?
Michael: Correct. Yeah.
Andrew: Okay. Is any of that . . . so that was because people asked you for it. They didn’t want to just go through the emails. They wanted a quick way to search and say, “I know the two customers we got this month. I don’t need all the other 98 that didn’t turn into customers. Help me find those. I’ll mark them and we’ll move on.” Right?
Michael: Exactly. Well, so everyone’s a little bit different. In this case, they gave us that feedback. So what you find is, you know, a percentage of our customers use that feature, others don’t. Others just . . . they want to know total leads and whether there were phone calls and where they came from. So most of our customers are happy with that. And then the ones that qualify them and put in quote values, they can see us being $1,000 in AdWords, and I got $100,000 back in customers. So there’s the different ranges of customers. They’re all at different levels on how they use, but we try and build in as much functionality as possible, but still keeping it simple.
Andrew: Getting agency clients, fairly easy. Going outside the agency wasn’t so easy. You told our producer . . . you guys at Mixergy. I’ve been listening to you for a long time. You tell it . . . you do interviews with people who just build a landing page and say, “I’m looking for beta customers.” And whammo, they get 2,000 beta customers on their email list, and then they turn them into customers. That didn’t happen for us.
Michael: No.
Andrew: Okay.
Michael: We tried the strategies your previous guests have said, you know, we built a landing page, you know, we let people know. We didn’t have a huge list other than my engineering contacts, which weren’t really interesting. But yeah, they didn’t work really.
Andrew: Why do you think?
Michael: I just . . . I’m not sure, but one thing we did, initially our go-to-market product fit was prove the value of your traffic sources. We wanted to show you the business value of your marketing in a sense. And people didn’t get it. So what we did is we just went after, “You want call tracking? We got it.” So we targeted only call tracking, and that’s why our site still focuses on call tracking because people were searching for that. People weren’t searching for track my revenue by marketing, or, you know . . .
Andrew: It’s too ambiguous.
Michael: It’s too ambiguous and needs too much explanation. What I’ve discovered is when you’re advertising, you want it to be crystal clear. You want call tracking? Yes, okay, here we go. [inaudible 00:49:49]
Andrew: You know what? I was on Pipedrive’s website the other day and I saw spreadsheet for keeping track of your clients . I thought, “Spreadsheet for keeping track of your clients? This is like, why are they offering it?” And I realized, of course, I’ve had several entrepreneurs on here to say, “People are looking for a spreadsheet to do what we’re trying to get them to do. Let’s just offer it to them. Have them give us their email address. We give them the spreadsheet template for keeping track of their clients, or keeping track of time sheets, or whatever they want. That’s what they’re looking for. Once we get their email, we could say the spreadsheet is good, but here’s a better solution. Our software Pipedrive will help you keep track of your customers in a more organized way. Try it for 14 days. If you don’t love it, you don’t have to pay.” And so I guess what you’re saying is same thing, meet them where they are and then show them what else they need.
Michael: Exactly.
Andrew: And if it’s [spreadsheets 00:50:39], great. If it’s phones, great. But in reality, it’s going to be more.
Michael: Yeah.
Andrew: And so those . . . that’s some of the lessons that you learn. How’d you learn that that’s what would work? Was it looking at search results or looking at what?
Michael: Yeah, running AdWords campaigns was one of them. We also added ourselves to a Google review directory, so Google Analytics partners and call tracking things came through there. But yeah, we tried lead tracking, call tracking. And call tracking, it was just the one that worked and then we just . . .
Andrew: So the AdWords thing that we heard long ago people say worked, that worked for you. I couldn’t get it to work for me.
Michael: Well, yeah. And most things didn’t work, and now AdWords doesn’t work for us.. We’ve got a few big competitors. One of our competitors just got a huge injection of money, and they’ll pay $100 a click for call tracking, so they’ve sort of priced out anybody that makes sense. So our plans start at $30 a month, and it’s just crazy thinking spending $100 per click because it’s going to take 10 to 20 clicks to get a customer to spend $2,000 to get a $30 a month customer. Ultimately, it does work if you’re buying market share, but you have to deep pockets.
Andrew: You know what does seem to work with you? It’s Capterra. I told you that one of the things that I did was search for you to see what people in Capterra said. The feedback was positive. You’re encouraging people who are happy to go to Capterra, right?
Michael: Yeah.
Andrew: And a lot of people do that. Capterra, for some reason, is still really big with businesses. I might be going to Product Hunt, but a bigger business, they’re going to Capterra.
Michael: Yeah, the thing that Capterra did right is they stuck in their lane. They decided we’re going to help people find business software, and then they’re going to allow them to, you know, print reviews. And I remember the Capterra story that there were two founders and one wanted reviews, the other one didn’t. And ultimately, I think that one founder left. I just saw it in some “Inc.” magazine story. But the reviews now, I think they hit over 500,000 reviews in their site and it’s all just business software.
Andrew: It’s solid. It always, when I’m looking into them for guests, I get solid input and it’s all very businessy. The types of tools that I couldn’t implement. I can’t implement your tool in an hour that I’m researching you to understand it as well as the people who are on Capterra do.
Michael: Yeah.
Andrew: The thing that I noticed is surprisingly sending your traffic is Neil Patel’s site, neilpatel.com. He did a blog post that seemed to include you, right?
Michael: Really?
Andrew: Yeah, yeah. Look at this. This happens to me a lot. At the end of interviews, people say, “How’d you know that that’s where my traffic is coming from? Who told you?” Here’s what I got. Yeah, he did a blog post about call tracking analytics, and he said, “Manage leads in web form tracking with WhatConverts.” And it seems to have sent you guys a considerable amount of traffic, and he’s walking through people how to use your software and what it works.
Michael: I’m going to get . . . I’m looking for those things. I didn’t know that was out there. I haven’t . . . so that’s interesting. I haven’t seen leads that came as a referral from Neil Patel because our, you know, our software, that’s what we do. So I’ll see the AdWords. I’ll see the Google organic being organic. I haven’t seen the Neil Patel.
Andrew: Yeah, so I guess what I’m looking at is traffic and what you’re keeping an eye on is orders.
Michael: Yeah, we’re very focused on leads and sales instead of . . . because Google Analytics does impressions and visits. We do leads.
Andrew: You know, a thing about him is he’s super smart, and he knows that if you put a date on a blog post like that, it feels outdated a week later, and so he doesn’t have the date, and I can’t tell when it was published. I have to go into the source code and then see 20 . . . 2018.
Michael: I’m going to find it.
Andrew: So it was published about a few months ago, about two, three months ago.
Michael: That’s interesting.
Andrew: Yeah, very cool they would do that.
Michael: Neil Patel is everywhere, man. Say again? I missed you.
Andrew: He’s really good.
Michael: Yeah.
Andrew: All right, so it’s content marketing is not big for you. Google AdWords still working, but not so much. SEO is working for you. What else is working for getting customers?
Michael: Referrals.
Andrew: Referrals. How are you asking for referrals?
Michael: We don’t. They just come.
Andrew: They just do. There’s no incentive that I’m not picking up on. There’s no call to action?
Michael: What we’ve done, I have been trying to analyze this because now, you know, now if it’s a million, it’s like, “Okay, how do we get to the two million?” And so we’re looking at this, and we’re finding that agencies talk to each other. So one of the scenarios is we’ll talk to an agency, they’ll tell their agency buddies, and we get it from there. They’ll say, “Hey, man, we’re using this and it’s great.” The other scenario is we’ll get an agency and their customers use us. The customers love us so much. And if they move agency, they tell a new agency, “We want to keep using WhatConverts.” And then sometimes it’s like we’ve got a really large agency and they did white label services for other agencies, and then from there we’ve got a number of customers. And then it’s surprising how many people move around. Like, we had one person at one agency and then he moved to another big agency, and he brought WhatConverts with him.
Andrew: But you know what? I wonder if your advantage in simplicity works against you in marketing, because you automatically will track forms no matter who creates the form. My brother can create a form for me with the CGI-bin URL or whatever. You guys will track that. Which means that form makers like Typeform, like Wufoo forms, and all the others, they don’t have this big day where Michael integrates them into their software, and they get to email their audience and say, “If you’re using our forms and you want to know where forms are getting filled from, we now have an integration with WhatConverts. Go try it.” There isn’t that big announcement. It just works.
Michael: We are going to announce it because even though it just works, we are building out these pages. It’s a part of our content strategy. So we will be doing that.
Andrew: And so it naturally just works, but whenever you want to promote that it works, that’s when it’s going to be a big thing.
Michael: Yeah, we are just saying, you know, track your Shopify. So Shopify is another example like e-commerce. I don’t know if you know this, but out of the dataset from e-commerce websites, sometimes only 10% to 50% of the orders go through checkout. The rest of them come through phone calls or web forms. So there’s a big opportunity, you know, for e-commerce websites who are only tracking their checkout. And that’s a funny story. Well, it’s not a funny story. It was annoying because I had a customer, we we’re doing e-commerce sites for them. This is part of EngNet.
And we’re doing a great job, we had a great relationship, and he asked for access to analytics [inaudible 00:57:28], and he looked at it and says . . . he says, “Michael, we could have a conversation.” And I’m like, “Okay, what’s up?” He says, “I don’t know if we can afford your fees”. And I think, at that time, we were charging around $30,000 a year for running his website. And he says, “Look, e-commerce orders is about 200,000 for the year and . . . but you’re charging us 30,000. My gross margin is 40%, so that means I’m making 78,000 gross margin, and 30,000 that it’s going to you. That’s not going to work for us.”
But what he didn’t take into account was the telephone calls, the web forms, and all those sort of things. Once we figured it out, there was a way we could retract, recheck it due to the territory we had expanded. It’d actually done a million dollars in sales. There’s e-commerce companies out there that are only tracking e-commerce sales. They’re missing all the telephone and form sales that are coming in.
Andrew: Right. Which makes sense. Somebody will come on to a website, see what they like and then call it. Well, is that a big part of it that someone’s going to fill out a form and then have a . . . ? I guess you know where it makes sense. They will come on, fill out a form because they want to do wholesale purchase, and then the wholesale purchase doesn’t get tracked to the source.
Michael: Well, it’s . . . yeah, we can go on a tangent, yeah. Because, normally, it’s a more . . . it’s a high value or a complex sale. So, for instance, the guy’s got a diesel pickup truck. He wants to buy new injectors that are going to give him 200 more horsepower. He wants to phone in to make sure he has the right model, that that injector works with his model of engine because every year there’s a different model kind of thing, and that is this the right thing to do. Is it going to give him 200 horsepower? So, in that case, that specific case we were tracking, 10% of the orders came through the checkout, 90% came through forms or the telephone. Actually, 80% was telephone.
Andrew: All right. I get that. And so you’re not in the App Store for Shopify, but that’s where you’re expecting to go for more integration.
Michael: But we don’t need to be in the App Store.
Andrew: Does being in the App Store get you enough attention that it’s worth to just creating a plugin that does hardly anything?
Michael: I think it’s a good idea. It’s, you know, one of those things we’re looking at. The thing is there’s so much opportunity. You got to choose what you’re going to do first.
Andrew: Yeah.
Michael: With Shopify, we don’t need to be in the App Store. If they’ve got a site, we can check them in our platform and it’s a . . . but it would, yeah, I’m sure some people would want to use Shopify and have everything one place, that’s where it would make sense. We do have a WordPress plugin, which allows you to do that.
Andrew: All right. The website, for anyone who wants to go check it out is whatconverts.com. You’re not going to know that they came from my site though, right, because they’re just going to listen and type it in on their phone.
Michael: If they type it in, they’ll come in as a direct visitor, yeah.
Andrew: All right.
Michael: But if we . . .
Andrew: I’m fine with that.
Michael: Like on your website, if we have Mixergy/WhatConverts and that redirects and it has UTM parameters, we can track it that way.
Andrew: Right.
Michael: If you have mixergy.com/whatconverts and they use that, then we can track it.
Andrew: You know what? I would like to do it. What will end up with is more . . . I would like to have more insight into how many people who listen to my interviews actually go and check out the guest, but to get them to not just go to your site and instead go to a special URL, like, it could be whatconverts.com/mixergy. Would mean that we would have to offer them some, kind of, a discount, right? Otherwise, what’s the incentive to go use a URL? So they’ll just use WhatConverts if they remember it. They’ll probably go search for it on Google and . . .
Michael: They like it, Andrew. They’ll support you.
Andrew: But I don’t want them to do it just for support, and then if we start offering a discount, it’s not a good idea for me to get into bed with my guests and to offer discounts where we’re closely aligned. So that’s why . . . I’m just being open with my audience about why I haven’t done it. Believe me, I’m dying to know. I loved when Neville Medhora at a conference that I spoke in said, “People don’t know it, but being on Mixergy is super effective.” I don’t want to get your hopes up for this, but he said, “We’re on one time.” I think he said $40,000 or $50,000 just from being on Mixergy. It’s like an easy win.
Michael: And so that’s the copywriting course, wasn’t it?
Andrew: This was when he was with AppSumo.
Michael: Okay.
Andrew: Before AppSumo split off into sumo.com and AppSumo and all that. Anyway, so they got a bunch of customers that way. Yeah, so I’m curious. I think that would also help me get better guests when I could say, “Hey, look at how many customers WhatConverts got.” But I’m really cautious to not be in bed with my guests because I see when podcasts are in bed with their guests, there’s a little bit of tension that’s not there. And I’m not creating it artificially, there was no tension in our conversation, but the tension needs to be that you are here to promote yourself, which is your best interest. I am here to promote the interest of my audience.
Yeah, there’s obviously overlap. I want everyone to do well. I want you to do well, you want me and my audience to do well too, but there’s still a little bit of a tension that I need to get stuff out of you that you wouldn’t think of in a blog post. I need to get more for my audience and you . . . and not love you so much that I’m in bed with you. This is what goes on in my head. It’s that and also, why don’t we have more scooters in San Francisco and every city, right? New York should have them too. I can go off on New York.
Michael: I’m impressed with the research, man. You brought up the PC heaven thing. I thought that was dead and buried. You found it.
Andrew: I do love to do research. Part of the problem with me is that I will love to do so much research that my vision is not, “How do we sell more ads?” People keep telling me, stick a third ad in here. Here’s what I would like to do. I would like to bring in a real reporter to go and call all . . . call your clients. Like, if you have somebody on your website, I want them to call up the client. Let me see what’s on your site right now. We could figure this stuff out. It’s not hard. Here we go. Martin [Lefore 01:03:19] from the WPromote. Call him up. What is it really like? What sucks? Where’s the problem? Where were they good? Where did they stink?
I want them to go to LinkedIn and hit on the WhatConverts’ link and see who’s not an employee there anymore. There are four employees now. Who’s an employee that’s no longer there? I would like them to call your competitor and say, “Why are you guys better? What does Michael not going to tell us about?” But this is my personal obsession. All right.
But here’s the deal. With all my research, I was not able to uncover negative stuff about you. With all my research, the only thing I’m a little . . . you know what? I’m going to say I’m a little disappointed that I didn’t get to know about this earlier, but I totally appreciate why you waited to hit a million. This is a moment for celebration. Congratulations on doing so well. I had no idea because you’re a very humble guy, and I, kind of, knew your wife more than you, so I could see why you wouldn’t stand up and say, “Hey, Andrew, wait. Look at what I’ve done.” But I’m glad that I got to see what you did.
Michael: Yeah, no, definitely. I just wanted to get . . . I’ve always appreciated the Mixergy interview, so I was happy to come back and do it.
Andrew: Everyone else, if you’re building a business and you’re doing well, be sure to let me know whenever you think it’s the right time to come on here and do an interview. Check out whatconverts.com. And also, my two sponsors, you’ve heard me say this over and over again. I think today the best email marketing automation company out there is the one that doesn’t want me to say email marketing automation because they do so much more than that, but get them in with email marketing automation, and then ActiveCampaign could explain that they do more.
Anyway, company is ActiveCampaign, email marketing automation, and so much more, check them out. And the office that I . . . the office company that I rent from, that if you want to professionalize your operation, go to Regus. regus.com/mixergy. You’ll get receptionist included, you’ll get coffee included, a fridge included, couches included, conference room for a day meeting if you need it. The works, regus.com/mixergy, you get more done. Michael, thanks so much for doing this.
Michael: Thank you.
Andrew: Good. Bye everyone.
