Why Didn’t Facebook Groups Crush Circle?

When I interviewed founders of online courses and asked about their communities, they often said they host them on Facebook. “That’s where everyone is” was the answer. Sometimes they’d use Slack, but FB was dominant. So how did Circle break through? That’s what founder Andrew Guttormsen & I breakdown.

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Andrew Guttormsen

Andrew Guttormsen

Circle

Andrew Guttormsen is the Co-Founder of Circle.so, a modern community platform for creators. Prior to founding Circle, he spent nearly five years at Teachable, where he joined as the seventh employee and led a 15-person growth and marketing team, helping to grow the company’s monthly recurring revenue from $10K to over $25MM in annual recurring revenue.

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Full Interview Transcript

Andrew Warner: 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. Joining me is the founder of Circle. Circle did something that I wouldn’t have thought would work. They created community software that you can, host on your own sub domain or domain.

Expect a community of people to actually end up using it. And the reason I didn’t think it would work is that so many others had tried this before. And Andy, what I’d like to talk to you about, I’ve got with me, the founder, one of the three founders Andy Gutturmsen,

love to find out the origin of the company. I’d love to find out the journey, how you built it, but also why this worked. When I saw vanilla came around years ago, that didn’t go so well. There were all these different, uh, message board apps. They didn’t do well. There’s discourse, which is good software use, but.

None of them have taken off the way that Circle did. And I want a thoughtful understanding of how this worked, why this works so that the rest of us who are building companies can, learn something and use it. And I should say this journey through the history of Circle, this community based software is sponsored by Gusto, a company that I love for payroll management and benefits, and I’ll tell you later on why, if you’re paying people, even if they’re just one contractor, you should Mixergy.

But first, Andy, good to have you here.

Andy Guttormsen: So great to be here with you. and I’ve been a Mixergy addict for a long time. I have so many great memories of listening to you, in my ear, walking around New York City. So it’s really fun to talk to you face to face.

Andrew Warner: Thanks. You know, then the first question and you said, Hey, we’re comfortable talking about it. The first question I would ask you is what’s the revenue? What can you tell us about where revenue is right now?

Andy Guttormsen: Yeah. So as we wrap up the year, probably end of this month, we’ll be right around 16 million in, annual recurring revenue.

Andrew Warner: This just blows me away. And how many communities are built on Circle?

Andy Guttormsen: So right now we’re, approaching 10, 000, customers. Which is pretty wild.

Andrew Warner: It really is because these are people who are paying to manage a community. And presumably they wouldn’t continue to pay if they didn’t have people who are active on their platform, right? WordPress install and be done.

Andy Guttormsen: Totally. Yeah, in order for people to keep paying, month after month after month. It’s like They need to be getting real value.

Andrew Warner: So let’s go back to the beginning and understand how you got here. And, The idea originated while you were still working at Teachable, the education software platform.

Andy Guttormsen: Yeah. So I think it’s such a great story. A lot of people, when they think about starting a company, any type of business, they think of the risk involved in it’s like jumping off of a cliff and it’s like. It actually was kind of the opposite. So my co founders and I, we were at Teachable, we were there for four and a half, five years.

and it was some of the, like the best experiences of my life. I’m still super, very close friends with, with Encore, who’s the founder and CEO of Teachable at the time. But he, um. We, we’re not risk givers, my co founders and I, and so what happened was, we’re sitting there and actually Teachable was acquired and, and we were thinking, all right, what do we do now?

And gosh, we were so tired. Like we just

we worked our asses off and we’re four and a half years in and we’re just super tired. And we’re like, all right, I guess let’s take a little break now and, take six months off, figure out what we’re gonna do next. But what ended up happening was it’s, It’s funny, I think how the best businesses start, it’s like when you work at a startup or any company like, like Teachable, you almost start to find kind of like these secrets, which are essentially these insights that only you can have working at a company really deeply in a space, deeply and closely with customers.

And so what we really noticed were, if you looked at all the top communities on, or sorry, courses on, on Teachable, the best. the folks who are driving the most revenue, the folks who had the happiest students, the people that were getting repeat purchases, the people who were really kind of setting themselves apart from a brand perspective and getting great word of mouth, those people, they had not just content where it was, you know, one to many, they had a community element and that was a big insight for us.

And sometimes when there’s those types of insights, it’s just an insight and it’s. Maybe, all right, well, there’s a new feature to be built here. but sometimes there’s a whole company to be built around those insights. And we thought there was something more than a feature, maybe less than a company at the time.

So we were like, all right, what if you build this kind of community experience, because at the time, those folks, they were using a Facebook group. Which was, you know, off there next to, whatever your, mother in law was saying, or a Slack group, meant for people on work, but I still have this totally separate experience.

And we were like, what if we took a community, kind of like almost like widget experience that you could put inside of any course platform, or we build that separately? Because, you know, we didn’t want to build courses. We had just been doing that for the last four and a half years, and we were tired of that.

So what if we just took community? And put it inside a community platform. We started talking, to a whole bunch of, new potential customers. Cause we’d left Teachable at this point. And what we realized was they just wanted the community experience to be the home. And so we went out and we were like, all right, what if we can get a hundred customers, if we can get a hundred customers here, we’ll turn it into a company.

And so that’s what we did. And we spent the next. You know, a few months, really going hard on getting those first hundred customers.

Andrew Warner: Before you even built software.

Andy Guttormsen: Well, we built it with the first five customers or so we kind of, so my co founders, Rudy and Sid, they’re the product folks. And so what they did is they, when they started to build an MVP. They would literally have mock ups and they would go to this, person who we thought could be a great fit.

And they would say, Hey, what if we build this for you? And then that night they would go and build it. Like literally they’d build like the different features. And so like a week later, there’d be a little prototype. Then they would go back and say, how does this sound? And, and, six weeks or eight weeks later.

We got our first customer.

Andrew Warner: So what are the initial features that they built that made it so interesting that somebody would sign up?

Andy Guttormsen: So at the time we were thinking that our kind of wedge into the market would be to go specifically after course creators. Like we knew that if you were a successful course creator, there was a lot of upside for you to add a community component to that course, right? So we weren’t thinking about all the different community types out there, you know, the 9, 000 customers that we have on, Circle.

There’s everything under the sun. We were just thinking very specifically who are course creators and what we thought was. What, they really want is they want a way for their students to interact with each other. So maybe a way to get feedback on my work or do a live coaching call or, ask a question to the instructor.

And so what we did is we figured out what’s like the most basic thing that we obviously have to have. Like what are like the three or four of those? And we did those. And it was really hard to choose, you know. What are the first few things to build? But we focused on discussions and posting and commenting and private messaging.

And those are things you can build over a week. You can build the first feature the next week. You can build the next feature.

Andrew Warner: Andy, I’m sorry. I still don’t get it because that’s built into every existing community platform. And you mentioned some that people were using. And one of the reasons why people were using Facebook. Even like My First Million or The Hustle, they were using Facebook for their communities. or Slack, which was used by a lot of people.

The feeling was, there are lots of tools that we could use for this. They all have posting and direct messaging, et cetera. Let’s go where our audience actually lives. They don’t want to go to another website. They don’t want to remember, but they’re being pulled in naturally into Facebook and they’re living in Slack for work.

And so I don’t understand why those features would have been enough to get anybody to say, sure, I’ll sign up and get this on a site that’s separate with features that are already existing everywhere else.

Andy Guttormsen: Well, here’s the thing. It wasn’t separate at the time. So they had their, so right now, actually, if you look at the course space, all the software, the core software companies, and we can just name them, Thinkific, Teachable, Kajabi. They all have their own little community features, but it’s kind of like an add on at this point.

And it’s not the thing that they’re really known for or go deep on. At the time though, none of them had community features, right? So it was literally just a point solution course focused product. And what these specific customers wanted at the time was they wanted a way to stay on their existing course product.

They didn’t want to do all the moving and all that, but add the community features to it. And so we gave them a little widget. That would come up, right within the course experience on Teachable or on Thinkific,

Andrew Warner: see. You know what? You entered my world through Notion. There was this community of people who didn’t believe in writing code, who wanted simplicity, who found that they could use Notion to build websites. And if they built a website on Notion, they also wanted a community. And I, had a sense that it was Notion.

so as the domain and Circle. so as a domain because it was overlap. And so I assumed that that was where the entry into, business was for you. But no, you’re telling me. There were people who already had, educational sites. People were already coming to their sites to learn the thing that they paid to learn, but they didn’t have a community feature.

And so you built that feature for these other platforms. I had no idea. I just assumed that all these platforms we mentioned already had community in them. I see. So that’s it. That was the answer. Realizing that these community platforms didn’t have it built in and people were already showing up there. All right.

Andy Guttormsen: because we were pretty risk averse, right? Like we, we wanted customers right away. And so we knew a common approach, like for like going to market when you’re launching a company from scratch is instead of trying to serve, everybody, you kind of have like a wedge into the market, like who’s the customer that really well, are there like five of them or 10 of them?

And we realized it was like this course. Creator who was already on a platform. We just needed the community features, but obviously the bigger companies are probably too slow to build them. Right. And so we literally just made a list of a hundred customers and we would send them an email. And by the way, we did have an advantage because we.

How to interact it in this space for 10 years. And we would say, Hey, what do you think about this? All right, let’s hop on a call. And that first year, I think I personally did over a thousand one on one demos, eight to 10 calls a day, just showing people mock ups or showing them the first version of the product.

Andrew Warner: Wow. All right. I’m assuming that Pat Flynn was one of the first people to use it. Am I right?

Andy Guttormsen: Exactly. So from a marketing perspective, something that I think we were like subconsciously thoughtful about, but really accelerated. We went from zero to a million dollars in, four months. but I think what happened is there was obviously product market fit, but we leveraged people like Pat, where he became an advisor.

We knew Pat has this great audience. Of course, there’s so many potential customers in that audience. Let’s collaborate really closely with that. And by the way, Pat, essentially, he helped us really shape the product and day one, and also his business partner, Matt. And so we brought on him as a partner, an advisor, uh, and And then we’ve, we’ve only brought on one other advisor ever.

And Brendan Burchard, who has a big community, very similar to Pat, where a lot of our customers in that community, they really changed the trajectory of, of Circle. And so our approach from a marketing perspective to get those first hundred customers and those first thousand customers was literally to kind of anchor ourselves, with Pat and Brendan, build a product that would be amazing just for them.

Every single week, you know, getting feedback and then have a list of those hundred top course creators and just be one on one. And if we can build an amazing product for those, first 50 to a hundred people, then we can do it for the next 10, 000.

Andrew Warner: What are some of the things that they helped you understand that you wouldn’t have understood otherwise in the early days?

Andy Guttormsen: they were on the front lines cause they made a big bet, right? Cause they’re actually launching a community. So what would happen was all of a sudden the stakes went way up. We weren’t just playing business anymore. Now they were running their multimillion dollar businesses and they have teams too.

All towards building unity. And so they would tell us so many nuances day in, day out. So it could be like, Hey, we’re going to onboard all of these new members. We want to. Give them a great experience. And so we want to create like an onboarding feature. What would this look like? And they would give us a bunch of feedback on it.

Or they would say, Hey, we’re going to, sell this membership here. We can’t use your payments feature because this other one converts better. And then we’d go to them. Like, Hey, what do we got to do to make this convert better? And we’d come with our own ideas. And so like when people’s money is on the line, all of a sudden the feedback becomes.

Really high signal,

Andrew Warner: Okay. So that’s you building into other people’s platforms. It’s hard to build in someone else’s platform because if it’s a really needed feature, they’re going to build it in themselves, which we know they had, they’d done that. What was your process for going outside of these educational platforms and not being a widget in there?

In their world, but a standalone product. Okay.

Andy Guttormsen: you know, it was a really challenging decision actually, because in some ways what that would mean is that we would change from being pure just partners with Teachable as an example to competing in the course space, eventually. And, the, what we realized is when we talk to actual customers. At first, what we thought was my course is my main thing.

I add community to it. But what we realized is that actually the ideal outcome. Is that there’s kind of a standalone home for my community where I can offer things like office hours. I can offer a course or no course. I can have member directories, live chat and messaging. I could bring all these people together.

The way that a person in that world, a creator, tends to actually make a living is that they have a, maybe a course product, but maybe they also have You know, events every month and maybe they have an ongoing membership and to deliver that buyer kind of journey, a new product was required in order to do that, which was a more like holistic and kind of let people go through the purchase process and buy these different products.

Andrew Warner: The original, would you say a million dollars within four months? It was you making phone calls and basically closing most of the sales yourself.

Andy Guttormsen: No. So that was the first a hundred customers or so. So what we did is we, We were in private beta. So for about, four or five months, and we said, we just had a waiting list on our marketing site and it said something, it was kind of cringy. It was like circle the modern community platform. And then it just had a.

Email address and, at that point we had probably, five or 10, 000 in MRR and, we were only charging, we had one plan. It was 39 a month, which if you know about how to build big software companies, it’s not to charge everybody 39 a month. It’s too low, but the feature set, it’s all like commanded at the time, cause it wasn’t a big product.

So we had this wait list and every single day people would sign up to the wait list. And community was kind of in the atmosphere at the time, right? Because the pandemic happened and people were moving online. And, and so everybody was looking for community platforms. We didn’t benefit as much as some of the more established community platforms, because nobody knew us yet.

So we weren’t the default that people were going to, but we were still having people sign up for the wait list every single day. I would see it come in, I’d review every single email address. Does it seem like a fancy person who could be a great customer or help us in some way or whatever, I would send them an email.

I’d say, look, I would love to show you the product. If you can answer these two or three questions for me, then I’ll hop on a demo with you. I told them it’s 39. If that’s good enough and you’re willing to spend that, like I’d love to show you the product and you can make a decision. You just have to have the budget cause I can only do so many a day.

Andrew Warner: And why did you want to talk to them instead of just giving them access and asking them, what do you think?

Andy Guttormsen: There was so much learning. That happened, and those calls were incredibly valuable because, Sid and Rudy, my co founders who are really leading the product and engineering, they ship so fast, they really listen to the customers. There’s a high velocity there. And so there was a lot of learning, but also it’s like when you’re just starting and you have 50 customers or a hundred customers.

Every customer counts. And so I think one of the things that will never, when we look back, the thing called out as really helping, our bottom line, but it gets overlooked from a brand perspective is like, don’t. I, I talked to a thousand people that year, so they all knew me. And so when we would go out, people would say on Twitter, what’s your favorite community platform?

There’d be 50 comments and 30 of them would be somebody tagging my name or Sid’s name or whoever gave them the demo and saying Circle. Because They knew that there was a real person behind the product. So there’s a lot of social proof happening. And if you look at that first list of a hundred people, they’re all relatively well known and so people would see everybody using Circle and that would build this kind of like brand momentum.

Andrew Warner: That was a big thing too, that I signed up for circle when I was trying to. Come up with new projects to launch. And so I created a site called I ship this and we all decided we would launch stuff together. And it was really helpful to have other people do it while I was doing it. I’m still connected to people who I’d met through that.

But the reason that I use circle was I was on, what was that? That site that it’s super, super turns a notion, I set a notion pages into a website and their community was using circle. And I thought, well, they’ve got taste. I like the experience I’ve got here. I’ll do it there because I don’t want to use Slack.

It’s in a, it just doesn’t work for me. And same thing with Facebook and that virality, I think was really helpful.

Andy Guttormsen: Yeah. something that, that happens is like right now, about 30 percent of our new communities. They were previously in another community, and that’s how they heard, about, that’s how they heard about Circle. So there’s definitely a little bit of, virality built in there.

Andrew Warner: Do you still have branding on a paid community? Let me go over to super and see I don’t know how to find their community here. Is there still some kind of branding on there?

Andy Guttormsen: So we remove, it just depends on what plan you’re on, right? So some people, don’t want any mention of Circle. They just want all the credit, right? Like they just, great. That’s why we built Circle. so they remove everything. And other folks actually feel like they get more credibility from, having the Circle branding.

And it’s funny. It’s kind of similar in some ways to like. When you buy a product through Amazon, you kind of know, I trust like where I’m buying this product. And there’s like a little version of that we sometimes get with Circle too.

Andrew Warner: Okay. if I were to try to understand why it is that it took off, is my understanding, right? That you were starting to see that course creators, which had started out building their own community platforms. Then they realized Facebook was working better. Then they started realizing that it, that their audience wanted a place on their own platform, that if they had that on their own platform, then they would sign up and that change in the market.

You were aware of because you were so deep in at Teachable and you were able to jump on that, right?

Andy Guttormsen: Yeah, I think we, um, kind of knew it would work like some version of it. Like there wasn’t actually much risk. We knew that there was this need, but I think in terms of evaluating companies and your, and moves for us, like as a, we’re going to start this company and join this team, whatever it is.

Like. The lens that we looked through when making the decision, whether to start the business or not was like, well, one, we could make a lot of money having a job somewhere else. So we have to be, right. And the other thing is we’ve seen, like, we know these customers, we know what they need. We’ve been in this space for five years.

Like it wasn’t just like an idea, like we earned the right to start this company. and so I think that really, that was what got it started. But then, as you build a business, like Circle, like we went from zero to a million in four months, a million to four million. In the next 12 months, 4 million to 8 million last year, and then 8 million to 16 million this year, and we’ll probably go to 30 million next year.

At every stage, like what’s important changes. So, for going from a million to 4 million or a million to 10 million, like I actually, I think why that’s gone well is because I give a lot of credit to my co founder Sid and the product and engineering teams and how close they are to the customer because It’s a lot of like the sequencing decisions of whether to build this feature or that feature if you look and this is hard for a lot of people to Believe when I say, but a lot of the reason that I think we’ve accelerated faster is because of the details around our product and some of like the small little decisions, like everybody has messaging, everybody has posts and discussions and all of that, but like, how do they work together holistically?

That’s what. I think differentiates Circle from some of the other tools, and then the speed at which the product gets better, that starts to compound month after month after month after month. There are competitors out there where we’re like same like feature parity with them, but they’ve been around for eight or 10 years and we’ve been around for three and a half years.

And I think the market, when people buy software, what they re, what they’re really doing, they’re not just inventing, invent, investing in what the product is today. They’re invest, investing in what the product’s going to become, like the trajectory of

Andrew Warner: Yeah. It’s true. Especially with community because you can export some things, but you can’t really transfer a community from one platform to the other. I can’t take a community on Circle and move it over to Discord very well. It’s, it just doesn’t work. And all that. Past information is gone. And so you want to know, is this going to work for me for the longterm?

Andy Guttormsen: Totally. I mean, we’ve spent a lot of time trying to figure out how to make migration smoother, and there’s a lot of things you can do, but every time it’s a big lift. and a lot of times it feels like starting from scratch because you’re starting from scratch.

Andrew Warner: I’m curious about how you ended up partnering up with your two co founders. Were you two really close friends? Did you explore other businesses before or other projects before you moved on?

Andy Guttormsen: Yeah. So, so Sid was, the VP of product at Teachable for four years. It was his first VP job there. I was the VP of growth and marketing. It was my first VP job there. And, it’s where we did all of our learning together. And what we always say is, I was. I was like always thinking I would try and recruit Sid to start a company with next thing.

I never told him that while we were at Teachable. I was like, if I want to start a company, it’s got to be with Sid because he has the exact complimentary skill sets. And so, when he left Teachable probably nine months before I did. And the entire time I just keep an eye on him. What’s he going to be up to?

What’s he going to be up to? I got to take this opportunity. There’s only so many opportunities in life when you find like the right person to build something big with. And then I found out later he was actually trying to recruit me too. And so, it all ended up working out. It was almost like dating, right?

But, he had also worked with Rudy, our other co founder there. and you know, all the credit in the world actually to Encore because. On core, what he did, which to me is one of the most,I think it’s a real like lesson for all of us who are running businesses, the entire time he was there, he really did put the team first.

So he was very happy with the idea of us moving on. And he was kind of measuring the success of Teachable by how many people would go on to build new businesses. He was literally, I told him, I was like, look, I’m going to go start a company with Sid. He didn’t have to pretend he was happy. He was like truly happy.

I brought him to lunch, little Thai restaurant we would go to almost every day together when we worked at Teachable. I told him, I was pretty nervous to tell him. and he said. How much can I invest? And he just, he wrote a check. Then he came back a few weeks later and he was like, actually, can I make it six times the size?

he was our biggest supporter. Um, and that, really helped Sid and I, as well with the transition.

Andrew Warner: What was Sid’s idea when he was thinking of recruiting you? Did he have something in mind?

Andy Guttormsen: He’s a product guy and I was a marketing guy. And so there’s a little bit of overlap from us in terms of, culture, values, like that’s very overlapped, but from a skillset experiences. Very complimentary because I was overseeing revenue and growth at Teachable. He was overseeing the product and engineering.

We both really need each other and be pretty useless without each other.

Andrew Warner: So he didn’t have an idea. He basically said, I see an overlap with this friend. I want to find a way to work together. Is that

Andy Guttormsen: He had been working on an idea with, Rudy. They tried a few different businesses while I was still at Teachable those last. few months Um, and none of them really, ended up taking off.

Andrew Warner: What are some of those ideas?

Andy Guttormsen: Gosh. So one of them, I’m going to butcher them. So it’s gonna only be like half true, but the, uh, one of the ideas I thought was horrible was, something like come up with your business plan or like, come up with like a business plan that would like create like a recommendation engine for all the tools you could use.

And there’d be like affiliate income or something like that. they actually had a couple of other ideas. That that weren’t as bad, I thought, but just weren’t right. don’t, I don’t remember them off the top of my

Andrew Warner: get that. There are versions of that idea, the link tree for affiliate products for products you love that happened to kick off affiliate revenue. Okay. And so you were in each other’s world and then Encore comes in and says, okay, I want to invest. I think this was a time he and I had talked when, um, AngelList helped him set up a fund.

And so the money I think was coming from that fund. This is before he set up his own thing. Right.

Andy Guttormsen: Yeah. So it actually was a few different funds. So Encore, first invested personally,

Andrew Warner: Okay.

Andy Guttormsen: and then at the time he also had his own, smaller little fund through AngelList. and then eventually he raised, a pretty large fund as a solo GP, and that was an investor as well. So I think he’s invested through three different funds.

Andrew Warner: All right. I’m

curious about what you learned from him. He’s super sharp. I remember he came here in the early days of COVID after he had sold Teachable and Teachable was taking off. And I asked him, did you sell too early? And he was pretty, okay with the fact that he had, you just take, you can’t predict these types of things in life, but he also opened my eyes to how the creator economy was taking off because he was so deep in it.

This was before others had. It talked about it. but I feel like he has other insights from having been in multiple businesses that did well, and also from having lived in this creator space that you’re catering to. But before we get into that, let me tell everyone about Gusto. What do you know about Gusto actually?

So I don’t double up.

Andy Guttormsen: Well, um,

Andrew Warner: To put you on the spot.

Andy Guttormsen: yeah. Yeah. Honestly, I, I don’t know too much. So, the truth is what I love about the tools that we use from our HR team. It’s like, I don’t really. I don’t know much about them because they kind of just work, which is like actually what you want from HR, from HR going. so I couldn’t talk, too much about it.

It’s kind of out of my depth.

Andrew Warner: I’ll tell you, Andy, dude, I was trying out this other software that did everything. It could even ship out computers to people who you’re working with, right? If you’re working with a remote team, you need to get a computer out to them. It did everything, and it was so good to have all those features, but it kept getting in the way.

I just wanted to pay somebody, and that would be a headache, but more than that, I wanted to know, quickly, how much should I pay that person? Like, maybe I was frustrated, and then I’m thinking, I’m 1099’ing this person, How much? Am I paying them a lot of money and then the frustration really is an issue or am I paying them nothing and so the fact that they’re not contributing that much is, is really in line with what I’m paying.

I want to go and see what that is. I couldn’t freaking figure it out. I had to go to tech support and tech support wasn’t there. One of the things that Gusto is known for is Having good tech support. The other thing that I don’t think they’ve got enough of a reputation for, because you don’t know it until you feel it is, it just is easy to use software.

It’s very similar to Circle, frankly, right? This idea that you should, even though you’re running a company, you should just be able to use it and be like, talk to almost like a five year old because you don’t want to screw this thing up. There’s I’ve over the years taught people how to use top entrepreneurs, how to use Skype back in the early days when I was doing interviews with Skype and I couldn’t believe these incredibly intelligent entrepreneurs in tech didn’t know how to use fricking Skype, didn’t know how to do the basic things in zoom until obviously the pandemic.

So what I’m saying is even the smartest entrepreneurs who are running tech companies that are cutting edge. Struggle with technology because they don’t want to deal with some of this nonsense that you have to deal with in order to back then make a Skype call today, pay people. And the beauty of gusto is it’s super simple.

You want to go and pay people, pay people. You want to make sure that they know how much they’re getting in benefits. They got that easy on their side. You want to say, Hey, we’re not working with this person. Easy to do. You’ve got a last minute thing. You want to make sure that you pay somebody bonus. You want to make sure you get your paperwork out to the accountants.

All easy. In fact, this is the time of year that people are thinking about this. If you are thinking about this, frankly, you should think about it at any time of year. I think I switched. I always wanted to wait. Let me do it January 1st. Screw this freaking thing. I’m just going to shift whenever and I’ll figure it out because I don’t want this headache.

And it was not that hard to shift. But this time of year, people are thinking about making the shift. So I’m going to tell you, go try this software out for free. It’s not that expensive. Frankly, this is, this is not a big expense. but I’m going to say for free, because when you eliminate the cost, people are much more likely to go and explore right now.

You can use it for free. If you go to gusto. com slash mixergy gusto. com slash M I X E R G Y grateful to them for sponsoring, they do more than paying attendance on time, pulling benefits, blah, blah, blah, blah. Go, go try them people. All right. Let’s talk about Encore. I’ve known him for a long time, but I feel like now everybody has known him for a long time.

What I don’t know is, what makes someone like him into a good leader? I’ve always wished that I could work for someone like that, so that I could learn things like, what’s the rhythm of meetings? What’s the way that they react when things don’t go well? What do you pick up from him that you’re now using as a leader, yourself?

Andy Guttormsen: I think Encore gets a lot of things right. I think the, reason people follow him is because he believes in you more than you believe in yourself. So he really will believe in you and he’ll bet on you. Right. And so like specifically at Teachable, for instance. I saw him put people into roles that maybe were like a little bit of a stretch for them where like they, they really needed to, work out in the role.

Encore did that over and over and over again. And all of a sudden, he might convince this person, Oh, actually I can do this, this thing. And so really like stretch them. And that, you know, starts to trickle, people see that they noticed that. And, I think that’s one of his.

His real strengths and, and like, he deeply cares about the people, which you just, you don’t always get that. but it comes, through very authentically.

Andrew Warner: I do find that with people, when sometimes they just believe in you. Especially if they have some track record, which I think by then he had, I forget what he had, he had like, um, like a little app company, right. A company that created lots of little apps. So when it comes from him, you feel like, all right, this guy knows stuff and he thinks that I’ve got something in him.

I don’t want to let him down. This is a big opportunity and maybe you see something I don’t see. I got to live up to that, right? That’s what you’re saying.

Andy Guttormsen: it’s exactly that. And so, at Teachable, I remember reaching out to him for, for a job and I actually had been spending about a year. about a year, kind of like I had started a company that didn’t work and I reached out to him. I actually went home to live with my parents for a few months.

25 years old, like not super, not ideal. I reached out to him, sent him a really, really long email, all these ideas for Teachable, trying to get this job, wasn’t a high paying job. I went in to see him and, he ended up basically in the interview, just kind of like looking at his phone most of the time, right?

So I was like, all right, crap, that didn’t work. Next week though, he calls me up, he’s like, come in. And then, a few months later, like eight months later, I was. Running the, the marketing and growth org there. And so I thought, wow, that’s really unique. That’s really cool. He took a big bet on me, but then I looked around the rest of the org and it was the same thing for our customer support team.

It was the same thing for ssid. It was the same thing, on the sales side and like, so he kept doing that over and over and over again. and by the way, there’s lots of challenges with that because all of a sudden you don’t have really experienced leaders in all these different functions. And so it’s a balance where you need to bring in other.

more senior folks who have been there before and have a nice combination of like very senior, kind of been there, done that leaders with more, stretch folks in these, in these different roles,

Andrew Warner: Yeah. Meaning like someone who’s experienced can come in and say, all right, you’re handing growth to me here, the 10 things that we did at this other company that. I left, let’s start with those 10 and then we’ll build on it here. And you didn’t have that. In fact, your previous company was Explorius. This was the company that you were talking about that helped venues like museums, zoos, aquariums, get more revenue.

Already. I see problems with that. I’d like to come back and talk to you about that for a second. Um, but you didn’t have this kind of. Online growth experience. How do you then go in and figure that out? What worked and how did you figure out what worked?

Andy Guttormsen: the, there is no reason looking at my background or, or resume or LinkedIn that you would ever hire me at your software company. And I was very self aware about that. And so. Ultimately, the thought process was I just need to get in on the ground floor and like, be willing to do anything ego aside, and I need to de risk the decision for Encore, and Conrad was his co founder at the time, and so for me, de risking that decision, what I did was I basically put together a list of, 10 or 15 ideas.

I spent two or three days on it, almost like a dedicated website, letter to Encore with all these ideas. And I did that by the way, for other people too. And that, that was to become like literally like an intern or, something like that. I did the same thing for about 10 other companies. I interviewed with all of them.

Tucker Max was another example at the time he started book in a box. And so I kind of got Tucker and, some other companies that you would know of, and it worked. It basically got responses from all of them, but that’s how I de risked that was I just showed them the work ahead of time. And I had to be willing, at a, at 25, 26 to go in and essentially be the lowest person on the totem pole.

Andrew Warner: After being an entrepreneur yourself,

Andy Guttormsen: Yeah, well, that was one of the worst business ideas I ever had was, Explorius, but I had to go in and I had to sell, these big deals to these folks who didn’t want to buy stuff. And so, there was some silver linings in there. It wasn’t a total waste of time, but it was ugly.

Andrew Warner: the challenge that I see in that is that museums, zoos, aquariums, they’re not open to new ideas for marketing the way others would, right. It would be you’re, you’re running circle. If someone comes into you and says, you know, I’ve got this clever idea. You’d be open to it because you’re looking for growth.

they’re not rewarded by growth. That feels like one of the issues.

Andy Guttormsen: Totally. It was, um. It kind of goes back to like, why did Circle work? Circle worked because we were running into this problem that we were really excited about. I was running, the reason I started Explorius was I was running away. I just was running away from my, previous job on, wall street. I just liked the idea of starting a company.

It was one of the worst, one of the worst reasons to start a company. it’s one of those examples of, there was almost no chance that was going to, to be successful. And there are definitely a lot of people who, if I was a better network at the time, would have tapped me on the shoulder and been like, don’t do that.

Just join a company, pretty successful.

Andrew Warner: it for me. Why, why didn’t it work?

Andy Guttormsen: So a whole bunch of reasons. The first one was it was a tech company in by nature, like people, it was basically like apps that you would have on your phone and I’m not a tech person. I would need a great counterpart. Like on a technology

Andrew Warner: I need a SID,

Andy Guttormsen: what we are. another reason is because the unit economics would never work.

This is something that would sell for a few dollars. People download it. I mean, if you want to build even a medium sized business, not a big business. If you’re selling something that’s, 10 average deal size, you got to sell many, many, many tens, hundreds of thousands of them for it to ever work.

It’s just like the hardest money on the planet. We’re trying to build an entertainment product, which you would layer onto something that’s already entertaining. The experience is the opposite of tactile. It’s on your phone. Do you really want to be looking down on your phone when you’re at a museum or a zoo or, like what a bad idea that that really was, but what I think was good about it was, having to go in and pitch something like that.

And it was a good lesson because actually when I tell people who don’t know anything about business, the idea, they all think it’s a great idea. And I’m just like, no, it’s not a great idea. And when I went in, by the way, a lot of the museums using aquariums, I love them, but they don’t know anything about business.

They thought it was a good idea too. So they were buying, like they were buying, their end users were buying.

Andrew Warner: you know, Andrew Mason from a Groupon and now from Descript, which I live in the podcast editing software, that’s amazing. He had kind of a similar idea though. It wasn’t looked down at your phones. It was put your earphones in and we’ll give you a guided tour of a museum or a city. And obviously that didn’t work out.

He transitioned away. It is a need. But it’s not one that people are really willing to pay for, it feels like. And the people who have the need are not, I don’t know, aren’t necessarily the ones who are open or have the decision making power to it. do anything.

Andy Guttormsen: Totally, totally. And by the way, when he launched that business, I was really excited to see how it would go because I would be a customer of that, but it’s a,

Andrew Warner: You know what? I would be a user of it. I thought, and then I never, even tried it when it was available in San Francisco, I was living there and you would think I would put it in and go and try this thing out. And I still didn’t do it, use it. It’s a, it’s a challenging thing. And then if I do want to use it, I don’t think I want to pay for it.

I just want to try it out for free somehow. And I don’t know it’s needed, but not, not really. Meanwhile, teachable. What worked for you? You were, you were running growth. Teachable grew tremendously. What worked for getting people to get on the platform, create courses and, and grow those courses.

Andy Guttormsen: so first of all, there’s something I think we have to all call out around the success of Teachable and Circle, which is a prerequisite, which is like the market actually has to be growing, like the market growing, like being on that wave. It makes all the growth way easier. So that’s the first kind of like prerequisite.

The other thing that I thought, for us was the biggest reason we accelerated was that we used partners. It was Jess. Jess led our partners, program at Teachable. She would go out, she would find influencers. She would, find people that have our type of audiences and it.

We might do 15, 20 webinars every single month. talking about the product

Andrew Warner: I see to someone else’s audience, teaching them how they could create a course, because there were these people who are in the core space, teaching content creators, how to create courses. You would do webinars with them and then you’d share affiliate commission. you share revenue with them through affiliate commission.

Is that right?

Andy Guttormsen: totally. So our model there would be. We would partner with somebody like Pat and would have this great audience. We’d go in, we’d do a partner webinar with him. We teach for an hour, hour and a half, go really deep and people would love it. And then at the end, we’d say, Hey, if you’re excited about creating a course, cause that’s what we would teach on, well, come to Teachable and, give it a shot.

And so we would literally at times, acquire hundreds of customers in one single, webinar. And then of course we built these relationships. You know, a 500 people, 300 people, a thousand people at a time. And by the way, that’s how the idea for us doing summits started. It was essentially me and Encore and a couple other folks outside of New York City in middle of May, just like having a drink, like, Hmm, webinars.

How can we scale this and do a lot more of it? And, the things with a summit, a virtual summit is we would have like multiple speakers and there were times when we literally had 10 or 20 people sign up. And so I, I remember having 8, 000 people live watching our first event on, on one of our summits. That really helped accelerate our growth. There were months where we grew 20, 30%.

Andrew Warner: I should tell people who don’t know what summits are this the way they work is Somebody hosts it and then gets multiple people to speak at the summit on a topic. It’s like a virtual conferenceand then they would each promote it to their audiences so that they bring more people in and have more people know them and As a result whoever’s organizing the summit gets big growth Right.

I

Andy Guttormsen: Exactly. And back then people were much more excited to promote a summit. It was new and novel. We do some, it’s even now at Circle. They’re great for us, but we don’t even ask anybody to promote it. We just ask them to come in and teach really great content. Um, and, uh, and that works really well from a brand perspective.

Andrew Warner: think the interesting thing was this was going around for a while and Encore, or I guess it was you, the team at a software company said, we’re not going to look down on this and consider it this info marketer type of thing and, and think we’re better than that. I was shocked when Encore did it because it did feel like a, like a slimy info marketer thing.

And I stayed away from it and I was in the education space, not software. And then when I saw him do it, I had tremendous respect. Like, here’s a thing that works. We are going to be smart enough to use something from this outside industry instead of looking down on it. Um, not too, uh, not too proud to admit that we use pop up ads at one of my previous companies because they work so well for, um, for porn sites.

I was on a porn site host message board learning what worked for them. And some of their ideas were really good. I wasn’t into the industry, but I was into technology and wherever you could get it. Let’s do it.

Andy Guttormsen: Yeah. I think that’s something that was, it was always a tough balance for us. It was like figuring out how much, how much we can kind of focus on the direct response, marketing, like

Andrew Warner: Yeah.

Andy Guttormsen: work and like balancing that with the brand. And I mean, we, we re reevaluated and revisited, like literally every time we did a summit, like we were like, all right, what’s the line, like what’s the line here.

Uh, and we, over time we were like, let’s get less direct.

Andrew Warner: All right. Let me close it out with this. You guys raise money from Tiger, according to TechCrunch. This was 2021. That was valuation 200 million. What’s the update on valuation today?

Andy Guttormsen: Yeah. So the, we raised money really at like a, the timing worked out really nicely because it was right in November or the tech industry started to contract and all of that. And so, we ended up raising about 25 million in that round. we had another round before that, that was, you know, 4 million with, much smaller.

And so the, we haven’t raised money since because we try to be generally pretty efficient and we still have the majority of that money in the bank and we don’t actually ever want to raise money again. And so we’ve been really prudent. We almost acted like we raised way less. and you know, in terms of valuation, I think just to be very transparent at the time we had something like, 4 million in revenue, right?

So 200 million valuation at the time. It’s 50X multiple, which is absurd. It’s like the top of the market. now, obviously we have 16 million in revenue and probably next 12 months we’ll have 30 million in revenue. So I think we’ve grown into that, valuation, but the, um, the plan is not to raise any more money.

The plan is just to keep growing the business, be really efficient. We have a path to profitability five quarters from now, which we take very seriously and, and we want to be in control of our own destiny.

Andrew Warner: I think software is great. It’s just so beautifully designed. Everything is in there and I still never feel like it’s. Cramped and packed that just feel like I don’t have to worry if this feature takes off in this community if this feature takes off Circles just gonna add it if they’re not adding it It probably is not a useful feature and I’m not gonna get distracted and focus on my community and it works really beautifully I’m actually not hosting a community anymore.

That thing was a really good experiment for me But I’m in other communities and I just appreciate This design. I appreciate how circle is done for anyone who wants to go check it out. Go check out circle. so. so. And thank you to my sponsor. Gusto. com slash Mixergy. Andy, congratulations.

Andy Guttormsen: Thanks so much for having me. It’s been, such a blast to, to get to come on.

Andrew Warner: Hell yeah. Good knowing you. Thanks. Bye everyone.

 

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