Andrew: Hey there, Freedom Fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. And I got an email from a Mixergy fan named Utsab Saha recently. And he said, “You got to check out the founder of this company. Back when he was in high school,” Wootsab said, “he created this neat little business.” And then Wootsab told me that later on he created a profitable collection of Facebook apps. And now he’s working on a company called WorkFlowy.
And I thought to myself I know WorkFlowy. I’ve heard people talk about it. It’s this notebook for lists that allows you to keep everything in your life in this little, organized list. It’s really good for outlines. I’ve seen people recommend it in the Mixergy community before. I just never thought about the company behind it. And I had no idea how big they were. Well, today we’re going to find out because I’ve got the founder, his name is Mike Turitzin and he is here to talk about how he built up his business.
And this interview is sponsored by Acuity Scheduling. Later on, I will tell you if you’re tired of going back and forth trying to schedule with people, you’ve got to check out Acuity Scheduling. It’s really good. I’ve had an account with them for I don’t know what, three, four, five years? And it’s also sponsored by a company that will help you find your next developer. It’s called Toptal, but I’ll tell you more about them later, first I got to welcome Mike. Mike, good to have you on here.
Mike: Good to be here, Andrew.
Andrew: You were working at Google just before you launched this and you left. Did you know what you were going to do after you quit working at Google?
Mike: So I certainly did not know what I was going to do. So Google was my first job out of college and honestly I really learned a huge amount there and it was great. I started on the search indexing team and stayed on that for almost the entire time. But I guess if I could describe it in one word it would be “wanderlust.” I think that a lot of people particularly in your 20s you have this desire for adventure you want to strike out on your own and do something new. And Google, while they try to foster a sense of entrepreneurship and they have the Founders’ Awards and everything, it honestly just does not feel like that sort of atmosphere. It feels like a place that you stay for decades comfortably employed.
Andrew: Give me an example of a day that made you feel “comfortably employed” but didn’t satisfy your need for your “wanderlust” as you called it.
Mike: I would say, it’s interesting, so it’s been about seven years now so it’s a little hard to think of specific days but I think that as with any large company there’s a lot of time spent in meetings. There’s these political groups who have opinions about things like, “Our project is more important than your project,” or whatever so there’s a lot of struggling to gain mindshare, and then there’s this sense of things moving at this very slow pace.
I noticed that before I worked at Google, and even maybe after I worked at Google, it feels like from the outside things are going very quickly, and they’re moving fast, and they are compared to a lot of companies, but honestly from the inside, it feels slow. It feels like you’re fighting for every inch a lot of the time.
Andrew: What do you mean? Was there something that you wanted to move on fast and they just wouldn’t do it?
Mike: So there was one particular project I was working on near the end of my tenure there that I honestly think that it was a bit of a mistake to put me on that project because there was a little bit of a political situation between a couple of groups. And I was put on this project and given a few people to help me with the goal of integrating these two parts of the backend of the search engine. And it was really interesting to learn in a lot of detail about how the two systems compared to each other and how they were different and what we would gain from combining them. But honestly, there was a lot of strife between the groups and I was put in the middle of that and I was 26 years old and I honestly just don’t think it was a situation that I was qualified to handle.
Andrew: You don’t strike me as somebody who really likes fighting and arguing and politics.
Mike: Yeah, I do sometimes enjoy arguing but I don’t enjoy politics.
Andrew: I see.
Mike: So yeah.
Andrew: All right, so you said, “All right, I see this, it’s too slow. I went to Stanford. I see what’s possible in the world. I learned a lot. Google’s not satisfying my need to build something more creative.” And so you just left. You had no idea what you were going to do?
Mike: Yeah, I literally had no idea what I was going to do, and in fact, I felt like my future was very much up in the air at the time. I’d been programming since the age of nine so it had been quite a while then but even then I was feeling a sense of “what do I want to do with my life” that sort of feeling? So I literally . . .
Andrew: Even at nine?
Mike: Not at nine, I mean at 26 when I left Google I was feeling that.
Andrew: By the way, in high school what was that little business that you built that Wootsab told me about?
Mike: It wasn’t really a business. It was this project that I worked on with several other people for a few years. It was this game that we made. And I sometimes feel like I get dragged into businesses a little bit because I’m very much the type of person who likes to make things and give them away for free. So I have learned a lot about business in the last seven years or so, and I appreciate that a lot more now, but back in high school what I was doing was working on this game and giving it away for free. So it wasn’t a business. We did do pretty well with it in terms of getting a lot of downloads and positive feedback.
Andrew: I heard 10,000 users at a [inaudible 00:06:14].
Mike: Yeah, well there were 10,000 downloads in the first couple of days of the release. So yeah.
Andrew: Wow, okay. All right, so then you left Google and you were starting to figure out what you were going to do with your life and then you hit on Facebook and at the time Facebook had this little magical thing for developers like you and what was that?
Mike: Well, those were the Wild West days of Facebook and actually my brother Chris, he was doing some of this stuff and I became interested because I saw the types of things he was making. So this is completely nonexistent now, these opportunities, but back in the day Facebook had APIs, or having both apps within the Facebook platform itself, on Facebook branded pages without leaving the site and also ways of posting news feed stories to all of your friends or inviting them to apps. A lot of these Facebook apps were pretty questionable. I would like to think that the ones we made were not doing questionable things.
Andrew: What did your apps do?
Mike: They were laughably simple. So the first one, I literally went from not having any idea how to make Facebook apps to a week and a half later launching this thing after having worked on it for a couple of hours a day. So the app, it compiled all of the U.S. government Social Security info on baby names and then it would allow you to start the app and then it would already know your first name obviously because that just comes straight from Facebook. So then it would give you a bunch of interesting/funny statistics on your first name.
One thing that people liked was, “If instead of being a boy you were a girl, what would your name be?” Or something like that. But the hook of the app was it was called “How original were your parents?” So it’d give your parents a grade from A+ to F- based of . . .
Andrew: These are the kinds of apps that you continued to make for Facebook and the revenue came from advertising on the pages that Facebook let you host on their site.
Mike: Yeah, yeah, and the most noteworthy thing about them was how quickly they would grow. We would launch these apps and literally hours later hundreds of thousands of people were using them. And hours after that millions were using them. It was pretty insane.
Andrew: It was insane. And part of the reason why it was insane was after you’d installed an app Facebook would say, or the app itself would say, “Which of these friends do you want to invite?” And it would pre-check all of your friends so then all of your friends would get an email saying, “Do you want to try this thing that your buddy just sent you.” Right?
Mike: Right. And we didn’t do that so that we did not do. We would just allow people to post things to their news feed because that was one of the more slightly spammy things that some of the apps would do, but yeah. Facebook realized obviously, that they were having a lot of problems with these apps so over the next year or two they really clamped down on all that stuff.
Andrew: Yeah, I think they were expecting that they would become the next Microsoft Windows and you’d build apps on their platform and instead they got this stuff. But all right, it was making money it was giving you some opportunity to explore new ideas. But it wasn’t the thing. And then you met up or connected with Jesse.
Andrew: Was it with the idea that you guys would work on a project together or did the project come first or did the relationship? The cofoundership come first?
Mike: I would say the relationship came first and partly because we lived together in college so we knew each other from back then. And basically, we came together we realized we were both in the same situation which was, we had left our jobs wanted to do something new. And when we started talking about what are our interests and we had a lot of similar interests in products that we were interested in making so it seemed obvious just to start working together. It was one of those decisions that it just seemed pretty clearly a good idea. Although I will say what we started working on ended up being drastically different from what we ended up doing for the next five years.
Andrew: What’d you start working on?
Mike: So our initial interest, the thing we connected on when we were talking about ideas was this space around habit change related apps. The one we actually started Y Combinator doing was one that was supposed to help advice gurus like, say Tim Ferriss or what have you, to connect with their fans by having these interactive routines and programs to follow. So in that genre.
Andrew: I see. So I could go to Tim Ferriss, get a routine for how to systemize my life better, and just stay in touch with him and have the app help me keep on top of what he’s telling me to do.
Mike: Yeah, the idea was not a one-on-one relationship with you and Tim Ferriss but more like a one-to-many relationship where he would broadcast a plan with accountability and community and stuff like that.
Andrew: Like what Lift, not the car-sharing company, but the other Lift ended up becoming.
Mike: Yeah, I have continued to follow those apps with some interest just to see what happens and Lift, they pivoted into something very similar to what we were trying to do.
Andrew: What are they called now? I forget.
Mike: Good question. I forgot they changed their name. I don’t remember.
Andrew: Let’s see, Google Lift change name. Coach me. Coach.me.
Mike: Right, right. Yeah.
Andrew: So you guys got accepted into Y Combinator with that idea, right?
Mike: Yeah, we did. We did. I didn’t get the impression the YC partners were super excited about the idea.
Andrew: So why’d they accept you in?
Mike: I think they accepted us for the same reason they accept most groups which is a combination of they like your background and experience, and they like you as people and think you’re smart or what have you. I think there are a lot of YC groups that get accepted where the partners there feel pretty iffy about the idea. It’s pretty [inaudible 00:12:49].
Andrew: Was Jesse also part of another Y Combinator company?
Mike: No, no he hasn’t been.
Andrew: Oh I see, okay. So I see in his background that he was Miro . . .
Mike: Miro, yeah.
Andrew: Miro, I don’t know what Miro is. Could that have been the thing? No that’s not . . . participatory culture foundation is what that is.
Mike: Yeah, it’s somehow related to the Mozilla Foundation right? Yeah.
Andrew: I see. All right, so you get in, and in three months right, you get demo day where you have to show off what you’ve built. And in those three months, you change the whole thing.
Mike: Yeah, we changed the whole thing multiple times actually. There was . . .
Andrew: Tell me why you have up on the first idea? What did you think was not working about your idea?
Mike: So I think there were good reasons and bad reasons why we gave up the first idea. I think the good reason were that (a) I think that we were not in any way personally qualified to pursue that idea. In my opinion, when starting a business, it’s good to pick something where you have a personal advantage in that area. And I think we would’ve done all right. There was nothing particularly about that business that had our names on it. I think that was one issue.
I think another good reason was just we started feeling . . . it was the type of thing where we were talking to people and we were starting to get the feeling less exciting for people than we had originally thought. We got a little bit of interest from people, from the gurus we talked to. In fact, at one point we even talked to Tim Ferriss about it and he seemed interested. And I think he may have actually done something later with another one of those similar services. But it wasn’t something where we were getting large amounts of desperate interest for it.
And I think the bad reason we didn’t do it was honestly, we were just new entrepreneurs and we were very flighty. I think it’s a common issue. An idea feels shiny and new and then you start thinking about it and after thinking about it for a month or two you’re seeing similar things that other people have already done and have failed you get lukewarm feedback about it, and then you want to move to the next shiny new thing. Honestly, I think that that was the big part of it.
Andrew: That’s what it was. And then one of the shiny new things was this little project that Jesse built when he was trying to learn how to code, and that project did what?
Mike: So that project was named WorkFlowy. It was basically I would say a prototype at the time that we together had started working on it. And it was a thing that Jesse built partly to learn how to code and partly because he really wanted a system that would allow him to focus in on what he was working on while allowing him to organize everything. And he’s the type of person that he needs to dial it in to get focused. He doesn’t focus easily. So I think he had pretty strong needs in the focus department and that was the direction he was going in. And there was this one feature of the app which is what we call zooming, which is where you click on particular list item and it shows a nice animation, you zoom into that list item and suddenly everything else that you were seeing or working on before is gone and you can think about just that one thing. And I really love that and a few other people who use the app really loved it. It definitely felt like that kernel . . .
Andrew: And focusing on that one item that I zoomed in on and all the sub-items underneath it. And so it’s like I’m looking only at that one part of my notebook.
Andrew: And that’s the part that got you guys excited and other people too?
Mike: Yeah, yeah. There were a handful of people who were using the prototype at the time. It was a very small group. But there’s one thing I’ve really learned to appreciate as a businessperson or just someone who’s making things that they want other people to use is, I think it’s really valuable to be able to tell when a small idea resonates with people and I think in retrospect that was a very good example of that. It was this tiny idea that really got people excited.
Andrew: I know what you’re talking about. You suddenly see you’re onto something when they get so excited about it that they want to see more of it. Who were some of the people who were looking at it back then? I imagine because you were in Y Combinator it was one of the Y Combinator partners who might’ve gotten excited, right?
Mike: We showed it to a couple of them and I remember Jessica Livingston liked it. Paul Graham actually was not really a fan if I remember correctly. But no grudges held there. But there were a number of the other YC batchmates. A number of them started using it and liked it. So we had a few users.
Andrew: Meanwhile though you told our producer you guys were not the hot commodity. And after Y Combinator, you raised a total of how much money?
Mike: A total of zero.
Andrew: Doesn’t that suck to watch your batchmates go and give their demo day pitch and get investors fighting over them and you get zero?
Mike: Yeah, from one perspective yeah, I think this is a way in which I am a little different from a lot of startup founders is that I’ve never been super excited about getting into this rat race of investing money and entering the trajectory toward either blowing up in a good way or blowing up in a bad way as fast as possible. Honestly, part of the reason we didn’t raise money was because I was ambivalent about it. I think Jesse was more in favor of doing it than I was at the time. But both of us had ambivalence and we did talk to investors and it could have happened, we might have raised money. We ended up not doing it and I personally breathed a sigh of relief that we didn’t raise money.
Mike: I don’t just say that in retrospect like everything turned out just the way I wanted it. Honestly, I didn’t want to deal with just that burden.
Andrew: All right, let me come back and talk to you about that because there we might actually have a fight. Because I want to hear about this.
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Andrew: All right, we were talking about lack of funding not being a big issue for you. And you being okay with where you were. But you go in, don’t you dream of being as big as Evernote? Don’t you see Evernote take off and start getting a little frustrated? Don’t you see Quip do well and go Quip is doing similar things to us?
Mike: So I think that a lot of it comes down to why you get into entrepreneurship. What your goals are. And I wouldn’t say that I would never have the goal of taking the world at the fastest possible speed and crushing the competition, etc. But I feel like I am more the type of person who’s motivated by (a) a sense of autonomy and freedom and (b) the ability to make something that’s awesome and that resonates with people.
Andrew: Are you a hippie?
Mike: Am I a hippie? Yes.
Andrew: Are you a weed smoking granola-eating hippie?
Mike: Well, [inaudible 00:23:55]
Andrew: Is it inappropriate for me to ask you that?
Mike: What’s that?
Andrew: Is it inappropriate for me to ask you that in a very businesslike environment?
Mike: Extremely inappropriate. But I can answer it anyway. I do have some hippie tendencies. I don’t consider myself a hippie but I lived in San Francisco for nine years so what can I say?
Andrew: Seriously what are your aspirations in life? It’s just to have a comfortable job that makes money and creates products that people love? It’s the thing that you just described.
Mike: So I would not say that my aspirations are to have a comfortable job, no. My aspirations are to realize these visions that I have and make something which I both think is awesome and other people think is awesome. And I think the problem with raising money is that it can be used as a tool toward that so I’m not saying it’s a horrible thing to do, and in fact, I may even raise money in a future business. It’s not like I’m so horrendously opposed to that but you must agree there’s a lot of baggage that suddenly comes when you raise money.
Andrew: A ton of baggage.
Mike: Less so from angels than VCs but still from angels I think. And I honestly think there’s a huge amount to be said for bootstrapping a business and not raising money and partly I toot the horn at that because I feel like the current rhetoric is so in favor of raising as much money as you possibly can as soon as you possibly can that I feel like it’s always good to give a voice to the other side of that.
Andrew: All right, so you didn’t get money after Y Combinator but what you got was this article that I’m looking at in TechCrunch by Alexia Tsotsis where she’s talking about this new way to organize your entire life using WorkFlowy. Did you get any customers from that? Any users, I should say?
Mike: No customers because we didn’t have a paid plan at the time. Yeah, that article combined with being on the top of Hacker News for basically a day was pretty huge for us in the beginning. If I remember correctly we got about 20,000 signups from those two things within a few days of launching. That’s the kind of thing that’s a kick in the pants. You suddenly realize that this could be a real thing. That this little project we’re working on maybe it has legs.
Even more than the numbers we were getting just an absurd amount of absurdly positive feedback. I still am blown away at how excited people get about WorkFlowy. It can be described in a very mundane way. It’s, “oh you can make some bolded lists. That’s nice.” But there really is something about it that clicks that people really love. Right from the instant we launched that was just so obvious because of the feedback.
Andrew: I get it. I wouldn’t have understood it either, except that so many people in the Mixergy community have told me about WorkFlowy or sent me notes using WorkFlowy so I get the WorkFlowy link, so I . . .
Mike: That’s awesome.
Andrew: And when you see it and you get to click around it makes much more sense than if you just hear it described. Matt Cutts was on the homepage I think as soon as you launched. That was impressive. Matt Cutts the guy who was running Google spam, the head of anti-spam over at Google.
Mike: Yeah, he was the public face of Google search at the time, actually. And actually, I knew him when I worked at Google. So that may have contributed to him giving the app a chance. But he really helped us out. He was one of our vocal, noteworthy supporters in the beginning so that was awesome.
Andrew: So you kept on going then Farhad Manjoo from Slate writes this glowing, two-page article about you guys. I think at that point, you guys didn’t yet have a revenue model but you were starting to.
Mike: I think if I remember correctly, we actually had launched our monetization model. We had launched that a few months earlier but it hadn’t taken off in a big way we were making still relatively small amounts of money at that point.
Andrew: Partially because you’re really understated about the way that you try to upsell people don’t you think?
Mike: Yeah, I think we are. You mean about how we convert people to the premium plan is that . . .
Mike: Yeah, that’s another one of those philosophical things. I think partly it’s from where we come from we would prefer not to be plastering ads in people’s faces, obviously not ads for Pepsi or something but also not ads for upgrading. And it also comes with the territory. If you look at almost all the apps in our space, which is say note taking or task management, in general, they’re pretty generous, right? They tend to be freemium and they tend to have a small percentage of their users pay them and they tend to not charge that much. So honestly, we do that partly because that’s the standard in this space I think. And we’ve experimented a little but not being pushy has worked out pretty well.
Andrew: Let’s talk about features so we understand how you figured out what features to charge for. Feature requests started coming almost from the very beginning, right?
Mike: Yeah, our product is endless feature requests literally from the beginning, yeah.
Andrew: And how, when you get so many features how do you figure out which ones to actually act on?
Mike: So I would say that it’s one of those optimization problems like triage in a hospital. It’s a combination of how many requests did we get for the problem, how easy is it to implement the solution relative to other things, and then honestly another factor is how excited are we about having that ourselves. And we’re both very much target users for the product, so if all else being equal we’ll tend to do things that people request that we’re more excited about doing.
Andrew: Okay, do remember some of the features that took you by surprise when you started?
Mike: You mean the requests that we were not expecting?
Andrew: Yeah, that were actually helpful that you couldn’t have thought of on your own.
Mike: Trying to think. I don’t think that most of the requests were that surprising and I think part of it is that we’re heavy users of the product and we kind of think about it a lot. So a lot of this stuff is just a natural outgrowth of what you could do with a hierarchical list. It’s like, “I want to share any item in the hierarchy.” Or, ” I want to be able to move from anywhere in the hierarchy to anywhere else in the hierarchy,” or “I want to export any part outside to another program.”
I would say all the major feature requests are things that we could’ve predicted. There have been some minor ones that we would not have predicted, minor being fewer people requesting. An example of that is people wanting Excel-like functionality where you can do formulas except they work on a tree instead of a table that sort of thing.
Andrew: I see. You don’t even have tables in here.
Mike: No, very minimalist by design.
Andrew: Yeah, I can see that. And so then how’d you figure out what to charge for considering how many of your competitors are free completely actually and all the features that you were getting all the feature requests?
Mike: Right. So a big point in that discussion was what are people paying for. I’d say there were two obvious directions to go there. One is additional features. And a subcategory of that is features for teams of people versus individuals. And I think a lot of businesses will have a free individual use case, but once it gets to teams that’s when you pay. That type of thing. So the features is one area, and the other major area that we thought about is the usage. And an example of that is say Dropbox right, where you have a quote and when you get above that quota they’re sorry, you have to delete something or pay us.
Andrew: And you guys have that. Beyond a certain number of items, I have to pay.
Mike: And so here’s another distinction. Which is because Dropbox and Evernote both preceded us I’ve always called this the Dropbox quota model versus the Evernote quota model. And Dropbox quota model is an absolute quota where you pass that and you literally have to delete stuff in your account or you cannot add more. And also another outgrowth of that if you pay Dropbox and then you stop paying them you actually have to delete data from your account in order to continue using it.
Whereas the Evernote quota model is quota per month and it’s not a quota on the size of your account but rather how much you add per month. So that was something we discussed and we decided to use what I’m calling the Evernote Quota Model and I feel good about that and a big reason for that partly because I don’t think it’s ever good to encourage users to delete content. I think Dropbox is like disc space is expensive so maybe they have to but if you don’t have to, I think you don’t want to encourage users to delete things from their account. That just seems pretty bad to me.
And the second reason is having a paid plan where literally people have to move data out of their account if they stop paying you that to me it just crosses a line a little bit into . . . I wouldn’t blame any business person who decided that but for me, I don’t really feel comfortable feeling like I’m forcing users to continue paying me just to [inaudible 00:34:39].
Andrew: How did you know where to set that drop off? How did you know where it was time to cut off the number of notes that people could put in there?
Mike: So we looked at statistics of account sizes and we wanted to make sure that I can’t remember the numbers but I think we wanted to make sure at least 10% of our users would hit the quota. Because if say 1% are hitting the quota and then you take some percentage of that, you’re not making much money at all, right?
Andrew: [inaudible 00:35:12] aiming for 15 percents [SP].
Mike: Yeah, above 10%. I don’t remember exactly. So we looked at that and we actually decided on a number originally which was 500 items a month and we ended up lowering that to 250 but at the same time that we lowered it to 250 we introduced a referral program to allow people to get additional space without paying us. So it’s like on one hand the quota was less, on the other hand, you could get even more than 500 through referring people.
Andrew: When you initially did 500 because that’s where roughly 10% of your users live, 500 items a month. What percentage of those people ended up paying?
Mike: Let me see.
Andrew: [inaudible 00:35:59].
Mike: Yeah, this is a while ago now so I’m trying to remember, but I think it was a pretty . . . so because we’re such nice guys we actually emailed all of our users who would be affected by the quota and we offered to allow them to have unlimited quota when we switched. So maybe not the greatest business decision but we just wanted them to do it. I think probably we were scared of people freaking out and leaving, or something like that. Which in retrospect I don’t think was really a valid fear that we felt that at the time.
So we emailed people and a large percentage of people we emailed actually responded, “Thanks for the awesome service. I’m happy to pay you guys.” And they paid us, and I think it was actually a surprisingly large number. So we emailed people who were already hitting the quota and I think maybe something like 30% of those people signed up within a week. So that was pretty awesome. And I’m sure more of them did after that as well. But almost immediately a high percentage did.
Andrew: You were charging I think $49 a year at the time?
Mike: Yeah, $5 a month or $49 a year.
Andrew: How’d you come up with that price?
Mike: That was I would say very influenced by prices of other companies and space. And we have experimented with other prices lower and higher since then actually because you always want to know where are you on this curve of price versus revenue and it actually has turned out that this $5 . . . So we tried lower and that was definitively worse and we tried higher and I think that may have been more of a wash but it wasn’t clearly better so we didn’t do it.
My suspicion, honestly, is that the reason we picked $5 a month which is that it’s pretty comparable to other products may match users’ judgments of whether a price is reasonable or not. Which is what do other people charge. There is this question of, people should just pay how much value they’re getting for something but I think they also think, how much is it worth and that is very much defined in your mind by what do other things cost. Right?
Andrew: Yeah, all right. I’m going to do a second sponsorship message and at the end of it, when we come back, I’d love to talk about something that’s really tough for many entrepreneurs to talk about but it’s really important. Dealing with a cofounder and the challenges of it. All right, and when we talk about it, we could play it really safe, or we could be really useful to the audience by being open. Love to get as open as you feel comfortable with. And then a little bit more.
Mike: Sounds good.
Andrew: Sponsor is for a company called Toptal. You Mike, before we started talking I asked you if you’d ever heard of Toptal. You’d never heard of them. They’re just now starting to get their name out there. Here’s the deal with Toptal. They’re a network of developers that you can tap into when you need to hire a developer. And by hire I mean full-time, part-time a few extra hours a week maybe on one project that you need. That’s the idea behind Toptal. And so these people have all been tested, they’ve been vetted, they made sure that they are the right fit for the Toptal community and frankly, 97% of the people who want to be in it are turned down. They only want the top 3%. And so if you need a developer I urge you to go to Toptal.com/mixergy. When you do, they’ll give you 83 developer hours. Mike, is there anything you would hire a developer for right now or are you guys all set?
Mike: I think that the first thing that comes to mind is we always have a lot of ideas for experiments for onboarding new users like changes to the flow in the beginning, but we’re limited by developer time because there’s always 10 ideas and only 1 can get implemented a week or what have you. So yeah, we would definitely hire someone to crank out some of those experiments.
Andrew: Yeah, Toptal’s fantastic for that. What about if you were back to being the 27-year-old you and you didn’t know how to code, but you had some Toptal developer time, say 80 hours of free developer time. What would you have them do considering the market as it is now doesn’t include Facebook anymore?
Mike: I was going to say Facebook apps.
Mike: I was going to say Facebook apps.
Andrew: Facebook ads?
Mike: Oh apps.
Andrew: Oh, apps. What about today? Yeah, is there anything that you look around and you say, “Boy, this is really simple, it’s a nice little widget, it probably won’t feed a family but it’s a good way to get started”?
Mike: Honestly I would have to think about it right off the top of my head. I’m too in the mix of these projects I’m working on to know really.
Andrew: Too much in the WorkFlowy model.
Andrew: What about this. Look at how Toptal just built a whole marketplace of talent. Imagine if there’s talent that’s not tech related that you can build a marketplace for. What would that be? Could it be a copywriter marketplace? You’d just need somebody to build a website where you can hire a copywriter, you screen the right copywriters. In one of the past interviews, I asked the audience what they would create and I just got a response from someone that I’ll read in a future Toptal message. If you are listening to me right now and you have an idea for a new project and you launch it because of what I’m saying right now, because talking about Toptal just spurred you to come up with something, email me. All right, I’m going to close out this ad by saying if you need a developer, go to Toptal.com/mixergy.
Cofounder issues. You know how many times I talk to people about this in private? Let’s talk about it publicly. I think we’ll do people a lot of good. What was a challenge that you and Jesse had?
Mike: I would say, honestly a lot of it is personality conflicts. And I think it’s partly why our collaboration has worked is because we have these different angles on things. But it’s also caused conflict. And if I were to summarize the personality conflict I would say, Jesse is very improvisational and wants to take a new idea and run with it and tends to have a lot of ideas and want to run with a lot of them at a time. And I would say my personality is more analyzing and thinking about things and weighing the pros and cons and then deciding to go with something.
So our conflict is very often would amount to Jesse would want to do something and I wouldn’t do it. Or I would want to discuss the other alternatives and weigh the pros and cons over the course of some period of time and then we would come to a rational decision and go forward with that. So that is basically the high-level summary of the conflicts that we . . .
Andrew: Do you remember one thing, one issue where your need to ponder and his need for speed clashed?
Mike: Let’s see. I would say when we were launching our monetization model, the freemium plan, I would say that was an example that which was I wanted to get a lot of numbers and maybe dip our toes in the water and do something that was a little bit less aggressive whereas I think he, in general, wanted to move more quickly and do something that was more aggressive and do it today, not next week, right now. And in that particular situation, I think that I was being too cautious. And that’s something that I have learned from him I think is that I can be too cautious about things.
Andrew: Do you guys scream at each other? Do you stop talking to each other?
Mike: Yeah, there were a couple dark moments in the history of the company one of which I don’t remember the exact timeframe of it. But yeah, we basically ended up in a situation where every day we were getting in an argument about something. And it started feeling like this powder keg where a little thing would escalate very quickly and I started just feeling a sense of I can’t deal with this. This is just like really stressing me out and hurting our ability to get anything done and I think Jesse felt the same way
And honestly, it was one of those times where you really wonder is this just the implosion of this company. When you feel like you can’t even have a normal conversation with your cofounder it really makes you think is this over. Have we just reached some kind of breaking point or something like that?
Andrew: I get it. And then you guys took some unusual steps. You went to couples therapy.
Mike: Yeah, yeah. And that happened at the point in time that I just described. Which was when we really felt that we were at this point where we were just not communicating with each other. And I don’t remember how the idea arose. It may have been my suggestion or it may have been a friend of ours, I don’t remember, but we decided to try going to a couples’ therapist which is kind of amusing, right?
Andrew: Like a relationship couples’ therapist.
Mike: Yeah, right.
Andrew: The kind that’s meant for married people.
Mike: Yeah, like marriage counseling or whatever. So we did that and honestly that was really helpful. The format of it was we both went in and talked to this therapist together and it was a little tense because both of us knew the other person was going to make some jabs to show how they were right, like that type of thing. So that was a little tense and after that we had a couple of intense conversations and then we both went in individually just me and the therapist and just Jesse and the therapist and she tried to portray the other side.
And I think that to me the biggest breakthrough there was she did a really good job of demonstrating that the intentions of both of us, were both we wanted the company to succeed and we both really appreciated the other person and wanted the other person to be happy and succeed as well. And I think when you’re just down in the trenches arguing about these little niggling issues every day, it’s very easy to forget this person isn’t just trying to ruin my life. They have good intentions just like I do.
Andrew: So you have to get down to a place where you could understand that he had good intentions and he would respect that your intentions were good. You just disagreed.
Mike: Exactly, exactly.
Andrew: But that doesn’t get you to speed up, just because you know that his intentions are good. If he’s speeding faster than you’re comfortable, or you’re going too slow that doesn’t solve the problem, does it?
Mike: So yeah, I agree that that by itself diffuses the situation a little bit but it doesn’t solve the problem. Other things were discussed and it was suggested to me by the therapist that if we really want to go into the details here, suggested to me . . . I’m talking from what she said. She said, “I think you could think about whether letting Jesse do all of these things he wants to do, whether that’s really as risky and dangerous as you think it is.” And maintain the ability to step in at some point in the future and say wait a second let’s discuss what we’re doing here while allowing him to move forward and have autonomy on those things. And I definitely took that to heart. And both of us made changes and that was one of those changes I made was to not insist that every decision be discussed to my level of satisfaction before anything was done.
Andrew: Where do you think that comes from? That you need to discuss it and be surer than Jesse?
Mike: I think it probably comes from a desire for safety or something like that.
Andrew: Safety from what?
Mike: Safety from destroying the company. Another thing I sometimes feel concerned about is we do things and our users feel like we did something wrong and they’ll like hate us forever, or something like that, that sort of sentiment. And I do think I was really oversensitive to that. One thing I’ve learned is that people forgive and forget very quickly or they just don’t care. Something that seems like a big deal to me often is just a total nonevent to someone.
Andrew: No, I get what you might have gone through. Tell me if this resonates. You got Matt Cutts speaking out, essentially, for your software with his quote on your homepage. You’ve got the founder of Slack now on your site talking . . . actually, he doesn’t say anything but he’s mentioned that he’s used WorkFlowy to create Slack. And so you have all these people who are highly respected using your software. If they suddenly think you’re a shithead, then it undoes all that and it sends you in the exact opposite. As great as it feels to have them compliment you, now it’s going to feel equally bad if not worse to have them dislike you or feel negative towards you.
Mike: Yeah, no that’s a good summary I think of what I was worried about was yeah, particularly our MVP users like having those people who I think part of the reason they love us is because of just how we’ve run the company and been generous with things and been straightforward and stuff. Yeah, so that’s . . .
Andrew: Yeah, I have that too, that same issue here with Mixergy that all the people who supported me by doing interviews here, by spreading the word by sometimes even buying ads to promote their interviews because they’re so proud of being on here. If I screw up, if I push it too far, if I have an extra popup, which I now see from a message on my right screen here, somebody added an extra popup on the site somewhere they can’t get rid of. I feel that. I’m thinking wow, what’s Mike going to think once this interview’s done and that stinking popup is in his face? And that keeps me at times from taking bigger risks because of all the support that I’ve got. Seems counter-intuitive. You feel like once you’ve had all the support that you could do more, but sometimes it feels like it restrains me.
Mike: Yeah and I know exactly what you mean.
Andrew: And now you guys are okay?
Mike: We certainly get in arguments but I think that one thing that has really kept us together since then and kept things relatively harmonious is that I think we both really did internalize this feeling that both of us had both the company and the other person’s best interests in mind. And honestly, that was why things reached the breaking point was I think we started basically believing that we were both trying to destroy each other’s lives. That was the vibe that was really tearing things down at the time.
Andrew: Speaking of Slack, I just as we were talking looked up Slack and WorkFlowy and LinkedIn and it came up with this engineer at LinkedIn who created what she’s calling a clone of WorkFlowy. Have you ever seen this?
Mike: You said you got to this through what?
Andrew: Through LinkedIn. I just happened to put both your company names into LinkedIn to see what’s going on to see what kind of connection I could come up with, and I came up with this engineer who created a copy of WorkFlowy. You ever see it?
Mike: What’s the name of it?
Andrew: Deep Thought.
Mike: No, I don’t think I’ve seen that one. I have seen clones of WorkFlowy but never that one, I don’t think.
Andrew: What do you think of that, that people are cloning you?
Mike: I mean, it’s certainly . . .
Andrew: That sound was me sending you a text message with the link.
Mike: Yeah, it texted me.
Andrew: I say that for the audience. Someone recently asked me if I was playing online poker during an interview because he heard random sounds. So probably I should identify those random sounds more.
Mike: Right. So it’s certainly flattering that people are copying us. We have a couple of clones that I’ve seen that really copy is not too strong a word. There’s a lot of similarity and I think it’s great that people feel like we’ve done such an awesome thing that they want to identically copy it. But on the other hand, I do think, I’m not going to lie, I see some of this stuff and I think yeah, it might have been nice if you had tried to be a little bit more innovative. I think that everything is inspired by something else there’s no true original.
Andrew: I think in her case you’re right. I don’t think she’s trying to create a copy of it. I think it’s a project. For all I know could have been a student project when she was at MIT Media Lab. I have no idea.
Mike: Oh, okay. I actually do know what you’re talking about. Yeah, I think that was more of a student project as you say.
Andrew: Here’s the one that could irritate you. There’s one called HackFlowy that copied you so much that on the bottom of all of your pages there’s text that says, “Make lists not war.” Which is one of the reasons why I asked you about the hippie thing. They copied that too.
Mike: Right. If I remember correctly HackFlowy was a thing a couple of years ago that I think just didn’t go anywhere. I think the idea with that was they wanted to create an open source version of what we were doing because we’re not open source. It’s one of those things where I try to be fairly laissez-faire about those things. People are going to do what they want to do and there’s nothing I can or will do to try stopping them. At the same time, I’m not following every detail of their history just because it’s not a good way of focusing your time.
Andrew: I was hoping to see if there was any fire there. And you’re not fired up about it. And I get it actually. Frankly, I’m okay with that too. Part of the reason why is I’ve seen so many clones of popular apps show up on Hacker News with links to GitHub and I know they never go anywhere. I don’t know why they don’t go anywhere maybe there’s lack of passion. Maybe you can’t just follow these projects fast enough. Maybe what makes say Evernote special is not just that you can create software that looks like Evernote, but the backend that they have. Same thing with you. I tend to be the exact same way as you. I would wish that they would be little more creative or at least pull out the stuff that’s obvious copy but I’m not too bothered by that.
All right, final question. Revenues today. Where are they? What’s your 2015 annual revenue? Your 2015 revenues.
Mike: So I don’t want to give an exact number but it’s between $500,000 and a million.
Andrew: Oh that’s why I was looking on LinkedIn to see how big your team was. I don’t think you have a big team. Is it just a couple of people?
Mike: We have the two cofounders, Jesse and myself and then there are several people who we contract out to do things like dev ops and customer support. But yeah, we’re maintaining a very small team.
Andrew: Very small team. And so profits have got to be something like 80% of your expenses, 75% of your revenue?
Mike: Yeah, the margins are very high. We pay these people. We pay AWS. The expenses are very low, so yeah.
Andrew: So basically what you’ve got is a lifestyle business, don’t you?
Mike: Yeah, I would use that term. I would use it without the sometimes negative connotation that people attach to it. It’s a lifestyle business in the sense that we didn’t raise VC money and it’s not hockey growth curve. So, yeah.
Andrew: In a way, I remember asking Wufoo if they had a lifestyle business in the interview because they weren’t looking to grow. They just wanted to create a product that people love and that they love themselves. Boom and one day I woke up and I saw that they sold out at a really nice price.
Mike: Did they say they were a lifestyle business? Is that what they said?
Andrew: I think it was something like that they didn’t care so much about their valuation. I think that they were doing small things like sending out greeting cards, which seemed not like the thing you’d do if you want to be the next SurveyMonkey for example. I think I even asked Paul Graham about it and he was totally fine with it from what I remember and they were definitely fine with it and they ended up creating something that they sold. All right. Well, would you say that it’s over three quarters of a million for this year? For 2015?
Mike: I don’t think I want to go more specific.
Andrew: All right. Fair enough. How’d this interview go for you? I know you don’t do a lot of interviews. How do you feel about it?
Mike: I feel like we did some deep dive into the cofounder relationship thing. Partly I wanted to talk about that because as you said it’s something that people tend to be, “everything’s awesome, we’re killing it, crushing it,” like that whole thing and from every single cofounder I’ve ever talked to that’s not actually the case. So I think it’s really common to have strife and it makes sense because there’s a lot on the line and no two people will ever see eye to eye on all the important issues.
Andrew: Yeah, and people do talk about it in private to me. The shocking thing is not that you guys argued but that you found a therapist that actually works. Gone through so many therapists, I can’t find one. That’s why I’m the way I am.
Mike: Yeah, the first one worked. So I guess we were lucky in there.
Andrew: Yeah, way to go. In they’re in San Francisco?
Mike: Yeah, she was in San Francisco.
Andrew: All right. If Olivia and I get into an argument I might hit you up.
Andrew: Please keep it quiet, don’t tell anyone until after we’ve resolved it.
Mike: Of course.
Andrew: All right, thank you. The website is workflowy.com and remember if you need an easy way for people to book appointments with so that you can close more sales, so that you can talk to your customers, so that you can more easily coordinate with people, go check out acuityscheduling.com/mixergy. And if you need a developer go to Toptal.com/mixergy. Top as in top of the mountain. Toptal.com/mixergy.
Thank you so much for doing this interview, thank you all for being a part of it and don’t forget subscribe to the podcast. When you do you’ll get every single one of my interviews directly delivered to your phone or other device and you’ll get all of my jerky questions including . . . did I ask you what was the question about do you feel like a shithead for having . . . yeah.
Mike: Do I feel like a shithead for what?
Andrew: No, you don’t want to look like a shithead to those people who are nice to you. I was saying that and I was so glad we had video because I said I don’t know Mike well enough. I don’t have a read on him. This cursing, is that going to turn him off and I’ll lose him in the interview. And you were fine.
Mike: I don’t know, I judged you but it turned out all right.
Andrew: Did you?
Mike: No, just kidding.
Andrew: All right. Cool. Thank you all for being a part of it. Go subscribe to the podcast. Bye.