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 for an audience of real entrepreneurs. I don’t think you can tell, but this side of my face right here, my forehead is suntanned and this side is not. It’s so weird.
Natalie, I was running 20 miles yesterday, 21 miles. I earned that last mile. And I for some reason didn’t put any sunscreen on and I’m just running into heat. I guess I didn’t expect it to be so hot in January here in San Francisco. And I can feel that this side of my body is getting a tan. And I finally went into Sports Basement, and I say, “I’m going to get drink and I’m going to find a way to get some sunscreen without having to buy a $10 sunscreen. Someone will have it, something.” They had a tester.
Natalie: I was going to say a sample, right? A tester?
Andrew: They did. It was like a kid sunscreen, and I just went and put it all over my face without even looking because I was too freaking tired. It was 10 miles by then. And then I started running outside thinking, “Wow, this smells really nice.” And it wasn’t until I was done with my run that I realized, “Wait the whole way out, you’ve got sunscreen on.” So this side of your head is like, yeah, the way out. You don’t have sunscreen. This side of your head is getting sunburned. This side is not because of the way back you’ve got sunscreen. Who cares? It’s worth it. It’s worth it. I will suffer for that.
Natalie: Twenty one miles is legit. It is worth a little bit of sunburn.
Andrew: It was so painful, dude. My legs were hurting. Also my enthusiasm for running towards the end was gone. But I’m trying to run a marathon on every continent, so I got to push myself. And then I thought to myself, “Not only am I running marathons on every continent, at the end of it, I got to do an interview.” Can you imagine?
Natalie: I cannot imagine running 21 miles, let alone an interview after that. I don’t know.
Andrew: Right. In person, live with someone in like Mexico and Chile where they’re going to be speaking Spanish more than anything. But then again, I’m here with you, Natalie, the next day doing an interview. So this is good practice.
Natalie: This is good. Yes.
Andrew: All right. Let’s talk about what this interview is about. Natalie Nagele, which rhymes with bagel is back. Well, her husband was on here eight years ago, Natalie, nine almost to talk about this little company called Wildbit. At the time they were like the little company that could . . . and I remember Chris was on here and he revealed his revenue and I could see his heart pounding because he revealed it. You don’t even believe that he revealed his revenue.
Natalie: I really don’t believe that he did it. I have to go back and listen.
Andrew: I’ll tell you why, you guys at the time had just launched Postmark, but it was doing well. It was doing from what I remember over a million dollars in sales and he said, “Look, all these freaking guys are now coming into the space, getting tons of money and funding and I’m going to compete against them and when I talked to clients they have to know we are not just some like bootstrap wannabe operation, we’re a bootstrapped, profitable, revenue-generating operation. I won’t tell you the exact numbers but I’ll tell you, Andrew, we’re doing over a million dollars in sales.” And I was proud. He was proud. I feel like you guys don’t celebrate enough. Like in that moment he was both scared and proud that he did it.
And years later when people were asking me, “Why do entrepreneurs reveal their revenue?” I said, “There are lots of reasons. Here’s why. Chris from Wildbit came on and he revealed it because it gives people credibility.”
Anyway, Natalie is on for a different reason. I don’t even know what the reason is because I asked her “What’s your goal here?” And she said, “I don’t know, whatever. We’re just going to have fun.” But I will tell you this, here’s my goal for Natalie. They had this little bootstrap operation and still she goes and she gets a job. And she does it for less than a year, which nearly breaks up her relationship with Chris.
And then she says, “All right, I’m going all in on this.” And she is running this company Wildbit, which does more than Postmark. They have built a collection of apps that help people build apps and run their teams when they’re building software for the internet. And so Postmark is one of them. As you’ll see, there are others. One of them at least they sold.
We’ll find out about the whole thing thanks to two phenomenal sponsors who make this interview happen. The first will help you hire developers. It is called Toptal. Oh and they’re the best of the best developers. And the second will help you host your website right. It’s called HostGator. Natalie, welcome.
Natalie: Thank you. I’m so excited to be here.
Andrew: Natalie, revenue now, it’s nine years almost later. How much you guys up to?
Natalie: More than a million.
Andrew: I asked you can you give me some number, give me a sense of scale? And you said . . . how many users? How many paid users you have?
Natalie: We’ve got over 20,000 paid users.
Andrew: Across how many different apps?
Natalie: Two.
Andrew: Two?
Natalie: Two.
Andrew: I thought it was three.
Natalie: Well, the third one hasn’t launched yet, so third has beta users.
Andrew: Oh, okay. All right. So it’s . . .
Natalie: Two. And the third one we just [inaudible 00:04:46] . . .
Andrew: It’s Postmark [inaudible 00:04:47]
Natalie: The first one we sold, right? Yeah, but they were around.
Andrew: Let’s talk about what they are. I’m just going to do it quickly. Postmark for delivering transactional email. Things, “Hey, your account has been started. Use this link to reset your password,” that type of thing. There’s Beanstalk, which I never freaking understood. The website says, “Complete development workflow.” I’m not a developer. How can you tell someone like me? How would you explain to a seven-year-old what Beanstalk is?
Natalie: I mean, we launched Beanstalk before GitHub. So it’s basically it’s version control hosting. It Git hosting. But what we did was we did deployments and workflow and all that kind of stuff early on.
Andrew: At the time when people said, “Why would I put my software in your hands? Why would I put my code in your hands?” Right?
Natalie: That’s the story. Yeah. Chris went to friends and said, “Would you do this?” Because he was managing our subversion servers at the time and said, “Like, would you let me host it?” And they’re like, “Are you nuts? Like I’d never give you my source code.” And, you know, he’s stubborn, thankfully, and says, “Okay, we’re going to do it anyway.” And then we launched. That thing was like . . . it’s 11 years old. So that’s . . .
Andrew: That’s like the granddaddy of them all, the thing that started everything. By the way, I’m looking over your shoulder. It looks like you’re like in a 12-year-old’s room, in a 12-year-old’s bedroom. Where are you?
Natalie: It’s my office.
Andrew: This is your office?
Natalie: It’s my office.
Andrew: In your house?
Natalie: No, at the office. We have a way of affiliate office but it’s got to stay clean otherwise my head gets foggy.
Andrew: I’m like that too. If my office is messy, I just can’t think clearly. The problem is people send me stuff. And if it’s something that they sent me, like I got these two beautiful games that somebody sent me, really expensive digital games taking a freaking space. It clutters my mind but I can’t bring myself to throw it out or sell it or anything. I keep thinking, “I’m going to use sometime.” What’s your biggest distraction in the office you can’t get rid of?
Natalie: There’s a box that I’m staring at right now on the floor that hacks. So our office has always been like a collection of things from my house. It’s very personal like and we kind of filled it that way. And there’s inside this box is a cast iron pot that my mom brought from Russia that we brought to the office at some point I guess for cooking or something and I have to bring it home but I don’t want to bring it home because I don’t know want to do it at home. But I don’t really want in my office so it’s just tucked into the corner of my couch and I just stare at it every once in a while and I don’t know what to do with it.
Andrew: You know what? That came from Russia. You know, let’s get into your story. I’ll quickly tell people the other app is Conveyor, a workflow you use not manage and then the company that they sold is DeployBot, let’s you deploy code anywhere. Natalie, you’re from Russia. You guys are what? How did you guys end up in the U.S., your family?
Natalie: We came in ’89 as Jewish refugees.
Andrew: What does that mean?
Natalie: So we left St. Petersburg. In Russia there’s kind of two nationalities. You’re either Russian or a Jew. They used to say “Jew” on passports and stuff like that. I don’t know if . . .
Andrew: In passports they would say Jewish?
Natalie: Yeah, yeah. And you know, I’m Jewish and there’s discrimination, but also just even it’s not officially discriminated but there’s discrimination. And there’s also this inability to succeed if you’re Jewish. So my grandfather is an engineer and an inventor, and he would create all these inventions and the patents would have his bosses’ names on them because you can’t have a Jew on the patent. So when things were kind of crumbling in Russia in, you know, ’88, ’89, ’90, Israel with the United States kind of did this thing where they’re like, “We’ll take all the Jews out.” And Russia was like, “Fine, take them.”
But it was this mass migration. And so what happened was, you kind of left in a hurry, but you didn’t get anywhere in a hurry. So what we would do is we actually lived in kind of encampments in different countries. We lived in Vienna, Austria, and then lived in Italy for about four months where you kind of left and then you couldn’t really get to the U.S. because they couldn’t absorb everybody fast enough. So like through various like nonprofit organizations through Israel, they created these some areas where they paid for housing and you live like two or three families in an apartment and you kind of did your thing waiting for your opportunity. And it was a combination of we had family in Philly, so like they have to pay some amount . . . I forgot my mom said there’s some amount and they have to collect the money and it was maybe 1,500 bucks.
But we kind of waited for them to collect the money and file the paperwork and then you came over. So we did that in 1989 and came here with basically nothing. And, you know, what I try to tell my kids all the time is, you know . . . or I say nothing. I mean, like, all of our furniture came from the trash, like my dad and my grandfather at night would like leave the apartment and go pick through people’s trash, which is really funny because I was with my daughter the other day and she saw a couch out on the sidewalk and she’s nine and she goes, “You would have been really lucky if you were little and you lived here.” And I couldn’t figure out what she was talking. And I was like, “What do you mean?” She’s like, “That’s a really nice couch across the street, a really nice couch.” And I was like, “Okay.”
Andrew: Wow.
Natalie: But, yes. So we did your very typical American dream. My dad was an actor in Russia and my mom was a classical pianist, a choir conductor came here. They’d clean houses, and then they both got what I say is like the job that was the fastest way to financial freedom, right? So like my mom became an ultrasound tech because that was an eight-month or something like that, you know, training quick. It pays really well. And my dad became a tech for, you know, heart stuff. Like, you know, just whatever was like the easiest way to like support a family and build a life, build the American dream.
Andrew: And then they did. And meanwhile, Chris, before you met him, started Wildbit. He was 20 years old. And Wildbit at the time was what?
Natalie: We did client services work. So 18 years ago was Flash, lots of nightclub websites, lots of bubbles and floating things and . . .
Andrew: I remember I called him out on that. He said that he did some restaurant work, and I said, “At the time the restaurant still using Flash? Are you doing it?” And he said, “I’m telling you I tell restaurants to stop using the freaking Flash, but if they insist, they’re my clients, I’ll do it and I’ll set it up.”
Natalie: You do what you have to do. Well, yeah. I mean, that’s what he started doing very early on and remote first. So like he had met a guy in Romania on a user group. He was young and basically needed to start building websites. And he learned very quickly he was not a good software developer. So that was like, you know, a very early on understanding.
Andrew: Chris.
Natalie: What were you saying?
Andrew: Chris is not a good software developer?
Natalie: No, he doesn’t code. He doesn’t write a line of code. He didn’t want to [inaudible 00:11:18].
Andrew: What is his title?
Natalie: CTO.
Andrew: Yeah. Okay.
Natalie: He’s extremely technical. But, I mean, he runs all the infrastructure stuff, and we’ve both been doing this for so long. People get shocked that I can manage engineers, and I was like, “I cannot write a line of code, but you do this long enough with smart people who have taught me so much that like I can manage it like the rest.”
Andrew: Like what? Give me one tip, as a non-engineer who has to manage a lot of engineers and build software for engineers, what’s one tip you could give us other non-engineers?
Natalie: On leading a team of engineers?
Andrew: Yeah. Or guiding somebody when you don’t know how to do what you’re guiding them to do. What’s one tip?
Natalie: So I think, for me, I used to ask a lot of questions. I still ask a lot of questions, and I ask them to like explain to me how. To me engineering is less about lines of like the code but how it’s architected, right? That’s how you have to understand the success. So architecture I can understand, right? Explain to me why this service talks to the service and figures out this service and why we’re stuck. And so just a lot of questions and that’s how I learned how to speak the language.
Andrew: Yeah, you know what? That’s one of the things I have to keep telling our pre-interviewers, ask the guests questions. If they just throw out some random term, don’t pretend you know it and don’t feel like an idiot for asking. You should be asking that. You should say, “Hey, explain what that means.”
Natalie: I ask all the time. I’m like, “I don’t know what that means.” And they’ll look at me and I’d be like, “Yeah, explain it to me.” But you kind of have to explain it to me because you want me to be on your side. You want me to understand what’s going on, so tell me what’s going on.
Andrew: And don’t you feel like, “Hey, how are these people going to take me seriously if I have to ask them basic questions that they probably are going home and laughing at me for not knowing”?
Natalie: I mean, I don’t know. Probably before I would be like when I was younger, maybe. But now I know that there’s a million things that I know that they don’t understand. I mean, I’m constantly trying to learn. And I don’t actually ever think of it that way. I think more that it would be stupid for me to have a conversation with somebody and pretend that I know something, and then walk myself into something where I show that I don’t. So like that’s a much worse scenario to me, and so just I’m honest. Like that’s not something I understand. I’ve gone to conferences.
I mean, I’ve been going to conferences for so long where, you know, I used to go I’m the only woman, right, or I’m like everyone just assumes, you know, “Oh, are you with the spouses? You know, go over this way,” that kind of thing. And, you know, I’ll have conversations with other software engineers and they’ll talk over me or like, you know, just assume and I’ll just be out like, “Explain that to me. Like I don’t owe you anything.” So I just kind of look at it and say, “I want to understand what you’re talking about. You want to have a conversation with me. I need to be on the same page. So tell me what this big data,” or whatever the hell they’re talking about throwing some terms out that I don’t care about.
Andrew: Here’s the thing, a lot of times when you ask them, they don’t know what the hell they’re talking about either and then that kind of brings them back to reality. Stop pretending, stop posturing, just be here and explain this to me. Let’s . . .
Natalie: Well, and they don’t understand how to explain it. I mean, like a smart person can explain something really complicated in simple terms. So a lot of times I’ll ask, I’ll keep asking, keep asking and it actually helps people understand they don’t actually realize what they’re talking about.
Andrew: Let’s continue then with the story. You and Chris met. You started dating. You would help him out at his company from time to time at Wildbit. Meanwhile, as I said earlier, you went and took a job in risk management. Why would you do that? Forget about like why you wouldn’t work at Wildbit. I just mean like what is it about risk management that excited you? Be honest with me. Though, I shouldn’t have had that attitude. Let me just step back and say, “Hey, what is it about risk management that’s so interesting?”
Natalie: Your first attitude was right on point.
Andrew: Was it?
Natalie: Yeah, yeah. You know, Wildbit was very young at the time. Chris and I were living together. We had gotten married my senior college. And we were investing all of our money back into the business. And I had taken the degree at Temple because I don’t have . . . I’m only now realizing I have certain passions or things that I’m really excited about. But back then, it wasn’t like I had some tremendous energy around anything, honestly, anything. It was like I wanted to contribute to the world and have a great job and do something really meaningful. And so at Temple, their risk management department was like it’s one of the top of the country and pays really well. And I was like, “Well, listen, then that’s what I’m going to do is hard and we’re going to do that.”
And so that’s how I got into it. But the key was that, you know, as you go through the degree, you get an internship, you do that. You got an internship and they’re like, “We love you. We want to pay you $48,000 a year start.” I’m 22 years old, $10,000 sign-on bonus and a 10% annual bonus and health insurance and we just got married. And so I was like, “Well, I’ll go do that. I mean, I went to school for it. They love me. I have an opportunity to build something. And we’ll live off of that.” So what was so beautiful about that was we basically like all of my income went to our checking account, and everything the business made went back right into the business, and it was a beautiful thing. It was actually from that perspective it was great.
Andrew: You were floating the relationship, buying the groceries, that type of thing.
Natalie: Yeah, yeah. We lived at a . . . it paid our mortgage, you know, because we had a house and, you know, just anything. We went on vacations, whatever we wanted to do, that came out of that and every penny out of the business stayed in like a totally separate bank account.
Andrew: I got to tell you, Natalie, my wife now has been working for big companies here in San Francisco for a few years. It’s really nice to have a big company insurance plan. And up until then, I’d always paid for entrepreneur insurance, whatever it was that I would even do for my company, even when we had 50 people and it was good. It was still not nearly as good as like when Olivia was at Yahoo. And there was something she needed and I said, “How are you going to get it?” “We have an advocate who works with the insurance companies.” Yeah, the hell. All right, send it to the advocate. And then the advocate would go to bat for you.
Natalie: I know.
Andrew: It’s just like amazing to have that, and I get why you guys would be drawn to it. And then Chris’ sister had an issue. What happened to her that got her in the hospital?
Natalie: So I started work in July, and September 10th, Chris’ sister was pulling out at a parking lot and got hit by a drunk driver. She lived in Denver at the time. She just started law school and she was in a coma and she’s fine now, thank God but, you know, we were traveling a bunch to Denver when all of that happened. So, yeah, I was taking a bunch of PTO days, and it was weird. Like I had to like ask for it and it has to be like a [fit 00:17:44]. And everybody was very support . . . you know, it’s not like that, but there’s still like a process and I felt like I had to think like, “Oh, I got to go back to work and can I come back again? And what does that mean?” And it was just like a very uncomfortable process, and at the same time we were fighting the two of us more in those nine months than we had fought in the four and a half years we were together.
Andrew: You know, let’s get real here. What kind of fights? What were they about?
Natalie: Since I grew up, Chris and I . . . My parents are entrepreneurs. So if you think about, like, that whole story like eventually my parents became entrepreneurs. And both my parents have run big, big, big businesses. And so I was used to entrepreneurship. So when Chris and I were dating early on, you know, he missed my best friend’s wedding because we had a work problem, and I was okay with that. Like, you know, there was like this part of me that like you work . . . entrepreneurship is a 24-hour business. I don’t care what anybody else says. But like you might not be sitting physically in front of the computer, you think about it, you know, you’re doing all these things. And so when I went to go work, I’m in this corporate job, you know, they love me, blah, blah, blah, there’s a ladder to climb and I’m working.
I’m working hard. I hadn’t gotten jaded yet, where I realized corporate America, everybody works at 30% of their effort, right, and that’s like considered amazing. And so I would work 60, 70 hours, and Chris would be like, “I can’t believe you’re not home. Like what are you doing? Why aren’t you home? Like why are you working so hard?” And I’m like, “Dude, you worked for five years, like five years I supported you and working these crazy hours.” And I think over time, I mean, we don’t fight in general, so like that was like a very unusual thing for us. And then it was like the PTO days and like what are we doing with that?
And it all culminated in this, “Why are you giving your efforts to somebody else when we have clearly the opportunity to do it all for ourselves?” And it wasn’t like, you’re working too hard. It’s we were separated for the first time in our relationship, and it was like not . . . you know, it was weird. You know, I’d come home and talk about my job, and he’d want to talk about Wildbit, and it was like we’re just not built that way. I don’t know, we’ve been doing this together 15 . . . we just celebrated 15 years and like, we’re just built a different way and the two of us are built to do this together. You know, that’s just how we are.
Andrew: And he wanted more of your time because he had some before and it’s like, “Why are you giving it to these people instead of to us? Why don’t you care enough about our relationship?” All right, those are pretty good fights to have. All right. So then you going and you say, “You know what? I’m not sure what to do.” You go to your parents who came from Russia who used to go and take garbage into their house so that they could have furniture for the kids. And you say, “I want to go work with Chris.” And what did they say?
Natalie: So my mom was like, “I can’t believe it took you this long.” And she was like, “I don’t understand why you went to work in the first place.” But my parents never . . . I was [worried 00:20:18] that my mom is good at like, “Well, I don’t know why you didn’t in the first place. Why didn’t you tell me nine months ago not to do it in the first place,” but that’s a different story. But my mom was like, “That’s ridiculous. Like, of course, you should do this.”
And then my father-in-law, Chris’s dad who’s always been like a mentor and advisor in the company. He’s run big orgs. He’s never been entrepreneur himself but always run big orgs. And he was like, “No, you shouldn’t do this.” Like health insurance and risk and all these things. So actually, we had a really nice balance of very practical kind of a conservative approach. And then my mom was like . . . I’ve learned from her, you just run and you figure shit out as you go. You just run as fast as you can. So it was a really good balance. And I did it.
Andrew: And you quit your job . . .
Natalie: [inaudible 00:21:00].
Andrew: . . . and you went to work at Wildbit. This is before they had any software. Let me take a moment and talk about my first sponsor then we’re going to get into that thing that you finally launched. Every dev shop seems to want to create software and I get why. Most don’t end up doing it. You did. I want to find out why in a moment. But first, I’ve got to tell everyone, including you. Natalie, do you know about Toptal?
Natalie: I’ve heard about Toptal. Yes.
Andrew: Man, they need to get the word out even more so you say, “Of course I did. Here’s how we work with Toptal.” Here’s the deal with Toptal. I’ll tell you a quick story. I was talking to Nathan Latka. He’s not a developer just like you. But he said, “You know, I want to buy this Chrome plugin.” He goes out and he buys a Chrome plugin that lets people send out email later, track, open, that whole thing. He eventually called it the Top Email. But he buys it. And he doesn’t know how to code. He doesn’t know what to do with the freaking thing. So he goes to Toptal and he says, “I need to get a developer.”
Toptal gets him a developer. He says to the developer, “Look, everything’s fine on this the way it works. Here’s what I need you to code. I want to start getting paid for this free plugin. Here’s what I need. Whenever people send more than X number of emails using my Chrome plugin for Gmail, put up an alert that says, ‘Pay to get access for more.’ And if they don’t want to do that, give them like an X or something that says, ‘I want to use this one more time for free.'”
So they do it. And suddenly this thing that he’s losing . . . not losing money, that was losing money before he bought it, because they had to pay for developers suddenly he’s making money because he paid a Toptal guy just to put up a popup after X number of uses that tell people to pay and now he’s got this business that has a revenue stream that he can use to build up the rest of his company.
Now, why do you go to Toptal instead of somebody else? Why didn’t he just look around for the cheapest person you could find? Because he wanted a really good developer, someone who isn’t going to screw things up, someone who’s going to think creatively, someone who could take his mission and not say, “How do I do this and how do I screw it up? Or how do I do this and Nathan you tell me every detail what needs to get done.”
No, with Toptal, they’re the best of the best. You just tell them what needs to get done. They’ve seen these problems before, and they want to solve good problems for you. Anyway, if you’re out there and you’re looking to hire developers, tons of places where you can go. If you want to hire the best of the best developers and get started with them fast, you’ll be shocked by how fast you can find a phenomenal developer at Toptal. Go to top as in top of your head, tal as in talent at toptal.com/mixergy. When you go to that URL, I will get credit which thank you for doing that.
But more importantly, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period. Really, no-risk trial period? o don’t go to them when you want the cheapest, don’t go to them when you want to just spend time looking, but when you want the best of the best, Google-level developers fast. You can often start with them within day. Toptal.com/mixergy.
All right. You guys decided, Natalie, you are going to create your own software. My guess is you said, “I’m tired of us trading hours for money building other people’s software, building other people’s company. I want to create our own thing.” And then the first product you created was?
Natalie: Actually Newsberry, which was in 2004. And it was created. We were doing client work. And we had a client who needed to send newsletters. And in 2004 there wasn’t a lot options and so we were kind of like, “Oh, let’s like build something.” And Chris had the idea, he’s like, “Well, what if we had our customers invest in it?” And so we basically went to a few clients and said, “Hey, if we build this thing, and you give us $2,000 . . . ” I swear it was $2,000 each, “you can use it for free for life.” And so he collected, I think, like 10 grand and was able . . .
Andrew: Oh, wait, so not invest in it as own a piece of a business.
Natalie: Oh, yes, sorry. Sorry.
Andrew: That’s brilliant.
Natalie: I know.
Andrew: So, “Give us money. We’ll create this for you. You’ll have this software for the life.” Okay. All right. And then what you guys do with the money?
Natalie: It was really smart.
Andrew: That’s really smart because I feel like . . . tell me if I’m wrong, Natalie, keep interrupting me because I’m getting excited right now. And I know I’m going to interrupt you. I feel like one of the best parts about this is now you have paying clients who depend on this being done and now you can go back to your team and feel the same sense of urgency to finish that you do when you have client work instead of, “This is going to be back burner. Whenever we have spare time, we’ll build it.”
Natalie: Yeah. So Chris’ whole thing back then was we needed to be able to . . . in client services work any week not working on clients is not, you know, billing, right? So we needed to have basically pay ourselves to write this thing. So it was enough money that we could pay ourselves to write this thing and knowing that we had existing customers (a) and also a feedback loop, right? Like we had people who were actually sending newsletters.
And so that’s how we built it, built Newsberry. Hired an engineer. And so we ran that thing but always generated most of our revenue through client services, right? So through building websites. And that became this like back burner, but it was definitely our first foray in billing and running a SaaS business and all these things. And so that was kind of like the thing. And then we built Beanstalk, which is the only one . . . obviously Newsberry is not around anymore. We shut it down. And Beanstalk . . .
Andrew: Let’s pause on that for a second. All right, you had your first clients, you got good feedback from them. I know it’s been over a decade so it’s hard to even remember what feed . . . right? It’s hard to remember what feedback came in that was especially useful or do you remember it?
Natalie: In aggregate, I probably remember a bunch. I remember the stuff that I wish we had done that we were stubborn about not doing and that MailChimp ended up doing because they’re smarter than us.
Andrew: For example?
Natalie: For example, people really like templates.
Andrew: And they kept asking you for templates.
Natalie: Yeah, like a Halloween template and like a Valentine’s. And I was like, “What the hell is wrong with you people? Who wants to send a Halloween template?” And it was we were just stubborn. Like we were stubborn about . . . we knew that rendering emails in the different browsers was a pain in the ass, right, the different clients.
Andrew: And so every time somebody said, “Give me a theme,” you said, “Wait a minute, do you understand if I give you a template, it’s going to work great in Hotmail but horrible in Gmail?” And when Hotmail changes tomorrow, it’s going to stink for them too?
Natalie: Exactly. Exactly.
Andrew: And so that’s what you kept saying no to, okay.
Natalie: Yeah. I mean, they wanted to be able to copy and paste out of their Microsoft Word documents. You know, they would like draft emails and then wanting to copy and paste.
Andrew: And you were against it?
Natalie: Yeah. Because we were like this is not good for end result, right? This is not providing value, and we were right. But the point is we were stubborn and not solving the problem. We were just like you’re wrong, which is dumb. And I could tell years of examples of . . . We did the same in Beanstalk. I mean, we’ve I hope grown a little bit from that, but we used to be so dogmatic about you’re just wrong. And that I think part of that is, you know, when you leave client work . . . because when client says make it round, you’re going to make it round. Like you can bang your head against it. My favorite stories about client services work was an agency that we worked with. And they said they went into a room with a huge customer and the customer is like, “We like everything about this, but could you make it round?”
And they all looked like, “What do you want us to make round?” “But just, you know, I wanted to be round?” “Like the computer screen or the browser? Like what do you want . . . ” So we got into our own products and it was like well I get to say no and no God damn it, you are not getting a Halloween template. Yeah, it was stuff like that. It was definitely the big one that we really screwed up was people really wanted individualized data on one subscriber.
And we looked at email marketing as an aggregate. If you want to know how your list is doing, not how Andrew is doing, you know, with your list. Even I remember this to this day, like some of the companies that invested in us originally, they wanted that and we just couldn’t and we were so thick headed. We were like, “That just doesn’t make sense. Like I’m not building this for you. It doesn’t make sense.” And, you know, I think ultimately comes down to we weren’t sending our own newsletters, we had no idea. We were barely . . . We’re not hard . . .
Andrew: Right. When you sent your own newsletter, you feel it more. You guys were not in that world. But then what you’re saying is your big takeaway was if they were asking for something like templates, and you saw the problem in sending out templates the way that they were asking for, your job should have been to say, “Why do they need templates? How do I give it to them in a way that doesn’t break the software?”
Natalie: Which seems so obvious now. But you have to think like this was 10 years . . . no, 2004, 14 years ago. And we were not very smart.
Andrew: Okay.
Natalie: We were just young. You know, like . . .
Andrew: But do you know what else? I feel like this is before Lean Startup, before customer development focus. It’s something else. It is at a time when we were thinking you need to be opinionated about software. This is roughly around the time when the guys from 37signals had the same thought, which was . . .
Natalie: They were a huge inspiration.
Andrew: They were?
Natalie: I mean, we followed them along. I mean, that was it. It was . . .
Andrew: I feel like they have a blind spot to this stuff. They really believe that you have to be an artist to understand what people are looking for. And in many ways, they were right. They were competing against Microsoft, which anytime somebody would ask for something, they would throw another checkbox into their project management software and let people turn it on when they wanted it or off when they didn’t. And they curated this bloated project management software that you could only figure out if you understood what every checkbox meant. And so 37signals came out with Basecamp and said, “We’re going to make the decisions for you,” and that was helpful in competing against Microsoft. But I do wonder if they could be listening to their customers much, much better and developing more for them. Still, as a Basecamp user, I’m kind of happy with their software.
Natalie: Yeah. I mean, we use it. I mean, but you have to . . . I think I credit them so much because they took like a person like Chris and gave him a vision to say, “I can . . . ” like if you told Chris he had to a build a business today that involved people and selling and marketing and all this talking to customers. I mean, that was the whole promise. The promise land was we were going to build these apps. We wouldn’t have to talk to customers. Money would just come in. We would build the things that we wanted to. And if you build it, they will come. And, you know, all these things.
I mean, like that’s what I still hanging out with a lot of folks who built businesses back then, who have big successful apps and there was this feeling of, you know, you have introverted folks who are just kind of like, “I want to build something really cool, make some great money doing it and this is it.” We used to tell like regular people, “Who are your customers?” They’re like, “I have no idea. They sign up. They pay. They pay every month. We never talked to them. We never hear from them. I don’t know.” You know, and it’s just not true like that anymore, right? You realize that it’s just [inaudible 00:31:08].
Andrew: That was the dream always too that you build a website, and then people self-serve and so on. Okay. And so because of that, you guys eventually did what with Newsberry?
Natalie: So we shut it down. We built Beanstalk in 2007, 2008 and really took off. And so we made a commitment at the time that we were going to stop doing client work, but not fire anybody. So we had to wait till Beanstalk made enough money with Newsberry to kind of cover all the expenses. And so we got to a point where Beanstalk was running the show. It was basically paying for everything and Newsberry is actually making money but it was a humongous distraction. Like we were not dog-fooding it. We didn’t understand the market. We didn’t understand marketers. And we kind of had to make this cost. Actually when I left my job, I had come on in my official role is to revive Newsberry. It was going to be to give it one last life. See if I can like make it a thing. And it just it was like the stepchild of the family. Like nobody wanted to hang out with . . . sorry. That’s a bad reference. I didn’t mean that. Like, you know, the proverbial stepchild.
Andrew: I get that old phrase and yes, we now rethought it. But I get what you’re saying. Look, this thing is not doing well. You’ve got clients who are paying. And then about three years later you guys say, “We’re going to create a next piece of software, Beanstalk.” And that came from where? What was the issue that led you guys to come up with that?
Natalie: Just managing our own version control. Like, you know . . .
Andrew: Can you explain that to non-developers?
Natalie: Yeah, so if you think . . . the best way I’ve explained it forever has been, you know, Microsoft Word has something called Track Changes, right? It’s the ability to for multiple people to edit and collaborate on a document. Well, software developers need the same thing. They need, one, they need an ability to track the history of their work, but two, be able to collaborate on that work on that code together. If you have something called version control, which is just an open source platform, it could whatever it wants to be. Right now it happens to be Git for most of the world and you can track your changes. You can work collaborative together, but it’s a server, right? So it’s like it has to run somewhere.
So what we built at the time was one of the first hosted ways to hold your source code and build a face on it. So instead of going into the server and adding a user and running all these commands, like you had a UI, and you could, like, add a user and comment on your code and do all this stuff. So that’s basically what we built. We took something that was . . . and this is like our trajectory, I think at Wild, but does it take something that sucks in the development process and try to put a face on it, try to take some of that pain away and let us absorb the pain through UI or through infrastructure, whatever, that we can manage it and then clean it up for end users. So that’s kind of what it was.
Andrew: Did you do any checking to see if other people wanted it? Did you presell this one?
Natalie: No, we had a beta so we had like asked . . . We basically went out to friends and said, “Would you use this?” And they were like, “No, you’re crazy.” And so we built it anyway. And then back then there wasn’t a lot of apps launching. So when you launch something like this, this was pretty cool. Like we did an integration of Basecamp and 37signals like blogged about . . . like a dedicated blog post about it, you know. And so this was a time when you could gain a lot of traction. So we launched a free beta and let people play with it. And then kind of got it to a place where we were comfortable. And then my favorite story of I think the 18 years was Chris and I sitting in our apartment and we launched paid plans.
And we did some napkin math and we were like, “Well, if 10% of customers, you know, upgrade then that’ll be great.” And so we like launch it, send the email, and we’re sitting there and we go refresh the billing page and nobody has upgraded and two minutes later refresh it again and two and then we pinged the developer, “Is it working?” He’s like, “Let me check. Yeah, it’s working.” And we’re like, “Why is nobody buying?” As if people were just sitting there waiting for the opportunity to pay for the thing. We were so silly. But yeah, and that we launched it that way. And we had the beta users to sustain us for a little bit and I think I don’t remember what the percentage was but of course they eventually bought once they check their email and upgraded and put their credit card in.” And then we kind of rolled it out from there.
Andrew: What was the integration with Basecamp?
Natalie: It was all project management. So it was like the idea that like if you had a project, you could link the commit in the . . . you know, so when you commit a line of code, you could commit it. And we would send a web hook up to Basecamp and it would show up and the project and it would be kind of integrated back. It was we had a ton of integrations. That’s actually how we grew early on was all integrations. It was, you know, how can you build this one piece of your process with all your other pieces of your process? You would integrate, they would share, you would share. It became like a very symbiotic . . . it used to be a very symbiotic relationship that way.
Andrew: I’m trying to pull up that blog post but it’s not coming up. Oh, there it is. “Beanstalk is a hosted subversion system making it easy for anyone to set up browse, track, and manage subversion.” This is the way they blogged at the time. Wow, I guess that’s what it is. Oh, no, this is somebody else blogging. No, this is them.
Natalie: Is it them?
Andrew: Wow. That was not like the most interesting blog post that they ever did. But I guess what they’re doing is they’re saying, “Look, we have this software. Other people are integrating with it. You should sign up for it too.”
Natalie: Andrew, that brought in a tremendous amount of customers for years. Years.
Andrew: Wow, two sentences. And actually it’s two sentences. I’m now seeing it in Internet Archive from something called 37signals.blogs.com. I guess that’s where they were blogging for a bit. Wow.
All right, I’m going to talk about my second sponsor. Second sponsor is a company called HostGator. Every time I do an interview here I feel like there’s somebody who signed up for HostGator as like their first website. I asked you if you did and you said, “I don’t even know.” Why did would you say you don’t know?
Natalie: Because any first website would have been hosted by Chris. I have no idea. Yeah, I have no idea. But I definitely remember seeing HostGator bills when I used to do QuickBooks for the team. We paid for something. I just couldn’t tell you what.
Andrew: I’m telling you, these guys have been around forever. Let me tell you how I’m using HostGator right now. First of all, I’ve one of those plans and if you go beyond that initial plan to the one that costs like 20 . . . I don’t know. Let me look exactly. Since I’m doing the sponsorship I should actually know this. Hostgator.com/mixergy. While I look up the price . . . Oh, there we go. If you go for the Hatchling Plan, it’s like what? $2.64 a month. If you upgrade to the Baby Plan, $3.98 a month, you get unlimited domain hosting.
So let me give an example what I do with it. I told you I’m running in the streets of San Francisco. Well, it’s to prepare to run a marathon on every continent. Well, the thing that I did was, and this came to me from a breakfast that I had with a friend. He said, “Give it a website.” I said, “Oh, yeah, once you give it a site, it feels like a thing. Now people can go back and reference it. It feels like something more exciting.”
So I did that, and I’m glad that I did. It’s called runwithandrew.com so people can follow along with my progress. I busted my freaking foot like weeks, days into my training, and I couldn’t walk on it. I was starting to limp and things were just really painful. I thought this whole thing is going to be over. I get Devin Meadows, he’s right here in the office, who’s shooting video. I said, “Devin, I’ve got to go to the doctor and look at this.” He goes, “We don’t yet have a lens.” Like we’re starting out to shoot video of my journey and we didn’t even have a freaking lens because Amazon took forever to ship it over here. He goes, “Do you want to wait a day?” “I like the way you’re thinking. You know what? If we’re going to shoot video, let’s prioritize that.”
So we wait a day. We go into the doctor’s office completely unannounced because the doctor has weeks of waiting, and I say, “I need your help. I can step on this. But what do I do?” And the doctor now knows about my journey. Everyone in the doctor’s office knows about my journey because they’re all like seeing the website because they googled me when I said this is what I was going to do. And so they said, “Yeah, come on in here.” And they helped me out and they gave me some medication and I was off my foot for a little over a week, taking up to six pills a day, steroids I guess, and then gradually reducing it to one and my foot was fine.
And the moral of the story is, if I didn’t have a website, it was just like some random thing that you’re doing. It’s like sure, sure, sure. Everyone has a goal for this year. Congratulations on your January wish list. But no, now they see the website. It feels more real.
So let me tell you this, guys, Seth Godin does this really well. Anytime you have an idea that like that you want people to rally around, you could create a blog post, you can go on to Medium and announce it, you can put it in your Facebook and say it. Nobody is going to take it seriously. You give it a website, for some reason people take it seriously.
An analogy that I give is like the old “A-Team.” Do you ever seen that, Natalie, TV show?
Natalie: “A-Team”?
Andrew: “A-Team.”
Natalie: Yeah.
Andrew: Okay, good. A lot of people didn’t. I feel like you must not have had cable growing up.
Natalie: Probably not. I don’t know.
Andrew: Yeah, my parents were so against television. Even though they were addicted to television, they were like, “If we don’t get you cable and we don’t give you options, you’re not going to be able to watch TV.” Meanwhile they watched TV every night. It would just be crappy TV. Anyway, in the “A-Team” Face, I don’t even know that guy’s name but he was Face.
Natalie: Face?
Andrew: He would pretend to be a lot of different people, and the way that he would get people to believe him is he’d just hand a business card. And as soon as people would see a business card, all right, he must be John whatever, because he’s got a business card. Same thing with a website.
If you need a website for any idea that you’ve got, go to hostgator.com/mixergy. Again, you’ll be giving me credit but also you’ll get a super low price up to 62% off their already low prices and they’ll host your website right, give you unmetered disk space, unlimited email addresses, 24-hour tech support 7 days a week, 365 days a year, 45-day money back guarantee. So if I’m full of it, do it.
And guys, let me tell you something about it. Forget about their money-back guarantee, I stand behind this. We are living in a world where every podcaster is playing music behind their ads to like distance themselves from the freaking message. I listened to “The Verge” podcast, Natalie, I love Nilay Patel, but he will not talk about a sponsor without, (a), having changed like sound effects in the background. Like we’re getting paid for this. And number one and number two, he reads it’s superfast, like I got to get this over with fast because I can’t believe I’m doing this as a journalists.
No, I believe I’m doing this. If I don’t love them, if they don’t treat you guys right, I don’t want to have them as a sponsors. So I stand behind them. Got to hostgator.com/mixergy.
Natalie, you finally had these customers coming in. Let’s talk a little bit about marketing. What did you do to actually get Beanstalk to grow . . . Wait, no, not Beanstalk. We’re still on the . . . No, we’re in Beanstalk.
Natalie: No, Beanstalk. Yeah, we are on Beanstalk.
Andrew: Beanstalk was the first one. Okay. What did you do to get people to use it?
Natalie: We very much subscribed to the if you build it, they will come. And so it was all word of mouth for us. I mean, we did the integrations. But we just focused all of our efforts on building a really spectacular product. And that’s . . .
Andrew: No, let’s not get past the fact that integrations are really big. They still are to this day and they were big at the time, right? Every time you integrate, the company that you’re integrating with has an excuse to tell its audience to blog about you, to list you on their website, right?
Natalie: I think the power that it had back then I think is lost. I mean, at this point, it’s, you know, you have Zapier and you have all these amazing things that you kind of do stuff yourself. I don’t know. To be to be quite honest with you I don’t know. I think some of that stuff is starting to . . . you know, people have like heads of partnerships and doing all these things and it’s turning into like a monetization thing. Back then it was genuine and it was like how do we make our product better? And, “Oh, it’d be really cool if it worked with this.”
And the folks on the other side, like the Basecamp, you know, we’re like, “Oh, this is cool. Like somebody else . . . you know, you can use Basecamp and then, look, it can even tie into your version control. Now you have like the whole flow. So, I mean, you’re probably right. But I don’t know that I could say that it was as powerful. I mean, there’s old interviews with us from back in the day that were literally like the only way to grow product is through integrations and like I can never say that now. You know, like that’s . . .
Andrew: No, I do feel like it helped at the time. And I’ve talked to several entrepreneurs who did that and it worked and you’re right. It’s definitely not as powerful today. But I don’t want to just walk away with just improve the product and customers who are going to come because that’s not the way the world works.
Natalie: I know. No.
Andrew: So what did you do? So talk more specifically about how you got customers, how you got users.
Natalie: No, I swear to you, that’s all we did and that’s why plateaued and that’s why we’re building a new product.
Andrew: Is that right? That’s as far as you got it?
Natalie: Yes. I mean, we got it. It’s a big product. It’s not like it’s small but we did not get it to where it needed to go. Like Chris and I, marketing is, one, not part of our DNA, and two, it’s also something that for very long time we believed was like an evil, you know, like it was not the way it was supposed to be. It was like this was not what we did. This is not why we built a business. We did not want to do these things. And so it took us really hitting some really shitty points in our lives to realize that like . . .
Andrew: Like what? What’s a shitty point?
Natalie: Well, so I guess, so we hit this plateau, Beanstalk, basically, growth went like . . . And Chris got really . . . you know, he had been running the business for 10 years. You know, we’ve been together for, I guess eight at that point, and he was really unhappy and did not want to come to work. And so he took a month off, went to go hike Bhutan with his dad. I met him in Bali with the kids. Well, we had one kid and I was pregnant with the other one and, you know, we were to be in a dark place. Like I started having panic attacks. I don’t even know the hell that was before and I’m like washing dishes and realized I can breathe.
I think what we uncovered in that process was up until that point, we had no idea. We really thought it all was given to us. Like we were not in control of anything that had happened. So like I could not have told you a single way to fix it because I don’t know how we got there in the first place. So we grew this big business. We were a big profitable team. Chris and I were making a ton of money, like the team was doing really well. Everything is great. And if it goes down, I don’t know how to get out of it because I don’t even know how we got here. You know, like what am I going to do? Build more features? I know that’s not going to work, right? Like . . .
Andrew: Wait, you were making money. Why not just get comfortable with that point and ignore everything? I feel like that’s not a shitty situation.
Natalie: Because if you do not fix a plateau, it’s not going to stay there for very long.
Andrew: Yeah, but most people don’t realize that until it’s not staying there for very long. What was it that just kicked you in the butt? Was it him feeling disconnected from work and starting to feel a little depressed?
Natalie: No, no. I think, we eyes were pretty wide open. I mean, I think like we were there for a little bit. It’s not like it was month one. You know, like it was a couple months in and we’re kind of like, “All right. This isn’t good and all these great competitors are coming out and the features are better.” And we kind of we hit a point we were like . . . we hit a point personally but also like the team, it was like we really enjoyed building things people love and we got to a point where it’s like there’s better products out there. Like what are we going to do? Just keep building features? That’s not fun. It like culminated like and Postmark was this . . . like we had Postmark at the time and it was doing its thing.
And there was this point where you realized . . . the depressing part was when you realized you have no control because I had . . . and I’ll tell you, so I hired a $30,000 consultant to come in and like help me do pricing. So that’s going to do it. Everybody says they go to 30-day trials and it works for everybody. We spent all this money and effort and of course it didn’t work. And so, now I’m turning like an idiot and realizing that we’re not solving the core of it, like what actually broke, which was we did not pay attention to our customers. We did not pay attention to the market. We did not pay attention to the need to get out there. We did not understand why we were running the damn business in the first place. I mean, we had to do a ton of soul searching to just understand why. Like we have a very specific charter to not grow too fast. So we are intentionally holding brains back.
Andrew: Because of this period in your life?
Natalie: Yeah. I think because we spent a lot of time understanding why and we realized like why we want to run a business. We want to run business . . . I look at business as like it lives in service of the people, not the people in service of the business. Like that’s a really important thing for me. And to me, like a business is this insatiable beast that you constantly have to feed, right? That’s its nature, bigger, bigger, bigger, fatter, whatnot. And so if you let that take control, then there’s no stopping you. And all the friends that I have who have let it take control and exited in some way or form are not happy, right? It’s rare you see a happy exit when it’s not . . .
Andrew: Really?
Natalie: Well, when you’re in control, it’s very different. But a lot of times those things like, they run, right? These businesses grow. You get into these conversation . “Oh, my God, we’re going to do this thing. It’s so big, it’s so big.” And then all of a sudden, you’re like, “Shit, what did I do?” Like, “Why am I here?”
And so I think what we wanted to do is when we realized that, like, we need to harness it, right? We need to understand why. The answer was like I want to be super profitable, like super profitable because that money goes directly to my family and to our ability to support our team. So it was a priority number one. To move faster would mean less profits and I just don’t want to play that game. So it’s like for us, that understanding and then I was like, “Okay, well, if we’re in control now, let’s figure out like how we’re going to get out of this.” And it was like, what do we know?
Andrew: Like what? So it’s interesting that you pitched us to be here. I think Chris is someone I pitched back then. So this means that you really embrace marketing because this is like the most . . . spend the most time. “Andrew has a process and then I’ve got to conform to his process and his team.” So you definitely come around to some kind of marketing and getting out there.
Natalie: Yeah. Well, we realized why. And so I’ll tell you why my team pitched you and why I’ve been doing these is it has nothing to do with the products. I’ve learned over the last five years that what I’m crazy obsessed with is to prove that a company can exist in service of the people, and that everything that we can do is maximize what we give back to the people surrounding us. So that’s our customers, our team obviously, first and foremost, Chris and myself.
Andrew: Here’s what Christina told us when she pitched you, she said, “One way that Natalie got through this was by asking, what do I need instead of what of what the business?” Okay. And so when you say what do I need, I get you want it to be very profitable because that goes to your family and also allows you to keep paying for . . . it keeps paying your people who then can take that money home to the family. What else do you need that helped your business grow?
Natalie: That helps my business . . .
Andrew: A schedule that works for you. What else do you need? More fun at the beach?
Natalie: No, no, no. I need to be able to prove that we can do this for something bigger than money. So like . . .
Andrew: So what’s the bigger thing?
Natalie: I’m very convinced that with intentional thinking, a business can run in a way that enables people to have a better life outside of work. So like we do a 32-hour workweek, right? We’ve been practicing this for over a year and a half. Not because we were like be stupid, but because we were trying to say or trying to prove to ourselves, first and foremost, that we can create an environment that’s growing but that only exists for the team, right?
Andrew: So you’re saying the thing that got you back on track was saying, “I can prove these ideas work,” the idea of fewer hours?
Natalie: No, no. I mean, the 32 hours is a new thing. What proved was we went to why, right? And what was the why. And the why is like we want to build a business to be independent and to be able to do whatever we want and to support this incredible team that has supported us over the years, right?
So like we looked at that and said, “Okay, what does that mean? That means values. That means culture. That means building a business that’s profitable so that we have money to spend on people. Building a business that’s peaceful that doesn’t have terrible sales practices that we’re embarrassed of, that doesn’t build a product that sucks because it will make us more money. You know, it was like, all these things that what the question starts and ends with, “Is in the best interest of the people?” Not the business. And I think that is a tremendous change because what was happening when you hit that plateau is you start moving knobs. And you’re like, “Well, I got to grow faster. What is faster? How fast? What does that even mean? And who says that that’s what I need to do?”
Andrew: Okay. So once you figured out your thing, what did you do that allowed the company to stop plateauing and start growing?
Natalie: Well, for a second, we took some deep breaths. I mean, just the clarity of mind was really, really, really important.
Andrew: Because before, you talked to a producer and my producer said, “Look, at one point she heard 30-day trials. So she did a 30-day trial. Then she heard that you have to raise prices. So she raised price and then she heard it was content. So she started doing content.” It’s like all this stuff just drives you nuts because you’re testing different things, not giving anyone . . .
Natalie: Well, and it doesn’t work.
Andrew: . . . any chance to breath and they don’t work.
Natalie: Well, because we all run software businesses and we have different markets, right? And so like what works for you doesn’t work for me. And then there’s all these other things. What do I feel good about? What I not feel good about? Content could work for me. I could be running three pieces of content a week, but am I going to wake up in the morning and be like, “Yeah, 17 ways to better transactional email.” Like no, you know, like I don’t want to do that. So it was clarity of mind was first and foremost. And then it was just intentional planning.
So like we started looking and saying “All right, what is the business look like?” We decided to focus on a new product instead of being stuck when we started building this thing called Conveyor. And, you know, that was for the team. It was like, well, we don’t want to just keep launching features for Beanstalk, that’s not fun. And then we looked the Postmark and said, “This is our most viable prospect right now.” And Chris and I just doubled down and we hired an incredible team. We ran super lean. Last year was a first year . . . 2018 was the first year where we are almost not profitable, like barely black in 2018.
Andrew: 2018?
Natalie: 2018, yeah.
Andrew: Okay. All right, even though part of your “Come to Jesus moment” was we have to earn a profit.
Natalie: Yeah. But we had to figure out how to get there, right? And so sometimes in businesses, you realize that you got to do some investing. And so we did a bunch of that. We realized that a lot of the stuff that we’ve been dogmatic about, like we don’t want to hire a lot of people. We don’t want a big team. All this stuff. It’s like, well, you kind of need good people to do good things. So you can do it all yourself. We spent a ton of time understanding what our roles were, which seems silly, but Chris and I never . . . you know what, honestly, and I keep coming back to this because I think this is really important. We are not good business people. We are entrepreneurs, and I think there’s such a huge distinction and what we’re learned is that we have to be better business people.
And I still don’t think we’re good business people but we’re getting better. And I think having more of that mindset is helpful because as an entrepreneur in my head, it’s like you just chase stuff. You know, and you chase the stuff that makes you . . . and that’s okay. That’s good. But you also have to balance some of that like, basic business practice . . .
Andrew: So what did you do? Did you start sitting down and planning? Here’s another thing that I highlighted. I was sitting with your notes all Sunday, just like going over and getting ready. I’m training my kids, two-year-old and four-year-old to just play on their own Saturday morning or Sunday morning. And almost always, I will read a book or do something meaningful to myself. But today, I knew I had a lot of work to do. So I sat down and said, “I’m going to get into Natalie’s world for a bit.”
And one of the things that I saw was that you said to our producer, “Look, we didn’t have a one-year plan, we didn’t know what levers to pull in.” And so I wrote a note to myself to make sure to ask you when you figured out the levers to pull, once you said, “I get . . . I’m sitting down and I’m going to have a one year plan.” So 2018 wasn’t just figure out whatever comes up, whatever blog posts we read that excites us, we’re going to go and follow their advice. It was sit and plan it out. What were the levers that finally worked for you? What were the things that when you were sitting and actually becoming an entrepreneur/manager that you did better?
Natalie: The very first thing that we did for Postmark was sat down together and said like, “Why do people love Postmark? Like what’s actually interesting about the product and what’s our value proposition truly?” Because we’re the smallest . . . again, every time we build a product with the smallest ones in the room and so what made us unique? And we realized that it was, you know, our value prop was what we call TTI Time To Inbox because transactional email actually, it’s not about getting to the inbox that’s a given. We’re always the best in getting into the inbox, but we realized we’re the fastest at getting into the inbox which is actually money saved for people because what happen . . .
Andrew: How did you know that?
Natalie: Actually Ryan Delk told us that.
Andrew: Ryan Delk is such a freaking brilliant guy. He’s so underestimated except by people who know him.
Natalie: It was at random. We were just talking about something. He was talking about something that he was working on and he made a comment about how . . . we were talking about Postmark and he made a comment about how he would pay anything in the world to get emails to the inbox faster. And like we started talking about it, because what you don’t realize, and this is a product pitch, but like what you don’t realize is . . . or if you take Minecraft, for example, every email at Minecraft [set 00:55:15] is a license key. And that license key, so your 18-year-old or 14-year-old kid makes this purchase, sends it and flips to their Gmail inbox and looks for that email.
And you refresh the page once and then refresh the page twice, three times and they’re sending a support request. So when you have a little team like Minecraft who all of a sudden blows up and they’re like, “Oh, my God, all these people are buying license keys and their emails are getting delayed,” they’re not even missing. They’re just late. They’re taking longer than a second. It actually costs money. Like they were looking at it and saying like, “Oh, my God, I’m going to grow this huge support team to just manage this. Like where’s my license? Where is my password reset? Oh, my God. Like you’re an e-commerce site and your password reset doesn’t come in right away. You lost that sale.”
Andrew: Yeah. What about this? Yesterday I was trying to . . . it was for my son. I needed a game. It was like an eight-minute. He was going to sit with the iPad, which he rarely does. He needs to be able to do something that’s going to teach him something. So it was a game. I paid for it. I couldn’t get the damn email password back so that I could log in.
Natalie: They don’t use Postmark.
Andrew: I’m done, I’m canceling them. So the reason that you knew this was big, and I see it on your on your website. It says right now at the homepage, “Reaching the inbox is not enough.” It used to be about reaching the inbox that I think that you guys used to talk about. Now it says, “Reaching the inbox is not enough. Here is the speed to get into the inbox and how we compared to the average. ” Like Gmail, you can get in there in 2.81 seconds versus the average of 5.97. So you’re saying talking to Ryan Delk taught you that.
Natalie: Years ago.
Andrew: And the reason you talked to Ryan Delk was you wanted to understand what made our products special and he works for Omni, right, the storage company?
Natalie: Yeah, but that I was before. He was at . . . what was it?
Andrew: Gumroad.
Natalie: Gumroad. Yeah.
Andrew: I’m fascinated by this freaking guy. So he was working at Gumroad and he’s . . .
Natalie: We were at the conference together. We’re sitting at dinner.
Andrew: When you’re sitting at dinner, were you saying, “I want to understand why people meet?”
Natalie: No.
Andrew: No? It was just random luck.
Natalie: It was random conversation. We were three miles from home and it was like a freaking light bulb went off. And Chris and I walked all three miles home from this dinner and we were like, “Holy shit, this is it.” We didn’t know it. Like we knew we were doing, right? We knew it but like [expected 00:57:20] so too fast. So we double down. We said this is it. So we spent all this development time building a status page that gives you . . . we track our own deliverable like our own time to inbox. And we push it and we share when it’s good, we share it when it’s not good. We’re super transparent about it, blah, blah, blah. And you can literally see the graphs like the trajectory like Postmark growth kind of like this then all of a sudden it’s like this.
Andrew: All of a sudden it just takes off.
Natalie: Up and to the right. Yeah, because . . .
Andrew: And wait, and so what’s the difference between hearing Ryan Delk tell you one thing that was really important and somebody else telling you content marketing works and this works? Why was that the new approach that was effective versus the old approach that was not?
Natalie: I think what he gave us, I think what we needed to hear was . . . what we needed to understand was how do we position ourselves, right? And I think we’re like content and all at it’s band aids. It’s band aids to a bigger problem. And so what we needed was to really understand like what is it that we’re going to explain to people? Why are people going to look at SendGrid and, you know, Mandrill and Mailgun and all these things and compare it to us and say like I’m going to use Postmark. We’re going to say all the same good shit. You know, oh, we’re fat but we get you to the inbox. Oh, we’re so great. Oh we have great support. Oh, we’re the best. But that’s not . . . we’re not going to sell it, right? They have so much clout. They’re so much bigger than us.
Every one of your friends uses SendGrid. Why use Postmark? And so when we started looking at people . . . that light bulb went off because we had these huge customers, right? Who were paying . . . and we were also very expensive. We were always the most expensive provider. I think we still are to some degree. We needed to understand how to communicate that in a way that felt like us. You know, and we’ve always tried to be like, you know, we’re not going to save you time and money, right? Like I need to make sure that the words we use are meaningful and impactful and they sound like me, like me standing in front of you.
And something about the way he talked about his delivery issues at Gumroad totally like we both just like . . . it was it and we walked home. We walked all those three miles home and I just remember this because we walked the whole time we were like talking about and just trying to understand it like this is it. And then we came up with this term TTI and we wrote at the status page. And it was the biggest thing and you can see like, you know, even just like in social and in conversations, people are starting to talk and people started to say like, “When you care about your email, you go to Postmark.” That became that you were saying when you care about your talent, right, top talent, when you care about your email, you choose Postmark and that’s what everybody does.
Andrew: Fair to say that part of the reason you were more sensitized to it is because through this period where you’re trying to figure out who you were and what you are about, you learned you needed to understand customer problems, customer issues, customer needs more. And this was why you paid attention to it where you think five years before you wouldn’t have noticed that Ryan just gave you gold advice.
Natalie: Yeah, we might have totally missed it. I think we were hungry for. You know, we were definitely ready and trying to understand how we were going to stand out. And that was the problem with Beanstalk was, you know, how would I answer what makes you better than GitHub? I couldn’t answer that. I have no idea.
Andrew: You mentioned your competition SendGrid. So of course, I go to SendGrid’s website and they do the opposite. It’s send email newsletters with confidence. Send and then it changes. Send password resets with confidence. That they are just confident that it will arrive. You figured it out for you it’s get it there faster and that’s the difference. By the way, I sent Isaac a note after his company was acquired by Twilio. He sent a really nice response back. I’m wondering why is Isaac out of SendGrid. Do you have any inside information? What’s going on over there?
Natalie: We’re not talking about that.
Andrew: I have a theory. I think that he was doing really well and then adult management came in and then invested and he was done.
Natalie: Isn’t that the rule though?
Andrew: That is the rule. I wonder though if he’s happy with that. I wonder if he just like, “You know what? I do things for five years.”
Natalie: I don’t know a person like that. I have no idea. I think, you know, we have always been transactional only which was, again, stubbornness that I think actually served us well. But one of the nice things about being at Wildbit is that because I don’t have anybody to answer to, right?
Andrew: I feel like one of the things that you have that’s a challenge is you don’t enjoy going out and talking to me and asking for speaking engagements and doing all that stuff. You don’t enjoy it, do you?
Natalie: Going out and asking for it?
Andrew: Yes. Like you’re not going to pitch conferences and say, “We should be speaking because we’re bootstrapped them and we’re going to be there.” You’re not doing that stuff.
Natalie: No. You know what’s terrible? Is I feel like I have to earn it. And if I asked for it, then I didn’t earn it and so then I just wait around till somebody asks me.
Andrew: Right. And who the hell knows? Like I’m not in your world.
Natalie: I know.
Andrew: I would never think to ask you to do it.
Natalie: I know.
Andrew: I’m going to speak at . . . you mentioned Bali. I’m going to fly to Bali to speak at this event for people who work their companies remotely.
Natalie: Oh I know that guy. He emails me. What’s his name?
Andrew: [Liam Martin 01:02:11].
Natalie: Yeah, yeah. Yeah.
Andrew: You’re not going to be there. You’re not pitching him.
Natalie: No. I also can’t. Listen, I have two little kids who I really like.
Andrew: I have two little kids who I really like.
Natalie: No, no. I know. So I have to be really, really conscious . . .
Andrew: On what you do.
Natalie: Yeah. Because Chris and I travel the two of us together. We are very committed to spending our time together the two of us. So we . . .
Andrew: That’s a challenge that Olivia and I don’t have because she is working at that corporate job. She can’t just . . . I pitched her on it. I said, “Olivia, look, tell them you have to come with me to running remote because you’re going to . . . ” It’s running remote guys, runningremote.com if of want to hang out with me and Bali. I love that thing. I love the event. I don’t really . . . I’d rather they did it in San Francisco and I could hang out over here.
Natalie: Yes, if it wasn’t in Bali I would . . . Bali is far. For me, it’s like a whole day flight.
Andrew: Yeah, it this whole day flight. And least you can go with Chris. My wife is going to have to stay here with the kids while I go out. And I’m not even going to end it there. You know what I’m going to do? I’m going to fly from there to Australia. I’m going to run a marathon in Australia.
Natalie: Good.
Andrew: Oh, yeah. And I’m going to interview entrepreneurs in Australia because it’s such a pain in the butt to interview them here in the U.S. So I’m going to do it.
Natalie: That’s brilliant. That’s a great idea.
Andrew: That’s my goal for 2019.
Natalie: Sounds like a great business trip.
Andrew: Right. All right. Here’s what we learned. Here’s what I learned that I love. Number one, if you don’t really love your software, even if it’s producing money and makes a killing [someone 01:03:37] else you can’t make well for you. Like you guys had MailChimp before MailChimp . . . right around the time that MailChimp . . .
Natalie: Right around.
Andrew: Yeah, around the same time. You didn’t love it. You don’t really get excited about it. You got to move on. My dad had a similar situation. He worked, he had a store like in the hood on Myrtle Avenue in Brooklyn, which now is like a super nice place. People would come in there. This guy was born in Iran. He barely speaks English and people come in and they would talk . . . like Ebonics was big at the time. And they would, you know, “What the hell you guys talking about? How could you get excited about it?” They will have these like rags that they would use to mop their heads in the sun, in the summer I forgot what it was called. One of my guests here on Mixergy called it a church rage. That’s not what it was for them.
He wouldn’t understand why they would want and what they would want it. So he didn’t go out of his way and say, “How do I get these tiny little towels that people love and I don’t even know where they’re buying it,” because he didn’t care for. He eventually closed down the store. That’s the move. I always said to myself, “Once you get to a place where you don’t get your customers, just move on because it’s going to fail anyway.” So you were in that situation?
Natalie: I wish we knew that because I, honestly, like today if he told me go run an email marketing site, I’d say, I’ll talk to customers. Go fly out, meet people like ask questions. Back then, we were like we’re not them.
Andrew: Did you think you’d love them? Like I think about Nathan Barry with ConvertKit. He loves his customers but he’s not dealing with like info-marketer type . . . I mean with marketer, marketer. He is dealing with creatives. Like he found a way to create the software for the people he loved.
Natalie: Yeah, I mean, no, I don’t know. But like I said, I still don’t know what I love. Like, I’m still back to like that 18-year-old girl who’s like, “What’s your purpose here?”
Andrew: Really?
Natalie: Yeah. I think it’s people, right? Like I always tell people like my superpower is people. I love the team that I work with.
Andrew: I do see that. That’s why I said go to the beach. It’s not that I think that you guys like to go to the beach but I’m doing research. I’m entering Natalie’s world. I go to wildbit.com. I don’t see a lot about what this freaking software is. Are the customers really . . . what I see is meet the Wildbit family. I see Chris’s legs on the website and everyone else’s legs because they’re on the beach hanging out. We are Wildbit.
Natalie: There’s a picture of me in the pool with a noodle.
Andrew: Oh, I didn’t even see that. I see like a photo of everyone on the team. And I guess that’s what it is for you. Like you just love the team. You love the way that you guys operate. And that’s the thing that gets you going.
Natalie: That’s my main product.
Andrew: That’s the main product.
Natalie: That’s what I believe. I think Chris and I are like the way I look at it is the products enable us. I mean, we are passionate about our customers and anybody who ask for. Like we build great software, and we adore them. And we’re grateful to them for enabling this Wildbit to exist. And this [is why 01:06:08] where we get to experiment. And we get to do whatever we want. And all in the name of understanding how we can provide the . . . like I want the team to . . . Wildbit exists to provide for a life outside of Wildbit, right? That’s the point. It’s not [inaudible 01:06:23].
Andrew: My friend, Shane Mac, I invested in his company Assist. They create chatbots for enterprise clients. He said, “We don’t really care about the product.” “Like what do you mean you don’t care about the product? ” He goes, “Everyone else here, how am I going to compete with like people who are going to come work for me? How am I going to compete with the things that they could get from all these other Silicon Valley companies that are here that are going to go public any minute now? I can’t compete with that.
So what I’m going to do is I’m not going to compete with them on salaries. I’m not going to compete with them on bonuses or stock options or whatever it is. I’m going to compete with them by giving our people a really good life. And if I take care of my people, give them a good life, they’re going to love their work so much that they’re going to just keep working with our clients and they’re going to love it.”
And sure enough, he’s doing really well with it, which is why they had like a nice office environment early on where they had a mother’s room, which fucking A, how many companies in San Francisco when my wife was nursing would send her to go and pump in like a janitor closet or in the bathroom?
Natalie: I’ll tell you a horrible story because when we build this office, I had just given birth to our second daughter. And this is my office. This is how bad it is. And we finished the build-out and I get here and I’m like, “Where am I going to pump?” Because I have glass doors in every freaking office. I didn’t even think of it. Like these things are hard.
Andrew: They are hard, and I don’t blame people for not thinking of it. But I do think that when he said, when Shane said, “This is what we’re going to create for our people, and that women are undervalued in San Francisco. So I’m going to make an effort to go after female engineers and female talent here.” He put up a mother’s room in his office and a seat for kids, so that the kids can come and sit in the fucking office right there with their parents, and create that kind of atmosphere.
I literally didn’t know what a mother’s room was, even though my wife pumped. I said to her, “Olivia, he has something called the mother room.” She goes, “Yeah, of course.” She understood it. All right, so I get it. I think what you’re saying makes a ton of sense. I got to ask you one question. I always asked like this question that I think is stuck in my head and then . . . or not always, sometimes I don’t. You came here, like the Jewish community in Russia suffered so much. You end up marrying a guy named Chris. Do your parents go, “What the hell you doing marrying Chris?” Like Chris is like a Christian name. Like the ultimate Christian name. No?
Natalie: He is not Jewish. When we started dating, my grandmother came to me. We’ve been dating for a little bit, and she goes, puts me aside and goes, “We just need you to know you can’t marry him.” I was like, “Grandma, I’m 18 years old. Like I’m marrying this guy. What do you mean?” She’s like, “I know. I know this is going and you can’t marry him.” And I said, “Okay.” And that was it. And then two years later, we are still together and my grandmother is cooking him meals just for him because she adores him. And so it mattered, it mattered a lot. And I went one night. We were at my parents’ house and we were talking about something and Chris was like, “I don’t want to raise my kids Catholic. I want to raise them Jewish. I’ve always wanted to raise my kids Jewish, because . . . ”
Andrew: He said that?
Natalie: Yeah. He said, “I’m not really” . . . He’s atheist. And he’s like, “But I’ve always loved the Jewish community and I love what that meant stood for. And all my friends were Jewish.” And I was like, “Yeah?” He’s like, “Yeah.” So I said, “I’ll be right back,” and I just remember bolting across the house, my parents’ house. I bolted to my parents were like, “Chris wants to raise the kids Jewish.” And my mom was like, “Huh?” And I was like, “I just want you to know that we’re not getting married, nothing is happening. But just in case, we’re going to have Jewish babies.” And she’s like, “Okay,” and then I said, “Goodbye.” And then we left. And that was the end of the conversation.
We had a Jewish wedding. I mean, I know it matters. I don’t know what would have happened. My sister married a really nice Jewish man, so thank God that we didn’t have to go down that road again. You know, it matters. It matters a lot. The community matters, the traditions matter, so I’m grateful for that. And my in-laws are wonderful and have no problem. They celebrate all the Jewish holidays with us. So it’s great.
Andrew: Do you guys do Christmas? Do you have a Christmas tree in your house?
Natalie: We do all of it, and we do New Year. So Russian New Year is a big holiday. It’s like a 10-day bank holiday. There’s a tree and presents.
Andrew: I’ve learned about that. And it’s not like they do a tree but it’s for New Years, right?
Natalie: Yeah. I mean, it’s got Christian roots, but in Russia there is was no Christianity for so long that like because there’s Orthodox Christmases in January. So New Year is like a basically an excuse to be drunk for 10 days. And I grew up with New Years, but because we grew up in a Jewish neighborhood, my mom was like, “We can’t put a tree up before Christmas is over. So we could never have a real tree.” So I had to go up on December 26th because God forbid the neighbors could see a Christmas tree in our windows.
Andrew: But you do it afterwards.
Natalie: Yes. So when I started dating Chris, I started buying a real tree. And I was like, “Well, I don’t have anything to worry about, Mom.” And so my dad would come over and smell the tree, he’s like, “I love this tree,” because he’s never had a tree. But, yeah, you wake up at midnight, you open presents, you go to bed at 9:00 p.m. Well, the kids go to bed. Everybody goes to bed at 9:00 p.m.. You wake up at 11:00. Everybody comes over. You throw a massive party till 6:00 in the morning. Kids open presents at midnight and you trade gifts and it’s a whole thing. So my kids do all of that. It’s horrible. You should see my house.
Andrew: I should be sending people to postmarkapp.com, or something else. I’m actually going to recommend anyone who wants to get to know you guys, just go to Wildbit. You’re going to be blown away. The whole site is like tiny about the software and then a whole lot of photos of the people who work there. Even the time in different parts of the world. Like right now, I can tell you in Philadelphia, it’s 2:16 p.m. because they update their website for the time all over the world where their people work. They have their big . . . and this I’d really love the rules for how we work. We’ve been going through our principles of how we work in Mixergy. I really like how you have it up on the homepage. Everything is really laid out. Beautifully done. And you guys have always had good design style.
Go check them out at wildbit.com. And if you ever see Natalie at a conference go, “What the hell are you doing here? How did you even show up here?” Or maybe it’s like not really Isaac . . . not Isaac. It’s not really Natalie. Just make sure that it’s really her and not somebody pretending because she’s never there. She’s just sitting and enjoying her family, enjoying her [inaudible 01:12:09].
Andrew: I did a bunch of stuff last year. No, I enjoy it. I don’t want to ask for it.
Andrew: And if you’re running a conference, ask for it. Like the people at Running Remote should do it. If you want to see me at a conference, I will be at a conference. Not a lot this year, because I’m going to be running marathons all over the world. You can come and see me run marathons with me or just watch me do interviews. Fantastic. Natalie, I think here’s my thing that I’ve discovered, me trying to find guests all over the world is good, but it’s going to be tortuous experience, because I’m going to get lost in like screening them and so on.
I’ve discovered if I go into a city, there’s like an investment group, a community I could partner up with and they know who the hot entrepreneur with the high businesses is, and so I’m going to do that, partner with them and do interviews all over the world and bring people on Mixergy, interviews with people outside of U.S.
You want to meet me in person, lots of different ways to see it. You can go check me out at runwithandrew.com to see where I’m traveling or see me at this Bali event in June runningremote.com. I also want to thank my two sponsors who made this interview happen. Hostgator.com/mixergy. Natalie apparently worked with them or just sent the money. Who knows why from [QuickBooks 01:13:11]. Not really a business person. She might have just been sending them money for no reason.
Natalie: It’s possible.
Andrew: Possible. We all have that on our book. And if you want to hire a phenomenal developer, go to toptal.com/mixergy. Natalie, it’s so good to have you on here.
Natalie: Thanks for having me, Andrew. This was fun.
Andrew: Cool. Thank you. Bye everyone.
